Serial No.: [______] Private & Confidential –For Private Circulation Only
Addressed to: ______Series-IX IM dated February 20, 2020
NATIONAL HIGHWAYS AUTHORITY OF INDIA (An Autonomous Body under the Ministry of Road Transport & Highways, Government of India) (Constituted on June 15, 1989 by an Act of Parliament - The National Highways Authority of India Act, 1988) Head Office: G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075 Tel: (011) 25074100, 25074200; Fax: +91-11-25093517, 25093515 Website: www.nhai.gov.in; E-mail: [email protected]
(This Series-IX IM is neither a Prospectus nor a Statement in lieu of Prospectus. This Series-IX IM is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time.
(PRIVATE & CONFIDENTIAL) SERIES-IX IM DATED February 20, 2020
SERIES-IX IM FOR PRIVATE PLACEMENT OF SECURED, NON-CONVERTIBLE, NON-CUMULATIVE, REDEEMABLE, TAXABLE BONDS IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKHS EACH AT PAR AGGREGATING TO TOTAL ISSUE SIZE NOT EXCEEDING RS.5,000 CRORES WITH A BASE ISSUE SIZE OF RS. 500 CRORES AND GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO RS. 4,500 CRORES BY NATIONAL HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”) BY WAY OF PRIVATE PLACEMENT.
ISSUE PROGRAM
ISSUE/BID OPENING DATE ISSUE/BID CLOSING DATE PAY-IN DATE DATE OF ALLOTMENT 20.02.2020 20.02.2020 24.02.2020 24.02.2020
TRUSTEE OF THE ISSUE REGISTRAR TO THE ISSUE BEACON TRUSTEESHIP LIMITED Bigshare Services Private Limited 4C & D Siddhivinayak Chambers, Gandhi Nagar, Opp. 1st Floor, Bharat Tin Works Building MIG Cricket Club, Bandra (East) Mumbai – 400 051 Opp. Vasant Oasis, Makwana Road Marol, Andheri (E), Mumbai-400059 Tel: 022-42425004/47565852 Email: [email protected]
TABLE OF CONTENTS
PARTICULARS PAGE NO
I. DISCLAIMER 1 II. DEFINITIONS/ ABBREVIATIONS 5 III. ISSUER INFORMATION 7 IV. DETAILS OF MEMBERS OF THE ISSUER 9 V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER 13 1) STATUTORY AUDITOR OF THE ISSUER 13 2) CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST 13 THREE YEARS VI. MANAGEMENT PERCEPTION OF RISK FACTORS 14 VII. BRIEF SUMMARY OF BUSINESS/ ACTIVITIES OF ISSUER AND ITS LINE OF 36 BUSINESS 1) OVERVIEW 36 2) STRENGTHS 37 3) STRATEGIES 39 4) ISSUER’S PROJECTS 40 5) FINANCING 43 6) CORPORATE STRUCTURE 53 VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE 54 LAST 3 AUDITED YEARS IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF 54 ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS 1) BRIEF BACKGROUND 54 2) CHANGE IN HEAD OFFICE 54 3) VISION 54 4) MAIN OBJECTS 55 5) MAJOR EVENTS 55 6) HOLDING COMPANY 55 7) THE PROMOTER 55 8) SPVs AND ASSOCIATE COMPANY 57 X. CAPITAL STRUCTURE 59 1) CAPITAL HISTORY 59 2) DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 62 1 YEAR 3) DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN 62 THELAST 1 YEAR 4) DISCLOSURES PERTAINING TO WILFUL DEFAULT 62 5) SHAREHOLDING PATTERN OF THE ISSUER 62
PARTICULARS PAGE NO
6) TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER 62 7) PROMOTER HOLDING IN THE ISSUER 62 8) BORROWINGS OF THE ISSUER 62 A) DEBT OUTSTANDING 62 B) TERMS OF ASSETS CHARGED AS SECURITY 70 C) TOP 10 BONDHOLDERS OF THE ISSUER 79 9) AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN 79 FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SPVs AND ASSOCIATE COMPANY 10) COMMERCIAL PAPER ISSUED BY THE ISSUER 79 11) OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN 79 CURRENCY CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/ PREFERENCE SHARES) 12) SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) 79 AND/OR DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS 13) OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR 80 CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE 81 XII. SUMMARY TERM SHEET 82 XIII. TERMS OF OFFER 87 XIV. CREDIT RATING FOR THE BONDS 102 XV. TRUSTEES FOR THE BONDHOLDERS 103 XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED 104 XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL 105 OBLIGATIONS OF THE ISSUER XVIII. DECLARATION 106 ANNEXURES
1. Financial Information 2. Credit Rating Letters 3. Consent of the Trustee 4. Limited review report for half year ended March 31, 2019 and 30 September 2019 5. Application Form-To be sent separate
I. DISCLAIMERS
1. DISCLAIMER OF THE ISSUER
This Series-IX IM is neither a Prospectus nor a Statement in Lieu of Prospectus. This Series-IX IM Document is prepared in conformity with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time. This Series-IX IM does not constitute an offer to public in general to subscribe for or otherwise acquire the Bonds to be issued by National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”). This Series-IX IM for the exclusive use of the addressee and it should not be circulated or distributed to third party(ies). It is not and shall not be deemed to constitute an offer or an invitation to the public in general to subscribe to the Bonds issued by the Issuer. This bond issue is made strictly on private placement basis. Apart from this Series-IX IM, no offer document or prospectus has been prepared in connection with the offering of this bond issue or in relation to the issuer.
This Series-IX IM does not intend to form the basis of evaluation for the prospective subscribers to whom it is addressed and who are willing and eligible to subscribe to the bonds issued by NHAI. This Series-IX IM has been prepared to give general information regarding NHAI to parties proposing to invest in this issue of Bonds and it does not purport to contain all the information that any such party mayrequire. NHAI believes that the information contained in this Series-IX IM is true and correct asof the date hereof NHAI does not undertake to update this Series-IX IM to reflect subsequentevents and thus prospective subscribers must confirm about the accuracy and relevancy of any information contained herein with NHAI. However, NHAI reserves its right for providing the information at its absolute discretion. NHAI accepts no responsibility for statements made in any advertisement or any other material land anyone placing reliance on any other source of information would be doing so at his own risk and responsibility.
Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscriber to have obtained all consents, approvalsor authorizations required by them to make an offer to subscribe for and purchase the Bonds. It is theresponsibility of the prospective subscriber to verify if they have necessary power and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Series-IX IM should be construed as advice or recommendation by the Issuer to the Issue to subscribers to the Bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownershipand redemption of these Bonds and matters incidental thereto.
This Series-IX IM is not intended for distribution. It is meant for the consideration of the personto whom it is addressed and should not be reproduced by the recipient. The securities mentioned herein are being issued on private placement basis and this offer does not constitute a public offer/invitation.
This Series-IX IM shall be accompanied by application form serially numbered and addressed specifically to the person to whom the offer is made and shall be sent to him, either in writing or in electronic mode, within thirty days of recording the names of such persons.
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2. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA
This Series-IX IM shall not be filed with Securities & Exchange Board of India (“SEBI”) for their approval. The Bonds have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Series-IX IM. It is to be distinctly understood that this Series-IX IM should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this Series-IX IM. The Issue of Bonds being made on private placement basis, filing of this Series- IX IM is not required with SEBI. However, SEBI reserves the right to take up at any point of time, with the Issuer, any irregularities or lapses in this Series-IX IM.
4. DISCLAIMER OF THE ARRANGERS TO THE ISSUE
The role of the Arranger in the assignment is confined to marketing and placement of the Debentures/Bonds (Debentures and Bonds have been used interchangeably in this Disclaimer) on the basis of this Series-IX IM (hereinafter collectively referred to as “Information Memorandum”) as prepared by the Issuer. The Arranger has neither scrutinized nor vetted nor reviewed nor has it done any due-diligence for verification of the contents of this Information Memorandum. The Arranger shall use this Information Memorandum for the purpose of soliciting subscription(s) from Eligible Investors in the Debentures to be issued by the Issuer on a private placement basis. It is to be distinctly understood that the use and distribution of this Information Memorandum by the Arranger should not in any way be deemed or construed to mean that the Information Memorandum has been endorsed by the Arranger in any manner.
It is responsibility of the Issuer to comply with all laws, rules and regulations and obtain all regulatory, governmental, corporate and other necessary approvals for the issuance of the Bonds. The Arranger has not verified whether the regulatory requirements have been fulfilled and necessary approvals have been obtained by the Issuer.
The Issuer has prepared this Information Memorandum and the Issuer is solely responsible and liable for its contents. The Issuer confirms that all the information contained in this Information Memorandum has been provided by the Issuer or is from publicly available information, the use of which isn’t regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise and that such information has not been independently verified by the Arranger.
No representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted, by the Arranger or any of their employees, directors or their Affiliates for the accuracy, completeness, reliability, correctness or fairness of this Information Memorandum or any of the information or opinions contained therein, and the Arranger hereby expressly disclaims any responsibility or liability to the fullest extent for the contents of this Information memorandum, whether arising in tort or contract or otherwise, relating to or resulting from this Information Memorandum or any information or errors contained therein or any omissions there from. Neither Arranger and its affiliates, nor its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of this document. By accepting this Information Memorandum, the Eligible Investor accepts this Disclaimer of the Arranger, which forms an integral part of this Information Memorandum and agrees that the Arranger will not have any such liability.
The Eligible Investors should carefully read this Series-IX IM. This Information Memorandum is for general information purposes only, without regard to specific objectives, suitability, financial situations
2 and needs of any particular person and does not constitute any recommendation and the Eligible Investors are not to construe the contents of this Series-IX IM as investment, legal, accounting, regulatory or tax advice, and the Eligible Investors should consult with its own advisors as to all legal, accounting, regulatory, tax, financial and related matters concerning an investment in the Bonds. This Information Memorandum should not be construed as an offer to sell or the solicitation of an offer to buy, purchase or subscribe to any securities mentioned therein, and neither this document nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
This Information Memorandum is confidential and is made available to potential investors in the Bonds on the understanding that it is confidential. Recipients are not entitled to use any of the information contained in this Information Memorandum for any purpose other than in assisting to decide whether or not to participate in the Bonds. This document and information contained herein or any part of it does not constitute or purport to constitute investment advice in publicly accessible media and should not be printed, reproduced, transmitted, sold, distributed or published by the recipient without the prior written approval from the Arranger and the Issuer. This Information Memorandum has not been approved and will or may not be reviewed or approved by any statutory or regulatory authority in India or by any Stock Exchange in India. This document may not be all inclusive and may not contain all of the information that the recipient may consider material.
Please note that:
(a) The Arranger and/or their affiliates may, now and/or in the future, have other investment and commercial banking, trust and other relationships with the Issuer and other entities related to the Issuer;
(b) As a result of those other relationships, the Arranger and/or their affiliates may get information about the Issuer and/or the Issue or that may be relevant to any of them. Despite this, the Arranger and/or their affiliates will not be required to disclose such information, or the fact that it is in possession of such information, to any recipient of this Information Memorandum;
(c) The Arranger and/or their affiliates may, now and in the future, have fiduciary or other relationships under which it, or they, may exercise voting power over securities of various persons. Those securities may, from time to time, include securities of the Issuer;
(d) The Arranger and/or their affiliates may exercise such voting powers, and otherwise perform its functions in connection with such fiduciary or other relationships, without regard to its relationship to the Issuer and/or the securities;
(e) The Arranger is not acting as trustee or fiduciary for the investors or any other person; and
(f) The Arranger is under no obligation to conduct any "know your customer" or other procedures in relation to any person.
NOTHING IN THIS INFORMATION MEMORANDUM CONSTITUTES AN OFFER OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA OR ANY OTHER JURISDICTION WHERE SUCH OFFER OR PLACEMENT WOULD BE IN VIOLATION OF ANY LAW, RULE OR REGULATION. NO ACTION IS BEING TAKEN TO PERMIT AN OFFERING OF THE BONDS IN THE NATURE OF DEBENTURES OR THE DISTRIBUTION OF THIS INFORMATION MEMORANDUM IN ANY JURISDICTION WHERE SUCH ACTION IS REQUIRED. THE DISTRIBUTION/TAKING/SENDING/DISPATCHING/TRANSMITTING OF THIS INFORMATION MEMORANDUM AND THE OFFERING AND SALE OF THE BONDS 3
MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS.
5. DISCLAIMER OF THE STOCK EXCHANGE
As required, a copy of this Series-IX IM shall be submitted to BSE Limited (hereinafter referred to as “BSE”) for hosting the same on its website. It is to be distinctly understood that such submission of the Series-IX IM with BSE or hosting the same on its website should not in any way be deemed or construed that the Series-IX IM 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 Series-IX IM; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange; nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.
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II. DEFINITIONS/ ABBREVIATIONS
AY Assessment Year Allotment/ Allot/ The issue and allotment of the Bonds to the successful Applicant(s) in the Issue Allotted Allottee A successful Applicant to whom the Bonds are allotted pursuant to the Issue, either in full or in part Applicant/Investor A person who makes an offer to subscribe the Bonds pursuant to the terms of this Series-IX IM and the Application Form Application Form The form in terms of which the Applicant shall make an offer to subscribe to the Bonds and which will be considered as the application for allotment of Bonds in the Issue Bondholder(s) Any person holding Bonds and whose name appears on the beneficial owners list provided by the Depositories Beneficial Owner(s) Bondholder(s) holding Bond(s) in dematerialized form (Beneficial Owner of the Bond(s) as defined in clause (a) of sub-section of Section 2 of the Depositories Act, 1996) Members of the The Members of the Board of National Highways Authority of India or Committee Board thereof BSE/ Designated BSE Limited, being the stock exchange in which Bonds of the Issuer are proposed Stock Exchange to be listed Record Date Reference date for payment of interest/ repayment of principal CAR Capital Adequacy Ratio CAG Comptroller and Auditor General of India IRRPL India Ratings and Research Private Limited CDSL Central Depository Services (India) Limited CCEA Cabinet Committee on Economic Affairs CRISIL CRISIL Limited CARE CARE Ratings Limited Depository A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time Depository A Depository participant as defined under Depositories Act Participant DP Depository Participant DRR Bond/ Debenture Redemption Reserve EPS Earnings Per Share FIs Financial Institutions FIIs/ FPIs Foreign Institutional Investors / Foreign Portfolio Investors Financial Year/ FY Period of twelve months ending March 31, of that particular year GoI/ GOI Government of India/ Central Government Trustees Trustees for the Bondholders in this case being Beacon Trusteeship Limited Issuer/ National Highways Authority of India, an autonomous body under the Ministry of NHAI/Authority Road Transport & Highways, Government of India, constituted by an act of Parliament - The National Highways Authority of India Act, 1988 and having its head office at G - 5 & 6, Sector 10, Dwarka, New Delhi – 110075
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I.T. Act The Income Tax Act, 1961, as amended from time to time Km kilo meter MF Mutual Fund MoF Ministry of Finance NECS National Electronic Clearing Service NEFT National Electronic Funds Transfer NSDL National Securities Depository Limited NHDP National Highways Development Programme PAN Permanent Account Number GIR General Index Registration Number Rs./ INR Indian National Rupee RBI Reserve Bank of India RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being Bigshare Services Private Limited SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI Debt Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended from time to time. TDS Tax Deducted at Source under provisions of the I.T. Act Series-IX IM This Information Memorandum dated February 20, 2020 containing necessary terms and conditions of the specific issue and other necessary disclosure The Act The National Highways Authority of India Act, 1988 (“NHAI Act”)
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III. ISSUER INFORMATION
Name of the Issuer : National Highways Authority of India Head Office : G - 5 & 6, Sector - 10, Dwarka, New Delhi - 110075 Tel. : (011)25074100, 25074200 Fax : +91-11-25093507 Website : www.nhai.gov.in E-mail : [email protected] Compliance Officer* for : Mr. S. Q. Ahmad the Issue General Manager (Finance) National Highways Authority of India Head Office G – 5&6, Sector 10, Dwarka, New Delhi - 110075 Tel: +91 11 25074100, 25074200 E-mail: [email protected]
* The investors can contact the Compliance Officer in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account etc.
Chief Financial Officer : Mr. Asheesh Sharma, IAS of the Issuer* Member (Finance) National Highways Authority of India Head Office G – 5&6, Sector 10, Dwarka, New Delhi - 110075 Tel.: +91 11 25074100, 25074200 Fax: +91 1125093542 E-mail: [email protected]
* The Issuer does not have a designated Chief Financial Officer. The finance function is headed byMr. Asheesh Sharma, IAS,who is the Member (Finance) of the Issuer, whose particulars are given above.
Arrangers/QiBs/Investors to the Issue:
Sr. No. Particulars Amount (In Rs. Crore) 1 CBT-EPF 3,840 2 others 1,160 Total : 5,000
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Trustees for the Bondholders: BEACON TRUSTEESHIP LIMITED 4C & D Siddhivinayak Chambers, Gandhi Nagar, Opp. MIG Cricket Club, Bandra (East) Mumbai – 400 051
Registrar to the : Bigshare Services Private Limited 1st Floor, Bharat Tin Works Building Opp. Vasant Oasis, Makwana Road Marol, Andheri (E), Mumbai-400059 Tel: 022-42425004/47565852 Email: [email protected]
Credit Rating : India Ratings & Research Private Limited Agencies A Fitch Group Company Wockhardt Tower, Level 4, West Wing BandraKurla Complex, Bandra (E) Mumbai – 400051 Tel:+91 2240001700 Fax:+91 22 40001701 E-mail: [email protected] Website: www.indiaratings.co.in
CARE Ratings Limited 13th floor, E-1 Videocon Towers, Jhandewala extansion , New Delhi 110055 Tel:+91 11 45333201 Fax:+91 1145333238 E-mail: [email protected] Website: www.careratings.com
CRISIL Limited Registered Office CRISIL House, Central Avenue Hiranandani Business Park Powai, Mumbai – 400 076 Tel.:+91 22 33423000 Fax:+91 2233423050 E-mail:[email protected] Website: www.crisil.com
Stautory Auditors : Comptroller and Auditor General of India Indian Audit & Accounts Department Office of the Principal Director of Commercial Audit & Ex-Officio Member, Audit Board - 1 3rd Floor, A-Wing, Indraprastha Bhawan New Delhi - 110002 Tel:+91 11 23378473 Fax:+91 1123378432 E-mail:[email protected]
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IV. DETAILS OF MEMBERS OF THE BOARD OF THE ISSUER
MEMBERS OF THE BOARD OF THE ISSUER
The Issuer was constituted by the NHAI Act to develop, maintain and manage the national highways vested in or entrusted to it by the Central Government. As per the NHAI Act, the Issuer is managed by Members of the Authority, which consists of:
(i) a Chairman; (ii) not more than six full-time Members; and (iii) not more than six part-time Members.
Each Member is appointed by the Central Government by notification in the official gazette. Presently, the Issuer has five full time Members (excluding the Chairman) and four part time Members.
Every meeting of the Issuer must be attended by at least two-thirds of total members and three-quarters of the part-time Members. The NHAI Act provides that for the purpose of discharging its functions, the Issuer shall appoint such number of officers and other employees as it may consider necessary.
Details of the Chairman and full-time Members of the Authority:
Sl. No. Description 1. Name Dr. Sukhbir Singh Sandu, IAS Designation Chairman, NHAI Date of Appointment October 28, 2019 Other Directorships - Age 56 years
2. Name Shri R. K. Pandey Designation Member (Projects) Date of Appointment November 4, 2015 Other Directorships None Age 56 years
3. Name Shri Asheesh Sharma, IAS Designation Member (Finance) Date of Appointment June 5, 2018. Other Directorships -Chairman & Managing Director of Indian Highways Management Company Ltd. Age 47 years
4. Name Shri Alok, IAS Designation Member (Administration) Date of Appointment January 20, 2020 Other Directorships [●] Age 53 years
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Details of part-time Members of the Authority:
SI. No. Description 1. Name Shri Sanjeev Ranjan, IAS Designation Secretary to the Government of India, Department of Road Transport & Highways, Government of India Date of Appointment April 1, 2019 Other Directorships - Age 56 years
2. Name Sh. Amitabh Kant, IAS (Retd) Designation CEO, NITI Aayog Date of Appointment November 6, 2017 Other Directorships India International Convention and Exhibition Centre Limited Age 62 years
3. Name Shri Atanu Chakraborty, IAS Designation Secretary, Department of Economic Affairs, Ministry of Finance, Government of India with Additional Charge Date of Appointment July 23, 2019 Other Directorships - Age 59 years
4. Name Shri I.K. Pandey Designation Director General (RD) & Special Secretary Date of Appointment February 07, 2019 Other Directorships None Age 57 years NONE OF THE CURRENT MEMBERS OF THE ISSUER APPEAR IN THE RBI'S DEFAULTER LIST OR ECGC'S DEFAULT LIST.
Changes to the Members of the Issuer during the last three years
The following changes have occurred to the membership of the Issuer in the three years preceding the date of this Prospectus:
Name Date of Date of retirement / Appointment relinquishing charge Dr. Sukhbir Singh Sandhu, IAS October 28, 2019 Continuing as Chairman Shri Alok, IAS January 20, 2020 Continuing as Member Administration Shri Sanjeev Ranjan, IAS April 1, 2019 Continuing as part time member Secretary to the Government of India, Department of Road Transport & Highways, Government of India
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Name Date of Date of retirement / Appointment relinquishing charge Shri Sanjeev Ranjan, IAS October 5, 2018 March 03, 2019 Chairman, National Highways Authority of India Shri D. O. Tawade 30 August 2016 May 15, 2019 Member (Technical) Shri I.K. Pandey, IES February 07, 2019 Continuing as part time member Director General (RD) & Special Secretary Shri Nagendra Nath Sinha, IAS March 5, 2019 October 22, 2019 Chairman, National Highways Authority of India Shri Girish Chandra Murmu, IAS January 31, 2019 [●] Secretary, Department of Expenditure Shri R. K. Chaturvedi, IAS May 18, 2018 April 22, 2019 Additional Secretary and Member (Administration) Asheesh Sharma, IAS May 18, 2018 Continuing as a Member Member (Finance) Shri Amitabh Kant, IAS (Retd.) November 06, 2017 Continuing as part time member CEO, NITI Aayog Shri Ajay Narayan Jha, IAS October 31, 2017 - Secretary, Department of Expenditure Shri Bhesha Nand Singh, IES July 1, 2018 January 31, 2019 Director General (RD) & Special Secretary Shri Subhash Chandra Garg, IAS July 2017 November 06, 2017 Shri Manoj Kumar March 01, 2017 June 30, 2017 Director General (RD) & Special Secretary Shri Rajeev Kumar, IAS May 16, 2017 June 27, 2017 Shri Ashok Lavasa, IAS April 30, 2016 October 31, 2017 Secretary, Department of Expenditure Sh. Deepak Kumar, IAS June 27, 2017 May 16, 2018 Chairman, NHAI Shri Shashikanta Das, IAS August 31, 2015 February 28, 2017 Secretary, Department of Economic Affairs, Ministry of Finance Shri R.K. Pandey November 04, 2015 Continuing as a Member Member (Projects) Shri Sanjay Mitra, IAS January 01, 2016 May 24, 2017 Secretary, MoRTH Shri Anand Kumar Singh February 12, 2016 -
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Name Date of Date of retirement / Appointment relinquishing charge Member (Project) Shri Niraj Verma, IAS, March 14, 2016 August 23, 2018 Member (PPP) Mrs. Veena Ish, IAS August 04, 2016 September 07, 2017 Member (Admin) Shri Yudhvir Singh Malik, IAS November 28, 2016 March 31, 2019 Secretary to the Government of India, Department of Road Transport & Highways,
Government of India Shri Rohit Kumar Singh, IAS December 21, 2016 May 17, 2018 Member (Finance) Smt. Sindushree Khullar, IAS April 2, 2012 March 09, 2015 Secretary, Planning Commission Shri R. P. Singh, IAS June 12, 2012 June 11, 2015 Chairman, NHAI Shri Rajiv Mehrishi, IAS March 09, 2015 August 31, 2015 Secretary, Department of Economic Affairs, Ministry of Finance Shri Sudhir Kumar April 15, 2013 September 8, 2015. Member (PPP) Shri V. K Chibber, IAS February 01, 2013 December 31, 2015 Secretary, MoRTH Shri M. P. Sharma February 08, 2013 February 29, 2016 Member (Technical) Shri Satish Chandra, IAS April 03, 2013 April 02, 2016 Member (Finance) Shri R. P. Watal, IAS November 30, 2013 April 30, 2016 Secretary, Department of Expenditure Shri Raghav Chandra, IAS August 31, 2015 November 28, 2016 Chairman, NHAI Shri S.N. Das August 01, 2015 February 28, 2017 General (Road Development & Special Secretary)
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V. DETAILS OF STATUTORY AUDITOR OF THE ISSUER
1. STATUTORY AUDITOR OF THE ISSUER (FY 2016-17)
Name of Statutory Auditor Address& Contact Details Auditor since Comptroller and Auditor General of India 3rd Floor, A-Wing Since establishment as per The Indian Audit & Accounts Department, Indraprastha Bhawan National Highways Authority Office of the Principal Director of New Delhi - 110002 of India Act, 1988 Commercial Audit & Ex-Officio Member, Tel: (011) 23378473 Audit Board – 1 Fax: (011) 23378432 E-mail: [email protected]
2. CHANGE IN STATUTORY AUDITOR OF THE ISSUER SINCE LAST THREE YEARS
There is no change in the Statutory Auditors of the Issuer during the last three financial years.
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VI. MANAGEMENT PERCEPTION OF RISK FACTORS
RISKS RELATING TO THE ISSUER'S BUSINESS
The Issuer is presently involved in a number of civil proceedings, including arbitration, environmental and land acquisition cases. In the event that these cases are decided against the Issuer or if there is a failure by the Issuer to adequately recover its claims against the other parties it may have an adverse effect on the Issuer's operations.
The Issuer is a party to various legal proceedings and claims relating to its business and operations in India. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. These legal proceedings include civil suits, arbitration claims, environmental proceedings and proceedings involving the acquisition of land for its operations. No assurance can be given that these legal proceedings will be decided in the Issuer’s favour. Any adverse decision in these proceedings may have a significant adverse effect on the Issuer’s business and results of operations. There is also no assurance that similar proceedings will not be initiated against the Issuer in the future. Further, should any new developments arise, such as a change in Indian law or rulings against the Issuer by appellate courts or tribunals, the Issuer may face an increase in the costs of construction which could in turn increase the Issuer's expenditure. The Issuer may need to make provisions in its financial statements, to reflect its increased expenses and liabilities. Additionally, the Central Government has made a direction to all concerned entities, including the Issuer, that in relation to arbitration proceedings where the Issuer is challenging the arbitral awards, it should make a payment of up to 75 per cent. of the amount claimed against a bank guarantee pending final adjudication of the appeal proceedings. The Issuer started accepting claims under this scheme on December 2016, the further implementation of this scheme may affect the Issuer's financial condition and limit its ability to allocate its financial resources towards the implementation of its projects.
The Issuer's operations are significantly dependent on the funding received from the Central Government and any delay or decrease in the funding plan by the Central Government or any Government entities may adversely affect the Issuer's operations.
The Issuer's operations are very capital intensive and any reduction in the budgetary allocation of capital, funding or grants by the Central Government may materially affect the Issuer's performance and operations. As the Issuer's growth plans are mainly determined by the amount of Central Government’s support in the form of budgetary allocations, any adverse developments in the policy of the Central Government in the manner in which it seeks to address the development of the infrastructure needs of India will have a material and adverse effect on the Issuer's business. If funding from the Central Government reduces or if there is any adverse change in the pattern of allocation of the cess collected by the Central Government or if there is a downturn in the macroeconomic environment in India or in sectors which are directly dependent on the road infrastructure, the results of the Issuer's operations and future performance could be materially and adversely affected.
The Issuer's operations are dependent on the policies of the Central Government and the State Governments and the initiatives implemented by them to develop the road infrastructure in India. Any lack of support or any delay in the implementation of regulatory initiatives will adversely affect the Issuer's operations.
The Issuer believes that the development of India's infrastructure is dependent on the formulation and effective implementation of State Government and Central Government’s programs and policies that facilitate and encourage private sector investment in the infrastructure sectors in India. Many of these programs and policies are evolving and their successful implementation may depend on whether they are properly designed to address the infrastructure development needs in India. Additionally, these programs will need continued support from stable and experienced regulatory regimes that not only 14 encourage the continued movement of private capital into infrastructure development but also lead to increased competition, appropriate allocation of risk, transparency, effective dispute resolution and more efficient and cost-effective services to the end-consumer. Additionally, policies of the Central Government and State Governments which mandate development in certain specific sectors, or areas, including but not limited to rural, coastal and/or border areas may not be economically remunerative. In the event that State Government and Central Government's initiatives and regulations in the infrastructure industry do not proceed or progress in the anticipated manner, the results of the Issuer's operations could be materially affected.
Further, for a successful implementation of a project, an efficient process for the acquisition of land is necessary. Whilst a modified land acquisition policy is presently being formulated by the Central Government in conjunction with the State Governments, it is yet to be finalised. Any delay in the acquisition of land will lead to delays in the implementation of the relevant projects which could materially affect the Issuer's operation and growth.
The Issuer's operations may also be affected by an increase in the prices of raw materials or shortages of raw materials which may lead to an increase in the cost of construction of road projects.
Any increase in the prices of raw materials or a shortage of raw materials necessary for a project may affect the financial viability of a project or cause delays in the implementation of a project. Additionally, some engineering, procurement and construction ("EPC") contracts may contain provisions where the payment made to the contractor will need to be adjusted to the wholesale prices index or the consumer prices index in India. These adjustments may lead to further increases in the construction cost for the projects.
The Issuer's operations are dependent on forecasting traffic volumes.
In some of the Issuer's projects, the user fee generated from highway stretches tolled by the Issuer is remitted to the Central Government and is received back by the Issuer from the Central Government. Any material decrease between the actual traffic volume and the forecasted traffic volume on account of inaccurate forecasting or (any other reason which may cause a difference between actual traffic volume and forecasts) may therefore have a material adverse effect on the Issuer's capital flows and performance.
During Fiscal 2018, the Issuer deposited an amount of INR 88.40 billion including toll revenue received by the Issuer from roads operated by it to the Consolidated Fund of India ("Consolidated Fund of India"). This amount excludes any amounts raised by concessionaires under the Issuer's public private partnership ("PPP") projects. Toll revenues depend on toll receipts and are affected by changes in traffic volumes. Factors that affect traffic volumes include: i) toll rates; ii) fuel prices in India; iii) the affordability of automobiles; iv) the quality, convenience and travel time on alternate routes outside the Issuer's network; v) the availability of alternative means of transportation, including rail networks and air transport; vi) the level of commercial, industrial and residential development in areas served by the Issuer's projects; vii) growth of the Indian economy; viii) adverse weather conditions; and ix) seasonal holidays.
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Revenue from toll receipts is affected by traffic volume and tariff rates, both of which are beyond the Issuer's control. The user fee structure is laid down under National Highways (Rate of Fee) Rules, 1997 and National Highways Fee (Determination of Rates and Collection) Rules, 2008 as amended and is uniformly applicable. Reduced growth of traffic on account of an economic slowdown, restrictions on mining, a decline in manufacturing and/or exports may decrease the Issuer's toll revenues. Further, any change in the applicable toll policies or other applicable laws which affects the category of vehicle or fuel, may lead to an increase or a decrease in the toll revenue and may affect the Issuer's capital inflows thereby affecting the Issuer's results. In the event of significant decrease in traffic volumes on such stretches of the road network, the Issuer may experience a corresponding decrease in the capital which the Issuer receives from the Central Government, which may reduce its future execution capabilities.
Leakage of traffic and toll collection on roads operated by the Issuer may affect the volume of collections and inflows which may in turn affect the capital which the Issuer receives from the Central Government and the Issuer's future project execution capabilities.
The success of toll road projects is dependent on the toll rates that are levied from the users. Any material decrease between the actual traffic volume and forecast traffic volume, or increase between the actual operation and maintenance expenses for such roads will lead to a decrease in toll receipts. Toll receipts are also primarily dependent on the integrity of toll collection systems. The revenues derived from the collection of tolls may be reduced by leakage through toll evasion, fraud, theft or technical faults in toll collection systems. If toll collection is not adequately monitored, leakage may reduce toll revenue. Although the Issuer has systems in place to minimise leakage through fraud and theft, any significant failure by the Issuer to control leakage in toll collection could have a material adverse effect on the Issuer's operations and prospects. Further, there may be situations where toll collection is disrupted or stopped due to public disturbances which may result in reduced revenue collection by the relevant concessionaires or contractors or by the Issuer. Any such disruption or stoppage of toll collection may adversely affect revenue collections.
Fluctuations in interest rates and exchange rates on the Issuer's external borrowings may adversely affect its operations.
As of September 30, 2019, the Issuer has outstanding multilateral external borrowings of Rs. 59,702.00 lakh from the ADB. The final instalment of such borrowings is payable on 1 July 2025. Because this loan is not hedged for repayment of principal and interest and repayment of principal and interest is made in foreign currency, any increase in the interest rates and/or any adverse fluctuation in the exchange rates may increase the cost of the Issuer's borrowings, thereby increasing the cost of the relevant projects.
The Issuer may raise further borrowings for funding various projects under the NHDP and other related programmes. Any increase in domestic and/or international interest rates may have adverse impact on the Issuer's cost of borrowings and projects.
The Issuer's financial condition and physical performance could be materially affected if the Issuer does not complete its projects as planned or if its projects experience delay.
The Issuer has experienced time and cost overruns in the past. There may be a delay in implementation or completion of projects or a change of scope of work, due to factors such as delays or failures to obtain necessary permits, or authorisations which are beyond the Issuer's control or the control of the relevant contractors or concessionaires. Delays in the completion of a project may also lead to cost overruns. Such delays in the completion of projects may delay the commencement of the Issuer's toll collections thereby affecting its operations and physical performance.
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Any delay in the completion of the projects may also trigger the delay mechanism in the underlying contracts and adverse consequences under the relevant contracts could follow.
The Issuer's operations and financials may be adversely affected due to any delay in completion of the relevant projects and resulting in an increase in the costs for the relevant concessionaires or contractors and in some situations delaying the accrual of revenue to the Issuer.
A change in Central Government’s equity stake in the Issuer or a change in the administrative structure of the Issuer may adversely affect its operations.
The Issuer is an Authority constituted by a Special Act i.e. NHAI Act and it is wholly owned, controlled and administered by the Ministry of Road Transport and Highways, Government of India. 100 per cent of the Issuer’s equity is funded by the Government of India. Any change in the Government’s shareholdings or any change in the structure of the Issuer could materially adversely affect the financial status and performance of the Issuer.
The Central Government can, pursuant to the powers vested in it under Section 32 of the NHAI Act supersede the Issuer.
If, at any time, the Central Government is of the opinion that (i) on account of a grave emergency, the Issuer is unable to discharge the functions and duties imposed on it by or under the provisions of the NHAI Act; (ii) the Issuer has persistently defaulted in complying with any direction issued by the Central Government under the NHAI Act; (iii) in the discharge of the functions and duties imposed on it by or under the provisions of the NHAI Act; or (iv) circumstances exist which render it necessary in the public interest to do so, the Central Government may supersede the Issuer.
Should the Central Government therefore exercise its power to supersede the Issuer pursuant to the power vested in it under the NHAI Act, the Issuer may not be able to carry out its business impacting its financial condition or may not be able to carry out its obligations under the Notes.
The Issuer's operations may also be adversely affected if it is unable to manage its business as it grows. The Issuer's business operations may be affected by shortcomings and failures in the Issuer's internal processes and systems.
The Issuer's business is highly dependent on its ability to process and monitor a large number of projects. As the Issuer develops its business, the inability of its systems to accommodate an increasing volume of projects could also constrain its ability to expand its businesses. Additionally, shortcomings or failures in the Issuer's internal processes or systems could lead to an impairment of its financial condition, financial loss, disruption of its business and reputational damage. Any inability of the Issuer to successfully scale up its resources will adversely affect its business and results of operations. The Issuer's ability to operate will depend in part on its ability to maintain and upgrade its contract management systems and policies on a timely and cost-effective basis. The information made available to the Issuer's management through its existing systems may not be timely and sufficient to manage risks or to plan for and respond to changes in market conditions and other developments in the Issuer's operations. The Issuer may experience difficulties in upgrading, developing and expanding its systems quickly enough to accommodate its growing requirements. The Issuer's failure to maintain or improve or upgrade its management information systems in a timely manner could materially and adversely affect its operations.
The Issuer may also be subject to disruptions of its operating systems, arising from events that are wholly or partially beyond the Issuer's control, including but not limited to, computer viruses or electrical or telecommunication service disruptions, which may result in a loss or liability to it.
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The Comptroller and Auditor General of India ("CAG") has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer.
In its audit report for Fiscal 2015 and Fiscal 2014, the CAG has expressed serious reservations regarding the maintenance of proper books of accounts and other relevant records by the Issuer. The CAG has observed that the Issuer, inter alia, has not followed the applicable accounting policies and has not maintained proper records in respect of the utilisation of project based borrowed funds. In their audit report for Fiscal 2014, the CAG noted, inter alia, that (i) the Issuer did not maintain records in respect of the utilisation of project-based borrowed funds and the total borrowed costs allocated to completed and incomplete projects could not be verified; (ii) the allocation of “net establishment expenses for the year” to completed projects was against generally accepted accounting principles; (iii) adjustments had not been made in the accounts for 16 road projects passed to concessionaires for upgrade and five other road projects transferred to State Governments; and (iv) depreciation had not been accounted for in stretches of highways of completed projects, leading to an overstatement of assets. The CAG also noted in their audit report for Fiscal 2015 that due to books of the Issuer not being maintained in a proper manner, there has been an overstatement of its fixed assets capital work in progress. In some instances the CAG was also not able to verify the capital work in progress due to the absence of project-based details of expenditure on ongoing as well as completed projects. The CAG has in their audit report for Fiscal 2015 and Fiscal 2014 stated that they are not able to provide an audit opinion as to whether the financial statements of the Issuer for these periods give a true and fair view in accordance with the generally accepted accounting principles in India.
In its audit report for Fiscal 2016, the CAG has provided an audit opinion that the Issuer's balance sheet and profit and loss account give a true and fair view in conformity with the generally accepted accounting principles of India. However, the CAG has made a number of observations. The observations from the CAG include, inter alia, statements that (i) the Issuer has not maintained proper books of accounts and other relevant records; and (ii) certain statements made by the Issuer in the offering documents relating to the Tax Free Bonds (as defined below) were not complied with.
The audit report for Fiscal 2016 also includes other observations from the CAG which includes (i) non- adherence by the Issuer to certain NHAI Rules; (ii) the need for the internal control systems of the Issuer to be strengthened; and (iii) that are some instances in which the Issuer has not taken corrective action following observations or comments in their past audit reports.
The audit report for Fiscal 2017 also includes other observations from the CAG which includes (i) non- adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government.
The audit report for Fiscal 2018 also includes other observations from the CAG which includes (i) non- adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government.
Although the Issuer believes that it has complied with the undertakings provided by it in the issue documents of the Tax Free Bonds, the CAG in its audit report has remarked that that the Issuer has not complied with certain undertakings. In the event that the Issuer is determined by the trustee or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation.
The Issuer has issued the Tax Free Bonds and had provided certain undertakings in the issue documents for the Tax Free Bonds stating that (i) all proceeds received out of each tranche issue of the 18 bonds to the public shall be transferred to a separate bank account; (ii) details of all proceeds utilised out of each tranche shall be disclosed under an appropriate separate heading in its balance sheet indicating the purpose for which such proceeds were utilised; and (iii) details of all unutilised proceeds from each tranche issue, if any, shall be disclosed under an appropriate separate head in its balance sheet indicating the form in which such unutilised proceeds have been invested. Under the terms of the Tax Free Bonds, it is an event of default if inter alia, any information provided by the Issuer in its issue documents and any other information furnished, and the warranties given or deemed to be given by the Issuer to bondholders or beneficial owners relating to the issue of the Tax Free Bonds is found to be misleading or incorrect in any material respect or any warranty is found to be incorrect.
The Issuer believes that it has complied with the undertaking to transfer proceeds from the offerings of the Tax Free Bonds to a separate bank account by crediting the issue proceeds to an escrow account established under the terms of the respective escrow agreements. The proceeds were further transferred to the NHAI Fund upon receipt of written notice from the Issuer and the managers to the issue confirming execution of the respective security documents under the Tax Free Bonds.
The details of the respective escrow agreements along with details of transfer of proceeds is as provided below:
1. For 2011 Tax Free Bonds:
Escrow agreement dated 15 December 2011 entered into between the Issuer, SBI Capital Markets Limited, A. K. Capital Services Limited, ICICI Securities Limited, Kotak Mahindra Capital Company Limited, MCS Limited and State Bank of India, Axis Bank Limited, ICICI Bank Limited, Syndicate Bank Limited, Union Bank of India and HDFC Bank Limited.
Escrow bank Escrow account Date of credit into escrow Amount credited Date of transfer to number(s) account in INR the NHAI Fund Axis Bank (i) 911020066736591 28 December 2011 to 5 31,150,852,000 7 February 2012 (ii) 911020066736748 January 2012 (iii) 911020066736832 HDFC Bank (i) 00030350015081 28 December 2011 to 5 16,674,435,000 7 February 2012 (ii) 00030350015106 January 2012 (iii) 00030350015098 ICICI Bank (i) 000405100352 28 December 2011 to 5 46,761,066,000 7 February 2012 (ii) 000405100353 January 2012 (iii) 000405100354 State Bank of (i) 32107995792 28 December 2011 to 5 4,036,184,000 7 February 2012 India (ii) 32107996525 January 2012 (iii) 32107997132 Syndicate Bank (i) 90623170000046 28 December 2011 to 5 618,040,000 7 February 2012 (ii) 90623170000050 January 2012 (iii) 90623170000065 Union Bank (i) 536401010000585 28 December 2011 to 5 759,423,000 7 February 2012 (ii) 536401010000583 January 2012 (iii) 536401010000584
2. For 2014 Tax Free Bonds:
Escrow agreement dated 9 January 2014 entered into between the Issuer, Edelweiss Financial Services Limited, A.K Capital Services Limited, Axis Capital Limited, ICICI Securities Limited, Axis Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IndusInd Bank Limited, IDBI Bank Limited, Syndicate Bank Limited and Karvy Computershare Private Limited. 19
Escrow bank Escrow account Date of credit into escrow Amount credited Date of transfer to number(s) account in INR the NHAI Fund IndusInd Bank (i) 200999371420 15 January 2014 to 27 27,381,777,000 12 February 2014 (ii) 200999371437 January 2014 Axis Bank (i) 914020001457427 15 January 2014 to 27 4,441,969,000 12 February 2014 (ii) 914020001457621 January 2014 HDFC Bank (i) 00030350018544 15 January 2014 to 27 3,288,555,000 12 February 2014 (ii) 00030350018554 January 2014 IDBI Bank (i) 0127103000014234 15 January 2014 to 27 80,262,000 12 February 2014 (ii) 0127103000014243 January 2014 ICICI Bank (i) 000405104456 15 January 2014 to 27 1,791,437,000 12 February 2014 (ii) 000405104457 January 2014
3. For 2016 Tax Free Bonds:
Escrow agreement dated 20 October 2015 entered into between the Issuer, A.K. Capital Services Limited, SBI Capital Markets Limited, Axis Capital Limited, Edelweiss Financial Services Limited, ICICI Securities Limited, IndusInd Bank Limited, HDFC Bank Limited, ICICI Bank Limited, IDBI Bank Limited, Axis Bank Limited, State Bank of India, Syndicate Bank Limited and Karvy Computershare Private Limited.
(a) 2016 Tax Free Bonds issued through tranche Offering Circular dated 11 December 2015
Escrow bank Escrow account Date of credit into escrow Amount credited Date of transfer to number(s) account in INR the NHAI Fund Axis Bank (i) 915020056420736 17 December 2015 to 31 5,890,467,000 14 January 2016 (ii) 915020056421373 December 2015 HDFC Bank (i) 00030350022021 17 December2015 to 31 20,813,071,000 14 January 2016 (ii) 00030350022031 December 2015 IDBI Bank (i) 0011103000013545 17 December 2015 to 31 213,753,000 14 January 2016 (ii) 0011103000013554 December 2015 ICICI Bank (i) 000405110068 17 December 2015 to 31 21,456,244,000 14 January 2016 (ii) 000405110067 December 2015 IndusInd Bank (i) 201000264609 17 December 2015 to 31 43,368,435,000 14 January 2016 (Including (ii) 201000264618 December 2015 ASBA) State Bank of (i) 35344311018 17 December 2015 to 31 8,255,330,000 14 January 2016 India (ii) 35344314756 December 2015 Syndicate Bank (i) 90623170000104 17 December 2015 to 31 2,700,000 14 January 2016 (ii) 90623170000119 December 2015
(b) 2016 Tax Free Bonds issued through tranche Offering Circular dated 22 February 2016
Escrow bank Escrow account Date of credit into Amount Date of transfer to number(s) escrow account credited in the NHAI Fund INR Axis Bank (i) 915020056420736 24 February 2016 to 26 453,814,000 11 March 2016 (ii) 915020056421373 February 2016 HDFC Bank (i) 00030350022021 24 February 2016 to 26 1,395,731,000 11 March 2016 (ii) 00030350022031 February 2016
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IDBI Bank (i) 0011103000013545 24 February 2016 to 26 73,908,000 11 March 2016 (ii) 0011103000013554 February 2016 ICICI Bank (i) 00405110068 24 February 2016 to 26 3,141,349,000 11 March 2016 (ii) 000405110067 February 2016 IndusInd Bank (i) 201000264609 24 February 2016 to 26 22,541,132,000 11 March 2016 (Including (ii) 201000264618 February 2016 ASBA) State Bank of (i) 35344311018 24 February 2016 to 26 5,391,056,000 11 March 2016 India (ii) 35344314756 February 2016 Syndicate Bank (i) 90623170000104 24 February 2016 to 26 3,010,000 11 March 2016 (ii) 90623170000119 February 2016
However, the CAG's observations in its audit reports for Fiscals 2013, 2014, 2015 and 2016 were that the Issuer has not complied with the above undertaking as no separate accounts were maintained by the Issuer for the Tax Free Bonds. The Issuer, in its management reply has provided responses to each of the remarks of the CAG. The Issuer believes that it has complied with the undertakings to provide details under an appropriate head in its balance sheet disclosing (a) the purpose for which the proceeds from the Tax Free Bonds have been utilised and (b) the details of investment of the unutilised proceeds from the Tax Free Bonds. Further, the proceeds from the Tax Free Bonds have been utilised for financing various projects implemented by the Issuer. This is in accordance with the objects of the issue provided under the issue documents for the Tax Free Bonds and therefore the requirement to disclose the use separately is satisfied as the utilisation of proceeds from the Tax Free Bonds have been disclosed as part of the capital work in progress in the balance sheet of the Issuer.
Further, the Issuer believes that it has complied with the undertaking in relation to it providing the details of investment of the unutilised proceeds from each of the Tax Free Bonds in its financial statements by disclosing such investments as part of balances with scheduled banks in its balance sheet.
Therefore, the Issuer is of the opinion that it has duly complied with the undertakings provided by it under the Tax Free Bonds notwithstanding adverse remarks of the CAG.
In the event that the Issuer is determined by the relevant trustees under the Tax Free Bonds or otherwise to have breached such undertakings, this could have a material adverse impact on the Issuer's prospects, operations, financial condition and/or reputation. Such adverse material effect may include but is not limited to default, cross-default, acceleration and/or enforcement of the Tax Free Bonds and litigation and/or other disputes. As described above, any determination by the trustee under the relevant issue documents relating to the Tax Free Bonds that the Issuer had not complied with the terms of the Tax Free Bonds (as reported by the CAG) may result in an event of default being called by the trustee. If the trustee gives a notice of occurrence of an event of default, it may not be possible for the Issuer to cure such a breach which will result in an event of default occurring and may have a material adverse impact on the financial condition and reputation of the Issuer.
Further, in the audit reports for the year Fiscals 2014 and 2015, the CAG has also remarked that the response to the CAG’s remarks provided in the notes to accounts of the financial statements of the Issuer were inadequate. The CAG further remarked that the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") provide that if an auditor, in his audit report, in respect of the financial results of any previous financial year has any remarks, the listed entity, in its notes to accounts, should provide how the reservation has been resolved or if the same has not been resolved, the reason thereof and the steps which the listed entity intends to take in the matter. As the Issuer had not included a statement satisfying the above, the CAG has remarked that the disclosures in the notes to accounts of the financial statements of the Issuer are inadequate and violates the Listing Regulations. The audit report for the Fiscal 2016, however, does not contain an adverse remark from the CAG in connection with the violation of the Listing Regulations
21 by the Issuer, as the Issuer believes that its responses to the CAG (in relation to the audit report for Fiscal 2015) in relation to its compliance with the Listing Regulations was found to be satisfactory by the CAG. The audit report for Fiscal year 2017 includes the following observations from the CAG (i) non-adherence by the Issuer to certain NHAI Rules; and (ii) that the Balance Sheet and Profit and Loss Account Statements of the Issuer have not been drawn up in the format approved by the Central Government.
The Listing Regulations provide that an entity which is in violation is liable to a penalty of INR 100,000 for each day during which such failure continues or INR 10,000,000 whichever is less. As of the date of this Offering Circular, no such penalty has been imposed on the Issuer for violating the Listing Regulations.
For the purposes of the above paragraphs of this risk factor:
2011 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 13 December 2011 and tranche Offering Circular dated 22 December 2011.
2014 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular and tranche Offering Circular, each dated 9 January 2014.
2016 Tax Free Bonds means the bonds issued pursuant to the shelf Offering Circular dated 11 December 2015, tranche Offering Circular dated 11 December 2015 and 22 February 2016.
Tax Free Bonds means collectively, the 2011 Tax Free Bonds, the 2014 Tax Free Bonds and the 2016 Tax Free Bonds.
The Issuer has certain contingent liabilities that may adversely affect its financial condition.
The Issuer has contingent liabilities, which may affect its financial condition. As at 31 March 2018, there were 1014 arbitration cases and 730 court cases involving Rs. 55,34,497.00 lakh and USD 4.30 lakh in Arbitration and Rs. 7,43,905.00 lakh and Euros 2.62 lakh in Court cases pending against the Issuer. Further, Issuer has also arranged bank guarantee to the tune of Rs. 7,051.00 lakh and fixed deposits of Rs.90,749.00 lakh as per various court orders. Issuer has issued letters of credits to the tune of Rs. 61,948.00 lakh for payment of annuities. The contingent liabilities consist primarily of liabilities on account of legal disputes, bank guarantees, letters of credit etc. Further, the contingent liability of Issuer in respect of total project cost pertaining to EPC, consultancy and O&M contracts under implementation is Rs. 63,99,707.00 lakh, Rs. 4,03,886.00 lakh and Rs. 43,673.00 lakh respectively. These contingent liabilities, if determined against us in the future, may impact our business and the results of operations.
The Issuer is exposed to the risks associated with the non-performance of underlying assets/projects of certain SPVs).
The issuer has taken up development of port connectivity projects and expressways by setting up Special Purpose Vehicles (SPVs) where the Issuer contributes toward a portion of the project cost by way of an equity participation or through loans and advances. Some of these SPVs also have an equity participation by port trusts, State Government or their representative entities. The SPVs also raise loans for financing the projects. The SPVs are authorised to collect user fees on the developed stretches to cover repayment of debts and for meeting the costs of operations and maintenance.
The Issuer formed 11 project specific SPVs, out of which 1 SPV has been wound up as per the order of NCLT dated 21.05.2019 and 1 associate company. Each SPV has been formed with the specific purpose of raising funds and the development of a project. The Issuer has shareholdings which range from 37 22 per cent to 100 per cent. in the various SPVs. The Issuer's equity participation is exposed to the risk of non-performance of the SPV's assets and the business decisions of the other members of the SPV's board which represent other entities such as the Central Government or State Government and in some cases, certain port trusts.
Some SPVs have incurred losses during the last three Fiscals.
Some of the SPVs have incurred losses during the last three Fiscals, as set out below: (INR in lakh) S. No. Name of SPV Fiscal 2019 Fiscal 2018 Fiscal 2017 1. Calcutta Haldia Port Road Company Limited (2,732.23) (882.89) (2,106.85) 2. Cochin Port Road Company Limited (2,096.35) (1,805.42) (2,252.02) 3. New Mangalore Port Road Company Limited (1,249.30) (231.29) (1,717.46) 4. Paradip Port Road Company Limited (3,713.62) (7,012.03) (4,750.99) 5. Tuticorin Port Road Company Limited (229.89) (1,079.49) (1,881.46) 6. Ahmedabad Vadodra Expressway Company 109.78 (3.78) 225.72 Limited 7. Chennai Ennore Port Road Company Limited (0.66) 0.77 84.28 8. Mormugao Port Road Company Limited 1.22 (8.04) - 9. Moradabad Toll Road Company Limited* -** (2.38) 4.55
Note: * Company has been wound up as per order of Hon’ble NCLT dated 21.05.2019. RoC records have not yet been updated on the date of this Information Memorandum. ** Financial statements for the FY 2018-19 have not been audited as the same has been wound-up.
There can be no assurance that the SPVs will achieve or sustain profitability in the future. Any losses incurred by these SPVs may have an effect on the successful execution of the Issuer's projects, its business and results of operations.
The auditors for some of the SPVs have provided qualified opinions in relation to their audit reports for Fiscal 2015 and Fiscal 2016.
The auditors for the above SPVs have provided qualified opinions in relation to certain SPVs.
Accounts for the half year ended September 30, 2019 for the Issuer have have not been audited. Audited performance may be materially different from the present results.
The accounts of the Issuer and the SPVs are audited annually by the CAG and the auditors appointed by the CAG respectively and they are not subject to any interim audit. Accounts for the half year ended September 30, 2019 have been prepared by the Issuer and are reviewed by S.K. Mehat & Co. (the "Auditors"). The Auditors have reviewed the unaudited standalone financial performance of the Issuer for the half year ended September 30, 2019 and submitted their Limited Review Report on the financial results for the half year period ending September 30, 2019. However, the actual audited performance may be materially different from the limited review results.
The Issuer's projects under development are subject to construction, financing and operational risks.
Some of the internal processes of the Issuer for the monitoring of its projects and enforcement of its contracts are subject to continuous revision and improvement and are in some instances evolving.
At present arrangements for the regular monitoring of projects during both the construction phase and the operations phase are being carried out through regional offices and project implementation units
23 of the Issuer. The existing risks include those relating to non-compliance with the conditions in the model concession agreement ("MCA") as well as the following:
(i) construction of the relevant projects as per the specified time schedule and agreed standards; (ii) levy of user charges strictly within the limits specified in the relevant concession agreements; (iii) protection of user interests by ensuring that performance standards, safety and other requirements are adhered to; (iv) preventing misuse of public assets transferred to the relevant concessionaires; (v) preventing any leakage, diversion or mis-classification of Government revenues; (vi) imposing and recovering penalties for breach of contract; (vii) operating the relevant escrow accounts in accordance with the terms of the relevant concession agreements; (viii) effective communication and exchange of information for monitoring and enforcement of obligations; and (ix) supervision of the functioning of the relevant independent engineers with a view to ensuring that the engineer is discharging all its duties.
Thus, any inadequate reporting or monitoring of the Issuer's projects may affect its ability to implement the projects effectively. The Issuer's inability to adhere to its obligations in its project agreements could also have a material adverse effect on the cost of its projects.
The Issuer's insurance coverage may not adequately protect it against all losses it incurs in its operations or otherwise.
The Issuer maintains or contractually provides for insurance coverage of the type and in the amounts that it believes is adequate for its operations. In addition, not all risks may be insurable on commercially reasonable terms or at all. Although the Issuer believes that it has obtained insurance coverage customary for its business, such insurance may not provide adequate coverage in certain circumstances and is subject to certain deductibles, exclusions and limits on coverage. Therefore, to the extent that the Issuer suffers damage or losses which are not insured, or exceeds its insurance coverage, the loss would have to be borne by the Issuer. There can also be no assurance that the Issuer's claims will be paid, and the proceeds of any insurance claim may also not be sufficient to cover the reinstatement costs as a result of inflation, changes in regulations regarding infrastructure projects, environmental and other factors. The Issuer cannot make any assurances that material losses in excess of insurance proceeds will not occur in the future, potentially having an adverse effect on the Issuer's operations, business and financial conditions. A successful assertion of one or more large claims against the Issuer that exceeds its available insurance coverage or results in changes in its insurance policies, including premium increases or the imposition of a larger deduction or co-insurance requirement, could adversely affect its performance and operations. Further, as an internal policy, the Issuer on some occasions makes pay- outs for the relevant concessionaire's workforce, such as if the concessionaire fails to keep in force all insurances for which it is responsible. The Issuer may, at its option, obtain the insurance policies and/or pay the insurance premium and keep the relevant policy in force. The Issuer does, however, have the option to recover the premium from the relevant concessionaires or contractors.
The Issuer may be unable to obtain environmental clearances from competent authorities in a timely manner or at all, and the lack of such permissions could adversely affect its projects.
The Issuer's ability to commence its projects depends on it obtaining certain environmental approvals from the relevant governmental authorities. In the event that any such environmental approvals are not received on a timely basis or at all, the commencement of the relevant projects or ongoing construction in such projects will be adversely affected, which may have a material adverse impact on the Issuer's business, financial condition and results of operations.
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The Issuer does not own the premises from which most of its regional offices and project implementation unit offices operate.
The Issuer's offices including regional offices and project implementation unit offices are on a lease or a leave and licence basis. The Issuer does not own most of its regional offices, project implementation offices. Any failure on the Issuer's part to execute and/or renew leave and licence agreements and/or lease deeds in connection with such offices or the failure to locate alternative offices in case of termination of the leases and/or leave and license agreements in connection with any branch could adversely affect the ability of the Issuer to efficiently carry out its operations.
The Issuer's operations are subject to physical hazards and similar risks that could expose it to material liabilities, reduced inflows and increased execution costs.
The Issuer's operations are subject to operational risks as well as project implementation risks. There are hazards inherent in construction projects such as the risk of equipment failure, impact from falling objects, collision, work accidents, fire or explosion and other hazards that may cause injury and loss of life, severe damage to and destruction of property and equipment, and environmental damage. The Issuer also does not have a structured and documented environmental and social management system to address the issues relevant to its sector. Further, the Issuer also assumes liability for defects in connection with any design or engineering work provided by the contractors. Although the Issuer sub- contracts its construction work, it may still be liable for accidents during the construction and operation of its projects. Any of the foregoing factors could have a material adverse effect on the financial condition, reputation and results of the Issuer's operations.
There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation.
There have been instances where certain present and past employees of the Issuer have been found to have indulged in criminal behaviour detrimental to the Issuer's business and reputation. The allegations against such present and past employees include (i) an employee being involved in allocating land to a third party at a concessional price; (ii) certain employees being involved in irregularities in the construction work on certain national highways; (iii) certain employees being involved in diversion of money allocated for land compensation; (iv) certain employees causing loss to the Issuer as a result of a discrepancy a financial bid not being corrected; and (v) certain employees abusing their official position and favouring a particular construction company. There is a set procedure to deal with such cases by the Investigating Agency or the Commission as the case may be. It may not be possible to get the details of such cases as these may be under investigation by different agencies and may be closed or pending at different stages. The allegations against the Issuer’s employees also involve a bribery incident in connection with a U.S.-based firm, CDM Smith. It is alleged that CDM Smith through its Indian subsidiary, CDM Smith India Private Limited, paid over U.S.$ 1.18 million in bribes to the Issuer’s officials to secure construction contracts between 2011 and 2016. The Central Bureau of Investigation and the Central Vigilance Commission are investigating into this bribery incident.
In relation to some of these matters, the Issuer and the relevant authorities have taken actions, including disciplinary actions and/or initiation of criminal proceedings against the individuals concerned. Any loss incurred by such disciplinary actions will be borne by the Issuer. While the Issuer maintains training programmes, codes of conduct and other safeguards designed to prevent the occurrence of every instance of bribery or corruption, it may not be possible for the Issuer to detect or prevent every instance of bribery and corruption by its employees or joint venture partners.
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Incidents such as those described above will affect the Issuer's reputation, its financial condition and its results of operations.
There have been adverse media reports in relation to the Issuer, its business, and its employees
There have also been various adverse media reports concerning certain present and past employees of the Issuer, oppositions from local communities and other parties to the Issuer's projects and oppositions from special interest groups such as environmental groups relating to the perceived negative impact such activities are having on the local community and the environment.
Such adverse media reports can affect the Issuer's reputation, its ability to implement its projects successfully and therefore its financial condition and results of operations.
The Issuer's operations could be adversely affected by strikes, work stoppages or increased wage demands by its own or its contractors' work force or any other kind of disputes involving the Issuer's work force.
As of 31 March 2018, on an unconsolidated basis, the Issuer had 1079 employees. While the Issuer considers its current labour relations to be good, there can be no assurance that future disruptions in the form of strikes or work stoppages may not be experienced due to disputes or other problems with its work force. Such disruptions may adversely affect its business and results of operations.
On many of the Issuer's projects, the Issuer engages external contractors and third parties for construction work and other services in connection with its projects. The number of contract labourers employed by the Issuer varies from time to time based on the nature and extent of work contracted to independent contractors. These third parties include engineers, contractors, suppliers of labour and materials and maintenance service agencies. They may not perform their services in a satisfactory manner and thereby exposing the Issuer to certain risks including delays and an inability to complete its projects in a timely manner. The quality of construction of the projects developed by the Issuer depends on the availability and skills of third parties, which may be adversely affected by strikes and lock-outs.
There can be no assurance that skilled contractors and third parties will continue to be available at reasonable rates and in the areas in which the projects are being implemented. As a result, the Issuer may be required to make additional investments or provide additional services to ensure the adequate performance and delivery of contracted services. Any delay in project execution could adversely affect its profitability.
Any inability to attract, recruit and retain skilled personnel could adversely affect results of the Issuer's operations.
The Issuer is highly dependent on its Members, senior management and other key personnel including skilled project management personnel for managing its business. The Issuer may also face strong competition in recruiting and retaining skilled and professionally qualified staff. Due to the limited pool of skilled personnel in the Issuer's industry, competition for retaining senior management, commercial and finance professionals and engineers in the Issuer's industry is intense. The loss of the services of the Issuer's Members, senior management or other key personnel or the Issuer's inability to recruit or train a sufficient number of experienced personnel or its inability to manage the attrition levels in different employee categories may have an adverse effect on the Issuer's results of operations.
Opposition from local communities and other parties may adversely affect the Issuer's operations and financial condition.
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The construction and operation of the Issuer's current and future projects may face opposition from local communities and other parties where these projects are located and from special interest groups such as environmental groups. Such opposition may arise in response to any proposed land acquisition, the intended operations of the Issuer in that particular area and the perceived negative impact such activities may have on the local community and the environment. Any significant opposition by local communities, environmental groups, non-governmental organisations and other parties to the projects of the Issuer may delay project implementation and adversely affect the Issuer's operations and financial condition.
The Issuer is subject to risks arising from construction contracts.
The risks associated with the Issuer's contractual arrangements are directly linked to the risks of non- performance, default and disputes arising from the underlying construction contracts. The different kinds of contracts which the Issuer manages for its construction activities and the associated risks relate to its PPP projects for which MCAs have been developed, its Operate, Maintain and Transfer (the "OMT") projects and its EPC projects
Build, Operate and Toll (BOT)
Land acquisition risk: The Issuer is responsible for acquiring land for a project on behalf of MoRTH and the Issuer provides all reasonable support and assistance to the concessionaire in procuring applicable permits required from any government authority. In the event of a delay in procuring the applicable permits, the Issuer may have to compensate the concessionaire which may be in form of an increase in the concession period.
Force Majeure Risk: Force majeure covers, among others, the following events which pose a risk to the execution of construction projects:
Non-Political Events Act of God, Epidemic, Extremely adverse weather conditions, Radioactive contamination, Ionising radiation, Fire or explosion; Strikes or boycotts; and the discovery of geological conditions, toxic contamination or archaeological remains on the site (together, "Non-Political Events").
Indirect Political Events a. an act of war, invasion, armed conflict or act of foreign enemy, blockade, embargo, riot, insurrection, terrorist or military action; civil commotion or politically motivated sabotage which prevents collection of tolls and/or fees; b. industry-wide or state-wide or India-wide strikes or industrial action which prevent collection of tolls and/or fees; and c. any failure or delay of a contractor to the extent caused by any Indirect Political Event and which does not result in any offsetting compensation being payable by the concessionaire by or on behalf of such contractor; (together, "Indirect Political Events").
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Political Events a) change in law affected by any governmental agency, if consequences thereof cannot be dealt with under and in accordance with the provisions of the relevant concession agreement; b) compulsory acquisition in national interest or expropriation of any project assets or rights of the concessionaires or of the contractors by any governmental agency; c) unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or grant without valid cause any consent or approval required by developer; d) any failure or delay of a contractors but only to the extent caused by another Political Event and which does not result in any offsetting compensation being payable to the concessionaire by or on behalf of such contractor (together, "Political Events").
Issuer Event of Default: In the event of the occurrence of a default specified in the relevant concession agreement which has not been cured within the applicable cure or remedy period as specified in the relevant concession agreement, the Issuer shall be deemed to be in default and the concessionaire shall have the right to terminate the relevant concession agreement. Any default by the Issuer under the concession agreement poses a risk of non-completion of a project or a risk of delay in the completion of a project.
Concessionaire Event of Default: A default by a concessionaire may result in delays to the completion of a project or in the effective management of an already completed project.
Termination Payment Liability: The MCA sometimes provides for payment to the project lender(s), in the event of a termination of the concession after the completion of the construction, of an amount equal to the debt due on the date of termination, and thereafter the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway.
Contract Monitoring Risk: Although there are detailed guidelines for the award of contracts to concessionaires, the institutional mechanisms for the monitoring and enforcement of PPP contracts is yet to be implemented. There is a risk that the implementation of PPP projects may not be sufficiently monitored owing to a satisfactory reporting process for monitoring on-site performance of contracts not being in place.
Risk arising from the international competitive bidding process and consultant selection: There is a risk arising from any misstatement or misrepresentation being made by a prospective concessionaire during the bidding process. If the disclosure made by a concessionaire is not true and they do not have the relevant expertise to implement a project, it may negatively affect the successful execution of the relevant project.
Insurance liability for the employees of concessionaires in case of default: If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer may be required to keep the insurance policies effective to pay the insurance premium. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments. i) OMT contracts:
Under OMT agreements, the Issuer is exposed to the following risks: a) Under the relevant OMT agreement, the Issuer has to procure the right of way to the site as a condition precedent within a specified period of time. Any delay in procuring this right of way
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may entitle the concessionaire to claim damages at a specified percentage of the performance security. b) The Issuer undertakes the risk of maintaining and protecting the construction works during any suspension of the concessionaire. c) In the event of default or breach of the relevant OMT agreement by the Issuer, its liability is calculated based on all direct costs suffered by the concessionaire as a consequence of such breach. This compensation may also include interest payment on debt. d) If the concessionaire fails to keep in force all insurances for which it is responsible, the Issuer is bound to pay the insurance premium and keep the policies effective. The Issuer does, however, have the option to recover the premium from the concessionaire or to deduct it from subsequent payments. ii) EPC contracts
In addition to the above types of construction contracts, the Issuer has also awarded selected highway projects to private sector participants under EPC contracts.
Some of the risks the Issuer may be exposed to under EPC contracts would include the following: a) Under the relevant EPC contract the Issuer has to procure the right of way to the site as a condition precedent within a specified period of time. Any delay in procuring this right of way will entitle the relevant contractor to claim damages from the Issuer. b) Additionally, the Issuer has to ensure that traffic worthiness and safety of the relevant road or highway is maintained. In the case of unforeseen events, such as floods or earthquakes causing excessive deterioration or damage to a particular highway, the Issuer also has to maintain and protect the construction works during the period of suspension of the relevant contractor. Such a liability to maintain may lead to increased works costs. c) If the relevant contractor fails to keep in force all insurances for which it is responsible, the Issuer, shall be bound to pay the insurance premium and keep the insurance policies effective. The Issuer does, however, have the option to recover the premium from the contractor or to deduct it from subsequent payments. d) Any dispute arising out of or in relation to the relevant EPC contracts between the parties is a risk for the Issuer. The mechanism for dispute resolution is typically provided in the relevant EPC contracts. Such disputes materially affect project completion and execution and are a major risk. e) The price quoted by a contractor is to be paid by the Issuer and the Issuer is exposed to the risk of price escalation related to labour or other materials necessary to carry out the project. f) The Issuer is liable to compensate the relevant contractors for any increase in costs to the contractors due to a change and/or modification in any applicable law. g) Upon termination of an EPC contract, the Issuer is bound to pay to the contractor a portion of the cost of those works that would not have commenced or have not been completed. Also, on the date of termination or suspension, as the case may be, the maintenance and operation of the project highway is transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway. iii) Hybrid Annuity Model:
The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer. The Hybrid Annuity model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction
29 period. The project is awarded to the developer quoting the lowest project life cycle cost, where "project life cycle cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent. of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and maintenance risks. Since the Government will bear 40 per cent. of the project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent, upfront funding spread over the 30-36 months of the construction period, and the private participant would be required to bear the balance 60 per cent. of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent. of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of the Hybrid Annuity Model compared with EPC model. Further, the annuity nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion. However, a lot would depend on the Issuer's ability to ensure right of way availability and approvals before awarding these projects.
The inherent risks comprised of in the Hybrid MCA include amongst others:
Force Majeure Risk
Force majeure covers events which pose a risk to the construction projects execution, namely any or all of Non-Political Event(s), Indirect Political Event(s) and Political Event(s) occurring in India as previously discussed under "Build, Operate and Toll - Force Majeure Risk".
Termination Risk
There is also the risk of termination arising from either Political Events or Non-Political Events. The MCA provides for payment to the relevant concessionaires in the case of a termination of the relevant concession agreements and the project highway being transferred to the Issuer. This puts additional liability on the Issuer to directly or indirectly operate and maintain the project highway. iv) Toll-Operate Transfer (TOT):
Government of India has approved Toll Operate and Transfer (TOT) model under which the Public funded projects operational for two years shall be put to bid wherein the right of collection and 30 appropriation of fee shall be assigned for a pre-determined concession period (30 years) to Concessionaires (Developers/Investors) against upfront payment of a lump sum amount to NHAI. Operation and Maintenance (O&M) obligation of such projects shall be with the concessionaire till the completion of the concession period. Projects to be undertaken in the TOT model are to be treated as Public-private-partnership (PPP) projects.
The first bundle of TOT projects comprising of 9 project stretches aggregating to a length of 680km has already finalised and Letter of Award (LOA) has been issued. Apart from TOT Bundle-I, NHAI has also identified stretches of approximate length of 1640 kms under TOT in which condition survey and traffic studies is under progress.
The inherent risks comprised of in the TOT MCA include amongst others:
Force Majeure Risk
Force Majeure risk pervades all through the specific provisions in the TOT MCAs and it is a major source of risk which directly affects the projects of NHAI and affects the output of the organization. Force Majeure cover the following events which pose a risk to the construction projects execution, namely any or all of Non-Political Event(s), Indirect Political Event(s) and Political Event(s) occurring in India which include the following:
Non-Political Events
act of God, epidemic, extremely adverse weather conditions or radioactive contamination or ionizing radiation, fire or explosion; strikes or boycotts; the discovery of geological conditions, toxic contamination or archaeological remains on the Site; any failure or delay of a Contractor but only to the extent caused by another Non-Political Event and which does not result in any offsetting compensation being payable to the concessionaire by or on behalf of such Contractor; any judgement or order of any court of competent jurisdiction or statutory authority made against the Concessionaire; any event or circumstances of a nature analogous to any of the foregoing.
Indirect Political Events
an act of war, invasion, armed conflict or act of foreign enemy, blockade, embargo, riot, insurrection, terrorist or military action; civil commotion or politically motivated sabotage which prevents collection of toll/fees; industry-wide or state-wide or India-wide strikes or industrial action which prevent collection of toll/fees; any failure of delay of a contractor to the extent caused by any Indirect Political Event and which does not result in any offsetting compensation being payable by the concessionaire by or on behalf of such contractor; any Indirect Political Event that causes a Non-Political Event; or any event or circumstances of a nature analogous to any of the foregoing
Political Events
change in Law effected by any governmental agency, only if consequences thereof cannot be dealt with under and in accordance with the provisions of the concession agreement; compulsory acquisition, in national interest, or expropriation of any project assets or rights of the concessionaire or of the contractors by any governmental agency. unlawful or unauthorised or without jurisdiction revocation of or refusal to renew or grant without valid cause any consent or approval required by developer.
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any failure or delay of a contractor but only to the extent caused by another Political Event and which does not result in any offsetting compensation being payable to the concessionaire by or on behalf of such contractor; or any event or circumstance of a nature analogous to any of the foregoing.
RISKS RELATING TO INDIA
Financial instability in other countries may cause increased volatility in Indian financial markets
The Indian market and the Indian economy are influenced by economic and market conditions in other countries, particularly emerging market countries in Asia. Financial turmoil in Asia, Russia, the Middle East and elsewhere in the world in recent years has affected the Indian economy. Although economic conditions are different in each country, investors' reactions to developments in one country can have adverse effects on the securities of companies in other countries, including India. A loss of investor confidence in the financial systems of other emerging markets may cause increased volatility in Indian financial markets and, indirectly, in the Indian economy in general. Any worldwide financial instability could also have a negative impact on the Indian economy. Financial disruptions may occur again and could harm the Issuer's business, its future financial performance and the trading price of the Notes.
Developments in the Eurozone have exacerbated the on-going global economic crisis. Large budget deficits and rising public debts in Europe triggered sovereign debt finance crises that resulted in the bailouts of some European economies and elevated the risk of government debt defaults, thereby forcing governments to undertake aggressive budget cuts and austerity measures, in turn underscoring the risk of global economic and financial market volatility. Moreover, in 2012, the sovereign ratings of various European Union countries were downgraded. Financial markets and the supply of credit could continue to be negatively impacted by on-going concerns surrounding the sovereign debts and/or fiscal deficits of several countries in Europe, the possibility of further downgrades of, or defaults on, sovereign debt, concerns about a slowdown in growth in certain economies and uncertainties regarding the stability and overall standing of the European Monetary Union.
In response to such developments, legislators and financial regulators in the United States, Europe and other jurisdictions, including India, have implemented several policy measures designed to add stability to the financial markets. However, the overall impact of these and other legislative and regulatory efforts on the global financial markets is uncertain, and they may not have the intended stabilising effects. In the event that the current adverse conditions in the global credit markets continue or if there is any significant financial disruption, this could have an adverse effect on the Issuer's business and future financial performance.
On 23 June 2016, the United Kingdom held a referendum on its membership of the European Union and voted to leave ("Brexit"). On March 29, 2017 the UK government gave notice (the "Article 50 Notice") to the President of the European Council of its intention to withdraw from the EU pursuant to Article 50 of the Treaty on European Union ("Article 50"). The delivery of the Article 50 Notice triggered the commencement of a negotiation process between the UK and the EU in respect of the arrangements for such withdrawal. Article 50 provides for a two year period for such negotiations to take place.
The delivery of the Article 50 Notice introduces significant new uncertainties and instabilities in the financial markets. There is significant uncertainty at this stage as to the impact of Brexit on general economic conditions in the United Kingdom and the European Union and any consequential impact on global financial markets. For example, Brexit could give rise to increased volatility in foreign exchange rate movements and the value of equity and debt investments. A lack of clarity over the
32 process for managing the exit and uncertainties surrounding the economic impact could lead to a further slowdown and instability in financial markets.
These and other related events have had a significant impact on the global credit and financial markets as a whole, including reduced liquidity, greater volatility, widening of credit spreads and a lack of price transparency in the United States, Europe and global credit and financial markets. In the event that the current adverse conditions in the global credit markets continue or if there are any significant financial disruption, this could have an adverse effect on the Issuer’s business, future financial performance and the trading price of the Notes.
There has been only limited trading in the bonds and it may not be available on sustained basis in the future, and the price of the Bonds may be volatile.
There has been only limited trading in bonds of such nature in the past. Although the Bonds are proposed to be listed on BSE, there can be no assurance that a public market for these Bonds would be available on a sustained basis. The liquidity and market prices of the Bonds can be expected to vary with changes in market and economic conditions, our financial condition and prospects and other factors that generally influence market price of Bonds. Such fluctuations may significantly affect the liquidity and market price of the Bonds, which may trade at a discount to the price at which the Bonds are issued. Further, all extraneous factors which influence the Bond market will affect the present Bonds. The pricing will be subject to factors affecting the general economic condition in India and in the global financial markets.
Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability
In May 2013, Standard & Poor's, an international rating agency, reiterated its negative outlook on India's credit rating. It identified India's high fiscal deficit and heavy government borrowing as the most significant constraints on its ratings and recommended the implementation of reforms and containment of deficits. In June 2013, Fitch, another international rating agency, returned India's sovereign outlook to "stable" from "negative" a year after its initial downgrade of the outlook, stating that the authorities had been successful in containing the upward pressure on the Central Government budget deficit in the face of a weaker-than-expected economy and that the authorities had also begun to address structural factors that have weakened the investment climate and growth prospects. Similarly, Standard & Poor's upgraded its outlook on India's sovereign debt rating to "stable" in September 2014 and reaffirmed such rating in November 2016, while reaffirming the "BBB-" long-term rating on bonds. Standard & Poor's stated that the revision reflects the view that India's improved political setting offers an environment which is conducive to reforms that could boost growth prospects and improve fiscal management. Going forward, the sovereign ratings outlook will remain dependent on whether the Central Government is able to transition the economy out of a low-growth and high inflation environment, as well as exercise adequate fiscal restraint. In July 2016, Fitch revised its outlook for the Indian banking sector to “Negative” from “Stable” due to the increase in non-performing loans. However, in November 2017, Moody’s upgraded India’s credit rating to “Baa2” from “Baa3” and changed its India rating outlook to “stable” from “positive” citing reforms such as GST, demonetisation, the inflation-targeting monetary policy framework, the Bankruptcy Act, bank recapitalisation, Aadhaar and the Direct Benefits Transfer system. There can be no assurance that these ratings will not be further revised or changed by Standard and Poor’s, Fitch or Moody’s or that any of the other global rating agencies will not downgrade India’s credit rating. Any adverse change in India's credit ratings by international rating agencies may adversely impact the Issuer's business, financial condition and results of operations and limit its access to capital markets.
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Any volatility in the exchange rate may lead to a decline in India's foreign exchange reserves and may affect liquidity and interest rates in the Indian economy, which may impact the Issuer
Capital inflows into India have remained extremely volatile responding to concerns about the domestic macroeconomic landscape and changes in the global risk environment. A substantial increase in the import bill, mainly on account of increase in crude oil prices led to a significant widening of the trade deficit that in turn increased the size of the current account deficit from the budget estimates. The primary challenge for the Rupee was the volatile swings in capital flows. The Rupee may come under further pressure given reversal in US monetary policy that is resulting in a rotation of global fund flows from emerging markets to the US markets over the medium term programme. Due to such decrease in Rupee compared to USD there may be a need for intervention which may result in a decline in India's foreign exchange reserves and subsequently reduce the amount of liquidity in the domestic financial system. This in turn could further impact domestic interest rates.
Political instability or changes in the Government in India could delay the liberalisation of the Indian economy and adversely affect economic conditions in India generally, which would impact the Issuer's financial results and prospects
Since 1991, successive Indian Governments have pursued policies of economic liberalisation, including significantly relaxing restrictions on the private sector. Nevertheless, the roles of the Central Government and State Governments in the Indian economy as producers, consumers and regulators remain significant as independent factors in the Indian economy. In 2014, further to the election of a pro-business majority Government, there has been a distinct increase in expectations for policy and economic reforms of the Indian economy. There is no guarantee that the new Government will be able to enact an optimal set of reforms or that any such reforms would continue or succeed if there were a change in the current majority leadership in the Government in the future. There is also no guarantee that the Government will announce an optimal set of reforms or policies in the future. The rate of economic liberalisation is subject to change and specific laws, and policies affecting banking and finance companies, foreign investment, currency exchange and other matters affecting investment in the Issuer's securities are continuously evolving as well. Other major reforms that have been proposed are the direct tax code and provisions relating to the General Anti-Avoidance Rule (the "GAAR"). Any significant change in India's economic liberalisation, deregulation policies or other major economic reforms could adversely affect business and economic conditions in India generally and the Issuer's business in particular.
Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely impact the Issuer's business, the trading price of the Notes could decrease and lead to a loss of confidence and impair travel, which could reduce its customers' appetite for its products and services
Terrorist attacks, such as those which took place in Mumbai in November 2008, and other acts of violence or war may negatively affect the Issuer's business, the trading price of the Notes and the worldwide financial markets. These acts may also result in a loss of business confidence, make travel and other services more difficult, and as a result, ultimately adversely affect its business. In addition, any deterioration in relations between India and Pakistan or between India and China might result in investors’ concern about stability in the region, which could adversely affect the trading price of the Notes.
India has also witnessed civil disturbances in recent years, and future civil unrest as well as other adverse social, economic and political events in India could have an adverse impact on the Issuer. Such
34 incidents also create a greater perception about investment in Indian companies involving a greater degree of risk, which in turn could have an adverse impact on the Issuer's business.
Natural disasters could have a negative impact on the Indian economy and damage the Issuer's facilities.
Natural disasters such as floods, cyclones, earthquakes or famines have in the past had a negative impact on the Indian economy. If any such event were to occur, the business of the Issuer could be affected due to the event itself or due to our inability to effectively manage the effects of the particular event. Potential effects include the damage to infrastructure and the loss of business continuity or business information. In the event that the facilities of the Issuer are affected by any of these factors, its operations may be significantly interrupted, which may materially and adversely affect its business, financial condition and results of operations.
The new taxation system in India could adversely affect the business of the Issuer.
The Government has proposed a major reform in Indian tax laws, namely the provisions relating to the GAAR. The provisions of GAAR have been introduced in the Finance Act, 2012 and have come into effect from 1 April, 2017. The GAAR provisions intend to target and tax arrangements declared as "impermissible avoidance arrangements", which is any arrangement, the main purpose or one of the main purposes of which is to obtain a tax benefit and which satisfies at least one of the following tests: (i) creates rights or obligations which are not ordinarily created between persons dealing at arm's length; (ii) results, directly or indirectly, in misuse, or abuse, of the provisions of the IT ACT; (iii) lacks commercial substance or is deemed to lack commercial substance, in whole or in part; or (iv) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes. If GAAR provisions are invoked, then the tax authorities have wide powers, including denial of tax benefit or a benefit under a tax treaty. The consequences of the implementation of GAAR cannot be determined at present and there can be no assurance that such effects would not adversely affect the business of the Issuer and its future financial performance.
RISK IN RELATION TO BONDS
Any downgrading in credit rating of the Bonds may affect the value of Bonds and thus our ability to raise further debts. Investors may not be able to recover, on a timely basis or at all, the full value of the outstanding amount and/or the interest accrued thereon in connection with the Bonds. Changes in interest rate/exchange rates may affect the prices of the Bonds. Payments made on the Bonds will be subordinated to certain tax and other liabilities preferred bylaw. There is a risk of volatility in the price of the Bonds. Any adverse change in India's credit rating by an international rating agency could adversely affect the Issuer's business and profitability
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VII. BRIEF SUMMARY OF BUSINESS/ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS
OVERVIEW
The Issuer is an autonomous Authority of the Government of India under the Ministry of Road, Transport & Highways (MoRTH) and was constituted on 15 June 1989 by the NHAI Act, 1988. The NHAI Act governs the functions of the Issuer and frames the rules and regulations pursuant to which it operates. It commenced operations in February 1995.
The Issuer was established by the Government of India for the provision and maintenance of a national highway network consistent with global standards, to meet road users' expectations in the most efficient and costeffective manner and to provide a national infrastructure system capable of supporting a sustainable economic growth. The objectives of the Issuer are provided in the NHAI Act pursuant to which the Issuer is responsible for the development, maintenance and management of the national highways entrusted to it by the Government and for matters connected or incidental thereto. The Issuer's functions include the survey, development, maintenance and management of the national highways and, inter alia, to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms on or near the highways entrusted to it, to regulate and control regular traffic volume, to develop and provide consultancy and construction services and to collect service and usage fees in accordance with the NHAI Act.
The Issuer's original mandate was limited to a number of pilot projects, undertaken with the assistance of the Asian Development Bank (ADB) and Japan Bank of International Cooperation (JBIC). Subsequently, in 1998, the Government, in conjunction with the Issuer, announced the National Highways Development Programme (NHDP) comprising two initial major phases. The First Phase comprised the Golden Quadrilateral project, which established modern road transportation links between a number of major Indian cities including New Delhi, Chennai, Kolkatta, Mumbai, Bangalore and Jaipur. The Golden Quadrilateral project was split into four sections totalling 5,846 km of road network. The Second Phase involved development of the North South corridor and the East West corridor ("NS-EW Corridors"), which established highways through central India connecting Srinagar (North), Kanyakumari (South), Porbandar (West) and Silchar (East), totalling approximately 7,142 km.
As of 30 September 2017, over 92 per cent. of the NS-EW Corridor projects totalling 7,142 km were completed.
Since the inception of the NHDP programme, the approach to implement the NHDP has changed significantly. Initially NHDP projects were implemented through EPC contracts. Since 2005, as a policy, the Government has been implementing NHDP projects through PPP models. The various PPP models followed include BOT models, being the BOT (Toll), BOT (Annuity) and BOT (Hybrid Annuity) models. As of 30 September 2017, the Issuer has awarded 155 BOT (Toll) based contracts at a total project cost of INR 1,260.12 billion, 47 BOT (Annuity) based contracts at a total project cost of INR 288.12 billion, 49 BOT (Hybrid Annuity) based contracted at a total project cost of INR 526.34 billion and 462 EPC contracts at a projected cost of INR 1511.42 billion.
The Issuer has adopted a business model that relies on outsourcing a number of activities including design, construction, supervision, operation and maintenance of national highways, rather than undertaking such activities through its own employees. This has allowed the Issuer to maintain an efficient organisational structure which focuses on operational decision-making.
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The Issuer is also involved in the implementation of the Special Accelerated Road Development Programme for Development –North East (SARDP-NE) to provide connectivity to all the State Capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region.
In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase- I to upgrade the road connectivity to the Major Ports in the Country. Port-road connectivity projects are being implemented by setting up SPVs where the Issuer contributes to the project cost by way of an equity investment or equity participation.
On 9 October 2017, the Issuer was assigned a rating of Baa3 with positive outlook from Moody's Investor Service ("Moody's"), the same rating as the Government of India. Moody's also highlighted the strong link between the Issuer and the Indian Government, adding that the Issuer’s baseline risk is the same as the default risk of India and indicating a strong correlation of the Issuer's credit rating with the credit rating of the Government of India. Subsequently, on 17 November 2017, Moody's upgraded India's rating from Baa3 to Baa2, also changing the outlook from Stable to Positive.
The Issuer was also assigned BBB- rating with stable outlook from S&P Global Ratings. This rating is the same with the rating of the Indian Government.
As of the date of this Offering Circular, the Issuer has set up 11 (eleven)* SPVs and 1 (one) associate company.
*Moradabad Toll Road Company Limited has been wound-up vide order of Hon’ble NCLT dated 21.05.2019.
STRENGTHS
Central role in Government initiatives in policy making in the infrastructure sector
The Issuer believes that it has a strategic advantage owing to its strong relationship with the Central Government and the central position it occupies in the plans of the Central Government for the development and implementation of various programmes, policies and structural and procedural reforms for the roads and highway infrastructure sector in India.
The Issuer is the primary agency responsible for the development of the national highways infrastructure projects under the NHDP
The NHAI Act has designated the Issuer as the primary agency responsible for the development of the national highway infrastructure under the NHDP and related programmes approved by the Central Government. The Issuer manages the development of the NHDP under the mandate of MoRTH and the Central Government. There are no comparable agencies within the Central Government for the development of the national highway infrastructure. This ensures that funds can be deployed to the various infrastructure projects under the NHDP relatively efficiently and also allows the Issuer to enable private sector participation in the development of the national highway infrastructure in India. The PPP models implemented by the Issuer vary from short-term simple management contracts (with or without investment requirements) to long-term and very complex BOT forms like Design, Build, Finance, Operate and Transfer ("DBFOT"). As well as the NHDP, the Issuer has implemented several other highway projects commissioned together with the Government, such as the SARDP-NE, the Port Connectivity projects and other projects.
The Issuer believes that the absence of direct competition for the implementation of the projects under the NHDP places it in a unique position as the developer of the national highway infrastructure. 37
Track record of consistent operational performance and growth
The Issuer believes that it has established a track record for consistent growth.
Pioneering initiatives in the road sector in India
The Issuer believes that it has initiated several innovative processes which are different from the practices generally followed in the infrastructure industry. Further to the adoption of performance based contracts with bonus and penalty provisions in both EPC and PPP projects, the Issuer believes that there has been an improvement in construction and service quality associated with such EPC and PPP projects. Detailed project reports ("DPRs") relating to each project currently undergo peer reviews by specialist engineers, selected from a panel of consultants, in order to enhance quality and efficiency. Mechanisms have been implemented to accelerate the process of dispute resolution, especially in relation to EPC projects. Umbrella state support agreements have also been put in place for projects undertaken within a single State. Each State support agreement executed between the Issuer and the State Government provides a legal framework for providing support and services to executing agencies to procure necessary support from the State Government for implementation of the projects in accordance with their defined schedule. Some of the other innovations introduced by the Issuer include e-tendering, e-procurement, introduction and implementation of Wayside Amenities on highways, road asset management systems, advanced traffic management systems, road user applications, green highways, safety engineering and adaptation of the some of the national highways to provide emergency landing facilities for military aircraft. The Issuer has also recently entered into a memorandum of understanding with the Indian Space Research Organisation and the North East Center for Technology Application and Research for the use of spatial technology for the monitoring and managing of national highways. Recently, the Issuer has also been involved in the plans by the Central Government and the Delhi Development Authority to enable the decongestion of Delhi-NCR region. Recently, the Issuer has placed its efforts on a proposal to decongest Delhi through the creation of various radial routes
Experienced and committed management and employee base with in-depth sector expertise.
The Issuer believes that it has an experienced, qualified and committed management and employee base. The Issuer believes that it is one of the few organisations where people with extensive experience in the road and highways and finance sectors are regularly seconded from various central or state services, departments and organisations to share their expertise. As on March 31, 2018, NHAI has a total strength of 1079 employees. The Issuer is organised in a manner so as to facilitate faster operational decision-making. Supervision consultants and independent engineers are appointed through a rigorous recruitment process in order to select the most qualified professionals.
Furthermore, all projects are monitored centrally at the Issuer's headquarters by both a technical and a financial division. These divisions are operated separately, each with their own management and sub- management structure.
Economies of scale
Given the scale of operations of the Issuer and the legislative mandate to the Issuer pursuant to the NHAI Act, the Issuer benefits from a large volume of commercial projects. The Issuer enjoys significant cost benefits as a result of its centralised decision making system. The Issuer aims to manage its projects efficiently so that equipment is stored more efficiently, manpower is deployed appropriately and redundant assets are minimised. The Issuer therefore, achieves large scale efficiencies and benefits from economies of scale owing to the size of its operations. 38
STRATEGIES
The Issuer's long term goal is to develop a highly-advanced highway network suitable for meeting the increasing demands of commercial transportation and heavy industrial use. The Issuer aims to achieve this goal through the following areas of strategic focus.
Decentralisation of local level decisions and activities
The Issuer is aiming to decentralise its field level decisions and activities in order to achieve a greater level of operational efficiency. To this end the Issuer has set up 25 Regional Offices and 179 Project Implementation Units, each with an appropriate management structure for the effective co-ordination and monitoring of local projects. Each Regional Office has been delegated the necessary powers and capacity to engage, where necessary, such technical experts as are required to achieve the most efficient outcome in the implementation of such regional office's projects.
Strengthening of core processes for the NHDP implementation and management
The Issuer believes that it pays significant attention to institutionalising knowledge and best practices within the project cycle. This includes preparing guidelines of best practice in land acquisition and preconstruction activities adopted in different Indian states, adopting "Resettlement and Rehabilitation" practices, in particular for externally aided projects, and preparing guidelines and standardised procedures for implementing amendments to existing project scopes and timelines. The Issuer has also developed an e-procurement system and an online platform for interaction with various service providers. These steps, the Issuer believes, will enhance its productivity and ability to implement its projects more efficiently.
Strengthening of the quality audit and review processes
As the Issuer relies frequently on outsourcing in the implementation of projects, its strategy is to invest resources in infrastructure required to carry out advanced audits and performance reviews of its service providers. This strategy includes improving the review process of project designs, greater involvement of the Issuer's field unit and supervision consultants at an earlier stage in a project, strengthening independent quality audits during the construction stage of EPC and PPP projects and receiving continuous feedback from stakeholders which enables it to enhance its wider monitoring framework.
Greater focus on human resources
The Issuer expects an increase in the scale and complexity of future national highways projects, which will require continued growth within its human resources both in terms of size and expertise. The Issuer plans to extend its outsourcing of personnel to its different areas of operation in order that the right level of expertise is available where necessary. On occasions, especially in relation to projects where land acquisition matters are involved, the Issuer is hiring retired officers who were working in the various state and national level government bodies and also other third party service providers. The Issuer believes that by doing so it shall be able to utilise the experience and expertise of these personnel to enhance its business and areas of operation.
Developing strong institutional relationships with external stakeholders
The Issuer's strategy is to engage with and build strong relationships with a variety of stakeholders across various aspects of its operations. These include, but are not limited to, the Central Government, the NitiAayog, State and local Governments and agencies, implementing authorities such as the police and
39 health service, contractors, concessionaires, technical, financial and legal consultants, audit firms, financial institutions, investors, industry associations, academic institutions, the media, and both multilateral and bilateral funding agencies such as the World Bank, the ADB and the JBIC.
Greater use of information technology ("IT")
The rapid advance in IT resources across various aspects of highway Development and management has resulted in a stronger incentive for the Issuer to maximise the application of these resources within its operations. Significant focus on IT is one of the key strategies for the Issuer in its plans for corporate growth. The Issuer has already instituted various information technology systems across its various operations. Examples include e-tendering, electronic tolling, advanced traffic management systems and road asset management systems. The Issuer expects to expend more resources towards the implementation of information technology across it operations to enhance its productivity and its results of operations.
THE ISSUER'S PROJECTS
The national highways are an integral component of the Indian economy and are fundamental to ensuring the efficient inter-state movement of both passengers and goods. The national highways connect the National and State Capitals of India, the Country's major ports and rail junctions, and provide links with border roads and international highways. The total length of the national highways (including expressways) of India stands at 120,144 km as per the NHAI Annual Report for Fiscal 2017. Whilst highways and expressways constitute only 1.9 per cent. of the length of all roads in India, they are responsible for carrying around 40 percent of the road traffic throughout the country.
The progress of the NHDP and other similar projects, as of July 31, 2018, are as follows: Total Length Already 4/6 Under Contracts under Balance length (Km.) Laned (Km.) Implementatio Implementation for award n (Km.) (No.) (Km.) NHDP Golden 5,846 5,846 0 0 - Quadrilateral North/South- 7,142 6625 318 28 199 East/West Phase I & II Port Connectivity 435 400 35 6 - NHDP Phase III 11,809 8269 2454 91 1086 NHDP Phase IV 13,203 6255 5318 126 1630 NHDP Phase V 6,500 2900 1927 46 1673 NHDP Phase VI 1,000 143 197 9 660 NHDP Phase VII 700 70 391 13 239 NHDP Total Other 5,560 1,862 3,698 92 - SARDP-NE 110 110 110 - 1 Total by the Issuer 52,305* 32,480 14,338 412 5,487 * Total 20,000 km was approved under NHDP Phase IV. Out of which 13,203 km as assigned to the Issuer and the remaining 6,791 km with MoRTH.
Connectivity to Major Ports
In December 2000, a mandate was given by the Central Government to the Issuer under NHDP Phase- I to upgrade the road connectivity to the major ports in the country. Port-road connectivity projects are being implemented by setting up SPV companies where the Issuer contributes to the project cost by way of an equity investment or equity participation.
The following SPVs have been incorporated for developing port connectivity projects:
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No. Name of Port Length (km) Name of the SPV 1 Mormugao 18.3 Mormugao Port Road Company Limited 2 Haldia 52.2 Calcutta-Haldia Port Road Company Limited 3 JNPT Package-I 30 Mumbai JNPT Port Road Company Limited JNPT Package-II 14.4 Mumbai JNPT Port Road Company Limited 4 Vishakapatnam 12.5 Viskhapatnam Port Road Company Limited 5 Chennai-Ennore 30 Chennai-Ennore Port Road Company Limited 6 Cochin 10.4 Cochin Port Road Company Limited 7 Tuticorin 47.2 Tuiticorin Port Road Company Limited 8 Paradip 77 Paradip Port Road Company Limited 9 New Mangalore 37.5 New Mangalore Port Road Company Limited Total: 329.5
In addition to the above projects, there are two projects being implemented by the Issuer to provide the port connectivity for Chennai Port Gate No. 10 and ICTT Vallarpadam (Cochin) port, as follows:
S. No. Name of Stretch/Port Length (km) 1 Elevated Road from Chennai Port Gate No.10 to Maduravoyal (NH-4) 19 2 NH-47(Km. 337.15) (Cochin) to ICTT Vallarpadam (NH-47C) 17.2 Total: 36.2
SPECIAL ACCELERATED ROAD DEVELOPMENT PROGRAMME FOR NORTH EASTERN REGION ("SARDP-NE")
The Issuer is also involved in the implementation of SARDP-NE to provide connectivity to all the State capitals and district headquarters in the north-east region of India. The proposal would include upgrading other stretches of national highways and state highways considered critical for the economic development of the north-east region.
The SARDP-NE envisages improvement of road connectivity to the State capitals with district headquarters in the north eastern region. The proposed programme includes improvement of 10,141 km of roads comprising national highways and state roads to be implemented under Phase 'A', Phase 'B' and Arunachal Pradesh Package.
Phase A
Phase A consists of improvements to 4,099 km of roads consisting of 3,014 km of national highways and 1,085 km of State roads at an estimated cost of Rs. 217.69 billion. Out of 4,099 km, BRO, State PWDs and the National Highways and Infrastructure Development Corporation Limited ("NHIDCL") have been entrusted with responsibility for the development of 3,213 km of roads. The works are in various stages of progress.
Phase B
Phase B involves adding extra lanes to 3,723 km of national highways and further improvements to state roads.
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Arunachal Pradesh Package for Roads and Highways
The Arunachal Pradesh Package of Roads and Highways covering 2,319 km of road was approved by the Government as part of SARDP-NE on 9 January 2009. Out of this, 776 km has been approved by the Government for execution on a BOT (Annuity) basis and for the remaining 1,543 km approval for tendering under the EPC basis.
Bharatmala Pariyojana
As per the MoRTH Government of India the Issuer will develop 34,800 Km of highways under BharatmalaPariyojana. The total length of 34,800 Km entrusted to NHAI consists of BharatmalaPariyojana under Ph-I, (24,800 Km); existing NHDP projects under implementation (10,000 Km)
The objective of the project is to optimize the efficiency of freight and passenger movement across India by bridging critical infrastructure gaps while simultaneously creating direct and indirect employment and enhancing economic activity. The project lays a special emphasis on fulfilling the connectivity needs of backward and tribal areas, areas of economic activity, places of religious and tourist interest, border areas, coastal areas and trade routes with neighbouring countries. Therefore, the Issuer will be responsible for the development and maintenance of economic corridors, inter corridors and feeder routes, national corridor efficiency improvement, border and international connectivity roads, coastal and port connectivity roads and green-field expressways among others.
The overall fund requirementis of approximately Rs. 6,92,324 crore (Rs. 3,85,000 Crore for Bharatmala Pariyojana, Rs.1,50,000 crore for existing NHDP Projects executed by NHAI and Rs. 1,57,324 crore for other schemes being executed by other agencies for the five years period starting from Fiscal 2018 upto Fiscal 2023.NHAI has availed certain borrowings from Life Insurance Fund and Employees Provident Fund, rupee denominated Masala Bonds and is proposing to issue BharatmalaBonds and private placement of long term bonds etc. For the total requirement of Rs. 6,92,324 crores NHAI intends to borrow Rs. 3,77,045 crores from GoI, Rs. 2,09,279 crore by way of market borrowings and Rs. 1,06,000 crore from private investment (PPP).
EASTERN PERIPHERAL EXPRESSWAY
Eastern Peripheral Expressway having a length of 135 Kms was completed in a record time of 500 days much before the stipulated period of completion. This is a prestigious project of the Government of India which was inaugurated by the Hon’ble Prime Minister in the last week of May 2018. This expressway is an access control expressway and the only expressway in India where the toll is charged for the actual journey undertaken by the users.
TOLL OPERATE TRANSFER MODEL (TOT)
NHAI bided a bundle of ten projects for ToT and the NHAI could fetch Rs. 9,682 crore. This is the beginning of ToT model and NHAI in due course would be awarding the work of ToT for many more projects in the time to come. The ToTproceeds which has been deposited to Consolidated Fund of India (CFI) is ring fenced for road projects and thus will be utilized by NHAI for this purpose.
OVERSEAS PROJECT
The Central Government has mandated that the Issuer undertakes management and consultancy services in connection with construction and improvement of a two-lane highway in the Kalewa-Yargi section of the proposed India-Myanmar-Thailand Trilateral Highway. The highway will connect India with Thailand through Myanmar.
The cost of this overseas project is estimated to be Rs. 11.70 billion and is fully funded by the Central Government through the Ministry of External Affairs (the “MEA”). According to an agreement between the Issuer and the MEA, the MEA will reimburse construction cost to the Issuer in phases and the Issuer
42 will receive a service fee amounting to 6 per cent. of the lower of the estimated cost of construction and the tendered construction bid.
As of the date of this Offering Circular, the Issuer has issued the letter of award to Punj Lloyd and Varaha Infra joint venture, the successful bidder, for the construction of the highway. The project is expected to be completed within 36 months from the date of the award.
Government as the policy maker
Pursuant to the NHAI Act, the Central Government may direct that any function in relation to thedevelopment or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto.
The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act.
FINANCING
As the Issuer has been created to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions.
The Issuer receives its funding through (i) support from the Government of India in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) Internal and External Borrowing Recourses (IEBR) i.e. market borrowings (both domestic and international).
The development and maintenance of National Highways is financed through, (i) Government’s Gross Budgetary Support (GBS) and Additional Budgetary Support (ABS); (ii) Dedicated accruals under Central Road Fund (share in the levy of cess on fuel); (iii) Lending by international institutions (World Bank, ADB and JBIC); (iv) private financing through PPP framework including in DBFOT pattern – investment by private firm and return through levy and retention of user fee, BOT (annuity) pattern – investment by private firm and return through semi-annual pre-determined payments from NHAI as per bid, and special purpose vehicle with equity participation by NHAI; and (v) market borrowing (including funds raised through capital gain tax exemption bonds under section 54EC of the Income Tax Act and long term tax free bonds, taxable bonds, loans from GoI, NSSF fund). During the year 2018-2019, a sum of Rs. 11,569.00 crore was received as Cess Funds.
Loan assistance from multilateral agencies
NHAI is implementing some projects under NHDP with external assistance in the form of loan from multilateral development agencies like World Bank (WB), Asian Development Bank (ADB) and Japan Bank of International Cooperation (JBIC). The loans for NHAI projects tied up with these multilateral agencies, except for one ADB loan for Surat Manor projects, are passed on to NHAI by the GoI in Rupees as 80% grant and 20% loan. The loan component is repaid to the Government by NHAI and repayments to these agencies are in turn done by GoI.
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The following table sets out the externally aided projects of the Issuer :
Summary of Externally Aided Projects
Awarded Awarded Cost Completed Category No. of Length in km (Rs. in Crore) No. of Length in km Contracts Contracts World Bank Funded Projects NHDP Phase I 18 983 5,538 18 982 GQ 18 983 5,538 18 982 Others - - - - - NHDP Phase II 10 408 2,587 10 409 (EW Corridors) Sub-Total A 28 1,391 8,125 28 1,391 ADB Funded Projects NHDP Phase I 10 615 1,866 10 615 GQ 9 567 1,807 9 567 Others 1 48 59 1 48 NHDP Phase II 31 1,638 7,565 30 1,584 (NS & EW Corridors) Sub-Total B 41 2,253 9,431 40 2,199 JBIC Funded Projects NHDP Phase I 7 150 634 7 150 GQ 5 111 333 5 111 Others 2 39 301 2 39 Sub-Total C 7 150 634 7 150 JICA ODA Funded Projects NHDP Phase III 1 127 1027 - - Sub-Total D 1 127 1027 - - Total (A+B+C+D) 77 3921 19217 75 3740 WB/NHAI 2 79 621 0 0 Grand Total 79 4000 19838 75 3740
NHAI also has a provision for providing grant upto 40% of the project cost to make projects commercially viable. However, the quantum of grant is decided on a case to case basis and typically constitutes the bid parameter in BOT projects. The disbursement of such grant is subject to the provisions of project concession agreements.
NHAI projects, with higher traffic volumes, have also received Negative Grant (upfront payment payable by successful bidder to NHAI) instead of grant/VGF as an outcome of the competitive bidding process. Further, under the revised MCA, projects under BOT/DBFOT framework have also been awarded on a revenue share/premium basis, where the bidder offering the highest revenue share/premium is awarded the project. These revenues are also ploughed back for the development and maintenance of National Highways. Market Borrowing
The Issuer is authorised to raise funds through the issue of bonds both on the domestic and international capital markets.
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SUMMARY OF INDEBTEDNESS
The following table sets forth the details of the Issuers' indebtedness as of the dates mentioned:
31 March 2018 31 March 2017 31 March 2016 (INR in Lac) (INR in Lac) (INR in Lac) Long Term Borrowings Secured Loans Capital Gains Tax Free Bonds- 54EC 16,51,132.50 13,19,731.60 10,56,670.30 Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 11-12 10,00,000.00 10,00,000.00 10,00,000.00 Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 13¬14 5,00,000.00 5,00,000.00 5,00,000.00 Tax Free Secured Redeemable Non- Convertible Bonds (10 Yr & 15 Yr) 15-16 19,00,000.00 19,00,000.00 19,00,000.00 Taxable Bonds (25 Yrs, 5 Yrs & 30 Yrs) 2016- 17 27,54,500.00 27,54,500.00 - Taxable Bonds (15 Yrs, 5 Yrs & 30 Yrs) 2017- 18 20,87,500.00 - - Taxable Bonds (30 Yrs with call option after 10 Yrs) 2018-19 Rupee Denominated Offshore (Masala) Bonds 2017-18 3,00,000.00 - - Loan from National Small Saving Fund (NSSF, MoF, GOI in FY 2017-18) 20,00,000.00 - - Loan from ADB - (Surat Manor Project) 59,283.46 64,233.11 70,366.40
Total 1,22,52,415.96 75,38,464.71 45,27,036.70
PUBLIC PRIVATE PARTNERSHIP ("PPP") IN HIGHWAY DEVELOPMENT
PPP is the Issuer's preferred mode of delivery for future phases of the BharatmalaPariyojana and NHDP. There are a number of forms of PPP which are popular in India and have been used by the Issuer for development of the national highways:
Build, Operate and Transfer ("BOT") (Toll)
Under the BOT (Toll) model, private developers and operators are awarded project contracts where they are entitled to collect and retain toll revenues for a certain tenure known as the concession period. Toll revenues are prescribed by the Issuer on a "per vehicle per km" basis for different types of vehicles. A model concession agreement for BOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators.
Build, Operate and Transfer ("BOT") (Annuity)
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In the BOT (Annuity) model, the concessionaire bids for projects on the basis of annuity payments to be received from the Issuer that would cover the construction, operational and maintenance costs of the project and cater for an expected return on the investment. The annuities are paid semi-annually by the Issuer to the concessionaire and are linked to performance covenants. The concessionaire does not bear the traffic or tolling risk in these contracts.
Design, Build, Finance, Operate and Transfer ("DBFOT")
The DBFOT model is similar to the BOT (Toll) and BOT (Annuity) model. However, in the DBFOT model, the concessionaire is also responsible for the design, building, financing, operation and maintenance aspects of the project.
A model concession agreement for DBFOT projects has been developed and is regularly revised as required to facilitate the efficient award of contracts to prospective operators.
Hybrid Annuity Model ("HAM")
The Finance Minister during his budget speech for Fiscal 2016 announced the Government's intentions to revisit the existing PPP models. Following the announcement by the Finance Minister, broad guidelines for a Hybrid Annuity model were announced by the Issuer.
The Hybrid Annuity Model combines the EPC and BOT (Annuity) models, whereby Government and private enterprises share the bid project cost in the ratio of 40:60 during the construction period. Project life cycle cost defined as net present value ("NPV") of the quoted bid project cost plus NPV of the operations and maintenance (O&M) cost for the entire operations period is the bid parameter. The project is awarded to the developer quoting the lowest project life cycle cost where "project life cycle cost" means the net present value of the quoted bid project cost plus the net present value of the operations and maintenance costs for the operational period. The Government funds 40 per cent. of the bid project cost, as determined by the bidder, in five equal instalments during the construction period. The private party bears the remaining 60 per cent of the project cost, through a combination of equity contributions and debt. The proportion borne by the private party during the construction period is expected to be recovered from the Issuer through annuity payments spread over a period of time. Project costs are inflation linked (through a price index multiple) ("PIM"), which is the weighted average of the wholesale price index ("WPI") and consumer price index ("CPI") in the ratio of 70:30. The bid project cost adjusted for variation between the price index occurring between the reference index preceding the bid date and reference index date immediately preceding the appointed date shall be deemed to be the bid project cost at the commencement of construction. Bid project cost shall be adjusted to variations in PIM on a monthly basis until the commencement of operations. Further, the Government also retains the revenue risk as it remains responsible for the collection of toll revenue upon completion. On the other hand, the private participant will bear construction, operations and maintenance risks. Since the Government will bear 40 per cent of the project cost during the construction phase, the returns to the private developer in the form of annuities during the operating phase will be proportionately lower when compared with normal annuity projects fully funded by a private developer. When compared with EPC projects, it is expected that a shift to the Hybrid Annuity model would ease the cash flow pressure on the Issuer as it would have to provide only 40 per cent. upfront funding spread over the 30-36 months of construction period, and the private participant would be required to bear the balance 60 per cent of the project cost through a combination of its equity contribution and debt raised from the market. Further, the 60 per cent of the project cost borne by the private participant during the construction period is to be recovered from the Issuer in terms of annuity payments spread over a period of 15 years. Therefore, the Issuer's own upfront funding requirement will be lower in the case of Hybrid Annuity Model compared with EPC model. Further, the annuity
46 nature of the projects would eliminate traffic related risks thereby improving ease of financial close and refinancing ability post project completion.
Operate, Maintain and Transfer ("OMT")
Under the OMT model, toll collection and highway maintenance are integrated and awarded to one private operator (traditionally, tolling agents have been responsible for the collection of toll revenue, with various subcontractors undertaking road maintenance). Project construction and development will remain to be the responsibility of a separately appointed EPC contractor until completion, at which point such private operator will assume responsibility for collection of tolls in return for their maintenance of the highways and the provision of essential facilities such as emergency and safety services. The Issuer has recently awarded a number of highway projects to the private sector under the OMT model.
Engineering, Procurement and Construction ("EPC")
Under the EPC model, a single contractor takes responsibility for all elements of the engineering, procurement, construction and maintenance aspects of the project. This is different from a traditional EPC contract, whereby the contractor does not provide for maintenance under the initial contract. Under the EPC model, the contractor will quote for the cost of upgrading and maintaining the highway at the outsetand will be required to provide such maintenance for two years' post completion of the construction. The cost of the project is borne by the Issuer.
Refinancing and Re-structuring: Refinancing and restructuring of a project is undertaken by the concessionaire to take advantage among others of the lower rate of interest, elongated tenure of payment.
Infrastructure Debt Funds: IDF are an investment vehicle which can be sponsored by commercial banks and NBFCs in which domestic/off shore institutional investors and in particular insurance and pension funds can invest through units and bonds issued by IDF. It offers among others the benefit of lower interest rates improving the viability of projects and offering a better return on equity. Since 2014, IDF have been established by ICICI Bank, L&T and IDBI.
Change of ownership: The provision of divestment in PPP projects are not uniformed overall concession agreement. Before 2009 concessions promoters has to hold at least 26% of the equity throughout the concession period. After 2009 the concessionaire can divest 100% of its equity two years after the completion of the said construction. The CCEA has allowed such divestment in all PPP Projects two years after the completion of the said construction subject to a subsequent investment in certain projects such as incomplete NHAI Projects, other Highway Projects, Power Sector Project and to retire debt to Financial Institution in any other Infrastructure Project.
Premium Deferment: The cost of a BOT (Toll) project awarded on premium includes other than cost of construction committed premium payment to the Government, operation and maintenance cost and debt servicing cost. The primary object of the deferment is to revive any projects bid during 2011-12 that were facing financial stress due to the economic downturn. Pursuant the CCEA decision (MoRTH letter no.37012/22/2011/H(pt.III) dated 04/03/2014) the premium has been deferred in 21 cases.
One-time Fund Infusion Scheme: The CCEA has approved a scheme to revive and quickly bring languishing project to physical completion by providing financial assistance as loan at bank rate + 2%.
Infrastructure Investment Trust (InVIT) for Concessionaires: InvIT is a mechanism that enables developers of infrastructure assets to monetise their assets by pooling multiple projects under a single entity (trust structure). Currently, Government Securities or G-secs are the only other instruments with 47 such a long life. The sponsor shall hold minimum 15% of the units issued by the InvIT with a lock-in period of three years from the date of issuance of units. The Minimum Investment limit is Rs.10 lac per investor helps monetize revenue generating road assets thereby increasing the propensity of bidders to invest in new road projects. It will lower the cost of capital by attracting long term investors (particularly pension and insurance funds) in completed projects. It will help reduce NPA incidence in commercial Banks, in respect of highway projects. InvIT for IRB, Reliance Infra and ILFS were approved by NHAI.
Incentives for Private Sector Participation
The Government has put in place financial incentives to encourage increased private sector participation in the road sector. Initiatives taken by the Government include: i) a declaration of the road sector as an industry; ii) the provision of a capital grants subsidy of up to 40 percent of a project's costs to enhance the viability of a project on a case-by-case basis; iii) a duty-free import of specifically identified high-quality construction plant and equipment; iv) a 100 percenttax exemption in any consecutive 10 years within a period of 20 years after completion of construction projects which involve an addition of new lanes; v) an undertaking by the Government to meet all expenses relating to land acquisition and other pre- construction activities (which, in essence, allows for construction and development on encumbrance-free land); and vi) an allowance for foreign direct investment of up to 100 percent in the road sector.
Bidding Process
The general procedure for the selection of concessionaires adopted by the Issuer involves a two-stage bidding process. Projects are awarded as per the model documents prepared by the Issuer and the Central Government such as Request for Qualification ("RFQ"), Request for Proposal ("RFP") and concession agreements. The Issuer amends these model documents based on project specific requirements. The two stage process involves:
Stage 1: Pre-qualification on the basis of technical expertise and financial position of the firm and its track record in similar projects which meets the minimum criteria set out in the RFQ document.
Stage 2: Commercial bids from pre-qualified bidders are invited through issue of RFPs. For BOT (Toll) projects the bid parameter is the premium offered to the Issuer or the grant sought from the Issuer. In BOT (Annuity) projects the bid parameter is the semi-annual annuity sought from the Issuer.
The Government has put in place appropriate policies and other institutional and regulatory mechanisms including a set of fiscal and financial incentives to encourage increased private sector participation in the road sector.
Bidding process for Engineering, Procurement and Construction ("EPC") projects
The Issuer has also adopted a single stage two part system for the selection of the bidder for award of a project. Under this process, the bid shall be invited under two parts. Eligibility and qualification of the bidder will be first examined based on the details submitted under the technical bid with respect to eligibility and qualifications criteria prescribed in the RFP. The financial bid shall only be opened to those bidders whose technical bids satisfy the eligibility and qualifications requirements as per the RFP.
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RELATIONSHIP WITH THE GOVERNMENT
NHAI has relationships with the Government in several contexts as described below:
Government as the policy maker Statutory Powers of the Government over NHAI Government as the Lender Government as the Regulator
Government as the policy maker
Pursuant to the NHAI Act, the Central Government may direct that any function in relation to the development or maintenance of national highways shall also be exercisable, among others, by any officer or authority subordinate to the Central Government. Accordingly, some of the functions were delegated by the Central Government to the respective State Governments. The NHAI Act was passed providing for the constitution of the Issuer for the development maintenance and management of the national highways and for matters connected therewith or incidental thereto.
The Central Government appoints the Chairman and may also appoint up to four part-time members. The Central Government is empowered to vest in, or entrust to, the Issuer such national highways or any stretch thereof, as are vested in the Central Government under the NHAI Act. As per the NHAI Act, the Central Government provides funds to the Issuer for the discharge of its functions. Further to this, the fee collected by the Issuer is on behalf of the Government for services or benefits rendered by it under the NHAI Act.
Statutory powers of the Government over the Issuer
Under Section 11 of NHAI Act, the Central Government is empowered to vest or entrust any national highway or stretch thereof to the Issuer by publishing a notification in the Official Gazette. On and from the date of publication of the said Notification, all assets, rights or liabilities of the Central Government in respect of such national highway or stretch thereof stands transferred to the Issuer including but not limited to all debts, contracts, capital expenditure, all sums of money due to the Central Government, suits and any other legal proceedings.
Financial Support from the Government
Financial support to the Issuer from the Government comes primarily in the form of yearly budgetary allocations and cess collected by the Government under the CRF Act, part of which is specially allocated for national highways and capital infusion in the form of loans. The NHAI Act provides for the Central Government to provide any capital that may be required by the Issuer or pay by way of loans or grants such sums of money as it may consider necessary to ensure the efficient discharge of the Issuer's functions. The NHAI Act also provides for the constitution of the National Highways Authority of India Fund, a provider of capital for the collection of any grants, aid, loan facilities or any other sums received by the Issuer, under which it can draw down to meet project expenses, procurement and other ongoing costs. Alternatively, the Central Government regularly provides consent to the Issuer to raise funds through the issuance of bonds and other debt securities both on the domestic and international capital markets.
As the Issuer has been set up to act as an authority for the development, maintenance and management of national highways in India, the Government of India has the responsibility of providing funds to the Issuer for the discharge of its functions.
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The Issuer receives its funding through (i) support from the Government in the form of capital investment, additional budgetary support (cess and toll plough back), (ii) loans from multilateral agencies and (iii) market borrowings.
The development and maintenance of the national highways is financed through (i) the Government's gross budgetary support and ABS, (ii) dedicated accruals under Central Road Fund (share in the levy of cess on fuel),(iii) lending by international institutions, (iv) private financing through PPP framework including DBFOT and SPVs with equity participation by the Issuer and (v) market borrowing (including funds raised through capital gain tax exemption bonds, Masala Bondsand long term tax free bonds).
The Government as the regulator
The NHAI Act also designates the Central Government as the principal regulator of the Issuer. The Central Government has a range of powers enabling it to exercise a broad degree of control over the functioning of the Issuer, including over the manner in which the Issuer may invest its funds or maintain its accounts. The NHAI Act stipulates that the Issuer shall remain bound by the directions of the Central Government on questions of policy. The Central Government may suspend the Issuer from its management role on any of its national highways projects, or alternatively replace the Issuer in its management role entirely if it is of the opinion that the Issuer is either unable to discharge its functions and duties effectively, or if it persistently fails to comply with any direction of the Central Government. The Central Government is further empowered to make rules for giving effect to the provisions of the NHAI Act in certain matters which include but are not limited to matters relating to manner in which the Issuer may invest its funds or maintain its accounts.
B. K. Chaturvedi Committee Report
In order to resolve the procedural hurdles to the national highways projects as well as to address the financing needs of the road sector, the Central Government established the B. K. Chaturvedi Committee ("Committee") headed by Shri B.K. Chaturvedi, Member, Planning Commission. Amongst the other recommendations the Committee made the following recommendations which also has had the in- principle approval of the Central Government: i) issuance of tax exempted bonds; ii) guarantee cover for any borrowing by the Issuer; iii) out of the borrowing approval of Rs. 300 billion earlier provided to Indian Infrastructure Finance Company Limited ("IIFCL"), Rs. 100 billion under a fiscal stimulus package to be transferred to the Issuer, as per the its borrowing requirement; iv) assistance in negotiating non-sovereign multilateral loans from organisations such as the World Bank, the ADB and the JBIC by providing back to back support, if necessary; and v) providing a letter of comfort from the Ministry of Finance confirming the availability of cess at least till 2030-31.
Risk Management
Since the Issuer is the implementing agency of the NHDP/Bharatmala, steps have been taken for restructuring and strengthening the Issuer. Institutional mechanisms have been established to address delays in, amongst other things, environmental clearances and land acquisition. There is a particular focus on traffic management and safety related issues through the proposed Directorate of Safety and Traffic Management to be set up by the Central Government. It is expected that these initiatives, once fulfilled, would deliver an efficient and safe highway network across the country.
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In order to specify the policy and regulatory framework on a fair and transparent basis, a Model concession agreement (MCA) for PPP in respect of the national highways has been prescribed. It is expected that this common framework, based on international best practices, will significantly accelerate the pace of project awards as well as ensure an optimal balance of risk and reward among all project participants.
Revenue realisation in BOT (Toll) projects is subject to some risks including, but not limited to variation in traffic, variation in toll rates, additional toll ways and occurrence of premature termination on account of certain events. The relevant concession agreement provides for various risk mitigation mechanisms including changing the concession period, differential toll rates that are linked to the cost of different roads structures and providing for termination payments upon the occurrence of any force majeure event.
Risk of Early Termination of Concession: In the event of a default by a concessionaire under the relevant concession agreement and if the concessionaire has failed to cure such default within the specified cure period, the Issuer shall have the right to terminate the agreement. If such default takes place within the relevant construction period, generally no payment is made to the concessionaire and if such default takes place during the operation period, the Issuer generally will only make payment of up to 90 per cent. of the debt due as on the date of such termination to the lender of the concessionaire, less any insurance claim further to which the Issuer will get the right over the relevant asset.
Land acquisition risk: The Issuer is responsible for acquiring lands required for the projects. The Issuer acquires land under the National Highways Act, 1956 ("NH Act"). In various parts of the country, the process for lands acquisition is affected by a large number of factors, including but not limited to Government policies and the social and political environment. Also, the process of land acquisition can result in litigations. However, the risk of delay associated with the land acquisition process is mitigated by the Issuer as it generally awards only those projects where land acquisition has already taken place.
Approval Risk: The obligation of obtaining approvals and/or permissions is on the concessionaires/contractors. In order to manage these risks, the Issuer provides assistance to the concessionaires/contractors in seeking the approval and/or permission from the relevant authorities. Although the Issuer tries to provide all reasonable support and assistance to the concessionaires/contractors in procuring applicable approvals and/or permissions required from any Government entity, such approvals or permissions may be delayed due to various reasons resulting in delay in completion of the projects. The Issuer generally assists concessionaires/contractors in obtaining the approvals and/or permissions in relation to the following among others: i) permission of the State Government for extraction of boulders from quarries; ii) permissions of village Panchayats and the Pollution Control Board for installation of crushers; iii) licences for use of explosives; iv) permission of the State Government for drawing water from rivers and/or reservoirs; v) licence(s) from inspectors of factories or other competent authorities and clearance of the Pollution Control Board for setting up concrete batching plants; vi) clearance from village Panchayats and the Pollution Control Board for setting up asphalt plants; vii) applicable permits, as required, relating to environmental protection and conservation; viii) permission of State Government for the cutting of trees; and ix) any other permits or clearances required under applicable laws.
Force majeure risk: Force majeure risk is applicable across all the business of the Issuer. Factors such as acts of God, epidemics, adverse weather conditions, radioactive contamination, ionising radiation, fire or explosion, strikes or boycotts, the discovery of geological conditions, toxic contamination or archaeological
51 remains on the relevant site, Indirect Political Event(s) and Political Event(s) and change in law are often threats to various projects undertaken by the Issuer. In order to mitigate the losses due to force majeure, the Issuer has a separate mechanism of payment upon the occurrence of a force majeure event.
HUMAN RESOURCES
The Issuer employed 1079 employees as of 31 March 2018. The employees include professionals in business management, accountancy, engineering, law, computer science, economics and other relevant disciplines. The Issuer believes that its employees are its most valuable asset and the management believes it has a good relationship with the employees. The Issuer aims to develop a collaborative culture and an ongoing consultative process at various levels of administration within the organisation. The Issuer believes that it has amicable relations with its employees. The management of the Issuer is also in constant dialogue with the employees to avoid any industrial relations actions, including strikes or work stoppages. The computerisation of the Issuer has reduced employee workloads and allowed the Issuer to maintain a relatively lean workforce during the past five to six years despite growing its business.
The details of employees of the Issuer as on March 31, 2018 are as follows:
Category of Employees Number of Employees Regular 394 Deputation 293 Contract 392
Social Awareness programmes promoted by the Issuer
The Issuer actively participates on social reform or national initiatives such as road safety, rehabilitation and resettlement and AIDS awareness. In addition, the Issuer is working towards the concept of "Green Highways" for future projects.
In furtherance of the concept of Green Highways, the Issuer is contemplating development of horticulture and greenbelts along highways.
INSURANCE
The Issuer's policy is to insure its properties adequately against fire and other usual risks. The Issuer's insurance policies are subject to exclusions which are customary for those insurance policies, including those exclusions which relate to war and terrorism-related events. The Issuer believes that its insurance policies as described above are appropriate for its business.
COMPETITION
Responsibility for all of the national highways vest in the Government, and such responsibility has been designated to the Issuer under the NHDP/Bharatmala and the other programmes entrusted to it. The Issuer aims to build and upgrade the national highways to the highest international standard and is the sole appointed authority in India for overseeing the implementations of national highway projects by private parties or state agencies. Although the Issuer is the sole delegate for this role, roads authorities such as PWDs and other road construction corporations under the control of State or Union Territory governments are also working towards the development and maintenance of roads and certain other national highways, some of which also form part of the NHDP.
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PROPERTIES
The Issuer holds certain properties in Delhi on a perpetual lease basis. The Issuer also leases 25 Regional Offices and 179 Project Implementation Units throughout India.
INFORMATION TECHNOLOGY ("IT")
The Issuer is continuing to invest in IT designed to help it better monitor and run its business. The Issuer has deployed the IT system across its organisation. The Issuer's website is designed to provide a comprehensive description of its business.
CORPORATE STRUCTURE
The organisation structure of the Issuer is as follows:
CHAIRMAN
MEMBER MEMBER MEMBER MEMBER MEMBER (A) MEMBER (F) CVO (PPP) (PROJ) (Tech) (PROJ)
CGM CGM (Fin) & CGM (T) CGM (T) CGM (T) CGM (T) CGM (Vig) (Admin/HR-I & II) CGM (FA)
GM GM (Fin) GM (T) GM (T) GM (T) GM (T) DGM (Vig) (Admin/HR)
DGM/Manager DGM/Manager DGM/Manager DGM/Manager DGM/Manager DGM/Manager Manager (Vig) (Admin/HR) (Fin) (T) (T) (T) (T)
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VIII. KEY OPERATIONAL & FINANCIAL PARAMETERS OF THE ISSUER FOR THE LAST 3 AUDITED YEARS
(Rs. in lacs) Sr. Particulars FY 2017-18 FY 2016-17 (audited) FY 2015-16 No. (audited) (audited) 1. Capital 16,377,926.38 13,959,380.47 12,551,457.89 2. Reserves & Surplus 0.00 0.00 748.68 3. Capital Grants 1,383,229.45 1,365,643.01 1,366,280.32 4. Borrowings 12,252,415.96 7,538,464.71 4,527,036.70 5. Total Fixed Assets 2,85,71,117.89 21,776,720.00 17,649,443.14 6. Investments (at cost) 93,617.34 90,959.00 121,652.89 7. Current Assets, Loans & 5,490,024.83 4,187,028.21 3,314,307.25 Advance 8. Current Liabilities & 4,141,188.27 3,191,219.03 2,639,879.69 Provisions 9. Net Current Assets 1,348,836.56 995,809.18 674,427.56 10. Total Income 1,382.30 1,354.40 1,294.24 11. Total Expenditure 40,608.57 29,226.13 24,183.90 12. Profit / (Loss) for the Year (39,226.27) (27,871.73) (22,889.66) 13. Surplus brought forward - - - 14. Surplus carried to Balance - - - Sheet
IX. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANYREORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS
1. BRIEF BACKGROUND
NHAI is an autonomous organisation of the Government of India under the Ministry of Road Transport & Highways and was constituted on June 15, 1989 by an Act of Parliament – The National Highways Authority of India Act, 1988, and was made operational in February, 1995 with the appointment of full time Chairman and other Members. NHAI has an all India presence through its different offices (Regional Offices/Project implementation Units/Corridor Management Units) in different cities. The functioning of NHAI is thus governed by NHAI Act and rules, and regulations framed thereunder. It succeeds the previous Ministry of Surface Transport.
2. CHANGE IN HEAD OFFICE
On September 21, 2000, the Head Office of NHAI was shifted from 1, Eastern Avenue, Maharani Bagh, New Delhi - 110 065 to G - 5 & 6, Sector-10, Dwarka, New Delhi - 110 075 for administrative and operational efficiency.
3. VISION
To meet the nation‘s need for the provision and maintenance of National Highways network to global standards and to meet user‘s expectations in the most time bound and cost effective manner, within the strategic policy frame work set by the GoI and thus promote economic well-being and quality of life of the people. The long term vision of NHAI is to meet the challenges of developing the Nation by
54 providing an unparalleled network of physical connectivity both to the common man as well as to the commercial transportation and for other heavy industrial use. This commitment results in a greater public good and NHAI is a means for achieving that public good for Indian industry as well as the common people at the grassroots level.
4. MAIN OBJECTS
The main objects of NHAI are provided in the NHAI Act as per which NHAI is responsible for the development, maintenance and management of National Highways entrusted to it, by the GoI and for matters connected or incidental thereto. NHAI was constituted to survey, develop, maintain and manage National Highways and inter alia to construct offices or workshops, to establish and maintain hotels, restaurants and rest rooms at or near the highways vested in or entrusted to it, to regulate and control plying of vehicles, to develop and promote consultancy and construction services and to collect fees for services and benefits rendered in accordance with NHAI Act.
5. MAJOR EVENTS
Year: Event: 1989 Establishment of the Issuer under the NHAI Act. The Issuer became fully operational with the appointment of a full-time Chairman and 1995 other Members. Announcement of the NHDP programme, whereby the Issuer would be entrusted with 1998 road construction totalling 46,200 km to be completed in seven phases. Government approval obtained from the Cabinet Committee on Economic Affairs 2000 ("CCEA") for Phase I of the NHDP. 2003 Government approval obtained from CCEA for NHDP Phase II 2005 Government approval obtained from CCEA for NHDP Phase III and IV 2006 Government approval obtained from CCEA for NHDP Phase V and VI 2007 Government approval obtained from CCEA for NHDP Phase VII Approval received from the Government of India for a revised strategy to implement the 2009 NHDP, based on the B. K. Chaturvedi Committee Report. The Issuer successfully raised the first public issue of tax free bonds under the IT Act 2012 totalling an aggregate sum of INR 100 billion. 2014 The Issuer successfully raised a further INR 50 billion through tax free bonds. 2016 The Issuer successfully raised an additional INR 190 billion through tax free bonds. 2017 The Issuer successfully raised an additional INR 275 billion through taxable bonds. The Issuer successfully raised INR 30 billion through Rupee denominated offshore bonds 2018 (Masala bonds) and INR 120 billion as unsecured loan from State Bank of India. The Issuer registered its logo.
6. HOLDING COMPANY
NHAI does not have any holding company.
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7. THE PROMOTER
Under Entry 23 of the Union List of the Seventh Schedule to the Constitution of India the development and maintenance of National Highways is vested in Central Government. Further, Section 5 of NHAI Act provides that the Central Government may direct that any function in relation to the development or maintenance of National Highways shall also be exercisable among other by any officer or authority subordinate to the Central Government.
In exercise of the above powers vested in the Central Government vide Entry 23 of the Union List of the Seventh Schedule to the Constitution of India and under Section 5 of the NHAI Act, the President of India gave his assent to The National Highways Authority of India Bill, 1988 which was passed by both the Houses of Parliament on December 16, 1988. Accordingly, National Highways Authority of India was established on June 15, 1989 as an autonomous body under the Ministry of Road Transport and Highways, Government of India.
[Intentionally Left Blank]
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8. BRIEF INFORMATION OF SPVs AND ASSOCIATE COMPANY AS ON SEPETMBER 30, 2019
Name Ahmedabad Vadodara Expressway Company Limited Date of Incorporation April 05, 2000 Registered Office NHAI Corporate Office, Plot G - 5 & 6, Sector -10, Dwarka, New Delhi-110075
Name Calcatta-Haldia Port Road Company limited Date of Incorporation December 26, 2000 Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075
Name Cochin Port Road Company Limited Date of Incorporation January 19, 2004 Registered Office G 5 & 6 Sector 10, Dwarka, New Delhi-110075
Name Moradabad Toll Road Company Limited* Date of Incorporation August 13, 1998 Registered Office 1 Eastern Avenue Maharani Bagh, Sector 10, Dwarka, New Delhi – 110075, India * Wound-up as per order of Hon’ble NCLT dated 21.05.2019
Name Mormugao Port Road Company Limited Date of Incorporation December 26, 2000 Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075
Name Mumbai-JNPT Port Road Company Limited Date of Incorporation December 26, 2000 Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075
Name Tuticorin Port Road Company Limited Date of Incorporation January 19, 2004 Registered Office G 5 & 6 Sector 10, Dwarka, New Delhi-110075
Name Paradip Port Road Company Limited Date of Incorporation January 19, 2004 Registered Office G 5 & 6 Sector 10, Dwarka, New Delhi-110075
Name Vishakhapatnam Port Road Company Limited Date of Incorporation December 26, 2000 Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075
Name New Mangalore Port Road Company Limited Date of Incorporation January 19, 2004 Registered Office G 5 & 6 Sector 10, Dwarka, New Delhi-110075
Name Chennai-Ennore Port Road Company Limited Date of Incorporation December 26, 2000 Registered Office G 5 & 6, Sector -10, Dwarka, New Delhi-110 075 57
Name Indian Highways Management Company Limited Date of Incorporation December 26, 2012 Registered Office Room No-402, NHAI HQ, Plot G-5 & 6, Sector -10, Dwarka, New Delhi- 110075
[Intentionally Left Blank]
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X. CAPITAL STRUCTURE
NHAI has not issued any shares against capital and capital grants invested by GoI (in pursuance of NHAI Act). The capital of NHAI as on September 30, 2019, is set forth below:
Details of Capital of NHAI
NHAI has not issued any shares against Capital and Capital Grants invested by GoI (in pursuance of NHAI Act).
The Capital of NHAI as on September 30, 2019, is set forth below:
Amount Particulars (` in lakhs) i) Capital u/s 12(i)(b) - Commencing Capital ii) Capital u/s 17 a) Capital Base 80,100.00 b) Cess Fund (up to March 31, 2019) 1,17,48,765.00 Add: 8,31,800.00 Cess fund received during Financial Year 2018-19 (up to September 30, 2019) c) Additional Budgetary Support (NHDP and 18,98,254.00 others) d) Capital – Net off toll collection, negative grant 6,18,355.88 etc. upto March 31, 2010 e) Plough back of Toll Remittance, etc. w.e.f. 65,97,466.00 April 01, 2010 Less: (2,69,105.22) 1) Expenditure on Toll Collection Activities (up to w.e.f. April 1, 2010) 2) (Excess)/Surplus of Expenditure on Maintenance of (4,95,732.65) Highways over Maintenance Grant Received (w.e.f. April 1, 2010). 3) Plough back transferred to SPVs (17,407.23) 4) Transfer of Exceptional item from P & L A/c (40,310.88) Sub-Total 2,08,72,084.89 Total 2,09,52,184.89
Capital History of NHAI upto September 30, 2019
1) Capital Base build-up
There have been no changes in the Capital base build-up of NHAI in the last five years.
2) Cess Fund Build-up (`In Lakhs) S. No. Date* Investor Amount Cumulative Amount 1. July 5, 2013 MoRTH, GoI 1,71,436.00 63,71,372.00 2. September 17, 2013 MoRTH, GoI 1,71,436.00 65,42,808.00 3. October 28, 2013 MoRTH, GoI 1,71,436.00 67,14,244.00
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S. No. Date* Investor Amount Cumulative Amount 4. February 04, 2014 MoRTH, GoI 1,71,437.00 68,85,681.00 5. September 17, 2014 MoRTH, GoI 4,78,290.00 73,63,971.00 6. November 05, 2014 MoRTH, GoI 2,10,299.00 75,74,270.00 7. May 20, 2015 MoRTH, GoI 4,60,500.00 80,34,770.00 8. July 23, 2015 MoRTH, GoI 4,60,500.00 84,95,270.00 9. September 28, 2015 MoRTH, GoI 4,60,500.00 89,55,770.00 10. December 28, 2015 MoRTH, GoI 16,05,00.00 91,16,270.00 11. June 9, 2016 MoRTH, GoI 2,00,000.00 93,16,270.00 12. July 5, 2016 MoRTH, GoI 2,00,000.00 95,16,270.00 13. August 5, 2016 MoRTH, GoI 2,07,650.00 97,23,920.00 14. January 18, 2017 MoRTH, GoI (375,000.00) 93,48,920.00 15. April 17, 2017 MoRTH, GoI 3,85,736.00 97,34,656.00 16. July 17, 2017 MoRTH, GoI 3,85,736.00 1,01,20,392.00 17. September 26, 2017 MoRTH, GoI 3,71,473.00 1,04,91,865.00 18. December 20, 2017 MoRTH, GoI 1,00,000.00 1,05,91,865.00 19. April 12, 2018 MoRTH, GoI 4,02,300.00 1,09,94,165.00 20. June 15, 2018 MoRTH, GoI 4,02,300.00 1,13,96,465.00 21. September 19, 2018 MoRTH, GoI 3,02,300.00 1,16,98,765.00 22. Feburary 11, 2019 MoRTH, GoI 50,000.00 1,17,48,765.00 23. June 21, 2019 MoRTH, GoI 2,06,720.00 1,19,55,485.00 24. August 28, 2019 MoRTH, GoI 2,31,130.00 1,21,86,615.00 25. September 25, 2019 MoRTH, GoI 3,93,950.00 1,25,80,565.00 * Date of Sanction and not the date of release of funds.
3) Additional Budgetary Support (NHDP and others) Build-up (` In lakhs) S. Date* Investor Amount Cumulative Amount No. 1. March 26, 2013 MoRTH 20,074.00 508,462.00 2. March 26, 2013 MoRTH 4,811.00 513,273.00 3. February 18, 2013 MoRTH 115,954.00 629,227.00 4. March 31, 2013 MoRTH 7,058.00 636,285.00 5. May 08, 2013 MoRTH 10,000.00 646,285.00 6. June 27, 2013 MoRTH 40,000.00 686,285.00 7. January 13, 2014 MoRTH 17,826.00 704,111.00 8. January 13, 2014 MoRTH 17,214.00 721,325.00 9. 31-Mar-15 MoRTH 60,000.00 781,325.00 10. March 29, 2016 MoRTH 37,027.00 818,352.00 11. April 29, 2016 MoRTH 1,000.00 819,352.00 12. Jun 02, 2016 MoRTH 10,000.00 829,352.00 13. September 23, 2016 MoRTH 375,000.00 12,04,352.00 14. January 12, 2017 MoRTH 4,000.00 12,08,352.00 15. March 09, 2017 MoRTH 100,000.00 13,08,352.00 16. March 23, 2017 MoRTH 50,902.00 13,59,254.00 17. 31-Mar-17 MoRTH 24,000.00 13,83,254.00 18. April 03, 2017 MoRTH 13,000.00 13,96,254.00 60
19. December 26, 2017 MoRTH 150,000.00 15,46,254.00 20. February 23, 2017 MoRTH 150,000.00 16,96,254.00 21. March 07, 2018 MoRTH 90,000.00 17,86,254.00 22. March 19, 2018 MoRTH 12,000.00 17,98,254.00 23. August 26, 2019 MoRTH 1,00,000.00 18,98,254.00 *Date of Sanction and not the date of release of funds.
4) Capital – Net off toll collection, negative grant etc. upto March 31, 2010
The GoI has decided that from April 1, 2010 onwards, the toll revenue, shared revenue and negative grant collected by NHAI should be deposited in the Consolidated Fund of India and additional budgetary provisions would be provided for expenditure from the Consolidated Fund of India in line with the amount deposited by NHAI in Consolidated Fund of India.
Accordingly, net current liability of pre April 1, 2010 period on account of toll and negative grant etc. stood at Rs. 618,355.88 lakhs. This amount had already been utilised on project development and was no longer payable to GoI. During Financial Year 2012-13, the same has been transferred to capital.
5) Additional Budgetary Support (Plough back of Toll, Revenue Sharing, etc.) Build-up (` in Lac) S. No. Date* Investor Amount Cumulative Amount 1. June 26, 2013 MoRTH, GoI 1,19,250.00 7,28,539.00 2. September 24, 2013 MoRTH, GoI 1,19,250.00 8,47,789.00 3. October 28, 2013 MoRTH, GoI 1,19,250.00 9,67,039.00 4. December 27, 2013 MoRTH, GoI 1,19,250.00 10,86,289.00 5. July 26, 2014 MoRTH, GoI 1,36,200.00 12,22,489.00 6. September 17, 2014 MoRTH, GoI 1,36,200.00 13,58,689.00 7. October 27, 2014 MoRTH, GoI 1,36,200.00 14,94,889.00 8. December 31, 2014 MoRTH, GoI 1,36,200.00 16,31,089.00 9. May 25, 2015 MoRTH, GoI 1,62,500.00 17,93,589.00 10. July 30, 2015 MoRTH, GoI 1,62,500.00 19,56,089.00 11. September 30, 2015 MoRTH, GoI 1,62,500.00 21,18,589.00 12. December 14, 2015 MoRTH, GoI 1,62,500.00 22,81,089.00 13. May 17, 2016 MoRTH, GoI 1,25,000.00 24,06,089.00 14. July 28, 2016 MoRTH, GoI 1,25,000.00 25,31,089.00 15. September 23, 2016 MoRTH, GoI 1,25,000.00 26,56,089.00 16. January 18, 2017 MoRTH, GoI 3,75,000.00 30,31,089.00 17. April 20, 2017 MoRTH, GoI 2,11,553.00 32,42,642.00 18. July 17,2017 MoRTH, GoI 2,11,554.00 3,454,196.00 19. September 26, 2017 MoRTH, GoI 2,11,554.00 3,665,750.00 20. December 20, 2017 MoRTH, GoI 2,11,553.00 38,77,303.00 21. April 12, 2018 MoRTH, GoI 2,39,300.00 41,16,603.00 22. June 15, 2018 MoRTH, GoI 2,39,300.00 43,55,903.00 23. September 19, 2018 MoRTH, GoI 2,39,300.00 45,95,203.00 24. December 28,2018 MoRTH, GoI 2,39,113.00 48,34,316.00 25. May 31, 2019 MoRTH, GoI 2,65,000.00 50,99,316.00 26. August 26, 2019 MoRTH, GoI 2,65,000.00 53,64,316.00 27. September 25, 2019 MoRTH, GoI 2,65,000.00 56,29,316.00
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* Date of Sanction and not the date of release of funds.
6) Additional Budgetary Support (Plough back of Toll, Operate & Transfer (TOT) (` in Lac) S. Date* Investor Amount Cumulative Amount No. 1. Feburary 20, 2019 MoRTH, GoI 4,28,269.00 4,28,269.00 2. March 12, 2019 MoRTH, GoI 4,84,075.00 9,12,344.00 3. March 20, 2019 MoRTH, GoI 55,806.00 9,68,150.00
2. DETAILS OF ANY ACQUISITION OR AMALGAMATION IN THE LAST 1 YEAR
None
3. DETAILS OF ANY REORGANIZATION OR RECONSTRUCTION IN THE LAST 1 YEAR
None
4. DISCLOSURES PERTAINING TO WILFUL DEFAULT
None of our members are wilful defaulter
5. SHAREHOLDING PATTERN OF THE ISSUER (as on December 31, 2019)
NHAI is an autonomous body constituted by an act of Parliament - The National Highways Authority of India Act, 1988, under the Ministry of Road Transport & Highways, Government of India. NHAI has not issued any shares against capital and capital grants invested by Government of India (in pursuance of NHAI Act). The entire capital base of NHAI is contributed by the Ministry of Road Transport & Highways, Government of India and as such, 100% owner’s capital in NHAI is held by the Government of India. The promoters have not pledged or encumbered by their shareholding in the Issuer.
6. TOP 10 EQUITY SHARE HOLDERS OF THE ISSUER (AS ON DECEMBER 31, 2019) NHAI is an entity constituted under the NHAI Act and therefore does not have any equity shares.
7. PROMOTER HOLDING IN THE ISSUER (AS ON DECEMBER 31, 2019)
The entire capital base of NHAI is contributed by the Ministry of Road Transport & Highways, Government of India and as such, 100% capital in NHAI is held by the Government of India.
8. GROSS BORROWINGS OF THE ISSUER (AS ON SEPTEMBER 30, 2019)
A) DEBT OUTSTANDING
As on September 30, 2019, we had outstanding secured borrowings of approximately Rs.1,32,58,124.00 Lakh and unsecured borrowings of Rs. 70,59,702.00 Lakh.
Bonds Outstanding as on September 30, 2019, Issued by the Authority:
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Set forth below is a brief summary of our significant outstanding bonds as on September 30, 2019, together with a brief description of certain significant terms of such financing arrangements.
(i) SECURED BORROWINGS
a) BONDS ISSUED BY NHAI
Capital gains tax exemption bonds under Section 54EC of the Income Tax Act.
Set forth below is a brief summary of our outstanding capital gains tax exemption bonds issued under Section 54EC of the IT Act as on September 30, 2019, together with a brief description of certain significant terms of such financing arrangements. These bonds are not listed on any stock exchange. The bonds are secured by mortgage over NHAI’s immovable property, located in Gujarat, or such other immovable property that may be agreed between NHAI and the Trustees for the bondholders ranking pari-passu with the mortgages created and/or to be created on the said property for securing bonds or any other instrument.
Sl. Debenture Tenor/Period Coupon Total Value of Date of Redemption Credit Rating Trustee No. Series of Maturity Outstanding Allotment Date/ Bonds (in Schedule lakhs Rs.) 1. NHAI 3 years from the 6.00% On Tap Bullet, at the AAA by SBICAP Bonds Series Deemed Date of p.a. 3,10,174.00 basis time of CRISIL, Trustee -XVII Allotment till 30-11- maturity i.e. 3 AAA by Company (2016-17) 16 years CARE AAA Limited 5.25% by India w.e.f 01- Ratings 12-16 AAA by Payable ICRA annually 2. NHAI 3 years from the 5.25% 6,65,741.30 On Tap Bullet, at the AAA by SBICAP Bonds Series Deemed Date of payable basis time of CRISIL, Trustee -XVIII Allotment annually. maturity i.e. 3 AAA by Company (2017-18) years CARE AAA Limited by India Ratings AAA by ICRA 3. NHAI 5 years from the 5.75% On Tap Bullet, at the AAA by Vistra ITCL Bonds Series Deemed Date of payable 4,70,669.00 basis time of CRISIL, India -XIX Allotment annually. maturity i.e. 5 AAA by Limited (2018-19) years CARE AAA by India Ratings AAA by ICRA 4. NHAI 5 years from the 5.75% On Tap Bullet, at the AAA by Beacon Bonds Series Deemed Date of payable 2,15,900.00* basis time of CRISIL, Trusteeship -XX Allotment annually. maturity i.e. 5 AAA by Limited (2019-20) years CARE AAA by India Ratings AAA by ICRA * Amount of Bonds allotted till September 30, 2019.
Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act.
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Set forth below is a brief summary of our outstanding Tax Free Bonds issued under Section 10(15)(iv)(h) of the Income Tax Act, together with a brief description of certain significant terms. The bonds are secured by way of pari-passu mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures constructed on national highways except those under Surat-Manor Tollways Project, in favor of SBICAP Trustee Company Limited.
Sl. Debenture Tenor/Period of Coupon Amount Date of Redemptio Credit Rating Security No Series Maturity (in lakh Allotmen n Date/ . Rs. ) t Schedule 1. Tax free 10 years from 8.20% 6,71,408.1 January January 25, CRISILAAA The bonds are secured deemed date of payable 2 25, 2012 2022 / Stable by secured by redeemable allotment annuall CRISIL way of pari- non – y “CARE passu convertible 15 years from 8.30% 3,28,591.8 January January 25, AAA” by mortgage bonds, in the Deemed Date of payable 8 25, 2012 2027 CARE nature of Allotment annuall "Fitch over the debentures. y AAA(IND) property of (2011-12) with Stable NHAI Outlook” by situated at FITCH Ahmedabad 2. Tax free 10 years from 8.35% 45,200.00 Novemb November “CRISIL along with secured deemed date of payable er 25, 25, 2023 AAA/Stable fixed assets of Redeemable allotment (Private annuall 2013 ” by CRISIL, NHAI, being non – Placement) y “CARE convertible 15 years from 8.48% 84,960.00 Novemb November AAA” by highway bonds, in the Deemed Date of payable er 25, 25, 2028 CARE"Fitch projects nature of Allotment annuall 2013 AAA (ind) comprising of debentures.* (Private y with Stable all * Placement) Outlook” by superstructur (2013-14) FITCH es constructed 10 years Publi 8.52% 30,132.21 February February “CRISIL on national from c – payable 5, 2014 5, 2024 AAA/Stable highways deemed Retail annuall ” by date of y CRISIL,“CAR except those allotme Publi 8.27% 47,524.71 February February E AAA” by under Surat- nt c – payable 5, 2014 5, 2024 CARE, “BWR Manor Other annuall AAA with Tollways s y Stable Project, in 15 years Publi 8.75% 1,18,980.7 February February Outlook” by favor of from c – payable 5 5, 2014 5, 2029 BRICKWOR SBICAP K deemed Retail annuall Trustee date of y Company allotme Publi 8.50% 1,73,202.3 February February nt c – payable 3 5, 2014 5, 2029 Limited. Other annuall s y 3. Tax free 10 years from 7.11% 54,900.00 Septemb September AAA by secured deemed date of payable er 18, 18, 2025 CRISIL, AAA Redeemable allotment (Private annuall 2015 by CARE AAA non – Placement) y by India convertible Ratings bonds, in the AAA by ICRA nature of 15 years from 7.28% 3,32,300.0 Septemb September AAA by debentures.* Deemed Date of payable 0 er 18, 18, 2030 CRISIL, AAA ** Allotment annuall 2015 by CARE AAA (2015-16) (Private y by India Placement) Ratings AAA by ICRA 10 years Publi 7.39% 65,576.03 January January AAA by from c – payable 11, 2016 11, 2026 CRISIL, AAA deemed Retail annuall by CARE AAA date of y by India allotme Ratings nt AAA by ICRA 64
Sl. Debenture Tenor/Period of Coupon Amount Date of Redemptio Credit Rating Security No Series Maturity (in lakh Allotmen n Date/ . Rs. ) t Schedule 10 years Publi 7.14% 68,640.24 January January AAA by from c – payable 11, 2016 11, 2026 CRISIL, AAA deemed Other annuall by CARE AAA date of s y by India allotme Ratings nt AAA by ICRA 15 years Publi 7.60% 2,67,526.2 January January AAA by from c – payable 7 11, 2016 11, 2031 CRISIL, AAA deemed Retail annuall by CARE AAA date of y by India allotme Ratings nt AAA by ICRA 15 years Publi 7.35% 5,98,257.4 January January AAA by from c – payable 6 11, 2016 11, 2031 CRISIL, AAA deemed Other annuall by CARE AAA date of s y by India allotme Ratings nt AAA by ICRA 10 years from 7.02% 45,500.00 February February AAA by deemed date of payable 18, 2016 18, 2026 CRISIL, AAA allotment (Private annuall by CARE AAA Placement) y by India Ratings AAA by ICRA 15 years from 7.39% 1,37,300.0 February February AAA by Deemed Date of payable 0 18, 2016 18, 2031 CRISIL, AAA Allotment annuall by CARE AAA (Private y by India Placement) Ratings AAA by ICRA 10 years Publi 7.29% 19,233.40 March 9, March 9, AAA by from c – payable 2016 2026 CRISIL, AAA deemed Retail annuall by CARE AAA date of y by India allotme Ratings nt AAA by ICRA 10 years Publi 7.04% 97,88.07 March 9, March 9, AAA by from c – payable 2016 2026 CRISIL, AAA deemed Other annuall by CARE AAA date of s y by India allotme Ratings nt AAA by ICRA 15 years Publi 7.69% 1,12,766.6 March 9, March 9, AAA by from c – payable 0 2016 2031 CRISIL, AAA deemed Retail annuall by CARE AAA date of y by India allotme Ratings nt AAA by ICRA 15 years Publi 7.39% 1,88,211.9 March 9, March 9, AAA by from c – payable 3 2016 2031 CRISIL, AAA deemed Other annuall by CARE AAA date of s y by India allotme Ratings nt AAA by ICRA ** At premium of Rs. 45.45 Lakh. *** At a premium of Rs. 169.83 Lakh.
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Taxable Bonds
Sl. Debenture Tenor/ Coupon Amount (in Date of Allotment Redemp Credit Rating Security No. Series Period of lakh Rs. ) tion Maturity Date/ Schedul e 1. Taxable 25 years 8.03% 5,00,000.00 August 3, 2016 August AAA by CRISIL, Bonds secured from payabl 3, 2041 AAA by CARE have been Redeemable Deemed e AAA by India secured non – Date of annual Ratings against convertible Allotment ly AAA by ICRA immovabl bonds, in the (Private e Property nature of Placement situated at debentures** ) Ahmedaba 2.o. Taxable 25 years 7.68% 5,00,000.00 September 1, 2016 August AAA by CRISIL, d and secured from payabl 30, 2041 AAA by CARE fixed Redeemable Deemed e AAA by India assets of non – Date of annual Ratings NHAI convertible Allotment ly AAA by ICRA being bonds, in the (Private highway nature of Placement projects debentures** ) comprisin 3. Taxable 5 years 7.17% 5,02,000.00 December 23, Decemb AAA by CRISIL, g of all secured from payabl 2016 er 23, AAA by CARE superstruc Redeemable Deemed e 2021 AAA by India tures non – Date of annual Ratings including convertible Allotment ly AAA by ICRA highway bonds, in the (Private lightings, nature of Placement road debentures** ) barriers 4. Taxable 30 years 7.22% 8,50,000.00 January 24, 2017 January AAA by CRISIL, and secured from payabl 24, 2047 AAA by CARE dividers, Redeemable Deemed e AAA by India culverts, non – Date of annual Ratings bridges, convertible Allotment ly AAA by ICRA flyovers bonds, in the (Private and all nature of Placement other debentures** ) super 5. Taxable 5 years 7.60% 4,02,500.00 March 20, 2017 March AAA by CRISIL, structures secured from payabl 18, 2022 AAA by CARE constructe Redeemable Deemed e AAA by India d on non – Date of annual Ratings national convertible Allotment ly AAA by ICRA highways bonds, in the (Private as nature of Placement entrusted debentures** ) to NHAI 6. Taxable 5 years 7.27% 1,52,500.00 June 06, 2017 June 06, AAA by CRISIL, [except secured from payabl 2022 AAA by CARE those Redeemable Deemed e AAA by India under the non – Date of annual Ratings Surat – convertible Allotment ly AAA by ICRA Manor bonds, in the (Private Tollway nature of Placement Project in debentures** ) favour of 7. Taxable 30 years 7.24% 5,00,000.00 June 16, 2017 June 14, AAA by CRISIL, SBICAP secured from payabl 2047 AAA by CARE Trustee Redeemable Deemed e AAA by India Company non – Date of annual Ratings Limited]. convertible Allotment ly AAA by ICRA bonds, in the (Private nature of Placement debentures** )
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Sl. Debenture Tenor/ Coupon Amount (in Date of Allotment Redemp Credit Rating Security No. Series Period of lakh Rs. ) tion Maturity Date/ Schedul e 8. Taxable 30 years 7.14% 3,50,000.00 July 14, 2017 July 12, AAA by CRISIL, secured from payabl 2047 AAA by CARE Redeemable Deemed e AAA by India non – Date of annual Ratings convertible Allotment ly AAA by ICRA bonds, in the (Private nature of Placement debentures** ) 9. Taxable 15 years 7.38% 5,00,000.00 August 24, 2017 August AAA by CRISIL, secured from payabl 24, 2032 AAA by CARE Redeemable Deemed e AAA by India non – Date of annual Ratings convertible Allotment ly AAA by ICRA bonds, in the (Private nature of Placement debentures** ) 10. Taxable 5 years 7.11% 85,000.00 November 6, 2017 Novem AAA by CRISIL, secured from payabl ber 6, AAA by CARE Redeemable Deemed e 2022 AAA by India non – Date of annual Ratings convertible Allotment ly AAA by ICRA bonds, in the (Private nature of Placement debentures ) 11. Taxable 30 years 8.55% 2,19,500.00 June 28, 2018 June 28, AAA by CRISIL, Bonds secured from payabl 2048 AAA by CARE have been Redeemable Deemed e AAA by India secured non – Date of annual Ratings against convertible Allotment ly AAA by ICRA immovabl bonds, in the (Private e Property nature of Placement situated at debentures ) Ahmedaba 12. Taxable secured 30 years 8.4535 2,06,020.00 August 2,2018 August AAA by CRISIL, d and fixed Redeemable non from % 2, 2048 AAA by CARE AAA assets of –convertible Deemed payable by India Ratings NHAI bonds, in the Date of annuall AAA by ICRA being nature of Allotment y highway debentures (Private projects Placement) comprisin 13. Taxable secured 30 years 8.1905 2,05,520.00 December 21, 2018 Decemb AAA by CRISIL, g of all Redeemable non from % er 21, AAA by CARE AAA –convertible Deemed payable 2048 by India Ratings superstruc bonds, in the Date of annuall AAA by ICRA tures nature of Allotment y including debentures (Private highway Placement) lightings, 14. Taxable secured 10 years 1,67,500.00 January 21, 2019 January AAA by CRISIL, road Redeemable non from 8.37% 21, 2028 AAA by CARE AAA barriers –convertible Deemed payable by India Ratings and bonds, in the Date of annuall AAA by ICRA dividers, nature of Allotment y culverts, debentures (Private bridges, Placement) flyovers 15. Taxable secured 10 years 2,00,000.00 February 05, 2019 February AAA by CRISIL, and all Redeemable non from 8.49% 05, 2029 AAA by CARE AAA –convertible Deemed payable by India Ratings other bonds, in the Date of annuall AAA by ICRA super nature of Allotment y structures debentures (Private constructe Placement) d on
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Sl. Debenture Tenor/ Coupon Amount (in Date of Allotment Redemp Credit Rating Security No. Series Period of lakh Rs. ) tion Maturity Date/ Schedul e 16. Taxable secured 10 years 5,50,000.00 March 28, 2019 March AAA by CRISIL, national Redeemable non from 8.27% 28, 2029 AAA by CARE AAA highways –convertible Deemed payable by India Ratings as bonds, in the Date of annuall AAA by ICRA entrusted nature of Allotment y to NHAI debentures (Private [except Placement) those 17. Taxable secured 30 years 8.179% 2,02,500.00 March 29, 2019 March AAA by CRISIL, Redeemable non from payable 29, 2049 AAA by CARE AAA under the –convertible Deemed annuall by India Ratings Surat – bonds, in the Date of y AAA by ICRA Manor nature of Allotment Tollway debentures (Private Project and Placement) Projects 18. Taxable secured 10 years 8.36% 4,70,900.00 May 20, 2019 May 20, AAA by CRISIL, awarded Redeemable non from payable 2020 AAA by CARE AAA under –convertible Deemed annuall by India Ratings TOT]. bonds, in the Date of y nature of Allotment debentures (Private Placement) 19. Taxable secured 10 years 7.92% 3,42,000.00 June 6, 2019 June 6, AAA by CRISIL, Redeemable non from payable 2029 AAA by CARE AAA –convertible Deemed annuall by India Ratings bonds, in the Date of y nature of Allotment debentures (Private Placement) 20. Taxable secured 10 years 7.80% 3,93,000.00 June 26, 2019 June 26, AAA by CRISIL, Redeemable non from payable 2029 AAA by CARE AAA –convertible Deemed annuall by India Ratings bonds, in the Date of y nature of Allotment debentures (Private Placement) 21 Taxable secured 10 years 7.49% 4,36,500.00 August 1, 2019 August AAA by CRISIL, Redeemable non from payable 1, 2029 AAA by CARE AAA –convertible Deemed annuall by India Ratings bonds, in the Date of y nature of Allotment debentures (Private Placement) 22 Taxable secured 10 years 7.70% 4,60,200.00 September 13, 2019 Septemb AAA by CRISIL, Redeemable non from payable er 13, AAA by CARE AAA –convertible Deemed annuall 2029 by India Ratings bonds, in the Date of y nature of Allotment debentures (Private Placement)
(ii) UNSECURED BORROWINGS
Debenture Series Tenor/ Period of Coupon Amount (in Date of Redemption Credit Rating Maturity lakh Rs. ) Allotment Date/ Schedule Taxable 15 years from 7.64% 5,00,000.00 22.11.2017 22.11.2032 AAA by CRISIL, AAA by CARE unsecured Deemed Date of payable AAA by India Ratings Redeemable non Allotment annually AAA by ICRA –convertible (Private bonds, in the Placement)
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Debenture Series Tenor/ Period of Coupon Amount (in Date of Redemption Credit Rating Maturity lakh Rs. ) Allotment Date/ Schedule nature of debentures
Unsecured loan from State Bank of India Amount (in Lakh Rs.) Name of the Type Loan Interest/Coupon Repayment Facility Amount Bank of Facility Documentation Rate Sanctioned availed State Bank of Term Loan Loan Monthly MCLR Door to door tenor of 10 25,00,000.00 22,00,000.00 India Agreement Rate + 9 bps years (Availability plus dated August moratorium period of 3 02, 2018 years and repayment period of 7 years)
Details of Foreign Currency un-secured loans
National Highways Authority of India has secured loan from ADB vide a Loan Agreement dated October 5, 2000 for an amount of $ 180,000,000. However, the total loan availed is $ 149,749,847.25. The loan is secured by the Government of India vide guarantee agreement dated October 5, 2000. The objective for availing the loan was to remove capacity constraints and improve road safety of critical section of the Western Transport corridor connecting Delhi to Mumbai (Surat- Manor Tollway Project).
Name of the Type Loan Interest/Coupon Rate Repayment Facility/ Amount Outstanding Bank of Documentation Sanctioned/Availed Amount as Facility on September 30, 2019 (in Rs. Lakhs) Asian Term Loan Agreement Based on the cost to the Principal $149,749,847.25 59,702.00 Development Loan dated October 5, bank of such currency Payment Bank 2000 or currencies plus a Half Yearly spread, both as on January 1 reasonably determine and July 1. by the bank from time to time.
Foreign Currency bonds facilities (Unsecured)
National Highways Authority of India has raised an amount of Rs. 3,00,000.00 lakh through Masala Bonds in May 2017.
Debenture Series Tenor/ Period of Maturity Coupon Amount Date of Redemption Credit Rating (in lakh Rs. ) Allotment Date/ Schedule Masala Bond 5 years from Deemed Date of 7.30% 3,00,000.00 May 18, 2017 Bullet repayment Unrated -2021 Allotment On May 18, 2022
Loan from NSSF
Debenture Tenor/ Period Coupon Amount (in Date of Redemption Date/ Credit Rating Series of Maturity lakh Rs. ) Loan Schedule Loan 10 Years 7.70% 10,00,000.00 18.01.2018 Bullet repayment Unrated Payable half yearly On 18.01.2028 Loan 10 Years 7.92% 10,00,000.00 07.03.2018 Bullet repayment Unrated Payable half yearly On 07.03.2028 69
Debenture Tenor/ Period Coupon Amount (in Date of Redemption Date/ Credit Rating Series of Maturity lakh Rs. ) Loan Schedule Loan 10 Years 8.38% 5,00,000.00 07.06.2018 Bullet repayment Unrated Payable half yearly On 07.06.2028 Loan 10 years 8.33% 5,00,000.00 28.09.2018 Bullet repayment Unrated Payable half yearly On 28.09.2028 Loan 10 years 8.11% 5,00,000.00 31.12.2018 Bullet repayment Unrated Payable half yearly On 31.12.2028 Loan 10 years 8.34% 5,00,000.00 11.03.2019 Bullet repayment Unrated Payable half yearly On 11.03.2029
B) TERMS OF ASSETS CHARGED AS SECURITY
Principal terms of issue in brief Details of assets charged as security Debt Facility Tax Free Bonds (10 years) Secured by a legal mortgage over NHAI’s Amount Rs. 6,71,408.12 lacs immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2011-2012 of NHAI (as reflected in the Balance Sheet for Credit Rating “AAA/Stable” by CRISIL, “AAA” by the financial year ended March 31, 2011), being CARE and “AAA (ind) with Stable highway projects comprising of all Outlook” by FITCH superstructure including highway lightings, Coupon Rate 8.20% p.a. road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2021-22 national highways except those under the Surat-Manor Tollway Project entrusted to Bond Trustee SBICAP Trustee Company Limited NHAI
Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s Amount Rs. 3,28,591.88 lac immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2011-2012 of NHAI (as reflected in the Balance Sheet for Credit Rating “AAA/Stable” by CRISIL, “AAA” by the financial year ended March 31, 2011), being CARE and “AAA (ind) with Stable highway projects comprising of all Outlook” by FITCH superstructure including highway lightings, Coupon Rate 8.30% p.a. road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2026-2027 national highways except those under the Surat-Manor Tollway Project entrusted to Bond Trustee SBICAP Trustee Company Limited NHAI
Debt Facility Tax Free Bonds (10 years) Secured by a legal mortgage over NHAI’s Amount Rs. 45,200.00 lacs immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2013-2014 of NHAI (as reflected in the Balance Sheet for Credit Rating “AAA/Stable” by CRISIL, “AAA” by the financial year ended March 31, 2013), being CARE and “and BWR AAA by highway projects comprising of all Brickwork superstructure including highway lightings, Coupon Rate 8.35% p.a. road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2023-24 national highways except those under the Surat-Manor Tollway Project entrusted to Bond Trustee SBICAP Trustee Company Limited NHAI
Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s Amount Rs. 84,960.00 lacs immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2013-2014
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Principal terms of issue in brief Details of assets charged as security Credit Rating “AAA/Stable” by CRISIL, “AAA” by of NHAI (as reflected in the Balance Sheet for CARE and “and BWR AAA by the financial year ended March 31, 2013), being Brickwork highway projects comprising of all Coupon Rate 8.48% p.a. superstructure including highway lightings, road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2028-2029 national highways except those under the Bond Trustee SBICAP Trustee Company Limited Surat-Manor Tollway Project entrusted to NHAI
Debt Facility Tax Free Bonds (10 years) Secured by a legal mortgage over NHAI’s Amount Rs. 77,656.92 lacs immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2013-2014 of NHAI (as reflected in the Balance Sheet for Credit Rating “AAA/Stable” by CRISIL, “AAA” by the financial year ended March 31, 2013), being CARE and “and BWR AAA by highway projects comprising of all Brickwork superstructure including highway lightings, Coupon Rate 8.27% p.a. (others); 8.52% p.a. (retail) road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2023-24 national highways except those under the Surat-Manor Tollway Project entrusted to Bond Trustee SBICAP Trustee Company Limited NHAI
Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s Amount Rs. 2,92,183.08 lacs immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Raised in Financial Year 2013-2014 of NHAI (as reflected in the Balance Sheet for Credit Rating “AAA/Stable” by CRISIL, “AAA” by the financial year ended March 31, 2013), being CARE and “AAA (ind) with Stable highway projects comprising of all Outlook” by FITCH superstructure including highway lightings, Coupon Rate 8.50% p.a. (others); 8.75% p.a. (retail) road barriers and dividers, bridges, culverts Interest Payment Annual and all other super structures constructed on Maturing in Financial Year 2028-2029 national highways except those under the Surat-Manor Tollway Project entrusted to Bond Trustee SBICAP Trustee Company Limited NHAI
Debt Facility Tax Free Bonds (10 years) (Private Secured by a legal mortgage over NHAI’s Placement) immovable property situated at Ahmedabad, Amount Rs. 54,900.00 lacs Gujarat, along with first charge on fixed assets of NHAI, being highway projects comprising of Raised in Financial Year 2015-16 all superstructure including highway lightings, Credit Rating “IND AAA” by IRRPL, “CARE AAA” road barriers and dividers, bridges, culverts by CARE, "[ICRA] AAA” by ICRA and all other super structures constructed on “CRISIL AAA/Stable” by CRISIL national highways except those under the Coupon Rate 7.11% Surat-Manor Tollway Project entrusted to Interest Payment Annual NHAI Maturing in Financial Year 2025-26 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (15 years) (Private Secured by a legal mortgage over NHAI’s Placement) immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Amount Rs. 3,32,300.00 lac of NHAI, being highway projects comprising of all superstructure including highway lightings, Raised in Financial Year 2015-16 71
Principal terms of issue in brief Details of assets charged as security Credit Rating “IND AAA” by IRRPL, “CARE AAA” road barriers and dividers, bridges, culverts by CARE, "[ICRA] AAA” by ICRA and all other super structures constructed on “CRISIL AAA/Stable” by CRISIL national highways except those under the Coupon Rate 7.28% p.a. Surat-Manor Tollway Project entrusted to NHAI Interest Payment Annual Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (10 years) (Public Secured by a legal mortgage over NHAI’s Issue) immovable property situated at Ahmedabad, Amount Retail Rs. 65,576.03 lacs Gujarat, along with first charge on fixed assets Non Retail 68,640.24 lacs of NHAI being highway projects comprising of all superstructure including highway lightings, Raised in Financial Year 2015-2016 road barriers and dividers, bridges, culverts Credit Rating “IND AAA” by IRRPL, “CARE AAA” and all other super structures constructed on by CARE, "[ICRA] AAA” by ICRA national highways except those under the “CRISIL AAA/Stable” by CRISIL Surat-Manor Tollway Project entrusted to Coupon Rate 7.14% p.a. (others); 7.39% p.a. (retail) NHAI Interest Payment Annual Maturing in Financial Year 2025-2026 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s (Public Issue) immovable property situated at Ahmedabad, Amount Retail Rs. 2,67,526.27 lacs Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for Non-retail Rs. 5,98,257.46 lacs the financial year ended March 31, 2013), being Raised in Financial Year 2015-16 highway projects comprising of all Credit Rating IND AAA” by IRRPL, “CARE AAA” superstructure including highway lightings, by CARE, "[ICRA] AAA” by ICRA road barriers and dividers, bridges, culverts “CRISIL AAA/Stable” by CRISIL and all other super structures constructed on Coupon Rate 7.35% p.a. (others); 7.60% p.a. (retail) national highways except those under the Surat-Manor Tollway Project entrusted to Interest Payment Annual NHAI Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (10 years) (Private Secured by a legal mortgage over NHAI’s Placement) immovable property situated at Ahmedabad, Amount Rs. 4,55,00.00 lacs Gujarat, along with first charge on fixed assets of NHAI, being highway projects comprising of Raised in Financial Year 2015-16 all superstructure including highway lightings, Credit Rating ““IND AAA” by IRRPL, “CARE road barriers and dividers, bridges, culverts AAA” by CARE, "[ICRA] AAA” by and all other super structures constructed on ICRA “CRISIL AAA/Stable” by national highways except those under the CRISIL Surat-Manor Tollway Project entrusted to Coupon Rate 7.02% NHAI Interest Payment Annual Maturing in Financial Year 2025-26 Bond Trustee SBICAP Trustee Company Limited
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Principal terms of issue in brief Details of assets charged as security Debt Facility Tax Free Bonds (15 years) (Private Secured by a legal mortgage over NHAI’s Placement) immovable property situated at Ahmedabad, Gujarat, along with first charge on fixed assets Amount Rs. 1,37,300.00 lacs of NHAI, being highway projects comprising of all superstructure including highway lightings, Raised in Financial Year 2015-16 road barriers and dividers, bridges, culverts Credit Rating “IND AAA” by IRRPL, “CARE AAA” and all other super structures constructed on by CARE, "[ICRA] AAA” by ICRA national highways except those under the “CRISIL AAA/Stable” by CRISIL Surat-Manor Tollway Project entrusted to Coupon Rate 7.39% p.a. NHAI Interest Payment Annual Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (10 years) (Public Secured by a legal mortgage over NHAI’s Issue) immovable property situated at Ahmedabad, Amount Retail Rs. 19,233.40 lacs Gujarat, along with first charge on fixed assets Non Retail 9,788.07 lacs of NHAI being highway projects comprising of all superstructure including highway lightings, Raised in Financial Year 2015-2016 road barriers and dividers, bridges, culverts Credit Rating “IND AAA” by IRRPL, “CARE AAA” and all other super structures constructed on by CARE, "[ICRA] AAA” by ICRA national highways except those under the “CRISIL AAA/Stable” by CRISIL Surat-Manor Tollway Project entrusted to Coupon Rate 7.04% p.a. (others); 7.29% p.a. (retail) NHAI Interest Payment Annual Maturing in Financial Year 2025-2026 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Tax Free Bonds (15 years) Secured by a legal mortgage over NHAI’s (Public Issue) immovable property situated at Ahmedabad, Amount Retail Rs. 1,12,766.60 lac Gujarat, along with first charge on fixed assets of NHAI (as reflected in the Balance Sheet for Non-retail Rs. 1,88,211.93 lac the financial year ended March 31, 2013), being Raised in Financial Year 2015-16 highway projects comprising of all Credit Rating IND AAA” by IRRPL, “CARE AAA” superstructure including highway lightings, by CARE, "[ICRA] AAA” by ICRA road barriers and dividers, bridges, culverts “CRISIL AAA/Stable” by CRISIL and all other super structures constructed on Coupon Rate 7.39% p.a. (others); 7.69% p.a. (retail) national highways except those under the Surat-Manor Tollway Project entrusted to Interest Payment Annual NHAI Maturing in Financial Year 2030-31 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series XVII Secured by a legal mortgage over NHAI’s Amount Rs. 4,49,508.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 6.00% p.a. till 30-11-2016 other instruments 5.25% p.a. w.e.f 01-12-2016 Interest Payment Annual Maturing in Financial Year 2019-2020 Bond Trustee SBICAP Trustee Company Limited
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Principal terms of issue in brief Details of assets charged as security
Debt Facility Bond Series XVIII Amount Rs. 6,65,741.30 lacs Secured by a legal mortgage over NHAI’s Raised in Financial Year 2017-2018 immovable property located at Ahmedabad, Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Gujarat ranking pari-passu with the Coupon Rate 5.25% p.a. mortgage(s) created and/ or to be created on Interest Payment Annual the said property for securing the bonds or any other instruments Maturing in Financial Year 2020-2021 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series XIX Amount Rs. 4,70,669 lacs Secured by a legal mortgage over NHAI’s Raised in Financial Year 2018-2019 immovable property located at Ahmedabad, Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL Gujarat ranking pari-passu with the Coupon Rate 5.75% p.a. mortgage(s) created and/ or to be created on Interest Payment Annual the said property for securing the bonds or any other instruments Maturing in Financial Year 2023-2024 Bond Trustee Vistra ITCL India Ltd
Debt Facility Bond Series XX Secured by a legal mortgage over NHAI’s Amount 1,00,305.00 lacs* immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2019-2020 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 5.75% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2024-2025 Bond Trustee Beacon Trusteeship Limited *Allotment made till June 30, 2019
Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s Amount Rs. 5,00000.00 lac immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 8.03% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2041-42 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s Amount Rs. 5,00,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.68% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2041-42 Bond Trustee SBICAP Trustee Company Limited
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Principal terms of issue in brief Details of assets charged as security
Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s Amount Rs. 5,02,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.17% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2021-2022 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s Amount Rs. 8,50,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.22% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2046-2047 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series V Secured by a legal mortgage over NHAI’s Amount Rs. 4,02,500.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2016-2017 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.60% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2021-2022 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series I Secured by a legal mortgage over NHAI’s Amount Rs. 1,52,500.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2017-2018 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.27% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2022-2023 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series II Secured by a legal mortgage over NHAI’s Amount Rs. 5,00,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2017-2018 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.24% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2047-2048 Bond Trustee SBICAP Trustee Company Limited
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Principal terms of issue in brief Details of assets charged as security Debt Facility Bond Series III Secured by a legal mortgage over NHAI’s Amount Rs. 3,50,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2017-2018 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.14% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2047-2048 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series IV Secured by a legal mortgage over NHAI’s Amount Rs. 5,00,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2017-2018 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.38% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2032-2033 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Bond Series V Secured by a legal mortgage over NHAI’s Amount Rs. 85,000.00 lacs immovable property located at Ahmedabad, Gujarat ranking pari-passu with the Raised in Financial Year 2017-2018 mortgage(s) created and/ or to be created on Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL the said property for securing the bonds or any Coupon Rate 7.11% p.a. other instruments Interest Payment Annual Maturing in Financial Year 2022-2023 Bond Trustee SBICAP Trustee Company Limited
Debt Facility Series-I 2018-19 Bonds have been secured against immovable Amount Rs. 2,19,500.00 lacs Property situated at Ahmedabad and fixed assets of NHAI being highway projects Raised in Financial Year 2018-19 comprising of all superstructures including Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL highway lightings, road barriers and dividers, Coupon Rate 8.55% p.a. culverts, bridges, flyovers and all other super Interest Payment Annual structures constructed on national highways as Maturing in Financial Year 2048-49 entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects Bond Trustee VISTRA (ITCL) India Limited awarded under ToT.
Debt Facility Series-II 2018-19 Bonds have been secured against immovable Amount Rs. 206020.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2018-19 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL comprising of all superstructures including Coupon Rate 8.4535% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2048-49 structures constructed on national highways as Bond Trustee VISTRA (ITCL) India Limited entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-III 2018-19
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Principal terms of issue in brief Details of assets charged as security Amount Rs. 205520.00 lacs Bonds have been secured against immovable Raised in Financial Year 2018-19 Property situated at Ahmedabad and fixed Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL assets of NHAI being highway projects Coupon Rate 8.1905% p.a. comprising of all superstructures including Interest Payment Annual highway lightings, road barriers and dividers, Maturing in Financial Year 2048-49 culverts, bridges, flyovers and all other super Bond Trustee VISTRA (ITCL) India Limited structures constructed on national highways as entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-IV 2018-19 Bonds have been secured against immovable Amount Rs. 167500.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2018-19 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL comprising of all superstructures including Coupon Rate 8.37% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2028-29 structures constructed on national highways as Bond Trustee VISTRA (ITCL) India Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-V 2018-19 Bonds have been secured against immovable Amount Rs. 200000.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2018-19 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL comprising of all superstructures including Coupon Rate 8.49% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2028-29 structures constructed on national highways as Bond Trustee VISTRA (ITCL) India Limited entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-VI 2018-19 Bonds have been secured against immovable Amount Rs. 550000.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2018-19 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL comprising of all superstructures including Coupon Rate 8.27% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2028-29 structures constructed on national highways as Bond Trustee VISTRA (ITCL) India Limited entrusted to NHAI[except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-VII 2018-19 Bonds have been secured against immovable Amount Rs. 202500.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2018-19 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, ICRA, IRRPL comprising of all superstructures including Coupon Rate 8.179% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2048-49 structures constructed on national highways as Bond Trustee VISTRA (ITCL) India Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
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Principal terms of issue in brief Details of assets charged as security Debt Facility Series-I 2019-20 Bonds have been secured against immovable Amount Rs. 470900.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2019-20 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including Coupon Rate 8.36% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2029-30 structures constructed on national highways as Bond Trustee Beacon Trusteeship Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-II 2019-20 Bonds have been secured against immovable Amount Rs. 342000.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2019-20 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including Coupon Rate 7.92% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2029-30 structures constructed on national highways as Bond Trustee Beacon Trusteeship Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-III 2019-20 Bonds have been secured against immovable Amount Rs. 393000.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2019-20 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including Coupon Rate 7.80% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2029-30 structures constructed on national highways as Bond Trustee Beacon Trusteeship Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-IV 2019-20 Bonds have been secured against immovable Amount Rs. 436500.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2019-20 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including Coupon Rate 7.49% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2029-30 structures constructed on national highways as Bond Trustee Beacon Trusteeship Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
Debt Facility Series-V 2019-20 Bonds have been secured against immovable Amount Rs. 460200.00 lacs Property situated at Ahmedabad and fixed Raised in Financial Year 2019-20 assets of NHAI being highway projects Credit Rating AAA by CRISIL, CARE, IRRPL comprising of all superstructures including Coupon Rate 7.70% p.a. highway lightings, road barriers and dividers, Interest Payment Annual culverts, bridges, flyovers and all other super Maturing in Financial Year 2029-30 structures constructed on national highways as Bond Trustee Beacon Trusteeship Limited entrusted to NHAI [except those under the Surat – Manor Tollway Project and Projects awarded under ToT.
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D) TOP 10 BONDHOLDERS OF THE ISSUER AS ON DECEMBER 31, 2019:
S. NO. NAME* VALUE (in Rs. Crores)* 1 LIFE INSURANCE CORPORATION OF INDIA 28,370.00 2 CBT-EPF 34,270.00 3 NPS TRUST 6,065.60 4 THE HONGKONG AND SHANGHAI BANKING CORP. LTD. 1,984.90 5 IDFC BOND FUND 1,697.00 6 AXIS BANK LIMITED 1612.99 7 WIPRO LIMITED 1576.42 8 STATE BANK OF INDIA 1,496.08 9 SBI LIFE INSURANCE CO.LTD 1,455.00 10 HDFC TRUSTEE COMPANY. LTD. 1,355.00
*The investments by above entities through their sub-schemes with same PAN have been clubbed
9. AMOUNT OF CORPORATE GUARANTEES ISSUED BY THE ISSUER IN FAVOUR OF VARIOUS COUNTER PARTIES INCLUDING ITS SPVs AND ASSOCIATE COMPANY
The Issuer has not issued, in any form, any corporate guarantee in favour of any counter party including its SPVs and associate company.
10. COMMERCIAL PAPER ISSUED BY THE ISSUER (as on December 31, 2019)
The Issuer has not issued any Commercial Paper till the date of this Series-IX IM.
11. OTHER BORROWINGS (INCLUDING HYBRID DEBT LIKE FOREIGN CURRENCY CONVERTIBLE BONDS (“FCCBS”), OPTIONALLY CONVERTIBLE BONDS/ DEBENTURES/PREFERENCE SHARES) (AS ON DECEMBER 31, 2019)
The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Bonds/ Debentures/ Preference Shares etc.
12. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES, DEFAULT(S) AND/OR DELAY(S) IN PAYMENTS OF INTEREST AND PRINCIPAL OF ANY KIND OF TERM LOANS, DEBT SECURITIES AND OTHER FINANCIAL INDEBTEDNESS INCLUDING CORPORATE GUARANTEE ISSUED BY THE ISSUER, IN THE PAST 5 YEARS
a. The main constituents of the Issuer’s borrowings are generally in the form of loans from banks and financial institutions, assistance from multilateral and bilateral financing agencies, bonds, debentures etc.
b. The Issuer has been servicing all its principal and interest liabilities on time and there has been no instance of delay or default since inception.
c. The Issuer has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of roll over against any of its borrowings in the past.
d. The Issuer has not issued, in any form, any corporate guarantee in favour of any counter party including its SPVs and associate company.
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13. OUTSTANDING BORROWINGS/ DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH, WHETHER IN WHOLE OR PART, AT A PREMIUM OR DISCOUNT, OR IN PURSUANCE OF AN OPTION
NHAI issued bonds at a premium of Rs. 45,45,656.00 for private placement of tax free bonds during Financial Year 2013-14. Further, NHAI has issued bonds at a premium of Rs. 7,03,22,000.00 for private placement of tax free bonds during Financial Year 2015-16.
As on December 31, 2019, NHAI has no outstanding borrowings taken/debt securities issued for consideration other than cash, whether in whole or part; at a premium or discount; or in pursuance of an option except as mentioned.
The Issuer hereby confirms that apart from above there has been no material event, development or change having implications on the financials/ credit quality of the Issuer (e.g. any material regulatory proceedings against the Issuer/ promoters of the Issuer, tax litigations resulting in material liabilities, corporate restructuring event etc) at the time of Issue which may affect the Issue or the investor’s decision to invest/ continue to invest in the debt securities of the Issuer.
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XI. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE
The Issuer hereby confirms that, except for any information disclosed in this Series- IX IM, there has been no material event, development or change having implications on the financial condition or credit quality of the Issuer at the time of issue of the Notes which may affect the issue of the Notes or an investor's decision to invest or continue to invest in the debt securities of the Issuer.
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XII. SUMMARY TERM SHEET
Issuer National Highways Authority of India (“NHAI”/ the “Authority”/ the “Issuer”) Issue Size Rs. 500 Crore with Green shoe option up to Rs. 4,500 Crore aggregating to Rs. 5,000 Crore Base issue Size Rs. 500 Crore Green Shoe Option Rs. 4,500 Crore Issue Subscribed Rs. 5,000 Crore Security name NHAI Taxable Bonds 2019-20 Series -IX Objects of the Issue To part finance various projects being implemented by NHAI under the NHDP/Bharatmala Pariyojana and other national highway projects as approved by the Government of India Instrument Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures Issuance Mode In Demat mode only Trading Mode In Demat mode only Credit Rating “CRISIL AAA/Stable” by CRISIL, “IND AAA/Stable” by IRRPL and “CARE AAA/Stable” by CARE Seniority Secured, Senior and Unsubordinated Mode of Issue Private Placement under electronic book mechanism of BSE under SEBI Circular ref SEBI/HO/DDHS/CIR/P/2018/05 dated January 5, 2018 and SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 read with “Operational Guidelines for issuance of Securities on Private Placement basis through an Electronic Book Mechanism” issued by BSE Security Mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and all other super structures constructed on national highways except those under the Surat-Manor Tollway Project entrusted to NHAI and projects awarded under TOTs with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect.
The Issuer states that will execute the necessary Bond/ Debenture Trust Deed within the timelines prescribed under the SEBI Debt Regulations and will be submit the same with BSE within five working days of execution of the same for uploading on its website. The creation of such security shall be sufficient compliance of the Issuer’s obligation to create security.
As per Securities And Exchange Board Of India (Listing Obligations And Disclosure Requirements) (Second Amendment) Regulations, 2019, where an issuer fails to execute the trust deed within the period specified in the sub- regulation (1), without prejudice to any liability arising on account of violation of the provisions of the Act and these Regulations, the issuer shall also pay interest of at least two percent per annum to the debenture holder, over and above the agreed coupon rate, till the execution of the trust deed. Eligible Investors All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue.
All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue. 82
Bond Series NHAI Taxable Bonds 19-20 Series-IX Face Value Rs. 10 lacs per Bond Minimum bid size 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and in multiple of 1 and in multiples Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each thereafter thereafter Issue Price At par Redemption At par (Rs. 10 lacs) per Bond Amount Minimum 1 Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each and in multiple of 1 Application Debenture of Rs. 10,00,000 (Rupees Ten Lakhs) each thereafter Tenor 15 years from the Deemed Date of Allotment Put Option Not applicable Put Option Price Not applicable Put Option Date Not applicable Put Notification Time Not applicable Call Option Not applicable Call Option Price Not applicable Call Option Date Not applicable Call Notification Not applicable Time Redemption/ 15 years from Deemed Date of Allotment i.e. February 24, 2020 Maturity Coupon Rate 7.27% p.a. Step Up/ Step Not applicable Down Coupon Rate Coupon Payment Annual Frequency Coupon Payment First interest payment on February 24, 2021 and thereafter annually every year Dates Coupon Type Fixed Coupon Reset Not applicable Process Day Count Basis Actual/ Actual Interest shall be computed on an “actual/actual basis”. In case of a leap year, if February 29 falls during the tenor of a security, then the number of days shall be reckoned as 366 days (Actual/Actual day count convention) for a whole one year period, irrespective of whether the interest is payable annually, half yearly, quarterly or monthly etc. It is thus emphasized that for a half yearly interest payment, 366 days would be reckoned twice as the denominator; for quarterly interest, four times and for monthly interest payment, twelve times. Interest on Interest at the respective Coupon Rate (subject to deduction of income tax under the Application Money provisions of the Income Tax Act, 1961, or any other statutory modification or re- enactment thereof, as applicable) will be paid to the applicants on the application money for the Bonds for the period starting from and including the date of realization of application money in Issuer’s Bank Account up to one day prior to the Deemed Date of Allotment Listing Proposed on the Wholesale Debt Market (WDM) segment of BSE Limited (“BSE”) Trustees Beacon Trusteeship Limited Depository National Securities Depository Limited and Central Depository Services (India) Limited Registrars Bigshare Services Private Limited
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Settlement Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism Business Day/ Working Days shall be all days on which commercial banks are open for business Working Day in the city of Delhi. Further, Sundays, have also been considered as non-Business Convention Days. We have not considered the effect of public holidays as it is difficult to ascertain for future dates. If any of date(s) defined in the Series-IX IM, except the Deemed Date of Allotment, the next working day shall be considered as the effective date(s) in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016. Record Date 15 days prior to each Coupon Payment Date and Redemption Date If the interest payment date falls on a holiday, the payment may be made on the Effect of holidays following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.
If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. In the event the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Day will be considered as the Record date. Transaction The Issuer has executed/ shall execute the documents including but not limited Documents to the following in connection with the Issue: 1. Letter appointing Trustees to the Bondholders; 2. Bond/ Debenture Trust Deed; 3. Rating letter from CRISIL; 4. Rating letter from IRRPL; 5. Rating letter from CARE; 6. Tripartite Agreement between the Issuer; Registrar and NSDL for issue of Bonds in dematerialized form; 7. Tripartite Agreement between the Issuer, Registrar and CDSL for issue of Bonds in dematerialized form; 8. Letter appointing Registrar; 9. Application made to BSE for seeking its in-principle approval for listing of Bonds; 10. Trustee Consent Letter; and 11. Board Resolution authorizing issue of Bonds. Conditions The subscription from investors shall be accepted for allocation and allotment by precedent to the Issuer subject to the following: subscription of 1. Rating letters from the aforesaid rating agencies not being more than one Bonds month old from the issue opening date; 2. Letter from the Trustees conveying their consent to act as Trustees for the Bondholder(s); 3. Application to BSE for seeking its in-principle approval for listing of Bonds. Conditions The Issuer shall ensure that the following documents are executed/ activities are subsequent to completed as per time frame mentioned elsewhere in this Series-IX IM: subscription of 1. Credit of demat account(s) of the allottee(s) by number of Bonds allotted Bonds within 1 working days from Bid Closing date; 2. Making listing application to BSE within 15 days from the Deemed Date of Allotment of Bonds and seeking listing permission within 20 days from the Deemed Date of Allotment of Bonds in pursuance of SEBI Debt Regulations.
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In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders. Besides, the Issuer shall perform all activities, whether mandatory or otherwise, as mentioned elsewhere in this Series-IX IM. 3. Execution of bond trust deed already executed, as explained herein above. Future Borrowings As long as the Issuer maintains the stipulated security cover in respect NCD’s, the and Automatic Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in Approvals to the whatever form and also issue Debentures / Notes / other securities in any manner Issuer and to change its capital structure without the consent of Debenture holders/Debenture Trustee.
Further, the Issuer shall not be required to obtain debenture holders/ debenture trustee consent for creating pari-passu charge on the assets given as a security for further borrowings till the time stipulated security cover is maintained. In case, pari-passu letter for any charge creation is requested by the Issuer, Debenture Trustee shall be empowered to issue the same without seeking consent from the Debenture holders, as long as the Issuer satisfies the above requirement of minimum security cover maintenance. Events of Default If the Issuer commits a default in making payment of any instalment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an “Event of Default” by the Issuer. In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period. Remedies Upon the occurrence of any of the Events of Default, the Trustees shall on instructions from majority Bondholder(s), declare the amounts outstanding to be due and payable forthwith and the security created under the security documents shall become enforceable, and the Trustees shall have the right to enforce any security created pursuant to the security documents towards repayment of the amounts outstanding and/or exercise such other rights as the Trustees may deem fit under the applicable laws. Cross Default Not Applicable Role and The Trustees shall protect the interest of the Bondholders in the event of default Responsibilities of by the Issuer in regard to timely payment of interest and repayment of principal Trustees and shall take necessary action at the cost of the Issuer. No Bondholder shall be entitled to proceed directly against the Issuer unless the Trustees, having become so bound to proceed, fail to do so. The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bond/ Debenture Trusteeship Agreement, the Bond/ Debenture Trust Deed, Offer Letter Document and all other related transaction documents, with due care, diligence and loyalty.
The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds.
The Issuer shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial
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information such as Statement of Profit & Loss, Balance Sheet and Cash Flow Statement and auditor qualifications, if any, to the Trustees within the timelines as mentioned in Simplified Listing Agreement issued by SEBI vide circular No. SEBI/IMD/BOND/1/2009/11/05 dated May 11, 2009 as amended. Besides, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Bondholder(s) within two working days of their specific request. Governing Law and The Bonds are governed by and shall be construed in accordance with the existing Jurisdiction laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India Additional 1. Security Creation: The Issuer states that it will execute the necessary Covenants documents for creation of the charge, including the Debenture/ Bond Trust Deed and will be submitting the same with BSE within five working days of execution of the same for uploading on its website.
2. Default in Payment: In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.
3. Listing: The Issuer shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders. Mode of As per SEBI circular dated January 5, 2018 and August 16, 2018 and operational Subscription guidelines of BSE, as amended Issue/Bid Opening 20.02.2020 Date Issue/Bid Closing 20.02.2020 Date Pay-in Date 24.02.2020 Date of Allotment 24.02.2020 Manner of Bidding Closed Book Mode of Uniform Yield Allotment/Allocati on option Mode of Settlement Through clearing corporation of BSE
DEBT EQUITY RATIO
*Debt Equity Ratio as on September 30, 2019 is 0.97 **Projected debt capital ratio post issue is 0.99
*Note: NHAI does not have any share capital
** 1. NHAI Taxable Bonds 2019-20 Series -IX Private Placement of Taxable Secured Non-Convertible Bonds in the nature of Debentures of Face Value of Rs. 10 Lakhs each for an amount of Rs. 500 Crores and Green Shoe Option of Rs. 4,500 Crores aggregating to Rs. 5,000 Crores. Issue subscribed for an amount of Rs.5,000 crore. 2. Post issue numbers have been calculated after increasing the debt by Rs. 5,000 Crores (after adding the subscribed issue) but no corresponding change has been made in capital.
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XIII. TERMS OF OFFER
(DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGE WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)
Series-IX IM FOR PRIVATE PLACEMENT OF SECURED, NONCONVERTIBLE, NON- CUMULATIVE, REDEEMABLE, TAXABLE BONDS IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKHS EACH AT PAR AGGREGATING TO TOTAL ISSUE SIZE NOT EXCEEDING RS. 5,000 CRORE WITH A BASE ISSUE SIZE OF RS. 500 CRORE AND AN GREEN SHOE OPTION TO RETAIN OVERSUBSCRIPTION UPTO RS. 4,500 CRORE BY NATIONAL HIGHWAYS AUTHORITY OF INDIA (“NHAI” OR THE “ISSUER” OR THE “AUTHORITY”) BY WAY OF PRIVATE PLACEMENT.
1. ISSUE SIZE AND SPECIFICATIONS
National Highways Authority of India (“NHAI” or the “Issuer” or the “Authority”) to raise Rs. 500 Crore with green shoe option to Rs. 4,500 Crore aggregating to Rs. 5,000 Crores through issue of Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures (“Bonds”) of face value of Rs. 10.00 lacs each under this Series-IX IM.
All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable and as amended from time to time.
2. ELIGIBILITY TO COME OUT WITH THE ISSUE
The Issuer or the person in control of the Issuer, or its promoter, has not been restrained or prohibited or debarred by SEBI/any other Government authority from accessing the securities market or dealing in securities and such direction or order is in force.
3. REGISTRATION AND GOVERNMENT APPROVALS
NHAI can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by NHAI to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.
4. AUTHORITY FOR THE ISSUE
The present Issue is being made pursuant to announcement in Union Budget, NHAI Act and resolution passed by the Members of the Board of NHAI on February 21, 2019, approving the Issue and delegation provided thereunder.
5. OBJECTS OF THE ISSUE
To part finance various projects being implemented by NHAI under the NHDP/Bharatmala Pariyojana and other national highway projects as approved by the Government of India.
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Further, in accordance with the SEBI Debt Regulations, NHAI shall not utilize the proceeds of the Issue for providing loans to or acquisition of shares of any person who is part of the same group or who is under the same management. Further, NHAI is a statutory authority and, as such, it does not have any identifiable group companies or companies under the same management though it does have shareholding interest in certain Special PurposeVehicles which are engaged in area specific development of port roads.
6. UTILISATION OF ISSUE PROCEEDS
The funds being raised by the Issuer through present issue of Bonds are not meant for financing any particular project. In terms of the SEBI Debt Regulations, there is no requirement for appointment of a monitoring agency in relation to the use of proceeds of the Issue. Members of the Authority shall monitor the utilisation of the proceeds of the Issue. NHAI shall disclose in its financial statements, the utilization of the proceeds of the issue under a separate head along with any details in relation to all such proceeds of the issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue. NHAI shall utilize the proceeds of the issue only upon the execution of the documents for creation of security as stated in this Series-IX IM and upon the listing of the Bonds. The objects of NHAI as specified in NHAI Act permits it to undertake its existing activities as well as the activities for which the funds are being raised through the Issue.
NHAI undertakes that proceeds of the present issue shall not be used for any purpose which may be in contravention of the regulations/ guidelines/ norms issued by the RBI/ SEBI/ RoC/ Stock Exchange(s).
7. MINIMUM SUBSCRIPTION
In terms of the SEBI Debt Regulations, the Issuer may decide the amount of minimum subscription which it seeks to raise by issue of Bonds and disclose the same in the Series-IX IM. The Issuer has decided not to stipulate any minimum subscription for the present Issue and therefore the Issuer shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.
8. UNDERWRITING
The present Issue of Bonds is not underwritten.
9. NATURE OF BONDS
The Bonds are to be issued in the form of Taxable Secured Redeemable Non-Convertible Bonds in the nature of Debentures.
10. FACE VALUE
Each Bond has a face value of Rs. 10 lacs. The Bonds are redeemable at par i.e. for Rs. 10 lacs.
11. SECURITY
The Bonds has been secured by way of mortgage over the property of NHAI situated at Ahmedabad along with fixed assets of NHAI, being highway projects comprising of all superstructures including highway lightings, road barriers and dividers, bridges, culverts and 88
all other super structures constructed on national highways except those under the Surat- Manor Tollway Project entrusted to NHAI and projects awarded under ToT with a minimum security cover of one time of the aggregate face value amount of Bonds outstanding at all times. Such security creation requires prior approval and authorization by the Government of India as owner of the land. The No-Objection Certificate has been received by the NHAI from the Government of India in this respect.
Security document will be executed in respect of the proposed Bonds Issue.
13. DEEMED DATE OF ALLOTMENT
All benefits under the Bonds including payment of interest will accrue to the Bondholders from and including date of allotment being February 24, 2020, which shall be the Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investors from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Issuer reserves the right to keep multiple allotment date(s)/ deemed date(s) of allotment at its sole and absolute discretion without any notice. In case if the issue closing date/ pay in dates is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-pond/ postponed) by the Issuer at its sole and absolute discretion.
14. LETTER(S) OF ALLOTMENT/ BOND CERTIFICATE(S)/ REFUND ORDER(S)/ ISSUE OF LETTER(S) OF ALLOTMENT
The beneficiary account of the investor(s) with National Securities Depository Limited (NSDL)/ Central Depository Services (India) Limited (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account will be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.
15. ISSUE OF BOND CERTIFICATE(S)
The initial credit in the account willbe akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to a Bond Certificate.However, in case , if all formalities are not completed the same will be akin to letter of allotment , which on completion of the all statutory formalities, such credit will be akin to a Bond Certificate. The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules notified in respect thereof. The Bonds shall be allotted in dematerialized form only.
16. DEPOSITORY ARRANGEMENTS
The Issuer has appointed Bigshare Services Private Limited. (Address: 1st Floor, Bharat Tin Works Building Opp. Vasant Oasis, Makwana Road Marol, Andheri (E), Mumbai-400059) as theRegistrar (“Registrar”) for the present Bond Issue. The Issuer has entered into necessary depository arrangements with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for dematerialization of the Bonds offered under the present Issue, in accordance with the Depositories Act, 1996 and regulations made thereunder. In this context, the Issuer has signed two tripartite agreements as under:
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Tripartite Agreement between the Issuer, National Securities Depository Limited (“NSDL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.
Tripartite Agreement between the Issuer, Central Depository Services (India) Limited (“CDSL”) and the Registrar for dematerialization of the Bonds offered under the present Issue.
Investors can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time.
17. PROCEDURE FOR APPLYING FOR DEMAT FACILITY
a. Applicant(s) should have/ open a Beneficiary Account with any Depository Participant of NSDL or CDSL.
b. The applicant(s) must specify their beneficiary account number and depository participants ID in the relevant columns of the Application Form.
c. If incomplete/incorrect beneficiary account details are given in the Application Form which does not match with the details in the depository system, the allotment of Bonds shall be held in abeyance till such time satisfactory demat account details are provided by the applicant.
d. The Bonds shall be directly credited to the Beneficiary Account as given in the Application Form and after due verification, allotment advice/refund order, if any, would be sent directly to the applicant by the Registrars to the Issue but the confirmation of the credit of the Bonds to the applicant’s Depository Account will be provided to the applicant by the Depository Participant of the applicant.
e. Interest or other benefits with respect to the Bonds would be paid to those bondholders whose names appear on the list of beneficial owners given by the depositories to the Issuer as on the Record Date. In case, the beneficial owner is not identified by the depository on the Record Date due to any reason whatsoever, the Issuer shall keep in abeyance the payment of interest or other benefits, till such time the beneficial owner is identified by the depository and intimated to the Issuer. On receiving such intimation, the Issuer shall pay the interest or other benefits to the beneficiaries identified, within a period of 15 days from the date of receiving such intimation.
f. Applicants may please note that the Bonds shall be allotted and traded on the stock exchange(s) only in dematerialized form.
18. FICTITIOUS APPLICATIONS
Any person who makes, in fictitious name, any application to a body corporate for acquiring, or subscribing to, the Bonds, or otherwise induced a body corporate to allot, register any transfer of Bonds therein to them or any other person in a fictitious name, shall be punishable as per provisions of extant laws.
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19. MARKET LOT
The market lot will be one Bond (“Market Lot”). Since the Bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.
20. TRADING OF BONDS
The marketable lot for the purpose of trading of Bonds shall be 1 (one) Bond of face value of Rs.10 lacs each. Trading of Bonds would be permitted in demat mode only in standard denomination of Rs.10 lacs and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be reported on a recognized stock exchange having a nationwide trading terminal or such other platform as may be specified by SEBI.
21. MODE OF TRANSFER OF BONDS
The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Issuer.
22. BASIS OF ALLOCATION / ALLOTMENT
Allotment to the bidders shall be done on yield priority basis in the following manner as per SEBI circular dated January 5, 2018 and August 16, 2018 and operational guidelines of BSE:
a) All the bids shall be arranged in the ascending order of the yields, and a cut-off yield shall be determined.
b) All the bids below the cut-off yield shall be accepted and full allotment should be made to such bidders.
c) For all the bids received at cut-off yield, allotment shall be made on pro-rata basis.
23. COMMON FORM OF TRANSFER
The Issuer undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Series-IX IM.
24. INTEREST ON APPLICATION MONEY
a. In case of change in Deemed Date of Allotment and in respect of investors who get allotment in the Bonds Issue , interest on application money shall be paid at the coupon rate applicable for bond series (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) from the date of receipt of application money in NHAI’s account 91
till one day prior to the date of allotment on the aggregate face value amount of Bonds The interest on Application Money shall be computed as per “Actual/Actual” day count convention. The payment shall be made only through electronic mode. However, in case of rejection of electronic mode, due to incomplete / in correct detail provided by applicant payment may be made through cheque /demand draft. The cheque /demand draft for interest on application money shall be dispatched by the Issuer within 15 days from the Deemed Date of Allotment by registered post to the sole/ first applicant, at the sole risk of the applicant.
b. No interest on Application Money will be paid in respect of applications which are rejected due to any reason.
25. INTEREST ON THE BONDS
The face value of the Bonds outstanding shall carry interest at the coupon rate from Deemed Date of Allotment and the coupon rate & frequency of payment (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) are mentioned at summary term sheet.
The interest payment shall be made through electronic mode to the bondholders whose names appear on the list of beneficial owners given by the depository participant to R&TAas on the record date fixed by Issuer in the bank account which is linked to the demat of the bondholder. However, in absence of complete bank details i.e. correct/updated bank account number, IFSC/RTGS code /NEFTcode etc., issuer shall be required to make payment through cheques / DDs on the due date at the sole risk of the bondholders. Interest or other benefits with respect to the Bonds would be paid to those Bondholders whose names appear on the list of beneficial owners given by the depository participant to R&TA as on the Record Date.
26. COMPUTATION OF INTEREST
Interest for each of the interest periods shall be computed as per Actual/ Actual day count convention on the face value amount of Bonds outstanding at the respective Coupon Rate rounded off to the nearest Rupee. Where the interest period (start date to end date) includes February 29, interest shall be computed on 366 days-a-year basis, on the face value amount of Bonds outstanding.
27. RECORD DATE
The ‘Record Date’ for the Bonds shall be 15 days prior to each Coupon Payment Date and Redemption Date. In case of redemption of Bonds, the trading in the Bonds shall remain suspended between the Record Date and the Redemption Date. Interest payment and principal repayment shall be made to the person whose name appears as beneficiary with the Depositories as on Record Date. In the event of the Issuer not receiving any notice of transfer at least 15 days before the respective Coupon Payment Date and Redemption Date, the transferees for the Bonds shall not have any claim against the Issuer in respect of amount so paid to the registered Bondholders.
28. DEDUCTION OF TAX AT SOURCE
Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re- enactment thereof will be deducted at source out of interest payable on Bonds.
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Tax exemption certificate/ declaration of non-deduction of tax at source, if applicable, on interest on application money should be submitted along with the Application Form. Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s). In case of tax deducted at source, the Issuer will issue the TDS certificate to the investors.
29. PUT & CALL OPTION
There is no call and put option.
30. REDEMPTION
The face value of the Bonds shall be redeemed at par, on the respective Redemption Dates. The Bonds will not carry any obligation, for interest or otherwise, after the Redemption Date. The Bonds shall be taken as discharged on payment of the redemption amount by the Issuer on the Redemption Date to the registered Bondholders whose name appear in the Register of Bondholders on the Record Date. Such payment will be a legal discharge of the liability of the Issuer towards the Bondholders.
In case any Redemption Date falls on a day which is not a Working Day, the payment due shall be made on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment.
31. ADDITIONAL COVENANTS
1. Security Creation: The Issuer submits that will execute the necessary documents for creation of the charge, including the Debenture/ Bond Trust Deed within the time prescribed under the SEBI Debt Regulations and shall submit to BSE within five working days of execution of the same for uploading on its website.
2. Default in Payment: In case of default in payment of interest and/or principal redemption on the due dates, the Issuer shall pay an additional interest at the rate of 2.00% p.a. over the respective Coupon Rates of the Bonds for the defaulting period.
3. Listing: The Issuer shall complete all the formalities and seek listing permission within 20 days from the Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.
32. SETTLEMENT/ PAYMENT ON REDEMPTION
Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest/ redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Issuer as on the Record Date.
The Bonds shall be taken as discharged on payment of the redemption amount by the Issuer on the Redemption Date to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant as on Record Date. Such payment will be a legal discharge of the liability of the Issuer towards the Bondholders. On such payment being made, the Issuer shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted. 93
The Issuer’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Issuer will not be liable to pay any interest or compensation from the Redemption Date. On the Issuer’s dispatching/ crediting the amount to the Beneficiary(ies) as specified above in respect of the Bonds, the liability of the Issuer shall stand extinguished.
33. EFFECT OF HOLIDAYS
If the interest payment date falls on a holiday, the payment may be made on the following working day however the dates of the future coupon payments would be as per the schedule originally stipulated at the time of issuing the security in line with SEBI circular No CIR/IMD/DF-1/122/2016 dated November 11, 2016.
If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Business Day, the redemption proceeds shall be paid by the Issuer on the preceding Business Day along with interest accrued on the Bonds until but excluding the date of such payment. ‘Business Day’ shall be a day on which commercial banks are open for business in the city of Delhi and the days when the money market is functioning in Mumbai. In the event the Record Date falls on a day which is not a Business Day, the immediately succeeding Business Day will be considered as the Record date. The interest/redemption payments shall be made only on the days when the money market is functioning in Mumbai.
Set forth below is an illustration for guidance in respect of the day count convention and effect of holidays on payments. Investors should note that this example is solely for illustrative purposes. We have not considered the effect of public holidays as it is difficult to ascertain for future dates.
Face Value of the Bond (in Rs) – 10,00,000/- Deemed Date of Allotment – February 24, 2020 Redemption date– February 23, 2035 Coupon rate – 7.27% p.a.
No. of Days Day count Amount Cash Flows Day, Date in Coupon (Actual/ Actual) (In Rupees) Period 1st Coupon February 24, 2021 Actual/Actual 366 72,700.00 2nd Coupon February 24, 2022 Actual/Actual 365 72,700.00 3rd Coupon February 24, 2023 Actual/Actual 365 72,700.00 4th Coupon February 26, 2024 Actual/Actual 365 72,700.00 5th Coupon February 24, 2025 Actual/Actual 366 72,700.00 6th Coupon February 24, 2026 Actual/Actual 365 72,700.00 7th Coupon February 24, 2027 Actual/Actual 365 72,700.00 8th Coupon February 24, 2028 Actual/Actual 365 72,700.00 9th Coupon February 26, 2029 Actual/Actual 366 72,700.00 10th Coupon February 25, 2030 Actual/Actual 365 72,700.00 11th Coupon February 24, 2031 Actual/Actual 365 72,700.00 12th Coupon February 24, 2032 Actual/Actual 365 72,700.00
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No. of Days Day count Amount Cash Flows Day, Date in Coupon (Actual/ Actual) (In Rupees) Period 13th Coupon February 24, 2033 Actual/Actual 366 72,700.00 14th Coupon February 24, 2034 Actual/Actual 365 72,700.00 15th Coupon February 23, 2035 Actual/Actual 364 72,501.00 Principal February 23, 2035 10,00,000 Redemption NHAI Taxable Bonds 19-20, Series-IX
Assumptions and Notes:
1. The aggregate coupon payable to each Bondholder shall be rounded off to the nearest rupee as per the Fixed Income Money Market and Derivatives Association handbook on market practices. 2. The actual dates and maturity amount will be in accordance to and in compliance with the provisions of SEBI circular CIR/IMD/DF-1/122/2016 dated November 11, 2016 giving effect to actual holidays and dates of maturity which qualifies the SEBI requirement. 3. For the purposes of the above illustration, non-business days i.e. Saturdays and Sundays have not been considered. Actual Interest/Maturity payment will be decided in accordance with SEBI regulation.
34. LIST OF BENEFICIAL OWNERS
The Issuer shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be.
35. SUCCESSION
In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Issuer shall recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s).the Issuer shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.
Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied:
a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin.
Such holding by the NRI will be on a non-repatriation basis.
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38. DOCUMENTS TO BE PROVIDED BY SUCCESSFUL BIDDER(S)
Successful bidder(s) need to submit the following documents, along with the Application Form, as applicable:
Certified true copy of the Memorandum and Articles of Association Certified true copy of the Board Resolution / letter authorizing the investment Certified true copy of the Power of Attorney Form 15G/ 15H for investors seeking exemption from TDS –on interest payments Relevant certificate(s)/ order(s)/ declaration(s)/ document(s) including order under Section195/ 197 of the Income-tax Act, 1961 on which the Debenture Holder wishes to place reliance for non-deduction of tax at source SEBI registration certificate IRDA registration certificate Specimen signature of the authorised signatories, duly certified by an appropriate authority Certified true copy of PAN
39. HOW TO APPLY
This Series-IX IM is neither a prospectus nor a statement in lieu of prospectus and does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds issued by the Issuer. The document is for the exclusive use of the institution(s) to whom it is delivered, and it should not be circulated/ distributed to third parties. This being a private placement Issue, the eligible investors who have been addressed through this communication directly, only are eligible to apply. Applications for the Bonds must be in the prescribed form and completed in BLOCK LETTERS in English and as per the instructions contained therein.
40. APPLICATION PROCESS
Who can bid / invest / apply?
All QIBs, and any non-QIB Investors specifically mapped by the Issuer on the BSE BOND – EBP Platform, are eligible to bid / invest / apply for this Issue.
All investors are required to comply with the relevant regulations/ guidelines applicable to them for investing in this Issue.
Eligible participants bidding on proprietary basis, for an amount equal to or more than Rs.15 crore or 5% of the base issue size, whichever is lower, shall bid directly i.e. shall enter the bids directly on EBP platform.
Provided that the foreign portfolio investors may bid through their custodians.
How to bid?
All Eligible Investors will have to register themselves as a one-time exercise (if not already registered) under the BSE BOND – EBP Platform offered by BSE for participating in the electronic book mechanism. Eligible Investors will also have to complete the mandatory KYC verification process. Investors should refer to the Operational
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Guidelines.
The details of the Issue shall be entered on the BSE BOND – EBP Platform by the Issuer at least 2 (two) working days prior to the Issue / Bid Opening Date, in accordance with the Operational Guidelines.
The Issue will be open for bidding for the duration of the bidding window that would be communicated through the Issuer’s bidding announcement on the BSE BOND – EBP Platform, at least 1 (one) working day before the start of the Issue / Bid Opening Date.
A bidder will only be able to enter the amount & percentage while placing their bids in the BSE BOND-EBP Platform. Some of the key guidelines in terms of the current Operational Guidelines on issuance of securities on private placement basis through an electronic book mechanism, are as follows:
(a) Modification of Bid:
Investors may note that modification of bid is allowed during the bidding period / window.
However, in the last 10 minutes of the bidding period / window, revision of bid is only allowed for upward revision of the bid amount placed by the Investor.
(b) Cancellation of Bid
Investors may note that cancellation of bid is allowed during the bidding period / window. However, in the last 10 minutes of the bidding period / window, no cancellation of bids is permitted.
(c) Multiple Bids
Investors may note that multiple bid is not permitted. If multiple bids are entered by the same Investor, only the first bid will be considered as valid.
(d) Withdrawal of Issue
The Issuer may, at its discretion, withdraw the issue process on the following conditions: i. non-receipt of bids upto the Issue Size; ii. bidder has defaulted on payment towards the allotment, within the stipulated timeframe, due to which the Issuer is unable to fulfil the Issue Size.
Provided that the Issuer shall accept or withdraw the Issue on the BSE BOND – EBP Platform within 1 (one) hour of the closing of the bidding window, and not later than 6 pm on the Issue/Bidding Closing Date.
However, Investors should refer to the Operational Guidelines as prevailing on the date of the bid.
Provisional/ Final Allocation
Allocation shall be made on a pro rata basis in the multiples of the bidding lot size, i.e., in multiples of Rs. 10,00,000 (Rupees Ten Lakhs). 97
Post completion of bidding process, the Issuer will upload the provisional allocation on the BSE BOND – EBP Platform. Post receipt of investor details, the Issuer will upload the final allocation file on the BSE BOND – EBP Platform.
Payment Mechanism
Subscription should be as per the final allocation made to the successful bidder(s) as notified by the Issuer by 10:30 am next date of Closing Date.
Successful bidders should do the funds pay-in in the bank account of as appearing on EBP Platform of BSE.
Successful bidders must do the funds pay-in to the Designated Bank Account in accordance with operational guidelines of BSE EBP PLATFORM. 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.
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 Designated Bank Account of clearing corporation of BSE by the Pay-in Time for any reason whatsoever, the bid will liable to be rejected and the Issuer shall not be liable to the successful bidder.
Funds pay-out would be made to the bank account as appearing on the EBP Platform of BSE.
Application by Successful Bidder(s)
All Application Forms, duly completed, must be delivered by the Pay-in Time to the Issuer by the successful bidder(s), to the attention of Mr. S.Q.Ahmad, GM (Fin) at G-5& 6, Sector 10, Dwarka, Delhi India.Applications for the Debentures must be in the prescribed form and completed in BLOCK LETTERS in English and as per theinstructions contained therein.
41. FORCE MAJEURE
The Issuer reserves the right to withdraw the issue prior to the Issue Closing Date in the event of any unforeseen development adversely affecting the economic and regulatory environment.
42. APPLICATIONS UNDER POWER OF ATTORNEY
A certified true copy of the power of attorney or the relevant authority as the case may be alongwith the names and specimen signature(s) of all the authorized signatories and the tax exemption certificate/ document, if any, must be lodged along with the submission of the completed Application Form. Further modifications/ additions in the power of attorney or authority should be notified to the Issuer or to the Registrars or to such other person(s) at such other address(es) as may be specified by theIssuer from time to time through a suitable communication.
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43. APPLICATION BY MUTUAL FUNDS
In case of applications by Mutual Funds, a separate application must be made in respect of each scheme of an Indian Mutual Fund registered with SEBI and such applications will not be treated as multiple applications, provided that the application made by the Asset Management Company/ Trustees/ Custodian clearly indicate their intention as to the scheme for which the application has been made.
43. ACKNOWLEDGEMENTS
No separate receipts will be issued for the application money.
45. PAN
Every applicant should mention its Permanent Account Number (“PAN”) allotted under the Income Tax Act, 1961, on the Application Form and attach a self-attested copy as evidence. Application Forms without PAN will be considered as incomplete and are liable to be rejected.
46. SIGNATURES
Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.
47. NOMINATION FACILITY
As per extant provisions of law, only individuals holding the Bonds as Sole/Joint holder of Bonds can nominate, in the prescribed manner, a person to whom his/ their Bonds shall vest in the event of his/ their death. Non-individuals including holders of Power of Attorney cannot nominate.
48. RIGHT OF BONDHOLDER(S)
Bondholder is not a shareholder. The Bondholders will not be entitled to any other rights and privilege of shareholders other than those available to them under statutory requirements. The principal amount and interest on the Bonds will be paid to the registered Bondholders only, and in case of Joint holders, to the one whose name stands first. Besides, the Bonds shall be subject to the provisions of NHAI Act, the terms of this Series-IX IM and other terms and conditions as may be incorporated in the Bond/ Debenture Trusteeship Agreement and other documents that may be executed in respect of these Bonds.
49. MODIFICATION OF RIGHTS
The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative againstthe Issuer where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Issuer.
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50. FUTURE BORROWINGS
The Issuer shall be entitled to borrow/ raise loans or avail of financial assistance in whatever form as also issue Bonds/ Debentures/ Notes/ other securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital, on such terms and conditions as the Issuer may think appropriate, without the consent of, or intimation to, the Bondholder(s) or the Trustees in this connection.
51. BOND/ DEBENTURE REDEMPTION RESERVE (“DRR”)
The Corporation is a statutory body constituted under The National Highways Authority of India Act, 1988 and is not a public/ private limited company incorporated under The Companies Act. Therefore, creation of Bond/ Debenture Redemption Reserve is not envisaged for the proposed issue of Bonds. The Corporation has also appointed a Trustee to protect the interest of the Bondholders.
52. NOTICES
All notices required to be given by the Issuer or by the Trustees to the Bondholders shall be deemed to have been given if sent by ordinary post/ courier to the original sole/ first allottees of the Bonds and/ or if published in one All India English daily newspaper and one regional language newspaper.
All notices required to be given by the Bondholder(s), including notices referred to under “Payment of Interest” and “Payment on Redemption” shall be sent by registered post or by hand delivery to the Issuer or to such persons at such address as may be notified by the Issuer from time to time.
53. JOINT-HOLDERS
Where two or more persons are holders of any Bond(s), they shall be deemed to hold the same as joint tenants with benefits of survivorship subject to provisions of Law.
54. DISPUTES & GOVERNING LAW
The Bonds are governed by and shall be construed in accordance with the existing laws of India. Any dispute arising thereof shall be subject to the jurisdiction of the competent court of New Delhi, India.
55. INVESTOR RELATIONS AND GRIEVANCE REDRESSAL
Arrangements have been made to redress investor grievances expeditiously as far as possible, the Issuer endeavours to resolve the investor’s grievances within 30 days of its receipt. All grievances related to the issue quoting the Application Number (including prefix), number of Bonds applied for, amount paid on application and details of collection centre where the Application was submitted, may be addressed to the Compliance Officer at head office of the Issuer. All investors are hereby informed that the Issuer has appointed a Compliance Officer who may be contracted in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc. Contact details of the Compliance Officer are given elsewhere in this Series-IX IM.
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Date of Subscription
The Date of Subscription shall be the date of realisation of proceeds of subscription money in the Designated Bank Account as appearing in the EBP Platform of BSE.
Rejection of Applications
The Issuer may reject any application on one or more technical grounds, including but not restricted to:
Bank account details not given Details for issue of debentures in electronic/ dematerialised form not given PAN not mentioned in appropriate place In case of applications under Power of Attorney by limited companies, corporate bodies, etc. relevant documents not submitted In the event that the number of Debentures applied for are not allotted in full, the excess application money of such applicant will be refunded, as may be permitted.
Settlement Process
Upon final allocation by the Issuer, the Issuer or the Registrar on behalf of the Issue shall instruct the depositories within 1 (one) day of the Date of Subscription, and the Depositories shall accordingly credit the allocated Debentures to the demat account of the successful bidder(s).
Within 2 (two) days of the Date of Subscription, the Depositories shall confirm to clearing corporation of BSE for the transfer of debentures in the demat account(s) of the successful bidder(s).
Post-Allocation Disclosures by the EBP
Upon final allocation by the Issuer, the Issuer shall disclose the Issue Size, coupon rate, ISIN, number of successful bidders, category of the successful bidder(s), etc., in accordance with the SEBI EBP Circular. The EBP shall upload such data, as provided by the Issuer, on its websiteto make it available to the public.
All other provisions as per SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/05 dated January 05, 2018 and SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/122 dated August 16, 2018 shall be applicable and as amended from time to time.
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XIV. CREDIT RATING FOR THE BONDS
CRISIL Limited (“CRISIL”) has vide its revalidation of credit rating letter dated 17.02.2020, assigned a credit rating of “CRISIL AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CRISIL is enclosed elsewhere in this Series-IX IM.
CARE Ratings Limited (“CARE”) has vide its revalidation of credit rating letter dated 18.02.2020 assigned the credit rating of “CARE AAA”to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from CARE is enclosed elsewhere in this Series-IX IM.
India Ratings and Research Private Limited (“IRRPL”) has vide revalidation of credit rating its letter dated 18.02.2020, assigned a credit rating of “IND AAA/Stable” to the Bonds of the Issuer. Instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations. Such instruments carry lowest credit risk. A copy of rating letter from IRRPL is enclosed elsewhere in this Series-IX IM.
Other than the credit ratings mentioned hereinabove, NHAI has not sought any other credit rating from any other credit rating agency(ies) for the Bonds offered for subscription under the terms of this Series-IX IM.
The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc.
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XV. TRUSTEES FOR THE BONDHOLDERS
The Issuer has appointed BEACON TRUSTEESHIP LIMITED to act as trustee for the Debenture Holder(s). The address and contact details of the Trustees are as under:
BEACON TRUSTEESHIP LIMITED 4C & D Siddhivinayak Chambers, Gandhi Nagar, Opp. MIG Cricket Club, Bandra (East) Mumbai – 400 051
A copy of letter from BEACON TRUSTEESHIP LIMITED conveying their consent to act as Trustees for the issue of Bonds is enclosed elsewhere in this Series-IX IM.
The Issuer hereby undertakes that a Debenture/ Bond Trust Deedinter alia, specifying the powers, authorities and obligations of the Debenture Trustee and the Issuer has been executed in favour of the Trustees within permissible time frame as per statutory laws. The Debenture Holder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Debenture Trustee or any of its agents or authorised officials to do all such acts, deeds, matters and things in respect of or relating to the Debentures as the Debenture Trustee may in its absolute discretion deem necessary or require to be done in the interest of the Debenture Holder(s).Any payment made by the Issuer to the Debenture Trustee on behalf of the Debenture Holder(s) shall discharge the Issuer pro tanto to the Debenture Holder(s). The Debenture Trustee will protect the interest of the Debenture Holder(s) in regard to the repayment of the principal and yield thereon and the Debenture Trustee will take necessary action, subject to and in accordance with the Debenture Trust Deed, at the cost of the Issuer. The Debenture Trust Deed shall more specifically set out the rights and remedies of the Debenture Holder and the manner of enforcement thereof.
The Trustees shall perform its duties and obligations and exercise its rights and discretions, in keeping with the trust reposed in the Trustees by the holder(s) of the Bonds and shall further conduct itself, and comply with the provisions of all applicable laws, provided that, the provisions of Section 20 of the Indian Trusts Act, 1882, shall not be applicable to the Trustees. The Trusteesshall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Debenture/ Bond Trusteeship Agreement, the Debenture/ Bond Trust Deed, Series-IX IM and all other related transaction documents, with due care, diligence and loyalty.
The Trustees shall be vested with the requisite powers for protecting the interest of holder(s) of the Bonds including but not limited to the right to appoint a nominee director on the Board of the Issuer in consultation with institutional holders of such Bonds. The Trustees shall ensure disclosure of all material events on an on-going basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds.
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XVI. STOCK EXCHANGE WHERE BONDS ARE PROPOSED TO BE LISTED
The Bonds are proposed to be listed on the Wholesale Debt Market (WDM) segment of BSE. The Issuer has obtained BSE in-principle approval for listing of Bonds offered under the terms of this Series-IX IM.
The Issuer shall make listing application to BSE and seek listing permission within 15 days of Deemed Date of Allotment. In case of delay in listing of the Bonds beyond 20 days from the Deemed Date of Allotment, the Issuer shall pay penal interest at the rate of 1.00% p.a. over the respective Coupon Rates of the Bonds from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the bondholders.
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XVII. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER
By very nature of its business, the Issuer is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Issuer. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Issuer) which are or may be deemed to be material have been entered into by the Issuer. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the head office of the Issuer between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.
A. MATERIAL CONTRACTS
a. Copy of letter appointing Registrars b. Copy of letter appointing Trustees to the Bondholders.
B. DOCUMENTS
a. The National Highways Authority of India Act, 1988, as amended. b. Board Resolution dated February 21, 2019 authorizing issue of Bonds. c. Letter of consent from the Trustees for acting as trustees for and on behalf of the holder(s) of the Bonds. d. Letter of consent from the Registrars for acting as Registrars to the Issue. e. Application made to the BSE for grant of in-principle approval for listing of Bonds. f. Letter from BSE conveying their in-principle approval for listing of Bonds. g. Letter from CRISIL conveying the credit rating for the Bonds. h. Letter from CARE conveying the credit rating for the Bonds. i. Letter from IRRPL conveying the credit rating for the Bonds. j. Tripartite Agreement between the Issuer, NSDL and Registrars for issue of Bonds in dematerialised form. k. Tripartite Agreement between the Issuer, CDSL and Registrars for issue of Bonds in dematerialised form.
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DECLARATION
The issuer undertakes that this Disclosure Document contains full disclosures in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 200 issued vide Circular No. LAD/NRO/GN/2008/13/127878 dated June 6, 2008, amended from time to time.
The Issuer also confirms that to the best of its knowledge and beliefs this Disclosure Document does not omit disclosure of any material fact which may make the statements made therein, in light of the circumstances under which they are made misleading. The Disclosure Document also does not contain any false or misleading statement.
The issuer accepts no responsibility for the statement made otherwise than in the Disclosure Document or in any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at his own risk.
Signed pursuant to internal authority granted: For National Highways Authority of India
(S.Q. Ahmad) General Manager (Finance)
Place: New Delhi Date: February 20, 2020
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ANNEXURE – 1 FINANCIAL INFORMATION ABRIDGED FINANCIAL INFORMATION
REFORMATTED STATEMENT OF ASSETS AND LIABILITIES (Rs in lakhs) AS AT MARCH 31 SL. Particulars Schedule Nos. 2017 2016 2015 (1) (2) (3) (4) (5) I.
SOURCES OF FUNDS 1
Shareholders' Fund a) Capital 1 13,959,380.47 12,551,457.89 10,452,040.18 b) Reserves & Surplus 2 0.00 748.68 45.46 2
Grants a) Capital 3 1,365,643.01 1,366,280.32 1,366,901.41 3 Borrowings 4 7,538,464.71 4,527,036.70 2,489,285.59 TOTAL 22,863,488.18 18,445,523.58 14,308,272.64 II.
APPLICATION OF FUNDS 1 5 Fixed Assets a) Gross Block 12,533.36 11,870.62 11,238.39 b) Less: Depreciation 7,857.39 7,217.40 6,462.96 c) Net Block 4,675.97 4,653.21 4,775.43 d) Less: Assets created out of 612.58 612.58 612.58
Grants e) Assets held on behalf of 21,772,656.62 17,645,402.50 14,079,731.46 GOI (Completed & ongoing)
Total 21,776,720.00 17,649,443.14 14,083,894.32 2 Investment (At cost) 6 90,959.00 121,652.89 121,625.00 3 Current Assets, Loans and 7 Advance a) Inventories - - b) Sundry Debtors - - c) Deposits, Loans & 3,295,320.19 2,577,831.04 1,426,624.21
Advances d) Interest accrued on deposit 1,399.71 2,826.98 4,402.19 52,628.05 59,569.52 e) Interest accrued and due on 34,975.69 CALA deposits f) Cash & Bank Balance 837,680.26 674,079.72 267,235.23 sub total 4,187,028.21 3,314,307.25 1,733,237.32
Less: Current Liabilities and Provisions a) Liabilities 8 3,187,098.88 2,636,198.49 1,627,412.69 b) Provisions 9 4,120.15 3,681.20 3,071.31 AS AT MARCH 31 SL. Particulars Schedule Nos. 2017 2016 2015 (1) (2) (3) (4) (5) sub total 3,191,219.03 2,639,879.69 1,630,484.00 Net Current Assets 995,809.18 674,427.56 102,753.32 4 Misc. Expenditure (to the - - - 10 extent not written off) 5 Profit & Loss Account - - -
(Debit balance, if any) 6 Significant Accounting - - - 18 Policies 7 Notes on Accounts 19 - - - TOTAL 22,863,488.18 18,445,523.58 14,308,272.64 REFORMATTED STATEMENT OF PROFIT AND LOSS ACCOUNT
(Rs In Lacs) FOR THE YEAR ENDED MARCH 31 Particulars Schedule 2017 2015 2016 Sl.Nos. (5) (1) (2) (3) (4)
I. INCOME a) Value of Work done - - - b) Other income 11 1,353.35 1,293.36 1,694.84 c) Interest (Gross) 12 1.06 0.88 1.18 d) Grant-in-aid for -
maintenance of Highways - 13 - - - e) Net Increase/Decrease in work-in-progress (+)/(-) TOTAL INCOME 1,354.40 1,294.24 1,696.01
II. EXPENDITURE a) Construction Stores/ - - Material consumed Other
stores, spares & tools etc. consumed
Work Expenses: 14 - - - a) Personnel & 15 27,282.06 22,537.20 20,799.86
Administrative Expenses b) Finance Charges 16 14.71 7.76 7.18 c) Depreciation 771.52 870.43 683.27 d) Assets of Small Value 22.01 21.50 16.83
Charged Off Exceptional Item Provision for diminution in 40,310.88 -
the value of investment Less: Provision transferred to (40310.88) -
capital (Sch-1) TOTAL EXPENDITURE 28,090.3 23,436.89 21,507.14 Profit (+)/Loss (-) for the
year (26,735.89) (22,142.65) (19,811.00) Add: Prior Period Items
net(+/-) 17 (1135.83) (747.01) (832.30) Less: Net Establishment 27,871.73 22,889.66 20,643.43 Expenses for the year
transferred to CWIP (Sch- 5)
Less/Add: Provision for - Taxation - - - -
Net Profit - - - - Less: Transfer to Capital Reserve - - - Less: Transfer to other specific Reserve/Fund Less/Add: Transfer - - - to/Transfer from General Reserve (+/-) - - - Less/Add: Surplus brought forward from previous year - - - Surplus carried to Balance Sheet
REFORMATTED STATEMENT OF CASH FLOW
(Rs. in lakhs) FOR THE YEAR ENDED MARCH 31 Particulars SL.Nos. 2017 2016 2015 (1) (3) (4) (5)
A. Cash flow from operating activities: Net profit before tax (26,735.89) (22,142.65) (19,811.13)
Adjustments for: Depreciation 771.52 870.43 683.27 Profit/(Loss )on sale of assets (2.77) (3.55) (8.33) Interest income (1.06) (0.88) (1.18)
Operating profit before working (25,968.20) (21,276.65) (19,137.36)
capital changes Adjustments for: (Increase)/Decrease in Deposits, Loans (717,489.15) (1,151,472.74) (427,786.46)
& Advances Increase in liabilities 550,900.39 1,008,785.80 321,133.65 Increase in Provision for gratuity and 438.95 609.89 673.60
Leave encashment
Cash flow before extraordinary item (192,118.01) (163,353.7) (125,116.57)
& prior period items Prior period items (1135.83) (747.01) (832.30) Net cash generated from operating (193,253.85) (164,110.71) (125,948.87)
activities
B. Cash flow from investing activities: Purchase of fixed assets (803.66) (757.79) (1905.46) Realization from sale of assets 12.16 13.13 25.25 Increase in Capital Work in progress (3,866,631.06) (3,450,701.69) (1,698,326.15) Increase in investment (9617.00) (27.88) (722.12) Interest Income 162,085.61 96,759.82 110,727.53 Capital Reserve (Receipts) 20,349.00 11,188.98 10,769.86 Interest and other expenditure on 54EC - (222,770.32) (1,178,087.42)
Net cash used in investing activities (3,694,604.95) (3,566,295.75) (1,757,518.50)
C. Cash flow from financing activities: Cess funds received from Govt of 232,650.00 1,542,000.00 688,589.00
India Capital additional budgetary receipts 564,902.00 37,027.00 60,000.00 FOR THE YEAR ENDED MARCH 31 Particulars SL.Nos. 2017 2016 2015 (1) (3) (4) (5) EAP Grant utilized towards revenue (637.31) (621.09) (445.03)
expenditure Transfer of ” Premium on bonds” to (748.68) - -
“Capital Reserve” Adjusted Plough back of Toll 650,681.46 520,390.71 433,072.96
Remittance, etc Net decrease in loan from ADBdue to (6,133.29) (159.09) (683.98) exchange loss after adjustment of pre payments 557,274.20 428,117.00 Proceeds from issue of 54 EC Capital 334,340.40 Gains Tax Free Bonds Proceeds from issue of Tax Free - 1,900,703.22 -
Bonds 2015-16, including premium Proceeds from issue of Taxable Bonds 2,754,500.00 - - Redemption of Capital Gains Tax Free (294,212.90) (290,206.80) (251,151.50)
Bonds (406,816.15) Interest and other expenditure on Bonds
Net cash used in financing activities 4,051,459.33 4,137,250.94 1,263,721.84 Net increase/(decrease) in cash and 203,911.43 406,844.49 (619,745.53)
cash equivalents Opening cash and cash equivalents 674,079.72 267,235.23 886,980.76
Closing cash and cash equivalents 877,991.14 674,079.72 267,235.23
Notes:
Cash and cash equivalents include: Cash and cheques in hand / in transit 114.81 4.39 38.57 Balance with banks: -In Current 811,682.59 73,702.27 98,690.56
Account - In FD account 25,882.86 600,372.95 168,506.10 Balance as per books of account 837,680.26 674,079.72 267,235.23
NATION BUILDING THROUGH HIGHWAYS
NATIONAL HIGHWAYS AUTHORITY OF INDIA G-5 & 6, Sector-10, Dwarka, New Delhi - 110 075 BALANCE SHEET AS AT 31st MARCH, 2018 PARTICULARS SCHEDULE CURRENT YEAR PREVIOUS YEAR ?In Lakhs ? In Lakhs
I. SOURCES OF FUNDS 1 Shareholders' Fund a) Capital 1 1,63,77,926.38 1,39,59,380.47 b) Reserves & Surplus 2
2 Grants a) Capital 3 13,83,29.45 3 Borrowings 4 1,22,52,415.96 TOTAL 3,00,13,571.79 1,3,65,643.01 II. APPLICATION OF FUNDS 75,38,464.71 1 Fixed Assets 5 2,28,63,488.18 a) Gross Block 16,163.18 b) Less: Assets created out of Grant 612.58 c) Assets out of Own Fund 15,550.60 12,533.36 d) Less: Depreciation 8,804.24 612.58 e) Net Block 6,746.36 11,920.77 f) Assets held on behalf of Gol 7,857.39 (completed & ongoing) 28,564,371.53 4,063.38 TOTAL 2,85,71,117.89 2 Investment 6 93,617.34 21,772,656.62 3 Current Assets, Loans and Advance 7 2,17,76,720.00 a) Inventories 90,959.00 b) Deposits, Loans & Advances 50,73,832.44 c) Interest accrued but not due on 4,326.74 deposits 32,95,320.19 d) Interest accrued and due on 8,069.98 1,399.71 CALA deposits e) Cash & Bank Balance 4,03,795.66 52,628.05 f) Inter Unit Account 0.00 sub total 54,90,024.83 8,37,680.26 Less: Current Liabilities and Provisions 41,87,028.21 a) Liabilities 8 41,36,257.50 b) Reserves & Provisions 9 4,930.77 31,87,098.88 sub total 41,41,188.27 4,120.15 Net Current Assets 13,48,836.56 4 Misc. Expenditure 10 31,91,219.03 (to the extent not written off) 9,95,809.18 5 Profit & Loss Account (Debit balance if any) TOTAL 3,00,13,571.79
Significant Accounting Policy (Schedule 18) and Notes on Accounts (Schedule 19) are integral part of this Financial Statements. 2,28,63,488.18
For and on behalf of the Board of the Authority
Place: New Delhi Date: 31.07.2018 Member (Finance) Chairman
Ell NATIONAL HIGHWAYS AUTHORITY OF INDIA NATIONAL HIGHWAYS AUTHORITY OF INDIA G-5 & 6, Sector-10, Dwarka, New Delhi - 110 075 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH, 2018 PARTICULARS SCHEDULE CURRENT YEAR PREVIOUS YEAR ? In Lakhs ? In Lakhs
I. INCOME a) Value of Work done b) Other income 11 1,381.89 1,353.35 c) Interest (Gross) 12 0.41 1.06 d) Net Increase/Decrease in 13 Work-in-progress (+)/(-) TOTAL INCOME 1,382.30 1,354.40 II. EXPENDITURE a) Construction Stores/Material consumed Other stores,spares & tools etc. consumed Work Expenses 14 Personnel & Administrative Expenses 15 38,230.45 27,282.06 Finance Charges 16 8.36 14.71 Depreciation 1,027.75 771.52 Assets of Small Value Charged Off 36.96 22.01 Exceptional Item Provision for diminution in the value 40,310.88 of investment Less: Provision transferred to Capital (40,310.88) (Sch-1) TOTAL EXPENDITURE 39,303.52 28,090.30 Profit / (Loss ) for the period (37,921.22) (26,735.89) Add: Prior Period Items net(+/-) 17 (1,305.05) (1,135.83) (details to be given) Transfer of Net Establishment 39,226.27 27,871.73 Expenses for the year to Sch-5 Less/Add: Provision for Taxation Net Profit Less: Transfer to Capital Reserve Less: Transfer to other specific Reserve/Fund Less/Add: Transfer to/Transfer from General Reserve (+/-) Less/Add: Surplus brought forward from previous year Surplus carried to Balance Sheet
For and on behalf of the Board of the Authority
(—f
Place: New Delhi Date: 31.07.2018 Member (Finance) Chairman
ANNUAL REPORT 2017-18 | NATION BUILDING THROUGH HIGHWAYS
NATIONAL HIGHWAYS AUTHORITY OF INDIA G-5 & 6, Sector-10, Dwarka, New Delhi - 110 075 CASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH, 2018 CURRENT YEAR PREVIOUS YEAR ? In Lakhs ? In Lakhs A. Cash flow from operating activities: Net profit before tax (37,921.22) (26,735.89) Adjustments for: Depreciation 1,027.75 771.52 Profit/Loss on sale of assets (3.20) (2.77) Interest income (0.41) (1.06) Operating profit before working capital changes (36,897.08) (25,968.20) Adjustments for: (Increasej/Decrease in Deposits, Loans & Advances (17,78,512.25) (7,17,489.15) lncrease/(Decrease) in liabilities 9,49,158.62 5,50,900.39 (Increasej/Decrease in Provision for Gratuity and 810.61 438.95 Leave Encashment Cash flow before extraordinary item & prior period items (8,65,440.09) (1,92,118.01) Prior period items (1,305.05) (1,135.83) Net cash generated from operating activities (8,66,745.14) (1,93,253.85) B Cash flow from investing activities: Purchase of fixed assets (3,713.53) (803.66) Realisation from sale of assets 6.00 12.16 (Increasej/Decrease in Capital Work in progress (62,79,050.43) (38,66,631.06) (Increasej/Decrease in investment (2,658.34) (9,617.00) Interest Income 2,24,294.28 1,62,085.61 Capital Reserve (Receipts) 32,922.86 20,349.00 Net cash used in investing activities (60,28,199.16) (36,94,604.95) C. Cash flow from financing activities: Cess funds received from Govt of India 12,42,945.00 2,32,650.00 Capital additional budgetary receipts 4,15,000.00 5,64,902.00 EAP Grant Received & utilised towards Revenue 17,586.44 (637.31) Expenditure Transfer of "Premium on Bonds" to "Capital Reserve" (748.68) Adjusted Plough back of Toll Remittance,etc 7,60,600.92 6,50,681.46 Net decrease in loan from ADB due to Exchange Loss after (4,949.65) (6,133.29) Adjustment of Repayments Proceeds from issue of 54EC Capital Gains Tax-Free Bonds 6,65,741.30 5,57,274.20 Proceeds from issue of Taxable bonds, Masala Bonds 43,87,500.00 27,54,500.00 & NSSF Loan 2017-18 Redemption of Capital Gains Tax- Free Bonds (3,34,340.40) (2,94,212.90) Interest and other expenditure on Bond (6,89,023.91) (4,06,816.15) Net cash generated from financing activities 64,61,059.69 40,51,459.33 Net increase/(decrease) in cash and cash equivalents (4,33,884.60) 1,63,600.54 (A+B+C) Opening cash and cash equivalents 8,37,680.26 6,74,079.72 Closing cash and cash equivalents 4,03,795.66 8,37,680.26 Notes: Cash and cash equivalents include: Cash and cheques in hand / in transit 1.10 114.81 Balance with banks-Current Account 90,400.98 6,08,310.77 Balance with banks-Savings Bank Account 2,78,858.78 2,03,371.82 Balance with banks-Fixed Deposit Account 34,534.80 25,882.86 Balance as per books of account 4,03,795.66 8,37,680.26
For and on behalf of the Board of the Authority
Place: New Delhi Date: 31.07.2018 Member (Finance) Chairman
9 | NATIONAL HIGHWAYS AUTHORITY OF INDIA
ANNEXURE – 2 CREDIT RATE LETTERS dk/ 5' Ratings Professional Risk Opinion
No. CARE/DRO/R1j2019-20/3407
Mr. Madhup Kumar Chief General Manager (Finance) National Highways Authority of India G-5 & 6, Sector — 10, Dwarka, New Delhi — 110 045 February 18, 2020
Confidential Dear Sir, Credit rating for Long-term Borrowing Programme for FY20
Please refer to our surveillance letter dated October 01, 2019 and your request for
revalidation of the rating assigned to the borrowing programme of your company, for a
limit of Rs.75,000 crore.
2. The following rating has been reviewed:
instrument Amount Rating' Remarks (Rs. crore) Long-term Borrowing 75,000 CARE AAA; Stable Reaffirmed Programme for FY20 (Rupees Seventy five (Triple A; outlook: thousand crore only) stable)
Please arrange to get the rating revalidated, in case the proposed issue is not made
within six months from the date of this letter.
Please inform us the below-mentioned details of issue immediately, but not later than
7 days from the date of placing the instrument:
Instrument ISIN Issue Coupon Coupon Terms of Redemption Name and Details of type Size Rate Payment Redemption date contact top 10 (Rs Dates details of investors cr) Debenture Trustee CARE eserves the right to undertake a surveillance/review of the rating from time to
time, based on circumstances warranting such review, subject to at least one such
review/surveillance every year.
CARE reserves the right to revise/reaffirm/withdraw the rating assigned as also revise
the outlook, as a result of periodic review/surveillance, based on any event or
information which in the opinion of CARE warrants such an action. In the event of
failure on the part of the entity to furnish such information, material or clarifications
'Complete definitions of the ratings assitnAggiltappOlikdit www.careratinas.com and In other CARE publications.
CORPORATE OFFICE: e Floor, Gocirel Coliseum, Somaiya Hospital Road, 13th Floor, E-1 Block, Vldeocon Tower Off Eastern Express Highway, Sion (E), Menthe - 400 022. Page 1 of 2 Mandowalan Extension, New Delhi -110055. Tel.: +91-22-6754 3436 • Fax +91-22-6754 3457 Tel: +91-11-4533 3200 • Fee *91-11-4533 3238 Email: [email protected] • www.careratings.com C IN- L67190MH1993PLC071691 as may be required by CARE so as to enable it to carry out continuous monitoring of
the rating of the debt instruments, CARE shall carry out the review on the basis of best
available information throughout the life time of such instruments. In such cases the
credit rating symbol shall be accompanied by "ISSUER NOT COOPERATING". CARE
shall also be entitled to publicize/disseminate all the afore-mentioned rating actions
in any manner considered appropriate by it, without reference to you.
Users of this rating may kindly refer our website www.careratings.com for latest
update on the outstanding rating. CARE ratings are not recommendations to buy, sell, or hold any securities.
If you need any clarification, you are welcome to approach us in this regard.
Thanking you,
Yours faithfully,
[NIshtha Chughl Pasmeen Raul.] Deputy Manager Associate Director [email protected] [email protected] End.: As above
Disclaimer CARE's ratings are opinions on the likelihood of timely payment of the obligations under the rated instrument and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE's ratings do not convey suitability or price for the investor. CARE'S ratings do not constitute an audit on the rated entity. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE 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/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/Instruments. CARE or its subsidiaries/associates may also have other commercial transactions with the entity. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is, inter-alia, based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor In addition to the financial performance and other relevant factors. CARE is not responsible for any errors and states that it has no financial liability whatsoever to the users of CARE's rating.
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Ratings CRISIL
An S&P Global Company CO:\"FIDE:"JTlAI, NATIIIAU/220220/L TB/OJ 190 1627/144 February 17.2020
Mr. S Q Alumni General Manager. Finance Nationallli!-:Imays Auth(Jrit~. of India G5&6, Sector-10, Dwarb New Delhi. 110075
Dear Mr. S Q Ahmad,
He: CRlSll Rating on the Ih. 75000 Crore Long-Term Borrowing Programme of National Highways Authority of India
All ratings assigned by CRISIL arc kept under continuous surveillance and review. Please refer to our rating lettcr daled January 06, 2020 bearing Ref. no: NATIIIAU/220220/LTBf031901627/143
Please find in the table below the rating outstanding for your company.
S.No. Instrument Rated Amount Rs. in Crore Ibtin • Outstandin' 1 LOIl2"Tcrm Borrowin' Programme'" 75000 CRISIL AANStab1c .Through dijJerem lIIoties inell/ding public issue of Bh(lralmala Bonds
In the event of your company not making the i!>!>uewithin a period of 180 day!>from the above date, or in the event of any change in thc sizc or stmcture of your proposed issue, a fresh lellcr of revalidation from CRISIL will bc necessary.
As per our Rating Agreement, CRISIL would disseminate thc rating along with outlook through its publications and other media. and keep the raling along with outlook under survcillance for the life of the instrument. CRISIL reservcs the right to withdraw or rcvise the r..ttings assigned to thc captioned instrument at any time, on the basis of new information, or unavailability of inform As per the ! Should you require any c1<1rification:.;.please feci free to get in touch with us. With warm regards, ~;t ~1 Yours sincerely, ~RISIL ""'_0;,- !\ ... •CJ:r"~ ..•; -1,C- :------~,,-)-.::;.....------. " ~ ~~~- Sushmit A CRISIL rating ref/octs CRI$IL's CUffentopinion an the likelihood of timely payment of the obligations under the rated inslrument and does nol constitule an audit of the rated enl,fy by CRI$IL CRISIL ratings are based on informalion provided by the issuer or obtained by CRI$IL from SOUlCesit considers reliable CRISIL does nof guaranlee the completeness ar accuraq of Ihe information on which the rating is based_ A CRISIL ratmg is not a recommendation 10 buy. sel/. or hold the rated instrument. if does nol comment on the market price or suitability for a particular investor. All CRt$IL ralmgs are under surveillance CRISIL ar "S aSSQCiatesmay have other commelCial transactions with the company/entity. Ratmgs are rev,sed q.s~ "Y~~f.,,~umstances so waffanl. CRI$IL ;s not responsible far any errors and especially Slales thaI it has no fmancial /l'abilotywhatsooJe~ig.:thl:!'!M8rcribers I users Itratlsmirrers I distributors of this product_ CRISIL Rarings ratmg crrlena are ava,labie wlrtCRJ!PQf~ CRI$IL House, Central Avenue, Hiranandani Business Park, Powai, Mumbai .400076. Phone: +91 22 3342 3000 I Fax: +91 22 4040 5800 www.c:rlsH.c:om Rating Rationale March 29, 2019 | Mumbai National Highways Authority of India 'CRISIL AAA/Stable' assigned to Long-Term Borrowing Programme Rating Action Rs.75000 Crore Long-Term Borrowing Programme@ CRISIL AAA/Stable (Assigned) Rs.8467.59 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Withdrawn) Rs.5573 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Reaffirmed) Rs.62000 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Reaffirmed) Rs.50532.41 Crore Long-Term Borrowing Programme CRISIL AAA/Stable (Reaffirmed) Rs.19000 Crore Tax Free Bonds CRISIL AAA/Stable (Reaffirmed) Rs.10000 Crore Tax Free Bonds CRISIL AAA/Stable (Reaffirmed) Rs.5000 Crore Tax Free Bonds CRISIL AAA/Stable (Reaffirmed) Rs.27545 Crore Tax Free Bonds** CRISIL AAA/Stable (Reaffirmed) 1 crore = 10 million Refer to annexure for Details of Instruments & Bank Facilities @Through different modes including public issue of Bharatmala Bonds **transferred from Long-Term Borrowing Programme Detailed Rationale CRISIL has assigned its 'CRISIL AAA/Stable' rating on the long-term borrowing programme of Rs 75000 crore and reaffirmed its 'CRISIL AAA/Stable' rating on the tax-free bonds and long-term borrowing programme of National Highways Authority of India (NHAI). CRISIL has also withdrawn its rating on Rs 8467.59 crore long-term borrowing programme at NHAI's request as the entity did not raise the amount during fiscal 2018 out of the budgeted amount of Rs 59,000 crore. The rating continues to reflect NHAI's strategic importance to the Government of India (GoI), and its strong financial flexibility, driven by continued support from the government. These strengths are partially offset by increasing indebtedness. Analytical Approach The rating on NHAI factors in support from GoI. CRISIL believes NHAI will receive distress support from GoI for timely repayment of debt, considering the entity's strategic role in implementation of the nation's road sector programmes. Key Rating Drivers & Detailed Description * Strategic importance to GOI NHAI, constituted by an act of Parliament, is the nodal agency for implementing the National Highways Development Project (NHDP) for the government. NHDP, worth over Rs 2,47,000 crore, is one of the largest infrastructure projects in the country. GoI has identified road sector reforms as a key area for removing infrastructure bottlenecks. NHAI is thereby entrusted with implementation of the Bharatmala programme which aims to construct 34,800-km of roads between fiscals 2018 and 2022 at an estimated cost of Rs 5,35,000 crore. * Strong financial flexibility, driven by continued support from GoI NHAI has strong financial flexibility, predominantly because of continuous support from GoI for its projects, by way of allocation of fuel cess funds and budgetary resources, as well as flexibility to raise funds through capital gains bonds and tax-free infrastructure bonds. NHAI received Rs 12,429 crore of the cess funds in fiscal 2018. Cess income till November 2018 was Rs 11,069 crore while borrowings for the period were Rs 34,721 crore. As per the revised budgetary allocation for fiscal 2019, cess allocation will be around Rs 16,093 crore. NHAI also receives additional budgetary support for the development of national highways, and grants and loans for execution of externally aided projects. The funds provided by GoI are used for servicing debt and meeting capital and operational expenses. Although the quantum of cess allocation and additional budgetary support increased in the past few fiscals, it remained lower than the budget estimate. NHAI also receives project revenues i.e. ploughing back of funds from toll collection, negative grant, and revenue sharing. Stability in budgetary support for meeting expenses will remain a key rating sensitivity factor. NHAI also has options to raise funds though monetising its operational assets - first set of operational road assets was monetised through the toll-operate-toll (TOT) model in fiscal 2018, which had received strong response. NHAI plans to raise funds through TOT mode which can thereby reduce dependence on borrowings. NHAI is one of the three bodies authorised to float bonds that qualify for capital gains tax exemption under Section 54 EC of the Income Tax Act, 1961. Furthermore, NHAI raised masala bonds in fiscal 2018 at a competitive coupon rate of around 7.3%, indicating that the entity is perceived to be a critical arm of GOI. * Increasing indebtedness NHAI's expenditure increased 39% over the past 4 fiscals. This, along with moderate allocation of cess towards NHAI, has resulted in increased dependence on Internal and Extra Budgetary Resources (IEBR) to be arranged by NHAI and has thereby resulted in increase in its borrowings. Consequently, gearing increased to 0.75 time as on March 31, 2018, from 0.23 times as on March 31, 2014. Bank borrowings increased to around 60% of total cash outflow in fiscal 2018 from 35% in fiscal 2014. Dependence on debt is expected to continue on account of implementation of the Bharatmala programme, which has an estimated cost of Rs 5,35,000 crore. However, NHAI will continue to enjoy healthy financial flexibility on account of support from the GoI in the form of cess allocation and additional budgetary support. Liquidity NHAI receives funds from GoI in the form of cess allocation, additional budgetary support, and plough back of toll and TOT (Toll-Operate-Transfer), and also raises funds from the market at competitive rates. NHAI had cash and bank balance of Rs 965 crore as on February 28, 2019. NHAI also has overdraft limits sanctioned to meet exigencies in case of delay in receipt of cess funds. NHAI is an important arm of GoI for implementation of road sector reforms, and CRISIL believes GoI will provide support to NHAI to meet debt obligation. Outlook: Stable CRISIL believes NHAI will continue to receive direct and indirect support from GoI for the implementation of road development programmes. The outlook may be revised to 'Negative' if there is any change in the road sector policy leading to dilution in NHAI's strategic importance to GoI. About NHAI NHAI, set up under the National Highways Authority of India Act, 1988, began operations in February 1995. It is responsible for developing, maintaining, and managing national highways. NHAI is mandated to implement NHDP and Bharatmala, and is responsible for implementing other national highway projects, mainly those ensuring connectivity with major ports. NHAI awards projects for development on an engineering-procurement-construction and build-operate-transfer (BOT) toll and annuity basis, as well as projects on a BOT hybrid'annuity basis and also on TOT basis. Key Financial Indicators As on / for the period ended March 31 2018 2017 Revenue Rs crore NA 13.5 Profit after tax Rs crore NA 0 PAT margin % NA - Adjusted Debt/Adjusted networth Times NA 0.49 Interest coverage Times NA 53.45 NA: Not available yet (Annual report for fiscal 2018 is not yet released) Any other information: Not applicable Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. Annexure - Details of Instrument(s) Date of Coupon Issue size Rating assigned ISIN Name of instrument Maturity date allotment rate (%) (Rs Crore) with outlook INE906B07CA1 Tax Free Bonds 25-Jan-12 8.20% 24-Jan-22 6714 CRISIL AAA/Stable INE906B07CB9 Tax Free Bonds 25-Jan-12 8.30% 24-Jan-27 3286 CRISIL AAA/Stable INE906B07DA9 Tax Free Bonds 22-Nov-13 8.35% 21-Nov-23 452 CRISIL AAA/Stable INE906B07DB7 Tax Free Bonds 22-Nov-13 8.48% 21-Nov-28 850 CRISIL AAA/Stable INE906B07DC5 Tax Free Bonds 5-Feb-14 8.27% 4-Feb-24 475 CRISIL AAA/Stable INE906B07DD3 Tax Free Bonds 5-Feb-14 8.52% 4-Feb-24 301 CRISIL AAA/Stable INE906B07DE1 Tax Free Bonds 5-Feb-14 8.50% 4-Feb-29 1732 CRISIL AAA/Stable INE906B07DF8 Tax Free Bonds 5-Feb-14 8.75% 4-Feb-29 1190 CRISIL AAA/Stable INE906B07EE9 Tax Free Bonds 18-Sep-15 7.11% 17-Sep-25 549 CRISIL AAA/Stable INE906B07EF6 Tax Free Bonds 18-Sep-15 7.28% 17-Sep-30 3323 CRISIL AAA/Stable INE906B07EG4 Tax Free Bonds 11-Jan-16 7.14% 10-Jan-26 686 CRISIL AAA/Stable INE906B07EH2 Tax Free Bonds 11-Jan-16 7.39% 10-Jan-26 656 CRISIL AAA/Stable INE906B07EI0 Tax Free Bonds 11-Jan-16 7.35% 10-Jan-31 5983 CRISIL AAA/Stable INE906B07EJ8 Tax Free Bonds 11-Jan-16 7.60% 10-Jan-31 2675 CRISIL AAA/Stable INE906B07EK6 Tax Free Bonds 18-Feb-16 7.02% 17-Feb-26 455 CRISIL AAA/Stable INE906B07EL4 Tax Free Bonds 18-Feb-16 7.39% 17-Feb-31 1373 CRISIL AAA/Stable INE906B07EM2 Tax Free Bonds 9-Mar-16 7.04% 8-Mar-26 98 CRISIL AAA/Stable INE906B07EN0 Tax Free Bonds 9-Mar-16 7.29% 8-Mar-26 192 CRISIL AAA/Stable INE906B07EO8 Tax Free Bonds 9-Mar-16 7.39% 8-Mar-31 1882 CRISIL AAA/Stable INE906B07EP5 Tax Free Bonds 9-Mar-16 7.69% 8-Mar-31 1128 CRISIL AAA/Stable INE906B07FB2 Tax Free Bonds 3-Aug-16 8.03% 3-Aug-41 5000 CRISIL AAA/Stable INE906B07FD8 Tax Free Bonds 1-Sep-16 7.68% 30-Aug-41 5000 CRISIL AAA/Stable INE906B07FE6 Tax Free Bonds 23-Dec-16 7.17% 23-Dec-21 5020 CRISIL AAA/Stable INE906B07FF3 Tax Free Bonds 24-Jan-17 7.22% 24-Jan-47 8500 CRISIL AAA/Stable INE906B07FG1 Tax Free Bonds 20-Mar-17 7.60% 18-Mar-22 4025 CRISIL AAA/Stable INE906B07FT4 NHAI Taxable Bonds 06-June-2017 7.27% 06-June-2022 1525 CRISIL AAA/Stable INE906B07FU2 NHAI Taxable Bonds 16-June-2017 7.24% 16-June-2047 5000 CRISIL AAA/Stable INE906B07FV0 NHAI Taxable Bonds 14-July-2017 7.14% 14-July-2047 3500 CRISIL AAA/Stable INE906B07FW8 NHAI Taxable Bonds 24-Aug-2017 7.38% 24-Aug-2038 5000 CRISIL AAA/Stable INE906B07FX6 NHAI Taxable Bonds 06-Nov-2017 7.11% 06-Nov-2022 850 CRISIL AAA/Stable INE906B08021 NHAI Taxable Bonds 22-Nov-2017 7.64% 22-Nov-2032 5000 CRISIL AAA/Stable Taxable Bonds 2018- INE906B07GK1 28-Jun-2018 8.55% 28-Jun-2048 2195 CRISIL AAA/Stable 19 Taxable Bonds 2018- INE906B07GL9 02-Aug-2018 8.45% 02-Aug-2048 2060.2 CRISIL AAA/Stable 19 Taxable Bonds 2018- INE906B07GM7 21-Dec-2018 8.1905% 21-Dec-2028 2055.2 CRISIL AAA/Stable 19 Taxable Bonds 2018- INE906B07GN5 21-Jan-2019 8.37% 21-Jan-2029 1675 CRISIL AAA/Stable 19 Taxable Bonds 2018- INE906B07GO3 05-Feb-2019 8.50% 05-Feb-2029 2000 CRISIL AAA/Stable 19 54EC Capital Gain Tax INE906B07EQ3 30-Apr-16 6.00% 30-Apr-19 270 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07ER1 31-May-16 6.00% 31-May-19 367 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07ES9 30-Jun-16 6.00% 30-Jun-19 441 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07ET7 31-July-16 6.00% 31-July-19 521 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EU5 31-Aug-16 6.00% 31-Aug-19 417 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07FC0 30-Sep-16 6.00% 30-Sep-19 455 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EV3 31-Oct-16 6.00% 31-Oct-19 433 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EW1 30-Nov-16 6.00% 30-Nov-19 566 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EX9 31-Dec-16 5.25% 31-Dec-19 455 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EY7 31-Jan-17 5.25% 31-Jan-20 392 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07EZ4 28-Feb-17 5.25% 28-Feb-20 376 CRISIL AAA/Stable Exemption Bonds 54EC Capital Gain Tax INE906B07FA4 31-Mar-17 5.25% 31-Mar-20 880 CRISIL AAA/Stable Exemption Bonds INE906B07FH9 54EC Bonds -2017-18 30-Apr-2017 5.25% 30-Apr-2020 277.94 CRISIL AAA/Stable INE906B07FI7 54EC Bonds -2017-18 31-May-2017 5.25% 31-May-2020 345.07 CRISIL AAA/Stable INE906B07FJ5 54EC Bonds -2017-18 30-June-2017 5.25% 30-June-2020 379.11 CRISIL AAA/Stable INE906B07FK3 54EC Bonds -2017-18 31-July-2017 5.25% 31-July-2020 515.3 CRISIL AAA/Stable INE906B07FL1 54EC Bonds -2017-18 31-Aug-2017 5.25% 31-Aug-2020 418.72 CRISIL AAA/Stable INE906B07FM9 54EC Bonds -2017-18 30-Sep-2017 5.25% 30-Sep-2020 470.06 CRISIL AAA/Stable INE906B07FN7 54EC Bonds -2017-18 31-Oct-2017 5.25% 31-Oct-2020 456.99 CRISIL AAA/Stable INE906B07FO5 54EC Bonds -2017-18 30-Nov-2017 5.25% 30-Nov-2020 508.7 CRISIL AAA/Stable INE906B07FP2 54EC Bonds -2017-18 31-Dec-2017 5.25% 30-Dec-2020 544.02 CRISIL AAA/Stable INE906B07FQ0 54EC Bonds -2017-18 31-Jan-2018 5.25% 31-Jan-2021 536.88 CRISIL AAA/Stable INE906B07FR8 54EC Bonds -2017-18 28-Feb-2018 5.25% 28-Feb-2021 565.31 CRISIL AAA/Stable INE906B07FS6 54EC Bonds -2018-19 31-Mar-2018 5.25% 31-Mar-2021 1639.31 CRISIL AAA/Stable INE906B07FY4 54EC Bonds -2018-19 30-Apr-2018 5.75% 30-Apr-2023 153.52 CRISIL AAA/Stable INE906B07FZ1 54EC Bonds -2018-19 31-May-2018 5.75% 31-May-2023 248.39 CRISIL AAA/Stable INE906B07GA2 54EC Bonds -2018-19 30-June-2018 5.75% 30-June-2023 314.02 CRISIL AAA/Stable INE906B07GB0 54EC Bonds -2018-19 31-July-2018 5.75% 31-July-2023 438.72 CRISIL AAA/Stable INE906B07GC8 54EC Bonds -2018-19 31-Aug-2018 5.75% 31-Aug-2023 348.44 CRISIL AAA/Stable INE906B07GD6 54EC Bonds -2018-19 30-Sep-2018 5.75% 30-Sep-2023 353.08 CRISIL AAA/Stable INE906B07GE4 54EC Bonds -2018-19 31-Oct-2018 5.75% 31-Oct-2023 360.03 CRISIL AAA/Stable INE906B07GF1 54EC Bonds -2018-19 30-Nov-2018 5.75% 30-Nov-2023 329.3 CRISIL AAA/Stable INE906B07GG9 54EC Bonds -2018-19 31-Dec-2018 5.75% 31-Dec-2023 402.75 CRISIL AAA/Stable Long-term borrowing NA 17-Jan-2018 NA 17-Jan-2028 10000 CRISIL AAA/Stable programme# Long-term borrowing NA 07-Mar-2018 NA 07-Mar-2028 10000 CRISIL AAA/Stable programme# Long-term borrowing NA 07-June-2018 NA 07-June-2028 5000 CRISIL AAA/Stable programme# Long-term borrowing NA 28-Sep-2018 NA 28-Sep-2028 5000 CRISIL AAA/Stable programme# Long-term borrowing NA 31-Dec-2018 NA 31-Dec-2028 5000 CRISIL AAA/Stable programme# Long-term borrowing NA 03-Aug-2018 NA 31-Mar-2029 5000 CRISIL AAA/Stable programme# Long-term borrowing NA 11-Sep-2018 NA 31-Mar-2029 2000 CRISIL AAA/Stable programme# Long-term borrowing NA 19-Sep-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 25-Sep-2018 NA 31-Mar-2029 2000 CRISIL AAA/Stable programme# Long-term borrowing NA 28-Sep-2018 NA 31-Mar-2029 2000 CRISIL AAA/Stable programme# Long-term borrowing NA 30-Nov-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 04-Dec-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 07-Dec-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 11-Nov-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 19-Dec-2018 NA 31-Mar-2029 1000 CRISIL AAA/Stable programme# Long-term borrowing NA 16-Jan-2019 NA 31-Mar-2029 500 CRISIL AAA/Stable programme# Long-term borrowing NA 17-Jan-2019 NA 31-Mar-2029 500 CRISIL AAA/Stable programme# Long-term borrowing NA 30-Jan-2019 NA 31-Mar-2029 500 CRISIL AAA/Stable programme# Long-term borrowing NA 31-Jan-2019 N 31-Mar-2029 250 CRISIL AAA/Stable programme# Long-term borrowing NA* NA N NA 3000 CRISIL AAA/Stable programme Long-term borrowing NA NA NA NA 8467.59 Withdrawn programme^ Long-term borrowing NA* NA NA NA 15316.35 CRISIL AAA/Stable programme Long-term borrowing NA* NA NA NA 75000 CRISIL AAA/Stable programme@ #raised through bank loan ^Not raised for fiscal 2018 *Not raised @through different modes including public issue of Bharatmala Bonds Annexure - Rating History for last 3 Years Start of Current 2019 (History) 2018 2017 2016 2016 Outstanding Instrument Type Rating Date Rating Date Rating Date Rating Date Rating Rating Amount Long-Term 193105.41 CRISIL CRISIL CRISIL CRISIL CRISIL Borrowing LT 29-03-19 AAA/Stable 29-03-18 AAA/Stable 26-05-17 AAA/Stable 28-07-16 AAA/Stable AAA/Stable Programme 28-04-17 CRISIL 07-04-16 CRISIL AAA/Stable AAA/Stable Non CRISIL CRISIL Convertible LT ------26-05-17 Withdrawal 28-07-16 AAA/Stable AAA/Stable Debentures 28-04-17 CRISIL 07-04-16 CRISIL AAA/Stable AAA/Stable Tax Free LT 61545.00 CRISIL 29-03-18 CRISIL 26-05-17 CRISIL 28-07-16 CRISIL CRISIL Bond 29-03-19 AAA/Stable AAA/Stable AAA/Stable AAA/Stable AAA/Stable 28-04-17 CRISIL 07-04-16 CRISIL AAA/Stable AAA/Stable All amounts are in Rs.Cr. 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All rights reserved @ CRISIL Note for Media: This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper / magazine / agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to CRISIL. However, CRISIL alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites, portals etc. About CRISIL Limited CRISIL is a leading agile and innovative, global analytics company driven by its mission of making markets function better. We are India’s foremost provider of ratings, data, research, analytics and solutions. A strong track record of growth, culture of innovation and global footprint sets us apart. We have delivered independent opinions, actionable insights, and efficient solutions to over 1,00,000 customers. We are majority owned by S&P Global Inc., a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. For more information, visit www.crisil.com Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK About CRISIL Ratings CRISIL Ratings is part of CRISIL Limited (“CRISIL”). We pioneered the concept of credit rating in India in 1987. CRISIL is registered in India as a credit rating agency with the Securities and Exchange Board of India (“SEBI”). With a tradition of independence, analytical rigour and innovation, CRISIL sets the standards in the credit rating business. We rate the entire range of debt instruments, such as, bank loans, certificates of deposit, commercial paper, non-convertible / convertible / partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 24,500 large and mid-scale corporates and financial institutions. CRISIL has also instituted several innovations in India in the rating business, including rating municipal bonds, partially guaranteed instruments and microfinance institutions. We also pioneered a globally unique rating service for Micro, Small and Medium Enterprises (MSMEs) and significantly extended the accessibility to rating services to a wider market. Over 1,10,000 MSMEs have been rated by us. CRISIL PRIVACY NOTICE CRISIL respects your privacy. We use your contact information, such as your name, address, and email id, to fulfil your request and service your account and to provide you with additional information from CRISIL and other parts of S&P Global Inc. and its subsidiaries (collectively, the “Company) you may find of interest. 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Ratings from CRISIL Rating are statements of opinion as of the date they are expressed and not statements of fact or recommendations to purchase, hold, or sell any securities / instruments or to make any investment decisions. Any opinions expressed here are in good faith, are subject to change without notice, and are only current as of the stated date of their issue. CRISIL assumes no obligation to update its opinions following publication in any form or format although CRISIL may disseminate its opinions and analysis. CRISIL rating contained in the Report is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment or other business decisions. The recipients of the Report should rely on their own judgment and take their own professional advice before acting on the Report in any way. Neither CRISIL nor its affiliates, third party providers, as well as their directors, officers, shareholders, employees or agents (collectively, “CRISIL Parties”) guarantee the accuracy, completeness or adequacy of the Report, and no CRISIL Party shall have any liability for any errors, omissions, or interruptions therein, regardless of the 7 cause, or for the results obtained from the use of any part of the Report. EACH CRISIL PARTY DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, SUITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. 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Reports with more detail and additional information may be available for subscription at a fee – more details about CRISIL ratings are available here: www.crisilratings.com. CRISIL and its affiliates do not act as a fiduciary. While CRISIL has obtained information from sources it believes to be reliable, CRISIL does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives and / or relies in its Reports. CRISIL keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of the respective activity. As a result, certain business units of CRISIL may have information that is not available to other CRISIL business units. CRISIL has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process. CRISIL has in place a ratings code of conduct and policies for analytical firewalls and for managing conflict of interest. For details please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html CRISIL’s rating criteria are generally available without charge to the public on the CRISIL public web site, www.crisil.com. For latest rating information on any instrument of any company rated by CRISIL you may contact CRISIL RATING DESK at [email protected], or at (0091) 1800 267 1301. This Report should not be reproduced or redistributed to any other person or in any form without a prior written consent of CRISIL. All rights reserved @ CRISIL 8 Login India Ratings A rms National Highways Authority of India at 'IND AAA'/Stable; Rates FY20 Borrowing Programme 29 MAR 2019 By Deepanshu Goyal India Ratings and Research (Ind-Ra) has affirmed National Highways Authority of India’s (NHAI) Long-Term Issuer Rating at ‘IND AAA’. The Outlook is Stable. The instrument-wise rating actions are given below: Instrument Type Date of Coupon Maturity Size of Issue (billion) Rating/Outlook Rating Issuance Rate Date Action (%) FY20 borrowing programme (including 54EC bonds for FY20)* - - - INR750 IND AAA/Stable Assigned FY19 borrowing programme (including 54EC bonds for FY19)* - - - INR620 IND AAA/Stable Affirmed FY18 borrowing programme (including 54EC bonds for FY18)* - - - INR505.32 (reduced from INR590) IND AAA/Stable Affirmed FY17 borrowing programme* - - - INR331.18 IND AAA/Stable Affirmed Tax-free bonds (FY12 and FY16)* - - - INR290 IND AAA/Stable Affirmed 54 EC bonds (FY15)* - - - INR6.48 WD Withdrawn (paid in full) 54 EC bonds (FY16)* - - - INR8.63 (reduced from INR42.81) IND AAA/Stable Affirmed * Details in annexure KEY RATING DRIVERS Public Policy Institution: Given NHAI is the sole agency responsible for the development of national highways in India, it is strategically important to the government of India (GoI). NHAI’s fundamental purpose is to improve the national road transit infrastructure, better serve the national economy and improve the country’s standard of living. Its mandate highlights the GoI’s priority on economic development, while retaining an underlying social welfare function. Its tax exemption status and privilege to raise funds through Section 54EC capital gains bonds and tax-free bonds reiterate its importance to the GoI. Robust Sovereign Control: The ratings factor in NHAI’s significant financial, operational and managerial linkages with the GoI, as well as its statutory status. Strong federal control, by way of continuous support from the GoI in the form of capital grants, allocation of cess funds, additional budgetary support and guarantees for its market borrowing programmes, via union budget allocation and operational performance, supports the ratings. The ratings draws comfort from National Highways Authority of India Act, 1988, which states i) the GoI will provide capital to NHAI for discharge of its functions as may be required ii) NHAI can borrow money from any sources as it may deem fit and iii) the GoI has the power to supersede NHAI in case of default in complying with its functions. Moreover, a 12.41% rise in budgetary allocation (including internal and extra-budgetary resources support) to the Ministry of Road Transport and Highways to about INR1,116 billion in FY20 (budget estimates (BE)) indicates the importance of NHAI to the GoI for building roads and highway infrastructure in India. Strong Financial Support; Increasing Market Borrowings: NHAI is well placed on the funding side, considering the GoI extends substantial budgetary support for its projects by way of allocation of fuel cess funds and budgetary resources. In addition, NHAI has the flexibility to raise funds through capital gains bonds and tax-free infrastructure bonds. In FY20, budgetary support to NHAI increased to INR367 billion from INR296 billion in FY19. Fuel cess remains the major source of finance. With the Central Road Fund (Amendment) Bill, 2017, 2.5% of the total proceeds from the cess collected on high-speed diesel oil and petrol, which amounts to about INR20 billion per annum, will now be used for financing national waterways, education institutions, medical colleges and other infrastructure segments, in addition for funding the development and maintenance of national and state highways. The bill has marginally reduced the allocation of cess towards the development and maintenance of national highways to 39% from 41.5%. Subsequently, fuel cess allocation to NHAI reduced to INR180 billion in FY19 (revised estimates (RE)) (FY19 (BE): INR200 billion) and is further budgeted at INR160 billion for FY20. The reduced fuel cess allocation has increased NHAI’s reliance on external borrowings, which are estimated at INR750 billion for FY20 (BE). As on 28 March 2019, NHAI had raised INR300 billion in loan from the National Small Savings Fund, INR190 billion in term loan from State Bank of India and around INR200 billion by issuing 54EC tax-free bonds and taxable bonds from Life Insurance Corporation of India. At FYE18, NHAI’s available funds (cash and bank balances) stood at INR83.77 billion. In Ind-Ra’s opinion, in view of NHAI’s strong linkages with and continuous support from the GoI, liquidity will not be a constraining factor for NHAI to execute projects. Pick-up in Operational Performance: The FY18 performance of NHAI with regard to project completion (measured as annual road length completed as a percentage of annual road completion targets) was lower than that in FY17. NHAI completed the construction of 51.18% (3,071km at 8.41km/day) of its targeted road stretches against the target of 6,000km at 16.44km/day. Furthermore, in FY18, NHAI was awarded a record high of 74.00% (7,400km; 20.27km/day) of its target stretch against the target of 10,000km at 27.40km/day. Ind-Ra expects order awards to pick up pace post the general elections in May 2019. Subsequently, the commencement of road construction will gain momentum in view of higher awards in FY18 and FY19. Bharatmala Pariyojana: Under Bharatmala Pariyojana, a total of 34,800km of national highways have been identified by the GoI for the improvement of national corridor efficiency. 24,800km will be taken up in Phase I, which will be implemented over FY18-FY22, along with the 10,000km that already exist under the National Highways Development Project. The overall fund requirement for Phase I is estimated at INR6,923.24 billion (INR3,850 billion for Bharatmala Pariyojana; INR1,500 billion for existing NHDP Projects executed by NHAI; INR1,573.24 billion for ongoing existing schemes). Thus, NHAI does not consider funding a restraining factor. Until August 2018, NHAI had successfully been awarded 4,466km of highways under Bharatmala Pariyojana. Mixed Performance of HAM; EPC Model Emerging: The hybrid annuity model (HAM) and engineering, procurement and construction (EPC) model have emerged as the preferred modes for awarding road projects, as the build-operate-transfer model has taken a back seat due to the weak financial position of private players and overleveraged balance sheet in some cases. Although FY18 saw a large number of projects being awarded under the HAM, the slowdown in project awards under the HAM may be attributable to i) a low appetite of developers as they secured large projects in 4QFY18 ii) land acquisition issues that led to delays in appointed date and iii) banks that were put into the prompt corrective action of the Reserve Bank of India led to cautious bank lending, thereby delaying financial closures. In Ind-Ra’s opinion, in view of the cautious approach of lenders to financing HAM projects, NHAI’s preferred mode of awarding is likely to move to EPC projects. At FYE18, NHAI had awarded 150 projects with a total length of 7,400km and equivalent total cost of INR1,220 billion. Of these projects, 51% (77), which have a total length of 3,791km, were awarded under the EPC model; 46% (69), which have a total length of 3,3696km, were awarded under the HAM and 3% (4), which have a total length of 209km, were awarded under the BOT mode. RATING SENSITIVITIES Negative: Any weakening of NHAI’s financial, operational and managerial linkages with the GoI will lead to a negative rating action. COMPANY PROFILE NHAI is an autonomous organisation of the GoI under the Ministry of Road Transport and Highways and was constituted on 15 June 1989 under the National Highways Authority of India Act, 1988. NHAI commenced operations in February 1995, with the appointment of full-time chairman and other members. The main objective of NHAI is to develop, maintain and manage national highways entrusted to it. FINANCIAL SUMMARY Particulars FY16 FY17 Operating balance (INR million) -2,213.93 -2,672.50 Current balance (INR million) -14,815.67 -27,146.9 Capital balance (INR million) -134,148.86 -236,878.4 Current balance/current revenue (%) -151.00 -166.10 Overall results/total revenue (%) 24.85 22.74 Direct debt/current revenue (x) 46.17 46.12 Source: Ind-Ra, NHAI RATING HISTORY Instrument Type Current Rating/Outlook Historical Rating/Outlook Rating Type Rated Rating 29 March 2018 11 April 2 September 2015 Limits 2016 (billion) Issuer rating Long-term IND AAA/Stable IND AAA/Stable IND IND AAA/Stable AAA/Stable Tax-free bonds (FY12 and FY16) Long-term INR290 IND AAA/Stable IND AAA/Stable IND IND AAA/Stable AAA/Stable Long-term bonds (FY15) Long-term INR6.48 WD IND AAA/Stable IND IND AAA/Stable AAA/Stable Long-term bonds (FY16) Long-term INR8.63 IND AAA/Stable IND AAA/Stable IND IND AAA/Stable AAA/Stable FY17 borrowing programme Long-term INR331.18 IND AAA/Stable IND AAA/Stable IND - AAA/Stable FY18 borrowing programme Long-term INR505.32 IND AAA/Stable IND AAA/Stable - - (including 54EC bonds for FY18) FY19 borrowing programme Long-term INR620 IND AAA/Stable IND AAA/Stable - - (including 54EC bonds for FY19) FY20 borrowing programme Long-term INR750 IND AAA/Stable - - (including 54EC bonds for FY20) ANNEXURE Instrument ISIN Coupon Rate (%) Date of Issuance Maturity Date Size of Issue (INR billion) Rating/Outlook Tax-free bonds (FY12) INE906B07CA1 8.20 25 January 2012 25 January 2022 67.14 IND AAA/Stable Tax-free bonds (FY12) INE906B07CB9 8.30 25 January 2012 25 January 2027 32.86 IND AAA/Stable Total 100.00 54 EC Bonds (FY15) INE906B07DR3 6.00 1 March 2015 31 March 2018 6.48 WD Total 6.48 54 EC Bonds (FY16) INE906B07ED1 6.00 1 March 2016 31 March 2019 8.63 IND AAA/Stable Total 8.63 Tax-free bonds (FY16) INE906B07EE9 7.11 18 September 2015 18 September 2025 5.49 IND AAA/Stable Tax-free bonds (FY16) INE906B07EF6 7.28 18 September 2015 18 September 2030 33.23 IND AAA/Stable Tax-free bonds (FY16) INE906B07EG4 7.14 11 January 2016 11 January 2026 6.86 IND AAA/Stable Tax-free bonds (FY16) INE906B07EH2 7.39 11 January 2016 11 January 2026 6.56 IND AAA/Stable Tax-free bonds (FY16) INE906B07EI0 7.35 11 January 2016 11 January 2031 59.83 IND AAA/Stable Tax-free bonds (FY16) INE906B07EJ8 7.60 11 January 2016 11 January 2031 26.75 IND AAA/Stable Tax-free bonds (FY16) INE906B07EK6 7.02 18 February 2016 18 February 2026 4.55 IND AAA/Stable Tax-free bonds (FY16) INE906B07EL4 7.39 11 January 2016 18 February 2031 13.73 IND AAA/Stable Tax-free bonds (FY16) INE906B07EM2 7.04 9 March 2016 9 March 2026 0.98 IND AAA/Stable Tax-free bonds (FY16) INE906B07EN0 7.29 9 March 2016 9 March 2026 1.92 IND AAA/Stable Tax-free bonds (FY16) INE906B07EO8 7.39 9 March 2016 9 March 2031 18.82 IND AAA/Stable Tax-free bonds (FY16) INE906B07EP5 7.69 9 March 2016 9 March 2031 11.28 IND AAA/Stable Total 190.00 54 EC Bonds (FY17) INE906B07EQ3 6.00 1 April 2016 1 April 2019 2.70 IND AAA/Stable 54 EC Bonds (FY17) INE906B07ER1 6.00 1 May 2016 1 May 2019 3.67 IND AAA/Stable 54 EC Bonds (FY17) INE906B07ES9 6.00 1 June 2016 1 June 2019 4.41 IND AAA/Stable 54 EC Bonds (FY17) INE906B07ET7 6.00 1 July 2016 1 July 2019 5.21 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EU5 6.00 1 August 2016 1 August 2019 4.17 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EC0 6.00 1 September 2016 1 September 2019 4.55 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EV3 6.00 1 October 2016 1 October 2019 4.33 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EW1 6.00 1 November 2016 1 November 2019 5.66 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EX9 5.25 1 December 2016 1 December 2019 4.55 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EY7 5.25 1 January 2017 1 January 2020 3.92 IND AAA/Stable 54 EC Bonds (FY17) INE906B07EZ4 5.25 1 February 2017 1 February 2020 3.76 IND AAA/Stable 54 EC Bonds (FY17) INE906B07FA4 5.25 1 March 2017 1 March 2020 8.80 IND AAA/Stable Total 55.73 54 EC Bonds (FY18) INE906B07FH9 5.25 30 April 2017 30 April 2020 2.78 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FI7 5.25 31 May 2017 31 May 2020 3.45 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FJ5 5.25 30 June 2017 30 June 2020 3.79 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FK3 5.25 31 July 2017 31 July 2020 5.15 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FL1 5.25 31 August 2017 31 August 2020 4.19 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FM9 5.25 30 September 2017 30 September 2020 4.70 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FN7 5.25 31 October 2017 31 October 2020 4.57 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FO5 5.25 30 November 2017 30 November 2020 5.09 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FP2 5.25 31 December 2017 31 December 2020 5.44 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FQ0 5.25 31 January 2018 31 January 2021 5.37 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FR8 5.25 28 February 2018 28 February 2021 5.65 IND AAA/Stable 54 EC Bonds (FY18) INE906B07FS6 5.25 31 March 2018 31 March 2021 16.39 IND AAA/Stable Total 66.57 Taxable bonds (FY17) INE906B07FB2 8.03 3 August 2016 3 August 2041 50.00 IND AAA/Stable Taxable bonds (FY17) INE906B07FD8 7.68 1 September 2016 30 August 2041 50.00 IND AAA/Stable Taxable bonds (FY17) INE906B07FE6 7.17 23 December 2016 23 December 2021 50.20 IND AAA/Stable Taxable bonds (FY17) INE906B07FF3 7.22 24 January 2017 24 January 2047 85.00 IND AAA/Stable Taxable bonds (FY17) INE906B07FG1 7.60 20 March 2017 18 March 2022 40.25 IND AAA/Stable Total 275.45 Taxable bonds (FY18) INE906B07FT4 7.27 6 June 2017 6 June 2022 15.25 IND AAA/Stable Taxable bonds (FY18) INE906B07FU2 7.24 16 June 2017 16 June 2047 50.00 IND AAA/Stable Taxable bonds (FY18) INE906B07FV0 7.14 14 July 2017 14 July 2047 35.00 IND AAA/Stable Taxable bonds (FY18) INE906B07FW8 7.38 24 August 2017 24 August 2032 50.00 IND AAA/Stable Taxable bonds (FY18) INE906B07FX6 7.11 6 November 2017 6 November 2022 8.50 IND AAA/Stable Taxable bonds (FY18) INE906B08021 7.64 22 November 2017 22 November 2032 50.00 IND AAA/Stable Total 208.75 54 EC Bonds (FY19) INE906B07FY4 5.75 30 April 2018 30 April 2023 1.54 IND AAA/Stable 54 EC Bonds (FY19) INE906B07FZ1 5.75 31 May 2018 31 May 2023 2.48 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GA2 5.75 30 June 2018 30 June 2023 3.14 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GB0 5.75 31 July 2018 31 July 2023 4.39 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GC8 5.75 31 August 2018 31 August 2023 3.48 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GD6 5.75 30 September 2018 30 September 2023 3.53 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GE4 5.75 31 October 2018 31 October 2023 3.60 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GF1 5.75 30 November 2018 30 November 2023 3.29 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GG9 5.75 31 December 2018 31 December 2023 4.03 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GH7 5.75 31 January 2019 31 January 2024 4.35 IND AAA/Stable 54 EC Bonds (FY19) INE906B07GI5 5.75 28 February 2019 29 February 2024 4.30 IND AAA/Stable 54 EC Bonds (FY19)* INE906B07GJ3 5.75 31 March 2019 31 March 2024 6.72 IND AAA/Stable Total 44.85 Taxable bonds (FY19) INE906B07GK1 8.55 28 June 2018 28 June 2048 21.95 IND AAA/Stable Taxable bonds (FY19) INE906B07GL9 8.45 2 August 2018 2 August 2048 20.60 IND AAA/Stable Taxable bonds (FY19) INE906B07GM7 8.19 21 December 2018 21 December 2028 20.55 IND AAA/Stable Taxable bonds (FY19) INE906B07GN5 8.37 21 January 2019 21 January 2029 16.75 IND AAA/Stable Taxable bonds (FY19) INE906B07GO3 8.49 5 February 2019 5 February 2029 20.00 IND AAA/Stable Taxable bonds (FY19) INE906B07GP0 8.27 28 March 2019 28 March 2029 55.00 IND AAA/Stable Total 154.85 Unutilised amount (FY19) 30.30 IND AAA/Stable Unutilised amount (FY20) 750.00 IND AAA/Stable * Provisional for March 2019 allotment is under process In FY19, NHAI took a loan of INR200 billion from the National Small Savings Fund and a term loan of INR190 billion from State Bank of India. In FY18, NHAI took masala bonds totalling INR30 billion and INR200 billion from the National Small Savings Fund. COMPLEXITY LEVEL OF INSTRUMENTS For details on the complexity levels of the instruments, please visit https://www.indiaratings.co.in/complexity-indicators SOLICITATION DISCLOSURES Additional information is available at www.indiaratings.co.in. The ratings above were solicited by, or on behalf of, the issuer, and therefore, India Ratings has been compensated for the provision of the ratings. Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer. 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Applicable Criteria Rating of Public Sector Entities Analyst Names Primary Analyst Deepanshu Goyal Analyst India Ratings and Research Pvt Ltd 601-9 Prakashdeep Building 7 Tolstoy Marg New Delhi 110001 011 43567289 Secondary Analyst Devika Malik Senior Analyst +91 40 67661911 Committee Chairperson Dr Devendra Pant Chief Economist and Head Public Finance +91 11 43567251 Media Relation Namita Sharma Manager – Corporate Communication +91 22 40356121 Applicable Criteria Rating of Public Sector Entities Analyst Names Primary Analyst Deepanshu Goyal Analyst India Ratings and Research Pvt Ltd 601-9 Prakashdeep Building 7 Tolstoy Marg New Delhi 110001 011 43567289 Secondary Analyst Devika Malik Senior Analyst 040 67661911 Committee Chairperson Dr. Sunil Kumar Sinha Principal Economist and Director Public Finance +91 11 43567255 Media Relation Namita Sharma Manager – Corporate Communication +91 22 40356121 ANNEXURE – 3 CONSENT OF THE TRUSTEE 5065/BTL/CL/17-18/DEB/251 Date: March 29, 2019 National Highways Authority of India G-5 & 6, Sector 10, Dwarka, New Delhi-110075 Kind Attn: Shri S Q Ahmad( General Manager Finance) Dear Sir, Consent to act as Trustee for NHAI Borrowing Programme of Rs.50000 Cr to be raised through private placement/public issue of various types of bonds/instruments and loan etc from domestic market. This is with reference to your letter dated March 29, 2019 for appointment of Beacon Trusteeship Limited as Trustee for NHAI’s subject borrowing programme. In this regards it would indeed be our pleasure to be associated with your esteemed organization as Trustee for the NHAI Borrowing Programme of Rs.50000 Cr to be raised through private placement/public issue of various types of bonds/instruments and loan etc. from domestic market. In this connection, we confirm our acceptance to act as Trustee for the same. We are also agreeable for inclusion of our name as trustees in the Company’s offer document/disclosure document/ listing application/any other document to be filed with the Stock Exchange(s) or any other authority as required Looking forward to a long and fruitful association with your esteemed organization. Yours faithfully, For Beacon Trusteeship Limited Authorised Signatory BEACON TRUSTEESHIP LTD. Corporate Office : 4C & D , Siddhivinayak Chambers, Gandhi Nagar, Opp MIG Cricket Club, Bandra East (E), Mumbai 400051 Regd Office: F/801, Jai Balaji CHS Ltd, Plot no. 23, Sector 6, Nerul, Thane, Maharashtra -400706.| CIN: U74999MH2015PLC271288 Phone : 022-26558759 | Email : [email protected] | Website : www.beacontrustee.co.in ANNEXURE – 4 LIMITED REVIEW REPORT FOR MARCH 2019 AND SEPTEMBER 2019