NLC India LimitedWebsite: Corporate Office: Block 1, Neyveli -607801, Cuddalore District Tamil Nadu...

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This a draft offer document. Final offer document will be provided on finalization of terms of the issue.

CIN No.: L93090TN1956GOI003507 GSTIN- 33AAACN1121C1ZG

THIS IS A PRIVATE PLACEMENT INFORMATION MEMORANDUM ISSUED IN CONFORMITY WITH FORM PAS-4 PRESCRIBED UNDER

SECTION 42 OF THE COMPANIES ACT, 2013 AND COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014, THE COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES, 2014, 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 AND SUCH OTHER CIRCULARS APPLICABLE FOR ISSUE OF DEBT SECURITIES ISSUED BY SEBI FROM TIME TO TIME.

(Our Company was incorporated on November 14, 1956 as Neyveli Lignite Corporation (Private) Limited, a private limited company under the Companies

Act, 1956, and subsequently, upon conversion to a public limited company, the name was changed to Neyveli Lignite Corporation Limited on July 30, 1959, as amended by the Registrar of Companies, Tamilnadu. Further, the name of the Company was changed to NLC India Limited on July 19, 2016.)

DRAFT PRIVATE PLACEMENT OFFER CUM APPLICATION LETTER FOR PRIVATE PLACEMENT OF ….%

SECURED, NON-CUMULATIVE, NON-CONVERTIBLE, REDEEMABLE, TAXABLE, BONDS OF RS. 10,00,000/-

EACH (SERIES I-2020) IN THE NATURE OF DEBENTURES AMOUNTING TO RS. 200 CRORE (“BASE ISSUE

SIZE”) WITH AN OPTION TO RETAIN OVERSUBSCRIPTION UP TO Rs. 325 CRORE AGGREGATING TO RS.

525 CRORE (“THE ISSUE”).

GENERAL RISK

For taking an investment decision, investors must rely on their own examination of the Issue and the Disclosure

Document including the risks involved. The Issue has not been recommended or approved by Securities and Exchange

Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this Disclosure Document. It should be clearly

understood that the issuer is solely responsible for correctness, adequacy and disclosure of all relevant information

CREDIT RATING

The Bonds proposed to be issued by the Company have been assigned a rating of “[ICRA] AAA/Stable” by ICRA Limited

vide its letter dated 13th May,2019 & 13th January, 2020 and “IND AAA/ Stable ” by India Ratings & Research Private

Limited vide its letter dated 14th May,2019 & 13th January, 2020. Instruments with this rating are considered to have the high

degree of safety regarding timely servicing of financial obligations. Such instruments carry low credit risk.

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 agency and should be evaluated

independently of any other ratings. Please refer to Annexure I and Annexure II for rating letters for the above ratings.

Private & Confidential – For Private Circulation Only (This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus). This Disclosure Document 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.

Dated: [●]

NLC India Limited

(‘Navratna’- A Government of India Enterprise)

Registered Office: First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai-600 031, Tamil Nadu Ph No. 044-28364613, 614,615,616,617 Fax No.044-28364619 E-Mail- [email protected] Website: www.nlcindia.com

Corporate Office: Block 1, Neyveli -607801, Cuddalore District Tamil Nadu

mailto:[email protected]

http://www.nlcindia.com/

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LISTING

The Bonds are proposed to be listed on Debt Market segment of the National Stock Exchange of India Limited (“NSE”) and

Bombay Stock Exchange of India Limited (“BSE”). BSE is proposed to be the Designated Stock Exchange.

Bid Open/ Bid Close on Issue Open/ Issue Close on Deemed Date of Allotment Pay in Date

The Issuer reserves its sole and absolute right to modify (pre -pone/ postpone) the above issue schedule without giving any reasons or prior notice. The Issuer also reserves its sole and absolute right to change the Deemed Date of Allotment/Pay in date of the above issue without giving any reasons or prior notice.

Advisor of the Issue Trustee of the Issue Registrar of the Issue

SBI Capital Markets Limited

202, Maker Tower ‘E’,

Cuffe Parade, Mumbai 400 005

Tel: (022) 22178300

Fax: (022) 2218 8332

Email: [email protected]

Website: www.sbicaps.com

SBICAP Trustee Company Limited

Apeejay House, 6th Floor,

3, Dinshaw Wachha Road, Churchgate,

Mumbai – 400 020

Tel: (022) 43025514

Fax: (022) 22040465


Website : www.sbicaptrustee.com

Integrated Registry Management

Services Private Limited

Address: “Kences Towers” II Floor,

No 1 Ramakrishna Street, North

Usman Road, T Nagar,

Chennai – 600017

Tel no.: (044) – 28140801 - 803

Fax no.: (044) - 28142479

E-mail: [email protected]

Website: www.integratedindia.in


http://www.sbicaps.com/


http://www.sbicaptrustee.com/


http://www.integratedindia.in/

Private & Confidential – Not for Circulation

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Contents Disclaimers: .......................................................................................................................................................8

1. General Disclaimer: ................................................................................................................ 8

2. Disclaimer of the Securities & Exchange Board of India (SEBI): ........................................ 9

3. Disclaimer of the Arranger to the Issue: ............................................................................... 9

4. Disclaimer of the Transaction Advisor: .............................................................................. 11

5. Disclaimer of the Stock Exchange: ...................................................................................... 11

6. Disclaimer of the Rating Agencies: ..................................................................................... 12

7. Disclaimer of the Trustees ................................................................................................... 12

Forward Looking Statements......................................................................................................................... 13

Definitions and Abbreviations....................................................................................................................... 14

A. Issuer Information .................................................................................................................................. 17

Business carried on by the company and its subsidiaries ........................................................ 17

Compliance Officer and Company Secretary of the Issuer ...................................................... 18

Contact Person ............................................................................................................................. 18

Chief Financial Officer of the Issuer ........................................................................................... 18

Arranger(s) of the issue ............................................................................................................... 18

Registrar and Transfer Agent to Issue ....................................................................................... 18

Trustee for the Bondholders ....................................................................................................... 19

Credit rating agencies for the Issue ............................................................................................ 19

Auditors of the Issuer .................................................................................................................. 19

B. A Brief Summary of the business / activities of the Issuer and its line of business: ......................... 19

1. Overview: ............................................................................................................................. 19

2. Brief Status of On-going projects ........................................................................................ 20

3. Brief History of the Issuer since its incorporation ............................................................. 22

4. Management perception of risk factors .............................................................................. 24

5. Corporate Structure: (FLOW CHART) ............................................................................... 49

6. Project cost and means of financing, in case of funding of new projects ......................... 50

7. Dividend Policy: ................................................................................................................... 50

8. Key Operational and Financial Parameters for the last 3 Audited years:........................ 50

C. Details regarding the Directors of the Issuer (as on 13.01.2020).......................................................... 52

1. Details of the current Directors: .......................................................................................... 52

2. Details of change in Directors since last three years: ........................................................ 54


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D. Details of shareholding of the Issuer as on 31.12.2019 ......................................................................... 56

1. Details of Share Capital as on 31.12.2019: .......................................................................... 56

2. Shareholding pattern of the Issuer as on 31.12.2019: ......................................................... 56

3. List of top 10 holders of equity shares of the Issuer as on 31.12.2019: ............................. 57

4. Changes in the capital structure of the Issuer (NLCIL) on 31.12.2019, for the last five

years: ............................................................................................................................................. 59

5. Details of changes in share capital of the Company since incorporation: ....................... 59

6. Details of any Acquisition or Amalgamation in the last 1 year: ....................................... 66

7. Details of any Reorganization or Reconstruction in the last 1year:.................................. 67

E. Details regarding Auditors of the Issuer:* ............................................................................................ 67

1. Details of the current auditors of the Issuer: ...................................................................... 67

2. Details of the change in auditors since last three years: .................................................... 67

F. Details of Borrowings of the Issuer(NLCIL) as on 30.09.2019 ............................................................. 68

1. Details of Bonds: .................................................................................................................. 68

i. Foreign Currency Issuances as on 30.09.2019: ............................................................. 68

ii. Domestic Bond Issuances as on 30.09.2019 .............................................................. 68

2. Details of Secured Loan as on 30.09.2019 ........................................................................... 68

3. Details of Unsecured Loan as on 30.09.2019 ...................................................................... 70

4. List of top 10 Bondholders as on 30.09.2019: ...................................................................... 70

5. The amount of corporate guarantee issued by the Issuer along with name of the

counterparty (including Subsidiaries, Joint Ventures, Group Companies, etc.) on behalf of

whom it has been issued ............................................................................................................. 70

6. Details of Commercial Paper outstanding as on 30.09.2019: ............................................ 71

7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally

Convertible Bonds /Preference Shares) as on 30.09.2019: ........................................................ 71

8. Details of all 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 five years: .............................................................. 71

9. Details of any outstanding borrowings taken/ debt securities issued where taken /

issued (i) for consideration other than cash, whether in whole or part, (ii) at a premium or

discount, or (iii) in pursuance of an option: .............................................................................. 71

G. Details of promoters of the Issuer ......................................................................................................... 71

Details of the Promoter Holding as on 31.12.2019:.................................................................... 71

H. Disclosures with regard to interest of directors, litigation etc. : .......................................................... 71

I. Abridged version of Audited Consolidated and Standalone Financial Information (Profit & Loss

statement, Balance Sheet and Cash Flow statement) for last three years and auditor qualifications: ...... 84

1. Standalone Balance Sheet .................................................................................................... 84


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2. Standalone Profit & Loss Account ...................................................................................... 85

3. Standalone Cash Flow Statement ....................................................................................... 86

4. Consolidated Balance Sheet ................................................................................................ 88

5. Consolidated Profit & Loss Account .................................................................................. 89

6. Consolidated Cash Flow Statement .................................................................................... 90

7. Auditor’s Opinion Extracts: ................................................................................................ 92

J. Abridged version of Limited Review Half Yearly Consolidated and Standalone Financial

Information: .................................................................................................................................................... 95

1. Unaudited Financial Results for the half-year ended 30th September 2019

(Standalone) ................................................................................................................................. 95

2. Unaudited summarized Balance Sheet (Standalone) ........................................................ 95

3. Unaudited Financial Results for the half-year ended 30th September 2019

(Consolidated).............................................................................................................................. 97

4. Unaudited Summarized Balance Sheet (Consolidated) .................................................... 97

K. Any material event/ development or change having implications on the financials/credit quality

(e.g. any material regulatory proceedings against the Issuer/Promoters, 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. .............................................. 99

L. Names of the Trustee and Consent thereof: ......................................................................................... 99

M. Rating and Detailed Rating Rationale................................................................................................. 100

N. Security : ............................................................................................................................................... 100

O. Stock Exchange where Bonds are proposed to be listed.................................................................... 100

P. Other Details......................................................................................................................................... 100

1. DRR Creation –................................................................................................................... 100

2. Issue/instrument specific regulations .............................................................................. 100

3. Application Process ........................................................................................................... 101

i. Who Can Apply ....................................................................................................... 101

ii. Documents to be provided by Investors ................................................................ 101

iii. Applications to be accompanied with Issuer Account Details ............................ 101

iv. How to Apply .......................................................................................................... 102

v. Terms of Payment.................................................................................................... 104

vi. Force Majeure .......................................................................................................... 104

vii. Applications under Power of Attorney ................................................................. 104

viii. Application by Mutual Funds ................................................................................ 104

ix. Application by Provident Funds, Superannuation Funds and Gratuity Funds . 105

x. Acknowledgements ................................................................................................. 105

xi. Basis of Allocation ................................................................................................... 105

xii. Right to Accept or Reject Applications .................................................................. 105

xiii. PAN /GIR Number ................................................................................................. 106


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xiv. Signatures................................................................................................................. 106

xv. Nomination Facility................................................................................................. 106

xvi. Fictitious Applications ............................................................................................ 106

xvii. Depository Arrangements ...................................................................................... 106

xviii. Procedure for applying for Demat Facility ............................................................ 107

4. Others .................................................................................................................................. 107

i. Right of Bondholder(s) ............................................................................................ 107

ii. Modification of Rights............................................................................................. 107

iii. Future Borrowings .................................................................................................. 108

iv. Notices ...................................................................................................................... 108

v. Minimum subscription ........................................................................................... 108

vi. Underwriting ........................................................................................................... 108

vii. Deemed Date of Allotment ..................................................................................... 108

viii. Credit of the Bonds .................................................................................................. 109

ix. Issue of Bond Certificate(s) ..................................................................................... 109

x. Market Lot ................................................................................................................ 109

xi. Trading of Bonds ..................................................................................................... 109

xii. Mode of Transfer of Bonds ..................................................................................... 109

xiii. Common Form of Transfer ..................................................................................... 110

xiv. Interest on Application Money............................................................................... 110

xv. Interest on the Bonds ............................................................................................... 110

xvi. Payment on Redemption ........................................................................................ 110

xvii. Right to further issue under the ISINs ................................................................... 111

xviii. Right to Re-purchase, Re-issue or Consolidate the Bonds ................................... 111

xix. Deduction of Tax at Source ..................................................................................... 111

xx. List of Beneficial Owners ........................................................................................ 112

xxi. Succession ................................................................................................................ 112

xxii. Joint - Holders .......................................................................................................... 112

xxiii. Disputes and Governing Law................................................................................. 112

xxiv. Investor Relations and Grievance Redressal ......................................................... 112

xxv. Material Contracts and Agreements involving Financial Obligations of the Issuer

113

Q. Issue Details .......................................................................................................................................... 114

Summary Term Sheet: ............................................................................................................... 114

R. Disclosures pertaining to willful default ............................................................................................ 118

S. Additional Disclosures: ....................................................................................................................... 119

T. DECLARATION................................................................................................................................... 122

ANNEXURE I - Copy of Rating letter from ICRA Limited ....................................................................... 123

ANNEXURE II - Copy of Rating Letter from India Ratings and Research Private Limited.................... 123

ANNEXURE III - Board Resolution Authorizing the Issue ....................................................................... 123

ANNEXURE IV - Shareholders’ approval obtained pursuant to section 180(1)(c) .................................. 123

ANNEXURE V – Illustrative cash flow for bonds ...................................................................................... 123


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ANNEXURE VI - In-Principle Approval for listing on BSE ...................................................................... 124

ANNEXURE VII - In-Principle Approval for listing on NSE .................................................................... 124

ANNEXURE VIII - Six Month Results (30.09.2019) .................................................................................... 124

ANNEXURE A.............................................................................................................................................. 125

ANNEXURE B .............................................................................................................................................. 126

ANNEXURE C .............................................................................................................................................. 127

ANNEXURE D.............................................................................................................................................. 128


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Disclaimers:

1. General Disclaimer:

This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in

accordance 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 Disclosure Document does not constitute an offer to public in general to subscribe for or otherwise acquire

the Bonds to be issued by (“NLC India”/“the “Issuer”/ the “Company”). This Disclosure Document is for 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 this Disclosure Document, no

offer document or prospectus has been prepared in connection with the offering of this bond issue or in relation

to the issuer.

The bond issue will be under the electronic book mechanism as required in terms of the Securities and Exchange

Board of India (“SEBI”) circular SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and (“SEBI”) circular

SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 and any amendments thereto (“SEBI EBP Circular”)

read with “Operational Guidelines for BSE Electronic Bidding Platform” issued by BSE vide their Notice No.

20180928-24 dated September 28, 2018 (“BSE EBP Operating Guidelines”) and any amendments thereto. (The

SEBI EBP Circular and the BSE EBP Operating Guidelines shall hereinafter be collectively referred to as the

“Operational Guidelines”).

This disclosure document and the contents hereof are restricted for only the Identified Investors who have been

specifically addressed through a communication by the Issuer, and only such Identified Investors are eligible to

apply for the Debentures. All Identified Investors are required to comply with the relevant regulations/

guidelines applicable to them, including but not limited to the Operational Guidelines for investing in this issue.

The contents of this disclosure document and any other information supplied in connection with this disclosure

document or the bonds are intended to be used only by those Identified Investors to whom it is distributed. It is

not intended for distribution to any other person and should not be reproduced or disseminated by the recipient.

This Disclosure Document is not 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 NLC India Limited.

This Disclosure Document has been prepared to give general information regarding the Bonds, to parties

proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such

party may require. NLC India Limited believes that the information contained in this Disclosure Document is

true and correct as of the date hereof.

NLC India Limited does not undertake to update this Disclosure Document to reflect subsequent events and

thus prospective subscribers must confirm about the accuracy and relevancy of any information contained

herein with NLC India Limited. However, NLC India Limited reserves its right for providing the information at

its absolute discretion. NLC India Limited accepts no responsibility for statements made in any advertisement

or any other material and anyone placing reliance on any other source of information would be doing so at his

own risk and responsibility. Prospective subscribers must make their own independent evaluation and

judgment before making the investment and are believed to be experienced in investing in debt markets and are

able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have

obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and


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purchase the Bonds. It is the responsibility of the prospective subscriber to verify if they have necessary power

and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers

should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in

this Disclosure Document should be construed as advice or recommendation by the Issuer or by the Arrangers,

if any to the Issue to subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers,

if any to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to

subscribe for the bonds. Prospective subscribers should also consult their own advisors on the implications of

application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental thereto.

This Disclosure Document is not intended for distribution. It is meant for the consideration of the person to

whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being

issued on private placement Basis and this offer does not constitute a public offer/ invitation.

The Issuer reserves the right to withdraw the private placement of the bond issue prior to the issue closing date(s)

in the event of any unforeseen development adversely affecting the economic and regulatory environment

or any other force majeure condition including any change in applicable law.

2. Disclaimer of the Securities & Exchange Board of India (SEBI):

This Disclosure Document has not been filed with Securities & Exchange Board of India (“SEBI”). The Bonds

have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this

Disclosure Document. It is to be distinctly understood that this Disclosure Document should not, in any way, be

deemed or construed to mean 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 Disclosure Document. The

Issue of Bonds being made on private placement basis, this Disclosure Document is not required to be filed with

SEBI.

3. Disclaimer of the Arranger to the Issue:

The role of the Arranger in the assignment is confined to marketing and placement of the Bonds on the basis of

this Disclosure Document as prepared by NLC India Limited. The Arranger has neither scrutinized nor vetted

nor reviewed nor has it done any due-diligence for verification of the contents of this Disclosure Document. The

Arranger shall use this Disclosure Document for the purpose of soliciting subscription(s) from Eligible Investors

in the Bonds to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the

aforesaid use of this Disclosure Document by the Arranger should not in any way be deemed or construed to

mean that the Disclosure Document has been prepared, cleared, approved, reviewed or vetted by the Arranger;

nor should the contents to this Disclosure Document in any manner be deemed to have been warranted, certified

or endorsed by the Arranger so as to the correctness or completeness thereof.

Nothing in this Disclosure Document 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

Disclosure Document in any jurisdiction where such action is required. The

distribution/taking/sending/dispatching/transmitting of this Disclosure Document 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.

The Issuer has prepared this Disclosure Document and the Issuer is solely responsible and liable for its contents.


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The Issuer will comply with all laws, rules and regulations and has obtained all regulatory, governmental,

corporate and other necessary approvals for the issuance of the Bonds. The Issuer confirms that all the

information contained in this Disclosure Document has been provided by the Issuer or is from publicly available

information, and 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 their affiliates for the accuracy, completeness, reliability, correctness or fairness of this Disclosure

Document 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 Disclosure Document, whether arising

in tort or contract or otherwise, relating to or resulting from this Disclosure Document or any information or

errors contained therein or any omissions therefrom. 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 Disclosure Document, the Eligible Investor accepts terms of this Disclaimer Clause

of Arranger, which forms an integral part of this Disclosure Document and agrees that the Arranger will not

have any such liability.

The Eligible Investors should carefully read this Disclosure Document. This Disclosure Document is for general

information purposes only, without regard to specific objectives, suitability, financial 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 Disclosure Document 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 Disclosure Document 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 Disclosure Document 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

Disclosure Document 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 Disclosure Document 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.

Each person receiving this Disclosure Document acknowledges that:

1. Such person has been afforded an opportunity to request and to review and has received all additional

information considered by it to be necessary to verify the accuracy of or to supplement the information herein;

and

2. Has not relied on the Arranger and/or its affiliates that may be associated with the Bonds in connection with

its investigation of the accuracy of such information or its investment decision.

Issuer hereby declares that the Issuer has exercised due-diligence to ensure complete compliance of applicable

disclosure norms in this Disclosure Document. The Arranger: (a) is not acting as trustee or fiduciary for the

investors or any other person; and (b) is under no obligation to conduct any "know your customer" or other


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procedures in relation to any person. The Arranger is not responsible for (a) the adequacy, accuracy and/or

completeness of any information (whether oral or written) supplied by the Issuer or any other person in or in

connection with this Disclosure Document; or (b) the legality, validity, effectiveness, adequacy or enforceability

of this Disclosure Document or any other agreement, arrangement or document entered into, made or executed

in anticipation of or in connection with this Disclosure Document; or (c) any determination as to whether any

information provided or to be provided to any investor is non-public information the use of which may be

regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

The Arranger or any of their directors, employees, affiliates or representatives do not accept any responsibility

and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any

of the information contained in this document. By accepting this Disclosure Document, investor(s) agree(s) that

the Arranger will not have any such liability.

Please note that:

(a) The Arranger and/or their affiliates may, now and/or in the future, have other investment and commercial

Issuing, trust and other relationships with the Issuer and with other persons ("Other Persons");

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

Persons, 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 Disclosure Document;

(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; and

(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.”

4. Disclaimer of the Transaction Advisor: Role of the Transaction Advisor in present transaction is limited to advising the Issuer in relation to market

scenarios, coordination with the external agencies etc., in respect of the Bonds. The Transaction Advisor has not

done any independent verification of the information provided and relied on the information provided by

Issuer. Transaction Advisor cannot guarantee the accuracy of the Information provided in this document. It is

the responsibility of the Issuer to obtain all necessary approvals for issuance of the Bonds.

The investors should take their own informed decision for investment in these bonds and in no way are the

transaction advisors or any of its directors and employees are responsible for any investment decision by

prospective investors, based on this document

5. Disclaimer of the Stock Exchange:

If required, a copy of this Disclosure Document may be submitted to Stock Exchange (s) for hosting the same on

its website. It is to be distinctly understood that such submission of the Disclosure Document with Stock

Exchange (s) or hosting the same on its website should not in any way be deemed or construed that the

Disclosure Document has been cleared or approved by Stock Exchange (s); nor does it in any manner warrant,


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certify or endorse the correctness or completeness of any of the contents of this Disclosure Document; nor does

it warrant that this Issuer’s securities will be listed or continue to be listed on the exchange (s); 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.

6. Disclaimer of the Rating Agencies:

The ICRA Limited rating reflects ICRA’s current opinion on the likelihood of timely payment of the obligation

under rated instrument and does not contribute an audit of the rated entity by ICRA. ICRA ratings are based on

the information provided by the issuer or obtained by ICRA from sources it considers reliable. ICRA does not

guarantee the completeness or accuracy of the information on which the rating is based. ICRA rating is not a

recommendation to buy, sell or hold the rated instrument, it does not comment on the market price or suitability

for a particular investor. All ICRA ratings are under surveillance. Ratings are revised as and when circumstances

so warrant. ICRA 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. ICRA Ratings rating criteria

are available without charge to the public on the ICRA website www.icra.in

The India Ratings & Research Private Limited (IRRPL) rating reflects IRRPL’s current opinion on the likelihood

of timely payment of the obligation under rated instrument and does not contribute an audit of the rated entity

by IRRPL. IRRPL ratings are based on the information provided by the issuer or obtained by IRRPL from sources

it considers reliable. IRRPL does not guarantee the completeness or accuracy of the information on which the

rating is based. IRRPL rating is not a recommendation to buy, sell or hold the rated instrument, it does not

comment on the market price or suitability for a particular investor. All IRRPL ratings are under surveillance.

Ratings are revised as and when circumstances so warrant. IRRPL 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. IRRPL Ratings rating criteria are available without charge to the public on the IRRPL

websitewww.indiaratings.co.in

7. Disclaimer of the Trustees

Investors should carefully read and note the contents of the Disclosure Document/Disclosure Documents. Each

Prospective investor should make its own independent assessment of the merit of the investment in Bonds and

the issuer. Prospective investors should consult their own financial, legal, tax and other professional advisors as

to the risks and investment considerations arising from an investment in the Bonds and should possess the

appropriate resources to analyze such investment and suitability of such investment to such investor's particular

circumstance. Prospective investors are required to make their own independent evaluation and judgement

before making the investment and are believed to be experienced in Investing in debt markets and are able to

bear the economic risk of investing in such instruments.

http://www.icra.in/

http://www.indiaratings.co.in/


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Forward Looking Statements

Certain statements in this Information Memorandum are not historical facts but are “forward-looking”

in nature. Forward-looking statements appear throughout this Information Memorandum. Forward-

looking statements include statements concerning the Issuer’s plans, financial performance etc., if any,

the Issuer’s competitive strengths and weaknesses, and the trends the Issuer anticipates in the industry,

along with the political and legal environment, and geographical locations, in which the Issuer operates,

and other information that is not historical information. Words such as “aims”, “anticipate”, “believe”,

“could”, “continue”, “estimate”, “expect”, “future”, “goal”, “intend”, “is likely to”, “may”, “plan”,

“predict”, “project”, “seek”, “should”, “targets”, “would” and similar expressions, or variations of such

expressions, are intended to identify and may be deemed to be forward looking statements but are not

the exclusive means of identifying such statements. By their nature, forward-looking statements involve

inherent risks and uncertainties, both general and specific, and assumptions about the Issuer, and risks

exist that the predictions, forecasts, projections and other forward looking statements will not be

achieved. Eligible Investors should be aware that a number of important factors could cause actual results

to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such

forward-looking statements. These factors include, but are not limited, to:

i. compliance with laws and regulations, and any further changes in laws and regulations

applicable to India, especially in relation to the petroleum sector;

ii. availability of adequate debt and equity financing at reasonable terms;

iii. our ability to effectively manage financial expenses and fluctuations in interest rates;

iv. our ability to successfully implement our business strategy;

v. our ability to manage operating expenses;

vi. performance of the Indian debt and equity markets; and

vii. general, political, economic, social, business conditions in Indian and other global markets.

By their nature, certain market risk disclosures are only estimates and could be materially different from

what actually occurs in the future. Although the Issuer believes that the expectations reflected in such

forward looking statements are reasonable at this time, the Issuer cannot assure Eligible Investors that

such expectations will prove to be correct. Given these uncertainties, Eligible Investors are cautioned not

to place undue reliance on such forward-looking statements. If any of these risks and uncertainties

materialize, or if any of the Issuer’s underlying assumptions prove to be incorrect, the Issuer’s actual

results of operations or financial condition could differ materially from that described herein as

anticipated, believed, estimated or expected. All subsequent forward looking statements attributable to

the Issuer are expressly qualified in their entirety by reference to these cautionary statements. As a result,

actual future gains or losses could materially differ from those that have been estimated. The Issuer

undertakes no obligation to update forward-looking statements to reflect events or circumstances after

the date hereof. Forward looking statements speak only as of the date of this Information Memorandum.

None of the Issuer, its directors, its officers or any of their respective affiliates or associates has any

obligation to update or otherwise revise any statement reflecting circumstances arising after the date

hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come

to fruition.


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Definitions and Abbreviations

Allotment/ Allot/

Allotted The issue and allotment of the Bonds to the successful Applicants 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

Disclosure Document 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

Articles Articles of Association of the Company as amended from time to time

AY Assessment Year

Base Issue Secured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the nature

of debentures of Face Value of Rs. 10,00,000 each, for an amount of Rs. 200 crore

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)

Board/ Board of

Directors The Board of NLC India Limited or Committee thereof, unless otherwise specified

Bond(s) Secured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the nature

of debentures

Bondholder(s) Any person or entity holding the Bonds and whose name appears in the list of Beneficial

Owners provided by the Depositories

BSE BSE Limited

BSE EBP Guidelines Electronic Book Provider Platform of BSE for issuance of debt securities on private

placement basis.

CDSL Central Depository Services (India) Limited

CMD Chairman cum Managing Director

C&AG Comptroller and Auditor General of India

Coupon / Interest

Payment Date As mentioned in the Summary Term Sheet

CVC Central Vigilance Commission

Debenture Trusteeship

Agreement

The agreement executed between the Issuer and the Debenture Trustee for the purpose

of the Issue

Deemed Date of

Allotment

The cut-off date declared by the Issuer with effect from which all benefits under the

Bonds including interest on the Bonds shall be available to the Bondholder(s). The actual

allotment of Bonds (i.e. approval from the Board of Directors or a Committee thereof)

may take place on a date other than the Deemed Date of Allotment

Depositories Act The Depositories Act, 1996, as amended from time to time

Depository A Depository registered with SEBI under the SEBI (Depositories and Participant)

Regulations, 1996, as amended from time to time

Depository Participant A Depository participant as defined under Depositories Act

DISCOMs Distribution Companies

DIN Director Identification Number


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DP Depository Participant

DRR Bond/ Debenture Redemption Reserve

ESCOMs Electricity Supplier Companies

Eligible Investor QIBs, arranger (either on proprietary basis or otherwise as permitted under the BSE EBP Platform) and any Non-QIB Investors

First ISIN Circular SEBI Circular CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017 as amended

FIIs Foreign Institutional Investors

Financial Year/ FY Period of twelve months beginning from April 1 of a calendar year and ending on March

31 of the subsequent calendar year

FIs Financial Institutions

FRN Firm Registration Number

GIR General Index Registration Number

GoI Government of India/ Central Government

GW Giga Watt

ICRA ICRA Limited

I.T. Act The Income Tax Act, 1961, as amended from time to time

IFSC Indian Financial System Code

India Ratings India Ratings & Research Private Limited

Issuer / NLC India

Limited/ Company

NLC India Limited, incorporated under the Companies Act, 1956 and having its

registered office at First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore

Complex of Food Corporation of India, Chetpet, Chennai-600 031.

Listing Agreement

Listing Agreement entered into/to be entered into by the Issuer with the BSE and/or the

NSE, in relation to the listing of the Bonds, as per the format issued by Securities and

Exchange Board of India in its circular dated October 13, 2015 (bearing reference

CIR/CFD/CMD/6/2015) read with the Securities and Exchange Board of India (Listing

Obligations and Disclosure Requirements) Regulations (Listing Regulations), as

amended from time to time.

Market Lot Means one Bond

MF Mutual Fund

MoC Ministry of Coal

MoEF & CC Ministry of Environment, Forest and Climate Change

MoF Ministry of Finance

MTPA Million Ton per Annum

MW Mega Watt

NEFT National Electronic Funds Transfer

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

NTPL NLC Tamilnadu Power Limited

Non-QIB Investor

An Eligible Investor that is not a QIB, and is specifically authorized by the Issuer

under the BSE EBP Platform, which shall include but is not limited to the

following:

i. companies;

ii. gratuity funds and superannuation funds;

iii. provident funds and pension funds with corpus of less than Rs. 25 Crore;

iv. societies;

v. registered trusts;


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vi. statutory corporations or undertakings established by central or state

legislature authorized to invest in the Debentures; and

vii. other investor authorized to invest in Debentures in accordance with

applicable laws.

NUPPL Neyveli Uttar Pradesh Power Limited

Operational Guidelines Refers to, collectively the SEBI EBP Circular and the BSE EBP Operating

Guidelines

Option to Retain

Oversubscription Option to retain oversubscription of Rs. 325 crore

PAN Permanent Account Number

PPA Power Purchase Agreement

QIB Qualified Institutional Buyer

R&TA Registrar and Transfer Agent

RBI Reserve Bank of India

Record Date As mentioned in the Summary Term Sheet

Registrar Registrar to the Issue, in this case being Integrated Registry Management

Services Private Limited

Rs. / INR Indian National Rupee

RTGS Real Time Gross Settlement

SEB State Electricity Board

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 EBP Circular Refers to SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI

circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018

SEBI Debt Regulations

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

Second ISIN Circular SEBI Circular CIR/DDHS/P/59/2018 dated March 28, 2018

Sole Advisor Sole Advisor of the issue in this case being SBI Capital Markets Limited

TDS Tax Deducted at Source

The Companies Act Companies Act, 2013, as amended and to the extent notified by the Government

of India and Companies Act, 1956 (to the extent applicable)

The Issue/ The

Offer/ Private

Placement

Base Issue Size of Rs. 200 crore with an option to retain oversubscription of Rs 325 crore

aggregating up to a total of the Issue Size, being, Rs.525 crore

Trustees Trustees for the Bondholders in this case being SBICAP Trustee Company Ltd..


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A. Issuer Information

Name and Address of the Registered and Corporate Office of the issuer

Name of the issuer NLC India Limited

Registered Office First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai-600 031

Corporate Office Block 1, Neyveli, Cuddalore District-607801,Tamil Nadu

Telephone No. 044-28364613,28364614, 28364615, 28364616, 28364617

Fax No. 044-28364619

Website www.nlcindia.com

E-Mail [email protected]

Date of Incorporation

NLC India Limited(NLCIL) was incorporated on November 14, 1956 as Neyveli Lignite Corporation

(Private) Limited, a Private Limited Company under the Companies Act, 1956, and subsequently, upon

conversion as a Public Limited Company, the name was changed to Neyveli Lignite Corporation Limited

on July 30, 1959, as amended by the Registrar of Companies, Tamilnadu. Further, the name of the

Company was changed to NLC India Limited on July 19, 2016.

Vision

To emerge as a leading Mining and Power Company, with Social Responsiveness accelerating Nation's

growth.

Business carried on by the company and its subsidiaries

NLCIL is a Navratna Government of India Enterprise. A pioneer in energy sector, NLCIL operates four

opencast lignite mines of total capacity of 30.6 million tonnes Per Annum (MTPA) at Neyveli, Tamil Nadu

and Barsingsar, Rajasthan, Five lignite based pithead Thermal Power Stations with an aggregate capacity

of 3640 MW – at Neyveli and Barsingsar. Company has set its footprint in generation of renewable energy

through its Wind Power Plant (51 MW) at Kazhuneerkulam, Tirunelveli in the State of Tamil Nadu and

Solar Power Plant (1350.06 MW) in Tamil Nadu and Solar Power Plant (2.5 MW) in Andaman.

Subsidiaries

The company has Two subsidiary companies.

(i) NLC Tamilnadu Power Limited (NTPL) (2x500MW): NLC Tamilnadu Power Limited (NTPL), is a

joint venture company of NLC India Ltd and M/s TANGEDCO (Tamil Nadu Generation and

Distribution Company), incorporated under the CompaniesAct,1956. The Equity participation

between NLCIL and TANGEDCO is at the ratio of 89:11. Unit 1 and Unit 2 have been declared for

Commercial Operation w.e.f., 18th June 2015 and 29th August 2015 respectively. The Company is

having a long term Power Purchase Agreement with Southern DISCOMS and the power generated

is being sold to cater the demand of Southern States. NTPL has entered fuel supply agreements with

Mahanadi Coal Fields Limited and Eastern Coal fields Limited and the balance portion of fuel supply

through Imports.

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Registered Office: First Floor, No. 8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food

Corporation of India, Chetpet, Chennai-600031, Tamil Nadu

(ii) Neyveli Uttar Pradesh Power Limited (3x660MW) : : Neyveli Uttar Pradesh Power Limited (NUPPL)

is a joint venture between NLC India Limited and Uttar Pradesh Rajya Vidyut Utpadan Nigam

Limited, in the State of Uttar Pradesh, for setting up of 3 x 660 MW coal based thermal power project

with a sanctioned project cost of Rs.17,237.80 Crore. The Equity participation between NLC India

Limited and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited is at the ratio of 51:49.NUPPL has

taken into possession of the entire land of 828 hectares required for this project. The Project is under

construction. Expected Commissioning of Unit I : November 2020; Unit II: May 2021 & Unit III:

November 2021. The Company is also developing Pachwara South Coal Block (PSCB) at Dumka,

Jharkhand having total reserve of 305 MT through Mine Developer and Operator (MDO). The Coal

from this block will be used as fuel for the project.

Registered Office: 6/42, Vipul Khand, Gomti Nagar, Lucknow-226010, Uttar Pradesh

Other JV Company

MNH Shakti Limited: Mahanadi Coalfields Limited, NLC India Limited and Hindalco jointly formed

MNH Shakti Limited with equity participation of 70:15:15 to implement 20.0 MTPA Coal Mining project

in Talabira, in the state of Odisha. The Talabira II & III Coal Blocks allocated for this purpose have been

cancelled pursuant to judgment of Hon’ble Supreme Court of India and the Coal Mines (Special

Provisions) Ordinance, 2014. The JV Company has proposed for winding up and necessary formalities

are being worked out by them. The above said Coal Blocks have since been allotted to NLCIL.

Registered Office: Anand Vihar, P.O. Jagruti Vihar, Burla, Sambalpur-768020

Compliance Officer and Company Secretary of the Issuer

Contact Person

Shri. K. Viswanath Corporate Office, Block 1, Neyveli TS, Cuddalore-607801, Tamil Nadu Tel no.: 04142-252205 Fax no.: 04142-252645 E-mail: [email protected]

Shri. Mukesh Agrawal Chief General Manager-Finance Corporate Office, Block 1, Neyveli TS, Cuddalore-607801, Tamil Nadu Tel: 04142-251961; Fax-04142-252645; E-mail: [email protected]

Chief Financial Officer of the Issuer

Shri. Rakesh Kumar CMD &Director-Finance(AC) Corporate Office, Block 1, Neyveli TS, Cuddalore-607801, Tamil Nadu Tel no.: 04142-252280 Fax no.: 04142-252543 E-mail: [email protected]

Arranger(s) of the issue ************************************

Registrar and Transfer Agent to Issue

Integrated Registry Management Services Private Limited Address: “Kences Towers” II Floor, No 1 Ramakrishna Street, North Usman Road, T Nagar, Chennai – 600017 Tel no.: 044 – 28140801 – 803





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Fax no.: 044 - 28142479 E-mail: [email protected] Website: www.integratedindia.in

Trustee for the Bondholders

SBICAP Trustee Company Limited Apeejay House, 6th Floor, 3,Dinshaw Wachha Road, Churchgate, Mumbai – 400 020 Mob:8879150014 Tel: (022) 43025514 Fax: (022) 22040465 Email : [email protected] Website : www.sbicaptrustee.com

Credit rating agencies for the Issue India Ratings & Research Private Limited

Address: 4th Floor, D South Block, #4, Rajiv Salai, Taramani, Chennai – 600 113 Tel no.: 044 4340 1727 Fax no.: 044 4340 1701 E-mail: [email protected] Website: www.indiaratings.co.in

ICRA Limited

Address: Karumuthu Centre, 5th Floor, #634, Annasalai, Nandanam, Chennai – 600035 Tel no.: 044 42974320/ 300. E-mail: [email protected] Website: www.icra.in

Auditors of the Issuer

PKKG Balasubramaniam & Associates, Chartered Accountants

FRN 001547S Address: Door No. 10/2, Eighth Street, Gandhi Nagar, Thiruvannamalai - 606 602 Tel no.: 044 - 24896819 E-mail:[email protected]

R. Subramanian and Company LLP Chartered Accountants

FRN 004137S/S200041 Address: New No 6 Old No 36, Krishna Swamy Avenue,Luz Mylapore, Chennai – 600 004 Tel no.: 044 - 24992261 E-mail:[email protected]

B. A Brief Summary of the business / activities of the Issuer and its line of business:

1. Overview:

The Company was incorporated on November 14, 1956 as Neyveli Lignite Corporation (Private) Limited, a Private Limited Company under the Companies Act, 1956, and subsequently, upon conversion as a Public Limited Company, the name was changed to Neyveli Lignite Corporation Limited on July 30, 1959, as amended by the Registrar of Companies, Tamilnadu. Further, the name of the Company was changed to NLC India Limited on July 19, 2016. The Company’s registered office is situated at First Floor, No. 8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai – 600 031, Tamil Nadu, India. The Company’s corporate office is situated at Block-1, Neyveli – 607 801, Cuddalore District, Tamil Nadu, India.

The Company is a Schedule “A” Central Public Sector Enterprise, under the administrative control of the Ministry of Coal and has been conferred with “Navratna” status by the Government of India in April 2011.

The Company is in the business of Lignite & Coal Mining and Power generation. The mining capacity of the Company is 30.6 MTPA out of which 3 Mines are located at Neyveli, Tami Nadu having capacity of 28.5 MTPA and one Mine having capacity of 2.1 MTPA is located at Barsingsar, Rajasthan. It is operating








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Thermal Power Stations at Neyveli, Tamil Nadu and one Thermal Power Station at Barsingsar, Rajasthan with a total installed thermal capacity of 3640 MW. Company has set its footprint in generation of renewable energy through its Wind Power Plant (51 MW) at Kazhuneerkulam, Tirunelveli in the State of Tamil Nadu and Solar Power Plant (1350.06 MW) in Tamil Nadu and Solar Power Plant (2.5 MW) in Andaman. The Company is also in the process of developing Talabira II & III coal block, Odisha having capacity of 20 MTPA. The Company has also commissioned through its JV Subsidiary company a coal based thermal Power station of 1000 MW (2 x 500 MW) at Tuticorin, Tamil Nadu which has been implemented through its JV company NLC Tamilnadu Power Limited (NTPL) with TANGEDCO, where the Company has 89% stake in the JV. The Company is also implementing (3x660 MW) coal based thermal power project at Ghatampur, Uttar Pradesh, through Neyveli Uttar Pradesh Power Limited (NUPPL) as a joint venture with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, where the Company has 51% stake. Further, Pachwara South Coal Block in Jharkhand with a capacity of 11 MTPA has been allotted as fuel link to NUPPL for Ghatampur, Uttar Pradesh thermal project.

Not just Mining and Power Generation, NLCIL has contributed significantly to the Socio-Economic development for more than half a century.

The business portfolio of the company is as under:

1. Lignite Mining 2. Thermal Power Generation

3. Solar Energy Generation

4. Wind Power Generation

5. Coal Mining

6. Power Trading

The Equity Shares of the Company are listed on BSE and NSE since 1994 and 2000 respectively.

2. Brief Status of On-going projects

a) Neyveli New Thermal Power Project (NNTPP)-Neyveli-1000 MW: Lignite based

Project cost: Rs 7,080.41 Crore (RCE).

Anticipated Commissioning during 2019-20

Unit I of 500 MW commissioned on 28th Dec, 2019

b) Expansion of Mine I (Area Expansion) & Expansion of Mine 1A

Project Cost : Rs. 709.06 Crore (RCE).

Environment clearance was accorded on 02.09.2015.

Mine development activities in Mine 1A is in progress through outsourcing mode.

Physical progress as on 31.12.2019 is 65.60%.

Presently, project is on hold.

c) Lignite based Bithnok Power Project (250 MW) and Barsingsar TPS Extension (250 MW) in

Rajasthan

Project Cost : Rs 4,308.89 crore (Bithnok Power Project Rs.2,196.30 Crore + Barsingsar TPS

Extension. Rs. 2,112.59 Crore).

Combined Expression of Interest (EOI) for Engineering Procurement Construction (EPC)

contract for both the projects were floated on 28th August 2015 and LOA was issued to M/s

Reliance Infrastructure on 21st November 2016.


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Both projects have been put on hold based on the communication received from Govt. of

Rajasthan and Rajasthan DISCOMs that they are not in a position to buy power, desires for

lowering the power tariff. Discussions are going on with Govt. of Rajasthan and the EPC

contractor for revival of the project.

d) NUPPL (Neyveli Uttar Pradesh Power Limited), Ghatampur TPS-through JV

Project Cost: Rs 17,237.80 Crore.

Anticipated Commissioning schedule:

Unit I: November 2020; Unit II: May 2021 & Unit III: November 2021.

All three main packages (GA1- Steam generator, GA2- Turbine generator & GA3-Balance of

Plants) have been awarded during the year 2016-17 and the project construction activities

are in progress.

• Physical progress as on 31.12.2019 is 52.10%.

e) Talabira II& III Coal Blocks in Odisha (20.0 MTPA)

• Project Cost Rs. 2,401.07 Crore.

• GoI has allotted Talabira II & III opencast coal mines of capacity 20.0 MTPA in the state of

Odisha in favour of NLC India Limited to meet the fuel requirement of the proposed End

Use Plant and JV-NTPL and Talabira Pit Head Thermal Power Plant of 4000 MW.

• Stage-I forest clearance has been issued by MoEF & CC 03 July 2018.

• MoEF & CC has accorded Environmental Clearance on 11th October 2018.

• Consent to Establish: Permission from State Pollution Control Board obtained on 07th

February 2019.

• Stage-II forest clearance has been issued by MoEF & CC on 28.03.2019.

• Consent to excavation permission obtained from Coal Controller on 29.03.2019.

• OCP has received the permission of tree felling for Forest and non Forest Land on 13.06.19.

f) Andaman Solar Power Project (20 MW)

Project Cost Rs.130.77 crore

According to the action plan issued by the Ministry of New & Renewable Energy (MNRE)

for the Andaman & Nicobar Islands and based on the tripartite MoU signed by the Company

with MNRE and Andaman & Nicobar Islands Administration, Solar PV Power Projects of 2

x 10 MW, integrated with 8 MW/hr. Battery Energy Storage System (BESS) is under

implementation.

Actions initiated to erect and install 20MW Solar Power Plants in Andaman & Nicobar

Islands.

MNRE sanctioned Central Financial Assistance (40 % of the discovered EPC Cost) for the

project on 18 Dec 2018. 2.5 MW solar plant installation completed in Dollygunj site on

28.12.2018 and the same was commissioned on 31.12.2018.


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g) Coal Block Development-Pachwara South (for Ghatampur TPS)

GOI has allotted Pachwara South Coal Block (Jharkhand) with a capacity of 11 MTPA for the

Ghatampur TPS (JV Company NUPPL) in July 2013.

MDO (Mine Development and Operation) contract has been awarded for carrying out

exploration and mining activities.

Exploratory drilling completed in October 2019 and Geological Report submitted to MoC

on 11.12.2019.

2. a. Projects in pipeline

i) Bithnok (Rajasthan) Lignite Mine (2.25 MTPA) & Hadla (Rajasthan) Lignite Mine (1.90

MTPA)

Project Cost: Rs. 1,036.08 Crore (Bithnok Mine: Rs.513.63 crore + Hadla Mine Rs. 522.45

crore).

Board accorded approval in March 2015.

MOE&F clearance for Bithnok Mine and Hadla Lignite Mine was issued in February 2016.

Compliance report for obtaining Stage-II Forestry clearance submitted.

Linked end use power projects activities put on hold awaiting GOI decision for reduction of

power tariff. Hence mine activities are on hold.

ii) Mine-III (Lignite) at Neyveli (11.50 MTPA)

Approval for Mining Plan from MoC is awaited.

Field inspection completed for Land acquisition.

iii) TPS-II 2nd Expansion (2 x 660 MW) at Neyveli

Tender finalisation is in process for major packages.

MoEF&CC has accorded Environmental Clearance on 29th October 2018.

iv) Talabira Thermal (3 x 800 MW) in Odisha

Administrative approval for acquisition of private land of 1,053.74 acres received from

Government of Odisha.

3. Brief History of the Issuer since its incorporation

History

S.No. Year Event

1. 1956 Formation of NLCIL as a Corporate body. NLCIL is born as a Government sponsored

Commercial concern.

2. 1961 The lignite seam was first exposed in 24thAugust 1961 for Mine I.

3. 1962 Synchronization of 1st unit of 600 MW Thermal Power Station-I and commencement of

regular mining of lignite in Mine I in May'62. .


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S.No. Year Event

4. 1970 Synchronization of Last unit of 600 MW Thermal Power Station-I in September'70.

5. 1978 In February 1978, Government of India sanctioned the Second Thermal Power Station (TS

II) of 630 MW capacity (3 X 210 MW) out of 1470 MW and Second Lignite Mine of capacity

4.7 MT of lignite per annum.

6. 1983 In Feb.'83, Government of India sanctioned the Second Thermal Power Station Expansion

from 630 MW to 1470 MW with addition of 4 units of 210 MW each and expansion of

Second Mine capacity from 4.7 Million Tonnes to 10.5 Million Tonnes.

7. 1984 The lignite seam in Mine-II was first exposed in September 1984.

8. 1985 The excavation of lignite from Mine II commenced in March, 1985.

9. 1986 Synchronization of 1stunit of 210 MW out of 1470 MW of Thermal Power Station-II in

March 1986.

10. 1993 Synchronization of Last unit of 1470 MW Thermal Power Station-II in June'93 .

11. 1994 Listed on BSE.

12. 1996 TPS I Expansion of 420 MW, was sanctioned by Government of India in February 1996.

13. 1998 Government of India sanctioned the project Mine-I A of 3 million tonnes of lignite per

annum in February'98.

14. 2000 Listed on NSE.

15. 2002 Synchronization of 1stunit of 420 MW Thermal Power Station-I Expansion in October 2002.

16. 2003 Synchronization of 2nd unit of 420 MW Thermal Power Station-I Expansion in July 2003.

The capacity of Mine I was increased from 6.5MT to 10.5MT of lignite per annum from

March 2003 under Mine-I expansion scheme.

The Mine IA project was completed on 30th March 2003.

17. 2004 Government of India sanctioned the Barsingsar Thermal Power Station 250 MW (2 X 125

MW) and the expansion of Mine-II from 10.5 MTPA to 15.0 MTPA of lignite in October

2004.

GOI sanctioned implementation of Barsingsar mine with a capacity of 2.1 MTPA of lignite

in December 2004.

18. 2005 Formation of NLC Tamil Nadu Power Limited(NTPL).

19. 2011 Received Navratna Status.

Unit-II of Barsingsar Thermal Power Station was commissioned on 29th December 2011.

20. 2012 Unit-I of Barsingsar Thermal Power Station was commissioned on 20th January 2012.

Formation of Neyveli Uttar Pradesh Power Limited (NUPPL).

21. 2013 South Pachwara (11.0 MTPA) in Jharkhand- Allotment to NLCIL on 25th July 2013 For

NUPPL.

22. 2014 1.5 MW out of 51 MW Wind Power Kazhuneerkulam, Tirunelveli, Tamil Nadu was

commissioned in 29th August 2014.

23. 2015 Commissioning of Unit-I & II of TPS II Expansion was in 5th July 2015 & 22ndApril 2015

respectively.

Unit 1 and Unit 2 of NLC Tamil Nadu Power Limited(NTPL)have been declared for

commercial operation w.e.f. 18th June 2015 and 29th August 2015.


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S.No. Year Event

Commissioning of Solar 10 MW in 28thSeptember,2015.

24. 2016 Allocation of Coal Blocks -Talabira II&III (20.0 MTPA)- For NLCIL on 2nd May,2016

Started Power Trading in Indian Energy Exchange from 19th June 2016 through NTPC

Vidyut Vyapar Nigam.

25. 2017 Commissioning of 51 MW Wind Power in 19th July, 2017.

Commissioning of Solar 130 MW in 31st Dec 2017.

26. 2018 Commissioning of 300 MW out of 500 MW Solar Power Plant during 2018.

Commissioning of 2.5 MW Solar Power Plant (Andaman) on 31st December,2018.

Commissioning of 1.06 MW Roof Top Solar during 25thSeptember,2018.

Unit 7 of TPS I for 100 MW retired on 22nd September,2018.

Category I Power trading license issued by CERC on 13th September,2018.

Member in Indian Energy Exchange from November,2018.

27. 2019 Commissioning of balance 200 MW out of 500 MW Solar Power Plant on 4thMarch 2019.

PPA with TANGEDCO for TPS I expired on 31st March,2019.

Power generated from TPS I is sold through Indian Energy Exchange from 1st April,2019.

Commissioning of 709 MW Solar Power Plant completed during September 2019.

Commissioning of NNTPS (1000 MW)Unit-I of 500 MW on 28th December,2019

4. Management perception of risk factors

An investment in Bonds involves a certain degree of risk. Investors should carefully consider all the information in this Offer Letter, including the risks and uncertainties described below, before making an investment in the Bonds. The risk factors set forth below do not purport to be complete or comprehensive in terms of all the risk factors that may arise in connection with our business or any decision to purchase, own or dispose of the Bonds. Additional risks and uncertainties not known to the Company or that the Company currently believes to be immaterial may also have an adverse effect on its business, prospects, results of operations and financial condition. If any of the following or any other risks actually occur, the Company’s business, prospects, results of operations and financial condition could be adversely affected and the price and value of your investment in the Bonds could decline such that you may lose all or part of your investment. You should not invest in the Issue unless you are prepared to accept the risk of losing all or part of your investment, and you should consult your own tax, financial and legal advisors about the particular consequences of an investment in the Bonds. The numbering of risk factors has been done to facilitate ease of reading and reference, and does not in any manner indicate the importance of one risk factor over another. Risk Related to our Business:

1. We are involved in legal, regulatory and arbitration proceedings that, if determined against us, may have an adverse impact on our business and financial condition.

There are certain outstanding legal proceedings against our Company, our directors and our employees pending at various levels of adjudication before various courts, tribunals, authorities and appellate bodies in India. Should any new development arise, such as change in applicable laws or rulings against us by the appellate courts or tribunals, we may need to make provisions in our financial statements, which may increase our expenses and current liabilities. In addition,


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our Company is presently and in future may be subject to risks of litigation including public interest litigation, in relation to the environmental impact of our projects. We cannot give any assurance that these legal proceedings will be decided in our favor. Any adverse decision may have a significant effect on our business including the financial condition of our Company, the implementation of our current or future projects and our results of operations. We receive occasional notices and complaints alleging various forms of violations by our company or its officials. Certain of these notices are also marked to the MoC, MoF, MoEF, CC, GOI or the CVC. While we respond to these notices as and when appropriate, we cannot assure you that they will not result in reputational losses or occupy the time of our management in the future.

2. We face certain operational risks specific to the mining of Lignite and operation of Lignite

based thermal power plants. NLCIL’s existing power plants utilize Lignite as a fuel. Lignite mining poses certain challenges that are unique to the industry. Mining of lignite is carried out by open cast mining techniques with high mechanization for excavation, transportation and disposal. Lignite is covered by overburden with thickness ranging from 55 to 150 meters. Further, the successful mining of lignite requires to depressurize the ground water below the lignite seam. Large scale pumping is required to be done continuously to avert heaving of the mine floor and consequent flooding of the mine pit. Therefore, continuous supply of electricity is required to maintain continuous mining operations. Strip mining eliminates existing vegetation and soil profile and to a large extent changing the general topography of the mined area. Lignite has a high content of volatile material which makes it easier to convert into gas and liquid petroleum products than higher ranking coals. However, its high moisture content and susceptibility to spontaneous combustion can cause problems in its transportation and storage. Further exposure to natural elements leads to crumbling which reduces the value of lignite as a fuel. Therefore, our lignite mining operations are subject to a number of operating risks. Below conditions and events include, among others:

Only a limited portion and area of the available lignite reserves being mineable in an economically viable manner;

Non-availability of mineable land in appropriate time will result in increase in production cost due to alternative measure to be taken like Diversion of the conveyor and leaving pocket land to be mined later by conventional mining.

Certain areas of our lignite mines requiring us to expend greater efforts towards evacuation of overburden including hard and compact boulders and water. This may lead to equipment damage and lower lignite recovery and power generation for such areas;

Lignite seams becoming thinner or being washed out, or a degradation in quality of the mined lignite due to higher moisture, ash or Sulphur content;

Our overburden dumps facing slope failure or inundation of mine pits;

Restrictions on the amount of water that we can draw for our mining operations. The depletion of water levels in connection with our mining operations may affect our ability to conduct such operations and may, where such depletion affects the water table, lead to unrest among residents in the area who are unable to access water for their consumption.;

The use of extensive conveyor belt systems both inside our mines and between our mines and power plants which may be exposed to the risk of conveyor belt failures and fires.;

Operation of our mines during the monsoon season requiring us to expend greater efforts towards excavating lignite and leading to the lignite being extracted having a higher level of moisture and lower calorific value. During this period, we may also face objections by local communities surrounding our mines due to evacuation of muddy water;

The unavailability of specialized materials, equipment or other critical supplies such as of the type, quantity and/or size required to meet production expectations including the


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availability of specialized mining equipments including bucket wheel excavators, spreaders, conveyors and other heavy equipment, either at a competitive price, or at all;

The lack of storage and transportation leading to wastage of raw material;

Wastage of raw material due to high combustibility of Lignite;

Further, the usage of Lignite as a fuel in our power plants exposes us to certain additional challenges including:

The necessity of using specialized power plant components including Lignite fired boilers which may not be available at a competitive price, or at all;

The usage of a fuel which is relatively low in calorific value, which may require special plant design and materials in order to achieve optimum generation capabilities;

Difficulties in using the Lignite as a fuel, particularly during the monsoon which may lead to higher moisture lignite, which may in turn result in inefficient plant performance or equipment damage;

Our limited ability to store an inventory of Lignite which may expose our power generation plants to production delays;

The presence of impurities like sand and Marcasite in Lignite would lead to slagging and fouling of boiler surfaces resulting in decreased efficiency and failure of boiler components.

The above risks may, individually or in the aggregate materially increase the consumption of Lignite in our power plants, our cost of mining and power generation operations and delay or disrupt production at particular mines or power stations, either permanently or for varying lengths of time, which could have material adverse effect on our business, operational efficiency and financial condition. Additionally, our operations involve high fixed costs and require us to generate pre-determined quantities of electricity and supply fixed quantities of Lignite. Any reduction in our ability to sustain or increase the level of production will have a material adverse effect on our results of operation and financial condition.

3. Power surrender results in lesser schedule of energy to NLCIL Power Plants and less revenue realization.

With the increased addition of Renewable Energy Projects, Power Surrender has become the

order of the day. Power Industry scenario in the country had changed completely and lot of

underutilization of power plants is happening leading to increased stressed assets.

Power Surrender started showing increased trend from 2015-16 and was maximum during 2017-

18. Power surrender results in lesser schedule of energy to NLCIL Power Plants and less revenue

realization through energy charges. Less schedule reduces the requirement of lignite for power

plants which ultimately results in lesser production in Mines.

NLCIL had started trading the Un-requisitioned surplus power or the surrendered power in the

market from June 2016, thus, trying to reduce the backing down of generation in the power plants

due to power surrender and further, to reduce the loss of production in Mines. Also, optimization

of lignite transfer price was resorted to maintain Merit Order so as to get sustained scheduling

of energy from NLCIL Power Plants.

4. Our new business ventures are subject to a number of risks and uncertainties.


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We have been engaged in the mining of Lignite in Neyveli, Tamil Nadu since 1956 and the generation of power from lignite fired power plants at the same location. We had also entered in renewable energy (solar and wind) at Tamil Nadu and Andaman. We have successfully expanded our operations of lignite mining and thermal power generation to Barsingsar, Rajasthan. Further, our JV company NUPPL’s power project is under construction stage at Ghatampur (Kanpur). In addition to above, company has expanded in coal mining with project at Talabira in Odisha and Pachwara South in Jharkhand. In order to pursue our corporate plan in respect of the capacity addition, we may have to take up projects at new locations, work with different types of geography, technology and in conditions which are not familiar to us. This will include the establishment of underground coal mines, development of coal fired power projects, implementation of renewable energy projects and the conduct of operations in remote and inaccessible locations including a potential expansion of our operations outside India. Our capacity addition plans are subject to a number of contingencies, including laws and regulations, governmental action, delays in obtaining permits or approvals, global prices of crude oil and other fuels for transportation, prices of fuel supplies required for plant operations, accidents, natural calamities and other factors beyond our control. Our Mining and Power projects generally have long gestation periods due to the process involved in their establishment. In addition to developing the projects, we will also need to find a suitable market for our power production and require us to execute PPAs in relation to any of our proposed projects. Contracts for construction and other activities relating to the projects are awarded at different times during the course of the projects. The scheduled completion targets for our power projects are subject to delays as a result of numerous risks and uncertainties such as:

non-availability of adequate financing on terms acceptable to us;

unforeseen engineering problems;

delays in definitive agreements or termination of existing agreements for the purchase of power;

changes in laws or regulations that make our current execution plans unprofitable or not feasible;

disputes involving workers at our projects;

force majeure events, such as floods, earthquakes, cyclones etc.; inability to secure suitable lignite or coal reserves, water or equipment, in each case to the extent required for the full planned capacity of our projects on competitive terms and in a timely manner; and

Delays in the construction of transportation or evacuation facilities and transmission lines.

Our projects are typically land intensive. In addition, our ability to acquire sites for our expansion plans depends on many factors, including whether the land is private or state-owned, whether the land is classified in a manner that allows its use for the purposes of our projects, and the willingness of the owners to sell or lease their land. In many cases, the area identified as a suitable site is owned by numerous small landowners. Acquisition of private land in India can involve many difficulties, including litigation relating to ownership, liens on the land, inaccurate title records, negotiations with numerous land owners, and obtaining government approvals. Land negotiations can be time consuming, require us to incur additional costs, and can involve a significant amount of attention and effort from our management. In certain cases, we may not be able to acquire land at all. Any of these factors could have a material adverse effect on our business, financial condition and operational efficiency. In addition, the public may oppose the acquisition or lease of land due to the perceived adverse impact mining may have on surrounding communities or the environment. We may face significant opposition to the development of our mines from local communities, non-government organizations and other parties. Such opposition or circumstances is beyond our control and even if we are able to overcome any such opposition, we may be subject to significant expenses


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arising from the rehabilitation and resettlement of communities affected by our projects. We have incurred in the past and will be required to incur in the future significant expenses towards the rehabilitation and resettlement of affected individuals and families. Obstacles involving proposed land acquisition have resulted in delays in the development of proposed projects as well as our having to abandon certain project proposals. We are subject to significant litigation in connection with land acquisition. Our industry is also subject to a number of laws and regulations and is highly regulated. We cannot guarantee that we will be able to obtain all the necessary approvals or clearances with respect to our expansion plans. In the event that such approvals are not obtained, our business, financial condition, prospects and results of operation may be materially and adversely affected. The occurrence of any of the foregoing could give rise to delays, cost overruns or the termination of a project. There can be no assurance that our projects under implementation and capacity addition programme will be completed in the time expected, or at all, or that their gestation period will not be affected by any or all of these factors. We cannot assure you that all potential liabilities that may arise from delays or shortfall in performance of contractors will be accurately estimated as part of the planned costs of the projects or that the damages that may be claimed from such contractors will be adequate to compensate any loss of revenues or profits resulting from such delays, shortfalls or disruptions. In addition, failure to complete a project according to its original specifications or schedule or at certain efficiency levels may result in higher costs, penalties or liquidated damages, lower returns on capital or reduced earnings and could render certain benefits under various government statutes becoming unavailable. In addition, most of our projects are dependent on external contractors for construction, installation, delivery and commissioning, as well as the supply and testing of key plant and equipment. We may only have limited control over the timing or quality of services, equipment or supplies provided by these contractors and are highly dependent on some of our contractors who supply specialized services and sophisticated and complex machinery. We may be exposed to risks relating to the quality of the services, equipment and supplies provided by contractors necessitating additional investments by us to ensure the adequate performance and delivery of contracted services or the financial condition of our contractors. We cannot assure you that the performance of our external contractors will meet our specifications or performance parameters or that they remain financially sound. Our contractors’ failure to perform or delay in performance could result in incremental cost and time overruns, which would adversely affect our expansion plans. In the event we terminate the contract, we may seek a replacement contractor or we may decide to complete the remaining work at the facility internally, with the help of other external contractors. If we are required to engage a new contractor or if we have to complete the contract ourselves, with the assistance of consultants, we will incur additional costs and the project will be further delayed. Disputes with contractors are time consuming, can be disruptive to our business and distracting to management. A dispute with a contractor that results in delays, or causes us to incur additional costs would have a material and adverse effect on our business and results of operations.

5. Our operations are subject to extensive government laws and regulations pertaining to, health, safety and environmental regulations, which require us to obtain and comply with the terms of various approvals, licenses and permits. We may incur material costs to comply with, or suffer material liabilities as a result of health, safety and environmental laws and regulations. Any failure to obtain, renew or comply with the terms of approvals, licenses and permits in a timely manner may have a material adverse effect on our results of operations and financial condition.

Our operations are subject to extensive laws and regulations pertaining to pollution and protection of the environment and health and safety of workers. These laws and regulations


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govern, among other things, emissions to the air, discharges onto land and into water, maintenance of safe conditions in the workplace, the remediation of contaminated sites, and the generation, handling, storage, transportation, treatment and disposal of waste materials, limitations on the amount of groundwater that we may draw, resettlement and afforestation requirements. The impact of such laws and regulations, or any changes to such laws or regulations, may be significant and may delay the commencement of, or cause interruptions to our operations. We also could incur significant costs, including cleanup costs, fines and civil and criminal sanctions, if we fail to comply with these laws and regulations or the terms of our permits. In addition, future changes to environmental laws and regulations, such as changes in laws and regulations relating to climate change, could result in substantial additional capital expenditure, taxes and reduced profitability from increased operating costs or in restrictions on our revenue generation, operations or strategic growth opportunities. For instance, Additional expenditures are being incurred for installation of FGD (Flue Gas Desulphurization) for complying with new emission norms in operating Thermal Units as well as in the upcoming projects. Though, the cost is recoverable thro tariff, this will have significant impact on total energy charge of the generating plant.

If we were to fail to meet environmental requirements or to have a major accident or disaster, we may also be subject to administrative, civil and criminal proceedings, as well as civil proceedings by environmental groups and other individuals, which could result in fines, penalties and damages against us as well as orders that could limit or halt or even cause closure of our operations, any of which could have a material adverse effect on our business, results of operations and financial condition. We may incur material costs and liabilities resulting from litigations and claims for damage to property or injury to persons arising from our operations. If we are pursued for sanctions, costs and liabilities, in respect of these matters, our operations and, as a result, our profitability could be materially and adversely affected. We may incur environmental liabilities in respect of our operations even for environmental damage caused by acts or omissions of our contractors. We are required to indemnify the contractors, as well as the GoI and the respective state governments, for environmental damage and related losses caused by our exploration and production operations subject to limited exceptions. Our insurance coverage does not cover all potential liabilities that may arise as a result of environmental damage caused by contractors, our joint venture partners or by us and this may result in a material adverse impact on our results of operations.

6. Any inability to effectively execute our projects, and manage our growth or to successfully implement our business plan and growth strategy could have an adverse effect on our operations, results and financial condition. We expect that the execution of new power projects, our expansion plans and our growth strategy will place significant strains on our management, financial and other resources. Further, continued expansion increases the challenges involved in financial and technical management, recruitment, training and retaining sufficient skilled technical and management personnel, developing and improving our internal administrative infrastructure. We may intend to evaluate and consider expansion in the future to pursue existing and potential market opportunities. Our inability to manage our business plan effectively and execute our growth strategy could have an adverse effect on our operations, results, financial condition and cash flows. If we are unable to successfully implement our business plan and growth strategy, our business, results of operations and financial condition would be materially and adversely affected. In order to manage the execution of new projects we must implement and improve operational systems, procedures and internal controls on a timely basis. If we fail to implement and improve these systems, procedures and controls on a timely basis, or if there are weaknesses in our internal controls that would result in inconsistent internal standard operating procedures, we may not be able to meet our expected schedule of project.


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7. Our operations are extensively regulated by the GoI, State Governments and various statutory and regulatory authorities. The compliance costs, liabilities and requirements associated with existing statutory and regulatory requirements and adverse regulatory or policy developments can have a significant impact on our operations. Our operations are subject to extensive regulation by the GoI, the relevant State Governments within which we operate, and various central, State, provincial and municipal statutory and regulatory authorities and agencies in India, including without limitation the Ministry of Coal, Ministry of Environment and Forests, Central Electricity Regulatory Commission, Central Electricity Authority, Ministry of Mines, the Directorate General of Mines Safety, Controller of Explosives and State Pollution Control Boards and electricity regulators. These authorities and agencies regulate many aspects of India’s coal, lignite and power generation industry, including, among others, the following aspects:

grant and renewal of coal and lignite exploration rights and mining rights;

pricing of power tariffs and adjustments for various variable costs;

transfer pricing for our lignite and coal, and ceilings on the limits to which operations and maintenance expenses may be factored into the same;

acquisition of land and surface rights;

environmental matters and pollution control, including forest land related approvals, authorization for the handling and disposal of hazardous wastes;

grant of mining licences and sanctions;

allocation of new coal blocks which are subject to specific conditions and stipulations failing which such blocks may be deallocated;

grant of approval for blasting, explosives and depillaring;

conditions in relation to emissions and consent to operate power plants;

conditions relating to continuing mining operations; safety and health standards;

labour matters;

distribution of coal in accordance with applicable GoI policies;

allocation of coal linkages and coal supply under long-term Fuel Supply Agreements (“FSAs”)

royalty, cess and other duties and taxes payable.

The compliance costs, liabilities and requirements associated with existing and any new policies, statutory and regulatory requirements can have a significant impact on our operations. Mining royalties and other related costs have demonstrated increases in the recent past which may continue going forward. There can be no assurance that our results of operations will not be materially adversely affected by any future changes in such regulations and policies. In addition, a significant portion of our total lignite production is used in our thermal power plants and the power generated is sold to electricity transmission and distribution utilities. Our business, operations and prospects may therefore be affected by various policies, statutory and regulatory requirements and developments that affect the thermal power industry in India in general or public sector power utilities in particular, including those introduced or administered by the Ministry of Power, GoI and the Central Electricity Authority (“CEA”) and CERC. We are subject to various other governmental policies, laws and regulations in the mining and power sector. The GoI has historically played a key role, and is expected to continue to play a key role, in regulating, reforming and restructuring the mining and power industry. It exercises substantial control over the growth of the industry. Further, in the exploration licenses and mining leases in which we have an interest, the GoI retains the right to direct our actions in certain circumstances. Our ability to pursue our own strategy fully in relation to mining and power generation in accordance with our own commercial interests has been affected by such conditions. In addition, the GoI plays an important commercial role in the execution of mining


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and power generation activities in India. Although the fiscal regime applicable to the mining and power generation industry has been relatively stable in the past, there can be no assurance that this stability will continue in the future. Presently, the Ministry of Coal (“MoC”) discharges certain regulatory functions relating to the mining of coal and lignite in India. Additionally, the cabinet has, in June 2013 approved the Coal Regulatory Authority Bill, 2013 (the “Bill”) which seeks to set up a regulator to address the issues of coal sector such as quality, supply and pricing. Our Company is currently unable to predict the impact the Bill on our business, financial condition, results of operations and prospects, as well as the final form that the Bill will take. The power sector is under the overall control of the Ministry of Power (“MoP”), with the Central Electricity Regulatory Commission regulating the power tariff of the power sector. In the future, Indian regulators, including the MoC and MoP, may adopt new policies, laws or regulations. Our business could be materially and adversely affected by any unfavorable regulatory changes. In addition, existing Indian regulations require that we apply for and obtain various GoI licenses and other approvals, grants of mining leases, and renewals or extensions of mining leases, in order for us to conduct our exploration, development and production activities. If in the future we are unable to obtain any such necessary approvals, our level of reserves and production would be adversely affected. Variations including retrospective pricing variations, during price fixation or truing up exercises conducted by the CERC or the MoC may potentially have an adverse effect on our results of operations. We are currently involved in appealing several orders which pertain to the fixation of tariffs for our power plants, as well as the fixation of transfer price for our lignite supplies. An adverse determination on the same may materially and adversely affect our results of operations and financial performance.

8. Certain directors and employees of our Company may face allegations of engaging in corrupt practices, which may adversely affect our business reputation and operations. Certain directors and employees of our Company may face allegations of engaging in corrupt practices. We have in the past experienced incidents involving our employees and officers relating to various corrupt practices. While we have initiated various internal compliance procedures to address such corrupt practices, there can be no assurance that we will be able to prevent such incidents in the future. Such corrupt activities by officers, directors, employees and personnel of our Company may continue to result in, loss of revenue, resources and property of our Company, as well as disruption in operations, which could have a material adverse effect on our business, operations and financial results. In addition, such corrupt practices have historically attracted and may continue to attract, significant media attention in India, which could harm our reputation.

9. Our expansion plans require significant capital expenditure and if we are unable to obtain the necessary funds for expansion, our business plan and prospects may be adversely affected. Our Company will need significant capital to finance our business plan and in particular, our plan for capacity expansion. We are presently engaged in construction activities for power projects representing 2,997.50 MW, including 1,980 MW undertaken by our joint venture companies and mining projects (coal and lignite) representing 35.0 MTPA, including 11.0 MTPA undertaken by joint venture companies, which are in different stages of progress. We are also venturing into the renewable energy sector with proposals for wind power project and solar power project. The scheduled completion dates of our expansion plans and budgets with respect to our expansion plans are management estimates only and we cannot assure you that there will not be cost and time overruns.


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We expect approximately 30% of our proposed capital expenditures to be funded by internal accruals from either us or from our Joint Venture Partners and/ the remaining approximately 70% to be funded by debt financing. Our ability to finance our capital expenditure plans is subject to a number of risks, contingencies and other factors, some of which are beyond our control, including our results of operations, tariff regulations, interest rates, borrowing or lending restrictions, if any, changes to applicable laws and regulation, the amount of dividend required to be paid to our shareholders and other costs and our ability to obtain financing on acceptable terms. In addition, as there are a number of large-scale infrastructure projects currently under development in India, our ability to obtain additional funding may be impaired and we may not be able to receive adequate debt funding on commercially reasonable terms in time in India. In the event, we may be required to seek funding internationally, which may result in exposure to foreign exchange risks and which may require approval under, or be restricted by, laws and regulations relating to exchange controls, including RBI regulations. In case we are unable to raise required funds for expansion/new projects, our business plans and prospects may be adversely affected.

10. A significant part of our business transactions are with government entities or agencies, which may expose us to various risks, including additional regulatory scrutiny and delayed collection of receivables. We may be subject to additional regulatory or other scrutiny associated with commercial transactions with government owned or controlled entities and agencies. In addition, there may be delays associated with collection of receivables from government owned or controlled entities, including from our significant customers that are power utilities. Although we believe our provisions for such doubtful accounts to be adequate, we cannot assure you that such provisions will be adequate and our failure to collect such debts may adversely affect our results of operation and/or cash inflows. Our operations involve significant working capital requirements and delayed collection of our receivables could adversely affect our liquidity. In addition, government contracts are subject to specific procurement regulations and a variety of other socio-economic requirements. We must also comply with various regulations applicable to government companies relating to employment practices, record keeping and accounting. These regulations and requirements affect how we transact business with our customers and, in some instances, impose additional costs on our business operations. We are also subject to government audits, investigations, and proceedings. If we violate applicable rules and regulations, fail to comply with contractual or regulatory requirements or do not satisfy an audit, we may be subject to a variety of penalties including monetary penalties and criminal and civil sanctions, which may harm our reputation and could have a material adverse impact on our business, financial condition, and results of operations.

11. We have incurred significant indebtedness and intend to incur additional substantial borrowings in connection with the development of our power projects and other investments. The indebtedness incurred and the conditions and restrictions imposed by our financing arrangements could adversely impact our ability to conduct our business operations and we may not be able to meet our obligations under these debt financing arrangements. As of September 30, 2019, we had total outstanding indebtedness of Rs. 16,232.50 crore. The indebtedness incurred and the restrictions imposed on us by our current or future loan arrangements could adversely impact our ability to conduct our business operations and result in other significant adverse consequences, including, but not limited to, the following:

we may be required to dedicate a significant portion of our cash flow towards repayment of our debt, which will reduce the availability of cash flow to fund working capital, capital expenditures, acquisitions and other general corporate requirements;


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we are, and may in future be, required to maintain certain financial ratios and satisfy certain financial or other covenants. If we breach any financial or other covenants contained in any of our financing arrangements, we may be required to immediately repay our borrowings either in whole or in part, together with any related costs. Furthermore, certain of our financing arrangements contain cross default provisions which could be automatically triggered by defaults under other financing arrangements. Additionally, because some of our borrowings are secured against our assets, lenders may attach those assets to enforce their claims against the debt;

our ability to obtain additional financing through debt or equity instruments in the future may be impaired;

if we are unable to service our indebtedness, it could cause the lenders to declare an event of default under the loan agreements and we will be required to immediately repay our borrowings either in whole or in part together with related costs;

we may be required to obtain approval from our lenders, regarding, among other things, our reorganization, amalgamation or merger, our incurrence of additional indebtedness, the disposition of assets and the expansion of our business and we cannot assure you that we will receive such approvals in a timely manner or at all;

increasing our vulnerability to general adverse economic, industry and competitive conditions;

it could limit our flexibility in planning for, or reacting to, changes in our business and the industry; and

Increasing our project cost since we capitalise our interest during the construction of our facilities.

As of September 30, 2019, we have Rs. 1,822.74 crore (including foreign currency loan of Rs. 447.74 crore equivalents to 57.90 Million Euros) of unsecured loans. Our ability to meet our debt service obligations and to repay our outstanding borrowings will depend primarily upon the cash flow generated by our business over time, as well as our ability to tap the capital markets as a source of capital. We cannot assure you that we will generate sufficient cash to enable us to service our existing or future borrowings, comply with covenants or fund other liquidity needs. If we fail to meet our debt service obligations or financial or other covenants required under the financing documents, the relevant lenders could declare us in default under the terms of our borrowings, cancel unutilized facilities, accelerate the maturity of our obligations or enforce against their security, which may include taking over the existing operational units or ongoing projects. We cannot assure you that, in the event of any such acceleration, we will have sufficient resources to repay these borrowings. Failure to meet our obligations under the debt financing arrangements could have a material adverse effect on our cash flows, business and results of operations. Our planned and any proposed future expansion projects may be materially and adversely affected if we are unable to obtain funding for such capital expenditures on satisfactory terms, or at all, including as a result of any of our existing facilities becoming repayable before its due date. Further, any downgrade in our credit rating may affect our ability to acquire debt financing at current interest rates, and, may adversely affect our business prospect, result of operation and financial condition.

12. The proposed lignite/coal price fixation for integrated mines by CERC may adversely affect our results of operations, our cash flow from operations and could result in an increase in future competition for us. In the recent CERC Tariff Regulation 2019, CERC had notified that Determination of Lignite

Price, hitherto carried out by Ministry of Coal will be taken over by CERC for Power Plants with

Integrated Mines. Separate Regulations will be notified by CERC for the determination of lignite

price and till such time the present practice of price determination by Ministry of Coal will

continue.


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It is apprehended that the shifting of the authority to determine lignite price from Ministry of

Coal to CERC may have significant impact on the price of the lignite since the approach of CERC

in determination of lignite price will be different when compared to the approach of Ministry of

Coal.

13. The interests of our Directors may cause conflicts of interest in the ordinary course of our business. Conflicts may arise in the ordinary course of decision making for our Company. Some of our Non-Executive Directors may or may not be on the Board of Directors of certain companies which are engaged in businesses similar to the business of our Company. There is no assurance that our Directors will not provide competitive services or compete with our Company’s business in which we are already present or will enter into in future.

14. Our business involves numerous other risks that may not be covered by insurance. Our current operations and expansion plans are subject to risks generally associated with capacity addition, power generation, and the related receipt, distribution, storage and transportation of fuel, equipment, materials, products and wastes. These hazards include explosions, fires, earthquakes and other natural disasters, mechanical failures, accidents, acts of terrorism, operational problems, delay in development by third-parties of, or congestion in, transmission lines, transportation interruptions, chemical or oil spills, discharges of toxic or hazardous substances or gases, and other environmental risks. These hazards can cause personal injury and loss of life, environmental damage and severe damage to or destruction of property and equipment, and may result in the limitation or interruption of our business operations and the imposition of civil or criminal liabilities. We are also subject to risks such as operational failure due to faulty equipment and business interruption due to strikes and work stoppages. While we maintain insurance of our operating plants, mines and projects with ranges of coverage that we believe to be adequate, we are not fully insured against all potential hazards and events incidental to our business and cannot assure you that our insurance coverage will be adequate and available to cover all the losses incurred in relation to such types of incidents. We are not covered for certain risks such as war, for machinery, loss of profits or earnings, damaged or destroyed data or records, or damage or loss due to pollution or contamination. The occurrence of any such events may have a material adverse effect on our business, financial condition and results of operations and the trading price of our Equity Shares.

15. We are exposed to risks brought about by asset concentration in a specific geographic region. We operate three opencast lignite mines of total capacity of 28.5 MTPA at Neyveli,Tamil Nadu and one open cast lignite mine of capacity 2.1 MTPA at Barsingsar, Rajasthan and four thermal power stations with a total installed capacity of 2890 MW at Neyveli,Tamil Nadu and one thermal power station at Barsingsar, Rajasthan with an installed capacity of 250 MW. The occurrence of certain events such as natural catastrophes, terrorist attacks and other acts of violence or events in our project area may affect our operations and as a result, our financial conditions. Further, consequence of any catastrophic damage to installations or other event that could adversely affect the excavation activities and/ or generation of power in a limited geographic area, including catastrophic damage to installations, natural catastrophes, terrorist attacks and other acts of violence or events may also impact us substantially. Hence, future production will be highly dependent upon our success in acquiring or finding and developing additional and new reserves in a timely and cost-effective manner in Neyveli and other locations. If we are unsuccessful in our above efforts, our total proved reserves and production will decline over time, which will adversely affect our results of operations and financial condition.


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16. Our financial results may be subject to seasonal variations and inclement weather could adversely affect our business and results of operations. Our revenues and results may be affected by seasonal factors. For example, inclement weather, during monsoon season, may delay or disrupt development of our power projects undergoing construction and affect the generation of power at our operational power plants due to the increased moisture content of Lignite/coal and decrease in its calorific value. Further, at such times our coal and lignite production may also be adversely affected. Further, demand for our power may vary as a result of power consumption by consumer businesses which are seasonal in nature and a downturn in demand for power by such consumers enables us to carry out maintenance and overhauling activity during this period, which, in turn, reduces our revenue during such periods.

17. We may encounter problems relating to the establishment or operation of joint ventures, which could adversely impact our strategy, business and results of operations. We have entered into three joint venture agreements for the incorporation of joint venture companies, namely, NTPL, NUPPL and MNH Shakti. These joint ventures enable us to undertake coal based power generation and to commence coal mining business. Our business is therefore dependent on developing and maintaining continuing relationships with our current or potential strategic joint venture partner(s). These joint ventures are subject to the risk of non-performance by our joint venture partners of their obligations, including their financial obligations, in respect of the joint venture. Joint venture partners may have business interests or goals that may differ from our business interests or goals. Any disputes that may arise between us and our joint venture partners may cause delays in completion or the suspension or abandonment of the venture. Any of the foregoing may have an adverse effect on our business, prospects, financial condition and results of operations and our ability to implement our growth strategy. Additionally, all these joint venture agreements contain clauses which prevent us from transferring or selling our equity shares in the joint venture company without the prior written approval of the other joint venture partner. We are also required to offer our shares in the joint venture to the other joint venture partner, in the event that we intend to transfer or sell our shares, before transferring or selling the same to a third party. We also require the assistance of our joint venture partners to make and obtain various regulatory approvals and licences and are dependent on them to make and obtain such applications. These clauses limit our ability to make optimum use of our investment or exit these companies at our discretion, which may have an adverse impact on our financial conditions.

18. If we are unable to adapt to technological changes, our business could suffer Our future success will depend in part on our ability to respond to technological advances and emerging power generation industry standards and practices on a cost-effective and timely basis. Changes in technology and high fuel costs of thermal power projects may make newer generation power projects or equipment more competitive than ours or may require us to make additional capital expenditures to upgrade our facilities. In addition, there are other technologies that can produce electricity, most notably oil, nuclear, hydroelectric, fuel cells, micro turbines, biomass, windmills, solar thermal and photovoltaic (solar) cells etc.. We need to continue to invest in new and more advanced technologies and equipments to enable us to respond to the emerging power generation industry standards and practices in a cost-effective and timely manner that is competitive with other thermal power projects and other methods of power generation. The development and implementation of such technology entails significant technical and business risks. We cannot assure you that we will successfully implement new technologies effectively or adapt our processing systems to customer requirements or emerging industry standards. If we are unable, for technical, legal, financial or other reasons, to adapt in a timely manner to changing market conditions, customer requirements or technological changes,


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our business, financial performance and the trading price of our Equity Shares could be adversely affected.

19. We outsource significant operations and may become liable for defaults by our contractors. We have in the past and will continue to engage entities on a contract basis to perform specific functions in our mining operations including overburden and lignite removal and operation and maintenance of power plants. These contractors would be required to perform certain specific and highly specialized tasks critical to our business. We have been increasing the volumes of work that we entrust to these contractors and outsourced service providers in the recent past. The operations of our mine at Barsingsar is entirely outsourced. Our coal mine at Talabira & Pachwara are also proposed to operate in MDO mode. In the course of such operations, we are dependent to an extent on the operating efficiencies of the contractor and may be exposed to liability for actions taken by the operating contractor. Additionally, contractual counterparties may not be able to meet their financial or other obligations to their counterparties or to their employees/ workers on their rolls. In such events, company may have to bear additional implications.

20. Our success will depend on our ability to attract and retain our key personnel. If we are unable to do so, it would adversely affect our business and results of operations. Our future success substantially depends on the continued service and performance of the members of our senior management team and other key personnel in our business for project implementation, management and running of our daily operations, and the planning and execution of our business strategy. Our business is dependent on our maintaining a skilled workforce. There is an intense competition for experienced senior management and other key personnel with technical and industry expertise in the power and mining business and if we lose the services of any of these or other key individuals and are unable to find suitable replacements in a timely manner, our ability to realize our strategic objectives could be impaired. We face specific disadvantages in our efforts to attract and retain our management. As a public sector undertaking, GoI policies regulate and control the emoluments, benefits and perquisites that we pay to our employees, including our key managerial and technical personnel and these policies may not permit us to pay at market rates. Consequently, private sector market participants that are able to pay at market rates in power generation, coal and lignite mining and other activities in the industry have been attracting qualified personnel and diluting the talent pool available to public sector undertakings.

21. Business disruptions could seriously harm our future revenue and financial condition and increase our costs and expenses. Our operations could be subject to war, terrorism, earthquakes, telecommunications failures, water shortages, tsunamis, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics, and other natural or manmade disasters or business interruptions. The occurrence of any of these business disruptions could seriously harm our revenue and financial condition and increase our costs and expenses. The ultimate impact on us and our general infrastructure as a result of such natural or manmade disasters or business interruptions is unknown. Our revenue, profitability and financial condition could suffer in the event of any such natural or manmade disasters or business interruptions. We cannot assure that we will be able to effectively carry out our operations in the event such disruption occurs.

22. Total expenditure under our resettlement and rehabilitation policy may exceed the amounts we anticipate.


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We incur expenditure toward resettlement and rehabilitation activities at our projects, including amounts payable to affected persons, resettlement grants, providing community facilities and compensatory afforestation, greenbelt development and other expenditure based on our Rehabilitation Action Plan. Expenditure towards resettlement and rehabilitation activities is beyond the control of our management. For instance, significant opposition by local communities, non-governmental organizations and other parties to the land acquisition process may put pressure on us to increase our resettlement and rehabilitation related compensation and expenditure. We cannot assure you that the amount we have provisioned to spend will be sufficient to cover our actual expenditure and our obligations toward resettlement and rehabilitation activities.

23. Significant increases in our employee remuneration and benefits may adversely affect our expenses and may adversely affect our financial condition. Employee remuneration and benefit expenses represent the largest component of our total expenditure. Employee remuneration and benefits expenses in Financial year 2018-19 were Rs. 2,963.68 crores which is 41.47 % of our total revenue. Salaries, wages and benefits for our non-executive employees is governed by an agreement between the recognized trade unions and us. The last Memorandum of Settlement, which was finalized in 2019 with effect from January 1, 2017 is effective for a period of ten years. Benefits of our executive employees are determined by the GoI and are fixed for a period of ten years. The expenditure on account of Employee cost may also increase on account of hike in Dearness Allowance, promotions, rate of Provident Fund and pension, gratuity etc, which may affect the profitability adversely in the future.

24. We may be adversely affected by changes in GoI’s policy relating to us. We generally manage our business on a day to day basis independently from the GoI. Changes in the terms of, or the loss of, our “Navratna” status may decrease our autonomy and our ability to compete with other participants in the Indian power and mining sector. Any significant changes in the Government’s shareholding in the company, and/or pursuit by the Government of policies that are not in our interests, could adversely affect our business.

25. Our business, financial condition and results of operations may be materially and adversely affected if we are unable to avail certain tax benefits or if there are any adverse changes to the tax regime in the future. Our business may get affected by any change in Income Tax rule in respect of benefit available for Power Sector, Mining and Renewable Energy and also change in the Government policy in respect of indirect tax and its rates.

26. There are some criminal case pending against some of our employees and any adverse decision would adversely impact the business, financial condition and reputation of our Company. A criminal case involving four of our employees has been filed by Deputy Director of Mine Safety, Chennai and is currently pending before the District Munsiff cum Judicial Magistrate, Neyveli. This matter relates to an industrial accident resulting in a fatality in Mine II. We cannot provide any assurance that the case will be decided in favour of our employees. Further, there is no assurance that similar proceedings will not be initiated against us or our employees in the future. Such proceedings could divert management time and attention, and consume financial resources in their defence or prosecution. Two criminal cases involving four of our employees has been filed by Director, Industrial Safety &Health, Chennai and is currently pending before the Chief Judicial Magistrate, Cuddalore. One matter relates to a Non-Fatal in Thermal Power Station –II Expansion industrial accident, and another matter relates to a Fire accident wherein no injury caused to any workforce in Thermal


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Power Station -1. We cannot provide any assurance that the case will be decided in favour of our employees. Further, there is no assurance that similar proceedings will not be initiated against us or our employees in the future. Such proceedings could divert management time and attention, and consume financial resources in their defence or prosecution.

27. Our results of operations could be adversely affected by strikes, work stoppages or increased wage demands by our or our contractors’ work force or any other kind of disputes involving our work force. We had entered into contracts/agreements with independent contractors and two co-operative societies to complete specified assignments and these contractors may be required to source the labour necessary to complete such assignments. We employ significant number of employees and engage various contractors who provide us with labourers at our coal and lignite mines and power projects for execution of outsourced non-perennial work. These contract workmen are represented by many trade unions registered under the Trade Union Act 1926, which have political affiliations. The work stoppages caused by contract workmen may have an adverse effect on our business, and results of operations. Although we do not engage these labourers directly, it is possible under Indian law that we may be held responsible for wage payments, or benefits and amenities to labourers engaged by our independent contractors should such contractors default on wage payments or in providing benefits and amenities. Any requirement to fund such payments may adversely affect our business, financial condition and results of operations. We are ensuring prompt payment of wages and statutory contributions like PF, ESI, etc., as stipulated under statues by continues monitoring and follow up. Further, we enable the contractor employers to enter in to settlement with the trade unions representing contract workmen on enhanced wages and benefits, Further, the unskilled vacancies are filled up by the contract workmen based on the seniority list prepared based on the directives of Honourable Supreme court of India. However, demands like equal pay for equal wages and continuous deployment of contract workmen are persisting

28. We are subject to many labour laws and trade union activity.

India has stringent labour laws that protect the interests of workers, including legislation that sets forth detailed procedures for employee removsal and dispute resolution. This makes it difficult for us to maintain flexible human resource policies, discharge employees or downsize and this may adversely affect our business and profitability. Our employees/workmen are represented by two recognised trade unions among other registered trade unions. Our Company has entered into many agreements with the recognised unions binding on all unionised categories of employees. We have in the past suffered disruptions in our operations due to strikes by our employees, most recently in the FY 2015-16. However, many proactive steps have been taken to avoid any Industrial Unrest leading to disruption in production activities which has led to peaceful wage settlement in 2018 and no major issues are foreseen which may lead to the Industrial Unrest.

29. We have not registered our name and logo or the trademarks of our joint ventures or subsidiaries, and any failure to protect our intellectual property rights may adversely affect our business.

Currently, we do not have a registered trademark over our name and logo for our Company or for any of our joint ventures or subsidiaries under the Trade Marks Act, 1999, and consequently we do not enjoy the statutory protections accorded to a trademark registered in India and there is no assurance that we will be able to register the same trademark in our favour. Any failure to protect our intellectual property rights may adversely affect our business. We hold a registered


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patent for production of “Humigold” a plant nutrient developed from lignite by the Company’s R&D wing. The commercialization of the above product in association with NRDC, an Enterprise of DSIR (Department of Scientific and Industrial Research), Ministry of Science and Technology, is in progress. There is no assurance that we will be able to make profit from such commercialization.

30. Any disruptions to our business during the implementation or operation of our Enterprise Resource Planning Platform (the “ERP”) and disaster recovery could materially adversely affect our ability to carry on our business efficiently. We have invested heavily in information technologies designed to help us better monitor and run our business. We are in the process of implementing our ERP and disaster recovery program to cover our business processes and provide a real time view and redundancy for the performance of our power stations and mines. Our inability to successfully implement ERP system and disaster recovery program may lead to disruptions in our business and operations and may materially and adversely affect our financial performance and results of operations.

31. We have significant contingent liabilities that we have not provided for in our balance sheet As on March 31, 2019, contingent liabilities not provided for were as follows:

Contingent Liabilities As of 31st March, 2019 (Rs in Crore)

Estimated Value of contracts remaining to be executed on Capital accounts not provided for

5,786.09

Claims against the Company / disputed demands not acknowledged as debt

5,084.19

Guarantees issued by Company 563.90

Total 11,434.18

In the event of crystallisation of above contingent liability at a time or in varying time period, we may have to provide for in our accounts, which may adversely affect financial statements.

32. Our present and future mining operations are subject to various operating risks, which could result in materially increased operating expenses and decreased production levels and could materially and adversely affect our results of operations Our mining operations are subject to a number of operating risks. These conditions and events include, among others:

Difficult mining conditions resulting from hydrogeological, geotechnical, or other conditions;

adverse weather and natural disasters, such as heavy rains particularly in Neyveli which is located in the monsoon affected belt and prone to cyclones, flooding and other natural events affecting operations, transportation or customers;

the unavailability of skilled and qualified labour and contractors;

the unavailability of materials, equipment (including SME, conveyors and other heavy earthmoving machinery) or other critical supplies such as explosives, fuel, lubricants and other consumables of the type, quantity and/or size required to meet production expectations;

the lack of / limited capacity of rail infrastructure and longer distance from rail transportation facilities and rail transportation delays or interruptions;

delays, challenges to, and difficulties in acquiring, maintaining or renewing necessary permits, including environmental permits, or mining or surface rights;

accessibility of project sites;


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delays or difficulties in, the unavailability of, or unexpected increases in the cost of acquiring, developing and permitting new mining reserves and surface rights;

acquisition of adequate land for our mining projects in a timely manner or at all;

competition and/or conflicts with other natural resource extraction activities and production within our operating areas;

a major incident or accident at a mine site, such as slope failures in large open cast mines, that causes all or part of the operations of a mine to cease for some period of time;

seepage of water in overburden benches interfering with our mining operations;

unexpected equipment failures and maintenance problems;

law and order problems;

loss of man days due to industrial labour problems and unauthorized absentees of labour;

power interruptions; and

current and future health, safety and environmental regulations or changes in interpretation or implementation of current regulations.

These conditions and events may materially increase our cost of mining operations and delay or disrupt production at particular mines either permanently or for varying lengths of time, which could have material adverse effect on our business, results of operations and financial condition. Additionally, our operations involve high fixed costs, and any reduction in our ability to sustain or increase the level of production will have a material adverse effect on our results of operation and financial condition.

33. If we fail to acquire or find and develop additional reserves, or if we fail to redevelop existing mining fields, our reserves, production and profitability may decline materially from their current levels over time. Successful execution of our mining strategy depends critically on sustaining long-term reserves replacement of Lignite and coal. If mining resources are not progressed in a timely and efficient manner, we will be unable to sustain long-term replacement of our reserves. Unless we conduct successful exploration and development activities or acquire properties containing proved reserves, or both, our proved reserves will decline over time as existing reserves are being exploited. In addition, the volume of production from properties containing mines generally declines as reserves are depleted. Any inability to develop long term resources may have an adverse effect on our business, prospects, financial condition and results of operations and our ability to implement our growth strategy.

34. Geological complications during project execution may negatively impact our time and cost. We may experience unanticipated geological complications during the execution of our mining or thermal projects, especially development of lignite and coal mines. Our construction projects are designed based on certain assumptions made to the locations of our power projects after studies have been made. However, we cannot guarantee that such assumptions would be accurate. For example, during the execution of our construction projects, we may discover adverse rock strata, terrains, or trapped gases and our designs may be unsuitable for dealing with such geology. These geological factors may result in costs and/or time overruns or the project may have to be abandoned due to impossibility or because the project is no longer economically feasible.

35. Estimates of coal and lignite reserves are subject to assumptions, and if the actual amounts of such reserves are less than estimated, or if the quality of the coal or lignite reserves is lower than estimated, our results of operations and financial condition may be adversely affected.

Actual reserves and production levels in coal and lignite mines or any future coal or lignite blocks that we may be allotted may differ significantly from estimates, as such estimates are subject to


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various assumptions such as interpretations of geological data obtained from sampling techniques and projected rates of production in the future. Additionally, there is no assurance that the mines from which our Company intends to source our coal requirements for our power projects, or those linkages awarded to us, would be able to meet all our coal requirements. If the quantity or quality of our coal or lignite reserves has been overestimated, we would deplete our coal or lignite reserves more quickly than anticipated or incur increased costs to process relatively lower levels of coal or lignite if the quality of coal or lignite is inferior than anticipated and in such event, we may have to source the required coal in the open market. Prices for coal in the open market may exceed the cost at which we might otherwise be able to extract coal, and may involve substantial transportation costs, which would increase our operating costs and it may adversely affect our business, financial condition and results of operations. We may not be able to identify a suitable source of coal in the open market. In addition, there can be no assurances that we will be successful in mining coal or lignite from the blocks that have been or may be allotted to us at a low enough cost for such blocks to benefit the profitability of our business or that the mined will meet the coal specifications required for use in our power stations.

36. If the assumptions underlying our reclamation, mine closure and void closure obligations are materially inaccurate, our costs could be significantly greater than anticipated. The GoI establishes operational, reclamation and closure standards for all aspects of surface mining. We have significant ongoing mine closure and rehabilitation obligations. We estimate our total rehabilitation and mine-closing liabilities based on permit requirements, engineering studies and our engineering expertise related to these requirements. The estimate of ultimate reclamation liability is reviewed periodically by our management and engineers. The final mine closure and rehabilitation liability at the end of the life of the mine depends on the outcome of various events during the period of operation and the conditions proposed by the MoEF for mine closure. We are required to deposit amounts in escrow on the basis of current estimates for such liability. As on September 30, 2019, the available escrow deposit towards such liability amounted to Rs. 215.44 crore. The estimated liability can change significantly if actual costs vary from our original assumptions or if governmental regulations change significantly, which could have a material adverse effect on our business, financial condition, and results of operations.

37. We depend on key equipment and machinery to conduct our lignite mining operations. Acquisition of mining equipment is capital intensive, and if such equipment is not utilized in a productive and efficient manner, we may not realize the benefits we expect from such equipment and our operations and profitability may be adversely affected. Our lignite mining and processing operations depend on various key equipment and heavy earthmoving machinery including Bucket Wheel Excavators and Spreaders. Some of the equipment which we use in our open cast mines and production facilities is more than 40 years old and may require maintenance, upgradation or replacement. In order for us to develop and operate large open cast mines and develop mechanized underground mining operations, we need to invest in additional advanced technologies and higher capacity equipment. As acquisition of mining equipment is capital intensive, if such equipment cannot be utilized in a productive and efficient manner as a result of various circumstances, we may not fully realize the benefits we expect from such equipment and our operations and profitability may be adversely affected. Further, if there is any potential delay or default on the part of equipment suppliers or if we are unable to acquire advanced technology or equipment in a timely manner or fail to appropriately upgrade existing technology and equipment, we may not be able to fully exploit our reserves, which could have an adverse effect on our business, financial condition, results of operations and prospects. In particular, there are a limited number of suppliers for heavy earthmoving machinery, some of which are imported. Moreover, due to the significant expansion of mining investments worldwide, mining equipment prices have increased


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significantly in recent years. Increase in the cost of mining equipment and spares may increase our cost of production and could adversely affect our profitability.

38. Any shortage in the availability or the reliability of transportation infrastructure and capacities for the offtake of our coal may adversely affect our business and results of operations. We will depend primarily on a combination of rail, road and sea transportation to deliver coal to our coal based power plants. The availability of coal for our power plants may be constrained by inadequate transportation capacities, including non-availability of adequate transport infrastructure. We may also be dependent on third party road transportation providers, including truckers, for the supply from the mine to the beneficiation facilities and the railway sidings and further for the supply of coal to our power plants. Non-availability of adequate road transportation, including in the form of transportation strikes could, in the future, have an adverse effect on our receipt of materials and offtake arrangements for coal produced by us. In addition, road and rail transportation may be adversely affected as a result of adverse weather conditions, mechanical failures, infrastructure damage, accidents, strikes, insurgency threats in the regions we operate in or other factors beyond our control, which could adversely affect our ability to supply coal and comply with any power supply obligations under our power purchase agreements. If we are unable to secure adequate rail or road transportation capacities or secure economically viable alternative modes of transportation for the purchase of coal for our power projects, our business, results of operations and financial condition may be materially and adversely affected.

39. Accumulation of dues beyond the permissible period to a considerable extent

The default in payment of power bills, tariff arrear bills and Renewable energy bills by Discoms

results in the accumulation of dues beyond the permissible period to a considerable extent. Some

of the Discoms have disputed the tariff arrears amount and gone for appeal in Appellate

authority of Electricity. The bills for Renewable energy projects are pending for a period of more

than a year.

The Discoms are continuously pursued for realisation of the dues through letters, personal

meetings etc., Further, actions are being taken legally against the appeal filed by Discoms against

the tariff arrears matter.

40. Our PPAs may exposes us to certain risks that may affect our future results of operations.

Our profitability is largely a function of our ability to operate our power projects at optimal levels as per minimum performance standards that may be determined for us from time to time by national bodies and our ability to manage our costs. Any failure to meet such minimum performance standard or manage our costs may have an adverse effect on our business and results of operation. Further, we have entered into certain long-term PPAs. Such long-term arrangements have inherent risks which may not be within our control as they restrict our operational and financial flexibility. For example, our long-term PPAs provide for the sale of power to the customers at tariffs and terms determined by the CERC. In addition, we derive a substantial portion of our sales of electricity from SEBs and state owned distribution companies through long-term PPAs. However, in the event that such PPAs are terminated prematurely, or not renewed or extended after the initial term expires, and if we are unable to enter into purchase agreements with other customers, this may have an adverse effect on our business, financial condition and results of operations.


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41. Activities in the power generation business can be dangerous and can cause injury to people or property in certain circumstances. This could subject us to significant disruptions in our business, legal and regulatory actions which could adversely affect our business, financial condition and results of operations. The power generation business requires us to work under potentially dangerous circumstances, with highly inflammable and explosive materials. Despite compliance with requisite safety requirements and standards, our operations are subject to hazards associated with handling of dangerous materials. If improperly handled or subjected to unsuitable conditions, these materials could hurt our employees or other persons, cause damage to our properties and properties of others and harm the environment. Due to the nature of these materials, we may be liable for certain costs related to hazardous materials, including cost for health related claims, or removal or treatment of such substances, including claims and litigation from our current or former employees or third parties for injuries arising from occupational exposure to materials or other hazards at our power stations. This could subject us to significant disruption in our business, legal and regulatory actions, which could adversely affect our business, financial condition and results of operations.

42. Our operations and our expansion plans have significant water requirements and we may not be able to ensure regular and adequate availability of water. Water is a key input for thermal power generation and our operations and the proposed expansion of our generation capacity will be dependent on, among other things, our ability to ensure unconstrained and undiminished availability of water during the life cycle of our existing and planned power stations. Changing weather patterns and inconsistent rainfall can hamper water supply at our power stations. Although we create reservoirs to hold water to cover any temporary shortfall, these reservoirs do not have sufficient capacity to sustain supply to the power stations for extended periods of time. We rely on water supply arrangements with certain state governments and state government bodies. Any interstate water disputes may affect the ability of these state governments to supply water to us. Water is a limited and politically sensitive resource, and has to be carefully allocated by the state governments for use between several groups of users. In the event of water shortages, our power projects may be required to reduce their water consumption, which would reduce their power generation capability. Expansion of our generation capacity and the development of new power plants cannot be initiated unless we have regular and adequate availability of water for these projects. We are unable to assure you that we will receive the regular and adequate quantities of water for the construction and/or operation of these power plants.

43. We undertake regular renovation and modernization schemes which require significant capital expenditure. Many of our stations are old and our average station life is 25 years. We undertake renovation and modernization schemes with a focus on feasible and cost effective technology upgrade, efficiency improvements to upgrade the old units to the latest designs. We propose to invest significant over the next five years in the renovation and modernization of various projects. Our renovation and modernization schemes require significant expenditures of capital. If we were not able to obtain the financing necessary to implement these schemes, our operating performance may suffer. Any degradation in our operating performance would have an adverse effect on our financial results.

44. If we are unable to commence operations as expected, our results of operations will be adversely affected.


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Our power projects have long gestation periods due to the process involved in commissioning power projects. Additionally, power projects typically require months or even years after being commissioned before positive cash flows can be generated, if at all. In addition, given the amount of developmental activity in the power sector in India, the commercial viability of our power projects may need to be re-evaluated and we may not be able to realize any benefits or returns on investments as estimated. The scheduled completion targets for our power projects are estimates and are subject to delays as a result of, among other things, contractor performance shortfalls, unforeseen engineering problems, dispute with workers, force majeure events, availability of financing, unanticipated cost increases or changes in scope and inability in obtaining certain property rights, fuel supply and government approvals, any of which could give rise to cost overruns or the termination of a power project’s development. There can be no assurance that our power projects will be completed in the time expected, or at all, or that their gestation period will not be affected by any or all of these factors. We cannot assure you that all potential liabilities that may arise from delays or shortfall in performance, will be covered or that the damages that may be claimed from such contractors shall be adequate to cover any loss of profits resulting from such delays, shortfalls or disruptions.

45. We may not be selected for projects we bid for in the future or those projects that we will bid upon in the future, if selected, may not be finalised within the expected time frame or on expected terms. We may submit bids for various power projects from time to time as mandated by the competitive bidding guidelines of the GoI tariff policy effective from January 6, 2011. There might be delays in the bid selection process or our bids, may not be selected or, if selected, may not be finalised within the expected time frame or on expected terms or at all owing to a variety of reasons which are beyond our control, including an exercise of discretion by the government or customers and greater resources of our competitors to make a competitive bid. Further, there is no assurance that we may qualify to submit bids.

46. Significant increases in prices or shortages of building materials may increase our cost of construction. The cost of construction of our projects is affected by the availability, cost and quality of the raw materials. The prices and supply of these and other raw materials depend on factors not under our control, including general economic conditions, competition, production levels, transport costs and import duties. If, for any reason, we are unable to obtain such raw materials in the quantities we need and at reasonable prices, our ability to meet our material requirements for our projects may be impaired, our construction schedules may be disrupted and our reputation and financial condition may be adversely affected.

47. Any downgrading of the ratings assigned to our debt could have a negative impact on our business. We have been conferred with AAA- Stable ratings for our bank facilities by ICRA Limited (“ICRA”), Brickwork Ratings India Private Limited (“BRICK”), Credit Analysis & Research Limited (“CARE”), CRISIL Limited (“CRISIL”) and India Ratings and Research Private Limited. Any adverse revisions to the credit ratings for our debt facilities by the above rating agencies or any new adverse ratings may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. It may also make our existing borrowings more expensive to finance and increase the interest rates and terms on which we avail our loans. This could have a material adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures, and the trading price of our Equity Shares.


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External Risk Factors

48. The global financial crisis and global and domestic economic conditions may have a material adverse effect on our business, financial condition and results of operations. In the past, global financial markets experienced a period of unprecedented turmoil and upheaval characterized by extreme volatility and declines in prices of securities, diminished liquidity and credit availability, inability to access capital markets, the bankruptcy, failure, collapse, nationalization or sale of financial institutions and an unprecedented level of governmental intervention. The Indian economy and financial markets were also significantly impacted by such global economic, financial and market conditions. Due to the conditions in the global and domestic financial markets, we cannot be certain that funding will be available or that we would be able to raise funds at affordable cost, if needed or to the extent required and we may be unable to implement our strategy, including our exploration and development plans.

49. Changes in the GoI’s policies in the future could delay the liberalization of the Indian economy and adversely affect economic conditions in India generally, which may impact our future prospects. Since 1991, successive Indian governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant. Although the current government has announced policies and taken initiatives that support the economic liberalization policies that have been pursued by previous governments, the rate of economic liberalization may change, and specific laws and policies affecting banking and finance companies, foreign investment and other matters affecting investment in our securities may change as well. Any major change in government policies might affect the growth of the Indian economy and thereby our growth prospects. Additionally, any change in these policies may have a significant impact on the mining and power sector and business and economic conditions in India generally, which may adversely affect our business, our future financial performance and the price of our Equity Shares.

50. Our ability to raise foreign capital is constrained by global economic conditions and conditions in foreign financial markets. Our ability to raise foreign capital is constrained by the conditions of these markets. The global capital and credit markets have recently been experiencing periods of extreme volatility and disruption. The global financial crisis, concerns over recession, inflation or deflation, energy costs, geopolitical issues, commodity prices and the availability and cost of credit, have contributed to unprecedented levels of market volatility and diminished expectations for the global economy and the capital and consumer markets. These factors, combined with others, may impact our ability to raise capital in foreign markets. An inability to raise foreign capital or access foreign credit markets would have a material adverse effect on our business and financial condition.

51. Our ability to raise foreign capital may be constrained by Indian law. The limitations on raising foreign debt may have an adverse effect on our business growth, financial condition and results of operation. As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing sources for our power projects under development and future investment plans and hence could constrain our ability to obtain


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financings on competitive terms and refinance existing indebtedness. In addition, we cannot assure you that the required approvals will be granted to us without onerous conditions, or at all. The limitations on foreign debt may have an adverse effect on our business growth, financial condition and results of operations.

52. Depreciation of the Rupee against foreign currencies may have an adverse effect on our results of operations and financial conditions. As of September 30, 2019 we had Foreign Currency (“FC”) borrowings of Rs. 447.74 crore (Equivalent to 57.90 Million Euro, 1 Euro = Rs. 77.3284). We further incur significant foreign exchange denominated expenditures in procuring equipment and spares from time to time. Accordingly, depreciation of the Rupee against these currencies will increase the Rupee cost to us of servicing and repaying our FC borrowings and managing our FC expenditure. Since the current tariff regulations allow us to pass through foreign exchange fluctuations through our tariffs, we do not currently hedge our FC exposure. If as a result of future changes in tariff regulations, we are unable to recover the costs of foreign exchange variations through our tariffs, we may be required to use hedging arrangements, which may not fully protect us from foreign exchange fluctuations.

53. Any downgrading of India’s debt rating by an international rating agency could have a negative impact on our business. Any adverse revisions to India’s credit ratings for domestic and international debt by international rating agencies may adversely impact our ability to raise additional financing, and the interest rates and other commercial terms at which such additional financing is available. This could have a material adverse effect on our business and future financial performance, our ability to obtain financing for capital expenditures, and the trading price of our Equity Shares.

54. The use of alternative energy sources for power generation could reduce coal and lignite consumption by Indian electric power generators, which could result in lower demand for our coal and lignite Gas-fired generation has the potential to displace coal and lignite fired generation. The use of natural gas in the energy industry has been gaining significance in the Indian market with its share in the primary energy market. With increased spending on infrastructure in the oil and natural gas sector, oil and natural gas may become easily available to the power generation companies, increasing their use as an alternative energy source. Further, many of the new power plants needed to meet increasing demand for Indian electricity generation may be fired by natural gas because gas-fired plants are cheaper to construct and permits to construct these plants are easier to obtain, as natural gas is seen as having a lower environmental impact than coal-fired generators. Additionally, wind power is also becoming increasingly popular as a renewable energy source. In addition, possible advances in technologies and incentives, such as tax credits, to enhance the economics of renewable energy sources could make these sources more competitive with lignite and coal. Any reduction in the amount of coal or lignite consumed by the power sector in India could reduce the demand and price of coal that we mine and sell, thereby, reducing our revenues and materially and adversely affecting our business and results of operations.

55. Demand for power in India may not increase as we anticipate.

It is generally believed that, demand for power in India will increase in connection with expected increases in India’s Gross Domestic Product (“GDP”). However, there can be no assurance that demand for power in India will increase to the extent we expect or at all. In the event demand for power in India does not increase as we expect, our results of operations and expansion strategy may be materially and adversely affected.


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Most of our present power plants are connected to the Southern Regional Grid. Moreover, most

of our power stations are pit head stations and any reduction in demand for power from our

thermal power stations may lead to a reduction in demand for our lignite production.

56. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely affect the financial markets and our business. Terrorist attacks and other acts of violence or war may negatively affect the Indian markets. Terrorist attacks and other acts of violence or war may also result in a loss of business confidence and ultimately adversely affect our business. In addition, any deterioration in relations between India and its neighbouring countries might result in investor concern about stability in the region, which could adversely affect the price of our market capitalisation. India has also witnessed civil disturbances in the past, and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on us. Such incidents could also create a larger perception that investment in Indian companies involves a higher degree of risk, and could have an adverse impact on our business and the price of our Equity Shares.

57. Companies operating in India are subject to a variety of central and state government taxes and surcharges. We are subject to taxes and other levies imposed by the Central or State Governments in India, including customs duties, goods and service tax, income tax and other taxes, duties or surcharges introduced on a permanent or temporary basis from time to time. The central and state tax scheme in India is extensive and subject to change from time to time. Any adverse changes in any of the taxes levied by the Central or State Governments may adversely affect our business and results of operations.

Risk Relating to the Issue:

58. The Issuer is required to create a debenture redemption reserve (“DRR”) equivalent to 25% of

the value of the Debenture offered through this Issue out of profits available for distribution

of dividends. In the absence of sufficient profits, we may not be able to transfer adequate

amounts to the DRR.

Sub rule 7 of Rule 18 of the Companies (Share Capital and Debenture) Rules, 2014 and Section 71

of the Companies Act states that any company that intends to issue debentures must create a

DRR to which adequate amounts shall be credited out of the profits of the company available for

payment of dividend until the debentures are redeemed. The quantum of DRR to be created

before the redemption liability actually arises in normal circumstances should be ‘adequate’

which has been prescribed to be 25% of the value of debentures issued through public issue. As

further clarified by the DRR Circular, the amount to be credited as DRR will be carved out of the

profits of the Issuer only and there is no obligation on the part of the Issuer to create DRR if there

is no profit or no adequate profit for the year to pay dividends for the particular year.

Accordingly, if we are unable to generate adequate profits, the DRR created by us may not be

adequate to meet the 25% of the value of the NCDs issued.

59. There has been only a limited trading in the bonds of such nature and the price of the Bonds

may be volatile subject to fluctuations.

The Bonds have no established market and there is no assurance that an active market for these

Bonds will develop or be sustained. Further, the liquidity and price of the Bonds may vary with


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changes in market and economic conditions, the Issuer’s financial condition and other factors

that may be beyond the Issuer’s control.

60. There is no guarantee that the Bonds will be listed on the Stock Exchange(s) in a timely

manner or at all, or that monies refundable to Eligible Investors will be refunded in a timely

manner.

In accordance with Indian law and practice, approval for listing and trading of the Bonds will

not be granted until after the Bonds have been allotted. While issuer will use best efforts to ensure

that all steps for completion of the necessary formalities for allotment, listing and commencement

of trading on the Stock Exchange(s) are taken within the time prescribed by SEBI or applicable

law, there may be a failure or delay in listing the Bonds on the Stock Exchange(s). Issuer cannot

assure you that any monies refundable on account of (a) withdrawal of the Issue, or (b) failure to

obtain final approval from the Stock Exchange(s) for listing of the Debentures, will be refunded

in a timely manner. The Issuer shall, however, refund any such monies, with interest due and

payable thereon, as prescribed under applicable law.

61. Eligible Investors may not be able to recover, on a timely basis or at all, the full value of

outstanding amounts on the Bonds.

The Issuer’s ability to pay interest accrued and the principal amount outstanding from time to

time in connection with the Bonds is subject to various factors, including the Issuer’s financial

condition, profitability and the general economic conditions in India and in the global financial

markets.

62. Changes in interest rates may affect the price of the Bonds.

Securities where a fixed rate of interest is offered, such as the Bonds, are subject to price risk. The

price of such securities will vary inversely with changes in prevailing interest rates, i.e., when

interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices

increase. The extent of fall or rise in the prices is a function of the coupon rate, days to maturity

and increase or decrease in prevailing interest rates. Increased rates of interest, which may

accompany inflation and/or a growing economy, may have a negative effect on the price of the

Bonds.

63. A downgrade in credit rating of the Bonds may affect the price of the Bonds.

The Bonds have been assigned “AAA Stable” -ratings by rating agencies. We cannot guarantee that this rating will not be downgraded, suspended or withdrawn at any time during the tenor of the Bonds. Any downgrade, suspension or withdrawal in the credit rating on the Bonds may lower the price of the Bonds.

64. Credit ratings may not reflect all risks.

ICRA Limited and India Rating and Research Private Limited have assigned credit ratings to Bonds. The ratings may not reflect the potential impact of all risks related to structure, market, additional factors discussed above, and other factors that may affect the value of the Bonds. A credit rating is not a recommendation to buy, sell or hold securities and may be revised or withdrawn by the rating agency at any time.

65. Payments on the Bonds will be subordinated to certain tax and other liabilities preferred by

law.

The payment on the Bonds will be subordinated to certain liabilities preferred by law, such as claims of the GoI on account of taxes, and certain liabilities incurred in the ordinary course of the


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Issuer’s business. In an event of default in excess of the DRR, in particular, in an event of bankruptcy, liquidation or winding-up, the Issuer’s assets will be available to meet payment obligations on the Bonds only after all liabilities that rank senior to the Bonds have been paid and, in such event, there may not be sufficient assets remaining, after paying amounts relating to these claims, to pay amounts due on the Bonds.

66. Risks in Solar Projects

Land acquisition for the solar projects. Due to decreasing trend in the solar tariff there is a

possibility of termination or short closure or power surrender from the existing solar projects

.Forfeiture of agreed tariff due to delay in commissioning of the project with in control period

prescribed by TNERC for tariff purpose, when the projects are executed under preferential tariff

scheme. Degradation of power generation capability of the module with in plant life will result

in high maintenance cost and reduction in revenue. Difficulty is faced in recruitment and

retention of skilled man power during project execution stage due to adverse health issue faced

by employee.

5. Corporate Structure: (FLOW CHART)

Note : CSR : Corporate Social Responsibility, TA : Township Administration, L& DC : Learning and

Development Centre, NUPPL : Neyveli Uttar Pradesh Power Limited, NTPL : NLC Tamil Nadu Power

Limited, IEW : Industrial Engineering Wing, PBD : Project & Business Development, CARD : Centre for

Applied Research and Development

Chairman cum Managing Director-NLCIL

Corporate Functions

Director HRDirector Finance

CVO

Operations

Director Mines

Director Power

Business

Director Planning &

Projects

• Employee Welfare and Amenities

• Medical Services

• CSR

• TA

• L & DC

• Public Relations & RTI

• Commercial

• Company Accounts & Audit

• Management Services

• Board Section

• Regional Office

• Mines operations

• Land Acquisition

• Mine Planning

• Coal Co-ordination

• Safety

Vigilance Dept.

• Thermal Power Plants

• NUPPL

• NTPL

• Power Station Engg.

• PBD

• IEW & Contracts

• Material Management / Disposal

• Corporate Environment Cell

• CARD

• Computer Services


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6. Project cost and means of financing, in case of funding of new projects

The funds being raised by the Issuer through present issue of Bonds are not meant for financing any particular project. The fund will be utilized to replace the equity deployed in the projects and operation over the normative level by the debt, and for the purpose of corporate requirements of regular business activities.

7. Dividend Policy:

The declaration and payment of dividend is recommended by the Board and approved by the shareholders of NLC India Limited. NLCIL has paid dividends to the Government and its other shareholders consistently. Detailed Dividend Policy is available under following link: https://www.nlcindia.com/investor/dividenddistributionpolicy_15042017.pdf Our Company has paid dividend for last ten Financial years as under:

Rs. per Share

Financial Year Interim Final Total

2018-19 4.53 - 4.53

2017-18 4.23 0.27 4.50

2016-17 7.34 - 7.34

2015-16 1.80 1.20 3.00

2014-15 1.80 1.00 2.80

2013-14 1.00 1.80 2.80

2012-13 1.00 1.80 2.80

2011-12 - 2.80 2.80

2010-11 - 2.30 2.30

2009-10 1.00 1.00 2.00

2008-09 - 2.00 2.00

8. Key Operational and Financial Parameters for the last 3 Audited years:

Key Operational and Financial Parameters of standalone results as extracted from the audited statement of

the past three years and Unaudited Results subject to limited review for half year ended 30.09.2019 are as

follows:

(Rs.in Crores)

Particulars As on

30.09.2019 (Limited Review)

2018-19 (Audited)

2017-18 (Audited)

2016-17 (Audited)

Net worth 12,933.49 12,393.53 13,135.53 12,046.65

Total debt 16,232.50 13,166.31 8,719.81 6,959.15

Non-Current Maturities of Long term Borrowing

11,546.87 8,316.51 6,050.29 5,040.62

Short term Borrowing-Working Capital Loan

3,353.96 3,668.00 1,457.80 1,546.09

Current Maturities of long term borrowing

1,331.67 1,181.80 1,211.72 372.45

Net Fixed Assets 12,579.14 11,684.43 10,574.11 9,625.03

https://www.nlcindia.com/investor/dividenddistributionpolicy_15042017.pdf


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Particulars As on

30.09.2019 (Limited Review)

2018-19 (Audited)

2017-18 (Audited)

2016-17 (Audited)

Non-Current Assets 26,167.14 24,529.00 21,303.20 18,549.92

Cash and Cash equivalents 20.73 13.82 12.63 22.07

Current Investments - - - -

Current Assets(excluding Cash and Cash Equivalent)

10,731.32 9,019.59 10,122.23 8,686.69

Current Liabilities# 2,679.35 3236.61 3,079.88 2,370.82

Regulatory Deferral Account Debit Balance

1156.09 1119.93 1068.35 250.69

Regulatory Deferral Account Credit Balance

2438.78 2438.81 4484.08 3809.55

Net Revenue from Operations 3,513.55 7,145.92 8,496.20 8,652.59

EBITDA 1,665.40 3,306.89 3,647.36 3,186.22

EBIT 1,296.87 2,561.17 2,786.21 2,503.15

Finance Cost 346.99 390.09 204.98 169.06

Profit After Tax 659.82 1,266.97 1,848.78 2,368.81

Dividend Amount - 669.42 646.58 1,121.97

Current Ratio^ 1.98 1.57 1.39 1.41

Interest Coverage Ratio 4.79 8.39 18.08 22.95

Gross Debt/ Equity Ratio* 1.00 0.77 0.55 0.45

Debt Service Coverage Ratio 1.99 1.78 6.40 7.15

*Gross Debt excluding Working Capital Loan.

# Excluding Short Term Borrowings and Current Maturities of long term borrowing

^ Current Ratio includes the impact of regulatory deferral balances.

Key Operational and Financial Parameters of consolidated results as extracted from the audited statement

of the past three years and Unaudited Results but subject to limited review for half year ended 30.09.2019

are as follows:

(Rs.in Crores)

Particulars As on 30.09.2019 (Limited Review)

2018-19 (Audited)

2017-18 (Audited)

2016-17 (Audited)

Net worth 13,052.89 12,651.64 13,152.92 11,982.83

Total debt 24209.23 20,598.40 13,215.37 11,478.65

Of which – Non Current Maturities of Long term Borrowing

18426.63 14,377.29 9,380.34 8,536.56

Short term Borrowing-Working Capital Loan

3958.15 4,546.53 2,130.53 2,125.23

Current Maturities of long term borrowing

1824.45 1,674.58 1,704.50 816.86

Net Fixed Assets 18,419.20 17,657.95 16,765.32 15,997.19

Non-Current Assets 36,271.23 33,316.26 27,235.90 23,401.40

Cash and Cash equivalents 28.25 18.49 101.93 63.42

Current Investments - -

Current Assets(excluding Cash and Cash Equivalent)

11347.68 10,469.44 10,034.18 9,771.58

Current Liabilities # 4003.22 4,724.55 3,787.84 3,264.38

Regulatory Deferral Account Debit Balance

1585.53 1476.10 1068.35 250.69


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Regulatory Deferral Account Credit Balance

2438.78 2438.81 4484.08 3809.55

Net Revenue from Operations 4,508.63 9,870.93 11,288.39 11,185.73

EBITDA 1,929.77 4,417.29 4,540.70 4,101.18

EBIT 1,376.68 3,296.53 3,309.08 3,057.65

Finance Cost 536.91 699.92 547.85 588.28

Profit After Tax 554.71 1,537.35 1,956.78 2,456.66

Dividend Amount - 669.42 648.99 1,121.97

Current Ratio^ 1.77 1.50 1.30 1.42

Interest Coverage Ratio 3.59 6.26 8.40 8.15

Gross Debt/ Equity Ratio* 1.55 1.27 0.84 0.78

Debt Service Coverage Ratio 1.55 1.68 3.37 1.00

*Gross Debt excluding Working Capital Loan.

# Excluding Short Term Borrowings and Current Maturities of long term borrowing ^ Current Ratio includes the impact of regulatory deferral balances.

Gross Debt-Equity Ratio (Standalone basis): (Based on Financials of 30.09.2019)

Particulars Before the issue of bonds After the issue of bonds#

Total Borrowing (Rs. crores)* 12,878.54 13,078.54

Net-worth (Rs. crores) 12,933.49 12,933.49

Borrowings / Equity Ratio 1.00 1.01

*Excluding Working Capital Loan

# considering the base issue size of Rs 200. crore.

The Issuer has provided the abridged audited consolidated and standalone financial information in this Information Memorandum. Investors can also visit the following link on our website for detailed information on financials:

https://www.nlcindia.com/new_website/financereport.php

C. Details regarding the Directors of the Issuer (as on 13.01.2020)

Presently, the Board of NLC India Limited comprises Chairman cum Managing Director (CMD) and

other Functional Directors, Government Nominee Directors and Independent Directors. As on

13.01.2020, there were 12 Directors, of which five were Functional Directors including Chairman cum

Managing Director, Two Government Nominee Director and five Independent Directors.

Particulars Board structure Actual Strength as on 13.01.2020

Chairman cum Managing Director 1 1

Functional Directors 5 4

Government Nominee Directors 2 2

Independent Directors 8 5

Total 16 12

1. Details of the current Directors:

S. no.

Name, Designation and DIN

Age (yrs)

Address Director

since Details of other Directorships

1. Shri. Rakesh Kumar Chairman-cum- Managing Director and Director Finance

56 K-22, J.N. Salai, Block-8 Neyveli – 607 801.

September, 28,2018 (CMD) & Director

1. NLC Tamil Nadu Power Ltd

2. Neyveli Uttar Pradesh Power Ltd

https://www.nlcindia.com/new_website/financereport.php


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S. no.


Age (yrs)

Address Director


( Addl. Charge) DIN: 02865335

(Finance) Addl. Charge and May 23, 2012 (Director/ Finance)

2. Shri. Vinod Kumar Tiwari Director DIN:03575641

56 Qtr B 8, Tower 10, New Moti Bagh, New Delhi - 21

May, 3, 2019

Coal India Limited

3 Shri. Dheeraj Kumar Director DIN: 00936284

49 F-1003, AIS Housing Complex Virugambakkam, Chennai- 600092

November, 28,2019

1. Tamilnadu Generation and Distribution Corporation Limited

2. TNEB Limited 3. Tamilnadu Transmission

Corporation Limited 4. Madras Race Club 5. Tamilnadu Power

Finance and Infrastructure Development Corporation Limited

4. Shri. R.Vikraman Director (Human Resource) DIN:07601778

57 J-18, J.N. Salai, Block-16 Neyveli – 607 801

December 9, 2016

MNH Shakti Ltd

5. Shri. N.N.M. Rao Director (Planning& Projects) DIN: 08148117

57 J-23, J.N. Salai, Block-8 Neyveli – 607 801.

June, 29, 2018



6. Shri. Prabhakar Chowki Director (Mines) DIN :08199813

57 H-3, J.N. Salai, Block-24 Neyveli – 607 801.

November, 28, 2018

7. Shri. Shaji John Director (Power) DIN: 08418401

56 H-6, J.N. Salai, Block-24 Neyveli – 607 801.

April,17, 2019



8 Ms. Nalini Padmanabhan Independent Director DIN: 01565909

54 F2, Kanakadharas Lakshmi Castle, No. 37/14, Chari Street, T.Nagar, Chennai – 600 017.

February 2, 2017

1. Informations System Audit and Solutions Private Limited

2. Prerana Educational and Media Private Limited

3. NLC Tamil Nadu Power Limited (NTPL)

9 Shri. Indrajit Pal Independent Director DIN: 00163967

64 House No.8-2-603/L-11 Happy Valley Near Income Tax Colony Banjara Hills Hyderabad-500 034.

September, 6, 2017

10 Dr. P. Vishnu Dev Independent Director DIN: 08308279

46 H.No.12-13-548, Flat No. 303, Shub Nivas, Street No.14, Nagarjuna Nagar, Tarnaka, Hyderabad-500 022.

December, 19, 2018

11 Dr Muralidhar Goud Vuppunuthula Independent Director

51 1A Sylvan Heights, Amala Bhavan Road,

July, 17, 2019


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S. no.


Age (yrs)

Address Director


DIN: 03595033 Kadavanthara Ernakulam- 682020

12 Shri Namboothiri Kesavan Narayanan Namboothiri Independent Director DIN: 08527157

60 Naramangalam Valavoor P.O, Vallichira Kottayam- 68663

August, 2, 2019

All our Directors are Indian Nationals. None of our Directors are willful defaulters as identified by the RBI and/or

included in the Export Credit Guarantee Corporation default list.

2. Details of change in Directors since last three years:

S. No. Name of Director, Designation & DIN

Date of Joining / Appointment

Date of Cessation Reason

1. Shri. Rakesh Kumar Designation: Chairman-cum- Managing Director DIN: 02865335

September, 28,2018 (CMD) & Director (Finance) Addl. Charge and May 23, 2012 (Director/Finance)

Continuing Appointment

2. Shri. Vinod Kumar Tiwari Designation: Director DIN:03575641

May 3 , 2019 Continuing Appointment

3. Shri. Dheeraj Kumar Designation: Director DIN: 00936284

November, 28,2019 Continuing Appointment

4. Shri. R.Vikraman Designation: Director (Human Resource) DIN:07601778

December 9, 2016 Continuing Appointment

5. Shri. N.N.M. Rao Designation: Director (P&P) DIN: 08148117

June, 29, 2018 Continuing Appointment

6. Shri. Prabhakar Chowki Designation : Director (Mines) DIN :08199813

November, 28,2018 Continuing Appointment

7. Shri. Shaji John Designation: Director (Power) DIN: 08418401

April,17, 2019 Continuing Appointment

8. Ms.Nalini Padmanabhan Designation:Independent Director DIN: 01565909

February 2, 2017 Continuing Appointment

9. Shri. Indrajit Pal Designation:Independent Director DIN: 00163967

September, 6, 2017 Continuing Appointment

10. Dr. P. Vishnu Dev Designation:Independent Director DIN: 08308279

December, 19, 2018 Continuing Appointment


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11. Shri Muralidhar Goud Vuppunuthula Designation:Independent Director DIN: 03595033

July 17, 2019 Continuing Appointment

12. Shri Namboothiri Kesavan Narayanan Namboothiri Designation:Independent Director DIN: 08527157

August 2, 2019 Continuing Appointment

13. Shri.Azad Singh Toor Designation: Independent Director DIN:07358170

December 3, 2015* November 17,2019 Cessation

14. Shri.K.Madhavan Nair Designation: Independent Director DIN: 07366493

December 11, 2015* November 17,2019 Cessation

15. Shri. Md Nasimuddin Designation: Director DIN:02026939

September, 24, 2018 September, 26, 2019 Cessation

16. Shri. Suresh Kumar Designation: Director DIN:06440021

June, 9, 2017 April, 10, 2019 Cessation

17. Shri.V.Thangapandian Designation: Director(Power) DIN:07255163

September 1, 2015 March 31, 2019 Superannuation

18. Shri.Chandra Prakash Singh Designation:Independent Director DIN:00594463

November 17, 2015 November 17, 2018 Cessation

19. Shri.Vikram Kapur Designation : Part-time Official Director DIN:00463564

March 29,2017 August 27,2018 Cessation

20. Ms.Monika Arora Designation:Independent Director DIN:01065112

March 2,2017 August 30, 2018 Cessation

21. Shri.Sarat Kumar Acharya Designation: Chairman and Managing Director DIN:03357603

October 1,2015 July 31,2018 Superannuation

22. Shri.Subir Das Designation:Director(Mines) DIN:06988287

September 30,2014 June 30,2018 Superannuation

23. Shri.P.Selvakumar Designation:Director (Planning & Projects)

January 1, 2016 May 31,2018 Superannuation


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DIN:07347130

24. Shri.R.P.Gupta Designation: Part-time Official Director DIN: 03388822

August 30, 2016 June 9, 2017 Cessation

25. Dr.Rajeev Ranjan Designation: Part-time Official Director DIN:01806973

August 16, 2016 March 6, 2017 Cessation

*Reappointed vide MoC dated 17th November,2018 for a further period of one year with

effect from 17th November,2018

D. Details of shareholding of the Issuer as on 31.12.2019

1. Details of Share Capital as on 31.12.2019:

Share Capital Amount (Rs.crore)

Authorized Share Capital 2,000.00

Issued Share Capital 1,386.64

Subscribed Share Capital 1,386.64

Paid-up Share Capital 1,386.64

2. Shareholding pattern of the Issuer as on 31.12.2019:

Category of Shareholder Total No. of

Shares

Total No. of

Shares held in

Dematerialized

Form

Total

Shareholding

as a % of Total

No. of Shares

(A) Shareholding of Promoter and Promoter

Group

(1) Indian

Central Government / State Government(s) 1119074746 1119074746 80.70

Sub Total 1119074746 1119074746 80.70

(2) Foreign

Total shareholding of Promoter and Promoter

Group (A)

1119074746 1119074746 80.70

(B) Public Shareholding

(1) Institutions

Mutual Funds / UTI 112532706 112531206 8.12

Financial Institutions / Issuers 36567771 36567771 2.64


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Category of Shareholder Total No. of

Shares

Total No. of

Shares held in

Dematerialized

Form

Total

Shareholding

as a % of Total

No. of Shares

Central Government / State Government(s) 59701260 59701260 4.31

Insurance Companies 5944221 5944221 0.43

Foreign Institutional Investors 5632029 5632029 0.41

Alternate Investment Funds 0 0

Sub Total 220377987 220376487 15.91

(2) Non-Institutions

Bodies Corporate 3380967 3379867 0.24

Individuals

Individual shareholders holding nominal share

capital up to Rs. 2 lakh

32893848 31042709 2.37

Individual shareholders holding nominal share

capital in excess of Rs. 2 lakh

7660004 7660004 0.55

NBFC Registered with RBI 4281 4281 0.00

Non Resident Indians 2301275 2039175 0.17

Trusts 58971 58971 0.00

Overseas Corporate Bodies 0 0 0.00

Clearing Members 475861 475861 0.03

Foreign Individuals 0 0 0.00

Others 408669 408669 0.03

Sub Total 47183876 45069537 3.39

Total Public shareholding (B) 267561863 265446024 19.30

Total (A)+(B) 1386636609 1384520770 100.00

(C) Shares held by Custodians and against

which Depository Receipts have been issued

– Public

Total (A)+(B)+(C) 1386636609 1384520770 100.00

Note: There are no shares pledged or encumbered by the promoters of the issuer.

3. List of top 10 holders of equity shares of the Issuer as on 31.12.2019:

Sr.

no. Name of the shareholders

Total no. of equity

shares

No. of equity

shares in demat

form

Total

Shareholding

as % of total

no. of equity

shares

1

PRESIDENT OF INDIA MINISTRY OF COAL A WING, SHASTRI BHAWAN NEW DELHI - 110001

1119074746 1119074746 80.7043


of 130

2

LIFE INSURANCE CORPORATION OF INDIA INVESTMENT DEPARTMENT 6TH FLOOR, WEST WING, CENTRAL OFFICE YOGAKSHEMA, JEEVAN BIMA MARG MUMBAI - 400021

33983260 33983260 2.4508

3

STATE INDUSTRIES PROMOTION CORPORATION OF TAMILNADU LTD NO.19-A, RUKMANI LAKSHMIPATHY ROAD, EGMORE, CHENNAI - 600008

26865567 26865567 1.9375

4

ICICI PRUDENTIAL EQUITY & DEBT FUND, HDFC BANK LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST MUMBAI 400042

22144741 22144741 1.5970

5

HDFC TRUSTEE COMPANY LTD. A/C HDFC BALANCED ADVANTAGE FUND CITIBANK N.A. CUSTODY SERVICES FIFC- 11TH FLR, G BLOCK, PLOT C-54 AND C-55, BKC BANDRA - EAST, MUMBAI - 400098

17911060

17911060

1.2917

6

TAMILNADU INDUSTRIAL DEVELOPMENT CORPORATION LTD 19-A, RUKMINI LAKSHMIPATHY ROAD EGMORE, CHENNAI - 600008

14925315 14925315 1.0764

7

CPSE EXCHANGE TRADED SCHEME (CPSE ETF) DEUTSCHE BANK AG,DB HOUSE HAZARIMAL SOMANI MARG, P.O.BOX NO 1142,FORT MUMBAI - 400001

13673892 13673892 0.9861

8

RELIANCE CAPITAL TRUSTEE COMPANY LIMITED A/C NIPPON INDIA GROWTH FUND DEUTSCHE BANK AG DB HOUSE, HAZARIMAL SOMANI MARG POST BOX NO. 1142, FORT MUMBAI - 400001

11421948 11421948 0.8237

9

ICICI PRUDENTIAL LARGE & MID CAP FUND SBI SG GLOBAL SECURITIES SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WINGGR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054

8175951 8175951 0.5896

10

TAMIL NADU POWER FINANCE AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. No.490/3 – 4, ANNA SALAI, NANDANAM, CHENNAI 600035

5970126 5970126 0.4305


of 130

4. Changes in the capital structure of the Issuer (NLCIL) on 31.12.2019, for the last five years:

Rs. Crore

Particulars As on

31.12.2019 2018-19 2017-18 2016-17 2015-16 2014-15

Authorized Share Capital

2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00

Issued, Subscribed & Paid Up

1,386.64 1,386.64 1,528.57 1,528.57 1,677.71 1,677.71

2018-2019

As on 01.04.2018, the Company’s Paid up Equity share capital was Rs.1528,56,84,270.Consequent to Buy-

back of shares completed in the month of December,2018, the Company’s Paid-up capital was reduced

to Rs.1386,63,66,090.

2016-2017

As on 01.04.2016, the Company’s Paid-up share capital was Rs.1677,70,96,000 (1,67,77,09,600 equity

shares of Rs.10/- each). Consequent to Buy-back of shares completed in the month of March,2017, the

Company’s Paid-up capital was reduced to Rs.1528,56,84,270.

5. Details of changes in share capital of the Company since incorporation:

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

24.12.56 3,559 1,000 1,000 Cash 3,559 35,59,000 35,59,000 Initial Investment

by GOI

28.03.57 7,830 1,000 1,000 Cash 11,389 78,30,000 1,13,89,000 Further

Allotment to GOI

17.7.57 8,000 1,000 1,000 Cash 19,389 80,00,000 1,93,89,000 Further

Allotment to GOI

23.08.57 38,314 1,000 1,000 Cash 57,703 3,83,14,000 5,77,03,000 Further

Allotment to GOI

23.08.57 10,000 1,000 1,000 Cash 67,703 1,00,00,000 6,77,03,000 Further

Allotment to GOI

28.01.58 12,000 1,000 1,000 Cash 79,703 1,20,00,000 7,97,03,000 Further

Allotment to GOI

10.03.58 10,000 1,000 1,000 Cash 89,703 1,00,00,000 8,97,03,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

15.09.58 2,106 1,000 1,000 Cash 91,809 21,06,000 9,18,09,000 Further

Allotment to GOI

15.09.58 22,200 1,000 1,000 Cash 1,14,009 2,22,00,000 11,40,09,000 Further

Allotment to GOI

08.12.58 15,500 1,000 1,000 Cash 1,29,509 1,55,00,000 12,95,09,000 Further

Allotment to GOI

21.04.59 21,800 1,000 1,000 Cash 1,51,309 2,18,00,000 15,13,09,000 Further

Allotment to GOI

14.07.59 13,900 1,000 1,000 Cash 1,65,209 1,39,00,000 16,52,09,000 Further

Allotment to GOI

22.09.59 15,640 1,000 1,000 Cash 1,80,849 1,56,40,000 18,08,49,000 Further

Allotment to GOI

14.12.59 69,700 1,000 1,000 Cash 2,50,549 6,97,00,000 25,05,49,000 Further

Allotment to GOI

15.03.60 34,400 1,000 1,000 Cash 2,84,949 3,44,00,000 28,49,49,000 Further

Allotment to GOI

09.06.60 44,673 1,000 1,000 Cash 3,29,622 4,46,73,000 32,96,22,000 Further

Allotment to GOI

04.10.60 13,600 1,000 1,000 Cash 3,43,222 1,36,00,000 34,32,22,000 Further

Allotment to GOI

19.12.60 66,400 1,000 1,000 Cash 4,09,622 6,64,00,000 40,96,22,000 Further

Allotment to GOI

21.4.61 73,000 1,000 1,000 Cash 4,82,622 7,30,00,000 48,26,22,000 Further

Allotment to GOI

10.08.61 48,000 1,000 1,000 Cash 5,30,622 4,80,00,000 53,06,22,000 Further

Allotment to GOI

14.11.61 88,400 1,000 1,000 Cash 6,19,022 8,84,00,000 61,90,22,000 Further

Allotment to GOI

29.01.62 72,000 1,000 1,000 Cash 6,91,022 7,20,00,000 69,10,22,000 Further

Allotment to GOI

21.02.62 35,000 1,000 1,000 Cash 7,26,022 3,50,00,000 72,60,22,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

24.03.62 26,600 1,000 1,000 Cash 7,52,622 2,66,00,000 75,26,22,000 Further

Allotment to GOI

23.05.62 12,150 1,000 1,000 Cash 7,64,772 1,21,50,000 76,47,72,000 Further

Allotment to GOI

21.06.62 12,500 1,000 1,000 Cash 7,77,272 1,25,00,000 77,72,72,000 Further

Allotment to GOI

21.09.62 15,000 1,000 1,000 Cash 7,92,272 1,50,00,000 79,22,72,000 Further

Allotment to GOI

22.10.62 7,728 1,000 1,000 Cash 8,00,000 77,28,000 80,00,00,000 Further

Allotment to GOI

24.03.73 2,00,000 1,000 1,000 Cash 10,00,000 20,00,00,000 100,00,00,000 Further

Allotment to GOI

26.09.73 9,700 1,000 1,000 Cash 10,09,700 97,00,000 100,97,00,000 Further

Allotment to GOI

27.06.74 14,200 1,000 1,000 Cash 10,23,900 1,42,00,000 102,39,00,000 Further

Allotment to GOI

25.09.74 7,000 1,000 1,000 Cash 10,30,900 70,00,000 103,09,00,000 Further

Allotment to GOI

28.11.74 12,500 1,000 1,000 Cash 10,43,400 1,25,00,000 104,34,00,000 Further

Allotment to GOI

30.12.74 18,700 1,000 1,000 Cash 10,62,100 1,87,00,000 10,621,00,000 Further

Allotment to GOI

06.06.75 3,99,300 1,000 1,000 Cash 14,61,400 39,93,00,000 146,14,00,000 Further

Allotment to GOI

26.08.75 15,000 1,000 1,000 Cash 14,76,400 1,50,00,000 147,64,00,000 Further

Allotment to GOI

29.12.75 69,500 1,000 1,000 Cash 15,45,900 6,95,00,000 154,59,00,000 Further

Allotment to GOI

06.03.76 8,000 1,000 1,000 Cash 15,53,900 80,00,000 155,39,00,000 Further

Allotment to GOI

06.05.76 71,400 1,000 1,000 Cash 16,25,300 7,14,00,000 162,53,00,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

21.08.76 61,400 1,000 1,000 Cash 16,86,700 6,14,00,000 168,67,00,000 Further

Allotment to GOI

17.12.76 53,500 1,000 1,000 Cash 17,40,200 5,35,00,000 174,02,00,000 Further

Allotment to GOI

14.03.77 50,100 1,000 1,000 Cash 17,90,300 5,01,00,000 179,03,00,000 Further

Allotment to GOI

19.08.77 61,400 1,000 1,000 Cash 18,51,700 6,14,00,000 18,517,00,000 Further

Allotment to GOI

28.09.77 1,00,000 1,000 1,000 Cash 19,51,700 10,00,00,000 195,17,00,000 Further

Allotment to GOI

30.12.77 48,000 1,000 1,000 Cash 19,99,700 4,80,00,000 199,97,00,000 Further

Allotment to GOI

03.02.78 50,439 1,000 1,000 Cash 20,50,139 5,04,39,000 205,01,39,000 Further

Allotment to GOI

26.08.78 60,000 1,000 1,000 Cash 21,10,139 6,00,00,000 211,01,39,000 Further

Allotment to GOI

27.09.78 13,900 1,000 1,000 Cash 21,24,039 1,39,00,000 212,40,39,000 Further

Allotment to GOI

28.12.78 20,000 1,000 1,000 Cash 21,44,039 2,00,00,000 214,40,39,000 Further

Allotment to GOI

28.12.78 60,000 1,000 1,000 Cash 22,04,039 6,00,00,000 220,40,39,000 Further

Allotment to GOI

29.03.79 40,000 1,000 1,000 Cash 22,44,039 4,00,00,000 224,40,39,000 Further

Allotment to GOI

29.03.79 6,700 1,000 1,000 Cash 22,50,739 67,00,000 225,07,39,000 Further

Allotment to GOI

16.05.79 28,300 1,000 1,000 Cash 22,79,039 2,83,00,000 227,90,39,000 Further

Allotment to GOI

20.06.79 35,500 1,000 1,000 Cash 23,14,539 3,55,00,000 231,45,39,000 Further

Allotment to GOI

12.12.79 21,000 1,000 1,000 Cash 23,35,539 2,10,00,000 233,55,39,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

12.12.79 18,900 1,000 1,000 Cash 23,54,439 1,89,00,000 235,44,39,000 Further

Allotment to GOI

16.03.80 56,303 1,000 1,000 Cash 24,10,742 5,63,03,000 241,07,42,000 Further

Allotment to GOI

08.05.80 57,400 1,000 1,000 Cash 24,68,142 5,74,00,000 246,81,42,000 Further

Allotment to GOI

14.07.80 42,800 1,000 1,000 Cash 25,10,942 4,28,00,000 251,09,42,000 Further

Allotment to GOI

29.12.80 1,92,500 1,000 1,000 Cash 27,03,442 19,25,00,000 270,34,42,000 Further

Allotment to GOI

05.02.81 95,800 1,000 1,000 Cash 27,99,242 9,58,00,000 279,92,42,000 Further

Allotment to GOI

22.04.81 1,73,100 1,000 1,000 Cash 29,72,342 17,31,00,000 297,23,42,000 Further

Allotment to GOI

22.04.81 39,900 1,000 1,000 Cash 30,12,242 3,99,00,000 301,22,42,000 Further

Allotment to GOI

06.06.81 1,65,600 1,000 1,000 Cash 31,77,842 16,56,00,000 317,78,42,000 Further

Allotment to GOI

06.06.81 64,400 1,000 1,000 Cash 32,42,242 6,44,00,000 324,22,42,000 Further

Allotment to GOI

24.10.81 1,26,600 1,000 1,000 Cash 33,68,842 12,66,00,000 336,88,42,000 Further

Allotment to GOI

19.03.82 1,45,200 1,000 1,000 Cash 35,14,042 14,52,00,000 351,40,42,000 Further

Allotment to GOI

19.03.82 1,40,200 1,000 1,000 Cash 36,54,242 14,02,00,000 365,42,42,000 Further

Allotment to GOI

01.06.82 45,800 1,000 1,000 Cash 37,00,042 4,58,00,000 370,00,42,000 Further

Allotment to GOI

22.07.82 1,35,100 1,000 1,000 Cash 38,35,142 13,51,00,000 383,51,42,000 Further

Allotment to GOI

17.08.82 21,300 1,000 1,000 Cash 38,56,442 2,13,00,000 385,64,42,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

08.12.82 1,46,100 1,000 1,000 Cash 40,02,542 1,461,00,000 400,25,42,000 Further

Allotment to GOI

07.02.83 4,40,000 1,000 1,000 Cash 44,42,542 44,00,00,000 444,25,42,000 Further

Allotment to GOI

16.03.83 2,50,000 1,000 1,000 Cash 46,92,542 25,00,00,000 469,25,42,000 Further

Allotment to GOI

26.05.83 2,95,700 1,000 1,000 Cash 49,88,242 29,57,00,000 498,82,42,000 Further

Allotment to GOI

26.05.83 2,25,000 1,000 1,000 Cash 52,13,242 22,50,00,000 521,32,42,000 Further

Allotment to GOI

01.09.83 3,00,000 1,000 1,000 Cash 55,13,242 30,00,00,000 551,32,42,000 Further

Allotment to GOI

05.01.84 4,19,500 1,000 1,000 Cash 59,32,742 41,95,00,000 593,27,42,000 Further

Allotment to GOI

14.02.84 4,05,500 1,000 1,000 Cash 63,38,242 40,55,00,000 633,82,42,000 Further

Allotment to GOI

16.07.84 70,000 1,000 1,000 Cash 64,08,242 7,00,00,000 640,82,42,000 Further

Allotment to GOI

16.07.84 50,000 1,000 1,000 Cash 64,58,242 5,00,00,000 645,82,42,000 Further

Allotment to GOI

28.09.84 50,000 1,000 1,000 Cash 65,08,242 5,00,00,000 650,82,42,000 Further

Allotment to GOI

05.12.84 94,500 1,000 1,000 Cash 66,02,742 9,45,00,000 660,27,42,000 Further

Allotment to GOI

09.05.85 1,15,500 1,000 1,000 Cash 67,18,242 11,55,00,000 671,82,42,000 Further

Allotment to GOI

21.09.85 50,000 1,000 1,000 Cash 67,68,242 5,00,00,000 676,82,42,000 Further

Allotment to GOI

07.03.86 58,000 1,000 1,000 Cash 68,26,242 5,80,00,000 682,62,42,000 Further

Allotment to GOI

06.05.86 3,52,000 1,000 1,000 Cash 71,78,242 35,20,00,000 717,82,42,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

17.06.86 1,80,000 1,000 1,000 Cash 73,58,242 18,00,00,000 735,82,42,000 Further

Allotment to GOI

20.11.86 1,40,000 1,000 1,000 Cash 74,98,242 14,00,00,000 749,82,42,000 Further

Allotment to GOI

17.04.87 4,80,000 1,000 1,000 Cash 79,78,242 48,00,00,000 797,82,42,000 Further

Allotment to GOI

29.06.87 3,45,300 1,000 1,000 Cash 83,23,542 34,53,00,000 832,35,42,000 Further

Allotment to GOI

03.09.87 2,10,200 1,000 1,000 Cash 85,33,742 21,02,00,000 853,37,42,000 Further

Allotment to GOI

14.12.87 97,600 1,000 1,000 Cash 86,31,342 9,76,00,000 863,13,42,000 Further

Allotment to GOI

06.04.88 1,16,900 1,000 1,000 Cash 87,48,242 11,69,00,000 874,82,42,000 Further

Allotment to GOI

03.05.88 2,50,000 1,000 1,000 Cash 89,98,242 25,00,00,000 899,82,42,000 Further

Allotment to GOI

27.06.88 10,88,700 1,000 1,000 Cash 100,86,942 108,87,00,000 1008,69,42,000 Further

Allotment to GOI

12.08.88 1,61,300 1,000 1,000 Cash 102,48,242 16,13,00,000 1024,82,42,000 Further

Allotment to GOI

11.05.89 4,84,000 1,000 1,000 Cash 107,32,242 48,40,00,000 1073,22,42,000 Further

Allotment to GOI

31.07.89 8,38,400 1,000 1,000 Cash 115,70,642 83,84,00,000 1157,06,42,000 Further

Allotment to GOI

08.09.89 8,13,100 1,000 1,000 Cash 123,83,742 81,31,00,000 1238,37,42,000 Further

Allotment to GOI

17.11.89 5,00,000 1,000 1,000 Cash 128,83,742 50,00,00,000 1288,37,42,000 Further

Allotment to GOI

24.01.90 2,74,500 1,000 1,000 Cash 131,58,242 27,45,00,000 1315,82,42,000 Further

Allotment to GOI

12.08.90 3,00,000 1,000 1,000 Cash 134,58,242 30,00,00,000 1345,82,42,000 Further

Allotment to GOI


of 130

Date of

Issue/

Allotme

nt

No. of

Equity

Shares

Face

Valu

e

(Rs)

Issue

price

(Rs)

Consid

eration

in

Cash/

other

than

cash

Cumulative

No. of

Equity

Shares

Equity Share

Capital (Rs)

Cumulative

Equity Share

Capital (Rs)

Remarks

12.01.91 6,80,000 1,000 1,000 Cash 141,38,242 68,00,00,000 1413,82,42,000 Further

Allotment to GOI

10.04.91 2,20,000 1,000 1,000 Cash 143,58,242 22,00,00,000 1435,82,42,000 Further

Allotment to GOI

30.07.91 4,56,600 1,000 1,000 Cash 148,14,842 45,66,00,000 1481,48,42,000 Further

Allotment to GOI

23.09.91 1,28,400 1,000 1,000 Cash 149,43,242 12,84,00,000 1494,32,42,000 Further

Allotment to GOI

20.03.92 71,500 1,000 1,000 Cash 1,56,58,242 71,50,00,000 1565,82,42,000 Further

Allotment to GOI

vide shareholders resolution dated March 20, 1992, the face value of Equity shares of the Company was reduced from Rs

1,000 per Equity Share to Rs 10 per Equity Share.

05.09.92 20,000,000 10 10 Cash 158,58,24,200 20,00,00,000 1585,82,42,000 Further

Allotment to GOI

18.11.92 15,000,000 10 10 Cash 160,08,24,200 15,00,00,000 1600,82,42,000 Further

Allotment to GOI

24.03.93 16,157,500 10 10 Cash 161,69,81,700 16,15,75,000 1616,98,17,000 Further

Allotment to GOI

15.05.93 82,392,500 10 10 Cash 169,93,74,200 82,39,25,000 1699,37,42,000 Further

Allotment to GOI

22.01.94 14,040,000 10 10 Cash 171,34,14,200 14,04,00,000 1713,41,42,000 Further

Allotment to GOI

29.04.94 83,370,000 10 10 Cash 179,67,84,200 83,37,00,000 1796,78,42,000 Further

Allotment to GOI

09.05.00 (119,074,600) 10 10 Other

than

cash*

167,77,09,600 (119,07,46,000) 1677,70,96,000 Reduction of

share capital

consequent to

transfer of

transmission

assets to Power

Grid Corporation

of India Limited

24.03.17 (14,91,41,173) 10 99# Cash 152,85,68,427

(149,14,11,730) 1528,56,84,270 Buyback offer of

the Company

06.12.18 (14,19,31,818) 10 88## Cash 138,66,36,609 (141,93,18,180) 1386,63,66,090 Buyback offer of

the Company

Notes: 1. * Reduction of share capital consequent to transfer of assets to Power Grid Corporation Limited. 2. #On March 24, 2017, the Company bought back 149,141,173 Equity Shares at Rs 99 per Equity Share 3. ##On Dec 06, 2018, the Company bought back 14,19,31,818 Equity Shares at Rs. 88 per Equity Share

6. Details of any Acquisition or Amalgamation in the last 1 year:

There has not been any acquisition or amalgamation in the last 1 year.


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7. Details of any Reorganization or Reconstruction in the last 1year:

Type of Event Date of Announcement Date of Completion Details

There has not been any reorganization or reconstruction in the last 1 year

E. Details regarding Auditors of the Issuer:*

1. Details of the current auditors of the Issuer:

S.No. Name Address Auditor since

1 PKKG Balasubramaniam &

Associates,

Chartered Accountants,

Door No. 10/2, Eighth Street, Gandhi

Nagar, Thiruvannamalai - 606 602 FY 2017-18 onwards,

2 R Subramanian and Company

LLP

New No6 Old No 36, Krishna Swamy

Avenue,Luz Mylapore, Chennai – 600

004

FY 2019-20 – Q2 onwards,

*Note: The appointment of auditors is being done by C&AG on a year to year basis.

2. Details of the change in auditors since last three years:

Name Address

Date of Appointment/

Date of

Resignation/Cessation

Auditor Since (in case

of Resignation/

Cessation)

Remarks

PB Vijayaraghavan &

Co

New No 14 old no 27 ,

Cathedral Garden Road,

Nungambakkam, Chennai -

600034

Auditor upto FY 2016-17 Auditor since FY

2013-14 onwards

Auditor

for 2016-17

before

Cessation

PKKG

Balasubramaniam &

Assocites

Door No. 10/2, Eighth Street,

Gandhi Nagar,

Thiruvannamalai - 606 602

Appointment date for

the FY 2017-18 is

12.07.2017

Current

Auditor

Chandran &

Raman,Chartered

Accountants,

Paragon No.2, Dr.

Radhakrishnan Salai, 2nd Street,

Mylapore, Chennai - 600 004

Auditor upto Q1 2019-20 Auditor since FY

2015-16 onwards

Auditor

upto Q1

2019-

20before

Cessation

R Subramanian and

Company LLP

New No 6 Old No 36, Krishna

Swamy Avenue,Luz Mylapore,

Chennai – 600 004

Appointment date for

the FY 2019-20 is

01.08.2019

Current

Auditor

*Note: The appointment of auditors is being done by C&AG on a year to year basis.


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F. Details of Borrowings of the Issuer(NLCIL) as on 30.09.2019

1. Details of Bonds:

i. Foreign Currency Issuances as on 30.09.2019:

Debenture series (ISIN)

Tenor / period of maturity coupon

Amount Outstanding In US$ Mio

Date of allotment

Redemption on date/ schedule

Credit Rating

Secured / unsecured

Currency

Nil

ii. Domestic Bond Issuances as on 30.09.2019

Debenture

series.

Tenor/ period of Maturity

Coupon Amount

in Rs

Allotment Date

Redemption Date

Call Option Date & Step Up

Credit Rating Secured/

Unsecured Security

NLCIL Bonds 2019-

Series-I

10 years 8.09%

p.a 1,475 crore

29th May, 2019

29th May, 2029

NA

[ICRA] AAA/Stable by ICRA Limited

& IND AAA/

Stable by India Ratings & Research

Private Limited

Secured

Secured by a first/pari passu first charge on

specified assets of the company as

mentioned in the Bond Trust Deed

2. Details of Secured Loan as on 30.09.2019

Rs. In Crore

SL No.

Lender's Name

Type of Facility

Amount Sanctioned as

per Agreement

Principal Amount Outstanding

Repayment Date / Schedule

1 Power Finance Corporation Limited

Rupee Term Loan

3,000.00 3,000.00 Repayable in 20 equal half yearly instalments. First Instalment due on 31.03.2020, and subsequent instalments will become due for payment on 30th day of September and 31st day of March every Year.

2 HDFC Bank Limited

Rupee Term Loan

1,135.00 1,135.00 Repayments to be made effective from December 2019 in half yearly 20 equal instalments.

3 HDFC Bank Limited

Rupee Term Loan

481.00 384.80 Repayable in 10 equal Half Yearly Instalments. The repayment starts on 01.10.2018 and Final Instalment on 27.03.2023.

4 Axis Bank Limited

Rupee Term Loan

500.00 450.00 10 Equal half yearly instalments after moratorium period. Repayment started on 09.09.2019 & Final repayment on 09.03.2024.


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SL No.

Lender's Name

Type of Facility

Amount Sanctioned as

per Agreement

Principal Amount Outstanding


5 Axis Bank Limited

Rupee Term Loan

300.00 300.00 10 Equal half yearly instalments after moratorium period. Repayment will start on 31.03.2020 & Final repayment on 30.09.2024.

6 Federal Bank Limited

Rupee Term Loan

306.00 306.00 10 Equal half yearly instalments after moratorium period starting from 31.03.2020 and Final Instalment 30.09.2024.

7 Federal Bank Limited

Rupee Term Loan

150.00 150.00 10 Equal half yearly instalments after moratorium period starting from 31.03.2020 and Final Instalment 30.09.2024.

8 Axis Bank Limited

Rupee Term Loan

150.00 150.00 10 Equal half yearly instalments after moratorium period. Repayment will start on 31.03.2020 & Final repayment on 30.09.2024

9 HDFC Bank Limited

Rupee Term Loan

821.00 390.00 20 half yearly instalments after moratorium period from 1st year from the date of first drawl of Loan. The repayment will start from Dec -2019 .Final instalment due in Jun-2029.

10 State Bank of India

Rupee Term Loan

2,552.00 1,945.00 20 Equal half yearly Instalments after moratorium period of 1 Year from 31.12.2019 or SCOD whichever is earlier. First Instalment will commence from 31.12.2020 and Final Instalment on 30.06.2030.


Rupee Term Loan

1,680.75 370.00 20 Equal half yearly instalments which will commence from 30.09.2021 and final instalment on 31.03.2031.


Rupee Term Loan

1,000.00 1000.00 6 Equal half yearly instalments after moratorium period of 6 months. First Instalment will commence from 31.03.2020 and Final instalment on 30.09.2022.


Working Capital - Cash Credit

5,000.00 3,353.96 Repayable on Demand.


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3. Details of Unsecured Loan as on 30.09.2019

a) Domestic Loan

Rs. in Crore

SL

No.

Lender's

Name

Type of

Facility

Amount

Sanctioned as

per Agreement

Principal

Amount

Outstanding


1

Mahanadi

Coalfields

Ltd.

Inter-

Corporate

Loan

2,000.00 1,375.00

48 Equal Monthly Installments

starting from the succeeding

month after complete drawl of the

Loan. First Installment Started on

31.07.2018

b) Foreign Currency

SL

No.

Lender's

Name

Type of

Facility

Loan

Outstanding as

on 30.09.2019

(FC in Million)

Loan Outstanding

as on 30.09.2019

(Rs in Crore)


1 KFW Loan € 7.46 57.68 Bi- annual equal repayment(€ 0.44

Million/annum), commenced from

30-12-2001, ending on 30-06-2036

2 KFW Loan € 50.44 390.07 Bi-annual equal repayment(€ 2.80

Million/annum), commenced from

30-06-2002, ending on 30-06-2037

NLCIL has extended letter of comforts to the extent of Rs. 5,128.22 crore to the lenders of its subsidiary NLC

Tamilnadu Power Limited towards its Rupee Term Loans and Working Capital limits.

4. List of top 10 Bondholders as on 30.09.2019:

Sr.no. Name of Bondholder Amount

(Rs. in Crore)

1 ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED 325.00

2 SBI LIFE INSURANCE CO.LTD 280.00

3 NPS TRUST- A/C SBI PENSION FUND SCHEME - STATE GOVT 185.00

4 NPS TRUST- A/C LIC PENSION FUND SCHEME - STATE GOVT 160.00

5 HDFC ERGO GENERAL INSURANCE COMPANY LIMITED 125.00

6 NPS TRUST- A/C LIC PENSION FUND SCHEME - CENTRAL GOVT 124.60

7 NPS TRUST- A/C SBI PENSION FUND SCHEME - CENTRAL GOVT 100.00

8 THE NEW INDIA ASSURANCE COMPANY LIMITED 50.00

9 NPS TRUST - A/C SBI PENSION FUND SCHEME - CORPORATE CG 50.00

10 NPS TRUST - A/C LIC PENSION FUND SCHEME - CORPORATE CG 20.00

5. The amount of corporate guarantee issued by the Issuer along with name of the counterparty

(including Subsidiaries, Joint Ventures, Group Companies, etc.) on behalf of whom it has

been issued

Nil


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6. Details of Commercial Paper outstanding as on 30.09.2019:

Maturity Date Amount Outstanding

Nil Nil

7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible

Bonds /Preference Shares) as on 30.09.2019:

The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (FCCBs), optionally

Convertible Bonds /Debentures (OCBs) / Preference Shares etc.

8. Details of all 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 five years:

There has been no 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 five years.

9. Details of any outstanding borrowings taken/ debt securities issued where taken / issued (i)

for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or

(iii) in pursuance of an option:

The Issuer confirms that other than and to the extent mentioned elsewhere in this Disclosure

Document, 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 or

discount or in pursuance of an option.

G. Details of promoters of the Issuer

Details of the Promoter Holding as on 31.12.2019:

Sr.no. Name of the shareholders Total no. of

equity shares

No. of shares in

demat form

Total shareholding

as % of total no. of

equity shares as on

31.12.2019

No. of shares

pledged

% of shares

pledged with

respect to shares

owned

1.

The President of India,

acting through the

Ministry of Coal

1119074746 1119074746 80.70% Nil Nil

H. Disclosures with regard to interest of directors, litigation etc. :

Financial or other material interest of the directors, promoters or key managerial personnel in the

offer and the effect of such interest in so far as it is different from the interests of other persons.

NIL

Details of any litigation or legal action pending or taken by any Ministry or Department of the

Government or a statutory authority against any promoter of the offeree company during the last


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three years immediately preceding the year of the circulation of the offer letter and any direction

issued by such Ministry or Department or statutory authority upon conclusion of such litigation

or legal action

Since President of India through Government of India is the Promoter of the Company, the

litigations, legal actions or directions pending or taken by any Ministry or Department of the

Government or a statutory authority against the Promoter of the Company during the last three

years cannot be ascertained.

Remuneration of Directors

Financial Year 2019-20

Details of remuneration of Functional Directors during the financial year 2019-20, for the period up to

30.09.2019 are given below: -

Name of the Director-(Sarvashri)

Salary for the year (Rs.)

Benefits (Rs.) Performance Related Pay

(Rs.)*

Rakesh Kumar 21,79,133 4,17,590 11,76,190

R. Vikraman 32,97,131 3,47,165 10,00,050

Shaji John 18,68,896 3,56,697 5,85,900

N. Naga Maheswar Rao 17,44,915 3,32,979 6,12,440

Prabhakar Chowki 18,73,488 3,57,598 -

Total 1,09,63,563 18,12,029 33,74,580

* PRP for FY 2017-18.

Details of payments towards sitting fee to Independent Directors during the period 01.04.2019 -

30.09.2019

Name of the Director- (Sarvashri /Ms.)

Sitting fee paid for (Rs) Total (Rs.) Board Meetings Committee Meetings

Nalini Padmanabhan 1,80,000.00 1,40,000.00 3,20,000.00 Azad Singh Toor 1,50,000.00 1,40,000.00 2,90,000.00

Murlidhar Goud 60,000.00 - 60,000.00

P. Vishnu Dev 1,20,000.00 40,000.00 1,60,000.00 Indrajit Pal 1,50,000.00 1,00,000.00 2,50,000.00 K. Madhavan Nair 1,50,000.00 1,60,000.00 3,10,000.00

N.K. Narayanan Namboothiri 60,000.00 - 60,000.00

Total 8,70,000.00 5,80,000.00 14,50,000.00


Details of remuneration of Functional Directors for the financial year 2018-19 are given below:-



Benefits (Rs.) Performance Related Pay(Rs.)*

Rakesh Kumar 48,11,380 8,59,157 13,96,767

V. Thangapandian 68,05,954 8,43,544 13,76,464

R. Vikraman 45,75,545 7,45,431 9,40,761

N. Naga Maheswar Rao 24,98,599 4,70,332 1,25,000

Prabhakar Chowki 12,49,185 2,38,201 -

Sarat Kumar Acharya 34,89,035 3,66,660 17,31,972

Subir Das 28,53,689 2,70,485 11,57,051

P. Selvakumar 32,00,647 2,08,185 11,17,182

Total 2,94,84,034 40,01,995 78,45,197 * PRP for 2016-17 & PRP advance for 2017-18

Details of payments towards sitting fee to Independent Directors during the period 01.04.2018-31.03.2019


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Name of the Director- (Sarvashri /Ms.)

Sitting fee paid for (Rs) Total (Rs.)

Board Meetings Committee Meetings

Chandraprakash Singh 2,40,000 1,60,000 4,00,000

Azad Singh Toor 3,60,000 3,60,000 7,20,000

K. Madhavan Nair 3,60,000 1,60,000 5,20,000

Nalini Padmanabhan 3,30,000 1,20,000 4,50,000

Monika Arora 90,000 - 90,000

Indrajit Pal 3,60,000 60,000 4,20,000

P. Vishnu Dev 90,000 - 90,000

Total 18,30,000 8,60,000 26,90,000





Benefits(Rs.) Performance Related

Pay (Rs.)#

Sarat Kumar Acharya 46,57,930.00 6,27,090.00 7,37,680.00

Rakesh Kumar 31,12,591.00 6,02,016.00 5,98,530.00

Subir Das 32,70,674.00 4,87,257.00 5,50,104.00

V. Thangapandian 30,77,061.00 2,74,453.00 2,71,553.00

P. Selvakumar 28,15,105.00 5,37,747.00 2,05,259.00

R. Vikraman 27,43,694.00 5,22,126.00 2,16,907.00

Total 1,96,77,055.00 30,50,689.00 25,80,033.00

Details of payments towards sitting fee to Independent Directors during the financial year 2017-18

Name of the Director-(Sarvashri/Ms.)

Sitting fee paid for (Rs) Total (Rs.)


Chandra Prakash Singh

1,80,000.00 1,80,000.00 3,60,000.00

Azad Singh Toor 2,00,000.00 2,70,000.00 4,70,000.00

K.Madhavan Nair 1,40,000.00 90,000.00 2,30,000.00

Nalini Padmanabhan 2,00,000.00 30,000.00 2,30,000.00

Monika Arora 80,000.00 - 80,000.00

Indrajit Pal 1,00,000.00 - 1,00,000.00

Total 9,00,000.00 5,70,000.00 14,70,000.00




Salary for the year (Rs.) Benefits(Rs.)* Total(Rs.)

Sarat Kumar Acharya 32,22,596.00 10,68,001.00 42,90,597.00

Rakesh Kumar 30,70,876.00 8,44,530.00 39,15,406.00

Subir Das 36,78,229.00 9,38,017.00 46,16,246.00

V. Thangapandian 26,58,674.00 7,81,786.00 34,40,460.00

P. Selvakumar 35,65,888.00 8,25,377.00 43,91,265.00

R. Vikraman 8,01,272.00 2,27,609.00 10,28,881.00

Total 1,69,97,535.00 46,85,320.00 2,16,82,855.00

*includes amount paid towards PRP if any


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Details of payments towards sitting fee to Independent Directors during the financial year 2016-17 are

given below:

Name of the Director-(Sarvashri/Ms.)

Sitting fee paid for (Rs) Total(Rs.)


Chandra Prakash Singh

1,00,000.00 75,000.00 1,75,000.00

Azad Singh Toor 2,00,000.00 2,25,000.00 4,25,000.00

K. Madhavan Nair 2,00,000.00 90,000.00 2,90,000.00

Nalini Padmanabhan 40,000.00 - 40,000.00

Total 5,40,000.00 3,90,000.00 9,30,000.00

Related party transactions during last three financial years including with regard to loans made,

guarantees given or securities provided.

Disclosure of transactions with the related party as defined in the Ind AS 24 are given below for

Financial Year 2018-19:

a. List of related parties

I. Key Managerial Personnel (KMP):

Whole Time Directors:

i. Shri. Rakesh Kumar Chairman Cum Managing Director (Appointed w.e.f. 28/09/2018)

ii. Dr. Sarat Kumar Acharya Chairman Cum Managing Director (Superannuated on 31/07/2018)

iii. Shri. Rakesh Kumar - Director(Finance)^

iv. Shri. R. Vikraman - Director (Human Resources)

v. Shri. Nadella Naga Maheswar Rao- Director(P&P) (Appointed w.e.f. 29/06/2018)

vi. Shri. Prabhakar Chowki - Director (Mines) (Appointed w.e.f. 28/11/2018)

vii. Shri. V. Thangapandian - Director (Power) (Superannuated on 31/03/2019)

viii. Shri. Subir Das - Director (Mines) (Superannuated on 30/06/2018)

ix. Shri. P. Selvakumar - Director(P&P) (Superannuated on 31/05/2018)

Independent Directors

i. Shri. Azad Singh Toor -Non Executive Director -Re-appointed w.e.f17.11.2018

ii. Shri. K.Madhavan Nair -Non Executive Director-Re-appointed w.e.f 17.11.2018

iii. Shri. Chandra Prakash Singh -Non Executive Director-Relinquished w.e.f 17.11.2018

iv. Ms. Nalini Padmanabhan -Non Executive Director

v. Ms. Monika Arora -Non Executive Director-Relinquished w.e.f 30.08.2018

vi. Shri. Indrajit Pal -Non Executive Director

vii. Dr. P. Vishnu Dev -Non Executive Director- Appointed w.e.f 19.12.2018

Nominee Directors

i. Shri. Vikram Kapur -Non Executive Director-Relinquished w.e.f 27.08.2018

ii. Shri. Suresh Kumar -Non Executive Director-Relinquished w.e.f 10.04.2019

iii. Shri. Md. Nasimuddin -Non Executive Director- Appointed w.e.f 24.09.2018

^ Holding as additional charge in addition to Chairman cum Managing Director of NLC India

Limited


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Chief Financial Officer and Company Secretary

i. Shri. Rakesh Kumar - CFO

ii. Shri. K. Viswanath - Company Secretary

II. Subsidiaries and Associate Entities

i. NLC Tamilnadu Power Limited (NTPL) – Subsidiary

ii. Neyveli Uttar Pradesh Power Limited (NUPPL) – Subsidiary

iii. MNH Shakti Limited – Associate

III. Post-Employment Benefit Plans

i. NLC Employees PF Trust

ii. NLC Employees Pension Fund

iii. NLC Post-Retirement Medical Assistance Fund

iv. NLC Employees Gratuity Fund

IV. Entities under the control of the same Government

The Company is a Public Sector Undertaking (PSU) wherein majority of shares are held by

the President of India. Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the

same government has control or joint control of, or significant influence, then the reporting

entity and other entities shall be regarded as related parties. The Company has applied the

exemption available under Paragraph 25 & 26 of Ind AS 24 for government related entities

and have made disclosures accordingly in the financial statements.

b. Transactions with the related parties:

The aggregate value of transactions and outstanding balances related to key managerial personnel and

entities over which they have control or significant influence were as follows

Rs. In Crore

I. Key management personnel compensation For the year ended

March 31, 2019 For the year ended

March 31, 2018

Short-term employee benefits 3.39 2.47

Post-employment benefits 0.24 0.17

Other long-term benefits 0.84 0.40

Sitting Fee 0.32 0.17

4.79 3.21

Rs. In Crore

II. A. Transactions with Subsidiaries NTPL NUPPL

2018-19 2017-18 2018-19 2017-18

i. Sales/purchase of goods and services

-Goods 5.50

-Services (excluding GST) 16.24 13.70 10.77 23.10

ii. Sales/purchase of Assets - - - -

iii. Loans issued 680.00 1,100.00 340.00 1,000

iv. Loans Repaid 750.00 870.00 1,340.00 60.00

v. Equity Contributions - - 402.21 -

vi. Dividend Received - 19.47 - -


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vii. Interest on Loans 57.53 46.62 89.90 26.91

Rs In Crore

II. B. Transactions with Associate MNH

2018-19 2017-18

i) Reimbursement of employee cost - - ii) Loans issued - - iii) Loans repaid - - iv) Equity contributions - -

Rs. In Crore

III. Transaction with Post employment benefit plans 2018-19 2017-18

- Contributions made during the year 318.35 309.04

Rs. In Crore

IV. Transactions with the related parties under the control of the same Government Name of the Company Nature of transaction 2018 - 2019 2017 - 2018

Bharat Heavy Electricals Limited Purchase of Stores and spares 19.10 10.69

Bharat Heavy Electricals Limited Package contracts 177.47 611.43

Bharath Earth Movers Limited Payment for FMC contract 14.76 5.06

Bharath Earth Movers Limited Payment for procuring CMEs 4.18 21.98

Hindustan Petroleum Corporation Limited

Purchase of furnace oil 67.96 64.68

Bharat Petroleum Corporation Limited


Indian Oil Corporation Limited Purchase of furnace oil 72.75 51.28

National Buildings Construction Corporation Limited

Purchase/Construction of Asset 13.57 5.07

Steel Authority of India Limited Purchase of Steel 24.57 16.81

Rashtriya Ispat Nigam Limited Purchase of Steel 1.07 1.04

Balmer Lawrie & Co. Limited Purchase of Lubricants 6.19 6.13

Balmer Lawrie & Co. Limited Purchase of Air Ticket 2.92 2.46

MSTC Limited E-auction agent Commission 4.28 0.49

Mecon Limited Consultancy Services - MOEF norms

0.28 0.45

Instrumentation Limited Supply of spares 0.51 0.36

Mahanadi Coalfields Limited Loan Received 1,000.00 1,000.00

Power Grid Corporation of India Limited

Maintenance Contract - 1.06

Central Power Research Institute (CPRI)

Testing Fee 0.13 -

c. Outstanding balances with related parties are as follows:

I. Key Management Personnel

Rs. In Crore

Particulars

Transactions value for the year ended March 31

Balance outstanding as at March 31

2019 2018 2019 2018 Shri. Rakesh Kumar/CMD & Director/Finance towards HBA

0.01 0.01 0.06 0.07

Shri. K. Viswanath/Company Secretary- towards Car Loan

0.00 0.00 0.03 0.04


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II. Subsidiaries and Associate

Rs. In Crore

Particulars March 31, 2019 March 31, 2018

a. NTPL

Receivable

- towards Other Loan & Advances 680.00 750.00

- Others 45.72 21.04

Payable - -

b. NUPPL Receivable towards Loan

- towards Other Loan & Advances - 1,000.00

- Others 8.81 7.87

Payable - -

c. MNH Shakti - -

There were no transactions during the year with MNH Shakti

III. Post Employment Benefit Plan:

Rs. In Crore

Description As at March 31, 2019

As at March 31, 2018

- Receivable - -

- Payable 29.16 26.98

d. Terms and conditions of transactions with the related parties

1. Transactions with the related parties are made on normal commercial terms and

conditions and at market rates.

2. The Company is seconding its personnel to Subsidiary Companies as per the terms and

conditions agreed between the Companies. The cost incurred by the group towards

superannuation and employee benefits are recovered from these companies.

3. Outstanding balances of Subsidiary and Joint Venture Companies/Associate at the

year-end are unsecured and settlement occurs through banking transaction. These

balances other than loans are Interest free.

4. For the year ended March 31, 2019 and March 31, 2018 the Company has not recorded

any impairment of receivables relating to amounts payable by related parties. This

assessment is undertaken each financial year through examining the financial position

of the related party and the market in which the related party operates.

5. Consultancy/Management services provided by the Company to Subsidiaries and

Associates are generally on nomination basis at the terms, conditions and principles

applicable for consultancy/management services provided to other parties.

Disclosure as per Ind AS 24 'Related Party Disclosures' Financial Year 2017-18



i. Shri. Sarat Kumar Acharya - Chairman and Managing Director

ii. Shri. Rakesh Kumar - Director / Chief Financial Officer

iii. Shri. Subir Das - Director

iv. Shri. V. Thangapandian - Director


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v. Shri. P. Selvakumar - Director

vi. Shri. R. Vikraman - Director

vii. Shri. R.P. Gupta (Relinquished w.e.f. 09/06/2017)- Director

viii. Shri. Vikram Kapur - Director

ix. Shri. Azad Singh Toor - Director

x. Shri. K.Madhavan Nair - Director

xi. Shri. Chandra Prakash Singh - Director

xii. Ms. Nalini Padmanabhan - Director

xiii. Ms. Monika Arora - Director

xiv. Shri. Suresh Kumar (Appointed w.e.f. 09/06/2017)- Director

xv. Shri. Indrajit Pal (Appointed w.e.f .06/09/2017)- Director

xvi. Shri. K. Viswanath - Company Secretary






i. NLC PF Trust


The Company is a Public Sector Undertaking (PSU) wherein majority of shares are held

by the President of India. Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which

the same government has control or joint control of, or significant influence, then the

reporting entity and other entities shall be regarded as related parties. The Company has

applied the exemption available under Paragraph 25 & 26 of Ind AS 24 for government

related entities and have made disclosures accordingly in the financial statements.


The aggregate value of transactions and outstanding balances related to key managerial

personnel and entities over which they have control or significant influence were as follows:

Rs. In Crore

I. Key Management Personnel Compensation For the year ended


March 31, 2017



Other long-term benefits 0.40 0.18

Termination benefits - -

Share-based payments - -

3.21 2.65

Rs. In Crore


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II. Transactions with Subsidiaries and Associate

NTPL NUPPL

2017-18 2016-17 2017-18 2016-17

i. Reimbursement of Expenses (incl Management Service Charges)

13.70 0.00 23.10 2.76

ii. Loans issued 1100.00 520.00 1000.00 60.00

iii. Loans Repaid 870.00 320.00 60.00 0.00

iv. Equity Contributions 0.00 200.93 0.00 271.32

v. Dividend Received 19.47 0.00 0.00 0.00

vi. Interest on Loans 46.62 37.90 26.91 0.06

Rs. In Crore

III. Transaction with Post employment benefit plans 2017-18

2016-17

NLC PF Trust


Rs. In Crore

IV. Transactions with the related parties under the control of the same government:

Name of the Company Nature of transaction 2017 - 2018

2016 - 2017


Bharat Heavy Electricals Limited Package contracts 611.43 711.75


Bharath Earth Movers Limited Payment for FMC contract 5.06 -

Bharath Earth Movers Limited Payment for procuring CMEs 21.98 -



Bharat Petroleum Corporation Limited

Purchase of furnace oil 50.07 -





Rashtriya Ispat Nigam Limited Purchase of Steel 1.04 -


Balmer Lawrie & Co. Limited Purchase of Air Ticket 2.46 -


Mecon Limited Consultancy Services-MOEF norms

0.45 -

Instrumentation Limited Supply of spares 0.36 -

Mahanadi Coalfields Limited Loan 1,000.00 -


Maintenance Contract 1.06 0.09

d. Outstanding balances with related parties are as follows:


Rs. In Crore

Particulars Transactions value for the year ended March 31


2018 2017 2018 2017 Mr. Rakesh Kumar- Director/Finance towards HBA

- - 0.07 0.08

Mr. Viswanath K.- Company Secretary towards Car Loan

- - 0.04 0.04


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Subsidiaries and Associate

Rs. In Crore


e. NTPL

Receivable

- Towards Bridge Loan - 180.00

- towards Other Loan & Advances 750.00 340.00

- Others 21.04 3.66

Payable - -

f. NUPPL Receivable towards Loan

- towards Other Loan & Advances 1,000.00 60.00

- Others 7.87 2.76

Payable - -

g. MNH Shakti - -

There were no transactions during the year with MNH Shakti

II. Post Employment Benefit Plan:

Rs. In Crore

NLC PF Trust March 31, 2018 March 31, 2017

- Receivable - -

- Payable 13.50 12.69

a. Terms and conditions of transactions with the related parties

1. Transactions with the related parties are made on normal commercial terms and

conditions and at market rates.



superannuation and employee benefits are recovered from these companies.

3. Outstanding balances of Subsidiaries and Associate at the year-end other than Loans

are unsecured and interest free.

4. For the year ended March 31, 2018 and March 31, 2017 the Company has not recorded

any impairment of receivables relating to amounts payable by related parties. This

assessment is undertaken each financial year through examining the financial position

of the related party and the market in which the related party operates.

5. Consultancy/Management services provided by the Company to Subsidiaries and

Associates are generally on nomination basis at the terms, conditions and principles

applicable for consultancy/management services provided to other parties.

Disclosure as per Ind AS 24 'Related Party Disclosures' Financial Year 2016-17



i. Shri. Sarat Kumar Acharya - Chairman and Managing Director

ii. Shri. Rakesh Kumar - Director / Chief Financial Officer

iii. Shri. Subir Das - Director

iv. Shri. V. Thangapandian - Director

v. Shri. P. Selvakumar - Director

vi. Shri. R. Vikraman - Director

vii. Shri. R.P. Gupta - Director


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viii. Shri. Vikram Kapur - Director

ix. Shri. Azad Singh Toor - Director

x. Shri. K.Madhavan Nair - Director

xi. Shri. Chandra Prakash Singh - Director

xii. Ms. Nalini Padmanabhan - Director

xiii. Ms. Monika Arora - Director

xiv. Shri. K. Viswanath - Company Secretary






i. NLC PF Trust


The Company is a Public Sector Undertaking (PSU) wherein majority of shares are held by the

President of India. Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the same

government has control or joint control of, or significant influence, then the reporting entity

and other entities shall be regarded as related parties. The Company has applied the exemption

available under Paragraph 25 & 26 of Ind AS 24 for government related entities and have made

disclosures accordingly in the financial statements.


The aggregate value of transactions and outstanding balances related to key managerial

personnel and entities over which they have control or significant influence were as follows:

Rs. In Crore

I. Key management personnel compensation For the year ended


March 31, 2016



Other long-term benefits 0.18 -

Termination benefits - -

Share-based payments - -

Rs. In Crore

II. Transactions with Subsidiaries and Associate

NTPL NUPPL

2016-17 2015-16 2016-17 2015-16

i. Reimbursement of employee cost - - 2.76 9.32

ii. Loans issued 520.00 320.00 60.00 -

iii. Loans Repaid 320.00 980.00 - -

iv.Equity Contributions 200.93 118.26 271.32 142.44

v. Interest on Loans 37.90 38.34 0.06 -


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Rs. In Crore

III. Transaction with Post employment benefit plans 2016-17 2015-16

NLC PF Trust


Rs. In Crore

IV. Transactions with the related parties under the control of the same government: Name of the Company Nature of transaction 2016-17 2015-16


Bharat Heavy Electricals Limited Package contracts 711.75 1,324.08







JDVVNL (Bithnok) Const of 33kv power station 0.00 7.76


Rashtriya Ispat Nigam Limited Purchase of Steel 0.00 0.80



Tamil Nadu Transmission Corporation Limited




c. Outstanding balances with related parties are as follows:


Rs. In Crore

Particulars

Transactions value for the year ended March 31


2017 2016 2017 2016

Mr.Rakesh Kumar Director/Finance towards HBA

- - 0.07 0.08

Mr.Viswanath K.- Company Secretary towards Car Loan

- - 0.04 0.05

II. Subsidiaries and Associate

Rs. In Crore


a. NTPL

Receivable

- Towards Bridge Loan 520.00 320.00

b. NUPPL

- towards Other Loan & Advances 60.00 -

d. Terms and conditions of transactions with the related parties

1. Transactions with the related parties are made on normal commercial terms and conditions

and at market rates


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superannuation and employee benefits are recovered from these Companies.

3. Outstanding balances (other than loan) of Subsidiaries and Associate at the year-end, are

unsecured and interest free.

4. For the year ended 31st March 2017 and 31st March 2016, the Company has not recorded any

impairment of receivables relating to amounts payable by related parties. This assessment is

undertaken each financial year through examining the financial position of the related party

and the market in which the related party operates.

Summary of reservations or qualifications or adverse remarks of auditors during last five financial

years

No reservations or qualifications or adverse remarks of statutory auditors during last five financial years.

Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act

or any previous company law in the last three years till date in the case of company and all of its

subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed,

compounding of offences in the last three years immediately preceding the year of the offer letter and

if so, section-wise details thereof for the company and all of its subsidiaries

There was no inquiry, inspections or investigations initiated or conducted under the Companies Act or

any previous company law in the last three years till date in the case of company and all of its subsidiaries.

Also, there was no prosecutions filed (whether pending or not) fines imposed, compounding of offences

in the last three years immediately preceding the year of the offer letter.

Details of acts of material frauds committed against the company in the last three years

There is no material fraud committed against the company in last three years.

I. Abridged version of Audited Consolidated and Standalone Financial Information (Profit &

Loss statement, Balance Sheet and Cash Flow statement) for last three years and auditor

qualifications:

1. Standalone Balance Sheet

Rs. In Crore

Sl. No

Particulars As at

31.03.2019 As at

31.03.2018 As at

31.03.2017

ASSETS

(1) Non-current assets

Property, Plant and Equipment 11,678.18 10,567.85 9,622.39

Intangible Asset 6.25 6.26 2.64

Capital Work-In-Progress 8,735.64 6,876.12 4,962.69

Asset under Development 117.80 199.05 151.96

Financial Assets

i) Investments 2,823.58 2,421.37 2,421.37

ii) Loans 42.60 67.45 99.42

Other non-current assets 1,124.95 1,165.10 1,289.45

24,529.00 21,303.20 18,549.92

(2) Current Assets

Inventories 1,464.38 1,688.90 1,813.24


of 130

Sl. No

Particulars As at

31.03.2019 As at

31.03.2018 As at

31.03.2017

Financial Assets

i) Trade receivables 4,606.19 3,366.15 3,750.09

ii) Cash and cash equivalents 13.82 12.63 22.07

iii) Other bank balances 303.34 266.02 451.63

iv) Loans 716.60 1,766.21 638.49

v) Other Financial assets 48.71 46.03 54.78

Current Year Tax (Net) 692.96 777.72 645.29

Other Current Assets 1,187.41 2,211.20 1,333.17

9,033.41 10,134.86 8,708.76

(3) Regulatory Deferral Account Debit Balances 1,119.93 1,068.35 250.69 Total Assets and Regulatory Deferral Account Debit

Balances 34,682.34 32,506.41 27,509.38

EQUITY AND LIABILITIES

Equity

Equity Share Capital 1,386.64 1,528.57 1,528.57

Other Equity

i) Retained earnings 8,843.46 9,551.61 8,463.80

ii) Other reserves 2,281.23 2,254.40 2,206.25

12,511.33 13,334.58 12,198.62

Liabilities

(1) Non-Current Liabilities

Financial liabilities

i) Borrowings 8,316.51 6,050.29 5,040.62

Deferred tax liabilities (Net) 2,093.47 1,877.42 1,538.38

Other non-current liabilities 1,235.81 1,010.64 632.85

11,645.79 8,938.35 7,211.85

(2) Current Liabilities


i) Borrowings 3,668.00 1,457.80 1,546.09

ii) Trade payables 1,988.07 1552.51 707.44

iii) Other financial liabilities 1,218.49 1,222.60 383.17

Other current liabilities 701.75 858.71 1,403.00

Provisions 510.10 657.78 249.66

8,086.41 5,749.40 4,289.36

(3) Regulatory Deferral Account Credit Balances 2,438.81 4,484.08 3,809.55 Total Equity and Liabilities 34,682.34 32,506.41 27,509.38

2. Standalone Profit & Loss Account

Rs. In Crore

SI. NO

Particulars For the year

ended 31.03.2019 For the year


ended 31.03.2017

I Revenue from Operations 7,145.92 8,496.20 8,652.59

II Other Income 913.35 586.85 674.57 III Total Income (I+II) 8,059.27 9,083.05 9,327.16

IV EXPENSES

Changes in Inventories 242.92 67.44 (436.71)

Employee benefit expenses 2,963.68 3,081.96 2,294.54

Finance Costs 390.09 204.98 169.06

Depreciation and Amortization expenses

745.72 861.15 683.07


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SI. NO

Particulars For the year



ended 31.03.2017

Other expenses 2,405.19 2,237.26 3,409.55 Total Expenses (IV) 6,747.60 6,452.79 6,119.51

V Profit / (loss) before Exceptional, Tax

& Rate Regulatory Activity (III-IV) 1,311.67 2,630.26 3,207.65

VI Net Movement in regulatory deferral account balances income / (expenses)

859.41 (49.03) (873.56)

VII Profit / (loss) before Exceptional Item

and Tax(V+VI) 2,171.08 2,581.23 2334.09

VIII Exceptional Items 35.21 (59.44) 180.08

IX Profit / Loss after Exceptional item and before tax (VII-VIIII) 2,135.87 2,640.67 2154.01

X Tax expenses

(1) Current tax -Current Year Tax 288.27 464.08 337.96

-MAT Credit (337.96)

-Previous Year 101.90 (0.24) (19.77)

-Tax Expenses / (Savings) on Rate

Regulated Account 262.69 (11.00) -

(2) Deferred Tax 216.04 339.05 (195.04)

XI Profit/ (Loss) for the Period (IX-X) 1,266.97 1,848.78 2,368.81

XII Other Comprehensive Income

A (i) Items not reclassified to profit or loss: (net of Taxes)

Re-measurement of defined

benefits plans (34.20) 61.03 (26.61)

XIII

Total Comprehensive Income for the period of (XI+XII) (Comprising Profit/(Loss) and other comprehensive income)

1,232.77 1,909.81 2,342.20

3. Standalone Cash Flow Statement

Rs. In Crore

Particulars For the year ended

31.03.2019 For the year ended


31.03.2017 A. Cash flow from operating

activities:

Net Profit Before Tax 2,135.87 2,640.67 3,027.56*

Adjustments for:

Less:

Profit on Disposal of Asset 18.24 0.64 0.78

Dividend from NTPL 0 19.47 -

Interest Income 271.91 108.57 231.19

290.15 128.69 231.97

Add:

Depreciation 745.72 861.15 683.07

Buyback Expenses 6.75 - 3.11

Other non-cash charges (79.08) 491.80 40.27

Loss on Disposal of assets 9.18 -

Provision for fixed assets 10.14 9.54 -


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31.03.2017

Interest expense 390.09 204.98 169.06 1,082.80 792.65 1,567.47 1,438.77 895.51 663.54

Operating Profit before working capital changes

2,928.52 4,079.44 3,691.10

Adjustments for :

Trade receivables (1,360.50) 382.25 (2,055.12)

Loans & advances (55.90) (196.49) (86.83)

Inventories & other current assets 1,108.51 (1,144.38) (606.25)

Trade payables & other current liabilities

(1,713.81) 1,008.52 369.75

Cash Flow generated from Operations

906.82

4,129.34

1,312.65

Direct Taxes paid (405.38) (463.42) (503.91)

Cash Flow Before Extraordinary Items

501.44 3,665.92 808.74

Grants received (2.73) 94.82 1.06 Net Cash from operating activities

498.71 3,760.74 809.80

B. Cash flow from investing activities:

Purchase of property, plant and equipment / preliminary expenses

(3,068.98) (3,232.39) (3,480.97)

Sale of property, plant and equipment / Projects From continuing operations

18.70 (0.08) 9.44

Sale/Purchase of Investments (402.21) 0.00 (472.25)

Dividend Received 19.47 -

Interest Received 269.23 114.42 362.34

Net Cash used in investing activities

(3,183.28) (3,098.58) (3,581.44)

C. Cash flow from financing activities:

Short Term Borrowings (Net) 2,210.20 (88.29) 116.20

Long Term Borrowings (Net) 2,236.30 1,848.94 3,288.35

Loans to subsidiary 1,070.00 (1,170.00) -

Interest paid (767.97) (487.60) (320.98)

Buyback of Equity Shares including Buyback Expenses

(1,255.76) - (1,479.61)

Dividend ( including Dividend Tax)

(807.01) (774.66) (1,590.94)

Net Cash used/received in financing activities

2,685.76 (671.61) 13.03

Net increase, decrease( ) Cash and Cash equivalents

1.19 (9.44) (2,758.61)

Cash and cash equivalents as at the beginning of the year

12.63 22.07 2,780.68

Cash and cash equivalents as at the end of the year

13.82 12.63 22.07


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31.03.2017

NOTE : ( ) INDICATES CASH OUTFLOW.

-

-

DETAILS OF CASH AND CASH EQUIVALENTS:

As at

March 31, 2019

As at

March 31, 2018

As at

March 31, 2017

Cash in Hand 0.01 0.01 0.01

Cash at Bank in Current Accounts 2.86 2.62 12.06

Cash at Bank in Deposit Accounts 10.95 10.00 10.00 Total 13.82 12.63 22.07

*Profit before tax for the FY 2016-17 is before considering the net movement in regulatory account

balances

Auditor Qualifications: There are no auditor qualifications for the fiscal years mentioned above

4. Consolidated Balance Sheet Rs. In Crore

Sl. No

Particulars As on

31.03.2019 As on

31.03.2018 As on

31.03.2017

ASSETS

(1) Non-current assets

Property, Plant and Equipment 17,651.58 16,758.95 15,994.55

Intangible Asset 6.37 6.37 2.64

Capital Work-In-Progress 13,737.86 8,197.50 5,074.99

Asset under Development 117.80 199.05 143.65

Financial Assets

i) Investments 12.69 12.69 12.69

ii) Loans 42.60 67.45 99.42

Other non-current assets 1,747.36 1,993.89 2,073.46

33,316.26 27,235.90 23,401.40

(2) Current Assets

Inventories 1,720.10 2,089.42 2,336.00

Financial Assets

i) Trade receivables 6,186.95 4,558.03 4,793.45

ii) Cash and cash equivalents 18.49 101.93 63.42

iii) Other bank balances 512.58 266.54 451.63

iv) Loans 37.39 16.21 146.77

V) Other Financial assets 49.17 46.22 54.85

Current Year Tax (Net) 698.60 781.97 645.29

Other Current Assets 1,264.65 2,275.79 1,343.59

10,487.93 10,136.11 9,835.00

(3) Regulatory Deferral Account Debit Balances 1,476.10 1,068.35 250.69 Total Assets and Regulatory Deferral Account Debit Balances 45,280.29 38,440.36 33,487.09


Equity

Equity Share Capital 1,386.64 1,528.57 1,528.57

Other Equity

i) Retained earnings 9,101.58 9,569.00 8,391.65

ii) Other reserves 2,281.23 2,254.40 2,206.26

12,769.45 13,351.97 12,126.48

Non-Controlling Interest 1,101.75 685.68 674.08

Liabilities

(1) Non-Current Liabilities


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i) Borrowings 14,377.29 9,380.34 8,536.56

Deferred tax liabilities (Net) 2,283.36 1,912.17 1,501.11

Other non-current liabilities 1,363.97 1,010.64 632.84

18,024.62 12,303.15 10,670.51

(2) Current Liabilities


i) Borrowings 4,546.53 2,130.53 2,125.23

ii) Trade payables 3,329.06 2,073.56 1,257.70

iii) Other financial liabilities 1,711.27 1,715.38 827.58

Other current liabilities 841.90 1,028.13 1,745.09

Provisions 516.90 667.88 250.87

10,945.66 7,615.48 6,206.47

(3) Regulatory Deferral Account Credit Balances 2,438.81 4,484.08 3,809.55

Total Equity and Liabilities and Regulatory Deferral Account Credit Balances

45,280.29 38,440.36 33,487.09

5. Consolidated Profit & Loss Account

Rs. In Crore

SI.

NO Particulars

For the year ended

31.03.2019

For the year ended

31.03.2018

For the year ended

31.03.2017

I Revenue from Operations 9,870.93 11,288.39 11,185.73

II Other Income 907.54 575.95 713.78

III Total Income (I+II) 10,778.47 11,864.34 11,899.51

IV EXPENSES

Changes in Inventories 242.92 67.44 (436.71)

Cost of Fuel Consumed 1,751.81 1,661.46 1,543.45

Employee benefit expenses 3,026.98 3,163.05 2,343.58

Finance Costs 699.92 547.85 588.28

Depreciation and Amortization expenses 1,120.76 1,231.62 1,043.53

Other expenses 2,555.03 2,382.66 3,474.44

Total Expenses (IV) 9,397.42 9,054.08 8,556.57

V Profit / (loss) before Exceptional, Tax & Rate

Regulatory Activity (III-IV) 1,381.05 2,810.26 3,342.93

VI Net Movement in regulatory deferral account

balances income / (expenses) 1,215.56 (49.03) (873.56)

VII Profit / (loss) before Exceptional Item and Tax

(V+VI) 2,596.61 2,761.23 2,469.37

VIII Exceptional Items 35.21 (59.44) 180.08

IX Profit / Loss before tax (VII-VIII) 2,561.40 2,820.67 2,289.29

X Tax expenses

(1) Current tax

-Current Year Tax 288.27 508.60 366.96

-MAT Credit (366.96)

-Previous Year 101.90 (0.24) (19.77)


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SI.

NO Particulars

For the year ended

31.03.2019

For the year ended

31.03.2018

For the year ended

31.03.2017

-Tax Expenses / (Savings)

on Rate Regulated Account 262.69 (11.00) -

(2) Deferred Tax 371.19 366.53 (147.61)

XI Profit/ (Loss) for the Period (IX-X) 1,537.35 1,956.78 2,456.66

XII Other Comprehensive Income

A (i) Items not reclassified to profit or loss: (Net

of Taxes)

Re-measurement of

defined benefits plans (34.20) 61.03 (26.61)

XIII

Total Comprehensive Income for the period of

(XI+XII) (Comprising Profit/(Loss) and other

comprehensive income) 1,503.15 2,017.81 2,430.06

6. Consolidated Cash Flow Statement

Rs. In Crore




31.03.2017

A. Cash flow from operating activities:

Net Profit Before Tax 2,561.40 2,820.67 3,162.84*

Adjustments for:

Less:

Profit on Disposal of Asset 18.24 0.64 0.78

Interest Income 130.68 38.26 232.43

148.92 38.90 233.21

Add:

Depreciation 1,120.76 1,231.62 1,043.44

Buyback Expenses 6.75 - 3.11

Fixed asset written off 0.18 -

Provision for loss on asset 19.32 9.37 -

Other non cash charges (82.38) 493.24 33.26

Interest expense 699.92 547.85 626.24

1,764.37 1,615.44 2,282.26 2,243.36 1,706.05 1,472.84

Operating Profit before working capital changes

4,176.84 5,064.03 4,635.68

Adjustments for :

Trade receivables (1,749.38) 233.73 (2,371.51)

Loans & advances 3.67 (32.48) (86.83)

Inventories & other current assets 629.19 (421.78) (964.16)

Trade payables & other current liabilities

(936.88) 151.85 514.79

Cash Flow generated from Operations

2,123.44

4,995.35 1,727.97

Direct Taxes paid (500.65) (556.80) (503.91)

Cash Flow Before Extraordinary Items

1,622.80 4,438.55 1,224.06


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31.03.2017

Grants received (2.73) 94.81 1.22 Net Cash from operating activities

1,620.06 4,533.36 1,225.28

B.Cash flow from investing activities:

Purchase of property, plant and equipment / preliminary expenses

(6,265.50) (4,646.29) (4,232.59)

Sale of property, plant and equipment / Projects From continuing operations

18.70 9.24 9.44

Sale/Purchase of Investments 0.00 (472.25)

Interest Received 127.73 43.99 363.58 Net Cash used in investing activities

(6,119.07) (4,593.06) (4,331.82)

C. Cash flow from financing activities:

Short Term Borrowings (Net) 2,416.00 5.30 655.32

Issue of Capital 386.43 - 225.77

Long Term Borrowings (Net) 4,967.02 1,731.42 2,899.83

Interest paid (1,291.12) (857.39) (778.16)

Buyback of Equity Shares including Buyback Expenses

(1,255.76) - (1,479.61)

Dividend ( including Dividend Tax)

(807.01) (781.12) (1,590.94)

Net Cash used/received in financing activities

4,415.56 98.22 (67.78)

Net increase, decrease(-) Cash and Cash equivalents

(83.44) 38.51 (3,174.32)

Cash and cash equivalents as at the beginning of the year

101.93 63.42 3,237.74

Cash and cash equivalents as at the end of the year

18.49 101.93 63.42

NOTE : (-) INDICATES CASH OUTFLOW.

0.00 0.00

DETAILS OF CASH AND CASH EQUIVALENTS:

As at

March 31, 2019

As at

March 31, 2018

As at

March 31, 2017

Cash in Hand 0.01 0.01 0.01

Cash at Bank in Current Accounts 7.53 22.09 24.30

Cash at Bank in Deposit Accounts 10.95 79.83 39.11 Total 18.49 101.93 63.42

*Profit before tax for the FY 2016-17 is before considering the net movement in regulatory account

balances

Auditor Qualifications: There are no auditor qualifications for the fiscal years mentioned above.


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7. Auditor’s Opinion Extracts:

Standalone

For the year ended 31st March 2019

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at 31 March, 2019, and its profit, total comprehensive income, changes in equity and its Statement of cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the Note No 29 Net movement in regulatory deferral account balances Income / expenses - to the Standalone financial statements: –

a. As explained in the said note, a sum of Rs. 131.29 crore along with period cost has been de-recognized under regulatory deferral liabilities during the current financial year on account of redetermination of the estimated liabilities arising out of orders of CERC in respect of sharing of incentives and revenue on sale of lignite to outsiders respectively and inclusion of the said amount under Regulatory deferral income

b. Our opinion is not modified in respect of the said matter.


Opinion

In our opinion and to the best of our information and according to the explanations given to us, the

aforesaid standalone Ind AS financial statements give the information required by the Act in the manner

so required and give a true and fair view in conformity with the accounting principles generally accepted

in India, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its profit,

its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the Note No 31 - Net movement in regulatory deferral account balances Income / expenses - to the Standalone financial statements: –

a) The incremental Cost of Rs.542.07 crore attributable to enhancement of the Gratuity ceiling limit

from Rs. 10 lakh to Rs. 20 lakh and also the additional liability of Rs.156.73 crore on account pay

revision respectively as explained in the said note have been reckoned as regulatory deferral

asset in accordance with the expert legal opinion pending the filing of petition with CERC for

the consequent tariff revision.

b) Our opinion is not modified in respect of these matters.


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Opinion

In our opinion and to the best of our information and according to the explanations given to us, the

aforesaid standalone financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles generally accepted

in India, of the state of affairs (Financial position) of the Company as at 31 March, 2017, and its profit and

its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the Standalone IND AS financial statements:

a) Note No: 49 to the financial statements regarding implementation of Ind AS 114 Regulatory

Deferral Accounts, wherein the resulting adjustments of giving effect to CERC Orders has been

recognised in the retained earnings for the years prior to transition date i.e., 01.04.2015. The

adjustments relating to the FY 2015-16 & FY 2016-17 are recognised in the Statement of Profit &

Loss under Net Movement in Regulatory Deferral Account Balances.

b) Note No: 46 to the financial statements regarding the change in accounting policy during the

year whereby the expenditure incurred on operation and maintenance (excluding interest and

depreciation) of Lignite Handling System is being treated as a part of Lignite Cost as against the

earlier practice of treating the said expenditure as a cost attributable to thermal stations.

c) Our opinion is not modified in respect of these matters.

Consolidated


Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs (financial position) of the Group as at 31 March, 2019, and its consolidated profit, consolidated total comprehensive income, consolidated changes in equity and its consolidated cash flows for the year ended on that date. Emphasis of Matter

We draw attention to the Note No 31- Net movement in regulatory deferral account balances Income/expenses - to the Consolidated financial statements: -

a. As explained in the said note, a sum of Rs 131.29 crore along with period cost has been de-recognised under regulatory deferral liabilities during the current financial year on account of redetermination of the estimated liabilities arising out of orders of CERC in respect of sharing of incentives and revenue on sale of lignite to outsiders respectively and inclusion of the said amount under Regulatory deferral income.

As reported by the auditor of the Subsidiary Company NLC TAMIL NADU POWER LIMITED in their audit report dated 27.05.2019.

b. Note number 53c of notes to balance sheet - “Regarding balances of Sundry creditors, Debtors, Loans and advances and deposits which are subject to confirmation and reconciliation”.

c. Note number 53d of notes to balance sheet- A sum of Rs 7,22,26,139/- has been accounted during the year as rebate to DISCOMS (BESCOM – Rs 6,65,27,250/-; MESCOM – Rs 56,98,889/-)


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pertaining to past years after reconciliation during the year. This accentuates the stress on reconciling parties accounts regularly and/ obtaining confirmation of balances at regular intervals'.

d. Our opinion is not modified in respect of the said matters

For the year ended 31st March 2018 Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind As and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associate and jointly controlled entity as at 31st March, 2018, and their consolidated profit, Consolidated total comprehensive income, consolidated statement of changes in equity and their consolidated cash flows for the year ended on that date. Emphasis of Matter

We draw attention to the Following Matters in the notes to the Consolidated financial statements: a. Note No.33 (Net Movement in regulatory deferral account balances income / expenses) - The

Incremental Cost of Rs 542.07 crore attributable to enhancement of the Gratuity ceiling limit from Rs 10 lakh to Rs 20 lakh and also the additional liability of Rs 156.73 crore on account of pay revision respectively as explained in the said note have been reckoned as Regulatory Deferral Asset in accordance with the expert legal opinion pending filing of petition with CERC for the consequent tariff revision.

b. Note No.53C regarding balances of sundry creditors, debtors, loans and advances and deposits which are subject to confirmation and reconciliation. Our opinion is not modified in respect of said matter.

For the year ended 31st March 2017 Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the consolidated state of affairs of the Group, its associates and jointly controlled entities as at 31st March, 2017, and their consolidated profit, their consolidated cash flows and their consolidated statement of changes in equity for the year ended on that date. Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements: a. Note No: 52 to the financial statements regarding implementation of Ind AS 114 Regulatory

Deferral Accounts, wherein the resulting adjustments of giving effect to CERC Orders has been recognised in the retained earnings for the years prior to transition date i.e, 01.04.2015. The adjustments relating to the FY 2015-16 & FY 2016-17 are recognised in the Statement of Profit & Loss under Net Movement in Regulatory Deferral Account Balances.

b. Note No: 50 to the financial statements regarding the change in accounting policy during the year whereby the expenditure incurred on operation and maintenance (excluding interest and depreciation) of Lignite Handling System is being treated as a part of Lignite Cost as against the earlier practice of treating the said expenditure as a cost attributable to thermal stations.

Our opinion is not modified in respect of these matters.


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J. Abridged version of Limited Review Half Yearly Consolidated and Standalone Financial

Information:

1. Unaudited Financial Results for the half-year ended 30th September 2019 (Standalone)

Rs. in crore

Particulars Half Year Ended

September 30, 2019 (Unaudited)

Revenue from Operations (I) 3,513.55

Other Income (II) 608.33 Total Income (III)= (I+II) 4,121.88

EXPENSES

Changes in Inventories 137.52

Employee Benefit Expenses 1,342.68

Finance Costs 346.99

Depreciation and Amortization Expenses 368.53

Other Expenses 1,015.45

Less: Expenses Capitalized Total Expenses (IV) 3,211.17

Profit / (loss) before Exceptional, Tax & Rate Regulatory Activity (V)=(III-IV)

910.71

Net Movement in Regulatory Deferral Account Balances Income / (Expenses)-(VI)

39.17

Profit / (loss) before Exceptional & Tax (VII)=(V-VI) 949.88

Exceptional Items (VIII) 2.19 Profit / (loss) after Exceptional Item and before Tax (IX)=(VII-VIII) 947.69

Tax Expense: (X)

(1) Current Tax

- Current Year Tax (Net of MAT Credit)

- Previous Year Tax

- Tax Expenses / (Savings) on Rate Regulated Account

(2) Deferred Tax 287.87 Profit / (loss) for the period (XI)= (IX-X) 659.82

Other Comprehensive Income (XII)

(A) Items not reclassified to Profit or Loss: (Net of Tax)

1. Re-measurements of defined benefit plans (122.86) Total Comprehensive Income for the period (XI+XII) (Comprising Profit or (Loss) and other Comprehensive Income)

536.96

2. Unaudited summarized Balance Sheet (Standalone)

Rs. in crore

Particulars As at September

30, 2019 (Unaudited)

ASSETS

Non-Current Assets

Property, Plant and Equipment 12,570.48

Right-of-Use Asset 2.86

Capital Work-In-Progress 8,986.15

Intangible Asset 5.80

Asset under development 114.68


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Particulars As at September

30, 2019 (Unaudited)

Financial Assets

i)Investments 3,183.35

ii)Loans 38.40

Other Non-Current Assets 1,265.42

26,167.14

Current Assets

(a) Inventories 1,434.95

(b) Financial Assets

i) Trade Receivables 5,631.79

ii) Cash and Cash Equivalents 20.73

iii) Other Bank Balances 325.71

iv) Loans 1,434.08

v) Other Financial Assets 47.43

(C) Current Year Tax ( Net ) 831.10

(d) Other Current Assets 1,026.26

10,752.05

Regulatory Deferral Account Debit Balances 1,156.09

Total Assets and Regulatory Deferral A/c Debit Balance 38,075.28

EQUITY AND LIABILITIES Equity

(a) Equity Share Capital 1,386.64

(b) Other Equity

i) Retained Earnings 9,380.30

ii) Other Reserves 2,281.23 13,048.17

Liabilities

Non-Current Liabilities

(a) Financial Liabilities

(i) Borrowings 11,546.87

(ii) Lease liability of Right-of-Use Assets 1.62

(b) Deferred Tax Liabilities (Net) 2,381.28

(C ) Other Non-Current Liabilities 1,293.58

15,223.34

Current Liabilities



(ii) Trade Payables

-Total outstanding dues of Micro and Small enterprises 17.97

-Total outstanding dues of creditors other than Micro and Small enterprises

1,529.25

(iii) Lease liability of Right-of-Use Assets

(iv) Other Financial Liabilities 1,384.35

(b) Other Current Liabilities 488.37

(C ) Provisions 591.08

7,364.98

Regulatory Deferral Account Credit Balances 2,438.78 Total Equity & Liabilities and Regulatory Deferral A/c Credit Balance 38,075.28


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3. Unaudited Financial Results for the half-year ended 30th September 2019 (Consolidated)

Rs. Crore

Particulars Half Year Ended

September 30, 2019 (Unaudited)

Revenue from Operations (I) 4,508.63

Other Income (II) 585.75 Total Income (III)= (I+II) 5,094.38

EXPENSES

Cost Of Fuel Consumed 665.94

Changes in Inventories 137.52

Employee Benefit Expenses 1,378.74

Finance Costs 536.91

Depreciation and Amortization Expenses 553.09

Other Expenses 1,094.86 Total Expenses (IV) 4,367.06

Profit / (loss) before Exceptional, Tax & Rate Regulatory Activity (V)=(III-IV) 727.32

Net Movement in Regulatory Deferral Account Balances Income / (Expenses)-(VI) 112.45

Profit / (loss) before Exceptional & Tax (VII)=(V-VI) 839.77

Exceptional Items (VIII) 2.19

Profit / (loss) after Exceptional Item and before Tax (IX)=(VII-VIII) 837.58

Tax Expense: (X)

(1) Current Tax

- Current Year Tax (Net of MAT Credit)

- Previous Year Tax (1.69)

- Tax Expenses / (Savings) on Rate Regulated Account -

(2) Deferred Tax 284.69 Profit / (loss) after Tax before share of Profit/(loss) of associates (XI)= (IX-X)

554.58

Share of Profit/(loss) of Associates (XI) 0.13

Profit / (loss) for the Year (XII)= (X)-(XI) 554.71

Other Comprehensive Income (XIII)

(A) Items not reclassified to Profit or Loss: (Net of Tax)

1. Re-measurements of defined benefit plans (122.86) Total Comprehensive Income for the period (XII+XIII) (Comprising Profit or (Loss) and other Comprehensive Income)

431.85

4. Unaudited Summarized Balance Sheet (Consolidated)

Rs. in crore

Particulars

As at September 30,

2019 (Unaudited)

ASSETS

Non-Current Assets

Property, Plant and Equipment 18,380.28

Right-of-Use Asset 33.02

Capital Work-In-Progress 15,878.33

Intangible Asset 5.90

Asset under development 114.68


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Particulars

As at September 30,

2019 (Unaudited)

Financial Assets

i)Investments 12.82

ii)Loans 38.40

Other Non-Current Assets 1,807.79

36,271.23

Current Assets

(a) Inventories 1,581.62

(b) Financial Assets

i) Trade Receivables 7,299.81

ii)Cash and Cash Equivalents 28.25

iii) Other Bank Balances 446.19

iv) Loans 34.80

v) Other Financial Assets 48.01

(C) Current Year Tax ( Net ) 863.66

(d) Other Current Assets 1,073.59

11,375.93

Regulatory Deferral Account Debit Balances 1,585.53 Total Assets and Regulatory Deferral A/c Debit Balance 49,232.69


Equity

(a) Equity Share Capital 1,386.64

(b) Other Equity

i) Retained Earnings 9,499.70

ii) Other Reserves 2,281.23 Total Equity attributable to the Owners of the Parent 13,167.57

(c ) Minority Interest 1,446.49

Total Equity 14,614.06

Liabilities

Non-Current Liabilities



(ii) Lease liability of Right-of-Use Assets 1.90

(b) Deferred Tax Liabilities (Net) 2,568.00

(C ) Other Non-Current Liabilities 1,397.50

22,394.03

Current Liabilities



(ii) Trade Payables

-Total outstanding dues of Micro and Small enterprises 19.18

-Total outstanding dues of creditors other than Micro and Small enterprises

2,822.63

(iii) Other Financial Liabilities 1877.13

(b) Other Current Liabilities 516.95

(C ) Provisions 591.78

9,785.82

Regulatory Deferral Account Credit Balances 2,438.78 Total Equity & Liabilities and Regulatory Deferral A/c Credit Balance 49,232.69


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K. Any material event/ development or change having implications on the financials/credit

quality (e.g. any material regulatory proceedings against the Issuer/Promoters, 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.

The Issuer hereby confirms that other than the information disclosed in the Public Domain, our website

and this disclosure document 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.

L. Names of the Trustee and Consent thereof:

In accordance with the provisions of 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, the Issuer has appointed SBICAP Trustee Company Limited to act as Trustees

to the Bondholder(s).

The address and contact details of the Trustees are as under:

Name: SBICAP Trustee Company Limited

Address: Apeejay House, 6th Floor,3, Dinshaw Wachha Road, Churchgate, Mumbai – 400 020

Tel: (022) 43025514

Fax: (022) 22040465


Website: www.sbicaptrustee.com

Copy of letter from SBICAP Trustee Company Limited dated 16th May, 2019 conveying their consent

to act as Trustees for the current issue of Bonds is enclosed within the Annexure in this Disclosure

Document.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their

consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters

and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem

necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the

Issuer to the Trustees on behalf of the Bondholder(s) shall discharge the Issuer pro tanto to the

Bondholder(s). 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 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 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 and Exchange Board of India (Debenture Trustees) Regulations, 1993, the




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Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents,

with due care, diligence and loyalty.

M. Rating and Detailed Rating Rationale

ICRA vide letters dated May 13, 2019 & 13th Jan, 2020has assigned “ICRA AAA” (pronounced as

"ICRA Triple A” with outlook on the long term is stable) and India Ratings & Research vide letter

dated letters dated May 14, 2019 & 13th Jan, 2020 has assigned “IND AAA” (pronounced as "IND

Triple A” with outlook on the long term is stable) rating to the Bonds being issued under the

current placement. Instrument with this rating indicate highest degree of safety regarding timely

service of financial obligations. Such instrument carry lowest credit risk. Copy of the letter from

ICRA Limited and India Ratings & Research Private Limited are enclosed with this Offer Letter

including respective Rating Rationales as Annexure I and Annexure II respectively.

N. Security :

The Bonds will be secured by a first/pari passu first charge on specified assets of the company

as may be mentioned in the Bond Trust Deed. The security will be created within the time

stipulated as per the relevant statutory provisions.

The Company shall at all times maintain a minimum-security cover of 1.0 times of the Bonds

proposed to be issued and interest accrued thereon.

The Company reserves the right to create further charge on such asset cover for its present and

future financial requirements or otherwise, without any prior consent of the Bondholders, or as

provided for under the Bond Trust Deed, provided that minimum asset cover of one time is

maintained.

O. Stock Exchange where Bonds are proposed to be listed

The Bonds are proposed to be listed on the Debt segment of NSE and BSE Limited.

P. Other Details

1. DRR Creation –

The Company will create a Debenture Redemption Reserve (‘DRR’) and will credit to the DRR

such amounts as applicable under provisions of Section 71 of the Companies Act 2013 and rules

made there under (as amended from time to time) or any other relevant statute(s) as applicable

2. Issue/instrument specific regulations

The Issue is being made under SEBI Debt Regulations and applicable laws. The Issuer can

undertake the activities proposed by it in view of the present approvals and no further approval

from any GOI authorities is required by it to 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. The present Issue is being made pursuant to the following:

i. Resolution of the Board of Directors of the Issuer dated 29th April,2019 approving issuance of debentures as set out in Annexure III.


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ii. Shareholder’s approval obtained pursuant to section 180(1)(c) of the Companies Act by special resolution through postal ballot on 7th October,2017 to borrow funds, not exceeding Rs. 35,154 Crores or the aggregate of paid up capital of the Issuer and its free reserve in accordance with its latest audited financial statement, whichever is higher apart from temporary loans, as set out in Annexure IV.

The aggregate amount of borrowings including the Debentures offered through this document

are within the limits of borrowings mentioned above. The Issuer can issue the Debentures

proposed by it in view of the present approvals and no further approvals in general from any

GOI authority are required by it to undertake the Issue.

3. Application Process

i. Who Can 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 applicants are required to comply with the relevant regulations/ guidelines applicable to them for

investing in the issue of Bonds as per the norms approved by Government of India, RBI or any other

statutory and regulatory body from time to time.

This Disclosure Document is intended solely for the use of the person to whom it has been sent by the

Issuer for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of

the securities offered herein, and it is not to be reproduced or distributed to any other persons (other

than professional advisors of the prospective investor receiving this Disclosure Document from the

Issuer).

ii. Documents to be provided by Investors

Investors need to submit the certified true copies of the following documents, along-with the

Application Form, as applicable:

• Memorandum and Articles of Association/constitution/ 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 Issuer and regional rural Issuers);

• SEBI registration certificate (for Mutual Funds);

• 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;

• Application Form (including RTGS/NEFT details).

iii. Applications to be accompanied with Issuer Account Details

Every application shall be required to be accompanied by the Issuer account details of the

Applicant for the purpose of facilitating direct credit of all amounts through RTGS.


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iv. How to Apply

All eligible Investors should refer the operating guidelines for issuance of debt securities on private

placement basis through an electronic book mechanism as available on the website of BSE. Investors

will also have to complete the mandatory know your customer (KYC) verification process. Investors

should refer to the BSE EBP Guidelines in this respect. The Application Form will be filled in by each

Investor and uploaded in accordance with the SEBI regulatory and operational guidelines. Applications

for the Bonds must be in the prescribed form (enclosed) and completed in BLOCK LETTERS in English

as per the instructions contained therein.

(a) The details of the Issue shall be entered on the BSE – EBP Platform by the Issuer at least 2 (two)

Business Days prior to the Issue opening date, in accordance with the Operational Guidelines.

(b) 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– EBP Platform, at least 1 (one)

Business Day before the start of the Issue opening date.

Some of the key guidelines in terms of the current Operational Guidelines on issuance of securities on

private placement basis through an EBP 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 (ten) minutes of the bidding period / window, revision of bid is only allowed for

improvement of coupon / yield and 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(ten) minutes of the bidding period / window, no cancellation of bids is permitted.

(c) Multiple Bids

Investors are permitted to place multiple bids on the EBP platform in line with EBP Guidelines vide

SEBI circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018.

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

Payment Mechanism

Applicants shall make remittance of application money by way of electronic transfer of funds through

RTGS/electronic fund mechanism for credit by the pay-in time in the Issuer account of the BSE Clearing

Corporation appearing on the BSEEBP platform in accordance with the timelines set out in the EBP

Guidelines and the relevant rules and regulations specified by SEBI in this regard. All payments must

be made through RTGS as per the Issuer details mentioned in the application form /BSE-EBP platform.

Payment of subscription money for the Debentures should be made by the successful Eligible

Investor as notified by the Issuer.


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Successful Eligible Investors should do the funds pay-in to the account of ICCL (“Designated

Bank Account”). The Designated Bank Account information shall be displayed in the front end

of BSE EBP Platform and the same shall also be available in the obligation file downloaded to

Eligible Investors.

The Designated Bank Accounts of ICCL are as under:

ICICI Bank :

Beneficiary Name: INDIAN CLEARING CORPORATION LTD

Account Number: ICCLEB

IFSC Code : ICIC0000106

Mode: NEFT/RTGS

YES Bank :



IFSC Code : YESB0CMSNOC

Mode: NEFT/RTGS

HDFC Bank:



IFSC Code : HDFC0000060

Mode: NEFT/RTGS

Successful Eligible Investors must do the subscription amount payment to the Designated Bank

Account on or before 10:30 a.m. on the Pay-in Date (“Pay-in Time”). Successful Eligible Investors

should ensure to make payment of the subscription amount for the Debentures from their same

bank account which is updated by them in the BSE EBP Platform while placing the bids. In case

of mismatch in the bank account details between BSE EBP Platform and the bank account from

which payment is done by the successful bidder, the payment would be returned.

Note: In case of failure of any successful bidders to complete the subscription amount payments by the Pay-in Time or the funds are not received in the ICCL’s Designated Bank Account by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable to issue the Debentures to such successful bidders.

The Issuer assumes no responsibility for any Applications lost in mail. The entire amount of Rs.10 lacs

per Bond is payable on application.

How to fill the Application Form

• Applications should be for the number of Bonds applied by the Applicant. Applications not

completed in the said manner are liable to be rejected.

• The name of the applicant’s Issuer, type of account and account number must be filled in the

Application Form.

• The Applicant or in the case of an application in joint names, each of the Applicant, should

mention his/her PAN allotted under the Income -Tax Act, 1961 or where the same has not been


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allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section

139A (5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the certificates.

Hence, the investor should mention their PAN/GIR No. Application Forms without this

information will be considered incomplete and are liable to be rejected.

• All applicants are requested to tick the relevant column “Category of Investor” in the

Application Form. Public/ private/ religious/ charitable trusts, provident funds and other

superannuation trusts and other investors requiring “approved security” status for making

investments.

v. Terms of Payment

The full face value of the Bonds applied for is to be paid along with the Application Form. Investor(s)

need to send in the Application Form and payment through RTGS for the full value of Bonds applied

for.

vi. 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 or otherwise.

vii. Applications under Power of Attorney

A certified true copy of the power of attorney or the relevant authority as the case may be along with

the names and specimen signature(s) of all the authorized signatories and the tax exemption

certificate/document, if any, must be lodged along with the submission of the completed Application

Form. Further modifications/ additions in the power of attorney or authority should be notified to the

Issuer or to the Registrars or to such other person(s) at such other address(es) as may be specified by the

Issuer from time to time through a suitable communication.

In case of an Application made by companies under a power of attorney or resolution or authority, a

certified true copy thereof along with memorandum and articles of association and/or bye-laws along

with other constitutional documents must be attached to the Application Form at the time of making

the application, failing which, the Issuer reserves the full, unqualified and absolute right to accept or

reject any application in whole or in part and in either case without assigning any reason thereto. Names

and specimen signatures of all the authorized signatories must also be lodged along with the

submission of the completed Application Form.

viii. Application by Mutual Funds

In case of applications by mutual funds and venture capital funds, a separate application must be made

in respect of each scheme of an Indian mutual fund/venture capital 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.

The application forms duly filled shall clearly indicate the name of the concerned scheme for which

application is being made and must be accompanied by certified true copies of:

a. SEBI registration certificate


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b. Resolution authorizing investment and containing operating instructions

c. Specimen signature of authorized signatories

ix. Application by Provident Funds, Superannuation Funds and Gratuity Funds

The applications must be accompanied by certified true copies of

a. Trust deed / bye laws /resolutions

b. Resolution authorizing investment

c. Specimen signatures of the authorized signatories

Those desirous of claiming tax exemptions on interest on application money are required to submit a

certificate issued by the Income Tax officer along with the Application Form. For subsequent interest

payments, such certificates have to be submitted periodically.

x. Acknowledgements

No separate receipts will be issued for the application money. However, the Issuer 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.

xi. Basis of Allocation

Allotment against valid applications for the Bonds will be made to applicants in accordance with

applicable SEBI regulations, operational guidelines of the exchanges and all applicable laws. At its sole

discretion, the Issuer shall decide the amount of over subscription to be retained over and above the

Base Issue size.

The allotment of valid applications received on the EBP shall be done on yield-time priority basis in the

following manner:

(a) allotment would be done first on “yield priority” basis;

(b) where two or more bids are at the same yield, then the allotment shall be done on “time-priority”

basis;

(c) where two or more bids have the same yield and time, then allotment shall be done on “pro rata”

basis.

If the proportionate allotment of Bonds to such applicants is not a minimum of one Bond or in multiples

of one Bond (which is the market lot), the decimal would be rounded off to the next higher whole

number if that decimal is 0.5 or higher and to the next lower whole number if the decimal is lower than

0.5. All successful applicants on the Issue closing date would be allotted the number of Bonds arrived

at after such rounding off. It is clarified that the rounding off as specified here will not amount to the

Issuer exceeding the total Issue size.

xii. Right to Accept or Reject Applications

The Issuer reserves its full, unqualified and absolute right to accept or reject any application, in part or

in full, without assigning any reason thereof. The application forms that are not complete in all respects

are liable to be rejected and would not be paid any interest on the application money. Application would

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


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(a) Number of Bonds applied for is less than the minimum application size;

(b) Application money received not being from the Issuer account of the person/entity subscribing to

the Bonds or from the Issuer account of the person/ entity whose name appears first in the

Application Form, in case of joint holders;

(c) Issuer account details of the Applicants not given;

(d) Details for issue of Bonds in dematerialized form not given;

(e) PAN/GIR and IT circle/Ward/District not given;

(f) In case of applications under power of attorney by limited companies, corporate bodies, trusts,

etc. relevant documents not submitted;

In the event, if any Bonds applied for is/ are not allotted in full, the excess application monies of such

Bonds will be refunded, as may be permitted.

xiii. PAN /GIR Number

All applicants should mention their Permanent Account Number or the GIR Number allotted under

Income Tax Act, 1961 and the Income Tax Circle/ Ward/ District. In case where neither the PAN nor

the GIR Number has been allotted, the fact of such a non-allotment should be mentioned in the

Application Form in the space provided.

xiv. Signatures

Signatures should be made in English or in any of the Indian languages. Thumb impressions must be

attested by an authorized official of Issuer or by a Magistrate/ Notary Public under his/her official seal.

xv. Nomination Facility

Only individuals applying as sole applicant/joint applicant can nominate, in the prescribed manner, a

person to whom his Bonds shall vest in the event of his death. Non-individuals including holders of

power of attorney cannot nominate.

xvi. Fictitious Applications

In terms of the Section 38 of the Companies Act, 2013, 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 person in a fictitious name,

shall be punishable under the extant laws.

xvii. Depository Arrangements

The Issuer has appointed Integrated Registry Management Services Private Limited(website-

www.integratedindia.in)as the Registrar for the present Bond Issue. The Issuer has entered into

necessary depository arrangements with NSDL and CDSL for dematerialization of the Bonds offered

under the present Issue, in accordance with the Depositories Act, 1996 and regulations made there

under. In this context, the Issuer has signed two tripartite agreements as under:

• Tripartite Agreement between the Issuer, NSDL and the Registrar for dematerialization of the

Bonds offered under the present Issue.

• Tripartite Agreement between the Issuer, CDSL and the Registrar for dematerialization of the



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Bonds offered under the present Issue.

Bondholders can hold the bonds only in dematerialized form and deal with the same as per the

provisions of Depositories Act, 1996 as amended from time to time.

xviii. Procedure for applying for Demat Facility

A. Applicant(s) must have a beneficiary account with any DP of NSDL or CDSL prior to making the

application.

B. Applicant(s) must specify their beneficiary account number and DP ID in the relevant columns of

the Application Form.

C. For subscribing to the Bonds, names in the application form should be identical to those appearing

in the account details of the Depository. In case of joint holders, the names should necessarily be in

the same sequence as they appear in the account details in the Depository.

D. If incomplete/ incorrect beneficiary account details are given in the Application Form which does

not match with the details in the depository system, it will be deemed to be an incomplete

application and the same be held liable for rejection at the sole discretion of the Issuer.

E. The Bonds shall be directly credited to the beneficiary account as given in the Application Form

and after due verification, the confirmation of the credit of the Bonds to the applicant’s depository

account will be provided to the Applicant by the DP of the Applicant.

F. 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 to the Issuer as on the

Record Date.

G. For the allotment of debentures and all future communications including notices, the address,

nomination details and other details of the applicant as registered with his/her DP shall be used

for all correspondence with the applicant. The Applicant is therefore responsible for the correctness

of his/her demographic details given in the Application Form vis-a-vis those with his/her DP. In

case the information is incorrect or insufficient, the Issuer would not be liable for the losses, if any.

H. Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s)

only in dematerialized form.

4. Others

i. Right of Bondholder(s)

Bondholder is not a shareholder. The Bondholders will not be entitled to any rights and privilege of

shareholders other than those available to them under statutory requirements. The Bond(s) shall not

confer upon the holders the right to receive notice, or to attend and vote at the general meetings of the

Issuer. 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 above, the Bonds shall be subject to the provisions of the terms of this Issue and the other

terms and conditions as may be incorporated in the Debenture Trusteeship Agreement and other

documents that may be executed in respect of these Bonds.

ii. 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


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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

against the 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.

Further, the Issuer shall be entitled (without obtaining a prior approval from the Bondholders) to make

any modifications in this Disclosure Document which in its opinion is of a formal, minor or technical

nature or is to correct a manifest error.

iii. Future Borrowings

The Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as

also issue bonds/ debentures or other securities in any manner with ranking as senior or on 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 conditions as the Issuer may

think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this

connection.

In relation to the aforesaid, it is hereby clarified that such borrowing or raising of loans or availing of

financial assistance by the Issuer may be on such terms and conditions as the Issuer may deem fit, in

accordance with applicable laws, and may be secured and/or unsecured, at the discretion of the Issuer.

It is further clarified that such borrowing may or may not be to enhance and/or to replace regulatory

capital.

iv. Notices

All notices required to be given by the Issuer or by the Trustee to the Bondholders shall be deemed to

have been given if sent by ordinary post/ courier /e-mail and/or any other mode of communication as

may be permitted under applicable law as per the discretion of the Issuer to the original sole/ first

allottees of the Bonds and/ or if an advertisement is given in a leading newspaper.

All notices to be given by the Bondholder(s) shall be sent by registered post or by hand delivery to the

Issuer at Registered Office or to such address as may be notified by the Issuer from time to time and

shall be deemed to have been received on actual receipts.

v. Minimum subscription

As the current issue of Bonds is being made on private placement basis, the requirement of minimum

subscription shall not be applicable 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 the issue size or

certain percentage of the issue size.

vi. Underwriting

The present issue of Bonds is not underwritten.

vii. Deemed Date of Allotment

All benefits under the Bonds and relating to the Bonds (including payment of interest) will accrue and


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be available to the Bondholders from and including 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 date(s) of allotment / allotment date(s) 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) by the Issuer at its sole and absolute discretion.

viii. Credit of the Bonds

The beneficiary account of the investor(s) with National Securities Depository Limited

(NSDL)/ Central Depository Services (India) Limited (CDSL)/ DP will be given initial credit

within 2 working days from the Deemed Date of Allotment. The initial credit in the account will

be akin to the letter of allotment. On completion of the all statutory formalities, such credit in the

account will be akin to a bond certificate.

ix. Issue of Bond Certificate(s)

Subject to the completion of all statutory formalities within time frame prescribed in the relevant

regulations/Act/ rules etc., the initial credit akin to a letter of allotment in the Beneficiary Account of

the investor would be replaced with the number of Bonds allotted. 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/ DP from time to time and other applicable laws and rules notified in respect thereof.

The Bonds shall be allotted in dematerialized form only.

x. Market Lot

The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialized

form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

xi. 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 recognized 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.

xii. 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/DP 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 DP. 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.


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In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not

with the Issuer.

xiii. Common Form of Transfer

The Issuer undertakes that it shall use a common form/procedure for transfer of Bonds issued under

terms of this Disclosure Document.

xiv. Interest on Application Money

Interest at the 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 the Issuer’s account up to one day prior to the Deemed Date of

Allotment. The interest on application money shall be payable by the Issuer through electronic mode

within 15 (Fifteen) days from the Deemed Date of Allotment. In absence of complete Issuer details i.e.

correct/updated Issuer account number, IFSC/RTGS code/NEFT code etc., the Issuer shall be required

to make payment through cheques/ DDs or any other mode of payment as per the discretion of the

Issuer.

Since the Pay-In Date and the Deemed Date of Allotment fall on the same date, interest on

application money shall not be applicable. Further, no interest on application money will be

payable in case the Issue is withdrawn by the Issuer in accordance with the Operational

Guidelines.

The Issuer shall not be liable to pay any interest in case of invalid applications or applications liable to

be rejected including applications made by person who is not an Eligible Investor.

xv. Interest on the Bonds

The face value of the Bonds outstanding shall carry interest at the coupon rate from deemed date of

allotment and the coupon rate & frequency of payment (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) are mentioned at summary term sheet.

The interest payment shall be made through electronic mode to the bondholders whose names appear

on the list of beneficial owners given by the depository participant to R&TA as on the record date fixed

by Issuer in the bank account which is linked to the demat of the bondholder. However, in absence of

complete bank details i.e. correct/updated bank account number, IFSC/RTGS code /NEFT code etc.,

issuer shall be required to make payment through cheques / DDs on the due date at the sole risk of the

bondholders. 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 depository participant to R&TA as on

the Record Date.

xvi. Payment on Redemption

The Bond will be redeemed on the expiry of the number of years/months as specified in the Summary

Term Sheet from the Deemed Date of Allotment.


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The redemption proceeds shall be made through electronic mode to the bondholders whose names

appear on the list of beneficial owners given by the DP to R&TA as on the record date fixed by the Issuer

in the Issuer account which is linked to the demat of the bondholder. However, in absence of complete

Issuer details i.e. correct/updated Issuer account number, IFSC/RTGS code/NEFT code etc., The Issuer

shall be required to make payment through cheques / DDs or any other mode of payment as per the

discretion of the Issuer on the due date at the sole risk of the bondholders.

The redemption proceeds shall be paid to those Bondholders whose names appear on the list of

beneficial owners given by the DP to R&TA as on the record date fixed by the Issuer for the purpose of

redemption.

xvii. Right to further issue under the ISINs

The Issuer reserves right to effect multiple issuances under the same ISIN with reference to SEBI

Circular CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017 as amended (“First ISIN Circular”) and SEBI

Circular CIR/DDHS/P/59/2018 dated March 28, 2018, as amended or any other applicable laws or

regulations from time to time (“Second ISIN Circular”, together with the First ISIN Circular, the “ISIN

Circulars”).

The Issue can be made either by way of creation of a fresh ISIN or by way of issuance under the existing

ISIN at premium, par or discount as the case may be in line with the ISIN Circulars.

xviii. Right to Re-purchase, Re-issue or Consolidate the Bonds

The Issuer will have power, exercisable at its sole and absolute discretion from time to time, to re-

purchase a part or all of its Bonds from the secondary markets or otherwise, at any time prior to the

Redemption Date, subject to applicable law and in accordance with the applicable guidelines or

regulations, if any.

In the event of a part or all of the Issuer’s Bonds being repurchased as aforesaid or redeemed under any

circumstances whatsoever, the Issuer shall have, and shall be deemed always to have had, the power to

re-issue the Bonds either by re-issuing the same Bonds or by issuing other debentures in their place. The

Issuer shall have right to consolidate the Bonds under present series in accordance with applicable law.

Further the Issuer, in respect of such re-purchased or re-deemed Bonds shall have the power, exercisable

either for a part or all of those Bonds, to cancel, keep alive, appoint nominee(s) to hold or re-issue at such

price and on such terms and conditions as it may deem fit and as permitted under the ISIN Circulars or

by laws or regulations.

xix. 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 from Interest on Application Money and/or Interest on Bonds, as

applicable. For seeking TDS exemption/ lower rate of TDS, relevant tax exemption certificate/

declaration of non-deduction of tax at source on interest on application money, should be submitted

along with the application form. Where any deduction of Income Tax is made at source, the Company

shall send to the Bondholder(s) a Certificate of Tax Deduction at Source.

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).


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xx. 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.

xxi. 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

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.

Non –resident Indians who become entitled to the Bonds by way of succession shall ensure that they

comply with all such procedures and compliances as may be required under the Foreign Exchange

Management Act, 1999 and the rules made thereunder, the relevant RBI guidelines and other applicable

laws for them to become the beneficial holders of the Bonds.

xxii. 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 contained in the Companies Act and the

amendments there to.

xxiii. Disputes and 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 courts of Chennai, Tamil Nadu.

xxiv. Investor Relations and Grievance Redressal

Arrangements have been made to redress investor grievances expeditiously as far as possible. The

Issuer shall endeavor to resolve the investor’s grievances within 30 (Thirty) 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 registered office of the Issuer. All investors

are hereby informed that the Issuer has designated a Compliance Officer who may be contacted 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 etc. Contact details of the Compliance Officer are given elsewhere in

this Disclosure Document.


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xxv. Material Contracts and 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 that have been entered into by the Issuer. Copies of these

contracts may be inspected at the Central Office of the Issuer between 10.00 a.m. and 2.00 p.m. on any

working day until the issue closing date.

A. Material Contracts and Documents

a. Consent of Registrars dated 15th May, 2019.

b. Letter appointing Trustees to the Issue dated 15th May, 2019.

c. Board of Directors Resolution of the meeting held on April 29, 2019authorizing issue of Bonds

offered under terms of this Disclosure Document.

d. Letter of consent from the Trustees to act as Trustees to the Issue.

e. Letter of consent from the registrars for acting as registrars to the issue.

f. In-principle Approval for listing of Bonds by BSE and NSE.

g. Letter from ICRA Limited and India Ratings and Research Private Limited conveying the credit

rating for the Bonds.

h. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of Bonds in dematerialized

form.

i. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of Bonds in dematerialized

form.

j. Annual Report along with Audited financials and Audit Reports for the last three financial years.

k. Limited Review financial for the six months ended 30th September 2019


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Q. Issue Details

Summary Term Sheet:

Security Name NLCIL Bonds 2020-Series I

Series Series I

Issuer/Issuer NLC India Limited

Type of Instrument Secured, Redeemable, Non-Cumulative, Taxable, Non-Convertible Bonds in the

nature of Debentures

Nature of Instrument Secured

Seniority Senior

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 participants are required to comply with the relevant regulations/

guidelines applicable to them for investing in this Issue.

Further, notwithstanding anything contained above, only eligible investors who

have been addressed through the application form are eligible to apply.

Prior to making any investment in these Bonds, each Eligible Investor should

satisfy and assure himself/herself/itself that he/she/it is authorized and

eligible to invest in these Bonds. The Issuer shall be under no obligation to verify

the eligibility/authority of the Eligible Investor to invest in these Bonds. Further,

mere receipt of the Disclosure Document (and/or any Transaction Document in

relation thereto and/or any draft of the Transaction Documents and/or the

Disclosure Document) by a person shall not be construed as any representation

by the Issuer that such person is authorized to invest in these Bonds or eligible

to subscribe to these Bonds. If after applying for subscription to these Bonds

and/or allotment of Bonds to any person, such person becomes ineligible

and/or is found to have been ineligible to invest in/hold these Bonds, the Issuer

shall not be responsible in any manner.

Notwithstanding any acceptance of bids by the Issuer on and/or pursuant to the

bidding process on the Electronic Book Platform, (a) if a person, in the Issuer’s

view, is not an Eligible Investor, the Issuer shall have the right to refuse

allotment of Bonds to such person and reject such person’s application; (b) if

after applying for subscription to these Bonds and/or allotment of Bonds to any

person, such person becomes ineligible and/or is found to have been ineligible

to invest in/hold these Bonds, the Issuer shall not be responsible in any manner.

Listing/Designated Stock

Exchange

On Debt Segment of NSE and BSE. BSE is proposed to be the Designated Stock

Exchange.

Rating “[ICRA] AAA (Stable)” by ICRA Limited and

“IND AAA/Stable” India Ratings & Research Private Limited

Base Issue Size 200 crore

Option to retain

oversubscription 325 crore

Objects of the Issue The fund will be utilized to replace the equity deployed in the projects and operation

over the normative level by the debt, and for the purpose of corporate requirements of

regular business activities.

Details of Utilization of

funds

The fund will be utilized to replace the equity deployed in the projects and operation

over the normative level by the debt, and for the purpose of corporate requirements of

regular business activities.


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Coupon Rate [●]

Step Up/Step Down

Coupon Rate Not Applicable

Coupon Payment Frequency Annual

Coupon Payment Dates [●]

Coupon Type Fixed

Coupon Reset Process

(including rates,

spread, effective date,

interest rate cap and

floor etc.)

Not Applicable

Day Count Basis

Actual/Actual. Interest payable on the Debentures will be calculated on the

basis of actual number of days elapsed in a year of 365 or 366 days as the case

may be. (as per the SEBI Circular dated November 11, 2016 bearing reference

CIR/IMD/DF-1/122/2016)

Business Day Convention/

Effect of Holidays

‘Business Day’ shall be a day on which commercial Issuers are open for business

in the city of Mumbai, Maharashtra and when the money market is functioning

in Mumbai. If the date of payment of interest/redemption of principal does not

fall on a Business Day, the payment of interest/principal shall be made in

accordance with SEBI Circular CIR/IMD/DF-1/122/2016 dated November 11,

2016.

If any of the Coupon Payment Date(s), other than the ones falling on the

redemption date, falls on a day that is not a Business Day, the payment shall be

made by the Issuer on the immediately succeeding Business Day, which

becomes the coupon payment date for that coupon. However, the future coupon

payment date(s) would be as per the schedule originally stipulated at the time

of issuing the debentures. In other words, the subsequent coupon payment

date(s) would not be changed merely because the payment date in respect of one

particular coupon payment has been postponed earlier because of it having

fallen on a non-Business Day.

If the redemption date of the Bonds falls on a day that is not a Business Day, the

redemption amount shall be paid by the Issuer on the immediately preceding

Business Day which becomes the new redemption date, along with interest

accrued on the debentures until but excluding the date of such payment.

Interest on Application

Money

Interest at the 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 the Issuer’s account up to one day

prior to the date of allotment. Since the Pay-In Date and the Deemed Date of

Allotment fall on the same date, interest on application money shall not be

applicable. Further, no interest on application money will be payable in case the

Issue is withdrawn by the Issuer in accordance with the Operational Guidelines.

The Issuer shall not be liable to pay any interest in case of invalid applications

or applications liable to be rejected including applications made by person who

is not an Eligible Investor.

Default Interest Rate

In case of default in payment of Interest and/or principal redemption on the due

dates, additional interest at 2% p.a. over the Coupon Rate will be payable by the

Issuer for the defaulting period.

Tenor 10 (Ten) years from the deemed date of Allotment


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Redemption Date [●]

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

Premium/Discount on

redemption Nil

Issue Price At par (Rs.10 lacs per Bond)

Discount

on Issue Nil

Put Option Date Not Applicable

Put Option Price Not Applicable

Issuer Call Option/Call

Option

Not Applicable

Call Option Date Not Applicable

Call Option Price Not Applicable

Put Notification Time Not Applicable

Call Notification Time Not Applicable

Face Value Rs. 10 Lacs per Bond.

Minimum Application 1 Bond and in multiples of 1 Bond thereafter.

Issue Timing:

1. Bid Opening/ Closing

Date

2. Issue Opening/ Closing

Date

3. Pay-in Date

4. Deemed Date of

Allotment

23rd January,2020

23rd January,2020

27th January, 2020

27th January, 2020

Issuance mode In Demat mode only.

Trading Mode In Demat mode only.

Settlement

Payment of interest and repayment of principal shall be made by way of credit

through direct credit/ National Electronic Clearing

Service/RTGS/ NEFT mechanism or any other permitted method at the

discretion of the issuer.

Settlement Cycle for EBP T+2 (‘T’ being the bidding date)

Mode of settlement Through ICCL

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

Limited.

Record Date

15 (Fifteen) calendar days prior to each Coupon Payment Date or the

Redemption Date (as the case may be). In the event the Record Date falls on a

day, which is not a Business Day, immediately succeeding Business Day shall

be considered as Record Date.

Security

The Bonds will be secured by a first/pari passu first charge on specified assets

of the company as may be mentioned in the Bond Trust Deed. The security will

be created within the time stipulated as per the relevant statutory provisions.


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The Company shall at all times maintain a minimum security cover of 1.0 times

of the Bonds proposed to be issued and interest accrued theron.

The Company reserves the right to create further charge on such asset cover for

its present and future financial requirements or otherwise, without any prior

consent of the Bondholders, or as provided for under the Bond Trust Deed,

provided that minimum asset cover of one time is maintained.

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 SBICAP Trustee as Trustees to the Bondholders;

2. Debenture Trusteeship Agreement/ Bond Trustee Agreement / Debenture

Trust Deed (as required);

3. Rating Letter from rating agency ICRA Limited and India Ratings &

Research Private Limited;

4. Tripartite Agreement between the Issuer, Registrar and NSDL for issue of

Bonds in dematerialized form;

5. Tripartite Agreement between the Issuer, Registrar and CDSL for issue of

Bonds in dematerialized form;

6. Letter appointing Registrar

7. Listing Agreement with BSE and/or NSE; and

8. The Disclosure Document with the application form.

Conditions precedent to

subscription of Bonds

The subscription from applicants shall be accepted for allocation and allotment by the

Issuer, subject to the following:

a) Rating Letters from ICRA Limited and India Ratings & Research Private

Limited not more than one month old from the Issue Opening Date; and

b) Consent Letter from the Trustees to act as Trustee to the Bondholder(s).

Conditions subsequent to

subscription of Bonds

The Issuer shall ensure that the following documents are executed / activities are

completed as per terms of the Disclosure Document:

a) Credit of Demat Account(s) of the Allottee(s) by number of Bonds allotted

within 2 (Two) Business Days from the Deemed Date of Allotment

b) Making application to NSE and BSE within 15(Fifteen) days from the

Deemed Date of Allotment to list the Bonds and seek listing permission

within 20 (Twenty) days from the Deemed Date of Allotment

Events of Default

If the Company 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 Company. Excluding in cases of technical errors due to reasons beyond the control of company

Prohibition on Purchase /

Funding of Bonds

Neither the Issuer nor its related party over which the Issuer exercises control or

significant influence (as defined under relevant Accounting Standards) shall purchase

the Bonds, nor shall the Issuer directly or indirectly fund the purchase of the Bonds.

The Issuer shall also not grant advances against the security of the Bonds issued by it.

Cross Default Not Applicable

Role and Responsibilities of

Trustees to the Issue

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 Bondholders 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 Trustees shall carry out its duties and perform its

functions as required to discharge its obligations under the terms of the Securities and

Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008, the


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Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the

Debenture Trusteeship Agreement, Disclosure Document and all other related

Transaction Documents, with due care, diligence and loyalty.

Additional Covenants

1. Default in Payment: In the event of delay in the payment of interest amount

and/ or principal amount on the due date(s), the Company shall pay additional

interest of 2.00% per annum in addition to the respective Coupon Rate payable

on the Bonds, on such amounts due, for the defaulting period i.e. the period

commencing from and including the date on which such amount becomes due

and up to but excluding the date on which such amount is actually paid.

2. Delay in Listing: The Company shall complete all the formalities and seek listing

permission from stock exchange(s) within 20 (Twenty) days from the Deemed

Date of Allotment. In the event of delay in listing of Bonds beyond 20 (Twenty)

days from the Deemed Date of Allotment, the Company shall pay penal interest

of 1.00% per annum over the respective Coupon Rate from the expiry of 30

(Thirty) days from the Deemed Date of Allotment till the listing of Bonds to the

Bondholder(s).

3. Security Creation: The Company undertakes that it shall obtain permission/

consent from the existing creditor(s) to create pari passu charge and execute the

necessary documents for creation of the charge, including the Bond Trust Deed,

within time frame prescribed in the relevant regulations/ act/ rules etc. and

submit with stock exchange(s) within five working days of execution of the

same for uploading on its website. In case of delay in execution of Bond Trust

Deed and/or other security documents, the Company will refund the

subscription with agreed respective Coupon Rate or pay penal interest at the

rate of 2.00% p.a. over the respective Coupon Rate till these conditions are

complied with at the option of the investor.

The interest rates mentioned in above three covenants shall be independent of each

other.

Type of Bidding Closed bidding

Manner of Allotment Uniform - yield

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 courts of Chennai, Tamil Nadu.

Note: The Issuer reserves its sole and absolute right to modify (pre -pone/ postpone) the above issue

schedule without giving any reasons or prior notice. The Issuer also reserves its sole and absolute right

to change the Deemed Date of Allotment of the above issue without giving any reasons or prior notice.

Consequent to change in Deemed Date of Allotment, the Coupon Payment Dates, if any may also be

changed at the sole and absolute discretion of the Issuer. The Issuer reserves the right to close the issue

earlier than the stipulated issue closing date and it is further clarified that the Issuer need not wait for

any minimum subscription amount to the Bonds before closing the issue.

R. Disclosures pertaining to willful default

a) Name of the Issuer declaring the entity as a willful defaulter

Not Applicable

b) The year in which the entity is declared as a willful defaulter

Not Applicable

c) Outstanding amount when the entity is declared as a willful defaulter

Not Applicable

d) Name of the entity declared as a willful defaulter


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Not Applicable

e) Steps taken, if any, for the removal from the list of willful defaulters

Not Applicable

S. Additional Disclosures:

Particulars Disclosures

A Details of Branches and Units Please refer to Annexure A for major plant

locations of the Company

B Details of default, if any, including therein the amount involved, duration of

default and present status, in repayment of –

i) statutory dues; None

ii) debentures and interest thereon; None

iii) deposits and interest thereon; and None

iv) loan from any bank or financial

institution and interest thereon.

None

C Details of default in annual filing of

the Company, if any, under the

Companies Act, 2013 and the rules

made thereunder

There are no defaults in annual filing of the

Company under the Companies Act, 2013 and

the rules made there under as on date.

D The change in control, if any, in the

Company, that would occur

consequent to the private

placement

Not Applicable as the issue relates to

Debentures

E The number of persons to whom

allotment on preferential

basis/private placement/rights

issue has already been made

during the year, in terms of

number of securities as well as

price

List is attached as Annexure B

F Contribution being made by the

promoters or directors either as

part of the offer or separately in

furtherance of such objects

The Issuer is issuing secured redeemable non-

convertible debentures on private placement

basis hence the contribution by the promoters

or directors is NIL.


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G The details of significant and

material orders passed by the

regulators, courts and tribunals

impacting the going concern status

of the Company and its future

operations.

There are no material orders passed by the

regulators, courts and tribunals which impact

the going concern status of the Company and

its future operations.

H The pre-issue and post-issue

shareholding pattern of the

Company

Not applicable being a debt security

I Summary of reservations or

qualifications or adverse remarks

of auditors in the last five financial

years immediately preceding the

year of circulation of this

Disclosure Document and of their

impact on the financial statements

and financial position of the

company and the corrective steps

taken and proposed to be taken by

the company for each of the said

reservations or qualifications or

adverse remark.

None

J Details of any inquiry, inspections

or investigations initiated or

conducted under the Act or any

previous company law in the last

three years immediately preceding

the year of circulation of this

Disclosure Document in the case of

company and all of its subsidiaries.

Also, if there were any

prosecutions filed (whether

pending or not) fines imposed,

compounding of offences in the

last three years immediately

preceding the year of this

Disclosure Document and if so,

section-wise details thereof for the

company and all of its subsidiaries.

None

K Details of acts of material frauds None


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committed against the company in

the last three years, if any, and if so,

the action taken by the company.

L The securities premium account

before and after the Issue

Before the issue of

Debentures

Nil

After the issue of

Debentures

Nil

M Any change in accounting policies

during the last three years and

their effect on the profits and the

reserves of the company.

Please refer to Annexure C

N Valuer who performed value of

security offered

Not Applicable

O Relevant Date with reference to

which the price has been arrived at

Not Applicable

P The justification for the allotment

proposed to be made for

consideration other than cash

together with valuation report of

the registered valuer;

Not Applicable

Q Profile of Directors Please refer to Annexure D


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T. DECLARATION

The Issuer undertakes that

(a) the company has complied with the provisions of the Companies Act, 2013 and the rules made

thereunder, 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 and such other applicable circulars issued by SEBI from time to time;

(b) the compliance with the said Act and the rules made thereunder do not imply that payment of interest

or repayment of debentures is guaranteed by the Central Government; (c) the monies received under the

offer shall be used only for the purposes and objects indicated in the private placement offer cum application

letter

Board of Directors of the company has authorized Shri Rakesh Kumar, Chairman cum Managing Director

and Director Finance, Additional Charge vide resolution number Item No. 490.05 dated 29.04.2019 to sign

this form and declare that all the requirements of the Companies Act, 2013 and the rules made thereunder

in respect of the subject matter of this form and matters incidental thereto have been complied with.

Whatever is stated in this form and in the attachments thereto is true, correct and complete and no

information material to the subject matter of this form has been suppressed or concealed and is as per the

original records maintained by the promoters subscribing to the Memorandum of Association and Articles

of Association. It is further declared and verified that all the required attachments have been completely,

correctly and legibly attached to this form

The Issuer accepts no responsibility for the statement made otherwise than in the Disclosure Document or

in any other material issued by or at the instance of the Issuer and that anyone placing reliance on any other

source of information would be doing so at his own risk.

Signed pursuant to internal authority granted;

For NLC India Limited

Rakesh Kumar

Chairman cum Managing Director

and Director (Finance) – (Additional Charge)

Place:

Date:


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ANNEXURE I - Copy of Rating letter from ICRA Limited

ANNEXURE II - Copy of Rating Letter from India Ratings and Research Private Limited

ANNEXURE III - Board Resolution Authorizing the Issue

ANNEXURE IV - Shareholders’ approval obtained pursuant to section 180(1)(c)

ANNEXURE V – Illustrative cash flow for bonds

As per SEBI circular no. CIR/IMD/DF-1/122/2016 dated November 11, 2016, illustrative cash flow for

bonds is as under:

Illustration

Name of the Issuer NLC India Limited

Face Value (Rs) 10,00,000

Deemed Date of Allotment

Redemption Date

Coupon Rate

Frequency of Interest Payment

Annual

Day Count Convention Actual/ Actual

Cash Flows Coupon Payment Date No. of Days in Coupon Period

Amount (Rs.)

1st Coupon

2nd Coupon

3rd Coupon

4th Coupon

5th Coupon

6th Coupon

7th Coupon

8th Coupon

9th Coupon

10th Coupon

Redemption

Assumptions: We have not considered the effect of public holidays as it is difficult to ascertain for

future dates


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ANNEXURE VI - In-Principle Approval for listing on BSE

ANNEXURE VII - In-Principle Approval for listing on NSE

ANNEXURE VIII - Six Month Results (30.09.2019)


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ANNEXURE A

List of Units & Offices along with Address

Units & Offices Address

Registered Office First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai-600031, Tamil Nadu, India.

Corporate Office Block - 1, Neyveli - 607 801, Cuddalore District, Tamil Nadu.

Liaison/Inspection Office – Delhi No. 703, 704, 7th Floor, NBCC Centre, Okhla Phase-I, New Delhi – 110020.

Liaison/Inspection Office - Kolkata Transit Flat, Flat No. 1A, First Floor,34 Allenby Road, Kolkatta - 700 020

Liaison/Inspection Office – Mumbai No.501 Anookul Co-op Housing Society Ltd,D' Building, 'A' Wing, Manish Park, Near Pump House, Andheri (East), Mumbai - 400 093.

Liaison/Inspection Office – Hyderabad SUDARSHAN, H No.8-2-601/P/19, Panchavati Colony, Road No.10,Banjarahills, Hyderabad - 500 034

Liaison/Inspection Office – Bangalore 1078 II Floor,11th Main, 9th Cross, Mahalakshmi puram Bangalore - 560 086

Project Liaison Office – Lucknow 6/42, Vipul Khand, Gomti Nagar, Lucknow – 226010.

Project Liaison Office - Bhubaneshwar Plot No: 255/B, Forest Park, Bhubaneswar - 751009.

Mine I Neyveli, Tamil Nadu

Mine IA Neyveli, Tamil Nadu

Mine II Neyveli, Tamil Nadu

Barsingsar Mine Barsingsar, Rajasthan

Talabira II & III Sambalpur, Orissa

TPS I Neyveli, Tamil Nadu

TPS I Exp Neyveli, Tamil Nadu

TPS II Neyveli, Tamil Nadu

TPS II Exp Neyveli, Tamil Nadu

NNTPS Neyveli, Tamil Nadu

Barsingsar TPS Barsingsar, Rajasthan

Solar 10 MW Neyveli, Tamil Nadu

Solar 130 MW Neyveli, Tamil Nadu

Solar 500 MW Tirunelveli, Virudhunagar, Tamil Nadu

Solar 709 MW Tirunelveli, Tuticorin, Ramanathapuram, Virudhunagar, Tamil Nadu

Roof Top Solar 1 MW Neyveli, Tamil Nadu

Wind Power 51 MW Kazhuneerkulam, Tirunelveli District, Tamil Nadu

Solar Andaman 20 MW Andaman


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ANNEXURE B

List of Bondholders to whom securities were allotted in FY 2019-20 during NLCIL Bonds 2019 – Series I.

INVESTOR NAME Number of Securities

allotted

A K CAPITAL FINANCE LIMITED 500

ADITYA BIRLA SUN LIFE INSURANCE COMPANY LIMITED 100

HDFC ERGO GENERAL INSURANCE COMPANY LIMITED 250

ICICI BANK 500

ICICI PRUDENTIAL LIFE INSURANCE COMPANY LIMITED 3,000

ICICI SECURITIES PRIMARY DEALERSHIP LIMITED 250

NPS TRUST AC LIC PENSION FUND SCHEME CENTRAL GOVT 2,000

NPS TRUST AC SBI PENSION FUND SCHEME ATAL PENSION

YOJANA 150

NPS TRUST AC SBI PENSION FUND SCHEME CENTRAL GOVT 1,000

NPS TRUST AC SBI PENSION FUND SCHEME CORPORATE CG 500

NPS TRUST AC SBI PENSION FUND SCHEME STATE GOVT 1,850

PNB GILTS LIMITED 500

RCRF - RELIANCE CREDIT RISK FUND 1,000

RELIANCE GENERAL INSURANCE COMPANY LTD 150

SBI CAPITAL MARKETS LIMITED 2,000

SBI LIFE INSURANCE CO.LTD 1,000

Total 14,750

Face Value of Bond is Rs. 10,00,000/-. Bonds were issued at face value.


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ANNEXURE C

Any change in accounting policies during the last three years and their effect on the profits

and the reserves of the company.

As per Ministry of Corporate Affairs notification, NLC India Limited has adopted Ind AS from 2015-16

with opening balance as on 1st April’2015 and prepared its accounts in compliance to Ind AS. Significant

accounting policies of the company has been aligned as per the requirements under Ind As. For the first

time adoption of Ind As a separate standard Ind AS 101 was available with various exemptions. Changes

in various policies of the company on Ind ASimplementation has been considered in 2015-16 and 2016-

17 accounts. The impact of the said policies was Rs.3610.63 crore out of which Rs.1830.73 crore was

adjusted from opening reserves and surpluses and balance Rs. 906.34 crore was considered in 2015-16

Accounts and Rs.873.56 crore in 2016-17. Further the company has revised its accounting policy on

Lignite Handling system and depreciation on Residential Building in 2016-17 which has an impact of Rs.

17.40 crore in the Profit and Loss Accounts.

Subsequently in 2017-18, company has also made few changes in Accounting Policy to align its policies

in line with the industry practice. However, the same has no significant impact on the bottom line. In

2018-19, new accounting standard Ind AS115 has been introduced and accordingly the company has

changed its accounting policy on Revenue Recognition in line with Ind AS115. There is no impact of the

same in the profit and loss of the company, however the same had an impact of Rs.1179.37 crore in 2016-

17 and 2017-18 in the revenue with corresponding impact on Regulatory Deferral Expenses. The company

opted to implement the same with prospective application.


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ANNEXURE D

Profile of Directors

Shri. Rakesh Kumar, Chairman cum Managing Director : Shri.Rakesh Kumar, has assumed charge of

the post of Chairman cum Managing Director of NLC India Ltd. (NLCIL) on 28-09-2018. Shri.Rakesh

Kumar, is a Commerce Graduate with Master Degree in Business Administration in Finance. He joined

NLCIL in 2012. Prior to his joining in NLCIL, he has associated with various important projects of BCPL

and GAIL (a Maharatna PSU) like HVJ Pipeline project, CNG Projects, Revival of Dhabol Power Project,

Lignite and coal based thermal power projects, Renewable energy projects benchmarking using WACC

and leveraging technology through ERP, E-procurement and E-banking, mobilization of resources

including equity, debt (domestic as well as international market) etc. As Director- Finance of NLCIL and

introduced various systems for effective control in Finance & Accounts, treasury and risk management,

budgetary and cost control, GST Implementation, tax planning, Corporate Governance etc. In recognition

of his contribution made in the financial management, he has been conferred with ACHIEVERS AND

LEADERS AWARD (FINANCE) and FINANCE LEADERSHIP AWARD. He has also been conferred

with BT Star PSU Excellence Award for his outstanding contribution as Director (Finance) in PSUs of

Maharatna/Navratna category. He has extensively travelled abroad including US, Europe and Japan. He

has recently been elected chairman of Standing Conference of Public Enterprises (SCOPE),Apex Body of

PSEs.

Shri. Vinod Kumar Tiwari, Part-time Official Director: Shri Vinod Kumar Tiwari, Additional Secretary,

Ministry of Coal (April, 2019) is 1986 Indian Forest Service officer of HP Cadre, who holds double masters

in Geology and in Forestry. In his career spanning over three decades, he served in various positions

(HRD, IT, Legal, Personnel, Environment, Social and RR and M&E) before his appointment (April, 2017)

as Joint Secretary in Ministry of Tribal Affairs, Government of India. He has served State Power Sector in

various capacities for a decade including directorship in HP Power Corporation Ltd. He has voluntarily

done two year’s stint in climatically harsh, remote and difficult tribal area (Pangi Sub-Division, Chamba

district) of H.P. He has travelled far and wide and is trained in various subjects in India and abroad.

He has been pivotal in the development of several important policies in State Power Sector, State’s

Environment and Forest Sector; besides CDM Project, WCD Compliance, EIA, EMP preparation and

compliance monitoring etc. for Environment Management

Shri. Dheeraj Kumar, Part-time Official Director: Shri. Dheeraj Kumar is a Graduate in Civil

Engineering from IIT (BHU), Varanasi. Shri. Dheeraj Kumar, a member of Indian Administrative Service,

has held various important positions in Government of Tamil Nadu and Government of India. Shri.

Dheeraj Kumar is presently serving as the Principal Secretary to Government of Tamil Nadu (Full

Additional Charge), Energy Department.

Shri. R. Vikraman , Director (Human Resource): Shri R. Vikraman, assumed charge as the Director

(Human Resource) of NLC India Ltd.on 09-12-2016. The unique status of being bracketed with the Top-

echelons of prestigious Central Public Sector Organisations is the reward to Vikraman’s relentless pursuit

of excellence in his areas of performance for over thirty years.He is a Mechanical Engineer (B.E) from the

prestigious Alagappa Chettiar College of Engineering and Technology, Karaikudi (ACCE&T) and holds

Post Graduate Degree in Business Administration (M.B.A) with University Second Rank.Joining NLC as

Graduate Engineer Trainee, he was involved in the successful construction, commissioning and

operation of Thermal Power Station-II- Stage-II (4x210 MW) project without time and cost overrun. After

switching over his line of service from Engineering to Management, he had been at the helm of affairs of

Corporate HR Department for over ten years, bringing in a number of innovations. After the Corporate

assignment, he took over as the Head of the HR Departments of NLC’s Mine-II & Mine-II Expansion and

Thermal Power Station-II, before becoming the “Group Head of HR” of all Thermal Units. He has

excelled in every challenging assignment entrusted and his significant contribution in HR include


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efficient crisis management, ensuring no production loss despite man-days loss, disciplining the units he

served and ensuring smooth and cordial Industrial climate.Shri.Vikraman had attended a number of

training programmes on technical and management subjects in India and “Advanced Technology

Management” programme in UK and Germany. He has visited a number of foreign countries viz.

Singapore, Malaysia, United Kingdom, Germany and France.He is a Life Member of National Institute

of Personnel Management (NIPM) and is presently the Hon. Secretary of NIPM, Neyveli Chapter. His

contribution in conducting various Workshops and Seminars under the aegis of NLC & NIPM is

noteworthy.

Shri. Nadella Naga Maheswar Rao, Director (Planning &Projects) : Shri Nadella Naga Maheswar Rao,

is a Graduate in Electrical & Electronics Engineering. He holds a Post Graduate Degree (M.Tech) in Power

Generation Technology from IIT, Delhi and also Masters Degree in Business Administration. Shri Nadella

Naga Maheswar Rao has assumed the charge as Director(Planning & Projects) in NLC India Ltd w.e.f

29.06.2018.Before joining NLC as General Manager in the year 2013, Shri Nadella Naga Maheswar Rao

has worked with NTPC Ltd in various positions in the Project Execution of Thermal Power Plants and

subsequently with Reliance Power Ltd for about 4 years in Project Execution and O&M of Thermal Power

Plants. On joining NLC he was posted in Barsingsar Thermal Power Project, Rajasthan and subsequently

assumed the charge as Project Head of NLCIL Barsingsar Mine cum Thermal Power Project and Chief

Project Officer for NLCIL Bithnok Thermal Power Project and Barsingsar Thermal Power Station

Extension Project. He had successfully implemented the necessary modifications in the Barsingsar

Thermal Power Project to achieve the rated capacity of the Plant. Shri Nadella Naga Maheswar Rao has

vast experience in Thermal Power Plants and also in administrating the Mine cum Thermal project and

was instrumental in many achievements in the area of his work.

Shri. Prabhakar Chowki, Director (Mines): Shri.Prabhakar Chowki, is a Graduate in Mining and holds

First Class Certificate of Competency under the Indian Mines Act. Shri.Prabhakar Chowki started his

career in Coal India Limited in the year 1984 and has worked in different capacities in Western Coalfields

Limited, Central Coalfields Limited and Coal India Limited.Shri.Prabhakar Chowki has rich experience

in the field of mine planning, production, management, supervision, direction & control of Underground

as well as Opencast Coal Mines. He was instrumental in introduction of Surface Miners at Ashok OCP in

the year 2003 which is a green mining activity and also in re-opening one of the closed opencast mine

Tapin South at Hazaribagh Area.

Shri. Shaji John, Director (Power): Shri.Shaji John, is a Graduate in Mechanical Engineering and also a

Post Graduate in M.Tech (Thermal Engineering).Shri.Shaji John started his career in NTPC in the year

1989 and has worked in various capacities till the year 2017 prior to joining NLC India Limited. Shri.Shaji

John joined NLC India Limited in 2017 and was deputed to NLC Tamilnadu Power Limited (a Joint

Venture Company between NLCIL and TANGEDCO) and during the period from March,2017 to

March,2018, he was posted as General Manager (Operation and Maintenance) and from 1st April,2018 to

20th February,2019 Shri.Shaji John was functioning as the Chief Executive Officer of the above Joint

Venture company. Prior to assuming charge as Director(Power) w.e.f.17.04.2019 ,Shri.Shaji John was

holding the position of Chief General Manager/Officer on Special Duty in the Company.Shri.Shaji John

has vast experience in boiler maintenance, Operation & Maintenance of Thermal Power Plants.

Shri.Narayanan Namboothiri, Non-official Part-time Director(Independent Director) : Shri Narayanan

Namboothiri is a leading law practitioner from Kottayam, Kerala. Having graduated from Kerala

university, he then pursued LLB from Mangalore University. He is an active social worker and has very

close relationships with many social, cultural and educational institutions. His firm, Namboothiri and

Associates is a leading law firm in the city and he has many Junior advocates practicing under his

guidance.


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Smt. Nalini Padmanabhan, Non-official Part-time Director(Independent Director): Smt. Nalini

Padmanabhan is a practicing Chartered Accountant who is in practice from the year 1985 and has rich

professional experience spanning to 3 decades. She is a senior partner in B.Thiagarajan & Co, Chartered

Accountants, Chennai. B.Thiagarajan & Co, Chartered Accountants, is a firm having 12 partners and has

been in practice for 4 decades. Ms.Nalini Padmanabhan specializes in system audit and business

consultancy areas. Ms.Nalini Padmanabhan handles assignments in IT, Textiles, Jewellery, Educational

Institutions, Engineering and Banking. She has served in State Bank of India, Chennai Local Board for a

periodof 3 years (2003 to 2006) as Director, appointed by Government of India. Ms.Nalini Padmanabhan

serves as a managing committee member of Madras Management Association a premier Management

Association of repute. Ms.Nalini Padmanabhan is a founder member of Prerana Helpline Foundation

that caters forthe need of people as a NGO outfit. Ms.Nalini Padmanabhan has contributed articles in

various seminars and conferences in the topics related to finance. Ms.Nalini Padmanabhan has taken

classes for Non-Finance Executives, CFO’s and senior executives of corporates in the areas of business

development, personality improvement and finance for non-finance executives. Ms.Nalini Padmanabhan

is interested in social activities particularly in the areas of women’s upliftment programmes and gave

counseling to many womenfolk from downtrodden, environments.

Shri. Indrajit Pal, Non-official Part-time Director(Independent Director): Shri.Indrajit Pal is a Honors

Graduate in Chemistry with a Post Graduation in Organic Chemistry both from Delhi University.

Shri.Indrajit Pal also holds Post Graduate Diploma in Public Administration from Indian Institute of

Public Administration and a M.Phil in Social Science from Punjab University. He was a Member of Indian

Administrative Service (1977 batch, Andhra Pradesh Cadre) and had held various important positions in

Government of Andhra Pradesh, Government of India, Public Sector Undertaking etc., before retiring as

the Secretary to Government of India, Department of Chemicals & Petrochemicals in the year 2014.

Dr.P.Vishnu Dev, Non-official Part-time Director (Independent Director): Dr. P. Vishnu Dev, MA.

M.Sc. (Psy.), Ph. D, is an eminent Professor of Sociology at the Osmania University, Hyderabad, India.

Presently, he is serving as State NSS Officer, Higher Education Department, Government of Telangana.

He is also a Visiting Professor at the Department of Indology and Comparative Religions, Tübingen

University, Germany. His extensive field work experience and several research projects carried out on

Tribal communities in India have broaden the proper understanding of Foragers in the context of modern

development model. He is the author of five books and published several articles in leading national and

international journals. His research areas include: Tribal Studies, Hunters- Gatherer Societies, Political

Sociology and Religious Studies. He combines academic pursuits with various administrative

experiences in service to the youth and marginalised communities. Previously, P. Vishnu Dev held

several administrative positions such as 'Chairman', Board of Studies, Department of Sociology, Osmania

University; 'Director', Empanelled Training Institute (OU), Ministry of Youth Affairs & Sports, Govt. of

India; Coordinator, National Service Scheme, Osmania University; 'Director', Equal Opportunity Cell,

sponsored by the University Grants Commission (UGC), New Delhi.

Dr. V. Muralidhar Goud, Non-official Part-time Director(Independent Director) : Dr. V. Muralidhar

Goud, an active Social Worker holds his Masters Degree in Public Administration. He has received his

Doctorate from Osmania University, Hyderabad, Telangana and pursues his Post-Doctoral Fellowship

at ICSSR. He has served as a Part-time Lecturer during 1992-98. He is a former Advisor Committee

Member at Nehru Yuva Kendra and also a former State Level Advisor Committee Member, Food

Corporation of India. Presently, he is the Chairman of Amma Urban & Rural Development Organisation

(AUDRO), a NGO.

Annexure I

1

May 15, 2019

NLC India Limited: Rating assigned

Summary of rating action

Instrument Previous Rated Amount (Rs. Crore)

Current Rated Amount (Rs. crore)

Rating Action

Long Term, Term Loans 1,400.0 1,400.0 [ICRA]AAA (Stable); outstanding Long Term, Borrowing Programme 2,000.0 2,000.0 [ICRA]AAA (Stable); outstanding Long Term, Non-Convertible Debentures

- 2,000.0^ [ICRA]AAA (Stable); assigned

Total 3,400.0 5,400.0

^Company can raise NCD upto Rs. 2000 crore

Rationale

For arriving at the rating, ICRA has taken a consolidated view of NLC along with its subsidiaries NLC Tamilnadu Power

Limited, which operates a 1000 MW power project at Tuticorin, and Neyveli Uttar Pradesh Power Limited, which is

setting up a 1980 MW power project in Uttar Pradesh.

The rating continues to reflect NLC Group’s strong business risk profile with respect to both lignite mining operations and

power generation. While access to captive lignite mines reduces the fuel risks, operation of pit-head power stations

linked to these mines enables NLC to have competitive energy costs. These operational strengths have resulted in a

favourable financial risk profile characterized by healthy cash accruals and comfortable capital structure. The rating also

continues to be supported by the dominant Government of India ownership.

These strengths are to some extent offset by the counterparty credit risk arising from the exposure to financially weak

discoms; the resultant elevated working capital requirements and the large cash outgo in the recent past towards

dividend & share buyback, which have impacted the liquidity profile of the company to an extent. The rating also factors

in the pressure on NLC’s profitability due to the lower PLFs and the adverse cost structure of the newly commissioned

plants; the availability of low cost merchant power has further kept the PLFs of thermal players depressed and the ability

of NLC to improve on its PLF levels in such an environment remains to be seen. The rating also considers NLC’s large

expansion plans with sizeable projects under execution which exposes the company to risks of cost overruns.

Outlook: Stable

ICRA believes NLC’s credit profile will remain stable given the long track record of operations, financial flexibility arising

out of sovereign ownership and also the regulated nature of mining / power generation where the company enjoys cost-

plus pricing and regulated returns. The outlook may be revised to ‘Negative’ if NLC’s working capital intensity remains

elevated, due to further delays in receipt of the arrears amounts from the beneficiaries, thereby impacting the liquidity

position. Also, continued technical issues in TPS II Expansion and Barsingsar projects & execution delays in under

construction thermal / solar projects resulting in large under-recoveries as well as increase in the cost of NLC’s power

generation would have a material impact on the profitability going forward and would be key rating sensitivities.

2

Key rating drivers

Credit strengths

Navratna Govt of India PSU with a long operational track record - The Government of India holds a dominant share of

~82% in NLC which has been operational for more than 50 years in the lignite mining and power generation segments.

NLC was also conferred the ‘Navratna’ status in 2011 which enables the management to take faster investment decisions

Integrated mining / power player with very low fuel supply risks - NLC is the Ministry of Coal designated nodal agency

for lignite mining in India and currently operates mines with a total capacity of 30.6 MTPA across the states of Tamil

Nadu and Rajasthan. Most of the company’s thermal stations are pithead power plants and hence the fuel supply risks

are very low considering the captive nature of the mines and large reserves. Even for the recently commissioned coal-

based power plant in Tuticorin, the company has a Fuel Supply Agreement which mitigates fuel risks to a large extent.

Cost plus tariff structure for both mining and power generation ensuring steady profitability - NLC uses lignite mined

from its captive mines to generate power and sells it to various beneficiaries. The lignite transfer pricing is determined by

Ministry of Coal and it is based on Cost plus principles ensuring healthy profitability from the mining segment. The tariffs

for the thermal power plants are determined by the Central Electricity Regulatory Commission (CERC) as per the classic

two part tariff methodology whereas the fixed and energy charges are calculated and approved separately. The fixed

charges include a stable return on equity and operation of the plants at desired parameters would result in a healthy

profitability at the company level.

Risk profile diversified through renewable energy generation - NLC has been focused on thermal power generation

since inception and this has exposed the company to risks specific to the sector. However, the company has ventured

into renewable power generation and is commissioning / has recently commissioned 1,339 MW of solar power projects

in TN in addition to the 61 MW renewable capacity that is already operational. These projects would largely not be

affected by risks inherent in the mining and thermal businesses including labour strikes, wage increases and technical

issues.

Financial profile characterised by healthy cash accruals and capital structure - The Company has reported healthy

profitability over the years driven by operational efficiency and regulated tariffs. With fully depreciated plants and low

interest burden, this has translated into healthy net cash accruals. NLC also has a large accumulated net worth due to

profitable operation over the years and, notwithstanding the recent uptick, the outstanding debt levels are relatively low

resulting in a healthy capital structure which the company intends to leverage for its expansion plans.

Credit challenges

Project execution delays and operational issues in recently commissioned power plants – NLC’s older power plants

(TPS I, TPS I Expansion & TPS II) continue to operate above normative parameters despite their vintage. However, the

company has faced technical issues in the recently commissioned Barsingsar and TPS II power plants and hence the

overall PLF levels of the company have remained lower than the normative PLF since FY 2016. This in addition to the

fixed cost under recovery – CERC has disallowed some portion of the cost overruns incurred for the Barsingsar, TPS II

Expansion & Tuticorin NTPL project – is expected to result in lower returns from these projects. Nevertheless, the plants

constitute a minor portion of the overall power generation and hence the impact is expected to be moderate.

The execution of the 500 MW solar project in Tamil Nadu has also seen substantial delays, owing to land acquisition

related issues, and this is expected to reduce the tariff applicable for a major portion of the capacity given that the bid

tariff was subject to commissioning within the control period. This is expected to stress the standalone project metrics

even though the project debt servicing would be met out of the accruals from other mines / power plants. With NLC also

executing the 709 MW project, further slippages on execution could impact the financial profile adversely.

3

Current low power tariff scenario has increased the risks of power surrender by discoms – NLC’s plants have

traditionally been in the top of the Merit Order Position of its beneficiaries due to the lower fixed and energy charges.

However, the tariff levels have increased following the increase in the lignite transfer prices and the higher capital costs

for the recently commissioned plants. Concurrently, the overall demand supply position has changed in the power sector

with the improvement in transmission network and availability of cheap renewable power. This has resulted in discoms

increasingly surrendering high cost thermal power which has impacted the PLF levels of thermal plants. NLC has

voluntarily reduced the lignite transfer price by Rs 300 / Tonne in FY 2019 to reduce the power tariff and improve its

merit order position; however, this has impacted the profitability of the company’s mining division.

Exposed to counterparty credit risks as majority of the discoms have weak financial profiles – Major portion of the

sales of the company is to counterparties like TANGEDCO and Rajasthan discoms who have large accumulated losses and

highly leveraged balance sheets. This has resulted in delayed payments especially from TANGEDCO which has stressed

the working capital position in the past. The large arrears billing (~Rs 1500 crore) done in March 2017 has also been

contested by TANGEDCO and not paid till date resulting in a substantial increase in working capital intensity in FY 2018

and current fiscal. Nevertheless, following a recent favourable order from the Court, these amounts are expected to be

received in the current fiscal which would aid the liquidity.

Mining segment exposed to risks with regards to labour strikes and land acquisition – The mining segment has

performed strongly over the years due to the high operational efficiency and the strong performance of the linked power

plants. However, mining performance is heavily contingent on the company achieving continuous production – in the

recent years there have been multiple stoppages of work due to flooding and labour strikes. Labour strikes especially

pose a significant risk as the company has a large unionised and temporary labour base who have been demanding

regularisation and wage revisions. Over the long term, the performance of the mining segment will also depend on

speedy land acquisition to mine the identified reserves once the current mines are fully exploited.

Significant expansion plans in the mining, thermal power and renewable power segments: NLC has sizeable expansion

plans with planned capex upwards of Rs 40,000 crore over the next five years, though most of the projects are in the

nascent stages of development. The key ongoing projects are the 1000 MW New Neyveli TPS (which is nearing

commissioning), NUPPL 1980 MW power plant, Mine I restructuring and the 500 & 709 MW solar projects. The company

has also started initial works for coal mining in the allocated Pachwara and Talabira mines and timely commencement of

mining would be critical to ensure fuel security for the UP and planned mega thermal project in Odisha. ICRA notes that

the funding mix and execution risks associated with these projects would be the key rating sensitivities.

Liquidity Position: NLC has traditionally maintained healthy cash balances owing to sizeable operational cash generation. In FY 2017, the

company declared its higher ever dividend of 73% which led to an outgo of Rs 1350 crore. NLC also completed buyback

of 9% of its then outstanding share capital, worth Rs 149 crore, in February 2017 at a substantial premium resulting in an

outgo of Rs 1477 crore. In FY 2018, the company declared dividend of Rs 774 crore (inclusive of taxes) and has further

spent Rs 1,249 crore in December 2018 to buyback a part of its equity shares. These outflows have decreased the overall

liquid surplus available with the company. In addition, the company’s working capital intensity has increased as the large

arrears billing to discoms resulted in elevated receivables as of December 2018.

Though the cash balances have been depleted, the projected cash generation of NLC is expected to be largely adequate

to meet the equity commitments of the ongoing and planned projects for the next three-year period. Also, the sanction

of working capital limits, of which average utilisation remains at ~40%, is also expected to provide a substantial liquidity

buffer to the company.

4

Analytical approach:

Analytical Approach Comments

Applicable Rating Methodologies Corporate Credit Rating Methodology

Rating methodology for thermal power producers

Parent/Group Support NA

Consolidation / Standalone Consolidated – Including the subsidiaries / JVs – NTPL & NUPPL

About the company:

NLC India Limited (NLC; erstwhile Neyveli Lignite Corporation Limited), a public sector undertaking incorporated in

November 1956, is engaged in the activities of lignite mining and power generation. The company currently has lignite

mining capacity of 30.6 million tons per annum (mtpa) and installed power generation capacity of 4731 megawatt (MW).

NLC’s power stations cater to the five southern states of Tamil Nadu, Andhra Pradesh, Kerala, Karnataka and Puducherry,

as well as Rajasthan through its newly commissioned thermal plant in Barsingsar. The Government of India (GoI) holds

~82% stake in the company. The company works under the administrative control of the Ministry of Coal, GoI. In April

2011, the Government of India declared the company as a 'Navratna' enterprise.

Key financial indicators (audited) – NLC - Consolidated

FY 2017 FY 2018

Operating Income (Rs. crore) 11,557.2 11,652.1

PAT (Rs. crore) 3,300.2 2,005.8

OPBDIT/ OI (%) 40.1% 37.6%

RoCE (%) 16.1% 14.5%

Total Debt/ TNW (times) 0.69 0.71

Total Debt/ OPBDIT (times) 2.48 3.02

Interest coverage (times) 7.87 7.99

Status of non-cooperation with previous CRA: Not applicable

Any other information: None

https://www.icra.in/Rating/ShowMethodologyReport/?id=464&Title=Corporate%20Credit%20Rating%20Methodology&Report=Corporate%20Credit%20Rating,%20Methodology,%20Mar%202017.pdf

https://www.icra.in/Rating/ShowMethodologyReport/?id=472

1

Rating history for last three years:

Instrument Current Rating (FY2020) Chronology of Rating History for the past 3 years

Type Amount Rated (Rs. crore)

Amount Outstanding (Rs Crore)

Date & Rating

Date & Rating in FY2019



May 2019 Feb 2019 Nov 2017 Sep 2017 Apr 2016

1 Non Convertible Debentures

Long term

600.0 - - [ICRA]AAA (Stable); Withdrawn

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

2 Non Convertible Debentures

Long Term

2000.0 - [ICRA]AAA (stable) assigned

3 Term Loans Long Term

1,400.0 350 [ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

4 Borrowing Programme

Long term

2,000.0 2000 [ICRA]AAA (Stable)

[ICRA]AAA (Stable)

[ICRA]AAA (Stable)

- -

Complexity level of the rated instrument:

ICRA has classified various instruments based on their complexity as "Simple", "Complex" and "Highly Complex". The

classification of instruments according to their complexity levels is available on the website www.icra.in

https://www.icra.in/Rating/ShowRatingPolicyReport/?id=1&type=new

2

Annexure-1: Instrument Details

ISIN No Instrument Name

Date of

Issuance /

Sanction

Coupon

Rate

Maturity

Date

Amount

Rated

(Rs. crore)

Current Rating and

Outlook

NA Term Loans Dec 2015 ~8.45%* Aug 2019 1,400.0 [ICRA]AAA (Stable)

NA Borrowing Programme Dec 2017 7% June 2022 2,000.0 [ICRA]AAA (Stable)

NA^ NCDs^ - - - 2,000.0 [ICRA]AAA (Stable)

^proposed NCD and yet to be issued and company can raise upto Rs. 2,000.0 crore Source: NLC

3

ANALYST CONTACTS

K.Ravichandran +91 44 4596 4301 [email protected]

Sai Krishna +91 44 4596 4304 [email protected]

Raghunath.T +91 44 4596 4304 [email protected]

RELATIONSHIP CONTACT

L Shivakumar +91 22 6114 3406 [email protected]

MEDIA AND PUBLIC RELATIONS CONTACT

Ms. Naznin Prodhani Tel: +91 124 4545 860 [email protected]

Helpline for business queries:

+91-9354738909 (open Monday to Friday, from 9:30 am to 6 pm)

[email protected]

About ICRA Limited:

ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and financial services

companies as an independent and professional investment Information and Credit Rating Agency.

Today, ICRA and its subsidiaries together form the ICRA Group of Companies (Group ICRA). ICRA is a Public Limited

Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit

Rating Agency Moody’s Investors Service is ICRA’s largest shareholder.

For more information, visit www.icra.in





http://www.icra.in/

4

ICRA Limited

Corporate Office Building No. 8, 2nd Floor, Tower A; DLF Cyber City, Phase II; Gurgaon 122 002 Tel: +91 124 4545300 Email: [email protected] Website: www.icra.in

Registered Office 1105, Kailash Building, 11th Floor; 26 Kasturba Gandhi Marg; New Delhi 110001 Tel: +91 11 23357940-50

Branches

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Pune + (91 20) 2556 0194/ 6606 9999

© Copyright, 2019 ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA.

ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of

surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capability of the issuer

concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA

office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to

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While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any

kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such

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herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication

or its contents


Annexure II

14MAY 2019

By Bhanu Patni

India Ratings and Research (Ind-Ra) has affirmed NLC India Limited’s (NLCIL) Long-Term Issuer Rating at ‘IND

AAA’. The Outlook is Stable. The instrument-wise rating actions are as follows:

InstrumentType

Date ofIssuance

CouponRate(%)

MaturityDate

Size ofIssue

(billion)

Rating/Outlook RatingAction

Term loan - - September

2030

INR25.52 IND AAA/Stable Affirmed

Proposed

Bond

Programme*

- - - INR20 Provisional IND

AAA/Stable

Assigned

* The bonds would be issued for a period of 10 years. The final rating will be assigned following the final issuance and

the receipt of the final documentation, conforming to the information already received by Ind-Ra.

Analytical Approach: Ind-Ra continues to take a consolidated view of NLCIL and its joint ventures, NLC Tamil Nadu

Power Limited (NTPL; NLCIL holds 89% stake) and Neyveli Uttar Pradesh Power Limited (NUPPL; 51% stake), to arrive

at the ratings.

KEY RATING DRIVERS

Operations Under Cost-Plus Model: NLCIL operates its power plants under the cost-plus return on equity (RoE)

framework and net fixed asset model, as outlined by the Central Electricity Regulatory Commission (CERC). The cost-

plus regulated approach allows the company to have stable and predictable cash flows. Furthermore, the new

guidelines by CERC for the control period FY20-FY24 are unlikely to have any material impact on the annual fixed cost

(AFC) for NLCIL.

India Ratings A�rms NLC India at ‘IND AAA’/Stable; RatesAdditional Bonds

https://www.indiaratings.co.in/Analyst?analystID=237&analystName=Bhanu%20Patni

The transfer price for the captive lignite mines too is calculated on the basis of the cost-plus approach. NLCIL has

adopted IND AS 115 from FY19; subsequently, the company has been booking and billing the revenue from mining

operations at the internal transfer price as calculated on the basis of the guidelines issued by the Ministry of Coal, as

against the earlier practice of adopting the lignite transfer price as approved by CERC. The previous practice had led to

a creation of unbilled revenues of INR11.8 billion (total unbilled revenues for FY18: INR19.6 billion) and a similar

amount as regulatory deferral liabilities, which was reversed as on 1 April 2019, thereby having a neutral impact on the

income statement and cash flows.

Low Offtake Risk: NLCIL’s operational plants (3140MW lignite-based, 1000MW NTPL, 794.5MW renewable as of April

2019) have long-term power purchase agreements with the distribution companies, thus lowering the off-take risk.

Even the under-construction portfolio of renewable and 1,000MW New Neyveli Thermal Power Station (NNTPS), a

replacement for TPS I (500MW), has power purchase agreements in place. The under-construction project, NUPPL,

also has coal linkages with South Pachwara Coal Block and a power purchase agreement for 75% of the capacity with

Uttar Pradesh Power Corporation Limited. NLCIL’s average selling price over FY17-FY18 was around INR4.4/kWh. Ind-

Ra expects the variable cost to moderate over FY19-FY21due to mining efficiencies, with the pooled transfer price of

lignite having reduced by INR300/tonne to INR1,873/tonne during FY19, and reduction in the average age of plants as

the new units come on-stream..

Integrated Nature of Operations: NLCIL has captive lignite mines for the majority of its existing power plants,

which reduces the company’s fuel availability risk. NLCIL operates lignite mines in Tamil Nadu (capacity: 28.5million

tonnes per annum (mtpa), FY18 production: 23.6mtpa) and Rajasthan (capacity: 2.1mtpa, FY18 production: 1.6mtpa).

Ind-Ra estimates a mining output requirement of around 26mtpa-27mtpa at an average plant load factor of 75% for

all its lignite-based plants, including NNTPS. Additionally, NLCIL has a tie-up with an independent power producer,

TAQA, for the sale of lignite of around 1.3mtpa and it also sells some lignite externally. The company is undertaking

capex for expanding the capacity of mines by 15.5mtpa, which would help it meet the lignite requirement for the

expanded capacity. However, NLCIL has slowed down the expansion of mine I’s capacity to 7mtpa from 3mtpa due to

the lower plant load factor (FY19: 44%; FY18: 45.9%) reported by TPS II Expansion, which is facing boiler issues, and

the likely commissioning of NNTPS being shifted to 1HFY20 from FY19.

Moderate Liquidity: NLCIL’s unencumbered cash balances remained low at INR1 billion in FY18 (FY17: INR 0.6

billion). Although the company had generated positive cash flow from operations of INR45 billion in FY18 (FY17: INR12

billion), the free cash flow remained negative at INR16.9 billion (negative INR62.6 billion) due to net interest cost of

INR8.1 billion (INR4.1 billion), high dividend/share buybacks, and capex. In FY19, Ind-Ra expects the free cash flows

to have remained negative, driven by higher debtors, continued capex, dividends and share buybacks. NLCIL has a

working capital limit of INR50 billion, of which around INR37 billion was utilised at FYE19. NLCIL has scheduled debt

repayments of about INR17 billion in FY20 and FY21 each. Despite a moderation in the liquidity position, Ind-Ra

believes NLCIL has sufficient financial flexibility to refinance its long-term liabilities, if required.

Exposure to Weak Counterparties: NLCIL continues to supply the bulk of its power to state-owned distribution

companies, with TANGEDCO being the largest off-taker. Ind-Ra expects the receivables to have increased during FY19

(FY18:INR46 billion; FY17:INR48 billion), given the financial position of TANGEDCO. Apart from receivables, NLCIL also

had unbilled revenues of INR19.6 billion in FY18 (FY17: INR13.1 billion). The amount is likely to have declined in FY19

owing to the adoption of IND AS 115. However, the company still had regulatory liabilities worth INR29.9 billion as of

1HFY19 (FY18: INR44.8 billion; FY17: INR38.1 billion) on account of certain petitions pending with the CERC with

respect to admissible charges while pricing lignite. The weak financial profile of the key off-taker remains a key rating

sensitivity. A continued build of debtors could result in higher-than-expected leverage and lower cash flows.

Increase in Leverage: Ind-Ra expects NLCIL’s consolidated leverage to have increased to over 6x in FY19

(FY18:3.3x; FY17:3.4x), largely due to the increase in debt to above INR200 billion (FY18: INR132.2 billion, FY17:

INR114.8 billion). The increase in leverage has been driven by i) the capex for the renewable projects and two under-

construction thermal projects; ii) the dividend and share buybacks of INR18.7 billion in FY19 (FY18: INR7.8 billion;

FY17: INR30.7 billion); and iii) the lower-than-expected EBITDA (FY18: INR39.6 billion, FY17: INR34.2 billion),

resulting from the fixed cost under-recovery on TPS-II expansion and Barsingar plants due to low plant availability

factor and pay revision implementation for both power and mining segments. However, Ind-Ra expects NLCIL’s net

leverage to decline to 5x-5.5x over FY21-FY22 as under-construction projects become operational.

Given the large debt for under-construction projects, Ind-Ra expects NLCIL’s net leverage on operational projects to be

around 3.5x for FY19. Ind-Ra expects the operational leverage to increase marginally over FY20-FY21 because of

capacity expansion in the renewable space, which has a higher leverage of around 4.7x-5.0x. Any higher-than-

expected capacity expansion in the renewables segment or a lower-than-expected operational performance could have

a negative impact on the operational leverage. Furthermore, higher dividends/buyback will put pressure on the

leverage in light of the high ongoing capex. However, NLCIL’s regulated cost-plus-return-on-equity model and captive

lignite mines provide sufficient predictability to cash flows.

High Ongoing Capex: Ind-Ra expects NLCIL to incur a capex of INR50-INR60 billion annually over the medium term

(FY18: INR46 billion, FY17: INR42 billion), largely on NNTPS, NUPPL and solar capacity expansion along with capex on

the mining and other upcoming projects. Over FY20-FY25, the company plans to incur a capex of INR330 billion,

largely funded in a debt-equity ratio of 70:30. Of the total amount, around INR65 billion would be allocated to the

mining segment for the development of mine III, the Talabira coal blocks and the expansion of mine I. The balance

INR265 billion would be directed towards the power segment, and would be allocated to NUPPL, the 709MW solar

plant in Tamil Nadu, Odisha TPP Phase I and TPS II expansion, and other renewable projects.

Government Ownership: As of March 2019, the government of India held the majority of the stake in NLCIL

(81.9%). The company works under the administrative control of the Ministry of Coal. In April 2011, the company was

granted the 'Navratna' status by the government. Furthermore, the board and the senior management at NLCIL are

appointed by the government. As a result, the ratings continue to factor in the strong probability of support to NLCIL

from the government if and when required.

Standalone Profile: At a standalone level, the company reported revenues of INR56.2 billion for 9MFY19

(FY18:INR84.4 billion, FY17: INR77.8 billion) and EBITDA of INR16.8 billion (INR30.5 billion, INR26.7 billion). The

standalone interest coverage was 6.8x (15x, 15.8x).

RATING SENSITIVITIES

Negative: Weakening of NLCIL’s credit profile due to a higher-than-expected capex, continued build-up of debtors,

unfavourable regulatory developments, leading to net leverage staying above 5x, on a sustained basis, could lead to a

negative rating action. COMPANY PROFILE

NNLCIL is a pioneer in lignite-based power in India with a total consolidated power capacity of 4934.5 MW including

3140MW lignite-based capacity at a standalone level, 1000MW under JV-NTPL and 794.5MW of renewable capacity as

of April 2019 . The existing mining capacity is 30.6mtpa.

FINANCIAL SUMMARY

Particulars FY18 FY17

Revenue (INR billion)* 112.4 103.1

EBITDA (INR billion)* 39.6 33.8

Profit after tax (INR billion) 19.6 24.6

Operating EBITDA/gross interest expense 7.2 5.8

Net debt/operating EBITDA* 3.3 3.4

Source: Ind-Ra, NLCIL

* adjusted for movement in regulatory deferral account balances

RATING HISTORY

Instrument Type Current Rating/Outlook Historical Rating/Outlook

Rating Type Rated

Limits

(billion)

Rating 13 March 2018

Issuer rating Long-term - IND AAA/ Stable IND AAA/ Stable

Term loan Long-term INR25.52 IND AAA/ Stable IND AAA/ Stable

Proposed bond programme Long-term INR20 Provisional IND AAA/ Stable -

COMPLEXITY LEVEL OF INSTRUMENTS

For details on the complexity levels of the instruments, please visit https://www.indiaratings.co.in/complexity-

indicators.

SOLICITATION DISCLOSURES

Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the

issuer, and therefore, India Ratings has been compensated for the provision of the ratings.

Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make

or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan

or security or any issuer.

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Applicable Criteria

Analyst Names

Corporate Rating Methodology

Primary Analyst

Bhanu Patni

Analyst

India Ratings and Research Pvt Ltd 601-9 Prakashdeep Building 7 Tolstoy Marg New Delhi

110001

011 43567276

Secondary Analyst

Nitin Bansal

Senior Analyst

+91 11 43567230

Committee Chairperson

Vivek Jain

Director

+91 11 43567249

Media Relation

Namita Sharma

Manager – Corporate Communication

+91 22 40356121

https://www.indiaratings.co.in/Uploads/CriteriaReport/CorporateRatingMethodology.pdf

Annexure III

Annexure IV

Annexure VI

Ref. No.:NSE/LIST/1737 January 15, 2020

The Company Secretary

NLC India Limited

First Floor, No.8,Mayor Sathyamurthy Road,

Egmore Complex of Food Corporation of India,

Chetpet, Chennai - 600031

Kind Attn.: Mr. K Viswanath

Dear Sir,

Sub.: In-principle approval for listing of Non-convertible Bonds on private placement basis.

This is with reference to your application dated 14-Jan-2020 for In-principle approval for listing of

Secured, Redeemable, Non-cumulative, Taxable, Non-convertible Bonds of face value of Rs. 1000000

lakhs each (Series I-2020), with a base issue size of Rs. 200 Crore and option to retain oversubscription

up to of Rs. 325 Crore aggregating to Rs. 525 Crore, to be issued by NLC India Limited on private

placement basis. In this regard, the Exchange is pleased to grant in-principle approval for the said issue.

Kindly note that these debt instruments may be listed on the Exchange after the allotment process has

been completed provided the securities of the issuer are eligible for listing on the Exchange as per our

listing criteria and the issuer fulfills the listing requirements of the Exchange. The issuer is responsible to

ensure compliance with all the applicable guidelines issued by appropriate authorities from time to time

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

Yours faithfully,

For National Stock Exchange of India Limited

Priya Iyer

Manager

Annexure VII

Annexure VIII

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