TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LIMITED

Transcription

1 (This is a Disclosure Document 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/ dated June 06, 2008 and circular no. LAD-NRO/GN/ /19/5392 dated October 12, 2012) DISCLOSURE DOCUMENT FOR PRIVATE PLACEMENT OF UNSECURED, REDEEMABLE, NON-CONVERTBLE, TAXABLE BONDS SERIES -1/ GUARANTEED BY GOVERNMENT OF TAMILNADU GOVERNMENT AGGREGATING TO Rs 500 CRORES+ GREEN SHOE OPTION UPTO THE AMOUNT OF Rs 500 CRORES TAMIL NADU GENERATION AND DISTRIBUTION CORPORATION LIMITED NPKRR Maaligai, 144, Anna Salai, Chennai Phone: ; Fax: DISCLOSURE DOCUMENT HIGHLIGHTS Impeccable track record of timely servicing of its debt obligation to all the bond holders. Unconditional & Irrevocable Guarantee by Govt. of Tamil Nadu for the timely servicing of the bond obligation backed by the Escrow Mechanism. Credit rating shows low credit risk, making it a safe investment option. The tariff increase by 37% resulted in an increase of cash flow by Rs 7875 crore in FY An analysis of monthly increase in cash flow on account of the revision of tariff shows that the cash flow of TANGEDCO increases by Rs. 655 Crore each month. This translates into a yearly increase in cash flow of Rs.7862 Crore for the utility. Attractive returns: Coupon Rate of 10.50% p.a. payable semi-annually. Annualized Yield: 10.78%. Maturity: 10 years. India Ratings has assigned IND A(SO) Listing The Redeemable Listed Taxable Non-Convertible Taxable Bonds are proposed to be listed on the WDM segment of BSE Registrar to the Issue Integrated Enterprises (India) Limited, 2nd Floor, Kences Tower, No.1,Ramakrishna Street, North Usman Road, T.Nagar, Chennai Tel: ; Fax: ; corpserv@iepindia.com Bond Trustee SBICAP Trustee Company Ltd, 8, Khetan Bhavan, 5th Floor, 198, J.T.Road, Churchgate, Mumbai Tel: ; Fax: Issue opening : Issue Closing : ARRANGERS TO THE ISSUE REAL GROWTH SECURITIES (P) LTD 112 A, Ist Floor, Jyoti Shikhar Building, District Centre, Janak Puri, New Delhi Phone: /15, Fax : SPA CAPITAL ADVISORS LTD 25, C-Block Community Centre, Janak Puri, New Delhi Ph / Fax

2 Issue Schedule Offer opening Date Offer Closing Date Deemed Date of Allotment Within 15 days from Issue closure In consultation with Arrangers, the issuer reserves the right to pre pone the issue earlier from the aforesaid date or post pone the issue at its sole discretion without giving any reasons or prior notice. 2

3 TABLE OF CONTENT Contents DISCLAIMER... 4 ISSUER INFORMATION:... 6 ORGANISATION BRIEF PROFILE... 6 SUMMARY OF BUSINESS ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS... 7 FINANCIAL POSITION... 9 BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS CAPITAL STRUCTURE AS ON GROSS DEBT: EQUITY RATIO AS ON PROJECT COST AND MEANS OF FINANCING, IN CASE OF FUNDING NEW PROJECTS DETAILS OF THE DIRECTORS BORROWING DETAILS OF TANGEDCO AS ON 31ST MARCH ISSUE DETAILS SUMMARY TERM SHEET DETAILED TERMS & CONDITIONS MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER ANNEXURES ANNEXURE 1: BSE IN PRINCIPAL APPROVAL FOR LISTING ANNEXURE 2: INDIA RATING LETTER & RATIONALE Rating letter & Rationale ANNEXURE 3: CONSENT LETTER FROM REGISTRAR TO THE ISSUE ANNEXURE 4 : CONSENT LETTER FROM TRUSTEE ANNEXURE 5 COPY OF GOVERNMENT GUARANTEE

4 DISCLAIMER GENERAL DISCLAIMER This Disclosure Document is neither a Prospectus nor a Statement in Lieu of Prospectus. There is currently no proposal to list the Bonds in a Stock Exchange, but the document is prepared to contain the disclosures, in accordance with Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/ dated June 06, 2008 and circular no. LAD- NRO/GN/ /19/5392 dated October 12, 2012). This document does not constitute an offer to the public to subscribe for or otherwise acquire the Bonds. The document is for the exclusive use of the Institutions to whom it is delivered and it should not be circulated or distributed to any third party. The TANGEDCO certifies that the disclosures made in this document are made with a view to facilitate investors to take an informed decision for making investment in the proposed Issue. DISCLAIMER OF THE ARRANGERS It is advised that the TANGEDCO has exercised self due-diligence in making disclosures contained in this document. The role of the Arrangers in the assignment is confined to mobilize and placement of the bonds on the basis of this Disclosure Document as prepared by the TANGEDCO. The Arrangers has neither scrutinized / vetted nor has it done any due-diligence for verification of the contents of this Disclosure Document. The Arrangers shall use this document for the purpose of soliciting subscription from investors in the bonds to be issued by the TANGEDCO on private placement basis. It is to be distinctly understood that the aforesaid use of this document by the Arrangers should not in any way be deemed or construed that the document has been prepared, cleared, approved or vetted by the Arrangers; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; 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 TANGEDCO. The Arrangers or any of its directors, employees, affiliates or representatives do not accept any responsibility and/or liability for any loss or damage arising of whatever nature and extent in connection with the use of any of the information contained in this document. DISCLAIMER OF THE ISSUER The Issuer confirms that the information contained in this Disclosure Document is true and correct in all material respects and is not misleading in any material respect. All information considered adequate and relevant about the Issue and the Organisation has been made available in this Disclosure Document for the use and perusal of the potential investors. The Organisation accepts no responsibility for statements made otherwise than in this Disclosure Document or any other material issued by or at the instance of the Organisation and anyone placing reliance on any other source of information would be doing so at his/her/their own risk. DISCLAIMER OF THE STOCK EXCHANGE Application shall be made to the Bombay Stock Exchange, to list the Bonds now being privately placed through this Information Memorandum on its Wholesale Debt Market (WDM) segment and permission be sought to deal in such Bonds. The TANGEDCO shall comply with the requirements of the listing agreement to the extent applicable to it on a continuous basis. A copy of this Information Memorandum shall be submitted to BSE. It is to be distinctly understood that such submission of this Information Memorandum to BSE for hosting of the same by BSE on its website should not in any way be deemed or 4

5 construed that this Information Memorandum has been cleared or approved by BSE; nor does BSE in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Information Memorandum ; nor does it warrant that 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 this Issuer. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchanges 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. FILING OF INFORMATION MEMEORANDUM As per extant SEBI guidelines/ regulations, filing of this Information Memorandum is not required either with SEBI, ROC or any other regulatory authority/(ies). The present issue of bonds being made on private placement basis, copy of this Information Memorandum along with the documents as specified under the head Material Contracts and Documents for Inspection required to be filed with Registrar of Companies (ROC) under Section 60 of the Companies Act, 1956 shall not be applicable and hence the same has not been delivered to ROC for registration nor has the same been filed with SEBI for vetting/ comments/ registration. DISCLAIMER IN RESPECT OF JURISDICTION The private placement of Bonds is made in India to Companies, Corporate Bodies, Trusts registered under the Indian Trusts Act, 1882, Societies registered under the Societies Registration Act, 1860 or any other applicable laws, provided that such Trust/ Society is authorised under constitution/ rules/ byelaws to hold bonds in a Company, Indian Mutual Funds registered with SEBI, Indian Financial Institutions, Insurance Companies, Commercial Banks including Regional Rural Banks and Cooperative Banks, Provident, Pension, Gratuity, Superannuation Funds as defined under Indian laws. The Information Memorandum does not, however, constitute an offer to sell or an invitation to subscribe to securities offered hereby in any other jurisdiction to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Information Memorandum comes is required to inform him about and to observe any such restrictions. Any disputes arising out of this issue will be subject to the exclusive jurisdiction of the courts at Chennai alone. All information considered adequate and relevant about the Issuer Board has been made available in this Information Memorandum for the use and perusal of the potential investors and no selective or additional information would be available for a section of investors in any manner whatsoever. DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA This disclosure document has not been filed with Securities & Exchange Board of India (SEBI). The securities have not been recommended or approved by the SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed to have 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 document. The issue of bonds being made on private placement basis, filing of this document is not required with SEBI. However, SEBI reserves the right to take up at any point of time with the TANGEDCO, any irregularities or lapses in this document. 5

6 ISSUER INFORMATION: ORGANISATION BRIEF PROFILE Name TAMILNADU GENERATION AND DISTRIBUTION COMPANY LIMITED (TANGEDCO) Registered & Corporate NPKKR Maaligai, 144 Anna Salai Chennai office Tel No. (044) Fax No. (044) Website Compliance Officer & Chief financial controller/ General Address Tamil Nadu Generation and Distribution Corporation Ltd 7 th floor, NPKRR Maaligai, 144, Anna Salai, Chennai Telephone & Telefax: ; cfctangedco@tnebnet.org Arrangers to the Issue SPA Capital Advisors Limited Registered and Corporate Office: 25, C Block, Community Centre, Janakpuri, New Delhi Ph / Fax Real Growth Securities Limited 112 A, Ist Floor, Jyoti Shikhar Building, District Centre, Janak Puri, New Delhi Phone: /15, Fax : Trustee to the Issue SBICAP Trustee Company Ltd., 8, Khetan Bhavan, 5th Floor, 198, J.T.Road, Churchgate, Mumbai Tel: ; Fax: Registrar of the Issue Integrated Enterprises (India) Limited, 2nd Floor, Kences Tower, No.1,Ramakrishna Street, North Usman Road, T.Nagar, Chennai Tel: ; Fax: ; corpserv@iepindia.com Credit Rating Agencies India Ratings (formerly FITCH) & ICRA Bankers to Issue HDCF Bank and SBI Bank Details of the Auditor of the Company Name M/s.Ponraj & Co Chartered Accounts M/s.Chandran and Raman Chartered Accounts Address Auditor since Chennai Chennai

7 SUMMARY OF BUSINESS ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS Tamilnadu Electricity Board came into being on 1 st July 1957, and has remained the energy provider and distributor all these years. During the period the Government has extended the electrical network to all the villages and towns throughout the State. Tamilnadu Generation and Distibution Corporation Limited, (TANGEDCO) is incorporated under the Companies, Act, 1956 (No.1 of 1956) on 1 st December After 53- years of journey, based on the Tamilnadu Electricity (Reorganization and Reforms) Transfer Scheme, 2010 and as per the provisions of the Electricity Act, 2003, and G.O.(Ms)No.100, Energy (B2) Department, Dt TNEB has restructured itself on 01/11/2010 into TNEB Ltd; Tamilnadu Generation and Distribution Corporation (TANGEDCO) Ltd; and Tamilnadu Transmission Corporation (TANTRANSCO) Ltd. The authorized capital is Rs crore and paid up capital is Rs crore as on To satisfy the energy needs of the State, TANGEDCO, as on 31/03/2013 has a total installed capacity of MW, which includes Central share and Independent Power Producers. Other than this, the State has installations in renewable energy sources like Windmill, Biomass, Solar and Co-generation Plants up to 7999 MW. Presently TANGEDCO has 42 Hydro Stations with a total capacity of 2237 MW, 4 major coal based Thermal Power Stations with a total capacity of 2970 MW and 4 gas based Power Plants with a total capacity of 516 MW. Three thermal units with an installed capacity of 600 MW each have started generation. A Joint Venture project with NTPC with installed Capacity of 3x500MW is under various stages of completion. The Unit-I & II with a share of 750MW already commissioned. The Unit-III would be commissioned during January/February Another Joint Venture project with NLC Ltd with installed capacity of 2x00MW is to be commissioned during To meet the ever-increasing energy demand in the coming years, TANGEDCO has proposed to establish 5 coal based thermal projects with installed capacity of 3300MW (5x660MW) and for which tender have already been floated. TANGEDCO has fully exploited the hydroelectric potential available in the State. However, to balance the excess power available during off peak hours and to tide over the peak hour shortage, a Pumped storage scheme in Kundah for 500 MW has been proposed. The composition of the Board of Directors of TANGEDCO as on the date of this Disclosure Document i.e. on 30 th September 2013 is as under: Name, Designation Thiru K. Gnanadesikan, IAS Thiru Rajesh Lakhoni, IAS Age (date of birth) Address Chairman and Managing Director, TANGEDCO Ltd, 144, Anna Salai, Chennai Secretary to Government, Energy Department & Exofficio Director, Fort St.George, 7 Directors of the company since Details of other directorship TNIDC, NTPC, Tamilnadu Energy Development Corp. Ltd. Arasu Cable,,Mandakini B Coal Ltd, Maha Tamil Collieries Ltd., TANTRANSCO, TNEB, TANGEDCO, UPCL, Tamilnadu Maritime Board, Poompuhar Shipping Corpn Ltd.

8 Secretariat, Chennai Thiru K Shanmugam, IAS Principal Secretary to Government, Finance Department & Exofficio Director, Fort St.George, Secretariat, Chennai Thiru C V Sankar, IAS Principal Secretary to Government, Industries Department & Exofficio Director, Fort St.George, Secretariat, Chennai Thiru S. Akshayakumar,BE,MBA Director (Transmission Projects) & Managing Director/ TANTRANSCO (a/c), Director (part time) Thiru T Jeyaseelan, B.E., Director (Distribution) TANGEDCO Ltd, 144, Anna Salai, Chennai Thiru N Sankar, BE, MIE, Director (Generation) TANGEDCO Ltd, 144, Anna Salai, Thiru G. Rajagopal, M.Com., FICWA, ACS, Chennai Director/Finance TANGEDCO Ltd, 144, Anna Salai, Chennai TANGEDCO, TNEB, Poompuhar Shipping Corpn Ltd., Maha Tamil Collieries Ltd., 8

9 FINANCIAL POSITION Financial position of TANGEDCO for the last three financial years as per the audited accounts are is as given below: BALANCE SHEET OF TAMIL NADU GENERATION AND DISTIBUTION CORPORATION LIMITED Sch. No. Particulars This year as at 31st March 2013 Previous year as at 31st March 2012 (Rupees in lakhs) As at 1st March 2011 NET ASSETS 19 Gross Block Less: Accumulated Depreciation NET FIXED ASSETS Capital Expenditure in Progress Assets not in use Deferred Costs Intangible Assets Investments NET CURRENT ASSETS 26 Total Current Assets Less: TOTAL CURRENT LIABILITIES 27 Security Deposits from Consumers Other Current Liabilities TOTAL CURRENT LIABILITIES NET CURRENT ASSETS Subsidy Receivable from Govt Deficit NET ASSETS FINANCED BY 30 Borrowings for Working Capital Payments due on Capital Liabilities Capital Liabilities Funds from State Government Contributions Grants and Subsidies Reserves and Reserve Funds Surplus - - TOTAL FUNDS

10 PROFIT AND LOSS ACCOUNT OF TAMIL NADU GENERATION AND DISTIBUTION CORPORATION LIMITED REVENUE ACCOUNT FOR THE YEAR Sch. No. Particulars This year Previous year For the year UNITS SOLD ( in MU) 61,662 61,387 24,159 INCOME (Rupees in lakhs) 1 Revenue from Sale of power Revenue subsidies & Garants Other Income Total Income "A" EXPENDITURE 6 Purchase of power Generation of power Repairs & Maintenance Employee costs Admin. &Gent. Expenses Depreciation & other related debits Interest and Finance charges Sub Total "B" Less: Expenses capitalised: 13 Interest & Finance charges capitalised Other expenses capitalized Total expenses capitalised "C" Sub Total (B) - ( C ) Other Debits Extra ordinary items Total (D) Profit before Tax (A)- (D) Provision for income tax - - Profit after tax Net Prior period charges/credit SURPLUS/DEFICIT

11 BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS PROFILE On 1 st July 1957, Tamil Nadu Electricity Board came into being and has remained the energy provider and distributor all these years. During the period the Government has extended the electrical network to all the villages and towns throughout the state. After 53years of journey on 1 st of November 2010 it has restructured itself into TNEB Ltd; Tamil Nadu Generation and Distribution Organisation (TANGEDCO) Ltd; and Tamil Nadu Transmission Organisation (TANTRANSCO) Ltd. MISSION OF THE GOVERNMENT The Government of India, MoP have planned to give Power for all by To achieve this, Tamil Nadu Generation and Distribution Organisation limited is making progress in Generation and Distribution sector. It is happy to inform that the electrification of all villages and towns were completed and also electrification of all households are under progress. GENERATION Installed Capacity To satisfy the energy needs of the state, Tamil Nadu Electricity Board has a total installed capacity of which includes Central share and Independent Power Producers. Other than this, the state has installations in renewable energy sources like windmill, Bios mass and Cogeneration up to 7999 MW. As of now, the total installed capacity in Tamil Nadu is MW. Future projects To meet the ever-increasing energy demand in the coming years, TANGEDCO has proposed new generation for the next 5 years. TANGEDCO has fully exploited the hydroelectric potential available in the state. However, to balance the excess power available during off peak hours and to tide over the peak hour shortage, a Pumped storage scheme in Kundah for 500 MW has been proposed. Environment Concern TANGEDCO has also proposed to establish small hydroelectric projects of capacity less than 25 MW in the run of river scheme with total capacity of 110 MW. Power generation, especially coal based power plants are prone to have an adverse impact on the environment. Presently TANGEDCO has four major coal based Thermal Power Stations with a total capacity of 2970 MW and four gas based power plants with a total capacity of 516 MW. TANGEDCO recognizes its social obligation and is conscious of the importance of prevention of degradation of the environment due to its Thermal Stations DISTRIBUTION An efficient distribution network is needed for effectively utilizing the energy that is generated. TNEB has an efficient network that has grown over the years. Growth from 1957: 11

12 Consumer base from 4.3 Lakhs to about Lakhs Number of Distribution Transformers from 3773 to 2.04 Lakhs Length of LT lines from 13,055 kms to 5.56 Lakhs Kms Peak demand from 172 MW to MW Per Capita consumption from 21 units to 1040 units Number of electrified towns, villages and hamlets from 1813 to To achieve the goal of electrification of all households by XI plan period, The Government has launched the following schemes, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) Restructured Accelerated Power Development &Reform Programme RESTRUCTURING OF TNEB 1. The Government of Tamil Nadu vide G.O Ms No 114 dated , accorded in-principle approval for the re-organisation of TNEB by establishment of a holding company, by the name TNEB Ltd and two subsidiarycompanies, namely Tamil Nadu Transmission Organisation Ltd (TANTRANSCO) and Tamil Nadu Generation and Distribution Organisation Ltd (TANGEDCO). 2. Based on the above G.O. the Tamil Nadu Transmission Organisation Ltd was registered on The Certificate of commencement of business has been obtained for the TANTRANSCO on The Tamil Nadu Transmission Organisation Ltd was inaugurated on and the Chairman, Managing Director, Director-Transmission Projects, Director-Finance have assumed office on Further, the holding company, TNEB Ltd was registered on and the Tamil Nadu Generation and Distribution Organisation Limited (TANGEDCO) on The Certificate for Commencement of Business have been obtained for TNEB Ltd and Tamil Nadu Generation and Distribution Organisation Ltd (TANGEDCO) on and respectively. The Chairman cum Managing Director (Present Chairman/TNEB), Director/Generation, Director/Projects and Director/Finance assumed office for TANGEDCO & Director/Operation for TANTRANSCO on Similarly, Chairman cum Managing Director (Present Chairman/TNEB) and 4 part timedirectors of TNEB Ltd (viz MD/TANTRANSCO, Director/Generation, Director/Distribution & Director/Finance/TANGEDCO) have assumed office. 4. The proposal for Assets Transfer and Employee transfer has been notified by GoTN on Based on the Transfer scheme, the Board has been re-organised with effect from The finalization of the Draft Tripartite Agreement between Government, Board and Employees is under process and the same will be finalized at the earliest. The provisional period for transfer of assets is one year and as the period has expired on The GoTN has extended the period up to vide G.O.No.2 and 23. The GoTN has been addressed to extend the period for the final transfer of assets and liabilities up to CAPITAL STRUCTURE AS ON Particulars Amount Rs in lacs State Government Contributions, Grants and Subsidies Reserves and Reserve funds

13 GROSS DEBT: EQUITY RATIO AS ON Pre Issue Post Issue Total Debt/Equity PROJECT COST AND MEANS OF FINANCING, IN CASE OF FUNDING NEW PROJECTS To meet the ever increasing energy demand in the coming years, TANGEDCO has proposed to establish 5 thermal projects with installed capacity of 3300 MW (5x660MW) with proposed capital expenditure of Rs. 6, Cr for the FY DETAILS OF THE DIRECTORS Name, Designation Thiru K. Gnanadesikan, IAS Age (date of birth) Address Chairman and Managing Director, TANGEDCO Ltd, 144, Anna Salai, Chennai Directors of the company since Thiru Rajesh Lakhoni, IAS Secretary to Government, Energy Department & Exofficio Director, Fort St.George, Secretariat, Chennai Thiru K Shanmugam, IAS Principal Secretary to Government, Finance Department & Exofficio Director, Fort St.George, Secretariat, Chennai Thiru C V Sankar, IAS Principal Secretary to Government, Industries Department & Exofficio Director, Fort St.George, Secretariat, Chennai Thiru S Director Details of other directorship TNIDC, NTPC, Tamilnadu Energy Development Corp. Ltd. Arasu Cable,,Mandakini B Coal Ltd, Maha Tamil Collieries Ltd., TANTRANSCO, TNEB, TANGEDCO, UPCL, Tamilnadu Maritime Board, Poompuhar Shipping Corpn Ltd.

14 Akshayakumar,BE,MBA (Transmission Projects) & Managing Director/ TANTRANSCO (a/c), Director (part time) Thiru T Jeyaseelan, B.E., Director (Distribution) TANGEDCO Ltd, 144, Anna Salai, Chennai Thiru N Sankar, BE, MIE, Director (Generation) TANGEDCO Ltd, 144, Anna Salai, Chennai Thiru G. Rajagopal, M.Com., FICWA, ACS, Director/Finance TANGEDCO Ltd, 144, Anna Salai, Chennai TANGEDCO, TNEB, Poompuhar Shipping Corpn Ltd., Maha Tamil Collieries Ltd., BORROWING DETAILS OF TANGEDCO AS ON 31ST MARCH 2013 a) DETAILS OF SECURED & UNSECURED LOAN FACILITIES AS ON :- The total outstanding amount is Rs.57,480 crores which is inclusive of secured and unsecured loan facilities. Sl. No. b) DETAILS OF BONDS AS ON 30TH SEPTEMBER 2013 Name of the issue % TNEB Bond Series- I/ % TNEB Bond Series- I/2007 Tranche-II Date of allotment Put call option / redemption At the end of 5th year / 35% / 35% / 30% At the end of 5th year / 35% / 35% / 30% - Amount subscribed / Amount allotted (Rs. in crores) 14 Payment of interest 200 Semianually on 1st Feb and 1st August of every year. 0.8 semiannually on 1st April & 1st October Ratings 1. ICRA - LA + SO 2. CRISIL - A (SO) dt ICRA - LA + SO 2. CRISIL - A (SO) Secured /

15 % TNEB Bond Series- 2/ % TNEB Bond Series- I/ % TNEB Bond Series- 2/ % TNEB Bond Series- 3/ % TNEB Bond Series- 1/ % TNEB Bond Series- 2/ At the end of 7th year / At the end of 5th year / 30% % % At the end of 5th year / 30% % % At the end of 7th year / 30% % % At the end of 7th year / 30% % % At the end of 8th year / 30% % semiannually on 1st March & 1st September semiannually on 3rd November & 3rd May 400 semiannually on 26th December & 26th June semiannually on 4th November & 4th May semiannually on 30th December & 30th June 481 semiannually on 6th July & 6th January 1. ICRA - LA + SO 2. CRISIL - A (SO) dt ICRA - LA + SO 2. FITCH- A (SO) dt Affirmed as IND A(SO) dt ICRA - LA + SO 2. FITCH- A (SO) dt ICRA - 1A + SO 2. CARE- A+SO 1. ICRA - 1A + SO 2. CARE- A+SO 1. FITCH - A-(SO) dt Upgraded to IND A(SO) dt CARE -

16 40% A+SO dt % TNEB Bond Series- 3/ % TNEB Bond Series- 4/ % TANGEDCO Bond Series- 1/ Rs.500 Crs w.o.t.r. over subscription upto Rs.1000 Crores % TANGEDCO Bond Series- 1/ Rs.500 crs w.o.t.r. over subscription upto Rs.900 crs At the end of 8th year / 30% % % At the end of 8th year / 30% % % At the end of 5th year / 20% % % % % At the end of 8th year/ 30% % % semiannually on 19th August & 19th February 319 semiannually on 29th Sep. & 29th March 80.7 semiannually on 7th August & 7th Feb Semi annually on 7th July and 7th January of every year. 1. FITCH - A(SO) dt Affirmed at 'IND A(SO) dt CARE - A+SO dt FITCH - A-(SO) dt Upgraded to 'IND A(SO)' dt CARE - A+SO dt ICRA - LA(SO) dt M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt M/s.CRISIL Ltd.- A-(SO) dt

17 % TANGEDCO Bond Series- 2/ Rs.500 crs w.o.t.r. over subscription upto Rs crs % TANGEDCO Bond Series- 3/ Rs crs % TANGEDCO Bond Series- 4/ Rs crs % 15 Banks At the end of 8th year/ 30% % % At the end of 8th year/ 30% % % At the end of 8th year/ 30% % % AT THE END OF 5TH YEAR Rs Cr against Cr under FRP Semi annually on 26th August and 26th February of every year. Semi annually on 3rd April and 3rd October of every year. Semi annually on 21st May and 21st November of every year Semi annually on 7th Oct and 7th April of every year 1. M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt M/s.CRISIL Ltd.- A-(SO) dt M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt (and for enhanced rating of Rs.1419 crs) 2. M/s.CRISIL Ltd.- A-(SO) dt M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt M/s.CRISIL Ltd.- A-(SO) dt M/s.Brick work Ratings India Pvt Ltd - BWR A(SO) dt for enhanced rating from Rs.1400 crs to Rs.1419 crs. India Ratings & Research Pvt Ltd. IND A(SO) exp for Rs cr 17

18 % 3 Banks SBI, UCO, Corpn Bank % Canara Bank % City Union Bank % CBI, OBC % Bank of Baroda % ICICI Bank AT THE END OF 5TH YEAR AT THE END OF 5TH YEAR AT THE END OF 5TH YEAR AT THE END OF 5TH YEAR AT THE END OF 5TH YEAR AT THE END OF 5TH YEAR Semi annually on 7th Nov and 7th May of every year Semi annually on 16th Nov and 16th May of every year Semi annually on 22nd Nov and 22nd May of every year Semi annually on 3oth Nov and 31st May of every year Semi annually on 17th Nov and 17th June of every year Semi annually on 24th Dec and 24th June of every year India Ratings & Research Pvt Ltd. IND A(SO) exp India Ratings & Research Pvt Ltd. IND A(SO) exp India Ratings & Research Pvt Ltd. IND A(SO) exp India Ratings & Research Pvt Ltd. IND A(SO) exp India Ratings & Research Pvt Ltd. IND A(SO) exp India Ratings & Research Pvt Ltd. IND A(SO) exp c) List of top 10 Bonds Holders (AS ON 30 th September 2013) NAME Rs (In Crs) State Bank of India UCO bank Central Bank of India Indian bank Indian Overseas Bank Punjab National Bank Canara Bank-Mumbai

19 Syndicate Bank Corporation Bank Vijaya Bank d) The amount of Corporate Guarantee issued by the issuer along with name of the counterparty (like name of the Subsidiary, JV Entity, Group Organisation, etc) on behalf of whom it has been issued. NIL e) Details of Commercial Paper:- The total face value of commercial papers outstanding as on the latest quarter end to be provided and its breakup in following table:- NA f) Details of Rest of the Borrowing ( incl hybrid debt like FCCB, Optionally Convertible Debentures/ Preference Shares) as on 31 st March, 2013 Party Name /Instrument Name Typeof Facility / Instrument Amount Sanctioned / Issued Principal Amount Outstanding Repayment Date / Schedule Credit Rating Secured/ NIL NIL NIL NIL NIL NIL NIL NIL g) Details of any Outstanding Borrowings taken/ debt securities issued where taken / issued: For consideration other than cash, whether in whole or part : NIL At a premium or discount : NIL In pursuance of an option : NIL Security ABRIDGED VERSION OF AUDITED STANDALONE FINANCIAL INFORMATION LIKE PROFIT AND LOSS STATEMENT, BALANCE SHEET & CASH FLOW STATEMENT) FOR ATLEAST 3 YEARS AND AUDITOR QUALIFICATIONS, IF ANY. Highlighted in Section Financials ABRIDGED VERSION OF LATEST AUDITED / LIMITED REVIEW HALF YEARLY CONSOLIDATED (WHEREVER AVAILABLE) AND STANDALONE FINANCIAL INFORMATION (LIKE PROFIT & LOSS STATEMENT, AND BALANCE SHEET) AND AUDITORS QUALIFICATIONS, IF ANY. Audited Financials of FY is attached ANY MATERIAL EVENT/ DEVELOPMENT OR CHANGE HAVING IMPLICATIONS ON THE FINANCIALS/CREDIT QUALITY (E.G. ANY MATERIAL REGULATORY PROCEEDINGS AGAINST THE ISSUER/PROMOTERS, TAX LITIGATIONS RESULTING IN MATERIAL LIABILITIES, CORPORATE RESTRUCTURING EVENT ETC) AT THE TIME OF ISSUE WHICH MAY AFFECT THE ISSUE OR THE INVESTOR S DECISION TO INVEST / CONTINUE TO INVEST IN THE DEBT SECURITIES. NIL IF THE SECURITY IS BACKED BY A GUARANTEE / LETTER OF COMFORT OR ANY OTHER DOCUMENT / LETTER WITH SIMILAR INTENT,A COPY OF THE SAME SHALL BE DISCLOSED. IN CASE SUCH DOCUMENT DOES NOT CONTAIN DETAILED PAYMENT STRUCTURE (PROCEDURE FOR INVOCATION OF GUARANTEE AND RECEIPT OF PAYMENT BY THE INVESTOR ALONGWITH TIMELINES), THE SAME SHALL BE DISCLOSED IN THE OFFER DOCUMENT. Guarantee letter enclosed with this document 19

20 ISSUE DETAILS SUMMARY TERM SHEET Security Name Issuer Type of Instrument Nature of Instrument Mode of Issue Eligible Investors Listing ( including name of stock Exchange(s) where it will be listed and timeline for listing) Rating of the Instrument Issue Size Option to retain oversubscription Objects of the Issue, Redeemable, Listed, Non-Convertible taxable Bonds Tamil Nadu Generation & Distribution Corporation Limited, Redeemable, Listed, Non-Convertible taxable Bonds Private placement As per section who can apply. Proposed to be listed on the WDM segment of BSE A(SO) by India Ratings Rs 500 crores Rs 500 Crores As per disclosure document Details of the utilization of the Proceeds As per disclosure document Tenure 10 years Put/Call At the end of 7th Year. Coupon Rate 10.50% Step Up/Step Down Coupon Rate None Coupon Payment Frequency Semi Annual Coupon Payment Dates First Coupon Payment Half yearly every year starting from the end of the six months from deemed date of allotment Six Months from Deemed date of allotment Coupon Type Coupon Reset Process (including rates, spread, effective date, interest rate cap and floor etc). Day Count Basis Interest on Application Money Default Interest Rate Tenor Redemption Date Fixed None Actual/ Actual At the coupon rate from the date of realization of Cheques/Demand Draft/RTGS up to one day prior to the deemed date of allotment. In case of default in payment of Interest and /or principal redemption on the due dates, additional interest of over the coupon rate will be payable by the Organisation for the defaulting period. Also refer Events of Default in the Summary Term Sheet of Disclosure Document. 10 years 1. At par 30% at the end of 8 th year from deemed date of allotment 2. At par 30% at the end of 9 th year from deemed date of allotment 20

21 Redemption Amount Redemption Premium /Discount Issue Price Discount at which security is issued and the effective yield as a result of such discount. Put option Date Put option Price Call Option Date Call Option Price Put Notification Time Call Notification Time Face Value Minimum Application and in multiples of one Debt security thereafter Issue Timing 1. Issue Opening Date 2. Issue Closing Date 3. Deemed Date of Allotment Issuance mode of the Instrument Trading mode of the Instrument Settlement mode of the Instrument Depository Business Day Convention Record Date Security (where applicable) (Including description, type of security, type of charge, likely date of creation of security, minimum security cover, revaluation, replacement of security). Transaction Documents Conditions Precedent to Disbursement Condition Subsequent to Disbursement 3. At par 40% at the end of 10 th year from deemed date of allotment. At Par None Rs. 10,00, ( Rupees Ten Lac ) per bond None 7 years from Deemed date of allotment At Par 7 years from Deemed date of allotment At Par As per disclosure Document As per disclosure Document Rs. 10,00, ( Rupees Ten Lac ) per bond Rs. 10, 00, (Rupees Ten Lac ) per bond (Minimum application is of 1 bond of face value of Rs. 10 lacs and in multiple of 1 bond thereafter. ) Within 15 days from Issue closure Demat only Demat only As per Disclosure document NSDL & CDSL Please refer Effect of holidays in the disclosure document. Please refer Record Date in the disclosure document. NA As mentioned in Disclosure document. NOT APPLICABLE NOT APPLICABLE 21

22 Events of Default Provisions related to Cross Default Clause Role and Responsibilities of Debenture Trustee Governing Law and Jurisdiction 1. Default in Payment In case of default in payment of Interest and /or principal redemption on the due dates, additional interest of over the coupon rate will be payable by the Organisation for the defaulting period. 2. Delay in Listing In case of delay in listing of the debt securities beyond 20 days from the deemed date of allotment, the Organisation will pay penal interest of atleast 1% p.a. over the coupon rate from the expiry of 30 days from the deemed date of allotment till the listing of such debt securities to the investor. 3. On the happening of any of the event of default, in addition to the rights specified above, the bond holders/bond trustee shall have the right to appoint a nominee on the Board of Directors of Organisation (hereinafter referred to as the nominee director ) in terms of the Security Exchange board of India (issue and listing of debt securities) regulation, 2008 NOT APPLICABLE Please refer Role and Responsibilities of Debenture Trustee in the disclosure document As Mentioned in disclosure document Structured Payment Mechanism T-45 days At least 45 calendar days prior to the forthcoming due date of interest and / or principal (T-45). TANGEDCO shall Credit the requisite funds in the Trust & Retention Account (TRA) for servicing the bondholders on the forthcoming due date T or put them in a Fixed Deposit (FDs) with a designated bank (rated AA or above) and ensure that the FDs are liened to the Trustee. Ensure that GoTN and the Trustee are intimated about the clear funds balance in the TRA. In case TANGEDCO do not deposit the funds into TRA, TANGEDCO shall communicate, at least 45 calendar days prior to forthcoming due date (T-45), in writing to the Finance Secretary and / or designated official in GoTN with a copy of the Trustee and India Ratings & Research Pvt Ltd: The forthcoming due date T and The amount payable to the bondholders as interest and / or principal on the said due date T TANGEDCO shall also request GoTN to ensure that adequate clear funds are available in the TRA for servicing obligations on the bonds on due date T T-40 days In case TANGEDCO fails to intimate GoTN above, the trustee shall intimate GoTN atleast 40 calendar days prior to forthcoming due date (T-40). T-5 days Atleast five working days prior to the due date (T-5), the trustee shall ensures Proceeds from maturity of Fixed Deposit are transferred to the TRA. The interest and / or principal payment cheques are dispatched to the bondholders by latest T-5 working days. In the event of GoTN failing to transfer clear funds in the TRA to make up the shortfall by T-5 working days, the Trustee shall forthwith invoke the Guarantee issued by GoTN and inform India Ratings & Research Pvt Ltd about the same. 22

23 T-3 days On invocation of the guarantee, GoTN must promptly deposit clear funds, to the extent of shortfall, into the TRA, before 3 working days prior to the due date (T-3). a) Object of the issue The proceeds of the issue would be utilized to meet Capital expenditure for new projects to the tune of Rs6, Crore for the financial year b) Utilization Details The funds would be utilized for the Object of the issue. DETAILED TERMS & CONDITIONS This is a confidential Disclosure Document setting out the terms and conditions pertaining to issue of Redeemable Listed Non-Convertible Taxable Bonds of the face value of Rs.10 lacs (Rupees Ten Lac Only) each for cash at par to be issued by TANGEDCO. Your participation is subject to the completion and submission of Application Form along with cheque (s) / draft(s) and acceptance of the offer by the Organisation. PRESENT ISSUE Tamil Nadu Generation and Distribution Corporation ltd (hereinafter referred to as the Issuer ) proposes to raise Rs 500 Crores (Rupees Five Hundred Crores Only) plus green shoe option of Rs 500Crores (Rupees Five Hundred Crores only) through the issue of unsecured Redeemable Listed Non-Convertible Taxable Bonds (hereinafter referred to as the Bonds ) of Rs.10 lacs (Rupees Ten Lac Only) each on private placement basis. MARKET LOT The market lot will be one Bond ( Market Lot ). Since the Bonds are being issued only in dematerialized form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds. LISTING The Issuer proposes to list these Bonds on the Wholesale Debt Market segment of the Bombay Stock Exchange Limited. The market lot will be one Bond of the face value of Rs.10 lacs (Rupees Ten Lac Only). AUTHORITY FOR THE ISSUE This private placement of Bonds is being made pursuant to the Resolutions passed thereon by the Board of Directors of TANGEDCO through circulation OBJECTS OF THE PLACEMENT The proceeds of the issue would be utilized to meet Capital expenditure for new projects to the tune of Rs6, Crore for the financial year NATURE OF INSTRUMENT Redeemable Listed Non-Convertible Taxable Bonds of the face value of Rs.10 lacs (Rupees Ten Lac Only) each. 23

24 PAYMENT TERMS The full face value of the Bonds applied for is to be paid along with the Application Form. Investor(s) need to send in the Application Form and the RTGS / cheque(s)/ demand draft(s) for the full face value of the Bonds applied for. UNDERWRITING The present Issue of Bonds on private placement basis has not been underwritten. FACE VALUE, ISSUE PRICE, EFFECTIVE YIELD FOR INVESTOR Each Bond has a face value of Rs. 10,00,000/- (Rupees Ten Lac Only) and is issued at par i.e. for Rs. 10,00,000/-(Rupees Ten Lac Only). The Bonds shall be redeemable at par i.e. for Rs. 10,00,000/- (Rupees Ten Lac Only) per Bond. Since there is no premium or discount on either issue price or on redemption value of the Bonds, the effective yield for the investors shall be the same as the coupon rate on the Bonds. MINIMUM APPLICATION The application should be for a minimum of 1 (one) Bond and in multiples of 1 (one) Bond thereafter. MINIMUM SUBSCRIPTION As the current issue of Bonds is being made on private placement basis, the requirement of minimum subscription shall not be applicable and therefore the Issuer shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size. OVER SUBSCRIPTION In the case of over subscription, Issuer shall have unqualified right to decide on the parameters of allotment entirely at its sole discretion. INTEREST ON APPLICATION MONEY Interest at the coupon rate 10.50% per annum) payable Semi annually (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or reenactment thereof, as applicable) will be paid to all the applicants on the application money for the Bonds. Such interest shall be paid from the date of realisation of application money upto one day prior to the Deemed Date of Allotment. The interest on application money will be computed on an Actual/ Actual day basis. Such interest would be paid on all the valid applications, including the refunds. Where the entire subscription amount has been refunded, the interest on application money will be paid along with the Refund Orders. Where an applicant is allotted lesser number of Bonds than applied for, the excess amount paid on application will be refunded to the applicant along with the interest on refunded money. In case of any delay in allotment, interest would be payable at the contracted rate for the period of delay, subject to a maximum of 15 (fifteen) days. The interest cheque(s)/ demand draft(s) for interest on application money (along with Refund Orders. in case of refund of application money, if any) shall be dispatched by the Organisation within 15 (fifteen) days from the Deemed Date of Allotment and the relative interest warrant(s) along with the Refund Order(s) as the case may be will be dispatched by registered post to the sole/ first applicant at the sole risk of the applicant. 24

25 INTEREST ON THE BONDS The Bonds shall carry interest at coupon 10.50% (Semi Annual) per annum, (subject to deduction of tax at source at the rates prevailing from time to time under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof for which a certificate will be issued by the Issuer) on the outstanding principal amount of Bonds semi annually throughout the tenure of the Bonds till final redemption. Final interest payment shall be made on the date of maturity. Interest on Bonds will cease from the date of final redemption in all events. The Issuer retains the right to revise (pre-pone/ postpone) the above interest payment date(s) at its sole and absolute discretion. Payment of interest shall be made by way of cheque(s)/ interest warrant(s)/ credit through RTGS mechanism. When interest payment is made by way cheque(s)/ warrant(s) the same shall be dispatched by the Issuer at least 7 (seven) days prior to the due date and shall be dispatched by registered post to the sole/ first applicant, at the sole risk of the applicant. If any interest payment date falls on a day which is not a Business Day ( Business Day being a day on which Commercial Banks are open for Business in Chennai), then payment of interest will be made on the previous day that is a business day but without liability for making payment of interest for the intervening period. PAYMENT OF INTEREST The interest will be payable on half yearly basis each year till final maturity from the deemed date of allotment. The interest payment on application money will be payable from the date of credit to the TANGEDCO account to the date immediately preceding the deemed date of allotment will be made within the fortnight period The interest payment on the Bonds shall be made to the registered Bondholders recorded in the books of the TANGEDCO on the record date. The final interest shall be paid along with the redemption proceeds. COMPUTATION OF INTEREST Interest for each of the interest periods shall be calculated, on 'Actual/ Actual days' basis, on the face value of principal outstanding on the Bonds at the applicable coupon rate rounded off to the nearest Rupee. RECORD DATE The Record Date for the Bonds shall be 15 (Fifteen) days prior to each interest payment and/ or principal repayment date. Interest and/or principal repayment shall be made to the person whose name appears as sole/ first in the register of bond holders/ beneficiaries position of the Depositories on record date. In the event of the Organisation not receiving any notice of transfer at least 15 (Fifteen) days before the respective due date of payment of interest and at least 15 (Fifteen) days prior to the maturity date, the transferees for the Bonds shall not have any claim against the Issuer in respect of interest so paid to the registered bond holder. PUT & CALL OPTION At the end of 7 th Year from deemed date of allotment. "Clear period of 30 days shall be required as notice period from either side for exercising put or call option, as the case may be, before the due date." TAX DEDUCTION 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. Tax exemption certificate/ document, under Section 193 of the Income Tax Act, 1961, if any, must be lodged at the registered office of the Organisation or at such other place as 25