NLC India Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

that an outflow of resources will be required to settle the
obligation and in respect of which a reliable estimate can
be made. The amount recognized as a provision is the best
estimate of the expenditure required to settle the present
obligation at the end of the reporting period. Provisions are
not discounted to present value.

Contingent liabilities are disclosed when there is (i)
a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events not
wholly within the control of the Company or (ii) a present
obligation that arises from past events where it is either
not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the amount
cannot be made.

Contingent Liability is not provided for in the accounts and
are disclosed by way of notes.

XXII. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise
cash at banks and on hand and short-term deposits with an
original maturity of three months or less, which are subject
to an insignificant risk of changes in value.

XXIII. Earnings per share

The Company presents basic and diluted Earnings Per
Share (EPS) data for its ordinary shares.

Basic EPS is calculated by dividing the Profit or Loss
attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding
during the period, adjusted for own shares held.

Diluted EPS is calculated by taking the weighted average
number of ordinary shares which is calculated for basic
earnings per share and adjusted to the weighted average
number of ordinary shares that would be issued on the
conversion of all the dilutive potential ordinary shares
into ordinary shares. Dilutive potential ordinary shares
are deemed to have been converted into ordinary shares at
the beginning of the period or, if later, the date of the issue
of the potential ordinary shares.

XXIV. Dividend

Dividends and interim dividends paid to Company’s
shareholders are recognized as changes in equity in the
period in which they are approved by the shareholders
meeting and the Board of Directors respectively.

XXV. Cash Flow Statement

Cash Flow Statement is prepared as per indirect method
prescribed in the Ind AS 7 ‘Statement of Cash Flow’.

XXVI. Regulatory Deferral Accounts

Income/Expense recognized in the Statement of Profit
or Loss to the extent recoverable from/payable to the
beneficiaries in the subsequent periods as per CERC
tariff regulations are recognized as Regulatory Deferral
Account Balances. Regulatory Deferral Account Balances
are adjusted from the year in which the same become
recoverable from/payable to the beneficiaries.

Pending the disposal of review/ appeal petitions filed by
the Company against adverse orders before CERC/SERC/
Other Appellate Authorities, the impact of the said orders
are considered under Regulatory Deferral Account in the
Profit or Loss of the respective financial year. In case of
appeal by the beneficiary against the CERC/SERC orders,
the impact on the same is not considered as Regulatory
Deferral Liability and disclosed under Contingent Liability.

Regulatory Deferral Account Balances are reviewed
and evaluated at each balance sheet date to ensure the
underlying activities meet the recognition criteria and
it is probable that future economic benefits associated
with such balances will flow to the entity. If this criteria
are not met this regulatory deferral account balances
are derecognized.

Regulatory Deferral Account Balances are presented as
separate line item in the Balance Sheet. The movement
in the Regulatory Deferral Account Balances for the
reporting period is presented as a separate line item in the
Statement of Profit and Loss.

XXI. Provisions and Contingent Liability
Recognition and measurement

A provision is recognized when the Company has a present
obligation as a result of a past event and it is probable

a) In respect of land acquired by the company during the periods 1956 to 1977 and 1997 to 2001, ownership is subject to certain
restrictions imposed through the assignment deeds and through the Tamil Nadu Acquisition of Land for Industrial Purpose
Act, 1997 respectively.

b) PPE Includes assets belonging to Ministry of Coal obtained under Coal Science &Technology Projects. This also includes
residual value of assets considered as addition to the assets under Life extension programme.

c) Free hold Land includes acquisition of land relating to Bithnok Power and its related Mining projects amounting to
H 194.75 crore.

d) All units of Thermal Power Station -I has been retired from operation subsequent to 30.09.2020. The net block of TPS-I
assets as on 31.03.2025 amounting to H 43.50 Crore are reclassified held for sale as per the requirements of IND AS 105
(Refer Note no. 13). Estimated net sale proceeds of the retired assets is expected to be above the residual value of assets
appearing in the books.

e) Spares meeting the criteria of PPE and having a value of more than H 10 Lakh have been considered for capitalisation.

f) Depreciation on Renewable Assets has been calculated considering 5% residual value in line with guidelines of MNRE/
SERC.

g) There is no impairment loss identified for the tangible fixed assets during the year.

h) The company has identified land with limited life and classified the same under the head mining land.

i) Based on physical verification of assets for FY 2022-23 the net block of H 7.00 crore was written off during the year.

j) Based on physical verification of assets conducted during the year, the net book value of assets which are not available has
been provided and the same are included as part of asset register.

k) Refer Note no. 17(a) for the property,plant and equipment pledged as security by the company.

l) NIRL, a wholly owned subsidiary of NLCIL was incorporated on 14.06.2023 for taking over of the existing operational
renewable assets on the net book value as on the date of transfer, under Asset Monetization. Transfer of the asset etc., is under
process and necessary approvals are pending from GoI.

a) Trade receivables for FY 2024-25 includes H 10.57 crore (previous year H 4.07 crore) and H 27.74 crore (previous year H 15.82
crore) receivable from NTPL and NUPPL respectively.

b) The Company has reviewed its outstanding debtors balance as on 31^st March’2025.Taking into account, period of outstanding,
collections and the trend of realization subsequent to intervention of Ministry of Power and Ministry of Coal and pending
completion of the reconciliation of balances and resolving various issues, in respect of which action have been initiated, on
estimated basis, a cumulative provision of H 267.95 crore (PY H 383.91 crore) has been considered towards loss allowances
on outstanding debtors balance as on March 31, 2025.

c) Secured Trade Receivables represents value of Letter of Credit (LC) submitted by DISCOM’s as per the MoP order dated
28/06/2019 w.e.f 01/08/2019 as Payment Security Mechanism under Power Purchase Agreements.

d) The Company has billed various DISCOMs an amount of H 386.51 Crore during the financial year 2022-23 towards income
tax recoverable as per the CERC tariff Regulations for different Tariff periods in respect of payments made under ‘Vivad Se
Vishwas Scheme’ (VSVS). While few DISCOMs have paid H 68.39 Crore, some of the DISCOMs have disputed this claim
and initiated legal proceedings which are pending for adjudication. However, the Company is of the opinion that the entire
balance outstanding amounting to H 318.12 Crore is recoverable.

e) Dues receivable through interest free instalment scheme as per MOP Late Payment surcharge rules amounting to H 177.64 crore.

f) A detailed ageing analysis of trade receivable has been provided in Note No. 48.

(a) The regulatory deferral account balances has been accounted in line with the company’s accounting policy. Refer note no. 46
for detailed disclosures.

(b) Based on petition filed with CERC for NNTPS (2 X 500 MW), the differential amount (as against provisional tariff order)
of H 360.27 crore were considered under regulatory deferral account debit balance. Consequent to receipt of CERC order,
regulatory assets created earlier has been reversed in the current year.

(c) The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May’2020
by Ministry of Coal, Gol, actual expenses incurred on mine closure up to a maximum of 50% of the Mine Closure Deposit
along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period
from 2016-17 to 2020-21, an amount of H 171.15 crore had been considered on provisional basis under regulatory assets over
the previous periods.

In the Current financial year H 171.15 crore has been reversed based on order from Coal Controller (CCO) received in
FY 2024-25 for the period of 2016-17 to 2020-21.

Further, an amount of H 23.92 crore (PY: H 22.78 crore) has been considered as regulatory income/assets based on the revised
mine plan.

d) As per CERC regulations 2024-29, security expenses, water charges and capital spares will be allowed separately after
prudence check. By considering the regulations, regulatory income of H 88.80 Crore in respect of those charges for the year
ended 31^st March 2025 are accounted in regulatory deferral account debit balances.

e) As the company continues to bill beneficiaries based on the latest available Tariff Order applicable for the previous control
period (2019-24), in accordance with the regulations, until the Tariff Order for the current control period (2024-29) is issued.
During the year O&M difference amounting to H 68.30 crore arising between last approved 2019-24 tariff order in respect of
Thermal power plants and normative O&M applicable for the current control period 2024-29 is considered under regulatory
deferral account debit balances.

Details of Terms of Repayment, Rate of Interest and Security:

a. To meet the fund requirement of Ney veli New Thermal Power Station (NNTPS 1000 MW) borrowing arrangement has been

done with:

i) Loan of H 3000 Crore was availed from M/s. Power Finance Corporation Ltd. and outstanding amount as at 31.03.2025
is H 1500 Crore. The Loan is secured by pari passu charge on project lands & fixed assets of NNTPP, repayable in 20
equal bi-annual instalments commencing from 31.03.2020. The interest rate as on 31.03.2025 is @ 8.23% p.a. (on the
basis of 3 year AAA Reuter rate i.e. 7.38% p.a plus fixed spread 0.85%).

ii) NLCIL Bonds 2021 Series-II was issued on 20.12.2021 for an amount of H 500 Crore @ 6.85% p.a., out of which H 295.60
Crore was utilised towards NNTPS project and balance H 204.40 Crore was utilised towards general business purpose.
This Bond is unsecured and will be repayable by bullet payment on 13.04.2032.

iii) M/s. The South Indian Bank has sanctioned Rupee Term loan of H 581 Crore out of which H 543.20 Crore was drawn up
to 31.03.2025. The outstanding balance as on 31.03.2025 is H 310.80 Crore. This Loan is secured by pari passu charge
by hypothecation of Non-Current assets of NNTPS, repayable in 10 equal bi-annual instalments commencing from
30.09.2023. The interest rate as on 31.03.2025 is @ 6.88% p.a. (on the basis of 3M Treasury Bill-FBIL rate i.e. 6.34%
p.a plus fixed spread 0.54%).

iv) M/s. Indian Overseas Bank has sanctioned Rupee Term loan of H 1078 Crore for FGD and other additional scope, and the
entire sanctioned amount is undrawn as on 31.03.2025. This Loan is secured by hypothecation of Non-Current Assets
of additional Scope NNTPS, repayable in 10 equal bi-annual instalments commencing from 30.04.2025. The interest
rate as on 31.03.2025 is @ 7.46% p.a. (on the basis of RBI Repo rate plus fixed spread 1.21%).

b. To meet the fund requirement of Tamilnadu Solar Power Project 500 MW, borrowing arrangement has been done with the
following banks:

i. Axis Bank sanctioned a loan of H 500 Crore and drawn H 500 Crore, secured by pari-passu charge on the project assets.
The interest rate is on the basis of 5 Year G-Sec rate plus 1.22% fixed spread. Repayment for the loan was started from
September’2019 in 10 equal half-yearly instalments and the loan was fully repaid and closed on 08.03.2024.

ii. Axis Bank sanctioned a loan of H 450 Crore and drawn H 450 Crore secured by pari-passu charge on the project assets.
The interest rate is the basis of 5 Year G-Sec Rate plus 1.20% fixed spread. Repayment for the loan started from March’
2020 in 10 equal half-yearly instalments and the loan was fully repaid and closed on 30.09.2024.

iii. Federal bank sanctioned a loan of H 456 Crore and drawn H 456 Crore, secured by pari-passu charge on the project
assets. The interest rate is on the basis of 5 Year G-Sec rate plus 1.20% fixed spread. Repayment for the loan started
from March’2020 in 10 equal half-yearly instalments and the loan was fully repaid and closed on 30.09.2024.

c. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with
SBI for an amount of H 2552 Crore. Out of the facility, H 2319 Crore was drawn & outstanding amount as on 31.03.2025 is
H 1170.04 Crore. The Interest rate as on 31.03.2025 is 8.90% p.a. (on the basis of 6 Month SBI MCLR rate @ 8.90%). This
loan is repayable in 20 equal half-yearly instalments, first repayment started on 31.12.2020. This loan is secured by pari-passu
charge on the project assets to the extent of the facility.

d. To meet the fund requirement of 300 MW Solar Power Project at Barsingsar, Rajasthan, borrowing arrangement has been
done with M/s. IndusInd Bank Limited for an amount of H 1000 Crore and entire amount is undrawn as on 31.03.2025. The
applicable Interest rate is linked to GoI 3 months Treasury Bill published by FBIL plus fixed spread of 1.17% p.a. This loan
is repayable in 20 equal half- yearly instalments and first scheduled repayment is on 31.12.2025, This loan is secured by
hypothecation of project assets to the extent of the facility.

e. To meet the fund requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with SBI for an amount
of H 1680.75 Crore. Out of the facility, H 593 Crore was drawn. The interest rate is on the basis of 6 Months SBI MCLR,
repayable in 20 equal half- yearly instalments starting from 30.09.2021 and the entire loan is repaid and closed on 29.03.2025.
The loan was secured by pari-passu charge on the project assets to the extent of the facility.

f. To meet the General Funding arrangement, NLCIL BONDS 2019 SERIES I was issued on 29.05.2019 for H 1475 Crore @
8.09% p.a. and NLCIL BONDS 2020 SERIES I was issued on 27.01.2020 for an amount of H 525 Crore @ 7.36% p.a. These
Bonds were initially secured by pari-passu 1^st charge on the project assets of TPS II Expansion 500 MW (250 MW X 2)
Thermal power station (including Land) to the extent of the facility and subsequently to have sufficient asset cover another
security has been created by pari-passu 1^st charge on the project assets of 1000 MW (2 X 500 MW) NNTPP, Neyveli project
to the extent of H 1184 Crore. These Bonds are repayable on 29.05.2029 & 25.01.2030 respectively. Out of H 1475 Crore,
H 749.22 Crore and H 234.98 Crore has been used towards unlocking of Equity of TPS II Expansion Project (2*250 MW) &
Wind 51 MW respectively and balance were used for general purpose.

g. Bi-annual equal repayment (€ 0.219 Million each) of Foreign Currency loan - I from KfW Germany, commenced from

30.12.2001, ending on 30.06.2036. This loan is unsecured and guaranteed by GoI @ guarantee fee of 1.20%. The outstanding
loan, Euro 5.05 million carries interest rate @ 0.75% p.a.

h. Bi-annual equal repayment (€ 1.401 Million each) of Foreign Currency loan - II from KfW Germany, commenced from

30.06.2002, ending on 30.06.2037. This loan is unsecured but guaranteed by GoI @ guarantee fee of 1.20%. The outstanding
soft loan, Euro 35.03 million carries interest rate @ 0.75% p.a.

i. The company has maintained required asset cover as per the terms of offer document/information memorandum and/or
Debenture trust deed, including compliance with all the covenants, in respect of the listed non-convertible debt securities.

Pursuant to the revised regulatory framework issued by SEBI vide Master Circular No. SEBI/HO/DDHS/P0D1/P/CIR/2024/54
dated May 22, 2024, NLC India Limited has been classified as a Large Corporate (LC) with effect from FY 2024-25. In line
with the applicable compliance requirements, the Company shall align its future borrowing strategy to ensure adherence to
the stipulated norms over the prescribed three-year period.

a) Deferred income includes capital grant of H 68.17 crore, H 35.80 crore, H 44.75 crore and H 67.12 crore (Unamortised value of
Grant) received from Ministry of New and Renewable Energy (MNRE) in respect of installation of 130 MW solar at various
locations in Neyveli, 20 MW of Solar Plant at various location of Andaman and Nicobar, 200 MW solar at various locations
in Gujarat and 300 MW solar at various locations in Rajasthan. In proportion to the depreciation of the respective solar asset,
the grant is amortised to profit and loss account each year. During the FY 2024-25 company has received grant for the Solar
300 MW (Rajasthan), Solar 200 MW (Gujarat) and Solar 10 MW smart city project amounting to H 46.11 crore, H 44.75 crore,
and H 1.77 crore respectively.

b) In respect of Mine Closure Pursuant to GOI guidelines on Mine closure, total Mine closure cost was approved by Ministry of
Coal at a rate of H 9 lakh per hectare for all the open cast Mines. The annual contribution, compounded @ 5% p.a. is deposited
in an Escrow account in the name of Coal Controller Escrow account NLC Ltd. Mine., as stipulated by the Coal Controller.

a) Amounts under regulatory deferral liabilities as on 31.03.2025 relates to the impact arises out of various regulatory orders
for the previous tariff periods.

b) The company has filed appeals before the Appellate Authority of Electricity (APTEL) against the following CERC orders
which are pending for disposal:

1) Thermal Power Station II (Neyveli) - Rejection of substitution of actual secondary fuel consumption (SFC) in place
of normative SFC in computing energy charge rate, disallowance of de-capitalization of LEP Assets and reduction of
claim towards capital expenses while truing up for the tariff period 2009-14.

2) NLCIL has filed appeal against the TNERC order challenging the reduction in levelized tariff for Solar 500 MW plants.

The impact on the above-mentioned orders have been considered appropriately under Regulatory Deferral Account Balances
/ Net Movement in Regulatory Deferral Balances in accordance with Ind AS 114 in the respective previous financial years.

c) NLCIL has filed review petition against CERC Lignite Transfer Price Truing up order (2014-19 control period) towards
disallowance of additional capital expenditure, O&M expenses, stores in working capital computation. During the year
CERC has issued order dated 19^th May 2024 allowing O&M expenses on actual basis in line with the 2009-14 Truing up
order issued for Neyveli Lignite mines. Upon receipt of the above order, the Company had earlier provided under regulatory
liability cumulatively of H 1,273.31 crore (after adjusting the net interest amount), has been reversed during the year.

d) NLCIL had earlier challenged the reduction in levelized tariff for 130 MW plant before APTEL, however during the year the
case was disposed off and denied the changes in tariff claimed by NLCIL. Consequently, regulatory provision to the extent
of H 30.24 crore has been reversed during the year.

e) In the case of Revision of pooled lignite price and sharing of incentive, APTEL has issued order on 03.07.2024 directing
NLCIL to share the profit earned on sale of lignite outside with the beneficiaries and specified in the order that incentive
is not shareable as per applicable regulations. Subsequently CERC has passed an effect order for the same on 29.03.2025.

Accordingly regulatory deferral liability which has been already created to the tune of H 778.07 crore has been reversed in
the books of accounts during the FY 2024-25.

f) Regulatory liability provided towards sharing of Non-tariff income arising from sale of coal / lignite for an amount of
H 418.81 crore has been reversed during the current year as they were passed on to the DISCOMs by way of credit note with
respect to tariff period 2019-24.

g) During the financial year 2022-23, the Company billed an amount of H 386.51 crore to various DISCOMs towards income
tax recoverable under the provisions of the CERC Tariff Regulations, pertaining to different tariff periods in respect of
payments made under the ‘Vivad Se Vishwas Scheme’ (VSVS), 2020. Of this, H 68.39 crore has been received from certain
DISCOMs. The balance amount remains disputed by other DISCOMs, who have initiated legal proceedings currently pending
before various High Courts. In one such matter involving TANGEDCO, the Hon’ble Madras High Court, through its order
dated September 11, 2024, disposed of the writ petition with a direction to approach the Central Electricity Regulatory
Commission (CERC) for adjudication. TANGEDCO subsequently filed an appeal, and the Division Bench of the Madras High
Court. Vide court order dated April 9, 2025 this matter has been sent back to CERC once again for resolution in accordance
with the law.

The Company is actively pursuing the vacation of stay orders in other High Courts and is in the process of filing a petition
before CERC for adjudication.

Since the matter is sub judice, the Company has retained the regulatory deferral liability for the disputed amount of
H 386.51 crore, along with accrued interest of H 16.52 crore on the amount already received. Accordingly, a total regulatory
deferral liability of H 403.03 crore has been recognized as of March 31, 2025 in this regard.

h) CERC has issued order on March 14, 2024 read with corrigendum on April 06, 2024 towards Lignite Input Price for tariff
period 2009-14. Based on the order, the Company had issued debit notes to TANGEDCO for an amount of H 694.33 Crore
(including interest of H 417.63 Crore) w.r.t TPS - I. Further, TANGEDCO has filed writ petition w.r.t interest portion before
Hon’ble Madras High Court and interim stay has been granted for the same on July 10, 2024 and further TANGEDCO filed
petition before CERC based on direction of High Court.

In its order dated November 8, 2024, CERC upheld the Company’s claim for interest, directing TANGEDCO to make payment
within three months from the date of the order. However, TANGEDCO has filed an appeal (Appeal No. 37 of 2025) against
the above CERC Order before the Appellate Tribunal for Electricity (APTEL), which is currently pending adjudication.

Considering the above, NLCIL has provided H 417.63 Crore under regulatory deferral liability in accordance with applicable
Indian accounting standards, pending resolution of the matter.

i) The Company has recognized a regulatory deferral liability of H 30.79 Crore, representing the difference arising from excess
billing based on the last available Input price tariff Order applicable for the previous control period (2019-24) and the Input
price Tariff petition filed for the control period (2024-29).

a) Power Sale includes Sale of Power through Trading for FY 2024-25 H 59.89 Crore. (FY 2023-24 H 21.32 Crore).

b) During the year CERC has issued tariff order of NNTPS for the control period 2019-24, the impact of such order amounting
to H 224.81 crore has been billed to the beneficiaries.

c) During the year, CERC vide order dated 19.05.2024 has issued revised Lignite truing up order of Neyveli mines for the tariff
Period 2014-19. Based on the same, the company has given credit note to all the beneficiaries during the year amounting to
H 388.40 crore (including TAQA).

d) During the year, the company has issued credit note for Non-tariff income earned on sale of lignite/coal pertaining to the
previous tariff period 2019-24 for an amount of H 425 crore. Further, for FY 2024-25 Non-tariff income w.r.t Barsingsar lignite
sales accounted for an amount of H 59.50 crore.

e) During the year, company has received order from CERC based on outcome of APTEL order, in the matter pertaining to sharing
of profit earned on outside lignite sales with the beneficiaries and incentive is not shareable as per applicable regulations. On
account of this order, an amount of H 39.92 crore has been accounted, which will be passed onto the beneficiaries.

f) The Company has received tariff order dated 12.06.2024 in respect of Talabira Mines for the tariff period 2019-24. Based on
the same, the Company has given credit note to the amount of H 103.87 Crore to NTPL.

g) Coal sales includes sales to subsidiary of NLCIL - NTPL amounting to H 92.95 crore (net sales after considering the order
CERC tariff order impact) (FY 2023-24 H 222.90 crore)

a. The Company received review petition order dated May 19, 2024 from CERC w.r.t 2014-19 tariff period for Neyveli mines.
Based on this Order, the Company has withdrawn regulatory liability amounting to H 1,273.31 crore after adjusting the net
interest amount.

b. CERC issued the Tariff Order for the 2019-24 period for NNTPS under petition no. 219/GT/2019 dated 02.08.2024. Based
on the order, the previously created regulatory deferral asset amounting to H 360.27 crore has been reversed in the books of
accounts during the financial year 2024-25.

c. The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May’2020
by Ministry of Coal, Gol, actual expenses incurred on mine closure up to a maximum of 50% of the Mine Closure Deposit
along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year
period from 2016-17 to 2020-21, an amount of H 171.15 crore has been considered on provisional basis under regulatory assets
over the previous periods & in the Current financial year the same is approved by Coal Controller (CCO) and an amount of
H 171.15 Cr has been reversed.

Further, an amount of H 23.92 crore (PY: H 22.78 crore) has been considered as regulatory income based on the revised
mine plan.

d. In the case of Revision of pooled lignite price and sharing of incentive, APTEL has issued order on 03.07.2024 directing
NLCIL to share the profit earned on outside lignite sales with the beneficiaries and specified in the order that incentive
is not shareable as per applicable regulations. Subsequently CERC has passed an effect order for the same on 29.03.2025.
Accordingly regulatory deferral liability which has been already created to the tune of H 778.07 crore has been reversed in
the books of accounts during the FY 2024-25.

e. During the current year, NTI has been passed on to the beneficiaries, accordingly the provision recognised earlier, an amount
of H 418.81 crore has been reversed in the books of accounts.

f. During the financial year 2022-23, the Company billed an amount of H 386.51 crore to various DISCOMs towards income
tax recoverable under the provisions of the CERC Tariff Regulations, pertaining to different tariff periods in respect of
payments made under the ‘Vivad Se Vishwas Scheme’ (VSVS), 2020. Of this, H 68.39 crore has been received from certain
DISCOMs. The balance amount remains disputed by other DISCOMs, who have initiated legal proceedings currently pending
before various High Courts. In one such matter involving TANGEDCO, the Hon’ble Madras High Court, through its order
dated September 11, 2024, disposed of the writ petition with a direction to approach the Central Electricity Regulatory
Commission (CERC) for adjudication. TANGEDCO subsequently filed an appeal, and the Division Bench of the Madras High
Court Vide court order dated April 9, 2025 this matter has been sent back to CERC once again for resolution in accordance
with the law.

The Company is actively pursuing the vacation of stay orders in other High Courts and is in the process of filing a petition
before CERC for adjudication.

Since the matter is sub judice, the Company has retained the regulatory deferral liability for the disputed amount of H 386.51
crore, along with accrued interest of H 16.52 crore on the amount already received. Accordingly, a total regulatory deferral
liability of H 403.03 crore has been recognized as of March 31, 2025 in this regard.

g. As the company continues to bill beneficiaries based on the latest available Tariff Order applicable for the previous control
period (2019-24), in accordance with the regulations, until the Tariff Order for the current control period (2024-29) is
issued. During the year O&M difference amounting to H 68.30 Crore arising between last approved 2019-24 tariff order in
respect of Thermal power plants and normative O&M applicable for the current control period 2024-29 is considered under
regulatory income.

h. As per CERC regulations 2024-29, security expenses, water charges and capital spares will be allowed separately after
prudence check. By considering the regulations, regulatory income of H 88.80 Crore in respect of those charges for the year
ended 31^st March 2025 are accounted in regulatory deferral account debit balances.

i. CERC has issued order on March 14, 2024 read with corrigendum on April 06, 2024 towards Lignite Input Price for tariff
period 2009-14. Based on the order, the Company had issued debit notes to TANGEDCO for an amount of H 694.33 Crore
(including interest of H 417.63 Crore) w.r.t TPS - I. Further, TANGEDCO has filed writ petition w.r.t interest portion before
Hon’ble Madras High Court and interim stay has been granted for the same on July 10, 2024 and further TANGEDCO filed
petition before CERC based on direction of High Court.

In its order dated November 8, 2024, CERC upheld the Company’s claim for interest, directing TANGEDCO to make payment
within three months from the date of the order. However, TANGEDCO has filed an appeal (Appeal No. 37 of 2025) against
the above CERC Order before the Appellate Tribunal for Electricity (APTEL), which is currently pending adjudication.
Considering the above, NLCIL has provided H 417.63 Crore under regulatory deferral liability in accordance with applicable
Indian accounting standards, pending resolution of the matter.

j. The Company has recognized a regulatory deferral expenses of H 30.79 Crore, representing the difference arising from excess
billing based on the last available Input price tariff Order applicable for the previous control period (2019-24) and the Input
price Tariff petition filed for the control period (2024-29).

k. The company undertakes review of regulatory assets and liabilities at the end of each year and based on reassessment of
recoverability/refund of such assets/liabilities necessary accounting adjustments are carried out and based on expert opinion
wherever required period cost on regulatory liability has also been considered subject to approval of Regulatory Authority.

Note 41: Employee benefits

(i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (‘Fund’) that is legally separated
from the Group. The board of the fund is required by law to act in the best interest of the plan participants and is responsible for
setting certain policies (e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the
group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund’s actuarial measurement
framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for
funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance
with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the
total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit (Asset) Liabilities
Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is
entitled to gratuity at 15 days salary (15/26* last drawn basic salary plus dearness allowance) for each completed year of service
subject to a maximum of H 0.20 Crore on superannuation, resignation, termination, disablement or on death considering the
provisions of the Payment of Gratuity Act, 1972, as amended. The gratuity scheme is funded by the Company and is managed by
separate trust. The liability for gratuity scheme is recognised on the basis of actuarial valuation.

The Company provide for earned leave benefit and half pay leave to the employees of the company, which accrue annually
at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves (HPL) are encashable only
on separation. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no
commutation of half pay leave shall be permissible. The liability for the same is recognized on the basis of actuarial valuation.

C. Defined Contribution Plan

Post Retirement Medical Assistance (PRMA)

The Company has a Post Retirement Medical Assistance scheme, under which annual cash assistance is provided to retired
employees and their spouses for both inpatient and outpatient medical treatment availed in subject to Company’s grade wise
policy applicable for employees.

A trust has been constituted and is managed by the Company for its employees, for the sole purpose of providing post retirement
medical assistance facility to them. For the employees retired on or before 31.12.2006, the company has extended the post retirement
medical assistance in form of cash reimbursements and Mediclaim insurance. A separate fund is maintained by the company and
necessary contributions are made every year for this purpose.

The fair valuation of employees loans have been carried out and accounted appropriately through profit and loss account, however
the amount is immaterial. Hence the same has not been disclosed separately.

Note 43: Disclosure as per Ind AS 23 on ‘Borrowing Costs’

Borrowing costs capitalised during the year is NIL (previous year NIL).

Note 44: Disclosure as per Ind AS 116 ‘Leases’

The companies significant leasing arrangements are in respect of various assets are as follows:

a.) Land: The company has lease arrangement with respect to its office and township requirements at various locations (i.e.
HUDCO land at Delhi and office & township land in Talabira project, Odisha) for 99 years. The lease rental are fixed for
entire lease term, which has been arrived based on lease agreement. The lease can be extended for similar periods on mutually
agreed terms after the completion of the current lease period. The company does not have option to buy.

b) Vehicles: The Company has taken certain vehicles (including e-vehicles) on lease for a period extending up to 5 years, which
can be further extended at mutually agreed terms. All the lease rental of vehicles are fixed in nature except for e-vehicles
Lease rental for which are escalated @10% each year.

c) Plant and Machinery: An agreement has been arrived between NLCIL (the company) and Solar Development Operator
(SDO) to use power evacuation facility for a period of 25 years. The lease rental are fixed in nature.

d) Buildings: Premises for use of offices and guest houses on lease are usually renewable on mutually agreeable terms. The
lease rental are fixed in nature for one property and escalated by 10% each year for other properties

When measuring lease liabilities, the Company discounted lease payments using its weighted average borrowing rate of long
term loans.

i. As a lessee

Following are the changes in the carrying value of right of use assets and Lease liability for the year ended 31^st March 2025:

Note 46: Disclosure on Ind AS 114, ‘Regulatory Deferral Accounts’

(i) Nature of rate regulated activities

The Company is engaged in the business of mining of lignite/coal and generation of power by using lignite as well as renewable
energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity
Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC)/bidding process. The CERC provide extensive
guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite.
Presently CERC follows Hybrid Tariff approach wherein most of the components of the tariffs are now allowed on a normative
basis irrespective of actual cost, while retaining a few of the cost determinants such as capital cost, additional capitalisation, Water
Charges, Security expenses, Capital Spares etc. to be allowed on actual basis subject to a prudence check.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return.

This form of rate regulation is known as cost plus service model regulations which enable the Company to recover its costs of
providing the goods or services plus a fair return.

NLCIL has filed truing up petition for tariff period 2019-24 of both Mines and Thermals. However,billing to beneficiaries is being
done as per latest approved CERC tariff order received for the respective units in line with the applicable regulations.

CERC has notified tariff regulations for the tariff period 2024-29. Accordingly, NLCIL has filed tariff petition before CERC as
per the applicable regulations.

(ii) Recognition and measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange rate variation during the construction period
shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff.
CERC during the past periods in tariff orders for various stations has allowed exchange differences incurred during the construction
period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency
to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized
on an undiscounted basis as ‘Regulatory deferral account debit/credit balance’ by credit/debit to ‘Movements in Regulatory
deferral account balances’ during construction period and adjustment from the year in which the same becomes recoverable from
or payable to the beneficiaries. Accordingly, an amount of H 120.48 crore for the year ended 31^st March 2025 has been accounted
for as ‘Regulatory deferral account debit balance’ (31^st March 2024: H 121.06 crore accounted as ‘Regulatory deferral account
debit balance’.

As per CERC regulations 2024-29, security expenses, water charges and capital spares will be allowed separately after prudence
check. Hence income in respect of those charges for the year ended 31^st March 2025 are accrued in regulatory deferral balances
on undiscounted basis.

In accordance with applicable regulations, the company continues to bill beneficiaries based on the last available Tariff Order
pertaining to the previous control period, until the Tariff Order for the current control period is issued except for the cases where
it is mutually agreed with the beneficiaries.

The O&M difference arising between last approved tariff order in respect of Thermal plants for previous control period and
normative O&M applicable for the current control period is also considered under regulatory deferral balances.

When the Company prefers review/appeal in CERC/APTEL/Other authorities the impact of the adverse items in the order along
with period cost if any required is considered under the Regulatory Deferral Account in the Profit or Loss of the respective financial
year based on the reliable estimates of the Company on case to case basis. Regulatory deferral account balances are adjusted in
the year in which the same become recoverable from or payable to the beneficiaries.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances:

i. Demand risk - Availability of alternative and cheaper sources of power may result in reduced demand.

ii. Regulatory risk - The regulatory deferral balances may undergo a change due to the rate setting process or truing up at the
end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

iii Other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers
and hence the risk is mitigated. In respect of disputed orders, where the company has preferred an appeal against the adverse
order, regulatory deferral liability has already been considered to the extent of estimated economic outflow of resources
which will be discharged in the event of adverse order from the appellate authorities.

Financial Instruments
Note 47: Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to
equity shareholders.

The Board of directors maintains an optimal balance between the higher return that further borrowings may generate vis-a-vis
the security afforded by sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC - Debt service coverage ratio not less than 1.50
Neyveli Bond - Minimum asset coverage ratio of 1.0

Loan from IndusInd Bank -Debt service coverage ratio not less than 1.20 and Debt to Total net worth not more than 2.5 times
There have been no breaches in the financial covenants of any interest bearing borrowings

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios
generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.
The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of noncurrent
borrowings (including current maturities) and current borrowings as specified in Note no.17 (a), 21 (a) less cash and cash equivalents
(excluding earmarked deposits). Equity includes equity share capital and reserves (excluding earmarked Reserves) that are managed
as capital. The gearing ratio at the end of the reporting period was as follows:

Note 48: Financial risk management

The treasury function of the company provides services to the business, co-ordinates access to domestic and international financial
markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures
by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk)
credit risk and liquidity risk.

The Company’s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and
other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal
financial assets include loans, trade and other receivables, short term deposits etc.

A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans &
advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising mainly state electrical utilities owned by State Governments and
Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant.
The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account
of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company
uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision
matrix takes into account available external and internal credit risk factors such as credit defaults and the Company’s historical
experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk.
However, management considers the factors that may influence the credit risk of its customer base, including the default risk of
the industry.

At March 31, 2025, the Company’s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO)
accounted for H 1,553.28 crore of the trade receivables carrying amount (H 2,940.57 crore as at March 31, 2024).

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loans and advances
to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of
India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties/customers have sufficient capacity to meet the obligations and where the
risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with strong capacity to meet the obligations. Further, management
believes that the unimpaired amounts that are past due by more than 45 days are still collectible in full. However, considering
various regulatory and other disputes including historical payment behaviour and analysis of customer credit risk impairment
loss has been considered for the reporting period in respect of trade receivables.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far
as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring
forecast and actual cash flows.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60
days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.

a.) SBI has sanctioned ? 1,680.75 Crore Rupee Term Loan facility for Talabira Mine project. This loan was repaid and closed
on 29.03.2025. Ref note 17 (a) (e).

b) SBI has sanctioned Rupee term loan of ? 2,552.00 Crore for solar 709 MW, out of which ? 2,319.00 Crore has been drawn
and the undrawn amount is ? 233.00 Crore as on 31.03.2025. Ref note 17 (c).

c) SIB has sanctioned Rupee Term loan of ? 581 Crore. for NNTPS, out of which ? 543.20 Crore was drawn and the undrawn
amount is ? 37.80 Crore as on 31.03.2025. Ref note 17 (a)(iii)

d) IOB has sanctioned Rupee Term loan of ? 1078 Crore for additional scope of NNTPS and entire amount is undrawn as on
31.03.2025. Ref note 17 (a)(iv)

e) IBL has sanctioned Rupee Term loan of ? 1000 Crore for 300 MW Solar Project at Barsingsar Rajasthan and entire amount
is undrawn as on 31.03.2025. Ref note 17 (a) (d)

f) SBI has sanctioned Fund Based Working Capital of ? 4000 Crore and Non-Fund based Working Capital of ? 1000 Crore
After availing the interchangeability option, the available limit of fund based working capital is ? 3300 Crore as on 31.03.2025
(PY ? 3750 Crore). Out of which, the availment of fund based working capital as on 31.03.2025 is Nil (PY NIL). Ref Note
no. 21 (a).

C) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will
affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters while optimising the return.

D) Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Up to 31^st March, 2016 the Company
capitalize the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities till the date of commercial
operation. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date
of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From 1^st April, 2016
exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated
asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure
in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

Fair value sensitivity analysis for fixed-rate instruments

The company’s fixed rate instruments are carried at amortized cost. They are therefore not subject to interest rate risk, since neither
the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. In the case of the
Company, none of the investments in equity shares are quoted in the market and does not expose the Company to equity price risks.

Note 49: Disclosure as per Ind AS 115 ‘Revenue from Contract with the Customers’

I Nature of Goods and Services

The revenue of the Company comprises of income from energy sales, Coal sales, lignite sales, consultancy and other services.
The following is a description of the principal activities:

A Revenue from energy sales

The major revenue of the Company comes from energy sales. The Company sells electricity to customers mainly electricity
utilities owned by State Governments. Sale of electricity is generally made pursuant to long-term Power Purchase Agreements
(PPAs) entered into with the beneficiaries.

V. Transaction price allocated to the remaining performance obligations

Revenue from sale of energy is accounted for based on tariff rates approved by the CERC (except items indicated as provisional)
as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations, where the tariff
rates are yet to be approved/items indicated provisional by the CERC in their orders, provisional rates are adopted considering
the applicable CERC Tariff Regulations. Revenue from sale of energy is recognized once the electricity has been delivered to the
beneficiary and is measured through a regular review of usage meters. Beneficiaries are billed on a periodic and regular basis.
Therefore, transaction price to be allocated to remaining performance obligations cannot be determined reliably for the entire
duration of the contract.

Note 50: Disclosure as per Ind AS 108 ‘Operating segments’

The Company publishes its financial statements along with the consolidated financials. In accordance with the IND AS 108,
Operating segments, the company has disclosed the segment information in the consolidated financial statements.

Note 51: Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debits to the extent
practicable. Balances due in respect of advances and amount due to creditors are subject to confirmation and
reconciliation. However, power and lignite sale dues are reconciled periodically with debtors.

(c) Dividend distribution tax on proposed dividend not recognised at the end of the reporting period

Since year end, the directors of NLCIL have recommended the payment of final dividend @ 15% amounting to ? 1.5 per share for
FY 2024-25 (31^st March 2024: ? 1.50 per share)which are subject to approval of shareholders in the AGM. As per IT Act 1961 as
amended by Finance Act 2020 dividend declared/distributed/paid by the Company on or after 01.04.2020 shall be taxable in the
hands of the shareholders and the Company shall be required to deduct tax at source (TDS) at the rate prescribed under Income
Tax Act from the dividend amount to be paid to the shareholders at the time of declaration/distribution/payment of dividend.

Note 57: Additional Disclosures: to the notification dated 24^th March, 2021, by Ministry of
Corporate Affairs

a) Title deeds/Assignment Deeds/Govt. Orders of Immovable Property not held in name of the Company: As on the date
of financials all the immovable properties are held in the name of the company by way of Title deed /Assignment deed/
Government Order. In certain cases the company is in the process of updation of name in the revenue records.

b) Loans and Advances to Directors, KMPs, & Related Parties: The company has a policy of loans

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Mar 31, 2024

XXI. Provisions and Contingent Liability Recognition and measurement

A provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Provisions are not discounted to present value.

Contingent liabilities are disclosed when there is (i) a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or (ii) a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

Contingent Liability is not provided for in the accounts and are disclosed by way of notes.

XXII. Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

XXIII. Earnings per share

The Company presents basic and diluted Earnings Per Share (EPS) data for its ordinary shares.

Basic EPS is calculated by dividing the Profit or Loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is calculated by taking the weighted average number of ordinary shares which is calculated for basic earnings per share and adjusted to the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Dilutive potential ordinary shares are deemed to have been converted into ordinary shares at the beginning of the period or, if later, the date of the issue of the potential ordinary shares.

XXIV. Dividend

Dividends and interim dividends paid to Company''s shareholders are recognized as changes in equity in the period in which they are approved by the shareholders meeting and the Board of Directors respectively.

XXV. Cash Flow Statement

Cash Flow Statement is prepared as per indirect method prescribed in the Ind AS 7 ''Statement of Cash Flow''.

XXVI. Regulatory Deferral Accounts

Income/Expense recognized in the Statement of Profit or Loss to the extent recoverable from/payable to the beneficiaries in the subsequent periods as per CERC tariff regulations are recognized as Regulatory Deferral Account Balances. Regulatory Deferral Account Balances are adjusted from the year in which the same become recoverable from/payable to the beneficiaries.

Pending the disposal of review/ appeal petitions filed by the Company against adverse orders before CERC/SERC/ Other Appellate Authorities, the impact of the said orders are considered under Regulatory Deferral Account in the Profit or Loss of the respective financial year. In case of appeal by the beneficiary against the CERC/SERC orders, the impact on the same is not considered as Regulatory Deferral Liability and disclosed under Contingent Liability.

Regulatory Deferral Account Balances are reviewed and evaluated at each balance sheet date to ensure the underlying activities meet the recognition criteria and it is probable that future economic benefits associated with such balances will flow to the entity. If this criteria are not met this regulatory deferral account balances are derecognized.

Regulatory Deferral Account Balances are presented as separate line item in the Balance Sheet. The movement in the Regulatory Deferral Account Balances for the reporting period is presented as a separate line item in the Statement of Profit and Loss.

a) In respect of land acquired by the company during the periods 1956 to 1977 and 1997 to 2001, ownership is subject to certain restrictions imposed through the assignment deeds and through the Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 respectively.

b) PPE Includes assets belonging to Ministry of Coal obtained under Coal Science & Technology Projects. This also includes residual value of assets considered as addition to the assets under Life extension programme.

c) Free hold Land includes acquisition of land relating to Barsingsar extension and Bithnok Power and its related Mining projects amounting to ^ 194.75 crore.

d) All units of Thermal Power Station -I has been retired from operation subsequent to 30.09.2020. The net block of TPS-I assets as on 31.03.2024 amounting to ^ 47.45 Crore are reclassified held for sale as per the requirements of IND AS 105 (Refer Note no 13). Estimated net sale proceeds of the retired assets is expected to be above the residual value of assets appearing in the books.

e) Spares meeting the criteria of PPE and having a value of more than ^ 5 Lakh have been considered for capitalisation.

f) Depreciation on Renewable Assets has been calculated considering 5% residual value in line with guidelines of MNRE/SERC.

g) There is no impairment loss identified for the tangible fixed assets during the year.

h) The company has identified land with limited life and classified the same under the head mining land.

i) Based on physical verification of assets FY 2018-19, FY 2020-21 and FY 2022-23 (including conveyor belts and pipes) the net block of ^ 13.26 crore were written off during the year.

j) Based on physical verification of assets conducted during the previous years, the net book value of assets which are not available has been provided and the same are included as part of asset register.

k) Refer Note no. 17(a) for the property, plant and equipment pledged as security by the Company.

l) Pursuant to Supplementary audit conducted by Comptroller of Auditor General of India under section 143(6)(a) of Companies Act 2013, additional disclosures has been given as follows:

i) NIRL, a wholly owned subsidiary of NLCIL was incorporated on 14.06.2023 for taking over of the existing renewable assets of 1420 MW with net book value (as on 31.03.2024) of ^ 5107 crore under Asset Monetization. Transfer of the asset etc. is under process and exemption of Income Tax is awaited from GoI.

ii) Freehold land includes 122.62 Ha having book value of ^ 5.27 crore which was transferred to the District Collector, Govt of Tamilnadu, vide Gift Deed in May 2024.

Details of Terms of Repayment, Rate of Interest and Security :

a. To meet the fund requirement of Neyveli New Thermal Power Project (NNTPP 1000 MW) borrowing arrangement has been done with:

i) Loan of ^ 3000 Crore was availed from M/s. Power Finance Corporation Ltd. and outstanding amount as at 31.03.2024 is ^ 1800 Crore. The Loan is secured by pari passu charge on project lands & fixed assets of NNTPP, repayable in 20 equal bi-annual instalments commencing from 31.03.2020. The interest rate as on 31.03.2024 is @ 8.81% p.a. (on the basis of 3 year AAA Reuter rate i.e. 7.96% p.a plus fixed spread 0.85%).

ii) NLCIL Bonds 2021 Series-I was issued on 12.02.2021 for an amount of Loan of ^ 1175 Crore @ 6.05% p.a. The Bond is unsecured and will be repayable by bullet payment on 12.02.2026.

NOTE 17 : Financial Liabilities (contd.)

iii) NLCIL Bonds 2021 Series-II was issued on 20.12.2021 for an amount of ^ 500 Crore @ 6.85% p.a., Out of which ^ 295.60 Crore was utilised towards NNTPS project and balance ^ 204.40 Crore was utilised towards general business purpose. This Bond is unsecured and will be repayable by bullet payment on 13.04.2032.

iv) M/s. The South Indian Bank has sanctioned Rupee Term loan of ^ 581 Crore out of which ^ 116.20 Crore was drawn and the undrawn amount is ^ 464.80 Crore as on 31.03.2024. The outstanding balance as on 31.03.2024 is ^ 5,000. This Loan is secured by pari passu charge by hypothecation of Non-Current assets of NNTPS, repayable in 10 equal bi-annual instalments commencing from 30.09.2023. The interest rate as on 31.03.2024 is @ 7.44% p.a. (on the basis of 3M Treasury Bill-FBIL rate i.e. 6.90% p.a plus fixed spread 0.54%)

v) M/s. Indian Overseas Bank has sanctioned Rupee Term loan of ^ 1078 Crore for FGD and other additional scope, and the entire sanctioned amount is undrawn as on 31.03.2024. This Loan is secured by hypothecation of Non-Current Assets of additional Scope NNTPS, repayable in 10 equal bi-annual instalments commencing from 30.04.2025. The interest rate as on 31.03.2024 is @ 7.71% p.a. (on the basis of RBI Repo rate i.e. 6.50% p.a plus fixed spread 1.21%)

b. To meet the fund requirement of Tamilnadu Solar Power Project 500 MW, borrowing arrangement has been done with the following banks:

i) Axis Bank sanctioned a loan of ^ 500 Crore and drawn ^ 500 Crore. The interest rate is on the basis of 5 Year G-Sec rate plus 1.22% fixed spread. Repayment for the loan was started from September''2019 in 10 equal half-yearly instalments and the loan was fully repaid on 08.03.2024. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

ii) Axis Bank sanctioned a loan of ^ 450 Crore and drawn ^ 450 Crore. The outstanding balance as on 31.03.2024 is ^ 44.96 Crore. The interest rate as on 31.03.2024 is 8.39% p.a (On the basis of 5 Year G-Sec Rate i.e. 7.19% plus 1.20% fixed spread). Repayment for the loan started from March'' 2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

iii) Federal bank sanctioned a loan of ^ 456 Crore and drawn ^ 456 Crore. The outstanding as on 31.03.2024 is ^ 45.55 Crore. The interest rate as on 31.03.2024 is 8.40% p.a. (on the basis of 5 Year G-Sec rate i.e. 7.20% plus 1.20% fixed spread). Repayment for the loan started from March''2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

c. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with SBI for an amount of ^ 2,552 Crore. Out of the facility, ^ 2,319 Crore was drawn & outstanding amount as on 31.03.2024 is ^ 1,425.24 Crore. The Interest rate as on 31.03.2024 is 8.55% p.a. (on the basis of 6 Month MCLR rate @ 8.55%). This loan is repayable in 20 equal half-yearly instalments, first repayment started on 31.12.2020. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

d. To meet the fund requirement of 300 MW Solar Power Project at Barsingsar, Rajasthan, borrowing arrangement has been done with M/s. IndusInd Bank Limited for an amount of ^ 1,000 Crore and entire amount is undrawn as on 31.03.2024. The applicable Interest rate is linked to GoI 3 months Treasury Bill published by FBIL plus fixed spread of 1.17% p.a. This loan is repayable in 20 equal halfyearly instalments, first repayment started on 31.03.2025. This loan is secured by hypothecation of project assets to the extent of the facility.

e. To meet the fund requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with SBI for an amount of ^ 1,680.75 Crore. Out of the facility, ^ 593 Crore was drawn & outstanding as on 31.03.2024 is ^ 88.65 Crore. The interest rate as on 31.03.2024 is 8.55% p.a (on the basis of 6 Months SBI MCLR) repayable in 20 equal half- yearly instalments starting from 30.09.2021. The loan is secured by pari-passu charge on the project assets to the extent of the facility.

f. To meet the General Funding arrangement, NLCIL BONDS 2019 SERIES I was Issued on 29.05.2019 for ^ 1,475 Crore @ 8.09% p.a. and NLCIL BONDS 2020 SERIES I was issued on 27.01.2020 for an amount of ^ 525 Crore @ 7.36% p.a. These Bonds were initially secured by pari-passu 1^st charge on the project assets of TPS II Expansion 500 MW (250 MW X 2) Thermal power station (including Land) to

the extent of the facility and subsequently to have sufficient asset cover another security has been created by pari-passu 1^st charge on the project assets of 1000 MW (2 X 500 MW) NNTPP, Neyveli project to the extent of ^ 1,184 Crore. These Bonds are repayable on 29.05.2029 & 25.01.2030 respectively. Out of ^ 1,475 Crore, ^ 749.22 Crore and ^ 234.98 Crore has been used towards unlocking of Equity of TPS II Expansion Project (2*250 MW) & Wind 51 MW respectively and balance were used for general purpose.

g. To meet the General Funding arrangement, an unsecured Bonds i.e. NLCIL Bond 2020 Series-II and was issued on 31.07.2020 for ^ 500 Crore carrying an interest rate of 5.34% p.a. which is repayable through bullet payment on 11.04.2025

h. Bi-annual equal repayment (€ 0.219 Million each) of Foreign Currency loan - I from KfW Germany, commenced from 30.12.2001, ending on 30.06.2036. This loan is unsecured and guaranteed by GoI @ guarantee fee of 1.20%. The outstanding loan, Euro 5.49 million carries interest rate @ 0.75% p.a.

i. Bi-annual equal repayment (€ 1.401 Million each) of Foreign Currency loan - II from KfW Germany, commenced from 30.06.2002, ending on 30.06.2037. This loan is unsecured but guaranteed by GoI @ guarantee fee of 1.20%. The outstanding soft loan, Euro 37.84 million carries interest rate @ 0.75% p.a.

j. The company has maintained required asset cover as per the terms of offer document/information memorandum and/or Debenture trust deed, including compliance with all the covenants, in respect of the listed non-convertible debt securities.

k. SEBI Circular on ease of doing business and development of corporate bond markets dated 19^th October, 2023 provides for raising 25% of the incremental borrowings by the large corporates, done during FY 2022, FY 2023 and FY 2024 respectively by way of issuance of debt securities till March 31, 2024. However, after considering the liquidity positions and the size of the Bond requirements, the Company did not raise funds by way of issuing any debt securities during the FY 2023-24.

NOTE 40: Disclosure of transactions with the related parties as defined in the Ind AS-24 are given below: (Contd.)

(3) Outstanding balances of subsidiary and joint venture companies at the year-end are unsecured and settlement occurs through banking transaction. These balances other than loans are interest free.

(4) For the year ended March 31, 2024 and March 31, 2023 the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(5) Consultancy/Management services provided by the Company to Subsidiaries are generally on nomination basis at the terms, conditions and principles applicable for consultancy/management services provided to other parties.

NOTE 41: Employee benefits

(i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (''Fund'') that is legally separated from the Group. The board of the fund is required by law to act in the best interest of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit (Asset) Liabilities Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of ^ 0.20 Crore on superannuation, resignation, termination, disablement or on death considering the provisions of the Payment of Gratuity Act, 1972, as amended. The gratuity scheme is funded by the Company and is managed by separate trust. The liability for gratuity scheme is recognised on the basis of actuarial valuation.

The Company provide for earned leave benefit and half pay leave to the employees of the company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves (HPL) are encashable only on separation. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half pay leave shall be permissible. The liability for the same is recognized on the basis of actuarial valuation.

NOTE 44: Disclosure as per Ind AS 116 ''Leases''

The companies significant leasing arrangements are in respect of various assets are as follows :

a) Land : The company has lease arrangement with respect to its office and township requirements at various locations (i.e. HUDCO land at Delhi and office & township land in Talabira project, Odisha) for 99 years. The lease rental are fixed for entire lease term, which has been arrived based on lease agreement. The lease can be extended for similar periods on mutually agreed terms after the completion of the current lease period. The company does not have option to buy.

b) Vehicles : The Company has taken certain vehicles (including e-vehicles) on lease for a period extending up to 5 years, which can be further extended at mutually agreed terms. All the lease rental of vehicles are fixed in nature except for e-vehicles Lease rental for which are escalated @10% each year.

c) Plant and Machinery: An agreement has been arrived between NLCIL (the company) and Solar Development Operator (SDO) to use power evacuation facility for a period of 25 years. The lease rental are fixed in nature.

d) Buildings : Premises for use of offices and guest houses on lease are usually renewable on mutually agreeable terms. The lease rental are fixed in nature for one property and escalated by 10% each year for other properties

When measuring lease liabilities, the Company discounted lease payments using its weighted average borrowing rate of long term loans.

(i) Nature of rate regulated activities

The Company is engaged in the business of mining of lignite/coal and generation of power by using lignite as well as renewable energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC)/bidding process. The CERC provide extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite. Presently CERC follows Hybrid Tariff approach wherein most of the components of the tariffs are now allowed on a normative basis irrespective of actual cost, while retaining a few of the cost determinants such as capital cost, additional capitalisation, Water Charges, Security expenses, Capital Spares etc. to be allowed on actual basis subject to a prudence check. Also CERC has notified its second amendment to its tariff regulation 2019-24, where in transfer price of Coal/Lignite will be determined by CERC effective from 01.04.2019. The Company has filed Tariff Petition for tariff period 2019-24 for all its Neyveli mines on July 26, 2022 and for Barsingsar mines on December 26, 2022 in line with regulations. Pending disposal of the said Petition, the Company has filed intralocutory application seeking approval of provisional Lignite transfer price for the Neyveli mines. Subsequently CERC has issued interim lignite transfer price order for the control period 2019-24 and the differential impact on such order is recognised under power sales. Company has also received Input price Tariff Order for 2019-24 with respect to Barsingsar Mines and the differential impact is recognised under power sales. The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return.

This form of rate regulation is known as cost plus service model regulations which enable the Company to recover its costs of providing the goods or services plus a fair return.

(ii) Recognition and measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past periods in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. Any Tariff difference arising on account of change in additional capital expenditure, water charges, security expenses and Capital Spares based on actuals from that allowed in provisional tariff orders shall be considered under regulatory deferral balances on undiscounted basis. When the Company prefers appeal in APTEL/Other authorities the impact of the adverse items in the order along with period cost if any required is considered under the Regulatory Deferral Account in the Profit or Loss of the respective financial year based on the reliable estimates of the Company on case to case basis. Regulatory deferral account balances are adjusted in the year in which the same become recoverable from or payable to the beneficiaries.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ''Regulatory deferral account debit/credit balance'' by credit/debit to ''Movements in Regulatory deferral account balances'' during construction period and Adjustment from the year in which the same becomes recoverable from or payable to the beneficiaries. Accordingly, an amount of ^ 121.06 crore for the year ended 31 March 2024 has been accounted for as ''Regulatory deferral account debit balance'' (31^st March 2023: ^ 134.24 crore accounted as ''Regulatory deferral account debit balance''.)

As per the CERC tariff regulation the expenses towards capital spares shall be allowed to claim from the beneficiaries based on prudence check at the time of truing up. The company has recognised ^ 18.92 crore for FY 2023-24 (PY: ^ 19.06 Crore) under its regulatory assets.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances:

i. Demand risk -Availability of alternative and cheaper sources of power may result in reduced demand.

ii. Regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

iii. Other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, where the company has preferred an appeal has recognised Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

(iv) Reconciliation of the carrying amounts:

The regulated assets/liabilities recognized in the books to be recovered from or payable to beneficiaries in future periods are as follows:

Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of directors maintains an optimal balance between the higher return that further borrowings may generate vis -s vis the security afforded by sound capital position

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC - Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.0

There have been no breaches in the financial covenants of any interest bearing borrowings.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of noncurrent borrowings (including current maturities) and current borrowings as specified in Note no.17 (a), 21(a) less cash and cash equivalents (excluding earmarked deposits). Equity includes equity share capital and reserves (excluding earmarked Reserves) that are managed as capital. The gearing ratio at the end of the reporting period was as follows:

NOTE 48: Financial risk management

The treasury function of the company provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

NOTE 48: Financial risk management (Cont''d)

The Company''s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, short term deposits etc.

A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults and the Company''s historical experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31, 2024, the Company''s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO) accounted for ^ 2,940.57 crore of the trade receivables carrying amount (^ 3,263.54 crore as at March 31, 2023)

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties/customers have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with strong capacity to meet the obligations. Further, management believes that the unimpaired amounts that are past due by more than 45 days are still collectible in full. However, considering various regulatory and other disputes including historical payment behaviour and analysis of customer credit risk impairment loss has been considered for the reporting period in respect of trade receivables.

(ii) Ageing analysis of trade receivables

The Company''s debtors include debtors in respect of TPS, Mines, renewables and also other debtors. As a policy, the Company does an ageing analysis of debtors, the details of which is stated below.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

a) SBI has sanctioned ^ 1,680.75 Crore Rupee Term Loan facility for Talabira Mine project. Out of the entire facility as on 31.03.2024 the undrawn amount is ^ 1,087.75 Crore. Ref note 17 (a) (e).

b) SBI has sanctioned Rupee term loan of ^ 2,552.00 Crore for solar 709 MW, out of which ^ 2,319.00 Crore has been drawn and the undrawn amount is ^ 233.00 Crore as on 31.03.2024. Ref note 17 (c).

c) SIB has sanctioned Rupee Term loan of ^ 581 Crore for NNTPS, out of which ^ 116.20 Crore was drawn and the undrawn amount is ^ 464.80 Crore as on 31.03.2024. Ref note 17 (a)(iv).

d) IOB has sanctioned Rupee Term loan of ^ 1,078 Crore for additional scope of NNTPS and entire amount is undrawn as on 31.03.2024. Ref note 17 (a)(v).

e) IBL has sanctioned Rupee Term loan of ^ 1,000 Crore for 300 MW Solar Project at Barsingsar Rajasthan and entire amount is undrawn as on 31.03.2024. Ref note 17 (a) (d).

f) SBI has Sanctioned Fund Based Working Capital of ^ 4,000 Crore and Non-Fund based Working Capital of ^ 1,000 Crore. After availing the interchangeability option, the available limit of fund based working capital is ^ 3,750 Crore as on 31.03.2024 (PY ^ 3,502 Crore). Out of which, the availment of fund based working capital as on 31.03.2024 is Nil (PY ^ 498 Crore). Ref Note no. 21 (a).

C) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

D) Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Up to 31^st March, 2016 the Company capitalize the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities till the date of commercial operation. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From 1^st April, 2016 exchange gain/loss on long term foreign

NOTE 58: Additional Disclosures : to the notification dated 24th March 2021, by Ministry of Corporate Affairs

a) Title deeds/Assignment Deeds/Govt.Orders of Immovable Property not held in name of the Company : As on the date of financials all the immovable properties are held in the name of the company by way of Title deed /Assignment deed/Government Order. In certain cases the company is in the process of updation of name in the revenue records.

b) Loans and Advances to Directors, KMPs, & Related Parties : The company has a policy of loans and advances given to its employees including loans and advances given to Directors, KMPs and the related parties. All these loans are paid as in accordance with the Policy adopted by the company and Repayments and interests to be charged accordingly. No loans paid to Directors, KMPs and Related parties are repayable on demand or without specifying the terms of repayment. Hence the additional disclosure as specified in the notification no.GSR 207 (e) dated 24^th March 2021 to companies Act 2013 is not applicable to the company.

c) Details of benami Properties : There is no benami properties held by the company as on date of financials. Hence the additional disclosure as specified in the notification no.GSR 207 (e) dated 24^th March 2021 to companies Act 2013 is not applicable to the company.

d) Wilful Defaulter : As on date of financials or any of the previous years, the company has not defaulted any of its loans paid to any Banks or Financial Institutions.

f) Compliance with number of layers of companies : Clause (87) of section 2, section 450 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 and section 2 Companies (Restriction on number of layers) Rules, 2017, government companies are exempt from requirements of disclosing the number of layers of its holding in subsidiaries. Hence the additional disclosure as specified in the notification no.GSR 207 (e) dated 24^th March 2021 to the Companies Act, 2013 is not applicable to the company.

g) Utilisation of Borrowed funds and share premium:

1) The company has not advanced or loaned or invested any funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(is), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall. (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

2) The company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall (i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, the company shall disclose the following.

Hence both the above additional disclosure as specified in the notification no.GSR 207 (e) dated 24^th March, 2021 to the Companies Act, 2013 is not applicable to the company.

h) Details of Crypto Currency or Virtual Currency : The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year or any of the previous financial years.

NOTE 59: Additional Disclosures (Contd.)

3) Assets held for sale

4) Revenue Recognition - Unbilled Revenue

5) Provisions and Contingent Liabilities

NOTE 60: Additional Disclosures

a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries for sale of power and lignite is generally done on periodical basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ''External Confirmations'', were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact. Loan outstanding balances of employees are also reconciled periodically.

b) In the opinion of the management, the value of assets, other than property, plant and equipment and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

c) The Company is facing with deficit in availability of land at Neyveli for lignite mining, which is adversely impacting generation of power, as local District Authorities are facing resistance for taking measurement of structures for further land acquisition and also in getting possession of already acquired land to handover to the Company. On 07.08.2023, Hon''ble Madras High Court pronounced the order that NLCIL to pay ex gratia amount to farmers and to take the possession of the land which was already acquired by NLCIL and paid the land compensation.

To mitigate the said hardship, the company has undertaken substantial efforts, leading to acquisition of requisite quantum of land to meet the thermal units production requirement. The Company is confident of overcoming the challenges on land acquisition at Neyveli mines with sustained efforts, in the near future.

d) As per the requirements of Rule 3(1) of the Companies (Accounts) Rules, 2014, the Company has used SAP for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail of each and every transaction creating an edit log of each change made in the books of account. This feature of recording audit trail has operated throughout the year and was not tampered with during the year.

In respect of 7 external applications that were integrated with SAP software, in connection with Auction & tender system, Integrated Weighment Tracking System, employees advance and reimbursement claims, GST Central Invoicing System & House Allotment, Rent Accounting & other Township related Management System, we confirm that there is no audit trail (edit log) facility that was enabled.

e) Pursuant to Supplementary audit conducted by Comptroller of Auditor General of India under section 143(6)(a) of Companies Act 2013, additional disclosures has been given as follows:

i) The Board has approved an amount of ^ 52.92 crore for PAPs of Talabira II & III, subject to their eligibility and acceptance.

ii) Minimum annual dividend as per DIPAM guidelines shall be 30% of PAT or 5% of Net-worth, whichever is higher. NLCIL has paid 30% of dividend on face value of share which is 2.60% of net worth and the differential amount as per DIPAM guidelines is ^ 383.70 crore for 2023-24. NLCIL has requested for exemption to MoC for the year which is awaited.

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Mar 31, 2023

a) In respect of land acquired by the Company during the periods 1956 to 1977 and 1997 to 2001, ownership is subject to certain restrictions imposed through the assignment deeds and through the Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 respectively.

b) PPE Includes assets belonging to Ministry of Coal obtained under Coal Science &Technology Projects. This also includes residual value of assets considered as addition to the assets under Life extension programme.

c) Free hold Land includes acquisition of land relating to Barsingsar extension and Bithnok Power and its related Mining projects amounting to ^ 194.75 Crore.

d) All units of Thermal Power Station -I has been retired from operation subsequent to 30^th September, 2020. The net block of TPS-I assets as on 31^st March, 2023 are included in the above Schedule. Estimated net sale proceeds of the retired assets is expected to be above the residual value of assets appearing in the books.

e) Spares meeting the criteria of PPE and having a value of more than ^ 5 Lakh have been considered for capitalisation .

f) Depreciation on Specialised Mining Equipment( SME) has been considered based on technical estimate of specific assets.

g) Depreciation on Renewable Assets has been calculated considering 5% residual value in line with guidelines of MNRE/SERC.

h) There is no impairment loss identified for the tangible fixed assets during the year.

i) The Company has identified land with limited life and classified the same under the head mining land.

j) In terms of Notification issued by CERC on 13^th September, 2021 and as per the accounting policy of the Company, 1^st April, 2022 has been reckoned as date of commencement of commercial operation in respect of MINE IA Expansion. Accordingly, the capitalization of the amount carried under CWIP as on 31st March,2022 has been reckoned as 1st April, 2022.

k) Based on physical verification of assets FY 2020-21 (including conveyor belts and pipes) the net block of ^ 13.47 Crore which are not available for use are included in the above schedule pending write off from Asset register.

l) Based on physical verification of assets conducted during the year and pertaining to the previous year, the net book value of assets which are not available has been provided and the same are included as part of asset register.

m) Refer Note no. 16(a) for the property, plant and equipment pledged as security by the Company

As per the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, Escrow Accounts have been opened in the name of "Coal Controller Escrow Account NLC India Limited" for each captive mine and the balances held in these escrow accounts are presented as ''Mine closure deposit''. Up to 50% of the total deposited amount including interest accrued in the escrow account shall be released after every five years in line with the periodic examination of the closure plan as per the Guidelines. Interest earned on the escrow account is added to mine closure deposit account. All the deposits are renewed every year. Deposits made during the year FY 2022-23 amounting to ^ 52.60 Crore.

a) Capital Advances includes ^ 121.62 Crore paid against bank guarantee to an EPC contractor with respect to Barsingsar extension & Bithnok Project. On invocation of the BG, the EPC contractor initially opted for judicial intervention. However subsequently the contractor agreed for arbitration, keeping the BG valid till arbitral award.

b) Advances other than capital advances include amount paid to vendors on receipt of LD Bank guarantee, which will be adjusted along with retention money upon finalisation of contract.

a) Inventory valuation - Inventories are valued at the lower of cost or net realisable value. Cost for this purpose is as follows:

(i) Extracted Lignite & Coal - At absorption cost excluding allocated common charges and social overhead.

(ii) Stores & Spares - At weighted average acquisition cost.

(iii) Fly ash bricks - At absorption cost.

(iv) Goods in transit including goods received but pending inspection / acceptance - At cost of acquisition

(v) Waste products, used belts reconditioned, Stores & Spares discarded for disposal, medicines and canteen stores are taken at NIL value.

b) Refer Note No. 19 (a) for information on inventory pledged as security by the Company.

a) Based on arrangements among NLCIL, Banks and DISCOMs'' certain bills which are due from DISCOMs'' have been discounted during FY 2022-23 . Accordingly, trade receivables as on 31^st March, 2023 have been disclosed net of outstanding bills discounted amounting to R 3,316.81 Crore (31* March, 2022 R 4,027.58 Crore) and NLCIL is bound to repay the same to the banks in the event of default by beneficiaries.

b) Trade receivables for FY 2022-23 includes R 126.62 Crore (previous year R 46.21 Crore) and R 22.46 Crore (previous year R 15.71 Crore) receivable from NTPL and NUPPL respectively.

c) The Company has reviewed its outstanding debtors balance as at 31^st March, 2023. Taking into account, period of outstanding, collections and the trend of realization subsequent to intervention of Ministry of Power and Ministry of Coal and pending completion of the reconciliation of balances and resolving various issues, in respect of which action have been initiated, on estimated basis, a cumulative provision of R 196.55 Crore ( PY R 501.51 Crore) has been considered towards loss allowances on outstanding debtors balance as at 31st March, 2023.

d) Secured Trade Receivables represents value of Letter of Credit (LC) submitted by DISCOM''s as per the MoP order dated 28t^h June, 2019 w.e.f. 1st August, 2019 as Payment Security Mechanism under Power Purchase Agreements.

e) The Company has billed various DISCOMs an amount of R 386.51 Crore during the year under report being income tax recoverable as per the CERC tariff Regulations, for different Tariff periods on account of payments made relating to earlier periods arising out of settlement of disputed cases pursuant to ''Vivad Se Vishwas Scheme'' (VSVS). While the Company has recovered a sum of R 58.07 Crore from a few DISCOMs during the year, others have disputed the validity of this Claim and opted for Judicial intervention and initiated legal proceedings. The Company is of the considered opinion that:

(i) the claiming of taxes paid under VSVS is in line with the CERC Regulations for all the tariff periods;

(ii) the sum paid under the dispute resolution scheme viz.VSVS has accrued due to settlement of disputed liabilities, which in any case the Company is entitled to claim in the normal course had the same been paid in the respective years; Further, the Company''s petition filed before CERC on 11th April, 2023 seeking their direction on this issue is pending for a decision. However, the Company is of the view that the balance amount is recoverable based on a reasonable assessment of various facts.

In order to meet the post retirement medical expenditure of employees retired on or before 1^st January, 2007 , the Company deposits 1.5% of its profit before tax after deducting actual expenditure towards PRMA in a separate deposit for this purpose termed as PRMA deposit. The above amount will be utilised in future years towards the purpose for which it has been created. The interest accrued in this fund is added to the fund. The deposit matured and renewed on 24t^h March, 2023.

i) The secured loans and unsecured loans to Employees include house building loan, Vehicle loan, multipurpose loan, etc. and are measured at amortised cost and the said deferred interest expenditure representing the benefits accruing to employees is amortised on straight line basis over the remaining period of the loan.

ii) The loans to employees (Housing, Vehicle) are secured against the mortgage of the house property and hypothecation of Vehicles for which the loan has been given in line with the policy of the Company.

iii) The Company, In order to meet the certain emergency financial needs of its two subsidiaries has entered into a interest bearing short term financial arrangements of ^ 1000 Crore with each of its subsidiaries. Out of this arrangement one subsidiary namely Neyveli Uttar Pradesh Power Limited has availed ^ 100 Crore at various dates during the financial year and the repayment of the same is also completed during the year. The details has been provided in table below.

iv) The Company has a policy of extending loans and advances to its employees including Directors, KMPs and the related parties. All these loans are paid in accordance with the Policy adopted by the Company and Repayments and interests are charged accordingly. No loans paid to Directors, KMPs and Related parties are repayable on demand or without specifying the terms of repayment. Hence separate disclosure as mentioned in revised schedule -III of Companies Act 2013 is not applicable .

a) Interest Accrued includes interest due on loans givens to employees, interest on advances given to suppliers and interest on various deposits towards PRMA and Mine closure etc.

b) Unbilled Revenue includes R 696.01 Crore (PY - R 704.13 Crore) of billing done after 31^st March, for Sale of Power related to March 2023. In addition to that on receipt of provisional order from CERC with respect to lignite transfer price for the period 2019-24 , the differential impact has been recognised as unbilled revenue.

c) Further insurance claim in respect of TPS-II fire incident has been lodged with the Insurance Company for recovery of damage including loss of profit. Based on confirmation from insurance Company R 50 Crore was recognized in the current financial year.

NLCIL has opted to avail the Vivad Se Viswas Scheme (VSVS) for settlement of income tax disputes and Form-5 has been issued by Income Tax department on acceptance of the forms filed by NLCIL. The tax liability on this account is R 730.91 Crore which has been considered as Tax expenses in the FY 2021-22. Further consequent to issuance of Form 3 by the department and filing of Form-4 by NLCIL for all years for which it has opted for VSVS, reduction in Tax expenses amounting to R 129.80 Crore arising out of orders of AY 2014-15 and AY 2015-16 have also been accounted in the previous financial year.

(a) The regulatory deferral account balances has been accounted in line with the Company''s accounting policy. Refer Note no: 44 for detailed disclosures.

(b) Based on petition filed with CERC for NNTPP (2 X 500 MW), the differential amount (as against provisional tariff order) of ^ 360.27 Crore (PY ^ 114.36 Crore ) considered under regulatory deferral account debit balance.

(c) The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May, 2020 by Ministry of Coal, Gol, actual expenses incurred on mine closure up to a maximum of 50% of the Mine Closure Deposit along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period from 2016-17 to 2020-21, an amount of ^ 171.15 Crore has been considered on provisional basis under regulatory income, pending filing of the claim with "Coal Controller" Pending approval the said amount is being carried forward. An amount of ^ 23.33 Crore(PY : ^ 22.22 Crore) has been considered as regulatory income based on the existing mine plan, Pending execution of Escrow agreement as per the revised mining plan with Coal controller during the current Financial year

d) During the year, the Company has received the provisional tariff order for the period 2019-24 of its thermal power stations( except NNTPS and BTPS) and truing up orders for the period 2014-19 of its thermal power stations (except BTPS).Consequent to allowance of water charges, security expenses and consumption of capital spares as part of O&M, regulatory assets created has been reversed in the current year.

e) During the year the CERC has issued order for the period 2014-19 allowing enhanced wage revision of executives, nonexecutives, CISF, gratuity limit enabling the Company to raise the invoice to the beneficiaries. Accordingly, the total claim of ^ 783.64 Crore which was earlier recognized under regulatory asset has been withdrawn and an amount of ^ 670.87 Crore has been billed to beneficiaries

Details of Terms of Repayment, Rate of Interest and Security :

a. To meet the fund requirement of Neyveli New Thermal Power Project (NNTPP 2x500 MW) borrowing arrangement has been done with:

i) Loan of ^ 3000 Crore was availed from M/s. Power Finance Corporation Ltd. and outstanding amount as at 31.03.2023 is ^ 1950 Crore. The Loan is secured by pari passu charge on project lands & fixed assets of NNTPP , repayable in 20 equal bi-annual instalments commencing from 31^st March, 2020. The interest rate as on 31^st March, 2023 is @ 8.51% p.a. (on the basis of 3 year AAA Reuter rate i.e., 7.66% p.a. plus fixed spread 0.85%)

ii) NLCIL Bonds 2021 Series-I was issued on 12t^h February, 2021 for an amount of R 1175 Crore @ 6.05% p.a. The Bond is unsecured and will be repayable by bullet payment on 12th February, 2026.

iii) NLCIL Bonds 2021 Series-II was issued on 20th December, 2021 for an amount of R 500 Crore @ 6.85% p.a., Out of which ^ 295.60 Crore was utilised towards NNTPP and balance ^ 204.40 Crore was utilised towards General Business Purpose. This Bond is unsecured and will be repayable by bullet payment on 13.04.2032.

b. To meet the fund requirement of Neyveli Solar Power Project (130 MW), borrowing arrangement has been done with HDFC Bank for an amount of ^ 481 Crore. Repayment for the same started from October 2018, amount drawn is ^ 481 Crore and the loan was fully repaid by March, 2023. Interest rate on closure of loan is 8.028% p.a. (on the basis of 5 year G-Sec Rate i.e., 7.398% plus 0.63% fixed spread).

c. To meet the fund requirement of Tamilnadu Solar Power Project 500 MW, borrowing arrangement has been done with the following banks:

i. Axis Bank sanctioned a loan of ^ 500 Crore and drawn ^ 500 Crore. The outstanding amount as on 31st March, 2023 is R 99.97 Crore. The interest rate as on 31st March, 2023 is 8.61% p.a. (on the basis of 5 Year G-Sec rate i.e., 7.39% plus 1.22% fixed spread). Repayment for the loan started from September''2019 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

ii. Axis Bank sanctioned a loan of ^ 450 Crore and drawn ^ 450 Crore. The outstanding balance as on 31st March, 2023 is R 134.97 Crore. The interest rate as on 31st March, 2023 is 8.59% p.a. (On the basis of 5 Year G-Sec Rate i.e., 7.39% plus 1.20% fixed spread). Repayment for the loan started from March'' 2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

iii. Federal bank sanctioned a loan of ^ 456 Crore and drawn ^ 456 Crore. The outstanding as on 31st March, 2023 is R 136.77 Crore. The interest rate as on 31st March, 2023 is 8.78% p.a. (on the basis of 5 Year G-Sec rate i.e., 7.58% plus 1.20% fixed spread). Repayment for the loan started from March'' 2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

d. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with SBI for an amount of ^ 2552 Crore. Out of the facility, ^ 2319 Crore was drawn & outstanding amount as on 31st March, 2023 is R 1680.44 Crore. The Interest rate as on 31st March, 2023 is 8.40% p.a. (on the basis of 6 Month MCLR rate @ 8.40%). This loan is repayable in 20 equal half- yearly instalments of ^ 127.60 Crore each, first repayment started on 31st December, 2020. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

e. To meet the fund requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with SBI for an amount of R 1680.75 Crore. Out of the facility, R 593 Crore was drawn & outstanding as on 31st March,2023 is R 256.73 Crore. The interest rate as on 31st March, 2023 is 8.40% p.a. (on the basis of 6 Months SBI MCLR) repayable in 20 equal half- yearly instalments of ^ 84.04 Crore starting from 30th September, 2021. The loan is secured by pari-passu charge on the project assets to the extent of the facility.

f. To meet the General Funding arrangement, NLCIL BONDS 2019 SERIES I was Issued on 29th May, 2019 for R 1475 Crore and NLCIL BONDS 2020 SERIES I was issued on 27th January, 2020 for an amount of R 525 Crore and which carries interest rate @ 8.09% p.a. & 7.36% p.a. respectively. These Bonds were initially secured by pari-passu 1st charge on the project assets of TPS II Expansion 500 MW (250 MW X 2) (including Land) to the extent of the facility and subsequently to have sufficient asset cover another security has been created by pari-passu 1st charge on the project assets of 1000 MW (2 X 500 MW) NNTPP, Neyveli project to the extent of ^ 450 Crore with the consent of lender of NNTPP i.e., PFC. These Bonds are repayable on 29th May, 2029 & 25th January, 2030 respectively. Out of ^ 1475 Crore, ^ 749.22 Crore and ^ 234.98 Crore has been used towards unlocking of Equity of TPS II Expansion Project (2 X 250 MW) & Wind 51 MW respectively and balance were used for operational requirement.

g. To meet the General Funding arrangement, an unsecured Bonds i.e., NLCIL Bond 2020 Series-II was issued on 31^st July, 2020 for ^ 500 Crore carrying an interest rate of 5.34% p.a. which is repayable through bullet payment on 11t^h April, 2025

h. Bi- annual equal repayment (€ 0.219 Million each) of Foreign Currency loan - I from KfW Germany, commenced from 30th December, 2001, ending on 30th June, 2036. This loan is unsecured and guaranteed by GOI @ guarantee fee of 1.20%. The outstanding loan, Euro 5.93 million carries interest rate @ 0.75% p.a.

i. Bi-annual equal repayment (€ 1.401 Million each) of Foreign Currency loan -II from KfW Germany, commenced from 30th June, 2002, ending on 30th June, 2037. This loan is unsecured but guaranteed by GOI @ guarantee fee of 1.20%. The outstanding soft loan, Euro 40.64 million carries interest rate @ 0.75% p.a.

j. The Company has maintained required asset cover as per the terms of offer document/information memorandum and/or Debenture trust deed, including compliance with all the covenants, in respect of the listed non-convertible debt securities.

a. Deferred income includes capital grant of ^ 75.97 Crore and ^ 39.38 Crore ( Unamortised value of Grant) received from Ministry of New and Renewable Energy ( MNRE) in respect of installation of 130 MW solar at various locations in Neyveli and 20 MW of Solar Plant at various location of Andaman and Nicobar in their respective year of commissioning. In proportion to the depreciation of the respective solar asset , the grant is amortised to profit and loss account each year.

b. In respect of Mine Closure Pursuant to GOI guidelines on Mine closure, total Mine closure cost was approved by Ministry of Coal at a rate of ^ 6 lakh per hectare for all the open cast Mines. The annual contribution, compounded @ 5% p.a. is deposited in an Escrow account in the name of Coal Controller Escrow account NLC Ltd. Mine., as stipulated by the Coal Controller.

a) Amounts under regulatory deferral liabilities as at 31^st March, 2023 relates to the impact arises out of various regulatory orders for the previous tariff periods.

b) The Company has filed appeals before the Appellate Authority of Electricity (APTEL) against the following CERC orders / filed review petition before CERC which are pending for disposal:

1) Thermal Power Station II (Neyveli) - Rejection of substitution of actual secondary fuel consumption (SFC) in place of normative SFC in computing energy charge rate, disallowance of de-capitalization of LEP Assets and reduction of claim towards capital expenses while truing up for the tariff period 2009-14

2) Lignite Truing up - Disallowance of O &M escalation at 11.50% p.a. as per MOC Guidelines considering FY 2008-09 as the base year

3) Sharing of profits and incentives on additional generation in TS -II on adoption of pooled lignite price considering the cost of Mines - II Expansion. The impact on the above mentioned orders have been considered appropriately under Regulatory Deferral Account Balances / Net Movement in Regulatory Deferral Balances in accordance with Ind AS 114, in the respective previous financial period''s.

4) The Company has filed review petition before CERC on the true up order for determination of Lignite Transfer Price for the Tariff Period 2014-19. During the year CERC has admitted the review petition for disallowance of additional capitalization w.r.t. new assets and disallowances of stores for the purpose of interest on working capital and has set aside to review of O&M Expenses as the similar issue for the period 2009-14 is sub-judice before APTEL and O&M Expense for the period 2014-19 is subject to the final decision of the APTEL case. In view of the order, the Company has considered in Regulatory Expenses of ^ 783.79 Crore (including interest) in addition to the existing amount already provided in different periods under Regulatory Deferral Account Balances towards O&M Expenses for the period 2014-19.

All the regulatory deferral liability is being reviewed on periodic basis. Based on subsequent information/ details/orders the same shall be reviewed and considered accordingly.

c) CERC has issued trued up order in respect of TPS-II expansion for the tariff period 2014-19 on 09^th June, 2022. The Company has filed a review petition on 20th July, 2022 and pending disposal of the review petition, the Company has accounted an amount of ^ 48.03 Crore arising out of the difference between billed rate and trued up order rate under regulatory deferral liabilities.

d) The Company has filed Tariff Petition for tariff period 2019-24 for all its Neyveli mines on 26th July, 2022 and for Barsingsar mines on 26th December, 2022. Refer Note no 23 (d) for neyveli mines. Pending disposal of the said Petition, the Company has billed energy charges based on provisionally approved Lignite transfer rate by CERC for NNTPS tariff petition for tariff period 2019-24 for Neyveli mines and provisionally approved rate by CERC for the tariff period 2014-19 for Barsingsar mines. Pending receipt of tariff order with respect to Barsingsar Mines for Tariff period 2019-24, an amount of ^ 40.90 Crore (including interest) representing the difference between billed rate and petition rate has been accounted under regulatory account balances.

e) AS per CERC regulations (second amendment) 2019-24, it is required to share the Non tariff income arising from sale of coal (Talabira Mines) to the beneficiary. Accordingly amount of ^ 143.54 Crore has been recognised as regulatory liabilities.

a) Power Sale includes Sale of Power through Trading for FY 22-23 R 94.64 Crore. (FY 21-22 R 340.45 Crore).

b) Sale of Lignite to related party during the current year is NIL ( PY ^ 5.70 Crore).

c) Pending disposal of tariff petition for BTPS and approval of CERC tariff for NNTPS for the tariff period 2019-24 , beneficiaries are being billed in accordance with the tariff order for the period 2014-19/interim order issued by CERC for control period 2019-24 respectively. However, recovery on account of O&M component for tariff period 2019-24 has been recognized based on CERC tariff regulations and differential revenue between tariff periods 2019-24 and 2014-19 is recognized under Regulatory Deferral Account. The accrual for the remaining 4 components of the capacity charges though charged off in the Statement of Profit and Loss periodically, the consequential adjustment for the same in the revenue will be carried out on obtaining the tariff order.

d) The Company has filed Tariff Petition for tariff period 2019-24 for all its Neyveli mines on 26^th July, 2022 and for Barsingsar mines on 26th December, 2022. Pending disposal of the said Petition, the Company has filed interlocutory application seeking approval of provisional Lignite transfer price for the neyveli mines. Subsequently CERC has issued provisional lignite transfer price order for the control period 2019-24 and the differential impact on such order (Amount in R 1,389.87 Crore) is recognised under power sales.

e) The Company has commissioned Talabira Coal mines on 01^st April, 2021. The Company has filed Tariff petition for the tariff period 2019-24 (effective period 2021-24) before CERC on 25th July, 2022. Pending disposal of the said petition, the Company has adopted petition rate for billing for the linked thermal plant.

f) Coal sales includes sales to NTPL (subsidiary of NLCIL) - amounting to R 257.53 Crore (FY 21-22 R 101.74 Crore).

g) During the year, the CERC has issued order for the period 2014-19 allowing enhanced wage revision of executives, nonexecutives, CISF, gratuity limit enabling the Company to raise the invoice to the beneficiaries. Accordingly, the total claim of R 783.64 Crore which was earlier recognized under regulatory asset has been withdrawn and an amount of R 670.87 Crore has been billed to beneficiaries.

h) Power sales include R 212.84 Crore on account of CERC truing up order and wage revision order for the tariff period 2014-19 with respect to TPS-I for FY 22-23 which was retired from operation as on 30th September, 2020. A Note containing details has been provided in Note no-53

a. Consequent to CERC truing up orders received for the tariff period 2014-19 and tariff orders for the period 2019-24 TPS I, TPSI Expn , TPS II and Neyveli Mines, interest income due on the order impact amounting to R 339.57 Crore (Including R171.09 Crore for Neyveli Mines for tariff period 2019-24) has been recognised under Interest others.

b. Provision written back includes R 304.96 Crore being reversal of expected credit loss provision recognised towards trade receivable and R 122.12 Crore towards provision created earlier in respect of Bithnok and BTPS expansion project capital advance.

c. Deferred income on Govt. grant includes grant received from Ministry of New and Renewable Energy (MNRE) on various Solar Projects executed by the Company.

d. Under the Electricity (Late Payment Surcharge and Related Matters) Rules, 2022, one DISCOM opted for interest free installment scheme within cutoff date i.e., 3^rd July, 2022. Accordingly such dues were recognised at fair value as per the requirements of IND AS 109 and the consequent unwinding interest income has been recognised in the current year.

e. The other income include R 31.09 Crore (PY R 3.33 Crore) of TPS-I which was retired from operation as on 30th September, 2020. A Note containing details has been provided in Note no-53.

f. Miscellaneous Income includes

i) Scrap sales amounting to R 36.25 Crore( PY : R 44.66 Crore)

ii) Insurance claim in respect of TPS-II fire incident has been lodged with the Insurance Company for recovery of damage including loss of profit. Based on confirmation from insurance Company R50 Crore was recognized in the current financial year.

a) Other Expenses includes R 17.23 Crore( PY R 22.42 Crore) of TPS-I for FY 22-23,which was retired from operation as on 30^th September, 2020. Refer Note No. 53

b) The Company has filed a petition against the ABT implementation order passed for claim of surcharge on the order amount. However CERC has not admitted the petition and consequently the Company has written off debts amounting to R 93.72 Crore.

c) Consequent to the interim order issued by CERC for the control period 2019-24, water charges, security expenses and power surrender sales and surcharge on these items already recognized earlier were written off in the current year amounting to R 1,087.57 Crore.

d) Upon physical verification of fixed assets conducted during the year , provision has been recognised under provision for fixed assets.

a) Pending disposal of tariff petition for BTPS and approval of CERC tariff for NNTPS for the tariff period 2019-24 , beneficiaries are being billed in accordance with the tariff order for the period 2014-19/interim order issued by CERC for control period 2019-24 respectively. However, recovery on account of O&M component for tariff period 2019-24 has been recognized based on CERC tariff regulations and differential revenue/expense between tariff periods 2019-24 and 2014-19 is recognized under Regulatory Deferral Account. The accrual for the remaining 4 components of the capacity charges though charged off in the Statement of Profit and Loss periodically, the consequential adjustment for the same in the revenue will be carried out on obtaining the tariff order.

b) The Company undertakes concurrent Mine Closure activity. Based on expenses incurred on actual mine closure for the 5 years'' period from 2016-17 to 2020-21 the Company has submitted a claim for R 171.15 Crore to Coal Controller based on the certification by third party. An amount of R 171.15 Crore (Including R 5.37 Crore recognized in current year) has been recognized under Regulatory Deferral asset. The same is pending for approval as of date.

On similar basis mine closure expenses amounting to R 23.33 Crore (PY : R 22.22 Crore) for the financial year 2022-23 are considered under Regulatory Income. The regulatory income has been recognized based on the existing mine plan, Pending execution of Escrow agreement as per the revised mining plan with Coal controller.

c) As per CERC regulations (second amendment) 2019-24, it is required to share the Non tariff income arising from sale of coal to the beneficiary. Accordingly amount of R 143.54 Crore has been recognised as regulatory liabilities.

d) During the year the CERC has issued order for the period 2014-19 allowing enhanced wage revision of executives, non-executives, CISF, gratuity limit enabling the Company to raise the invoice to the beneficiaries. Accordingly, the total claim of R 783.64 Crore which was earlier recognized under regulatory asset has been withdrawn and an amount of R 670.87 Crore has been billed to beneficiaries

e) During the year , the Company has received the provisional tariff order for the period 2019-24 of its thermal power stations( except NNTPS and BTPS) and truing up orders for the period 2014-19 of its thermal power stations (except BTPS).Consequent to allowance of water charges, security expenses and consumption of capital spares as part of O&M, regulatory assets created has been reversed in the current year.

f) The Company undertakes review of regulatory assets and liabilities at the end of each year and based on reassessment of recoverability/refund of such assets/liabilities necessary accounting adjustments are carried out and in addition to that period cost on regulatory liability has also been considered subject to approval of Regulatory Authority.

a) Power sales - VSVS in FY 2022-23 pertains to the reversal of unbilled sales upon billing the actual.

b) NLCIL has opted to avail the Vivad Se Viswas Scheme (VSVS) for settlement of income tax disputes and Form-5 has been issued by Income Tax department on acceptance of the forms filed by NLCIL. The tax liability on this account is ^ 730.91 Crore which has been considered as Tax expenses in the FY 2021-22. Further consequent to issuance of Form 3 by the department and filing of Form-4 by NLCIL for all years for which it has opted for VSVS, reduction in Tax expenses amounting to ^ 129.80 Crore arising out of orders of AY 2014-15 and AY 2015-16 have also been accounted in the previous financial year.

Note 39- Employment Benefits

(i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (''Fund'') that is legally separated from the Group. The board of the fund is required by law to act in the best interest of the plan participants and is responsible for setting certain policies ( e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market ( investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit ( Asset ) Liabilities

Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of ^ 0.20 Crore on superannuation, resignation, termination, disablement or on death considering the provisions of the Payment of Gratuity Act, 1972, as amended. The gratuity scheme is funded by the Company and is managed by separate trust. The liability for gratuity scheme is recognised on the basis of actuarial valuation.

The Company provides earned leave benefit and half pay leave to the employees of the Company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves ( HPL) are encashable only on separation. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half pay leave shall be permissible. The liability for the same is recognized on the basis of actuarial valuation.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Further, contribution to employee pension scheme is paid to the appropriate authorities.

Pursuant to Para 57 of Ind AS 19, accounting by an entity for defined benefit plans, inter-alia, involves determining the amount of the net defined benefit liability (asset) which shall be Adjustment for any effect of limiting a net defined benefit asset to the asset ceiling prescribed in Para 64. As per Para 64 of Ind AS 19, in case of surplus in a defined benefit plan, an entity shall measure the net defined benefit asset at the lower of actual surplus or the value of the assets ceiling determined using the discount rate. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Further, Para 65 provides that a net defined benefit asset may arise where a defined benefit plan has been overfunded or where actuarial gains have arisen.

As per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of ^9.01 Crore (Previous year ^ 10.03 Crore) determined through actuarial valuation. Accordingly, Company has not recognised the surplus as an asset and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the Company.

C. Defined Contribution Plan:

Post Retirement Medical Assistance (PRMA)

The Company has a Post Retirement Medical Assistance scheme, under which annual cash assistance is provided to retired employees and their spouses for both inpatient and outpatient medical treatment availed in subject to Company''s grade wise policy applicable for employees.

A trust has been constituted and is managed by the Company for its employees, for the sole purpose of providing post retirement medical assistance facility to them. For the employees retired on or before 31^st December, 2006 , the Company has extended the post retirement medical assistance in form of cash reimbursements and mediclaim insurance. A separate fund is maintained by the Company and necessary contributions are made every year for this purpose.

Note 42- Disclosure as per Ind AS 116 ''Leases''

The Company has adopted Ind AS 116 "Leases" with effect from 1^st April 2019 and has applied the standard to all lease contracts that are existing as at 1^st April 2019. The Company has chosen the modified retrospective approach for valuation of its right of use assets and lease liability.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices and aggregate standalone prices of non-lease components. However, for the leases of land and buildings and vehicles in which it is a lessee, the Company has elected not to separate non-lease components and account for lease and non-lease components as a single lease component.

i. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability Adjustment for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any and Adjustment for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease payments included in the lease liability comprises of fixed payments (including in-substance fixed payments), residual value guarantees and where the Company is reasonably certain to exercise purchase, renewal and termination options includes exercise price under a purchase option, lease payments in an optional renewal period and penalties for early termination of a lease. The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there are any reassessments or lease modifications or revised in-substance fixed payments. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Company presents right-to-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities in ''loans and borrowings'' in the balance sheet.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for all short-term leases that have lease term of 12 months or less and leases of low-value assets, when it is new. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis or any other systematic basis over the lease term.

The companies significant leasing arrangements are in respect of various assets are as follows :

a) Land : The Company has lease arrangement with respect to its office and township requirements at various locations ( i.e., HUDCO land at Delhi and office & township land in Talabira project, Odisha) for 99 years. The lease rental are fixed for entire lease term, which has been arrived based on lease agreement. The lease can be extended for similar periods on mutually agreed terms after the completion of the current lease period. The Company does not have option to buy.

b) Vehicles : The Company has taken certain vehicles (including e-vehicles) on lease for a period extending up to 5 years, which can be further extended at mutually agreed terms. All the lease rental of vehicles are fixed in nature except for e-vehicles Lease rental for which are escalated @10% each year.

c) Plant and Machinery : An agreement has been arrived between NLCIL (the Company) and Solar Development Operator (SDO) to use power evacuation facility for a period of 25 years. The lease rental are fixed in nature.

d) Buildings : Premises for use of offices and guest houses on lease are usually renewable on mutually agreeable terms. The lease rental are fixed in nature for one property and escalated by 10% each year for other properties.

When measuring lease liabilities, the Company discounted lease payments using its weighted average borrowing rate of long term loans.

The Company does not face significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

ii. As a lessor

The Company has not entered any agreement as on date of this financial year as a lessor. Thus the disclosure requirements of Ind AS 116 as lessor does not arise for the Company.

The Company''s investments do not contain any restrictions on disposal within a stipulated period of time.

Note 44- Disclosure as per Ind AS 114 ''Regulatory Deferral Accounts''

i. Nature of rate regulated Activities

The Company is engaged in the business of mining of lignite/coal and generation of power by using lignite as well as renewable energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC)/bidding process. The CERC provide extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite. The CERC has notified its second amendment to its tariff regulation 2019-24, where in transfer price of Coal/Lignite will be determined by CERC effective from 1^st April, 2019. The Company has filed Tariff Petition for tariff period 2019-24 for all its Neyveli mines on 26t^h July, 2022 and for Barsingsar mines on 26t^h December, 2022 in line with regulations. Pending disposal of the said Petition, the Company has filed interlocutory application seeking approval of provisional Lignite transfer price for the neyveli mines. Subsequently CERC has issued interim lignite transfer price order for the control period 2019-24 and the differential impact on such order is recognised under power sales.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which enable the Company to recover its costs of providing the goods or services plus a fair return.

ii. Recognition and Measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past periods in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. When the Company prefers appeal in APTEL/Other authorities the impact of the adverse items in the order along with period cost if any required is considered under the Regulatory Deferral Account in the Profit or Loss of the respective financial year based on the reliable estimates of the Company on case to case basis.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ''Regulatory deferral account debit/credit balance'' by credit/debit to ''Movements in Regulatory deferral account balances'' during construction period and Adjustment from the year in which the same becomes recoverable from or payable to the beneficiaries. Accordingly, an amount of ^134.24 Crore for the year ended 31^st March, 2023 has been accounted for as ''Regulatory deferral account debit balance'' (31st March, 2022: ^ 117.85 Crore accounted as ''Regulatory deferral account debit balance''.)

As per the CERC tariff regulation the expenses towards water charges , security expense and capital spares shall be allowed to be claimed from the beneficiaries based on prudence check at the time of truing up. The Company has recognised ^ 108.78 Crore as on 31st March, 2023 ( ^ 484.04 Crore as on 31st March, 2022.) under its regulatory assets subject to petition for truing up for tariff period 19-24.

iii. Risks associated with future recovery/reversal of regulatory deferral account balances:

(a) Demand risk -Availability of alternative and cheaper sources of power may result in reduced demand.

(b) Regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

(c) Other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, where the Company has preferred an appeal has recognised Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

Note 45- Financial Instruments

Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of directors maintains an optimal balance between the higher return that further borrowings may generate vis -s vis the security afforded by sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants: Loan from PFC - Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.0

There have been no breaches in the financial covenants of any interest bearing borrowings.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of noncurrent borrowings (including current maturities ) and current borrowings as specified in Note no.19 (a) , 16 ( a) less cash and cash equivalents ( excluding earmarked deposits). Equity includes equity share capital and reserves ( excluding earmarked Reserves) that are managed as capital.

Note 46- Financial Risk Management

The treasury function of the Company provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

The Company''s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, short term deposits etc.

A. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade Receivable

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults and the Company''s historical experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At 31^st March, 2023, the Company''s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO) accounted for ^ 3,263.54 Crore of the trade receivables carrying amount (^ 2,009.58 Crore of the trade receivables as at 3rt March, 2022)

Loans and Advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties/customers have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The Company has customers (State government utilities) with strong capacity to meet the obligations. Further, management believes that the unimpaired amounts that are past due by more than 45 days are still collectible in full. However, considering various regulatory and other disputes including historical payment behaviour and analysis of customer credit risk impairment loss has been considered for the reporting period in respect of trade receivables.

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or other financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

a) SBI R 1,680.75 Crore facility has been taken for Talabira project. Out of the entire facility as on 31^st March, 2023 the undrawn amount is R 1,087.75 Crore. Ref note 16(a).

b) SBI term loan of R 2,552.00 Crore has been taken for solar 709 MW , out of which R 2,319.00 Crore has been utilised till date and the undrawn amount is R 233.00 Crore as on 31st March, 2023. ref note 16 (a).

c) A working capital cash credit facility of R 4,000.00 Crore availed from SBI, out of which R 498 Crore ( PY R 285 Crore) Crore has been utilised and the undrawn amount of R 3,502 Crore ( PY R 3,715 Crore) Crore is available as on 31.03.2023. Ref Note no. 19 (a).

C. Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

D. Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Up to 31^st March, 2016 the Company till the date of commercial operation capitalize the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

E. Interest rate Risk

The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates. However, the actual interest incurred on normative loan is recoverable from beneficiary as fixed charge as per CERC Regulations.

Fair value sensitivity analysis for fixed-rate instruments

The Company''s fixed rate instruments are carried at amortized cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. In the case of the Company, none of the investments in equity shares are quoted in the market and does not expose the Company to equity price risks.

1. Since the business operation is wi

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Mar 31, 2022

g. Depreciation on Renewable Assets has been calculated considering 5% residual value in line with guidelines of MNRE/ SERC.

h. There is no impairment loss identified for the tangible fixed assets during the year.

i. The company has identified land with limited life and classified the same under the head mining land.

j. In terms of Notification issued by CERC on September 13, 2021 and as per the accounting policy of the Company, 01.04.2021 has been reckoned as date of commencement of commercial operation in respect of Talabira II & III Coal Mines. Accordingly, the capitalization of the amount carried under CWIP as on 31.03.2021 has been reckoned as 01.04.2021.

k. The financial impact due to change in accounting policy for amortisation of land amounts ? 592.00 crore till 01.04.2020 and ? 27.21 crore for FY 20-21. The above impact has been considered in Retained Earning up to 01.04.2020 and Statement of Profit and Loss for FY 2020-21 respectively. The impact on current financial year is ? 39.32 crore. The carrying Net Block of assets has been restated accordingly.

l. During the FY 2021-22 the company has changed the period of amortisation for Mine Development expenditure and the financial impact due to change in such accounting estimate in the current year is ? 131.90 crore.

m. The Licence fees for mining land capitalised under lease hold mining land in FY 2020-21 has been reclassified to intangible assets in line with CERC Regulation of Tariff Period 2019-24.

n. Based on physical verification of assets FY 2020-21 ( including conveyor belts and pipes) the net block of ? 13.47 crore which are not available for use are included in the above schedule pending write off from Asset register.

a. In respect of investment in NLC Tamilnadu Power Limited ( NTPL) the fully paid up share capital includes 400 shares @ ?10 each held in the name of full time directors in their capacity as nominees of NLC India Limited.

b. During the FY 2021-22 NLCIL has subscribed to additional equity shares of 31,81,75,128 nos. @ ? 10/- each of NUPPL (PY 10,25,83,440 nos. @ ? 10/- each) through rights issue.

c. In respect of MNH Shakti Limited NCLT has approved for the reduction of equity capital of MNH Shakti Limited from ?85.10 crore to ?35.10 crore. Accordingly the effect of the same has been carried out in FY 2021-22 . The NLCIL''s stake in the said associate is maintained at 15% after reduction of share capital.

a. The secured loans and unsecured loans to Employees include house building loan, Vehicle loan, multipurpose loan, etc. and are measured at amortised cost and the said deferred interest expenditure representing the benefits accruing to employees is amortised on straight line basis over the remaining period of the loan.

b. The loans to employees (Housing, Vehicle) are secured against the mortgage of the house property and hypothecation of Vehicles for which the loan has been given in line with the policy of the company.

c. The details of transactions with Key Management Personnel''s are mentioned in note 42.

a. Capital Advances includes ? 135.43 crore paid against a bank guarantee to an EPC contractor with respect to Barsingsar extension & Bithnok Project. On invocation of Bank Guarantee by the company, the EPC contractor approached Judicial intervention. Pending final judicial order, the advance to an extent of ? 114.79 crore (for which BG is available) has been provided for. Also refer note 21

b. Advances other than capital advances include amount paid to vendors on receipt of LD Bank guarantee, which will be adjusted along with retention money upon finalisation of contract.

a. Inventory valuation-inventories are valued at the lower of cost or net realisable value. Cost for this purpose is as follows:

(i) Extracted Lignite & Coal - At absorption cost excluding allocated common charges and social overhead.

(ii) Stores & Spares - At weighted average acquisition cost.

(iii) Fly ash bricks - At absorption cost.

(iv) Goods in transit including goods received but pending inspection / acceptance - At cost of acquisition

(v) Waste products, used belts reconditioned, Stores & Spares discarded for disposal, medicines and canteen stores are taken at NIL value.

b. Refer Note 19 (a)for information on inventory pledged as security by the Company.

a. Based on arrangements among NLCIL, Banks and DISCOMs'' certain bills which are due from DISCOMs'' have been discounted during FY 2021-22 . Accordingly, trade receivables as on 31^st March have been disclosed net of outstanding bills discounted amounting to ? 4027.58 crore (31 March 2021 ? 1542.00 crore ).

b. Trade receivables for FY 2021-22 includes ?46.21 crore (previous year ?30.33 crore) and ? 15.71 crore (previous year ? 1.76 crore) receivable from NTPL and NUPPL respectively.

c. The Company has reviewed its outstanding debtors balance in March''2022. Taking into account, period of outstanding, collections and the trend of realization subsequent to intervention of Ministry of Power and Ministry of Coal and pending completion of the reconciliation of balances and resolving various issues, in respect of which action have been initiated, on estimated basis, a cumulative provision of ? 501.51 crore ( PY ?366.52 crore) has been considered towards loss allowances on outstanding debtors balance as on March 31, 2022.

d. Secured Trade Receivables represents value of Letter of Credit (LC) submitted by DISCOM''s as per the MoP order dated 28/06/2019 w.e.f. 01/08/2019 as Payment Security Mechanism under Power Purchase Agreements.

a. As per the guidelines from Ministry of Coal, Government of India for preparation of Mine Closure Plan, Escrow Accounts have been opened in the name of "Coal Controller Escrow Account NLC India Limited" for each captive mine and the balances held in these escrow accounts are presented as ''Mine closure deposit''. Up to 50% of the total deposited amount including interest accrued in the escrow account shall be released after every five years in line with the periodic examination of the closure plan as per the Guidelines. Interest earned on the escrow account is added to mine closure deposit account. All the deposits are renewed every year.

b. In order to meet the post retirement medical expenditure of employees retired on or before 01.01.2007, the Company deposits 1.5% of its Profit before tax after deducting actual expenditure towards PRMA in a separate deposit for this purpose termed as PRMA deposit. The above amount will be utilised in future years towards the purpose for which it has been created. The interest accrued in this fund is added to the fund. The deposit matured and renewed on 4th April, 2022.

a. The secured loans and unsecured loans to Employees include house building loan, Vehicle loan, multipurpose loan, etc. and are measured at amortised cost and the said deferred interest expenditure representing the benefits accruing to employees is amortised on straight line basis over the remaining period of the loan.

b. The loans to employees (Housing, Vehicle) are secured against the mortgage of the house property and hypothecation of Vehicles for which the loan has been given in line with the policy of the Company.

c. The Company, in order to meet the certain emergency financial needs of its two subsidiaries, has entered in a interest bearing short term financial arrangements of Rs 1000 crore with each of its subsidiaries. Out of this arrangement one subsidiary namely Neyveli Uttar Pradesh Power Limited has availed Rs 375 crore at various dates during the financial year and the repayment of the same is also completed during the year. The movement of this has been provided in table below.

d. The Company has a policy of extending loans and advances to its employees including Directors, KMPs and the related parties. All these loans are paid in accordance with the Policy adopted by the company the repayments with principal and interests are charged accordingly. No loans paid to Directors, KMPs and Related parties are repayable on demand or without speifying the terms of repayment. Hence separate disclosure as mentioned in revised schedule -III of Companies Act, 2013 is not applicable.

a. Interest Accrued includes interest due on loans given to employees, interest on advances given to suppliers and interest on various deposits such as PRMA etc.

b. There is no Commercial Paper outstanding (PY ? 3550 crore) as on 31.03.2022. These are unsecured loans repayable on respective due dates. The Commercial Paper to tune of Rs 7000 crore has been issued at a coupon rate ranging from 3.33% to 3.50% p.a. during the FY 2021-22. All the Commercial Paper issued during the current Financial year and outstanding as on March 2021 has been repaid during the FY 2021-22.

NLCIL has opted to avail the Vivad Se Viswas Scheme (VSVS) for settlement of income tax disputes and Form-5 has been issued by Income Tax department on acceptance of the forms filed by NLCIL. The tax liability on this account is ?730.91 crore which has been considered as Tax expenses in the FY 2021-22. Further consequent to issuance of Form 3 by the department and filing of Form-4 by NLCIL for all years for which it has opted for VSVS, reduction in Tax expenses amounting to ?129.80 crore arising out of orders of AY 2014-15 and AY 2015-16 have also been accounted in the FY 2021-22. Refer Note No. 31

a. Unbilled Revenue includes ? 704.13 crore (PY - ? 665.28 crore) of billing done after March 31, for Sale of Power related to March 2022.

b. Under advances other than capital advances-Staff advance includes advances paid towards Performance Related Pay (PRP & UIS) pending final performance ratings of the employees & the Company for FY 2021-22 & FY 2020-21.

c. Advances other than capital advances -Other represents advances given to contractors and suppliers in the ordinary course of supply of goods and services.

a. The Regulatory Deferral accounts balances has been accounted in line with the Company''s accounting policy. Refer note 48 for detailed disclosures.

b. The Company has Filed truing up petition for the tariff period 2014-19 for its Mines. CERC has issued true up order for determination of Lignite Transfer Price for neyveli mines the tariff period 2014-19 on 24^th March'' 2022 followed by corrigendum order dated 26^th April'' 2022. In the said order CERC has interpreted few aspects of Lignite Transfer Price Guidelines 2014-19 issued by Ministry of Coal (MoC) which are not in line with the intent and sprit of MoC guidelines. NLCIL is in the process of seeking necessary clarification from MoC and also filed review petition for the same before CERC. Pending disposal of CERC review petition, no impact has been considered in current financial year. All the regulatory deferral liability is being reviewed on periodic basis. Based on subsequent information/ details/orders the same shall be reviewed and considered accordingly.

c. The Company has filed truing up petition for the Tariff period 2014-19 for its Thermal Stations in December 2019. Adjustment arising out of price revisions, if any shall be considered in the books of accounts on receipt of order from CERC.

d. Based on petition filed with CERC for NNTPP (2 X 500 MW), the differential amount( as against provisional tariff order) of ? 166.47 crore considered under regulatory deferral account debit balance.

e. The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May''2020 by Ministry of Coal, GoI, actual expenses incurred on mine closure up to a maximum of 50% of the Mine Closure Deposit along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period from 2016-17 to 2020-21, an amount of ?165.78 crore has been considered on provisional basis under regulatory income during FY 2020-21, pending filing of the claim with "Coal Controller". Pending submission of the claim and its approval the said amount is being carried forward. Further an amount of ? 22.22 crore has been considered as regulatory income for the Financial Year 2021-22 in line with mine closure guidelines.

f. CERC Tariff Regulations, 2019 provide for recovery of deferred tax liability (DTL) as at 31^st March 2009 from the beneficiaries. Accordingly, DTL as at 31^st March 2009 is recoverable on materialisation from the beneficiaries. The deferred tax materializing from FY 19-20 onwards has not been considered in the financials, pending finalisation of the claim amount.

a. To meet the fund requirement of Neyveli New Thermal Power Project (NNTPP 1000 MW) borrowing arrangement has been done with:

i. Loan of ? 3000 crore was availed from M/s. Power Finance Corporation Ltd., and outstanding amount as on 31.03.2022 is ? 2250 Crore. The Loan is secured by pari passu charge on project lands & fixed assets of NNTPP, repayable in 20 equal bi-annual instalments commencing from 31.03.2020. The interest rate as on 31.03.2022 is @ 6.26% p.a. (on the basis of 3 year AAA Reuter rate i.e. 5.41% p.a plus fixed spread 0.85%)

ii. NLCIL Bonds 2021 Series-I was issued on 12.02.2021 for an amount of ? 1175 Crore @ 6.05% p.a. The Bond is unsecured and will be repayable by bullet payment on 12.02.2026.

iii. NLCIL Bonds 2021 Series-II was issued on 20.12.2021 for an amount of ? 500 Crore @ 6.85% p.a., Out of which ? 295.60 crore was utilised towards NNTPS project and balance ? 204.40 crore was utilised towards working capital requirements. This Bond is unsecured and will be repayable by bullet payment on 13.04.2032.

b. To meet the fund requirement of Neyveli Solar Power Project (130 MW), borrowing arrangement has been done with HDFC Bank for an amount of ?481 Crore. The interest rate as on 31.03.2022 is 6.94% p.a (on the basis of 5 year G-Sec Rate

i.e. 6.31% plus 0.63% fixed spread). Repayment for the same started from October 2018, amount drawn is ? 481 Crore and outstanding amount as on 31.03.2022 is ? 96.20 Crore. The Loan is secured by charge on project lands & fixed asset to the extent of the loan amount, repayable in 10 equal bi-annual instalments.

c. To meet the fund requirement of Tamilnadu Solar Power Project 500 MW, borrowing arrangement has been done with the following banks:

i. Axis Bank sanctioned a loan of ?500 Crore and drawn ? 500 crore. The outstanding amount as on 31.03.2022 is ? 199.97 Crore. The interest rate as on 31.03.2022 is 7.66% p.a (on the basis of 5 Year G-Sec rate i.e. 6.44% plus 1.22% fixed spread). Repayment for the loan started from September''2019 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the Project Assets to the extent of facility.

ii. Axis Bank sanctioned a loan of ? 450 Crore and drawn ? 450 crore. The outstanding balance as on 31.03.2022 is ? 224.98 Crore. The interest rate as on 31.03.2022 is 7.64% p.a (On the basis of 5 Year G-Sec Rate i.e. 6.44% plus 1.20% fixed spread). Repayment for the loan started from March'' 2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the Loan facility.

iii. Federal bank sanctioned a loan of ? 456 Crore and drawn ? 456 Crore. The outstanding as on 31.03.2022 is ? 227.97 Crore. The interest rate as on 31.03.2022 is 7.56% p.a. (on the basis of 5 Year G-Sec rate i.e. 6.36% plus 1.20% fixed spread). Repayment for the loan started from March'' 2020 in 10 equal half-yearly instalments. This loan is secured by pari-passu charge on the project assets to the extent of the facility.

d. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with SBI for an amount of ? 2552 crore. This loan is repayable in 20 equal half- yearly instalments of ? 127.60 Crore each, first repayment started on 31.12.2020. Out of the facility, ? 2319 Crore was drawn & outstanding amount as on 31.03.2022 is ? 1935.67 Crore. The Interest rate as on 31.03.2022 is 6.95% p.a (on the basis of 6 Month MCLR rate @ 6.95%). This loan is secured by pari-passu charge on the project assets to the extent of the facility.

e. To meet the fund requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with SBI for an amount of ? 1680.75 crore. Out of the facility, ? 593 Crore was drawn & outstanding as on 31.03.2022 is ? 424.80 crore. The interest rate as on 31.03.2022 is 6.95% p.a (on the basis of 6 Months SBI MCLR rate) repayable in 20 equal half- yearly instalments of ? 84.04 crore starting from 30.09.2021. The loan is secured by pari-passu charge on the project assets to the extent of the facility.

f. To meet the general funding arrangement, NLCIL BONDS 2019 SERIES I was Issued on 29.05.2019 for ? 1475 Crore and NLCIL BONDS 2020 SERIES I was issued on 27.01.2020 for an amount of ? 525 Crore. and which carries interest rate @ 8.09% p.a & 7.36% p.a respectively. These Bonds were initially secured by pari-passu 1^st charge on the project assets of TPS II Expansion 500 MW (250 MW X 2) Thermal power station (including Land) to the extent of the facility and subsequently to have sufficient asset cover another security has been created by pari-passu 1^st charge on the project assets of 1000 MW (2 X 500 MW) NNTPP, Neyveli project to the extent of ? 450 Crore with the consent of lender of NNTPP i.e. PFC. These Bonds are repayable on 29-05-2029 & 25-01-2030 respectively. Out of ? 1475 Crore, ? 749.22 Crore and ? 234.98 Crore has been used towards unlocking of Equity of TPS II Expansion Project (2*250 MW) & Wind 51 MW respectively and balance were used for operational requirement.

g. To meet the general funding arrangement, an unsecured Bonds i.e. NLCIL Bond 2020 Series-II and was issued on 31.07.2020

for ? 500 Crore carrying an interest rate of 5.34% p.a. which is repayable through bullet payment on 11.04.2025.

h. To meet the general funding arrangement, an unsecured inter corporate borrowing agreement was tied up with Mahanadi Coalfields Limited for ? 2000 Crore carrying an interest rate of 7%. This is unsecured loan repayable in 48 equal monthly instalments commencing from July 2018. Total drawl was ? 2000 Crore. The entire outstanding loan of ? 458.33 Crore was pre-closed on 19.08.2021.

i. Bi- annual equal repayment (€ 0.219 Million each) of Foreign Currency loan - I from KfW Germany, commenced from 30-12-2001, ending on 30-06-2036. This loan is unsecured but guaranteed by Gol @ guarantee fee of 1.20%. The outstanding loan, Euro 6.36 million carries interest rate @ 0.75% p.a.

j. Bi-annual equal repayment (€ 1.401 Million each) of Foreign Currency loan -II from KfW Germany, commenced from 30-06-2002, ending on 30-06-2037. This loan is unsecured but guaranteed by Gol @ guarantee fee of 1.20%. The outstanding soft loan, Euro 43.44 million carries interest rate @ 0.75% p.a.

k. The company has maintained required asset cover as per the terms of offer document/information memorandum and/or Debenture Trust Deed, including compliance with all the covenants, in respect of the listed non-convertible debt securities.

a. Deferred income includes capital grant of ? 79.87 crore and ? 41.17 crore ( gross value of Grant) received from Ministry of New and Renewable Energy ( MNRE) in respect of installation of 130 MW solar at various locations in Neyveli and 20 MW of Solar Plant at various locations of Andaman and Nicobar in their respective year of commissioning. The portion of the grant matching with depreciation of the respective solar asset is charged to Statement of Profit and Loss each year.

b. In respect of Mine Closure pursuant to GoI guidelines on Mine closure, total Mine closure cost was approved by Ministry of Coal at a rate of ? 6 lakh per hectare for all the open cast Mines. The annual contribution, compounded @ 5% p.a. is deposited in an Escrow account in the name of Coal Controller Escrow account NLC Ltd. Mine., as stipulated by the Coal Controller.

a. The working capital facility of ? 5000 crore (? 4000 crore Fund based and ? 1000 crore non fund based) agreed with SBI and is secured by hypothecation of entire current assets of the Company i.e. Raw Materials, Consumable stores, Spares and charge on receivables. The outstanding Working Capital loan as on 31.03.2022 is Rs 285 Crore in the form of T-bill linked WCL. This outstanding loan carries interest rate of 4% p.a.

b. There is no commercial paper outstanding ( PY ? 3550 crore) as on 31.03.2022. All the commercial paper issued during the

FY 2021-22 and outstanding as on 31^st march 2021 have been repaid during the FY 2021-22. ,, _C

a. On invocation of Bank Guarantee, the EPC contractor has sought Judicial intervention. Pending final Judicial order, a provision for the advance amount of ? 114.79 crore for which BG is available has been provided for. Refer Note 8

b. Provision for gratuity and others includes provisions for EPC contractors of Bithnok and BTPS Expansion Projects amounting to ?29.98 crore.

c. Provision for loss on assets includes Bithnok and BTPS project provision amounting to ? 22.78 crore.

a. Amounts under Regulatory Deferral Liabilities as on 31.03.2022 relates to the impact arises out of various regulatory orders for the previous tariff periods.

b. The company has filed appeals before the Appellate Authority of Electricity (APTEL) against the following CERC orders / filed review petition before CERC which are pending for disposal:

1. Thermal Power Station II (Neyveli) - Disallowance of de-capitalization of LEP Assets and reduction of claim towards capital expenses while truing up for the tariff period 2009-14.

2. Lignite Truing up - Disallowance of O &M escalation at 11.50% p.a as per MOC Guidelines considering FY 2008-09 as the base year.

3. Sharing of profits on adoption of pooled lignite price considering the cost of Mine - II Expansion. The impact on the above mentioned orders have been considered appropriately under Regulatory Deferral Account Balances / Net Movement in Regulatory Deferral Balances in accordance with Ind AS 114, in the respective previous financial period''s.

4. The Company has filed review petition before CERC on the true up order for determination of Lignite Transfer Price for the Tariff Period 2014-19.

c. The company has filed truing up petition for the Tariff period 2014-19 for its Mines. CERC has issued true up order for determination of Lignite Transfer Price for Neyveli Mines for the Tariff period 2014-19 on 24^th March''2022 followed by corrigendum order dated 26^th April''2022. In the said order CERC has interpreted few aspects of Lignite Transfer Price Guidelines 2014-19 issued by Ministry of Coal (MoC) which are not in line with the intent and sprit of MoC guidelines. NLCIL is in the process of seeking necessary clarification from MoC and also filed review petition for the same before CERC. Pending disposal of CERC review petition, no impact have been considered in current financial year. All the regulatory deferral liability is being reviewed on periodic basis. Based on subsequent information/ details/orders the same shall be reviewed and considered accordingly.

d. The company has filed truing up petition for the Tariff period 2014-19 for its Thermal Stations in December 2019. Adjustment arising out of price revisions, if any shall be considered in the books of accounts on receipt of order from CERC.

a. Sale includes Sale of Power through Trading of ? 340.45 crore (31^st March 2021: ?408.41 crore).

b. Sale of Lignite includes sale to related party amounting to ? 5.70 crore (PY ? Nil).

c. Pending disposal of petition and approval of CERC tariff for thermal power plants for the tariff period 2019-24 , beneficiaries are being billed in accordance with the tariff order for the tariff period 2014-19. However, recovery on account of O&M component for tariff period 2019-24 has been recognized based on CERC tariff regulations and differential revenue between tariff periods 2019-24 and 2014-19 is recognized under Regulatory Deferral Account. The accrual for the remaining 4 components of the capacity charges though charged off in the Statement of Profit and Loss periodically, the consequential adjustment for the same in the revenue will be carried out on obtaining the final order.

d. Central Electricity Regulatory Commission has notified (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2021 on 13^th September 2021, which is effective from 1^st April 2019 which is related to determination of transfer price of coal and lignite of integrated mines.

As per the tariff regulation tariff petition in respect of integrated mines for the tariff period 2019-24 shall be filed by the company as per new regulation notified by CERC. The company is in the process of filling the said petition.

Pending filing of the petition for tariff period 2019-24 before CERC, NLCIL has billed @ ?1950/Ton to its DISCOMs which was approved by the Commission earlier and adjustments if any arising out of revision of lignite price by CERC, will be accounted in the books on filing / disposal of petition by CERC.

As per the regulation "the generating company shall, after the date of commercial operation of the integrated coal mine(s), till the input price of coal is determined by the Commission under these regulations, fix the input price of coal for the generating station at notified price of Coal India Limited commensurate with the grade of the coal from the integrated mine(s) or the estimated price available in the investment approval, whichever is lower, as the input price of coal."

e. Coal sales includes sales to related party (i.e. subsidiaries of NLCIL) amounting to ? 101.74 crore (PY ? Nil).

a. Interest others includes ? Nil (PY ?41.98 crore) towards interest on income tax refunds and ? 3.12 crore (PY ?7.69 crore) towards interest from customer.

b. Miscellaneous income includes ? 44.66 crore (PY ? 32.80 crore) towards sale of scrap and ? 5.09 crore (PY ?44.04 crore) towards liquidated damage recovered other than project contracts.

c. The other income include ? 3.33 crore (PY ?17.49 crore) of TPS-I for FY 21-22,which was discontinued from operation as on 30^th September, 2020. A Note containing details has been provided in Note 57.

d. Provision written back includes ? 16.56 crore towards reversal of provision created on TDS deduction, which now forms part of VSVS scheme and ? 7.94 crore from Gujarat Mineral Development Corporation towards initial development cost incurred by NLCIL for various projects in Gujarat for which necessary provision was created in previous years.

e. Deferred income on Govt. grant includes grant received from Ministry of New and Renewable Energy (MNRE) on various Solar Projects executed by the Company.

f. Insurance claim of ?253.31 crore in respect of TPS-II fire incident has been lodged with the Insurance Company for recovery of damage including loss of profit. Based on confirmation from insurance Company ?50 Crore was recognized in 2020-21 and ?9.50 Crore was received in 2021-22. Pending receipt of the balance claim amount, the same has been derecognized in the current year.

a. Spares meeting the criteria of PPE and having value more than ? 5 lakh has been considered for capitalisation.

b. Depreciation includes ? 0.51 crore(PY ? 1.54 crore) of TPS-I for FY 21-22,which was discontinued from operation as on 30^th September, 2020.Refer Note 57.

c. Mine Development and other amortisation includes ? 131.90 crore due to change in accounting estimates in line with CERC regulation 2019-24.

a. Other Expenses includes ? 22.42 crore( PY ? 186.14 crore) of TPS-I for FY 21-22,which was discontinued from operation as on 30^th September, 2020. Refer Note No. 57.

b. Miscellaneous expenses include following provisions for EPC contractors of Bithnok and BTPS Expansion Projects amounting to ?29.98 crore.

c. Provision for fixed asset/CWIP includes Bithnok and BTPS Project provision amounting to ? 22.78 crore.

d. Corporate Social Responsibility for FY 2021-22 includes ? 0.23 crore towards CER expenses of Talabira project.

a. Pending disposal of petition and approval of CERC tariff for the tariff period 2019-24, beneficiaries are being billed in accordance with the tariff order for the tariff period 2014-19. However, Income/Expenses to the extent of O&M parameters have been recognized based on the applicable operating norms for the tariff period 2019-24 and recognized under Regulatory Deferral Account. The accrual for the other 4 components of the capacity charges though charged off in the Statement of Profit and Loss periodically, the consequential adjustment for the same in the revenue will be carried out on obtaining the final order.

b. The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May''2020 by Ministry of Coal, GoI, actual expenses incurred on mine closure up to a maximum of 50% of the Mine Closure Deposit along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period from 2016-17 to 2020-21, an amount of ?165.78 crore has been considered on provisional basis during FY 2020-21 under regulatory income pending filing of the claim with Coal Controller.

Further an amount of ? 22.22 crore has been considered as regulatory income for the Financial Year 2021-22 in line with mine closure guidelines.

c. The Company undertakes review of regulatory assets and liabilities at the end each year and based on reassessment of recoverability/refund of such assets/liabilities necessary accounting adjustments are carried out and based on expert opinion wherever required period cost on regulatory liability has also been considered subject to approval of Regulatory Authority.

d. Pending filing of petition for sale of coal to end use plants under the said regulations, the Company adopted investment approval price for billing and estimated transfer price as per CERC Regulation for accounting purpose amounting to ?48.59 crore considered under regulatory income in the current year.

a. The Company in pursuant to ''Vivad Se Vishwas Scheme'' (VSVS) has accounted ? 389.97 crore on account of income tax recoverable from the beneficiaries as per the CERC tariff Regulations, for different Tariff periods due to payments/ adjustments relating to earlier periods pursuant to ''Vivad Se Vishwas Scheme'' (VSVS). Pending billing to beneficiaries, the said amount has been considered under Power Sales as unbilled revenue in FY 2021-22. Any adjustments arising out of the subsequent resolutions with the beneficiaries in this regard shall be accounted for in the subsequent periods. Refer Note 11.

b. Power sales (VSVS) includes ? 94.87 crore (PY ? NIL) for TPS-I which is retired from operation. Refer Note 57.

NOTE 34: DISCLOSURE AS PER IND AS - 8 - ACCOUNTING POLICIES, CHANGE IN ACCOUNTING ESTIMATE AND ERRORS

In accordance with Ind AS 8, ''Accounting Policies, Changes in Accounting Estimates and Errors'' and Ind AS 1, ''Presentation of Financial Statements'', the Company has retrospectively restated its Balance Sheet as at 31^st March 2021 and 1^st April 2020 (beginning of the preceding period) and Statement of Profit and Loss and Statement of Cash Flows for the year ended 31^st March 2021. Impact on other items are not material and hence not disclosed. Reconciliation of financial statement line items which are retrospectively restated are as under:

As per the Guidance Note on Rate Regulated Activity issued by ICAI , exchange rate difference (on account of restatement of foreign currency borrowing) recoverable from or payable to the beneficiaries in subsequent years as per CERC Tariff regulations and MoC guidelines on Lignite Transfer price are accounted as Deferred foreign currency fluctuation asset / liability. Accordingly necessary adjustment is made in depreciation and interest expenditure of the current year.

1. Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

2. The Company is seconding its personnel to Subsidiary Companies as per the terms and conditions agreed between the companies. The cost incurred by the company towards superannuation and employee benefits are recovered from the subsidiary companies.

3. Outstanding balances of subsidiary and joint venture companies at the year-end are unsecured and settlement occurs through banking transaction. These balances other than loans are interest free.

4. For the year ended March 31, 2022 and March 31, 2021 the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

5. Consultancy/Management services provided by the Company to Subsidiaries and Associates are generally on nomination basis at the terms, conditions and principles applicable for consultancy/management services provided to other parties.

NOTE 43: EMPLOYEE BENEFITS i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (''Fund'') that is legally separated from the Group. The board of the fund is required by law to act in the best interest of the plan participants and is responsible for setting certain policies ( e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market ( investment) risk.

a) Funding

Defined benefit plan is fully funded by the Company. The funding requirements are based on the fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

b) Movement in net defined benefit ( Asset ) Liabilities Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of ? 0.20 Crore on superannuation, resignation, termination, disablement or on death considering the provisions of the Payment of Gratuity Act, 1972, as amended. The gratuity scheme is funded by the Company and is managed by separate trust. The liability for gratuity scheme is recognised on the basis of actuarial valuation.

The Company provide for earned leave benefit and half pay leave to the employees of the Company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves ( HPL) are encashable only on separation. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half pay leave shall be permissible. The liability for the same is recognized on the basis of actuarial valuation.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Further, contribution to employee pension scheme is paid to the appropriate authorities.

Pursuant to Para 57 of Ind AS 19, accounting by an entity for defined benefit plans, inter-alia, involves determining the amount of the net defined benefit liability (asset) which shall be Adjustment for any effect of limiting a net defined benefit asset to the asset ceiling prescribed in Para 64. As per Para 64 of Ind AS 19, in case of surplus in a defined benefit plan, an entity shall measure the net defined benefit asset at the lower of actual surplus or the value of the assets ceiling determined using the discount rate. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Further, Para 65 provides that a net defined benefit asset may arise where a defined benefit plan has been overfunded or where actuarial gains have arisen.

As per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act,1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of Rs 10.03 Crore (Previous year Rs 10.55 Crore) determined through actuarial valuation. Accordingly, Company has not recognised the surplus as an asset, and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the company.

c) Defined Contribution Plan

Post Retirement Medical Assistance (PRMA)

The Company has a Post Retirement Medical Assistance scheme, under which annual cash assistance is provided to retired employees and their spouse for both inpatient and outpatient medical treatment availed in subject to Company''s grade wise policy applicable for employees.

A trust has been constituted and is managed by the Company for its employees, for the sole purpose of providing post retirement medical assistance facility to them. For the employees retired on or before 31.12.2006 , the company has extended the post retirement medical assistance in form of cash reimbursements and mediclaim insurance. A separate fund is maintained by the company and necessary contributions are made every year for this purpose.

The Company has adopted Ind AS 116 "Leases" with effect from 1^st April 2019 and has applied the standard to all lease contracts that are existing as at 1^st April 2019. The Company has chosen the modified retrospective approach for valuation of its right of use assets and lease liability.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices and aggregate standalone prices of nonlease components. However, for the leases of land and buildings and vehicles in which it is a lessee, the Company has elected not to separate non-lease components and account for lease and non-lease components as a single lease component.

i. As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability Adjustment for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and Adjustment for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease payments included in the lease liability comprises of fixed payments (including in-substance fixed payments), residual value guarantees, and where the Company is reasonably certain to exercise purchase, renewal and termination options includes exercise price under a purchase option, lease payments in an optional renewal period, and penalties for early termination of a lease. The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there are any reassessments or lease modifications or revised in-substance fixed payments. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents right-to-use assets that do not meet the definition of investment property in ''property, plant and equipment'' and lease liabilities as Financial Liabilities in the balance sheet.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for all short-term leases that have lease term of 12 months or less and leases of low-value assets, when it is new. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis or any other systematic basis over the lease term.

The companies significant leasing arrangements are in respect of various assets are as follows :

a. Land : The company has lease arrangement with respect to its office and township requirements at various locations ( i.e. HUDCO land at Delhi and office & township land in Talabira project, Odisha) for 99 years. The lease rental are fixed for entire lease term, which has been arrived based on lease agreement. The lease can be extended for similar periods on mutually agreed terms after the completion of the current lease period. The company do not have option to buy.

b. Vehicles : The Company has taken certain vehicles (including e-vehicles) on lease for a period extending up to 5 years, which can be further extended at mutually agreed terms. All the lease rental of vehicles are fixed in nature except for e-vehicles Lease rental for which are escalated @10% each year.

c. Plant and Machinery : An agreement has been arrived between NLCIL ( the company ) and Solar Development Operator (SDO) to use power evacuation facility for a period of 25 years. The lease rentals are fixed in nature.

d. Buildings : Premises for use of offices and guest houses on lease are usually renewable on mutually agreeable terms. The lease rental are fixed in nature for 2 properties and escalated by 10% each year for other properties.

When measuring lease liabilities, the Company discounted lease payments using its weighted average borrowing rate of long term loans.

The Company does not face significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.

ii. As a lessor

The company has not entered any agreement as on date of this financial year as a lessor. Thus the disclosure requirements of Ind AS 116 as lessor does not arise for the company.

The Company''s investments do not contain any restrictions on disposal within a stipulated period of time. The associate had filed the application with NCLT for reduction of share capital. During the FY 21-22 , NCLT has approved reduction of share capital. An amount of ? 7.50 crore has been received on account of such reduction of share capital .

NOTE 48: DISCLOSURE ON IND AS 114, ''REGULATORY DEFERRAL ACCOUNTS''

(i) Nature of rate regulated activities

The Company is engaged in the business of mining of lignite/coal and generation of power by using lignite as well as renewable energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC)/bidding process and the lignite transfer price is determined by the Ministry of Coal (MoC) guidelines. The CERC and MoC provide extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite. The CERC has notified its second amendment to its tariff regulation 2019-24, where in transfer price of Coal/Lignite will be determined by CERC effective from 01.04.2019. The company is in the process of filing petition before CERC for the tariff period 2019-24.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus a fair return.

(ii) Recognition and measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past periods in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. When the Company prefers appeal in APTEL/Other authorities the impact of the same along with period cost if any required is considered under the Regulatory Deferral Account. The Lignite price difference between CERC approved rate, other recoverable/ payable in future through Tariff are also considered under Regulatory Deferral Account Balances. On filing revi ew petition for various regulatory orders the impact of the same is carried forward.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ''Regulatory deferral account debit/credit balance'' by credit/debit to ''Movements in Regulatory deferral account balances'' during construction period and

Adjustment from the year in which the same becomes recoverable from or payable to the beneficiaries. Accordingly, an amount of ? 117.85 crore for the year ended 31 March 2022 has been accounted for as ''Regulatory deferral account debit balance'' (31 March 2021: ? 132.17 crore accounted as ''Regulatory deferral account debit balance''.)

Revision of pay scales of employees of PSEs w.e.f. 1^st January 2017 has been implemented based on the guidelines issued by Department of Public Enterprises (DPE). The guidelines provide payment of superannuation benefits @ 30% of basic DA to be provided to the employees of CPSEs which includes gratuity at the enhanced ceiling of ? 0.20 crore from the existing ceiling of ? 0.10 crore. As per Proviso 8(3) of Terms and Conditions of Tariff Regulations 2014 applicable for the period 2014-19, truing up exercise in respect of Change in Law or compliance of existing law has been taken up with CERC. The increase in gratuity limit from ? 0.10 crore to ? 0.20 crore falls under the category of ''Change in law'' and a regulatory asset has been created. The Payment of Gratuity Act, 1972 has since been amended and the ceiling has been increased to ? 0.20 crore. Based on petition filed with CERC the company has recognised both amounts recoverable for Wage revision and gratuity amounting ? 783.65 crore under regulatory deferral account debit balance as recoverable from the beneficiaries.

As per the CERC tariff regulation the expenses towards water charges , security expense and capital spares shall be allowed to be claimed from the beneficiaries bases on prudence check at the time of truing up. The company has recognised ? 484.04 crore as on 31.03.2022 (? 376.99 as on 31.03.2021) under its regulatory assets subject to petition for truing up for tariff period 19-24.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances:

a. Demand risk - Availability of alternative and cheaper sources of power may result in reduced demand.

b. Regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

c. Other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, the company has recognised Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

NOTE 49: FINANCIAL INSTRUMENTS Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants: Loan from PFC - Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.25

There have been no breaches in the financial covenants of any interest bearing borrowings.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of noncurrent borrowings (including current maturities) and current borrowings as specified in Note 19 (a), 16(a) less cash and cash equivalents ( excluding earmarked deposits). Equity includes equity share capital and reserves ( excluding earmarked Reserves) that are managed as capital. The gearing ratio at the end of the reporting period was as follows:

(? Crore)
Particulars	March 31, 2022	March 31,2021
1 Gearing Ratio:
Debt #	10,239.03	14,917.69
Less: Cash and bank balances*	123.52	152.36
Net debt	10,115.51	14,765.33
Total equity*	13,162.70	12,338.56
Net debt to total equity ratio	0.77	1.20
* excludes earmarked deposits/reserves # debt does not include amount payable to subsidiaries.

NOTE 50: FINANCIAL RISK MANAGEMENT

The treasury function of the company provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

The Company''s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, short term deposits etc.

A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults and the Company''s historical experience for customers.

NOTE 50: FINANCIAL RISK MANAGEMENT (CONTD.)

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31, 2022, the Company''s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO) accounted for ? 2009.58 crore of the trade receivables carrying amount (Rs 3913.01 crore of the trade receivables as at March 31, 2021).

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Ba nks. The risk of default with government controlled entities is considered to be insignificant.

i. Provision for expected credit losses

a. Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties/customers have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

b. Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with strong capacity to meet the obligations . Further, management believes that the unimpaired amounts that are past due by more than 45 days are still collectible in full. However considering various regulatory and other disputes including historical payment behaviour and analysis of customer credit risk impairment loss has been considered for the reporting period in respect of trade receivables.

ii. Ageing analysis of trade receivables

The Company''s debtors include debtors in respect of TPS, Mines, renewables and also other debtors. As a policy, the Company does an ageing analysis of thermal debtors, the details of which is stated below. The Company does not carry out an ageing analysis of debtors pertaining to Mines and other debtors since the transactions are generally carried out against advances received from the customers.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

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Mar 31, 2021

a) In respect of land acquired by the Company during the periods 1956 to 1977 and 1997 to 2001, ownership is subject to certain restrictions imposed through the assignment deeds and through the Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 respectively.

b) Plant and Machinery Includes assets belonging to Ministry of Coal obtained under Coal Science &Technology Projects and Machinery spares. This also includes residual value of assets considered as addition to the assets under Life extension programme.

c) Land includes acquisition of land relating to Barsingsar extension and Bithnok Power and related Mining projects amounting to ''169.28 crore.

d) All units of Thermal Power Station -I has been retired from operation subsequent to 30.09.2020. The Ind AS Gross Block, Ind AS accumulated depreciation and Ind AS Net block of TPS-I as on 31.03.2021 amounting to ''60.52 crore, '' 06.54 crore and ''53.98 crore respectively are included in the above Schedule. Estimated net sale proceeds of the retired assets is expected to be above the residual value of assets appearing in the books.

e) Spares meeting the criteria of PPE and having a value of more than ''5 lakh have been considered for capitalisation .

f) Depreciation on Specialised Mining Equipment (SME) has been considered based on technical estimate useful life of specific assets.

g) Depreciation on Renewable Assets has been calculated considering 5% residual value in line with guidelines of MNRE/SERC.

h) There is no impairment loss identified for the tangible fixed assets during the year.

i) Addition in current year Includes capitalisation of 2^nd unit of 2 X 500 MW Neyveli New Thermal Power Project at Neyveli and capitalisation of 17.5 MW of Solar Project at various locations of Andaman .

j) Lease hold land represents land acquired for Talabira II & III open cast Coal Mine at Odisha under Coal Bearing Act 1957.

k) Based on physical verification of assets ( including conveyor belts and pipes) the net block of ''13.47 crore which are not available for use are included in the above schedule pending write off from Asset register.

a) The regulatory deferral accounts balances has been accounted in line with the company''s accounting policy. Refer note no 47 for detailed disclosures.

b) The Company has filed truing up petition for the Tariff period 2014-19 both for its Thermal Stations and Mines. Any adjustment arising out of the same shall be considered in the books of accounts on receipt of order from CERC.

c) Based on petition filed with CERC for NNTPP (2x500 MW), the differential amount of ''52.11 crore considered under regulatory deferral account debit balance.

d) The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May'' 2020 by Ministry of Coal, GoI, actual expenses incurred on mine closure upto a maximum of 50% of the Mine Closure Deposit along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period from 2016-17 to 2020-21, an amount of ''165.78 crore has been considered on provisional basis under regulatory income pending filing of the claim with Coal Controller.

Details of Terms of Repayment, Rate of Interest and Security :

i. To meet the General Funding arrangement, two Bonds were issued for an amount of '' 1,475 crore and '' 525 crore which carries interest @ 8.09% p.a & 7.36% p.a respectively. The bonds were secured by pari-passu 1st charge on the project assets of TPS 11 Expansion 500 MW (2 X 250 MW) (including Land) to the extent of the facility. The Bonds are repayable through bullet payment on 29-05-2029 & 25-01-2030.

ii. To meet the General Funding arrangement, an unsecured Bond i.e NLCIL Bond 2020 Series-II carrying an interest rate of 5.34% p.a. was issued for '' 500 crore on 31.07.2020 which is repayable through bullet payment on 11.04.2025.

iii. To meet the fund requirement of Neyveli New Thermal Projects ( 2 X 500 MW ) :

a) Loan of '' 3000 crore @ 6.56% p.a. (on the basis of 3 year AAA Reuter rate i.e 5.71% p.a plus fixed spread 0.85%) from M/s. Power Finance Corporation Ltd., amount drawn is '' 3000 Crore & outstanding amount is '' 2550 crore. The Loan is secured by pari-passu charge on project lands & fixed asset, repayable in 20 equal bi-annual instalments commencing from 31.03.2020.

b) RTL of '' 1135 crore @ 6.37% p.a. (on the basis of 5 year G-Sec rate i.e. 5.51% plus 0.86% fixed spread) from HDFC Bank, amount drawn is '' 1135 crore. Outstanding Loan of '' 1021.50 crore was pre-closed on 27.01.2021. Outstanding amount as on 31.03.2021 is Nil.

c) RTL of '' 821 crore @ 5.91% p.a. (on the basis of 1 year G-Sec rate i.e 5.30% plus 0.61% fixed spread) from HDFC Bank, out of this facility, amount of loan drawn is '' 499 crore. Outstanding Loan of '' 449.10 crore was pre-closed on 27.01.2021. Outstanding amount as on 31.03.2021 is Nil.

d) NLCIL Bonds 2021 Series-I was issued on 12.02.2021 for an amount of '' 1175 crore @ 6.05% p.a. The Bond is unsecured and will be repayable by bullet payment on 12.02.2026.

iv. To meet the fund requirement of Neyveli Solar Power Project (130 MW), borrowing arrangement has been done with HDFC Bank for an amount of '' 481 crore @ 6.62% p.a (on the basis of 5 year G-Sec Rate i.e 5.99% plus 0.63% fixed spread). Repayment for the same started from October 2018, amount drawn is '' 481 crore and outstanding amount is '' 192.40 crore. The Loan is secured by charge on project lands & fixed asset to the extent of the loan amount, repayable in 10 equal bi-annual instalments, the last installment falls due on March 2023.

v. To meet the fund requirement of Tamilnadu Solar Power Project 500 MW, borrowing arrangement has been done with

a)_Axis Bank Ltd. for an amount of '' 500 crore @7.41% p.a (on the basis of 5 Year G-Sec rate i.e. 6.19% plus 1.22% fixed spread). Repayment for the loan has commenced from September'' 2019 in 10 equal half-yearly installments. The amount outstanding as _on 31.03.2021 is '' 300 crore._

b) Axis Bank Ltd. for an amount of '' 450 crore @ 7.39% p.a (On the basis of 5 Year G-Sec Rate i.e. 6.19% plus 1.20% fixed spread). Repayment for the loan starts from March'' 2020 in 10 equal half-yearly installments. The amount outstanding as on 31.03.2021 is '' 315 crore.

c) Federal bank Ltd. for an amount of '' 456 crore @ 7.27% p.a. (on the basis of 5 Year G-Sec rate i.e. 6.07% plus 1.20% fixed spread). Repayment for the loan starts from March'' 2020 in 10 equal half-yearly installments. The amount outstanding as on 31.03.2021 is '' 319.20 crore.

The loans are secured by pari-passu charge on the project assets to the extent of the facility.

vi. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with State Bank of India for an amount of '' 2552 crore @ 6.95% p.a (on the basis of 6 months MCLR rate @ 6.95% ) repayable in 20 equal half- yearly installments of '' 127.60 crore each. The first repayment has made on 31.12.2020. Out of total facility, '' 2319 crore has been drawn and the outstanding amount as on 31.03.2021 is '' 2191.40 crore. The loan is secured by a pari-passu charge on the project assets to the extent of the facility.

vii. To meet the fund requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with SBI for an amount of '' 1680.75 crore @ 6.95% p.a (on the basis of 6 Month MCLR rate) repayable in 20 equal half- yearly instalments of '' 84.0375 crore stating from 30.09.2021. Out of the facility, '' 593 crore is drawn. The loans is secured by pari-passu charge on the project assets to the extent of the facility.

viii. To meet the general funding arrangement, an unsecured inter corporate borrowing agreement was tied up with Mahanadi Coalfields Limited for '' 2000/- crore. This is unsecured loan repayable in 48 equal monthly installments commencing from July'' 2018. Out of the total drawal of '' 2000 crore amount outstanding as at 31.03.2021 is '' 625 crore. This loan carries a Fixed Interest at 7% p.a.

ix. Bi- annual equal repayment (€ 0.219 Million each) of Foreign Currency loan - I from KfW Germany @ 0.75% p.a, commenced from 30-12-2001, ending on 30-06-2036.

x. Bi-annual equal repayment (€ 1.401 Million each) of Foreign Currency loan -II from KfW Germany, @ 0.75% p.a, commenced from 30-06-2002, ending on 30-06-2037.

xi. A portion of KfW Germany loan which was used for renovation of TPS-I, has not been repaid in full. The balance outstanding as on 31.03.2020 is ''21.25 crore for all the units of TPS-I. Petition has been filed for recovery of balance outstanding loan from TANGEDCO. Pending order from CERC, the outstanding loan balance has been carried forward.

a) In respect of Mine Closure Pursuant to GOI guidelines on Mine closure, total Mine closure cost was approved by Ministry of Coal at a rate of '' 6 lakh per hectare for all the open cast Mines. The annual contribution, compounded @ 5% p.a. is deposited in an Escrow account in the name of Coal Controller Escrow account NLC Ltd. Mine., as stipulated by the Coal Controller.

b) Deferred income includes capital grant of '' 95.73 crore and '' 32.52 crore ( gross value of Grant) received from Ministry of New and Renewable Energy ( MNRE) in respect of installation of 130 MW solar at various locations in Neyveli and 20 MW of Solar Plant at various location of Andaman and Nicobar in their respective year of commissioning. The portion of the grant matching with depreciation of the respective solar asset is charged to Profit and Loss account each year.

(a) The Company has filed petition for determination of Tariff of its new NNTPP (2 X 500 MW) before CERC. Based on petition an amount of '' 52.11 crore has been considered under regulatory deferral Account.

(b) Pending disposal of petition and approval of CERC tariff for the tariff period 2019-24, beneficiaries are being billed in accordance with the tariff order for the tariff period 2014-19. However, Income/Expenses to the extent of O&M parameters have been recognized based on the applicable operating norms for the tariff period 2019-24 and recognised under Regulatory Deferral Account. The accrual for the other 4 components of the capacity charges though charged off in the Statement of Profit and Loss periodically, the consequential adjustment for the same in the revenue will be carried out on obtaining the final order

(c) The Company undertakes concurrent Mine Closure activity. In line with the Mine Closure Guidelines issued in May'' 2020 by Ministry of Coal, GoI, actual expenses incurred on mine closure upto a maximum of 50% of the Mine Closure Deposit along with interest in Escrow Account can be withdrawn on verification in every five years. Accordingly, for the 5 year period from 2016-17 to 2020-21, an amount of ''165.78 crore has been considered on provisional basis under regulatory income pending filing of the claim with Coal Controller.

(d) The Company undertakes review of regulatory assets and liabilities at the end each year and based on reassessment of recoverability/refund of such assets/liabilities necessary accounting adjustments are carried out and based on expert opinion wherever required period cost on regulatory liability has also been considered subject to approval of Regulatory Authority.

d) Terms and conditions of transactions with the related parties

(1) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(2) The Company is seconding its personnel to Subsidiary Companies as per the terms and conditions agreed between the Companies. The cost incurred by the group towards superannuation and employee benefits are recovered from these Companies.

(3) Outstanding balances of subsidiary and joint venture companies at the year-end are unsecured and settlement occurs through banking transaction. These balances other than loans are interest free.

(4) For the year ended March 31, 2021 and March 31, 2020 the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(5) Consultancy/Management services provided by the Company to Subsidiaries and Associates are generally on nomination basis at the terms, conditions and principles applicable for consultancy/management services provided to other parties.

Employee benefits (I) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (''Fund'') that is legally separated from the Group. The board of the fund is required by law to act in the best interest of the plan participants and is responsible for setting certain policies ( e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market ( investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit ( Asset ) Liabilities Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of '' 0.20 crore on superannuation, resignation, termination, disablement or on death. The Company has carried out actuarial valuation of gratuity benefit considering the enhanced ceiling.

The Company provide for earned leave benefit and half pay leave to the employees of the company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves (HPL) are encashable only on separation. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation. The fund manager declared interest subsequent to publication of financials in FY 2019-20 which has been considered in current FY 2020-21 actuarial valuation report without changing the previous published details.

Disclosure as per Ind AS 116 ''Leases’

The Company has adopted Ind AS 116 “Leases” with effect from 1^st April 2019 and has applied the standard to all lease contracts that are existing as at 1^st April 2019. The Company has chosen the modified retrospective approach for valuation of its right of use assets and lease liability.

At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices and aggregate standalone prices of non-lease components. However, for the leases of land and buildings and vehicles in which it is a lessee, the Company has elected not to separate non-lease components and account for lease and non-lease components as a single lease component.

i. As a lessee

The Company recognises a right-of-use asset and a lease liability at the lease commencement date.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability Adjustment for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and Adjustment for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. The lease payments included in the lease liability comprises of fixed payments (including in-substance fixed payments), residual value guarantees, and where the Company is reasonably certain to exercise purchase, renewal and termination options includes exercise price under a purchase option, lease payments in an optional renewal period, and penalties for early termination of a lease. The lease liability is measured at amortised cost using the effective interest method. It is re-measured when there are any reassessments or lease modifications or revised in-substance fixed payments. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Company presents right-to-use assets that do not meet the definition of investment property in ‘property, plant and equipment'' and lease liabilities in ‘loans and borrowings'' in the Balance Sheet.

Short-term leases and leases of low-value assets

The Company has elected not to recognize right-of-use assets and lease liabilities for all short-term leases that have lease term of 12 months or less and leases of low-value assets, when it is new. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis or any other systematic basis over the lease term.

ii. As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease as per requirements under Ind AS 116.

To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risk and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease, if not, then it is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

If an arrangement contains lease and non-lease components, the Company applies Ind AS 115 to allocate the consideration in the contract. The Company recognises lease payments received under operating leases as income on a straight-line basis over lease term as part of ‘other income''

When measuring lease liabilities, the Company discounted lease payments using its incremental borrowing rate.

Disclosure on Ind AS 114, ''Regulatory Deferral Accounts’

(i) Nature of rate regulated activities

The Company is engaged in the business of mining of lignite and generation of power by using lignite as well as renewable energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC)/bidding process and the lignite transfer price is determined by the Ministry of Coal (MoC) guidelines. The CERC and MoC provide extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus a fair return.

(ii) Recognition and measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past periods in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. When the Company prefers appeal in APTEL/Other authorities the impact of the same along with period cost if any required is considered under the Regulatory Deferral Account. The Lignite price difference between CERC approved rate, other recoverable/ payable in future through Tariff are also considered under Regulatory Deferral Account Balances.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ‘Regulatory deferral account debit/credit balance'' by credit/debit to ‘Movements in Regulatory deferral account balances'' during construction period and Adjustment from the year in which the same becomes recoverable from or payable to the beneficiaries.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances

(I) Demand risk -Availability of alternative and cheaper sources of power may result in reduced demand.

(ii) Regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

(iii) Other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, the Company has recognised Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC - Debt service coverage ratio not less than 1.50 NLCIL Bond - Minimum asset coverage ratio of 1.00

The capital structure of the Company consists of net debt (borrowings as detailed in notes 16(a), 19 (a) & (c) offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

The Company''s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables.

A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults, credit ratings from international credit rating agencies and the Company''s historical experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31,2021, the Company''s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO) accounted for '' 3913.01 crore of the trade receivables amount ('' 4470.29 crore of the trade receivables as at March 31,2020)

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter-parties/customers have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with strong capacity to meet the obligations. Further, management believes that the unimpaired amounts that are past due by more than 45 days are still collectible in full. However considering various regulatory and other disputes including historical payment behavior and analysis of customer credit risk impairment loss has been considered for the reporting period in respect of trade receivables.

(ii) Ageing analysis of trade receivables

The Company''s debtors include debtors in respect of Power (Thermal & Renewables), Mines, and also other debtors. As a policy, the Company does an ageing analysis of Power debtors, the details of which is stated below. The Company does not carry out an ageing analysis of debtors pertaining to Mines and other debtors since the transactions are generally carried out against advances received from the customers.

C) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

D) Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Upto March 31^s1, 2016 the Company till the date of commercial operation capitalise the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

C. Information about major customers

Revenue from one major customer under generation of energy segment is '' 3379.70 crore ( March 31,2020 : '' 2914.79 crore ) which is more than 10% of Company''s total revenues.

a) Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debits to the extent practicable. Balances due in respect of advances and amount due to creditors are subject to confirmation and reconciliation. However, power and lignite sale dues are reconciled periodically with debtors.

(a) Recent Pronouncement

Vide notification dated March 24, 2021 , the Ministry of Corporate Affairs has amended the disclosure requirements of Schedule-IM to the Companies Act 2013, which shall be applicable from FY 2020-21.

(b) Rounding off & Regrouping in Financials

Amount in the financial statements are presented in '' crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately. Figures of previous year has been regrouped/reclassified wherever necessary.

(c) Other regulatory matters

As per the directives of Ministry of Coal, NLCIL Board has decided lignite transfer price guideline for the tariff period 2019-24 in consultation with stakeholders during October’2019 and billed to beneficiaries. On the petition filed by M/s KSEB, challenging Lignite Transfer Price Guidelines 2019-24 issued by NLCIL, CERC in its record of proceeding issued in Feb’2021 directed NLCIL to keep the said guideline in abeyance and continue to bill lignite @ '' 2132/Ton till issue of final order and /or notification of new regulation by CERC for integrated mines. Accordingly, in line with CERC directives, NLCIL has considered billing @ '' 2132/Ton since Feb’ 2021 without any adjustment for the earlier periods.

a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries for sale of power and lignite is generally done on periodical basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ‘External Confirmations’, were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact. Loan outstanding balances of employees are also reconciled periodically.

b) In the opinion of the management, the value of assets, other than property, plant and equipment and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

COVID-19 disclosures

Significant disruptions have taken place worldwide due to COVID-19 pandemic. The 2nd wave of COVID 19 is also disrupting significantly across the country. The Company is engaged in Mining and Power Generation. Considering Power an essential service, management believes there is not much material impact due to this pandemic on the business of the Company in the year 2020-21. However, the Company is continuously monitoring the current situation and possible impact of the same in the business of the Company.

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Mar 31, 2019

Reporting entity

NLC India Limited (formerly “Neyveli Lignite Corporation Limited”) (“NLC” or “the Company”), is a Government Company registered under the erstwhile Companies Act, 1956 with its registered office located at First Floor, No. 8, Mayor Sathyamurthy Road, FSD, Egmore Complex of FCI, Chetpet, Chennai - 600031 and is listed with the Bombay Stock Exchange Ltd and the National Stock Exchange of India Ltd. NLC is engaged in the business of mining of lignite and generation of power by using lignite as well as Renewable Energy Sources.

Details of Terms of Repayment, Rate of lnterest and Security:

i. Term Loan from bank includes Rupee Term Loan amounting to Rs. 175 crore (PY Rs. 525 crore) as at the year end out of total sanction amount of Rs.. 1400 crore, (fromSBIRs. 467 crore @8.55% p.a.), (from HDFC Bank Rs. 466.50 crore @8.40% p.a.) and (from ICICI Bank Rs. 466.50 crore @8.60% p.a.). Interest Rate are based on 1 Year MCLR rate and the loan shall be completely repaid by August, 2019. These loan is secured by

a. Pari-Passu charge on the immovable assets of Mines II Expansion, TSII Expansion, Barsingsar Mines and Barsignsar TPS &

b. Pari-Passu charge by way of hypothecation on the movable assets both present and future pertaining to Mines II Expansion, TS-II Expansion, Barsingsar Mines and Barsingsa rTPS projects.

ii. Rupee Term Loans (RTL) of Rs.. 3000 crore @ 9.65% p.a. (on the basis of 3 year AAA Reuter rate) from M/s. Power Finance Corporation Ltd. for NNTPS project secured by Pari-Passu charge on NNTPS project fixed assets, repayable in 20 equal bi-annual instalments commencing from 30.12.2019.

iii. Rupee Term Loan of Rs.. 1135 crore @ 7.81% p.a. (on the basis of 5 year G-Sec rate i.e. 6.95% plus 0.86% fixed spread) from HDFC Bank Ltd. for NNTPS project secured by Pari-Passu charge on NNTPS project fixed asset, repayable in 20 equal bi-annual instalments commencing from December, 2019.

iv. Rupee Term Loan (RTL) of Rs.. 821 crore @ 8.43% p.a. (on the basis of 1 year G-Sec rate i.e 7.82% plus 0.61% fixed spread) from HDFC Bank Ltd. for NNTPS Project, secured by Pari-Passu charges on project fixed assets repayable in 20 equal bi-annual instalments commencing from December,2019.Rs. 190 crore has been drawn as at 31.03.2019.

v. To meet the fund requirement of Neyveli Solar Power Project (130 MW), borrowing arrangement has been done with HDFC Bank for an amount of Rs.. 481 crore @7.68 % p.a (on the basis of 5 year G-Sec Rate i.e. 7.05% plus 0.63% fixed spread). The repayment for the same started from October 2018, as on 31.03.2019 outstanding amount is Rs. 384.80 crore. The Loan is secured by charge on project fixed asset, repayable in 10 equal bi-annual instalments; last instalment falls due on March 2023.

vi. To meet the fund requirement of Tamil Nadu Solar Power Project 500 MW, borrowing arrangement has been done with

a) Axis Bank Ltd. for an amount of Rs.. 500 crore @ 8.19% p.a (on the basis of 5 Year G-Sec rate i.e. 6.97% plus 1.22% fixed spread). Repayment for the loan starts from September 2019 in 10 equal half-yearly instalments.

b) Axis Bank Ltd. and Federal Bank for an amount of Rs.. 300 crore @8.17% p.a (On the basis of 5 Year G-Sec Rate i.e. 6.97% plus 1.20% fixed spread) and Rs. 306 crore @ 8.43% (on the basis of 5 Year G-Sec rate i.e 7.23% plus 1.20% fixed spread) respectively. Repayment for the loan starts from March’ 2020 in 10 equal half-yearly instalments.

c) Federal bank Ltd. for an amount of Rs.. 150 crore @ 7.90% p.a. (on the basis of 5 Year G-Sec rate i.e. 6.70% plus 1.20% fixed spread). Repayment for the loan starts from March’ 2020 in 10 equal half-yearly instalments.

The loans are secured by pari-passu charge on the project assets to the extent of the facility.

vii. To meet the fund requirement of Tamilnadu Solar Power Project 709 MW, borrowing arrangement has been done with State Bank of India for an amount of Rs.. 2552 crore @ 8.74% p.a (on the basis of 1 Year MCLR rate plus 0.19 fixed spread) repayable in 20 equal half- yearly instalments of Rs.. 127.60 crore after the moratorium period of 1 year from 31.12.2019 or Scheduled Commercial Date of Operation (SCOD) whichever is earlier. Rs. 750 crore is drawn as at31.03.2019. The loan is secured by a pari-passu charge on the project assets.

viii. To meet the funding requirement of Talabira Coal Mine II & III, borrowing arrangement has been done with State Bank of India for an amount of Rs.. 1680.75 crore @ 8.55% p.a (on the basis of 1 Year MCLR rate) repayable in 20 equal half- yearly instalments of Rs.. 84.0375 crore starting from 30.09.2021. Out of the facility,Rs. 270 crore has been drawn during F.Y 2018-19. The loan is secured by pari-passu charge on the project assets.

ix. To meet the General Funding arrangement, a Rupee Loan Agreement was tied up with State Bank of India CAG Branch for Rs. 1000 crore @ 8.74% p.a (on the basis of 1 Year MCLR rate i.e 8.55% plus 0.19% fixed spread) repayable in 6 equal Half Yearly Installments of Rs. 166.66 crore starting from 31.03.2020. The loan is secured by pari-passu 1st charge on the project assets of 10 MW Solar Project, 51 MW Wind Project & 2nd charge on the project assets of Barsingsar250 MW Thermal power station (including Land). Out of the facility, Rs. 250 crore has been drawn during F.Y 2018-19.

x. To meet the General Funding arrangement, a Rupee Loan Agreement was tied up with Mahanadi Coalfields Limited for Rs. 2000/- crore. This is Unsecured loan repayable in 48 equal monthly instalments starting from July’ 2018. Out of which Rs. 1000 crore has drawn as at the end of current Financial Year. This loan carries a Fixed Interest rate at 7% p.a.

xi. Bi-annual equal repayment (€ 0.44 Million) of Foreign Currency loan -1 from KfW Germany @ 0.75% p.a, commenced from 30-12-2001, ending on 30-06-2036.

xii. Bi-annual equal repayment(€ 2.80 Million) of Foreign Currency loan -II from KfW Germany, @ 0.75% commenced from 30-06-2002, ending on 30-06-2037.

As per the Guidance Note on Rate Regulated Activity issued by ICAI, exchange rate difference (on account of restatement of foreign currency borrowing) recoverable from or payable to the beneficiaries in subsequent years as per CERC Tariff regulations and MoC guidelines on Lignite Transfer price are accounted as Deferred foreign currency fluctuation asset / liability. Accordingly necessary adjustment is made in depreciation and interest expenditure of the current year.

a. In all these cases, outflow of economic benefits is expected within next one year.

b. The assumptions made for provisions relating to current period are consistent with those in the earlier years. The assumptions and estimates used for recognition of such provisions are qualitative in nature and their likelihood could alter in next financial year. It is impracticable for the Company to compute the possible effect of assumptions and estimates made in recognizing these provisions.

1 The Company has adopted Ind AS 115 “Revenue from Contracts with Customers”. The adjustments arising on account of adoption of Ind AS 115 have been considered in the Retained Earnings as on 01.04.2018 and impact of the same has also been considered in assets and liabilities. Accordingly, the previous corresponding period figures have not been restated (i.e. it is presented as reported previously) using cumulative effect approach and hence, the same is not comparable. The following table summarises the impact, net of tax, of transition to Ind AS 115 on retained earnings as on 01.04.2018:-

i) Entities under the control of the same government:

The Company is a Public Sector Undertaking (PSU) wherein majority of shares are held by the President of India. Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. The Company has applied the exemption available under Paragraph 25&26 of Ind AS 24 for government related entities and have made disclosures accordingly in the financial statements.

b) Transactions with the related parties:

The aggregate value of transactions and outstanding balances related to key managerial personnel and entities over which they have control or significant influence were as follows:

d) Terms and conditions of transactions with the related parties

(1) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(2) The Company is seconding its personnel to Subsidiary Companies as per the terms and conditions agreed between the companies. The cost incurred by the group towards superannuation and employee benefits are recovered from these companies.

(3) Outstanding balances of Subsidiary and joint venture Companies at the year-end are unsecured and settlement occurs through banking transaction. These balances other than loans are interest free

(4) For the year ended March 31,2019 and March 31,2018 the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

(5) Consultancy/Management services provided by the Company to Subsidiaries and Associates are generally on nomination basis at the terms, conditions and principles applicable for consultancy/management services provided to other parties.

2 Employee benefits

(i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (‘Fund’) that is legally separated from the Group. The board of the fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longivity risk, currency risk, interest rate risk and market ( investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund’s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit (Asset)/Liabilities Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum of Rs.. 0.20 crore on superannuation, resignation, termination, disablement or on death. The Company has carried out acturial valuation of gratuity benefit considering the enhanced ceiling.

The Company provide for earned leave benefit and half pay leave to the employees of the company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves (HPL) are encashable only on separation upto maximum of 240 days (HPL). However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no cummutation of half pay leave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring atthe end of the reporting period. This analysis may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions maybe correlated.

Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Futher, contribution to employee pension scheme is paid to the appropriate authorities.

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the provident fund plan as at balance sheet date:

Pursuant to para 57 of IndAS 19, accounting by an entity for defined benefit plans, inter-alia, involves determining the amount of the net defined benefit liability/(asset) which shall be adjusted for any effect of limiting a net defined benefit asset to the asset ceiling prescribed in para 64. As per Para 64 of IndAS 19, in case of surplus in a defined benefit plan, an entity shall measure the net defined benefit asset at the lower of actual surplus or the value of the assets ceiling determined using the discount rate. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Further, Para 65 provides that a net defined benefit asset may arise where a defined benefit plan has been overfunded or where actuarial gains have arisen.

As per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of Rs.. 35.04 crore (Previous year Rs. 23.03 crore) determined through actuarial valuation. Accordingly, Company has not recognised the surplus as an asset, and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the Company.

C. Defined Contribution Plan

Post Retirement Medical Assistance (PRMA)

The Company has a Post Retirement Medical Assistance scheme, under which annual cash assistance is provided to retired employees and their spouses for both inpatient and out patient medical treatment availed in subject to Company’s grade wise policy applicable for employees.

A trust has been constituted and is managed by the Company for its employees, for the sole purpose of providing post retirement medical assistance facility to them.

3 Disclosure as per Ind AS 17 ‘Leases’

I) Operating Lease

a) as Lessee

Expenses on operating leases of the premises for offices are included Note 28 - Other Expenses. Such leases entered into by the Company are non cancellable.

Details of lease rental payable over the remaining contract period is provided below:

4 Disclosure on Ind AS 114, ‘Regulatory Deferral Accounts’

(I) Nature of rate regulated activities

The Company is engaged in the business of mining of lignite and generation of power by using lignite as well as renewable energy sources. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC)/State Electricity Regulatory Commission (SERC) and the lignite transfer price is determined by the Ministry of Coal (MoC) guidelines. The CERC and MoC provide extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of power and transfer of lignite.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus affair return.

(ii) Recognition and measurement

As per the CERC/SERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past period in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. When the Company prefers appeal in APTEL / Other authorities the impact of the same along with period cost if any required is considered under the Regulatory Deferral Account. The Lignite price difference between CERC approved rate, other recoverable / payable in future through Tariff are also considered under Regulatory Deferral Account Balances.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognised on an undiscounted basis as ‘Regulatory deferral account debit/credit balance’ by credit/debit to ‘Movements in Regulatory deferral account balances’ during construction period and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances:

(i) demand risk-Availability of alternative and cheaper sources of power may result in reduced demand.

(ii) regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

(iii) other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, the Company has recognised Regulatory Deferral Liability which may require economic out flow of resources upon passing of orders by the appellate authorities.

(iv) Reconciliation of the carrying amounts

The regulated assets/liability recognised in the books to be recovered from or payable to beneficiaries in future periods are as follows:

a) Regulatory deferral account debit balance

5 Financial Instruments Capital Management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC- Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.25

The capital structure of the Company consists of net debt (borrowings as detailed in notes 15,18 (a) and (c) offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

6 Financial risk management

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

The Company’s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables.

7 A) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults, credit ratings from international credit rating agencies and the Company’s historical experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31,2019, the Company’s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd. (TANGEDCO) accounted for Rs. 3119.24 crore of the trade receivables carrying amount (Rs. 2428.09 crore of the trade receivables as at March 31,2018).

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The Company has customers (State government utilities) with strong capacity to meet the obligations and therefore the risk of default are not material. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. Hence, no impairment loss was considered necessary during the reporting period in respect of trade receivables.

(ii) Ageing analysis of trade receivables

The Company’s debtors include debtors in respect of TPS and Mines and also other debtors. As a policy, the Company does an ageing analysis of thermal debtors, the details of which is stated below. The Company does not carry out an ageing analysis of debtors pertaining to Mines and other debtors since the transactions are generally carried out against advances received from the customers.

B) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

C) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

D) Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Upto March 31,2016 the Company till the date of commercial operation capitalise the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

The currency profile of financial assets and financial liabilities as at March 31,2019, March 31,2018.

Sensitivity analysis

A strengthening/weakening of the Indian Rupee, as indicated below, against the Euro as at 31st March would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for previous year, except that the reasonably possible foreign exchange rate variances were different, as indicated below.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

E) Interest rate risk

The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates. However, the actual interest incurred on normative loan is recoverable from beneficiary as fixed charge as per CERC Regulations.

Cash flow sensitivity analysis for variable-rate instruments

A change of 50 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the previous year.

Fair value sensitivity analysis for fixed-rate instruments

The company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. In the case of the Company, none of the investments in equity shares are quoted in the market and does not expose the Company to equity price risks.

8 Disclosure as per Ind AS 108 ‘Operating segments’

A. Basis for segmentation

The Company has the following two strategic divisions, which are its reportable segments. These divisions are managed separately because they require different technology and operational methodologies. The following summary describes the operations of each reportable segment.

Reportable segments Product / Service from which reportable segment derives revenues

Lignite mining Mining of lignite

Power generation Generation of power and sale of power utilities across the country

The Chairman-cum-Managing Director monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the consolidated financial statements.

Note: 1. Since the business operation is within India the secondary disclosure does not arise

2. The inter-segment transfers are priced on cost plus profit basis.

3. Allocation of i. Storage charges on the basis of material consumption

ii. Common charges and social overhead on the basis of salaries & wages and

iii. Service Centres Assets & Liabilities are apportioned among the Segments on the basis of the service rendered.

C. Information about major customers:

Revenue from one major customer under “generation of energy” segment is Rs. 3252.39 crore ( March 31, 2018 :Rs. 3356.39 crore ) which is more than 10% of Company’s total revenues.

9 a) Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debits to the extent practicable.

Balances due in respect of advances and amount due to creditors are subject to confirmation and reconciliation. However, power and lignite saledues are reconciled periodically with debtors.

b) Performance Achieve Trade (PAT) - TPS-I, exemption from PAT liability was granted upto March 31,2017. The Group has requested for extention of time to Ministry of Coal (MoC) and Ministry of Power (MoP), pending such extention the group has provided penalty as applicable underSec.26 of Energy Conservation Act, 2001 has been considered upto March, 2019.

(c) Dividend distribution tax on proposed dividend not recognised at the end of the reporting period

Since year end, the directors have recommended the payment of final dividend amounting to Rs. Nil (31 March 2018: Rs. 41.27 crore). The dividend distribution tax on this proposed dividend amounting to Rs. Nil (31 March 2018:Rs. 8.48 crore) has not been recognised since this proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

10 Amount in the financial statements are presented in Rs. crore (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately. Figures of previous year has been regrouped/reclassified wherever necessary.

11 a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries for sale of power and lignite is generally done on quarterly basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ‘External Confirmations’, were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact. Loan outstanding balances of employees are also reconciled periodically.

b) In the opinion of the management, the value of assets, other than property, plant and equipment and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

12 Recent accounting pronouncements Standards issued but not yet effective:

a) IndAS116,Leases

The Company is required to adopt Ind AS 116, Leases from 1st April 2019. Ind AS 116 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard - i.e. lessors continue to classify leases as finance or operating leases. It replaces existing leases guidance, Ind AS 17, Leases. The Company has completed an initial assessment of the potential impact on its financial statements but has not yet completed its detailed assessment. The quantitative impact of adoption of Ind AS 116on the financial statements in the period of initial application is not reasonably estimable as at present.

Transition

The Company plans to apply Ind AS 116 initially on 1st April 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting Ind AS 116 will be recognized as an adjustment to the opening balance of retained earnings at 1st April 2019, with no restatement of comparative information.

The Company plans to apply the practical expedient to grandfather the definition of a lease on transition. This means that it will apply Ind AS 116to all contracts entered into before 1st April 2019and identified as leases in accordance with Ind AS 17.

b) IndAS21 ‘The effects of changes in foreign exchange rates’

The amendment to Ind AS 21 applies to entities for foreign currency consideration paid or received in advance. The amendment requires such advance paid or deferred liability to be restated using the spot rate as of the date of such a transaction.

The Company is evaluating the requirements of the amendment after which the effect on the financial statements will be evaluated.

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Mar 31, 2018

* In respect of land acquired by the company during the periods 1956 to 1977 and 1997 to 2001, ownership is subject to certain restrictions imposed through the assignment deeds and through the Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 respectively.

Includes leasehold buildings of value Rs, 2.10 crore for which lease agreement is yet to be executed.

** Includes assets belonging to Ministry of Coal obtained under Coal Science &Technology Projects and Machinery spares. This also includes assets under LEP, for which residual value considered for restating in books for further depreciation under the LEP period.

# Includes Assets non commissioned amounting to Rs, 0.34 crore (Previous year Rs, 71.76 crore).

@ Represents provisions for amortization which is based on initial estimated life of linked power plant.

There is no impairment loss identified for the assets.

Based on internal assessment and in consultation with Indian Bureau of Mines (Sub-ordinate Office under the control of Ministry of Mines) and Ministry of Corporate Affairs approved in Aug, 2007 the useful lives of Specialized Mining Equipment commissioned on or after 31-08-2007 such as Bucket Wheel Excavator, Mobile Transfer Conveyor, Spreader, Conveyors deployed in mines were fixed as 15 years which are different from useful life as prescribed under Part C of Schedule II of the Companies Act, 2013.

iv) Entities under the control of the same Government:

The Company is a Public Sector Undertaking (PSU) wherein majority of shares are held by the President of India. Pursuant to Paragraph 25 & 26 of IndAS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. The Company has applied the exemption available under Paragraph 25 & 26 of IndAS 24 for government related entities and have made disclosures accordingly in the financial statements.

d) Terms and conditions of transactions with the related parties

1. Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

2. The Company is seconding its personnel to Subsidiary Companies as per the terms and conditions agreed between the Companies. The cost incurred by the group towards superannuation and employee benefits are recovered from these companies.

3. Outstanding balances of Subsidiaries and Associate at the year-end other than Loans are unsecured and interest free.

4. For the year ended March 31, 2018 and March 31, 2017 the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the marketing which the related party operates.

5. Consultancy/Management services provided by the Company to Subsidiaries and Associates are generally on nomination basis at the terms, conditions and principles applicable for consultancy/management services provided to other parties.

42 Employee benefits

(i) Defined benefit plans:

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (''Fund'') that is legally separated from the Group. The board of the fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies ( e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund''s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

B. Movement in net defined benefit (Asset)/Liabilities Gratuity & Leave Benefit

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to gratuity at 15 days salary (15/26 * last drawn basic salary plus dearness allowance) for each completed year of service subject to a maximum ofRs, 0.10 crore on superannuation, resignation, termination, disablement or on death. The maximum ceiling ofRs, 0.10 crore has been now enhanced to Rs, 0.20 crore by the Report of the 3^rd Pay Revision Committee appointed by the GOI. The Company has carried out acturial valuation of gratuity benefitconsidering the enhanced ceiling.

The Company provide for earned leave benefit and half pay leave to the employees of the company, which accrue annually at 30 days and 20 days respectively. Earned leave is encashable while in service. Half pay leaves (HPL) are encashable only on separation upto maximum of 240 days. However total number of leave that can be encashed on superannuation shall be restricted to 300 days and no cummutation of half pay leave shall be permissible. The liability for the same is recognized on the basis of actuarial valuation.

Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Futher, contribution to employee pension scheme is paid to the appropriate authorities.

Based on the actuarial valuation obtained in this respect, the following table sets outthe same of the provident fund plan as at balance sheet date:

Pursuant to para 57 of IndAS 19, accounting by an entity for defined benefit plans, inter-alia, involves determining the amount of the net defined benefit liability (asset) which shall be adjusted for any effect of limiting a net defined benefit asset to the asset ceiling prescribed in para 64. As per Para 64ofInd AS 19, in case of surplus in a defined benefit plan, an entity shall measure the net defined benefit asset at the lower of actual surplus or the value of the assets ceiling determined using the discount rate. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Further, Para 65 provides that a net defined benefit asset may arise where a defined benefit plan has been overfunded or where actuarial gains have arisen.

As per the provisions of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus ofRs, 23.03 crore (Previous yearRs, 69.09 crore) determined through actuarial valuation. Accordingly, Company has not recognized the surplus as an asset, and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the Company.

C. Defined Contribution Plan

Post Retirement Medical Assistance (PRMA)

The Company has a Post Retirement Medical Assistance scheme, under which annual cash assistance is provided to retired employees and their spouses for both inpatient and outpatient medical treatment availed in subject to Company''s grade wise policy applicable for employees. The Company contributes a fixed contribution of'' 15,000 per employee per annum towards PRMA and creates a provision for the same.

A trust has been constituted and is managed by the Company for its employees, for the sole purpose of providing post retirement medical assistance facility to them.

43 Financial Instruments - Fair value disclosures

Fairvalue of financial assets and financial liabilities that are not measured at fairvalue (but fairvalue disclosures required).

The management considers that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values. Hence leveling disclosures as per IndAS 113 is not applicable.

(ii) Recognition and measurement

As per the CERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost till declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past period in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Ind AS 114. When the Company prefers appeal in APTEL / Other authorities the impact of the same along with period cost if any required is considered under the Regulatory Deferral Account. The Lignite price difference between CERC approved rate, other recoverable / payable in future through Tariff are also considered under Regulatory Deferral Account.

In view of the above, exchange differences arising from settlement/translation of monetary item denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ''Regulatory deferral account debit/credit balance'' by credit/debit to ''Movements in Regulatory deferral account balances'' during construction period and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

(iii) Risks associated with future recovery/reversal of regulatory deferral account balances

(i) demand risk -Availability of alternative and cheaper sources of power may result in reduced demand.

(ii) regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in derecognition of regulatory deferral asset/liability.

(iii) other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. Irrespective disputed orders, the Company has recognized Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

(iv) Reconciliation of the carrying amounts

The regulated assets/liability recognized in the books to be recovered from or payable to beneficiaries in future periods are as follows:

a) Regulatory deferral account debit balance

48 Financial Instruments Capital Management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

"Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC- Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.25

The capital structure of the Company consists of net debt (borrowings as detailed in notes 15(a), 18 (c) offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

49 Financial risk management

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk) credit risk and liquidity risk.

The Company''s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables.

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues. The provision matrix takes into account available external and internal credit risk factors such as credit defaults, credit ratings from international credit rating agencies and the Company''s historical experience for customers.

Since the Company has its customers within different states of India, geographically there is no concentration of credit risk. However, management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31,2018, the CompanyRs,s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd. (TANGEDCO) accounted for Rs, 2428.09 crore of the trade receivables carrying amount (Rs, 2199.10 crore of the trade receivables as at March 31,2017).

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employees through settlement of dues against full &final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks. The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognized during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using lifetime expected credit losses

The Company has customers (State government utilities) with strong capacity to meet the obligations and therefore the risk of default are not material. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behavior and extensive analysis of customer credit risk. Hence, no impairment loss was considered necessary during the reporting period in respect of trade receivables.

(ii) Ageing analysis of trade receivables

The Company''s debtors include debtors in respect of TPS and Mines and also other debtors. As a policy, the Company does an ageing analysis of thermal debtors, the details of which is stated below. The Company does not carry out an ageing analysis of debtors pertaining to Mines and other debtors since the transactions are generally carried out against advances received from the customers.

Liquidity riskis the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.

The Company''s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices which will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing the return.

Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Up to March 31,2016 the Company till the date of commercial operation capitalize the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from benefiaries as a part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk

The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates. However, the actual interest incurred on normative loan is recoverable from beneficiary as fixed change as per CERC Regulations.

Cash flow sensitivity analysis for variable-rate instruments

A change of 50 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the previous year.

Fair value sensitivity analysis for fixed-rate instruments

The company''s fixed rate instruments are carried at amortized cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Equity price risk

Equity price risk is related to the change in market reference price of the investments in quoted equity securities. In the case of the Company, none of the investments in equity shares are quoted in the market and does not expose the Company to equity price risks.

50 a) Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debit to the extent practicable. Balances due in respect of advances and amount due to creditors are subject to confirmation. However, Power dues and lignite sales dues are reconciled with debtors periodically.

b) Performance Achieve Trade (PAT)- TPS-I, exemption from PAT liability was granted up to 31^st March, 2017. The Company has requested for extension of time to Ministry of Coal (MOC) and Ministry of Power (MOP), pending such extension the company has provided penalty as applicable under Sec-26 of Energy Conservation Act, 2001.

52 Disclosure as per Ind AS 108 ''Operating segments’

A. Basis for segmentation

The Company has the following two strategic divisions, which are its reportable segments. These divisions are managed separately because they require different technology and operational methodologies. The following summary describes the operations of each reportable segment.

Reportable segments Product/ Service from which reportable segment derives revenues

Lignite mining Mining of lignite

Power generation Generation of power and sale to power utilities across the country

The Chairman and Managing Director monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the consolidated financial statements.

57 Amount in the financial statements are presented in Rs, crore (up to two decimals) except for per share data and as other-wise stated. Certain amounts which do not appear due to rounding off are disclosed separately. Figures of the corresponding Previous period have been regrouped wherever necessary.

58 a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries and other customers is generally done on quarterly basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ''External Confirmations'', were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than property, plant and equipment and non-current investments, on realization in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

59 Recent accounting pronouncements Standards issued but not yet effective:

In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying the standard IndAS 115 ''Revenue from contracts with customers'' and amendments to IndAS 21 ''The effects of changes in foreign exchange rates''. The notified standard and the amendment are applicable to the Company from 1 April 2018.

IndAS115''Revenue from contracts with customers

IndAS 115, establishes a comprehensive framework for determining whether, how much and when revenue should be recognized. It replaces existing revenue recognition guidance, including IndAS 18 Revenue, IndAS 11 Construction Contracts and Guidance Note on Accounting for Real Estate Transactions. Ind AS 115 is effective for annual periods beginning on or after 1 April 2018 and will be applied accordingly. The Company is currently evaluating the potential impact of the adoption of Ind AS 115 on accounting policies followed in its financial statements. The quantitative impact of adoption of Ind AS 115 on the financial statements in the period of initial application will be done on completion of evaluation of the potential impact.

IndAS 21 ''The effects of changes in foreign exchange rates''

The amendment to IndAS 21 applies to entities for foreign currency consideration paid or received in advance. The amendment requires such advance paid or deferred liability to be restated using the spot rate as of the date of such a transaction.

The Company is evaluating the requirements of the amendment after which the effect on the financial statements will be evaluated.

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Mar 31, 2017

Reporting entity

NLC India Limited (formerly “Neyveli Lignite Corporation Limited”) (“NLC or “the Company”), is a Government Company registered under the erstwhile Companies Act, 1956 with its registered office located at First Floor, No. 8, Mayor Sathyamurthy Road, FSD, Egmore Complex of FCI, Chetpet, Chennai - 600031 and is listed with the Bombay Stock Exchange Ltd and the national Stock Exchange of India Ltd. NLC is engaged in the business of mining of lignite and generation of power by using lignite as well as Renewable Energy Sources.

Basis of preparation

a. Statement of compliance

The financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS’) notified under the Companies (Indian Accounting Standards) Rules, 2015, the relevant provisions of the Companies Act, 2013 and the Electricity Act, 2003.

The financial statements have been prepared on a historical cost basis, except otherwise stated.

The Company has adopted the Ind AS in preparation of the financial statements from the financial year 2016-17 (as notified by the Ministry of Corporate Affairs vide Notification No. G.S.R. 111(E) dated 16^th February 2015 as amended from time to time). Accordingly the comparative financial information for the year ended 31^st March 2016 are reinstated in accordance with Ind AS.

As these are the Company’s first financial statements prepared in accordance with Ind AS, Ind AS 101, First-time Adoption of Indian Accounting Standards has been applied. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Group is provided in Note 34.

The financial statements are presented in Indian Rupees (‘INR’) which is also the Company’s functional currency. All amounts are rounded to the nearest crore, except otherwise indicated.

b. Use of Estimates and Judgements

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes, requiring a material adjustment in the carrying amounts of assets or liabilities in the future periods. Difference between the actual results and estimates are recognised in the financial year in which the results are known or materialised.

1 Financial Liabilities

a. Neyveli Bonds Rs.600 crore,8.83%,10 Years, Secured, Redeemable, Taxable, Non-convertible Bonds in the nature as Debentures of Rs.10 lakh each secured by way of pari-passu charge on the present and future fixed assets of Mine-II Expansion Project, TS-II Expansion Project, Barsingsar Mine and Thermal Power Station and exclusive charge on an immovable property. Redeemable on 23-01-2019.(without Put or Call Option).

b. Rupee Term Loan outstanding amounting to Rs.1400 crore from SBI (Rs.467 crore), HDFC Bank (Rs.466.50 crore) and ICICI Bank (Rs.466.50 crore).The loan shall be completely repaid by August 2019. This loan is secured by

i. First pari-passu charge on the borrower’s immovable assets of Mine-II Expansion, TS-II Expansion, Barsingsar Mines and TS.

ii. First pari-passu charge by way of hypothecation on the Borrower’s movable assets both present and future pertaining to Mine-II Expansion, TS-II Expansion, Barsingsar Mines and TS.

c. RTL of Rs.3000 crore from M/s. Power Finance Corporation for NNTPS project secured by pari-passu charge on project fixed asset, repayable in 20 equal bi-annual instalments commencing after moratorium period of 6 months from the date of achievement of COD of Unit-II. The Scheduled Commercial Operation Date (SCOD) is 31.12.2018. Accordingly, the repayment of loan shall start from 30.06.2019.

d. To meet the fund requirement of Neyveli Solar Power Project (130 MW), borrowing arrangement has been done with HDFC Bank for an amount of Rs.481 crore. Full amount was drawn on 29.03.2017 and the same has been grouped under Term Loans from Banks.

e. Bi-annual equal repayment(€ 0.44 Million) of Foreign Currency loan-I from KfW Germany, commenced from 30-12-2001, ending on 30-06-2036.

f. Bi-annual equal repayment(€ 2.80 Million) of Foreign Currency loan-II from KfW Germany, commenced from 30-06-2002, ending on 30-06-2037.

2 a.) Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debit to the extent practicable.

Balances due in respect of advances and amount due to creditors are subject to confirmation. However, Power dues and lignite sales dues are reconciled with debtors periodically.

3 First-time Adoption of Ind AS

Immediately before adopting Ind AS, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles in India (‘Indian GAAP’), including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Reconciliation and description of the effect of the transition from Indian GAAP to Ind AS on equity is provided below.

These financial statements, for the year ended March 31, 2017, are the first set of financial statements the Company has prepared in accordance with Ind AS. These financial statements being the first Ind AS financial statements, are covered by Ind AS 101, First-time Adoption of Indian Accounting Standards (‘Ind AS 101’). The Company has applied Ind AS 101 in making the transition to Ind AS, with April 1, 2015 as the date of transition to Ind AS.

Ind AS 101 requires that Ind AS effective for the first Ind AS financial statements be applied consistently and retrospectively for all fiscal years presented. However, this standard provides some mandatory and optional exemptions to this general requirement in specific cases. Accordingly, the Company has applied certain mandatory and optional exemptions from full retrospective application of Ind AS. The exceptions and exemptions availed by the under Ind AS 101 are discussed below.

Property, Plant and Equipment - Deemed cost

Para D7AA of Ind AS 101 states ‘Where there is no change in its functional currency on the date of transition to Ind ASs, a first-time adopter to Ind ASs may elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments in accordance with paragraphD21 and D21A, of this Ind AS.

In accordance with the above mentioned requirement, the Company has availed the exemption and the carrying values of Property, Plant and Equipment under the previous GAAP have been taken as the deemed cost on transition to Ind AS.

Embedded Lease

Para D9 of Ind AS 101 states ‘A first-time adopter may apply paragraphs 6-9 of the Appendix C of Ind AS 17 Determining whether an Arrangement at the date of transition to Ind ASs contains a lease on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material.’

The Company has availed above exemption for TPS-I where in the entire power generated through the station after consumption is supplied to TANGEDCO is not an embedded lease arrangement as it is considered immaterial.

Long Term Foreign Currency Monetary Items

Para D13AA of Ind AS 101 states ‘A first-time adopter may continue the policy adopted for accounting forex change differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the previous GAAP’

The Company has applied the above exemption on transition to Ind AS in respect of asset acquired before the date of transition to Ind AS.

Use of deemed cost for investments in subsidiaries, joint ventures and associates

Para 31 of Ind AS 101 states’ Similarly, if an entity uses a deemed cost in its opening Ind AS Balance Sheet for an investment in a subsidiary, joint venture or associate in its separate financial statements (see paragraph D15), the entity’s first Ind AS separate financial statements shall disclose: (a) the aggregate deemed cost of those investments for which deemed cost is their previous GAAP carrying amount; (b) the aggregate deemed cost of those investments for which deemed cost is fair value; and (c) the aggregate adjustment to the carrying amounts reported under previous GAAP.’

The Company has elected to value its investments in subsidiaries and associate at previous GAAP carrying values on transition to Ind AS.

Borrowings

Ind AS 101 permits that if it is impracticable for an entity to apply retrospectively the effective interest method in Ind AS 109 ‘Financial Instruments’, the fair value of the financial liability at the date of transition to Ind ASs shall be the new amortised cost of that financial liability at the date of transition to Ind ASs.

The borrowings outstanding as at the transition date, consists of loans drawn more than fifteen years back, some with multiple tranches in different financial years with varying interest rates. In some cases, the rate of interest on the loans was both fixed and floating in nature and withdrawal of the loans have been made in multiple installments with each drawl to be treated as a separate transaction for the purpose of computing the amortised cost. In case of some loans the drawl period stretches beyond 3-4 years and in case of loans with floating interest rate, the rates have been reset at frequent intervals and reset rates are also applicable for previous drawls from that date onwards. Implementing the requirement of amortised cost retrospectively is impracticable and also the amount is expected to be immaterial and hence the Company has amortised the transaction costs as an adjustment of interest expense of the term of the related loan w.e.f. the transition date to Ind AS i.e. 1^st April 2015.

Regulatory Deferral Accounts

Para D8B of Ind AS 101 states that some entities hold items of property, plant and equipment or intangible asset that are used, in operations subject to rate regulation. The carrying amount of such items might include amounts that were are determined under previous GAAP but do not qualify for capitalisation in accordance with Ind AS. If this is the case a first time adopter may elect to use the previous GAAP carrying amount of such an item at the date of transition to Ind AS as deemed cost.

Classification and measurement of financial assets

The Company has also elected the option under Ind AS 101 by not applying the requirement of Ind AS 109 in case of employee loans which requires that these shall be recognised initially at fair value and subsequently at amortized cost. As per the exemption, if an entity finds impracticable to apply retrospectively effective interest method, the fair value of the financial asset at the date of transition to Ind ASs shall be the new amortised cost of that financial asset at the date of transition to Ind AS.

(a) Proposed Dividend

Under previous GAAP, the Company had recognised for proposed dividends relating to year ended 31^st March 2015 and 31^st March 2016 in that respective year, though the approval of that dividend took place after the reporting date. Under Ind AS, proposed dividends do not meet the definition of liability until they have been approved by shareholders at the Annual General Meeting. Therefore, the Group has not recognised a liability for dividend that has been proposed but will not be approved until after the reporting date. The effect of the adjustment increases the retained earnings by Rs.202.88 crore with corresponding decrease in provisions as at 1^st April 2015 and Rs.242.30 crore as at 31^st March 2016.

(b) Employee benefits

Both under previous GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised in other comprehensive income.

As a result, profit for the year ended 31^st March 2016 increased by Rs.12.62 crore (net of tax) with corresponding decrease in other comprehensive income during the year.

(c) Other comprehensive income

Under previous GAAP, the Company has not presented other comprehensive income (OCI) separately. Items that have been reclassified from statement of profit and loss to other comprehensive income consists of remeasurement of defined benefit plans. Hence, previous GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(d) Other equity

Retained earnings as at 1^st April 2015 has been adjusted consequent to the above Ind AS transition adjustments. Refer ‘Reconciliation of total equity as at 31^st March 2016 and 1^st April 2015 given above for details.

d) Terms and conditions of transactions with the related parties

(1) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(2) The Company is seconding its personnel to Subsidiary Companies as per the terms and conditions agreed between the Companies. The cost incurred by the group towards superannuation and employee benefits are recovered from these Companies.

(3) Outstanding balances (other than loan) of Subsidiaries and Associate at the year-end, are unsecured and interest free.

(4) For the year ended 31^st March 2017 and 31^st March 2016, the Company has not recorded any impairment of receivables relating to amounts payable by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

4 Employee benefits

(i) Defined benefit plans

The defined benefit plan is administered by the LIC which is named as LIC Group Gratuity Fund (‘Fund’) that is legally separated from the Group. The board of the fund is required by law to act in the best interests of the plan participants and is responsible for setting certain policies (e.g. investment, contribution and indexation policies) of the fund. Their defined benefit plans expose the group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market (investment) risk.

A. Funding

Defined benefit plan is fully funded by the group. The funding requirements are based on the fund’s actuarial measurement framework set out in the funding policies of the plan. The funding of the plan is based on a separate actuarial valuation for funding purpose.

The Company has determined that in accordance with the terms and conditions of the defined benefit plan, and in accordance with statutory requirements, the present value of refunds or reductions in future contributions is not lower than the balance of the total fair value of the plan asset less the total present value of obligations.

Provident fund

The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Further, contribution to employee pension scheme is paid to the appropriate authorities.

Pursuant to paragraph 57 of Ind AS 19, accounting by an entity for defined benefit plans, inter-alia, involves determining the amount of the net defined benefit liability (asset) which shall be adjusted for any effect of limiting a net defined benefit asset to the asset ceiling prescribed in paragraph 64. As per Para 64 of Ind AS 19, in case of surplus in a defined benefit plan, an entity shall measure the net defined benefit asset at the lower of actual surplus or the value of the assets ceiling determined using the discount rate. The asset ceiling is the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. Further, Paragraph 65 provides that a net defined benefit asset may arise where a defined benefit plan has been overfunded or where actuarial gains have arisen.

As per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act,1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of Rs.69.09 crore (Previous year Rs.107.79 crore) determined through actuarial valuation. Accordingly, Company has not recognised the surplus as an asset, and the actuarial gains in Other Comprehensive Income, as these pertain to the Provident Fund Trust and not to the Company.

5 Financial Instruments - Fair value disclosures

Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures required)

The management considers that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values. Hence levelling disclosure as per Ind AS 113 is not applicable.

6 Disclosure as per Ind AS 23 on ‘Borrowing Costs’

Borrowing costs capitalised during the year is Rs.151.79 crore (previous year Rs.82.65 crore).

7 Lignite Handling System

As per the recommendation of the committee formed for the undertaking a review for expenditure incurred towards operation and maintaining the Lignite Handling System (LHS), the Company has changed its accounting policy for the current financial year for treating the said expenditure (excluding interest and depreciation) as a part of the Mine operations as against the earlier practice wherein the said expenditure was considered as a cost attributable to Thermal Stations.

8 Disclosure as per Ind AS 17 ‘Leases’

i) Leases as lessee a) Operating lease

Expenses on operating leases of the premises for offices are included under ‘Rent’ in Note 28 - Other Expenses’ includes Rs.1.40 crore (previous year Rs.0.90 crore ). Such leases entered into by the Company are non cancellable.

9 Disclosure as per Ind AS 114, ‘Regulatory Deferral Accounts’

(i) Nature of rate regulated activities

The Company is engaged in the business of Lignite mining and Power generation which is a rate regulated activity.

The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus a fair return.

(ii) Regulatory Rate Setting process

Central Electricity Regulatory Commission (CERC) approves the tariff of electricity as petitioned by considering the energy charges based on Lignite transfer price as per the guidelines of Ministry of Coal issued from time to time and capacity charges as per norms and parameters of CERC, for the relevant tariff period in accordance with CERC Regulations applicable from time to time.

The petitioned tariff is approved with or without modifications by the CERC in accordance with the relevant Regulations through a Provisional Tariff Order. At the end of each tariff period, the CERC determines the final tariff by Truing Up of actual amounts/permissible amounts and the estimated cost determined as per the Provisional tariff Order. Upon Truing up the net amounts payable/receivable from Electricity Distribution Companies is settled along with the applicable interest.

Upto FY 2015-16, the Company applied the principles of the Guidance Note on Accounting for Rate Regulated Activities issued by the Institute of Chartered Accountants of India (ICAI) with effect from 1^st April 2015 (‘previous GAAP’). The Company recognised the exchange rate difference (on account of restatement of foreign currency borrowing) recoverable from or payable to the beneficiaries in subsequent years as per CERC Tariff regulations and MoC guidelines on Lignite Transfer price as Deferred foreign currency fluctuation asset/ liability.

(iii) Adoption of Ind AS 114

Ind AS 114, Regulatory Deferral Accounts permits an eligible entity to continue previous GAAP accounting policy for its regulatory deferral account balances.In addition to the above, the company had identified deferred foreign currency fluctuation balances as regulatory deferral balance in accordance with the previous GAAP and continue to recognise the same under Ind AS.

Ind AS 114 also requires an entity to identify and recognise all regulatory deferral account balances in respect of all rate regulated activities.

(iv) Recognition and Measurement

Pursuant to election of Ind AS 114, the company has given effect to all the CERC orders in its entirety irrespective of such orders being contested by the company in APTEL or any other higher Appellate forum. In respect of transactions and events prior to the date of transition to Ind AS, the adjustments are made in the Retained Earnings. In respect of transaction and events subsequent to the date of transition to Ind AS, the resultant adjustments are made in the Statement of Profit and Loss of the respective financial year.

(v) Risks associated with future recovery/reversal of regulatory deferral account balances:

(i) demand risk -Availability of alternative and cheaper sources of power may result in reduced demand.

(ii) regulatory risk - the regulatory deferral balances may undergo a change due to the rate setting process or truing up at the end of the tariff period resulting in de-recognition of regulatory deferral asset/liability.

(iii) other risks - The Foreign Exchange Variation on actual repayment of loans are eligible for recovery from the customers and hence the risk is mitigated. In respect of disputed orders, the company has recognised Regulatory Deferral Liability which may require economic outflow of resources upon passing of orders by the appellate authorities.

The regulated assets/liability recognised in the books to be recovered from or payable to beneficiaries in future periods are as follows:

a) Regulatory deferral account debit balance

b) Regulatory deferral account credit balance

c) Total amount recognised in the Statement of Profit & Loss during the year

The Company expects to recover the carrying amount of regulatory deferral account debit balance upon truing up at the end of the relevant tariff period and expect to settle or otherwise upon passing of orders by appellate authorities

10 Financial Instruments Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.

The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position.

Under the terms of major borrowing facilities, the Company is required to comply with the following financial covenants:

Loan from PFC - Debt service coverage ratio not less than 1.50 Neyveli Bond - Minimum asset coverage ratio of 1.25

The capital structure of the Company consists of net debt (borrowings as detailed in notes 13, 16 offset by cash and bank balances) and total equity of the Company. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

11 Financial risk management

The treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations through internal risk reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company’s principal financial liabilities comprise loans and borrowings in domestic and foreign currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade and other receivables.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

The Company primarily sells electricity to customers comprising, mainly state electrical utilities owned by State Governments and Union Territory. The risk of default in case of power supplied to these state owned companies is considered to be insignificant.The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenues.The provision matrix takes into account available external and internal credit risk factors such as credit defaults, credit ratings from international credit rating agencies and the Company’s historical experience for customers.

Management considers the factors that may influence the credit risk of its customer base, including the default risk of the industry.

At March 31, 2017, the Company’s most significant customer, Tamil Nadu Generation & Distribution Co. Ltd (TANGEDCO) accounted for Rs.2,199.10 crore of the trade receivables carrying amount (Rs.850.93 crore of the trade receivables as at March 31, 2016 and Rs.623.68 crore of the trade receivables as at April 1, 2015).

Loans and advances

The Company has given loans & advances to its employees. The Company manages its credit risk in respect of Loan and advances to employee through settlement of dues against full & final payment to employees.

Cash and cash equivalents and deposits with banks

The Company has banking operations with highly rated banks including scheduled banks which are owned by Government of India and Private Sector Banks.The risk of default with government controlled entities is considered to be insignificant.

(i) Provision for expected credit losses

(a) Financial assets for which loss allowance is measured using 12 month expected credit losses

The Company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence, no impairment has been recognised during the reporting periods in respect of such assets.

(b) Financial assets for which loss allowance is measured using life time expected credit losses

The Company has customers (State government utilities) with strong capacity to meet the obligations and therefore the risk of default are not material. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. Hence, no impairment loss was considered necessary during the reporting period in respect of trade receivables.

(ii) Ageing analysis of trade receivables

The Company’s debtors include debtors in respect of TPS and Mines and also other debtors. As a policy, the Company does an ageing analysis of thermal debtors, the details of which is stated below. The Company does not carry out an ageing analysis of debtors pertaining to Mines and other debtors since the transactions are generally carried out against advances received from the customers.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company manages liquidity risk through cash credit limits and undrawn borrowing facilities by continuously monitoring forecast and actual cash flows.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Upto March 31, 2016 the Company till the date of commercial operation capitalise the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated asset.Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items.The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

Sensitivity analysis

A strengthening/weakening of the Indian Rupee, as indicated below, against the Euro as at 31^st March would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for previous year, except that the reasonably possible foreign exchange rate variances were different, as indicated below.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

Interest rate risk

The Company is exposed to interest rate risk arising mainly from long term borrowings with floating interest rates. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowings will fluctuate with changes in interest rates. However, the actual interest incurred on normative loan is recoverable from beneficiary as fixed charge as per CERC Regulations.

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments is as follows:

Cash flow sensitivity analysis for variable-rate instruments

A change of 50 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis for the previous year.

Fair value sensitivity analysis for fixed-rate instruments

The Company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

12 Disclosure as per Ind AS 108 ‘Operating segments’

A. Basis for segmentation

The Company has the following two strategic divisions, which are its reportable segments. These divisions are managed separately because they require different technology and operational methodologies. The following summary describes the operations of each reportable segment.

The Chairman and Managing Director monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the consolidated financial statements.

B. Information about major customers

Revenue from one major customer under ‘generation of energy’ segment is Rs.4,348.75 crore (31^st March 2016: Rs.2,756.00 crore) which is more than 10% of the Company’s total revenues.

(a) Dividend distribution tax on proposed dividend not recognised at the end of the reporting period

Since year end, the directors have recommended the payment of final dividend amounting to Rs.201.33 crore (31^st March 2016). The dividend distribution tax on this proposed dividend amounting to Rs.40.97 crore (31^st March 2016) has not been recognised since this proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

13 Capital Employed

Recent accounting pronouncements

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’. The amendments are applicable to the Group from 1^st April, 2017.

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Company is evaluating the requirements of the amendment and the effect on its financial statements.

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Mar 31, 2015

1 Neyveli Bonds 6000, 8.83% 10 Years, Secured, Redeemable, Taxable, Non-convertible Bonds in the nature as Debentures of t 10 lakh each secured by way of pari-passu charge on the present and future fixed assets of Mine-II Expansion Project, TS-II Expansion Project, Barsingsar Mine and Thermal Power Station and exclusive charge on an immovable property. Redeemable on 23-01-2019 (without Put or Call Option).

2 i. The Rupee Term Loan of t 2500 crore from Canara Bank consortium is secured by pari-passu charge on project fixed assets financed and repayable in Twenty equal bi-annual instalments commenced from 23-02-2010, ending on August 2019.

ii. The Rupee Term Loan of Rs.1250 crore from Canara Bank consortium is secured by pari-passu charge on project fixed assets financed and repayable in twenty equal bi-annual instalments commenced from 23-02-2010, ending on August 2019.

3 During the year Company availed t 500 crore (upto 31-03-2015) out of the Rupee term loan of t 3000 crore from M/s. Power Finance Corporation Ltd is secured by pari-passu charge on project fixed assets of Neyveli New Thermal Power Station (NNTPS) and repayable in 20 equal bi-annual instalments commencing after moratorium period of 6 months from the date of achievement of COD of Unit II.

4 Bi-annual equal repayment (0.44 Million euro) of Foreign Currency loan - I from KfW Germany, commenced from 30-12-2001 ending on 30-06-2036.

5 Bi-annual equal repayment (2.80 Million euro) of Foreign Currency loan -II from KfW Germany, commenced from 30-06-2002, ending on 30-06-2037.

6 Pursuant to GOI guidelines on Mine closure, Mine closure cost was approved by Ministry of Coal at a rate of t 6 lakh per hectare for all the open cast Mine. The amount is being compounded annually @ 5% and deposited in Escrow account in the name of Coal Controller Escrow account NLC Ltd. Mine..., ( renewed with interest less tax) as stipulated by Coal Controller.

7 Thermal Power Station-II Expansion consists of two units of 250 MW each based on first of its kind eco friendly CFBC technology in India with the scheduled completion in February 2009 for Unit-I and June 2009 for Unit-II which were revised to June 2012 for Unit-I and March 2013 for Unit-II.

Due to technical issues, sustained operations could not be maintained to declare Commercial Operation Date (COD).

The issue was also subjected to a technical audit in July-August 2014 to assess the nature of delays in the project. The technical audit report proposed extension of time to provide further opportunity to the contractor to complete the project, given the technological constraints.

Subsequently, Unit-II has been commissioned on 22.04.2015 and Unit-I is expected to be commissioned shortly.

The additional interest and overheads for the period of delay are being capitalized along with the cost of the project in line with industry practice and policies of the company. Based on the past experience, management is reasonably confident to recover the project cost through tariff.

8 Inventory valuation - Inventories are valued at the lower of cost and net realisable value.

i. Lignite - At absorption cost excluding share of common charges and social overhead.

ii. Stores & Spares procured - At weighted average acquisition cost.

iii. Fly ash bricks - At absorption cost.

iv. Waste products, used belts reconditioned, Stores & Spares discarded for disposal, medicines and canteen stores are taken at NIL value.

9 Stocks of stores, spares,raw materials and finished goods are under hypothecation for cash credit facilities arranged with State Bank of India.

10 Contingencies and Commitments As at As at 31.03.2015 31.03.2014 a. Contingent Liability exists in respect of:

i. Guarantees issued by Company 4.45 4.45

ii. Differential amount to beneficiaries 55.61 55.61

on account of adopting normal Corporate

Tax rate instead of Minimum Alternative Tax rate (MAT) for Return on Equity in power tariff for the year 2012-13, as the Company is of the opinion that MAT rate is not applicable. Petition with the CERC filed and awaiting orders

b. Claims against the Corporation not acknowledged as debts:

i. From Employees /Others NQ NQ

ii. Additional amount payable for the land NQ NQ acquired after 1-1-2014 towards compensation payable under the Right to Fair Compensation and Transparency in land acquisition, Rehabilitation and Resettlement of Act 2013

iii. From Suppliers / Contractors/Customers 1,816.81 1,798.43

iv. Disputed amount of Income Tax/ST/Other 1,040.79 669.57 Taxes v. Statutory Authorities 1,162.25 869.46

a. Includes tax payable under Tamilnadu Tax on Consumption or sale of Electricity Act.2003 of t 856.63 crore (previous year t 722.12 crore) and t 138.71 crore (previous year t 128.99 crore) towards sale of power to distribution Companies and Captive consumption in Mines. However the same is recoverable from the beneficiaries after getting approval from CERC.

b. Includes Rs. 147.56 crore estimated liability under the scheme of Perform, Achieve and Trade (PAT) mechanism of The Energy Conservation Act, 2001 in respect of Thermal Power Station-I for exceeding the energy efficiency targets. However application for exemption of TPS-I from PAT mechanism has been made to the appropriate authority.

c. i. Estimated value of contracts remaining 4,473.22 4,322.67 to be executed on capital accounts not provided for

ii. Commitment for the acquisition of lands 8.96 94.56

NQ - In view of the various court cases and litigations and claims disputed by the corporation financial impact as to outflow of resources is not quantifiable at this stage.

11 Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/ debits to the extent practicable. Balances due in respect of advances and amounts due to creditors are subject to confirmation. However, Power dues and Lignite sale dues are reconciled with Debtors periodically.

12 Pending determination of power tariff by Central Electricity Regulatory Commission (CERC), sale of power for the year is accounted by adopting provisional tariff as per CERC Regulation, 2014 and provisional lignite price in energy charges is considered as per the guidelines of Ministry of Coal (MOC) dt, 02.01.2015. Due to this, net sales from the operation is increased to the extent of Rs. 275.78 crore for which invoice will be raised on receipt of CERC Order.

13 CERC Order dt 07-05-2015 was received admitting the inclusion of cost of Mine-II Expansion for the year 2010-11 to 2014-15 in the Pooling price of lignite. While admitting the increase in the lignite price, the CERC has ordered for the refund of incentive earned for the excess generation of power over and above the contemplated PLF in TPS-II and passing of the revenue earned on lignite sales from Mine-II to the beneficiaries. This has not been quantified since the Company has not accepted this order and is in the process of filing the petition for review/appeal before the competent authority.

14 Power sales comprises, t 73.36 crore towards impact of Truing up provided from 2009-14 and t 273.33 crore towards Claim of Wage Revision arrears approved by CERC vide order dt.12.5.2015 and the same are receivable from beneficiaries.

15 Lignite sales includes t 24.20 crore towards impact of truing up from 2009-14 payable to the customers and t 25.59 crore towards increase in pooled price due to wage revision arrears paid which is receivable from the customers.

16 Based on opinion from Expert Advisory Committee (EAC) of ICAI , exchange rate difference (on account of restatement of foreign currency borrowing) recoverable from or payable to the beneficiaries in subsequent years as per CERC Tariff regulations are accounted as Deferred foreign currency fluctuation asset / liability. Accordingly necessary adjustment is made in the current year in depreciation and interest expenditure.

17 Disclosure in accordance with the Accounting Standard-24 towards discontinued operations:

a. Discontinuing operation : Thermal Power Station I

b. Business Segment : Power

c. Date and nature of initial : On 3rd June 2014, it was communicated that TPS-I disclosure of event will be retired on commissioning of Neyveli New Thermal Power Project. d. Date of discontinuation : Likely from Oct.2017 to April 2018

18 New higher capacity of Neyveli New Thermal Power Project of 1000 MW under implementation would be commissioned as replacement to TPS-I.

19 i. Salaries and wages are included in the expenses in order to arrive the operating profit before tax

ii. Total assets includes net current assets.

20 Figures of the previous year have been re-grouped wherever necessary.

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Mar 31, 2014

Sl. Particulars (Rs. in crore) No.

1 Contingencies and Commitments As at 31.03.2014 As at 31.03.2013

a. Contingent Liability exists in respect of:

i. Guarantees issued by Company 4.45 4.13

ii. Differential amount to beneficiaries on account of adopting normal Corporate Tax rate instead of Minimum Alternative Tax rate(MAT) for Return on Equity in power tariff for the year 2012-13, as the Company is of the opinion that MAT rate is not applicable. The matter is to be referred for clarification from CERC. 55.61 0.00

b. Claims against the Corporation not acknowledged as debts:

i. From employees/others NQ NQ

ii. From suppliers/contractors/ customers 1798.43 1640.56

iii. Disputed amount of Income tax/ST/ Other taxes 669.57 458.45

iv. Statutory authorities 869.46 87.49 Rs. Includes Rs.722.12 crore (previous year Rs.Nil) and Rs.128.99 crore (previous year Rs.68.15 crore) tax payable under Tamilnadu Tax on Consumption or sale of Electricity Act.2003 towards sales made to Companies and Captive consumption in Mines. However the same is recoverable from the beneficiaries after getting approval from CERC.

c.i. Estimated value of contracts remaining to be executed on capital accounts not provided for 4322.67 1159.76

ii. Commitment for the acquisition of lands 94.56 59.86

NQ - Not Quantifiable

2 Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/ debits to the extent practicable. Balances due in respect of advances and amounts due to creditors are subject to confirmation. However, Power dues and Lignite sale dues are reconciled with Debtors periodically.

3 Based on opinion from Expert Advisory Committee (EAC) of ICAI, exchange rate difference (on account of restatement of foreign currency borrowing) recoverable from or payable to the beneficiaries in subsequent years as per CERC Tariff regulations are accounted as Deferred foreign currency fluctuation asset/liability. Accordingly necessary adjustment is made in the current year in depreciation and interest expenditure. Credit to the tune of Rs.57.60 crore, being interest for Rs.1.29 crore and depreciation for Rs.56.31 crore is accounted. Out of Rs.57.60 crore, Rs.26.19 crore accounted in current year and Rs.31.41 crore accounted as prior period transaction. This treatment is effected retrospectively from April 1, 2004. Upto 31.03.2014, the Company accounted the above FERV as sales revenue as and when recovered from the beneficiaries.

4 Disclosure of transactions with the related parties as defined in the Accounting Standard-18 are given below:

(i) List of related parties: (a) Key Management Personnel:

Shri B.Surender Mohan - Chairman-cum-Managing Director

Directors

Shri. Sarat Kumar Acharya

Shri. Rakesh Kumar

Shri. S. Rajagopal

Shri. M.S.Ravindranath

Shri. S.Boopathy

Shri. R.Kandasamy

Dr. A.K.Dubey

Shri. C.V. Sankar

Shri. N.S. Palaniappan

(ii) Transactions during the year with related parties:

Remuneration to Directors listed in (a) above: Rs.2.50.crore

5 Disclosure in respect of the interests in Joint Venture as per Accounting Standard-27 is furnished as under:

a. Company Name : M/s. MNH Shakti Limited

b. Registered Office : Anand Vihar, PO Jagruti Vihar, Sambalpur District, Odisha.

6 Figures of the previous year have been re-grouped wherever necessary.

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Mar 31, 2013

1 Advances, Sundry Debtors and Sundry Creditors have been linked with corresponding credits/debits to the extent practicable. Balances due in respect of advances and amounts due to creditors are subject to confirmation.

2 Disclosure of transactions with the related parties as defined in the Accounting Standard-18 are given below:

(i) List of related parties: (a) Key Management Personnel:

Shri B.Surender Mohan - Chairman-cum-Managing Director Shri A.R. Ansari - Chairman-cum-Managing Director

Directors

Ms. Zohra Chatterji

Shri N. Sundaradevan

Shri. N.S. Palaniappan

Shri. Vikram Kapur

Shri. R. Kandasamy

Shri. Sarat Kumar Acharya

Shri. Rakesh Kumar

Shri. S. Rajagopal

Shri. J. Mahilselvan

(ii) Transactions during the year with related parties:

Remuneration to Directors listed in (a) above: Rs.1.71 crore

3 Figures of the previous year have been re-grouped wherever necessary.

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Mar 31, 2012

1 Contingencies and Commitments As at 31.03.2012 As at 31.03.2011

a. Contingent Liability exists in respect of:

(i) Guarantees issued by Company 3.38 0.01

b. Claims against the Corporation not acknowledged as debts:

(i) From employees/others 0.22 0.23

(ii) From suppliers/contractors 1721.04 1545.05

(iii) Statutory authorities 19.34 16.02

(iv) Disputed amount of Income tax 280.97 82.92

c. (i) Estimated value of contracts remaining to be executed on capital accounts not provided for 523.93 600.35

(ii) Commitment for the acquisition of lands 40.89 90.51

d. Value of Securities other than cash not considered in accounts 0.75 1.22

2 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 and amounts due to Creditors are subject to confirmation.

a. Pending determination of power tariff by Central Electricity Regulatory Commission (CERC), tariff rate has been provisionally accounted based on the Ministry of Coal Guidelines on the lignite transfer price for energy charges and other relevant parameters for capacity charges in respect of Barsingsar Thermal Power Station in accordance with the accounting policy.

b. Revision in capacity charges of power tariff and transfer price of lignite (in accordance with Ministry of Coal (MOC) Guidelines) for energy charges of power tariff on account of "truing up" (i.e., adjustments based on actuals as against projected) to the actual of the normative, wherever and whenever applicable will be considered subject to approval by Central Electricity Regulatory Commission (CERC).

c. Mine-ll Expansion expenditure in determining the transfer price of lignite for energy charges in respect of sale of power will be considered on filing of tariff petition with CERC for TPS-II Expansion.

d. Surcharges recoverable from Electricity Boards on the belated settlement of the power bill, amounting to Rs.64.66 crore (previous year Rs.9.66 crore) has not been reckoned as income since there is uncertainty in realisation. The same will be accounted on certainty of realisation.

e. Power tariff has been finalised by CERC for Thermal Power Station-1 & II for the period from 01.04.2009 during the year. Consequently there is a reduction in the power sale which had been provisionally reckoned in the earlier years.

f. Claim for the Income-Tax reimbursement for the period from 2005-06 to 2008-09 has been accepted by the beneficiaries in respect of lignite supplied to them. Hence the same has been reckoned as income during the year.

g. Consequent to receipt of finalised power tariff for Thermal Power Station-1 & II and on acceptance of Income Tax reimbursement claim, income in respect of interest for the difference between the provisional billing and finalised power tariff and on earlier year Income Tax reimbursement claim has been reckoned.

h. Additional provision has been made in respect of employee superannuation benefit for the period from 01.01.2007 to 31.03.2011.

i. During the year ended 31st March, 2011, the Ministry of Coal approved Mine Closure Plans effective from 01.04.2004. Pursuant to this, the provision created in earlier years has been reversed to the extent of Rs. 400.42 crore, power sales has been reduced by Rs.340.72 crore and lignite sales has been reduced by Rs. 6.15 crore being adjustment relating to earlier years and consequent interest payable to the beneficiaries has been reckoned at Rs.52.74 crore. Interest income on receipt of finalised powertariff forTPS-l Expansion amounting toRs.16.21 crore also considered.

3 Disclosure of transactions with the related parties as defined in the Accounting Standard-18 are given below:

(i) List of related parties: (a) Key Management Personnel:

Chairman-cum-Managing Director

Shri A.R. Ansari

Directors

Shri. Alok Perti

Smt. Zohra Chatterji

Shri. Rajeev Ranjan

Shri N.Sundaradevan

Shri.R.K.Mahajan

Shri. B.Surender Mohan

Shri. R.Kandasamy

Shri. K.Sekar

Shri. J.Mahilselvan

Shri. Sarat Kumar Acharya

(ii) Transactions during the year with related parties:

Remuneration to Functional Directors listed in (a) above: Rs.1.92 crore

4 Figures of the previous year have been re-grouped wherever necessary.

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Mar 31, 2011

1. Net pre-commissioning income/expenditure are adjusted directly in the cost of related assets.

2. For the year For the year M' Subject in brief ended ended _ 31s'March 2011 31s'March 2010

1. A. Contingent liability exists in respect of:'

a. Guarantees issued by the Company 0.01 0.01

b. Additional customs duty, on final assessment of goods

released on bond N.Q N.Q

c. Labour Court cases N.Q N.Q

3. As per the accounting policy of the Corporation, surcharge recoverable from Electricity Boards on the belated settlement of the power bill, amounting to Rs.9.66 crore (previous year Rs. 116.83 crore) has not been reckoned as income since there is uncertainty in realisation. The same will be accounted on certainty of realisation.

4. Details relating to consumption of raw materials, stores and spares, licensed and installed capacities, production, etc., are furnished in the Annexure to Schedule-21.

5. i. Principal amount remaining unpaid to any supplier belonging to Micro, Small and Medium Enterprises as at the end of the year Rs. 2.74 crore (previous year Rs. 3.04 crore).

ii. Amount of Interest due and payable for the period of delay in making payment but without adding the interest specified under this Act Rs. 0.12 crore.

6. As per the accounting policy, pending determination of power tariff by Central Electricity Regulatory Commission (CERC), tariff rate has been provisionally accounted based on the Ministry of Coal Guideline on the lignite transfer price for energy charges and other relevant parameters for capacity charges. On account of this an amount of Rs. 847.32 crore (previous year Rs.805.34 crore) has been reckoned as sale of powerfor which the bill will be raised on receipt of CERC order.

7. Revision in capacity charges of power tariff and transfer price of lignite for energy charges of power tariff on account of "truing up" (i.e., adjustments based on actuals as against projected) to the actual of the normative, wherever and whenever applicable and inclusion of Mine-ll expansion expenditure will be considered on receipt of Central Electricity Regulatory Commission's (CERC) Orders in accordance with Ministry of Coal (MOC) guidelines and CERC Regulations.

8. During the year the Ministry of Coal approved Mine Closure Plans effective from 01.04.2004. Pursuant to this, the provision created in earlier years has been reversed to the extent of Rs. 382.45 crore, after netting of current year provision of Rs. 17.97 crore, power sales has been reduced by Rs. 340.72 crore (being adjustment relating to earlier years) and lignite sales has been reduced by Rs.6.15 crore (being adjustment relating to earlier years) and Interest payable to the beneficiaries has been reckoned at Rs.53.38 crore (Rs.0.64 crore pertains to current year).

9. Stocks of stores, spares, raw materials and finished goods are under hypothecation for cash credit facilities arranged with State Bank of India.

10. 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 and amounts due to creditors are subject to confirmation.

11. Profit after tax - Rs. 1298.33 crore Number of shares - 167,77,09,600 Face value of share - Rs. 10/-

12. There is no impairment loss identified other than disposable/dismantled assets for which provision of Rs.1.95 crore has been created as per Accounting Standard-28.

13. Figures of the previous year have been re-grouped wherever necessary.

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Mar 31, 2010

1. Net Pre-commissioning income/expenditure are adjusted directly in the cost of related assets.

Sl. Subject in brief 31 stMarch 2010 31st March 2009

1. i. Contingent liability exists in respect of:

a. Guarantees issued by the Company 0.01 0.01

b. Additional customs duty, on final assessment of goods released on bond N.Q N.Q

c. Labour Court cases N.Q N.Q

ii. Claims against the Corporation not acknowledged as debts:

a. From employees/others 7.23 6.43

b. From suppliers/contractors 1317.59 1207.87

c. From statutory authorities 16.03 16.03

d. Disputed amount of Income tax 0.90 16.30

2. As per the accounting policy of the Corporation, surcharge recoverable from Electricity Boards on the belated settlement of the power bill amounting to Rs.116.83 crore has not been reckoned as income since there is uncertainty in realisation. The same will be accounted on certainty of realisation.

3. The rate of depreciation has been modified to match with main equipment of Thermal Power Station - I on account of revised planned shutdown of the unit.

4. Details relating to consumption of raw materials stores and spares licensed and installed capacities, production etc., are furnished in the Annexure to Schedule-22.

5. There is no impact in profit due to change in accounting policy of providing depreciation by way of fixing ceiling limit of Rs.1 crore for prior period transaction. However depreciation to the extent of Rs.0.75 crore (debit) has been included in the current year on account of this change.

6. i. Principal amount remaining unpaid to any supplier belonging to Micro, Small and Medium Enterprises as at the end of the year Rs. 3.04 crore.

ii. Amount of Interest due and payable for the period of delay in making payment but without adding the interestspecifiedunderthisActRs. 0.03 crore.

7. Pending finalisation of pay revision to non-executives from 01.01.2007, provisional liability is being provided in the accounts towards arrears of pay revision. The liability as on 31.3.2010 is Rs. 564.24 crore.

8. As per the accounting policy, pending determination of power tariff by Central Electricity Regulatory Commission (CERC), tariff rate has been provisionally accounted based on the Ministry Guideline on the lignite transfer price for energy charges and other relevant parameters for capacity charges. On account of this an amount of Rs 805.34 crore has been reckoned as sale of power and Rs. 52.20 crore has been reckoned as sale of lignite for which the bill will be raised on receipt of CERC order.

9. Stocks of stores, spares, raw materials and finished goods are under hypothecation for cash credit facilities arranged with State Bank of India.

10. 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 and amounts due to creditors are subject to confirmation.

11. Profit after tax-Rs.1247.46 crore. Numbers of shares -167,77,09,600. Face value of share - Rs.10/-.

12. There is no impairment loss identified other than disposable/dismantled assets for which provision of Rs. 1.95 crore has been created as per Accounting Standard-28.

13. Figures of the previous year have been re-grouped wherever necessary.