NEYVELI LIGNITE CORPORATION LIMITED

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1 SHARE CAPITAL SCHEDULE-1 Authorised 2,00,00,00,000 Equity Shares of Rs.10 each Issued, Subscribed and Paid Up 1,61,31,86,300*(P.Y.1,73,22,60,900) Equity shares of Rs.10 each ,01,50,000 Equity Shares of Rs.10 each issued by converting Government Loan into Equity ,73,300 Equity Shares of Rs.10 each issued as fully paid for consideration other than cash *Share capital stands reduced by Rs lakhs effective from 5th September 2000, arising out of take over of certain assets by M/s.Power Grid Corporation of India Limited, vide Department of Company Affairs Order no.40/02/2000/cl-iii. RESERVES AND SURPLUS SCHEDULE-2 As at Additions Withdrawal As at Capital reserve vide schedule 2A Profit and Loss Account Interest Differential Fund KFW Sub Account No - I Sub Account No - II Investment Allowance (Utilized)Reserve Guarantee Fees & Foreign Exchange difference arising on payment of KFW Loan, Interest and Commitment charges are adjusted against the Interest Differential Fund as provided in the Loan Agreement. 52

2 ANNUAL REPORT CAPITAL RESERVE SCHEDULE-2A As at Additions Withdrawal As at CAPITAL GRANTS: Fly Ash Housing Grant Plant Renovation Grant Safety Investigation System SECURED LOANS SCHEDULE-3 Cash credit Account with State Bank of India (Secured by hypothecation of stocks of stores, spares, raw materials and finished goods) UNSECURED LOANS SCHEDULE-4 From Government of India ** Interest Payable in Instalments on Govt. of India loan ** From KFW 65 Million Portion I ## From KFW 65 Million Portion II ## From KFW Million Portion I ## From KFW Million Portion II ## Bank(Book Overdraft) Repayable within a year ** The Company has given an undertaking to the President of India not to encumber or alienate the Fixed Assets without his written consent. ## Guaranteed by the Government of India. 53

3 FIXED ASSETS SCHEDULE-5 GROSS COST DEPRECIATION NET VALUE DESCRIPTION AS AT ADDITIONS/ DISPOSALS/ AS AT UPTO WITHDRAWALS/ FOR THE UPTO AS AT AS AT TRANSFER TRANSFER/ADJT TRANSFER/ADJT. YEAR LAND ROADS BUILDINGS ELEC. INSTALLATIONS WATER SUPPLY&DRAINAGE RAILWAY SIDINGS PLANT & MACHINERY* FURNITURE & EQUIPMENTS VEHICLES PATENTS ASSETS COSTING RS.5000 AND BELOW # MINE DEVELOPMENT MINE-I MINE-II TOTAL PREVIOUS YEAR # Includes Assets non commissioned amounting to Rs lakhs (Previous year Rs Represents provisions for amortisation Disposals are subject to approval of the President of India ++ Includes leasehold buildings of value Rs lakhs for which lease agreement is yet to be signed. Normal depreciation rate adopted in view of lower amortisation rate. * Includes Insurance Spares 54

4 ANNUAL REPORT INVESTMENTS - LONG TERM SCHEDULE-6 Trade Investments at cost (Quoted) 15.75%,7 years Secured, Redeemable, Non-convertible bonds of APTRANSCO (15000 No.of Bonds for a face value of Rs.1.00 lakh each) (Market Value not Available) (Unquoted ) 13% 7 years Unsecured, Redeemable, Non-convertible bonds of APTRANSCO (44500 No. of Bonds for a face value of Rs.1.00 lakh each) Total INVENTORIES SCHEDULE-7 (As certified by the Management) Raw Materials Semi-Finished Stocks Finished Stocks Main Products By - Products Stores and Spares Less:Provision Loose Tools Solid/Hallow/Fly Ash Bricks SUNDRY DEBTORS SCHEDULE-8 Secured More than six months Others Unsecured Considered Good More than six months Others Considered Doubtful Less:Provision for Doubtful Debts

5 CASH AND BANK BALANCES SCHEDULE-9 Cash,Cheques and Demand Drafts on hand With Scheduled Banks On Current Accounts Unpaid Dividend Account On short-term Deposits Includes Indo U.S. S&T grant Rs Lakhs (Rs.8.87 Lakhs) On Fixed Deposits Staff Security Deposit Endowment Fund in the name of Neyveli Lignite Corporation Schools CPF Trust (pledged with the CPF Trust) Education Endowment Fund OTHER CURRENT ASSETS SCHEDULE-10 Project Under Sale : Land Buildings Plant & Machinery Elecl.Installations Water Supply & Drainage Others Exploration Expenditure Total Interest Accrued but not due Disposable/Dismantled Assets

6 ANNUAL REPORT LOANS AND ADVANCES SCHEDULE-11 Advances recoverable in cash or in kind or for value to be received Secured Unsecured Considered Good Considered Doubtful Less:Provision for Doubtful Advances Prepaid Expenses Advance Income Tax Less : Provision for Taxation Deposit with Central Excise, Port Trust and Customs Authorities Deposit with Public Financial Institutions and other Public Sector Undertakings a. Due by Officers - - b. Maximum amount due at any time during the year a. Due by Directors - - b. Maximum amount due at any time during the year

7 CURRENT LIABILITIES & PROVISIONS SCHEDULE-12 A. Current Liabilities Sundry Creditors and accrued expenses Commitment Charges - KFW Loan Unclaimed Bonds Interim Dividend payable Other Liabilities Revenue Grant Unclaimed Dividend Staff Security Deposit Education Endowment Fund Interest accrued but not due Unsecured Loans - GOI KFW B. Provision Provision for Gratuity Provision for Accrued Earned Leave Provision for Half Pay Leave Provision for Contingencies Provision for Post Retirement Medical Benefit Provision for Proposed final Dividend Provision for Tax on Dividend MISCELLANEOUS EXPENDITURE SCHEDULE-12A (To the extent not written off or adjusted) Preliminary Project Expenditure Less: Provision Deferred Expenditure

8 ANNUAL REPORT SALES SCHEDULE-13 Products Unit Quantity Value Quantity Value Thermal Power Stations Power K.W Fertilizer Plant Urea # T Carbon-di-oxide T Carbon Pellets T Briquetting and Carbonisation Plant Leco ** T Cokefines T Raw Briquette Chips T Pre-Cooler Dust T Phenol T Ortho Cresol T M.V.Phenol T Xylenol T M.P.Cresol T Lignite Dust T Others Lignite T Fly Ash T Miscellaneous # Does not include Bed Stock movement and other adjustments Nil (P.Y.208 Tonnes) ** Excluding internal consumption 1063 Tonnes (P.Y.1244 Tonnes) K.W. Kilo Watt Hour T.- Tonnes 59

9 OTHER INCOME SCHEDULE-14 Interest Bank [TDS Rs lakhs(rs lakhs)] Employees Long term Investments Others [Includes TDS Rs lakhs ( Rs lakhs)] Recoveries Rent Others Packing and Freight charges recovered Profit on Disposal of Assets Provision Written back Miscellaneous Less : Transfer to Capital Expenditure Accounts

10 ANNUAL REPORT SCHEDULE-15 Products Unit Quantity Value Quantity Value A. OPENING STOCKS Raw Materials Lignite T Low Sulphur Heavy Stock T Furnace Oil K.L Semi-Finished Ammonia T Raw Briquettes T Finished Main Products Fertilizer Plant Urea T Briquetting and Carbonisation Plant Leco T Coke Fines T Finished-By-Products Raw Briquette Chips T Tar T Neutral Oil K.L Phenol T M.V.Phenol T Orthocresol T Xylenol T M.P.Cresol T T-Tonnes K.L.- Kilo Litres 61

11 SCHEDULE-15 (Contd.) Products Unit Quantity Value Quantity Value B. CLOSING STOCKS Raw Materials Lignite * T Low Sulphur Heavy Stock T Furnace Oil K.L Semi-Finished Ammonia T Raw Briquettes T Finished Main Products Fertilizer Plant Urea T Briquetting and Carbonisation Plant Leco T Coke Fines T Finished-By-Products Raw Briquette Chips T Tar T Neutral Oil K.L Phenol T Orthocresol T M.V.Phenol T Xylenol T M.P.Cresol T Opening Stocks Less:Closing Stocks Increase/Decrease (-) in Stocks T-Tonnes K.L.- Kilo Litres *Does not include Bed-Stock Quantity of Tonnes(P.Y Tonnes) 62

12 ANNUAL REPORT EMPLOYEES REMUNERATION AND BENEFITS SCHEDULE-16 Salaries,Wages,Bonus and Incentives Contribution to Provident and Other Funds Gratuity Welfare Expenses Less: Transfer to Capital Expenditure Accounts Transfer from Grant INTEREST SCHEDULE-17 ON FIXED LOANS Unsecured Loans - GOI Unsecured Loans - KFW - Portion I Unsecured Loans - KFW - Portion II Secured Loans - Bonds Others Less: Transfer to Capital Expenditure Accounts DEPRECIATION SCHEDULE-18 Fixed Assets Mine Development and Other Amortisations Loose Tools Less: Transfer to Capital Expenditure Accounts Transfer from Capital Grants

13 OTHER EXPENSES SCHEDULE-19 Consumption of Stores and Spares Fuel Excise Duty Rent Rates and Taxes Electricity Tax Wealth Tax Others Repairs and Maintenance Plant and Machinery Buildings Others Insurance Payments to Auditors Audit Fees (includes Service Tax) Tax Audit Fees (includes Service Tax) Other Certification Fees Reimbursement of Expenses Travelling Expenses Training Expenses Family Welfare Expenses Commitment Charges KFW Loan Guarantee Fees KFW Loan Selling Expenses Packing and Forwarding Charges Field Handling and Distribution Charges Discounts Others Afforestation Expenses Discarded Stock Written off Loss on Disposal of Assets Fixed Assets Written off Bad debts/irrecoverable Advances written off Provision for Stores & Materials Provision for Loss on Assets Provision for Doubtful Debts/Advances Provision for contingencies Provision for Preliminary Expenses Royalty Miscellaneous Expenses Less: Transfer to Capital Expenditure Accounts Transfer from Grant

14 ANNUAL REPORT PRIOR PERIOD ADJUSTMENTS SCHEDULE-20 Other Income Employees Remuneration and Benefits Interest Depreciation Consumption of Stores and Spares Other Expenses Transfer to Capital Expenditure Accounts Prior Period Adjustment (Net) Note:(-)indicates debit 65

15 Notes on Accounts (Schedule forming part of the Accounts) Schedule-21 Sl. Subject in Brief Current Previous No. Year Year 1. Contingent liability exists in respect of : a. Guarantees issued by the company b. Additional customs duty, if any, on final assessment of goods released on bond. N.Q. N.Q. c. Litigation expenses, if any, payable to M/s Dunlop (India) Ltd., net of interest charges recoverable from them for belated refund of excise duty to the corporation. N.Q. N.Q. d. Arbitration Award against company pending before High Court (Net) e. Labour Court cases N.Q. N.Q. 2. Claims against the Corporation not acknowledged as debts : a. From employees/others b. From suppliers/contractors c. Excise Duty on some of the Company s products. i) Neutral oil N.Q. N.Q ii) Other Products d. Towards penalty for Sales Tax under appeal e. Sales Tax on works contract N.Q. N.Q. f. Additional Electricity consumption tax demanded by Tamil Nadu Government under dispute g. Additional E.C Tax payable from to in respect of the energy supplied to employees N.Q N.Q. h. Additional E.C Tax payable from to in respect of the energy supplied to employees i. Interest on E.C. Tax on Power consumption by Fertilizer Unit Estimated value of contracts remaining to be executed on capital accounts Outstanding Letters of Credit Value of Securities other than cash not considered in accounts

16 ANNUAL REPORT NOTES ON ACCOUNTS (Schedule forming part of the Accounts) SCHEDULE-21 CONTD. Sl. Subject in Brief Current Previous No. Year Year 6. Bank Guarantees held for liquidated damages recoverable Details relating to consumption of raw materials stores and spares are furnished in Annexure- I.Licensed and installed capacities, production, consumption etc., are furnished in the Annexure- IV, wherein the details of coke fines, by-products and waste products are not included. 8. The amount charged to Profit and Loss Account towards Repairs and Maintenance works done departmentally and included under: a. Salaries and Wages b. Consumption of stores and spares i) Sundry Creditors includes Rs lakhs payable to SSI Units. ii) The following are the SSI Units to which amount payable is more than Rs.one lakh and outstanding for more than 30 days. 1. M/s.AFTAB Products, Chennai 2. M/s.ESDEE Hydraulic Controls (P) Ltd., 3. M/s.Fluid Control Specialists, Chennai 4. M/s.Lakshmi Industrial Works, Chennai. 5. M/s.NEXO Industries, Ludhiana 6. M/s.Ronex Engg. Co., Howrah 7. M/s.Wellvin Industries Ltd., Chennai 10. Expenditure on public relations and publicity: a. Expenditure on employees b. Other Expenditure c. Ratio to Total Income : :1 11. Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debits to the extent practicable. Balances due in respect of Sundry Debtors, Advances to contractors/suppliers, materials issued to contractors and amounts due to creditors are subject to confirmation. 67

17 NOTES ON ACCOUNTS (Schedule forming part of the Accounts) SCHEDULE-21 CONTD. Sl. Subject in Brief Current Previous No. Year Year 12. a. Capital Works in progress includes Capital Goods in stock and in transit amounting to b. Capital Works in Progress and addition to Fixed Assets are after abatement of Rs lakhs of exchange rate variation on KFW Loan ( Rs lakhs) c. Stores and Spares include Goods-in-Transit amounting to Sales excludes the products consumed internally valued at transfer price Out of the additional land compensation of Rs lakhs (Rs lakhs) awarded, a sum of Rs lakhs (Rs lakhs) was deposited with courts, of which Rs lakhs (Rs lakhs) has been withdrawn by land owners without security as per courts order and the same has been capitalised to the land cost. Pending High Court decision the balance amount has not been capitalised In respect of land acquired by the Corporation for use in the Projects the execution of assignment deeds has not been completed for. Hectares Hectares 16. Execution of conveyance deeds for land sold by the Corporation pending Hectares Hectares 17. Pending completion of legal formalities land put to use by the company not capitalised in the books. Hectares Hectares 18. Capital works entrusted to various Government departments have been capitalised to the extent of payments made to them, pending receipt of accounts In respect of Lignite Exploration Works, pending finalisation of rate with M/S.MECL, drilling works have been accounted for at provisional rate. 20. Pursuant to receipt of orders from Government of India advising NLC Ltd not to implement the Rajasthan Project and pending finalisation of transfer arrangements of the project, the amount expended on the project is included under other Current Assets. 21. Provision for contingencies in Schedule 12 represents Rs.655 lakhs (Rs.592 lakhs) towards Road Tax, Rs 1944 lakhs (Rs.1790 lakhs ) towards Sales Tax on urea subsidy and freight subsidy and Rs.74 lakhs (Rs.52 lakhs) towards Wealth Tax, and Rs. 699 lakhs towards supplemental claim of UDRP. 68

18 ANNUAL REPORT NOTES ON ACCOUNTS (Schedule forming part of the Accounts) SCHEDULE-21 CONTD. Sl. Subject in Brief Current Previous No. Year Year 22. Income -Tax recoverable represents the incidence of Income-tax on income from generation of electricity recoverable from E.Bs based on the Power Tariff agreement for Thermal Power Stations and is included under Advances. The provision for taxation in the Profit and Loss Account is net after deduction of the amount of Income - Tax recoverable from the EBs Increase in the power tariff of TS-I on account of commissioning of certain fixed assets of Mines-I has not been considered, in view of the capital costs not firmed up with the T.N.E.B The following changes in the accounting policy / method has resulted in (Increase)/Decrease in profit: i) Treatment of spares costing Rs.50 lakhs and above, conveyor belts etc; hitherto treated as Deferred Revenue Expenditure fully charged off in the current year ii) 100% Depreciation on loose tools costing Rs. 10,000 and above as against 20% in the earlier years iii) Differential retention price of Urea and closing stock of urea accounted on adhoc price or estimated realisable price whichever is less and supplementary escalation claim accounted in the year of acceptance / realisation as against the earlier policy of accounting the claim on estimated realisable price iv) Depreciation for exchange rate variation on borrowings for fixed assets charged off prospectively as against earlier policy of charging off the depreciation retrospectively. (4.91) v) Accounting of Post Retirement Medical Benefit based on acturial valuation, as against accounting the same on actual liability basis vi) Educational grant accounted on accrual basis as against receipt basis. (32.66) 25. Figures for the previous year have been re-grouped to the extent practicable. 69

19 NOTES ON ACCOUNTS (Schedule forming part of the Accounts) SCHEDULE-21 CONTD. Sl. Subject in Brief Current Previous No. Year Year 26. Consequent on the revision of accounts based on the Provisional Comments issued by the Principal Director of Commercial Audit and Ex-officio Member Audit Board, Chennai, the Post Tax Profit for the year including Prior Period Adjustments has increased from Rs lakhs to Rs lakhs due to the following changes made. Pre-revised Revised Income : Expenditure : Prior Period Adjustments (net) : Sources/Application of funds : N.Q NOT QUANTIFIABLE/NOT QUANTIFIED 70

20 ANNUAL REPORT ANNEXURE REFERRED TO IN SCHEDULE - 21 I. CONSUMPTION OF RAW MATERIALS AND SPARE PARTS A. Raw materials (fully indigenous) (Rs.in lakhs) Product Unit Quantity Value Quantity Value Lignite(at transfer price) T R.B. Chips T Leco fines T Low Sulphur Heavy Stock T Furnace Oil K.L B. Value of Indigenous and Imported Spares consumed (Rs.in lakhs) Indigenous Imported Spare parts Percentage II. A. REMUNERATION TO DIRECTORS (Rs.in lakhs) Salaries * Contribution to Provident and other funds Cost of Benefits * Including pay revision liability subject to approval. Recoveries for private use of company cars by Directors are regulated at the rates prescribed by the Government. II. B. C.I.F. VALUE OF IMPORTS (Rs.in lakhs) Capital Goods Components and spares III. EXPENDITURE IN FOREIGN CURRENCY (Rs.in lakhs) Travelling Expenses Professional and Consultancy Interest and Commitment Charges Others

21 ANNEXURE REFERRED TO IN SCHEDULE - 21 Contd. IV CAPACITIES AND PRODUCTION Sl Product Unit Licensed Installed capacity Production No. Capacity (for 3 shifts) For the year For the year as certified by ended ended the Management LIGNITE - MINES - I TONNES Not applicable(b) 7.5 MILLION (d) MINES - II TONNES Not applicable(b) 10.5 MILLION POWER (a) - THERMAL - I K.W.HR. Not Applicable 600 M.W. GROSS NET THERMAL - II K.W.HR. Not Applicable 1470 M.W. GROSS NET UREA - FERTILIZER PLANT TONNES 1,52,000 (c) 1,52,000 (e) (f) 4. LECO - B&C PLANT TONNES 3,80,000 3,27,000 (e) (f) (a) (b) (c) (d) (e) (f) Does not include power K.W.Hr. (Gross) previous year K.W.Hr. (Gross) and K.W.Hr. (Net) previous year K.W.Hr. (Net) Generated in Process Steam Plant and consumed internally. Licencing requirement for mining has been dispensed with vide Government of India communication dated tonnes of nitrogen content. Capacity as fixed by the Committee constituted by the Govt. of India based on the various operational optimum technical parameters. Achievable capacity fixed by the Committee constituted by the Government of India as modified by the Board for Urea tonnes and Coke tonnes (Leco and Coke fines). After adjustment of year end inventory discrepancies. V. EXCEPTIONAL ITEMS IN PROFIT AND LOSS ACCOUNT Sl. No. Description Schedule No. Expenditure Income 1. Sales relating to previous years, due to Power Tariff revision for Thermal Power Station-I concluded during the year Income Tax recoverable relating to earlier years P&L a/c Employees Remuneration (Pay Revision) related to earlier years Voluntary Retirement compensation Income-tax provision written back pertains to earlier years P&L a/c Gantry crane damaged due to cyclone

SHARE CAPITAL RESERVES AND SURPLUS CAPITAL RESERVES. 31 March March Authorised

SHARE CAPITAL RESERVES AND SURPLUS CAPITAL RESERVES. 31 March March Authorised SHARE CAPITAL Authorised SCHEDULE-1 2,00,00,00,000 Equity Shares of Rs.10/- each 2000.00 2000.00 Issued, Subscribed and Paid Up 1,61,31,86,300 Equity shares of Rs.10/- each fully paid 1613.19 1613.19 6,01,50,000