Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Serial Number: 1
THE TATA POWER COMPANY LIMITED (The Tata Power Company Limited, incorporated in India with limited liability on September 18, 1919 under the Companies Act, 1913) Registered Office: Bombay House, 24 Homi Mody Street, Mumbai 400 001, India Compliance Person: Mr. H.M. Mistry, Company Secretary | Email of Compliance Person: [email protected] | Telephone: +91 22 6665 8282 | Fax: +91 22 6665 8885 | Website: www.tatapower.com | CIN: L28920MH1919PLC000567 INFORMATION MEMORANDUM AND PRIVATE PLACEMENT OFFER LETTER BY WAY OF PRIVATE PLACEMENT BY THE ISSUER (THE “ISSUE”) BY THE TATA POWER COMPANY LIMITED (THE “ISSUER”) FOR ISSUE OF UNSECURED, REDEEMABLE, TAXABLE, LISTED, RATED, NON-CONVERTIBLE DEBENTURES OF A FACE VALUE OF RS. 10,00,000 EACH AGGREGATING TO RS. 10,00,00,00,000 (“DEBENTURES”). THIS ISSUANCE WOULD BE UNDER THE ELECTRONIC BOOK MECHANISM FOR ISSUANCE OF DEBT SECURITIES ON PRIVATE PLACEMENT BASIS AS PER SEBI CIRCULAR SEBI/HO/DDHS/CIR/P/2018/05 DATED JANUARY 5, 2018 ISSUED BY SEBI UNDER SEBI (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008. THE COMPANY INTENDS TO USE BSE’S ELECTRONIC BIDDING PLATFORM (“BSE-BOND EBP”) FOR THIS ISSUE.
This Information Memorandum contains relevant information and disclosures required for issue of the Debentures. The issue of the Debentures comprised in the Issue and described under this Information Memorandum has been authorised by the Issuer through resolutions passed by the shareholders of the Issuer on 13 August 2014, the Board of Directors of the Issuer on 29 October 2018, the Committee of Directors of the Issuer on May 31, 2020 and the Memorandum and Articles of Association of the Issuer. Pursuant to the resolution passed by the Issuer’s shareholders dated 13 August 2014 in accordance with provisions of the Companies Act, 2013, the Issuer has been authorised to borrow, upon such terms and conditions as the Board may think fit for amounts up to Rs 27,000 crores. GENERAL RISKS Investment in debt and debt related securities involves a degree of risk and Investors should not invest any funds in the debt instruments, unless they understand the terms and conditions and can afford to take the risks attached to such investments. For taking an investment decision, potential Investors must rely on their own examination of the Issuer, the Issue, this Information Memorandum including the risks involved. As the issue is being made on a private placement basis, the Debentures have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. Investment in debt and debt related securities involves a degree of risk and Investors are advised to take an informed decision and consider with their advisers, of the suitability of the Debentures in the light of their particular financial circumstances and investment objectives and risk profile, and of all information set forth in this Information Memorandum, including the section entitled “Risk Factors”, before investing. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to the Issuer and the Issue, which is material in the context of the Issue, that the information contained in this Information Memorandum is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. CREDIT RATING
Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Credit Rating Information Services of India Limited (“CRISIL”) has by way of the letter dated ------, 2020 assigned rating of “AA/ Stable” to the Debentures proposed to be issued by the Issuer pursuant to this Information Memorandum. The above rating is not a recommendation to buy, sell or hold securities and Investors should take their own decision. The rating may be subject to revision or withdrawal at any time by CRISIL and should be evaluated independently of any other ratings. Please refer to the Annexure E to this Information Memorandum for rationale for the above rating by CRISIL. LISTING The Debentures offered through this Information Memorandum are initially proposed to be listed on the Wholesale Debt Market (“WDM”) Segment of the BSE Ltd. (“BSE”). The Issuer, with prior notice to the Debenture Trustee, may get the Debentures listed on other material stock exchanges as it deems fit. The Issuer shall comply with the requirements of the listing agreement to the extent applicable to it on a continuous basis. The Issuer intends to use electronic book mechanism as available on the website of the BSE. ISSUE PROGRAMME ISSUE OPENING DATE ISSUE CLOSING PAY-IN DATE DATE Nov 26, 2020 Nov 26, 2020 Nov 27, 2020 [T+1 Settlement]
Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
The Issue shall be subject to the provisions of the Companies Act, 2013, (the “Companies Act”), the rules notified pursuant to the Companies Act, the Memorandum and Articles of Association of the Issuer, the terms and conditions of this Information Memorandum filed with the BSE and any other material stock exchanges, as applicable, the Application Form, and other terms and conditions as may be incorporated in the Debenture Trust Deed and other documents in relation to each such Issue.
THIS INFORMATION MEMORANDUM ALSO CONSTITUTES A PRIVATE PLACEMENT OFFER LETTER AND INCORPORATES DISCLOSURES REQUIRED UNDER FORM PAS-4 OF THE COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014
DEBENTURE TRUSTEE TO THE REGISTRAR TO THE ISSUE JOINT ARRANGERS ISSUE
SBICAP Trustee Company Limited 1. HDFC Bank Ltd. Address: 6th Floor, Apeejay House Address: Peninsula Business 3, Dinshaw Wachha Road, TSR Darashaw Consultants Park, 4th Floor, Tower B, Churchgate, Mumbai, India – 400 Private Limited Senapati Bapat Marg, Lower 020 6-10, Haji Moosa Patrawala Parel – (W), Mumbai – 400 013 Tel No. +91 22 43025555 Industrial Estate Tel No. + 91 22 3395 8150 Fax No: +91 22 6631 1776 20, Dr. E. Moses Road, Mahalaxmi Fax No: +91 22 3078 8584 Email: [email protected] Mumbai 400 011, India Email:Niranjan.Kawatkar@hdfc Contact Person: Mr. R.L.N. Rao, Tel No. +91 22 6656 8484 bank.com Head - Legal and Compliance Fax No: + 91 22 66568494 Contact Person: Mr. Niranjan Email: [email protected] Kawatkar Contact Person: Ms. Vidya Brahme, Manager 2. Kotak Mahindra Bank Limited Address: Corporate and Investment Banking3rd floor,27BKC, Bandra Kurla Complex, Bandra East, Mumbai 400051 Tel No. 02261660329 Fax No: - Email: [email protected] Contact Person: Mr. Sumit Sachdeva
Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
TABLE OF CONTENTS
DISCLAIMERS ...... 1
DEFINITIONS AND ABBREVIATIONS ...... 6
FORWARD LOOKING STATEMENTS ...... 13
RISK FACTORS ...... 15
ISSUE SUMMARY ...... 37
HISTORY AND BUSINESS OF THE ISSUER ...... 50
KEY OPERATIONAL AND FINANCIAL PARAMETERS OF THE ISSUER ...... 57
MATERIAL AGREEMENTS/ DOCUMENTS ...... 59
FINANCIAL INFORMATION OF THE ISSUER ...... 60
OBJECTS OF THE ISSUE ...... 88
STATUTORY AND REGULATORY DISCLOSURES ...... 89
NO WILFUL DEFAULT ...... 150
ISSUE PROCEDURE...... 151
DECLARATION ...... 161
ANNEXURE A ...... 162
APPLICATION FORM ...... 162
ANNEXURE B ...... 167
BOARD RESOLUTION AUTHORISING THE ISSUE ...... 167
ANNEXURE C ...... 170
COMMITTEE OF DIRECTOR’S RESOLUTION ...... 170
ANNEXURE D ...... 175
SHAREHOLDERS’ RESOLUTION ...... 175
ANNEXURE E ...... 176
RATING LETTER OF CRISIL ALONGWITH RATING RATIONALE ...... 176
ANNEXURE F ...... 178
CONSENT OF DEBENTURE TRUSTEE ...... 178
ANNEXURE G...... 179
LIST OF GROUP COMPANIES AS ON 30TH SEP 2020 ...... 179
ANNEXURE H...... 182
FINANCIAL POSITION OF THE COMPANY ...... 182
Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
ANNEXURE I ...... 186
BRIEF PARTICULARS OF THE MANAGEMENT OF THE COMPANY ...... 186
ANNEXURE J ...... 187
DETAILS OF INQUIRY, INSPECTIONS AND INVESTIGATIONS ...... 187
ANNEXURE K...... 189
ANNUAL REPORTS ...... 189
ANNEXURE L ...... 190
CONSENT OF REGISTRAR TO THE ISSUE...... 190
...... ERROR! BOOKMARK NOT DEFINED.
Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
DISCLAIMERS
ISSUER’S DISCLAIMER
The distribution of this Information Memorandum and the Issue, to be initially listed on the WDM segment of the BSE and subsequently on any material stock exchange as the Issuer deems fit, after giving prior notice to the Debenture Trustee, is being made strictly on a private placement basis. This Information Memorandum is not intended to be circulated to any person other than Eligible Investors. Multiple copies hereof or of any Information Memorandum given to the same entity shall be deemed to be given to the same person and shall be treated as such. It does not constitute and shall not be deemed to constitute an offer or an invitation to subscribe to the Debentures to the public of India in general. This Information Memorandum should not be construed to be a prospectus or a statement in lieu of prospectus under the Companies Act. Apart from this Information Memorandum, no offer document or prospectus has been or will be prepared in connection with the offering of the Debentures or in relation to the Issuer nor is such a prospectus required to be registered under applicable laws.
This Information Memorandum has been prepared in conformity with the SEBI Debt Regulations, Companies Act and the rules thereunder. Pursuant to Section 42 of the Companies Act and Rule 14(3) of the PAS Rules.
This Information Memorandum has been prepared to provide general information about the Issuer to potential Investors to whom it is addressed and who are willing and eligible to subscribe to the Debentures. This Information Memorandum does not purport to contain all the information that any potential Investor may require. Neither this Information Memorandum nor any other information supplied in connection with the Debentures is intended to provide the basis of any credit or other evaluation and any recipient of this Information Memorandum should not consider such receipt a recommendation to purchase any Debentures. Each Investor contemplating purchasing any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer as well as the structure of the Issue. Potential 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 Debentures and should possess the appropriate resources to analyse such investment and the suitability of such investment to such Investor’s particular circumstances. It is the responsibility of the potential Investors to also ensure that they will sell these Debentures in strict accordance with this Information Memorandum and applicable laws, so that the sale does not constitute an offer to the public, within the meaning of the Companies Act. Neither the intermediaries nor their agents nor advisors associated with the Issue undertake to review the financial condition nor affairs of the Issuer during the life of the arrangements contemplated by this Information Memorandum or have any responsibility to advise any Investor or potential Investors on the Debentures of any information coming to the attention of any other intermediary.
The Issuer confirms that, as of the date hereof, this Information Memorandum (including the documents incorporated by reference herein, if any) contains all information that is material in the context of the Issue, is accurate in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact as known to the Issuer on the date of the Information Memorandum necessary to make the statements herein, in the light of the circumstances under which they are made, and are not misleading. No person has been authorised to give any information or to make any representation not contained or incorporated by reference in this Information Memorandum or in any material made available by the Issuer to any potential Investor pursuant hereto and, if given or made, such information or representation must not be relied upon as having been authorised by the Issuer. The legal advisors to the Issuer and any other intermediaries and their agents or advisors associated with the Issue have not separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility is accepted by any such intermediary as to the accuracy or completeness of the information contained in this Information Memorandum or any other information provided by the Issuer. Accordingly, the legal advisors to the Issuer and other intermediaries associated with the Issue shall have no liability in relation to the
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 information contained in this Information Memorandum or any other information provided by the Issuer in connection with the Issue.
The Issuer does not undertake to update the Information Memorandum to reflect subsequent events after the date of the Information Memorandum and thus it should not be relied upon with respect to such subsequent events without first confirming its accuracy with the Issuer.
Neither the delivery of this Information Memorandum nor any Issue made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof.
This Information Memorandum and the contents hereof and thereof are restricted only for the intended recipient(s) who have been addressed directly and specifically through a communication by the or on behalf of the Issuer and only such recipients are eligible to apply for the Debentures. All Investors are required to comply with the relevant regulations/guidelines applicable to them for investing in this Issue. The contents of this Information Memorandum and any other information supplied in connection with this Information Memorandum or the Debentures are intended to be used only by those potential Investors to whom it is distributed. It is not intended for distribution to any other person and should not be reproduced by the or disseminated recipient.
Each copy of this Information Memorandum will be serially numbered and the person, to whom a copy of the Information Memorandum is sent, is alone entitled to apply for the Debentures. No invitation is being made to any persons other than those to whom application forms along with this Information Memorandum have been sent. Any application by a person to whom the Information Memorandum has not been sent by or on behalf of the Issuer shall be rejected without assigning any reason.
Invitations, offers and allotment of the Debentures shall only be made pursuant to this Information Memorandum. You may not be and are not authorised to (1) deliver this Information Memorandum or any other information supplied in connection with this Information Memorandum or the Debentures to any other person; or (2) reproduce this Information Memorandum or any other information supplied in connection with this Information Memorandum or the Debentures in any manner whatsoever. Any distribution or reproduction of this Information Memorandum in whole or in part or any public announcement or any announcement to third parties regarding the contents of this Information Memorandum or any other information supplied in connection with this Information Memorandum or the Debentures. Failure to comply with this instruction may result in a violation of the Companies Act, the SEBI Debt Regulations or other applicable laws of India and other jurisdictions. This Information Memorandum has been prepared by the Issuer for providing information in connection with the proposed Issue described in this Information Memorandum.
Each person receiving this Information Memorandum acknowledges that 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 such person has not relied on any intermediary associated with the Issue in connection with its investigation of the accuracy of such information or its investment decision. Each person in possession of this Information Memorandum should carefully read and retain this Information Memorandum. However, each such person in possession of this Information Memorandum are not to construe the contents of this Information Memorandum as investment, legal, accounting, regulatory or tax advice, and such persons in possession of this Information Memorandum should consult with their own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Debentures.
The Issue will be a domestic issue restricted to India and no steps have been taken or will be taken to facilitate the Issue in any jurisdictions other than India. This Information Memorandum is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where distribution or use of such information would be contrary to law or regulation. This Information Memorandum does
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 not constitute, nor may it be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation. Persons into whose possession this Information Memorandum comes are required to inform themselves about and to observe any such restrictions. This Information Memorandum is made available to Investors in the Issue on the strict understanding that it is confidential and may not be transmitted to others, whether in electronic form or otherwise.
DISCLAIMER IN RESPECT OF JURISDICTION
The Issue will be made to the Investors as specified under “Eligible Investors” of this Information Memorandum, who shall be specifically approached by the Issuer. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the Debentures offered hereby to any person to whom it is not specifically addressed. Any disputes arising out of this Issue will be subject to the jurisdiction of the courts of Mumbai. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the Debentures herein, in any jurisdiction and to any person to whom it is unlawful to make an offer or invitation in such jurisdiction.
DISCLAIMER CLAUSE OF THE BSE
As required, a copy of this Information Memorandum has been submitted to BSE Ltd. (hereinafter referred to as BSE). It is to be distinctly understood that the aforesaid submission or hosting the same on the website of BSE 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 to mean that this Information Memorandum has been cleared or approved by BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; nor does it warrant that the Issuer’s Debentures will be listed or will continue to be listed on the BSE; nor does it take any responsibility for the financial or other soundness of the 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 the Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE 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.
DISCLAIMER CLAUSE OF THE JOINT ARRANGERS
It is advised that the Issuer has exercised self-due diligence to ensure complete compliance of prescribed disclosure norms in this Information Memorandum. The role of the Joint Arrangers in the assignment is confined to marketing and placement of the Debentures on the basis of this Information Memorandum as prepared by the Issuer. The Joint Arrangers have neither authorised/vetted nor has done any due- diligence for verification of the contents of this Information Memorandum. Accordingly, no representation, warranty or undertaking (express or implied) is made and no responsibility is accepted by the Joint Arrangers or any of their officers as to the adequacy, completeness or reasonableness of the information contained herein or of any further information, statement, notice, opinion, memorandum, expression or forecast made or supplied at any time in relation thereto.
The Joint Arrangers shall use this Information Memorandum for the purpose of soliciting subscription from eligible investors for the Debentures to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the aforesaid use of this Information Memorandum by the Joint Arrangers should not in any way be deemed or construed that the Information Memorandum has been prepared, cleared, approved or vetted by the Joint Arrangers; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum; 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. The Joint Arrangers or any of their directors,
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 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 Information Memorandum.
Please note that:
(A) The Joint Arrangers and/or their respective Affiliates may, now and/or in the future, have other investment and commercial banking, trust and other relationships with the Issuer and with other persons (“Other Persons”);
(B) As a result of those other relationships, either of the Joint Arrangers and/or their respective 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 Joint Arrangers and/or their respective Affiliates will not be required to disclose such information, or the fact that any of them are in possession of such information, to any recipient of this Information Memorandum;
(C) The Joint Arrangers and/or their respective 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 Debentures of the Issuer; and
(D) Either of the Joint Arrangers and/or their respective Affiliates may exercise such voting powers, and otherwise perform their functions in connection with such fiduciary or other relationships, without regard to their relationship to the Issuer and/or the Debentures.
DISCLAIMER CLAUSE OF THE CREDIT RATING AGENCY
All credit ratings assigned are subject to certain limitations and disclaimers. Please read these limitations and disclaimers on CRISIL’s website. In addition, rating definitions and the terms of use of such ratings are available on CRISIL’s public website. Published ratings, criteria, and methodologies are available from this site at all times. Code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures may also apply. Ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CRISIL has based its ratings on information obtained from sources believed by it to be accurate and reliable. CRISIL does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities or instruments are rated by CRISIL have paid a credit rating fee, based on the amount and type of bank facilities/instruments.
FORCE MAJEURE
The Issuer understands that this Issue is contingent on the assumption that from the date of the provision of this mandate to the Deemed Date of Allotment, there is no material adverse change in the financial conditions of the Issuer or any of its affiliate or in the condition of the Indian credit and debt markets which in the reasonable opinion of the Arranger would make it inadvisable to proceed with the Issue. In the case of such material adverse change, the terms may be renegotiated to the mutual satisfaction of the Sole Arranger and the Issuer. The Arranger may further choose to explicitly use transparent Indian debt and credit market benchmarks to define Force Majeure conditions at the time of finalizing this Issue and/or a mandate on the Debentures.
CONFIDENTIALITY
The information and data contained herein is submitted to each recipient of this Information
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Memorandum on a strictly private and confidential basis. By accepting a copy of this Information Memorandum or any other information supplied in connection with this Information Memorandum or the Debentures, each recipient agrees that neither it nor any of its employees or advisors will use the information contained herein for any purpose other than evaluating the specific transactions described herein or will divulge to any other party any such information. This Information Memorandum or any other information supplied in connection with this Information Memorandum or the Debentures must not be photocopied, reproduced, extracted or distributed in full or in part to any person other than the recipient without the prior written consent of the Issuer.
CAUTIONARY NOTE
The Investors have confirmed that they, (i) are knowledgeable and experienced in financial and business matters, have expertise in assessing credit, market and all other relevant risk and are capable of evaluating, and have evaluated, independently the merits, risks and suitability of purchasing the Debentures; (ii) understand that the Issuer has not provided, and will not provide, any material or other information regarding the Debentures, except as included in this Information Memorandum, (iii) have not requested the Issuer to provide it with any such material or other information, (iv) have not relied on any investigation that any person acting on their behalf may have conducted with respect to the Debentures, (v) have made their own investment decision regarding the Debentures based on their own knowledge (and information they have or which is publicly available) with respect to the Debentures or the Issuer (vi) have had access to such information as deemed necessary or appropriate in connection with purchase of the Debentures, (vii) are not relying upon, and have not relied upon, any statement, representation or warranty made by any person, including, without limitation, the Issuer, and (viii) understand that, by purchase or holding of the Debentures, they are assuming and are capable of bearing the risk of loss that may occur with respect to the Debentures, including the possibility that they may lose all or a substantial portion of their investment in the Debentures, and they will not look to the Debenture Trustee appointed for the Debentures for all or part of any such loss or losses that they may suffer.
Neither this Information Memorandum nor any other information supplied in connection with the Issue is intended to provide the basis of any credit or other evaluation and any recipient of this Information Memorandum should not consider such receipt as a recommendation to purchase any Debentures. Each Investor contemplating purchasing any Debentures should make its own independent investigation of the financial condition and affairs of the Issuer, and its own appraisal of the creditworthiness of the Issuer. Potential 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 Debentures and should possess the appropriate resources to analyse such investment and the suitability of such investment to such Investor’s particular circumstances. This Information Memorandum is made available to potential Investors on the strict understanding that it is confidential. Recipients shall not be entitled to use any of the information otherwise than for the purpose of deciding whether or not to invest in the Debentures.
No person, including any employee of the Issuer, has been authorised any information or to make any representation not contained in this Information Memorandum. Any information or representation not contained herein must not be relied upon as having been authorised on behalf of the Issuer. Neither the delivery of this Information Memorandum at any time nor any statement made in connection with the offering of the Debentures shall under the circumstances imply that any information/ representation contained herein is correct at any time subsequent to the date of this Information Memorandum. The distribution of this Information Memorandum or the Application Forms and the offer, sale, pledge or disposal of the Debentures may be restricted by law in certain jurisdictions. This Information Memorandum does not constitute an offer to sell or an invitation to subscribe to the Debentures in any other jurisdiction and to any person to whom it is unlawful to make such offer or invitation in such jurisdiction. Persons into whose possession this Information Memorandum comes are required by the Issuer to inform themselves about and observe any such restrictions.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
DEFINITIONS AND ABBREVIATIONS
In this Information Memorandum, unless the context otherwise requires, the terms defined and abbreviations expanded below shall have the same meaning as stated in this section. References to statutes, rules, regulations, guidelines and policies will be deemed to include all amendments and modifications notified thereto.
Further, unless otherwise indicated or the context otherwise requires, all references to “The Tata Power Company Limited” or “Tata Power” or to the “Issuer” is to The Tata Power Company Limited. References to “we”, “us” or “our” is to The Tata Power Company Limited, its subsidiaries, associates and joint ventures, on a consolidated basis, and references to “you” are to the prospective Investors in the Debentures.
Issuer Related Terms
Term Description
ATE Appellate Tribunal for Electricity
AT&C Aggregate technical and commercial losses
Andhra Valley The Andhra Valley Power Supply Company Limited
AOA / Articles/ The articles of association of the Issuer as amended Articles of Association
APTEL Appellate Tribunal for Electricity
Arutmin PT Arutmin
BEST Brihanmumbai Electric Supply and Transport Undertaking
Belgaum The 81 MW non-operational power plant located in Karnataka
Bhira Bhira Investment Limited
Bhivpuri Bhivpuri Investments Limited
Board of Directors/ The board of directors of the Issuer or a duly constituted committee thereof Board
BSE BOND – EBP Electronic book building platform of BSE for issuance of debt securities on private placement basis
BSSR PT Baramulti Suksessarana Tbk
Bumi PT Bumi Resources TBK
Cennergi Cennergi (Pty) Limited
CERC Central Electricity Regulatory Commission
CGPL Coastal Gujarat Power Limited
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Term Description
Coal Companies Indonesian coal mining operations: KPC, Arutmin, Indocoal, PT Indo Kalsel and PT Indo Kaltim
DERC Delhi Electricity Regulatory Commission
Discoms State power distribution companies
Director(s) Director(s) on the Board, as appointed from time to time
IEL Industrial Energy Limited
Indocoal Indocoal Resources (Cayman) Limited
Jojobera Captive power plant located in Jharkhand
Khopoli Khopoli Investments Limited
KPC PT Kaltim Prima Coal
LIBOR London Interbank Offered Rate
MERC Maharashtra Electricity Regulatory Commission
MTPA Million tonnes p.a.
MVA MegaVolt Ampere
MW Megawatts
Memorandum of The memorandum of association of the Issuer as amended Association
Mumbai License Area The Issuer’s area of supply in Mumbai extending from Colaba in the South to Vasai Creek in the North and Vikhroli on the Central Side
Mundra UMPP 4,000 MW Ultra Mega Power Project located near Tundawanda village in Mundra Taluka, Kutch district of Gujarat, which commenced full commercial operation in March, 2013, developed by CGPL
NDPL North Delhi Power Limited
New Mining Law New law on mineral and coal mining passed by the Indonesian government on January 12, 2009
PPA Power purchase agreement
Registered Office Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
Entities as declared to the NSE/BSE as on March 31, 2017 under “Promoter & Promoter Promoter Group”
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Term Description
Promoter group shall mean the persons and entities forming part of the Issuer’s Promoter Group promoter group, in accordance with the SEBI (ICDR) Regulations
Reliance Infrastructure Limited, the erstwhile distribution licensee in Mumbai and RIL its successor entity Adani Transmission Limited
SED Strategic Engineering Division of the Issuer
SERC State Electricity Regulatory Commission
Tata Group The group of companies under the Tata brand
Tata Hydro The Tata Hydro-Electric Power Supply Co. Limited
Tata Power Group Please refer to Annexure G of this Information Memorandum
Tata Sons Tata Sons Private Limited
Tata Steel Tata Steel Limited
Tata Power Trading Tata Power Trading Company Limited
Trust Energy Trust Energy Resources Pte Limited
TTML Tata Teleservices (Maharashtra) Limited
TPDDL Tata Power Delhi Distribution Limited
UMPP Ultra Mega Power Project
Issue Related Terms
Term Description
Allot/ Allotment/ Unless the context otherwise requires or implies, the allotment of the Allotted Debentures pursuant to the Issue
Application Form The form in which an Investor can apply for subscription to the Debentures as attached in Annexure A of this Information Memorandum
Authorisation means: (a) an authorisation, approval, resolution, licence, exemption, filing, notarisation, lodgement or registration; or (b) in relation to anything which will be fully or partly prohibited or restricted by law if a Governmental Authority intervenes or acts in any way within a specified period after lodgement, filing, registration or notification, the expiry of that period without intervention or action.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Joint Arrangers HDFC Bank Ltd. and Kotak Mahindra Bank Limited
Beneficial Owner(s) Holder(s) of the Debentures in dematerialized form defined under section 2 of the Depositories Act
Business Days Means all days on which the money market is functioning in the city of Mumbai, Maharashtra, India
Consolidated has the meaning set forth in the Section titled “Issue Procedure” Debenture Certificate
Credit Rating Agency CRISIL
DRR Debenture Redemption Reserve required under Section 71 of the Companies Act
Debt Listing The debt listing agreement, as amended from time to time, entered into by the Agreement Issuer with the BSE for the listing of the Debentures and any other recognised stock exchange to which the Issuer may apply for the listing of the Debentures subsequently after giving prior notice to the Debenture Trustee
Debentures 10000 Unsecured, Redeemable, Taxable, Listed, Rated Non-Convertible Debentures of a face value of Rs. 10,00,000 each aggregating Rs. 10,00,00,00,000 for cash at par issued by the Issuer
Debentureholder(s) Persons who are for the time being and from time to time holders of the Debentures and whose names appear in the Register of Debentureholders and shall include the Beneficial Owners where the Debentures are held in dematerialized form and in the Register of Debenture Holders where the Debentures are held in physical form upon re-materialisation, if any
Debenture Trustee for the Debentureholders, in this case being SBICAP Trustee Trustee/Trustee Company Limited
Debenture Trust Deed means the trust deed to be entered into between the Debenture Trustee and the Issuer in relation to the Issue
Debenture Trustee Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993, as amended Regulations
Deemed Date of Nov 27, 2020 Allotment
Depository A depository registered with the SEBI under the Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018, as amended from time to time, in this case being NSDL and CDSL
Event of Default Events of default as set out in the Debenture Trust Deed, the occurrence of which will lead to all amounts payable under the Debentures becoming immediately due and payable upon notice from the Debenture Trustee
Governmental shall mean any:
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Authority (a) government (central, state or otherwise) or sovereign state; (b) any governmental agency, semi-governmental or judicial or quasi-judicial or administrative entity, department or authority, or any political subdivision thereof; (c) international organisation, agency or authority, and (d) including, without limitation, any stock exchange or any self-regulatory organisation, established under any applicable law
Information This Information Memorandum Memorandum
Coupon means the coupon or interest payable on the Debentures at the applicable Coupon Rate.
Coupon Payment Saturday, November 27, 2021 Dates Sunday, November 27, 2022
Monday, November 27, 2023 Coupon Period Each period from (and including) any Coupon Payment Date to (but excluding) the next succeeding Coupon Payment Date
Coupon Rate Coupon on the Debentures payable on each Coupon Payment Date
Final Redemption November 27, 2023 Date
Investor(s) The following categories of investors, when specifically approached, are eligible to apply for this private placement of Debentures: (a) Scheduled commercial banks in India; (b) NBFCs and RNBCs registered with the RBI; (c) Indian companies and other bodies corporate; (d) Rural regional banks in India; (e) Financial institutions, including All India Financial Institutions; (f) Housing finance companies registered with the National Housing Bank; and (g) Any other investors who are permitted to invest in the Debentures under Applicable Law.
Issue Issue by way of private placement of Debentures by the Issuer pursuant to the terms of this Information Memorandum
Record Date The date which is 15 (fifteen) days prior to each Coupon Payment Date and the Redemption Date, as the case may be, for the purposes of actual payment or as may be prescribed by SEBI. Registered Debenture holders on the Record Date will be the recipients of actual payment of Coupon at the Coupon Rate by the Issuer
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Redemption Amount Redemption Amount – Rs 10,00,000 (at par) and Redemption Date Redemption Date – November 27, 2023
Register of Debenture The register maintained by the Issuer at its Registered Office in accordance holders with Section 88 of the Companies Act, containing the names of the Debenture holders entitled to receive interest in respect of the Debentures on the Record Date, and shall include the register of Beneficial Owners maintained by the Depository under Section 11 of the Depositories Act
Registered Debenture The Debenture holder whose name appears in the Register of Debenture holder holders or in the beneficial ownership record furnished by the Depository for this purpose
Registrar/Registrar to Registrar to this Issue, in this case being TSR Darashaw the Issue
Secured Parties means the Debenture holders, Trustee and each of their receivers, delegates and agents.
Conventional and General Terms, Abbreviations and References to Other Business Entities
Abbreviation Full form
CDSL Central Depository Services (India) Limited
Depositories Act The Depositories Act, 1996, as amended
Depository Participant/ A depository participant as defined under the Depositories Act DP
DP ID Depository Participant Identification Number
Equity Shares Equity shares of the Issuer of Face Value of Rs. 1 each
FEMA Foreign Exchange Management Act, 1999, as amended, including the regulations framed thereunder
Financial Year/ Fiscal/ Period of 12 months ended on March 31 of that particular year FY
FSA Fuel Supply Agreement
Government / GoI Government of the Republic of India
GAAP Generally Accepted Accounting Principles
IT Act The Indian Income Tax Act, 1961, as amended
IFRS International Financial Reporting Standards
NBFC Non-Banking financial company
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Abbreviation Full form
NECS National Electronic Clearing Services
NEFT National Electronic Funds Transfer
Companies Act The Companies Act, 2013, as amended
NRI Non-resident Indian
NSDL National Securities Depository Limited
NSE National Stock Exchange of India Limited
OCB Overseas Corporate Body
PAS Rules Companies (Prospectus and Allotment of Securities) Rules, 2014, as amended p.a. Per annum
RBI The Reserve Bank of India constituted under the RBI Act
RBI Act Reserve Bank of India Act, 1934, as amended
RNBC Residuary non-banking companies
RoC / ROC The Registrar of Companies, Maharashtra
RTGS Real Time Gross Settlement
Rs./INR Indian Rupees
SEBI The Securities and Exchange Board of India constituted under the SEBI Act, 1992
SEBI Act The Securities and Exchange Board of India Act, 1992, as amended
SEBI Debt Regulations SEBI (Issue and Listing of Debt Securities) Regulations, 2008 issued by SEBI, as amended
SEBI (ICDR) Securities and Exchange Board of India (Issue of Capital and Disclosure Regulations Requirements) Regulations, 2009, as amended
WDM Wholesale Debt Market
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
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, including, without limitation, under the section titled “Risk Factors”. Forward-looking statements include statements concerning the Issuer’s plans or financial performance, capital expenditure, etc. If any, the Issuer’s competitive strengths and weaknesses and the trends the Issuer anticipates in the industry, along with the political and legal environment, and geographical locations, in which the Issuer operates, and other information that is not historical information.
Words such as “aims”, “anticipate”, “believe”, “could”, “continue”, “estimate”, “expect”, “future”, “goal”, “intend”, “is likely to”, “may”, “plan”, “predict”, “project”, “seek”, “should”, “targets”, “would” and similar expressions, or variations of such expressions, are intended to identify and may be deemed to be forward-looking statements but are not the exclusive means of identifying such statements.
By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and assumptions about the Issuer, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.
These risks, uncertainties and other factors include, among other things, those listed under the section titled “Risk Factors” of this Information Memorandum, as well as those included elsewhere in this Information Memorandum. Prospective 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:
Negative cash flows from CGPL’s operating activities and sponsor support obligations of the Issuer with respect to CGPL;
If the Issuer’s customers in Mumbai source power from other suppliers;
Cyclical and fluctuating nature of coal prices;
Interruption in fuel supplies or an increase in the cost of fuel;
Growth prospects of the Indian power and infrastructure sector and related policy developments;
General, political, economic, social and business conditions in Indian and other global markets;
The Issuer’s ability to successfully implement its strategy, growth and expansion plans;
Competition in the Indian markets;
Adverse rulings against the Issuer by courts or tribunals in the legal proceedings;
Inability of the Issuer to employ substantial number of qualified personnel for operating its business and project operations;
Occurrence of strikes, work stoppages and/or increased wage demands by the employees/labour employed for the Issuer’s business operations, resulting in a material adverse effect on the business of the Issuer, results of operations and cash flows;
Availability of adequate debt and equity financing at reasonable terms;
Inability of the Issuer to obtain or maintain adequate insurance cover for its projects;
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Performance of the Indian debt and equity markets; and
Changes in laws and regulations applicable to companies in India, including foreign exchange control regulations in India.
For a further discussion of factors that could cause the Issuer’s actual results to differ, please refer to the section titled “Risk Factors” of this Information Memorandum. 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 Investors that such expectations will prove to be correct. Given these uncertainties, the Investors are cautioned not to place undue reliance on such forward- looking statements. If any of these risks and uncertainties materialise, or if any of the Issuer’s underlying assumptions prove to be incorrect, the Issuer’s actual results of operations or financial condition could differ materially from that described herein as anticipated, believed, estimated or expected. All subsequent forward-looking statements attributable to the Issuer are expressly qualified in their entirety by reference to these cautionary statements. As a result, actual future gains or losses could materially differ from those that have been estimated. The Issuer undertakes no obligation to update forward- looking statements to reflect events or circumstances after the date hereof.
Forward looking statements speak only as of the date of this Information Memorandum. None of the Issuer, its Directors, its officers or any of their respective affiliates or associates has any obligation to update or otherwise revise any statement reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfill its obligations under the Debentures. All of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a view on the likelihood of any such contingency occurring. These risks may include, among others, business aspects, equity market, bond market, interest rate, market volatility and economic, political and regulatory risks and any combination of these and other risks. Prospective Investors should carefully consider all the information in this Information Memorandum, including the risks and uncertainties described below, before making an investment in the Debentures. To obtain a complete understanding, prospective Investors should read this section in conjunction with the remaining sections of this Information Memorandum, as well as the other financial and statistical information contained in this Information Memorandum. If any of the following risks, or other risks that are not currently known or are now deemed immaterial, actually occur, the Issuer’s business, results of operations and financial condition could suffer, the price of the Debentures could decline, and the Investor may lose all or part of their investment. More than one risk factor may have simultaneous effect with regard to the Debentures such that the effect of a particular risk factor may not be predictable. In addition, more than one risk factor may have a compounding effect which may not be predictable. No assurance can be given as to the effect that any combination of risk factors may have on the value of the Debentures. The inability of the Issuer to pay interest, principal or other amounts on or in connection with the Debentures may occur for other reasons which may not be considered significant risks by the Issuer based on information currently available to them or which they may not currently be able to anticipate. You must rely on your own examination of the Issuer and this Issue, including the risks and uncertainties involved. The ordering of the risk factors is intended to facilitate ease of reading and reference and does not in any manner indicate the importance of one risk factor over another.
RISKS RELATED TO THE ISSUER AND THE TATA POWER GROUP
The distribution license granted by MERC to the Issuer may be revoked due to inadequacies in the roll out plan submitted by the Issuer and on account of appeals pending in ATE.
The MERC has granted a distribution license to the Issuer for a period of 25 years starting from August 16, 2014 for the earlier distribution license area of the Issuer plus villages of Chene and Versave covered under Mira Bhayander Municipal Corporation.
The MERC has directed the Issuer to resubmit a revised network rollout plan on account of the earlier network rollout plan being inadequate. The Issuer has submitted a revised network rollout plan to MERC relating to establishment of distribution sub-stations, consumer sub-stations, laying of high tension and low tension cables, installation of feeder pillars, among others. The total capital expenditure proposed in the revised network rollout plan is about Rs 2,600 to Rs 3,100 crore, depending on the externalities. If the revised network rollout plan is not accepted by MERC, the Issuer shall not be able to perform its duties as a distribution licensee and MERC will direct the Issuer in relation to its existing distribution assets. This could impact the Issuer’s financial condition and results of operation. MERC has given an interim order providing the principles of network rollout and directed appointment of a committee to provide recommendations regarding network rollout, subsequent to which a public hearing would be held and the network rollout will be finalised.
Additionally, the licence order granted to the Issuer has been appealed against by RIL in ATE stating that the Issuer should not be allowed to use the network of RIL for the purpose of supplying to the consumers. The ATE, in its interim order has stayed the removal of certain restrictions (including restrictions on changeover of consumers) on the Issuer which were granted by the MERC pursuant to its license order. Presently, the Issuer serves many consumers on RIL’s wires. If RIL succeeds in its appeal, the Issuer will not be able to access these consumers before laying down its own network for these consumers.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
RIL has also stated that the Issuer should not be allowed to connect to any consumer in the common area of supply (with RIL) until it lays down the network in the entire common area. If RIL succeeds in the appeal, the Issuer will have to lay down network in the entire common area before connecting to any consumers in this area. This will substantially increase the wheeling charges of the Issuer (as the cost of existing and new network would be recovered from existing connected consumers) and make its network uncompetitive as compared to RIL. The hearings in this matter are in progress and no judgment has been pronounced in this matter yet.
BEST has also challenged the MERC judgement of granting a distribution licence to the Issuer in the absence of submission of network rollout plan by the Issuer. If BEST succeeds in its appeal, ATE might remand the matter back to MERC for reconsideration of the Issuer’s distribution licence in light of the revised network rollout plan by the Issuer.
Any adverse decision by the ATE in these matters could lead to revocation of the distribution license granted to the Issuer and could impact the Issuer’s financial condition and results of operation.
The Issuer’s revenue generation is concentrated in Mumbai and could have a material adverse effect on the Issuer’s revenues and results of operations if its customers in Mumbai source power from other suppliers.
The Issuer’s revenue from Mumbai License area contributed in excess of two thirds of its total unconsolidated net income from operations in the year ended March 31, 2019, respectively. Further, within the Mumbai License Area, the Issuer is dependent on certain key large non-retail customers. Following the implementation of the Electricity Act, 2003, non-retail customers with a demand in excess of 1 MVA are entitled to purchase power from sources other than the Issuer. If a significant number of these customers source power from other suppliers, the Issuer’s revenue and results of operations could be materially and adversely affected.
CGPL experiences negative cash flows from its operating activities
CGPL experiences negative operating cash flows from its operating activities. The Issuer cannot assure you that CGPL’s operating activities will generate positive cash flows or that, if ever generated, CGPL will be able to sustain such positive cash flows in future. CGPL’s failure to generate positive cash flows from its operating activities could adversely affect the Issuer’s business, financial condition and results of operations.
The Issuer has made and may continue to make investments in CGPL, and if the business and operations of CGPL, in whom the Issuer makes such investments, deteriorates, the value of the Issuer’s investments may be adversely affected in the future. The repayment of debt facility provided by the Issuer is subject to certain pre-existing conditions agreed to by CGPL with its existing lenders, whereby certain restrictions could be placed on repayments with respect to the subordinated debt facility extended to it by the Issuer. This could affect the Issuer’s ability to recover its dues, and may affect its credit rating, its financial condition and its results. In accordance with the terms currently governing this unsecured subordinated debt facility, the Issuer is entitled to convert the unsecured subordinated debt facility into equity of CGPL. If the Issuer chooses to exercise this option, the returns on such equity cannot be assured.
The Issuer is substantially dependent on the coal segment of its business and any adverse developments in relation to the operations of the Coal Companies could result in a material adverse effect on its business, results of operations and prospects. Further, the performance of the Coal Companies’ is highly dependent upon the prices they receive for the coal produced by them. Accordingly fluctuations in world coal prices could significantly affect the results of operations of the Coal Companies’ which in turn could materially and adversely affect the results of the Issuer’s operations and financial position.
On June 26, 2007, the Issuer completed the acquisition of a 30% equity interest in Coal Companies
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 from Bumi for coal mining operations in Indonesia. As at March 31, 2019 the Issuer continues to hold 30% equity interest in the Coal Companies. For the year ended March 31, 2019, the coal segment (which comprises the indirect holding of the Issuer in the Coal Companies) contributed to approximately one sixth of the Issuer’s consolidated revenue before intersegment eliminations. The Issuer is dependent on the Coal Segment for a significant portion of its revenues and any adverse developments in relation to the operations of the Coal Companies could result in a material adverse effect on its business, results of operations and prospects.
Arutmin is a mine spread over number of pits in South Kalimantan, Indonesia. The Company has signed an agreement to sell its stake in Arutmin and associated companies in coal trading and infrastructure for an aggregate consideration of approximately USD 400.92 million, subject to certain closing adjustments. The sale is subject to certain conditions and restructuring actions.
The Issuer also announced in July 2014 that it has entered into an option agreement to sell a 5% stake in KPC and its entire 30% stake in KPC’s associated power infrastructure companies to a Bakrie Group for approximately USD 250 million. As on date, the option under the option agreement has not been exercised by the Issuer.
The world coal markets are sensitive to changes in coal mining capacity and output levels, patterns of demand and consumption of coal from the electricity generation industry and other industries for which coal is the principal fuel and changes in the world economy. The coal consumption patterns of the electricity generation, steel and cement industries are affected by the demand for these customers’ products, local, environmental and other governmental regulations, technological developments and the price and availability of competing coal and alternative fuel supplies. All of these factors can have a significant impact on the selling prices for coal. Prices for coal products are also based upon or affected by global coal prices, which tend to be highly cyclical and subject to significant fluctuations. Prices for coal products are also affected by a variety of other factors over which the Coal Companies have no control, including weather, distribution problems and labour disputes. Further, the performance of the Coal Companies’ is highly dependent upon the prices they receive for the coal produced by them. Any fluctuations in world coal prices could affect the results of operation of the Coal Companies’ which in turn could materially and adversely affect the results of the Issuer’s operations and financial position.
Changes in the cost of imported coal may materially affect the Issuer’s results of operations.
CGPL, a wholly owned subsidiary of the Issuer and the special purpose vehicle for the Mundra UMPP, entered into a PPA under which a substantial portion of the fuel component in revenues recoverable is not eligible for escalation. This exposes CGPL and the Issuer to any unfavourable movement in spot coal prices over the term of the PPA. Further, since CGPL relies entirely on coal imported from Indonesia, its profitability has been affected by the Indonesian government’s directive that coal can only be sold at market rates, regardless of mutually negotiated or contracted rates. As the Issuer’s bid for the Mundra UMPP was based on coal prices forecasted based on prevailing rates at the time of bidding, CGPL has been exposed to considerably higher costs than originally contemplated. Given the volatility in fuel prices and significant increases in recent years, this has already had, and could in the future, have a material adverse effect on the Issuer’s results of operations and financial condition.
While the Issuer has taken certain commercial and technical measures to reduce the impact of this adverse development, there can be no assurance that such measures will be successful.
The estimates of reserve and resource figures of the Coal Companies are subject to assumptions, which, if incorrect, could have an adverse effect on the Issuer’s business and financial condition.
Although reserve and resource figures of the Coal Companies have been carefully prepared using engineering, economic, hydrological and geo-technical data assembled and analysed by the Coal Companies or, in some instances, have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only. There are numerous uncertainties inherent in estimating
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 quantity and quality of, and costs to mine, recoverable reserves, including many factors outside the control of the Coal Companies. Further, sustained downward movements in coal prices could render less economical, or uneconomical, some or all of the coal production related activities to be undertaken by the Coal Companies. There can be no assurance that any particular level of recovery of coal from such reserves or resources will in fact be realised or that an identified resource will ever qualify as a resource to be mined commercially and/or which can be legally and economically exploited. This could have an adverse impact on the availability of sufficient supplies of coal for the Issuer’s projects and the value of its investments in the Coal Companies, which, in turn, could adversely affect the Issuer’s business and financial condition.
Coal mining is subject to unexpected disruptions which could cause the Coal Companies’ results of operations to fluctuate across fiscal periods.
The Coal Companies’ surface mining operations are subject to events and operating conditions that could disrupt production, loading and transportation of coal at or from their mines for varying lengths of time. These events and conditions include but are not limited to the following:
adverse weather and natural disasters, including heavy rains, floods, earthquakes and forest fires;
unexpected equipment failures and maintenance problems;
failure to obtain key materials and supplies, such as explosives, fuel and spare parts;
variations in coal seam thickness, the amount and type of rock and soil (overburden) overlying the coal seam and other discrepancies to geological models;
delays or disruptions in coal chains, shipments of coal products or importation of equipment and spare parts;
changes in geological conditions and geotechnical instability of the highwall of mining pits; and
reserve estimates proving to be incorrect.
Any disruption of the Coal Companies’ operations in the event that mining operations are disrupted could have a material adverse effect on the Issuer’s business, financial condition and results of operations.
The Indonesian government has passed a New Mining Law, which, if brought into effect, may affect the Issuer’s coal mining operations in Indonesia and may consequently affect the Issuer’s business, costs and revenues.
The Indonesian government passed the New Mining Law that repealed the existing law and created a new regime for the grant and implementation of mining rights. Some of the changes proposed by the New Mining Law include:
obligations for mine owners to carry out the basic production work themselves;
requirements for foreign investors to divest a certain percentage of their share in mining projects after a specified period of time; and
reduction of mining concession production area under IUP system (“Izin Usaha Pertambangan” which means “mining permit”) after the expiry date of the coal contracts of work.
Any changes to the legal and regulatory regime on mineral and coal mining in Indonesia may affect the
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 way the Tata Power Group conducts its mining operations and may consequently, affect the Tata Power Group’s business, costs and revenues. KPC and Arutmin have first generation CCoW granted by the Indonesian Government. First generation CCoWs are structured as contracts between the concession holder and the central government and ratified by the Indonesian parliament. A first generation CCoW has “lex specialist” status, which means that provisions contained in it sit above general Indonesian law. In the event that any provision under the first generation CCoW are in conflict with general Indonesian law, the provisions under the first generation CCoW would prevail.
The New Mining Law provides that existing CCoWs could remain valid until expiration of their term, but these need to be “transitioned” to conform to the New Mining Law within one year of the implementation of the New Mining Law. Transitioned CCoWs are also able to be extended beyond their term without the need for being re-tendered. KPC and Arutmin are already compliant with the regulations which have been implemented in relation to the allocation of a specified quantity of the coal produced by coal mining firms to Indonesian markets and sale of coal based on a benchmark price. KPC and Arutmin have signed a memorandum of understanding with the Indonesian Government in September 2014 month to give effect to certain changes in the CCOW with regard to CCOW area, revised form of mining rights and other conditions. The changes agreed will have to be incorporated in CCOW amendment document and will be effective from the effective date of such CCOW amendment. Till this date, the final draft of the CCOW amendment document is yet to be circulated by the government. Arutmin and KPC are currently in discussions with the Indonesian government on this. Failure to implement a smooth transition process could adversely affect the Tata Power Group’s business, financial condition, costs and revenues.
Inability to manage growth and expansion effectively could disrupt the Issuer’s business, reduce profitability and adversely affect its results of operation and financial conditions.
The Issuer expects that its growth strategy will place significant demands on its management, financial and other resources. The Issuer’s growth strategy will require it to develop and improve their operational, financial and internal controls, as well as their management, recruitment and administrative capabilities on a continuous basis. In particular, continued expansion and diversification increases the challenges involved in financial and technical management, recruitment, training and retaining sufficiently skilled technical and management personnel and developing and improving internal administrative infrastructure. The Issuer’s growth is dependent upon its ability to meet such challenges successfully and may require significant expenditure and allocation of valuable management resources. An inability to manage such growth effectively could disrupt its business, reduce profitability and adversely affect the results of operations and financial condition.
Inorganic growth opportunities being pursued by the Issuer may require significant investments and may have unforeseen risks adversely impacting the Issuer's business and revenues.
On 12th June 2016 the Issuer, through its 100% subsidiary, Tata Power Renewable Energy Limited (TPREL), signed an SPA with Welspun Energy Private Limited (WEPL) to acquire its subsidiary Welspun Renewables Energy Private Limited (WREPL). WREPL has about 1140 MW of Renewable Power Projects comprising of about 990 MW Solar Power Projects and about 150 MW of Wind Power spread across ten states. Out of 1,140 MW renewable portfolio, all units are operational.
In addition, the Issuer continues to evaluate opportunities, both in India and overseas. These may require significant investments, which may adversely affect the Issuer’s business and revenues. Acquisitions involve a number of risks, including but not limited to the following:
the acquired assets may not perform to the expected levels of operations
impact of unforeseen risks, such as contingent or latent liabilities relating to the acquired businesses that may only become apparent after the merger or acquisition is finalised;
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
success or failure of integration and management of the acquired operations and systems;
success or failure of retention of select personnel; or
diversion of the Issuer’s management’s attention from other on-going business concerns.
If the Issuer is unable to integrate the operations of an acquired business successfully or manage such future acquisitions profitably, its business and results of operations may be adversely affected.
Interruption in fuel supplies or an increase in the cost of fuel may adversely affect the Issuer’s business costs and revenues.
Dependence on a few fuel suppliers for power projects exposes the Issuer’s power projects to vulnerabilities. These include non-supply due to reserves depletion, pro-rata scaling down of supply to all consumers, onerous contractual terms (such as no penalties for short supply while enjoying the comfort of minimum guaranteed off-take or payments in respect thereof) and an inability to obtain alternative fuel at short notice. Several of the Issuer’s current generation operations and projects under development are, or will / may be, coal-fired thermal plants, the majority of which are, or will be, dependent on an adequate supply of low ash, low sulphur coal imported from Indonesia. These imports, which are, as is difficult to source, may be subjected to further disruption including and on, account of any changes in mining laws by the Indonesian government. Further, these imports may not be capable of ready substitution by domestic / alternative fuel sources. Any interruption in fuel supplies or an increase in the cost of fuel may adversely affect the Issuer’s business costs and revenue. For instance, from the Issuer’s projects in operation, TPDDL’s power plant at Rithala has not been operational due to the high cost of sourcing fuel and due to lack of fuel and supply of gas.
In addition, the Issuer has entered into FSAs with various government companies for supply of fuel in India, and expect to enter into, in the future, other long-term agreements for supply of fuel in India. If the Issuer’s counterparties fail to honour their commitments under these agreements, the Issuer could face difficulties in obtaining fuel in India for its power plants, which could adversely affect the Issuer’s business, financial condition and results of operations.
The Tata Power Group may not be able to acquire sufficient land for project site development in a timely manner, on commercially acceptable terms, or at all, which could have an adverse effect on the Issuer’s results of operations and prospects.
The Tata Power Group is in the process of acquiring land for the development and/or execution of certain of its projects. There can be no assurance that such acquisitions will be completed in a timely manner, on commercially acceptable terms, or at all. This could have an adverse effect on the results of operations and prospects of the Tata Power Group. The Issuer may also face public opposition to its land acquisition policies. Further, the Issuer is implementing power projects and cannot be certain of the cost of any financial compensation that it may have to pay to individuals or entities pursuant to any compulsory acquisition orders or resettlement and rehabilitation packages implemented by Indian state authorities. Such payment could have a material adverse effect on the Issuer’s results of operations, financial condition and prospects.
The Issuer intends to continue in expanding their generating capacity, which will involve substantial capital expenditure and other risks associated with major projects.
The Issuer intends to continue in expanding their power generating capacity to meet the increasing demand forecast in India and abroad in the foreseeable future. This would involve constructing additional power plants, expanding existing plants, increasing their output capacity and improving and expanding their transmission and distribution services through optimisation and modernisation schemes. The Issuer has established, or will establish special purpose vehicles or joint ventures for these purposes and has invested, and may further invest, considerable resources in developing these generation plants and services.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Some of the Issuer’s projects are under execution and have not yet achieved commercial operation. Thermal and hydropower projects have a long gestation period of more than three years, due to the process involved in commissioning power projects. This process typically includes the process of applying for and obtaining government approvals, including permission for acquiring land, environmental approvals, and approvals for the use of water. It also requires entering into fuel supply agreements, evacuation agreements, financing agreements, raw material agreements and obtaining detailed project reports, after which the construction process commences. Further, power plants typically require months or even years after being commissioned before positive cash flows can be generated, if at all. In addition, due to increased development activity in the power sector in India, the commercial viability of the Issuer’s power projects may need to be re-evaluated and the Issuer may not be able to realise the benefits or returns on its investments as expected.
The construction and expansion of the Issuer’s various projects involve substantial capital expenditure and other risks associated with major projects, such as cost overruns, interest during construction, delays in implementation, technical and economic viability and changes in market conditions. Although the Issuer may enter into turnkey contracts for the supply or installation of certain equipment or for certain civil works of its plants and facilities, the Issuer faces the risk of funding any project delays or cost overruns arising from various factors, such as unavailability, high cost and low quality of construction materials such as steel and cement, among others, required for such projects. The scheduled completion dates for the Issuer’s projects are estimates and are subject to delays and other risks. Amongst other things, the Issuer is subject to risks on account of significant increases in prices or shortages of equipment and building materials (which may prove defective), technical skills and labour, adverse weather conditions, third party performance risks, environmental risks, changes in market conditions, objections from affected communities, changes in foreign exchange rates for loans borrowed or equipment planned to be purchased, changes in government or regulatory policies, litigation and delays in obtaining requisite approvals, permits, licences or certifications from the relevant authorities. These, and other unforeseeable problems and circumstances, could adversely affect the Issuer’s ability to develop their power projects in the time estimated. These could further result in cost overruns, termination of a project’s development or execution and/or a breach of the financial covenants imposed by lenders. Although the Issuer builds a contingency into their expected total project costs, there can be no certainty that such a contingency will be sufficient to fund any such costs.
The timely completion of a project is also dependent on the completion of related infrastructure by third parties. Related infrastructure includes ports, high voltage evacuation, railways, roads, water ways and dams, amongst others. Any delay in the construction of related infrastructure by third parties could delay the commissioning of the Issuer’s projects. In addition, failure to complete a project according to its original specifications or schedule, if at all, may give rise to potential liabilities and could render certain benefits available under various government statutes being unavailable. As a result of this, the Issuer’s returns on investments may be lower than originally expected.
Any of the above risks may adversely affect the Issuer’s business, results of operations, financial position and prospects. In particular, any delay in relation to, or non-completion of any of the Issuer’s projects aimed at increasing the Issuer’s generating capacity will adversely impact its projections for future operating capacity.
The reduction in Mumbai’s high-end consumer base may have an adverse impact on the Issuer’s business and revenues.
In the recent past, many businesses, in particular industrial consumers, have decided to shift their operations out of Mumbai to nearby areas or other states due to the high cost of operating in Mumbai. The industrial and commercial sectors represent Mumbai’s high-end consumer base and account for a significant portion of power consumers. Therefore, although demand for power currently outstrips supply and is forecast to do so for the foreseeable future, and while the Issuer sells its power to other distribution licensees who then on-sell to industrial end users, this exodus could have an adverse impact on the Issuer’s business and revenues.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
The Issuer is involved in various legal and other proceedings that, if determined against it, could have a material adverse effect on its financial condition and results of operations.
The Issuer is currently involved in a number of legal and other proceedings arising in the ordinary course of its business. These proceedings are pending at different levels of adjudication before various courts and tribunals.
The Issuer cannot assure you that these legal proceedings will be decided in its favour or that no further liability will arise out of these proceedings. Furthermore, such legal proceedings could divert management time and attention and consume its financial resources. An adverse decision in any of these proceedings could adversely affect the Issuer’s profitability and reputation and could have a material adverse effect on its business, financial condition and results of operations. Furthermore, if any new developments arise, for instance, a change in law or rulings against the Issuer by courts or tribunals, the Issuer may face losses and may have to make provisions in its financial statements, which could increase its expenses and its liabilities.
Disruption to the supply of services and equipment or increase in the cost of certain materials may adversely affect the Issuer’s business.
The Issuer requires the continued support of certain original equipment manufacturers to supply necessary services and equipment to maintain and operate its projects at affordable costs. The Issuer may be unable to procure the required services or equipment from these manufacturers (for example, as a result of the bankruptcy of the manufacturer or natural disasters). In addition, the cost of these services or equipment may exceed the budgeted cost, or there may be a delay in the supply of such equipment or a default by a supplier in respect of its supply obligations. In such a scenario, there may be a material adverse impact on the Issuer’s business, results of operations and prospects.
The Issuer’s business is also affected by the availability, cost and quality of raw materials such as steel and cement, which are used to construct and develop its projects. The prices and supply of these materials depend upon a number of factors, which are not within the Issuer’s control, including general economic conditions, competition, production levels, transportation costs and import duties. If, for any reason, the Issuer’s primary suppliers of steel and cement should curtail or discontinue their delivery of such materials in the quantities needed and at prices that are competitive, the Issuer’s ability to meet the material requirements for its projects could be impaired and construction schedules could be disrupted, which could have a material adverse effect on the Issuer’s results of operations and financial position.
Any failure or delay by the DERC or the MERC in undertaking tariff revisions could have an adverse effect on the Issuer’s business and results of operations
The tariffs for the Issuer’s distribution operations in Delhi, i.e. by way of TPDDL, and for the Mumbai License Area are approved by the DERC and the MERC, respectively. These tariffs typically allow for a fixed return on equity and incentive for surpassing targets set for reducing AT&C losses. At periodic intervals, these SERCs typically review the actual costs to be recovered as per regulations, costs recovered and any under or excess recoveries are appropriately adjusted towards the tariffs set for the next year(s). However, any delay by these SERCs in undertaking these tariff revisions or not allowing cost reflective tariff could result in a buildup of regulatory assets. As of September 30, 2019 the net regulatory assets for the Issuer (on standalone basis) were Rs. 878 crore and for TPDDL were in excess of Rs. 4000 crore. Though the DERC has continued with revenue recovery surcharge and PPAC mechanism announced in the tariff orders, but DERC has not yet come up with any concrete plan for liquidation of accumulated revenue gap.
The success of the Issuer’s power plants depends on the reliable and stable supply of water to its power plants. In the event of water shortages, the Issuer’s power plants may be required to reduce their water consumption, which could reduce its power generation capability.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
All of the Issuer’s thermal and hydro power plants require a reliable water source. There can be no assurance that water supply to its thermal power plants, particularly to projects situated away from the coast, will continue to be dependable. In the event of water shortages, the Issuer’s power plants may be required to reduce water consumption, which would reduce its power generation capability and have an adverse impact on its business, results of operations and prospects. Further, if the Issuer or the relevant company comprising a part of the Tata Power Group does not receive the necessary approvals and licences to draw sea water from the relevant government authorities, it will have to find alternative sources of water supply.
In addition, government approvals and licences are subject to numerous conditions, some of which are onerous and require the licence holders to incur substantial expenditure. If the Issuer fails to comply, or a regulator claims that the Issuer has not complied, with these conditions, the Issuer’s business, prospects, financial condition and results of operations may be materially and adversely affected.
Disruption to the development, execution or operation of any of the Issuer’s assets could adversely affect its business.
The development, execution or operation of the Issuer’s projects may be disrupted for reasons that are beyond its control. These include, among other things, the occurrence of explosions, fires, earthquakes and other natural disasters, prolonged spells of abnormal rainfall, breakdown, failure or substandard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks and labour disputes. There can be no assurance that the affected units will resume operations in a timely manner. Delays in resuming operations for the affected units may have a material adverse effect on its results of operations. In addition, the Issuer’s projects may also be a target of terrorist attack or other civil disturbance.
Further, the Issuer relies on extremely sophisticated and complex machinery that is built by third parties and may be susceptible to malfunction. Although, in certain cases, the Issuer is entitled to be compensated by manufacturers for certain equipment failures and defects, such arrangements may not fully compensate the Issuer or the relevant Tata Power Group companies. In addition, the Issuer may not be entitled to compensation for indirect losses such as loss of profits or business interruption under such agreements. If such operational difficulties occur in the future, they may have a material adverse effect on the Issuer’s business, financial condition and results of operations.
Environmental awareness throughout the world, including in India and other emerging markets, has grown significantly, in part due to the perceived negative impact that thermal power generation and mining operations have on the environment. Public protest, if any over the Issuer’s power or mining operations could result in a number of adverse consequences, including but not limited to delays in project development and/or execution, damage to the Issuer’s reputation and goodwill with the government or the public in the countries in which it operates or has interests, disruption of operations and damage its facilities, interruptions in the supply of fuel to its thermal generation plants, and affect its ability to obtain necessary licences to expand existing facilities or establish new operations. The occurrence of such events could have a material adverse effect on the Issuer’s business, results of operations, financial condition and prospects.
If the Issuer does not operate its facilities efficiently, or otherwise breaches its contractual obligations, the Issuer may face penalties under the terms of the PPAs into which it has entered or may enter in the future.
PPAs, including the PPA for the Mundra UMPP (“Mundra PPA”), generally set out certain penalties payable by the relevant companies in the event performance does not meet certain pre-agreed levels. In the case of the Mundra PPA, this includes the potential payment of liquidated damages in connection with unavailability of contracted power or non-satisfaction of certain other conditions. The Issuer’s customers may not reimburse them for any increased costs arising as a result of failure to operate within the agreed norms. This could, in turn, have an adverse effect on the Issuer’s revenues, financial
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 condition and results of operations.
Failures to supply power to the Issuer’s customers may have a significant adverse effect on the Issuer’s business, revenues, results of operations and prospects.
Unplanned outages of any of the Issuer’s generating stations, failures in transmission systems, failure in inter-regional transmission as a result of inadequate inter-regional transmission capacity and consequent network congestion, or failures in distribution systems could prevent it from supplying power to its customers. The occurrence of these or other similar events could have a material adverse effect on the Issuer’s business, financial condition, revenues and results of operations.
Some of our customers may have weak credit history
We are exposed to the risks associated with entering into arrangements with other public and private buyers of our power with weak credit histories, including industry consumers. Any change in the financial position of our customers that adversely affects their ability to pay us may adversely affect our own financial position and results of operations
The performance of the Issuer’s green projects is dependent on wind speed, solar insulation and regular inflow of water sources which may be beyond the Issuer’s control. Accordingly, any disruption in the availability of these sources may adversely impact its results of operations and financial position
For the Issuer’s green projects, the plant load factor (“PLF”) depends on wind speed, solar insulation, and a regular inflow of water from rains, glacier melt or groundwater, as applicable. The supply of such resources cannot be assured and the reduction in their availability may affect the generation capacity of those units. This in turn may adversely affect the results of the Issuer’s operations and financial condition.
The Issuer may have limited access to funding for the development and execution of its power projects, which may limit the expansion of its business.
The acquisition, construction and expansion of power plants, in addition to the on-going improvements required to maintain or upgrade existing assets, are capital intensive. Such costs are usually funded from a mixture of operating cash flow and third party financing. The Issuer intends to finance upto 70% to 80% of the cost of each of the prospective projects with third party debt. Given the growth plans, the Issuer may incur substantial borrowings in the future. The availability of such borrowings and access to the capital markets for financing would depend on various factors including but not limited to prevailing market conditions, any regulatory approvals required, and the financing terms offered. There can be no assurance that future financings in the form of debt or equity will be available, whether on acceptable terms, in sufficient amounts or at all. The lack of adequate funding at competitive terms or at all could delay the development and execution of the Issuer’s projects which in turn may adversely affect its business, financial condition and results of its operations.
Financing at non-competitive rates, higher cost of borrowing and financing structure could adversely affect the Issuer’s financial performance, condition, results of operations and prospects.
The Issuer’s growing business needs require it to raise funds through commercial borrowings. The Issuer’s ability to raise funds at competitive rates depends on its credit rating, the regulatory environment in India, global and economic conditions in India and general liquidity conditions. Changes in economic and financial conditions could make it difficult to access funds at competitive rates. The Issuer may also face certain restrictions when raising money from international markets, which may further constrain the Issuer’s ability to raise funds at competitive rates.
Any downgrade of the Issuer’s credit ratings could adversely affect its business and results of operations.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
As on date of this Information Memorandum, the domestic long term rating of the Issuer from CRISIL is ‘CRISIL AA’ with stable outlook, from CARE Ratings Limited is ‘CARE AA’ with stable outlook, from India Ratings is ‘IND AA’ with stable outlook and from ICRA Limited is ‘ICRA AA-’ with Positive outlook. The pressure on ratings is primarily due to concerns relating to the Mundra UMPP’s long term impact on the Issuer’s financial profile due to Supreme Court unfavourable order on compensatory tariff in Mundra UMPP. There can be no assurance that credit rating agencies will not downgrade the Issuer’s credit ratings in the future. Any downgrade of the Issuer’s credit rating by rating agencies, may have an adverse impact on the Issuer’s ability to raise additional financing and the interest rates and commercial terms on which such financing is available and could have a material adverse effect on the Issuer’s results of operations, financial condition and growth prospects.
The structure and specific provisions of the Issuer’s financing arrangements could give rise to certain additional risks.
Certain Tata Power Group companies may be unable to service interest payments and principal repayments or comply with other requirements of any loans, rendering borrowings immediately repayable in whole or in part, together with any attendant cost. Certain Tata Power Group companies may also be forced to sell some of their assets to meet such obligations, with the risk that borrowings will not be able to be refinanced or that the terms of such refinancing may be less favourable than the terms of the existing borrowing. In addition, these borrowings are generally secured against some or all of the relevant Tata Power Group company’s assets and in particular the assets related to the relevant project. Any event of default would result in the lenders enforcing their security and taking possession of the underlying properties. Any cross-default provisions could magnify the effect of an individual default and if such a provision were exercised, this could result in a substantial loss to the Issuer. A number of factors (including changes in interest rates, conditions in the banking market and general economic conditions which are beyond the Issuer’s control) may make it difficult for these Tata Power Group companies to obtain refinancing on attractive terms or at all. There will be an adverse impact on the Issuer’s results of operations if borrowings become more expensive relative to the income received from investments. If these Tata Power Group companies are unable to obtain new finance for any reason, the relevant company may suffer a substantial loss as a result of having to dispose off those of their investments.
The Issuer may also guarantee the payment and performance of the obligations of certain of its Tata Power Group companies under various contracts and loan agreements. Any default by such Tata Power Group companies would require the Issuer to fulfil its payment obligations under such guarantees, which could have an adverse effect on the Issuer’s cash flows and results of operations.
The Issuer may not be able to service all of its existing or proposed debt obligations, which could adversely affect its business and results of operations.
The Issuer’s ability to meet its existing and future debt service obligations and to repay outstanding borrowings under its funding arrangements will depend primarily upon the on-going cash flow generated by its business. Certain of its borrowings are subject to floating interest rates, which may increase. However, revenues under the PPAs may not increase correspondingly. In addition, the duration of the Issuer’s PPAs may not match the duration of the related financial arrangements and thereby expose the Issuer to refinancing risk. The Issuer may not generate sufficient cash to enable it to service existing or proposed borrowings, comply with covenants or fund other liquidity needs.
Further, the Issuer (or any of the members of the Tata Power Group) will face additional risks if it fails to meet the debt service obligations or financial covenants required under the terms of its financing documents. In such a scenario, the relevant lenders could declare it in default under the terms of its borrowings, accelerate the maturity of its obligations, exercise rights of substitution over the financed project or replace directors on its board. There can be no assurance that in the event of any such acceleration, the Issuer or the relevant Tata Power Group company will have sufficient resources to repay these borrowings. Failure to meet obligations under debt financing arrangements could have a
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 material adverse effect on the Issuer’s cash flows, business, financial condition and results of operations.
The Issuer is involved in a number of legal proceedings that may be determined against the Issuer.
The Issuer is party to various legal proceedings and claims relating to its business and operations. These legal proceedings are pending at different levels of adjudication before various courts, tribunals and forums. These legal proceedings include civil suits, proceedings relating to taxation and other statutory levies initiated against the Issuer, criminal proceedings and other legal and regulatory proceedings pertaining to its operations and business. No assurance can be given that these legal proceedings will be decided in the Issuer’s favour. Any adverse decision may have a significant adverse effect on the Issuer’s, business and results of operations. There is also no assurance that similar proceedings will not be initiated against the Issuer in future. Further, should any new developments arise, such as a change in Indian law or rulings against the Issuer by appellate courts or tribunals, the Issuer may need to make provisions in its financial statements, which could increase its expenses and its liabilities.
The Issuer has equity investments and capital commitments, the terms of which may restrict its ability to liquidate such investments and therefore may adversely affect its business and operations.
The Issuer has made and will continue to make capital investments, loans, advances and other commitments to support certain of its subsidiaries, joint venture companies and associates. In the past, these investments and commitments have included capital contributions, loans and corporate guarantees to enhance the financial condition or liquidity of such subsidiaries, joint venture companies and associates. Certain of the Issuer’s non-core investments are in sectors which can be volatile. Some of the agreements, pursuant to which such investments were made, may contain certain terms, which may restrict the Issuer’s ability to liquidate such investments.
If the business and operations of the Issuer’s subsidiaries, joint venture companies and associates deteriorate, the Issuer may suffer losses and / or be required to write-off or write-down the value of its investments. The Issuer may make capital expenditures in the future, which may be financed through additional debt. In addition, certain loans or advances may not be repaid or may need to be restructured, or the Issuer may be required to outlay capital under its commitment to support these companies. This may have a material adverse effect on the Issuer’s business, financial condition and revenues.
The Issuer currently enjoys certain significant tax incentives, which may not be available in the future. This could have an adverse effect on the Issuer’s financial performance, results of operations and prospects.
The Issuer currently enjoys the benefit of various tax incentives provided by both the Government and the state governments, in the form of tax holidays, exemptions and subsidies, in order to encourage investment in the power sector. These incentives have a substantial positive impact on the Issuer’s returns from these projects. The most significant of these incentives is the benefit under Section 80-IA of the Indian Income Tax Act, 1961, which provides for a tax holiday of ten Consecutive assessment years out of the first fifteen assessment years from commissioning of the infrastructure project. The Issuer’s financial performance, results of operations and prospects could be adversely affected if these benefits are amended or withdrawn or become unavailable (following the expiry of the time period for which the benefit is available) if its claim for deductions under Section 80-IA are disputed or disallowed by the taxation authority.
The Issuer’s projects are subject to risks associated with the engagement of third party contractors.
The construction work at certain of the Issuer’s projects is being, and will be, performed by third party contractors. Neither the Issuer nor its subsidiaries or joint venture companies have direct control over the day-to-day activities of such contractors and are reliant on such contractors performing these
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 services in accordance with the relevant contracts. If the Issuer or the relevant subsidiary or joint venture company fails to enter into such contracts or if the contractors fail to perform their obligations in a manner consistent with their contracts, the Issuer’s projects may not be completed as or when envisaged, if at all, thus leading to unexpected costs.
The Issuer may not recover all or any losses they incur because of legal action in respect of breach by third party contractors of their respective obligations. If a contractor engaged to work on a project becomes insolvent, it may prove impossible to recover compensation for such defective work or materials and the Issuer may incur losses because of funding the repair of the defective work or paying damages to persons who have suffered any loss as a result of such defective work.
The Issuer’s shareholding in its subsidiaries and joint venture companies may be diluted resulting in an adverse impact on its business and financial position.
A substantial part of the Issuer’s business is undertaken through its subsidiaries and joint venture companies. The Issuer regularly provides equity and debt financing to its subsidiaries and joint venture companies. A certain portion of the third party debt financing taken by the Issuer’s subsidiaries and joint venture companies requires the Issuer to pledge the shares held by it in its relevant subsidiary or joint venture company in favour of the concerned lender. Any default in such loans by such subsidiary or joint venture company can result in the concerned lender exercising the rights in respect of such pledge and acquiring the shares held by the Issuer in the relevant subsidiary or joint venture company. In such circumstances, the Issuer’s ownership in such relevant subsidiary or joint venture company may be diluted. Such an event may have an adverse impact on the Issuer’s business and financial position.
Revenue in respect of the unit 4 at the Issuer’s Jojobera plant is recognised on the basis of a draft PPA, which is yet to be finalised.
The Jojobera plant has an aggregate capacity of approximately 428 MW consisting of 4 units. Of the 4 units, with respect to unit 4 of 120 MW, the Issuer recognises revenue on the basis of a draft PPA prepared jointly by the Issuer and Tata Steel. The Issuer continues to recover revenues on basis of the draft PPA, which has been mutually agreed with Tata Steel until execution of the PPA. However, the Issuer has not faced any problem till date with regards to the revenue recovery in terms of such draft PPA. While the Issuer shall endeavour to execute a PPA with Tata Steel, with respect to this unit, there can be no assurance that the Issuer would be able to do so and to that end the existing arrangement may continue in the future.
Disagreements with the Issuer’s joint venture partners or unfavourable terms in the agreements governing those joint ventures could adversely affect the Issuer’s operations.
The Issuer currently participates in a number of joint venture arrangements. The success of these joint ventures depends significantly on the satisfactory performance by the joint venture partners and the fulfilment of their obligations. If a joint venture partner fails to perform its obligations satisfactorily, the joint venture may be unable to perform adequately or deliver its contracted services. The Issuer’s level of participation in each joint venture varies and it does not have a controlling interest in some operations. In certain instances, the Issuer’s ability to withdraw funds (including dividends) from its participation in and its ability to exercise management control over, joint ventures and investments therein depends on receiving the consent of its joint venture partners. The Issuer’s operations and revenues may be adversely affected to a material extent if disagreements develop with its joint venture partners and are not resolved in a timely manner.
The Issuer’s corporate reputation could be adversely affected if it fails to meet high safety, quality, social, environmental and ethical standards.
The Issuer believes it has a good corporate reputation and its businesses generally have a high profile in India and internationally. Should any part of the Issuer’s operations fail to meet high safety, quality, social, environmental and ethical standards, its corporate reputation could be damaged. This could lead
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 to the rejection of the Issuer as a preferred service provider by customers, devaluation of the Tata brand and diversion of management time into rebuilding and restoring its reputation which could have a material adverse effect on the Issuer’s business, financial condition, results of operations and prospects.
The Issuer has entered into an agreement for the use of the “Tata” brand. Termination of this agreement could result in a loss of brand value.
The Issuer has entered into a Tata Brand Equity and Business Promotion Agreement dated December 18, 1998, for the use of the brand “Tata” from Tata Sons. Pursuant to the terms of this Agreement, Tata Sons may terminate the aforementioned agreement either (i) in case of breach of any of the terms by the Issuer or any other specific reason set out in the agreement; or (ii) with six months written notice for reasons to be recorded. Further, only Tata Sons has the right to register any trademark with the “Tata” brand or bearing the name “Tata”. The Issuer cannot guarantee that the aforementioned agreement will not be terminated in the future and this may result in the Issuer having to change its name. Any value to the Issuer in being associated with the “Tata” brand may consequently be lost. Loss of this brand value could cause diversion of management time into rebuilding and restoring its reputation which could have a material adverse effect on the Issuer’s business, financial condition, results of operations and prospects.
Tata Sons, as principal shareholder and Promoter of the Issuer, may take actions which may conflict with the interests of other shareholders of the Issuer.
The principal shareholder and the promoter of the Issuer is Tata Sons which, as at December 31, 2019, beneficially owned approximately 35.27% of the equity shares. Moreover, Tata Sons, along with other companies comprising part of the Promoter Group and related trusts, together controlled approximately 37.22% of the equity shares as at December 31, 2019.
Tata Sons, as a significant shareholder, will continue to have the ability to exert influence over the actions of the Issuer. Tata Sons may also engage in activities that conflict with the interest of the Issuer’s shareholders and in such event the Issuer’s shareholders could be disadvantaged by these actions. Tata Sons could cause the Issuer to pursue strategic objectives that conflict with the interests of the Issuer’s shareholders. Conflict of interest may arise between the Issuer, its affiliates and the Issuer’s principal shareholder or its affiliates, possibly resulting in the conclusion of transactions of terms not determined by market forces. Any such conflict of interest could adversely affect the Issuer’s results of operations and financial covenants.
Failure to obtain and retain approvals and licences, or changes in applicable regulations or their implementation, may adversely affect the Issuer’s operations.
The Issuer’s operations are subject to extensive government regulation. The Issuer requires certain approvals, licences, registrations and permissions for operating its businesses, some of which may have expired and for which the Issuer has either made, or is in the process of making, an application for obtaining the approval or its renewal. If the Issuer fails to obtain or retain any of these approvals or licences, or renewals thereof, in a timely manner, the Issuer’s business may be adversely affected. Furthermore, although the Issuer currently obtains and maintains all required regulatory licences, there can be no guarantee that any such licence will not be withdrawn in the future, or that any applicable regulation or method of implementation will not change. This could have a material adverse effect on the Issuer’s business, revenues and results of operations.
The Issuer has some limited presence in Myanmar which is currently subject to U.S. sanctions.
The Issuer entered into a memorandum of understanding with the Government of Myanmar in October 2013 to develop a coal-based power plant in Myanmar. The Issuer is currently undertaking feasibility studies with respect to the proposed power plant. Myanmar is currently the subject of certain trade restrictions and sanctions administered by the U.S. Department of Treasury’s Office of Foreign Asset Control (“OFAC”). The Issuer may be subject to negative media or investor attention and/or U.S.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 sanctions as a result of the Issuer’s limited operations in Myanmar, which may have a material adverse effect on its business, financial condition and results of operations.
The Issuer’s long-term success is dependent upon its ability to attract and retain key personnel and in sufficient numbers. Inability of the Issuer to employ substantial number of qualified personnel for operating its business and project operations may have a material adverse effect on the business of the Issuer.
The Issuer depends on its senior executives and other key management members to implement its projects and business strategies. The success of the Issuer’s business will depend on its ability to identify, attract, hire, train, retain and motivate skilled personnel. Any failure to hire and retain sufficient numbers of qualified professional personnel for functions such as finance, marketing and sales, engineering, research and development and operations and management services, could adversely affect the Tata Power Group’s business, operating results, financial condition and cash flows. If any of these individuals resigns or discontinues his or her service, it is possible that an adequate replacement may not be found easily or at all. If this were to happen, there could be a material adverse effect on its ability to successfully implement its projects and business strategies.
Competition for management and industry experts in the power sector is intense. The Issuer’s future performance depends on its ability to identify, hire and retain technical, support, sales and other qualified personnel. Failure to attract and retain such personnel could have a material adverse impact on its ability to implement planned projects and on its business in general.
The Issuer may not have sufficient insurance coverage to cover all possible economic losses.
The Issuer relies upon insurance coverage to insure against damage and loss to its projects that may occur during construction and operation. The Issuer purchases such additional insurance coverage as it believes to be commercially appropriate as new projects enter the construction and operation phases. Nevertheless, the insurance the Issuer obtains may not be sufficient to protect it from all losses. There can be no assurance that any such insurance obtained by the Issuer (including the insurance for its projects) will be comprehensive and sufficient in all circumstances or that such insurance will be available to the Issuer in the future on commercially reasonable terms.
Should an uninsured loss or a loss in excess of insured limits occur, the Issuer could lose the capital invested in and the anticipated revenue from the affected property. The Issuer could also remain liable for any debt or other financial obligation related to that property. Further, it is to be noted that some operating risks such as increase in anticipated operating costs of the projects, technical performance failure, force majeure events are, among others, typically not covered in terms of the insurance policies. Losses suffered due to inadequate coverage may have a material adverse impact on the Issuer’s business, results of operations and financial condition.
Operations could be adversely affected by strikes, work stoppages or increased wage demands by employees or any other kind of disputes with employees.
The Issuer continues to maintain a cordial relationship with the members of its workforce. However, there can be no assurance that the Issuer will not experience disruptions to its operations due to disputes or other problems with its work force, if they arise in the future, which may adversely affect its business. Furthermore, a large number of the Issuer’s employees are members of labour unions. Although these unions are not affiliated to national labour organisations, any actions by these labour unions may divert management’s attention and result in increased costs to the Issuer. The Issuer may be unable to negotiate acceptable collective bargaining agreements with those who have chosen to be represented by unions, which could lead to union-initiated work stoppages, including strikes.
The Issuer enters into contracts with independent contractors to complete specified assignments and these contractors are required to source the labour necessary to complete such assignments. Although the Issuer does not engage these labourers directly, it is possible under Indian law that the Issuer may
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 be held responsible for wage payments to labourers engaged by contractors should the contractors default on wage payments. Any requirement to fund such payments may adversely affect the Issuer’s business, financial condition and results of operations. Furthermore, pursuant to the provisions of the Contract Labour (Regulation and Abolition) Act, 1970, the Issuer may be required to absorb a portion of such contract labourers as its employees.
Furthermore, labour activism could adversely affect the Issuer’s Indonesian investments and key fuel sourcing arrangements from Indonesia which could, in turn, adversely impact the Issuer’s business, financial condition, results of operations and prospects. Laws permitting the formation of labour unions combined with weak economic conditions, have resulted, and may in the future result, in labour unrest and activism in Indonesia. Any significant labour dispute or labour action in Indonesia could have a material adverse effect on the Issuer’s business, financial condition, results of operations and prospects.
General conditions in the power sector, including historically weak payment records could adversely affect the Issuer’s revenues and results of operations.
The Indian power sector is vulnerable to the Government’s political will to allow reforms and privatisation of the sector. The historically weak financial position of the power sector, especially that of the Discoms, has an impact on the industry as a whole. The Discoms are significant customers for the Mundra UMPP and the Maithon plant. The state-owned power distribution companies have had a weak credit history and there can be no assurance that these entities will pay their obligations in a timely manner or at all. Power projects in which the Issuer has invested or in which it plans to invest may sell power to either Discoms or the state power companies formed as a result of the privatisation of the Discoms. However, as a result of the state companies’ generally weak payment record, project companies established to develop and operate the power projects would normally seek (and would normally require for the purpose of obtaining bank finance) additional payment assurance in the form of bank letters of credit and escrow arrangements. Nevertheless, there can be no assurance that the vulnerable condition of the sector, including the trend of substantial payment defaults by customers, will not adversely affect the Issuer’s revenues and results of operations.
Furthermore, in order to promote renewable generation, the various SERCs usually declare preferential tariffs for renewable power and renewable purchase obligations for Discoms and distribution licensees. The recovery of such tariff from Discoms and distribution licensees may be very difficult. In addition, on completion of the period for which preferential tariffs are awarded, returns on the Issuer’s renewable generation capacity may be lower, which could have a material adverse effect on its financial condition and results of operations.
The provisions of the Electricity Act, 2003 and tariff regulations have increased the Issuer’s competition in the power sector.
The Electricity Act, 2003 has resulted in changes in the power sector in India, including de-licensing of generation, greater competition in supply, open access to distribution and transmission systems and the reorganisation and privatisation of certain of the SEBs. However, while the Issuer has greater flexibility to sell power, the provisions of the Electricity Act, 2003 increased the scope for competition in the Issuer’s supply and distribution businesses, and may continue to do so, which could adversely affect its revenues, results of operations and prospects.
Activities in the power generation business can be dangerous and can cause injury to people or property in certain circumstances. This could subject the Issuer to significant disruptions in its business and to legal and regulatory action, which could adversely affect the Issuer’s financial condition and results of operations.
The power generation business requires the Issuer to work under potentially dangerous circumstances and with highly flammable and explosive materials. Despite compliance with requisite safety requirements and standards, the Issuer’s operations are subject to hazards associated with handling of
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 such dangerous materials. If improperly handled or subjected to unsuitable conditions, these materials could hurt the Issuer’s employees, contract labourers or other persons, cause damage to the Issuer’s properties and properties of others and harm the environment. Due to the nature of these materials, the Issuer 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 its current or former employees for injuries arising from occupational exposure to materials or other hazards at its power plants. This could subject the Issuer to significant disruption in its business and to legal and regulatory actions, which could adversely affect its business, financial condition and results of operations.
Changes in technology may affect the Issuer’s business by making its equipment or power projects less competitive or obsolete. Inability of the Issuer to keep pace with the rapidly evolving technology in the design and manufacture of raw materials and/or components thereof may have an adverse effect on the business and cash flows of the Issuer.
The Issuer’s future success will depend, in part, on its 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 more traditional power projects or may require the Issuer to make additional capital expenditures to upgrade its facilities. In addition, there are other technologies that can produce electricity. The primary alternative technologies are fuel cells, micro turbines, windmills and solar photovoltaic cells. The global market for renewable energy components involves rapidly evolving technology. The Issuer’s component manufacturing equipment and technology may not be suited for future generations of products being developed by other companies. To maintain a successful business in its relevant business operating sectors, the Issuer needs to quickly and consistently design and develop new and improved components and machinery that keep pace with technological developments and changing customer standards and meet the growing demands of its customers for improved performance. The Issuer is vulnerable to technological failures and failures of its information/software systems, which could affect its business. The Issuer’s ability to design, develop, manufacture and market financially viable and cost-efficient alternatives to its consumers on an ongoing basis is particularly important. If the Issuer is unable to adapt in a timely manner to changing market conditions, customer requirements or technological changes, the Issuer’s business and financial performance could be adversely affected.
There may be other changes to the regulatory framework that could adversely affect the Issuer.
The statutory and regulatory framework for the Indian power sector has changed significantly in recent years and the full impact of these changes is unclear. The Electricity Act, 2003 has put in place a framework for reforms in the sector, but in many areas the details and timing of reforms are yet to be determined. It is expected that many of these reforms will take time to be implemented. Furthermore, there could be additional changes in tariff policy, requirements for unbundling of the SEBs, restructuring of companies in the power sector, open access and parallel distribution and licensing requirements for, and tax incentives applicable to, companies in the power sector. Such additional changes could adversely affect the Issuer’s business prospects, financial condition and results of operations.
Fluctuations in interest rates in the Issuer’s foreign borrowings and exchange rate fluctuations could result in foreign exchange losses
Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. A depreciation of the value of the Rupee will affect the cost of the Issuer’s purchases denominated in currencies other than the Rupee. In addition imported coal accounts for a significant portion of the total coal purchased by the Issuer for its directly owned power stations. The recent depreciation of the Rupee has increased the costs of coal imports by the Issuer. Any significant fluctuation in exchange rates to the Issuer’s disadvantage may increase the
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 cost of its debt and derivative contracts and generally have a material adverse effect on its results of operations.
The Issuer has significant borrowings in foreign currency. Interest on many of these loans floats with reference to the LIBOR. The Issuer continually monitors its exposure to exchange rate fluctuations and periodically engages in currency and interest rate hedging in order to decrease its foreign exchange exposure when it is deemed to be appropriate. However, there can be no assurance that such hedging arrangements will fully protect the Issuer against exchange rate fluctuations. A weakening of the Rupee against the U.S. dollar, Yen and other major foreign currencies may have a material adverse effect on the Issuer’s cost of borrowing in Rupee terms, and consequently may increase the cost of financing of its expenditure in Rupee terms. This could have a material adverse effect on its results of operations and financial condition.
The Issuer’s overseas investments and business activities may be subject to unforeseen risks.
In recent years, the Issuer has expanded its business activities overseas and has operations and investments in a number of jurisdictions, including Indonesia, South Africa, Zambia, Georgia and Bhutan. The Issuer also plans to undertake investments and operations in countries such as Vietnam and Myanmar. These international operations are subject to special risks that can materially affect its results of operations. These risks include, but are not limited to, the following:
• unsettled political conditions, war, civil unrest and hostilities in foreign countries;
• underdeveloped legal systems;
• economic instability in foreign markets;
• the impact of inflation;
• fluctuations and changes in currency exchange rates; and
• governmental action such as expropriation of assets, general legislative and regulatory environment, exchange controls, changes in global trade policies such as trade restrictions and embargoes imposed by the United States of America and other countries.
To date, instability in the overseas political and economic environment has not had a material adverse effect on the Issuer’s condition or results of operations. However, the Issuer cannot predict the effect that current conditions affecting various foreign economies or future changes in economic or political conditions abroad could have on the Issuer’s business activities. Any of the foregoing factors could have a material adverse effect on the Issuer’s international operations and, therefore, its business, financial condition and results of operations.
Increasingly stringent environmental regulations may adversely affect the Issuer’s business, results of operations and prospects.
The Issuer’s power plants are subject to environmental regulations promulgated by the Ministry of Environment and the State Pollution Control Boards. In the event that an environmental hazard were to be found at the site of one of the Issuer’s power stations, or if the operation of the power stations were to result in material contamination of the environment, the Issuer could be subject to substantial liabilities to the Government, the state governments and to third parties. Such liabilities may be expensive to remedy. There can be no assurance that compliance with such environmental laws and regulations will not result in a curtailment of production or a material increase in costs, or otherwise have a material adverse effect on the Issuer’s business, financial condition, results of operations or prospects.
Despite using low ash, low sulphur coal imported from Indonesia where possible, the Issuer generates a considerable amount of ash in its operations. There are limited options for utilising ash and therefore
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 the demand for ash is currently low. The Issuer’s current methods to utilise or dispose of ash may be insufficient to dispose of the ash that it expects to generate. Government mandates that 100% of the fly ash produced through the Issuer’s generation activities must be gainfully utilised by 2014. Compliance with this requirement, as well as any future norms with respect to ash utilisation, may add to the Issuer’s capital expenditure.
It is also possible that increasingly strict environmental regulations in relation to power plants in India may be imposed in the future, compliance with which could require significant capital expenditure. This could adversely affect the Issuer’s revenues, results of operations and prospects. Further, the scope and extent of new environmental regulations, including their effect on the Issuer’s operations, cannot be predicted with any certainty.
Our indebtedness and the conditions and restrictions imposed by our financing arrangements could adversely affect our ability to conduct our business and operations.
As on September 30, 2020, the Issuer has a total borrowing of Rs 17,725 Crores outstanding. The lending documents impose a number of restrictive covenants including on distribution of dividends, prepaying any indebtedness prior to its maturity date, maintaining debt equity ratio etc. Our future borrowings may contain further restrictive covenants that could limit our ability to undertake certain types of transactions and could adversely affect our ability to raise additional liquidity.
Contingent Liabilities
As of September 30, 2020 we had contingent liabilities that have not been provided for, in the following amounts: Rs 1254 crores
If a significant portion of these liabilities materializes, it could have a material adverse effect on our business, financial condition and results of operations.
EXTERNAL RISK FACTORS
Political, economic and social developments in India could adversely affect our business
The Government and state governments have significant influence on the power industry and us. Even though economic liberalization policies have encouraged private investment in the power sector, any change in Government or its favorable policies could have a significant impact on the business and economic conditions in India in general and the power sector in particular, which in turn could adversely affect our business, future financial condition and results of operations.
Any political instability in India may adversely affect the Indian securities markets in general, which could also adversely affect our business and operation.
A slowdown in economic growth in India or an increase or decrease in oil or coal prices could have an adverse effect on the Tata Power Group’s business.
The Tata Power Group’s performance and the growth of the Indian power industry are necessarily dependent on the health of the overall Indian economy. Any slowdown in the Indian economy could adversely affect the Tata Power Group’s business. In addition, increases in the prices of oil, coal and petroleum products could result in an increase in costs for Issuer and movements in interest rates, or various other factors affecting the growth of industrial, manufacturing and services sector or a general down trend in the economy could adversely affect its business. Also, the Issuer has made investments in coal companies to mitigate the fuel risk of its operations. A substantial reduction in coal prices may result in impairment of investments in coal companies which will have attendant implications on cash flows from these companies to the Issuer.
Any downgrade of India’s sovereign debt rating by an international rating agency could have a negative impact on the Issuer’s results of operations and financial condition.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
Any downgrade of India’s credit rating for domestic and international debt by international rating agencies may adversely impact the Issuer’s ability to raise additional financing and the interest rates and commercial terms on which such additional financing is available. This could have an adverse effect on the Issuer’s ability to obtain financing to fund its growth on favourable terms or at all and, as a result, could have a material adverse effect on its results of operations, financial condition and prospects.
Any legal and regulatory changes in the future could have a negative impact on the Issuer’s results of operations and financial condition.
Future government policies and changes in laws and regulations in India and comments, statements or policy changes by any regulator, including but not limited to the SEBI or the RBI, as well as any future government policies and changes in laws and regulations in Indonesia or other countries where the Tata Power Group has a significant presence may adversely affect the Issuer’s financial results and operation, and restrict the Issuer’s ability to do business in its target markets. The timing and content of any new law or regulation is not within the Issuer’s control and such new law, regulation, comment, statement or policy change could have an adverse effect on its business, results of operations and financial condition.
Further, the SEBI, the BSE, other recognised stock exchanges where the Issuer may decide to get the Debentures listed after giving prior intimation to the Debenture Trustee or other regulatory authorities may require clarifications on this Information Memorandum, which may cause a delay in the issuance of Debentures or may result in the Debentures being materially affected or even rejected.
RISKS RELATING TO THE ISSUE
The Issuer’s management will have significant flexibility in applying proceeds received from the Debentures. The fund requirement and deployment have not been appraised by any bank or financial institution.
The Issuer intends to utilise the proceeds of the Debentures towards general corporate purposes of the Issuer, including without limitation, refinance of existing debt, capital expenditure and/or augmentation of working capital. The fund requirement and deployment are based on internal management estimates and has not been appraised by any bank or financial institution. Accordingly, the management will have significant flexibility in applying the proceeds received by the Issuer the Debentures. Further, in terms of the provisions of the SEBI Debt Regulations, the Issuer is not required to appoint a monitoring agency and therefore no monitoring agency will be appointed for the Debentures.
The Debentures may not be a suitable investment for all purchasers.
Investment in Debentures involves a significant degree of risk and is intended for sale only to those investors capable of understanding the risks involved in such instruments. Potential Investors should ensure that they understand the nature of the Debentures and the extent of their exposure to risk, that they have sufficient knowledge, experience and access to professional advisers to make their own legal, tax, accounting and financial evaluation of the merits and risks of investment in the Debentures and that they consider the suitability of the Debentures as an investment in the light of their own circumstances and financial condition.
Modification, waivers and substitution
The conditions of the Debentures shall contain provisions for calling meetings of Debenture holders to consider matters affecting their interests generally. These provisions permit defined majorities to bind all Debenture holders including Debenture holders who did not attend and vote at the relevant meeting and Debenture holders who voted in a manner contrary to the majority.
Any downgrading in credit rating of the Debentures may affect the value of the Debentures
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
The Debentures proposed to be issued pursuant to this Information Memorandum have been rated “AA” with stable outlook by CRISIL. The Issuer cannot guarantee that the ratings on the Debentures will not be downgraded.
The unsecured Debentures will be effectively subordinated to all of the Issuer’s secured debt.
The Issuer proposes to issue unsecured Debentures under this Information Memorandum. The Issue of unsecured Debentures will be generally unsubordinated, unsecured obligations of the Issuer that will be effectively subordinated to all of the Issuer’s secured indebtedness to the extent of the value of the assets securing the indebtedness. In the event of bankruptcy, liquidation, reorganisation or other winding up, the Issuer’s assets that secure its secured indebtedness will be available to pay obligations on the unsecured Debentures only after all secured indebtedness, together with accrued interest, has been repaid. If the Issuer is unable to repay its secured indebtedness, the lenders could foreclose on substantially all of its assets which serve as collateral. In this event, the secured lenders would be entitled to be repaid in full from the proceeds of the liquidation of those assets before those assets would be available for distribution to other creditors, including holders of the unsecured Debentures. Holders of the unsecured Debentures will participate in the proceeds of the liquidation of the Issuer’s remaining assets ratably with holders of its unsecured indebtedness that is deemed to be of the same class as the unsecured Debentures, and potentially with all of the Issuer’s other general creditors.
The rights of the Debenture holders to receive payments is junior/subordinate to certain tax and other liabilities preferred by law.
The Debentures will rank subordinated to certain liabilities preferred by law such as to claims of the Government on account of taxes and certain liabilities incurred in the ordinary course of the Issuer’s business. In particular, in the event of bankruptcy, liquidation or winding-up, the Issuer’s assets will be available to pay obligations on the Debentures only after all of the above liabilities that rank senior to the Debentures have been paid. In the event of bankruptcy, liquidation or winding-up, there may not be sufficient assets remaining, after paying amounts relating to these proceedings, to pay amounts due on the Debentures.
Changes in interest rates may affect the price of the Issuer’s Debentures.
All fixed income securities, such as the Debentures, 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 existing coupon, days to maturity and the increase or decrease in the level of prevailing interest rates. Increased rates of interest, which frequently accompany inflation and/or a growing economy, are likely to have a negative effect on the price of the Debentures.
The Issuer may raise further borrowings and charge its assets.
The Issuer is not barred from raising future borrowings and may charge its assets from time to time for any of such future borrowings. In the event of a default in repayment of the borrowings of the Issuer which will also trigger cross default of the Debentures, the borrowings of the Issuer which are secured with the assets of the Issuer will have a higher probability of being repaid/redeemed than the Debentures.
Uncertain trading market
The Issuer intends to list the Debentures on the WDM segment of the BSE and such other recognised stock exchanges that the Issuer may deem fit after giving prior notice to the Debenture Trustee. The Issuer cannot provide any guarantee that the Debentures will be frequently traded on the BSE or such other stock exchanges on which the Debentures are listed and that there would be any market for the Debentures. The less frequently the Debentures are traded, the more difficult it may be for Debentureholders to realise the value for the Debentures prior to redemption.
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COVID-19
In December 2019, the COVID-19 disease, commonly known as “coronavirus”, was first reported in Wuhan, China. In January 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern” and on March 11, 2020 it was declared a pandemic. Between January 2020 and the date of this Information Memorandum, the COVID-19 disease has spread from China to many other countries, with the number of reported cases and related deaths increasing daily and, in many countries, exponentially. Several countries’ governments and numerous companies have imposed increasingly stringent restrictions to help avoid, or slow down, the spreading of COVID-19, restrictions on international and local travel, public gatherings and participation in meetings, as well as closures of universities, schools, stores and restaurants, with some countries imposing strict curfews. In India, the Government had announced a country-wide lockdown in March 2020 which was further extended from time to time. As on the date of this Information Memorandum, government restrictions continue to be imposed in different parts of the country as per State specific guidelines and there can be no assurance that the Government will not again impose a lockdown either in specific locations or country-wide.
The Company continues to monitor developments closely as the COVID-19 pandemic develops. The impact of the COVID-19 pandemic on the Company’s business will depend on a range of factors which the Company is not able to accurately predict, including the duration and scope of the pandemic, the geographies impacted, the impact of the pandemic on economic activity in India and globally, and the nature and severity of measures adopted by governments. These factors include, but are not limited to significant volatility in financial markets (including exchange rate volatility) and measures adopted by governments and central banks that further restrict liquidity, which may limit the Company’s access to funds, lead to shortages of cash. As of the date of this document, there is significant uncertainty relating to the severity of the near- and long-term adverse impact of the COVID-19 pandemic on the global economy, global financial markets and the Indian economy, and the Company is unable to accurately predict the near-term or long-term impact of the COVID-19 pandemic on its business.
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
ISSUE SUMMARY
1. Issuer The Tata Power Company Limited (TPCL) 2. Security Name 3. Seniority Senior Unsecured, Redeemable, Rated, Listed, Taxable, Non- 4. Instrument Convertible Debentures (NCDs / Debentures) 5. Mode of Placement Private placement basis to all Eligible Investors Private placement under the electronic book mechanism of 6. Mode of Issue NSE/BSE The proceeds of the Issue will be utilized for bona fide purposes in the normal course of business of the Company / Purpose/ Details of the Issuer including shoring up of long term sources of capital. 7. utilization of the Proceeds However, the Issuer shall not use the issue proceeds towards investment in capital markets and real estate or any other purpose ineligible for bank finance by the RBI. 8. Issue Amount Rs. 1000 Crores only Option to retain 9. Not Applicable oversubscription amount 10. Face Value Rs.10,00,000/- (Rupees Ten Lakhs Only)
11. Tenor 3 Years from the Date of Allotment
The Coupon Rate for the NCDs shall be 6% p.a. which will be fixed throughout the tenor of the Debentures unless Coupon Rate 12. revised pursuant to the Step Up or Step Down Coupon Rate as mentioned below
(a) 25 bps increase in Coupon Rate upon every notch rating Step Up/Step Down Coupon downgrade of the Debentures by CRISIL. 13. Rate (b) 25 bps decrease in Coupon Rate upon every notch rating upgrade of the Debentures by CRISIL.
14. Final Redemption Date Monday, November 27, 2023
15. Coupon Type Fixed
Mode of allotment/Allocation Uniform 16. option
17. Bid Book Type Open
Coupon Reset Process Fixed Coupon Debentures 18. (including rates, spread, effective date, interest rate cap
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
and floor etc).
19. Coupon Payment Frequency Annual
Saturday, November 27, 2021
20. Coupon Payment Dates Sunday, November 27, 2022 Monday, November 27, 2023
21. Redemption Date Bullet on Final Redemption Date
22. Redemption Amount Rs 10,00,000 per Debenture
Redemption Premium/ Not Applicable 23. Discount
24. Put/Call Option Not Applicable
Not Applicable 25. Put / Call Notification time
26. Put Date/ Call Date Not Applicable
27. Put Price/ Call Price Not Applicable
28. Minimum Application One Debenture of Rs 10,00,000/-
Description regarding Security (where applicable) including type of security (movable/immovable/tangible etc.), type of charge (pledge/ hypothecation/ mortgage etc.), date of creation of security/ likely date of creation of 29. security, minimum security Unsecured cover, revaluation, replacement of security, interest to the debenture holder over and above the coupon rate as specified in the Trust Deed and disclosed in the Offer Document/Information Memorandum
30. Credit Rating ‘AA/Stable by CRISIL’
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020
If the credit rating of Debentures is downgraded to A- or below, each Debenture holder shall have an option to require the Issuer to redeem the Debentures held by such Debenture holder by providing a notice to the Issuer within a period of 30 (thirty) days from the announcement of such downgrade by the Credit Rating Agency(ies) (“Notice of Redemption”).
Upon any Debenture holder providing a Notice of 31. Credit Rating Covenants Redemption, the Issuer must redeem the Debentures, held by such Debenture holder, on or prior to 60 (sixty) calendar days from the date of the Notice of Redemption. The Issuer must repay all the Outstanding Amounts, whether due or not in respect of relevant the Debentures held by such Debenture holder, including principal, Coupon accrued and not paid, any penal interest, if any.
No prepayment penalty, early redemption cost or break cost will be applicable on such prepayment.
15 (fifteen) days prior to each Coupon Payment Date and Record Date 32. Redemption Date
Such covenants as may be specified in the Transaction Documents, including that the Issuer shall not without the prior written approval of the Debenture Trustee:
a. apply the proceeds of the issue of Debentures for any purpose other than that for which the Issue was made;
b. declare any dividend to its shareholders in any year until All covenants of the issue the Issuer has paid or made satisfactory provision for the (including side letters, payment of the redemption amount and interest as 33. accelerated payment clause, required under applicable law; and etc.) c. induct into its board of directors a person whose name appears in the willful defaulter’s list of Reserve Bank of India or TransUnion CIBIL Limited (other than as a nominee director). In case such a person is already on the board of directors of the Company, it shall take expeditious and effective steps for resolution of the above.
Issue Opening Date: November 26, 2020 Issue Timing 34. Issue Closing Date: November 26, 2020
Pay in Date: November 27, 2020
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Deemed Date of Allotment: November 27, 2020
If:
a) an Event of Default occurs, then the Issuer shall pay Coupon on the Debentures at a rate which is 2% (two per cent) over and above the applicable Coupon Rate for the period until such Event of Default ceases to exists or is cured to the satisfaction of the Trustee (acting on the instructions of the Debenture holders);
b) the Company fails to list the Debentures on the BSE within 20 (twenty) days from the Deemed Date of Allotment, or such other date as may be prescribed under applicable law then the Company shall pay Coupon on the Debentures at a rate which is 1% (one per cent) over and above the applicable Coupon Rate for the period from the expiry of 20 (twenty) days from the Deemed Date of Allotment or such other date as may be prescribed under applicable law till the final listing approval of Debentures is obtained from the 35. Default Interest / Penal Rate BSE;
c) the Company fails to execute the Debenture Trust Deed within 60 (sixty) days from the Deemed Date of Allotment, then the Issuer shall pay Coupon on the Debentures at a rate which is 2% (two per cent) over and above the applicable Coupon Rate for the period from the expiry of 60 (sixty) days from the Deemed Date of Allotment till the Debenture Trust Deed is executed to the satisfaction of the Trustee (acting on the instructions of the Debenture holders); and
d) The default interest payable in accordance with this Clause will remain immediately due and payable. The Company agrees that the default interest is a genuine pre-estimate of the loss likely to be suffered by the Debenture holders on account of any default by the Company. shall mean all amounts outstanding, whether due or not, in respect of the NCDs, including principal outstanding, 36. Outstanding Amounts accrued Coupon, default interest and other charges, if any, payable in accordance with the terms of the Transaction Documents.
Proposed to be listed on the WDM segment of BSE. The Issuer will ensure that the NCDs are listed on the BSE within Listing 37. 20 (twenty) days from the Deemed Date of Allotment or such other period as may be prescribed under applicable law.
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38. Dematerialized Yes
The Issuer will issue the Debentures / Letters of Allotment 39. Issue of Debentures in dematerialized form within 2 (two) business days from the Deemed Date of Allotment.
Applications will be made for the Debentures to be Depositories 40. deposited with NSDL and/or CDSL
41. Issue Price At Par
Discount at which security is 42. issued and the effective yield as Not Applicable a result of such discount
43. Redemption Price At Par
44. Day Count Basis Actual / Actual
Means all days on which the money market is functioning in Business Days 45. the city of Mumbai, Maharashtra, India.
At the Coupon Rate, (subject to deduction of tax of source, Interest on as applicable) from the date of realization cheque(s) / 46. Application/Subscription demand draft(s) / date of receipt of funds up to 1 (one) day prior to the Deemed Date of Allotment.
47. Debenture Trustee SBI CAP Trustee Company Limited
a. Information Memorandum and Private Placement Offer Letter (Form PAS-4) b. Debenture Trustee Agreement and Consent Letter from Debenture Trustee 48. Transaction Documents c. Debenture Trust Deed which is to be provided within 60 (sixty) days from Deemed Date of Allotment d. Rating Letter from the rating agencies e. Letter of appointment of Registrar & Transfer Agent f. Listing Agreement with BSE The Company shall ensure that all the consents required from any Governmental Authority or any third party and resolutions required in relation to the Issue have been Conditions Precedent obtained prior to the Deemed Date of Allotment. The Issuer 49. shall also comply with all Applicable Law in relation to the Issue, including the Companies Act and the SEBI Debt Regulations. Approvals and documents including but not limited to:
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(a) Copy of the constitutional documents of the Issuer (b) Copy of the shareholders resolution under Section 180(1)(c) of the Companies Act (c) Copy of the resolutions passed by the Board of Directors of the Issuer approving the Issue (d) Copy of the resolution passed by Committee of Directors of the Issuer in relation to the issue of the Debentures, the appointment of the Debenture Trustee and the execution of necessary documents in connection therewith (e) Issuance of this Information Memorandum (in compliance with the disclosure by SEBI) and PAS-4 signed and certified by the Issuer (f) Credit Rating Letters from CRISIL (not older than 1 (one) month) (g) Consent Letter from the Debenture Trustee (h) Consent Letter from the Registrar to the Issue (i) Authorized Signatory List with specimen signatures (j) Undertaking on letter head from the Issuer that each of the Representations & Warranties made by the Issuer are true and correct to its best possible knowledge; (k) Undertaking on letter head from the Issuer that no Event of Default has occurred and is continuing, and no such event or circumstance will result as a consequence of the Borrower performing any obligation contemplated under the transaction documents. (l) Undertaking on letter head from the Issuer that there is no Material Adverse Effect and there are no circumstances existing which could give rise, with the passage of time or otherwise, to a material adverse effect on the Issuer.
(a) Issue of Letter of Allotment on the Deemed Date of Allotment (b) Listing within 20 (twenty) days from the Deemed Date of Allotment or such other date as may be prescribed under applicable law 50. Conditions Subsequent (c) Issue of Debentures in Dematerialized form (d) Execution of Debenture Trust Deed within 60 (sixty) days from the Deemed Date of Allotment. The Issuer shall get the credit rating of the Debentures from CRISIL reviewed and published at least once within a
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maximum period of 1 (one) year from the immediately previous review of the credit rating by CRISIL. (a) The Company is a public listed company, which has been duly incorporated and is validly existing under the Companies Act. (b) The Company has all Authorisations required to carry on its business as it is conducted from time to time. (c) The obligations expressed to be assumed by the Company in each Transaction Document are legal, valid, binding and enforceable obligations. (d) The entry into and performance by the Company of, and the transactions contemplated by, the Transaction Documents do not and will not conflict with (i) any Applicable Law; (ii) its memorandum of association and articles of association; or (iii) any agreement or instrument binding upon it or any of its assets. (e) The Company has the power to enter into, perform and deliver, and has taken all necessary corporate action to issue the Debentures, authorize their entry into, performance and delivery of, the Transaction Representation & Warranties Documents and the transactions contemplated by those 51. Transaction Documents. (f) All Authorisations required (i) to enable the Company to issue the Debentures, (ii) to lawfully enter into and comply with its obligations in the Transaction Documents; (iii) to enable the Company to carry on its business as it is being conducted from time to time; and (iv) to make the Transaction Documents admissible in evidence in its jurisdiction of incorporation, have been obtained or effected and are in full force and effect. (g) issuance of Debentures is in compliance with all applicable laws. (h) no consent is required from any person or any Governmental Authority for the issue of Debentures. (i) Legal, valid and binding nature of the Transaction Documents; (j) No outstanding default, material litigation, violation of law or material agreements; Completeness and accuracy of financial statements and other information shared with investors/ arranger As set out in the Debenture Trust Deed and including, but Events of Default (including not limited to: 52. manner of voting/conditions of (a) the Company fails to pay the Redemption Amount on joining Inter Creditor any Redemption Date, the Coupon on the Coupon
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Agreement) Payment Date and/or any other amounts due and payable to any of the Secured Parties in terms of this Information Memorandum or the other Transaction Documents, on respective dates on which such amounts are payable in accordance with the Transaction Documents; (b) the Company does not perform or comply with one or more of its other obligations in relation to the proposed Debentures or the Transaction Documents and the same is not remedied within 90 (ninety) days after written notice of such default shall have been given to the Company by the Debenture Trustee; (c) the Company commences a voluntary proceeding under any applicable bankruptcy, insolvency, winding up or other similar law now or hereafter in effect, (including by way of filing of any application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 as amended from time to time)or consents to the entry of an order for relief in an involuntary proceeding under any such law, or consents to the appointment or taking possession by a receiver, insolvency professional, liquidator, assignee (or similar official) for any or a substantial part of its property or take any action towards its reorganization, liquidation or dissolution; (d) a financial creditor of the Company taking any action or commencing any legal proceedings or filing any petition or application, for winding-up, initiation of corporate insolvency resolution process, liquidation, or dissolution of the Issuer, under the Insolvency and Bankruptcy Code, 2016 as amended from time to time (“Code”) or any other applicable law for the time being in force; (e) an operational creditor of the Issuer taking any action or commencing any legal proceedings or filing any petition or application, for winding-up, initiation of corporate insolvency resolution process, liquidation, or dissolution of the Issuer, under the Code or any other applicable law for the time being in force and such action is not stayed or dismissed by a competent authority within 60 (sixty) days; (f) breach of any representations, warranties, covenants and other terms of the Transaction Documents, other than those which have specifically been mentioned as Events of Defaults herein, which has not been remedied within 90 (ninety) days of the occurrence of the default;
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(g) the Company, without consent of the Debenture Trustee, ceases to carry on its business or gives notice of its intention to do so; (h) it is or becomes unlawful for the Company to perform its obligations with respect to proposed Debentures under any Transaction Documents; (i) subject to clause (d) and (e) above, an order is made (other than an order successfully appealed or permanently stayed within 90 (ninety) days) or a resolution is passed, as the case may be, for the winding up or dissolution, judicial management or administration of the Company, or the Company ceases or threatens to cease to carry on all or substantially all of its business or operations, except for the purpose of and followed by a reconstruction, amalgamation, reorganization, merger or consolidation on terms approved by an extraordinary resolution of the holders of the proposed Debentures (j) subject to clause (d) and (e) above, the appointment of an insolvency professional, liquidator, receiver, administrative receiver, administrator, compulsory manager, provisional supervisor or other similar officer in respect of the Company or any of its assets and such appointment is not stayed, quashed or dismissed by any Court within 90 (ninety) days of such appointment; (k) any step is taken by Governmental Authority or agency or any other competent authority, with a view to the seizure, compulsory acquisition, expropriation or nationalization of all or (in the opinion of the Debenture Trustee) a material part of the assets of the Company which is material to the Company; and such action of the agency / authority is not stayed, quashed or dismissed by any Court within 90 (ninety) days; (l) execution, distress, attachment or other legal process is enforced, levied or sued out on or against the whole or any material part of the property, assets or revenues of the Company and any order relating thereto is not discharged or stayed within a period of 90 (ninety) days from the date of enforcement or levy; and (m) The occurrence of Material Adverse Effect and if the same is not cured within 90 (ninety) days. (n) If the transactions contemplated under this NCD Issue become illegal or unlawful or unenforceable, or if any of the documents entered into in relation to the Debentures or any part thereof ceases, for any reason, to be valid and binding or in full force and effect;
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(o) If it becomes unlawful for the Issuer to perform any of its obligations under the Transaction Documents, or if the Transaction Documents or any part thereof ceases, for any reason whatsoever, to be valid and binding or in full force and effect; and (p) Termination of Transaction Documents (q) Any material act of fraud, embezzlement, misstatement, misappropriation or siphoning off funds or revenues or any other act having a similar effect being committed by the Key Management Personnel or a Director of the Issuer; (r) The Issuer is unable to or has admitted in writing its inability to pay its debts as they mature; (s) The Issuer or any of their promoter directors are included in RBI's willful defaulters (t) Delisting of Debentures: The listing of the Debentures ceases or is suspended at any point of time prior to the Debentures being fully redeemed. In case of event of default, Debenture holders / Debenture Trustees may:
(a) Accelerate the redemption of NCDs; (b) Initiate recovery proceedings / exercise rights available to recover the outstanding amounts; (c) Exercise any rights available under the Transaction Documents; and (d) Exercise such other rights as may be available to the Debenture Trustee under Applicable Law. Upon occurrence of an Event of Default, the Debenture Trustee may join the Inter Creditor Agreement in the manner as may be specified by SEBI from time to time and as may be agreed with Debenture Trustee in this regard. Further, other than as specified in the Debenture Trust Deed, all decisions need to be taken by Debenture Holders representing 75% of the nominal value of outstanding Debentures. Certain decisions, including the following, are unanimous consent items: (a) change in rate of Interest for the Debentures; (b) change in redemption amount or tenor of the Debentures; and (c) any change in the end use of the proceeds of the Debentures. 53. Conditions for breach of As specified in the Debenture Trust Deed
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covenants
The Issuer will create and maintain the recovery expense Creation of recovery expense fund as per the terms of applicable law, including any 54. fund guidelines in this regard from SEBI, as may be amended from time to time.
If the Issuer is unable or has admitted in writing, its inability to pay any financial indebtedness (other than default under this Debenture issue) in excess of Rs. 400,00,00,000/- (Rupees Four Hundred Crores) in aggregate, on the date it Provisions related to Cross has become due, and such default has not been remedied to 55. Default Clause the satisfaction of the lender thereof/waived by the lender / creditor within a period of 30 ( thirty) days from the date of occurrence of such default, it shall also constitute an event of default under the present Debenture issue.
Any event or circumstance, occurrence, or condition which, as of any date of such determination in the sole opinion of the Debenture Trustee, has caused or is likely to cause a material and adverse effect in respect of one or more of the following: (a) adversely affect the ability of the Issuer to perform or 56. Material Adverse Effect comply with its obligations under the Transaction Documents; or (b) the businesses, operations or financial condition, properties, assets or prospects of the Issuer; or (c) validity or enforceability of, or the effectiveness of any Transaction Documents. Until the Final Settlement Date, the Company covenants with the Trustee that it shall not without the prior written approval of the Trustee enter into any merger, consolidation, reorganization, scheme of arrangement or compromise with its creditors or shareholders or effect any scheme of amalgamation or reconstruction if such actions have a Material Adverse Effect. Provided that in case a Debenture Holder does not consent to such scheme, then the Company shall have the option to redeem the Debentures held by such 57. Merger and Amalgamation Debenture Holder prior to effecting any such action.
The restriction under this covenant shall not apply to the merger of Coastal Gujarat Power Limited, Tata Power Solar Systems Limited and Af-Taab Investment Company Limited with the Company (“Permitted Merger”). The Debenture Holders and Debenture Trustee grant their upfront consent for the Permitted Merger.
58. Information Covenant The Issuer undertakes to provide information pertinent to a
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credit assessment of the company by the arranger/potential investors in a timely fashion. This information will include, but not be limited to, latest financial information, rating letter and rating rationale, copies of the resolutions authorizing the borrowing and the latest corporate presentation (a) Scheduled commercial banks in India;
(b) NBFCs and RNBCs registered with the RBI;
(c) Indian companies and other bodies corporate;
(d) Rural regional banks in India;
59. Eligible Investors (e) Financial institutions, including All India Financial Institutions;
(f) Housing finance companies registered with the National Housing Bank; and
(g) Any other investors who are permitted to invest in the Debentures under Applicable Law.
Issuance mode of the Demat only 60. Instrument
Demat only 61. Trading mode of the Instrument made by way of cash using Cheque/ DD/ RTGS/ Settlement mode of the 62. NEFT/NACH/ Electronic mode and any other prevailing Instrument mode of payment from time to time.
Role and Responsibilities of as per the Debenture Trustee Agreement and the Debenture 63. Debenture Trustee Trust Deed
Risk factors pertaining to the As set out in the Information Memorandum 64. Issue
Relevant taxes, duties and levies are to be borne by the Issuer. All charges / fees and any amounts payable under this 65. Taxes duties cost and expenses Instrument by the Issuer to the Investor/Arranger as mentioned herein do not include any applicable taxes, levies including service tax etc. and all such impositions shall be borne by the Issuer additionally.
The Debentures, this Information Memorandum and the Governing Law and Transaction Documents for the Issue shall be governed by 66. Jurisdiction and construed in accordance with Indian Law and the Parties shall be subject to the non-exclusive jurisdiction of courts
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and tribunals of Mumbai.
Any interest, commission or fee accruing in relation to the Debentures will accrue from day to day and is calculated on the basis of 365 (three hundred and sixty five) days’ year or where the year is a leap year a 366 (three hundred and sixty six) days’ year, and the actual number of days elapsed.
In case any Coupon Payment Date falls on a day which is not a Business Day, the payment to be made on such Coupon Payment Date shall be made on the immediately succeeding Business Day Convention 67. Business Day. When the Redemption Date falls on a day which is not a Business Day, the payment to be made of such Redemption Date (including interest thereon) shall be made on the immediately preceding Business Day.
However, the schedule of Coupon payment will not be amended on account of change in payment date on account of holiday unless it is the Final Redemption Date of the Debentures.
CASH FLOWS OF THE ISSUE
Cash flows for the Debentures
No. of days in Series Per NCD Cash Cash Flows Modified Date / Interest Period Flow (in Rupees)
1st Coupon Saturday, November 27, 2021 365 60,000
2nd Coupon Sunday, November 27, 2022 365 60,000
3rd Coupon Monday, November 27, 2023 365 60,000
Principal Monday, November 27, 2023 10,00,000.00
Note - For the purpose of above illustration, all Sundays and 2nd & 4th Saturdays are considered as non-Business Days.
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HISTORY AND BUSINESS OF THE ISSUER
HISTORY OF THE ISSUER
The Issuer has been in the business of power generation since its incorporation, in 1919 under the Companies Act, 1913. The Issuer is now regulated by the Companies Act. Following its incorporation, the Issuer, Andhra Valley and Tata Hydro operated as separate but affiliated companies. By way of an order dated October 18, 2000, the High Court of Bombay approved the scheme of amalgamation between the Issuer, Andhra Valley and Tata Hydro to create one unified entity. Over the years, the Issuer has built its portfolio of generation plants and is one of the largest private power generators in India. As at March 31, 2020, the Issuer had a gross installed power generation capacity of 12961 MW generated through a mix of thermal (coal, gas and oil), hydroelectric, renewable (wind and solar) and waste gas based power plants. The Issuer is an established power generation company with a strong track record and extensive industry experience. This has also allowed the Issuer to identify new opportunities and plan expansions to its existing power generation assets.
GROUP ORGANISATION
The following chart outlines, in schematic form, the Issuer’s key business divisions as at March 31, 2020 and lists the key operating assets for its power business:
BUSINESS OF THE ISSUER
The Issuer is an integrated utility company primarily engaged in the generation, transmission, distribution and trading of electricity in India. As one of the largest private sector generators in India by capacity, it owns and operates power stations with an aggregate capacity of 12,783 MW as at March 31, 2020. The Tata Power Group’s core business is organised into four segments - generation, transmission and distribution, fuel and logistics, and power trading and other businesses. The Issuer is the holding company of the Tata Power Group and is directly engaged in certain generation, transmission and distribution activities focused largely on the Mumbai region. Other power businesses and the fuel and logistics operations are conducted through its subsidiaries and joint ventures.
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In Financial Year 2019-20, the Issuer’s consolidated total revenue (including Regulatory income/expense) was Rs. 29,136.37 Crore compared to Rs. 29,881.06 Crore in Financial Year 2018- 19. Consolidated profit after tax, minority interest and share of profit of associates was Rs. 1855.63 Crore in Financial Year 2019-20 as compared to a profit of Rs 2521.11 Crore in Financial Year 2018- 19 (after accounting for Share of Profit of associates and Minority Interest).
Generation
The Issuer has an extensive generating portfolio consisting of thermal (coal, oil and gas), hydro and wind power. The output of the generating assets in Maharashtra is primarily used to meet the requirements of the distribution licensees in Mumbai. The output of Issuer’s plant in Jharkhand is sold to Tata Steel at arm’s length terms under a PPA and the surplus power, if any, is traded. Approximately one-sixth of the power generated in the Haldia plant is sold to the West Bengal State Electricity Distribution Company Limited and the balance is traded through Tata Power Trading.
As at March 31, 2020, the Issuer had gross installed generation capacity of approximately 12,961 MW, of which 9,235 MW comes from thermal power sources (including coal, oil, and gas and waste heat recovery) (including the 4,000 MW Mundra UMPP that was fully commissioned in March 2013), 871 MW comes from hydro power, 1,161MW comes from wind power and 1,694 MW comes from solar power. The generation sales was 51,408 MUs for the Fiscal Year 2019 and 50,437 MUs for FY18.
The Issuer’s operations in Mumbai accounted for approximately 1377 MW of installed capacity, as at September 30, 2019. The Issuer’s division, Tata Power Generation, has two PPAs with BEST for 677 MW and with Tata Power Distribution for 700 MW expiring on March 31, 2024. BEST and Tata Power Distribution are the Issuer’s main customers in Mumbai. In addition, the Issuer is implementing a number of new power projects as part of its planned expansion of generating capacity. CGPL, a 100 % subsidiary of the Issuer, has implemented a UMPP at Mundra in Gujarat, the first UMPP to be awarded by the Government of India through competitive bidding. All the five units of 800 MW each of CGPL have been commissioned. The power so generated by CGPL is being supplied to the states of Gujarat, Maharashtra, Punjab, Haryana and Rajasthan. The Issuer also owns a 74% interest in MPL, which is a joint venture between the Issuer and the state-owned Damodar Valley Corporation in connection with a 1,050 MW mega power project in Jharkhand. Both the units of MPL have been successfully commissioned. MPL has signed the PPAs for the entire capacity and power evacuation arrangement has been put in place by Power Grid Corporation of India Limited. Out of the total 1050 MW, long term power purchase agreement has been entered into for sale of power to Damodar Valley Corporation - 150 MW, WBSEDCL - 300 MW, TPDDL - 300 MW and KSEB - 300 MW. The Issuer has a 26% shareholding in investment platform, Resurgent Power Ventures Pte Ltd., which has recently picked 75% stake in Prayagraj Power Generation Company Limited (PPGCL). PPGCL operates a 1980 MW coal-based thermal power plant in Bara, Uttar Pradesh and off-take arrangements for 90% of its capacity with the UP state discoms. In addition, the Issuer has commissioned a 126 MW hydro project in Bhutan through a Dagachhu Hydro Power Corporation Limited, a joint venture company between the Issuer and Druk Green Power Corporation, an entity of The Royal Government of Bhutan. The Issuer also has 2856 MW of renewable capacities under its subsidiary TPREL (this includes capacity in WREPL). A consortium comprising the Issuer and SN Power Norway has won the bid for a 236 MW “Dugar Hydro Electric Project” in Chenab Valley in Himachal Pradesh.
The Tata Power Group has also established a joint venture, IEL, with Tata Steel in order to provide Tata Steel with its captive power requirements. Through IEL, the Issuer has added two units of 120 MW each at Jamshedpur and Jojobera for generation of power to meet the requirements of Tata Steel’s Jamshedpur Steel Works. In addition, IEL has an operational Plant of 135 MW at Kalinganagar and has acquired (i) operational 40 MW Back-Up DG Station and (ii) under-construction 120 MW Power Project in October, 2019, to meet the requirements of Tata Steel’s Kalinganagar Steels Works.
Transmission and Distribution
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Transmission
Mumbai License Area
The Issuer’s transmission system carries a substantial portion of the bulk power requirement of the city of Mumbai. Power carried by the Issuer’ transmission system is utilised by all the four distribution companies operating in Mumbai. The transmission system is the link between the generating stations and the distribution companies for evacuating power from the generating stations and also is the corridor for bringing in power from outside Mumbai. The Issuer’s transmission network comprises approximately 1,188 CKm (“Circuit kilometer”) of 220kV/ 110 kV lines and 22 receiving stations. An islanding system is in place in the network which isolates the Mumbai city from blackouts caused by faults in national grid.
Powerlinks Transmission Company
As of March 31, 2020, the Issuer holds a 51% interest in Powerlinks, a joint-venture with Power Grid Corporation of India Limited. The joint-venture was formed primarily to transmit power from the Tata Hydro Project in Bhutan and the north-eastern and eastern Indian states to New Delhi and its adjoining areas. The joint-venture is India’s first public private partnership inter-state transmission project and is based on the Build Own Operate and Transfer business model. Power is transmitted through the Issuer’s transmission lines (400 kV double circuit EMV), which are located between Siliguri in West Bengal and Mandola in Uttar Pradesh. Powerlinks has received a transmission license from the CERC for a period of 25 years with effect from November 13, 2003.
Distribution
Mumbai License Area
The Issuer is a distribution licensee in the State of Maharashtra and distributes and supplies electricity in the Mumbai License Area. The Issuer is a major supplier to retail and bulk consumers of electricity including refineries and other large industrial and commercial complexes. The Issuer was issued a new distribution license for the Mumbai License Area by the MERC under the Electricity Act, 2003 valid until August 15, 2039. As on March 31, 2020, Tata power distributes electricity to approximately 7.01 lakh retail customers.
Under the Electricity Act, 2003 the MERC has the power to determine the tariffs under a multi-year tariff framework for a control period based on several elements. MERC allows a return on equity of 15.5% for Fiscal Year 2019 and Fiscal Year 2020 on the approved capitalisation, apart from incentives, if any.
Total sales in Mumbai (for Tata Power Company - Distribution) amounted to 4575Mus for the Fiscal Year 2020 4,521 Mus and for Fiscal Year 2019.
The Issuer’s revenue from Mumbai License Area (including Generation, Transmission and distribution) contributed approximately 75.31 and 78.34 of its total unconsolidated net income from operations in the year ended March 31, 2020 and March 31, 2019, respectively.
Tata Power Delhi Distribution Limited
As of March 31, 2020, the Issuer held a 51% stake in a distribution company, TPDDL which was formerly named NDPL. The remaining 49% is held by the Delhi Power Company limited, a government-owned company. TPDDL is amongst the three private licensees in Delhi and is licensed to distribute power to north and north west Delhi. TPDDL supplies power to a largely residential customer base in northern Delhi and, as at March 31, 2020, TPDDL had approximately 16.96 Lakh customers. DERC has granted a 24 year distribution license to TPDDL which took effect on March 12, 2004.
Tata Power Odisha Distribution Limited
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As on June 1, 2020 the issuer had acquired a 51% stake in a distribution company, TPODL which was formerly named CESU. The remaining 49% is held by the government of Odisha. TPCODL serves a population of 1.36 Crore with Customer Base of 26 Lakh and a vast Distribution Area of 29,354 Sq. Km.
Fuel and Logistics
A key strategic priority for the Issuer is the securing of its fuel supplies for existing and new thermal power generation projects. The Issuer meets its fuel requirements for thermal power generation projects through a mix of imported coal, domestic coal, gas and coal bed methane.
Indonesian coal mine equity investment
On June 26, 2007, the Issuer completed the acquisition (through its wholly-owned overseas subsidiaries, Bhira and Bhivpuri) of a 30% equity interest in the Coal Companies from Bumi for coal mining operations in Indonesia, and as at March 31, 2020, the Issuer continues to hold 30% equity interest in the Coal Companies. The Issuer paid a consideration of approximately USD 1.2 billion (including working capital adjustments) for this acquisition. The Issuer believes that this equity position, with attendant rights to share in the financial success of the operations, mitigates in part its exposure to fluctuating coal prices for its operations in India.
In 2012, the Issuer, through Khopoli, acquired 26% interest in BSSR. The Issuer believes that this acquisition further protects the company from fluctuations in coal prices as well as diversifying its coal sources. BSSR, together with PT Antang Gunung Meratus, a 100% Subsidiary, own certain coal reserves in South and East Kalimantan in Indonesia. As at March 31, 2020, the Issuer continues to hold 26% interest in BSSR.
On January 31, 2014, the Issuer announced that it signed an agreement for the sale of its 30% interest in Arutmin and associated companies in coal trading and infrastructure. The aggregate consideration for the Issuer’s 30% interest is approximately USD 510 million, subject to certain closing adjustments. The sale is subject to certain conditions and restructuring.
The Issuer also announced in July 2014 that it has entered into an option agreement to sell a 5% stake in KPC and its entire 30% stake in KPC’s associated power infrastructure companies to a Bakrie Group for approximately USD 250 million. As on date today, the Issuer has not exercised this option and continues to hold its equity stake in KPC.
Indonesian coal off-take arrangements
In addition to the equity investment in KPC, BSSR and Arutmin, the Issuer entered into coal purchase agreements with the trading arm of KPC, which entitles it to purchase 9.36 MTPA of coal with a margin of 20%. The coal purchased under these agreements caters to the imported coal requirement of Mundra UMPP. Furthermore, the Issuer also sources 2.65 MTPA through long-term contracts from certain other Indonesian coal companies for Mundra UMPP requirements. This 2.65 MTPA is acquired from Adaro to the tune of 2 MTPA, Samtan to the tune of 0.75 MTPA. For further details refer to the section titled “Risk Factors” of this Letter of Offer.
Investment in shipping
As part of securing fuel supplies for Mundra UMPP, the Issuer established a Singapore subsidiary, Trust Energy, responsible for the transportation of coal from Indonesia to India for the Mundra UMPP. Trust Energy currently owns three ships 5,66,000 DWT, which partially satisfies the fuel transportation requirements of Mundra UMPP. Trust Energy has also entered into three long-term charter party agreements as of the date of this Letter of Offer.
Other Segments
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Details of other segments are set out below.
Power Trading
As at March 31, 2020, the Issuer held 100% stake in Tata Power Trading, a subsidiary established to engage in the trading of power in India. Tata Power Trading received a licence to trade in electricity as a category ‘A’ trader from the CERC on June 9, 2004. Tata Power Trading holds a trading license for a period of 25 years, starting from 2004, and the trading license currently held by Tata Power Trading (category ‘I’) permits unrestricted trading volume. The trading capacity of Tata Power Trading, which is determined by the net worth of the licensee, was upgraded to category ‘I’ by the CERC through its letter dated June 9, 2005.
Strategic Electronics Division (“SED”)
November, 2020: The Tata Power Company Limited has completed the sale of its Defense business on 31st October, 2020 to Tata Advanced Systems Limited, a wholly owned subsidiary of Tata Sons Pvt. Ltd. The sale was completed as per a Scheme of Arrangement, which was approved by National Company Law Tribunal at Mumbai and Hyderabad in December’19 & March’20 respectively Sale to Tata Advanced Systems Ltd completed at enterprise value of ₹ 1,076 crore against ₹ 1,040 crore as per agreement. ₹ 539 crore received on completion of sale (₹ 1,076 crore minus SED Debt of ₹ 537 crore)
Tata Power Solar Systems Limited
As at March 31, 2020, the Issuer held a 100% stake in Tata Power Solar Systems Limited (“Tata Power Solar”), one of the leading companies engaged in the development of solar photovoltaic technology in India. Tata Power Solar currently has four main business lines: manufacturing and sale of solar photovoltaic cells and modules (for which it has a solar cell manufacturing facility in Bengaluru), providing engineering, procurement and construction/commissioning services as well as operations and management services to solar project developers, developing and selling solar photovoltaic products in domestic markets, and developing and selling solar thermal (water heating) products in domestic markets.
As at December 31, 2019, the Tata Group owned a 36.21% stake in the Issuer, including a 34.26% stake held by Tata Sons and 1.95% by other Tata Group companies.
DETAILS OF BRANCHES OR UNITS OF THE ISSUER
(a) Thermal Power Stations:
(i) Trombay Generating Station, Mahul Road, Chembur, Mumbai, Maharashtra
(ii) Jojobera Power Plant, Jojobera, Jamshedpur, Jharkhand (iii) Belgaum Power Plant, Plot Nos.1234 to 1240 & 1263 to 1297, KIADB Kanbargi Industrial Area, Auto Nagar, Belgaum, Karnataka (iv) Haldia Power Plant, HFC Complex, Patikhali Haldia, East Medinipur, West Bengal
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(b) Hydro Generating Stations:
(i) Generating Station, Bhira, P O Bhira, Taluka Mangaon, District Raigad, Maharashtra
(ii) Generating Station, Bhivpuri, P O Bhivpuri Camp, Taluka Karjat, District Raigad, Maharashtra (iii) Generating Station, Khopoli, P O Khopoli Power House, District Raigad, Maharashtra
(c) Wind Farms:
(i) Village Shahjahanpur & Pimpalgaon, Taluka Parner, District Ahmednagar, Maharashtra
(ii) Village Khandke, Taluka & District Ahmednagar, Maharashtra
(iii) Village Valve, Taluka Sakri, District Dhulia, Maharashtra
(iv) Jamjodhpur, Sadodar, Motapanch Devda, Samana, District Jamnagar, Gujarat
(v) Hosur, Kanavi, Mulgund, Shiroland Harti, District Gadag, Karnataka
(vi) Village Sadawagapur Taluka Patan, District Satara, Maharashtra
(vii) Village Anikaduvu, Mongilphuluvu, Illupunagaram, Taluka Madathukulam, District Tripur, Tamil Nadu
(viii) Village Kannarwadi, Hiwarwadi & Agaswadi, Taluka Khatav, District Satara,
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Maharashtra
(ix) Village Sawarghar and Niwade, Taluka Patan, District Satara, Maharashtra
(d) Solar Plants:
(i) Mulshi (Khurd), Post Male, Taluka Mulshi, District Pune, Maharashtra
(e) Transmission Division:
Shil Road, Netivli, Kalyan, District Thane, Maharashtra
(f) Distribution Division:
Senapati Bapat Marg, Lower Parel, Mumbai
(g) Strategic Engineering Division:
42/43 Electronic City, Electronic City Post Office, Hosur Road, Bengaluru
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KEY OPERATIONAL AND FINANCIAL PARAMETERS OF THE ISSUER
31.03.2017 31.03.2018 31.03.2019 31.03.2020 30.09.2020 Financial Parameters (Rs. Cr) (Rs. Cr) (Rs. Cr) (Rs. Cr)
CONSOLIDATED Total Debt 48,815 48,589 48,507 48,376 44,495 of which -Non Current Maturities of Long-Term 32,695 32,737 25,143 22,356 31,139 Borrowing -Short Term Borrowing 16,280 18,827 13,875 11,844 7,746 -Current Maturities of Long-Term 3,836 4,012 7,393 7,406 3,492 Borrowing -Secured Loans 22,800 20,693 23,379 24,661 23,507 -Unsecured Loans 26,016 27,896 25,128 23,715 20.988 Net Fixed Assets - Property, Plant and 44,663 4,5785 41,404 41,432 41,102 Equipment - Other Intangible Asset 1,706 1,583 1,562 1,362 1,314 Goodwill on Consolidation 1,654 1,642 1,642 1,642 1,668 Non-Current Assets (excluding Net Fixed 18,327 19,306 16,578 16,679 18,332 Assets and Goodwill in Consolidation) Cash & Cash Equivalents 835 1,061 645 1,862 3,838 Current Investments (excluding Cash & 700 1,446 1,098 436 167 Cash Equivalent) Current Assets (excluding Cash & Cash 9,460 9,467 8,855 8,094 9,412 Equivalent and Current Investments) Current Liabilities (excluding Short Term 10,841 13,353 Borrowing and Current Maturity of Long - 11,118 10,287 10,297 Term Borrowing) Net Sales 27,658 26,863 29,889 29,136 8,290 EBITDA 7,191 7,850 8,040 9,495 2,276 EBIT 5,235 5,504 5,647 6,862 1,773 Interest 3,218 3,761 4,170 4,494 1,065 PAT 1,579 2,611 2,440 1,316 371 Dividend Amounts 5 19 15 424
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31.03.201 31.03.201 31.03.201 31.09.202 31.03.202 Financial Parameters 7 8 9 0 0 (Rs. Cr) (Rs. Cr) (Rs. Cr) (Rs. Cr) STANDALONE Total Debt 16,504 16,571 17,453 17,802 17,724 of which -Non Current Maturities of Long-Term 11,199 8,848 8,124 8,750 9,825 Borrowing -Short Term Borrowing 2,392 4,326 6,732 6,212 4,698 -Current Maturities of Long-Term 1,828 5,264 4,121 1,971 1,764 Borrowing -Secured Loans 6,090 5,752 6,042 5,757 6,332 -Unsecured Loans 10,414 10,820 11,411 12,044 11,393 Net Fixed Assets - Property, Plant and 7,928 8,358 7,874 7,546 7,974 Equipment - Other Intangible Asset 190 93 84 62.22 51.23 Non-Current Assets (excluding Net Fixed 24,121 26,061 20,866 23,479 23,693 Assets) Cash & Cash Equivalents 142 43 76 158.54 333.51 Current Investments (excluding Cash & 965 130 10 42 20 Cash Equivalent) Current Assets (excluding Cash & Cash 3,501 3,171 2,560 3,102 2,811 Equivalent and Current Investments) Current Liabilities (excluding Short Term 2,660 Borrowing and Current Maturity of Long 3,686 3,349 2,998 2,574 Term Borrowing) Net Sales 7,764 8,230 8,204 7,726 1,550 EBITDA 3,090 3,287 2,891 2,547 1446 EBIT 2,485 2,624 2,259 1,861 397 Interest 1,319 1,431 1,500 1510.38 387 145 PAT 398 -3,151 1,709 148 Dividend Amounts 651 748 384 352 419 Net worth (Rs. Crores) - Equity Share Capital 271 271 271 271 320 - Unsecured Perpetual 1,500 1,500 1,500 1,500 1,500 Securities - Other Equity 16,321 12,718 13,919 13,491 15,746 Net Worth 18,092 14,489 15,690 15,262 17,565 Current Ratio 0.22 0.28 0.28 0.52 Interest Coverage Ratio - With Exceptional Item 1.40 (1.31) 2.13 0.94 1.34 - Without Exceptional Item 1.89 1.77 1.37 1.14 1.34
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Debt/Equity Ratio 0.91 1.14 1.11 1.17 1.05 Debt Service Coverage Ratio - With Exceptional Item 1.23 (0.37) 1.00 0.62 0.80 - Without Exceptional Item 1.55 1.00 0.70 0.71 0.80 Note: Audited Cash flows for the last three financial years have been added as an attachment in Annexure H.
MATERIAL AGREEMENTS/ DOCUMENTS
A statement containing particulars of the dates of, and parties to all material contracts and agreements involving financial obligations of the Issuer is set out below. The following are the material documents and agreements:
1. Certified copy of the Memorandum and Articles of Association of the Issuer;
2. Certified true copy of resolution of the Board of Directors dated 29 October 2018 authorising (a) the Issue, and (b) the Committee of Directors (“COD”) to take all steps and to settle the terms and conditions of the such debentures and to approve allotment of the Debentures, attached as Annexure B to this Information Memorandum;
3. Certified true copy of the resolution dated November 19, 2020 of the COD authorising certain officials of the Issuer named therein to appoint intermediaries, execute all documents and do all such acts, deeds, matters and things in relation to the Issue, attached as Annexure C to this Information Memorandum;
4. Certified true copy of resolution of the shareholders of the Issuer dated 13 August 2014 passed in accordance with Section 180(1)(c) of the Companies Act specifying the borrowing limit for the Issuer;
5. Credit rating letter dated ______, 2020 from CRISIL assigning rating for the Issue pursuant to this Information Memorandum attached as Annexure E to this Information Memorandum;
6. Consent letter from the Debenture Trustee issued on November 20, 2020 attached as Annexure F to this Information Memorandum;
7. Consent letter from the Registrar to the Issue attached as Annexure L dated November 19, 2020;
8. Debenture Trustee Agreement between the Debenture Trustee and Issuer;
9. Tripartite Agreement between NSDL, Registrar and Issuer dated September 9, 1998 for dematerialisation securities of the Issuer;
10. Tripartite Agreement between CDSL, Registrar and Issuer October 8, 1999 for dematerialisation securities of the Issuer;
11. Listing agreement between the BSE and the Issuer.
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FINANCIAL INFORMATION OF THE ISSUER
A. Abridged version of audited consolidated and standalone financial statements (profit and loss statement, balance sheet and cash flow statement) of the Issuer for each of the years ended March 31, 2020, 2019, 2018 and 2017 and auditor’s qualifications, if any.
Attached as Annexure H and Annexure K to this Information Memorandum.
B. Abridged version of the latest audited/ limited review yearly consolidated and standalone financial statements (profit and loss statement, and balance sheet) of the Issuer and auditor’s qualifications, if any
Attached as Annexure H and Annexure K to this Information Memorandum.
C. Any change in the accounting policies during the last three years and their effect on the profits and reserves of the Issuer
Consolidated Accounts (includes Standalone) for FY 2019-20
(a) Application of Ind AS 116
The Group has applied Ind AS 116 ‘Leases” (Ind AS 116) using modified retrospective approach, under which the cumulative effect of initial application is recognized as at 1st April, 2019. On adoption of Ind AS 116, the Group has recognized ‘Right-of-use’ assets amounting to ₹ 3,786 crore (including reclassification of lease prepayment from other assets amounting to ₹ 341 crore) and ‘Lease liabilities’ amounting to ₹ 3,469 crore (including reclassification of lease liability from trade payables amounting to ₹ 24 crore) as at 1st April, 2019. There is no impact on retained earnings as at 1st April, 2019. Had the Group continued to apply previous lease accounting standard, following would have been the impact on current period/year financial results:
(₹ Crore) Particulars Quarter ended Year ended
31-Mar-20 31-Mar-20
Finance Cost – Increase / (Decrease) (81.32) (308.73)
Depreciation and Amortisation Expenses – Increase / (Decrease) (52.82) (190.09)
Other Expense – Increase / (Decrease) 94.67 383.11
Profit Before Tax – Increase / (Decrease) 39.47 115.71
(b) Accounting of Deffered Tax
In the regulated operations of the Group where tariff recovered from consumers is determined on cost plus return on equity, the Income tax cost is pass through cost and accordingly the Group recognizes Deferred tax recoverable / payable against any Deferred tax expense / income. Until previous year, the same was presented under ‘Tax Expenses’ in the financial results. During the period, pursuant to an opinion by the Expert Advisory Committee of The Institute of Chartered Accountants of India, the same has now been included in ‘Revenue from Operations’ in case of Generation and Transmission business and disclosed as ‘Deferred Tax Recoverable / (Payable)’ in case of Distribution business.
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There is no impact in the Other equity and Profit / (Loss) on account of such change in presentation. Impact of this restatement in the comparative period is as follows: (₹ Crore) Particulars Quarter ended Year ended
31-Mar-19 31-Mar-19
Revenue from Operations – Increase / (Decrease) (0.39) 322.50
Movement in Net Regulatory Deferral Balances - Income / (Expense) 22.78 169.11
Tax (expense) / credit (22.39) (491.61)
Basic and diluted EPS from continuing operations before movement in regulatory deferral balances – Increase / (Decrease) (0.04) (0.40)
Consolidated Accounts (includes Standalone) for FY 2018-19
(a) Revenue from delay payment charges
Delayed payment charges were hitherto recognized only when they are realised/recovered. With effect from 1st April, 2018, the Group has revised its accounting policy to recognize Delayed Payment Charges (DPC) on accrual basis based on contractual terms and an assessment of certainty of realization. Management believes that this policy results in the financial statements providing reliable and more relevant information about the effects of transaction on the Group’s financial position and performance. The revision in accounting policy has been applied retrospectively has resulted in increase in other income and profit before tax by ₹ 58.64 crore, current tax by ₹ 20.39 crore, profit after tax by ₹ 39.25 crore for the year ended 31st March, 2019 and does not have any significant impact on previous year’s statement of profit and loss and retained earnings as at 1st April, 2017.
New and amended standards and interpretations
The Group applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2018. The nature and the impact of each amendment is described below:
(b) Ind AS 20 Accounting for Government Grants and Disclosure
In accordance with the amendment in Ind AS 20 “Accounting for Government Grants and Disclosure” the Group has changed its accounting policy of recognizing the grant as a reduction from the carrying amount of the asset instead of recognizing the grant as deferred income. Management believes that this policy results in the financial statements providing reliable and more relevant information about the effects of transaction on the Group’s financial position and performance. The revision in accounting policy has been applied retrospectively. Refer Note 43 for restatement.
(c) Ind AS 115 Revenue from Contracts with Customers
Ind AS 115 supersedes Ind AS 11 Construction Contracts, Ind AS 18 Revenue and related interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. Ind AS 115 establishes a five-step model to account for revenue arising from contracts with customers and requires that revenue be recognised at an amount that reflects the
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The Group adopted Ind AS 115 using the full retrospective method of adoption. Ind AS 115 requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, the standard requires relevant disclosures.
Refer Note 43 for restatement.
Consolidated Accounts (includes Standalone) for FY 2017-18
New and amended standards and interpretations
The Group applied for the first time certain amendments to the standards, which are effective for annual periods beginning on or after 1st April, 2017. The nature and the impact of each amendment is described below:
Amendments to Ind AS 7 Statement of Cash Flows: Disclosure Initiative
The amendments require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Group has provided the information for the current period.
Consolidated Accounts (includes Standalone) for FY 2016-17
The Parent Company has changed the method of providing depreciation on Tangible Fixed Assets at its Strategic Engineering Division. Depreciation which was hitherto provided on written down value method is now provided on straight line method based on the useful life provided in Schedule II to the Companies Act, 2013. As a result of the change, the charge on account of depreciation for the year ended 31st March, 2015 is lower by Rs. 18.46 crore (including write back of depreciation of Rs. 22.86 crore upto 31st March, 2014)
Pursuant to the enactment of the Companies Act, 2013 (the 'Act'), the Group has, effective 1st April 2014, reviewed and revised the estimated useful life of certain fixed assets, generally in accordance with the provisions of Schedule II of the Act. Further, depreciation in respect of certain power plants which were hitherto charged on a straight line method at rates provided in the power purchase agreements is from 1st April, 2014, charged on straight line method over the balance useful life using the methodology as notified by the Central Electricity Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014. The consequential impact (after considering the transitional provision specified in Schedule II) on the depreciation charged and on the results for year ended 31st March, 2015 is lower by Rs. 438.18 crore.
In earlier years, the deferred tax liability on timing difference relating to depreciation in respect of the above referred power plants was not recognised since the timing difference was expected to reverse during the tax holiday period in accordance with the Accounting Standard-22 (AS- 22) - "Accounting for Taxes on Income". As a result of the change in depreciation as above, the Group has, during the year ended 31st March, 2015, recognised deferred tax liability of Rs. 126.64 crore in respect of the timing difference which is now expected to reverse after the tax holiday period
The Parent Company had, during the previous year ended 31st March, 2014, changed its accounting policy in respect of Tangible Assets at its Strategic Engineering Division. These
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Tangible Assets which were hitherto carried at cost have been revalued as at 1st April, 2013. The revaluation is based on a valuation made by an independent valuer using the Depreciated Replacement Cost Method. Accordingly, the gross book value of such assets and the accumulated depreciation as at 1st April, 2013 had increased by Rs. 234.98 crore and Rs. 7.59 crore respectively and Rs. 227.39 crore had been credited to the Revaluation Reserve
In an earlier year, in line with the Notification dated 29th December, 2011 issued by the Ministry of Corporate Affairs (MCA), the Group had selected the option given in paragraph 46A of the Accounting Standard-11 (AS-11) - “The Effects of Changes in Foreign Exchange Rates”. Accordingly, the depreciated/amortised portion of net foreign exchange (gain)/loss on long-term foreign currency monetary items for the year ended 31st March, 2015 is Rs. 211.48 crore (31st March, 2014 - Rs. 227.73 crore). The unamortised portion carried forward as at 31st March, 2015 is Rs. 1,785.58 crore (31st March, 2014 - Rs. 1,645.08 crore).
D. Summary of reservations or qualifications or adverse remarks of auditors in the last five financial years immediately preceding the year of circulation of offer letter and of their impact on the financial statements and financial position of the Issuer and the corrective steps taken and proposed to be taken by the Issuer for each of the said reservations or qualifications or adverse remark.
Key Audit Matters for FY 2019-2020
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2020. These matters were addressed in the context of our audit of the consolidated Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements. The results of audit procedures performed by us and by other auditors of components not audited by us, as reported by them in their audit reports furnished to us by the management, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements.
Key audit matters How our audit addressed the key audit matter Accrual of Regulatory Deferrals (as described in note 18 of the financial statements)
In the regulated generation, transmission and Our audit procedures and procedures performed by distribution business of the Group, the tariff is component auditors, amongst others, included the determined by the regulator on cost plus return on following: equity basis wherein the cost is subject to prudential norms. The Group invoices its customers on the basis • Considered the Group's accounting policies with of pre-approved tariff which is based on budget and is respect to accrual of regulatory deferrals and assessing subject to true up. The Group recognizes revenue on compliance with Ind AS 114 “Regulatory Deferral the basis of tariff invoiced to customers. As the Group Accounts” and Ind AS 115 “Revenue from Contract is entitled to a fixed return on equity, the Group with Customers”. recognizes accrual for the shortage / excess compared • Performed test of controls over revenue recognition to the entitled return on equity. The Group has recognized ` 1,027.12 crore for generation and and accrual of regulatory deferrals through inspection transmission business and ` 5,480.17 crore for of evidence of performance of these controls. distribution business as accruals as at March 31, 2020. • Performed the tests of details including the following Accruals are determined based on tariff regulations key procedures: and past tariff orders and are subject to verification and
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approval by the regulators. Further the costs incurred • Evaluated the key assumptions used by the Group by are subject to prudential checks and prescribed norms. comparing it with prior years, past precedents and the Significant judgements are made in determining the accruals including interpretation of tariff regulations. opinion of management’s expert. Further certain disallowances of claims have been • Considered the independence, objectivity and litigated by the Group before higher authorities. In the competence of management’s expert. renewables business of the Group, certain customers • For tariff orders received by the Group, assessed the have raised dispute with respect to the tariff as per the impact recognized by the Group and for matters executed power purchase agreement (‘PPA’) and are making part payment of invoices. Pending outcome of litigated by the Group, also assessed the management’s litigation, the Group continues to recognize revenue at evaluation of the likely outcome of the dispute based on PPA rate. Revenue recognition and accrual of past precedents and/or advice of management’s expert. regulatory deferrals is a key audit matter considering • Assessed the disclosures in accordance with the the significance of the amount and significant requirements of Ind AS 114 “Regulatory Deferral judgements involved in the determination.. Accounts” and Ind AS 115 “Revenue from Contract with Customers” Recognition and measurement of deferred tax (as described in Note 12 and 33 of the consolidated Ind AS financial statements)
The Group has recognized Minimum Alternate Tax Our audit procedures and procedures performed by (MAT) credit receivable of ` 1,250.49 crore as at March component auditors, amongst others, included the 31, 2020. The Group also has recognized deferred tax following: assets of ` 297.97 crore on long term capital loss on sale • Considered Group’s accounting policies with respect of investments. Further, pursuant to the Taxation Laws to recognition and measurement of tax balances in (Amendment) Act, 2019 (new tax regime), the Group accordance with Ind AS 12 “Income Taxes” has remeasured its deferred tax balances expected to • Performed test of controls over recognition and reverse after the likely transition to new tax regime, at measurement of tax balances through inspection of the rate specified in the new tax regime and has evidence of performance of these controls. recognized a net gain of ` 159.25 crore. The recognition and measurement of MAT credit receivable and • Performed the tests of details including the following deferred tax balances; is a key audit matter as the key procedures: recoverability of such credits within the allowed time • Involved tax specialists who evaluated the Group’s frame in the manner prescribed under tax regulations tax positions basis the tax law and also by comparing and estimation of year of transition to the new tax it with prior years and past precedents. regime involves significant estimate of the financial • Discussed the future business plans and financial projections, availability of sufficient taxable income in projections with the management. the future and significant judgements in the • Assessed the management’s long-term financial interpretation of tax regulations and tax positions projections and the key assumptions used in the adopted by the Group.. projections by comparing it to the approved business plan, projections used for estimation of likely year of transition to the new tax regime and projections used for impairment assessment where applicable. • Assessed the disclosures in accordance with the requirements of Ind AS 12 “Income Taxes”
Impairment of Assets (as described in note 4,5 and 6 of the Consolidated Ind AS financial statements)
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As per the requirements of Ind AS 36 "Impairment of Our audit procedures and procedures performed by Assets", the Group tests the Goodwill acquired in component auditors, amongst others, included the business combination for impairment annually. For following: other assets, the Group assesses at the end of every • Considered the Group's accounting policies with reporting period, whether there is any indication that an respect to impairment in accordance with Ind AS 36 asset or cash generating unit (CGU) may be impaired. “Impairment of assets” If any such indication exists, the Group estimates the • Performed test of controls over impairment process recoverable amount of the asset or CGU. The through inspection of evidence of performance of determination of recoverable amount, being the higher these controls. of fair value less costs to sell and value-in-use involves significant estimates, assumptions and judgements of • Performed the tests of details including the following the long-term financial projections. The Group is key procedures: carrying Goodwill of ` 1,641.57 crore relating to • Obtained the management’s impairment assessment. acquisition of renewable energy businesses. The Group • Evaluated the key assumptions including projected is also carrying impairment provision amounting to ` generation, coal prices, exchange rate, energy prices 1,119.77 crore with respect to Mundra CGU post power purchase agreement period and weighted (comprising of investment in companies owning average cost of capital by comparing them with prior Mundra power plant, coal mines and related years and external data, where available. • Obtained infrastructure), ` 221.86 crore for investment in and evaluated the sensitivity analysis. company owning hydro power plant in Georgia and ` • Assessed the disclosures in accordance with Ind AS 100.00 crore with respect to a generating unit in 36 “Impairment of assets”. Trombay. During the year, as the indication exists, the Group has reassessed its impairment assessment with respect to the specified CGUs. Impairment of assets is a key audit matter considering the significance of the carrying value, long term estimation and the significant judgements involved in the impairment assessment.
Going concern assessment (as described in Note 40.4.3 of the consolidated Ind AS financial statements)
The Group has current liabilities of ` 26,521.43 crore Our procedures, amongst others, included the and current assets of ` 12,021.48 crore as at March 31, following: 2020. Current liabilities exceeds current assets as at the year end. Given the nature of its business i.e. contracted • Obtained an understanding of the process and tested long term power supply agreements and a significant the internal controls associated with the composition of cost plus contracts leading to management’s assessment of Going Concern significant stability of cashflows and profitability, assumption. management is confident of refinancing and consider the liquidity risk as low and accordingly, the Group • Discussed with management and assessed the uses significant short term borrowings to reduce its assumptions, judgements and estimates used in borrowing costs. Management has made an assessment assessment having regards to past performance and of the Group’s ability to continue as a Going Concern current emerging business trends affecting the as required by Ind AS 1 "Presentation of Financial business and industry. Statements" considering all the available information and has concluded that the going concern basis of • Assessed the Group’s ability to refinance its accounting is appropriate. Going Concern assessment obligation based on the past trends, credit ratings, has been identified as a key audit matter considering the significant judgements and estimates involved in ability to generate cash flows and access to capital. the assessment and its dependence upon management’s • Assessed the adequacy of the disclosures in the ability to complete the planned divestments, raising long term capital and/or successful refinancing of consolidated Ind AS financial statements. certain current financial obligations.
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Other Matters for FY 2019-2020 (a) We did not audit the financial statements and other financial information, in respect of 12 subsidiaries, whose Ind AS financial statements include total assets of ` 11,246.33 crore as at March 31, 2020, and total revenues of ` 8,731.09 crore and net cash outflows of ` 7.58 crore for the year ended on that date. These Ind AS financial statements and other financial information have been audited by other auditors, whose financial statements, other financial information and auditor’s reports have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ` 670.90 crore for the year ended March 31, 2020, as considered in the consolidated Ind AS financial statements, in respect of 6 associates and joint ventures, whose financial statements, other financial information have been audited by other auditors and whose reports have been furnished to us by the Management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on the reports of such other auditors.
Certain of these subsidiaries, associates and joint ventures are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company’s management has converted the financial statements of such subsidiaries, associates and joint ventures located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India.
We have audited these conversion adjustments made by the Holding Company’s management. Our opinion in so far as it relates to the balances and affairs of such subsidiaries, associates and joint ventures located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and audited by us.
(b) The accompanying consolidated Ind AS financial statements include unaudited financial statements and other unaudited financial information in respect of 1 subsidiary, whose financial statements and other financial information reflect total assets of ` 50.02 crore as at March 31, 2020, and total revenues of Nil and net cash outflows of ` 0.44 crore for the year ended on that date. These unaudited financial statements and other unaudited financial information have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ` 14.98 crore for the year ended March 31, 2020, as considered in the consolidated Ind AS financial statements, in respect of 13 associates and joint ventures, whose financial statements, other financial information have not been audited and whose unaudited financial statements, other unaudited financial information have been furnished to us by the Management. Our opinion, in so far as it relates amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub- sections (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on such unaudited financial statements and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Group.
Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management.
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Key Audit Matters for FY 2018-19
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated Ind AS financial statements for the financial year ended March 31, 2019. These matters were addressed in the context of our audit of the consolidated Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the consolidated Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the consolidated Ind AS financial statements. The results of audit procedures performed by us and by other auditors of components not audited by us, as reported by them in their audit reports furnished to us by the management, including those procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated Ind AS financial statements.
Key audit matters How our audit addressed the key audit matter Accrual of Regulatory Deferrals (as described in note 18 of the financial statements)
In the power distribution business of the Group, the Our audit procedures included considering the tariff is determined by the regulator on cost plus return Group’s accounting policies with respect to accrual on equity basis wherein the cost is subject to prudential of regulatory deferrals and assessing compliance norms. The Group invoices its customers on the basis with Ind AS 114 “Regulatory Deferral Accounts”. of pre-approved tariff which is based on budget and is We performed test of controls over accrual of subject to true ups to be adjusted in the future tariff. regulatory deferrals through inspection of evidence of performance of these controls. The Group recognizes revenue on the basis of tariff invoiced to consumers. As the Group is entitled to a We performed the following tests of details: fixed return on equity, the Group recognizes regulatory • Evaluated the key assumptions used by the deferral for the shortage / excess compared to the Group by comparing it with prior years, past entitled return on equity. The Group has recognized precedents and the opinion of management’s regulatory deferrals of ₹ 5,758.13 crore as at March 31, expert. 2019. • Considered the independence, objectivity and Regulatory deferrals are determined based on tariff competence of management’s expert. regulations and past tariff orders and are subject to • For tariff orders received by the Group, we verification and approval by the regulators. Further the have assessed the impact recognized by the costs incurred are subject to prudential checks and Group and for matters challenged by the prescribed norms. Significant judgements are made in Group, we have also assessed the determining the regulatory deferrals including management’s evaluation of the likely outcome interpretation of tariff regulations. Further certain of the dispute based on past precedents and/ or disallowances of claims have been challenged by the advice of management’s expert. Group before higher authorities. We have assessed the disclosures in accordance with the requirements of Ind AS 114 “Regulatory Accrual of regulatory deferrals is a key audit matter Deferral Accounts”. considering the significance of the amount of regulatory deferrals and the significant judgements involved in the determination of accruals.
Recognition of tax credits (as described in note 12 of the financial statements)
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The Group has recognized Minimum Alternate Tax Our audit procedures included considering the (MAT) credit receivable of ₹ 1,469.56 crore and Group’s accounting policies with respect to unrecognized MAT credit receivable of ₹ 276.87 crore recognition of tax credits in accordance with Ind as at 31st March 2019. The Group also has AS 12 “Income Taxes”. unrecognized other deferred tax assets of ₹ 2,926.07 We performed test of controls over recognition of crore on operating losses incurred by certain tax credits through inspection of evidence of subsidiaries and unrecognized other deferred tax assets performance of these controls. of ₹ 309.73 crore on provision for diminution in value We performed the following tests of details: of investment classified as asset held for sale. • We involved our tax specialists who evaluated The recognition of MAT credit and deferred tax assets the Group’s tax positions by comparing it with (together referred to as “tax credits” hereinafter) is a prior years and past precedents. key audit matter as the recoverability of such tax credits • We discussed the future business plans and within the allowed time frame involves significant financial projections with the Company. estimate of the financial projections, availability of • We assessed the management’s long term sufficient taxable income in the future and significant financial projections and the key assumptions judgements in the interpretation of tax regulations and used in the projections by comparing it to the tax positions adopted by the Group. approved business plan and projections used for impairment assessment where applicable. We have assessed the disclosures in accordance with the requirements of Ind AS 12 “Income Taxes”. Impairment of Assets (as described in note 4,5 and 6 of the financial statements)
As per the requirements of Ind AS 36, the Group tests • Our audit procedures included considering the the Goodwill acquired in business combination for Group’s accounting policies with respect to impairment annually. For other assets, the Company impairment in accordance with Ind AS 36 assesses at the end of every reporting period, whether “Impairment of assets”. there is any indication that an asset or cash generating • We performed test of controls over impairment unit (CGU) may be impaired. If any such indication process through inspection of evidence of exists, the Group estimates the recoverable amount of performance of these controls. the asset or CGU. • We performed the following tests of details: The determination of recoverable amount, being the • We obtained the management’s impairment higher of fair value less costs to sell and value-in-use assessment. involves significant estimates, assumptions and • We evaluated the key assumptions including judgements of the long term financial projections. projected generation, coal prices, exchange rate, energy prices post power purchase During the earlier years, the Group has recognized agreement period and weighted average cost impairment provision with respect to Mundra CGU of capital by comparing them with prior years (including coal mines and related infrastructure), hydro and external data, where available. power plant in Georgia and a generating unit in Trombay. During the year, as the indication exists, the • We have obtained and evaluated the Group has reassessed its impairment assessment with sensitivity analysis. respect to the specified CGUs. The Group is also • We assessed the disclosures in accordance with carrying a Goodwill of ₹1,641.57 crore relating to the Ind AS 36 “Impairment of assets”. acquisition of renewable energy businesses.
Impairment of assets and goodwill is a key audit matter considering the significance of the carrying value, long term estimation and the significant judgements involved in the impairment assessment.
Key audit matters How our audit addressed the key audit matter
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Related Party Transactions (as described in note 17 and 38 of the financial statements)
During the year, the Group has sold its investments in • Our audit procedures included considering the shares of Tata Communications Limited and Panatone compliance with the various requirements for Finvest Limited to Tata Sons Private Limited for a total entering in to such related party transactions. consideration of ₹ 1,542.61 crore and ₹ 613.49 crore • We performed test of controls over related party respectively. transactions through inspection of evidence of performance of these controls. Further, during the previous year, the Board of Directors of the Holding Company had approved sale • We performed the following tests of details: of its Strategic Engineering Division (SED) to Tata • We have read the valuation reports and Advanced Systems Limited, a wholly owned fairness opinion obtained from independent subsidiary of Tata Sons Private Limited at an enterprise valuers and assessed the objectivity and valuation of ₹2,230 crore (including ₹1,190 crore competence of the independent valuers. contingent upon achieving certain milestones). The • We have read the approvals obtained from transaction is subject to regulatory and necessary Audit Committee, Board of Directors, approvals. Shareholders and all other regulatory approvals for the transactions. Determination of transaction price for such related • We have assessed the disclosures in accordance party transactions outside the normal course of business with Ind AS 24 “Related Party Disclosures”. is a key audit matter considering the significance of the transaction value and the significant judgements involved in determining the transaction value.
Other Matter
(a) We did not audit the financial statements and other financial information, in respect of twelve subsidiaries, whose Ind AS financial statements include total assets of ₹ 10,336.49 crore as at March 31, 2019 and total revenues of ₹ 9,021.54 crore and net cash outflows of ₹ 91.74 crore for the year ended on that date. These Ind AS financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditor’s reports have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ₹ 1,038.12 crore for the year ended March 31, 2019, as considered in the consolidated Ind AS financial statements, in respect of seven associates and joint ventures, whose financial statements, other financial information have been audited by other auditors and whose reports have been furnished to us by the Management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on the report of such other auditors.
(b) The comparative Ind AS financial information of the Company for the corresponding year as at April 1, 2017 included in the financial statements, were audited by the predecessor auditor whose report for the year ended March 31, 2017 dated 19th May, 2017 expressed a modified opinion on those financial statements. The comparative financial information is based on the previous consolidated financial statements prepared in accordance with the recognition and measurement principles of the Accounting Standards specified under section 133 of the Companies Act, 2013, read with relevant rules issued thereunder and other accounting principles generally accepted in India, and is adjusted for the differences as explained in note 43 of the financial statements, which have been audited by us.
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(c) The accompanying consolidated Ind AS financial statements include unaudited financial statements and other unaudited financial information in respect of one subsidiary, whose financial statements and other financial information reflect total assets of ₹ 52.07 crore as at March 31, 2019 and total revenues of ₹ Nil and net cash inflows of ₹ 22.86 crore for the year ended on that date. These unaudited financial statements and other unaudited financial information have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ₹ 20.08 crore for the year ended March 31, 2019, as considered in the consolidated Ind AS financial statements, in respect of twelve associates and joint ventures, whose financial statements, other financial information have not been audited and whose unaudited financial statements, other unaudited financial information have been furnished to us by the Management. Our opinion, in so far as it relates amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub- sections (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on such unaudited financial statement and other unaudited financial information. In our opinion and according to the information and explanations given to us by the Management, these financial statements and other financial information are not material to the Group.
Our opinion above on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management.
Other Matters for FY 2017-18
(a) We did not audit the financial statements and other financial information, in respect of twelve subsidiaries, whose financial statements include total assets of ₹ 10,102.51 crore and net assets of ₹ 2,997.32 crore as at 31st March, 2018, and total revenues of ₹ 7,950.86 crore and net cash inflows of ₹ 22.88 crore for the year ended on that date. These financial statement and other financial information have been audited by other auditors, which financial statements, other financial information and auditor’s reports have been furnished to us by the Management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ₹ 1,454.63 crore for the year ended 31st March, 2018, as considered in the consolidated Ind AS financial statements, in respect of eleven associates and joint ventures, whose financial statements, other financial information have been audited by other auditors and whose reports have been furnished to us by the Management. Our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on the report(s) of such other auditors.
(b) The accompanying consolidated Ind AS financial statements include unaudited financial statements and other unaudited financial information in respect of two subsidiaries, whose financial statements and other financial information reflect total assets of ₹ 38.90 crore and net asset of ₹ (2.11) crore as at 31st March, 2018, and total revenues of ₹ 35.98 crore and net cash outflow of ₹ 0.25 crore for the year ended on that date. These unaudited financial statements and other unaudited financial information have been furnished to us by the management. The consolidated Ind AS financial statements also include the Group’s share of net profit of ₹ 14.28 crore for the year ended 31st March, 2018, as considered in the consolidated Ind AS financial statements, in respect of eleven associates and joint ventures, whose financial statements, other financial information have not been audited and whose unaudited financial statements, other unaudited financial information have been furnished to us by the management. Our opinion, in so
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far as it relates amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act in so far as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on such unaudited financial statement and other unaudited financial information. In our opinion and according to the information and explanations given to us, these financial statements and other financial information are not material to the Group.
(c) The consolidated Ind AS financial statements of the Company for the year ended 31st March, 2017, included in these consolidated Ind AS financial statements, have been audited by the predecessor auditor who expressed modified opinion on those statements on 19th May, 2017.
(d) We audited the adjustments, as fully described in Note 43 to the consolidated Ind AS financial statements, which have been made to the comparative consolidated Ind AS financial statements presented for the year prior to year ended 31st March, 2018. In our opinion, such adjustments are appropriate and have been properly applied.
Our opinion above on the consolidated Ind AS financial statements and our report on Other Legal and Regulatory Requirements below are not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial statements and other financial information certified by the Management.
Basis for Qualified Opinion for FY 2016-17
As described in Note 34 (iii) and (iv) to the consolidated Ind AS financial statements, the fair value of unquoted equity shares of Tata Teleservices Limited (TTSL) has not been determined as at 31st March, 2017. We are, therefore, unable to comment on whether the carrying value of:
(a) Investments in TTSL of Rs. 384.88 crore represents the fair value of such investments as at 31st March, 2017 and the consequent impact thereof on Other Comprehensive Income, and (b) ‘Other advance’, which represent TTSL shares receivable from DoCoMo under a contractual obligation of ` 138.55 crore as at 31st March, 2017 represents the fair value of such shares and the consequent impact thereof on the Statement of Profit and Loss. Emphasis of Matter in Auditor’s Report on the Consolidated Accounts (includes Standalone) for FY 2016-17
Auditors draw attention to the following matters in the notes to the Consolidated Ind AS financial statements:
(a) Note 36(e) to the consolidated Ind AS financial statements which describes uncertainties relating to the outcome of the Appeal filed before the Hon’ble Supreme Court. Pending outcome of the Appeal filed before the Hon’ble Supreme Court, no adjustment has been made by the Group in respect of the standby charges estimated at Rs. 519 crore accounted for as revenue in earlier periods and its consequential effects for the period upto 31st March, 2017. The impact of the same on the consolidated Ind AS financial statements for the year ended 31st March, 2017 cannot presently be determined pending the ultimate outcome of the matter. Since the Group is of the view, supported by legal opinion, that the Tribunal’s Order can be successfully challenged, adjustment, if any, will be recorded by the Group based on final outcome of the matter. (b) Note 36(g) to the consolidated Ind AS financial statements in respect of entry tax matter, estimated at Rs. 1,967.43 crore (including interest of Rs. 643.99 crore and penalty of Rs. 740.89 crore), has been decided by the Hon’ble Bombay High Court
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against the Group. The Group is of the view, supported by legal opinions, that it has a strong case on merits and has appealed the matter before the Hon’ble Supreme Court. Adjustments, if any, will be recorded by the Group based on final outcome of the matter. (c) Note 34(ii)(b) to the consolidated Ind AS financial statements, which describes the uncertainties in estimation as at 31st March, 2017 relating to the determination of the carrying amount of assets at Mundra. (d) Note 36(f ) to the consolidated Ind AS financial statements, related regulatory deferral account balance of ` 591.61 crore in respect of Rithala Plant as at 31st March, 2017. Since the Group is of the view, supported by legal opinion, that the Order of the Delhi Electricity Regulatory Commission (DERC) can be successfully challenged, no adjustment are considered necessary. Auditor opinion is not modified in respect of these matters.
Other Matters:
Auditor did not audit the financial statements/financial information of 11 subsidiaries, whose financial statements/financial information reflect total assets of Rs. 24,058.40 crore as at 31st March, 2017, total revenues of Rs. 7,400.96 crore and net cash inflows amounting to Rs. 73.75 crore for the year ended on that date, as considered in the consolidated Ind AS financial statements. The consolidated Ind AS financial statements also include the Group’s share of net profit of Rs. 1,005.86 crore for the year ended 31st March, 2017, as considered in the consolidated Ind AS financial statements, in respect of 2 associates and 10 joint ventures, whose financial statements/financial information have not been audited by us. These financial statements/financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, and our report in terms of subsection (3) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiaries, joint ventures and associates, is based solely on the reports of the other auditors.
(a) Auditor did not audit the financial information of 4 subsidiaries, whose financial information reflect total assets of Rs. 34.74 crore as at 31st March, 2017, total revenues of Rs. 45.05 crore and net cash (outflows) amounting to Rs. (0.77) crore for the year ended on that date, as considered in the consolidated Ind AS financial statements. The consolidated Ind AS financial statements also include the Group’s share of net profit of Rs. 1.86 crore for the year ended 31st March, 2017, as considered in the consolidated Ind AS financial statements, in respect of 1 associate and 10 joint ventures, whose financial information have not been audited by Auditor. These financial information are unaudited and have been furnished to auditors by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint ventures and associates, is based solely on such unaudited financial information. In auditor's opinion and according to the information and explanations given to us by the Management, this financial information are not material to the Group.
(b) The comparative financial information for the year ended 31st March, 2016 and the transition date opening balance sheet as at 1st April, 2015 in respect of 11 subsidiaries, 2 associates and 10 joint ventures included in this consolidated Ind AS financial statements prepared in accordance with the Ind AS have been audited by other auditors and have been relied upon by the auditors. Their opinion on the consolidated Ind AS financial statements above, and our report on Other
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Legal and Regulatory Requirements below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors and the financial information certified by the Management.
Emphasis of Matter in Auditor’s Report on the Consolidated Accounts (includes Standalone) for FY 2015-16
Note 35 (e) to the consolidated financial statements which describes uncertainties relating to the outcome of the Appeal filed before the Hon’ble Supreme Court. Pending outcome of the Appeal filed before the Hon’ble Supreme Court, no adjustment has been made by the Company in respect of the standby charges estimated at Rs. 519 crores accounted for as revenue in earlier periods and its consequential effects for the period upto 31st March, 2016. The impact of the same on the results for the year ended 31st March, 2016 cannot presently be determined pending the ultimate outcome of the matter. Since the Company is of the view, supported by legal opinion, that the Tribunal’s Order can be successfully challenged, adjustment, if any, including consequential adjustments to the deferred tax liability fund and the deferred tax liability account, will be recorded by the Company based on final outcome of the matter.
Note 32 (b) to the consolidated financial statements, which refers to reversal of impairment loss of Rs. 2,320 crores (net of depreciation of Rs. 330 crores) in respect of the carrying amount of assets of Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary, consequent to change in the estimates of future cash flows due to decline in forecast of coal prices.
In case of 2 jointly controlled entities of the Holding Company, the component auditors have drawn attention to matters as stated in Note 35(a) (xi) to the consolidated financial statements, regarding recoverability of Rs. 8,483.95 crores (Group’s share of Rs. 2,545.19 crores) of value added tax and vehicle fuel tax balances, and Group’s share in tax claims, and other claims from third parties on the said jointly controlled entities, the outcome of which cannot be presently determined.
In case of 1 subsidiary, the component auditor has drawn attention to a matter as stated in Note 35(h) to the consolidated financial statements, wherein no adjustment has been made by the subsidiary in respect of income estimated at Rs. 238.79 crores as at 31st March, 2016 which includes carrying cost of Rs. 25.66 crores for the year ended 31st March, 2016, respectively. The impact of the above as at 31st March, 2016 cannot presently be determined pending ultimate outcome of the matter. Since the Group is of the view, supported by legal opinion that the disallowance of expenses by the Delhi Electricity Regulatory Commission (DERC) pertaining to the Rithala plant can be successfully challenged, no adjustment has been considered necessary by the Management.
The Auditor’s report is not qualified in respect of these matters.
Qualified Opinion in Auditor’s Report on the Consolidated Accounts (includes Standalone) for FY 2014-15
Basis for Qualified Opinion
As referred to in Note 2.1(c)(viii) to the consolidated financial statements, the consolidated financial statements include the unaudited financial information of 1 jointly controlled entity, whose financial information reflect total assets (net) of Rs. 3,228.36 crores as at 31st March, 2015, total revenue of Rs.1,603.12 crores and net cash out flows amounting to Rs. 2.49 crores for the year ended on that date, as considered in the consolidated financial statements, based on their unaudited financial information. This financial information has been certified by the Management and our opinion, in so far as it relates to the amounts included in respect of this jointly controlled entity, is based solely on such Management certified financial information.
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In case of 1 jointly controlled entity, as referred to in Note 33(c) to the consolidated financial statements, the Hon’ble Supreme Court had issued an Order dated 24th September, 2014, cancelling the coal block (“coal block”) allocated to the said entity. Subsequently, Government of India has promulgated the Coal Mines (Special Provisions) Ordinance, 2014. The said entity has filed a petition with the Hon’ble Delhi High Court, disputing the amount of compensation determined including relating to purchase of leasehold land for the coal block. Pending outcome of the matter, the Group has, based on a legal opinion carried forward amounts aggregating to Rs. 66.69 crores (net of provision of Rs. 23.30 crores) as fully recoverable. Accordingly, we are unable to comment on the possible financial impact on the consolidated financial statements.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph above, 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 consolidated state of affairs of the Group and its associates as at 31st March, 2015, and their consolidated profit and their consolidated cash flows for the year ended on that date.
Emphasis of Matter in Auditor’s Report on the Consolidated Accounts (includes Standalone) for FY 2014 15
Note 35(e) and (f) to the consolidated financial statements, which describe uncertainties relating to the outcome of the Appeals filed before the Hon’ble Supreme Court. Pending outcome of the Appeals filed before the Hon’ble Supreme Court, no adjustment has been made by the Holding Company in respect of the standby charges estimated at Rs. 519 crores accounted for as revenue in earlier periods and its consequential effects. Note 35(e) and (f) for the period upto 31st March, 2015. The impact of the same on the results for the year ended 31st March, 2015 cannot presently be determined pending the ultimate outcome of the matter. Since the Holding Company is of the view, supported by legal opinion, that the Tribunal’s Order can be successfully challenged, no provision/adjustment has been considered necessary by the Management.
Note 32(b) to the consolidated financial statements, which describes the key source of estimation uncertainties relating to the assessment of the recoverability of the carrying amount of the assets aggregating to Rs. 14,657.05 crores of the subsidiary, its compliance with debt covenants and classification of long-term borrowings.
In case of 2 jointly controlled entities of the Holding Company, the component auditors have drawn attention to matters as stated in Note 35(a)(xi) to the consolidated financial statements, regarding recoverability of Rs. 7,771.36 crores (Group’s share of Rs. 2,331.41 crores) of value added tax and vehicle fuel tax balances and Group’s share in tax claims and other contingent claims from third parties on the said jointly controlled entities, the outcome of which cannot be presently determined.
In case of 1 subsidiary, the component auditor has drawn attention to a matter as stated in Note 35(h) to the consolidated financial statements, wherein no adjustment has been made by the subsidiary in respect of income estimated at Rs. 213.13 crores as at 31st March, 2015 which includes carrying cost of Rs. 28.10 crores for the year ended 31st March, 2015. The impact of the above as at 31st March, 2015 cannot presently be determined pending ultimate outcome of the matter. Since the Group is of the view, supported by legal opinion that the disallowance of expenses by the Delhi Electricity Regulatory Commission (DERC) pertaining to the Rithala plant can be successfully challenged, no adjustment has been considered necessary by the Management.
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The Auditor’s report is not qualified in respect of these matters.
Dividend (Standalone)
The following table sets forth certain details regarding the dividend paid by the Issuer on the equity shares for Financial Years 2019-20, 2018-19, 2017-18, 2016-17 and 2015-16:
(Rs., In Crores, except per share data)
Particulars Fiscal 2019 Fiscal 2018 Fiscal 2017* Fiscal 2016* Face value of Equity Shares (Rs. per share) 1.00 1.00 1.00 1.00 Interim dividend on Equity Shares (Rs. per Nil Nil Nil Nil share) Final dividend of Equity Shares (Rs. per 1.30 1.30 1.30 1.30 share) Total dividend on Equity Shares 351.99 351.99 351.99 351.99 Dividend tax (gross) - 33.81 29.58 11.60 *Restated
Interest Coverage Ratio (Standalone)
The following table sets forth the interest coverage ratio for Financial Years 2019-20, 2018-19, 2017- 18 and 2016-17:
Financial Year 2020 (As per Ind AS) (Half year With Exceptional Item 1.34 Ended)
Without Exceptional Item 1.34
Financial Year 2020 (As per Ind AS) With Exceptional Item 0.94
Without Exceptional Item 1.14
Financial Year 2019 (As per Ind AS) (Restated) With Exceptional Item 2.1 3
Without Exceptional Item 1.3 7
Financial Year 2018 (As per Ind AS) With Exceptional Item (1.31)
Without Exceptional Item 1.77
Financial Year 2017 (As per Ind AS) Restated With Exceptional Item 1.40
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Without Exceptional Item 1.89
Financial Year 2017 (As per IGAAP) With Exceptional Item 1.45
Without Exceptional Item 2.03
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RELATED PARTY TRANSACTIONS
The related party transactions mentioned below form part of the Standalone Financial Statements of the Issuer.
Please refer to the following points in the Annual Report for the last 3 financial years which are enclosed to this Information Memorandum as Annexure K:
1. Financial Year ending March 31, 2017 – Annex VII: Related Party Transactions (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No 41) & Note no 42 under standalone financials regarding related party disclosures).
2. Financial Year ending March 31, 2018 - Annex VII: Related Party Transactions (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No 38) & Note no 40 under standalone financials regarding related party disclosures).
3. Financial Year ending March 31, 2019 - Annex VII: Related Party Transactions (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No 38) & Note no 41 under standalone financials regarding related party disclosures).
4. Financial Year ending March 31, 2020- Annex VI: Related Party Transaction (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No. 39) & Note no 41 under standalone financials regarding related party disclosure).
In line with the requirements of Applicable Law, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company’s website at https:// www.tatapower.com/corporate/ policies.aspx
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THE ISSUER’S MANAGEMENT
Promoters of the Issuer
The following are the details of the promoter shareholding in the Issuer as at 30th Sep 2020:
Sr. Name of Total No of No. of shares in Total No. of shares % of No. Shareholder Equity Shares demat form Shareholding pledged shares as % of total pledged no of equity with shares respect to shares owned 1. Tata Sons 1,44,45,13,021 1,44,45,13,021 45.21 3,87,71,375 2.68 Private Limited 2. Tata Steel 3,91,22,725 3,91,22,725 1.22 0 0 Limited 3. Tata 68,47,842 68,47,842 0.21 0 0 Investment Corporation Limited 4. Tata 45,35,200 45,35,200 0.14 0 0 Industries Limited 5. Ewart 22,29,657 22,29,657 0.07 0 0 Investments Limited 6. Tata Motors 9,120 9,120 0.00 0 0 Finance Limited 1,49,72,57,565 1,49,72,57,565 46.86 3,87,71,375 2.68
Interest of Promoters
Other than as already disclosed in the Information Memorandum, the Promoters of the Issuer do not have any financial or other material interest in the Issue proposed to be issued under this Information Memorandum.
Board of Directors
As of the date of this Information Memorandum, the Issuer has 10 Directors on its Board. As per the Articles of Association, the number of Directors on the Issuer’s Board cannot exceed 15.
The following table sets forth certain details regarding the Board of Directors as on the date of this Information Memorandum.
Date of Age Particulars Other directorships Appointment (years)
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Mr. N. Chandrasekaran 11.02.2017 56 Indian Companies Designation: Non-Independent Tata Sons Private Limited Non-Executive Chairman Tata Consultancy Services Limited DIN: 00121863 Tata Steel Limited Occupation: Company Executive Tata Motors Limited Nationality: Indian The Indian Hotels Company Address: Floor 21 & 22, 33 South Limited Condominium, Peddar Road, TCS Foundation Opposite Sterling Apartments, Tata Consumer Products Limited Mumbai (Formerly known as Tata Global 400 026 Beverages Limited) The Society and Board of Governors of the Indian Institute of Management, Lucknow
Foreign Companies Jaguar Land Rover Automotive Plc Tata Limited Ms. Anjali Bansal 14.10.2016 49 Indian Companies Designation: Independent, Non- Siemens Limited Executive Director Tata Power Renewable Energy DIN: 00207746 Limited Occupation: Company Director Apollo Tyres Limited Nationality: Indian Bata India Limited Address: 3302-3202, A Wing, Voltas Limited Vivarea, Jacob Circle, Mahalaxmi, Kotak Mahindra Asset Mumbai Management Company Limited 400 030 Tata Power Solar Systems Limited Delhivery Private Limited Bombay Chamber of Commerce Avaana Advisory Services Private Limited
Foreign Companies SAB Holdings Pvt Ltd., Mauritius Ms. Vibha U. Padalkar 14.10.2016 51 Indian Companies Designation: Independent, Non- HDFC Life Insurance Company Executive Director Limited DIN: 01682810 HDFC Pension Management Occupation: Company Executive Company Limited Nationality: Indian HDFC Investments Limited Address: Flat Nos. 2503/04/05/06, 25th Floor, Tower B, Ashok Tower Foreign Companies CHS, Dr. S S Rao Road, Parel, HDFC International Life and Re Mumbai 400 012. Company Limited Mr. Sanjay V. Bhandarkar 14.10.2016 52 Indian Companies Designation: Independent, Non- Newage Power Company Private Executive Director Limited DIN: 01260274 S Chand and Company Limited Occupation: Company Director Chayya Prakashni Private Limited Nationality: Indian Walwhan Renewable Energy Address: 32/33, Moonreach Limited Apartments, Prabha Nagar, P Balu Tata Power Renewable Energy Marg, Prabhadevi, Mumbai Limited
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400 025. HDFC Asset Management Company Limited National Investment and Infrastructure Fund Limited Vagarai Windfarm Limited Clean Sustainable Solar Energy Private Limited Mr. K. M. Chandrasekhar 04.05.2017 72 Indian Companies Designation: Independent, Non- KIMS Healthcare Management Executive Director Limited DIN: 06466854 KIMS Al Shifa Healthcare Private Occupation: Company Director Limited Nationality: Indian Tata Advanced Systems Limited Address: Flat No. 2H, 'Majestic', Coastal Gujarat Power Limited GIE Homes, Near NISH, Akkulam Tata Power Delhi Distribution Boat Club Road, Kuzhivila, Limited Sreekaryam P.O., Thiruvananthapuram 695 017 Mr. Ashok Sinha 02.05.2019 68 Indian Companies Designation: Independent, Non- JK Cement Limited Executive Director Cipla Limited DIN: 00070477 AirAsia (India) Limited Occupation: Company Director Axis Asset Management Company Nationality: Indian Limited Address: Flat No. 18, Kailash, 50, Maithon Power Limited Cumballa Hill, Peddar Road, Coastal Gujarat Power Limited Mumbai 400 026 The Hospital & Nursing Home Benefits Association Mr. Hemant Bhargava 24.08.2017 60 Indian Companies Designation: LIC Nominee Director, ITC Limited Non-Independent, Non-Executive Larsen & Toubro Limited DIN: 01922717 Voltas Limited Occupation: Company Executive Nationality: Indian Address: Flat 3804, Tower 5, Runwal Greens, Mulund Goregaon Link Road, Mulund (West), Mumbai - 400 080
Mr. Saurabh Agrawal 17.11.2017 50 Indian Companies Designation: Non-Independent, Tata Sons Private Limited Non-Executive Director Tata Steel Limited DIN: 02144558 Tata Capital Limited Occupation: Company Executive Tata AIA Life Insurance Company Nationality: Indian Limited Address: Flat No.2803, Imperial Tata AIG General Insurance Towers, B. B. Nakashe Marg, Company Limited Tardeo, Mumbai - 400 034 Tata Teleservices Limited Tata Sky Limited
Gradis Trading Private Limited
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Mr. Banmali Agrawala 17.11.2017 Indian Companies Designation: Non-Independent, 56 Tata Projects Limited Non-Executive Director Tata Advanced Systems Limited DIN: 00120029 Tata Realty & Infrastructure Occupation: Company Executive Limited Nationality: Indian AirAsia (India) Limited Address: Ashford Apartment, Flat Tata Housing Development No. 03, 3rd Floor, 1/26A Ridge Road, Company Limited Malabar Hill, Mumbai - 400 006
Mr. Praveer Sinha 01.05.2018 57 Indian Companies: Designation: CEO & Managing Tata Power Delhi Distribution Director Limited DIN: 01785164 Tata Power Solar Systems Limited Occupation: Company Executive Tata Power Trading Company Nationality: Indian Limited Address: 22 A&B, New Akashganga Tata Power Renewable Energy CHS Ltd., 89, Bhulabhai Desai Road, Limited Mumbai - 400 026
None of the Issuer’s Directors are listed as defaulters in the Credit Information Bureau (India) Limited (CIBIL) defaulters’ list and/or Export Credit Guarantee Corporation of India (ECGC) defaulters’ list as of the date of this Information Memorandum.
Details of changes in the Directors since last three years:
Name of the Designation DIN Date of Date of Remarks Director Appointment Cessation Mr. Nawshir Independent 00044816 29.09.2006 12.08.2019 Completion of Mirza Director term of appointment as Independent Directors Mr. Deepak Independent 00009627 12.02.2008 12.08.2019 Completion of Satwalekar Director term of appointment as Independent Directors Mr. Ashok Independent 00070477 02.05.2019 - Nil Sinha Director Mr. Ashok Sethi COO & 01741911 07.05.2014 30.04.2019 Superannuation Executive Director Mr. Praveer CEO & 01785164 01.05.2018 - Nil Sinha Managing Director Mr. Hemant LIC Nominee 01922717 24.08.2017 - Nil Bhargava Mr. Anil CEO & 00006867 01.02.2011 30.04.2018 Resignation Sardana Managing Director
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Mr. Saurabh Non-Executive, 02144558 17.11.2017 - Nil Agrawal Non- Independent Director Mr. Banmali Non-Executive, 00120029 17.11.2017 - Nil Agrawala Non- Independent Director Mr. S Non-Executive, 00306299 16.12.2016 16.11.2017 Resignation Padmanabhan Non- Independent Director Ms. Sandhya S. Non-Executive, 00021947 16.04.2016 16.11.2017 Resignation Kudtarkar Non- Independent Director Mr. K. M. Independent 06466854 04.05.2017 - Nil Chandrasekhar Director Mr. Pravin H. LIC Nominee 01629256 07.09.2015 20.05.2017 Resignation Kutumbe Dr. Homair S. Independent 00016610 13.08.2014 23.04.2017 Consequent Vachha Director upon attaining 75 years of age, as required by the Retirement Policy adopted by Company
Profile of Directors
Mr. N. Chandrasekaran
Natarajan Chandrasekaran is Chairman of the board of Tata Sons, the holding company and promoter of more than 100 Tata operating companies with aggregate annual revenues of more than US $100 billion. He joined the board of Tata Sons in October 2016 and was appointed Chairman in January 2017. He also chairs the boards of several group operating companies, including Tata Steel, Tata Motors, Tata Power, Indian Hotels and Tata Consultancy Services (TCS) - of which he was chief executive from 2009-17.
His appointment as chairman followed a 30-year business career at TCS, which he joined from university. He rose through the ranks at TCS to become CEO and managing director of the leading global IT solutions and consulting firm. Under his leadership, TCS generated total revenues of US $16.5 billion in 2015-16 and consolidated its position as the largest private sector employer in India and the country's most valuable company. TCS has also been placed among the 'Big 4' most valuable IT services brands worldwide, ranked as one of the World's Most Innovative Companies by Forbes and recognised as a Global Top Employer by the Top Employers Institute across 24 countries.
In addition to his professional career at Tata, he was also appointed as a director on the board of India's central bank, the Reserve Bank of India, in 2016. He is an active member of India's bilateral business forums including USA, UK, Australia and Japan. He served as the chairman of NASSCOM, the apex trade body for IT services firms in India in 2012-13. His business leadership has been recognised by several corporate and community organisations, and he has received numerous awards, including:
Business Leader of the Year at the ET Awards for Corporate Excellence 2016
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CNBC TV 18 Indian Business Icon 2014 CNN-IBN Indian of the Year 2014 (business category) Best CEO for 2013 and 2014 by Business Today Best CEO 2010-15, Institutional Investor's Annual All Asia Executive Team rankings
He has been awarded several honorary doctorates by leading Indian and international universities, including an honorary 'doctor of letters' from the Regional Engineering College, Trichy, Tamil Nadu, where he completed a master's degree in computer applications before joining TCS in 1987.
Ms. Anjali Bansal
Ms. Anjali Bansal is a Senior Advisor to TPG Capital (TPG), a leading global private equity fund, based in Mumbai. Prior to joining TPG, Ms. Bansal was a global Partner with Spencer Stuart where she founded and led their India business and co-led their Asia Pacific Board & CEO practice as part of the Asia Pacific leadership team. She has worked in various geographies across the United States, Europe and Asia, advising Indian and multinational companies. Earlier, Ms. Bansal was a strategy consultant with McKinsey & Company in New York and Mumbai. She started her career as an engineer.
An active contributor to the emerging dialogue on corporate governance and diversity, she co-founded and chaired the FICCI Center for Corporate Governance program for Women on Corporate Boards. She is a keen participant in the broader business ecosystem and has served on the managing committee of the Bombay Chamber of Commerce and Industry and on the CII National Committee for Women.
She has been listed as one of the Most Powerful Women in Indian Business by India's leading publication, Business Today, and as one of the Most Powerful Women in Business by Fortune India.
Ms. Bansal serves on the boards of Bata India Limited, Siemens Limited and Voltas Limited. She serves on the Advisory Board of the Columbia University Global Centers, South Asia and as a trustee on the boards of the United Way of Mumbai and Enactus. Her prior non-profit roles include chairing the board of FWWB, India's leading livelihood and microfinance organization. Ms. Bansal is an active member of the YPO (Young Presidents' Organization).
Ms. Vibha U. Padalkar
Ms. Vibha Padalkar is the Managing Director & Chief Executive Officer of HDFC Life and has been with the company for almost a decade. The company, a leading life insurer with assets under management in excess of ₹ 1 trillion, recently completed its Initial Public Offering in India.
Ms. Padalkar qualified as a member of the Institute of Chartered Accountants in England and Wales in 1992. She is also a member of the Institute of Chartered Accountants in India. Prior to her appointment with HDFC Life, she has worked in varied sectors such as Business Process Outsourcing, Global FMCG and in a Big 4 audit firm.
Ms. Padalkar is also an independent director on the Board of HDFC Investments Limited.
Ms. Padalkar was recently honoured the 'CA CFO - Insurance Sector' award by the Institute of Chartered Accountants of India and by Business Today as being amongst the 'Top 30 most powerful women in business'. She was also conferred the 'CFO-Woman of the year' award by the Institute of Chartered Accountants of India in 2011 and for "Excellence in Financial Control, Compliance and Corporate Governance" by IMA, India 2013.
Mr. Sanjay V. Bhandarkar
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Mr. Sanjay Bhandarkar is the former Managing Director of Rothschild's Investment Banking operations in India.
During his career with Rothschild, he advised on a variety of corporate finance transactions across M&A, Capital Markets and Debt Restructuring.
A few notable deals include; advising Meralco on their acquisition of GMR's Island Power Project in Singapore; advising shareholders of CAMS, India's largest mutual fund registry business on the sale of 45% stake to National Stock Exchange; advising McCormick on the purchase of the foods business from Kohinoor Foods; advising Government of India on the 3G and BWA auctions, the pioneering e- auction process in India; advising the Tata Group on the purchase of Corus; advising Aircel on the sale of its towers business to GTL; advising Suzlon on its debt restructuring discussions with international lenders; advising GVK - South African consortium on its bid for Mumbai airport privatisation; advising Indian Lenders on restructuring and sale of Dabhol Power Company, India's largest and most complex restructuring.
Mr. Bhandarkar has a degree in Management from XLRI, Jamshedpur. Prior to Rothschild, he has also worked with Peregrine Capital and ICICI Securities and Finance Company Limited. He has over two decades of experience in Investment banking.
Mr. K. M. Chandrasekhar
Mr. Kesava Menon Chandrasekhar entered the Indian Administrative Service in 1970. He was ranked third in the list in the batch. Prior to that, he secured B.A. (Honours) in Economics and M.A. in History from St. Stephen's, College, University of Delhi. After entering Government service, he did his M.A. in Management Studies from the University of Leeds in United Kingdom.
He spent the first 25 years of his career in Kerala, holding such positions as Managing Director of the State Civil Supplies Corporation, District Collector, Idukki, Director of Fisheries, Principal Secretary (Industries) and Principal Secretary (Finance). During this period, he was also Chairman of the Spices Board under the Ministry of Commerce, Government of India.
In 1996, he left Kerala on Central Government deputation. During his 15 years tenure with the Government of India, from 1996 to 2011, he was Joint Secretary in the key Trade Policy Division of the Ministry of Commerce, Deputy Chief of Mission in the Embassy of India, Brussels and the Ambassador and Permanent Representative of India in the World Trade Organization in Geneva. He rose to the position of Union Cabinet Secretary. As Cabinet Secretary, he was Head of all the Civil Services in India and reported directly to the Prime Minister. He retained that position for four years. He retired from Government service in 2011 at the age of 63, having served Government for 41 years.
Post Retirement, he was, for 5 years, Vice-Chairman, Kerala State Planning Board with rank of Cabinet Minister of the State.
Mr. Chandrasekhar has considerable management experience having been associated as Chairman, Managing Director or member of the Board of Directors of more than 40 companies in the public, joint and private sector. He has written several articles and presented papers. He has also been consultant to the Commonwealth Secretariat and to the UN Food and Agriculture Organization.
Mr. Hemant Bhargava
Mr. Hemant Bhargava retired as the Managing Director of Life Insurance Corporation of India effective 1st August 2019.
A Master in Economics, Mr. Bhargava joined LIC in 1981 and has handled diverse portfolios across
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Mr. Bhargava, with his expertise in business modeling and execution, has successfully launched a number of new projects in LIC, which includes designing and setting up the Micro Insurance vertical which was LIC's first comprehensive enterprise-wide initiative in financial inclusion space. LIC's foray into credit card as joint venture in collaboration with banking partners, founding LIC Cards Services Limited and launch of 'LIC Card' in 2009 was also headed by Mr. Bhargava. The 'Indian Business Group' in Mauritius for promoting the business interests of companies of Indian origin, with the High Commissioner of India as the Patron, was founded by Mr. Bhargava as head of LIC's Mauritius operations. He also played key role in setting up newly formed SBU-international Operations to manage LIC's operation in about 14 countries and laid structural design to form a composite insurance company in the Kingdom of Saudi Arabia.
Mr. Bhargava has been instrumental in shaping strategies of corporate India while serving on the Boards of many Indian companies. Presently, he is on the Boards of ITC Limited, Larsen & Toubro Limited and Voltas Limited.
He has also been on the Boards of National Mutual Fund, Mauritius, LIC Mauritius Offshore Limited, LIC Housing Finance Limited, LIC HFL Care Homes Limited, LIC Mutual Fund Trustee Pvt Ltd, LIC HFL Asset Management Company Limited, LIC Pension Fund Limited, LIC Mutual Fund Asset Management Limited, LIC Cards Services Limited, IDBI Bank Limited, IL&FS Limited, Life Insurance Corporation (Nepal) Limited, LIC Lanka Limited, Life Insurance Corporation (International) BSC (C) Bahrain, Kenindia Assurance Company Limited, Life Insurance Corporation (LIC) of Bangladesh Limited, LIC (Singapore) Pte Limited, National Insurance Academy, Insurance Institute of India, Governing Council of Insurance Information Bureau of India and Office of the Executive Council of Insurers.
Mr. Hemant Bhargava is an Alumni of Jamnalal Bajaj Institute of Management. He has studied Strategic Management at ISB, Hyderabad.
Mr. Ashok Sinha
Mr. Sinha has a B.Tech. degree in Electrical Engineering from the Indian Institute of Technology (IIT), Kanpur (1973) and PGDBM from the Indian Institute of Management (IIM), Bangalore, with specialisation in Finance (1977). He has been conferred the Distinguished Alumnus Award from both IIT, Kanpur and IIM, Bangalore. He has been conferred with the India Chief Financial Officer Award 2001 for Information and Knowledge Management by the Economic Intelligence Unit (EIU) India and American Express. He received award from TMG (Technology Media Group) for Customer Management.
He has a wealth of experience, competencies and expertise from his leadership journey as the Chairman and Managing Director of Bharat Petroleum Corporation Ltd. (BPCL), which is present across the entire value chain with activities covering exploration and production, refining and marketing oil and gas products. He spent 33 years in BPCL, where he served on the Board of BPCL for 15 years - first as Director (Finance) for 10 years from 1996 and then as its Chairman and Managing Director for 5 years from August 2005.
Since 2011, he has served on the Boards of Petronet LNG Ltd., CMC Ltd. (erstwhile subsidiary of Tata Consultancy Services Ltd.), four subsidiaries of Vodafone India Ltd., Tata Advanced Systems Ltd., Tata Lockheed Martin Aerostructures, and Nova Integrated Systems. Currently, he is an independent
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Mr. Saurabh Agrawal
Mr. Saurabh Agrawal, joined Tata Sons Private Limited (Tata Sons) in July 2017 as the Group Chief Financial Officer. As an investment banker, he brings with him over two decades of rich experience in capital markets. Starting his career in 1995, Mr. Agrawal has a sterling record in both strategy and execution, covering a wide range of industries. He joined Tata Sons from the Aditya Birla Group, where he was head of strategy. Prior to that, he has been head of the corporate finance unit of Standard Chartered Bank in India and South Asia, and the head of the investment banking division in DSP Merrill Lynch. He is a graduate of the IIT, Roorkee, and has a post graduate management degree from the Indian Institute of Management, Calcutta.
Mr. Banmali Agrawala
Mr. Banmali Agrawala, joined Tata Sons Private Limited in October 2017 as President, Infrastructure, Defence and Aerospace. He has global experience in Infrastructure and defence and knowledge in several areas including leadership development, digital infrastructure, innovation and technology. Prior to this, he was President and CEO of GE South Asia, a position he held since February 2013. Earlier, Mr. Agrawala was the Executive Director (Business Development & Strategy) on the Company's Board from February 2008 to November 2011. Prior to that, he was the Managing Director of Wartsila India Limited and Group Vice President, Bio Power, Wartsila Corporation, responsible for the global Bio Power business. He is a Mechanical Engineering graduate from Mangalore University and an alumnus of the Advanced Management Programme of Harvard Business School.
Mr. Praveer Sinha
Mr. Praveer Sinha has over three decades of experience in the power sector and has been credited with transforming the power distribution sector and development and setting up of greenfield and brownfield power plants in India and abroad.
Mr. Sinha holds a Master's Degree in Business Law from National Law School, Bengaluru and is also professionally trained as an Electrical Engineer. He is also a member of the Faculty Board at Faculty of Management Studies and a member of Board of Governors at the Indraprastha Institute of Information Technology, Delhi. He is a Research Scholar at the Indian Institute of Technology Delhi and is also a visiting Scholar at Massachusetts Institute of Technology, Boston, USA.
Before his appointment in Tata Power, Mr. Sinha was the CEO & Managing Director of Tata Power Delhi Distribution Limited (Tata Power-DDL). Tata Power-DDL is a Public Private Partnership (Joint Venture) between the Company and Government of National Capital Territory of Delhi, supplying power to over seven million people in North and North-West Delhi.
Interest of the Directors
Other than as already disclosed in the Information Memorandum, the Directors of the Issuer do not have any financial or other material interest in the Issue proposed to be made under this Information Memorandum.
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Organisation chart
The Issuer’s management organisation structure is set forth below:
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OBJECTS OF THE ISSUE
Funds Requirement and Utilisation of Issue Proceeds
The proceeds of the Issue will be utilized for bona fide purposes in the normal course of business of the Company / Issuer including shoring up of long term sources of capital. However, the Issuer shall not use the issue proceeds towards investment in capital markets and real estate or any other purpose ineligible for bank finance by the RBI.
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STATUTORY AND REGULATORY DISCLOSURES
This section sets out disclosures required under Form No. PAS-4 (Private Placement Offer Letter) pursuant to the PAS Rules.
I. GENERAL INFORMATION (i) Name of the Company The Tata Power Company Limited (ii) CIN L28920MH1919PLC000567 Registered Office: Bombay House, 24 Homi Mody street, Fort Mumbai - 400001
Corporate office: Bombay House 24 Homi Mody street, Address Fort Mumbai – 400001
Regional office:
14th Floor, Dr. Gopal Das Bhawan, (iii) 28 Barakhamba Road, New Delhi Telephone with STD 022 6717 1000 Fax No. +91 22 6665 8885 E-mail id. [email protected] Website: www.tatapower.com Date of incorporation of (iv) September 18, 1919 under the Companies Act, 1913 the Company Business carried on by Generation, transmission, distribution of power and other related activities the Company and its Details of the Group’s subsidiaries at the end of the reporting period (FY 20) considered in the preparation of the (v) subsidiaries with details Consolidated Financials of branches or units, if any. Direct Subsidiaries
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Name Country Details of Business Carried out Af-Taab Investment Co. Ltd India Investment Holding Company Tata Power Trading Co. Ltd India Trading of Power NELCO Ltd India V SAT Solutions Maithon Power Ltd India Power Generation Tata Power Delhi Distribution Ltd India Power Distribution Coastal Gujarat Power Ltd India Power Generation Bhira Investments Pte. Ltd Singapore Investment Holding Company Bhivpuri Investments Ltd Mauritius Investment Holding Company Khopoli Investments Ltd Mauritius Investment Holding Company Trust Energy Resources Pte. Ltd Singapore Shipping Company TP Renewable Microgrid Limited India Power Generation Tata Power International Pte. Ltd Singapore Investment Holding Company Tata Power Solar Systems Ltd India Erection and commissioning of solar projects Tata Power Renewable Energy Ltd India Renewable Power Generation Tata Power Jamshedpur Distribution Ltd India Power Distribution TP Ajmer Distribution Ltd India Power Distribution Tata Power Green Energy Ltd India Renewable Power Generation TP Central Odisha Distribution Limited India Power Distribution TP Solapur Solar Limited India Renewable Power Generation TP Akkalkot Renewable Limited India Renewable Power Generation TP Kirnali Solar Limited TP Saurya Limited
Indirect Subsidiaries Name Country Details of Business Carried out NDPL Infra Ltd India Power Distribution
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Tatanet Services Ltd (Consolidated with NELCO Ltd.) India Satellite Communication Services Supa Windfarm Ltd India Renewable Power Generation Poolavadi Windfarm Ltd India Renewable Power Generation Nivade Windfarm Ltd India Renewable Power Generation Indo Rama Renewables Jath Ltd India Renewable Power Generation Walwhan Renewable Energy Ltd India Renewable Power Generation Clean Sustainable Solar Energy Private Ltd. @ India Renewable Power Generation Dreisatz Mysolar24 Private Ltd. @ India Renewable Power Generation MI Mysolar24 Private Ltd. @ India Renewable Power Generation Northwest Energy Private Ltd. @ India Renewable Power Generation Solarsys Renewable Energy Private Ltd. @ India Renewable Power Generation Walwhan Solar Energy GJ Ltd. @ India Renewable Power Generation Walwhan Solar Raj Ltd. @ India Renewable Power Generation Walwhan Solar BH Ltd. @ India Renewable Power Generation Walwhan Solar MH Ltd. @ India Renewable Power Generation Walwhan Wind RJ Ltd. @ India Renewable Power Generation Walwhan Solar AP Ltd. @ India Renewable Power Generation Walwhan Solar KA Ltd. @ India Renewable Power Generation Walwhan Solar MP Ltd. @ India Renewable Power Generation Walwhan Solar PB Ltd. @ India Renewable Power Generation Walwhan Energy RJ Ltd. @ India Renewable Power Generation Walwhan Solar TN Ltd. @ India Renewable Power Generation Walwhan Solar RJ Ltd. @ India Renewable Power Generation Walwhan Urja Anjar Ltd. @ India Renewable Power Generation Walwhan Urja India Ltd. @ India Renewable Power Generation
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Chirasthayee Saurya Ltd India Renewable Power Generation Nelco Network Products Ltd (Consolidated with NELCO Ltd.) India Manufacturing of TV and radio receivers Vagarai Windfarm Ltd India Renewable Power Generation Far Eastern Natural Resources LLC Russia Coal Mine TP Solapur Ltd India Renewable Power Generation TP Kirnali Ltd India Renewable Power Generation @ Consolidated with Walwhan Renewable Energy Ltd.
Brief particulars of the (vi) management of the Annexure I (Brief Particulars of the Management of the Company) Company Names DIN Addresses of the Occupations of directors the directors CHANDRASEKARAN 00121863 Floor 21 and 22, 33 Company NATARAJAN South Executive Condominium, Peddar Road, Opp Sterling Apartment, Mumbai 400 026 Names, Addresses, DIN, ANJALI BANSAL 00207746 Flat No 3302-3202, Company (vii) and Occupations of A Wing, Vivarea Director Directors Tower, Jacob Circle, Mahalaxmi, Mumbai 400 030 VIBHA UMESH 01682810 B 2503-2506, 25th Company PADALKAR Floor, Tower B, Executive Ashok Tower CHSL, Dr S S Rao Road, Parel Mumbai
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400 012 SANJAY VIJAY 01260274 33, Moonreach Company BHANDARKAR Apartment, Prabha Director Nagar, P Balu Marg, Prabhadevi, Mumbai 400 025 HEMANT BHARGAVA 01922717 Flat 3804, Tower 5, Company Runwal Greens, Executive Mulund Goregaon Link Road, Mulund (West), Mumbai - 400 080 KESAVA MENON 06466854 Flat No. 2H, Company CHANDRASEKHAR 'Majestic', GIE Director Homes, Near NISH, Akkulam Boat Club Road, Kuzhivila, Sreekaryam P.O., Thiruvananthapuram 695 017 SAURABH MAHESH 02144558 Flat No 2803, Company AGRAWAL Imperial Towers, B Executive B Nakashe Marg, Tardeo, Mumbai 400 034 BANMALI AGRAWALA 00120029 Ashford Apartment, Company Flat No 03, 3rd Floor, Executive 1/26A, Ridge Road, Malabar Hill, Mumbai 400 006
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ASHOK SINHA 00070477 Flat no 18, Kailash 50 Company Peddar Road, Director Cumballa Hill, Mumbai 400 026 PRAVEER SINHA 01785164 Flat No 22A&B, Company New Akash Ganga Executive CHS Ltd, 89, Bhulabhai Desai Road, Mumbai 400 026
Management’s (viii) As per the Risk Factors of the Information Memorandum perception of risk factors Details of default, if any, NIL including therein the amount involved, duration of default and present status, in repayment of – i. Statutory Dues (ix) ii. Debentures and Interest thereon iii. Deposits and Interest thereon iv. iv. Loans from any Bank or Financial institution and any interest thereon Names, designation, Name: Mr. Hanoz M Mistry address and phone no., (x) email ID of the Designation: Company Secretary nodal/compliance officer
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of the Company, if any, Address: The Tata Power Company Limited, Bombay House, 24 Homi Mody Street, Mumbai 400 001, India for the private placement offer process Tel. No.: +91 22 6665 8282
Fax No.: +91 22 6665 8885
Grievance Redressal ID: [email protected] Any default in annual None filing of the Company under the Companies (xi) Act, 2013 or the rules made thereunder
II. PARTICULARS OF THE OFFER Financial Position of the Please refer to Annexure H and Annexure K. (i) Company for the last 3
financial years Date of passing of board Board resolution dated October 29, 2018 (ii) resolution Committee of Directors resolution dated November 19, 2020 Date of passing of August 13, 2014 resolution in the general (iii) meeting, authorizing the offer of securities; Kinds of securities Unsecured, rated, listed, redeemable, taxable non-convertible debentures (“Debentures”) of a face value of INR offered (i.e. whether 10,00,000 (Rupees Ten Lakh) each aggregating upto INR 1000,00,00,000 (Rupees One Thousand Crores) share or debenture) and (“Issue”). (iv) class of security; the total number of shares or other securities to be issued Price at which the Issue is at par value of INR 10,00,000 per Debenture. (v) security is being offered
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including the premium, if any, along with justification of the price Name and address of the valuer who performed valuation of the security offered, and basis on As this is an issuance of Debentures at par value, there is no valuation for this issue. (vi) which the price has been arrived at alongwith the report of the registered valuer Relevant date with NA reference to which the price has been arrived at
Relevant date means a (vii) date at least thirty days prior to the date on which the general meeting of the Company is scheduled to be held (a) Scheduled commercial banks in India;
(b) NBFCs and RNBCs registered with the RBI;
The class or classes of (c) Indian companies and other bodies corporate; persons to whom the (viii) allotment is proposed to (d) Rural regional banks in India; be made (e) Financial institutions, including All India Financial Institutions;
(f) Housing finance companies registered with the National Housing Bank; and
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(g) Any other investors who are permitted to invest in the Debentures under Applicable Law
Intention of promoters, directors or key managerial personnel to (ix) subscribe to the offer NA (applicable in case they intend to subscribe to the offer) Issue opening date: Nov 26, 2020 The proposed time within Issue closing date: Nov 26, 2020 (x) which the allotment shall Pay-in Date: Nov 27, 2020 [T+1 Settlement] be completed Deemed date of allotment: Nov 27, 2020
The names of proposed allottees and the (xi) percentage of post private NA placement capital that may be held by them The change in control, if any, in the Company, that NA (xii) would occur consequent to the private placement The number of persons to whom allotment on preferential basis/private placement/rights issue (xiii) 3 has been made during the year, in terms of number of securities as well as price
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The justification for the allotment proposed to be made for consideration Not applicable. The consideration for this issue will be cash. (xiv) other than cash together with valuation report of the registered valuer Amounts which the Company intends to raise INR 1000,00,00,000 (xv) by way of the proposed offer of securities The form in which an investor can apply for subscription to the Debentures, the format of which is set out in (xvi) Application Form Annexure A of the Information Memorandum.
Debentures Tenor 3 years Issue Size Rs. 1000 Crores Terms of raising of Coupon Rate 6 % p.a. securities: Duration, if Coupon rate is fixed. applicable, Rate of (xvii) Coupon Payment Dates Saturday, November 27, 2021 dividend or rate of interest, mode of Sunday, November 27, 2022 payment and repayment Monday, November 27, 2023
Mode of payment and repayment: Payment of interest and Redemption Amount will be made by way of cash using Cheque/ DD/ RTGS/ NEFT/NACH/ Electronic mode and any other prevailing mode of payment from time to time. Proposed time schedule Issue opening date: November 26, 2020 (xviii) for which the private Issue closing date: November 26, 2020 placement offer cum Pay-in Date: November 27, 2020 [T+1 Settlement]
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application letter is valid Deemed Date of (xix) November 27, 2020 Allotment The proceeds of the Issue will be utilised for bona fide purposes in the normal course of business of the Company Purposes and objects of (xx) / Issuer including shoring up of long term sources of capital. However, the Issuer shall not use the issue proceeds the offer towards investment in capital markets and real estate or any other purpose ineligible for bank finance by the RBI. Contribution being made by the promoters or directors either as part of (xxi) NA the offer or separately in furtherance of such objects Principal terms of assets The Debentures are unsecured (xxii) charged as security, if
applicable The details of significant and material orders passed by the Regulators, Courts and Tribunals (xxiii) NIL impacting the going concern status of the Company and its future operations The pre-issue and post- (xxiv) issue shareholding There will be no change in the shareholding pattern of the Company as this is a Debenture issue. pattern of the Company In line with SEBI circular no SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 regarding Mechanism for issuance of debt securities on private placement basis through an Electronic Book Mechanism, the payment must Mode of payment for III be made through RTGS to the Designated Bank Account of Indian Clearing Corporation Limited subscription Beneficiary Name Indian Clearing Corporation Limited
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Name of the Banker: HDFC Bank Limited IFSC Code: HDFC0000060
IV DISCLOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION ETC. Any financial or other NIL material interest of the directors, promoters or key managerial personnel (i) in the offer and the effect of such interest in so far as it is different from the interests of other persons. Details of any litigation No such litigations / legal action, is expected to impact the repayment capability of the Company in respect of the or legal action pending or non-convertible debentures and / or the decision to invest by the investors. A summary of the outstanding legal taken by any Ministry or proceedings against the Company, has been set out in Annexure J below. Department of the Government or a statutory authority against any promoter of the offeree Company during the last three years immediately preceding (ii) the year of the circulation of the private placement offer cum application letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action shall be disclosed.
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Financial Year 2016-2017
Remuneration to Directors [Gross Amount (₹)] Name of the Director Sitting Fees paid for FY17* Commission paid for FY17
Mr. N. Chandrasekaran& 0 0 Mr. S. Padmanabhan 1,50,000 13,00,000 Mr. Cyrus P. Mistry# 3,90,000 0 Dr. Homiar S. Vachha 6,60,000 59,50,000 Mr. Nawshir H. Mirza 9,60,000 94,50,000 Mr. Deepak M. Satwalekar 10,50,000 80,50,000 Mr. Piyush G. Mankad 3,30,000 24,50,000 Mr. Ashok K. Basu 2,70,000 17,50,000 Remuneration of Mr. Pravin H. Kutumbe 2,70,000 13,00,000 Ms. Sandhya S. Kudtarkar 2,40,000 13,00,000 Directors (during the (iii) Ms. Anjali Bansal 2,40,000 13,50,000 current and last three Ms. Vibha Padalkar 3,30,000 20,00,000 financial years). Mr. Sanjay V. Bhandarkar 2,40,000 11,00,000 * Excludes service tax & Mr. Chandrasekaran has not attended any meeting in FY17 and hence, was not paid any sitting fees or commission. # Mr. Mistry, being Executive Chairman of Tata Sons till 24th October 2016, has not accepted any commission till such date. @ The sitting fees for attending meetings and the commission is paid to LIC.
Details of remuneration and perquisites paid and/or value calculated as per the Income-tax Act, 1961 to the Managing Director and Executive Directors. Name Salary & Commission Perquisites Retirement Total Allowances for FY17 & Benefits Benefits Mr. Anil Sardana, 2,38,12,250 5,00,00,000 7,59,562 26,73,000 7,72,44,812 CEO & Managing Director
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Mr. Ashok S. Sethi 1,49,12,134 1,60,00,000 19,597 6,98,400 3,16,30,131 COO & Executive Director
Financial Year 2017-2018
Remuneration to Directors [Gross Amount (₹)] Name of the Director Sitting Fees paid for FY18 Commission paid for FY18
Mr. N. Chandrasekaran$ 4,50,000 0 Mr. S. Padmanabhan# 3,90,000 0 Mr. Pravin H. Kutumbe @ 30,000 1,50,000 Mr. Hemant Bhargava @ 1,50,000 11,00,000 Ms. Sandhya S. Kudtarkar# 1,50,000 0 Mr. Saurabh Agrawal# 2,10,000 0 Mr. Banmalli Agrawala# 1,50,000 0 Dr. Homiar S. Vachha 0 0 Mr. Nawshir H. Mirza 7,20,000 95,50,000 Mr. Deepak M. Satwalekar 6,90,000 81,00,000 Ms. Anjali Bansal 5,70,000 40,00,000 Ms. Vibha Padalkar 7,20,000 40,00,000 Mr. Sanjay V. Bhandarkar 7,20,000 43,00,000 Mr. K. M. Chandrasekhar 2,70,000 18,00,000 $ As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving Commission from the Company. # In line with the internal guidelines, no payment is made towards Commission to Mr. Saurabh Agrawal and Mr. Banmali Agrawala, NEDs of the Company, who are in full-time employment with another Tata company. @ Sitting fees for attending meetings and the Commission is paid to LIC.
Details of remuneration and perquisites paid and/or value calculated as per the Income-tax Act, 1961 to the Managing Director and Executive Directors:
Name Salary & Commission Perquisites Retirement Total Allowances for FY18 & Benefits Benefits
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Mr. Anil Sardana, 2,67,32,506 6,50,00,000 7,01,351 29,97,000 9,54,30,857 CEO & Managing Director Mr. Ashok S. Sethi 1,68,72,167 1,90,00,000 1,11,870 7,92,000 3,67,76,037 COO & Executive Director
Financial Year 2018-2019
Remuneration to Directors [Gross Amount (₹)] Name of the Director Sitting Fees paid for FY19 Commission for FY19* Mr. N. Chandrasekaran$ 3,00,000 0 Mr. Nawshir H. Mirza 4,80,000 70,00,000 Mr. Deepak M. Satwalekar 5,40,000 65,00,000 Ms. Anjali Bansal 4,20,000 50,00,000 Ms. Vibha Padalkar 4,50,000 50,00,000 Mr. Sanjay V. Bhandarkar 5,40,000 55,00,000 Mr. K. M. Chandrasekhar 3,60,000 40,00,000 Mr. Hemant Bhargava@ 90,000 20,00,000 Mr. Saurabh Agrawal# 4,20,000 0 Mr. Banmali Agrawala# 3,90,000 0 * Commission relates to the financial year ended 31st March 2019, which was approved by the Board on 2nd May 2019, to be paid during FY20. $ As a policy, Mr. N. Chandrasekaran has abstained from receiving Commission from the Company. @ Sitting fees for attending meetings and the Commission is paid to LIC on account of Mr. Hemant Bhargava, being nominee of LIC. # In line with the internal guidelines, no payment is made towards Commission to Mr. Saurabh Agrawal and Mr. Banmali Agrawala, NEDs of the Company, who are in full-time employment with another Tata company.
Details of remuneration and perquisites paid and/or value calculated as per the Income-tax Act, 1961 to the CEO & Managing Director and COO & Executive Director during FY19:
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Name Salary & Commission Perquisites Retirement Total Allowances for FY19 & Benefits Benefits Mr. Anil Sardana, 68,59,799 N.A. 10,398 1,33,00,936 2,01,71,133 CEO & Managing Director* Mr. Praveer Sinha 1,68,95,342 2,50,00,000 3,32,613 22,27,500 4,44,55,455 CEO & Managing Director& Mr. Ashok S. Sethi, 1,85,73,500 2,25,00,000 1,29,754 8,71,200 4,20,74,454 COO & Executive Director# * Mr. Sardana resigned as CEO & Managing Director of the Company with effect from close of business hours on 30th April 2018. & Mr. Sinha was appointed as CEO and Managing Director of the Company effective 1st May 2018. # Mr. Sethi superannuated as COO & Executive Director of the Company with effect from close of business hours on 30th April 2019.
All the Non-Executive Directors of the Issuer are paid sitting fees of ₹ 30,000 for every Board and committee meetings of the Company. For the current Financial Year, the sitting fees for each board and committee meeting is Rs. 30,000/- for non-executive directors (including independent directors). There are no sitting fees for Executive Directors.
Financial Year 2019-2020 [Gross Amount (₹) Name of the Director Sitting Fees paid for FY20 Commission for FY20* Mr. N. Chandrasekaran$ 2,40,000 0 Mr. Nawshir H. Mirza 1,50,000 24,00,000 Mr. Deepak M. Satwalekar 1,20,000 19,00,000 Ms. Anjali Bansal 3,90,000 51,00,000 Ms. Vibha Padalkar 4,80,000 58,00,000 Mr. Sanjay V. Bhandarkar 4,50,000 55,00,000 Mr. K. M. Chandrasekhar 3,00,000 51,00,000 Mr. Hemant Bhargava@ 1,80,000 40,00,000 Mr. Saurabh Agrawal# 2,40,000 0
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Mr. Banmali Agrawala# 2,40,000 0 Mr. Ashok Sinha 2,70,000 40,00,000
* Excludes GST & Commission relates to the financial year ended 31st March 2020, which will be paid to the eligible Directors during FY21. $ As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from receiving Commission from the Company. @ The Sitting Fees for attending meetings are paid to Mr. Bhargava and the Commission will be paid to LIC. # In line with the internal guidelines of the Company, no payment is made towards Commission to the Non- Executive Directors of the Company, who are in full time employment with another Tata Company
Details of remuneration and perquisites paid and/or value calculated as per the Income-tax Act, 1961 to the CEO & Managing Director and COO & Executive Director during FY20:
Name Salary & Commission Perquisites Retirement Total Allowances for FY20 & Benefits Benefits Mr. Praveer Sinha 2,11,71,818 2,75,00,000 20,34,499 26,24,400 5,33,30,717 CEO & Managing Director& Mr. Ashok S. Sethi, 16,82,600 - 1,31,073 3,36,00,667 3,54,14,340 COO & Executive Director#
@ Commission (variable component) relates to the financial year ended 31st March 2020, which was approved by the Board on 19th May 2020, to be paid during FY21.
# Mr. Sethi superannuated as COO & Executive Director of the Company effective 30th April 2019.
Related party Please refer to the following points in the Annual Report for the last 3 financial years which are enclosed to this transactions entered Offer Letter as Annexure K. during the last three (iv) financial years Financial Year ending March 31, 2017 – Annex VII: Related Party Transactions (Form No AOC 2) and Notes to immediately preceding Consolidated Financial Statements (Note No 41) & Note no 42 under standalone financials regarding related party the year of circulation of disclosures). private placement offer
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cum application letter Financial Year ending March 31, 2018 - Annex VII: Related Party Transactions (Form No AOC 2) and Notes to including with regard to Consolidated Financial Statements (Note No 38) & Note no 40 under standalone financials regarding related party loans made or, guarantees disclosures). given or securities provided. Financial Year ending March 31, 2019 - Annex VII: Related Party Transactions (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No 38) & Note no 41 under standalone financials regarding related party disclosures).
Financial Year ending March 31, 2020 – Annex VI: Related Party Transaction (Form No AOC 2) and Notes to Consolidated Financial Statements (Note No. 39) & Note no 41 under standalone financials regarding related party disclosure).
In line with the requirements of Applicable Law, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company’s website at https:// www.tatapower.com/corporate/ policies.aspx
Summary of reservations Refer pages 238-247 of the Annual Report for Financial Year ended March 31, 2020 or qualifications or Refer pages 242- 249 of the Annual Report for Financial Year ended March 31, 2019 adverse remarks of auditors in the last five Refer pages 246-251 of the Annual Report for Financial Year ended March 31, 2018 financial years immediately preceding Refer pages 279-285 of the Annual Report for Financial Year ended March 31, 2017 the year of issue of Refer pages 126-131 of the Annual Report for Financial Year ended March 31, 2016 (v) private placement offer cum application letter Refer pages 108-111 of the Annual Report for Financial Year ended March 31, 2015 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
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the Company for each of the said reservations or qualifications or adverse remark Details of any inquiry, Not any inspections or investigations initiated or conducted under the Companies Act or any previous Company law in the last three years immediately preceding the issue of private placement offer cum application letter in the case of Company and all of its subsidiaries. Also, (vi) 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 private placement offer cum application letter and if so, section-wise details thereof for the Company.
(vii) Details of acts of material NIL
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frauds committed against the Company in the last three years, if any, and if so, the action taken by the Company.
V FINANCIAL POSITION OF THE COMPANY Share Capital Share Amount Number of Description/ Capital (INR) shares Nature of shares Authorized 350,00,00,000 350,00,00,000 Equity Shares share 2,29,00,000 2,29,000 Preference Shares capital Issued, 319,53,39,547 319,55,66,037 Equity Shares subscribed and paid- up share capital (i) the capital structure of 1. Paid up 319,53,39,547 319,53,39,547 Equity Shares the Company - (in INR) capital after the present Issue
Size of the NA present offer
Paid Up Capital Particulars INR
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After the offer Same as above, the Issue being an issuance of Debentures will not alter the paid up capital
After conversion of convertible NA instruments, if applicable
Share Before the Offer: NA Premium Account After the Offer: NA (before and after the offer)
2. The details of the existing share capital of the issuer company in a tabular form, indicating therein with regard to each allotment, the date of allotment, the number of shares allotted, the face value of the shares allotted, the price and the form of consideration. Provided that the issuer company shall also disclose the number and price at which each of the allotments were made in the last one year preceding the date of the private placement offer cum application letter separately indicating the allotments made for considerations other than cash and the details of the consideration in each case:
Date of Allotment No of Face Issue Consider Nature of Cumulative Equity Value Price ation Allotment No. of Equity Equity Share Shares (Rs.) (Rs.) (cash, equity Share Premium other shares capital than cash, etc) April 25, 2014 331,552,89 1 60 Cash Rights Issue 331,552,89 331,552,89 19,561,620,746 4 4 4 March 27, 2015 1,680 1 60 Cash Rights Issue 331,554,57 331,554,57 19,561,719,866
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Abeyance Case 4 4 May 29, 2015 2,464 1 60 Cash Rights Issue 331,557,03 331,557,03 19,561,865,242 Abeyance Case 8 8 November 17, 144,112 1 60 Cash Rights Issue 331,701,15 331,701,15 19,570,367,850 2016 Abeyance Case 0 0 August 13, 2020 49,05,66,03 1 53 Cash Preferential 49,05,66,03 49,05,66,03 25,50,94,33,92 7 Issue 7 7 4
3. Profits of the Company before and after making Financial Year Profits before making Profits after making provision for provisions for tax, for the three financial years provision for tax (Rs in tax (Rs in crore) immediately preceding the date of issue of the private crore) placement offer cum application letter 2019-20 558.35 148.12
2018-19 1834.42 1708.58
2017-18 (3078.78) (3150.52)
2016-17 506.13 283.45
4. Dividends declared by the Company in respect of the Dividends declared: said three financial years; interest coverage ratio for 31st March, 2020- Rs 1.30 per share of Re 1 each last three years (Cash profit after tax plus interest 31st March, 2019 – Rs 1.30 per share of Re 1 each paid/interest paid) 31st March, 2018 – Rs 1.30 per share of Re 1 each 31st March, 2017 – Rs 1.30 per share of Re 1 each
Interest Coverage Ratio for last three years is as below:
31st March 2020 – 1.14
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31st March, 2019 – 1.58 31st March, 2018 – 1.65 31st March, 2017 – 1.59
5. A summary of the financial position of the Company as Please refer to Annexure K and Annexure H in the three audited balance sheets immediately preceding the date of issue of the private placement offer cum application letter 6. Audited Cash Flow Statement for the three years Please refer to Annexure K and Annexure H immediately preceding the date of the issue of the private placement offer cum application letter 7. Any change in accounting policies during the last three Please refer to the Company’s consolidated and standalone financials notes for the same. years and their effect on the profits and the reserves of These have been enclosed as Annexure K and Annexure H the Company.
VI. A DECLARATION BY THE DIRECTORS THAT-
(a) the Company has complied with the provisions of the Companies Act, 2013 and the rules made thereunder; (b) the compliance with the Companies Act, 2013 and the rules thereunder does not imply that payment of dividend or interest or repayment of debentures, if applicable, is guaranteed by the Central Government; and (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;
I am authorized by the Committee of Directors of the Company vide resolution dated November 19, 2020 to sign this form and declare that all the requirements of 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.
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This section sets out certain disclosures required under Schedule I of the SEBI Debt Regulations.
The following officials have been authorised by the resolution passed by the Board of Directors of the Issuer in the meeting held on 29 October 2018 and the resolution of the Committee of Directors of the Issuer dated November 19, 2020 to issue this Information Memorandum:
Mr. Ramesh Subramanyam, Chief Financial Officer & President - Fuel, Logistics & Land
Mr. Hanoz Mistry, Company Secretary
Mr. Anand Agarwal, Group Financial Controller
Mr. Kasturi Soundararajan, Chief – Corporate Treasury & Investor Relations
1. General Information
(a) Name and registered office of the Issuer
Issuer Name : The Tata Power Company Limited
Registered Office : Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
Corporate Office : Corporate Center, 34 Sant Tukaram Road, Carnac Bunder, Mumbai 400 009, Maharashtra, India
Tel No. : +91 22 6665 8282
Fax No. : +91 22 6665 8885
Email : [email protected]
Website : www.tatapower.com
(b) Compliance Officer
Name : Mr. H.M. Mistry, Company Secretary
Address : Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
Tel No. : +91 22 6665 8282
Fax No. : +91 22 6665 8885
Email : [email protected]
(c) Chief Financial Officer of the Issuer
Name : Mr. Ramesh Subramanyam
Address : Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
Tel No. : +91 22 6665 7503
Fax No. : +91 22 6665 8885
Email : [email protected]
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(d) Joint Arrangers
Name : HDFC Bank Ltd. Address : Peninsula Business Park, 4th Floor, Tower B, Senapati Bapat Marg, Lower Parel – (W), Mumbai – 400 013 Tel. No. : + 91 22 3395 8150 Fax No. : +91 22 3078 8584 Email : [email protected] Contact Person : Mr. Niranjan Kawatkar
Name : Kotak Mahindra Bank Limited
Address : Corporate and Investment Banking3rd floor,27BKC, Bandra Kurla Complex, Bandra Kurla Complex, Bandra East, Mumbai 400051 Tel. No. : 02261660329 Fax No. : Email : [email protected] Contact Person : Mr. Sumit Sachdeva
(e) Debenture Trustee
Name: : SBICAP Trustee Company Limited Address : 6th Floor, Apeejay House 3, Dinshaw Wachha Road, Churchgate, Mumbai, India – 400 020 Tel No. : +91 22 43025555
Fax No. : +91 22 6631 1776
Email : [email protected]
Contact Person : Mr. R.L.N. Rao,
Head - Legal and Compliance
(f) Registrar
TSR Darashaw Consultants Private Limited 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr. E. Moses Road, Mahalaxmi Mumbai 400 011 Tel No.: +91 22 6656 8484
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Fax No: + 91 22 66568494
Email: [email protected]
Contact Person: Ms. Vidya Brahme, Manager
(g) Credit Rating Agencies
Name: CRISIL Address: CRISIL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai- 400 076, India
Email: darshan.dodhia@crisil.com, [email protected]
Website: www.crisil.com
Fax: +91 22 3342 3000, +91 022 4040 2910
Tel. No.: 91 9930570606
(h) Auditors of the Issuer
SRBC & CO LLP Address: 12th Floor, The Ruby, Senapati Bapat Marg, Dadar (W), Mumbai – 400 028 2. A Brief Summary of the Business / Activities of the Issuer and its Line of Business.
Please see the section headed “History and Business of the Issuer”.
3. Project Cost and means of financing, in case of funding of new projects
N.A.
4. Gross debt to equity ratio prior to and after Issue
Particulars Prior to Issue After the Issue Debt Equity Ratio 1.05 (as at Sep, 2020) 1.07
For this disclosure, the Issuer has used the figures of audited standalone balance sheet as at Sep 2020.
5. A Brief History of the Issuer since its Incorporation giving Details of its Following Activities: (i) Details of Share Capital as at Sep 30, 2020: No. of Shares Share Face Value Premium Total Share Capital Capital Face Value Rs. Rs. Rs. Rs. AUTHORISED CAPITAL Equity Shares 350,00,00,000 1 350,00,00,000 Nil 350,00,00,000
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No. of Shares Share Face Value Premium Total Share Capital Capital Face Value Rs. Rs. Rs. Rs. Preference Shares 2,29,00,000 100 229,00,00,000 Nil 229,00,00,000 ISSUED CAPITAL Equity 325,22,67,007 1 325,22,67,007 Nil 325,22,67,007
Preference Nil Nil Nil Nil Nil SUBSCRIBED CAPITAL Equity 319,53,39,547 1 319,53,39,547 Nil 319,53,39,547 Preference Nil Nil Nil Nil Nil PAID-UP CAPITAL Equity 319,53,39,547 1 319,53,39,547 Nil 319,53,39,547 Preference Nil Nil Nil Nil Nil
(ii) Details of Changes in Capital Structure of the Issuer in the last five years, as at March 31, 2020
As per the table provided below.
(iii) Details of Equity Share Capital History of the Issuer for the last five years, as at March 31, 2020:
Date of No of Fac Iss Consider Nature Cumulative Allotment Equity e ue ation of No. of Equity Equity Shares Val Pri (cash, Allotm equity Share Share ue ce other ent shares capital Premium (Rs. (Rs than cash, ) .) etc) April 25, 33,15,52, 1 60 Cash Rights 33,15,52, 33,15,52, 19,56,16,2 2014 894 Issue 894 894 0,746 March 27, 1,680 1 60 Cash Rights 33,15,54, 33,15,54, 19,56,17,1 2015 Issue 574 574 9,866 Abeyan ce Case May 29, 2015 2,464 1 60 Cash Rights 33,15,57, 33,15,57, 19,56,18,6 Issue 038 038 5,242 Abeyan ce Case November 17, 1,44,112 1 60 Cash Rights 33,17,01, 33,17,01, 19,57,03,6
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Date of No of Fac Iss Consider Nature Cumulative Allotment Equity e ue ation of No. of Equity Equity Shares Val Pri (cash, Allotm equity Share Share ue ce other ent shares capital Premium (Rs. (Rs than cash, ) .) etc) 2016 Issue 150 150 7,850 Abeyan ce Case August 13, 49,05,66, 1 53 Cash Prefere 49,05,66, 49,05,66, 25,50,94,3 2020 037 ntial 037 037 3,924 Issue
(iv) Details of any Acquisition or Amalgamation in the last 1 year:
Not Applicable
(v) Details of any Reorganisation or Reconstruction in the last 1 year:
Not Applicable
6. Details of the Shareholding of the Issuer as at Sep 30 2020:
(i) Shareholding Pattern of the Issuer as at Sep 30, 2020:
Category Category of Shareholder (II) Total number Total Shareholding as a code (I) of shares (IV) percentage of total number of shares As a As a percentage percentage of (A+B) of (A+B+C) (VI) (VII) (A) Shareholding of Promoter and Promoter Group (1) Indian (a) Individuals / Hindu Undivided Family 0 0 0 (b) Central Government / State 0 0 0 Governments(s) (c) Bodies Corporate 1,49,72,57,565 46.86 46.86 (d) Financial Institutions / Banks 0 0 0 (e) Any other (specify) Trust 0 0 0 Sub-Total (A) (1) 1,49,72,57,56 46.86 46.86 5 (2) Foreign (a) Individuals (Non-Resident 0 0 0 Individuals/Foreign Individuals)
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Category Category of Shareholder (II) Total number Total Shareholding as a code (I) of shares (IV) percentage of total number of shares As a As a percentage percentage of (A+B) of (A+B+C) (VI) (VII) (b) Bodies Corporate 0 0 0 (c) Institutions 0 0 0 (d) Qualified Foreign Investor 0 0 0 (e) Any Other (specify) 0 0 0 Sub-Total (A) (2) 0 0 0 Total Shareholding of Promoter and 1,49,72,57,565 46.86 46.86 Promoter Group (A) = (A)(1)+(A)(2) (B) Public Shareholding (1) Institutions (a) Mutual Funds / UTI 39,74,81,237 12.44 12.44 (b) Financial Institutions / Banks 1,59,80,637 0.50 0.50 (c) Central Government / State 2,56,09,803 0.95 0.80 Governments(s) (d) Venture Capital Funds 0 0 0 (e) Alternet Investment Funds 1,04,67,091 0.33 0.33 (f) Insurance Companies 40,20,28,304 12.58 12.58 (g) Provident Fund/ Pension Fund 11,62,502 0.04 0.04 (h) Foreign Venture Capital Investors 0 0 0 (i) Qualified Foreign Investor 0 0 0 (j) Any Other (Specify) 0 0 0 (j-i) Foreign Portfolio Investors (Corporate) 34,66,17,736 10.85 10.85 (j-ii) Foreign Institutional Investors – DR 0 0 0 (j-iii) Foreign Nationals-DR 0 0 0 (j-iv) Foreign Bodies – DR 3,65,990 0.01 0.01 Sub-Total (B) (1) 1,19,97,13,30 37.70 37.70 0 (2) Non-Institutions (a) Bodies Corporate 3,03,75,549 0.95 0.95 (b) Clearing Members 69,28,801 0.22 0.22 (c) LLP 600,503 0.02 0.02 (d) Individuals 0 0 0
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Category Category of Shareholder (II) Total number Total Shareholding as a code (I) of shares (IV) percentage of total number of shares As a As a percentage percentage of (A+B) of (A+B+C) (VI) (VII) (i) Individual Shareholders holding 38,19,32,578 11.95 11.95 nominal Share Capital upto ₹ 2 Lakh (ii) Individual Shareholders holding 2,67,00,600 0.84 0.84 nominal Share Capital in excess of ₹2 Lakh (e) Qualified Foreign Investor 0 0 0 (f) Any Other (Specify) (i) Trust 13,81,430 0.04 0.04 (ii) HUF 98,72,185 0.31 0.31 (iii) Non Resident Individual 3,19,31,981 1.00 1.00 (iv) Directors & their relatives 2,16,262 0.01 0.01 (v) OCBs/Foreign Cos 4,000 0.00 0.00 (vi) IEPF Account 80,02,583 0.25 0.25 (vii) QIB-Insurance Co. Regd.with IRDA Sub-total (B) (2) 49,79,46,382 15.59 15.59 Total Public Shareholding (B) = 169,76,59,682 53.29 53.29 (B)(1)+(B)(2) TOTAL (A)+(B) 3,19,49,17,24 100.00 100 7 (C) Shares held by Custodians against 0 0 0 which DRs are issued (GDR) (1) Promoter and Promoter Group 0 0 0 (2) Public 4,22,300 0.00 0.02 GRAND TOTAL (A)+(B)+(C) 3,19,53,39,54 100.00 100.00 7
Notes: Shares pledged or encumbered by the Promoters (if any): Tata Sons Private Limited holds 3,87,71,375 pledged shares (ii) List of top 10 holders of Equity Shares of the Issuer as at Sep 30, 2020:
Sr. Name of Address of No. of Shares No. of Shares % of No. Shareholder Shareholder held in Demat Shareholdin form g
1 Tata Sons Bombay House 24 Homi 1,44,45,13,02 1,44,45,13,021 45.21 Private Limited Mody Street Mumbai 1
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Mumbai - 400001 2 ICICI SBI SG Global Securities 20,96,70,512 20,96,70,512 6.56 Prudential Services Pl Jeevan Seva Value Annexe Building, A Discovery Fund Wing Gr Floor, S V Road Santacruz West, Mumbai – 400054 3 Life Insurance Investment Department 19,52,82,314 19,52,82,314 6.11 Corporation of 6th Floor, West Wing, India Ltd Central Office Yogakshema, Jeevan Bima Marg, Mumbai 400021 4 Matthews Deutsche Bank AG DB 16,51,79,377 16,51,79,377 5.17 Pacific Tiger House, Hazarimal Fund Somani Marg Post Box No. 1142, Fort Mumbai - 400001 5 The New India New India Assurance 4,46,43,839 4,46,43,839 1.40 Assurance Building 87, M.G.Road, Company Fort, Mumbai - 400001 Limited
6 General Suraksha. 1 7 0, J. T A 4,33,62,960 4,33,62,960 1.36 Insurance T A Road, Church Gate Corporation of Mumbai - 400020 India
7 Reliance Deutsche Bank AG DB 4,30,22,848 4,30,22,848 1.35 Capital Trustee House, Hazarimal Co Ltd-A/C Somani Marg Post Box Nippon India No. 1142, Fort Mumbai - Growth Fund 400001
8 Franklin India HSBC Securities 4,20,67,715 4,20,67,715 1.32 Equity Services 11th Floor, Bldg Advantage 3, Nesco - IT Park Nesco Fund Complex, W.E. Highway Goregaon (East), Mumbai - 400063 9 Tata Steel Bombay House, 3rd 3,91,22,725 3,91,22,725 1.22 Limited Floor, 24, Homi Mody Street, Fort, Mumbai - 400001 10 HDFC Life Deutsche Bank Ag, DB 3,46,89,841 3,46,89,841 1.09 Insurance House, Hazarimal Company Somani Marg, Fort, Limited Mumbai
Total 2,26,15,55,15 2,26,15,55,152 70.79 2
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7. Brief particulars of the Management of the Issuer
Please see the section titled “The Issuer’s Management”.
8. Names and details of the Directors of the Issuer, Remuneration of the Directors, Interest of Directors and Changes in Directors in the last three years
Please see the section titled “The Issuer’s Management” and Disclosures under Form PAS-4.
9. Management’s perception of Risk Factors
Please see the section titled “Risk Factors”.
10. Details Regarding Auditors of the Issuer
(i) Details of the Auditor of the Issuer:
Name Address Auditor Since S R B C & Co. LLP, Chartered 12th Floor, The Ruby, August 23, 2017 Accountants 29 Senapati Bapat Marg, Dadar West, Mumbai 400 028
(ii) Changes in Auditors of the Issuer during the last three years:
SRBC & Co. LLP, Chartered Accountants has been appointed as statutory auditors of the Company in place of Deloitte Haskins and Sells LLP on 23rd August 2017.
Name Address Date of Date of Remarks Appointment Cessation Deloitte Haskins and 32nd Floor, Tower 3, April 1, 2007 August 23, NA Sells LLP Indiabulls Finance 2017 Centre, Elphinstone Mill Compound, Senapati Bapat Marg, Elphinstone Road (W), Mumbai 400 013 (iii) Details of Borrowings of the Issuer as at Sep 30, 2020
Details of Secured Loan Facilities:
Lender's Name Type of Amount Principal Repayment Security Facility Sanctioned Outstanding Date (Rs. (Rs. Crores) Crores) HDFC Bank 13 Years 300.00 187.5 Amortised over Movable Fixed Term Loan the Term Assets of the Issuer HDFC Bank 13 Years 350.00 238.44 Amortised over Movable Fixed Term Loan the Term Assets of the Issuer
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Lender's Name Type of Amount Principal Repayment Security Facility Sanctioned Outstanding Date (Rs. (Rs. Crores) Crores) HDFC Bank 13 Years 250.00 209.38 Amortised over Movable Fixed Term Loan the Term Assets of the Issuer HDFC Bank 13 Years 250.00 250.00 Amortised over Movable Fixed Term Loan the Term Assets of the Issuer HDFC Bank 13 Years 750.00 750.00 Amortised over Movable Fixed Term Loan the Term Assets of the Issuer Kotak Mahindra 13 Years 300.00 187.5 Amortised over Movable Fixed Bank Term Loan the Term Assets of the Issuer Kotak Mahindra 13 Years 250.00 193.13 Amortised over Movable Fixed Bank Term Loan the Term Assets of the Issuer Kotak Mahindra 13 Years 250.00 106.63 Amortised over Movable Fixed Bank Term Loan the Term Assets of the Issuer Kotak Mahindra 3 Years Term 300.00 100 Amortised over Current Assets of Bank Loan the Term the Issuer Kotak Mahindra 306.80 300.78 Amortised over A first pari-passu Bank the Term charge on all moveable fixed assets excluding land or building and except assets of wind project, Haldia and SED division
ICICI Bank 10 years term 280.00 162.45 Amortised over Movable Fixed loan the term Assets of the Issuer ICICI Bank 5 year term 750.00 570.00 Amortised over Current Assets of loan the term the Issuer Technology 6 years term 109.00 85.8 Amortised over Secured only by development Board loan the term way of Bank guarantee. SBI 10 years term 2000.00 1191.53 Amortised over Movable Fixed loan the term Assets of the Issuer Axis Bank 3 year term 500.00 166.67 Amortised over Movable Fixed loan the term Assets of the Issuer Axis Bank 5 year term 440.00 380.00 Amortised over Movable Fixed loan the term Assets of the Issuer Canara Bank 13 year Term 30.00 60.00 Amortised over Movable Fixed Loan the term Assets of the Issuer HDFCL 3 Year Term 300.00 1000.00 Amortised over All the Tangible Loan the term Fixed Assets of the Borrower, present & future, including
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Lender's Name Type of Amount Principal Repayment Security Facility Sanctioned Outstanding Date (Rs. (Rs. Crores) Crores) any capital WIP however excluding revaluation thereof, further excluding -Land and building -Furniture, fixtures & Office equipment -Motor Vehicles, Launches, Barges, Helicopters etc -Assets of Haldia & Solar & SED Assets
Details of Unsecured Loan Facilities:
Party/ Instrument Type of Facility/ Amount Sanctioned/ Principal Repayment Name Instrument Issued Outstanding Date (Rs. Crores) ICICI Bank 3 year term loan 750 450.00 March 31, 2022 Axis Bank 3 year term loan 500 166.67 August 2, 2021 First AbuDhabi 3 year term loan 200 133 August 16, Bank 2022 SMBC 3 year term loan 300 300 October 13, 2022
Details of non-convertible debentures issued by the Issuer:
Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed 9.15% 15 9.15% 100.00 July 2010 Redeem CRISIL Secured First charge on all Secured, years able at AA- with movable Redeemable par in positive properties Non- ten outlook by pertaining to: (1) Convertible annual CRISIL 50.40 MW Wind Debentures instalme Farm Project at nts of Sadodar Rs. 25 Village,Samana Crores Plains, Jamnagar each and district, in the state
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Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed five of Gujarat; and (2) annual 50.40 MW Wind instalme Farm Project at nts of Gadag Plains, Rs. 20 Gadag District, in Crores the state of each Karnataka and from First charge on July 23, immovable 2021 properties at Village Mota Panch Devda, Taluka Kalavad, District Jamnagar, State Gujarat bearing Survey No.230/P1 and 242/1/P1 aggregating to 1.0219 acres
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Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed 9.15% 15 9.15% 90.00 Septembe Redeem CRISIL Secured first pari passu Secured, years r 2010 able at AA- with charge on the land Redeemable par in positive of the Issuer at Non- fourteen outlook by Takve Khurd of Convertible annual CRISIL Taluka Mawal, Debentures instalme District, Pune and nts of Sub-District Rs. 16 Mawal as well as Crores first pari passu each and charge on movable one fixed assets, instalme present and future nt of Rs. pertaining to 49.5 26 MW wind project Crores at Agaswadi, from 17th Satara, Septemb Maharashtra, 10 er 2025 MW wind project at Visapur, Satara, Maharashtra, 99 MW wind project at Poolavadi, Tirupur, Tamil Nadu, subject to existing charges created in favour of the existing lenders of the Issuer for securing its existing working capital facilities 11.40% Perpet 11.40 1,500.00 June No CRISIL Unsecur NA Unsecured, ual % 2011 Redempt AA- with ed Subordinated, ion date. positive Perpetual First outlook by Non Call CRISIL Convertible Option and Debentures in June CARE 2021 AA by and then CARE at the Ratings end of Limited every year thereafte r 10.75% 60 10.75 1,500.00 August First CRISIL Unsecur NA
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Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed Unsecured, Years % 2012 call AA- with ed Subordinated, option positive Rated Non on outlook by Convertible August CRISIL Debentures 21, 2022 and and at CARE the end AA by of every CARE year Ratings thereafte Limited r. Redempt ion date is August 21, 2072 9.40% 10 9.40% 210.00 Decembe 10 years CRISIL Secured First pari passu Secured, years r 2012 from the AA- with charge on the Rated, Non- Deemed positive immovable Convertible Date of outlook by properties at Debentures Allotme CRISIL Village Takve nt being and Khurd of Taluka Decemb CARE Mawal and er 28, AA by hypothecation of 2022 CARE plant and Ratings machinery and Limited other movable assets excluding assets pertaining to present and future windmill projects of the Issuer 7.99% 7 years 7.99% 1500 Novembe Redeem CARE Unsecur NA Unsecured, r 2017 able at AA by ed Redeemable par in CARE Non- five Ratings Convertible annual Limited Debentures instalme IND AA nts of with Rs. 300 stable Crores outlook by each India starting Ratings Novemb er 16, 2020 8.85% 8 years 8.85% 213.44 Novembe Redeem IND AA Secured hypothecation of Secured, 5 able at with plant and
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Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed Redeemable, months r 2019 par in 1 stable machinery and Non- quarterly outlook by other movable Convertible instalme India assets excluding Debentures nts of Ratings (a) assets of 120 Rs. 2.5 MW Haldia Plant Crore on (b) assets Dec 31, pertaining to 2019, 32 present and future quarterly solar and windmill instalme projects of the nts of Issuer (c) assets of Rs. SED division 4.0625 crore each starting March 31, 2020 and final quarterly instalme nt of Rs 87.5 crore on Mar 31, 2028 8.84% 3 years 8.84% 750 Novembe 3 years IND AA Unsecur NA Unsecured, 3 r 2019 & 3 with ed Redeemable months months stable Non- from the outlook by Convertible Deemed India Debentures Date of Ratings Allotme nt being February 21, 2023 8.84% 3 years 8.84% 500 Novembe 3 years IND AA Unsecur NA Unsecured, r 2019 from the with ed Redeemable Deemed stable Non- Date of outlook by Convertible Allotme India Debentures nt being Ratings Novemb er 21, 2022 9% 5 years 9.00% 250 Novembe 5 years CARE Unsecur NA Unsecured, 3 r 2019 & 3 AA by ed Redeemable months CARE
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Debenture Tenor Coup Principal Date of Redemp Current Secured Security Series on Outstandi Allotmen tion Credit / ng (Rs. t Date Rating Unsecur Crores) ed Non- months from the Ratings Convertible Deemed Limited Debentures Date of IND AA Allotme with nt being stable February outlook by 21, 2025 India Ratings 7.6% 3 years 7.6% 1000.00 29th April 28th IND AA Unsecur Unsecured (Floating (Floati 2020 April with ed Rate) ng) 2023 stable Unsecured, outlook by Redeemable India Non- Ratings Convertible Debentures Non- 1183 8.21% 300 3rd June August IND AA/ Unsecur Unsercured Convertible Days 2020 31, 2023 Stable by ed Debentures India Ratings
(iv) List of Top 10 holders of non-convertible debentures of the Issuer as at Sep 30, 2020:
a) 9.15% Secured, Non-Convertible, Non-Cumulative, Redeemable, Taxable, Debentures with Separately Transferable Redeemable Principal Parts allotted in July 2010
Sr. List of top 10 Non Amount % Total Address No. Convertible Outstanding Debenture holders (Rs crores) 1 ADITYA BIRLA SUN 45.00 45.00 DEUTSCHE BANK AG LIFE INSURANCE DB HOUSE, COMPANY LIMITED HAZARIMAL SOMANI MARG POST BOX NO. 1142, FORT MUMBAI 400001
2 ICICI PRUDENTIAL 20.00 20.00 STANDARD LIFE INSURANCE CHARTERED BANK, COMPANY LIMITED CRESCENZO SECURITIES SERVICES, 3RD FLOOR C-38/39 G- BLOCK, BKC, BANDRA (EAST) MUMBAI INDIA 400051
3 CSB BANK LTD 15.00 15.00 NO 44, JOLLY MAKER
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CHAMBER 2 4TH FLR VINAYAK K SHAH MARG, NARIMAN
4 UNITED INDIA 10.00 10.00 INVESTMENT INSURANCE DEPARTMENT 24 COMPANY LIMITED WHITES ROAD ROYAPETTAH CHENNAI 600014
5 TATA FIXED 5.00 5.00 STANDARD MATURITY PLAN - CHARTERED BANK, SERIES 55 SCHEME CRESCENZO F SECURITIES SERVICES, 3RD FLOOR C-38/39 G- BLOCK, BKC BANDRA (EAST) MUMBAI INDIA 400051
6 ICICI PRUDENTIAL 4.00 4.00 DEUTSCHE BANK AG ULTRA SHORT DB HOUSE, TERM FUND HAZARIMAL SOMANI MARG POST BOX NO. 1142, FORT MUMBAI 400001
7 RELIANCE CAPITAL 1.00 1.00 DEUTSCHE BANK AG, TRUSTEE CO LTD- DB HOUSE HAZARIMAL A/C RELIANCE SOMANI MARG, FIXED HORIZON P.O.BOX NO. 1142, FORT FUND XXXV SERIES MUMBAI 400001 9
100.00 100.00
b) 9.15% Secured, Non-Convertible, Non-Cumulative, Redeemable, Taxable, Debentures with Separately Transferable Redeemable Principal Parts allotted in September 2010
Sr. List of top 10 Non Amount % Total Address No. Convertible Debenture Outstanding holders (crores) 1 SBI LIFE INSURANCE 49.24 61.55 HDFC BANK LIMITED CO.LTD CUSTODY SERVICES LODHA-I THINK TECHNO CAMPUS 8TH FLR NEXT TO KANJURMARG RAILWAY STATION KANJURMARG E MUMBAI 400042
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2 UNITED INDIA 26.16 32.70 INVESTMENT INSURANCE DEPARTMENT 24 WHITES COMPANY LIMITED ROAD ROYAPETTAH CHENNAI 600014
3 THE KALYAN 4.00 5.00 NIHARIKA NR ICE JANATA SAHAKARI FACTORY OPP RAILWAY BANK LTD STATION KALYAN WEST 421301
4 CAPGEMINI 0.40 0.50 10TH FLOOR BRIGADE BUSINESS SERVICES METROPOLIS BENGALURU (INDIA) LIMITED 560048 EMPLOYEES PROVIDENT FUND TRUST
5 DOMBIVLI NAGARI 0.14 0.18 MADHUKUNJ PLOT NOP/52 SAHAKARI BANK MIDC PHASE II KALYAN LTD SHIL ROAD SONAR PADA DOMBIVLI EAST 421204
6 LAWRENCE AND 0.06 0.08 LAWRENCE AND MAYO MAYO (I) PVT LTD HOUSE 274 DR D N ROAD STAFF MUMBAI 400001 PROVIDENTFUND
TOTAL 80.00 100.00
c) 11.40% Perpetual Bonds allotted in June 2011
Sr. List of top 10 Non Amount Outstanding % Total Address No. Convertible (crores) Debenture holders 1 HDFC TRUSTEE 159.8 10.65 HDFC BANK LTD COMPANY LTD CUSTODY A/C HDFC CREDIT SERVICES LODHA RISK DEBT FUND I THINK TECHNO CAMPUS OFF FLR 8 NEXT TO KANJURMARG RLY STN KANJURMARG - E MUMBAI 400042
2 TATA 115.00 7.67 ELPHINSTONE INVESTMENT BUILDING 2ND CORPORATION FLOOR 10 VEER LIMITED NARIMAN ROAD NEAR HORNIMAN CIRCLE MUMBAI 400001
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3 NPS TRUST A/C - 102.10 6.81 C/O UTI UTI RETIREMENT RETIREMENT SOLUTIONS SOLUTIONS LIMITED - NPS LTD. UTI LITE SCHEME - TOWER, GN GOVT. PATTERN BLOCK BANDRA KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400051
4 AZIM PREMJI 100.00 6.67 CITIBANK N.A. TRUST CUSTODY SERVICES FIFC- 11TH FLR, G BLOCK PLOT C-54 AND C-55, BKC BANDRA - EAST, MUMBAI - 400098 5 KOTAK 95.00 6.33 DEUTSCHE MAHINDRA BANK AG, DB TRUSTEE CO. HOUSE LTD. A/C KOTAK HAZARIMAL LOW DURATION SOMANI MARG, FUND P.O.BOX NO. 1142, FORT MUMBAI - 400001 6 ICICI 90.00 6.00 SBI SG GLOBAL PRUDENTIAL SECURITIES CREDIT RISK SERVICES PL FUND JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054
7 FRANKLIN INDIA 76.00 5.07 HSBC CREDIT RISK SECURITIES FUND SERVICES 11TH FLOOR, BLDG 3, NESCO - IT PARK NESCO COMPLEX, W.E. HIGHWAY GOREGAON (EAST), MUMBAI -
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400063
8 TATA 67.50 4.50 HDFC BANK CONSULTANCY LIMITED, SERVICES CUSTODY EMPLOYEES OPERATION PROVIDENTFUND SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 9 TRENT LIMITED 50.0 3.33 TRENT HOUSE, G - BLOCK PLOT NO C - 60, BESIDES CITI BANK BANDRA KURLA COMPLEX, BANDRA (E) MUMBAI, MAHARASHTRA 400051
10 UNITED INDIA 25.00 1.67 INVESTMENT INSURANCE DEPARTMENT 24 COMPANY WHITES LIMITED ROAD ROYAPETTAH CHENNAI - 600014
880.40 58.70
d) 10.75% Unsecured Debentures allotted in August 2012
Sr. List of top 10 Non Amount Outstanding % Total Address No. Convertible (crores) Debenture holders 1 SBI LIFE 281.10 18.74 HDFC BANK INSURANCE LIMITED CO.LTD CUSTODY SERVICES LODHA-I THINK TECHNO CAMPUS 8TH FLR NEXT TO KANJURMARG RAILWAY STATION KANJURMARG
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E MUMBAI 400042
2 FRANKLIN INDIA 243.40 16.23 HSBC LOW DURATION SECURITIES FUND SERVICES 11TH FLOOR, BLDG 3, NESCO - IT PARK NESCO COMPLEX, W.E. HIGHWAY GOREGAON (EAST), MUMBAI - 400063
3 HDFC TRUSTEE 178.00 11.87 HDFC BANK COMPANY LTD LTD CUSTODY A/C HDFC CREDIT SERVICES RISK DEBT FUND LODHA I THINK TECHNO CAMPUS OFF FLR 8 NEXT TO KANJURMARG RLY STN KANJURMARG - E MUMBAI 400042
4 LARSEN AND 103.70 6.91 L AND T HOUSE TOUBRO LIMITED BALLARD ESTATE MUMBAI 400001
5. POSTAL LIFE 70.00 4.67 HDFC BANK INSURANCE LIMITED, FUND A/C UTI CUSTODY AMC OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083
6 UNITED INDIA 50.00 3.33 INVESTMENT INSURANCE DEPARTMENT COMPANY 24 WHITES LIMITED ROAD ROYAPETTAH CHENNAI
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600014
7 VOLTAS LIMITED 50.00 3.33 VOLTAS HOUSE A DR BABASAHEB AMBEDKAR ROAD CHINCHPOKLI MUMBAI 400033
8 AXIS MUTUAL 50.00 3.33 DEUTSCHE FUND TRUSTEE BANK AG, DB LIMITED A/C AXIS HOUSE MUTUAL FUND HAZARIMAL A/C AXIS SOMANI MARG, STRATEGIC BOND P.O.BOX NO. FUND 1142, FORT MUMBAI - 400025
9 RURAL POSTAL 45.00 3.00 HDFC BANK LIFE INSURANCE LTD, CUSTODY FUND A/C UTI SERVICES AMC LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST MUMBAI 400042
10 TATA 36.00 2.40 HDFC BANK CONSULTANCY LTD, CUSTODY SERVICES SERVICES EMPLOYEES LODHA - I PROVIDENTFUND THINK TECHNO CAMPUS OFF. FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST, MUMBAI 400042
1107.20 73.81
e) 9.40% Redeemable, Transferable, Secured, Non-Convertible Debentures allotted in December 2012
Sr. List of top 10 Non Amount % Total Address No. Convertible Debenture Outstanding
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holders (crores) 1 POSTAL LIFE 50.00 23.81 HDFC BANK INSURANCE FUND LIMITED, A/C UTI AMC CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083
2 RURAL POSTAL LIFE 30.00 14.29 HDFC BANK INSURANCE FUND LIMITED, A/C UTI AMC CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083
3 RURAL POSTAL LIFE 15.00 7.14 HDFC BANK INSURANCE FUND LIMITED, A/C SBIFMPL CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083
4 POSTAL LIFE 30.00 14.29 HDFC BANK INSURANCE FUND LIMITED, A/C SBIFMPL CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST
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MUMBAI - 400083 5 SBI LIFE INSURANCE 15.00 4.76 HDFC BANK CO.LTD LIMITED, CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 6 GENERAL 30.00 4.76 SURAKSHA. 1 7 0, J. T A T INSURANCE A ROAD, CHURCH GATE CORPORATION OF MUMBAI 400020 INDIA
7 THE ORIENTAL 10.00 9.52 THE ORIENTAL INSURANCE INSURANCE COMPANY COMPANY LIMITED LIMIT ORIENTAL HOUSE, P B 7037, A- 25/27, ASAF ALI ROAD, NEW DELHI 110002
8 ECGC LIMITED 10.00 2.38 NIRMAL BLDG, 5TH FLOOR 241/242, BACKBAY RECLAMATION NARIMAN POINT, MUMBAI - 400021
9 STANDARD 20.00 19.05 STANDARD CHARTERED BANK CHARTERED INDIA STAFF BANK Securities PROVIDENTFUND Services, 3rd Floor 23-25, MAHATMA GANDHI ROAD FORT, MUMBAI - 400001
210.00 100.00
f) 7.99% Unsecured, Redeemable, Non-Convertible Debentures allotted in November 2017 - Series I S NAME Amount %Total Address R Outstandi N ng O (crores)
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1 HDFC BANK 510 34.00 HDFC BANK LTD LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST, MUMBAI - 400042 2 SBI LIFE 445 29.67 HDFC BANK INSURANCE LIMITED, CO.LTD CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 3 ICICI 96.4 6.43 HDFC BANK LIMITED, PRUDENTIAL CUSTODY ULTRA SHORT OPERATION TERM FUND SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 4 RELIANCE 55 3.67 DEUTSCHE GENERAL BANK AG DB INSURANCE HOUSE COMPANY HAZARIMAL LIMITED SOMANI MARG P.O.BOX NO. 1142 FORT MUMBAI - 400001 5 HDFC LIFE 50 3.33 DEUTSCHE INSURANCE BANK AG, DB COMPANY HOUSE LIMITED HAZARIMAL SOMANI MARG, P.O.BOX NO. 1142, FORT MUMBAI - 400001 6 HDFC BANK 40 2.67 B BUILDING, ITHINK LIMITED TECHNO
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COVERED CAMPUS EMPLOYEES KANJUR MARG PROVIDENT E MUMBAI - 400042 FUND TRUST 7 BNP PARIBAS 35 2.33 BNP PARIBAS, BNP PARIBAS HOUSE 1 NORTH AVENUE,6TH FLOOR MAKER MAXITY BKC, BANDRA (EAST), MUMBAI - 400051 8 CHOLAMANDA 35 2.33 C/O STANDARD LAM MS CHARTERED GENERAL BANK 3RD INSURANCE FLOOR, 23-25 COMPANY LTD M G ROAD FORT MUMBAI - 400001 9 ICICI BANK 30 2.00 TREASURY LTD MIDDLE OFFICE GROUP 2ND FLOOR, NORTH TOWER, EAST WING ICICI BANK TOWER, BKC BANDRA (EAST), MUMBAI - 400051 10 IDBI BANK 30 2.00 IDBI LIMITED LIMITED - TBO IDBI TOWER 17TH FLOOR WORLD TRADE CENTRE COMPLEX CUFFE PARADE MUMBAI - 400005 Total 1326.4 88.43
g) 8.85% Secured, Redeemable, Non-Convertible Debentures allotted in November 2019
Sr. List of top 10 Non Amount % Total Address No. Convertible Outstanding Debenture holders (crores) 1 KOTAK 205.31 100 Treasury Operations 7th MAHINDRA Floor,12 BKC,C-12,G BANK LTD Block Bandra Kurla Complex,Bandra East Mumbai 400051
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205.31 100
h) 9.00% Unsecured, Redeemable, Non-Convertible Debentures allotted in November 2019 – Series I
S NAME Amount Outstanding % Total Address R (crores) N O
1 ICICI PRUDENTIAL 5 2.00 CITIBANK N.A. RETIREMENT FUND- CUSTODY PURE DEBT PLAN SERVICES FIFC- 11TH FLR, G BLOCK PLOT C-54 AND C-55, BKC BANDRA - EAST, MUMBAI - 400098 2 ICICI PRUDENTIAL 45 18.00 HDFC BANK SHORT TERM FUND LIMITED, CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 3 ADITYA BIRLA SUN 12.5 5.00 DEUTSCHE LIFE INSURANCE BANK AG DB COMPANY LIMITED HOUSE, HAZARIMAL SOMANI MARG POST BOX NO. 1142, FORT MUMBAI - 400001 4 RELIANCE GENERAL 12.5 5.00 DEUTSCHE INSURANCE COMPANY BANK AG DB LIMITED HOUSE HAZARIMAL SOMANI MARG P.O.BOX NO. 1142, FORT MUMBAI - 400001 5 IDBI BANK LIMITED - 75 30.00 IDBI LIMITED TBO IDBI TOWER 17TH FLOOR WORLD TRADE
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CENTRE COMPLEX CUFFE PARADE, MUMBAI - 400005 6 NPS TRUST- A/C SBI 48 19.20 C/O SBI PENSION FUND PENSION SCHEME C - TIER I FUNDS PVT. LTD. NO. 32, 3RD FLOOR MAKER CHAMBERS - III NARIMAN POINT, MUMBAI - 400021 7 NPS TRUST- A/C SBI 2 0.80 C/O SBI PENSION FUND PENSION SCHEME C - TIER II FUNDS PVT. LTD. NO. 32, 3RD FLOOR MAKER CHAMBERS - III NARIMAN POINT, MUMBAI - 400021 8 NPS TRUST - A/C SBI 20 8.00 C/O SBI PENSION FUND PENSION SCHEME - CORPORATE FUNDS PVT. CG LTD. NO. 32, 3RD FLOOR MAKER CHAMBERS - III NARIMAN POINT, MUMBAI - 400021 9 NPS TRUST - A/C SBI 30 12.00 C/O SBI PENSION FUND PENSION SCHEME - ATAL FUNDS PVT. PENSION YOJANA LTD. NO. 32, (APY) 3RD FLOOR MAKER CHAMBERS - III, NARIMAN POINT, MUMBAI - 400021 Total 250 100.00 i) 8.84% Unsecured, Redeemable, Non-Convertible Debentures allotted in November 2019 – Series II
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SR NAME Amount Outstanding % Total Address NO (crores)
1 HDFC BANK LTD 150 30.00 HDFC BANK LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST, MUMBAI - 400042 2 ICICI PRUDENTIAL 10 2.00 HDFC BANK SHORT TERM FUND LIMITED, CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST MUMBAI - 400083 4 ICICI PRUDENTIAL 60 12.00 HDFC BANK LIMITED, FLOATING INTEREST CUSTODY FUND OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI, WEST MUMBAI - 400083 5 SBI LIFE INSURANCE 75 15.00 HDFC BANK CO.LTD LIMITED, CUSTODY OPERATION SEMPIRE PLAZA TWR-1, 4TH FLOOR, CHA NDAN NAGARLBS MARG, VIKHROLI WEST
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MUMBAI - 400083 6 RELIANCE GENERAL 22 4.40 DEUTSCHE INSURANCE BANK AG DB COMPANY LIMITED HOUSE HAZARIMAL SOMANI MARG P.O.BOX NO. 1142 FORT MUMBAI - 400001 7 BANK OF BARODA 21 4.20 DGM, BANK OF BARODA SPECIALIZED INTEGRATED TREASURY BR. BST,4TH AND 5TH FLOOR, C- 34 G-BLOCK BANDRA KURLA COMPLEX, MUMBAI - 400051 8 ICICI BANK LTD 150 29.00 TREASURY MIDDLE OFFICE GROUP 2ND FLOOR, NORTH TOWER, EAST WING ICICI BANK TOWER, BKC BANDRA (EAST), MUMBAI - 400051 9 BARODA CREDIT RISK 10 3.40 SBI SG GLOBAL FUND SECURITIES SERVICES PL JEEVAN SEVA EXTENSION BUILDING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI- 400054 Total 498 100.00 j) 8.84% Unsecured, Redeemable, Non-Convertible Debentures allotted in November 2019 – Series III
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SRNO NAME Amount Outstanding % Total Address (crores)
1 HDFC BANK LTD 150 20.00 HDFC BANK LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST, MUMBAI - 400042 2 BANK OF BARODA 150 20.00 DGM, BANK OF BARODA SPECIALIZED INTEGRATED TREASURY BR. BST,4TH AND 5TH FLOOR, C- 34 G-BLOCK BANDRA KURLA COMPLEX, MUMBAI - 400051 3 ICICI BANK LTD 325 43.33 TREASURY MIDDLE OFFICE GROUP 2ND FLOOR, NORTH TOWER, EAST WING ICICI BANK TOWER, BKC BANDRA (EAST), MUMBAI - 400051 4 SBI EQUITY HYBRID 3 0.40 SBI SG GLOBAL FUND SECURITIES SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 5 SBI MAGNUM 40 5.33 SBI SG GLOBAL INCOME FUND SECURITIES
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SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 6 SBI MAGNUM 2 0.27 SBI SG GLOBAL CHILDREN'S SECURITIES BENEFIT FUND SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 7 SBI MAGNUM 35 4.67 SBI SG GLOBAL MEDIUM SECURITIES DURATION FUND SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 8 SBI DEBT HYBRID 25 3.33 SBI SG GLOBAL FUND SECURITIES SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 9 SBI EQUITY 20 2.67 SBI SG GLOBAL SAVINGS FUND SECURITIES SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD,
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SANTACRUZ WEST, MUMBAI - 400054 Total 750 100.00
(k) TTPCL Repo Rate + 3.20% 2023
SR NAME Amount Outstanding % total Address NO (crores)
1. HDFC 1000 100.00 HDFC BANK Bank Ltd. LTD, CUSTODY SERVICES LODHA - I THINK TECHNO CAMPUS OFF FLR 8, NEXT TO KANJURMARG STN KANJURMARG EAST, MUMBAI - 400042 Total 1000 100.00
(l) TTPCL 8.21% Sr Name Amount Outstanding % Total Address no 1 SBI EQUITY 210 70.00 SBI SG GLOBAL HYBRID SECURITIES FUND SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 2 SBI MAGNUM 5 1.67 SBI SG GLOBAL INCOME SECURITIES FUND SERVICES PL JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST,
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MUMBAI - 400054 3 SBI MAGNUM 85 28.33 SBI SG GLOBAL MEDIUM SECURITIES DURATION SERVICES PL FUND JEEVAN SEVA ANNEXE BUILDING, A WING GR FLOOR, S V ROAD SANTACRUZ WEST, MUMBAI - 400054 Total 300 100.00
(v) Details of amount of corporate guarantee issued by the Issuer along with the name of the counterparty on behalf of whom the corporate guarantee has been issued, as at March 31, 2020
30th Sep 2020 Guarantees given crore Coastal Gujarat Power Ltd. 6,227 Khopoli Investments Ltd. 1,023 Bhira Investments Ltd. 1,430 Tata Power Renewables Energy Ltd. 2,479 Walwhan Renewable Energy Ltd. 1,324 WSTNL 76 WWRJL 13 Total 12,572
(vi) Details of Commercial Paper / Certificate of Deposit:
As on Sep 30, 2020, the Issuer has commercial papers outstanding of Rs 2700 crore.
Maturity Date Amount Outstanding (Rs Cr) 19-May-21 200 23-Apr-21 250 25-March-21 250 07-May-21 400 29-April-21 400 23-Nov-20 500 27-Nov-20 200 04-Dec-20 500 Total 2700
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(vii) Details of Rest of the Borrowing of the Issuer not already covered above as at Sep 30, 2020:
NIL
(viii) Details of all default/s and/or delay in payments of interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Issuer, in the past 5 years:
There has been no default and/or delay in payments of interest and principal of any kind of term loans, debt securities and other financial indebtedness including corporate guarantee issued by the Issuer in the past 5 years.
(ix) 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:
As of the date of this Information Memorandum, the Issuer has no outstanding borrowings taken/any debt securities issued where taken/issued, (i) for consideration other than cash, whether in whole or in part, (ii) at a premium or discount, or (iii) in pursuance of an option.
11. Details of Promoters of the Issuer
Please see the section headed “The Issuer’s Management”.
12. Abridged version of Audited Consolidated (wherever available) and Standalone Financial Information (like Profit & Loss statement, Balance Sheet and Cash Flow statement) for at least last three years and auditor qualifications, if any.
Please see the section headed “Financial Information of the Issuer”.
13. Abridged version of Latest Audited / Limited Review Half Yearly Consolidated (wherever available) and Standalone Financial Information (like Profit & Loss statement, and Balance Sheet) and auditors’ qualifications, if any
Please see the section headed “Financial Information of the Issuer”.
14. 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
As set out in Annexure J
15. Names of the Debenture Trustees and Consents thereof
The Debenture Trustee for the Issue of Debentures proposed to be issued under this Information Memorandum shall be SCICAP Trustee Company Limited. The Debenture Trustee has given its written consent for its appointment and inclusion of its name in the form and context in which it appears in this Information Memorandum for the Issue of Debentures. The Debenture Trustee has given their consent to the Issuer to act as trustee for the Debentureholders under Regulation 4(4) of the SEBI Debt Regulations.
The consent letter dated November 20, 2020 from the Debenture Trustee is attached as
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Annexure F to this Information Memorandum.
16. The detailed rating rationale(s) adopted (not older than one year on the date of opening of the Issue)/ credit rating letter issued (not older than one month on the date of opening of the Issue) by the rating agencies:
Please refer to Annexure E to this Information Memorandum for the rating letter and rating rationale adopted by CRISIL.
17. If the security is backed by a guarantee or letter of comfort or any other document / letter with similar intent, a copy of the same shall be disclosed. In case such document does not contain detailed payment structure (procedure of invocation of guarantee and receipt of payment by the investor along with timelines), the same shall be disclosed in the offer document:
The Debentures are unsecured.
18. Names of all the Recognised Stock Exchanges where Securities are Proposed to be Listed clearly indicating the Designated Stock Exchange
The Debentures are proposed to be listed on the WDM segment of the BSE initially. The Issuer shall comply with the requirements of the Debt Listing Agreement to the extent applicable to it on a continuous basis. The BSE is therefore the designated stock exchange.
The Issuer reserves the right to get the Debentures listed on other recognised stock exchanges as the Issuer may deem fit after giving prior notice of such proposed listing to the Debenture Trustee.
19. Other Details pertaining to the Issue
(i) Debenture Redemption Reserve
The Issuer will create a DRR as may be required in case of privately placed debentures in accordance with applicable law.
(ii) Recovery Expense Fund
The Issuer will create a recovery expense fund as may be required in case of privately placed debentures in accordance with applicable law.
(iii) Regulations pertaining to the Issue
The Debentures being offered pursuant to this Information Memorandum are subject to the provisions of the Companies Act including the rules thereunder, the SEBI Debt Regulations, the Memorandum and Articles of Association of the Issuer, the terms of this Information Memorandum, Application Form, and other terms and conditions as may be incorporated in the Debenture Trust Deed.
(iv) Application Process
Please see the section headed “Issue Procedure”.
(v) No-objection Certificate
The Issuer does not require any consents from its existing lenders for borrowing by way of the Issue.
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NO WILFUL DEFAULT
Name of Year in Outstanding Name of Steps Other Any other Bank which amount at entity taken for disclosures disclosures declaring entity is the time of declared removal entity to declared declaration as wilful from list be wilful as wilful defaulter of wilful defaulter defaulter defaulters
NIL NIL NIL NIL NIL NIL NIL
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ISSUE PROCEDURE
The Issuer proposes to Issue the Debentures on the terms set out in this Information Memorandum. The Debentures being offered pursuant to this Information Memorandum are subject to the provisions of the Companies Act and the erstwhile Companies Act, 1956, the SEBI Debt Regulations, SEBI Circular dated January 5, 2018 on electronic booking mechanism for issuance of debt securities on private placement basis, the Memorandum and Articles of Association of the Issuer, the terms of this Information Memorandum, Application Form, and other terms and conditions as may be incorporated in the Debenture Trust Deed. This section applies to all applicants. Please note that all applicants are required to make payment of the full application amount along with the Application Form.
Borrowing Powers of the Board
The shareholders of the Issuer, through a resolution passed at their meeting dated August 13, 2014 authorised the Board of Directors to borrow monies together with monies already borrowed by the Issuer, in excess of the aggregate of the paid up capital of the Issuer and its free reserves, not exceeding Rs. 27,000 crores at any time. Pursuant to a resolution of the Board of Directors dated October 29, 2018 the Issuer has been authorised to issue Debentures pursuant to this Information Memorandum.
How to Apply
Only Eligible Investors as given hereunder may apply for the Debentures by completing the application form in the prescribed format in BLOCK LETTERS in English in accordance with the instructions contained therein. No application can be made for a fraction of a Debenture. Application Forms should be duly completed in all respects and applications not completed in the said manner are liable to be rejected. The name of the applicant’s bank, type of account and account number must be duly completed by the applicant. This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/ redemption warrants.
An Application Form must be accompanied by either demand draft(s) or cheque(s) drawn or made payable in favour of the Issuer or otherwise as may be set out in the application form and crossed “Account Payee Only”.
Cheque(s) or demand draft(s) may be drawn on any bank including a co-operative bank, which is a member or a sub-member of the bankers clearing house located at Mumbai. Money orders or postal orders will not be accepted. The payments can be made by real time gross settlement (“RTGS”)/NEFT, the details of which are given below. No cash will be accepted. An application once submitted cannot be withdrawn.
The Issuer assumes no responsibility for any application/cheques/demand drafts lost in mail or in transit.
Since the aggregate issue size during this financial year now crosses Rs. 200 crores, the Issuer will use Electronic Book Provider mechanism for the incremental private placement as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated April 21, 2016.
All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this issue of Debentures.
How to bid
All eligible investors will have to register themselves with BSE-BOND platform offered by BSE for participating in electronic book building mechanism. Investors should refer the operating guidelines for issuance of debt securities on private placement basis through an electronic book mechanism as available on web site of BSE.
Right to accept or reject bids
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The Company reserves its full, unqualified and absolute right to accept or reject any bid(s), in part or in full, without assigning any reason thereof and to make provisional / final allocations at its absolute discretion.
Provisional/ Final allocation
Post completion of bidding process, the Company will upload the provisional allocation on the BSE- BOND EBP platform. Post receipt of investor details, the Company will upload the final allocation file on the BSE-BOND EBP platform.
Application Procedure
Potential Investors will be invited to subscribe by way of Application Form as provided by the Issuer during the period between the Issue Opening Date and the Issue Closing Date (both days inclusive) mentioned in the Information Memorandum.
The Issuer reserves the right to close the Issue at the earlier date on the Issue of that particular Debentures being fully subscribed.
The Issuer reserves the right to close the Issue at any time on the Issue Closing Date.
Application Size
Applications, for the Debentures, are required to be for a minimum of 1 (one) Debenture and multiples of 1 (one) Debenture thereafter.
Who can Apply
Nothing in this Information Memorandum shall constitute and/or deem to constitute an offer or an invitation to an offer, to be made to the public or any section thereof through this Information Memorandum and this Information Memorandum and its contents should not be construed to be a prospectus under the Companies Act, as amended or the rules made thereunder.
This Information Memorandum and the contents hereof or thereof are restricted for only the intended recipient(s) who have been addressed directly through a communication by the Issuer and only such recipients are eligible to apply for the Debentures.
The following categories of Investors together constitute “Eligible Investors”:
(a) Scheduled commercial banks in India;
(b) NBFCs and RNBCs registered with the RBI;
(c) Indian companies and other bodies corporate;
(d) Rural regional banks in India;
(e) Financial institutions, including All India Financial Institutions;
(f) Housing finance companies registered with the National Housing Bank; and
(g) Any other investors who are permitted to invest in the Debentures under Applicable Law.
Only the Eligible Investors, when specifically approached, are eligible to apply for the Debentures and subject to the compliance with the relevant regulations/guidelines applicable to them for investing in this Issue.
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Other than as stated above, applications cannot be made by person(s) or entity(ies) resident outside India, including but not limited to NRIs and OCBs.
All Eligible Investors and subsequent Debentureholders (who shall purchase the Debentures in the secondary market) are required to consult their own advisors in investing in the Debentures and comply with the relevant rules/regulations/guidelines/notifications applicable to them for investing in the Debentures.
Submission of Documents
Investors should submit the following documents, wherever applicable:
(a) Memorandum and Articles of Association/Documents governing constitution;
(b) Government notification/certificate of incorporation;
(c) Resolution authorising investment along with operating instructions;
(d) Power of Attorney (original and certified true copy);
(e) Form 15AA granting exemption from TDS on interest;
(f) Form 15H for claiming exemption from TDS on interest on application money, if any;
(g) Order u/s 197 of IT Act;
(h) Order u/s 10 of IT Act;
(i) Specimen signatures of authorised persons duly certified by an appropriate authority; and
(j) SEBI registration certificate, if applicable.
Note: Participation by potential Investors in the Issue proposed to be issued under this Information Memorandum may be subject to statutory and/or regulatory requirements applicable to them in connection with subscription to Indian securities by such categories of persons or entities. Applicants are advised to peruse the Debenture Trust Deed and further ensure that they comply with all regulatory requirements applicable to them, including exchange controls and other requirements. Applicants ought to seek independent legal and regulatory advice in relation to the laws applicable to them.
Permanent Account Number
Each applicant should mention their PAN allotted under the IT Act in the Application Form.
Minimum Subscription
As the Issue under this Information Memorandum will be made on private placement basis, the requirement of minimum subscription shall not be applicable to the Issue and therefore the Issuer shall not be liable to refund the subscription(s)/ proceed(s) in respect of Issue in the event of the total Issue collection falling short of the proposed Issue size or certain percentage of the proposed Issue size.
Submission of completed Application Form
All applications duly completed accompanied by transfer instructions from the respective Investor’s account to the account of the Issuer, shall be submitted at the Registered Office of the Issuer.
Mode of Payment
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Applications complete in all respects must be submitted before the last date indicated in the Issue time table or such extended time as decided by the Issuer in accordance with applicable laws. Payment should be made by the deadline specified by the BSE. Successful bidders should do the funds pay-in to the following bank account of the Issuer (“Designated Bank Account”):
Beneficiary Name INDIAN CLEARING CORPORATION LTD Name of the Banker: HDFC Bank Limited IFSC Code: HDFC0000060
Successful bidders must do the funds pay-in, in totality, to the Designated Bank Account up to 10:30 am on the Pay-In Date (“Pay-in Time”). Successful bidders should ensure to do the funds pay-in from their same bank account which is updated by them in the BSE Bond– EBP Platform while placing the bids. In case of mismatch in the bank account details between BSE Bond – EBP Platform and the bank account from which payment is done by the successful bidder, the payment would be returned back. Provided that, in case of bids made by the Arranger on behalf of Eligible Investors, funds pay-in shall be made from the bank account of such Eligible Investor.
Note: In case of failure of any successful bidder to complete the funds pay-in by the Pay-in Time or the funds are not received in the Indian Clearing Corporation Limited’s Designated Bank Account by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer and/or the Arranger shall not be liable to the successful bidder. Funds pay-out on would be made by Indian Clearing Corporation Ltd to the bank account of the Issuer.
Cheque(s), demand draft(s), money orders, postal orders will not be accepted. The entire amount of ₹10,00,000 (Rupees Ten Lakhs Only) per Debenture is payable on application. Applications should be for the number of Debentures applied by the Eligible Investor.
Applications not completed in the manner required are liable to be rejected.
The Date of subscription shall be the date of realisation of proceeds of subscription money in the Designated Bank Account, as listed above.
All successful bidders under the Operational Guidelines will subsequently receive a Private Placement Offer Cum Application Letter, which will contain an application form. This application form will need to be completed and delivered to the Issuer with the relevant documents on the terms and within the timelines set out therein.
Basis of Allotment and Schedule for Allotment and Issue of Certificates
The Issuer reserves the sole and absolute right to allot the Debentures to any applicant. The unutilised portion of the application money will be refunded to the applicant by electronic transfer to the bank account notified by the applicant. In case the cheque payable at par facility is not available, the Issuer’s reserves the right to adopt any other suitable mode of payment. The Issuer will allot the Debentures to the Debentureholders dematerialised account within 2 (two) Business Days of the Deemed Date of Allotment. A Consolidated Debenture Certificate for the Debentures will be dispatched at the sole risk of the applicant, through registered/speed post, within 30 (thirty) days from the date of closure of the Issue. The Issuer further agrees to pay interest in accordance with the applicable provisions of the Companies Act, if the allotment letters/refund orders have not been dispatched to the applicants within 30 (thirty) days from the date of the closure of the Issue.
Right to Accept or Reject Applications
The Board of Directors, the Committee of Directors and/or any other authorised officials of the Issuer
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Notwithstanding anything stated elsewhere, the Issuer reserves the right to accept or reject any application, in part or in full, without assigning any reason. Subject to the aforesaid, in case of over subscription, priority will be given to Investors on a first come first serve basis. The Investors will be required to remit the funds as well as submit the duly completed application form along with other necessary documents to the Issuer by the Deemed Date of Allotment.
Interest on Application Money
Interest on application money will be paid to Investors at the Interest Rate from the date of realisation of subscription money, for the Debentures, up to 1 (one) day prior to the Deemed Date of Allotment. Such interest shall be payable within 7 (seven) Business Days from the Deemed Date of Allotment.
Refunds
For applicants whose applications have been rejected or allotted in part, refund orders will be dispatched within 7 (seven) days from the Deemed Date of Allotment of the Debentures.
In case the Issuer has received money from applicants for Debentures in excess of the aggregate of the application money relating to the Debentures in respect of which allotments have been made, the Registrar shall upon receiving instructions in relation to the same from the Issuer repay the moneys to the extent of such excess, if any.
Issue of Debentures in Dematerialised Form
The Debentures will be issued in dematerialised form within 2 (two) Business Days from the Deemed Date of Allotment. The Issuer has made arrangements with the Depositories for the Issue in dematerialised form. Investors will hold the Debentures in dematerialised form in accordance with the provisions of Depositories Act. The Depository participant’s name, DP ID and beneficiary account number must be mentioned at the appropriate place in the Application Form. The Issuer shall take necessary steps to credit the Debentures allotted to the Depository account of the Investor. All provisions relating to issue, allotment, transfer, transmission etc. in respect of the Debentures as prescribed under the Depositories Act will be applicable to the Debentures issued in dematerialised form.
If the Debentures issued are held in dematerialised form, then no action is required on the part of the Investors for redemption purposes and the redemption proceeds will be paid by cheque/fund transfer/RTGS to those Investors whose names appear on the list of beneficiaries provided by the Depository to the Issuer. The names would be in accordance with the Depository’s records on the relevant record date fixed for the purpose of redemption. All such Debentures will be simultaneously redeemed through appropriate debit corporate action.
The list of beneficiaries as of the relevant Record Date setting out the relevant beneficiaries’ name and account number, address, bank details and depositary participant’s identification number will be given by the Depository to the Issuer and the Registrar. Based on the information provided above, the Issuer/Registrar will dispatch the cheque for interest / coupon payments to the beneficiaries. If permitted, the Issuer may transfer payments required to be made in relation to any by electronic transfer of funds/RTGS, to the bank account of the Debentureholders for redemption and interest/ coupon payments.
However, for the Debentures that are rematerialised and held in physical form, the Issuer will issue one certificate to the relevant Debentureholder for the aggregate amount of the Debentures that are rematerialised and held by such Debentureholder (each such certificate a “Consolidated Debenture
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Certificate”). In respect of the Consolidated Debenture Certificate(s), the Issuer will, upon receipt of a request from the Debentureholder within 30 days of such request, split such Consolidated Debenture Certificates into smaller denominations in accordance with the Articles of Association, subject to a minimum denomination of one Debenture. No fees will be charged for splitting any Consolidated Debenture Certificates but, stamp duty, if payable, will be paid by the Debentureholder. The request to split a Consolidated Debenture Certificate shall be accompanied by the original Consolidated Debenture Certificate which will, upon issuance of the split Consolidated Debenture Certificate, be cancelled by the Issuer.
Deemed Date of Allotment
All benefits relating to the Debentures will be available to the Investors from the Deemed Date of Allotment. The actual allotment of Debentures may take place on a date other than the Deemed Date of Allotment. The Issuer reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. The Deemed Date of Allotment may be changed (advanced/ postponed) by the Issuer at its sole and absolute discretion.
Payment on Redemption
In respect of the Debentures held in dematerialised form, payment of the Redemption Amount will be made by the Issuer to the beneficiaries in accordance with the beneficiary list provided by the Depositories as on the Record Date. The Debentures shall be taken as discharged on payment of the Redemption Amount by the Issuer to the beneficiaries in accordance with the beneficiary list by making payment electronically to the bank account notified by the beneficiary. Such payment will be a legal discharge of the liability of the Issuer towards the Debentureholders. On such payment being made, the Issuer will inform the Depositories and accordingly the account of the Debentureholders with Depositories will be adjusted. In case of cheque issued towards redemption proceeds, the same will be dispatched by courier or hand delivery or registered post at the address provided in the Application Form at the address as notified by Debentureholder or at the address with Depositiories’ record. Once the cheque for redemption proceeds is dispatched to the Debentureholder(s) at the addresses provided or available from the Depositories record, the Issuer’s liability to redeem the Debentures on the date of redemption shall stand extinguished and the Issuer will not be liable to pay any interest/premium, income or compensation of any kind from the date of redemption of the Debenture(s).
In respect to the Debentures held physically under a Consolidate Debenture Certificate, payments will be made by way of cheque or pay orders or electronically. However, if the Issuer so requires, payments on maturity may be made on surrender of the Consolidated Debenture Certificate(s). Dispatch of cheques or pay orders in respect of payments with respect to redemptions will be made within a period of 30 days from the date of receipt of the duly discharged Consolidated Debenture Certificate.
Upon dispatching the payment instrument towards payment of the redemption amount as specified above in respect of the Debentures, the liability of the Issuer shall stand extinguished.
Currency of Payment
All obligations under the Debentures including yield, are payable in Indian Rupees only.
Transfers
The Debentures shall be transferable freely to all classes of investors eligible to purchase these Debentures subject to applicable law and the rules and regulations governing their investments. Subject to the foregoing, the Debentures may be transferred and/or transmitted in accordance with the applicable provisions of the Companies Act, 2013. The provisions relating to transfer, transmission and other related matters in respect of shares of the Company contained in the Articles of Association of the Issuer and the Companies Act, 2013 shall apply, mutatis mutandis (to the extent applicable to debentures), to the Debentures as well. The Debentures held in dematerialised form shall be transferred subject to and
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Provided further that nothing in this section shall prejudice any power of the Issuer to register as Debentureholder, any person to whom the right to any Debenture of the Company has been transmitted by operation of law.
The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these debentures held in electronic form. The seller should give delivery instructions containing details of the buyer’s depository participant account to his depository participant. The Issuer undertakes that there will be a common transfer form/procedure for transfer of debentures.
The Debentures shall be issued only in dematerialised form in compliance with the provisions of the Depositories Act, 1996 (as amended from time to time), any other applicable regulations (including of any relevant stock exchange) and these conditions. No physical certificates of the Debentures would be issued. The Issuer undertakes that there will be a common form of transfer available for the Debentures held under a Consolidated Debenture Certificate.
Title
In case of:
1. Debentures held in the dematerialised form, the person for the time being appearing in the register of Beneficial Owners maintained by the Depository; and
2. Debentures held in physical form, the person for the time being appearing in the Register of Debentureholders as Debentureholder, shall be treated for all purposes by the Issuer, the Debenture Trustee, the Depositories and all other persons dealing with such person as the holder thereof and its absolute owner for all purposes whether or not it is overdue and regardless of any notice of ownership, trust or any interest in it or any writing on, theft or loss of the Consolidated Debenture Certificate issued in respect of the Debentures and no person will be liable for so treating the Debentureholder.
List of Beneficial Owners
The Issuer shall request the Depositories 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.
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 authorised 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 its agents 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
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Computation of Interest
All interest accruing for any Interest Period shall accrue from day to day and be calculated on the Face Value of principal outstanding on the Debentures at the coupon rate on the basis of the actual number of days elapsed and a year of 365 days (or 366 days in case of a leap year), at the applicable Interest Rate, and rounded off to the nearest Rupee.
Tax Deduction at Source
Debentureholders should consult their own independent tax advisers to understand their tax positions. In addition, Debentureholders should be aware that tax regulations and their application by the relevant taxation authorities change from time to time. Accordingly, it is not possible to predict the precise tax treatment which will apply at any given time. Therefore, Debentureholders are advised to consider the tax implications in respect of subscription to the Debentures in consultation with their tax advisors.
In accordance with the prevalent provisions of the IT Act, the amount of interest received/ receivable by the Debentureholders is treated as a taxable income in their hands. However, with effect from June 1, 2008, no tax is deductible at source from the amount of interest payable on any listed demat security, held by a person resident in India. Since the Debentures shall be issued in dematerialised mode and shall be listed on the NSE and such other recognised stock exchanges as the Issuer may deem fit after giving prior intimation of such proposed listing to the Debenture Trustee, no tax will be deductible at sources on the payment/credit of interest on the Debentures held by any person resident in India.
In the event of rematerialisation of the Debentures or a change in applicable law governing the taxation of the Debentures, the following provisions shall apply:
Any payment to be made by the Issuer shall be made to the Debenture Trustee, in the appropriate currency, at such place as the Debenture Trustee shall designate. Except as provided in this Clause, all payments to be made by the Issuer shall be made in full without set-off or counterclaim and free and clear of any Tax of any nature now or hereafter imposed by any country or any subdivision or relevant authority, unless the payment/deduction/withholding of any present and future Tax (“Tax Deduction”) is required by applicable law. If any sums payable to the Debentureholders is subject to any Tax Deduction, the Issuer shall make such Tax Deduction, and shall immediately (but no later than 30 (thirty) days from the due date of payment of such Tax Deduction to the Governmental Authority (or any shorter period stipulated by applicable law) deliver to the Debenture Trustee the withholding certificate or similar certificate or an official receipt or other official documentation evidencing such payment in accordance with applicable law received in connection with the Tax Deduction.
In the event that a Debentureholder is entitled by virtue of any applicable laws to receive amounts at a lower rate of tax withholding, such Debentureholder will provide evidence thereof to the Issuer who will then deduct Tax at such lower rate.
Right of the Issuer to Purchase and Re-sell Debentures
Purchase and Resale of Debentures: The Issuer may, subject to applicable laws, at any time and from time to time, purchase Debentures issued under this Information Memorandum at discount, at par or premium in the open market. Such Debentures, at the option of the Issuer, be cancelled, held or resold at such a price and on such terms and conditions as the Issuer may deem fit and as permitted by applicable laws.
Succession
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In the event of insolvency or winding up of a Registered Debentureholder, or the first holder in the case of joint holders, the Issuer will recognise the executor or administrator of the demised Debentureholder or the holder of succession certificate or other legal representative of the demised Debentureholder as the Registered Debentureholder of such Debentures, if such a person obtains probate or letter of administration or 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 and delivers a copy of the same to the Issuer.
The Issuer may in its absolute discretion, where it thinks fit, dispense with the production of the probate or letter of administration or succession certificate or other legal representation, in order to recognise such holder as being entitled to the Debentures standing in the name of the demised Debentureholder(s) on production of sufficient documentary proof or indemnity. In case a person other than individual holds the Debentures, the rights in the Debentures shall vest with the successor acquiring interest therein, including liquidator or such any person appointed in accordance with the applicable law.
Notices
All notices to the Debentureholders required to be given by the Issuer or the Debenture Trustee shall have been given if sent either by registered post, by facsimile or by email to the original/ first allottees of the Debentures, or as may be prescribed by applicable law.
All notice(s) to be given by the Debentures shall be sent by registered post or by hand delivery to the Issuer or to such persons at such address as may be notified by the Issuer from time to time through suitable communication.
Notice(s) shall be deemed to be effective (in the case of registered post) 7 (seven) business days after posting, (in the case of facsimile/email) twenty four hours after dispatch or (in the case of personal delivery) at the time of delivery.
Payment of outstanding amounts on the Debentures
The Issuer will comply with the terms of the Debt Listing Agreement including but not limited to ensuring that, the Issuer shall ensure that services of ECS (Electronic Clearing Service), Direct Credit, RTGS (Real Time Gross Settlement) or NEFT (National Electronic Funds Transfer) are used for payment of all outstanding amounts on the Debentures, including the principal and interest accrued thereon, in accordance with the applicable norms of the RBI.
Debenture Trustee
The Issuer has appointed SBICAP Trustee Company Limited as the Debenture Trustee for the Issue. All the rights and remedies of the Debentureholders shall vest in and shall be exercised by the Debenture Trustee without referring to the Debentureholders. All Investors are deemed to have irrevocably given their authority and consent to SCICAP Trustee Company Limited to act as their Debenture Trustee and for doing such acts and signing such documents to carry out their duty in such capacity. Any payment by the Issuer to the Debenture Trustee on behalf of the Debentureholders shall discharge the Issuer pro tanto to the Debentureholders. The Debenture Trustee shall carry out its duties and shall perform its functions in accordance with all applicable laws and regulations including without limitation the SEBI Debt Regulations and the Debenture Trustee Regulations as well as the Debenture Trust Deed and this Information Memorandum, with due care, diligence and loyalty. Resignation/retirement of the Debenture Trustee shall be in accordance with terms of the Debenture Trust Deed entered into between the Issuer and the Debenture Trustee and a notice in writing to the Debentureholders shall be provided for the same.
The Debenture Trustee shall ensure disclosure of all material events on an ongoing basis. The Debenture Trustee will protect the interest of the Debentureholders on the occurrence of an event of default by the Issuer in regard to timely payment of interest and repayment of principal and they will take necessary
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Rights of Debentureholders
The Debentureholders shall not be entitled to any right and privileges of shareholders other than those available to them under the Companies Act. The Debentures shall not confer upon the holders the right to receive notice(s) or to attend and to vote at any general meeting(s) of the shareholders of the Issuer.
Sharing of Information
The Issuer may, at its option, but subject to applicable laws, use on its own, as well as exchange, share or part with any financial or other information about the Debentureholders available with the Issuer, with its subsidiaries and affiliates and other banks, financial institutions, credit bureaus, agencies, statutory bodies, as may be required and neither the Issuer nor its subsidiaries and affiliates nor their agents shall be liable for use of the aforesaid information.
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DECLARATION Declaration by the Issuer
The Issuer hereby declares that this Information Memorandum contains full disclosure in accordance with SEBI Debt Regulations and the Companies Act.
The Issuer also confirms that this Information Memorandum does not omit disclosure of any material fact which may make the statements made therein, in the light of the circumstances under which they are made, misleading. The Information Memorandum also does not contain any false or misleading statement. The Issuer accepts no responsibility for the statements made otherwise than in this Information Memorandum 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.
The Issuer declares that all the relevant provisions of the relevant regulations or guidelines issued by SEBI and other applicable laws have been complied with and no statement made in this Information Memorandum is contrary to the provisions of the regulations or guidelines issued by SEBI and other applicable law, as the case may be.
Declaration by the Directors
(i) The Issuer has complied with the provisions of the Companies Act and the rules made thereunder;
(ii) The compliance with the Companies Act and the rules made thereunder does not imply that payment of interest or repayment of any Debentures is guaranteed by the Central Government; and
(iii) the monies received under the offer shall be used only for the purposes and objects indicated in the Information Memorandum.
I am authorised by the Board of Directors of the Issuer by way of the resolution dated 29 October 2018 and Committee of Directors of the Issuer by way of the resolution dated November 19, 2020 to sign this form and declare that all the requirements of Companies Act 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 in accordance with 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.
Signed by:
Name: Kasturi Soundararajan
Designation: Chief - Corporate Treasury & Investor Relations
Date: 24th November 2020
Place: Mumbai
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ANNEXURE A APPLICATION FORM
THE TATA POWER COMPANY LIMITED
Registered Office:
Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
Phone: +91 22 6665 8282 Fax: +91 22 6665 8885
Email: [email protected]
Website: www.tatapower.com
APPLICATION FORM FOR PRIVATE PLACEMENT OF NON-CUMULATIVE, REDEEMABLE, TAXABLE, LISTED, RATED SECURITIES IN THE FORM OF NON- CONVERTIBLE DEBENTURES
ISSUE OPENS ON: Nov 26, 2020 CLOSING ON: Nov 26, 2020
Date of Application: ______
Dear Sirs,
We have received, read, reviewed and understood all the contents, terms and conditions and required disclosures in the private placement offer letter cum information memorandum dated [●], 2020 (“Information Memorandum”) issued by The Tata Power Company Limited (the “Issuer”). We have also done all the required due diligence (legal or otherwise) without relying upon the information contained in the Information Memorandum. Now, therefore, we hereby agree to accept the Debentures mentioned hereunder or such smaller number as may be allocated to us, subject to the terms of the said Information Memorandum, this application form and the documents. We undertake that we will sign all such other relevant documents and do all such other acts, if any, necessary on our part to enable us to be registered as the holder(s) of the Debentures which may be allotted to us. The amount payable on application as shown below is remitted herewith. We authorise you to place our name(s) on the Register of Debentureholders of the Issuer as well as the number of Debentures that may be so allocated to us and to register our address(es) as given below. We note that the Issuer is entitled in their absolute discretion to accept or reject this application in whole or in part without assigning any reason whatsoever. Yours faithfully, For (Name of the Applicant)
(Name and Signature of Authorised Signatory) The details of the application are as follows:
APPLICATION FORM FOR DEBENTURES (CONT.)
DEBENTURES APPLIED FOR:
No. of Debentures (in figures Issue Price per Debenture Amount (Rs.)
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and in words) (Rs.)
[•] [•] [•]
Tax status of the Applicant (please tick one)
1. Non Exempt 2. Exempt under: Self-declaration Under Statute Certificate from I.T. Authority
Please furnish exemption certificate, if applicable.
We apply as (tick whichever is applicable)
Financial Institution Company
Commercial Bank/RRB/Co-op.Bank/UCB
Body Corporate Others: ______
PAYMENT PREFERENCE
Cheque Draft RTGS Payable at ______
APPLICANT’S NAME IN FULL:
Tax payer’s PAN IT Circle/ Ward/ District
MAILING ADDRESS IN FULL (Do not repeat name) (Post Box No. alone is not sufficient)
Pi Te Fax n l
CONTACT PERSON
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NAME DESIGNATION TEL. NO. FAX NO.
I / We, the undersigned, want delivery of the Debentures in Electronic Form. Details of my / our Beneficiary (Electronic) account are given below: Depository Name NSDL CDSL Depository Participant Name DP ID Beneficiary Account Number Name of Applicant
We understand that in case of allocation of Debentures to us, our Beneficiary Account as mentioned above would get credited to the extent of allocated Debentures. (Applicants must ensure that the sequence of names as mentioned in the application form matches that of the Account held with the DP).
Name of the Authorised Designation Signature Signatory(ies)
FOR BANK USE ONLY
Date of receipt of application
No. of Debentures Date of receipt of (in words and cheque figures) Amount for Date of clearance of Debentures (Rs.) (in cheque words and figures) PARTICULARS OF DP ID RTGS/Cheque/Fund Cheque/Demand RTGS/Cheque/ DP ID No. Transfer/ Demand Draft No./UTR Demand Draft/ Draft drawn on No. in case of fund transfer (Name of Bank and RTGS/ A/c no Date Branch) incase of FT Client ID No.
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……………………………………………..…………………TEAR….………………………………………… ………......
The TATA POWER COMPANY LIMITED Regd office: Bombay House, 24 Homi Mody Street, Mumbai 400 001, India
APPLICATION FORM FOR PRIVATE PLACEMENT OF NON CONVERTIBLE DEBENTURES ACKNOWLEDGEMENT SLIP (To be filled by the Applicant) Received from ______an application for ______Debentures Address______cheque/ draft No.______dated ______Drawn on ______for Rs. (in figures)______Pin Code ______for Rs. (in words) ______
1. Application must be completed in full BLOCK LETTER IN ENGLISH except in case of signature. Applications, which are not complete in every respect, are liable to be rejected.
2. Payment should be made by the deadline specified by the BSE. Successful bidders should do the funds pay-in to the following bank account of the Issuer (“Designated Bank Account”):
Beneficiary Name INDIAN CLEARING CORPORATION LTD Name of the Banker: HDFC Bank Limited IFSC Code: HDFC0000060
Successful bidders must do the funds pay-in, in totality, to the Designated Bank Account up to 10:30 am on the Pay-In Date (“Pay-in Time”). Successful bidders should ensure to do the funds pay-in from their same bank account which is updated by them in the BSE Bond– EBP Platform while placing the bids. In case of mismatch in the bank account details between BSE Bond – EBP Platform and the bank account from which payment is done by the successful bidder, the payment would be returned back. Provided that, in case of bids made by the Arranger on behalf of Eligible Investors, funds pay-in shall be made from the bank account of such Eligible Investor.
Note: In case of failure of any successful bidder to complete the funds pay-in by the Pay-in Time or the funds are not received in the Indian Clearing Corporation Limited’s Designated Bank Account by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer and/or the Arranger shall not be liable to the successful bidder. Funds pay-out on would be made by Indian Clearing Corporation Ltd. to the bank account of the Issuer. 3. Cheque or bank draft should be drawn on a scheduled bank payable at Mumbai. 4. The Application Form along with relevant documents should be forwarded to the registered office of The Tata Power Company Limited (the “Issuer”) to the attention of Mr. H.M. Mistry, on the same day the application money is deposited in the Bank. A copy of PAN Card must accompany the application. 5. In the event of debentures offered being oversubscribed, the same will be allotted in such manner and proportion as may be decided by Tata Power.
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6. The debentures shall be issued in Demat form only and subscribers may carefully fill in the details of Client ID/ DP ID. 7. In the case of application made under Power of Attorney or by limited companies, corporate bodies, registered societies, trusts etc., following documents (attested by Company Secretary /Directors) must be lodged along with the application or sent directly to the Issuer at its registered office to the attention of Mr. H.M. Mistry along with a copy of the Application Form. (a) Memorandum and articles of association / documents governing constitution/ certificate of incorporation. (b) Board resolution of the investor authorising investment. (c) Certified true copy of the Power of Attorney. (d) Specimen signatures of the authorised signatories duly certified by an appropriate authority. (e) PAN (otherwise exemption certificate by IT authorities). (f) Specimen signatures of authorised persons. (g) SEBI registration certificate, if applicable. 8. The attention of applicants is drawn to sub-section (1) of Section 38 of the Companies Act, which is reproduced below: Any person who:
(a) Makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, for its securities; or (b) Makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a company to allot or register any transfer of securities to him or any other person in a fictitious name, shall be punishable with imprisonment for a term which shall not be less than 6 months but which may extend to 10 years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to 3 times the amount involved in the fraud.
9. The applicant represents and confirms that it has understood the terms and conditions of the Debentures and is authorised and eligible to invest in the same and perform any obligations related to such investment.
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ANNEXURE B BOARD RESOLUTION AUTHORISING THE ISSUE
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ANNEXURE C COMMITTEE OF DIRECTOR’S RESOLUTION
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ANNEXURE D SHAREHOLDERS’ RESOLUTION
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ANNEXURE E RATING LETTER OF CRISIL ALONGWITH RATING RATIONALE
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ANNEXURE F CONSENT OF DEBENTURE TRUSTEE
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ANNEXURE G LIST OF GROUP COMPANIES AS ON 30th Sep 2020
SUBSIDIARIES
1. Tata Power Delhi Distribution Ltd. 2. Coastal Gujarat Power Ltd. 3. Tata Power Renewable Energy Ltd. 4. Walwhan Renewable Energy Ltd 5. Clean Sustainable Solar Energy Private Limited 6. Dreisatz Mysolar24 Private Limited 7. MI Mysolar24 Private Limited 8. Northwest Energy Private Limited 9. Solarsys Renewable Energy Private Limited 10. Walwhan Solar Energy GJ Limited 11. Walwhan Solar Raj Limited 12. Walwhan Solar BH Limited 13. Walwhan Solar MH Limited 14. Walwhan Wind RJ Limited 15. Walwhan Solar AP Limited 16. Walwhan Solar KA Limited 17. Walwhan Solar MP Limited 18. Walwhan Solar PB Limited 19. Walwhan Energy RJ Limited 20. Walwhan Solar TN Limited 21. Walwhan Solar RJ Limited 22. Walwhan Urja Anjar Limited 23. Walwhan Urja India Limited 24. Maithon Power Ltd. 25. Tata Power Trading Co. Ltd. 26. Bhivpuri Investments Ltd. 27. Bhira Investments Pte. Ltd. 28. Tata Power Solar Systems Ltd. 29. Tata Power International Pte. Ltd. 30. Trust Energy Resources Pte. Ltd. 31. Khopoli Investments Ltd. 32. Af-Taab Investment Co. Ltd. 33. TP Wind Power Limited ( Formely Known as Indo Rama Renewable Jath Limited) 34. Nelco Ltd. (Consolidated) 35. PT Sumber Energi Andalan Tbk. (SEA) 36. NDPL Infra Ltd. 37. Nivade Windfarms Limited 38. Tata Power Jamshedpur Distribution Ltd. 39. Supa Windfarms Limited 40. Poolavadi Windfarms Limited 41. Tata Power Green Energy Limited 42. TP Renewable Microgrid Limited 43. Tata Power Ajmer Distribution Ltd 44. Vagarai Windfarm Limited (VWL) 45. Chirasthayee Saurya Limited 46. Nelco Network Products Ltd 47. Far Eastern Natural Resources LLC 48. Tatanet Services Ltd
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49. TP Solapur Limited 50. TP Kirnali Limited 51. TCL Ceramics Ltd.(formerly known as Tata Ceramics Limited) 52. TP Central Odisha Distribution Limited 53. TP Kirnali Solar Limited 54. TP Solapur Solar Limited 55. TP Akkalkot Renewable Ltd 56. TP Saurya Ltd 57. TP Roofurja Limited
JOINT VENTURE
PT Kaltim Prima Coal lndoCoal Resources (Cayman) Limited
PT Indocoal Kaltim Resources
Candice Investments Pte. Limited
PT N usa Tambang Pratama
PT Marvel Capital Indonesia
PT Dwikarya Prima Abadi
PT Kalimantan Prima Power
PT Baramulti Sukessarana Tbk
Adjaristsqali Netherlands B.V
Koromkheti Netherlands B.V
IndoCoal KPC Resources (Cayman) Limited
Resurgent Power Ventures Pte Limited
Tubed Coal Mines Ltd
Nandakini Coal Company Limited
Industrial Energy Limited
Powerlinks Transmission Limited
Dugar Hydro Power Limited
ASSOCIATES
1. Dagachhu Hydro Power Corporation Ltd. 2. Tata Projects Ltd. (consolidated) 3. Yashumun Engineers Limited
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4. Brihat Trading Private Limited 5. The Associated company limited
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ANNEXURE H FINANCIAL POSITION OF THE COMPANY Balance Sheet
(INR in Crore) As at 31st As at 31st As at 31st As at 31st As At 30th March, March, March, March, Sep, 2020 2017 2018 2019 2020 EQUITY AND LIABILITIES
SHAREHOLDERS' FUNDS
Share Capital 270.50 270.50 270.50 270.5 319.56 Reserves and Surplus 16321.47 12718.03 13919.10 13491.47 15,745.55
16591.97 12,988.53 14,189.60 13,761.97 16,065.11
UNSECURED PERPETUAL 1,500.00 1,500.00 1,500.00 1,500.00 1,500.00 SECURITIES
NON-CURRENT LIABILITIES Long-term Borrowings 8847.86 8123.84 8749.72 9825.33 11,199.15 Deferred Tax Liabilities (Net) 1468.88 235.99 583.49 307.25 329.97 Other Non Current Liabilities 254.89 312.23 183.54 237.03 232.40 Long-term Provisions 170.75 182.10 195.55 161.34 156.43 Other Financial Liabilities 14.60 15.51
CURRENT LIABILITIES
Short-term Borrowings 2391.98 4326.46 6731.80 6212.31 4698.01 Lease Liabilities - - - 44.25 41.82
Trade Payables 1346.23 1105.68 1102.14 1001.87 940.23 Other Current Liabilities 819.76 855.37 849.12 107.67 492.34 Short-term Provisions 52.95 15.44 14.74 62.02 59.29 Other Financial Liabilities 6632.61 5386.20 2895.43 2621.62 2,826.18 Current Tax Liabilities (Net) 98.62 107.67 107.67 107.67 126.17 Liabilities directly associated with 877.56 966.27 1,402.84 1036.32 assets classified as held for sale TOTAL Liabilities Before Regulatory 22,084.53 21,528.54 22,444.98 22,748.47 22,354.51 Deferral Account Regulatory Deferral Account - 656 485 -
Liability Total Equity and Liabilities 40,832.50 36,502.07 38,134.58 37,616.48 40,313.58
ASSETS
NON-CURRENT ASSETS
Fixed Assets 8358.30 7873.55 7545.96 7974.07 7,928.36
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As at 31st As at 31st As at 31st As at 31st As At 30th March, March, March, March, Sep, 2020 2017 2018 2019 2020 Investment in Property 0.96 - - Intangible Assets 189.87 93.18 83.89 62.22 51.23 Capital Work-in-Progress 666.19 418.78 368.10 402.87 266.05 Intangible Assets under Development 254.68 - - Investments 22340.31 18382.45 21,270.77 21,327.20 21,532.54 Trade Receivables 185.86 185.76 185.76 Finance Lease receivables 573.47 574.76 554.27 553.03 546.92 Other Financial Assets 376.74 434.83 2.89 222.77 30.42 Loans 22.82 22.09 51.35 42.1 489.70 Other Non-current Assets 884.83 559.72 977.10 1009.64 1120.55 Non Current Tax Assets (Net) 135.00 135.00
CURRENT ASSETS Current Investments 130.08 10.00 42.00 20 965.19 Inventories 671.09 474.22 579.51 635.01 557.90 Trade Receivables 1234.82 972.05 1256.44 1108.68 986.74 Unbilled Revenue 53.75 560.98 41.56 83.41 82.52 Cash and Cash Equivalents 141.88 42.94 75.94 158.54 333.51 Bank Balances other than above 14.47 15.48 19.85 20.4 66.93 Loans - 402.25 119.20 550.09 1374.23 Finance Lease Receivables 39.16 34.27 37.58 31.89 34.52 Other Financial Assets 376.74 434.83 96.06 235.58 231.44 Other Current Assets 273.97 172.87 952.11 146.26 164.50
Total Current Assets 3443.19 2612.66 3220.25 2989.86 4,797.48 Assets Classified as held for Sale 235.72 3261.14 2806.59 2639.4 2,996.31 Total Assets before Regulatory 38288.50 34706.88 37,135.58 39,894.56 37,358.16 deferral account Regulatory Deferral Accounts - Assets 2544.00 1795.19 999.00 258.32 419.02 TOTAL ASSETS 40832.50 36501.07 38134.54 37616.48 40,313.58
Statement of Profit and Loss (Rs., in Crore)
For the year For the year For the year For the year For the half ended 31st ended 31st ended 31st ended 31st year ended March, March, 2018 March, 2019 March, 2020 30th Sep, 2017 2020 REVENUE Revenue from Operations 6924.16 7536.59 7932.83 7726.39 1550.28 Other Income 994.72 929.34 516.35 582.62 232.28 TOTAL REVENUE 7918.88 8465.93 8449.18 8309.01 1782.66
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For the year For the year For the year For the year For the half ended 31st ended 31st ended 31st ended 31st year ended March, March, 2018 March, 2019 March, 2020 30th Sep, 2017 2020 EXPENSES Cost of Power Purchased 466.52 412.05 457.02 457.59 172.46 Cost of Fuel 2342.83 2776.40 3168.27 2765.61 535.28 Transmission Charges 221.30 279.88 248.23 214 64.50 Employee Benefits Expense 631.02 596.69 637.57 610.71 158.87 Finance Costs 1318.76 1431.38 1500.35 1510.38 387.20 Depreciation and 605.00 663.21 632.70 167.37 685.75 Amortisation Other Expenses 1011.77 877.52 801.87 756.69 159.00 TOTAL EXPENSES 6597.20 7037.13 7446.01 7000.73 1644.68
PROFIT BEFORE TAX 515.23 (3244.60) 1926.39 350.53 137.98
TAX EXPENSE/(BENEFIT) Current Tax Expense 264.19 224.26 171.00 18.61 42.89 Deferred Tax Expense (78.46) (844.37) 331.58 73.08 34.92 Deferred Tax Relating to - 10.00 -24.51 earlier years Deferred Tax (65.00) 454.29 (420.61) -275 (Recoverable)/Payable
PROFIT/ (LOSS) FOR 394.50 (3078.78) 1834.42 558.35 164.23 THE YEAR FROM CONTINUING OPERATIONS PROFIT/ (LOSS) BEFORE 16.44 (85.87) (191.82) -81.64 (29.53) TAX FOR THE YEAR FROM DISCONTINUED OPERATIONS IMPAIRMENT LOSS - - - -361 RELATED TO DISCONTINUED OPERATIONS ON REMEASUREMENT TO FAIR VALUE Tax Expense / (Credit) on (10.30) Discontinued Operations Current Tax 3.71 (17.36) (71.92) Deferred Tax 9.69 3.23 5.94 -32.41 Tax Expense / (Credit) on 13.40 (14.13) (65.98) -32.41 Discontinued Operations
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For the year For the year For the year For the year For the half ended 31st ended 31st ended 31st ended 31st year ended March, March, 2018 March, 2019 March, 2020 30th Sep, 2017 2020 Profit/ (Loss) for the year 3.04 (71.74) (125.84) (19.23) from discontinued -410.23 operations
Profit/ (Loss) for the Year 397.54 (3150.52) 1708.58 148.12 145.00 EARNINGS PER SHARE (FACE VALUE Rs. 1/- PER SHARE) Basic (Rs.) Diluted (Rs.)
Cash Flows
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ANNEXURE I BRIEF PARTICULARS OF THE MANAGEMENT OF THE COMPANY
Brief profiles of the key managerial personnel i) Mr. Praveer Sinha, CEO & Managing Director
Mr. Praveer Sinha has over three decades of experience in the power sector and has been credited with transforming the power distribution sector and development and setting up of greenfield and brownfield power plants in India and abroad.
Mr. Sinha holds a Master's Degree in Business Law from National Law School, Bengaluru and is also professionally trained as an Electrical Engineer. He is also a member of the Faculty Board at Faculty of Management Studies and a member of Board of Governors at the Indraprastha Institute of Information Technology, Delhi. He is a Research Scholar at the Indian Institute of Technology Delhi and is also a visiting Scholar at Massachusetts Institute of Technology, Boston, USA.
Before his appointment in Tata Power, Mr. Sinha was the CEO & Managing Director of Tata Power Delhi Distribution Limited (Tata Power-DDL). Tata Power-DDL is a Public Private Partnership (Joint Venture) between the Company and Government of National Capital Territory of Delhi, supplying power to over seven million people in North and North-West Delhi. ii) Mr. Ramesh N. Subramanyam, Chief Financial Officer
Mr. Subramanyam is a Commerce Graduate from the University of Nagpur. He is also an Associate of the Institute of Cost Accountants of India, The Institute of Company Secretaries of India and has passed the Certified Public Accountant (CPA) examination from USA. He has over two decades of experience in the field of Finance, Commercial, Corporate Treasury, Accounts and Secretarial functions. He has worked in Siemens AG, Monsanto India Limited, Hindustan Lever Limited and Lloyds Steel Industries Limited. He has served in various senior positions in The Tata Power Company Ltd. and its subsidiaries since 2007, and is presently it's Chief Finance Officer. iii) Mr. Hanoz M. Mistry, Company Secretary
Mr. Hanoz Mistry is a commerce and law graduate from the University of Mumbai. He is also a Fellow of The Institute of Company Secretaries of India. He has over 30 years of experience in the Secretarial field. He has worked in Greaves Cotton Ltd. as an Assistant company Secretary.
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ANNEXURE J DETAILS OF INQUIRY, INSPECTIONS AND INVESTIGATIONS
Except as stated below the Issuer and its subsidiaries are not aware of any outstanding litigation including suits, criminal or civil prosecutions and taxation related proceedings against the Issuer and / or its subsidiaries that would have a material adverse effect on the Issuer’s business. Furthermore, there are no defaults, non-payment of statutory dues including, institutional/ bank dues and dues payable to holders of any debentures, bonds and fixed deposits that would have a material adverse effect on the Issuer’s business other than unclaimed liabilities against the Issuer as of the date of this Information Memorandum.
In determining whether any outstanding litigation against the Issuer and its subsidiaries, other than litigation involving moral turpitude, criminal liability, material violations of statutory regulations or proceedings relating to economic offences, would have a material adverse effect on the Issuer’s business, those proceedings which involve a claim of more than 1% of the Issuer’s total net worth as of 31st March 2020 (threshold - approx Rs. 152 crores) have been individually described below.
Civil Cases
1. Tata Power imported coal from various countries during the period from March of 2012 to February of 2013. Tata Power classified the imported coal as steam coal under CTH 27011920 and accordingly, paid concessional rate of custom duties as applicable to steam coal. The Customs Department contended that the coal imported by Tata Power is classifiable as bituminous coal and accordingly, the benefit of the exemption notification should not be available to Tata Power. In light of contrary decisions of the CESTAT on the issue of classification of imported coal, the matter was referred to a Larger Bench of CESTAT for resolving the issue. The Larger Bench heard the matter and vide its Order dated 16.01.2017 observed that the issue of classification of steam coal is already pending before the Hon’ble Supreme Court as the appeal filed by Coastal Energy against the adverse order of CESTAT, Bangalore on the said issue has been admitted by the Supreme Court. In view of the matter pending before Hon’ble Supreme Court, the Larger Bench disposed of the references made by the Divisional Benches without any findings on the merit of the case but granted the liberty to approach the Bench (if required), once the decision of the Hon’ble Supreme Court is delivered. An amount of Rs. 135 crores was charged by the Customs Department for the classification of the coal as bituminous coal, which we have paid under protest. The Customs Department is additionally charging for penalty for wrong classification along with interest to the tune of approximately Rs. 35 crores.
Tax Matters
2. Perpetual Non-Convertible Debentures Matter: The Company had issued unsecured, perpetual non-convertible debentures for Rs. 1500 Crores. During F.Y. 2011-12. The Company is paying Interest at a fixed rate of 11.40% i.e. Rs. 171 Crores p.a. The same is being claimed as allowable business expenditure in income tax returns. However, the assessing officer has disputed its allowability and disallowed the same in company assessment for F.Y. 2011-12 to 2015-16. The company has filed appeal against AO order which is pending before ITAT, Mumbai for adjudication. The amount in dispute is approx. Rs. 400 crores but no tax liability will arise even if the case is decided against the company because the Company is being assessed to tax under MAT provision for entire disputed period. 3. Demand against Transmission Charges Received by Tata Power: The Company has collected an amount of Rs.2824crs as a transmission charges from MSETCL from July 2012 to June 2017. DGCEI is of the view that the said receipt is towards the rent for making infrastructure available to
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Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 other entities for transmission of electricity and hence it does not qualify for exemption under Service Tax Law as a receipt towards transmission Charges. DGCEI issued Show Cause Notice asking Tata Power to pay Service Tax to the tune of Rs.375.29 crores. Company has filed Writ Petition before Hon. High Court of Mumbai and the same is pending for disposal. Court has granted 100% unconditional stay against the said recovery.
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ANNEXURE K ANNUAL REPORTS / REVIEW REPORT
Annual reports / Financial results of the Company can be downloaded from https://www.tatapower.com/pdf/investor-relations/q4-results-31mar20.pdf https://www.tatapower.com/pdf/investor-relations/100Annual-Report-2018-19.pdf https://www.tatapower.com/pdf/investor-relations/99Annual-Report-2017-18.pdf https://www.tatapower.com/pdf/investor-relations/98Annual-Report-2016-17.pdf https://www.tatapower.com/pdf/investor-relations/97Annual-Report-2015-16.pdf https://www.tatapower.com/pdf/investor-relations/96Annual-Report-2014-15.pdf
Limited Review Report for the year ended 30th Sep 2020.
189 12th Floor. The Ruby 29 Senapati Bapat Marg SR BC & COLLP Dadar (West) Chartered Accountants Mumbai - 400 028. India Tel +91 22 5813 3000
Independent Auditor's Review Report on the Quarterly and Year to Date Unaudited Consolidated Financial Results of the Company Pursuant to the Regulation 33 of the SERI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended
Review Report to The Board of Directors The Tata Power Company Limited
I. We have reviewed the accompanying Statement of Unaudited Consolidated Financial Results of The Tata Power Company Limited (the "Holding Company") and its subsidiaries (the Holding Company and its subsidiaries together referred to as "the Group"), its associates and joint ventures for the quarter ended September 30, 2020 and year to date from April 1, 2020 to September 30, 2020 (the "Statement") attached herewith, being submitted by the Holding Company pursuant to the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (the "Listing Regulations").
2. This Statement, which is the responsibility of the Holding Company's Management and approved by the Holding Company's Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34, (Ind AS 34) "Interim Financial Reporting" prescribed under Section 133 of the Companies Act, 2013 as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410, ··Review oflnterim Financial Information Performed by the Independent Auditor of the Entity" issued by the Institute of Chartered Accountants of India. This standard requires that we plan and perform the review to obtain moderate assurance as to whether the Statement is free of material misstatement. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We also performed procedures in accordance with the Circular No. CIR/CFD/CMD 1/44/2019 dated March 29, 2019 issued by the Securities and Exchange Board of India under Regulation 33(8) of the Listing Regulations, to the extent applicable.
4. The Statement includes the results of the entities as per Annexure I.
5. Based on our review conducted and procedures performed as stated in paragraph 3 above and based on the consideration of the review/audit reports of other auditors referred to in paragraph 8 and 9, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with recognition and measurement principles laid down in the aforesaid Indian Accounting Standards ('Ind AS') specified under Section 133 of the Companies Act, 2013, as amended, read with relevant rules issued thereunder and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of the Listing e:,ffi.--£,~~C=&~~ ~:i::~/ncluding the manner in which it is to be disclosed, or that it contains any material ~ Mu . \~~~ ;: / ~ ~ ~ SR B~c:d~OO~l~:c ai~m~t::;t:~~~~t~~~;~:•p 3~~t~1~~~ 1::;~~!-~~~ 18~4318 ~ ~ ?-'~ SR BC & COLLP Chartered Accountants
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6. We draw attention to Note 6 of the consolidated Ind AS financial results. The auditors of a joint venture company and an associate company of the group have reported an Emphasis of Matter on the existence of material uncertainty on the future operations of the respective companies due to the impact of COVID 19. Our conclusion is not modified in respect of this matter.
7. The accompanying Statement includes the audited / unaudited interim financial statements and other financial information, in respect of:
• 2 subsidiaries, whose audited / unaudited interim financial statements include total assets of Rs. 11,359.22 crores as at September 30, 2020, total revenues of Rs. 2,320.06 crores and Rs. 3,981.89 crores, total net profit after tax of Rs. 118.97 crores and Rs. 239.39 crores, total comprehensive income of Rs. 120.00 crores and Rs. 239.45 crores for the quarter ended September 30, 2020 and the period ended on that date respectively, and net cash inflows of Rs. 2.46 crores for the period from April 1, 2020 to September 30, 2020, as considered in the Statement which have been audited/ reviewed by their respective independent auditors.
• 1 associate and 5 joint ventures, whose interim financial statements include Group's share of net profit of Rs. 130.87 crores and Rs. 237.89 crores and Group's share of total comprehensive income of Rs. 125.20 crores and Rs. 227.95 crores for the quarter ended September 30, 2020 and for the period from April 1, 2020 to September 30, 2020 respectively as considered in the Statement whose interim financial statements and other financial information have been reviewed by their respective independent auditors.
The independent auditor's reports on interim financial statements and financial information of these entities have been furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures in respect of these subsidiaries, joint ventures and associates is based solely on the report of such auditors and procedures performed by us as stated in paragraph 3 above.
8. Certain of these subsidiaries and joint ventures are located outside India whose interim financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Holding Company's management has converted the interim financial statements of such subsidiaries and joint ventures located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have reviewed these conversion adjustments made by the Holding Company's management. Our conclusion in so far as it relates to the balances and affairs of such subsidiaries and joint ventures located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Holding Company and reviewed by us.
9. The accompanying Statement includes unaudited interim financial statements and other unaudited financial information in respect of: SR BC & COLLP Chartered Accountants
The Tata Power Company Limited Page 3 ofS
• 4 associates and 9 joint ventures, whose interim financial statements include the Group's share of net profit of Rs. 3.32 crores and Rs. 11.77 crores and Group's share of total comprehensive income of Rs. 3.33 crores and Rs. 11.77 crores for the quarter ended September 30, 2020 and for the period ended on that date respectively.
The unaudited interim financial statements and other financial information of these subsidiaries, joint ventures and associates have not been audited / reviewed by any auditor and have been approved and furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the affairs of these subsidiaries, joint ventures and associates, is based solely on such unaudited interim financial statements and other unaudited financial information. According to the information and explanations given to us by the Management, these interim financial statements are not material to the Group.
Our conclusion on the Statement in respect of matters stated in para 7, 8 and 9 above is not modified with respect to our reliance on the work done and the reports of the other auditors and the interim financial statements and financial information certified by the Management.
For S RB C & CO LLP Chartered Accountants ICAI Firm registration number: 324982E/E300003 C& co
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Annexure -1 to Auditor's Report
No Name of Entities Country of Incorporation
A Subsidiaries (Direct) Af-Taab Investments Company Limited India 2 Tata Power Solar Systems Limited India 3 Tata Power Trading Company Limited India 4 Nelco Limited India 5 Maithon Power Limited India 6 Tata Power Renewable Energy Limited India TP Renewable Microgrid Limited (Formerly known 7 India as Industrial Power Utility Limited) 8 Coastal Gujarat Power Limited India 9 Bhira Investments Limited Singapore 10 Bhivpuri Investments Limited Mauritius 11 Khopoli Investments Limited Mauritius 12 Trust Energy Resources Pte. Limited Singapore 13 Tata Power Delhi Distribution Limited India 14 Tata Power Jamshedpur Distribution Limited India 15 Tata Power International Pte. Limited Singapore 16 TP Ajmer Distribution Limited India 17 Tata Power Green Energy Limited India 18 TP Central Odisha Distribution Limited India 19 TP Solapur Solar Limited India 20 TP Akkalkot Renewable Limited India 21 TP Kirnali Solar Limited India 22 TP Saurya Limited India
B Subsidiaries (Indirect) I NDPL Infra Limited India 2 Tatanet Services Limited India 3 Supa Windfarms Limited India 4 Nivade Windfarms Limited India 5 Poolavadi Windfarms Limited India 6 Indo Rama Renewables Jath Limited India 7 Walwhan Renewable Energy Limited India 8 Clean Sustainable Solar Energy Private Limited India 9 Dreisatz Mysolar24 Private Limited India 10 MI Mysolar24 Private Limited India 11 Northwest Energy Private Limited India 12 Solarsys Renewable Energy Private Limited India 13 Walwhan Solar Energy GJ Limited India 14 Walwhan Solar Raj Limited India Walwhan Solar BH Limited India Walwhan Solar MH Limited India SR BC & COLLP Chartered Accountants
The Tata Power Company Limited Page 5 of 5
No Name of Entities Country of Incorporation 17 Walwhan Wind RJ Limited India 18 Walwhan Solar AP Limited India 19 Walwhan Solar KA Limited India 20 Walwhan Solar MP Limited India 21 Walwhan Solar PB Limited India 22 Walwhan Energy RJ Limited India 23 Walwhan Solar TN Limited India 24 Walwhan Solar RJ Limited India 25 Walwhan Urja Anjar Limited India 26 Chirasthayee Saurya Limited India 27 Nelco Network Products Limited India 28 Vagarai Windfarm Limited India 29 TP Solapur Limited India 30 TP Kimali Limited India 31 Walwhan Urja India Limited India 32 Far Eastern Natural Resources LLC Russia
C Joint Ventures (Direct) Tubed Coal Mines Limited India 2 Mandakini Coal Company Limited India 3 Industrial Energy Limited India 4 Powerlinks Transmission Limited India 5 Dugar Hydro Power Limited India
D Joint Ventures (Indirect) PT Kaltim Prima Coal Indonesia 2 lndoCoal Resources (Cayman) Limited Cayman Islands 3 PT Indocoal Kaltim Resources Indonesia 4 Candice Investments Pte. Limited Singapore 5 PT N usa Tambang Pratama Indonesia 6 PT Marvel Capital Indonesia Indonesia 7 PT Dwikarya Prima Abadi Indonesia 8 PT Kalimantan Prima Power Indonesia 9 PT Baramulti Sukessarana Tbk Indonesia 10 Adjaristsqali Netherlands B.V Netherlands 11 Koromkheti Netherlands B.V Netherlands 12 IndoCoal KPC Resources (Cayman) Limited Indonesia 13 Resurgent Power Ventures Pte Limited Singapore
India Bhutan India India India TATA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Websile: WWW ll!ltapower com CIN : L28920MH1919PLC000567 STATEMENT OFCONSOUOATEO FINANCIAL RESULTS FOR THE QUARTER} HALF YEAR ENDED lOTH SEPTEMBER. 2020 Cuil1\12 r CJndt!d 1-hll l •Year ended 1f,:,11r ende,d Particulars lQ..~n-20 JO..Jun-20 J-O- S.o-19 J{)..St!JJ-20 I 30-Seci-19 JH,lm-20 (Refer Noles Below) Uoourilloa (Un1UJ di tod1 rtJ1111udiie-dt f Unaudi~·H I (Unauditedt Audited i1 t:r\l{a 1 Income Revenue from Operations 8,289 81 6,452 99 7,677 82 14,742 80 15,444 54 29,136,37 Other Income (Refer Nole J) 151,79 87 43 216 53 23922 324 45 562,61 Tot.al Income 11,«·1.,o G,5,tcl.,U 7.1111"-lS 1UJl2.DZ 15,76ll,99 lll.698,98 2 Expenses Cost of power purchased 2,333,48 1,425 24 1,719 78 3,758 72 3,355 78 6,220 46 Cost of fuel 2,321,34 2,191 60 2,330 12 4,512 94 4,998 80 9,922 39 Transmission charges 12S,63 84 21 SJ 62 209 8-4 1071 5 214 oa Rl'tW m\.1te:11A1 C011$UmOd 334.68 91 S,I 375 66 42622 536 47 95718 Purchase of finished goo~ and spares 742 425 25 tJ 1167 68 10 111 7'1 Oeuease/(lnc1ea:se) in stock-in-trade and work-in-progress 744 1 54 (695) 898 (5.54) (1S64) Employee benefits expense 559,95 405 25 359 59 96520 707.27 1,44064 Finance costs 1,064,98 1,089.36 1,129.95 2,154.34 2,27) 83 4,493 7l Depreciation and amortisation expenses 698 88 644 49 65444 1,343 37 1,274 39 2,633.56 Other expenses 59867 518 08 564 84 1 116.75 111842 2 342 78 Total Expenses J,052.<7 6,05,SG 7,206.18 1,1 508.0) 1U.14.67 2&.'J20.8'1 3 ProfitJ(Loss) before Regulatory Deferral Balances, Exceptional Items, Tax and Share of Prof,t or Associates and Joint Ventures (1-2) 389.13 84... 68Jl,17 473,99 1,33-4.ll 1,378.14 Add/(Less): Net movement in Regulalory Deferral Balances 65.67 185,24 (438 35) 250 91 (696 84) (451 68) • Addl(Less): Net movement in Regulatory Deferral Balances in respect of earlier years (21 32) Addl(Less): Dererred Ta:r RecoverableJ(?ayable) 57.14 ll.26 89,37 90,40 147 88 264. 31 5 Profitl(Loss) before Exceptional Items, Tax and Share of Prof,t of Associates and Joint Vantures (J+4) 511 ,84 ,0).)6 ll9.19 815.JO 785)4 1,189.45 6 Share of Profit of Associates and Joint Ventures accounted for using the Equity Method (Refer Nole 3) 19S.88 176 87 190 54 372,73 443,52 952 55 7 Profit before Exceptional Items and Tax (5+8) 707.80 480.23 529.73 1,188.03 1,228.86 2,142.00 8, Add/(Lns): Exceptional Items Standby charges lrngation (328.97) (276 JS) Reversal of Impairment for Investment in Joint Venture and related obligalion 235,00 235 00 Gain on Sale of Investment in Associates 532 51 Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (net) . 12SS 00 9. Profit before Tax (7+8) 707.30 480.23 529,7J 1,188.0l 1,1l.U19 2,168.16 10 Tax EJl:pense/{Credit} Current Tax 144.41 9085 10065 235,26 l5BZ6 494 30 Deferred Tax 17323 98 50 8501 271,73 17034 )3095 Deferred Tax Expense ln respect of eilrlier years (24 51) Remeas~ement or Delerred Tax on account or New Tai'. Regime (nel) (159,251 11 Net Prorit for the Period from Continuing Operations (9-10) 390.16 290,88 344.07 681,04 606.29 1,726.67 Profil/(Loss) before tax from Discontinued Operations (29 SJ) (JS 04) (847) (64 57) (3789) (81 64) Impairment Loss on Remeasurement to Fair Value (361 00) Ta:r Expense/(Credit) on Discontinued Operations 110,301 112,26 12.961 122,56 11J.24l 132.411 12 Profit/(Loss} for the Period from Discontinued Operations (19.23) (22.78) (5,51) (42,01 ) (24,65) (410,23) 13 Profit for the Period (11+12) 370.93 268.10 :138,56 639.03 581.6-4 1,316.44 Other Comprehensive lnc:ome/(Expenses) including Discontinued Operations (;) Items that will not be reclassified to profit or loss 7412 24.21 (7404) 98,)9 (64 84) (127 08) (ii) Tax relating to items that will not be recl~sified to profit or loss 1 69 0 52 1968 2.21 19 7J 26 95 (iii) Net movement in Regulatory Deferral Balances (8360) 16n (66 88) (iv) Share of Other Comprehensive lrv-...orTtc,t',&oana,c) that will not be reclassified to profit or loss of Assoelales and Jo,ntVentufH Q.at0tm1ttti h)t u,1ng tl1ti: Equity Method (Reier Note J) (5 65) (5 12) (10 861 (10 77) (1707) 2 23 (v) Items that will be reclassified to profit and loss (327 70) (82 781 70 35 (410 48) 5669 559 47 (vi) Income tax relating lo ilems that will be ,eclassified to profit or loss 42,36 1388 5624 (32 431 (vii) Share of other Comprehensive lncome/(Eipense) that will be reclassified lo profit or loss of Associates and Joint Ventures accounted ror using the Equity Method 166.97 1223 14061 /54.74 13267 407 06 14 Other Comprehensive Income/I Expenses) !Net of Tax) {365,75 {20.28 145.74 {386.03 127.11 136.20 15 Total Comprehensive Income (13+14) 5.18 247,U 4JIUO 25300 708.82 Z,1$2.64
Profit/(Loss) for the Period attributable to : C>Nners of the Company 279 61 20662 257 92 48623 421 47 1,017 38 Non-controlling Interests 91 .32 61 48 8064 152,80 160 17 299 06
Others Comprehensive lncome/(Expense) attributable to : C>Nners of the Company (366 31) (19 77) 146,72 (386 08) 128 38 838 25 Non-controlling Interests 0,58 (0 51 ) (0 98) 0 05 (1 20) (2 05)
Total Comprehensive Income attribulable to : C>Nners of the Company (86,70) 18685 404.~ 100,15 "4985 1,855 63 Non-controlling Interests 91,88 60 97 79,66 15285 15897 297 01
16 ?aid-up equity share capital (face Value: f 1/- per share) 319,56 270 so 270,50 319 56 27050 270 50 17 Other Equity 17,795 52 18 Basic. and D iluted E.irimings Per Equity Shan: (off 11- (l!.;ICh) (f) (not annualised) (i) From Continuing Operations before net movement in regulatory deferral balances 0.62 0.1~ 1 60 0 78 265 5,JJ (ii) From Continuing Operations after net movement in regulator; defe • R.alllawt (R.l'.ff!f Noh! .J) TATA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website: www.tatapower.com CIN: L28920MH1919PLC000567 CONSOLIDATED STATEMENT OF ASSETS ANO LIABILITIES ~ crore As at As at Particulars 30-Sep.20 31-Mar-20 (Unaudltedl Audited A. ASSETS 1. Non-current Assets (a) Property, Plant and Equipment 45,765.35 44,662.61 (b) Capital Work-in-Progress 2,941 .61 1,611 .52 (c) Goodwill 1,667.52 1,641 .57 (d) Other Intangible Assets 1,313 75 1,362.18 (e) Investments accounted for using the Equity method 12,809.39 13,202,65 (f) Financial Assets (i) Other Investments 657 64 632,68 (ii) Trade Receivables 70 42 30,28 (iii) Loans 79 72 80.88 (iv) Finance Lease Receivables 596 77 588,92 (v) Other Financial Assets 374.29 578,79 (g) Non-current Tax Assets (Net) 317.98 342.00 (h) Deferred Tax Assets (Net) 122 77 74.24 (i) Other Non-current Assets 1,335.13 1,185 12 Total Non-current Assets 68,052.34 65,993.44 2. Current Assets (a) Inventories 1,823 44 1,75235 (b) Financial Assets (i) Investments 1,445 86 699 51 (ii) Trade Receivables 4,433 07 4,425.90 (iii) Unbilled Revenue 1,094.27 79942 (iv) Cash and Cash Equivalents 3,837.93 1,861 .50 (v) Bank Balances other than (iv) above 782 97 232 68 (vi) Loans 3115 33 ,00 (vii) Finance Lease Receivables 3618 33.20 (viii) Other Financial Assets 39311 1,412 43 (c) Current Tax Assets (Net) 5 58 1 10 (d) Other Current Assets 876 65 770,39 Total Current Assets 14,760 21 12,021.48 Assets Classified as Held For Sale (Refer Note 10) 5,269 13 6,253,06 Total Assets before Regulatory Deferral Account 88,081 68 84,267.98 Regulatory Deferral Account - Assets 6,145 28 5,480.17 TOTAL ASSETS 94,.:.:1>.~1> .,~,, ..0 .1:, B. EQUITY ANO LIABILITIES Equity (a) Equity Share Capital 319 56 270.50 (b) Unsecured Perpetual Securities 1,500 00 1,500.00 (c) Other Equity 19,942.36 17,795.52 Equity attributable to Shareholders of the Company 21,761 92 19,566.02 Non-controlling Interests 2,534.46 2,332,04 Total Equity 24,296 38 21,898,06 Liabilities 1, Non-current Liabilities (a) Financial Liabilities (i) Borrowings 32,736 96 32,695.14 (ii) Lease Liabilities 3,19839 3,180.48 (iii) Trade Payables 1.67 - (iv) Other Financial Liabilities 1,780.90 721 .52 (b) Non-current Tax Liabilities (Net) 3.03 3,03 (c) Deferred Tax Liabilities (Net) 1,410 18 1,174,04 (d) Provisions 416 99 407.40 (e) Other Non-current Liabilities 3,599,43 2,084,52 Total Non-current Liabilities 43,147.55 40,266,13 2. Current Liabilities (a) Financial Liabilities (i) Borrowings 7,745.75 11,844.36 (ii) Lease Liabilities 389.41 379.74 (iii) Trade Payables 5,456 08 5,095.44 (iv) Other Financial Liabilities 9,487 96 7,502,90 (b) Current Tax Liabilities (Net) 185.16 129.49 (c) Provisions 184,13 116.42 (d) Other Current Liabilities 1,662.12 1,453,08 Total Current Liabilities 25,110.61 26,521.43 Liabilities directly associated with Assets Classified as Held For Sale (Refer Note 1O) 1,429,06 1,062,53 Total Liabilities before Regulatory Deferral Account 69,687.22 67,850,09 Regulatory Deferral Account - Liability 243.36 . TOTAL EQUITY ANO LIABILITIES !14,.<. Half-year ended Half year endec1 30th September, 2020 30th September, 2019 - "crore ' ("ro ra A. Cash Flow from Operating Activities Prof1t/(Loss) before \a)( from Continuing Operations 118803 1 134 89 Profit/(loss) before tax from D1scontmued Operations (64 57) (37 89) Adjustments to reconc1le Prom Before Ta• to Net Cash Flows Deprec1abon and Amortisation EKpense 1 343 37 127439 Transfer to Contingency Reserve 500 900 ~eversal of Impairment of Non-Current lnve-stments and related abl1~atton (23500) (Gam)/Loss on disposal of Property, Plant and Equipment (Net) (22 90) 1 56 Finance Cost (Net of Ca~lal1zallon) 2,175 89 2,291 92 Interest Income (6779) (101 66) Dividend Income (6 78) (64 72) Gamon sale/fair value of Current Investment measured at fair valuethrough prorit and loss (26 94) (33 B6) Allowances for Doubtful Debts and Advances (Net) 11216 861 Impairment of Non-Current Investments 084 Amorbsatmn of Premium paid on leasehold land 056 045 Provts1on far Warranties 7 86 4 75 Delayed Payment Charges (19 02) (4828) Transfer from Capital Grants (1 36) (105) Amortisation of Service Line Contr1bullons and Capital Grants (90 30) (4325) Guarantee Comm1ssmn from Joint Ventures (3 90) (4 87) Share of Net Prorit of Associates and Joint Ventures accounted for usmg the equity method (372 73) {443 52) Amortisation of Deferred Revenue 23 32 (3943) Errect of &change Fluctuation (Net) 442 18 22) 3 060 86 !..54; fri' 4,184 32 :i 64.i e1 Worlung Capital AdJustments Adjustments ror (mcreaseVdecrease m Assets lnventones 111 26 181 34 Trade Receivables (26 38) (41718) Un01Ued Revenue (35315) (22281) Finance Lease Receivables (1083) 274 Loans-Current 570 (519) Loans-Non Current 084 786 Other current assets (13795) 405 89 Other non-current assets (11620) 193 39 Other Financial Assets - Current 17220 170 Other Finane1al Assets - Non-Current 13 37 (40 94) Regulatory Deferral Account -Assets (35912) 484 92 Current Investments (Net) 148 32 112031 Movement in Operating Asset (551 94) 579 69 Adjustments for mcrease/(decrease) m L1abtl1bes Trade Payables 390 31 (95925) Other Current L1abtl1bes 450 87 178 77 Other Non-current Liabl/1\Jes 3 34 68 37 Other Financial L1abtlilies - Current 425 38 19845 Other Financial L1ablllbes - Non-current 32954 2119 Regulatory Deferral Account - L1abtllty (6264) - Current ProV1S1ons (922) (21 53) Non-currentProv1stons 982 1229 Movement m Operabng Liability 153740 (501 71 1 Cash Flow rrom/(used rn) Operations 5,16978 3 722 65 lncome-ta:w: Paid (147 99) (398.81 ) Net Cash Flow from Operating Activities A 5,021 ,79 J,323 84 Net cash r'l'o\VS frofTV(usod) in operating a~rvrlies lrom Con/inwng Oosra/1ons 456053 3 268 91 Not :ash trows frornl(used} in O(Jera t1r19 ac!111,li1Js from Discontinued Ooerations 36115 54 9) 8 Cash Flow from Investing Activities Capital e1pcnditure on Property Plant and Equ,pment (includmg capital advances) (126622) (992 75) Proceeds tram sale ot Propcrty Plant and Equipment (including property plant and equipment cl11-S1fied as held for sale) 1 41671 34 7' Proceeds.I (Purchase) from sale of Current Investments (Ne!) (93009) (365 50) Purchase ol Non-current lnvestmenls (53 86) (80 33) Proceeds rrom sale or Non-current Investments 761 36 445 22 Con~deta\Jon tran1ferred on business combinations (147 00) Inter-corporate Oepow (Net) 22) 68 92 Interest recetved 64 00 82 66 Delayed Payment Charges rece1Ved 1902 35 3J 3 uarantee Com mission rece111ed 266 (2 82) Drvidendreceived 54i 08 1,48477 Ban k Bal ance not Considered as Cash and Cash Equt\lalents 228 54 1236.43! Net Cash Flow u,-ed In lnve-sting Activities 8 1144,43 473 81 Net casl'I trows frornl(us~J in investing activtl,es from Continuing Opera1,ons 662 81 487 OJ Nol cash !Tows frorrl(used) in investing ad1vtt1es from Discontinued Operations pa.Jal 113.221 C. Cash Flow from Financ-lng Activities Proceeds rrom Issue of Shares including shares uued to Minority Shareholders 2,747 00 lnereaw 1n Capilal/SeMce Line Contribubo ns 2184 38 75 Proceeds from Non-cuuent Borrowings 2,81868 4,202 02 Repayment of Non-current Borrowings (2,96574) (3,717 98) Proceeds from Current Borrowings 9,84167 26,104 89 Repavment of Current BorrOW1ngs (13.550 22) (28 964 89) Finance Cost Pard (1.939 43) 12 081 46) Lease L1aoility (153 27) (5 40) Dividend Paid ('97 05) (484 32) Additional lncome-la:w: on Dividend Paid (85 81) D1stnbubon on Unsec:ured Perpetual Securities (85 03) 184 801 Net Cash Flow froml{used in) Financing Ac:tivllies C (3,7&1 .55) (3.07880) Net cash ffows froml(usedJ in financing acliv,ties from Conltnwng Opara/,ons (3 688 071 (3,033 92) Net cash ffows froml(used) m financing aclivrties from D1scont1nued Opara/,ons (73 4B ) (44 88) Net Increase in Cash and Cash Equivalents (A+B+C) 1,904~67 718,85 Cash and Cash Equivalents as at 1st April (Opening Balance) 1,834 Jg 61 .52 Cash and Cash Equivalents Acquir~ on Business Combinations 400.17 EffKt of Exc-hange Fluctuation on Cash and Cash Equivalents 162.981 10.15 Cash and Cash Eauivalents as at Joth SeDl:ember (Closina Balance) .4,076..2.S 19052 Cash and cash equivalents include A, .. A, ot 30th Septemt>er, 2020 30th September, 2019 • , cn:m, lie:rore fill J a.,t:11nccr1v.o!l.'t~n, (1) In Current Accounts 1,580 52 oro,:u (iii) In Deposrl Accounts 2,20114 ~2~0 (b) Cheques on Hand 2668 31 14 (c) Cash on Hand 29 59 n, (d) Bank; Overdraft pa.sai 1287 $8) Cash and cash equivalents relat~ to continuing operations 3,799 JS '7!17.,7& iii) 3-llilr;..'"ft'il,,IUJb.in t• (i) In Current Accounts 433 2 7 0 M In Deposit Accounts (with original maturity three months or less) 297 04 (b) Book Overdraft !24 47) [0 02}"' Cash and cash equivalents related to discontinued operations 276.90 2,74 4,076.25 ,... ,, • Restated/Refer Note 31 TI\TA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website: www lalapower com CIN l26920MH1919PLC000567 CONSO LI DATED SEGMENT INFORMATION , ornre Quarter ended Half-Year eoclce! Year ended Particulars 30-Sep-20 30-Jur>-20 30-Sep-19 30-Sep-20 30-Sep-19 31 -Mar-20 (Unaudited) (Unaudited} (Unaudited)" (Unaudited) Unaudited\' (Audited\ Segment Revenue Generation 3,46416 3,303 16 3,396 38 6,787 32 7,284 43 14,532 74 Renewables 1,10564 849 70 1,165 37 1,955 34 2,131 02 3,977 45 Transm ission and Distribution 4,550 85 3,230 92 3,601 23 7,781 77 7.408 46 14,002 70 Others 6163 59.45 53 40 121 OB 109 22 255.53 9,202 28 7,443 23 8,216 38 16,645 51 16,933 13 32,768 42 Less: Inter Segment Revenue Generation (73211) (714 96) (801 62) (1,447 09) (1,897 21) (3,582.99) Renewables (5643) (55 83) (9366) (11226) (150 25) (23561 ) Others 12.801 12.731 15.47) (5.531 16.67 112.561 Total Segment Revenue 8,410 94 6,669 69 7,315 43 15,080 63 14,878 80 28,937 26 Discontinued Ooerations # 101 11 33,76 8538 13487 118 31 343.74 Revenue/Income from Operations {including Net movement in Regulatory Deferral 8,512.05 6,703.45 7,400.81 15,215.50 14,997.11 Balances} 29,281.00 Segment Results Generation 754.60 768,30 58523 1,522 90 1,400 96 2,765 46 Renewables 46277 37619 417 55 83896 86661 1,499 66 Transmission and Distribution 50965 432 04 50111 94169 1,020 37 1.92214 Others 47 20 (24.511 (10,811 2269 11 00 19312 Total Segment Results 1,774 22 1,552 02 1,493 OB 3,326 24 3,298 94 6,380 38 Less: Finance Costs (1 ,064.98) (1,089 36) (1 ,12995) (2,154 34) (2,273 83) (4,493 73) Less: Exceptional Item - Generatioo (328.97) (351 35) Less: Exceptional Item - Transmission and Distribution - - - - (19000) Add/(Less): Exceptional Item - Unallocable I ncome/(Expense) 235 00 767 51 Add/(Less): Unallocable Income I (Expenses) (Net) (144' 17 57 16660 1613 203.75 255 35 Profit before tax from Continuing Operations 707.80 480.23 529.73 1,188.03 1,134.89 2,368.16 Loss before tax from Discontinuing Operations before Impairment Loss (29 53) (35,04) (8 47) (6457) (37 89) (61 64) lmpaim,ent Loss on Remeasurement to Fair Value . . (361 00) Loss before tax from DiscontlnuinQ Operations (29.531 (35.041 (8.47) (64.571 (37.891 (442.64\ Segment Assets Generation 36,73312 40,151 92 40,812 86 36,733 12 40,812 86 40,07613 Renewables 20,317 96 20,346 23 18,954 39 20,317 96 18,954 39 19,533 81 Transmission and Distribution 22,906 39 21,013 64 17,433 99 22,906 39 17,433 99 17,859 37 Others 1,267 63 1,236 31 1,052 26 1,26763 1,052 26 1,361 59 Unallocable S 8,m36 9,885 38 6,12431 8,777 38 6.124 31 9,03718 Assets classified as held for sale# 2-222.48 1 926,73 2,1. 49 68 2.222 48 2,14968 1 880.07 Total Assets 94.226.96 94.560.21 86,527.49 94.226.96 86,527.49 89,748.15 Segment Liabilities Generation 3,875 01 4,367 54 3,248 57 3,875 01 3.248 57 3,665 28 Renewables 1,960 22 2,103 35 1,36617 1,960.22 1,36617 1,596 45 Transmission and Distribution 9,890 63 7,996,96 4,788 65 9,690 83 4,788 65 5,294.05 Others 11311 11820 12520 11311 12520 128 71 Unallocable S 52,802 13 56,666,47 55,426 90 52,602 13 55,426 90 56,113 53 Liabilities classified as held for sale# 128926 1 093,42 101299 1_26928 1 012.99 1,037. .07 Total Liabilities 69,930.58 72,367,96 65~8.48 69 930.58 65,968.48 67,850.09 Generation: Comprises of generation of power from hydroelectric sources and thermal sources (coal, gas and oil) from plants owned and operated under lease arrangement and related ancillary services, It also comprises of coal - mining, trading, shipping and related infra business Renewables: Comprises of generation of po,.ver from renewable energy sources i e wind and solar lt also comprises EPC and maintenance services with respect to solar Transmission and Distribution: Comprises of transmission and distribution netwofl<, sale of power to retail customers through distributiOll netwofl< and related ancillary services It also comprises of power trading business Others: Comprises of project management cootracts/1nfrastructtM"e management services, property development, lease rent of oil tanks, satellite communication and investment business # Pertains to Strategic Engineering Division being classified as Discontinued Operations (Refer Note 10) S Includes assets held for sale other than Strategic Engineering Division • Restated (Refer Note 3) RECONCILIATION OF REVENUE Qu1311erended Half-Year ended Vear onded Particulars 30...Sap-20 30.Jun-20 30-Sep.19 30-Sep.20 30-Seo-19 31-Mar-20 /Unaudlt adl I Unaudited I 1unauditedr I (U naudited l1Unaud1tedl" IAudlladl Revenue from Operabons S,289,81 6,452.99 7,sn 02 14,742 80 15.44•1 54 29,136.37 Add/(Less): Net movement in Regulatory Deferral Balances 65 67 18524 (436 35) 250 91 (696 84) (451 68) Addl(Less): Net movement in Regulatory Deferral Balances in respect of earlier years . (21 32) Add/(Less): Deferred Tax Recoverable/(Payable) 5714 3326 69.37 9040 147 86 284 31 Add/(Less): Unallocable Revenue (1,68) (1,80) (13.4tl (3.481 11 6.T6l 110A21 Total Segment Revenue S,4 10.94 6,66969 7,31 5 43 15.080 63 14.878.80 28,937 26 Discontinued Operations- Others# 101 11 33 76 8538 134.87 118.31 343 74 Total S_eamenl Revenue as reoortcd above 8,512.05 6,703.45 7,400.81 15,215.50 14,997.11 29,281 .00 NOTES TO THE CONSOLIDATED FINANCIAL RES UL TS - Q2 FY21 1. The above Consolidated financial results of The Tata Power Company Limited (the Holding Company or Group) were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 10th November, 2020. 2. During the quarter ended 301h September, 2020, the Holding Company has distributed dividend @ { 1.55 per fully paid share amounting lo t 41 9 crore as approved by shareholders in its annual general meeting on 301h July, 2020 for the financial year 2019-20. 3, During the previous year, the Group had reassessed its plan to sell its investment in Tata Projects Limited (Associate company of the Group) and had reclassified its investment in Tata Projects Limited from Assets held for sale to Investments in Associate accounted under equity method. Accordingly, the Group had recognized the profit/loss as per equity method from the date of classification and hence , the figures of comparative perlod has been restated as follows: ~ Crore) Particulars Quarter ended Half year ended 30-Sep-19 30-Sep-19 Other income - Increase/ (Decrease) (9.68) (9.68) Share of net profit of associates and joint ventures accounted (2.54) 9 .71 for usinq the equity method - Profit/ (Loss) Share of other comprehensive income that will not be (9.89) (14.02) reclassified to profit or loss of associates and joint ventures accounted for usinq the equity method - Profit / (Loss) 4. During the quarter ended 30th June, 2020, the Group has acquired 51 % stake in TP Central Odisha Distribution Limited ('TPCODL') for { 179 crore. TPCODL shall be the licensee to carry out the function of distribution and retail supply of electricity covering the distribution circles of Bhubaneswar, Cuttack, Paradeep, and Dhenkanal in the state of Odisha for a period of 25 years effective from 1st June, 2020. The acquisition has been recognised by the Group on provisional basis in accordance with Ind AS 103 'Business Combination'. 5. During the period ended 30th September, 2020, the Group has completed the sale of ships owned by Trust Energy Resources Pte. Limited (a wholly owned subsidiary of the Holding Company) for a consideration of USO 213 Million (t 1,607 crore). The Group has simultaneously entered into a long term affreightment contract for the shipping of coal with the buyer. Resultant gain on sale of ships has been deferred and would be recognized over the term of affreightment contract in accordance with Ind AS 115 'Revenue from contract with customers.' 6. India and other global markets experienced significant disruption in operations resulting from uncertainty caused by the worldwide coronavirus pandemic. The management believes that there is not much of an impact likely due to this pandemic except that there exists some uncertainty over impact of COVID-19 on future business performance of some joint ventures involved in the coal mining and an associate engaged in providing engineering, procurement and construction services. However, management believes that the said uncertainty is not likely to impact the recoverability of the carrying value of its investment in such joint ventures and associate. As the situation is still continuously evolving, the eventual impact may be different from the estimates made as of the date of approval of these consolidated financial statements. 7. The shareholders of the Holding Company in the Annual General Meeting dated 30th July, 2020 has approved the issuance of 49,05,66,037 equity shares of the face value of { 1 each at t 53 per equity share for an amount aggregating to t 2,600 crore to Tata Sons Private Limited on preferential basis. The Holding Company has allotted the said equity shares to Tata Sons Private Limited on 13th August, 2020. 8. The Board of Directors of the Holding Company in its meeting held on 12th August, 2020 have approved the Composite Scheme of Arrangement for merger of Coastal Gujarat Power Limited and Tata Power Solar Systems Limited (wholly owned subsidiaries) with the Holding Company along with the capital reorganization after the merger. The Board of Directors have also approved the Scheme of Amalgamation for merger of Af taab Investment Company Limited (a wholly owned subsidiary) with the Holding Company. Further, the aforesaid schemes are subject to the necessary approvals from shareholders, National Company Law Tribunal and other regulatory authorities. Post necessary approvals, the merger will be accounted in accordance with Appendix C of Ind AS 103 - 'Business combinations of entities under common control' using pooling of interest method. 9. The Code on Social Security 2020 has been notified in the Official Gazette on 29th September, 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective and the rules framed thereunder are notified. 10. Subsequent to the quarter ended 30 th September, 2020, the Holding Company has completed the sale of its Strategic Engineering Division (SEO) to Tata Advanced Systems Ltd. (TASL) and has received upfront consideration of Rs. 539 crore (net of borrowings of Rs . 537 crore transferred to TASL) after certain adjustments as specified in the scheme. 11 . Figures for the previous periods/year are re-classified/re-arranged/re-grouped, wherever necessary. 12. Financial Information of the standalone audited financial results of the Holding Company is as follows: (' crore) Quarter ended Year Particulars Half year ended ended 30-Sep-20 30-Jun-20 30-Sep-19 30-Sep-20 30-Sep-19 31-Mar-20 Revenue from operations 1,550.28 1,412.42 1,993.21 2,962.70 4,029.75 7,726.39 Profit before regulatory deferral balances, exceptional items 137.98 39.04 352.09 177.02 967.99 1,308.28 and tax Profit before exceptional items 242.04 95.19 171 .64 337.23 604.54 656.88 and tax Profit/(Loss) before tax from 242.04 95.19 171 .64 337.23 510.57 350.53 continuing operations Net Profit/(Loss) for the period 164.23 67.71 160.12 231.94 475.77 558.35 from continuing operations Profit/(Loss) before tax from (29.53) (35.04) (8.47) (64.57) (37.89) (442.64) discontinued operations Profit/(Loss) for the period from (19.23) (22.78) (5.51) (42.01) (24.65) (410.23) discontinued operations Profit/(Loss) for the period 145.00 44.93 154.61 189.93 451 .12 148.12 Other Comprehensive (14.90) 32.38 (45.21) 17.48 (36.56) (52.76) lncome/(Expense) net of tax Total Comprehensive Income 130.10 77.31 109.40 207.41 414.56 95.36 Paid-up equity share capital 319.56 270.50 270.50 319.56 270.50 270.50 (Face Value: ~ 1/- per share) Other Equity 13,491.47 13. The standalone audited financial results of the Holding Company are available for Investors at www.tatapower.com, www.nseindia.com and www.bseindia.com . For and on behalf of the Board of THE TATA POWER COMPANY LIMITED PRA VEER SINHA CEO & Managing Director Date: 10th November, 2020 DIN 01785164 G TATA 12th Floor The Ruby 29 Senapat, Bapat Marg SR BC & COLLP Dadar (West) Chartered Accountants Mumbai - 400 028 India Tel: +9 1 22 Ga t J 8000 Independent Auditor's Report on the Quarterly and Year to Date Audited Standalone Ind AS Financial Results of the Company Pursuant to the Regulation 33 and 52 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended To The Board of Directors of The Tata Power Company Limited Report on the audit of the Standalone Ind AS Financial Results Opinion We have audited the accompanying statement of quarterly standalone Ind AS financial results of The Tata Power Company Limited {the "Company") for the quarter ended September 30, 2020 and the year to date results for the period from April OI, 2020 to September 30, 2020 {the "Statement"), attached herewith, being submitted by the Company pursuant to the requirement of Regulation 33 and 52 of the SEBf (Listing Obligations and Disclosure Requirements) Regulations, 20 I 5, as amended (the "Listing Regulations"). In our opinion and to the best of our information and according to the explanations given to us, the Statement: 1. is presented in accordance with the requirements of the Listing Regulations in this regard; and ii. gives a true and fair view in conformity with the recognition and measurement principles laid down in the applicable Indian Accounting Standards and other accounting principles generally accepted in India of the total comprehensive income (comprising of net profit and other comprehensive (loss)/income) and other financial information of the Company for the quarter ended September 30, 2020 and year to date results for the period from April Ol, 2020 to September 30, 2020. Basis for Opinion We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013, as amended ("the Act"). Our responsibilities under those Standards are further described in the "Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Results" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Standalone Ind AS financial results under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion. Management's Responsibilities for the Standalone Ind AS Financial Results These quarterly Standalone Ind AS financial results as well as the year to date Standalone Ind AS financial results have been prepared on the basis of the interim condensed Standalone Ind AS financial statements. The Board of Directors of the Company is responsible for the preparation of the Statement that gives a true and fair view of the net profit and other comprehensive (loss)/income of the Company and other financial information in accordance with the recognition and measurement principles laid down in Indian Accounting Standard 34 (Ind AS - 34), 'Interim Financial Reporting' prescribed under Section 133 of the Act read with •: relevant rules issued thereunder and other accounting principles generally accepted in India and in ~ C & Co· mpliance with Regulation 33 of the Listing Regulations. This responsibility also includes maintenance of C/)~~- w_~~uate accounting records in accordance with- the provisions of the Act for safeguarding of the assets of * I ~ l n MLJ~-1 J .i ' SR BC 3 CO LL P, 3 Limited L13bili tv P3rtner)hip wilh LLP Identity No AAB-4318 ~ /:: Regd Office: 22, Ca mac Str~~t. Blo-::il. ·s·. 3r:j Flo:.ir, Kolkat,·700 016 ~ $- '9f" o ACCCl~ SR BC & COLLP Chartered Accountants The Tata Power Company Limited Page 2 of3 the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Statement that give a true and fair view and are free from material misstatement, whether due to fraud or error. Jn preparing the Statement, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Company's financial reporting process. Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Results Our objectives are to obtain reasonable assurance about whether the Statement as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Statement. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the Statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the operating effectiveness of the company's internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. • Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material unce1tainty exists, we are required to draw attention in our auditor's report to the related disclosures in the Standalone Jnd AS financial results or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the Statement, including the disclosures, and whether the Statement represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope timing of the audit and significant audit findings, including any significant deficiencies in internal I that we identify during our audit. U I SR BC & COLLP Chartered Accountants The Tata Power Company Limited Page 3 of3 We also provide those charged with governance with a statement that we have comp I ied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. For SR BC & CO LLP E100003 p p Mem UDIN: 201127TA Mumbai November 10, 2020 TATA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website: www.tatapower.com CIN: L28920MH1919PLC000567 STATEMENT OF STANDALONE AUDITED FINANCIAL RESULTS FOR THE QUARTER/HALF-YEAR ENDED 30TH SEPTEMBER, 2020 Quarter ended Half -year ended Year ended Particulars 30-Sep-20 30.Jun-20 30-Sep-19 30-Sep-20 30-SeD-19 31-Mar-20 MUs MUs MUs MUs MUs MUs (A) 1. Generation 2,589 2,324 3,054 4,913 6,234 11,676 2. Sales 2,810 2,259 3,051 5,069 IS.318 11 ,731 (' in crorol (Audited ) l Audiledl (Audited) (Audiled) (Audited) (Audited) (B) 1. Income Revenue from Operations 1,550.28 1,412.42 1,993.21 2,962.70 4,029.75 7,726.39 Other Income 232.38 90.09 121 .07 322.47 495.18 582.62 Total Income 1,782.66 1,502.51 2,114.28 3,285.17 4,524.91 8,309.01 2. Expenses Cost of Power Purchased 172.48 89.49 121.19 261.95 276.95 457.59 Cost of Fuel 535.28 468.54 707.34 1,003.82 1,418.76 2,765.61 Transmission Charges 64.50 64.68 53.50 129.18 107.00 214.00 Employee Benefits Expense 158.87 152.00 154.50 310.87 301.77 610.71 Finance Costs 387.20 390.98 385.38 778.18 772.34 1,510.38 Depreciation and Amortisation Expenses 167.37 163.25 162.07 330.62 325.12 685.75 Other Expenses 159.00 134.53 178.21 293.53 354.98 756.69 Total Expenses 1,644.68 1,483.47 1,762.19 3,108.15 3,556.92 7,000.73 3. Profit Before Regulatory Deferral Balances, Exceptional Items and Tax (1-2) 137.98 39,04 352.09 177.02 967.99 1,308.28 4. Add/ (Less): Net Movement in Regulatory Deferral Balances 93.00 45.00 (233.27) 138.00 (450.89) (792,24) ' Add / (Less): Net Movement in Regulatory Deferral Balances in respect of ear1ier years - - (21 .32) Add/ (Less): Deferred Tax Recoverablel(Payable) 11.06 11.15 52.82 22,21 87.44 162.16 5. Profit Before Exceptional Items and Tax (3+4) 242.04 95.19 171.64 337.23 604.54 656.88 6. Add/(Less): Exceptional Items Reversal of Impairment of Non-current Investments and related obligation - 235.00 235.00 Standby Litigation - (328.97) (276.35) Remeasurement of Deferred Tax Recoverable on account of New Tax Regime (net) - - - (265,001 - - f93.97l (306.351 7. Profit Before Tax from Continuing Operations (5+6) 242.04 95.19 171.64 337.23 510.57 350.53 8. Tax Expense/(Credit) Current Tax 42.89 14.86 29.33 57.75 29.33 18.61 Deferred Tax 34.92 12.62 (17.81) 47.54 5.47 73.08 Deferred Tax Expense in respect of earlier years - - (24.51) Remeasurement of Deferred Tax on account of New Tax Regime (net) - - - (275.00) 9. Net Profit/(Loss) for the period from Continuing Operations (7-3) 164.23 67.71 160.12 231 .94 475.77 558.35 Profit/(Loss) before tax from Discontinued Operations (29.53) (35.04) (8.47) (64.57) (37.89) (81 .64) Impairment Loss on Remeasurement to Fair Value - - - (361 .00) Tax Expense/(Cred~) on Disconijnued Operations (10.30' (12.26) (2.96: (22.56) f13.241 (32.411 10. Profit/(Loss) for the Period from Discontinued Operations (19.23) (22.78) (5.51) (42.01) (24.65) (410.23) 11 . Profit/(Loss) for the Period (9+10) 145.00 44.93 154.61 189.93 451 .12 148.12 Other Comprehensive lncome/(Expenses) including Discontinued Operations hems that will not be reclassified to profit or loss (17.15) 32.38 (63.81) 15.23 (55.16) (70.93) Tax relating to items that will not be reclassified to profit or loss 2.25 - 18.60 2.25 18.60 18.17 12. Other Comprehensive lncome/(Expenses) (Net of Tax) (14.90 32.38 (45.21 17.48 136.56 152.76 13. Total Comprehensive Income (11+12) 130.10 77.31 109.40 207.41 414.56 95.36 14. Paid- AUDITED STANDALONE STATEMENT OF ASSETS AND LIABILITIES ~ crore Asat Asat Particulars 30-Sep-20 31-Mar-20 (Audited) (Audited) A. ASSETS 1. Non-current assets a) Property, plant and equipment 7,928.36 7,974.07 b) Capital Work-in-Progress 266.05 402.87 c) Intangible Assets 51 .23 62.22 d) Financial Assets (i) Investments 21 ,532.54 21,327.20 (ii) Loans 489.70 42.10 (iii) Finance Lease Receivables 546.92 553.03 (iv) Other Financial Assets 30.42 222.77 e) Non-current Tax Assets (Net) 135.00 135.00 f) Other No_n-current Assets 1,120.55 1,009.64 Total - Non-current assets 32,100.77 31 ,728.90 2. Current assets a) Inventories 557.90 635.01 b) Financial Assets (i) Investments 965.19 20.00 (ii) Trade Receivables 986.74 1,108.68 (iii) Unbilled Revenue 82.52 83.41 (iv) Cash and Cash Equivalents 333.51 158.54 (v) Bank Balances other than (iv) above 66.93 20.40 (vi) Loans 1,374.23 550.09 (vii) Finance Lease Receivables 34.52 31 .89 (viii) Other Financial Assets 231 .44 235.58 c) Other Current Assets 164.50 146.26 Total - Current assets 4, 797.48 2,989.86 Assets Classified as Held For Sale (Refer Note 8) 2,996.31 2,639.40 Total Assets before Regulatory Deferral Account 39,894.56 37,358.16 Regulatory Deferral Account - Assets 41 9. 02 258.32 TOTAL· ASSETS 40,313.58 37,616.48 B. EQUITY AND LIABILITIES Equity a) Equity Share Capital 31 9.56 270.50 b) Unsecured Perpetual Securities 1,500.00 1,500.00 c) Other Equity 15,745.55 13, 491.47 Total Equity 17,565.11 15,261 .97 Liabilities 1. Non-current liabilities a) Financial Liabilities (i) Borrowings 11,199.15 9,825.33 (ii) Lease Liabilities 232.40 237.03 (iii) Other Financial Liabilities 1,5.51 14.60 b) Deferred Tax Liabilities (Net) 329.97 307.25 c) Provisions 225.70 222.46 d) Other Non-current liabilities 156.43 161.34 Total - Non-current liabilities 12. 159 .16 10,768.01 2. Current liabilities a) Financial Liabilities (i) Borrowings 4,698.01 6,212.31 (ii) Lease Liabilities 44.25 41.82 (iii) Trade payables (a) Total outstanding dues of micro enterprises and small enterprises 3.02 7.72 (b) Total outstanding dues of trade payables other than micro enterprises and small enterprises 937.21 994.15 (iv) Other Financial Liabilities 2,826.18 2,621 .62 b) CurrentTax Liabilities (Net) 126.17 107.67 c) Provisions 59.29 62.02 d) Other Current Liabilities 492.34 502.87 Total - Current liabilrtles 9,186.47 10,550.18 Liabilities directly associated with Assets Classified as Held For Sale (Refer Note 8) 1, 402.84 1,036.32 Total Liabilities before Regulatory Deferral Account 22,748.47 22,354.51 Regulatory Deferral Account - Liability - . TOTAL• EQUITY AND LIABILITIES 40,313.58 37,616.48 TATA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website: wwwJatapower.com CIN : L28920MH1919PLC000567 Audited Standalone Cash Flow Statement For the H.a tf-yaar 11nd1Jd For the H•lf-year ended Particulars Joth Sap~mbor, 2020 30th September, 2019 tcrora ~ crore A, Cash flow from Operating activities Pm(rt/(loss) before tax from continuing operations 337.23 s,a_s1 Profil/(loss) before tax from discontinued aperalions (64-57) (37_89) Adjustments lo reconcile profit before tax to net cash flov.is: Depreciation and amortisation expense 330.62 325.12 Interest income (76_26) (82.43) rntrtt~I on lncomo-tOJI refund (10.96) Delayed paymeril charges (2.75) (17.37) Oiscounl amor1lsed/accrued on bonds (net) (003) Dividend income (188.35) (305.97) Finance cost (Net of capitalisation) 799.73 790.43 (Gain)lloss on disposal of property, plant and equipment (Net) (23.88) (9.00/ (Gain)Jloss on sale/fair value of c;urrent investment measured at fair value through profit and loss (10 .95) (6.57) (Gain)/loss on sale of non-current investments (including fair value change) . (9.06) Guarantee commission from subsidiaries and joinl ventures (9.92) (50.10} Amortisation of service line contributions (4.09) (3. 95} Transfer to Slalutory Consumer Reserve 5.00 9.00 Allowance for doubtful debts and advances (Net) 12.87 (5.36) Rever.;al d impairment of non-current ln\l'estmenls and related obligation (8.00) (235.00) liabilities/ provisions no longer required !Mitten back 0.12 Effect of e)(change fluctuation {Net) 0.24 1.07 822.26 389.94 1,D9'.92 B62-62 Working Capital adjustments: Adjustments for (increase)/ decrease in assets: Inventories 53,43 69 09 Trade receivables 245.74 14657 Finance lease receivables 3.48 10.74 Loans - current (3.31) (2.39) Loans - non-current 2.56 4.31 Other current assets (83.55) 139.13 Other non-a.ureril assets (111.11) 119.42 Unbilled revenue (57.41) (82.35) other financial assets - current 88.49 (3.10} Other financial assets - non-current 12.03 (33.75) Regulato,y deferral account - assets (160,70) 299-'1 no.Js1 687.oa 1,084,57 1,5Z9J0 Adjustments for increase/ {decrease) in liabilities: Trade payables (31.36) (458-10} Other current liabllilies 219.45 111.34 Other non-current liabilities (2.18) 1-22 Current provisions (6.64) (13.53} Non-current provisions 3.49 1 70 Other financial liabilities - current 198.66 (93.62) Other financial liabilities - non current 1.b3 1'24.21) 383.07 (415.20) Cash now from/(used in) operations 1,467,64 1.0S4.SO Income \a)( paid (Net of refund received) (44.!l'll (48.17) Net cash flows from/{usad in) Operating ActMtias A 1,423.3D 1,006;33 -Net cash flows from/(used) in operaling activities from conlinuing operations 1,062.14 951.40 -Net cash flows froml(used) in operating activities from disconh·nued operations 361. 18 54.93 B. Cash flow from Investing Adfvities c.a.p1,ru D);pendilure on property, plant and equipment (including copltal ndvances) (J!12.J9) (337.85/ Pf'OCC)ads from sale of property, plant and equipment (including property, plant and equipment classified as held for sale) 136.29 30.82 Purchase of non current investments (i l AOI (65.60) Proceeds from sale of non-cummt investments (including investments classmed as held Jor sale) 24653 (Purchase)/proceeds from/ to sale of current investments (Net) (93.4.24) (271.50/ Interest received 37,9!1 80.97 Delayed payment charges received 2.75 4.41 Loans given (3,601 .30) (1 ,797.33) Loans repaid 2,330.47 1,684.33 Dividend received 147.26 387.13 Guarantee commission received 8.l;II 42.74 Bank balance not considered as cash and cash equivalenls 146,221 fl5.0 1J Net cash flow from/(u ■ ed in} Investing Activities B IJ.31 2.101 {10.36} -Net cash nows froml(us&d) in investing 8cii\11ries from continuing operations (2.293.72/ (57./ C. Cash Flow from Finanir;lng Activities Procood!I from l5su1:1 or .:ih.alcu 1,600.00 Proceeds from non-current borrowings 2,650.05 642.25 Repayment of non-current borrowings (1.268.26/ ( 1.428.80/ Proceeds from current borrowings 12.446_60 17, 752-60 Repaymenl of currenl borrowings (1l,959.S5) (16,854.05) Interest and other bol'TO'Mng costs t~-38) (721.38) Dividends paid 4 1~.Z•I) (351.99) Distribution on unsecured perpetual securilles (BS.OJI (84 ,80} Increase in capital/service line contributions 1,S6 3.64 Payments or lease liability (12.13 (U2/ Net Cash Flow from/(used in) Financing Activities C 1,3:i..12 -Net cash flows froml(usad) in financing activitios from continuing operations 1,407.60 g,gg:,;~ -Net cash flows froml(used) in financing activities from discontinued operations (73A61 ,, ~. 88/ Net inerease/(decrease) In caah and cash equivalents (A+B+C) «5.32 /IH.981 Cash and cash equivalents aa at 1st April (Opening Balance) 1ti5.0IJ 79.66 Ca.11 h and ca.s h oquivahmta as at lOth Saalumb,or tctoslna Blll:tnco\ 610.41 /1S.12J " Cash and casn Equivalenls inc1uc:ia: Asol b•t 30th September, 2020 lOIII September, 2019 ,crore If crore (a) Balances v.ith banks In current accounts 183.51 30.22 In Deposit Accounts (with original maturity th1"98 months or less) 150.00 (b) Bank ovordratt (66.28) Cuh and cash equivalentli related to GOl"ltlnulng operations 333.51 (38.0fi) (a) Balances 'Mlh banks In current account& 4.33 2.96 In Deposit Accounts (YAth original maturity three months or less) 297.04 (b) Book overdratt 124.471 10.021 C.h and caah equivalents related to dlacontlnuad operation• 276.90 2.94 T ol:ilf of c.n.h and c.1.1 h oouivalinnts 810.41 /JS.121 .... TATA POWER Toe Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website : wwwJatapower.com CIN: l28920MH1919PLC000567 STANDALONE SEGMENT INFORMATION Quarter ended Half-year ended Year ended Particulars 30-Sep-20 30-Jun-20 30-Sep-19 30-Sep-20 30-Sep-19 31-Mar-20 /Audited) /Audited) /Audi led) (Audited) (Audited) (Audited) Segment Revenue Generation 926.83 867.99 1,100.98 1,794.82 2,256.38 4,456.33 Renewables 83.21 58.03 117.12 141.24 187.29 283.49 Transmission and Distribution 954.68 864.21 1,059.85 1,818,89 2,149.23 4,012.16 Others 7.95 8.63 7.57 16.58 15.58 30.76 1,972.67 1.798,86 2,285.52 3,771.53 4,608.48 8,782.74 (Less): Inter Segmenl Revenue - Generation (287.68) (307.08) (406.04) (594.76) (841 .61) (1,589.26) I/Le,;•\: Inter Socmenl Revenue - Rencwables 145.21) 130.63) 172.55) /75.84) 1113.53) /165.59) Total Segment Revenue 1,639.78 1,461.15 1,806.93 3,100.93 3,653.34 7,027.89 Discontinued Ooerations- Others# 101.11 33.76 85,38 134.87 118.31 343.74 Revenue/ Income from Operations (including Net Movement in Regulatory Deferral Balances) 1,740.89 1,494.91 1,892.31 3,235.80 3,771.65 7,371.63 Segment Results Generation 184.65 204.02 175.71 388.67 391.85 739,16 Renewables 37.65 18.52 69.83 56.17 94.65 102.43 Transmission and Distribution 186.19 184.07 214.76 370.26 440.99 825.29 Others I0.99) 3.29 3.49 2.30 7.89 7.78 Total Segment Results 407.50 409.90 463.79 817.40 935.38 1,674.66 (Less): Finance Costs (387,20) (390.98) (365.36) (778.18) (772,34) (1,510.38) Add/(Less ): Exceptional Item - Generation . (328,97) (351.35) Add/(Less): Exceptional Item - Transmission and Distribution . . . (190.00) Add/(Less): Exceptional ttem - Unallocable - 235.00 235,00 Addi/Less): Unallocable lncome/(Expense) (Net) 221.74 76.27 93.23 298.01 441 .50 492.S □ Proffl/(Lou) Before Tax from Continuing Operations 242.04 95.19 f71 .64 337.ZJ 510.57 350.53 Proflt/(Loss) Before Tax from Discontinued Operations Before Impairment Loss (29.53) (35.04) (8.47) (64.57) (37.89) (81.64) Impairment Loss on Remeasurement tc;, Fair Value . . (351.00) Profit/tloss) Before Tax from Ol.scontinu~d OoeratJons- (29.SJ) (35.04) (8.47) (64.57) (37.89) (4-42.84 Segment Assets Generalion 4,605.59 4,864.07 4,859.32 -4.6-05.58 -1,859,32 5.068.61 Renewables n2A3 752.52 846.31 772.43 846.31 TT9.56 Transmission and Distribution 6,322.1 9 6,082.!W 6,158.64 6,322.19 6,1 58.64 6,1 23.68 Others 22 1.43 203.30 180.32 221.43 160.32 193.22 Unallocable• 26,169.47 26,480.13 23,316.74 26,1 69.47 23,31 6.74, 23,571.34 Assels classified as held fo.- sale # 2.W.48 1.926.73 2,149.68 2.222.48 2, 149.68 1.11ao:p1 Total Assets 40,313.68 40,309. 59 37,511.01 40,313.58 37 ,511.01 37,616 , ◄ 8 Segment Liabilities Generation J90.39 JJ0.65 563.97 J90.39 563.97 682.J B Renewables 20.8.6 21.94 20.84 20.86 20.64 2'1.97 Transmission and Distribution 1,701 .10 1,557.92 1,308.18 1,701.10 1,308.18 1,599.16 Others 15.45 11 .85 23.81 15A5 23.81 20.20 Unallocable· 19,231.40 21 ,939.56 18,913.85 19,23 1.40 19.913,85 '18,9911.66 Liabililies classified as held for sale# 1 289.27 1,093.42 1,012.99 1.289.27 1 012.99 I 032.07 Total Liabilijias 22,748.47 25,055.34 21 ,843.64 22 , 7◄ 8.47 21 ,84J.64 22,3S4.51 Generation: Comprises of generation of power from hydroelectric sources and lherrnal sources (coal, gas and oil) from plants owned and operated under lease arrangement and related ancillary services. Renewabkts: Comprises of generation of power from renewable energy sources i,e. wind and solar and relaled ancillary services~ Transmission and Distribution: Comprises of transmission and distribution network, sale of power to retail customers through distribution network and related ancillary services. Olhers: Comprises of project management contractsfinfrastructure management services, property development and lease rent of oil tanks. RECONCILIATION OF REVENUE r Ci rore Quarter ended Half-veur ended Year ended Particulars 30-Sep.20 30.Jun-20 30-Seo-19 30-Sep.20 30-SeP-19 31-Mar-20 (Audited) (Audited) (Audited) (Audited) (Audited) (Audiled) Revenue from Operations 1,550.28 1,412.42 1,993.21 2,962.70 4,029.75 7,726.39 Add/(Less): Net Movement in Regulatory Deferral Balances 93.00 45.00 (233.27) 138.00 (450.89) (792.24) Add/(Less): Net Movement in Regulatory Deferral Balances in respect of earlier years . - (21.32) Add/(Less): Deferred Tax Recoverable/(Payable) 11.06 11.15 52.82 22.21 87.44 162.16 Add/(Less): Unallocable Revenue (14.56) (7.42) (5.83) (21.98) (12.96) (47.10) Total Segment Revenue 1,639.78 1,461,15 1,806.93 3,100.93 3,653.34 7,027_89 Discontinued Operations- Others# 101.11 33.76 85.38 134.87 118.31 343.74 Total Segment Revenue as reported above 1.740.89 1,494.91 1,892.31 3,235.80 3,771.65 7,371.63 # Pertains to Strategic Engineering Division being classified as Discontinued Operations. (Refer Note B) • Includes amount classified as held for sale other than Strategic Engineering Division . ..... TATA POWER The Tata Power Company Limited Bombay House, 24 Homi Mody Street, Mumbai 400 001 Website: www ,tatapower.com CIN L2B920MH1919PLC000567 Additional information pursuant to Regulation 52(4) and Regulation 54 (2) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended as at and for the half year ended September 30, 2020. S. No. Particulars As at and for the half year ended September 30. 2020 1 Debt equity ratio (in times) (Refer Note i and iii) 1.05 2 Debt service coverage ratio (in times) (Refer Note i) 0 80 3 Interest service coverage ratio (in times) (Refer Note i) 1-34 4 Outstanding redeemable preference shares Nil 5 Capital redemption reserve (in Crores) 1 85 6 Debenture redemption reserve (in Crores) (Refer Note iv) 296.95 7 Net worth (in Crores) (Refer Note ii) 15.142,30 B Net profit after tax (excluding Other comprehensive income) (in Crores) 189.93 9 Earnings per share {of~ 1/- each)(~) (Basic and Diluted- not annualised) From continuing operations before net movement in regulatory deferral balances 015 From continuing operations after net movement in regulatory deferral balances 0.52 From discontinued operations (0 15) Total operations after net movement in regulatory deferral balances 0.37 10 Asset cover ratio (in times) (Refer Note i and v) a) 9.15% Non convertible debentures - Face value 250 Crores 414 b) 9, 15% Non convertible debentures - Face value 350 Crores 117 c) 9 40% Non convertible debentures - Face value 21 O Crores 1 26 Notes: Note i The following definitions have been considered for the purpose of computation of ratio and other information: a Debt Equity Ratio= Debi/Equity Debt : Debt means long term borrowings (including current maturities of long term borrowings) and Short term borrowings. Equity : Equity means issued share capital, other equity and unsecured perpetual securities b Debt Service Coverage Ratio= (Profit before tax + interest expenses + depreciation and amortization expenses) I (interest expenses + scheduled principal repayment of long - term borrowings)# # For the purpose of computation, scheduled principal repayment of long term borrowings does not include prepayments (including prepayment by exercise of call/put option) c Interest Service Coverage Ratio = (Profit before tax+ interest expenses) I interest expenses. d Asset Cover Ratio= Secured assets/ secured loans. Secured Assets: Written down value of the secured assets, capital work in progress, machinery spares and asset classified as held for sale Secured loans: Outstanding value of the secured Non- convertible debentures and secured borrowings Note ii Net Worth has been computed on the basis as stated in Clause 2 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations. 2015 i e. Net worth as defined in sub-section (57) of section 2 of the Companies Act, 2013. Note iii Unsecured Perpetual non-convertible debentures of ~1 ,500 crore issued by the Company are perpetual in nature and rank senior only to the share capital of the Company and the Company does not have any redemption obligation. Accordingly, these are considered as part of equity under generally accepted accounting principles in India and are not classified as borrowings as at half year ended September 30, 2020 Accordingly, the same has been considered as equity in the above computation Note iv The Company was required to create Debenture Redemption Reserve (ORR) out of the profits which are available for payment of dividend for the purpose of redemption of debentures, Pursuant to Companies (Share Capital and Debentures) Amendment Rules, 2019 dated August 16, 2019, the Company is not required to create ORR . Accordingly, the Company has not created ORR during the financial year 2019-20 and half year ended September 30, 2020 and ORR created till previous years will be transferred to retained earnings on redemption of debentures. Note v i) 9 15% Non convertible debentures - Face value 250 Crores have been secured by a charge on movable properties and assets of the Company at Agaswadi and Visapur in Satara District of Maharashtra and Poolavadi in Tirupur District of Tamil Nadu, ii) 9.15% Non convertible debentures - Face value 350 Crores have been secured by a pari passu charge on the assets of the wind farms situated at Samana in Gujarat, Gadag in Kamataka and immovable properties in Jamnagar, Gujarat iii) 9 40% Non convertible debentures - Face value 21 O Crores have been secured by a charge on the land situated at Village Takve Khurd (Maharashtra) and movable fixed assets (except the Wind assets) including movable machinery, machinery spares, tools and accessories but excluding vehicles, launches and barges, present and future. 11 Disclosure with respect to previous and next due dates for the repayment and outstanding of principal amount of listed Commercial Papers (CP) is as under: ISIN Due Date of payment• Actual date of payment• Rs. In Crore INE245A14CT2 April 9, 2020 April9,2020 500.00 INE245A14CUO April17,2020 April 17, 2020 500.00 INE245A14CW6 April29, 2020 April29,2020 500.00 INE245A 14CV8 May 27, 2020 May 27, 2020 500.00 INE245A 14CX4 Maya, 2020 Maya, 2020 500.00 INE245A14DAO May 18, 2020 May 18, 2020 400.00 INE245A14DB8 May 22, 2020 May 22, 2020 500.00 INE245A14CR6 June 10, 2020 June 10, 2020 500.00 INE245A14CS4 June 17, 2020 June 17, 2020 500.00 INE245A14CY2 June 2, 2020 June 2, 2020 500.00 INE245A14CZ9 June 8, 2020 June 8, 2020 600.00 INE245A14DC6 June 26, 2020 June 26, 2020 500.00 INE245A14DE2 June 15, 2020 June 15, 2020 500.00 INE245A14DD4 June 22, 2020 June 22, 2020 500.00 INE245A14DK9 July 24, 2020 July 24, 2020 300.00 INE245A14DF9 July 30, 2020 July 30, 2020 100.00 INE245A14DH5 August 12, 2020 August12,2020 500.00 INE245A14DG7 August 10, 2020 August 10, 2020 400.00 INE245A 14Dl3 August 13, 2020 August13,2020 500.00 INE245A14DJ1 August 21, 2020 August21,2020 800.00 INE245A14DL7 August 25, 2020 August 25, 2020 525.00 INE245A14DM5 August 31, 2020 August 31, 2020 500.00 INE245A14DN3 September 2, 2020 September 2, 2020 200.00 INE245A14D01 September 7, 2020 September 7, 2020 500.00 INE245A14DQ6 September 18, 2020 September 18, 2020 500.00 INE245A14DQ6 April 23, 2021 Not due as at September 30, 2020 250.00 INE245A14DU8 March 25, 2021 Not due as at September 30, 2020 250.00 INE245A14DV6 November 23, 2020 Not due as at September 30, 2020 500.00 INE245A14DW4 November 27, 2020 Not due as at September 30, 2020 200.00 INE245A14DX2 December 04, 2020 Not due as at September 30, 2020 500.00 "Since the interest(discount) on CP is prepaid at the time of availment of respective CPs, the due date of payment of interest(discount) and actual date of payment of interest(discount) have not been disclosed separately. I The Company has retained 'CRISIL A1 +' and 'IND A1 +· ratings by CRISIL Limited and India Ratings and Research respectively for its outstanding CP. 12 Disclosure with respect to previous due dates for the repayment and outstanding of principal and interest of listed Non Convertible Debentures (NCD's) is as under: S.No. Previous due date for the payment of interest on NCD's Due date Interest payment (i) 11.40% Rs 1500 crore NCD's # April 30,2020 Yes (ii) 10.75% Rs 1500 crore NCD's April 30,2020 Yes (iii) 7.99% Rs 1500 crore NCD's November 16, 2019 Yes (iv) 8.84% Rs 500 crore NCD's November 21 , 2019 Yes (v) 9.40% Rs 210 crore NCD's December 28, 2019 Yes (vi) 8.84% Rs 750 crore NCD's February 21, 2020 Yes (vii) 9.00% Rs 250 crore NCD's February 21 , 2020 Yes (viii) 9.15% Rs 350 crore NCD's July 23, 2020 Yes (ix) 9.15% Rs 250 crore NCD's September 17, 2020 Yes S.No. Previous due date for the repayment of NCD's Due date Principal repayment (i) 9.15% Rs 350 crore NCD's July 23, 2020 Yes (ii) 9.15% Rs 250 crore NCD's September 17, 2020 Yes 13 Disclosure with respect to next due dates far the re payment and outstanding of principal and interest of listed NCD's Is as under; S.No. Next due date for the Payment of interest on NCD's Next Due Date Interest (in Croresl (i) 11.40% Rs 1500 crore NCD's # October 31, 2020 86.20 (ii) 10.75% Rs 1500 crore NCD's October 31, 2020 81 .29 (iii) 7.99% Rs 1500 crore NCD's November 16, 2020 119.85 (iv) 8.84% Rs 500 crore NCD's November 21, 2020 44.32 (v) 9.40% Rs 210 crore NCD's December 28, 2020 19.79 (vi) 8.84% Rs 750 crore NCD's February 21, 2021 66.48 (vii) 9.00% Rs 250 crore NCD's February 21, 2021 22.56 (viii) 8.21 % Rs 300 crore NCD's June 4 , 2021 24.63 (ix) 7.60% Rs 1000 crore NCD's April 30,2021 76.00 (x) 9.15% Rs 350 crore NCD's July 23, 2021 9.12 (xi) 9.15% Rs 250 crore NCD's September 17, 2021 8.21 S.No. Next due date for the Repayment of NCD's Next Due Date Principal (in Crores) (i) 11.40% Rs 1500 crore NCD's # # 1,500.00 (ii) 10.75% Rs 1500 crore NCD's $ August 21, 2072 1,500.00 (iii) 7 .99% Rs 1500 crore NCD's November 16, 2020 300.00 (iv) 8.84% Rs 500 crore NCD's November 21, 2022 500.00 (v) 9.40% Rs 21 O crore NCD's December 28, 2022 210.00 (vi) 8.84% Rs 750 crore NCD's February 21, 2023 750.00 (vii) 9.00% Rs 250 crore NCD's February 21, 2025 250.00 (viii) 8.21 % Rs 300 crore NCD's August 31, 2023 300.00 (ix) 7.60% Rs 1000 crore NCD's April30,2023 1,000.00 (x) 9.15% Rs 350 crore NCD's July 23, 2021 20.00 (xi) 9.15% Rs 250 crore NCD's September 17, 2021 16.00 # In an ea rlier year, the Company raised Rs.1,500 crore throug), lssua of unsecured perpetual securities (the "Securities"), These Securities are perpetual in nature with no maturity or redemption and are callable only at the option of the Company. The distribution on these Securities are 11.40% with a step up provision if the Securities are not called after 10 years. The distribution on the Securities may be deferred at the option of the Company, if during the six months preceding the relevant distribution payment date, the Company has made no payment on, or redeemed or repurchased, any securities ranking pari passu with, or junior to the instrument. As these Securities are perpetual in nature and ranked senior only to the share capital of the Company and the Company does not have any redemption obligation, these are considered to be in the nature of equity instruments in the financial results. S The 10.75% redeemable NCD's are redeemable at par at the end of 60 years from the date of allotment viz. 21st August, 2072. The Company has the call option to redeem the same at the end of 10 years viz. 21st August, 2022 and at the end of every year thereafter. 14 The credit rating for NCO's iss ued but not r edeemed as on September 30, 2020 11.40% Rs 1500 crore NCD's CRISIL AA-/ Positive and CARE AA Stable 10.75% Rs 1500 crore NCD's I CRISIL AA-/ Positive and CARE AA Stable 7.99% Rs 1500 crore NCD's CARE AA Stable and IND AA/ Stable 8.84% Rs 500 crore NCD's IND AA/ Stable 9.40% Rs 210 crore NCD's CRISIL AA-/ Positive and CARE AA Stable 8.84% Rs 750 crore NCD's IND AA/ Stable 9.00% Rs 250 crore NCD's IND AA/ Stable 8.21% Rs 300 crore NCD's IND AA/ Stable 7.60% Rs 1000 crore NCD's IND AA/ Stable 9.15% Rs 250 crore NCD's CRISIL AA-/ Positive and ICRA AA-(Stable) 9.15% Rs 350 crore NCD's CRISIL AA-/ Positive and ICRA AA-(Stable) """'· NOTES TO STANDALONE FINANCIAL RESULTS - Q2 FY 21 1. The above results were reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 10th November, 2020. 2. During the quarter ended 30th September, 2020, the Company has distributed dividend @ ~ 1.55 per fully paid share amounting to ~ 419 crore as approved by shareholders in its annual general meeting on 30th July, 2020 for the financial year 2019-20. 3. The shareholders of the Company in its annual general meeting dated 30th July, 2020 has approved the issuance of 49,05,66,037 equity shares of the face value of ~ 1 each at ~ 53 per equity share for an amount aggregating tot 2,600 crores to Tata Sons Private Limited on preferential basis. The Company has allotted the said equity shares to Tata Sons Private Limited on 13th August, 2020. 4. The Board of Directors of the Company in its meeting held on 12th August, 2020 have approved the Composite Scheme of Arrangement for merger of Coastal Gujarat Power Limited and Tata Power Solar Systems Limited (wholly owned subsidiaries) with the Company along with the capital reorganisation after the merger. The Board of Directors have also approved the Scheme of Amalgamation for merger of Af-taab Investment Company Limited (a wholly owned subsidiary) with the Company. Aforesaid schemes are subject to the necessary approvals from shareholders, National Company Law Tribunal and other regulatory authorities. Post necessary approvals, the merger will be accounted in accordance with Appendix C of Ind AS 103 - 'Business combinations of entities under common control' using pooling of interest method. I 5. The Code on Social Security 2020 has been notified in the Official Gazette on 29th September, 2020. The effective date from which the changes are applicable is yet to be notified and the rules are yet to be framed. Impact if any of the change will be assessed and accounted in the period in which said Code becomes effective and the rules framed thereunder are notified. 6. During, the quarter ended 30th June, 2020, the Company has acquired 51 % stake in TP Central Odisha Distribution Limited ('TPCODL') for~ 179 crores. TPCODL is the licensee to carry out the function of distribution and retail supply of electricity covering the distribution circles of Bhubaneswar, Cuttack, Paradeep, and Dhenkanal in the state of Odisha for a period of 25 years effective from 1st June, 2020. 7. During, the quarter ended 30th September, 2020, the Board of Directors of the Company has approved the transfer of 348.50 MW of renewable assets (forming part of renewable segment) to its wholly owned subsidiaries on a slump sale basis. Sale will be recognized post execution of sale agreement and transfer of control of renewable assets to the wholly owned subsidiaries. 8. Subsequent to the quarter ended 30th September, 2020, the Company has completed the sale of its Strategic Engineering Division (SEO) to Tata Advanced Systems Ltd. (TASL) and has received upfront consideration of ~ 539 crores (net of borrowings of ~ 537 crores transferred to TASL) after certain adjustments as specified in the scheme. 9. India and other global markets experienced significant disruption in operations resulting from uncertainty caused by the worldwide coronavirus pandemic. Management believes that there is not much of an impact likely due to this pandemic on the business of the Company and its subsidiaries, joint ventures and associates except that there exists some uncertainty over impact of COVID-19 on future business performance of its coal mining companies which form part of Mundra CGU (comprising of investment in companies owning Mundra power plant, coal mines and related infrastructure). Based on sensitivity analysis, management believes that the said uncertainty is not likely to impact the recoverability of Mundra CGU. As the situation is still continuously evolving, the eventual impact may be different from the estimates made as of the date of approval of these financial results. 10. Figures for the previous periods/year are re-classified/re-arranged/re-grouped, wherever necessary For and on behalf of the Board of THE TATA POWER COMPANY LIMITED -i~ PRAVEER SINHA CEO & Managing Director er, 2020 DIN 01785164 .r.. TATA Private & Confidential – For Private Circulation Only (This Information Memorandum is neither a Prospectus nor a statement in Lieu of Prospectus) Dated: November 24, 2020 ANNEXURE L CONSENT OF REGISTRAR TO THE ISSUE 190