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: [●] This a draft offer document. Final offer document will be provided on finalization of terms of the issue.
NLC India Limited (‘Navratna’- A Government of India Enterprise)
Corporate Office: Registered Office: First Floor, No.8, Mayor Sathyamurthy Road, FSD, Block 1, Neyveli -607801,
Egmore Complex of Food Corporation of India, Cuddalore District Chetpet, Chennai-600 031, Tamil Nadu Tamil Nadu Ph No. 044-28364613, 614,615,616,617 Fax No.044-28364619 E-Mail- [email protected] Website: www.nlcindia.com
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 ….% UNSECURED, NON-CUMULATIVE, NON-CONVERTIBLE, REDEEMABLE, TAXABLE, BONDS OF FACE VALUE OF RS. 10,00,000/- EACH (“BONDS”) AT PAR AGGREGATING TO TOTAL ISSUE SIZE NOT EXCEEDING Rs . 500 CRORE (“THE ISSUE”) WITH A BASE ISSUE SIZE OF Rs. 125 CRORE (“BASE ISSUE SIZE”) AND GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO Rs. 375 CRORE. GREEN SHOE OPTION IS RESERVED FOR BHARAT BOND ETF BY NLC INDIA LIMITED. 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 “CRISIL AAA/Stable” by CRISIL vide its letter dated 15th May, 2020 and revalidation letter dated 13th July,2020 and “BWR AAA/ Stable ” by Brickwork Ratings vide its letter dated 11th May,2020 and revalidation letter dated 14th July,2020.Instruments with this rating are considered to have 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.
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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.
Trustee of the Issue Registrar of the Issue
IDBI Trusteeship Services Limited Integrated Registry Management Asian Building, Ground Floor Services Private Limited 17. R. Kamani Marg Ballard Estate Address: “Kences Towers” II Floor, Mumbai Maharashtra – 400 001 No 1 Ramakrishna Street, North India Usman Road, T Nagar, Phone: 022 40807000 Chennai – 600017 Fax: 022 66311776 Tel no.: (044) – 28140801 - 803 Email: [email protected] Fax no.: (044) - 28142479
E-mail: [email protected] Website: www.integratedindia.in Bid Open/ Bid Close on Issue Open/ Issue Close on Deemed Date of Allotment Pay in Date
29.07.2020 29.07.2020 31.07.2020 31.07.2020
Arrangers to the Issue
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.
This taxable bond issue is being made on a private placement basis. It is not and should not be deemed to constitute an offer to the public in general. It cannot be accepted by any person other than to whom it has been specifically addressed. The contents of this Offer Letter for private placement are not transferrable and are intended to be used by the parties to whom it is distributed. It is not intended for distribution to any other person and should not be copied / reproduced by the recipient for any person whatsoever. The information contained in this Offer Letter has certain forward looking statements. Actual result may vary materially from those expressed or implied, depending upon economic conditions, government policies and other factors. Any opinion expressed is given in good faith but is subject to change without notice. No liability is accepted whatsoever for any direct or consequential loss arising from the use of the document. NLCIL does not undertake to update this Offer Letter for Private Placement to reflect subsequent events and thus it should not be relied upon without first confirming the accuracy of such events with NLCIL.
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Contents Disclaimers: ...... 7 1. General Disclaimer: ...... 7 2. Disclaimer of the Securities & Exchange Board of India (SEBI): ...... 9 3. Disclaimer of the National Stock Exchange (NSE): ...... 9 4. Disclaimer of the Arranger to the Issue: ...... 9 5. Disclaimer of the Stock Exchange: ...... 11 6. Disclaimer of the Rating Agencies: ...... 12 7. Disclaimer of the Trustee ...... 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 ...... 19 Trustee for the Bondholders ...... 19 Credit rating agencies for the Issue ...... 19 Auditors of the Issuer- (FY 2019-20) ...... 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) ...... 53 6. Project cost and means of financing, in case of funding of new projects ...... 53 7. Dividend Policy: ...... 53 8. Key Operational and Financial Parameters for the last 3 Audited years: ...... 54 C. Details regarding the Directors of the Issuer (as on 04.07..2020) ...... 56
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1. Details of the current Directors: ...... 56 2. Details of change in Directors since last three years: ...... 58 D. Details of shareholding of the Issuer as on 30.06.2020 ...... 60 1. Details of Share Capital as on 30.06.2020: ...... 60 2. Shareholding pattern of the Issuer as on 30.06.2020: ...... 60 3. List of top 10 holders of equity shares of the Issuer as on 30.06.2020: ...... 61 4. Changes in the capital structure of the Issuer (NLCIL) on 31.03.2020, for the last five years: ...... 62 5. Details of changes in share capital of the Company since incorporation: ...... 62 6. Details of any Acquisition or Amalgamation in the last 1 year: ...... 69 7. Details of any Reorganization or Reconstruction in the last 1year: ...... 70 E. Details regarding Auditors of the Issuer: ...... 70 1. Details of the current auditors of the Issuer: ...... 70 2. Details of the change in auditors since last three years: ...... 70 F. Details of Borrowings of the Issuer(NLCIL) as on 31.03.2020 ...... 70 1. Details of Bonds: ...... 70 i. Foreign Currency Issuances as on 31.03.2020: ...... 70 ii. Domestic Bond Issuances as on 31.03.2020 ...... 71 2. Details of Secured Loan as on 31.03.2020 ...... 71 3. Details of Unsecured Loan as on 31.03.2020...... 72 4. List of top 10 Bondholders as on 03.07.2020: ...... 72 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 ...... 73 6. Details of Commercial Paper outstanding as on 31.03.2020: ...... 73 7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible Bonds /Preference Shares) as on 31.03.2020: ...... 73 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: ...... 73 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: ...... 73 G. Details of promoters of the Issuer ...... 74 Details of the Promoter Holding as on 30.06.2020 : ...... 74 H. Disclosures with regard to interest of directors, litigation etc. : ...... 74
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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: ...... 88 1. Standalone Balance Sheet ...... 88 2. Standalone Profit & Loss Account ...... 89 3. Standalone Cash Flow Statement ...... 90 4. Consolidated Balance Sheet ...... 92 5. Consolidated Profit & Loss Account ...... 93 6. Consolidated Cash Flow Statement ...... 94 7. Auditor’s Opinion Extracts: ...... 96 J. 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...... 100 K. Names of the Trustee and Consent thereof: ...... 100 L. Rating and Detailed Rating Rationale ...... 101 M. Security : ...... 101 N. Stock Exchange where Bonds are proposed to be listed ...... 102 O. Other Details ...... 102 1. Issue/instrument specific regulations ...... 102 2. Application Process ...... 103 i. Who Can Apply ...... 103 ii. Documents to be provided by Investors ...... 103 iii. Applications to be accompanied with Issuer Account Details ...... 103 iv. How to Apply ...... 103 v. Terms of Payment ...... 106 vi. Force Majeure ...... 106 vii. Applications under Power of Attorney ...... 106 viii. Application by Mutual Funds ...... 106 ix. Application by Provident Funds, Superannuation Funds and Gratuity Funds...... 107 x. Acknowledgements ...... 107 xi. Basis of Allocation...... 107 xii. Right to Accept or Reject Applications ...... 107 xiii. PAN /GIR Number ...... 108 xiv. Signatures ...... 108 xv. Nomination Facility ...... 108 xvi. Fictitious Applications ...... 108 xvii. Depository Arrangements ...... 108 xviii. Procedure for applying for Demat Facility...... 109 3. Others ...... 109 i. Right of Bondholder(s) ...... 109 ii. Modification of Rights ...... 110
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iii. Future Borrowings ...... 110 iv. Notices ...... 110 v. Minimum subscription ...... 110 vi. Underwriting ...... 110 vii. Deemed Date of Allotment ...... 111 viii. Credit of the Bonds ...... 111 ix. Issue of Bond Certificate(s) ...... 111 x. Market Lot ...... 111 xi. Trading of Bonds ...... 111 xii. Mode of Transfer of Bonds ...... 111 xiii. Common Form of Transfer ...... 112 xiv. Interest on Application Money ...... 112 xv. Interest on the Bonds ...... 112 xvi. Payment on Redemption ...... 113 xvii. Right to further issue under the ISINs ...... 113 xviii. Right to Re-purchase, Re-issue or Consolidate the Bonds ...... 113 xix. Deduction of Tax at Source ...... 113 xx. List of Beneficial Owners ...... 114 xxi. Succession ...... 114 xxii. Joint - Holders ...... 114 xxiii. Disputes and Governing Law ...... 114 xxiv. Investor Relations and Grievance Redressal ...... 114 xxv. Material Contracts and Agreements involving Financial Obligations of the Issuer...... 115 P. Issue Details ...... 115 Summary Term Sheet: ...... 115 Q. Disclosures pertaining to willful default ...... 120 R. Additional Disclosures: ...... 121 ANNEXURE I - Copy of Rating letter from CRISIL ...... 125 ANNEXURE II - Copy of Rating Letter from Brickwork Ratings ...... 125 ANNEXURE III - Board Resolution Authorizing the Issue ...... 125 ANNEXURE IV - Shareholders’ approval obtained pursuant to section 180(1)(c) ...... 125 ANNEXURE V – Consent Letter of Trustee ...... 125 ANNEXURE VI – Illustrative cash flow for bonds ...... 125 ANNEXURE VII - In-Principle Approval for listing on BSE ...... 125 ANNEXURE VIII - In-Principle Approval for listing on NSE ...... 125 ANNEXURE IX – Latest Audited Financials (for the year ended 31st March, 2020) ...... 125 ANNEXURE A ...... 126 ANNEXURE B ...... 127 ANNEXURE C ...... 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 made 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”).
In accordance with the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019 received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019, the base size of the issue Rs. 125 crore is 25% of the total issue amount i.e Rs.500 Crore. The green shoe option of Rs. 375 crore shall be exclusively reserved for the BHARAT Bond ETF at the same cut off yield of the base amount.
The price for base issue Rs. 125 crore shall be discovered in a transparent manner on the EBP Platform. After discovery of price for base issue the same price will be applicable to the green shoe option which is reserved for BHARAT BOND ETF.
Further, there is no restriction on BHARAT Bond ETF to participate in bidding for base issue size on EBP Platform.
All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable.
Further, this is the 1st NFO of NLC India Limited in accordance with the SEBI letter SEBI/DDHS/NK/OW/P/2020/10735 dated June 01, 2020 and communication of DIPAM dated June 05, 2020, DIPAM F. No 3/2/2018-DIPAM-II (Vol. VII), wherein SEBI has approved the special bidding arrangement to be applicable for further NFO under BHARAT Bond ETF in following manner:
I. The special bidding arrangement shall be available to all issuers for next 5 NFO’s of BHARAT Bond ETF.
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II. In case of FFO, if any new issuer is participating in an already existing ETF for the first time, through an FFO by the ETF, the special bidding shall also be available only to that new issuer subject to maximum of total of 5 FFO’s by BHARAT Bond ETF. III. The method of calculation of minimum base issue size shall remain unchanged and the green shoe option shall be reserved only for the BHARAT Bond ETF as mentioned in the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019.
This disclosure document and the contents hereof are restricted to 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 subscribers to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective subscribers 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 should 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
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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 National Stock Exchange (NSE):
As required, a copy of this Offer Document has been submitted to National Stock Exchange of India Limited (hereinafter referred to as NSE). It is to be distinctly understood that the aforesaid submission or in-principle approval given by NSE vide its letter Ref.: NSE/LIST/2542 dated July 23, 2020 or hosting the same on the website of NSE in terms of SEBI (Issue and Listing of Debt Securities) Regulations, 2008 as amended from time to time, should not in any way be deemed or construed that the offer document has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this offer document; nor does it warrant that this Issuer's securities will be listed or will continue to be listed on the Exchange; nor does it take any responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of this 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 or omitted to be stated herein or any other reason whatsoever.
4. 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
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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. 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 the 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 ,Tax or financial 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 , disseminated 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.
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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 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.”
5. Disclaimer of the Stock Exchange:
As required, a copy of this Disclosure Document will 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, 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.
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6. Disclaimer of the Rating Agencies:
The CRISIL rating reflects CRISIL’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 CRISIL. CRISIL ratings are based on the information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. CRISIL 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 CRISIL ratings are under surveillance. Ratings are revised as and when circumstances so warrant. CRISIL 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. CRISIL rating criteria are available without charge to the public on the CRISIL website www.crisil.com.
The Brickwork Ratings (BWR) rating reflects BWR’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 BWR. BWR ratings are based on the information provided by the issuer or obtained by BWR from sources it considers reliable. BWR does not guarantee the completeness or accuracy of the information on which the rating is based. BWR 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 BWR ratings are under surveillance. Ratings are revised as and when circumstances so warrant. BWR 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. BWR rating criteria are available without charge to the public on the BWR website www.brickworkratings.com.
7. Disclaimer of the Trustee
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 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 such instruments.
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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 “aim”, “anticipate”, “believe”, “could”, “continue”, “estimate”, “expect”, “future”, “goal”, “intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”, “should”, “target”, “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 etc. 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/ The issue and allotment of the Bonds to the successful Applicants in the Issue Allotted
A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in Allottee full or in part A person who makes an offer to subscribe the Bonds pursuant to the terms of this Applicant/ Investor Disclosure Document and the Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Bonds Application Form 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 Unsecured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the Base Issue nature of debentures of Face Value of Rs. 10,00,000 each, for an amount of Rs. 125 crore Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Beneficial Owner(s) Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996) Board/ Board of The Board of Directors of NLC India Limited or Committee thereof, unless otherwise Directors specified Unsecured, Redeemable, Non-Cumulative, Non-Convertible, Taxable bonds in the Bond(s) nature of debentures Any person or entity holding the Bonds and whose name appears in the list of Bondholder(s) Beneficial Owners provided by the Depositories BSE BSE Limited Electronic Book Provider Platform of BSE for issuance of debt securities on private BSE EBP placement basis.
BWR Brickwork Ratings CDSL Central Depository Services (India) Limited CMD Chairman cum Managing Director C&AG Comptroller and Auditor General of India Coupon / Interest As mentioned in the Summary Term Sheet Payment Date CRISIL CRISIL Ratings CVC Central Vigilance Commission Debenture Trusteeship The agreement executed between the Issuer and the Debenture Trustee for the purpose Agreement of the Issue
The cut-off date declared by the Issuer with effect from which all benefits under the Deemed Date of Bonds including interest on the Bonds shall be available to the Bondholder(s). The Allotment 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 A Depository registered with SEBI under the SEBI (Depositories and Participant) Depository Regulations, 1996, as amended from time to time Depository Participant A Depository participant as defined under Depositories Act
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DISCOMs Distribution Companies DIN Director Identification Number DP Depository Participant ESCOMs Electricity Supplier Companies QIBs, arranger (either on proprietary basis or otherwise as permitted under the BSE Eligible Investor EBP Platform) and any Non-QIB Investors EOI Expression of Interest EPC Engineering,Procurement and Construction FFO Further Fund Offer First ISIN Circular SEBI Circular CIR/IMD/DF-1/ 67 /2017 dated June 30, 2017 as amended FIIs Foreign Institutional Investors Period of twelve months beginning from April 1 of a calendar year and ending on Financial Year/ FY 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 I.T. Act The Income Tax Act, 1961, as amended from time to time IFSC Indian Financial System Code NLC India Limited, incorporated under the Companies Act, 1956 and having its Issuer / NLC India registered office at First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Limited/ Company Complex of Food Corporation of India, Chetpet, Chennai-600 031. 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 Listing Agreement 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 Refers to 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 NFO New Fund Offer NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited NTPL NLC Tamil Nadu Power Limited 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 Non-QIB Investor following: i. companies; ii. gratuity funds and superannuation funds;
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iii. provident funds and pension funds with corpus of less than Rs. 25 Crore; iv. societies; v. registered trusts; vi. statutory corporations or undertakings established by central or state legislature authorized to invest in the Debentures; and
other investor authorized to invest in Debentures in accordance with applicable laws. NUPPL Neyveli Uttar Pradesh Power Limited Refers to, collectively the SEBI EBP Circular and the BSE EBP Operating Operational Guidelines Guidelines Option to Retain Option to Retain Oversubscription of Rs 375 crore (Green Shoe reserved for Bharat Bond ETF) Oversubscription
PAN Permanent Account Number
PPA Power Purchase Agreement
QIB Qualified Institutional Buyer R&TA Registrar and Transfer Agent RBI Reserve Bank of India RCE Revised Cost Estimate Record Date As mentioned in the Summary Term Sheet Registrar to the Issue, in this case being Integrated Registry Management Registrar 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 Refers to SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI SEBI EBP Circular circular SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 Securities and Exchange Board of India (Issue and Listing of Debt Securities) SEBI Debt Regulations 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 TDS Tax Deducted at Source Companies Act, 2013, as amended and to the extent notified by the Government The Companies Act of India and Companies Act, 1956 (to the extent applicable) The Issue/ The Base Issue Size of Rs. 125 crore with an option to retain oversubscription of Rs 375 Offer/ Private crore (Green Shoe reserved for Bharat Bond ETF) aggregating up to a total of the Placement Issue Size, being, Rs.500 crore Trustees Trustees for the Bondholders in this case being IDBI Trusteeship Services Limited.
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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 First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Registered Office 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
Company
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 3240 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 (20 MW) in Andaman. The Company is also in the process of developing Talabira – II & III Coal Block, Odisha, having capacity of 20MTPA from which coal production has commenced from April 2020.
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.
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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 828 hectares of land required for this project. The Project is under construction. Scheduled commissioning of Unit I : December 2020; Unit II: June 2021 & Unit III: December 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 Contact Person of the Issuer Shri. K. Viswanath Shri. Mukesh Agrawal Corporate Office, Block 1, Neyveli TS, Chief General Manager-Finance Cuddalore-607801, Tamil Nadu Corporate Office, Block 1, Neyveli TS, Tel no.: 04142-252205 Cuddalore-607801, Tamil Nadu Fax no.: 04142-252645 Tel: 04142-251961; E-mail: [email protected] Fax-04142-252645; E-mail: [email protected]
Shri. Jaikumar Srinivasan Director-Finance Corporate Office, Block 1, Neyveli TS, Chief Financial Officer of the Issuer Cuddalore-607801, Tamil Nadu Tel no.: 04142-252280 Fax no.: 04142-252543 E-mail: [email protected] Arranger(s) of the issue ************************************ Integrated Registry Management Services Private Limited Address: “Kences Towers” II Floor, No 1 Ramakrishna Street, North Usman Road,
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Registrar and Transfer Agent to Issue T Nagar, Chennai – 600017 Tel no.: 044 – 28140801 – 803
Fax no.: 044 - 28142479 E-mail: [email protected] Website: www.integratedindia.in IDBI Trusteeship Services Limited Asian Building, Ground Floor 17. R. Kamani Marg Ballard Estate Mumbai Maharashtra – 400 001 Trustee for the Bondholders India Phone: 022 40807000 Fax: 022 66311776 Email: [email protected] Credit rating agencies for the Issue 3rd Floor, Raj Alkaa Park, 29/3 & 32/2 Kalena Agrahara, Bannerghatta Road, Brickwork Ratings Bengaluru - 560 076 Phone : +91 80 4040 9940 | Fax: +91 80 4040 9941 | Mobile: +91 96118 05999 Website: www.brickworkratings.com CRISIL House Central Avenue, CRISIL Ratings Hiranandani Business Park, Powai, Mumbai 400 076, India Phone : +91 22 3342 3000 Fax : +91 22 3342 3001 Website: www.crisil.com Auditors of the Issuer- (FY 2019-20) FRN 001547S PKKG Balasubramaniam & Associates, Address: Door No. 10/2, Eighth Street, Gandhi Nagar, Chartered Accountants Thiruvannamalai - 606 602 Tel no.: 044 - 24896819 E-mail:[email protected] R. Subramanian and Company LLP FRN 004137S/S200041 Chartered Accountants 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.
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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 lignite 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 Thermal Power Stations at Neyveli, Tamil Nadu and one Thermal Power Station at Barsingsar, Rajasthan with a total installed thermal capacity of 3240 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 (20 MW) in Andaman. The Company is also in the process of developing Talabira II & III coal block, Odisha having capacity of 20 MTPA from which coal production has commenced from April 2020. The Company has also commissioned 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 Power 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 7,980.79 Crore (RCE-II). Unit I of 500 MW commissioned on 28th Dec, 2019 The first Synchronization of Unit # 2 was achieved on 26.02.2020. Unit II of 500 MW scheduled to commission in August 2020
b) Expansion of Mine I (Area Expansion) & Expansion of Mine IA
Project Cost : Rs. 709.06 Crore (RCE). Environment clearance was accorded on 02.09.2015. Mine development activities in Mine IA is in progress through outsourcing mode. Presently, project is on hold.
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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. 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 and desires for lowering the power tariff. Discussions are going on with Govt. of Rajasthan and the EPC contractor for the 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: December 2020; Unit II: June 2021 & Unit III: December 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. 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. • Project has received the permission of tree felling for Forest and non Forest Land on 13.06.19. • Coal Production commenced from April 2020 f) 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.
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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. Mine Plan was submitted on 20th June 2020
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 has 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 have been 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 has been completed for Land acquisition. iii) TPS-II 2nd Expansion (2 x 660 MW) at Neyveli MoEF&CC has accorded Environmental Clearance on 29th October 2018. Tendering activities to execute the Project under Single EPC Mode is in progress.
iv) Talabira Thermal (3 x 800 MW) in Odisha Administrative approval for acquisition of private land of 1,053.74 acres has been received from Government of Odisha. Allocation of power and approval of exemption for competitive bidding is awaited. v) PAN India Solar Power Project (1000 MW) Project under formulation 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.
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S.No. Year Event 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. . 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.
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S.No. Year Event 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. 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 100 MW of TPS I out of total 600 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 by September 2019. Commissioning of NNTPS (1000 MW)Unit-I of 500 MW on 28th December,2019 28. 2020 Decommissioning of 400 MW out of balance 500 MW of TPS I. Coal Excavation from Talabira II & III on 26th April,2020. Commissioning of balance 17.5 MW of Andaman Project on 30th June 2020. Power Trading in Real Time market was commenced on 1st June 2020.
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.
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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, 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 primary 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 including below conditions and events, 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 measures 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; 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
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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 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 the type, quantity and/or size required to meet production expectations including the 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 has 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. Power surrender results in lesser schedule of energy to NLCIL Power Plants and less revenue realization through energy
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charges. Less schedule reduces the requirement of lignite for power plants which ultimately results in lesser production in Mines.
NLCIL has started trading 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. NLCIL has started power trading in the Real Time Market from 1st June 2020 onwards. 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. Risk related to COVID-19
Mining is heavily dependent on the availability of manpower/labour who undertake the groundwork; with operations being scaled back, many such migrant labourers and workforce have retreated to their homebase. In addition, the lockdown has not only restricted access to workforce but also placed constraints on the movement of goods. Despite steel, coal and power production being termed as essential services, mining operations have been affected due to COVID-19.
Apart of mining ,the Company is in the business of generation and sale of electricity which is an essential service. The Company has ensured the availability of its power plants to generate power and has continued to supply power during the period of lockdown. However, for the short-term period the demand of power is lower and accordingly, the Company is operating its power plants in line with demand.
Ministry of Power (MoP) directed CERC to reduce the rate of late payment surcharge (LPSC) for the payments which become delayed beyond a period of 45 days (from the date of presentation of the bill) during the period from 24 March 2020 to 30 June 2020, to contain the impact of COVID-19. On these directions CERC has issued order whereby it has been directed that LPSC shall apply at a reduced rate of 12% instead of normal rate of 18% on payments becoming overdue during the said period.
Further Ministry of Power (MoP) vide circular dated 15th May,2020 advised all Central Public Sector Generation Companies under Ministry of Power including their Joint Ventures/Subsidiaries and Central Public Sector Transmission Company, to offer following rebate to the Distribution Companies (Discoms) for passing on to the end consumers for the lockdown period on account of Covid-19 pandemic: a. Deferment of capacity charges for power not scheduled, to be payable without interest after the end of the lockdown period in three equal monthly installments. b. Rebate of about 20-25% on power supply billed to Discoms and inter- state transmission charges levied by PGCIL
Discoms may expect the same rebate from NLCIL which will have a bearing on the financials of the company.
Due to the lockdown and its further impact in the near term, the financial situation of Discoms is likely to be aggravated. This will also impact other entities in the value chain including generation companies and their fuel suppliers. This may lead to reduced availability of working capital for these entities
5. Our new business ventures are subject to a number of risks and uncertainties.
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
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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 generation and 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, pandemic 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 arising from the rehabilitation and resettlement of communities affected by
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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 abandoning 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.
6. 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 through tariff, this will have significant impact on total energy charge of the generating plant.
If we fail to meet environmental requirements or 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 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 a material adverse impact on our results of operations.
7. 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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8. 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 licenses 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 etc; 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.
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
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conditions. In addition, the GoI plays an important commercial role in the execution of mining 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 mining, 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. Further DISCOMs have also been appealing for several orders and any adverse determination on the same may materially and adversely affect our results of operations and financial performance.
9. 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.
10. 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 2,480 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
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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.
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.
11. 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 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.
12. 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 March 31, 2020, we had total outstanding indebtedness of Rs. 16,780.47 crore. The indebtedness incurred and the restrictions imposed on us by our current or future loan
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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; 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 March 31, 2020, we have Rs. 2,592.42 Crore (including foreign currency loan of Rs. 467.42 crore equivalent to 56.28 Million Euros and Commercial Paper of Rs. 1,000 Crore) 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.
13. 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.
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In the CERC Tariff Regulation 2019, CERC had notified that Determination of Lignite Price, hitherto carried out by Ministry of Coal will come under the domain of 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.
MoC had issue the guidelines for pricing of lignite for the tariff period 2004-09, 2009-14 and 2014-19. Ministry of Coal vide letter dt.24.6.19 intimated that NLCIL Board in consultation with the stakeholders can decide lignite pricing at such frequency it demands. Accordingly NLCIL Board approved the Lignite Price Guidelines for the tariff period 2019-24 and at present price of lignite is determined based on the above guidelines.
As a sequel to the above, the Central Electricity Regulatory Commission(CERC)vide their Public Notice No.L-1/236/2018/CERCdt.1.6.2020 have published a draft CERC (Terms & Conditions of Tariff) (II Amendment) Regulations 2020 whereby the Commission has invited comments, suggestions from the stakeholder and interested persons on the above Draft Regulations on or before 15th July 2020.
The draft Amendment to the Regulation as above shall apply in all cases where the generating company has arrangement for supply of coal or lignite from the integrated Mine allotted to it for one or more of its specified end use generation stations whose tariff is required to be determined by the Commission u/s 62 of the Act read with Section 79 thereof.
It is apprehended that the shifting of the authority to determine lignite price CERC may have significant adverse impact on the price of the lignite which may impact the financials of the company significantly.
14. 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.
15. 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 that, insurance in the form of Mega Risk Insurance cover for FY 2020-21 by paying additional premium over last year’s Fire Insurance policy for our operating thermal & solar plants, mines and projects, with ranges of coverage that we believe to be adequate. we are
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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 like pandemic, terrorism, loss of generation due to low natural irradiation loss, faulty or defective design of material, gradual deterioration, natural wear & tear, interruption of water supply, gas, electricity, collapse and cracking of buildings, corrosions, rust formations, fungus growth, larcenary, acts of fraud, unexplained disappearance of stock, any wilful act or wilful negligence of any persons, war invasions, mutiny, civil commotion, unlawful occupation, destruction of property by public authority order, damage due to nuclear radiation, ionisation and properties of railways, spacecraft, watercrafts, aircrafts, transit other than the said locations etc.
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.
16. 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 2990 MW at Neyveli,Tamil Nadu and one thermal power station at Barsingsar, Rajasthan with an installed capacity of 250 MW. Further 1350.06 MW solar plant ,20 MW in Andaman,51 MW Wind in Tamil Nadu and 20 MTPA Coal Mine in Talabira in Odisha were also added. 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.
17. 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. Further demand of power may vary due to availability of hydropower in monsoon, availability of wind during June to September and reduction in power consumption by businesses which are seasonal in nature and downturn in demand for power by such consumers enable us to carry out maintenance and overhauling activities during this period which in turn reduces our revenue during such periods.
18. 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 (which is dormant). All joint ventures except MNH Shakti enable us to undertake coal based power generation and to commence coal
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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.
19. 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, our business, financial performance and the trading price of our Equity Shares could be adversely affected.
20. 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 is under operation through MDO mode & Pachwara South will also be operated through 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
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obligations to their counterparties or to their employees/ workers on their rolls. In such events, company may have to bear additional implications.
21. 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.
22. 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, pandemics 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.
23. Total expenditure under our resettlement and rehabilitation policy may exceed the amounts we anticipate.
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.
24. 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 2019-20 were Rs.
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2,804.70 crores which is 35.43 % of our total revenue from operations. 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.
25. 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.
26. 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.
27. There are some Civil / Criminal case pending against some of our employees and Company as well which arouse during the course of Business/operational transactions 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 our employees or us 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 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 our employees or us in the future. Such proceedings could divert management time and attention, and consume financial resources in their defence or prosecution. Further, the following matters are pending before various courts and forums as follows; 4 Arbitrations matters and one Conciliation matter are pending. Apart from the above there are 7 Section 34 of Arbitration act cases are pending before District Court, Cuddalore, 8 appeals relating to Arbitration before High courts, and one appeal filed by Supplier pending before supreme court against the Arbitration Award. One case before NCLT filed by the employee of a Contractor. In Supreme 65 Civil Appeals related to Land Acquisition matters and 5 more cases relating to service and contractual related and one appeal against the CESTAT order are pending. in Madras High Court service related cases- 181, Madras High Court Land Acquisition related cases- 204, Other High Court cases-82, are pending. Regarding cases related to Garnishee and attachment of salary against the employees who stood as
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guarantors in personal financial transactions and on other issues 393 cases are pending, Total = 945 cases
28. Recent accidents and its impact
Fire incident occurred in Unit-6 of TPS-II, Neyveli, Tamil Nadu on 07.05.2020 at 16:41 Hrs. Eight persons working in the vicinity suffered burn injuries. Subsequently five of them succumbed to the injuries and three got discharged. An internal committee and an external Committee, conducted investigations and submitted their reports. Compensation and relief were provided to injured. Compensation and relief, along with employment to the immediate kin were given to the deceased.
Another fire incident occurred in Unit-5 of TPS-II, Neyveli, Tamil Nadu on 01.07.2020 at 09:45 Hrs. Twenty-three persons working in the vicinity suffered burn injuries. Out of which, six persons succumbed to the injuries in the spot itself. Subsequently eight persons succumbed to the injuries in the hospital, six persons got discharged and three are convulsing in the hospital. An internal committee, and an external Committee has been constituted to conduct the investigations Compensation and relief were provided to injured. Compensation and relief, along with employment to the immediate kin were given to the deceased.
Due to the above accidents, all the 4 units of TPS-II Stage II are not in operation currently and Safety Audit has been initiated. Thus, schedule of resumption of operations of units of TPS II Stage II would be based on the Safety Audit Reports and reports of internal and external committees. This accident has impacted the power generation and will have consequential effects on the financials of the Company.
Further, National Green Tribunal (NGT) suo moto has taken-up the Unit-5 incident of TPS-II and on hearing, ordered NLCIL to deposit Rs.5 Cr as an interim compensation with the District Magistrate. NGT has also constituted an independent committee to study and give an independent report on incident.
29. 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
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the directives of Honourable Supreme court of India. However, demands like equal pay for equal wages and continuous deployment of contract workmen are persisting
30. 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 removal 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.
31. 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 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.
32. 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 inabilities 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.
33. We have significant contingent liabilities that we have not provided for in our balance sheet
As on March 31, 2020, contingent liabilities not provided for were as follows:
Contingent Liabilities As of 31st March, 2020* (Rs in Crore) Estimated Value of contracts remaining to be 4,155.42 executed on Capital accounts not provided for Claims against the Company / disputed 5,091.69 demands not acknowledged as debt Guarantees issued by Company 564.40 Total 9,811.51
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*Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received
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.
34. 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; 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.
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35. 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.
36. 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.
37. 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 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.
38. 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
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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 March 31,2020, the available escrow deposit towards such liability amounted to Rs. 264.28 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.
39. 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 that 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 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.
40. 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
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coal for our power projects, our business, results of operations and financial condition may be materially and adversely affected.
41. 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.
42. 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.
43. 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.
44. 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
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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.
45. 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.
46. If we are unable to commence operations as expected, our results of operations will be adversely affected.
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.
47. 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.
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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.
48. Significant increase in prices or shortage 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.
49. 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 CRISIL (“CRISIL”), Brickwork Ratings (“BWR”), Credit Analysis & Research Limited (“CARE”), ICRA Limited (“ICRA”) and India Ratings and Research Private Limited(“IND”).
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.
External Risk Factors
50. 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.
51. 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.
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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.
52. 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.
53. 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 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.
54. Depreciation of the Rupee against foreign currencies may have an adverse effect on our results of operations and financial conditions.
As of March 31, 2020 we had Foreign Currency (“FC”) borrowings of Rs. 467.42 crore (Equivalent to 56.28 Million Euro, 1 Euro = Rs. 83.0496). 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 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.
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55. 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.
56. 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 deemed to have a lower environmental impact than lignite/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.
57. 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 the demand for power in India does not increase as we expect, our results of operations and expansion strategy may be materially and adversely affected.
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.
58. 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.
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59. 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.
60. Risks in Solar Projects
Difficulties in land acquisition for the solar projects has become a concern. 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. Also there may be forfeiture of agreed tariff due to delay in commissioning of the project within 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 within plant life will result in high maintenance cost and reduction in revenue.
61. The Risk due to the falling power Tariff in the open market:
This risk is mainly due to the emergence of renewable power as well as nuclear power which have relatively lesser cost of generation when compared to the conventional coal/lignite based power generation. Even in the same thermal power generation, with the advent of ultra super critical technology in Boilers, the minimum capacity of generation per unit has got increased to 800 MW. This has considerably reduced the cost of generation and also the losses leading to cheaper power. NLCIL is having old technology boilers and now only 500 MW and 660 MW boilers are in operation/under construction. There is a considerable risk involved in selling the power in future for the NLCIL’s plants. All efforts are being made to reduce the cost of generation, so that the cost per unit is competitive in the market. There is no guarantee that all the efforts will be fruitful.
62. The various risks that are being faced in the newly opened Talabira – II & III OC coal mine of NLCIL: a. Land acquisition & Mining Operation: As per approved Mine plan, initial mining operation, external dumping and other infrastructures are to be started in the tenancy land. As the disbursement of land compensation and acquisition of land is under slow progress due to higher demand value of land owners and kisam change. Hence, the initial mine cut and Over Burden & Top soil removal are being carried out in Forest and Non-forest Govt land. To continue the mining operation and external dumping as per mining plan, the acquisition of Tenancy land is need to be expedited. Also the construction of mine infrastructure such as CHP, Railway siding and statutory building, offices are going to get affected, if tenancy land is not acquired in time.
b. Structure payment: Structures constructed after section 9(1) gazette notification is also posing a big problem. The Project affected persons are insisting for structure payment with all benefits, which may increase the project cost. NLCIL has agreed to pay the cost of structure for construction after section 9(1) gazette notification.
c. Railway siding: As per the Environmental Clearance, the coal evacuation is permitted for initial three years only through road. Railway siding within mining lease area falls under forest, Non-forest govt, Jalbhandhar and tenancy land. Railway siding outside of
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mining lease area falls under Non-forest govt, Jalbhandhar and tenancy land. Permission to use Jalbhandhar land within and outside of mining lease area for railway infrastructure is to be granted by Govt. of Odisha. Delay in getting the permission from Govt. of Odisha will affect the progress of railway siding works. Likewise, for acquisition of the tenancy land outside the mine lease area, DCAC meeting with landowners has to be conducted by the District Authority, Jharsuguda. Also, the same district authority, has to expedite the transfer of Non-forest Govt land to NLCIL for railway corridor. NLCIL has engaged the M/s. RITES for Project Monitoring Consultancy for the railway siding works. Agency for Package–I for construction of Major bridge and Package–II for Earthwork, miner bridge, culverts etc have been finalized by M/s. RITES and contractors are waiting for land availability to commence the work.
d. Coal transportation by road initially: To evacuate the coal produced from the coal mine, a 2.4 km coal transportation road from the Mine boundary to the State highway is under construction. The delay in the land acquisition of tenancy land and SC/ST land is affecting the progress of construction of road. Land owners are demanding very high cost for the land. Delay in the construction of coal transportation road, will affect the evacuation of coal and coal production from mine leading to financial losses. Also there will be a possibility of fire in the stock pile of coal, if coal is not transported in time.
63. Risks in Talabira thermal Power Plant (3x800 MW): The associated pit head thermal power plant for the above said mine is the three units of 800 MW Neyveli Talabira Thermal Power Project (NTTPP). The land acquisition for the thermal power plant is yet to begin. The power purchase agreement is not yet signed by the state beneficiaries for the thermal power plant. Due to these delays, the construction of the power plant may get delayed which will hike the cost of power. Also, delay in obtaining the exemption from the competitive bidding route, power allocation, land acquisition, coal evacuation etc, could delay the project schedule and also increase the cost of the project.
Risk Relating to the Issue:
64. 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 changes in market and economic conditions, the Issuer’s financial condition and other factors that may be beyond the Issuer’s control.
65. 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
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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.
66. 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.
67. 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.
68. 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.
69. Credit ratings may not reflect all risks.
CRISIL and Brickwork Ratings have assigned credit ratings to this bond. 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.
70. 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 Issuer’s business. In an event of 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.
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5. Corporate Structure: (FLOW CHART)
Chairman cum Managing Director-NLCIL
Corporate Functions Operations Business
Director Director Director HR CVO Director Director Finance Mines Power Planning & Projects
Vigilance Dept.
• Employee • Commercial Welfare and • Mines • Thermal • PBD • Company operations Power Amenities • IEW & Contracts Accounts & Plants • Land • Medical Audit • Material Services Acquisition • NUPPL • Managemen Management / Disposal • CSR t Services • Mine • NTPL Planning • TA • Board • Power • Corporate
Section • Coal Co- Station Environment Cell • L & DC ordination Engineer • Regional • CARD ing • Public Office • Safety Relations & • Computer Services
RTI • Corporate Legal
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 RTI: Right to Information
6. Project cost and means of financing, in case of funding of new projects
The fund will be utilized for refinancing of existing borrowings, funding of capital expenditure requirement and for general business requirements.
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
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Our Company has paid dividend for last ten Financial years as under:
Rs. per Share Financial Year Interim Final Total 2019-20 7.06 - 7.06 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:
(Rs.in Crores) 2019-20* 2018-19 2017-18 Particulars (Audited) (Audited) (Audited) Net worth 12,511.84 12,393.53 13,135.53 Total debt 16780.47 13,166.31 8,719.81 Non-Current Maturities of 11,370.16 8,316.51 6,050.29 Long term Borrowing Short term Borrowing 3,641.42 3,668.00 1,457.80 Current Maturities of long 1,768.89 1,181.80 1,211.72 term borrowing Net Fixed Assets 18,305.10 11,684.43 10,574.11 Non-Current Assets 27,330.17 24,529.00 21,303.20 Cash and Cash equivalents 12.97 13.82 12.63 Current Investments - - - Current Assets(excluding Cash 10,538.77 9,019.59 10,122.23 and Cash Equivalent) Current Liabilities# 3,284.43 3236.61 3,079.88 Regulatory Deferral Account 1,237.18 1119.93 1068.35 Debit Balance Regulatory Deferral Account 2,565.05 2438.81 4484.08 Credit Balance Net Revenue from Operations 7,916.30 7,145.92 8,496.20 EBITDA 3,986.80 3,306.89 3,647.36 EBIT 3,028.41 2,561.17 2,786.21 Finance Cost 820.38 390.09 204.98 Profit After Tax 1,413.85 1,266.97 1,848.78 Dividend Amount 978.97 669.42 646.58
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2019-20* 2018-19 2017-18 Particulars (Audited) (Audited) (Audited) Current Ratio^ 1.83 1.57 1.39 Interest Coverage Ratio 4.86 8.39 18.08 Gross Debt/ Equity Ratio 1.34 1.06 0.66 Debt Service Coverage Ratio 1.81 1.78 6.40 *Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received # 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: (Rs.in Crores) 2019-20* 2018-19 2017-18 Particulars (Audited) (Audited) (Audited) Net worth 12,777.46 12,651.65 13,152.92 Total debt 27,226.23 20,598.40 13,215.37 Of which – Non Current Maturities of Long term 18,943.19 14,377.29 9,380.34 Borrowing Short term Borrowing 6,021.37 4,546.53 2,130.53 Current Maturities of long term 2,261.67 1,674.58 1,704.50 borrowing Net Fixed Assets 24076.86 17,657.95 16,765.32 Non-Current Assets 38,666.35 33,316.26 27,235.90 Cash and Cash equivalents 16.96 18.49 101.93 Current Investments - Current Assets(excluding Cash 13,069.61 10,469.44 10,034.18 and Cash Equivalent) Current Liabilities # 4,803.05 4,724.55 3,780.45 Regulatory Deferral Account 1068.35 1,735.21 1476.10 Debit Balance Regulatory Deferral Account 2,565.05 2438.81 4484.08 Credit Balance Net Revenue from Operations 10,320.56 9,870.93 11,288.39 EBITDA 4,857.08 4,417.29 4,540.70 EBIT 3,522.93 3,296.53 3,309.08 Finance Cost 1,174.38 699.92 547.85 Profit After Tax 1,452.98 1,537.35 1,956.78 Dividend Amount 978.97 669.42 648.99 Current Ratio^ 1.87 1.50 1.30 Interest Coverage Ratio 4.13 6.26 8.40 Gross Debt/ Equity Ratio 2.13 1.63 1.00 Debt Service Coverage Ratio 1.78 1.68 3.37 *Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received # Excluding Short Term Borrowings and Current Maturities of long term borrowing ^ Current Ratio includes the impact of regulatory deferral balances
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Gross Debt-Equity Ratio (Standalone basis): (Based on Financials of 31.03.2020) Particulars Before the issue of bonds After the issue of bonds# Total Borrowing (Rs. crores)* 16,780.47 16,905.47 Net-worth (Rs. crores) 12,511.84 12,511.84 Borrowings / Equity Ratio 1.34 1.35 # considering the base issue size of Rs 125. 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 04.07..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 04.07.2020, there were 12 Directors, of which six were Functional Directors including Chairman cum Managing Director, Two Government Nominee Directors and four Independent Directors.
Particulars Board structure Actual Strength as on 04.07.2020 Chairman cum Managing Director 1 1 Functional Directors 5 5 Government Nominee Directors 2 2 Independent Directors 8 4 Total 16 12
1. Details of the current Directors:
S. Name, Designation and Age Director Details of other Address no. DIN (yrs) since Directorships 1. Shri. Rakesh Kumar 57 K-22, J.N. Salai, Block-8 September, 1. NLC Tamil Nadu Power Chairman-cum- Neyveli – 607 801. 28,2018 Ltd Managing Director 2. Neyveli Uttar Pradesh DIN: 02865335 Power Ltd 2. Shri. Vinod Kumar 57 Qtr B 8, Tower 10, New May, 3, 1. Coal India Limited Tiwari MotiBagh, 2019 Director New Delhi – 21 DIN:03575641 3. Shri. S. K. Prabakar 54 998-B, 10th Street, July 2 , 1. Tamilnadu Director Mogappair Eri Scheme, 2020 Generation and DIN: 01238040 Mogappair, Chennai, Distribution Tamil Nadu India 600037 Corporation Limited 2. Tamilnadu Transmission Corporation Limited 3. Tamil Nadu Electricity Board 4. Madras Race Club 5. Tamilnadu State Marketing Corporation Limited
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S. Name, Designation and Age Director Details of other Address no. DIN (yrs) since Directorships 6. Tamilnadu Power Finance and Infrastructure Development Corporation Limited 7. Poompuhar Shipping Corporation Limited
4. Shri.R.Vikraman 58 J-18, J.N. Salai, December MNH Shakti Ltd Director Block-16 9, 2016 (Human Resource) Neyveli – 607 801 DIN:07601778 5. Shri. N.N.M. Rao 59 J-23, J.N. Salai, June, 29, 1. NLC Tamil Nadu Power Director Block-8 2018 Ltd (Planning& Projects) Neyveli – 607 801. DIN: 08148117 6. Shri. Prabhakar Chowki 58 H-3, J.N. Salai, November, Director (Mines) Block-24 28,2018 DIN :08199813 Neyveli – 607 801. 7 Shri. Shaji John 57 H-6, J.N. Salai, April,17, 1. NLC Tamil Nadu Power Director (Power) Block-24 2019 Ltd DIN: 08418401 Neyveli – 607 801. 2. Neyveli Uttar Pradesh Power Ltd 8. Shri Jaikumar Srinivasan 53 H4,J.N.Salai, February 5, 1. NLC Tamil Nadu Power Director (Finance) Block-24 2020 Ltd DIN 01220828 Neyveli – 607 801 2. Neyveli Uttar Pradesh Power Ltd 9. Shri. Indrajit Pal 65 House No.8-2-603/L-11 September, Independent Director Happy Valley 6, 2017 DIN: 00163967 Near Income Tax Colony Banjara Hills Hyderabad-500 034. 10. Dr. P. Vishnu Dev 47 H.No.12-13-548, Flat No. December, Independent Director 303, ShubNivas, Street 19, 2018 DIN: 08308279 No.14,Nagarjuna Nagar, Tarnaka, Hyderabad-500 022. 11. Dr Muralidhar Goud 51 5-9-22/18/A, Adharsh July, 17, Vuppunuthula Nagar, Near Birla Mandir, 2019 Independent Director New Mla Quarters, DIN: 03595033 Himayathnagar Hyderabad 500063 TG 12. Shri Namboothiri 61 NaramangalamValavoor August, 2, Kesavan Narayanan P.O, Vallichira Kottayam- 2019 Namboothiri 68663 Independent Director DIN: 08527157
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
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2. Details of change in Directors since last three years:
S. No. Name of Director, Date of Joining / Date of Cessation Reason Designation& DIN Appointment 1. Shri. Rakesh Kumar September, 28,2018 Continuing Appointment Designation: Chairman-cum- Managing Director DIN: 02865335
2. Shri. Vinod Kumar Tiwari May 3 , 2019 Continuing Appointment Designation: Director DIN:03575641
3. Shri. S. K. Prabakar July 2 , 2020 Continuing Appointment Director DIN: 01238040
4. Shri. A. Karthik March, 2, 2020 June, 15, 2020 Cessation Designation: Director DIN: 03601436
5. Shri.R.Vikraman December 9, 2016 Continuing Appointment Designation:Director (Human Resource) DIN:07601778
6. Shri. N.N.M. Rao June, 29, 2018 Continuing Appointment Designation: Director (P&P) DIN: 08148117
7. Shri. Prabhakar Chowki November, 28,2018 Continuing Appointment Designation : Director (Mines) DIN :08199813 8. Shri. Shaji John April,17, 2019 Continuing Appointment Designation: Director (Power) DIN: 08418401 9. Shri Jaikumar Srinivasan February, 5, 2020 Continuing Appointment Director (Finance) DIN 01220828 10. Shri. Indrajit Pal September, 6, 2017 Continuing Appointment Designation:Independent Director DIN: 00163967 11. Dr. P. Vishnu Dev December, 19, 2018 Continuing Appointment Designation:Independent Director DIN: 08308279 12. Shri Muralidhar Goud July 17, 2019 @ Continuing Appointment Vuppunuthula Designation: Independent Director DIN: 03595033 13. Shri Namboothiri Kesavan August 2, 2019 Continuing Appointment Narayanan Namboothiri Designation:I ndependent Director DIN: 08527157
14. Shri. Dheeraj Kumar November, 28,2019 February 10, 2020 Cessation Designation: Director DIN: 00936284 15. Ms.Nalini Padmanabhan February 2, 2017 February 2, 2020 Cessation Designation:Independent Director DIN: 01565909
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S. No. Name of Director, Date of Joining / Date of Cessation Reason Designation& DIN Appointment 16. Shri. Azad Singh Toor November 17,2019 Cessation Designation: Independent December 3, 2015* Director DIN:07358170
17. Shri.K.Madhavan Nair November 17,2019 Cessation Designation: Independent December 11, 2015* Director DIN: 07366493
18. Shri. Md Nasimuddin September, 24, 2018 September, 26, 2019 Cessation Designation: Director DIN:02026939
19. Shri. Suresh Kumar June, 9, 2017 April, 10, 2019 Cessation Designation: Director DIN:06440021
20. Shri.V.Thangapandian September 1, 2015 March 31, 2019 Superannuation Designation: Director(Power) DIN:07255163
21. Shri. Chandra Prakash Singh November 17, 2015 November 17, 2018 Cessation Designation:Independent Director DIN:00594463
22. Shri. Vikram Kapur March 29,2017 August 27,2018 Cessation Designation : Part-time Official Director DIN:00463564
23. Ms. Monika Arora March 2,2017 August 30, 2018 Cessation Designation:Independent Director DIN:01065112
24. Shri.Sarat Kumar Acharya October 1,2015 July 31,2018 Superannuation Designation: Chairman and Managing Director DIN:03357603 25. Shri.Subir Das September 30,2014 June 30,2018 Superannuation Designation: Director(Mines) DIN:06988287
26. Shri.P. Selvakumar January 1, 2016 May 31,2018 Superannuation Designation: Director (Planning & Projects) DIN:07347130
@ The annual general meeting of the Company was held on 1st August, 2019, accordingly pursuant to the provisions of Section 161 (1) of the Companies Act, 2013, Dr. V. Muralidhar Goud ceases to be Director with effect from 2nd August, 2019 and again re- appointed with effect from 2nd August, 2019 as an Additional Director
*Reappointed vide MoC dated 17th November,2018 for a further period of one year with effect from 17th November,2018
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D. Details of shareholding of the Issuer as on 30.06.2020
1. Details of Share Capital as on 30.06.2020:
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 30.06.2020:
Category of Shareholder Total No. of Total No. of Shares held Total Shares in Dematerialized Form Shareholding as a % of Total No. of Shares (A) Shareholding of Promoter and Promoter Group (1) Indian Central Government / State 1098221224 1098221224 79.2 Government(s) Sub Total 1098221224 1098221224 79.2 (2) Foreign Total shareholding of Promoter and 1098221224 1098221224 79.2 Promoter Group (A) (B) Public Shareholding (1) Institutions Mutual Funds / UTI 117085032 117083532 8.44 Financial Institutions / Issuers 36,486,970 36,486,970 2.63 Central Government / State 59701260 59701260 4.31 Government(s) Insurance Companies 5944221 5944221 0.43 Foreign Institutional Investors 6009296 6009296 0.43 Alternate Investment Funds 0 0 0 Sub Total 225226779 225225279 16.24 (2) Non-Institutions Bodies Corporate 4560551 4559451 0.33 Individuals 53,353,168 51509529 3.85 NBFC Registered with RBI 650 650 0 Non Resident Indians 3364545 3102445 0.24 Trusts 135170 135170 0.01 Overseas Corporate Bodies 0 0 0 Clearing Members 1326648 1326648 0.1 Foreign Individuals 0 0 0 Others 447,874 447,874 0.03 Sub Total 63188606 61081767 4.56 Total Public shareholding (B) 288415385 286307046 20.8 Total (A)+(B) 1386636609 1384528270 100
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(C) Shares held by Custodians and against which Depository Receipts have been issued – Public
Total (A)+(B)+(C) 1386636609 1384528270 100 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 30.06.2020:
Total No. of equity Shareholding Sr. Total no. of equity Name of the shareholders shares in demat as % of total no. no. shares form of equity shares PRESIDENT OF INDIA MINISTRY OF COAL 1098221224 1098221224 79.2004 1 A WING, SHASTRI BHAWAN NEW DELHI – 110001 LIFE INSURANCE CORPORATION OF INDIA INVESTMENT DEPARTMENT 33983260 33983260 2.4508 2 6TH FLOOR, WEST WING, CENTRAL OFFICE YOGAKSHEMA, JEEVAN BIMA MARG MUMBAI – 400021 STATE INDUSTRIES PROMOTION CORPORATION OF TAMILNADU LTD 26865567 26865567 1.9375 3 NO.19-A, RUKMANI LAKSHMIPATHY ROAD, EGMORE, CHENNAI – 600008
HDFC TRUSTEE COMPANY LTD. A/C HDFC 23603517 BALANCED ADVANTAGE FUND 23603517 1.7022 4 CITIBANK N.A. CUSTODY SERVICES
FIFC- 11TH FLR, G BLOCK, PLOT C-54 AND C-55, BKC BANDRA - EAST, MUMBAI - 400098
ICICI PRUDENTIAL EQUITY & DEBT FUND, HDFC BANK LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS 22852262 22852262 1.6480 5 OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST MUMBAI 400042 CPSE EXCHANGE TRADED SCHEME (CPSE ETF) 16176080 16176080 DEUTSCHE BANK AG,DB HOUSE 1.1666 6 HAZARIMAL SOMANI MARG,
P.O.BOX NO 1142,FORT MUMBAI - 400001
TAMILNADU INDUSTRIAL DEVELOPMENT CORPORATION LTD 14925315 14925315 1.0764 7 19-A, RUKMINI LAKSHMIPATHY ROAD EGMORE, CHENNAI - 600008 ICICI PRUDENTIAL LARGE & MID CAP FUND SBI SG GLOBAL SECURITIES SERVICES PL 7114095 7114095 0.5130 8 JEEVAN SEVA ANNEXE BUILDING, A WINGGR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054
ICICI PRUDENTIAL VALUE FUND SERIES - 19 6265568 6265568 0.4519 9 –CITINBANK N.A. CUSTODY SERVICES FIFC-11TH FLR, G BLOCK, PLOT C-54 AND C- 55, BKC BANDRA – EAST, MUMBAI 400098
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TAMILNADU URBAN FINANCE & INFRASTRUCTURE DEVELOPMENT 5970126 5970126 0.4305 10 CORPORATION LIMITED NO 490/1-2 ANNA SALAI, NANDANAM, CHENNAI 600035
4. Changes in the capital structure of the Issuer (NLCIL) on 31.03.2020, for the last five years:
Rs. Crore As on Particulars 2018-19 2017-18 2016-17 2015-16 2014-15 31.03.2020 Authorized Share 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 Capital Issued, Subscribed & 1,386.64 1,386.64 1,528.57 1,528.57 1,677.71 1,677.71 Paid Up
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:
Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash to GoI
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
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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
12.01.91 6,80,000 1,000 1,000 Cash 141,38,242 68,00,00,000 1413,82,42,000 Further Allotment
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Consid eration Date of Face Issue in Cumulative Cumulative Remarks Issue/ No. of Equity Valu Equity Share price Cash/ No. of Equity Equity Share Allotme Shares e Capital (Rs) (Rs) other Shares Capital (Rs) nt (Rs) than cash 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 167,77,09,600 (119,07,46,000) 1677,70,96,000 Reduction of than share capital cash* 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 & Door No. 10/2, Eighth Street, Gandhi Associates, Nagar, Thiruvannamalai - 606 602 FY 2017-18 onwards, Chartered Accountants, 2 R Subramanian and Company LLP New No6 Old No 36, Krishna Swamy FY 2019-20 Avenue,Luz Mylapore, Chennai – 600 004 *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:
Date of Appointment/ Auditor Since (in case Name Address Date of of Resignation/ Remarks Resignation/Cessation Cessation) New No 14 old no 27 , Auditor PB Vijayaraghavan & Cathedral Garden Road, Auditor since FY for 2016-17 Auditor upto FY 2016-17 Co Nungambakkam, Chennai - 2013-14 onwards before 600034 Cessation PKKG Door No. 10/2, Eighth Street, Appointment date for Current Balasubramaniam & Gandhi Nagar, the FY 2017-18 is Auditor Assocites Thiruvannamalai - 606 602 12.07.2017 Auditor Chandran & Paragon No.2, Dr. upto Q1 Auditor since FY Raman,Chartered Radhakrishnan Salai, 2nd Street, Auditor upto Q1 2019-20 2019-20 2015-16 onwards Accountants, Mylapore, Chennai - 600 004 before Cessation New No 6 Old No 36, Krishna Appointment date for R Subramanian and Current Swamy Avenue,Luz Mylapore, the FY 2019-20 is Company LLP Auditor Chennai – 600 004 01.08.2019 *Note: The appointment of auditors is being done by C&AG on a year to year basis.
F. Details of Borrowings of the Issuer(NLCIL) as on 31.03.2020
1. Details of Bonds:
i. Foreign Currency Issuances as on 31.03.2020:
Tenor / Amount Redemption Credit Debenture series period of Outstanding Date of on date/ Rating Secured / (ISIN) maturity coupon In US$ Mio allotment schedule unsecured Currency Nil
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ii. Domestic Bond Issuances as on 31.03.2020
Call Deben Tenor/ Allot Redem Amount Option Secured/ ture period of Coupon ment ption Credit Rating Security in Rs Date & Unsecured series. Maturity Date Date Step Up NLCIL 29th 29th Secured by a Bonds 8.09% 1,475 10 years May, May, NA first/pari-passu first 2019- p.a crore charge on specified Series-I 2019 2029 [ICRA] assets of the AAA/Stable Secured company as NLCIL 27th 25th IND AAA/ Stable Bonds 7.36% 525 mentioned in the 10 years Jan, Jan, NA Bond Trust Deed 2020- p.a Crore Series-I 2020 2030
2. Details of Secured Loan as on 31.03.2020
Rs. In Crore Amount SL Sanctioned as Principal Amount Lender's Name Type of Facility Repayment Date / Schedule No. per Outstanding Agreement 1 Power Finance Rupee Term 3,000.00 2,850.00 Repayable in 20 equal half yearly instalments. Corporation Loan First Instalment due on 31.03.2020, and Limited subsequent instalments will become due for payment on 30th day of September and 31st day of March every Year. 2 HDFC Bank Rupee Term 1,135.00 1,078.25 Repayments to be made effective from March Limited Loan 2020 in half yearly 20 equal instalments. 3 HDFC Bank Rupee Term 481.00 288.60 Repayable in 10 equal Half Yearly Instalments. Limited Loan The repayment starts on 01.10.2018 and Final Instalment on 27.03.2023. 4 Axis Bank Rupee Term 500.00 400.00 10 Equal half yearly instalments after Limited Loan moratorium period. Repayment started on 09.09.2019 & Final repayment on 09.03.2024. 5 Axis Bank Rupee Term 300.00 270.00 10 Equal half yearly instalments after Limited Loan moratorium period. Repayment will start on 31.03.2020 & Final repayment on 30.09.2024. 6 Federal Bank Rupee Term 306.00 275.40 10 Equal half yearly instalments after Limited Loan moratorium period starting from 31.03.2020 and Final Instalment 30.09.2024. 7 Federal Bank Rupee Term 150.00 135.00 10 Equal half yearly instalments after Limited Loan moratorium period starting from 31.03.2020 and Final Instalment 30.09.2024. 8 Axis Bank Rupee Term 150.00 135.00 10 Equal half yearly instalments after Limited Loan moratorium period. Repayment will start on 31.03.2020 & Final repayment on 30.09.2024 9 HDFC Bank Rupee Term 821.00 474.05 20 half yearly instalments after moratorium Limited Loan period from 1st year from the date of first drawl of Loan. The repayment started from March 2020 .Final instalment due in Jun-2029. 10 State Bank of Rupee Term 2,552.00 2,319.00 20 Equal half yearly Instalments after India Loan 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. 11 State Bank of Rupee Term 1,680.75 488.00 20 Equal half yearly instalments which will India Loan commence from 30.09.2021 and final instalment on 31.03.2031.
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Amount SL Sanctioned as Principal Amount Lender's Name Type of Facility Repayment Date / Schedule No. per Outstanding Agreement 12 State Bank of Rupee Term 1,000.00 833.33 6 Equal half yearly instalments after moratorium India Loan period of 6 months. First Instalment will commence from 31.03.2020 and Final instalment on 30.09.2022. 13 State Bank of Working 5,000.00 2,641.42 Repayable on Demand. India Capital - Cash Credit
3. Details of Unsecured Loan as on 31.03.2020 a) Domestic Loan Rs. in Crore Principal SL Lender's Type of Amount Amount Repayment Date / Schedule No. Name Facility Sanctioned as Outstanding per Agreement 48 Equal Monthly Installments Mahanadi Inter- starting from the succeeding 1 Coalfields Corporate 2,000.00 1,125.00 month after complete drawl of Ltd. Loan the Loan. First Installment Started on 31.07.2018
b) Foreign Currency
Loan Loan Outstanding SL Lender's Type of Outstanding as as on 31.03.2020 Repayment Date / Schedule No. Name Facility on 31.03.2020 (Rs in Crore) (FC in Million) Bi- annual equal repayment(€ 0.44 1 KFW Loan € 7.24 60.12 Million/annum), commenced from 30-12-2001, ending on 30-06-2036 Bi-annual equal repayment(€ 2.80 2 KFW Loan € 49.04 407.30 Million/annum), commenced from 30-06-2002, ending on 30-06-2037 NLCIL has extended letter of comforts to the extent of Rs. 3,920.12 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 03.07.2020:
Category Percentage on Face Value in Rs. Sr.no. Name of Bondholder total debt Crore securities CORPORATE BODY – 290.00 14.50 1 SBI LIFE INSURANCE CO.LTD OTHERS CORPORATE BODY – 232.10 11.61 2 CBT-EPF-05-F-DM CENTRAL GOVT. NPS TRUST- A/C LIC PENSION FUND SCHEME - 210.00 10.50 3 TRUSTS STATE GOVT NPS TRUST- A/C SBI PENSION FUND SCHEME - 185.00 9.25 4 TRUSTS STATE GOVT CBT-EPF-05-E-DM CORPORATE BODY – 138.00 6.90 5 CENTRAL GOVT.
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NPS TRUST- A/C LIC PENSION FUND SCHEME – 134.60 6.73 6 TRUSTS Central GOVT NPS TRUST- A/C SBI PENSION FUND SCHEME - 120.00 6.00 7 TRUSTS CENTRAL GOVT INSURANCE 100.00 5.00 HDFC ERGO GENERAL INSURANCE COMPANY COMPANY 8 LIMITED REGISTERED WITH IRDA EMPLOYEE’S STATE INSURANCE CORPORATION A/C CORPORATE BODY – 100.00 5.00 9 SBI FUNDS MANAGEMENT PVT. LTD CENTRAL GOVT. NPS TRUST - A/C SBI PENSION FUND SCHEME - 85.00 4.25 10 Trust CORPORATE CG
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
6. Details of Commercial Paper outstanding as on 31.03.2020:
Rs.in Crore Maturity Date Amount Outstanding 28-08-2020 500 29-05-2020 500
7. Details of rest of the borrowings (including hybrid debt like FCCB, Optionally Convertible Bonds /Preference Shares) as on 31.03.2020:
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.
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G. Details of promoters of the Issuer
Details of the Promoter Holding as on 30.06.2020 :
Total shareholding % of shares Total no. of No. of shares in as % of total no. of No. of shares pledged with Sr.no. Name of the shareholders equity shares demat form equity shares as on pledged respect to shares 30.06.2020 owned The President of India, 1. acting through the 1098221224 1098221224 79.20% Nil Nil Ministry of Coal
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 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 31.03.2020 are given below: -
Name of the Director- Salary for the year Performance Related Pay Benefits (Rs.) (Sarvashri) (Rs.) (Rs.)* Rakesh Kumar 4,431,777.00 1,440,687.00 1,276,182.00 R. Vikraman 5,210,438.00 1,303,900.00 1,100,048.00 Shaji John 3,793,213.00 1,216,751.00 665,895.00 N. Naga Maheswar Rao 4,016,856.00 1,133,783.00 692,432.00 Prabhakar Chowki 3,847,388.00 1,107,770.00 34,165.00 Jaikumar Srinivasan 526,891.00 101,505.00 - Sarat Kumar Acharya - 1,653,203.00 V. Thangapandian - 1,301,660.00 P. Selvakumar - - 1,182,405.00 Subir Das - - 1,227,213.00 Total 21,826,563.00 6,304,396.00 9,133,203.00 * PRP for FY 2017-18.
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Details of payments towards sitting fee to Independent Directors during the period 01.04.2019 - 31.03.2020 Sitting fee paid for (Rs) Name of the Director- Total (Rs.) (Sarvashri /Ms.) Board Meetings Committee Meetings Nalini Padmanabhan 2,10,000.00 1,60,000.00 3,70,000.00 Azad Singh Toor 1,80,000.00 1,60,000.00 3,40,000.00 Murlidhar Goud 2,25,000.00 1,70,000.00 3,95,000.00 P. Vishnu Dev 2,85,000.00 2,50,000.00 5,35,000.00 Indrajit Pal 3,15,000.00 2,20,000.00 5,35,000.00 K. Madhavan Nair 1,80,000.00 1,80,000.00 3,60,000.00 N.K. Narayanan Namboothiri 2,25,000.00 1,65,000.00 3,90,000.00 Total 16,20,000.00 13,05,000.00 29,25,000.00
Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received
Financial Year 2018-19 Details of remuneration of Functional Directors for the financial year 2018-19 are given below:- Name of the Director- Salary for the year Benefits (Rs.) Performance Related (Sarvashri) (Rs.) 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 Sitting fee paid for (Rs) Name of the Director- Total (Rs.) (Sarvashri /Ms.) 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
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Financial Year 2017-18 Details of remuneration of Functional Directors for the financial year 2017-18 are given below:- Name of the Director- Salary for the year Performance Related Benefits(Rs.) (Sarvashri) (Rs.) 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 Sitting fee paid for (Rs) Name of the Director- Total (Rs.) Board Meetings Committee Meetings (Sarvashri/Ms.) 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
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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 2019-20:
a. List of related parties I. Key Managerial Personnel (KMP): Whole Time Directors:
i. Shri. Rakesh Kumar -Chairman Cum Managing Director ii. Shri. Rakesh Kumar -Director(Finance)^ iii. Shri. R. Vikraman - Director (Human Resources) iv. Shri. Nadella Naga Maheswar Rao- Director(P&P) v. Shri. Prabhakar Chowki - Director (Mines) vi. Shri. Shaji John - Director (Power) (Appointed w.e.f 17/04/2019) vii. Shri. Jaikumar Srinivasan - Director(Finance) (Appointed w.e.f 05/02/2020)
Independent Directors
i. Shri. Azad Singh Toor -Non Executive Director - Relinquished w.e.f 17.11.2019 ii. Shri. K.Madhavan Nair -Non Executive Director- Relinquished w.e.f 17.11.2019 iii. Ms. Nalini Padmanabhan- Non Executive Director- Relinquished w.e.f 02.02.2020 iv. Shri. Indrajit Pal -Non Executive Director v. Dr. P. Vishnu Dev -Non Executive Director vi. Shri. Dr. V Muralidhar Goud-Non Executive Director- Appointed w.e.f 17.07.2019 vii. Shri. N K Narayanan Namboothiri- Non Executive Director- Appointed w.e.f 02.08.2019
Nominee Directors
i. Shri. Suresh Kumar -Non Executive Director-Relinquished w.e.f 10.04.2019 ii. Shri. Vinod Kumar Tiwari - Non Executive Director- Appointed w.e.f 03.05.2019 iii. Shri. Md. Nasimuddin -Non Executive Director-Relinquished w.e.f 26.09.2019 iv. Shri.Dheeraj Kumar-Non Executive Director-Appointed w.e.f 28.11.2019/Relinquished w.e.f 10.02.2020 v. Shri. A Karthik - Non Executive Director- Appointed w.e.f 02.03.2020
^ Held additional charge upto 04.02.2020 in addition to Chairman cum Managing Director of NLC India Limited
Chief Financial Officer and Company Secretary
i. Shri. Rakesh Kumar - CFO (Relinquished w.e.f 11.02.2020) ii. Shri. Jaikumar Srinivasan - CFO (Appointed w.e.f 11.02.2020) iii. 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
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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 For the year ended For the year ended I. Key management personnel compensation March 31, 2020 March 31, 2019
Short-term employee benefits 3.54 3.39 Post-employment benefits 0.24 0.24 Other long-term benefits 0.44 0.84 Sitting Fee 0.36 0.32 4.58 4.79 Rs. In Crore NTPL NUPPL II. A. Transactions with Subsidiaries 2019-20 2018-19 2019-20 2018-19 i. Sales/purchase of goods and services -Goods - 5.50 - -Services (excluding GST) 17.88 16.24 12.59 10.77 ii. Sales/purchase of Assets - - - - iii. Loans issued 1,500.00 680.00 790.00 340.00 iv. Loans Repaid 2,180.00 750.00 790.00 1,340.00 v. Equity Contributions - 695.82 402.21 vi. Dividend Received 97.37 - - vii. Interest on Loans 91.47 57.53 6.08 89.90
Rs In Crore MNH Shakti Limited II. B. Transactions with Associate 2019-20 2018-19 i) Reimbursement of employee cost - - ii) Loans issued - - iii) Loans repaid - - iv) Equity contributions - -
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Rs. In Crore III. Transaction with Post employment benefit plans 2019-20 2018-19 - Contributions made during the year 393.35 318.35
Rs. In Crore IV. Transactions with the related parties under the control of the same Government Name of the Company Nature of transaction 2019-20 2018-19 Bharat Heavy Electric Limited Purchase of Stores and spares 22.02 19.10 Bharat Heavy Electric Limited Package contracts 78.00 177.47 Bharath Earth movers Ltd-BEML Payment for FMC contract 20.84 14.76 Bharath Earth movers Ltd-BEML Purchase of Stores and spares 0.08 - Bharath Earth movers Ltd-BEML Payment for procuring CMEs 13.39 4.18 Hindustan Petroleum Corporation Purchase of furnace oil 127.22 67.96 Limited Bharath Petroleum Corporation Ltd Purchase of furnace oil 135.94 51.86 Indian Oil Corporation Limited Purchase of furnace oil 58.53 72.75 National Buildings Construction Purchase/Construction of Asset 6.04 13.57 Corporation Limited), Steel Authority Of India Limited Purchase of Steel 14.41 24.57 Rashtriya Ispat Nigam Ltd Purchase of Steel 2.34 1.07 Balmer Lawrie & Co Ltd Purchase of Lubricants 6.70 6.19 Balmer Lawrie & Co Ltd Purchase of Air Ticket 3.85 2.92 MSTC Ltd E-auction agent Commission 1.78 4.28 M/s Mecon Ltd Consultancy Services-MOEF norms 0.01 0.28 Instrumentation ltd Supply of spares 1.05 0.51 Mahanadi Coal Fields ( MCL) Loan Received - 1,000.00 Mahanadi Coal Fields ( MCL) Loan repayment 500.00 - Power Grid Corporation Of India Maintenance Contract 11.95 - Limited Central Power Reaserch Institute (CPRI) Testing Fee 0.42 0.13 c. Outstanding balances with related parties are as follows: I. Key Management Personnel Rs. In Crore Transactions value for the Balance outstanding Particulars year ended March 31 as at March 31 2020 2019 2020 2019 Shri. Rakesh Kumar/CMD & Director/Finance 0.06 0.01 - 0.06 towards HBA Mr.Shaji John/Director(Power)- towards Car Loan 0.02 0.02 0.03 0.04 Shri. K. Viswanath/Company Secretary 0.02 0.00 0.01 0.03 - towards Car Loan -towards Festival Advance 0.00 - 0.00 -
II. Subsidiaries and Associate Rs. In Crore Particulars As at March 31, As at March 31, 2020 2019 a. NTPL Receivable - towards Other Loan & Advances - 680.00 - Others 62.58 45.72 Payable - - b. NUPPL Receivable towards Loan - towards Other Loan & Advances - -
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- Others 11.36 8.81 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, As at March 31, 2020 2019 - Receivable - - - Payable 29.10 29.16
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, 2020 and March 31, 2019 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.
Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received
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Disclosure of transactions with the related party as defined in the Ind AS 24 are given below for Financial Year 2018-19:
d. 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
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 i. Neyveli Uttar Pradesh Power Limited (NUPPL) – Subsidiary ii. 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
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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. e. 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 For the year ended For the year ended I. Key management personnel compensation March 31, 2019 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 NTPL NUPPL II. A. Transactions with Subsidiaries 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 - - vii. Interest on Loans 57.53 46.62 89.90 26.91
Rs In Crore MNH III. B. Transactions with Associate 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
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- 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 Purchase of furnace oil 67.96 64.68 Limited Bharat Petroleum Corporation Limited Purchase of furnace oil 51.86 50.07 Indian Oil Corporation Limited Purchase of furnace oil 72.75 51.28 National Buildings Construction Purchase/Construction of Asset 13.57 5.07 Corporation Limited 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 0.28 0.45 norms 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 Maintenance Contract - 1.06 Limited Central Power Research Institute (CPRI) Testing Fee 0.13 -
f. Outstanding balances with related parties are as follows: I. Key Management Personnel Rs. In Crore Transactions value for the Balance outstanding Particulars year ended March 31 as at March 31 2019 2018 2019 2018 Shri. Rakesh Kumar/CMD & Director/Finance 0.01 0.01 0.06 0.07 towards HBA Shri. K. Viswanath/Company Secretary- towards 0.00 0.00 0.03 0.04 Car Loan
II. Subsidiaries and Associate Rs. In Crore Particulars As at March 31, As at March 31, 2019 2018 e. NTPL Receivable - towards Other Loan & Advances 680.00 750.00 - Others 45.72 21.04 Payable - - f. NUPPL Receivable towards Loan - towards Other Loan & Advances - 1,000.00
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- Others 8.81 7.87 Payable - - g. 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, As at March 31, 2019 2018 - Receivable - - - Payable 29.16 26.98
h. 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
a. List of related parties I. Key Managerial Personnel (KMP): 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 (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
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xv. Shri. Indrajit Pal (Appointed w.e.f .06/09/2017)- Director xvi. 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 PF Trust 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
For the year ended For the year ended I. Key Management Personnel Compensation March 31, 2018 March 31, 2017
Short-term employee benefits 2.64 2.01 Post-employment benefits 0.17 0.46 Other long-term benefits 0.40 0.18 Termination benefits - - Share-based payments - - 3.21 2.65
Rs. In Crore II. Transactions with Subsidiaries and NTPL NUPPL Associate 2017-18 2016-17 2017-18 2016-17 i. Reimbursement of Expenses (incl 13.70 0.00 23.10 2.76 Management Service Charges) 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
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NLC PF Trust - Contributions made during the year 309.04 294.29
Rs. In Crore IV. Transactions with the related parties under the control of the same government: Name of the Company Nature of transaction 2017 - 2016 - 2017 2018 Bharat Heavy Electricals Limited Purchase of Stores and spares 4.39 19.13 Bharat Heavy Electricals Limited Package contracts 611.43 711.75 Bharat Heavy Electricals Limited Purchase of Stores and spares 6.30 40.17 Bharath Earth Movers Limited Payment for FMC contract 5.06 - Bharath Earth Movers Limited Payment for procuring CMEs 21.98 - Hindustan Petroleum Corporation Purchase of furnace oil 64.68 142.54 Limited Bharat Petroleum Corporation Purchase of furnace oil 50.07 - Limited Indian Oil Corporation Limited Purchase of furnace oil 51.28 69.41 National Buildings Construction Purchase/Construction of Asset 5.07 14.14 Corporation Limited Steel Authority of India Limited Purchase of Steel 16.81 12.26 Rashtriya Ispat Nigam Limited Purchase of Steel 1.04 - Balmer Lawrie & Co. Limited Purchase of Lubricants 6.13 4.95 Balmer Lawrie & Co. Limited Purchase of Air Ticket 2.46 - MSTC Limited E-auction agent Commission 0.49 0.59 Mecon Limited Consultancy Services-MOEF norms 0.45 - Instrumentation Limited Supply of spares 0.36 - Mahanadi Coalfields Limited Loan 1,000.00 - Power Grid Corporation of India Maintenance Contract 1.06 0.09 Limited
g. Outstanding balances with related parties are as follows: I. Key Management Personnel Rs. In Crore Particulars Transactions value for the Balance outstanding as at year ended March 31 March 31 2018 2017 2018 2017 Mr. Rakesh Kumar- Director/Finance - - 0.07 0.08 towards HBA Mr. Viswanath K.- Company Secretary - - 0.04 0.04 towards Car Loan
II. Subsidiaries and Associate Rs. In Crore Particulars As at March 31, As at March 2018 31, 2017 i. NTPL Receivable - Towards Bridge Loan - 180.00 - towards Other Loan & Advances 750.00 340.00 - Others 21.04 3.66 Payable - - j. NUPPL Receivable towards Loan
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- towards Other Loan & Advances 1,000.00 60.00 - Others 7.87 2.76 Payable - - k. MNH Shakti - - There were no transactions during the year with MNH Shakti
III. Post Employment Benefit Plan: Rs. In Crore NLC PF Trust As at March 31, As at March 31, 2018 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. 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 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.
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 were 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.
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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. However, the company has discovered few irregularities in respect to its Joint Venture Company – NUPPL, which might lead to fraud in the land registration and payment process. The total amount of such irregularities identified is about Rs 0.29 crores for which further investigation is in process. A forensic investigation has been initiated by the company for identification of causes and the exact amounts involved in the said irregularities.
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. As at As at As at Particulars No 31.03.2020 31.03.2019 31.03.2018 ASSETS (1) Non-current assets Property, Plant and Equipment 18,298.74 11,678.18 10,567.85 Right- of-use-Asset 3.06 Intangible Asset 6.36 6.25 6.26 Capital Work-In-Progress 4,083.58 8,735.64 6,876.12 Asset under Development 127.67 117.80 199.05 Financial Assets i) Investments 3,519.40 2,823.58 2,421.37 ii) Loans 30.88 42.60 67.45 Other non-current assets 1,260.48 1,124.95 1,165.10 27,330.17 24,529.00 21,303.20 (2) Current Assets Inventories 1,324.55 1,464.38 1,688.90 Financial Assets i) Trade receivables 6,691.83 4,606.19 3,366.15 ii) Cash and cash equivalents 12.97 13.82 12.63 iii) Other bank balances 360.30 303.34 266.02 iv) Loans 37.98 716.60 1,766.21 v) Other Financial assets 65.13 48.71 46.03 Income Tax Asset (Net) 832.28 692.96 777.72 Other Current Assets 1,226.70 1,187.41 2,211.20 10,551.74 9,033.41 10,134.86 (3) Regulatory Deferral Account Debit Balances 1,237.18 1,119.93 1,068.35 Total Assets and Regulatory Deferral Account 39,119.09 34,682.34 32,506.41 Debit Balances EQUITY AND LIABILITIES Equity Equity Share Capital 1,386.64 1,386.64 1,528.57 Other Equity i) Retained earnings 8,942.89 8,843.46 9,551.61 ii) Other reserves 2,309.98 2,281.23 2,254.40 12,639.51 12,511.33 13,334.58 Liabilities (1) Non-Current Liabilities
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Sl. As at As at As at Particulars No 31.03.2020 31.03.2019 31.03.2018 Financial liabilities I. Borrowings 11,370.16 8,316.51 6,050.29 II. Lease liability of Right-of-Use Assets 3.30 Deferred tax liabilities (Net) 2,779.94 2,093.47 1,877.42 Other non-current liabilities 1,066.39 1,235.81 1,010.64 15,219.79 11,645.79 8,938.35 (2) Current Liabilities Financial liabilities i) Borrowings 3,641.42 3,668.00 1,457.80 ii) Trade payables 1,830.89 1,988.07 1552.51 iii) Other financial liabilities 1,886.53 1,218.49 1,222.60 Other current liabilities 587.64 701.75 858.71 Provisions 748.26 510.10 657.78 8,694.74 8,086.41 5,749.40 (3) Regulatory Deferral Account Credit Balances 2,565.05 2,438.81 4,484.08 Total Equity and Liabilities 39,119.09 34,682.34 32,506.41
Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received.
2. Standalone Profit & Loss Account
Rs. In Crore For the year For the year For the year SI. Particulars ended ended ended NO 31.03.2020 31.03.2019 31.03.2018 I Revenue from Operations 7,916.30 7,145.92 8,496.20 II Other Income 1,216.98 913.35 586.85 III Total Income (I+II) 9,133.28 8,059.27 9,083.05 IV EXPENSES Changes in Inventories 81.99 242.92 67.44 Employee benefit expenses 2,804.70 2,963.68 3,081.96 Finance Costs 820.38 390.09 204.98 Depreciation and Amortization 745.72 958.39 expenses 861.15 Other expenses 2,255.38 2,405.19 2,237.26 Total Expenses (IV) 6,920.84 6,747.60 6,452.79 Profit / (loss) before Exceptional, V Tax & Rate Regulatory Activity 2,212.44 1,311.67 2,630.26 (III-IV) Net Movement in regulatory VI deferral account balances income / (4.41) 859.41 (49.03) (expenses) Profit / (loss) before Exceptional VII 2,208.03 2,171.08 2,581.23 Item and Tax(V+VI) VIII Exceptional Items 3.44 35.21 (59.44) Profit / Loss after Exceptional item and IX 2,204.59 before tax (VII-VIIII) 2,135.87 2,640.67 X Tax expenses (1) Current tax -Current Year Tax 309.93 288.27 464.08
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For the year For the year For the year SI. Particulars ended ended ended NO 31.03.2020 31.03.2019 31.03.2018 -MAT Credit (200.92) -Previous Year (3.27) 101.90 (0.24) -Tax Expenses / (Savings) on Rate (1.54) 262.69 (11.00) Regulated Account (2) Deferred Tax 686.54 216.04 339.05
XI Profit/ (Loss) for the Period (IX-X) 1,413.85 1,266.97 1,848.78 XII Other Comprehensive Income A (i) Items not reclassified to profit
or loss: (net of Taxes) Re-measurement of defined (125.36) benefits plans (34.20) 61.03 Total Comprehensive Income for the period of (XI+XII) XIII 1,909.81 (Comprising Profit/(Loss) and 1,288.49 1,232.77 other comprehensive income) Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received.
3. Standalone Cash Flow Statement
Rs. In Crore
For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 A. Cash flow from
operating activities: Net Profit Before Tax 2,204.59 2,135.87 2,640.67 Adjustments for: Less: Profit on Disposal of Asset 2.65 18.24 0.64 Dividend from NTPL 97.37 0 19.47 Interest Income 166.85 271.91 108.57 266.87 290.15 128.69 Add: Depreciation 958.39 745.72 861.15 Buyback Expenses - 6.75 - Other non-cash charges 61.12 (79.08) 491.80 Provision for fixed assets 0.02 10.14 9.54 Loss on Disposal of assets 2.65 9.18 Interest expense 820.38 390.09 204.98 1,842.56 1,575.69 1,082.80 792.65 1,567.47 1,438.77 Operating Profit before 3,780.28 2,928.52 4,079.44 working capital changes
Adjustments for : Trade receivables (2,096.59) (1,360.50) 382.25 Loans & advances (87.63) (55.90) (196.49) Inventories & other current 40.73 1,108.51 (1,144.38) assets
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For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 Trade payables & other (93.01) (1,713.81) 1,008.52 current liabilities Cash Flow generated from 1,543.78 906.82 4,129.34 Operations
Direct Taxes paid (378.30) (405.38) (463.42) Cash Flow Before 1,165.48 501.44 3,665.92 Extraordinary Items Grants received 2.61 (2.73) 94.82 Net Cash from operating 1,168.09 498.71 3,760.74 activities
B. Cash flow from investing activities: Purchase of property, plant and equipment / (2,699.66) (3,068.98) (3,232.39) preliminary expenses Sale of property, plant and equipment / Projects From 2.11 18.70 (0.08) continuing operations
Sale/Purchase of (695.82) (402.21) 0.00 Investments Dividend Received 97.37 19.47 Interest Received 150.43 269.23 114.42 Net Cash used in (3,145.57) (3,183.28) (3,098.58) investing activities
C. Cash flow from financing activities: Short Term Borrowings (26.58) 2,210.20 (88.29) (Net) Long Term Borrowings 3,640.74 2,236.30 1,848.94 (Net)
Loans to subsidiary 680.00 1,070.00 (1,170.00) Interest paid (1,157.37) (767.97) (487.60) Buyback of Equity Shares including Buyback - (1,255.76) - Expenses Dividend ( including (1,160.16) (807.01) (774.66) Dividend Tax) Net Cash used/received in 1,976.63 2,685.76 (671.61) financing activities Net increase, decrease( ) Cash and Cash (0.85) 1.19 (9.44) equivalents Cash and cash equivalents as at the beginning of the 13.82 12.63 22.07 year Cash and cash equivalents 12.97 13.82 12.63 as at the end of the year NOTE : ( ) INDICATES
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For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 CASH OUTFLOW. -
As at DETAILS OF CASH AND As at As at March 31, March 31, March 31, CASH EQUIVALENTS: 2020 2019 2018 Cash in Hand 0.01 0.01 0.01 Cash at Bank in Current 2.71 2.86 2.62 Accounts Cash at Bank in Deposit 10.25 10.95 10.00 Accounts Total 12.97 13.82 12.63 Auditor Qualifications: There are no auditor qualifications for the fiscal years mentioned above. However, Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received.
4. Consolidated Balance Sheet Rs. In Crore Sl. As on As on As on Particulars No 31.03.2020 31.03.2019 31.03.2018 ASSETS (1) Non-current assets Property, Plant and Equipment 24,070.41 17,651.58 16,758.95 Right of Use of Asset 32.28 Intangible Asset 6.45 6.37 6.37 Capital Work-In-Progress 12,534.11 13,737.86 8,197.50 Asset under Development 127.67 117.80 199.05 Financial Assets i) Investments 13.51 12.69 12.69 ii) Loans 30.88 42.60 67.45 Other non-current assets 1,851.04 1,747.36 1,993.89 38,666.35 33,316.26 27,235.90 (2) Current Assets Inventories 1,683.75 1,720.10 2,089.42 Financial Assets i) Trade receivables 8,509.79 6,186.95 4,558.03 ii) Cash and cash equivalents 16.96 18.49 101.93 iii) Other bank balances 415.72 512.58 266.54 iv) Loans 39.54 37.39 16.21 V) Other Financial assets 65.39 49.17 46.22 Income Tax Asset (Net) 829.44 698.60 781.97 Other Current Assets 1,525.98 1,264.65 2,275.79 13,086.57 10,487.93 10,136.11 (3) Regulatory Deferral Account Debit Balances 1,735.21 1,476.10 1,068.35 Total Assets and Regulatory Deferral Account Debit Balances 53,488.13 45,280.29 38,440.36 EQUITY AND LIABILITIES Equity Equity Share Capital 1,386.64 1,386.64 1,528.57 Other Equity i) Retained earnings 9,208.51 9,101.58 9,569.00 ii) Other reserves 2,309.98 2,281.23 2,254.40
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12,905.13 12,769.45 13,351.97 Non-Controlling Interest 1,767.37 1,101.75 685.68 Liabilities (1) Non-Current Liabilities Financial liabilities i) Borrowings 18,943.19 14,377.29 9,380.34 Deferred tax liabilities (Net) 3.46 2,283.36 1,912.17 Other non-current liabilities 3,052.23 1,363.97 1,010.64 1,165.61 18,024.62 12,303.15 Current Liabilities
(2) Financial liabilities i) Borrowings 6,021.37 4,546.53 2,130.53 ii) Trade payables Total outstanding dues of Micro and Small enterprises 22.97 29.92 17.88 Total outstanding dues of creditors other than Micro and 3,264.72 3,299.14 2055.68 Small enterprises iii) Other financial liabilities 2,385.31 1,711.27 1,715.38 Other current liabilities 634.29 841.90 1,028.13 Provisions 757.43 516.90 667.88 13,086.09 10,945.66 7,615.48 (3) Regulatory Deferral Account Credit Balances 2,565.05 2,438.81 4,484.08 Total Equity and Liabilities and Regulatory Deferral Account 53,488.13 45,280.29 38,440.36 Credit Balances Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received.
5. Consolidated Profit & Loss Account
Rs. In Crore
SI. For the year For the year For the year Particulars ended ended ended NO 31.03.2020 31.03.2019 31.03.2018 I Revenue from Operations 10,320.56 9,870.93 11,288.39 II Other Income 1,272.14 907.54 575.95 III Total Income (I+II) 11,592.70 10,778.47 11,864.34 IV EXPENSES Changes in Inventories 81.99 242.92 67.44 Cost of Fuel Consumed 1,533.59 1,751.81 1,661.46 Employee benefit expenses 2,874.96 3,026.98 3,163.05 Finance Costs 1,174.38 699.92 547.85 Depreciation and Amortization expenses 1,334.15 1,120.76 1,231.62 Other expenses 2,382.53 2,555.03 2,382.66 Total Expenses (IV) 9,381.60 9,397.42 9,054.08 Profit / (loss) before Exceptional, Tax & Rate V 2,211.10 1,381.05 2,810.26 Regulatory Activity (III-IV) Net Movement in regulatory deferral account VI 137.45 1,215.56 (49.03) balances income / (expenses)
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SI. For the year For the year For the year Particulars ended ended ended NO 31.03.2020 31.03.2019 31.03.2018 Profit / (loss) before Exceptional Item and Tax VII 2,348.55 2,596.61 2,761.23 (V+VI) VIII Exceptional Items 3.44 35.21 (59.44) IX Profit / Loss before tax (VII-VIII) 2,345.11 2,561.40 2,820.67 X Tax expenses (1) Current tax -Current Year Tax 325.39 288.27 508.60 -MAT Credit (240.49) -Previous Year 15.66 101.90 (0.24) -Tax Expenses / (Savings) 23.45 262.69 (11.00) on Rate Regulated Account (2) Deferred Tax 768.94 371.19 366.53 Profit / (loss) after Tax before share of XI 1,452.16 1,537.35 1,956.78 Profit/(loss) of associates (IX-X) XII Share of Profit/(loss) of Associates 0.82 XIII Profit / (loss) for the Year ( XI+XII ) 1,452.98 1,537.35 1,956.78 XIV Other Comprehensive Income A (i) Items not reclassified to profit or loss: (Net
of Taxes) Re-measurement of (125.36) (34.20) 61.03 defined benefits plans Total Comprehensive Income for the period of XV (XIII+XIV) (Comprising Profit/(Loss) and 1,327.62 1,503.15 2,017.81 other comprehensive income) Note: Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited for the year ended 31st March, 2020 are yet to be received.
6. Consolidated Cash Flow Statement
Rs. In Crore
For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 A. Cash flow from operating activities: Net Profit Before Tax 2,345.11 2,561.40 2,820.67 Adjustments for: Less: Profit on Disposal of Asset 2.65 18.24 0.64 Interest Income 97.37 130.68 38.26 100.02 148.92 38.90 Add: Depreciation 1,334.15 1,120.76 1,231.62 Buyback Expenses - 6.75 - Fixed asset written off 0.18 Other non cash charges 130.49 (82.38) 493.24
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For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 Provision for loss on asset 2.97 19.32 9.37 Interest expense 1,174.38 699.92 547.85 2,641.99 2,541.97 1,764.37 1,615.44 2,282.26 2,243.36 Operating Profit before working 4,887.08 4,176.84 5,064.03 capital changes Adjustments for : Trade receivables (2,333.79) (1,749.38) 233.73 Loans & advances (63.54) 3.67 (32.48) Inventories & other current assets (278.88) 629.19 (421.78) Trade payables & other current (70.54) (936.88) 151.85 liabilities Cash Flow generated from 2,140.33
Operations 2,123.44 4,995.35 Direct Taxes paid (496.40) (500.65) (556.80) Cash Flow Before Extraordinary 1,643.93 1,622.80 4,438.55 Items Grants received 2.83 (2.73) 94.81 Net Cash from operating 1,646.76 1,620.06 4,533.36 activities B.Cash flow from investing activities: Purchase of property, plant and (5,894.73) equipment / preliminary (6,265.50) (4,646.29) expenses Sale of property, plant and 1.81 equipment / Projects From 18.70 9.24 continuing operations Sale/Purchase of Investments (0.00) 0.00 Interest Received 81.15 127.73 43.99 Net Cash used in investing (5,811.77) (6,119.07) (4,593.06) activities C. Cash flow from financing activities: Short Term Borrowings (Net) 1,474.84 2,416.00 5.30 Issue of Capital 668.53 386.43 - Long Term Borrowings (Net) 5,153.00 4,967.02 1,731.42 Interest paid (1,950.24) (1,291.12) (857.39) Buyback of Equity Shares - (1,255.76) - including Buyback Expenses Dividend ( including Dividend (1,182.65) (807.01) (781.12) Tax) Net Cash used/received in 4,163.48 4,415.56 98.22 financing activities Net increase, decrease(-) Cash (1.53) (83.44) 38.51 and Cash equivalents Cash and cash equivalents as at 18.49 101.93 63.42 the beginning of the year Cash and cash equivalents as at 16.96 18.49 101.93 the end of the year NOTE : (-) INDICATES CASH 0.00 OUTFLOW. DETAILS OF CASH AND As at March 31, 2020 As at March 31, 2019 As at March 31, 2018 CASH EQUIVALENTS:
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For the year ended For the year ended For the year ended Particulars 31.03.2020 31.03.2019 31.03.2018 Cash in Hand 0.01 0.01 0.01 Cash at Bank in Current 6.70 7.53 22.09 Accounts Cash at Bank in Deposit 10.25 10.95 79.83 Accounts Total 16.96 18.49 101.93 Auditor Qualifications: There are no auditor qualifications for the fiscal years mentioned above. However, Comments of the Comptroller & Auditor General of India under Sec. 146(6)(b) of the Companies Act, 2013 on the Financial Statements of NLC India Limited and its joint venture subsidiary companies for the year ended 31st March, 2020 are yet to be received.
7. Auditor’s Opinion Extracts:
Standalone
For the year ended 31st March 2020
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 Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, the Profit (Including Other Comprehensive Income), the changes in Equity, and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following matters in the Notes to the Standalone Financial Statements: a. Without qualifying our opinion, attention is invited to Note 22 of the Standalone Financial Statements in respect of pending liabilities to DISCOMS subject to CERC Orders. The true up petition is filed with CERC in the third quarter of FY 2019-2020. b. Without qualifying our opinion, attention is drawn to Note 23(c) of the Standalone Financial Statements regarding Deferred Tax Liability materialized for Rs.218.94 crores (for Thermal Plants) up to March 31, 2019, which has not been considered as revenue pending reconciliation and confirmation from the beneficiaries. c. Without qualifying our opinion, attention is invited to Note 49 A (i) of the Standalone Financial Statements on the requirement of loss allowance for expected credit losses. d. Without qualifying our opinion, attention is drawn to Note 59 of the Standalone Financial Statements regarding material impact on the business of the Company due to the COVID-19 pandemic. e. Our opinion on the Standalone Financial Statements is not modified in respect of the above matters.
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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 31st 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.
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 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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Consolidated
For the year ended 31st March 2020
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 Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, and its Consolidated Profit (Including Other 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 following matters in the notes to the Consolidated Financial Statements:
a. Without qualifying our opinion, attention is invited to Note 23 of the Consolidated Financial Statements in respect of pending liabilities to DISCOMS subject to CERC Orders. The true up petition is filed with CERC in the third quarter of FY 2019-2020
b. Without qualifying our opinion, attention is drawn to Note 24(c) of the Consolidated Financial Statements regarding Deferred Tax Liability materialized of Rs. 218.94 crores (for Thermal Plants) up to March 31, 2019, which has not been considered as revenue pending reconciliation and confirmation from the beneficiaries
c. Without qualifying our opinion, attention is invited to Note 52 A (i) of the Consolidated Financial Statements on the requirement of loss allowance for expected credit losses.
d. Without qualifying our opinion, attention is drawn to Note 60(a) of the Consolidated Financial Statements regarding material impact on the business of the Company due to the COVID-19 pandemic.
As reported by the auditor of the Subsidiary Company NLC TAMIL NADU POWER LIMITED in their audit report.
e. Without modifying our opinion, we draw attention to Note 54(c) of notes to Consolidated Financial Statements - “Regarding External confirmation of balances from parties which are subject to confirmation and reconciliation.”
f. Without modifying our opinion, we draw attention to Note 60(b) of notes to Consolidated Financial Statements – “Transit and Handling loss – Regarding Coal stock at off-site namely Dhamara Port and Paradeep Port not being physically verified as on March 31, 2020 due to the lockdown (COVID-19)”
As reported by the auditor of the Subsidiary Company, Neyveli Uttar Pradesh Power Limited in their audit report.
g. In the Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”):
The existing Internal Financial Control with respect to acquisition / purchase of land, related payments, capitalization of the same and accounting need to be strengthened to ensure any irregularity in this regard. The company has found few irregularities to the tune of Rs. 0.29
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crores during its internal reconciliation process. An internal committee has been constituted to investigate further in the matter and to suggest changes in the financial controls in this regard in order to prevent irregularities in land acquisition process in future.
A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim Financial Statements will not be prevented or detected on a timely basis.
We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2020 Financial Statements of the Group, and the material weakness does not affect our opinion on the Consolidated Financial Statements of the Company.
h. In point no 10 of Companies (Auditor’s Report) Order, 2016:
During its reconciliation process, the company has discovered few irregularities which might lead to fraud in the land registration and payment process. The total amount of such irregularities identified is about Rs 0.29 crores for which further investigation is in process. A forensic investigation has been initiated by the company for identification of causes and the exact amounts involved in the said irregularities. The above reported fraud by employee does not cause the Financial Statements to be materially misstated.
Our opinion on the Consolidated Financial Statements is not modified in respect of the above matters.
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 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.
J. 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.
K. 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 IDBI Trusteeship Services Limited to act as Trustees to the Bondholder(s).
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The address and contact details of the Trustees are as under:
IDBI Trusteeship Services Limited Asian Building, Ground Floor 17. R. Kamani Marg Ballard Estate Mumbai Maharashtra – 400 001 India Phone: 022 40807000 Fax: 022 66311776 Email: [email protected]
Copy of letter from IDBI Trusteeship Services Limited dated 26th May, 2020 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 Debenture Trusteeship Agreement, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty.
L. Rating and Detailed Rating Rationale
CRISIL vide letters dated May 15, 2020 and revalidation letter dated 13th July,2020 has assigned “CRISIL AAA” (pronounced as "CRISIL Triple A” with outlook on the long term is stable) and Brickwork Ratings vide letter dated letters dated May 11, 2020 and revalidation letter dated 14th July,2020 has assigned “BWR AAA” (pronounced as "BWR 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 CRISIL and Brickwork Ratings are enclosed with this Offer Letter including respective Rating Rationales as Annexure I and Annexure II respectively.
M. Security :
The Bonds will be Unsecured.
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N. 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.
O. Other Details
1. Issue/instrument specific regulations
In accordance with the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019 received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019, the base size of the issue Rs. 125 crore is 25% of the total issue amount i.e Rs.500 crore. The green shoe option of Rs. 375 crore shall be exclusively reserved for the BHARAT Bond ETF at the same cut off yield of the base amount.
The price for base issue Rs. 125 crore shall be discovered in a transparent manner on the EBP Platform. After discovery of price for base issue the same price will be applicable to the green shoe option which is reserved for BHARAT Bond ETF.
Further, there is no restriction on BHARAT Bond ETF to participate in bidding for base issue size on EBP Platform.
All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable.
Further, this is the 1st NFO of NLC India Limited in accordance with the SEBI letter SEBI/DDHS/NK/OW/P/2020/10735 dated June 01, 2020 and communication of DIPAM dated June 05, 2020, DIPAM F. No 3/2/2018-DIPAM-II (Vol. VII), wherein SEBI has approved the special bidding arrangement to be applicable for further NFO under BHARAT Bond ETF in following manner:
I. The special bidding arrangement shall be available to all issuers for next 5 NFO’s of BHARAT Bond ETF. II. In case of FFO, if any new issuer is participating in an already existing ETF for the first time, through an FFO by the ETF, the special bidding shall also be available only to that new issuer subject to maximum of total of 5 FFO’s by BHARAT Bond ETF. III. The method of calculation of minimum base issue size shall remain unchanged and the green shoe option shall be reserved only for the BHARAT Bond ETF as mentioned in the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019.
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 18th March,2020 approving issuance of debentures as set out in Annexure III. 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.
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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.
2. 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. 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
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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.
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
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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 : Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB IFSC Code : YESB0CMSNOC Mode: NEFT/RTGS
HDFC Bank: Beneficiary Name: INDIAN CLEARING CORPORATION LTD Account Number: ICCLEB 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 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
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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 b. Resolution authorizing investment and containing operating instructions c. Specimen signature of authorized signatories
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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:
(a) Number of Bonds applied for is less than the minimum application size;
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(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.
3. 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.
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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 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.
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vii. Deemed Date of Allotment
All benefits under the Bonds and relating to the Bonds (including payment of interest) will accrue and 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
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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. 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.
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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.
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/
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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).
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
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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.
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. Material Contracts and Documents
a. Consent of Registrars dated 15th July,2020 b. Letter appointing Trustees to the Issue dated 20th May,2020. c. Board of Directors Resolution of the meeting held on March 18,2020 authorizing 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 CRISIL and Brickwork Ratings 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.
P. Issue Details
Summary Term Sheet:
Security Name NLCIL Bonds 2020-Series II
Series Series II
Issuer/Issuer NLC India Limited Unsecured, Redeemable, Non-Cumulative, Taxable, Non-Convertible Bonds in Type of Instrument the nature of Debentures Nature of Instrument Unsecured
Seniority Senior 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. Eligible Investors 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
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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 On Debt Segment of NSE and BSE. BSE is proposed to be the Designated Stock Exchange Exchange. “CRISIL AAA (Stable)” by CRISIL and Rating “BWR AAA/Stable” Brickwork Ratings Base Issue Size Rs. 125 crore Option to retain The Green Shoe Option of Rs. 375 crore shall be exclusively reserved for the oversubscription BHARAT Bond ETF at the same cut off yield of the base amount. For refinancing of existing borrowings, funding of capital expenditure requirement Objects of the Issue and for general business requirement. Details of Utilization of For refinancing of existing borrowings, funding of capital expenditure requirement funds and for general business requirement. Coupon Rate [●] Step Up/Step Down Not Applicable Coupon Rate Coupon Payment Annual Frequency Coupon Payment Dates [●]
Coupon Type Fixed Coupon Reset Process (including rates, spread, effective date, Not Applicable interest rate cap and floor etc.) 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 Day Count Basis may be. (as per the SEBI Circular dated November 11, 2016 bearing reference CIR/IMD/DF-1/122/2016) Business Day Convention/ ‘Business Day’ shall be a day on which commercial Issuers are open for Effect of Holidays 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.
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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 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 Interest on Application Allotment fall on the same date, interest on application money shall not be Money 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. In case of default in payment of Interest and/or principal redemption on the Default Interest Rate due dates, additional interest at 2% p.a. over the Coupon Rate will be payable by the Issuer for the defaulting period. 4 years 8 months 11 days from the deemed date of Allotment (This is subject to Tenor change based on the allotment date) Redemption Date 11th April, 2025
Redemption Amount At par (Rs.10 lacs per Bond) Premium/Discount on Nil redemption Issue Price At par (Rs.10 lacs per Bond) Discount Nil on Issue Put Option Date Not Applicable
Put Option Price Not Applicable Issuer Call Option/Call Not Applicable Option Call Option Date Not Applicable
Call Option Price Not Applicable
Put Notification Time Not Applicable
Call Notification Time Not Applicable
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Face Value Rs. 10 Lacs per Bond.
Minimum Application 1 Bond and in multiples of 1 Bond thereafter. Issue Timing:
1. Bid Opening/ Closing 29th July, 2020 Date 2. Issue Opening/ Closing 29th July, 2020 Date 3. Pay-in Date 31st July, 2020 4. Deemed Date of Allotment 31st July, 2020
Issuance mode In Demat mode only.
Trading Mode In Demat mode only. Payment of interest and repayment of principal shall be made by way of credit through direct credit/ National Electronic Clearing Settlement 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) National Securities Depository Limited and Central Depository Services (India) Depository Limited. 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 Record Date a day, which is not a Business Day, immediately succeeding Business Day shall be considered as Record Date.
The Bonds will be unsecured Security
The Issuer has executed/ shall execute the documents including but not limited to the following in connection with the issue: 1. Letter appointing Trustees to the Bondholders; 2. Debenture Trusteeship Agreement/ Bond Trustee Agreement / Debenture Trust Deed (as required); 3. Rating Letter from rating agency CRISIL and Brickwork Ratings; Transaction documents 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. The subscription from applicants shall be accepted for allocation and allotment by the Issuer, subject to the following: Conditions precedent to subscription of Bonds a) Rating Letters from CRISIL and Brickwork Ratings 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). The Issuer shall ensure that the following documents are executed / activities are Conditions subsequent to completed as per terms of the Disclosure Document: subscription of Bonds a) Credit of Demat Account(s) of the Allottee(s) by number of Bonds allotted
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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
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. Events of Default Excluding in cases of technical errors due to reasons beyond the control of company
Prohibition on Purchase / Neither the Issuer nor its related party over which the Issuer exercises control or Funding of Bonds 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 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 Role and Responsibilities of applicable to the Trustees. The Trustees shall carry out its duties and perform its Trustees to the Issue 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 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. 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 Additional Covenants 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). The interest rates mentioned in above three covenants shall be independent of each other. Type of Bidding Closed bidding
Manner of Allotment Uniform - yield The Bonds are governed by and shall be construed in accordance with the Governing Law and existing laws of India. Any dispute arising thereof shall be subject to the Jurisdiction jurisdiction of courts of Chennai, Tamil Nadu. A. In accordance with the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019 Other Conditions received vide DIPAM OM No. 3/2/2018-DIPAM-II (Vol.V) dated December 18, 2019, the base size of the issue Rs. 125 crore is 25% of
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the total issue amount i.e Rs.500 crore. The green shoe option of Rs. 375 crore shall be exclusively reserved for the BHARAT Bond ETF at the same cut off yield of the base amount. The price for base issue Rs. 125 crore shall be discovered in a transparent manner on the EBP Platform. After discovery of price for base issue the same price will be applicable to the green shoe option which is reserved for BHARAT Bond ETF. Further, there is no restriction on BHARAT Bond ETF to participate in bidding for base issue size on EBP Platform. All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable. B. Further, this is the 1st NFO of NLC India Limited in accordance with the SEBI letter SEBI/DDHS/NK/OW/P/2020/10735 dated June 01, 2020 and communication of DIPAM dated June 05, 2020, DIPAM F. No 3/2/2018-DIPAM-II (Vol. VII), wherein SEBI has approved the special bidding arrangement to be applicable for further NFO under BHARAT Bond ETF in following manner: I. The special bidding arrangement shall be available to all issuers for next 5 NFO’s of BHARAT Bond ETF. II. In case of FFO, if any new issuer is participating in an already existing ETF for the first time, through an FFO by the ETF, the special bidding shall also be available only to that new issuer subject to maximum of total of 5 FFO’s by BHARAT Bond ETF. III. The method of calculation of minimum base issue size shall remain unchanged and the green shoe option shall be reserved only for the BHARAT Bond ETF as mentioned in the SEBI Letter no. SEBI/DDHS/TD/OW/P/2019/32928/1 dated December 11, 2019.
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.
Q. 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 Not Applicable e) Steps taken, if any, for the removal from the list of willful defaulters - Not Applicable
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R. 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 None Institution And Interest Thereon.
C Details of default in annual filing of There are no defaults in annual filing of the the Company, if any, under the Company under the Companies Act, 2013 Companies Act, 2013 and the rules and the rules made there under as on date. made thereunder
D The change in control, if any, in the Not Applicable as the issue relates to Company, that would occur Debentures consequent to the private placement
E The number of persons to whom Not Applicable 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
F Contribution being made by the The Issuer is issuing unsecured redeemable promoters or directors either as part non-convertible debentures on private of the offer or separately in placement basis hence the contribution by the furtherance of such objects promoters or directors is NIL.
G The details of significant and There are no material orders passed by the material orders passed by the regulators, courts and tribunals which impact regulators, courts and tribunals the going concern status of the Company and
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Particulars Disclosures
impacting the going concern status its future operations. of the Company and its future operations.
H The pre-issue and post-issue Not applicable being a debt security shareholding pattern of the Company
I Summary of reservations or None 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.
J Details of any inquiry, inspections or None 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.
K Details of acts of material frauds There is no material fraud committed against committed against the company in the company in last three years. However, the the last three years, if any, and if so, company has discovered few irregularities in the action taken by the company. respect to its Joint Venture Company – NUPPL, which might lead to fraud in the land registration and payment process. The total amount of such irregularities identified is about Rs 0.29 crores for which further
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Particulars Disclosures
investigation is in process. A forensic investigation has been initiated by the company for identification of causes and the exact amounts involved in the said irregularities.
L The securities premium account Before the issue of Nil before and after the Issue Debentures
After the issue of Nil Debentures
M Any change in accounting policies Please refer to Annexure B during the last three years and their effect on the profits and the reserves of the company.
N Valuer who performed value of Not Applicable security offered
O Relevant Date with reference to Not Applicable which the price has been arrived at
P The justification for the allotment Not Applicable proposed to be made for consideration other than cash together with valuation report of the registered valuer;
Q Profile of Directors Please refer to Annexure C
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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 Jaikumar Srinivasan, Director Finance vide resolution number Item No. 499.04 dated 18.03.2020 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
Jaikumar Srinivasan Director-Finance
Place:
Date:
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ANNEXURE I - Copy of Rating letter from CRISIL
ANNEXURE II - Copy of Rating Letter from Brickwork Ratings
ANNEXURE III - Board Resolution Authorizing the Issue
ANNEXURE IV - Shareholders’ approval obtained pursuant to section 180(1)(c)
ANNEXURE V – Consent Letter of Trustee
ANNEXURE VI – 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 31st July, 2020 Redemption Date 11th April, 2025 Coupon Rate Frequency of Interest Annual Payment Day Count Convention Actual/ Actual
No. of Days in Cash Flows Coupon Payment Date Amount (Rs.) Coupon Period 1st Coupon 2nd Coupon 3rd Coupon 4th Coupon 5th Coupon Redemption Assumptions: We have not considered the effect of public holidays as it is difficult to ascertain for future dates
ANNEXURE VII - In-Principle Approval for listing on BSE
ANNEXURE VIII - In-Principle Approval for listing on NSE
ANNEXURE IX – Latest Audited Financials (for the year ended 31st March, 2020)
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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 1.06 MW Neyveli, Tamil Nadu Wind Power 51 MW Kazhuneerkulam, Tirunelveli District, Tamil Nadu Solar Andaman 20 MW Andaman
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ANNEXURE B 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 AS implementation 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.
During the Financial Year 2019-20, following modification has been done in accounting policies:
1. The company has also modified its accounting policy /estimates related to Capitalization of Solar Power Plant. Adjustments arising out of the same have net positive impact of Rs 19.24 crore for the current Financial Year. 2. Subsequent expenditure incurred on PPE post capitalization 3. Capitalization of spares parts. Adjustments arising out of the same have net impact of Rs.12.56 crore (Rs.31.03 crore as increase in depreciation and Rs.43.59 crore reduction in consumption) for the current financial year. 4. Capitalization of Thermal Power Plants. Adjustments arising out of the same have net adverse impact of Rs 19.50 crore for the current Financial Year. 5. The company also framed new policy for capitalization of coal mines.
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ANNEXURE C 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. S K Prabakar, Part-time Official Director: Shri. S K Prabakar is a Graduate in Electrical Engineering and a Member of Indian Administrative Service (1989 Batch), has held various important positions in Government Departments and is presently serving as the Principal Secretary to Government of Tamilnadu, Energy Department, Chennai. 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
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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 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. Jaikumar Srinivasan, Director (Finance): Shri. Jaikumar Srinivasan is a BCom graduate from the University of Nagpur and Associate Member of Cost & Management Accountants of India. Prior to his appointment he was Director (Finance) of M/s Maharashtra State Electricity and Distribution Company Limited (MSEDCL) and MAHAGENCO state PSU controlled by the Government of Maharashtra. Shri.
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Jaikumar Srinivasan was instrumental in achieving financial closure for all generation projects of MAHAGENCO which were commissioned between 2009-2014. He was part of the steering committee which successfully implemented SAP system in MAHAGENCO. He has undergone a study on Best Practices in Power Sector at SDA Bucconni University in Milan and ESCP Business School in Torino & amp, Paris. Shri. Jaikumar Srinivasan has also served as part time Director in Mahuguj Colliery Company Limited, UCM Coal Company Ltd and other subsidiary companies of MAHAGENCO. Shri. N K 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.
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.
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Annexure I
CONFIDENTIAL NEYLIGN/247927/NCD/052000685/1 July 13, 2020
Mr. Mukesh Agrawal Chief General Manager NLC India Limited F & AB/Treasury Section, Corporate office Neyveli Lignite Corporation Ltd, Block 1, Neyveli, Cuddalore - 607801
Dear Mr. Mukesh Agrawal,
Re: CRISIL Rating on the Rs.3000 Crore Non-Convertible Debentures of NLC India Limited
All ratings assigned by CRISIL are kept under continuous surveillance and review. Please refer to our rating letters dated May 22, 2020 bearing Ref. no: NEYLIGN/247927/NCD/052000685
Please find in the table below the rating outstanding for your company.
S.No. Instrument Rated Amount (Rs. in Crore) Rating Outstanding 1 Non-Convertible Debentures 3000 CRISIL AAA/Stable
In the event of your company not making the issue within a period of 180 days from the above date, or in the event of any change in the size or structure of your proposed issue, a fresh letter of revalidation from CRISIL will be necessary.
As per our Rating Agreement, CRISIL would disseminate the rating along with outlook through its publications and other media, and keep the rating along with outlook under surveillance for the life of the instrument. CRISIL reserves the right to withdraw or revise the ratings assigned to the captioned instrument at any time, on the basis of new information, or unavailability of information or other circumstances, which CRISIL believes, may have an impact on the rating.
As per the latest SEBI circular (reference number: CIR/IMD/DF/17/2013; dated October 22, 2013) on centralized database for corporate bonds/debentures, you are required to provide international securities identification number (ISIN; along with the reference number and the date of the rating letter) of all bond/debenture issuances made against this rating letter to us. The circular also requires you to share this information with us within 2 days after the allotment of the ISIN. We request you to mail us all the necessary and relevant information at [email protected]. This will enable CRISIL to verify and confirm to the depositories, including NSDL and CDSL, the ISIN details of debt rated by us, as required by SEBI. Feel free to contact us for any clarifications you may have at [email protected]
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With warm regards,
Yours sincerely,
Nitesh Jain Nivedita Shibu Director - CRISIL Ratings Associate Director - CRISIL Ratings
A CRISIL rating reflects CRISIL's current opinion on the likelihood of timely payment of the obligations under the rated instrument and does not constitute an audit of the rated entity by CRISIL. CRISIL ratings are based on information provided by the issuer or obtained by CRISIL from sources it considers reliable. CRISIL does not guarantee the completeness or accuracy of the information on which the rating is based. A CRISIL 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 CRISIL ratings are under surveillance. CRISIL or its associates may have other commercial transactions with the company/entity. Ratings are revised as and when circumstances so warrant. CRISIL 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. CRISIL Ratings rating criteria are available without charge to the public on the CRISIL web site, www.crisil.com. For the latest rating information on any instrument of any company rated by CRISIL, please contact Customer Service Helpdesk at 1800-267- 1301.
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Rating Rationale May 15, 2020 | Mumbai NLC India Limited 'CRISIL AAA/Stable' assigned to NCD ; Bond Withdrawn
Rating Action Total Bank Loan Facilities Rated Rs.10741 Crore Long Term Rating CRISIL AAA/Stable (Reaffirmed)
Rs.3000 Crore Non Convertible Debentures CRISIL AAA/Stable (Assigned) Rs.600 Crore Bond CRISIL AAA/Stable (Withdrawn) 1 crore = 10 million Refer to annexure for Details of Instruments & Bank Facilities Detailed Rationale CRISIL has assigned its 'CRISIL AAA/Stable' rating to the non-convertible debentures of NLC India Limited (NLC), while reaffirming its 'CRISIL AAA/Stable' rating on the long-term bank facilities.
CRISIL has also withdrawn its rating on the bond programme of Rs 600 crore based on the company's request and on receipt of independent confirmation of its redemption from the trustee, in line with CRISIL's policy on withdrawal of debt instruments.
The rating continues to reflect the company's strong business risk profile, backed by healthy operating efficiency, regulated cash flow, and adequate fuel availability for its power plants. The rating also factors in NLC's strategic importance to the Government of India (GoI) and a healthy financial risk profile, driven by a healthy capital structure and liquidity. These strengths are partially offset by exposure to risks related to counterparty and implementation of the ongoing capacity expansion project. Analytical Approach For arriving at the ratings, CRISIL has combined the business and financial risk profiles of NLC and its joint ventures (JVs) - NLC Tamil Nadu Power Ltd (NTPL; 89% held by NLC) and Neyveli Uttar Pradesh Power Ltd (NUPPL; 51% held by NLC) - due to the management's stated position of providing complete financial and managerial support to the JVs. Any new acquisition will remain a key rating sensitivity factor.
Please refer Annexure - Details of Consolidation, which captures the list of entities considered and their analytical treatment of consolidation. Key Rating Drivers & Detailed Description Strengths * Strategic importance to GoI: NLC is the nodal agency for lignite mining in India and is backed by its sizeable reserve. The company's plants are a major source of power for South Indian states. The government has granted the 'Navratna'�? status to NLC and continues to be a dominant shareholder, with a 79.20 % stake in the company. Furthermore, GoI has provided guarantees for NLC's foreign currency borrowings in the past and is expected to continue to provide need-based support.
* Regulated cash flow under the classic two-part tariff structure: NLC, on a consolidated basis, owns and operates thermal power plants with combined capacity of 4,490 megawatt (MW), including the 1,000-MW coal-based capacity under NTPL. It has recently commissioned a unit of 500 MW Thermal Power Station (TPS) named Neyveli New Thermal Power Station (NNTPS) and is expected to commission another 500-MW unit soon. All these plants have long-term power purchase agreements (PPAs) with a regulated two-part tariff structure; this ensures recovery of all fixed expenses - including debt obligation'and fixed return on equity based on the achievement of performance benchmarks mandated by Central Electricity Regulatory Commission (CERC). The company also receives revenue from trading sales from one of the units, TPS-I, as the PPA had expired last year. Moreover, owned lignite mines and depreciated plants allow the company to price its power lower than other suppliers in southern India, making it a preferred supplier and adding stability to the cash flow.
* Healthy operating efficiency and adequate fuel availability: NLC's ownership of lignite mines mitigates risks related to availability and price of fuel; this has also enabled the company to operate above normative levels for most of its plants despite their vintage status. The captive lignite mines should be sufficient to meet the fuel requirement for about 20 years. Fuel requirement for the coal-based NTPL plant is partly met through a fuel supply agreement with Mahanadi Coalfields Ltd for 3.0 million tonne per annum (mtpa). While 48% of the installed capacity, comprising TPS-II Exp and vintage TPS-I in Neyveli (Tamil Nadu), operates at reduced efficiency due to technical issues, the newly commissioned unit-I (500 MW) of NNTPS and expected commissioning of the Unit-II (500 MW) in the current fiscal are expected to support the operating efficiency. In addition, the company has recently commissioned Talabira mines of 20 mtpa and will support the upcoming Talabira TPS. In the meanwhile, open sale of coal from the mine will provide additional cash flow.
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* Healthy financial risk profile: Gearing, on a consolidated basis, is estimated to remain below 2 times as on March 31, 2020 (1.56 times a year earlier) despite ongoing capital expenditure (capex), which is well within the CERC-stipulated norm of 70:30. The company had unutilised fund-based limit of around Rs 1,150 crore as on March 31, 2020. Bank limit utilisation averaged 79% over the 12 months through March 2020.
Weaknesses * Exposure to counterparty risks: Exposure to receivables collection risk persists given the weak credit risk profile of key consumers, which are primarily state distribution companies. Receivables are estimated to be higher in fiscal 2020 compared to 259 days in the previous fiscal. Nearly half the power generated is sold to Tamil Nadu Generation and Distribution Corporation Ltd (TANGEDCO; the generation and distribution arm of the erstwhile Tamil Nadu Electricity Board). TANGEDCO's credit risk profile was weak, as poor operating performance and absence of periodic tariff revision led to substantial loss from operations. While TANGEDCO is still in the red, its performance has improved due to implementation of the financial restructuring package, increase in tariff, and support from the state government through higher subsidies.
TANGEDCO's financial risk profile is also likely to improve, as it has joined the Ujjwal Discom Assurance Yojana, resulting in takeover of part of its debt by the state government and repricing of the remaining debt at low rates. The company started using letters of credit (LCs) as a form of payment security from the previous fiscal and has started discounting the LCs; moreover, the government has recently announced liquidity support of Rs 90,000 crore to the power sector. The final contours of the package are yet to be announced. This is expected to partially ease the counterparty risks. However, timely recovery of receivables will remain a key rating sensitivity factor.
* Risks related to implementation of the ongoing capacity expansion projects: Exposure to project implementation risk persists due to the ongoing large capacity expansion programme. The upcoming capacity will be insulated from demand and fuel supply risk due to the long-term PPA and adequate fuel availability. However, the company will face risks related to time and cost overruns (as seen in some of its newly commissioned projects), primarily due to delay in obtaining clearances, supply of equipment, and technical issues during the stabilisation phase. These delays can impact profitability depending on the extent of cost overruns allowed, as a pass-through by CERC.
The long-term expansion plan includes development of around 7 gigawatt (GW) of projects on a standalone basis and 1,980 MW through NUPPL, a 51:49 JV with Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd and 5,000 MW in a JV with Coal India Ltd. Besides, there are around 2.8 GW of renewable projects under implementation. Total standalone capex is estimated at around Rs 14,000 crore on a standalone basis and around Rs 9000 crore through JVs until fiscal 2022. Timely commissioning of the projects without cost overrun will remain a key rating sensitivity factor. Liquidity Strong The healthy liquidity is reflected in unutilised bank lines of around Rs 1,150 crore as on March 31, 2020. Utilisation of bank limit of Rs 4,000 crore averaged 79% over the 12 months through March 31, 2020. Liquidity (including undrawn bank lines) and expected cash accrual of more than Rs 2,000 crore in fiscal 2021 should adequately cover the debt obligation and meet the funding commitments towards the ongoing projects. Outlook: Stable CRISIL believes NLC's business risk profile will remain strong, backed by efficient operations and fuel security (because of its status as a nodal agency for lignite mining in India). Financial risk profile should also remain strong, driven by conservative gearing and healthy liquidity.
Rating sensitivity factors Downward factors * Any change in the support philosophy of GoI * Significant weakening in the operating performance of power plants and delays in capex * Delay in recovery of dues from counterparties, constraining liquidity * Large, debt-funded acquisition constraining the business and financial risk profiles About the Company NLC operates lignite mines and thermal power stations in Neyveli and Barsingsar. It sells power to the state utilities of Tamil Nadu, Rajasthan, Andhra Pradesh, Kerala, Karnataka, and the union territory of Puducherry. The company has four lignite mines and two coal blocks, with combined mining capacity of 50.6 mtpa, and seven thermal power stations, with combined generation capacity of 4,490 MW. In addition, NLC operates a 1,352-MW solar power plant and a 51-MW wind power plant in Tamil Nadu. It was awarded the Navratna status in fiscal 2011. It plans to add around 11.5 GW capacity in the long term through projects in Uttar Pradesh, Rajasthan, Odisha, and Tamil Nadu. GoI has a 79.2 % stake in the company.
For the nine months ending December 2019, NLC reported profit after tax (PAT) of Rs 955 crore on total income of Rs 8,188 crore compared to Rs 1,042 and Rs 7,890 crore, respectively, in the corresponding period of the previous fiscal. Key Financial Indicators As on/for the period ended March 31 Unit 2019 2018 Operating Income Rs crore 10,616 11,859 Profit after tax (PAT) Rs crore 1,528 1,955 https://email.gov.in/service/home/~/?auth=co&loc=en&id=20743&part=2 Page 2 of 5 16/07/20, 3 29 PM
PAT margin % 14.4% 16.5% Adjusted debt/adjusted networth Times 1.56 1.00 Interest coverage Times 4.66 8.40
Any other information: Not applicable
Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments.
Annexure - Details of Instrument(s) Date of Coupon Issue size Rating assigned ISIN Name of instrument Maturity date allotment rate (%) (Rs crore) with outlook NA Cash credit*# NA NA NA 4000 CRISIL AAA/Stable Letter of credit and NA NA NA NA 1000 CRISIL AAA/Stable bank guarantee# Proposed long-term NA NA NA NA 3741 CRISIL AAA/Stable bank loan facility NA Term loan NA NA June-2022 2000 CRISIL AAA/Stable Non-convertible NA NA NA NA 3000 CRISIL AAA/Stable debentures INE589A07029 Bonds Jan-2009 NA Jan-2019 600 Withdrawn #100% Two-way interchangeability between fund-based working capital and non-fund-based working capital *Full interchangeability with working capital demand loan
Annexure - List of entities consolidated Extent of Names of Entities Consolidated Rationale for Consolidation Consolidation NLC Tamil Nadu Power Ltd Full Strong managerial, operational, and financial linkages Neyveli Uttar Pradesh Power Ltd Full Strong managerial, operational, and financial linkages MNH Shakti Ltd Equity method Proportionate consolidation
Annexure - Rating History for last 3 Years 2020 Start of Current 2019 2018 2017 (History) 2017 Outstanding Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating Amount 0.00 CRISIL CRISIL CRISIL CRISIL Bond LT Withdrawn 27-09-19 28-11-18 08-11-17 15-05-20 AAA/Stable AAA/Stable AAA/Stable AAA/Stable CRISIL CRISIL 08-04-19 19-05-17 AAA/Stable AAA/Stable CRISIL CRISIL 06-03-19 31-03-17 AAA/Stable AAA/Stable Non 3000.00 CRISIL Convertible LT ------15-05-20 AAA/Stable Debentures Fund-based CRISIL CRISIL CRISIL CRISIL CRISIL Bank LT/ST 9741.00 27-09-19 28-11-18 08-11-17 AAA/Stable AAA/Stable AAA/Stable AAA/Stable AAA/Stable Facilities CRISIL CRISIL 08-04-19 19-05-17 AAA/Stable AAA/Stable CRISIL CRISIL 06-03-19 31-03-17 AAA/Stable AAA/Stable Non Fund- CRISIL CRISIL CRISIL CRISIL based Bank LT/ST 1000.00 27-09-19 28-11-18 08-11-17 -- AAA/Stable AAA/Stable AAA/Stable AAA/Stable Facilities CRISIL CRISIL 08-04-19 19-05-17 AAA/Stable AAA/Stable CRISIL CRISIL 06-03-19 31-03-17 AAA/Stable AAA/Stable All amounts are in Rs.Cr. Annexure - Details of various bank facilities
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Current facilities Previous facilities Amount Amount Facility Rating Facility Rating (Rs.Crore) (Rs.Crore) CRISIL CRISIL Cash Credit*# 4000 Cash Credit*# 4000 AAA/Stable AAA/Stable Letter of credit & Bank CRISIL Letter of credit & Bank CRISIL 1000 1000 Guarantee# AAA/Stable Guarantee# AAA/Stable Proposed Long Term CRISIL Proposed Long Term CRISIL 3741 3741 Bank Loan Facility AAA/Stable Bank Loan Facility AAA/Stable CRISIL CRISIL Term Loan 2000 Term Loan 2000 AAA/Stable AAA/Stable Total 10741 -- Total 10741 -- #100% two way Interchangeability between Fund based Working Capital and Non fund based Working Capital *Full interchangeability with working capital demand loan
Links to related criteria CRISILs Approach to Financial Ratios CRISILs Bank Loan Ratings - process, scale and default recognition Rating Criteria for Power Generation Utilities Rating criteria for manufaturing and service sector companies CRISILs Bank Loan Ratings CRISILs Criteria for Consolidation The Rating Process
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https://email.gov.in/service/home/~/?auth=co&loc=en&id=20743&part=2 Page 5 of 5 Annexure II
BWR/NCD/HO/CRC/VI/0179/2020-21 July 14, 2020
Mr. Mukesh Agrawal Chief General Manager - Finance NLC India Ltd (NLCIL) F&AB/Treasury Wing Corporate Office, Block-1 Neyveli - 607801
Dear Sir,
Sub: Validation of Rating - Bonds Issue amounting to ₹ 3000 Crores (INR Three Thousand Crores Only) of NLC India Ltd
Ref: Your email dated July 13, 2020
We wish to advise that your company’s aforementioned bonds issue of ₹ 3000 Crores carries a rating of BWR AAA/Stable as advised vide our letter ‘BWR/NCD/HO/CRC/VI/0063/2020-21’ dated May 11, 2020.
The said rating is valid up to May 10, 2021. Instruments with this rating are considered to have the Highest degree of Safety regarding timely servicing of financial obligations. Such instruments carry Lowest credit risk. We note that the company has not raised any amount out of the said issue till now.
Please note that all terms and conditions as per our initial rating letter (referenced above) remains unchanged. On completion of the borrowing, kindly furnish all the financing documents to us.
Best Regards,
Vipula Sharma Director – Ratings Brickwork Ratings India Pvt Ltd
Note: Rating Rationale of all valid Ratings are published on Brickwork Ratings website. All non-accepted ratings are also published on Brickwork Ratings’ website. Interested persons are well advised to refer to our website www.brickworkratings.com, If they are unable to view the rationale, they are requested to inform us on b [email protected].
RATING RATIONALE
11 May 2020 NLC India Ltd
Brickwork Ratings assigns rating for the proposed Bonds Issue amounting to ₹ 3000 Crs and reaffirms rating for the Bank Loan Facilities aggregating ₹ 6636.75 Crs of NLC India Ltd
Particulars
Rating Amount ( ₹ Rating* Instrument Crs) Tenure BWR AAA Proposed Bonds 3000 Long Term Stable Total 3000 INR Three Thousand Crores Only
Amount ( Crs) Rating* ₹ Previous Facility** Previous Present Tenure Present (Nov 2019) BWR AAA BWR AAA Stable Fund Based 6636.75 6636.75 Long Term Stable Reaffirmation INR Six Thousand Six Hundred Thirty Six Crores and Total 6636.75 6636.75 Seventy Five Crores Only * Please refer to BWR website www.brickworkratings.com/ for definition of the ratings ** Details of Facilities are provided in Annexure-I
Rating Action / Outlook
Brickwork Ratings (BWR) has assigned BWR AAA/Stable to the proposed bonds issue of NLC India Ltd (NLCIL or the company), in addition to reaffirming the rating for the existing bank loan facilities. The said bonds are being raised to refinance the company’s existing debt and thus, will not impact the overall leverage.
The rating derives comfort from the company’s ownership (79.20% held by GoI), status as a Navratna and its strategic importance for the Ministry of Coal (MoC), established track record in both mining and power businesses, consistent operational and financial performance, adequate availability of fuel for power plants through own mines, assured off-take on account of tie-ups for the entire power generation capacity by way of long-term agreements and the availability of a two-part tariff structure ensuring the recovery of both fixed and variable costs.
BWR has also noted that NLCIL has successfully commissioned Talabira II & III Coal Block on 26 April 2020 and Unit-I of New Neyveli Thermal Power Plant (NNTPP) in December 2019. Unit-II of
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NNTPP, which was supposed to achieve COD by 31 March 2020, has got delayed on account of the ongoing lockdown and is expected to commence operations once the same is lifted.
The rating however, continues to remain constrained on account of continuous debt-funded capex impacting the leverage, execution-related risks for ongoing projects and counterparty risks associated with the Discoms, particularly TANGEDCO, leading to a deterioration in the receivables days.
Key Rating Drivers
Credit Strengths:
Strategic Importance of the Company: NLCIL has been conferred upon the status of Navratna by the government; the company comes under the administrative control of the Ministry of Coal, which has a 79.20% shareholding in the company. Additionally, the company has the largest market share in the lignite mining business, backed by its reserves of 3067.25 MT, as on 1 April 2019. The government has also extended support to the company in the past by way of guaranteeing its debt and is likely to continue extending such support as and when need arises.
Consistent Operational Performance: The company continues to report PLFs higher than the all-India average for its power plants. During FY19, the company’s power plants on average achieved a PLF of 73.03%, compared with the all-India average of 61%. The PLF for FY20 is expected to be relatively lower at around 70% as one of the units of NLC Tamil Nadu Power Ltd (NTPL) was shut on account of fire damages for the period of January 2019-August 2019. While capacity utilisation for mining also declined in FY19, it still remains high at 79%.
Adequate Availability of Fuel and Two-Part Tariff Structure: Most of the company’s power plants are lignite-based, and the company uses its captive mines to meet fuel requirements, ensuring the availability of required quantities of lignite. The company has required tie-ups in place for its coal-based power plants, and now, with the commissioning of Talabira II & III coal mines, the company will also have access to its own coal reserves. The tariff the company gets from Discoms is as per the two-part tariff structure including the recovery of fixed costs (also providing for financial cost and return on equity) and variable costs. Even if the plants do not operate at their full capacity, the company will still get the fixed part of the tariff for the unutilised capacities. However, owing to the captive consumption of lignite, the company’s cost is relatively lower than that of other power plants, and thus, it receives steady demand from Discoms.
Commissioning of NNTPP and Talabira II & III Coal Block: NNTPP has faced delays in the past on account of various external factors; however, Unit-I of the plant (500 MW) achieved COD in December 2019. NLCIL has successfully completed trial runs for Unit-II (500 MW) as well; however, the unit could not be commissioned as per schedule (by 31 March 2020) due to the ongoing lockdown. The same is expected to start generation as soon as the lockdown is lifted.
For Talabira II & III coal block, the company was earlier facing resistance from villagers, but the matter was resolved, and the mines achieved the COD from 26 April 2020. The mines have been
www.brickworkratings.com Page 2 of 7 developed on the MDO (Mine Developer & Operator) model, and the coal has a low stripping ratio of 1.09, resulting in minimal wastage and a relatively lower operational cost.
Credit Risks:
Continuous Debt-Funded Capex: The company has been in an expansion mode with multiple ongoing projects requiring varying amounts of debt. Accordingly, the company’s debt at the consolidated level increased from Rs.13215.37 Crs as on 31 March 2018 to Rs.20598.40 Crs as on 31 March 2019, which has impacted the company’s overall leverage. Gearing increased from 0.96x as on 31 March 2018 to 1.50x as on 31 March 2019. During Jan 2020, the company raised additional debt in the form of NCDs amounting to Rs. 525 Crs and during March-April 2020, the company has raised Commercial Papers of Rs. 2000 Crs. Furthermore, with multiple projects at various stages of completion, the company is also exposed to execution-related risks for these projects. Any time overruns resulting in cost overruns will further put pressure on the gearing.
Counterparty Risk and Receivables Issue: The company supplies power primarily to Southern Discoms, exposing it to counterparty risk. Nearly 50% of the power is being supplied to TANGEDCO, impacting the realisation of receivables due to TANGEDCO’s weak financial profile. Accordingly, NLCIL’s receivables at the consolidated level increased from 177 days as of FY18 to 199 days as of FY19. Furthermore, in the current lockdown situation wherein the cash collection of Discoms has deteriorated substantially, receivables from Discoms have been piling up across the country, and thus, the realisations of NLCIL are also expected to remain strained. Nevertheless, NLCIL has been generating healthy internal accruals in the past and is expected to manage its liquidity efficiently.
Analytical Approach And Applicable Rating Criteria
For arriving at the rating, BWR has considered the consolidated financials of the company owing to equity holding, commonality of management and various business synergies. The financials of NLC Tamil Nadu Power Ltd, Neyveli Uttar Pradesh Power Ltd and MNH Shakti Ltd have been consolidated.
For more details, please refer to the applicable criteria at the end.
Rating Sensitivities
The timely completion of ongoing projects without major cost overruns and the realisation of past dues from Discoms are key rating monitorables.
Negative: Delay in completion of the projects with significant cost overruns, leading to even higher debt requirements, thereby impacting the capitalisation of the company; non-recovery or partial recovery of dues from Discoms and deterioration in the overall financial risk profile
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Liquidity Position: Adequate
During FY19, the company earned cash accruals of Rs. 3025.45 Crs at a consolidated level against a CPLTD of Rs. 1674.58 Crs. In addition, the company reported cash and cash equivalents (including other bank balances) of Rs. 531.07 Crs as on 31 March 2019 and Rs. 474 Crs as on 30 September 2019. The company also has standalone working capital limits amounting to Rs. 4000 Crs, wherein the average utilisation has remained around 80%, providing sufficient liquidity backup.
Company Profile:
NLCIL is a Navratna established in 1956 and comes under the administrative control of the Ministry of Coal, GoI, and serves as an important source of power generation to the states of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Telangana and Rajasthan and the Union Territory of Puducherry. NLCIL operates primarily in two segments - mining and power generation. The company also has a category I trading license. The company owns multiple lignite mines with a combined capacity of 30.60 MTPA and thermal, as well as renewable energy power plants, with a cumulative generation capacity of 4543.56 MW.
Key Financial Indicators
Key Financial Indicators Particulars Unit FY18 (A) FY19 (A) Operating Income Rs. Crores 11288.39 9870.93 OPBITDA# Rs. Crores 4025.10 2303.37 Net Profit Rs. Crores 1956.78 1537.35 Total Debt Rs. Crores 13215.37 20598.40 Tangible Networth Rs. Crores 13832.23 13747.03 Debt to Equity Times 0.96 1.50 Note: TNW in FY19 has come down on account of buy-back of shares. All financials are adjusted as per BWR standards. # Excluding regulatory deferral account adjustments.
Key Terms of the Proposed Bonds Issue:
▪ Nature: Unsecured Bonds ▪ Total Issue Size: Rs. 3000 Crs ▪ Tranches: Three tranches of Rs. 1000 Crs each ▪ Tenure: 3 years, 5 years and 10 years ▪ Purpose: To repay some of the existing debt which is at relatively higher cost ▪ Coupon Rate: ~ 6.50%
Non-cooperation With Previous Rating Agency If Any: NA www.brickworkratings.com Page 4 of 7
Rating History for the past three years (including withdrawals and suspensions)
Sl. Facilities/Instru Current Rating (2020) Rating History No. ment Amount NCD/Bonds Type Rating 2019 Sep 2018 July 2018 2017 (Rs. Crs) Long BWR AAA 1. Proposed Bonds 3000 NA NA NA NA Term (Stable) Total 3000 INR Three Thousand Crores Only Bank Loan Facilities Amount Fund Based Type Rating 2019 Sep 2018 July 2018 2017 (Rs. Crs) BWR AAA BWR AAA BWR AAA BWR AAA 1. TL - NNTPP 4956.00 Long BWR AAA (Stable) (Stable) (Stable) (Stable) TL - Talabira II & Term (Stable) BWR AAA BWR AAA 2. 1680.75 NA NA III Coal Block (Stable) (Stable) INR Six Thousand Six Hundred Thirty Six Crores and Total 6636.75 Seventy Five Lakhs Only
Complexity Levels Of The Instruments
For more information, visit www.brickworkratings.com/download/ComplexityLevels.pdf
Hyperlink/Reference To Applicable Criteria
● General Criteria ● Approach to Financial Ratios ● Infrastructure Sector
Analytical Contacts Investor and Media Relations Aakriti Sharma M : +91 7738875550 Assistant Manager - Ratings B : +91 22 6745 6666 Board: +91 11 2341 2232 Ext: 111 [email protected] [email protected]
Vipula Sharma Director– Ratings Board: +91 80 4040 9940 [email protected]
www.brickworkratings.com Page 5 of 7
NLC India Ltd Annexure I
Details of Bank Facilities rated by BWR
Bank wise Details - Rs. Crs
Bank/FI Sanctioned Amount
PFC - NNTPP 3000.00
HDFC Bank - NNTPP 1956.00
SBI - Talabira CB 1680.75
Total 6636.75
Additional information is available at www.brickworkratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Brickwork 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.
About Brickwork Ratings: Brickwork Ratings (BWR) is India’s home grown credit rating agency built with superior analytical prowess from industry’s most experienced credit analysts, bankers and regulators. Established in 2007, Brickwork Ratings aims to provide reliable credit ratings by creating new standards for assessing risk and by offering accurate and transparent ratings. Brickwork Ratings provides investors and lenders timely and in-depth research across the Structured Finance, Public Finance, Financial Institutions, Project Finance and Corporate sectors.
Brickwork Ratings has employed over 350 credit analysts and credit market professionals across 8 offices in India. Our experienced analysts have published over 12,000 ratings across asset classes. Brickwork Ratings is committed to provide the investment community with the products and services needed to make informed investment decisions. Brickwork Ratings is a registered credit rating agency by Securities and Exchange Board of India (SEBI) and a recognised external credit assessment agency (ECAI) by the Reserve Bank of India (RBI) to carry out credit ratings in India.
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THE INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT ANY REPRESENTATION OR WARRANTY OF ANY KIND. A Brickwork Ratings rating is an opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that Brickwork Ratings is continuously evaluating and updating. Therefore, ratings are the collective work product of Brickwork Ratings and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Brickwork Ratings is not engaged in the offer or sale of any security. All Brickwork Ratings reports have shared authorship. Individuals identified in a Brickwork Ratings report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Brickwork Ratings rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Brickwork Ratings. Brickwork Ratings does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Neither Brickwork Ratings nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “BWR Reps”) guarantee the accuracy, completeness or adequacy of the Report, and no BWR Reps shall have any liability for any errors, omissions, or interruptions therein, regardless of the cause, or for the results obtained from the use of any part of this publication. In no event shall any BWR Reps be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the Report even if advised of the possibility of such damages. Brickwork Ratings receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities.
www.brickworkratings.com Page 7 of 7 Annexure III
Annexure IV Annexure V Annexure VII BSE Limited Registered Office: Floor 25, P J Towers, Dalal Street, Mumbai – 400 001, India T : +91 22 2272 8045 / 8055 F : +91 22 2272 3457 www.bseindia.com Corporate Identity Number: L67120MH2005PLC155188
DCS/COMP/SU/IP-PPDI/246/20-21 July 22, 2020
The Company Secretary NLC India Limited First Floor, No.8, Mayor Sathyamurthy Road, FSD, Egmore Complex of Food Corporation of India, Chetpet, Chennai-600 031, Tamil Nadu.
Dear Sir,
Re: Private Placement of Unsecured, Non-Cumulative, Non-Convertible, Redeemable, Taxable, Bonds Of Face Value Of Rs. 10,00,000/- each (“Bonds”) at par aggregating to total issue size not exceeding Rs . 500 Crores (“The Issue”) with a base issue size of Rs. 125 Crores (“Base Issue Size”) and an green shoe option to retain oversubscription upto Rs. 375 Crores. Green shoe option is reserved for Bharat Bond ETF (the “Issue”)
We acknowledge receipt of your application on the online portal on July 22, 2020 seeking In-principle approval for issue of captioned security. In this regard, the Exchange is pleased to grant in-principle approval for listing subject to fulfilling the following conditions:
1. Filing of listing application.
2. Payment of fees as may be prescribed from time to time.
3. Compliance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 as amended 2012, and submission of Disclosures and Documents as per Regulations 21, in the format specified in Schedule I of the said Regulations and also Compliance with provisions of Companies Act 2013.
4. Receipt of Statutory & other approvals & compliance of guidelines issued by the statutory authorities including SEBI, RBI, DCA etc. as may be applicable.
5. Compliance with change in the guidelines, regulations directions of the Exchange or any statutory authorities, documentary requirements from time to time
6. Compliance with below mentioned circular dated June 10, 2020 issued by BSE before opening of the issue to the investors.:
https://www.bseindia.com/markets/MarketInfo/DispNewNoticesCirculars.aspx?page=20200610-31
This In-Principle Approval is valid for a period of 1 year from the date of issue of this letter. The Exchange reserves its right to withdraw its in-principle approval at any later stage if the information submitted to the Exchange is found to be incomplete/ incorrect/misleading/false or for any contravention of Rules, Bye-laws and Regulations of the Exchange, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Guidelines/Regulations issued by the statutory authorities etc. Further, it is subject to payment of all applicable charges levied by the Exchange for usage of any system, software or similar such facilities provided by BSE which the Company shall avail to process the application of securities for which approval is given vide this letter.
Yours Faithfully, For BSE Limited Sd/- Sd/- Rupal Khandelwal Raghavendra Bhat Senior Manager Deputy Manager
BSE - CONFIDENTIAL
Annexure VIII
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