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Information Memorandum Volume I 450 MW Thermal Power Project Bajaj Energy Private Limited

(A Subsidiary of Bajaj Hindusthan Limited)

Prepared By

SBI Capital Markets Limited

Draft Project Information Memorandum - BHL (5 x 90 MW)

6th Floor, World Trade Tower Barakhamba Lane, New Delhi 110001 Head Office: 202, Maker Tower E, Cuffe Parade, Mumbai 400 005 April 2010

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IMPORTANT NOTICE
This Information Memorandum (IM) has been prepared for 450 MW (2 X 45 MW at 5 locations) Thermal Power Project (the Project) being set up by Bajaj Energy Private Limited (BEPL or the Company), a wholly owned subsidiary of Bajaj Hindusthan Limited (BHL), at Barkhera (district: Pilibhit), Khambarkhera (district: Lakhimpuri Kheri), Maqsudapur (district: Shajhanpur), Kundarkhi (district: Gonda), Utraula (district: Balrampur), of Uttar Pradesh. Its contents are strictly confidential and accordingly, this IM and its contents are circulated on the basis that they will be held in and with complete confidentiality. By accepting a copy of this IM, the recipient agrees to keep its contents and any other information, which is disclosed to such recipient, confidential and shall not divulge, distribute or disseminate any information contained herein, in part or in full, without the prior written approval of SBI Capital Markets Limited (SBICAP). The recipient also agrees to indemnify SBICAP against any claims that may arise as a result of a breach of any confidentiality arrangement, which governs the contents of this IM. This IM has been prepared for the internal use of prospective lenders for 450 MW Thermal Power Project of BEPL and may contain proprietary and confidential information about the Project and the Sponsor. This IM has been prepared by SBICAP, inter alia, on the basis of the information and documents available in the public domain, data made available by the Sponsor and in-house databases available to SBICAP as a part of its professional practice & which SBICAP believes to be reliable. SBICAP has not carried out any independent verification for the accuracy or truthfulness of the same. This IM constitutes an opinion expressed by SBICAP and each party concerned has to draw its own conclusions on making independent enquiries & verifications and SBICAP cannot be held liable for any financial loss incurred by anyone based on this IM. Further, on accepting a copy of this IM, the recipient accepts the terms of this Notice, which forms an integral part of this IM and the recipient shall be deemed to have agreed to indemnify SBICAP against any claims that may be raised against SBICAP as a result of or in connection with the data & opinions presented in this IM. The delivery of this IM does not imply that the information in it is correct as of any time after the date set out on the cover page hereof, or that there has been no change in the operation, financial condition, prospects, creditworthiness, status or affairs of the subject or anyone else since that date. Further, capital costs and operating expenditures are subject to uncertainties concerning the effects that change in

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legislation or economic or other circumstances may have on future events, and different people may have a different view in future. There will usually be differences between projected & actual results because events & circumstances do not occur as expected and those differences may be material. Under the circumstances, no assurance can be provided that the assumptions or data, upon which any projections have been based, are accurate or whether these financial projections will actually materialize. Neither SBICAP, nor State Bank of India or any of its associates, nor any of their respective directors, employees or advisors make any expressed or implied representation or warranty and no responsibility or liability is accepted by any of them with respect to the accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, projections, or other information set forth in this IM or the underlying assumptions on which they are based or the accuracy of any computer model used and nothing contained herein is, or shall be relied upon as a promise or representation regarding the historic or current position or performance of the Sponsor, or any future events or performance of the Sponsor. This IM is divided into sections & sub-sections only for the purpose of reading convenience. Any partial reading of this IM may lead to inferences, which may be at divergence with the conclusions and opinions based on the entirety of this IM. Neither this IM, nor the information contained herein, may be reproduced or passed to any person or used for any purpose other than stated above.

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Contact Persons
SBI CAPITAL MARKETS LIMITED (A Subsidiary of State Bank of India) 6th Floor, World Trade Tower, Barakhambha Lane, New Delhi 110 001 Tel. +91-11 2341 8460 Fax. +91-11 2341 7783 Website: www.sbicaps.com Mr. Mukul Modi Vice President, Project Advisory & Structured Finance Ph. 011- 2341 8491 Fax 011- 2341 6292 Mob. +91-9811776510 e-mail: mukul.modi@sbicaps.com Ms. Neha Goel Manager, Project Advisory & Structured Finance Ph. 011 2341 8460 (Extn: 413) Fax 011 2341 6292 Mob. +91-9560397199 e-mail: neha.goel@sbicaps.com Mr. Lovkesh Kapoor Manager, Project Advisory & Structured Finance Ph. 011- 2341 8460 (Extn: 409) Mob. 91-9560397202 e-mail: lovkesh.kapoor@sbicaps.com Mr. Pulkit Bhandari Deputy Manager, Project Advisory & Structured Finance Ph. 011- 2341 8460 (Extn: 403) Mob. 91-9818678668

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e-mail: pulkit.bhandari@sbicaps.com

Table of Contents
1Introduction...................................................................... 11 2The Company....................................................................14 2.1General Particulars The Company.............................................14 2.2Background of the Company........................................................14 2.3Key Management Personnel.........................................................15 2.4Capital Structure BEPL...............................................................15 2.5Board of Directors - BEPL.............................................................16 2.6Historical Financial Performance of BEPL.....................................17 2.7Promoter Company BHL............................................................18 3Project Details..................................................................29 3.1Location of the Project.................................................................29 3.2Key Project Inputs .......................................................................30 3.3Primary Fuel Requirement and Availability..................................31 3.4Evacuation of Power.....................................................................33 4Implementation Framework...............................................36 4.1Project Implementation Framework ............................................36 4.2State Support - MoU with Government of Uttar Pradesh..............36 4.3Technical Arrangements..............................................................36 4.4Operation & Maintenance Arrangement......................................46 4.5Power Sale Arrangements............................................................46
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4.6Power Evacuation Arrangement...................................................50 4.7Schedule of Implementation ......................................................50 5Industry Scenario..............................................................52 5.1Power Sector Scenario in India: A Perspective ............................52 5.2Region wise Demand Supply Scenario.........................................56 5.3Analysis of Present Capacity ......................................................58 5.4Capacity Addition Program .........................................................60 5.5Power Trading Scenario...............................................................63 5.6Regulatory Scenario.....................................................................65 5.7Conclusion....................................................................................66 6Project Cost and Means of Financing..................................68 6.1Components of Project Cost ........................................................68 6.2Means of Financing......................................................................72 7Financial Projections Snapshot .......................................73 7.1Project Financials.........................................................................73 7.2Sensitivity Analysis......................................................................76 8Status of Approvals and Clearances...................................78 9Risk Analysis .................................................................... 81 9.1Risk Analysis Allocation & Mitigation.........................................81 10Conclusion .....................................................................88 11Indicative Term Sheet......................................................90 11.1Indicative Terms and Conditions Rupee Term Loan................90 12Annexure......................................................................112 12.1Annexure I: Historical Financials of BHL...................................112 12.2Annexure II: Detailed Banking Arrangement of BHL................115 12.3Annexure III: Project Implementation Schedule.......................118 12.4Annexure IV: Key Assumptions................................................119 12.5Annexure V: Award of Coal Linkage for the Project..................121 12.6Annexure VI: Brief profile of Contractors.................................122 12.7Annexure VII: Projected Financials of Project...........................129

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List of Tables Table 1: Particulars of BEPL.................................................14 Table 2: Key Management Personnel....................................15 Table 3: Capital Structure of BEPL........................................15 Table 4: Share Holding pattern of BEPL................................16 Table 5: Board of Directors of BEPL......................................16 Table 6: Snapshot of Balance Sheet of BEPL.........................17 Table 7: Particulars of BHL..................................................18 Table 8: Location of existing cogeneration power plants.......20 Table 9: Board of Directors of BHL.......................................21 Table 10: Capital Structure of BHL.......................................23 Table 11: Share Holding pattern of BHL................................24 Table 12: Snapshot of Profit & Loss account of BHL...............25 Table 13: Snapshot of Balance Sheet of BHL.........................25 Table 14: Credit Rating........................................................27 Table 15: Snapshot of Debt Arrangement of BHL ..................27 Table 16: Details of Accessibility of sites..............................29 Table 17: Break-up of land requirement...............................30 Table 18: Coal Requirement Estimation................................31 Table 19: Transportation details of Coal...............................32 Table 20: Estimation of cost of coal for the project................33 Table 21: UPPCL Sub-stations..............................................33 Table 22: Key personnel of BIDCO........................................38 Table 23: Details of BTG contracts.......................................40 Table 24: Key features of contracts for Boiler and Auxiliaries ..........................................................................................41 Table 25: Key features of contracts for Steam Turbine and Generator...........................................................................43 Table 26: Schedule of Implementation..................................50 Table 27: Year Wise Power Demand Supply Scenario.............54

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Table 28: Power Deficit vs Highest Power Consumption in India ..........................................................................................55 Table 29: AT&C losses.........................................................55 Table 30: Region Wise Demand-Supply Scenario...................56 Table 31: Demand Supply Scenario in Northern Region States ..........................................................................................57 Table 32: Projected Power Requirement in Northern Region. .57 Table 33: Ownership Mix of the Installed Generation Capacity ..........................................................................................58 Table 34 : Capacity Additions Required in Uttar Pradesh.......62 Table 35: Power Trading Entities and Respective Market Shares in 2007-08...............................................................64 Table 36: Estimation of Cost of Project.................................68 Table 37: Components of Financing......................................72 Table 38: Snapshot of financial parameters of the Project.....73 Table 39: Sensitivity Analysis..............................................76 Table 40: Status of Approvals and Clearances......................78 Table 41: Risk Analysis........................................................81 List of Figures Figure 1: Holding Structure of BEPL.....................................14 Figure 2: Family Tree of Bajaj Group....................................20 Figure 3: Location Map........................................................29 Figure 4: Project Structure..................................................36 Figure 5: Installed Generation Capacity...............................52 Figure 6: Per Capita Consumption........................................53 Figure 7: Growth in Private Participation in Power Sector......59 Figure 8: Installed Capacity by Type of Fuel..........................59 Figure 9: Long Term Capacity Addition Projections...............60 Figure 10: Plan Wise Capacity Additions...............................61

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Figure 11: Historical Trend of Merchant Power Transaction. . .63 Figure 12: Price Analysis of Traded Power............................64

List of Abbreviations
Abbreviation s AAI AOA AT&C BEPL BHL BHSIL BIDCO BOD CEA CERC COD CTU DPR EA03 EPC EPS FM FSA GCV GOI GoM GoUP GW HFO IDC IPP KV KWh LD LDO LOI MDO MLD MOA MoEF Descriptions Airport Authority Of India Articles Of Association Aggregate Technical and Commercial Bajaj Energy Private Limited Bajaj Hindusthan Limited Bajaj Hindusthan Sugar & Industries Limited Bajaj Infrastructure Development Company Limited Board Of Directors Central Electricity Authority Central Electricity Regulatory Commission Commercial Operation Date Central Transmission Utility Detailed Project Report Electricity Act 2003 Engineering, Procurement And Construction Electric Power Survey Force Majeure Fuel Supply Agreement Gross Calorific Value Government Of India Group of Ministers Government of Uttar Pradesh Giga Watt Heavy Fuel Oil Interest During Construction Independent Power Producer Kilo Volt Kilowatt Hour Liquidated Damages Light Diesel Oil Letter Of Intent Mine, Develop, Operate Million Liters Per Day Memorandum Of Association Ministry Of Environment And Forest
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Abbreviation s MoU MT MTPA MU MW NTP O&M PDC PLF PNB PPA PTC SG STG TCD TG UPERC UPPCL

Descriptions Memorandum Of Understanding Million Tonne Million Tonne Per Annum Million Units Mega Watt Notice To Proceed Operation And Maintenance Pre-Disbursement Condition Plant Load Factor Punjab National Bank Power Purchase Agreement Ptc India Limited Steam Generator Steam Turbine Generator Tonnes Crushed Per Day Turbine Generator Uttar Pradesh Electricity Regulatory Commission Uttar Pradesh Power Corporation Limited

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1 Introduction
Bajaj Energy Private Limited (BEPL) is promoted by Bajaj Hindusthan Limited (BHL), the flagship company of Shishir Bajaj Group. BEPL proposes to set up 450 MW (2 x 45 MW at 5 locations) coal fired Thermal Power Project under the current proposal. The promoter company, BHL is Indias leading sugar and ethanol manufacturing company, headquartered at Mumbai. BHL has fourteen sugar units spread across the north Indian state of Uttar Pradesh (UP) with ten units functioning under it and balance four units operating under its subsidiary, Bajaj Hindusthan Sugar and Industries Limited (BHSIL). The aggregate crushing capacity of BHL is 136,000 tonnes crushed per day (tcd) including capacity of BHSIL of 40,000 tcd. BHL is the pioneer of Indias fuel ethanol programme, being the largest ethanol producer in the country. It produced 52 million litres of industrial alcohol (ethanol being the major contributor) during FY 200809. It also has a distillery capacity to produce 800,000 litres of alcohol per day. BHL has also set up small co-generation power units (8-40 MW) at its existing sugar units. The total generation capacity of the plants is around 428 MW. Under the current proposal, BEPL is setting up 450 MW coal fired power plant in the premises of five (5) of existing sugar units of BHL and BHSIL at Barkhera (district: Pilibhit), Khambarkhera (district: Lakhimpuri Kheri), Maqsudapur (district: Shajhanpur), Kundarkhi (district: Gonda), Utraula (district: Balrampur), of Uttar Pradesh.

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The project is expected to be commissioned by November 1 st 2011 and is one of the few projects to be commissioned under 11th Five Year Plan. The land for the project is already available and site development and civil works are already being carried out. The contracts for BTG and civil works have already been placed with reputed suppliers. BHL has already incurred expenditure around Rs. 438 crores on the Project. Moreover, BHL has vast experience in implementing projects and has commissioned 1,06,000 tcd of green field sugar units across Uttar Pradesh. Initially the Project was envisaged to be implemented by BHL and accordingly the process of obtaining statutory and other clearances and award of major project contracts was initiated by BHL. However, subsequently BHL decided to implement the Project through a special purpose vehicle viz Bajaj Energy Private Limited, which is presently its wholly owned subsidiary. On December 24, 2009, BHL awarded a Project Co-ordination, Management Consultancy and Implementation Support contract to Bajaj Infrastructure Development Company Limited (BIDCO). As per the Letter of Award (LoA), BIDCO shall be responsible for overall implementation of the Project including award of major project contracts, project management and construction supervision etc. BIDCO has placed major orders including Boiler and Auxiliaries to ThyssenKrupp Industries India and Thermax Limited and Turbine & Generator package to Siemens Limited. BIDCO has also awarded Civil Works packages to ERA Building Systems Limited, K.K Construction Builders Limited and Petron Civil Engineering Private Limited. An MoU was executed on 14th January, 2010 between Government of
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Uttar Pradesh (GoUP) and BHL for setting up the project in the state of Uttar Pradesh. GoUP has assured its help in expediting various statutory approvals/clearances for the Project. An MoU was signed between Uttar Pradesh Power Corporation Limited (UPPCL) and BHL on 31st December, 2009 for sale of power from the Project. As per the MoU, UPPCL will procure at least 50% of the net power generated from the Project. Subsequently, UPPCL and BHL have initialled the Draft Power Purchase Agreement (PPA) for sale of 90% of net power generated from the Project. The final PPA is expected to be signed soon. The tariff under the PPA shall be calculated as per the Uttar Pradesh Electricity Regulatory Commission (UPERC) tariff determination guidelines. Balance 10% power from the Project is proposed to be sold on merchant basis. The Project is proposed to commence commercial operations in 22 months from the date of issuance of Letter of Award to BIDCO, i.e. by November 01, 2011. Estimated cost of the Project is Rs. 2,320 Crores and is proposed to be funded at a Debt: Equity ratio of 75:25. The proposed financing mix entails Debt of Rs. 1740 Crores and Equity of Rs. 580 Crores. The entire equity requirement for the Project would be contributed by BHL/Promoter Group. In order to facilitate its debt raising efforts, BHL has appointed SBI Capital Markets Limited (SBICAP) to prepare the Information Memorandum for the Project and approach Commercial Banks and Financial Institutions on its behalf to arrange funds.

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2 The Company
2.1 General Particulars The Company
Table 1: Particulars of BEPL

Name Incorporation Date Sector Corporate Office Registered Office

: : : :

Bajaj Energy Private Limited (BEPL) 27th June, 2008 Power Generation Bajaj Bhawan, Jamnalal Bajaj Marg, B-10, Sector-3, Noida-201301, Uttar Pradesh : Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai-400021

2.2 Background of the Company The Company was incorporated on 27th June, 2008 as Bajaj Eco-Chem Products Private Limited. Subsequently, on 19th March, 2010 the name of the Company was changed to Bajaj Energy Private Limited (BEPL). Fresh certificate of incorporation has been received from Registrar of Companies (Enclosed in Volume II of this IM). The Company is promoted by Bajaj Hindusthan Limited (BHL), the flagship company of Shishir Bajaj Group. The Company is a wholly owned subsidiary of BHL. Pictorial presentation of the Group holding structure is as under:
Figure 1: Holding Structure of BEPL

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2.3 Key Management Personnel BEPL is establishing a team of qualified and experienced personnel for implementation and subsequent operation of the Project. Brief details of the key management personnel for the Project are given below.
Table 2: Key Management Personnel

Name Dr. Sanjeev Kumar Mr. N. K. Balasubramanian Mr. D.L. Narasimham Mr. Manoj Maheshwari Mr. Sachin Sharma Mr. Vivek Srivastava Mr. Birendra Kr. Agarwal

Designation Director (Legal & Corporate Affairs) Advisor (Power) Advisor (Power) Chief Financial Officer Executive President Vice President - Group HR Vice President (Corporate Commercial) Vice President (EHS) Vice President (Indirect Taxation) General Manager (Finance & Accounts)

Educational Qualification M.Com, LL.B, BE (Mech.), BE (Mech.), PGDM (International Marketing) B.Com (H), FCA, FCS PGDM MSW, BA B.Com.(H), MBA, Lead Auditor M.Sc., PG Diploma(Industrial Safety & Environment) B.Com., Diploma (Excise & Custom) B.Com, C.A.

Experien ce (years) 30 48 41 23 8 21 26

Mr. Ajay Vikram Singh Mr. N. K .Kashyap Mr. Subodh Kumar Garg

25 29 24

2.4 Capital Structure BEPL The capital structure of BEPL as on 31st March, 2010 is as under
Table 3: Capital Structure of BEPL

Particulars Authorized Share Capital 30,00,000 Equity shares of Rs. 10/each Issued, Subscribed and Paid-up
15

Rs. Crore 3.00 0.81

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Particulars Capital of 8,10,000 Equity shares of Rs. 10/- each

Rs. Crore

The shareholding pattern of BEPL as on 31st March, 2010 is as under:


Table 4: Share Holding pattern of BEPL

Category of Shareholder (A) Promoter and Promoter Group Indian Bajaj Hindusthan Limited Total

Total number of shares

Percentage)

100.00 100.00

Currently, the entire shareholding of BEPL is being held by BHL. The Company proposes to expand its capital base shortly. It is expected that BHL and Promoter Group would subscribe to entire shareholding of BEPL initially. The exact shareholding/equity contribution pattern of BEPL is expected to be finalised in next 2-3 months (finalization of exact shareholding pattern is stipulated as a Pre-commitment Condition). During the currency of the loan, BHL and Promoter Group would maintain a minimum equity shareholding of 51% with BHL holding a minimum of 26% stake (maintenance of aforesaid interests in BEPL stipulated as a Negative Covenant). 2.5 Board of Directors - BEPL Presently, BEPL is managed by a Board of Directors comprising of two (2) directors. The Company proposes to suitably broad-base and strengthen its Board of Directors shortly. Present composition of the Board of Directors is as shown below:
Table 5: Board of Directors of BEPL

Name of the Director 1 Mr. Pradeep Parakh .

Designation Director

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Name of the Director 2 Mr. Chandresh Chhaya .

Designation Director

A brief profile of the directors of the Company is given below: Mr. Pradeep Parakh, has been on Board of BEPL since its inception. He joined BHL in March 2001 and is presently designated as its President and Company Secretary. He holds a B. Com (Honours) degree and is a Chartered Accountant and Company Secretary by qualification. He has over 21 years of experience with strengths in areas of Corporate Law, Corporate Governance and Finance. Mr Chandresh Chhaya, is currently on the Board of BEPL as one of its directors. He is employed with BHSIL as Manager and Company Secretary. He is a graduate in Commerce and Law and is a fellow member of The Institute of Company Secretaries of India as well as The Institute of Cost and Works Accountants of India. He has over 20 years of experience in areas of Corporate Law and Secretarial Practice. The Company has confirmed that the name of none of the directors appears in defaulters list of RBI, CIBIL defaulters list and ECGC SAL. The letter certifying the same is enclosed in Volume II of this IM. 2.6 Historical Financial Performance of BEPL A brief summary of Balance Sheet of the Company (Financial Year ending March 31) is given below:
Table 6: Snapshot of Balance Sheet of BEPL Rs. lakh

2009 FY Ending March 31, Net Fixed Assets


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As on December, 2009 -

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2009 FY Ending March 31, Capital work in progress Investments Current assets Total Assets Equity share capital Reserves and surplus Current liabilities and provisions Less: Miscellaneous Expenses Total Liabilities and Provisions 62.58 15.12 77.7 81.00 0.11 3.41 77.7

As on December, 2009 72.72 4.87 77.59 81.00 3.41 77.59

There have been no major business operations in BEPL since its incorporation and the Company now proposes to focus mainly on its power operations. 2.7 Promoter Company BHL 2.7.1 General Particulars
Table 7: Particulars of BHL

Name Incorporation Date Sector Registered Office Existing Operations

: : : :

Bajaj Hindusthan Limited (BHL) 23rd November, 1931 Sugar Manufacturing Bajaj Bhawan, Jamnalal Bajaj Marg, 226, Nariman Point, Mumbai-400021 : 10 sugar units with capacity of 96,000 tcd under BHL and 4 sugar units with capacity of 40,000 tcd under its subsidiary BHSIL; 428 MW bagasse based co-generation power plant is in operation.

BHL, promoter of BEPL, was incorporated on 23 rd November, 1931 as Hindusthan Sugar Mills Limited. BHL was founded by Late Shri Jamnalal Bajaj. BHL started its operations by setting up its first sugar unit at

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Golagokarannath, district Lakhimpur Kheri of Uttar Pradesh. In 1967, a new company - Sharda Sugar & Industries Limited - was established as a subsidiary of Hindusthan Sugar Mills Limited. Under this new subsidiary, a sugar plant with a cane crushing capacity of 1400 tcd was set up in 1972 at Palia Kalan about 70 kilometers from Golagokarannath. The capacity was subsequently increased in stages to reach 11,000 tcd. In 1988, Hindusthan Sugar Mills Limited was renamed as Bajaj Hindusthan Limited and shortly thereafter in 1990, Sharda Sugar & Industries Limited was amalgamated with Bajaj Hindusthan Limited. BHL embarked on an aggressive Greenfield expansion drive in 2003-2007, starting with a plant at Kinauni, near Meerut (UP), which was completed in a record time of seven months. The facility commenced commercial production in November 2004. In December 2005, BHL acquired Pratappur Sugar and Industries Limited (PSIL), district Deoria, Eastern UP. PSIL was subsequently renamed Bajaj Hindusthan Sugar and Industries Limited (BHSIL). This acquisition provided BHL a strategic foothold in the sugar-deficient region of Eastern UP. BHSIL embarked upon significant expansions and set up three new sugar units were Eastern UP at Rudauli (district Basti), Kundarkhi (district Gonda) and Utraula (district Balrampur). BHSIL now has a crushing capacity of 40,000 tcd and a distillery with the capacity to manufacture 160 kilo-liter (KL) per day of ethanol. The total industrial alcohol/ ethanol capacity of the company, including its subsidiary, is 800 KL/ day. BHL also generates around 428 MW of power from the co-generation plant. After meeting its own energy needs, BHL has a surplus of over 90 MW. It has already begun to supply a significant part of this surplus
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power to the UP state grid. The details are as follows:


Table 8: Location of existing cogeneration power plants

Units Unit in BHL Golagokarannath Palia Kalan Khambarkhera Barkhera Maqsoodapur Kinauni Bilai Thanabhawan Budhana Gangnauli Total in BHL Unit in BHSIL Pratappur Kunderki Utraula Rudauli Total in BHSIL Total Group Capacity

Location Lakhimpur Lakhimpur Lakhimpur Pilibhit Shahjahanpur Meerut Bijnore Muzaffarnagar Muzaffarnagar Saharanpur

Power MW) 30 40 35 35 30 35 35 35 40 25 340 8 43 21 46 88 428

Deoria Gonda Balrampur Basti

2.7.2 Promoter Profile of BHL BHL belongs to Shishir Bajaj Group which is part of Bajaj Group. Bajaj Group of companies was founded by Late Shri Jamnalal Bajaj in the 1930s. The group now has 24 companies, including 6 listed companies. The family tree of the Bajaj Group is as follows:
Figure 2: Family Tree of Bajaj Group

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Mr. Shishir Bajaj, 62, is the Chairman and Managing Director of BHL for over twenty (20) years. Mr Bajaj holds an MBA degree from New York University in finance. He joined BHL in 1974 and has been responsible for overall management of the company since then. He is the Managing Director of the company since July 1988.

2.7.3 Board of Directors BHL is managed by a Board of Directors comprising eight directors. Composition of the Board of Directors is as shown below:
Table 9: Board of Directors of BHL

Name of the Director 1 Mr. Shishir Bajaj 2 3 4 5 6 7 8 Mr. Kushagra Bajaj Mr. D S Mehta Mr. M.L. Apte Mr. Ravindrakumar V. Ruia Mr. Dinesh Kumar Shukla Mr. Alok Krishna Agarwal Dr. Sanjeev Kumar

Designation Chairman & Managing Director Vice Chairman Director Director Director Director Director Whole Time Director

As mentioned earlier, Mr. Shishir Bajaj serves as the Chairman and Managing Director on the Board of BHL. A brief profile of other directors of the company is given below: Mr. Kushagra Bajaj, is the Vice Chairman of BHL. He joined BHL in 2001 as Chief Executive and was inducted on its board in April, 2007. He has a Bachelor of Science degree in Economics, Political Philosophy and Finance from Carnegie Mellon, Pittsburgh, USA and has a master degree in Marketing from North-western University, Chicago, USA. He is responsible for

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overall operations of the company. Mr. D S Mehta has been on the Board of BHL since January 1986. He also holds directorship in various other Bajaj group companies. He graduated with an honours degree in commerce from Mumbai University and he is an alumnus of Sydenham College. He is a fellow member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. He has been associated with the Bajaj Group of companies since 1966 and has more than 30 years experience in corporate law, taxation, finance and investment. Mr. M.L. Apte, is associated with BHL as director for over 33 years. He has held various prestigious positions including Sheriff of Mumbai; he was also a former President of Maharashtra Chamber of Commerce, Bombay Chamber of Commerce, Cricket Club of India, Indian Sugar Mills Association, Member of the Indian Cotton Mills Federation and Chairman of the Textiles Committee. Mr. Ravindrakumar V Ruia, joined the Board of BHL in April 2001. He is the Executive Director of the Dawn Mills Company Limited. He is also a Director of Special Paints Ltd. and Special Paints (Karnataka) Ltd. apart from various other Ruia group companies. He is also Committee Member of The Bombay Mill owners' Association, Indian Cotton Mills Federation and Bombay Textile Research Association and is associated with various public charity trusts as Trustee. Mr. Dinesh Kumar Shukla, has been associated with BHL as

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nominee of LIC since October, 2001 and also as a member of the Audit Committee. He is a B. A. and Masters of Social Work (M.S.W). He retired as an Executive Director (Personnel) in February, 2003 from Life Insurance Corporation of India (LIC). During his tenure with LIC, he occupied positions like Regional Manager Marketing, Group Pension and Superannuation Schemes of LIC at Kolkata (Eastern Zone) as well as in-charge of 3 LIC divisions viz. Raipur, Jabalpur and Bhopal. Mr. Alok Krishna Agarwal, joined the Board of BHL in April, 2007. He is the founder managing partner of Juris Consultus, New Delhi. In 1988 he was admitted to Bar Council in India. He is also an associate member of Bar Council of Delhi, Supreme Court Bar Association, International Bar Association, Indo American Chamber of Commerce & FICCI. Dr. Sanjeev Kumar, is presently working as Group President (Corporate & Legal Affairs) of BHL with experience of more than 20 years. He was appointed as a Whole Time Director from 12 March, 2009. He has degrees in Masters of Commerce, Doctorate, LL.B, Diploma in Intellectual Property Rights Laws, Cost Accountant and Company Secretary. BHL has confirmed that the name of none of the directors appears in defaulters list of RBI, CIBIL defaulters list and ECGC SAL. The letter certifying the same is enclosed in Volume II of this IM. 2.7.4 Capital Structure- BHL The capital structure of BHL as on 31st December 2009 is as under
Table 10: Capital Structure of BHL

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Particulars Authorized Share Capital 80,00,00,000 Equity shares of Rs. 1/each Issued, Subscribed and Paid-up Capital of 17,68,57,111 Equity shares of Rs. 1/- each

Rs. Crore 80.00 17.68

The shareholding pattern of BHL as on 31st December 2009 was as under:


Table 11: Share Holding pattern of BHL

Category of Shareholder (A) (B) 1 Promoter and Promoter Group Indian Public Holding Institutions Mutual Funds/ UTI Financial Institutions/ Banks Central Government/ State Government(s) Insurance Companies Foreign Institutional Investors Sub-Total (B)(1) Non-institutions Bodies Corporate Individuals Others Sub-Total (B)(2) Total Public Shareholding (B)= (B)(1)+(B)(2) Total (A)+(B) Shares held by Custodians and against which Depository Receipts have been issued Grand Total (A)+(B)+(C)

Total number of shares 65561186 15161871 1224034 1500 9696465 41285678 67369548 17080800 22362803 2882174 42325777 109695325 175256511

As a percentage of (A+B+C) 37.07 8.57 0.69 0.00 5.48 23.34 38.09 9.66 12.64 1.63 23.93 62.02 99.09

(C)

1600600

0.91

176857111

100.00

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2.7.5 Historical Financial Performance of BHL A brief summary of Profit & Loss account and Balance Sheet of the company for the past four years (BHL follows accounting year ending September 30) is given below:
Table 12: Snapshot of Profit & Loss account of BHL Rs crore

FY Ending September 30, Net Sales PBDIT PBT PAT Depreciation Cash Profit PBDIT / Net Sales (%)

2006 1,447 .24 350.42 280.17 190.83 72.39 347.85 24%

2007 1,713.0 1 248.46 37.89 45. 70 146.88 183.49 15%

2008

2009

1,756.2 1,583.74 8 218.54 595.29 (108.13) 206.00 156. (47.69) 23 187.22 202.21 77. 407.5 71 5 12% 38%

Table 13: Snapshot of Balance Sheet of BHL Rs. Crore

FY Ending September 30, Net Fixed Assets Capital work in progress Investments Current assets Total Assets Equity share capital Reserves and surplus Current liabilities and provisions Secured loans Unsecured loans Deferred tax liabilities

2006 1,013.48 1,223.08 205.81 941.83 3,384.2 1 14.14 1,354.53 475.45 344.2 1 1,065.92 129.96

2007 2,220.6 4 562.97 437.47 2,109.0 5 5,330. 13 14.14 1,420.1 9 1,868.8 7 1,051. 04 855.01 120.88

2008 2,478.8 3 138.69 488.26 2,525.4 7 5,631. 25 14.14 1330.9 67 1,676. 67 1,949. 54 600.99 58.94

2009 2,632.5 0 131.28 549.11 3,034.4 2 6,347. 30 36.59 2257.0 78 1,409. 96 1,417. 22 1118.4 2 108.04

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FY Ending September 30, Total Liabilities and Provisions Net worth Current Ratio Debt Equity Ratio TOL/TNW

2006 3,384.2 1 1,498. 63 1.98 1.03 1.26

2007 5,330. 13 1,555. 21 2.39 2.02 2.43

2008 5,631. 25 1,404. 04 3.09 2.53 3.01

2009 6,347. 31 2,401. 70 3.49 1.34 1.64

For FY 2008-09, BHL reported sales of around Rs 1,584 crore and PAT of Rs 156.23 crore. BHL incurred operational losses in FY 2007-08 mainly due to higher sugarcane prices and excess production of sugar. Due to excess supply of sugar globally, the sugar prices declined but the raw material cost i.e. sugar cane prices remained high which resulted in aforesaid losses.

Net Fixed Assets of BHL have more than doubled from Rs 1,013 crore in FY 2005-06 to Rs 2,632 crore in FY 2008-09 mainly on account of expansion in sugar crushing capacity.

Net worth of the company has also grown at a CAGR of around 18% from FY 2005-06 to FY 2008-09. TOL/ TNW of BHL has reduced from 3.01 in FY 2007-08 to 1.64 in FY 2008-09 mainly on account of repayment of secured loans from the receipts of Qualified Institutional Placement of equity of around Rs. 720 crore. In addition, debt-equity ratio of the company has also improved to 1.34 in FY 2008-09 against 2.53 in FY 2007-08.

Detailed historical financials of BHL are given in Annexure I. 2.7.6 Stock Market Performance The shares of BHL are listed on BSE and NSE. The stock was quoted at Rs. 136.101 on BSE with its 52-week high and low of Rs. 242 and Rs. 39
1

As on April 16, 2010

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respectively. 2.7.7 Credit Rating Fitch Rating has affirmed the following ratings of the various bank lines of BHL.
Table 14: Credit Rating

Particulars National Long Term Rating Cash Credit/ Fund Based Limits (Rs 14,500 mn) Short Term Non-Fund based limits (Rs 3,500 mn)

Rating A+(ind) A+(ind) F1 (ind)

Date of award of Rating August 27, 2009 August 27, 2009 August 27, 2009

2.7.8 Present Arrangement with Banks/Financial Institutions The snapshot of debt availed by BHL as on December 31, 2009 is as given below.
Table 15: Snapshot of Debt Arrangement of BHL Rs. crore

S. Type of Loan No. Secured Loan 1 . Non Convertible Debentures 2 . Term Loans 3 . Corporate Loans 4 . Working Capital Loans 5 . Other Loans Sub Total Unsecured Loan

Sanctioned

Outstanding

15.00 953.83 1,620.00 1,555.00 123.77 4,267.59

15.00 690.64 1,460.01 514.52 70.04 2,750.21

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S. Type of Loan No. 6 . Public Deposits 7 . Short Term Loan 8 . Mutual Funds 9 . FCCB Sub Total Total

Sanctioned 0.08 100 550.00 549.22 1,199.30 5,466.89

Outstanding 0.08 100 400.00 464.80 964.88 3,715.09

The detailed arrangement of debt availed by BHL as on December 31, 2009 is provided in Annexure II.

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3 Project Details
3.1 Location of the Project The Project would be located in the premises of five (5) existing sugar units of BHL and BHSIL, located at Barkhera (district: Pilibhit), Khambarkhera (district: Lakhimpuri Kheri), Maqsudapur (district: Shajhanpur)`, Kundarkhi (district: Gonda), Utraula (district: Balrampur) of Uttar Pradesh. All the sites are accessible by road and rail network. Location map and accessibility details are given below:
Figure 3: Location Map

Project Locations

Table 16: Details of Accessibility of sites

Name Unit

of

the

Barkhera Maqsoodapur Khambarkhera Kundarkhi Utraula

Name of the nearest Railway Station Shahjahanpur Shahjahanpur Sitapur Gonda Gonda
29

Distance from Plant (kms.) 70 65 60 20 50

Connectivity by Road Yes Yes Yes Yes Yes

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3.2 Key Project Inputs 3.2.1 Land Total land requirement for the Project at all sites is around 104 acres. Entire land requirement shall be met from the surplus land available within the premises of existing sugar units of BHL and BHSIL. The break up of the land requirement at difference sites is as under:
Table 17: Break-up of land requirement in acres

S. No . 1 2 3 4 5

Plant Sites Khambarkher a Barkhera Utraula Kundarkhi Maqsoodapur

Power Plant Land 16 20 16 16 16

Ash Pond Land 4 4 4 4 4

Total Land Requireme nt 20 24 20 20 20

BHL and BHSIL have initiated the process of transferring required project land to BEPL. The transfer of land shall be at the notified circle rate of land for industrial use. 3.2.2 Water Total consumptive water requirement for the Project is estimated to be about 34920 m/day (6984 m per day per site). Entire water requirement is proposed to be met through extraction of Ground water. Water is proposed to be drawn through 2 bore-wells at each project site. Final approval to draw the requisite quantity of water from all the five sites has been obtained from Central Ground Water Authority, GoI vide their letters dated January 27, 2010 and February 4, 2010 (Enclosed in Volume II of this IM).

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3.2.3 Construction Power Apart from availability of co-gen plants at each site, project sites receive power from the existing UPPCL sub-stations. As per the various contracts awarded by BIDCO, construction power would be arranged by the respective contractors. Contractors may also use their own DG sets before supply of power commences from UPPCL sub-stations to support the project construction activities. 3.3 Primary Fuel Requirement and Availability 3.3.1 Coal Requirement The Project will use domestic coal as primary fuel for power generation. Annual primary fuel requirement works out to about 2.34 MTPA based on following parameters:
Table 18: Coal Requirement Estimation

S. No. 1 2 3

Parameter Gross Station Heat Rate (GSHR) Gross Calorific Value (GCV) Plant Load Factor (PLF)

Value 2675 kcal/kwh 3865 kcal/kg 85%

Basis As per the back-to-back BTG contracts awarded by BIDCO Grade F Coal As per prevalent operating norms in the Industry

Aggregate primary fuel requirement over an operating life of 25 years works out to about 58.19 MT of coal. 3.3.2 Coal Source & Availability: Coal Linkage: BHL had requested Ministry of Coal (MoC) for grant of long term coal linkage from Northern Coalfields Limited (NCL) (NCL mines being the stated preference in the request letter) vide letter dated 19th October, 2009 (application copy enclosed in Volume II of
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this IM). Standing Linkage Committee (Long-term) [SLC (LT)] met on 8th April, 2010 to discuss the award of coal linkage to various power projects including the Project. As informed by BHL, it has been awarded long-term coal linkage by MoC in the aforesaid meeting (letter from company confirming the same is presented at Annexure V of this IM). For the purpose of financial projections, Grade F coal from Northern Coal Fields Limited (NCL) mines near Singrauli, Madhya Pradesh is assumed. 3.3.3 Coal Transportation For supply of domestic coal from NCL mines, under long term coal linkage, coal would be transported through the Indian Railways rail network to the nearest railway stations of the proposed sites of the units. About 600 km Indian Railways network would be used to transfer coal to two of the Project sites and around 800-900 km would be used for the remaining Project sites and thereafter the coal would be transported through road. The transportation details of coal are as follows:
Table 19: Transportation details of Coal

S.N o 1 2 3 4 5

Plant Site Kundarki Utraula Khamberkhe ra Maqsudapur Barkhera

Nearest railway siding Gonda Gonda Sitapur Shahjahanp ur Shahjahanp ur

Distance from CIL/ NCL Mines (in km) 618 618 817 896 896

Distance from Railway siding to Plant (Km) 20 50 60 65 70

3.3.4 Coal Pricing As Grade F coal is assumed to be received from NCL mines, fuel pricing has been estimated accordingly in the DPR. Based on the existing

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notifications of CIL, the delivered cost of coal from NCL has been estimated at Rs. 1880 per tonne as mentioned below.
Table 20: Estimation of cost of coal for the project

Long Term Linkage Run of mine Price Royalty SED (Special Excise Duty) CDM cess Crushing charges MPGAT SVA Total delivered cost (w/o tax) VAT/ CST (2%) Entry tax (2%) Total Cost (ex-mine including tax) Estimated Average Transportation & Handling Cost Total Landed Cost (average at 5 sites) 3.4 Evacuation of Power

Rate (Rs./ton ne) 580 84 10 50 39 44 807 16 16 839 1041 1880

The power would be evacuated by using already placed 132 KV transmission line at four out of the five plant sites. UPPCL sub-stations are located at around 15-25 km from the respective project sites. At Utraula, UPPCL sub-station is being built within the premises of the existing sugar unit. The details are as given under:
Table 21: UPPCL Sub-stations

S. No. 1 2 3 4 5

Plant Sites Khambarkher a Bartkhera Kundarki Maqsoodapur Utraula

Name of UPPCL Sub-station Lakhimpur, Kheri

Distance from respective site (in Km) 14.6

Ruppur kamalu, 16.6 Pilibhit Mankapur, Gonda 15.5 Baragaon, Puwaya, 26.7 Maqsoodapur To be installed within the premises of

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S. No.

Plant Sites

Distance from Name of UPPCL respective Sub-station site (in Km) the existing sugar unit

BEPL will build the evacuation system at Utraula and suitably augment the existing transmission network, as required, at each of the remaining 4 project sites. Cost of such augmentation has been considered in the project cost estimates. 3.4.1 Environmental Aspects BHL has applied for the Environment Clearance to State Level Expert Appraisal Committee (SEAC), GoUP vide letter no. BHSIL/02/SEAC/09 dated 12th November, 2009 (copy of letter enclosed in Volume II of this IM). The approved Terms of Reference (TOR) have been received by BHL from Directorate of Environment, Uttar Pradesh. BHL has also carried out the Environmental Impact Assessment (EIA) study and prepared the Environment Management Plan in line with the approved TOR. The same have been submitted to Uttar Pradesh Pollution Control Board (UPPCB). BHL has requested UPPCB to conduct Public hearing for the proposed project vide letter dated April 5, 2010 (copy of letter enclosed in Volume II of this IM). BHL has also made application to Pollution Control Board for a No-Objection Certificate (NOC) for the Project vide letter dated 7th December, 2009(copy of letter enclosed in Volume II of this IM). The Project takes into consideration establishment of the entire essential pollution control systems / processes viz. chimney, waste water treatment, recycling, etc. and expenditure for the same has been included in the project cost estimates. Further, the Project sites are free of any environmentally fragile features viz, national park, sanctuaries, historical monuments within 25 Km from the Project sites

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and no encroachment of forest land or any water body is envisaged by the proposed Project.

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4 Implementation Framework
4.1 Project Implementation Framework The broad framework for implementation & subsequent operation of the Project is depicted in the figure below:
Figure 4: Project Structure Lender BHL/Promot LIE, s er Group LLC & LIA Debt Cash Flow TRA BEPL 450 MW Equity

GoUP State Support MoU FSA

UPPCL

PPA Coal India Limited

O&M (In-house/Limited Outsourcing)

BIDCO Project Management

4.2 State Support - MoU with Government of Uttar Pradesh An MoU has been executed on 14th January, 2010 between Government of Uttar Pradesh (GoUP) and BHL for setting the project in the state of Uttar Pradesh at the aforesaid sites. GoUP has also assured help in obtaining various statutory approvals/ clearances regarding the Project like availability of water, environment clearance, recommendation to Ministry of Coal for coal linkage, etc. GoUP has also assured in purchasing power at the price decided/ approved by UPERC. 4.3 Technical Arrangements

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4.3.1 Technical Consultant The Company has appointed M/s Mantech Technical Services Private Limited (MTSPL) vide letter dated 25.12.2009 (Copy enclosed in Volume II of this IM) for the preparation of Detailed Project Report (DPR) for the Project incorporating the following: Basis of site selection and land requirement Compliance statutory requirements Fuel type and availability Suitability of technology selected Project schedule Project cost and cost of generation Status of permits/ approvals/ clearances/ Drawings Design basis and technical features of main plant equipment Basic requirements like land, fuel, water, power evacuation, etc A brief profile MTSPL and past projects handled by it is given in Annexure VI. 4.3.2 Project Management Company (PMC) The PMC contract for the Project has been awarded to Bajaj Infrastructure Development Company (BIDCO) through a Letter of Award dated 24/12/2009. BIDCO was incorporated in 2006 to focus and expand groups infrastructure and real estate initiatives. BIDCO focuses on developing high quality infrastructure, commercial, retail, industrial and residential projects in India. Following are some of the projects under execution by BIDCO: Integrated township, Warangal Highway, Andhra Pradesh Commercial Mall, Old Hyderabad, Andhra Pradesh
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Redevelopment of prime land in Bandra and Kurla, BKC, Mumbai

Following are the projects in pipeline, all in Mumbai: Redevelopment of 42000 sq. ft, Andheri (W) Own plot development of 30,000 sq. ft, Santacruz (E) Greenfield development of over 2,00,000 sq. ft, Kings Circle

BIDCO has a team of qualified professionals with vast experience of implementing power projects throughout India. BIDCO shall function as a dedicated central resource with the overall responsibility for formulation of concepts, systems, basic and detailed engineering, procurement, construction and management service, erection & testing management services, inspection, quality control, obtaining approvals and clearances, training of manpower & project management concepts. Brief details of the key personnel of BIDCO are given below:
Table 22: Key personnel of BIDCO

Name Mr. Kailash Bihari Dubey Mr. Ripon Jain Mr. Dwarkesh Sharma Mr. Sunil Kr. Ojha Mr. Pramod Kr. Mishra

Designation Director (Project) Vice President Finance & Operations Asst. Vice President (Commercial) General Manager (F&A) General Manager (Group Technical Services)

Qualificatio n B. Tech (Mechanical) B.Com., LLB(Gen), C.A. B.E. (Mechanical) ICSI, ICWAI, CA, B.Com B.E. (Electronics)

Experien ce (yrs)

Previous Organizati on

35 NTPC Keystone 19 Reality Pvt. Ltd. Electro Steel 13 Castings Ltd. 18 BHSIL Yokogawa India Ltd.

17

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Name Mr. Lalit Kumar Singhal

Designation General Manager (Civil)

Qualificatio n B.E. (Civil)

Experien ce (yrs)

Previous Organizati on Reliance 19 Energy Ltd.

4.3.3 Major Contracts Awarded by BIDCO BIDCO has initiated the process of project implementation by placing orders for major project contracts as under: A. Engineering Services BIDCO has awarded the contract for Engineering Services to Powertech Engineering Pvt. Limited (PEPL) vide letter dated 21/1/2010 (letter enclosed in Volume II of this IM). The broad scope of work for PEPL includes the following: 1. 2. 3. 4. 5. Detailed preparation of Design Basis documents; Evaluation and Technical recommendation for placement Layout of system integration of various packages; Control & Instrumentation Designs; Civil and Structural Design Services.

of POs by BIDCO;

A brief profile of PEPL and assignments executed by PEPL in the past is enclosed in Annexure VI. BIDCO shall also appoint an Owners Engineer to bring in requisite expertise in various aspects of project supervision, management services and overall wrapping of project packages in order to deliver the performance as per the norms set out (stipulated as a predisbursement condition). B. BTG Contract BIDCO has issued Letters of Awards (LOA) to the following suppliers for

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the Boiler, Turbine & Generator package. BIDCO had appointed SMC Power Limited to provide support/advisory services to ensure quality sourcing and procurement.

Table 23: Details of BTG contracts

Supplier

Date of LOA by BIDCO

Date of Acceptance of LOA by the supplier

Cost per unit (Rs crore)

No. of Unit s

Total Cost excl. Taxes (Rs crore)

Boilers & Auxiliaries ThyssenKrupp 26/12/0 Industries India Thermax 9 26/12/0

28/12/2009

116 120

3 2

348 240

28/12/2009 Limited 9 Steam Turbine & Generator (STG) Siemens 26/12/0 28/12/2009 Limited 9

45.50

227.5

Brief Scope of Work for ThyssenKrupp and Thermax Design, engineering, manufacture, shop testing, packing, forwarding, supply of boiler & its auxiliaries; Complete erection, testing, trial run and commissioning of the Boilers. Supply of mandatory spare for two (2) years for trouble free operation of the equipments Supply of special tools for operation, maintenance, inspection and repair of the equipments Training of owners personnel in the operation and maintenance of equipments/ systems

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Commissioning: Commissioning of Boilers shall be done within 18-21 months from the date of LOA.

Key features of the contracts awarded to ThyssenKrupp and Thermax:

Table 24: Key features of contracts for Boiler and Auxiliaries

S.N o 1 . 2 .

Particulars Performance Guarantees Guaranteed Boiler Efficiency o Thermax

Details

86.0% 84.7% 1.0%

o Thyssenkrupp Steam output at the outlet of main steam stop valve (MCR 100%) feed details while water firing design at and at Motor run performance guarantee fuel with temperatures (Thermax economizer inlet as per design Thyssenkrupp) Power consumption input
o o

190 TPH (MCR)

3 .

for

continuously
Thermax Thyssenkrupp

auxiliaries (in KW) 3600 3476 Rs 145 lacs for every percentage fall below guaranteed parameter 80,000/per KW the

4 .

Liquidated Damages (LDs) Boiler efficiency - 84.7% (Thyssenkrupp) Boiler efficiency 86.0% (Thermax) Auxiliary power

5 .

consumption Rs

(Thermax and Thyssenkrupp)

increase

beyond

guaranteed parameter

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S.N o 6 .

Particulars Maximum 100%


o Thyssenkrupp

Details rating 1% of contract value for every 1% reduction in MCR 1% of contract value for

continuous

7 . 8 .

every 1% reduction in MCR Delay in Delivery (Thermax and 0.50% of contract value per Thyssenkrupp) Cap on LDs week delay of delay or part thereof LDs on Shortfall Performance: 7.5% of contract price LDs on account of Delay in Delivery: 7.5% of contract price account of in

Thermax

Brief Scope of Work for Siemens Limited Design, engineering, manufacture of Steam Turbine, Generator & Auxiliaries, Station Control & Instrumentation package, Generator Control Relay panels, Bunker Bay structure; Complete erection, testing and commissioning of Steam & Turbine Generators including Generator Transformer (GT), Station Transformers (ST) and Auxiliary Transformers (UAT). Supply of mandatory spare for two (2) years for trouble free operation of the equipments (one set per site) Supply of special tools and tackles required for operation, maintenance, inspection, removal and repair of generator rotor, etc.

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Training of owners personnel in the operation and maintenance of equipments/ systems Commissioning & Taking Over: Commissioning of Boiler shall be done within 18 months from the date of LOA along with advance. The taking over shall be completed with in 2 months from schedule date of commissioning.

Performance Guarantee test to be conducted at 45 MW. Key features of the contracts awarded to Siemens

Limited:
Table 25: Key features of contracts for Steam Turbine and Generator

S.N o 1 . 2 .

Particulars Performance Guarantees Turbine Heat Rate

Details

2281 Kcal/kWh Auxiliary power consumption 198 kW Liquidated Damages (LDs) For every 1 Kcal/ KWh Rs 6.5 lacs deterioration in performance figure of heat rate For every kW increase in auxiliary Rs 80,000/power consumption For every M/ hr increase in water requirement Reduction in gross power output To be compulsorily rectified Rs 1.2 lac/M

3 . 4 . 5 . 6 .

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S.N o 7 . 8 . 9 .

Particulars Increase in sound levels

Details To be compulsorily rectified

Delay in Delivery

0.50% of contract value per week of delay or part of in thereof LDs on Shortfall Performance: 7.5% of contract price LDs on account of Delay in Delivery: 7.5% of contract price

Cap on LDs

account

A brief profile of ThyssenKrupp, Thermax and Siemens along with the details of similar assignments handled in the past is enclosed in Annexure VI. C. Civil Work and Structural Services Contract for Design Services BIDCO had awarded the contract for preliminary Architectural, Civil and Structural Design Services to Sijcon Consultants (P) Ltd (Sijcon) vide letter dated 11.01.2010. Sijcons broad scope of services included the following: Soil investigation work for the land Drawings for site levelling, filling and grading based on survey drawing Drawings for roads, pathways, etc. Scheme for de-watering in the plant area and drainage scheme

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Design detailed engineering drawings Preparation of machinery foundations Quality assurance Control room layout Sanitary and other plumbing works Finishing works like plastering, paintings, etc.

Subsequently, for the complete project Architectural, Civil and Structural Design Services, contract has been awarded to TPSC (India) Pvt. Ltd which has taken over the previous contract awarded to Sijcon. Contract for Civil Works BIDCO has awarded the contract for Civil Works to ERA Building Systems Ltd (ERA), K.K Construction Builders (KKCB) and Petron Civil Engineering Pvt. Limited (Petron) vide letters dated 14.01.2010. The broad scope of work under the Civil Works Package is as under: Earthwork for relevant area PCC/ RCC works of relevant area Foundations including pilling wherever required Masonry works Structural steel work Plastering, paintings, skirting, flooring, etc Water supply and drainage Road work, storm water drain work, etc Post completion site clearance Dismantling and shifting work of existing structures

A brief profile of TPSCI, ERA, KKCB and Petron along with the details of recent projects executed is enclosed in Annexure VI.

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In addition to the above, minor civil works not covered under the above mentioned contracts will be awarded as per requirement to other parties of repute. 4.4 Operation & Maintenance Arrangement BHL Group has extensive experience in operating more than ten cogeneration power plants. The operation & maintenance (O&M) of the Project would be undertaken by BEPLs in-house O&M team. The O&M team of the power station would be headed by a Senior Vice President, under whom separate groups viz. Operation, Mechanical, Electrical, Civil and C&I maintenance would operate. In addition to these groups, operation and efficiency management In order to improvement respectively group and and maintenance continual planning group would monitor the efficiency in operations and maintenance improvements. partially. 4.5 Power Sale Arrangements U.P. Power Corporation Limited (UPPCL) and BHL have initialled Draft PPA for sale of 90% of the net power generated by the Project. The following are the key features of the Draft PPA: 4.5.1 Power Sale to UPPCL 4.5.2 Term of Agreement The PPA shall become effective after receiving due approval from Uttar Pradesh Energy Regulatory Commission (UPERC) and shall be valid for a period of twenty five (25) years, which can be extended further on mutually agreed terms. suggest bring expertise and state-of-the-art

technology and systems, O&M activities may also be outsourced

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4.5.3 Tariff The tariff shall be determined in accordance to the UPERC Guidelines and shall consist of the following: 4.5.3.1 following: Interest on loan capital as per the financial package approved by the UPERC. Debt-equity ratio shall be considered as 70:30 with equity being limited to 30% if equity employed is more than 30%. Depreciation shall be calculated on Straight Line Method and at prescribed rates. Depreciation shall be allowed up to 90% of the historical cost of the plant. Advance Against Depreciation, as under: o AAD = Debt repayment amount subject to a ceiling of 1/10 th of debt minus Depreciation Return on equity @ 15.50% p.a. If the project is completed before the stipulated time as per Regulatory Norms, additional return of 0.5% shall be provided. O&M Expenses (including insurance) as determined by UPERC guidelines. Interest on Working Capital @ short term prime lending rate of State Bank of India, calculated on the aggregate of the following: o Cost of coal for two months consumption; o Cost of secondary fuel for two months; o O&M Expenses for one month o Maintenance spares at rates determined by UPERC o Receivables equivalent to two months of fixed and variable charges for sale of electricity; Capacity Charge

The Capacity Charge, payable by UPPCL, shall comprise of the

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o Any other component as may be approved by UPERC. Recovery of Capacity Charges The Capacity Charge shall be recoverable at target availability as approved by UPERC, but is subject to a pro rata reduction if the Plant Availability is below target availability as approved by UPERC. 4.5.3.2 Energy Charge

The Energy Charge payable by UPPCL includes the following: Landed cost of both Primary and Secondary fuel. Fuel costs shall be worked out on the basis of ex-bus energy scheduled to be sent out from the Project as per the following formula: o Energy Charge = Rate of Energy Charge in Rs/ kWh x Scheduled Energy (ex-bus) for the month in kWh corresponding to scheduled generation. o Where, Rate of Energy Charge shall be the sum of the cost of normative quantities of primary and secondary fuels for delivering ex-bus one kWh of electricity in Rs./ kWh.

4.5.3.3 Tax on Income and Statutory Levies


Tax on income streams of the Company from sale of electricity shall be computed as an expense and shall be allowed to be recovered in the same proportion as Capacity Charge. Apart from this, Statutory taxes, duties and levies paid by the Company in relation to generation of electricity from the Project shall be recovered in Tariff. 4.5.4 Incentive for Timely Completion In case the plant/ unit is commissioned before schedule as approved by UPERC the Company shall be eligible for the incentive of an amount equivalent to reduction of interest during construction as UPERC

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guidelines. 4.5.5 Billing and Payment Security Mechanism The Company shall raise a monthly bill to UPPCL based on the monthly joint meter reading of the main meters. For payment of bills through a Letter of Credit on presentation, a rebate of 2% shall be allowed to UPPCL. If the payment is made by a mode other than the Letter of Credit but within one month of presentation of bill, a rebate of 1% will be allowed to UPPCL. Payments delayed by a period of more than 2 months from date of billing shall bear surcharge of 1.25% per month. 4.5.5.1 UPPCL is Letter of Credit required to maintain an irrevocable, revolving, self-

replenishing Letter of Credit in favour of the Company throughout the term of the PPA. The Letter of Credit shall be valid for a period of at least 1 year and have a face value equal to one months billing amount based on 85% target availability for the first three operating months following CoD of the First Unit and thereafter equal to the average monthly billing for last three operating months. The Letter of Credit shall be reinstated/replenished within 5 days of drawdown. Notwithstanding the mechanism described herein, UPPCL shall have the right to make direct payment of any bill by cheque or otherwise. 4.5.5.2 Escrow Account

UPPCL shall establish an Escrow Account to maintain funds equivalent to 1.25 times of the monthly Tariff amount and other payables based on 85% target availability for the purpose of guaranteeing the reinstatement of the Letter of Credit on a monthly basis as and when the same becomes due and payable. The Company shall have a recourse to the Escrow Account at all times during the term of the PPA.

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4.5.6 Merchant Sale BEPL proposes to sell balance power, i.e. around 45 MW project capacity on merchant basis. The commercial aspects of saleability of merchant power are discussed in Chapter 5. 4.6 Power Evacuation Arrangement The power would be evacuated by using existing 132 KV transmission line at four out of the five plant sites. UPPCL sub-stations are located at around 15-25 km from the respective project sites. At Utraula, UPPCL sub-station is being built within the premises of the existing sugar unit. BEPL will build the evacuation system at Utraula and suitably augment the existing transmission network at each of the remaining 4 project sites. 4.7 Schedule of Implementation As per the LOA given to BIDCO by BHL (and corresponding back to back contracts awarded by BIDCO to project contractors) all the five (5) units of the Project are expected to be completed within 22 months of award of LoA to BIDCO. Indicative timelines for achievement of key project implementation milestones are as follows:
Table 26: Schedule of Implementation

Milestone/Activity Letter of Award to BIDCO Coal Linkage Meeting Finalization of Draft PPA with UPPCL Signing of Final PPA with UPPCL Completion of Land Transfer Financial Closure Environment Clearance by MoEF, GoI Commencement of Commercial operations of Project

Timeline 24 December, 2009 8th April, 2010


th

April, 2010 July, 2010 July, 2010 July, 2010 September, 2010 1st November, 2011

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The detailed time schedule for implementation of the Project is given in Annexure III.

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5 Industry Scenario
5.1 Power Sector Scenario in India: A Perspective The power sector provides one of the most important inputs for the development of a country and availability of reliable and inexpensive power is critical for its sustainable economic development. To sustain GDP growth rate of around 9-10 %, it is imperative that the power sector also grows at the same rate. The Indian power sector has grown manifold in size and capacity since independence. Power installed generating capacity has increased from 1,362 MW in 1947 to 1,56,092 MW as on 31st December, 2009. Even after the considerable growth in the power sector infrastructure and the supply of electricity, many parts of the country continue to face severe power shortages as consumption by commercial and industrial consumers has been increasing at much faster rate than electricity supply. The following chart depicts growth in the installed generation capacity since 2003.
Figure 5: Installed Generation Capacity
Growth in Installed Generation Capacity
160000 140000 120000 100000 80000 60000 40000 20000 0 2003 2004 2005 2006 2007 2008 2009 Year

RES Hydro Nuclear Thermal

In MW

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(Source CEA)

5.1.1 Historical Demand-Supply scenario The annual per capita consumption of electricity in India has increased by CAGR of about 4% from FY 2003 (566.7 Kwh) to FY 2008 (704.2 Kwh). Worlds average per capita consumption stands at 2600 Kwh as on 31st October, 2008. The low per capita consumption is a result of the low penetration of electricity at the household level especially in rural areas.
Figure 6: Per Capita Consumption

Per C apita C onsumption


800 700 600 500 400 300 200 100 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 Per Capita Cons um ption (Kwh) (As per U.N m ethodology)

(Source CEA)

Though

there

has

been

substantial

growth

in

power

sector

infrastructure in India over the last few years, the power supply position in still characterized by shortages, both in terms of supply during peak period and the overall electricity supply. Many parts of the country continue to face severe power shortages. In fact, power supply position in the country has worsened over the last few years with growth in power demand outstripping new capacity addition with peak power deficit being worst at 16.6% in 2007-08. The energy deficit at the national level has increased from 7.1% in 2003-04 to 11% in 2008Strictly Private & Confidential

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09.
Table 27: Year Wise Power Demand Supply Scenario

Year

Energy (MU) Requireme Availabilit nt y 545,674 497,589 559,264 519,398 591,373 548,115 631,554 578,819 690,587 624,495 739,345 666,007 774,324 689,021 549,257 495,821 % Shorta ge 8.8 7.1 7.3 8.4 9.6 9.9 11 9.7

Peak (MW) Deman d 81,492 84,574 87,906 93,255 100,715 108,866 109,809 116,281 Met 71,547 75,066 77,652 81,792 86,818 90,793 96,685 101,60 9 % Shorta ge 12.20 11.20 11.70 12.30 13.80 16.60 12.00 12.60

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 Apr 09Nov 09

(Source CEA)

The power deficit scenario is particularly worse in the northern and western regions, two of the most industrialized regions of the country. Peak power deficit in the northern and western regions were 10.7% and 19% respectively in 2009. The reasons for power shortage are: Low Plant Load Factor of some of the thermal generating units, mostly in State sector. High transmission and distribution losses. Inadequate sub-transmission and distribution network in some States. Inadequate inter regional transmission capacity, for supplying power from surplus regions to deficit regions. Poor financial position of State utilities rendering it difficult for them to raise the resources necessary for making required investments to create adequate generation, transmission and distribution system. The table below shows the base load and peak load deficit for the top

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five states on the basis of power consumption.

Table 28: Power Deficit vs Highest Power Consumption in India

State Maharashtra Gujarat Tamil Nadu Andhra Pradesh Uttar Pradesh

Base Load Deficit (%) Peak Load Deficit (%) Apri Apri Novemb Novemb April l l April er er 2009 200 200 2008 2009 2009 8 9 16.8 21.7 21.4 25.1 23.3 28.2 8.1 3.3 23.1 9.2 5.5 28.5 6.8 8.4 4.2 4.4 9.8 8.5 3.5 11.8 4.6 4.2 10.1 12.7 23.1 10.8 15.7 24.6 21.9 25

(Source: CRISIL Research)

As seen above UP is amongst the top five states power deficit states of the country. 5.1.2 Relatively Higher Aggregate Technical and Commercial (AT&C) Losses The key factor for sustainability of the power sector is to keep the Aggregate Technical and Commercial (AT&C) losses at low levels, as against the current high level of around 28%. To address this issue, GoI started an initiative named as Accelerated Power Development and Reform Programme (APDRP) to leverage distribution reforms in the states. Priority is given to the states that have committed themselves to a time-bound programme of reforms as elaborated in the Memorandum of Understanding and Memorandum of Agreement with the Central Government, and are progressing on those commitments. GOI aims to bring AT&C losses down to 15% by the end of the 11th five year plan.
Table 29: AT&C losses 55

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AT&C Loss (%) for SEBs, PDs & Discoms for FY 2001200220032004Region 02 03 04 05 Eastern 47.34 44.37 44.81 43.16 North Eastern 40.65 44.1 40.56 39.01 46.01 37.85 40.14 41.54 Northern Southern 27.63 28.05 22.71 24.18 Western 39.6 40.45 37.55 35.19
(Source CRISIL Research)

2002 2007 2005200606 07 41.8 38.21 35.92 41.33 40.44 37.18 23.93 22.69 38.29 37.37

Northern (19.2%) and Eastern (19.3%) region have shown substantial reduction in these losses during the five year period while other regions have made only marginal improvements. 5.2 Region wise Demand Supply Scenario Details of the region wise demand-supply scenario in India are given herein.
Table 30: Region Wise Demand-Supply Scenario (MUs)

Region Norther n Wester n Souther n Eastern NE Region All India

2009-10 (till Nov09) Requirem Availabili Defic ent ty it (%) 173719 166766 143454 58949 6369 549257 152708 146408 134693 56430 5582 495821 12.1 12.2 6.1 4.3 12.4 9.7

Requirem ent

2008-09 Availabili ty 199928 213724 188865 78370 8134 689021

Defic it (%) 10.8 16 7.5 4.6 13.5 11

224218 254486 204086 82127 9407 774324

(Source: CEA)

5.2.1 Demand-Supply Scenario in Northern Region The Northern region experienced an energy shortage of 10.8% and a peak power deficit of 10.7% during 2008-09. Details of the prevailing power situation in Northern region states during April 2008 to March

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2009 are provided in the table below:


Table 31: Demand Supply Scenario in Northern Region States

Region

Delhi Haryana Himachal Pradesh Jammu & Kashmir Punjab Rajasthan U.P. Uttaranchal Chandigarh Northern region
(Source CEA)

Energy Requirement (MU) Peak Load (MW) Requirem Availab Defici Deman Defici Met ent le t d t 22,249 22,123 0.6% 4,036 4,034 0.0% 28,791 26,331 8.5% 5,511 4,791 13.1% 6,261 11,148 41,297 37,306 68,003 7,762 1,401 224,218 6,246 8,564 36,900 36,898 53,796 7,669 1,401 199,92 8 0.2% 23.2% 1,055 2,120 1,014 3.9%

1,405 33.7% 7,309 15.9% 6,101 3.2% 8,248 22.1% 1,267 0.0% 279 0.0% 29,5 10.7 04 %

10.6% 8,690 1.1% 6,303 20.9% 10,587 1.2% 1,267 0.0% 279 10.8 33,034 %

The worst affected states in the Northern region are Uttar Pradesh and Jammu & Kashmir with severe energy and peaking power deficit. 5.2.2 Projected Power Requirement in Northern Region The projected power requirement in the aforementioned states is given below:
Table 32: Projected Power Requirement in Northern Region

State Delhi Haryana Himachal Pradesh Jammu & Kashmir Punjab Rajasthan Uttar Pradesh Uttaranchal

Energy Requirement Peak Load (MW) (MU) 2011-12 2016-17 2011-12 2016-17 36,293 52,762 6,092 8,729 38,417 54,305 6,839 9,375 9,504 11,202 60,489 48,916 79,268 8,445 13,136 15,272 82,572 67,767 110,665 11,668 1,611 2,063 11,000 8,482 13,947 1,533 2,194 2,790 14,441 11,404 19,623 2,085

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State Chandigarh Northern region

Energy Requirement Peak Load (MW) (MU) 2011-12 2016-17 2011-12 2016-17 2,308 3,367 420 602 294,841 411,513 48,137 66,583

(Source: 17th Electricity Power Survey (EPS) of CEA)

There would be projected shortage of about 14,286 MW power by the year 2011-12 pan India. The major shortfall would be evident especially in Northern region. 5.3 Analysis of Present Capacity Electricity being a concurrent subject, both the Centre and the States has to play a decisive role in this sector. While the Centre has a significant share in the transmission segment, the distribution segment is in the domain of the States. However, for creation of generation and transmission capacity, in line with the growing needs of economy, all the sectors namely Central, State and Private need to play a vital role. The ownership mix of the installed generation capacity in the country as on December 31, 2009 is as depicted below:
Table 33: Ownership Mix of the Installed Generation Capacity (in MW)

Secto r

Hydr o Thermal

Nucle ar R.E.S (MNRE ) 0 4120 0 4120 2624 0 12602 15225 Total 7841 4 4981 3 2786 6 1560 92

State Centr al Privat e Total

Coal Gas Diesel Total 2708 4405 4870 4046 603 7 5 3 3042 3712 8565 6702 0 5 7 1403 1233 7126 6308 597 1 3688 8160 1705 9986 1200 5 6 6 1

(Source: CEA)

As a matter of legacy, the central and state sectors together constitute

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over 86% of the installed capacity. However, with opening up of sector in 1990s with further reforms pursuant to the Electricity Act, 2003, the share of private-sector in the ownership-mix for the generation sector has improved substantially. The graph below shows the growth in private players participation in power sector from 1993 onwards:
Figure 7: Growth in Private Participation in Power Sector

(Source: Central Electricity Authority, CRISIL Research)

There has been no significant change in the fuel mix over the past 11 years. The thermal-hydel mix changed from 75:25 in 1997-98 to 72:28 in 2007-08. The share of nuclear power plants in the overall installed capacity remains low.
Figure 8: Installed Capacity by Type of Fuel

(Source: Central Electricity Authority, CRISIL Research)

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5.4 Capacity Addition Program Assuming 8% and 9% GDP growth rate scenario with 1:1 elasticity between economic growth and energy intensity, the following projections have been set forth by the Ministry of Power in its Integrated Energy Policy.
Figure 9: Long Term Capacity Addition Projections

(Source: Central Electricity Authority)

Government of India has formulated an ambitious capacity addition programme over the 11th and 12th plan periods in order to meet its Power for all objective by 2012. GOI, under its Power For All by 2012 mission, plans to increase per capita power consumption to 1000 KW by 2012. Under Rajiv Gandhi Grameen Vidhyutikaran Yojana, Ministry of Power is planning to achieve 100% rural electrification. This provides a tremendous investment opportunity in the Indian power generation market for both public and private sector. Government is also emphasizing on use of renewable sources of energy generation, like solar power, biomass, hydro power, biogas and wind power. Moreover, parallel focus is being given on demand side management with initiatives like energy conservation and energy efficiency and supply side management with initiatives like reduction in Transmission & Distribution (T&D) losses, improvement in transmission and subtransmission networks. 11th five year plan (April 2007- March 2012) for power aims at adding
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78,700 MW. However, the actual capacity addition in 2008-09 is about 3,453.7 MW against the target of 11,061.2 MW for the period2. The capacity additions are significantly lower than the projected requirements and the current power deficit situation is likely to continue in medium term. The following have been identified as the main reasons for repeated failures in achievement of the targets by thermal power plants: Delay in land acquisition; Delay in water linkage; Environmental clearances; Road and Railway connectivity for approach; Delay in award of coal linkage/gas linkage by Government; Financial problems related to the health of SEBs as also delay in achieving financial closures of the project. The chart below shows the capacity deficits in comparison to target levels in different five year plans. In the coming times, manifold increase is expected in power demand due to high economic growth and hence it is imperative to ensure that the targets are met.
Figure 10: Plan Wise Capacity Additions

(Source: Ministry of Power)

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(Source: CEA)

As against the 14,507 MW capacity addition planned by the government in 2009-10, only 6250 MW has been setup till 31st December 2009 (CRISIL Research). 5.4.1 Capacity Additions Required in Uttar Pradesh (UP) Capacity additions required to meet the Peak and Energy deficit in the UP is given in the table below:
Table 34 : Capacity Additions Required in Uttar Pradesh

S.N o.

Details

Unit (MW) Starting year of XI five year plan (2007-08) NA 9335 6578 10193 -3615

End Year of

End year of XII five XI five year year plan plan (2016-17) (2011-12) 3600 12935 9054 13947 -4893 4640* 17575 12478 19623 -7145

1 2 3 4 5

Planned capacity addition during XI-th plan (MW) Total capacity available during the year (MW) Peak power availability (MW) Peak power demand (MW) Power deficit (MW)

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S.N o.

Details

Unit (MW) Starting year of XI five year plan (2007-08)

End Year of

End year of XII five XI five year year plan plan (2016-17) (2011-12)

(+ for surplus, - for deficit) Additional installed Capacity required to offset the deficit (MW)

5092

6850

10003

*Assuming PAF of 71% (Source: www.cea.nic.in 1.Capacity addition target during 11th plan set by planning commission and 2. International conclave on key inputs for accelerated development of Indian power sector for 12th plan and beyond)

Installed capacity required to offset the power deficit in U.P. is about 6,850 MW by the year 2011-12 and by the year 2016-17 it is about 10,003 MW. 5.5 Power Trading Scenario 5.5.1 Trading Volume & Power Traders The merchant power generated is sold in the open market via bilateral transactions or through power exchanges.
Figure 11: Historical Trend of Merchant Power Transaction

(Source: CERC)

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Trading of power has increased substantially over the last few years with the emergence of several power traders. Power trading volumes have increased from 11,028.96 MU in 2003-04 to 20,964.77 MU in 2007-08 depicting a CAGR of ~17.4%. However, the total power traded in the country is still a meagre 3.57% of the total power generation (2008-09) but is expected to reach 10% of total energy generation by 2012 maintaining double digit CAGR. PTC India Ltd was the first entrant in the sector and is today the largest power trading entity in the country with over 45.57% market share in 2007-08. Few key power trading entities in the country and their respective market share are as follows:
Table 35: Power Trading Entities and Respective Market Shares in 2007-08

S.No
1. 2. 3. 4. 5. 6. 7.

Name
PTC India Ltd Adani Exports Ltd JSW Power Trading Co. Ltd Lanco Electric Utility Ltd NTPC Vidyut Vyapar Nigam Ltd Tata Power Trading Co. Ltd Reliance Energy Trading Ltd

Market Share
45.57% 6.31% 7.05% 12.4% 15.86% 8.02% 3.70%

5.5.2 Price of Traded Power The weighted average price of traded power has also increased substantially which is reflective of the widening demand-supply mismatch and huge seasonal variations in power demand. The weighted average price of traded power has increased from Rs 4.52 per Kwh in 2007-08 to Rs 7.31 per Kwh in 2008-09. A detailed analysis of the volume of power traded at various price levels over the last four years is presented in the figure below.

Figure 12: Price Analysis of Traded Power

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(Source: CERC)

5.6 Regulatory Scenario 5.6.1 The Electricity Act, 2003 The Act moves towards creating a market-based regime in the power sector. The Act seeks to consolidate, update and rationalize laws related to generation, transmission, distribution, trading and use of power. It focuses on: Creating competition in the industry Protecting consumer interests Ensuring supply of electricity to all areas Rationalizing tariff and thus lowering the cross-subsidization levels Encouraging autonomous regulation with the separation of policy, regulatory and operational aspects 5.6.2 National Tariff Policy In compliance with the provisions under the Electricity Act, 2003, GoI notified the Tariff Policy on January 06, 2006. The policy deals with

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various parameters with respect to fixation of tariffs, like providing adequate return on investment to the power generator and ensuring reasonable user charges for the customers. The policy moots the procurement of power separately for base and peak load requirements and introduction of differential tariffs for peak and off-peak hours, for better load management. The MoP notified the Guidelines for Determination of Tariff by Bidding Process for Procurement of Power by Distribution Licensees (Competitive Bidding Guidelines) on 19th January 2005, under the provisions of Section 63 of EA03. 5.7 Conclusion Given the prevalent demand supply deficit scenario and projected growth in power requirement, huge addition in generation capacity is required in the country over the coming decade. Consequently, there exists an attractive business and market opportunity especially in the northern & western regions of the country. As discussed earlier, 90% of the net energy generated from the Project will be delivered to the state of Uttar Pradesh, under a long term PPA with UPPCL. Uttar Pradesh (U.P.) is the largest power consumer of Northern India with the highest energy deficit among all north Indian states. As a result of the continuing power deficit situation in the state, price of power sold in the short-term market has also risen sharply. Based on the Annual Revenue Requirements (ARR) filed by the U.P. distribution utilities to UPERC for tariff fixation for FY 2009-10, the price of short term power approved is Rs. 7.70/kWh. Recent PPAs for long-term sale of power in U.P. have also followed the increase in price of power and have been in excess of Rs. 3/KWh. Additionally, power procured from electricity surplus states of eastern
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and north-eastern region is being sold at higher tariff due to additional wheeling charges and associated transmission losses involved. The proposed Project is one of the few power projects expected to be commissioned in the state of Uttar Pradesh in the 11th five year plan period. Given the acute shortage of power in U.P., there is low risk foreseen in the off-take of power from the Project.

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6 Project Cost and Means of Financing


6.1 Components of Project Cost The Project is estimated to be set up at an aggregate cost of Rs. 2,320 crore. This includes hard cost of Rs. 1,878.72 crore and soft cost of Rs. 441.28 crore. The hard cost estimates are as per the DPR prepared by Mantech Technical Services Private Limited and are inclusive of all indirect taxes as may be applicable for the Project. A breakup of the Project cost estimate is provided in the Table below:
Table 36: Estimation of Cost of Project Rs. crore

Particulars Land and Site Development Civil Works BTG BoP Mechanical BoP Electrical Control and Instrumentation Augmentation of Evacuation System Initial Spares Total Hard Cost Project Monitoring, Supervision and Quality Control Trial & Pre-commissioning Expenses Pre-operative Expenditure Interest During Construction Period Margin Money for Working Capital Contingency Total Soft Cost Total Cost

Amount 57.50 345.00 949.53 321.91 97.87 39.56 44.75 22.60 1878.72 82.00 50.00 29.36 174.86 48.70 56.36 441.28 2320.00

Based on the estimated Project cost indicated above, the cost per MW of the Project works out to Rs 5.16 crore/MW. Capital cost of the proposed Project is comparable with other coal based power projects being currently developed using similar technology and configuration. Rural Electrification Corporation has sanctioned loan for a 2 x 50 MW

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Brownfield thermal power project using similar technology and equipment configuration. Per MW cost in the aforesaid project is estimated at around Rs. 5.33 crore which is comparable to the proposed Project. 6.1.1 Cost of Land and Site Development Aggregate land requirement for the Project is about 104 acres. The total cost of the land is estimated at around Rs. 12.50 Crores for the Project at the rate ranging from Rs. 6 Lacs to Rs. 20 Lacs per Acre. There is no Rehabilitation and Resettlement (R&R) involved at the Proposed Project Site. The cost of Site Development has been estimated at Rs. 45.00 crores. 6.1.2 Cost of Civil Works Cost of civil works includes expenditure on all plant civil work including foundation, structures, main plant and ancillary buildings, site civil work including piling, chimney including ladder, ash dyke, raw water reservoir, de-watering system, essential housing, security and store buildings, roads and drains, boundary walls, watch towers and other necessary infrastructures. 6.1.3 BTG Cost BTG package has been awarded to ThyssenKrupp Industries India (for 3 Boilers) for Rs 348 crore, Thermax Limited (for 2 Boilers) for Rs 240 crore and Siemens Limited (for all 5 Steam Turbine & Generator package) for Rs 227.50 crore on fixed cost basis exclusive of taxes and duties. Aggregate cost of BTG package after applying relevant taxes and duties of works out to Rs. 949.53 Crore. The company is required to pay the contract price in INR only.

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6.1.4 Balance of Plant (BOP) Cost BoP is divided under Mechanical and Electrical BoP. BoP Mechanical includes expenditure on all piping, cooling towers, DM Plant, coal and ash handling plant, air-conditioning, fire fighting & protection system, Effluent Treatment Plant, EOT cranes, etc. BoP Electrical includes cost of all panels, transformers, switch gears, cables, switchyard, etc. The cost of BoP Mechanical is estimated at Rs. 321.91 crores and BoP Electrical at Rs. 97.87 crores. 6.1.5 Control and Instrumentation Control and Instrumentation comprises of distributed control system for centralized control and monitoring of the plant parameters, BoP instrumentation, cable laying , steam and water analysis system, erection and commissioning of all the C&I systems. 6.1.6 Augmentation of Evacuation System This cost includes strengthening of transmission lines and addition of Bay equipment with associated civil work at the respective UPPCL Substations, as required. 6.1.7 Initial Spares The cost of initial spares for various plant and machinery equipment is estimated at Rs. 22.60 crores. 6.1.8 Project Monitoring, Supervision and Quality Control The total cost towards project monitoring, supervision and quality control is estimated at Rs. 82 crores. This includes the payment to the Project Management Company for co-ordination and appointment of sub-consultants with requisite expertise to provide civil, structural design and architectural services, Soil related studies, Seismic study and other civil work related study and investigations, Owners
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Engineering services including integration and inter-facing of package, critical piping routing etc., complete plant/design with legal owners advisors engineering, engineers, and other including complete procurement and logistics management, project supervision, architects, execution. monitoring, quality co-ordination services, control

professional service providers for and in relation to plant and project Project monitoring and supervision will ensure timely implementation of project, synchronisation of plant in co-ordination with Equipment Suppliers and other agencies while adhering to quality in erection and commissioning in order to achieve successful trial as per agreed performance parameters. 6.1.9 Trial and Pre-commissioning Expenses The trial and pre-commissioning expenses are estimated at Rs. 50 crores to be incurred mainly towards start-up fuel and coal to be used while undertaking the trial operations for various units. 6.1.10 Contingency

To provide for any unforeseen expenditures and variations in the estimates of costs on account of change in contract scope, escalation in cost of key inputs like steel and cement etc., a contingency of 3% of the Total Hard Cost has been assumed at Rs. 56.36 crores. 6.1.11 Pre-Operative Expenses

Pre-operative Expenses are estimated to be Rs. 29.36 crore for the Project which consists of preliminary expenses including establishment charges, fees to be paid towards technical studies conducted by various consultants, legal expenses, manpower training, overheads and other administrative expenses.

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6.1.12

Interest during Construction Period

The debt drawdown schedule has been made in accordance to the expenditure phasing assumptions enumerated in Annexure IV. The interest rate considered for the construction period is 11.5% per annum. The Interest during Construction (IDC) for the Project works out to be Rs. 174.85 crore. 6.1.13 Margin Money The margin money has been estimated at 25% of projected net working capital requirement of Project in the first full year of operation. For the purpose of estimates, the current assets comprising of receivables of 1.5 month, primary fuel stock of 1.5 month, secondary fuel stock of 1.5 month, O&M expenses of 1 month and spares requirement equal to 20% of the O&M expenses has been assumed. The provision for margin money for working capital has been made at Rs. 48.70 crore for the Project. 6.2 Means of Financing The cost of the Project is estimated at Rs. 2320 crore and is proposed to be financed with debt and equity in ratio of 75:25. The proposed components of financing are as under:
Table 37: Components of Financing

Particulars Promoter Contribution Rupee Term Loan Total

Rs. Crore 580.00 1740.00 2320.00

% 25% 75% 100 %

6.2.1 Promoter Equity Contribution The equity requirement for the Project is Rs. 580 crore and is proposed to be funded by internal accruals of BHL and through equity contribution from Promoter Group. Out of the total equity requirement for the Project, 60% of total equity requirement would be brought

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upfront prior to the initial drawdown of the Rupee Term Loan. 6.2.2 Rupee Term Loan Rupee Term Loan for the Project will be sourced from various domestic banks and Financial Institutions (FIs) and the indicative terms for the proposed debt are mentioned in Chapter 11. Rupee Term Loan is expected to be contracted for a door-to-door tenor of up to 12 years.

7 Financial Projections Snapshot


The key assumptions underlying the profitability projections for the Project are detailed in Annexure IV. Based on these assumptions key financial parameters are given below. Detailed Profit & Loss Account, Cash Flow Statement, Balance Sheet and DSCR Calculations are given in Annexure VII. 7.1 Project Financials
Table 38: Snapshot of financial parameters of the Project (Rs. Crores)

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FY Ending March 31, No. of months of operation Capacity(MW ) PLF Net Generation (MU's) Total Revenue Total operating cost PBDIT Total Interest PBDT Depreciation PBT Total Tax PAT PBDIT/Total Revenue PBT/Total Revenue PAT /Total Revenue Annual DSCR Average DSCR Minimum DSCR Project IRR

2012 2013 2014 5 450 80% 1182 .6 393. 5 202. 8 190. 7 87.9 102. 8 45.5 57.3 19.0 38.3 48.5 % 14.6 % 9.7% 2.12 1.51 1.35 15.0 % 12 450 85% 3015 .6 982. 5 528. 2 454. 3 207. 3 247. 0 109. 2 137. 8 45.8 92.0 46.2 % 14.0 % 9.4% 1.35 12 450 85% 3015 .6 980. 7 543. 5 437. 2 187. 4 249. 8 109. 2 140. 6 46.7 93.9 44.6 % 14.3 % 9.6% 1.38

2015 2016 2017 12 450 85% 3015 .6 979. 5 559. 2 420. 2 167. 5 252. 7 109. 2 143. 5 47.7 95.8 42.9 % 14.6 % 9.8% 1.41 12 450 85% 3015 .6 978. 8 575. 5 403. 3 147. 7 255. 6 109. 2 146. 4 48.6 97.8 41.2 % 15.0 % 10.0 % 1.44 12 450 85% 3015 .6 978. 8 592. 4 386. 5 127. 8 258. 6 109. 2 149. 4 49.6 99.8 39.5 % 15.3 % 10.2 % 1.48

2018 2019 2020 12 450 85% 3015 .6 979. 5 609. 7 369. 7 108. 0 261. 7 109. 2 152. 5 50.6 101. 8 37.7 % 15.6 % 10.4 % 1.53 12 450 85% 3015 .6 980. 8 627. 7 353. 1 88.2 264. 9 109. 2 155. 6 51.7 103. 9 36.0 % 15.9 % 10.6 % 1.58 12 450 85% 3015 .6 982. 8 646. 3 336. 5 68.4 268. 1 109. 2 158. 8 52.8 106. 1 34.2 % 16.2 % 10.8 % 1.64

2021 12 450 85% 3015 .6 985. 5 665. 5 320. 0 48.6 271. 4 109. 2 162. 2 53.9 108. 3 32.5 % 16.5 % 11.0 % 1.72

2022 12 450 85% 3015 .6 990. 2 685. 4 304. 8 28.5 276. 3 109. 2 167. 1 55.5 111. 6 30.8 % 16.9 % 11.3 % 1.66

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From the above financial projections it may be observed that the Project is financially viable with a Project IRR of around 15.0%. It may also be noted that the average DSCR for the Project debt is 1.51 while minimum DSCR is 1.35. The DSCR levels of the Project are satisfactory. 7.2 Sensitivity Analysis As discussed in Chapter 4, BHL has initialled a Draft PPA with UPPCL for sale of 90% of the net saleable power from the Project. Tariff as per the PPA shall be determined on cost-plus basis i.e. all proportionate operating and financing charges shall be recovered from UPPCL. Any increase in the operating/financing charges will be recovered through a corresponding increase in tariff. However, the impact of variation in key operating assumptions on DSCR/PIRR has been studied by assuming that the adverse deviations in operating/financing charges will not be recovered through an increase in tariff. The results of the sensitivity analysis are given below:
Table 39: Sensitivity Analysis

Average DSCR Base Case Case 1: Reduction in PLF by 5% Case 2: Increase in O&M Cost by 10% Case 3: Increase in Station Heat Rate (SHR) by 100 Kcal/Kwh Case 4: Increase in Interest Rate by 1% p.a.
1.51 1.42 1.49 1.45 1.46

Minimu m DSCR
1.35 1.28 1.34 1.31 1.29

PIRR
15.00% 13.82% 14.63% 14.17% 15.00%

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As seen above, the Project is able to withstand various adverse deviations in the operating assumptions and its debt servicing capacity is satisfactory.

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8 Status of Approvals and Clearances


Status of some of the major statutory/ regulatory approvals and clearances for the Project are as under:
Table 40: Status of Approvals and Clearances

Sr. No. 1.

Type Of Authority/Entity Clearance/ Approval Land Acquisition BHL/BHSIL and Availability

Remarks

2.

3.

Project is being set up on the surplus land available in the premises of existing sugar plants of BHL and its subsidiary, BHSIL. BEPL has already demarcated around 104 acres of land required at various project sites. BHL/BHSIL shall transfer the demarcated parcels of land to BEPL at the state notified circle rate for industrial land. BHL/BHSIL are in the process of obtaining requisite approvals/NoCs from the lenders. All NoCs shall be obtained and land shall be transferred in the name of BEPL before seeking first disbursement from the Lenders. Pollution Control Uttar Pradesh BHL has already applied for Board Clearance Pollution Control NoC from UPPCB vide letter Board (UPPCB) dated 7th December, 2009. Environment State Level Expert BHL has applied for the Clearance Appraisal Environment Clearance to Committee State Level Expert Appraisal Committee (SEAC), GoUP vide letter no. BHSIL/02/SEAC/09 dated 12th

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Sr. No.

Type Clearance/ Approval

Of Authority/Entity

Remarks

4.

Coal Linkage

MoC

5.

Defence Clearance

Ministry of Defence (MoD)

6.

Civil Aviation Airport Authority of Clearance for India (AAI) Chimney Height Rehabilitation and GoUP Resettlement (R&R)

7.

8.

Forest Clearance

Ministry of Environment and Forest (MoEF), Government of India/State

November, 2009. The Terms of Reference (TOR) have been received. EIA study and EMP have been submitted to UPPCB and request for public hearing has been made vide letter dated 5.04.2010. As informed by the Company, BHL understands that it has been granted long term coal linkage for the project vide SLC-LT meeting held on April 08, 2010. The power plants at respective sites do not have any defence establishment/ land with in 15 kilometres of radius. Hence, defence clearance is not required from MoD. BHL has applied for a No Objection Certificate from AAI vide letter dated March 30, 2010. The plant is being set up on the land available in the premises of existing sugar plants of BHL and its subsidiary, BHSIL. Hence no R&R is required. No Forest land is involved in the development of Project. Hence Forest Clearance is not required.

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Sr. No.

Type Clearance/ Approval Water Linkage

Of Authority/Entity

Remarks

9.

Government Central Ground Water Authority (CWGA), GoI/ CWGB, Northern region, Lucknow

For the total requirement of 34920 m/day (6984 m/ day per site) water per annum, final approval from has been obtained for the drawl of the required ground water vide letter dated 4.02.2010.

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9 Risk Analysis
9.1 Risk Analysis Allocation & Mitigation
Table 41: Risk Analysis

Allocated To Management Risk Implementation BEPL/ BHL Capability & Experience

Risk Factor

Proposed Mitigation Mechanism The group is the largest sugar and ethanol manufacturer in India and has displayed excellent project executions skills in the past. The group has commissioned 11 Greenfield and integrated sugar plants with aggregate capacity of 1,06,000 TCD. The group has commissioned most of these projects much ahead of the schedules and created a benchmark in the industry. The group has also implemented various co-generation power projects at its existing sugar manufacturing facilities. The group is already operating co-gen power plants aggregating a capacity of around 428 MW. The group has mobilized an experienced and reliable team of personnel with requisite skills. The Company would be able to leverage the vast experience of the group in the execution of various larger size projects. BHL has retained BIDCO as the overall co-ordinator for the implementation of the Project. BIDCO has awarded contracts to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) on fixed price and fixed time basis. The contracts provide for adequate liquidated damages (LD)

Pre-Completion Risks Construction BEPL / Risk BIDCO/ BTG Contractor/ Other Contractors

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Risk Factor

Allocated To

Proposed Mitigation Mechanism provisions in case of delay in implementation and for plants various performance parameters. Contracts for civil works have also been awarded to reputed contractors with similar LD provisions. The group small size aggregate MW power has implemented various co-gen power projects of capacity of around 428 project.

BIDCO shall also appoint an Owners Engineer to bring in requisite expertise in various aspects of project supervision, management services and overall wrapping of project packages in order to deliver the performance as per the norms set out.

Sponsor Risk

BHL/Group Promoters

Land Availability

BEPL

Cost and Over-run

Time Contractors / BEPL/ BHL

The Project is in advanced stage of development with a balance gestation period of around 17 months. An amount of Rs. 438 crores has already been spent by BHL and Promoter Group on the Project, out of total equity requirement of Rs. 580 crore. BHL and Group Promoters have sufficient resources to contribute the requisite equity for the Project. The plant is being set up on the surplus land available in the premises of BHLs existing sugar plants and its subsidiary, BHSIL. The Company has already identified land required for the Project and BHL and BHSIL have initiated the process of transfer/assignment of land and obtaining NoCs from various lenders. The group has extensive experience of successfully implementing large projects in

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Risk Factor

Allocated To

Proposed Mitigation Mechanism the past. Further, BIDCO has awarded BTG contract to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) on fixed price and fixed time basis. The contracts provide for strict Liquidated Damages provisions in case of delay in implementation and deviation from performance parameters. The cost estimates for the Project, have been broadly arrived based on the awarded contracts and the estimates of the technical consultant. Further, a contingency provision of 3% of the total Hard Cost has been considered in the Project Cost. Further, any cost overrun shall be funded by BHL from its own sources.

Post-Completion Risks Environmental BEPL Risks

Water Availability

BEPL

Fuel Supply

BEPL/ BHL/MoC/ CIL

The Terms of Reference (ToR) for undertaking the EIA study have already been approved by State Level Expert Appraisal Committee, GoUP. EIA study and EMP have been submitted to UPPCB and request for public hearing has been made vide letter dated 5.04.2010. For the total requirement of 34920 m/day (6984 m/ day per site) water per annum, final approval from Central Ground Water Authority, GoI has been obtained for the drawl of the required ground water. As informed by BHL, it has been granted coal linkage in Standing Linkage Committee (Long-term) [SLC (LT)] meeting held on April 8, 2010.

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Risk Factor

Allocated To

Proposed Mitigation Mechanism The linkage is expected to be granted from NCL mines near Singrauli, Madhya Pradesh.

Coal Transportation

BEPL

For supply of coal from the allotted mines, under long term coal linkage, coal would be transported through Indian Railways rail network and by road. All the project sites are well connected through road and rail network. Fuel pricing under the long-term linkage of from CIL/NCL will be subject to price variations on account of change in government notified prices though the historical rise in price of Linkage coal has been gradual. Also, fluctuation in the price of secondary fuel shall impact the operating cost structure of BEPL. However, this is a very small component of the total operating costs. However, as per the draft PPA initialled by UPPCL and BHL, delivered fuel cost (both primary and secondary) including ex-mine price and transportation cost shall be a pass-through in tariff. This will ensure that the profitability and debt servicing capability of the Project remain robust.

Fuel Price

BEPL

Evacuation Risks

BEPL

To assess the viability and debt servicing capability of the Project, 2.5% p.a. escalation has been considered in the fuel price in line with past trends in coal prices. The power would be evacuated by using the existing 132 KV transmission line at four out of the five project sites. Further, the

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Risk Factor

Allocated To

Proposed Mitigation Mechanism evacuation network is being augmented and strengthened suitably for which Cost has been provided for in the Project cost. UPPCL sub-stations are located within 15-25 km from these sites. For Utraula, UPPCL sub-station is being constructed within the premises of the existing sugar unit for which land has already been provided to UPPCL.

Market Risk Off Take Risk

UPPCL/othe rs

Payment Risk

UPPCL/ Other Offtakers

Technology Risk Plant BTG Performance Contractor


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BHL has already initialled the Draft Power Purchase Agreement with UPPCL for sale of 90% of the net power produced on long term basis for 25 years. Final PPA is expected to be signed soon. Balance 10% power from the Project would be sold on merchant basis. The tariff considered for merchant sale is reasonable and in line with the long term tariff derived as per UPERC guidelines and the Company would be in position to sell the entire power given the power deficit stage in the state of Uttar Pradesh. The Company proposes to sell 90% of the net saleable energy to UPPCL on long term Take or Pay basis. The draft PPA initialled by BHL and UPPCL provides for a strong payment security mechanism in the form of Letter of Credit and Escrow Account to secure the payments from UPPCL. The balance power from the Project would also be sold against adequate payment security. The BTG awarded
85

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Risk Factor

Allocated To /BIDCO

Proposed Mitigation Mechanism Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package) through the appointed Project Management Consultant, BIDCO. The aforesaid companies have an established track record of manufacturing and installing power equipment for 45 MW size units. Back to back contracts awarded by BIDCO to the aforesaid contractors provide for stringent Performance Tests and in case of performance below the stipulated parameters, the suppliers will be required to pay liquidated damages.

Force Majeure

BEPL Insurers

The O&M shall be carried out by BEPL in-house with the support of its technical team of experts. Adequate level of stocks of spare parts would be maintained as per the recommendations of BIDCO/ Equipment Suppliers. The group has an established track record of operating and maintaining the existing units of power plants of aggregate capacity of 428 MW on bagasse technology. / BHL proposes to take out a comprehensive insurance policy package during the construction/ operations period for the Project for insurable Force Majeure events. Interest on project loan will be allowed as a pass-through expense in the tariff to be approved by UPERC;

Financial Risk Interest Rate

BEPL

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Risk Factor

Allocated To

Proposed Mitigation Mechanism Sensitivity has been carried out at interest rate of 12% p.a. against base case rate of 11.50% p.a., and holding revenues constant, and the financials and DSCR are found to be comfortable.

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10 Conclusion
BEPL proposes to set-up 450 MW Coal fired Thermal Power Project in the premises of five (5) existing sugar units of BHL and BHSIL. Salient features of the proposed Project are as under: Credible Promoters: Bajaj Hindusthan Limited (BHL) is the largest sugar and ethanol manufacturer of India with robust business operations and adequate financial strength. Additionally, BHL has successfully set up various green field projects including sugar units and co-generation power plants across Uttar Pradesh and has vast experience in such projects. Significant progress in project development activities as under: BHL has already spent around Rs. 438 crore on the Project. The Project is in advanced stage of implementation and is expected to commence commercial operations on 1st November, 2010. Entire land requirement to be met through the surplus land available in the premises of sugar units of BHL and BHSIL. Land parcels have already been identified and site development work has already commenced; Contract for Boiler, Turbine & Generator has already been awarded to ThyssenKrupp Industries India (for 3 Boilers), Thermax Limited (for 2 Boilers) and Siemens Limited (for all 5 Steam Turbine & Generator package); Contract for Engineering services and Civil Works has already been awarded to Powertech Engineering (P) Limited, Toshiba Plant Systems & Services Corporation India Private Limited, KK Construction & Builders, ERA Building Systems Limited and

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Petron Civil Engineering (P) Limited. Ministry of Coal has granted long term coal linkage to the Project in the SLC-LT meeting held on 8th April, 2010. Coal is expected to be provided from the mines of Northern Coalfields Limited in Madhya Pradesh. Draft Power Purchase Agreement for sale of 90% of the net power produced from the Project has been initialled by BHL and UPPCL. Power to be procured on cost-plus tariff, determined in accordance with the UPERC tariff determination guidelines. Power to be evacuated through the already existing 132 KV transmission line at four out of the five project sites to different UPPCL sub-stations located 15-20 km from the respective sites. Final approval to draw the requisite quantity of ground water for all the five sites has been obtained from Central Ground Water Authority, GoI. BHL has already applied for all major statutory clearances/ approvals required for the Project. EIA study and EMP already submitted to Uttar Pradesh Pollution Control Board for conduct of public hearing and subsequent grant of Environment Clearance for the Project. This Information Memorandum analyzes the project development structure and projected financial performance of the Project as per information provided by BHL. The Base Case business projections have been prepared based on the information pertaining to the project cost, financing plan, regulatory environment and prevalent market conditions. Sensitivity analysis has also been carried out to test the robustness of project financials in respect of DSCR and PIRR. The projected financials of the project as required to service the project debt over proposed tenor are reasonably comfortable under different

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sensitivity scenarios. Based on the projected financials, sensitivity analysis and risks factors, the proposed Project may be viewed as financially viable.

11 Indicative Term Sheet


11.1 Indicative Terms and Conditions Rupee Term Loan
1. Borrower Bajaj Energy Private Limited (BEPL) 2 X 45 MW Thermal Power Projects at 5 separate 2. Project Kheri), locations Maqsudapur viz. Barkhera (district: Pilibhit), Khambarkhera (district: Lakhimpuri (district: Shajhanpur), Kundarkhi (district: Gonda), Utraula (district: Balrampur), in the state of Uttar Pradesh, 3. 4. Sponsor Lenders aggregating to a total capacity 0f 450 MW. Bajaj Hindusthan Limited/ Promoter Group Indian Banks/ Institutions, collectively the Lenders, who are participating in funding the

5. 6. 7.

Project by way of Rupee Term Loan. Facility Agent/Lead State Bank of India (subject to approval of the Lenders) Bank Project Cost Rs 2,320 crore Debt Equity Ratio 75:25 The cost of the project is proposed to be funded at a Debt Equity Ratio of 3:1 as under: Rupee Term Loan: Rs.1740 Cr Sponsors Contribution/ Equity : Rs.580 Cr 60% of the total equity contribution for the Project Rupee Term Loan of Rs. 1740 crore and Sub Limit: 100% of the sanctioned rupee loan by way of Letter of Credit (LC) as a sub limit of the Rupee

8.

Means of Finance

9. 10.

Upfront Equity Facility

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Term Loan. The proceeds of the Facility will be utilized towards the following: 11. Purpose Facility of the 1. Funding of the Project Cost; 2. Repayment of bridge loans, if any, availed to meet the ongoing capital expenditure pending disbursement of Rupee Term Loan. The availability period for the Facility shall be up to six (6) months from the CoD. The sanction terms shall be valid up to a period of six (6) months from the date of sanction. Date of signing of Facility Agreement. First Disbursement shall mean the earlier of: 15. First Disbursement 1. First Drawdown under the Rupee Term Loan; 2. Opening of LC under the Facility. CoD shall be the earlier of the following: Commercial 16. Operation (CoD)

12. 13. 14.

Availability Period Validity Period Financial Date Closure

1. November 01, 2011;


Date 2. Actual commercial operations date of the last unit of the Project as certified by the Lenders Independent Engineer (LIE). Upto 12 years (Construction Period plus

17.

Door to Door Tenor

Moratorium of 6 months and Repayment period of 10 years) Moratorium period of six (6) months from the CoD. Principal repayment in forty equated quarterly

18. 19. 20.

Moratorium Repayment

instalments post Moratorium. (i) Interest Rate on The Borrower shall pay the interest on the Rupee Term Loan outstanding principal amount of the Rupee Term Loan at the end of every month to the Lenders as under :

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State Bank Advance Rate (SBAR) minus a Spread of 0.25%, present effective being 11.50% p.a., floating, payable monthly. Interest Rate shall be suitably adjusted in accordance to the Base Rate Provisions, as and when applicable to the Rupee Term Loan as per the provisions to be introduced by the Reserve Bank of India. (ii) LC Charges LC charges shall be decided mutually with the Lenders at the time of opening of LC. Lenders would have the option to reset the Spread on CoD such and at annual being intervals the thereafter, date(s) called

Interest Reset Date(s). Between two consecutive Interest Reset Dates, the Spread would remain constant and SBAR would be floating. Facility Agent would advise the Borrower about the reset of Interest Rate 30 days prior to each Interest Reset Date. Interest tax / other levies / duties, if any, 22. Interest Tax, Levies applicable as per Facility Agreement, shall be & Duties payable by the Borrower over and above the Interest Rate mentioned above. 0.25% of the Rupee Term Loan, payable at the time of signing of Facility Agreement. 1.20% p.a. on the undrawn amount with respect to the quarterly Drawdown Schedule provided by the Borrower on Financial Closure Date with flexibility to amend/revise/replace the Drawdown Schedule with fifteen (15) days

21.

Interest Reset Date

23. 24.

Up-front Fees Commitment Fee

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written notice by the Borrower to the Facility Agent prior to beginning of each quarter. Commitment Fee shall not be payable in case of such amendments or replacement. 2% of the amount pre-paid. No pre-payment penalty, however, shall be payable if the prepayment is effected in any of the following events: a. At the instance of the Lenders; b. From surplus cash accruals generated by 25. Pre-Payment penalty the Project, c. On Interest Reset Date, the Borrower shall have the option to prepay the outstanding Rupee Term Loan by advising its intention to prepay with an advance written notice of 15 days and prepay the Rupee Term Loan within 4 months from Interest Reset Date; 2% p.a. for the period of default on the on outstanding amount in respect of Principal & interest, up-front fees or any other monies specified in the Facility Agreement due on their respective due dates. The Rupee Term Loan alongwith interest, fees, commission and other monies in respect thereof and Working Capital Limits, to the extent assessed and revised from time to time, shall be secured by way of:

Liquidated 26. damages defaulted payments 27. Security

a) Security to be created prior to the First Disbursement: 1) First pari-passu charge by way of hypothecation of all the movable assets including, but not limited to plant &

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machinery, machinery spares, tools & accessories of the Project; 2) First pari-passu charge on all the bank accounts of the Project including but not limited to the Trust & Retention Account (TRA) and Debt Service Reserve Account (DSRA). 3) First pari-passu charge on book debts, operating cash flows, commissions, revenues of whatsoever nature and wherever arising, present and future, intangibles, goodwill, uncalled capital, present and future relating to the Project; 4) First pari-passu charge on other Current Assets of the Project; b) Security to be created within six months from the date of First Disbursement: 1) First pari-passu charge by way of mortgage and charge over all immovable assets (including mortgage of leasehold rights in case of leasehold land, if any) of the Project; 2) Assignment by way of security of all rights, titles and interests of the Borrower in, to and under all project documents, contracts, insurance policies, permits / approvals etc. to which the Borrower is a party and which can be legally assigned 28. Collateral related to the Project. Pledge of 51% of the fully paid-up equity shares of BEPL by the Sponsor, at all times during the currency of the Rupee Term Loan in favour of the Lenders. The pledgor to ensure

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that the voting rights of the pledged shares do not fall below 51%. Pledge of shares shall be created on the Financial Closure Date. BHL shall provide Undertaking backed by Board Resolution for the following purposes: 1) Infuse sufficient money in the Borrower, in case of any shortfall in equity, in a manner and form to the satisfaction of the Lenders;

2) That the completion cost of the Project


29. Undertaking by BHL shall not exceed the Project Cost indicated above and in case of any cost over-run, the same shall be met by BHL through additional equity contribution / subordinated debt from BHL or loans arranged by BHL without recourse to the Security and Collateral, in a manner and form to the satisfaction of the Lenders. The Borrower shall create the security as per Clause 27 (b) within six (6) months from the date of First Disbursement. If the Borrower fails to create the security within six (6) months from the date of First Disbursement, the 30. Additional interest Borrower shall pay an additional interest of 1% p.a. on the entire outstanding Rupee Term Loan amount from 1st day of the seventh (7th) month from the date of first disbursement till creation of security. Any further disbursements pending perfection of security shall be at the sole discretion of the Lenders. 31. Financial Covenants Starting from first full year of operations post CoD, for any adverse deviation of any two out of the first three covenants i), ii) and iii)

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indicated below by more than 10% from the levels stipulated hereunder and any deviation in covenant iv) stipulated hereunder, Penal Interest of 1% p.a. will be levied for the period of non-adherence, subject to a minimum period of one year. The measurement of deviation shall be once a year with reference to the last annual audited financial statements. (i) Current Ratio of 1.33 (never below 1.20) ; (ii) Total Outstanding Liabilities* / Tangible Net Worth** of 3.20 (never above 3.50); (iii) Security Margin*** of 20% (never below 18%); (iv) DSCR of 1.15 * Total Outstanding Liabilities = (Secured Loans + Unsecured Loans + Current Liabilities & Provisions + Advance Against Depreciation) ** Tangible Net Worth = (Paid up capital + Reserves and Surplus (excluding Revaluation reserve) + Net Deferred Tax Liability Intangible Assets) *** Security Margin = (1- Outstanding Rupee 32. Pre-Commitment conditions Term Loan/ Net Fixed Assets) The Borrower agrees as under: 1) The Borrower shall have received sanctions for the entire Rupee Term Loan;

2) To finalise the exact shareholding/equity


contribution pattern by the Sponsor in the Borrower;

3) The Borrower/BHL shall have received


Letter of Assurance from Ministry of Coal for

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the coal required for the Project. 4) Undertake to bring in the entire equity requirement for the Project in a timely manner;

5) Provide an undertaking that the completion


cost of the Project shall not exceed the Project Cost indicated above and in case of any cost over-run, the same shall be met by BHL through additional equity contribution / subordinated debt from BHL or loans arranged by BHL without recourse to Project assets, in a manner and to the satisfaction of the Lenders; 6) Agree for appointment of Lenders Independent Engineer (LIE), Lenders Legal Counsel (LLC) and Lenders Insurance Advisor (LIA) and any other agencies as may be necessary for review and monitoring of the Project. The Borrower shall also agree to bear the expenditure incurred for availing the services of these agencies; 7) Agree to prepare a schedule for award of Project contracts adhering to or improving upon the envisaged implementation schedule for the Project ; 8) That the Lenders reserves the right to withhold disbursement of the amount of loan equivalent to the provision against margin money for working capital in the cost of the Project till such time as the Project is near completion and the build up of the working capital commences;

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9) That the Lenders shall reserve the right to review the cost of the Project and means of finance anytime during construction period of the Project and stipulate relevant conditions, as deemed necessary; 10) That the preliminary and preoperative expenses shall be allowed as part of the Project cost only to the extent they are certified by the LIE / LLC/ Statutory Auditor/Other agency as relating to the Project and as accepted by the Lenders; 11) Agree to make suitable arrangements for project management/ O&M during implementation and operation of the Project; 12) Agree to modify its Memorandum of Association and Articles of Association, for enhancement of the authorized share capital and borrowing power as per the envisaged financing plan, if required, and incorporate any other changes as may be required by the Lenders;

13)

Ensure that the expenditure on the

Project is as per schedule and in case of any savings in the expenditure on account of change in duties/other taxes and / or price negotiations, the Lenders shall have the right to cancel their Rupee Term Loan in the proportion mentioned under Financing plan; 14) That the Lenders shall be entitled to appoint one (1) nominee on behalf of all the Lenders on the Board of the Borrower on occurrence of an Event of Default;

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15)

Undertake to open a Trust and Retention

Account (TRA) to the satisfaction of the Lenders through which all the Project cash flows (including during construction period) would flow and maintain a Debt Service Reserve Account (DSRA) in the TRA for the ensuing 3 months principal and interest payment due to the Lenders from the cash flows available after meeting debt service obligations during the operational phase. DSRA should be topped-up to the required level within 6 months from CoD. The Borrower will have one-time option to provide a letter of credit/ bank guarantee without recourse to project assets and as acceptable to Lenders, for an amount equivalent to ensuing 3 months principal and interest payment to the Lenders, in lieu of cash funded DSRA. No grace period will be allowed for build-up of requisite amount in DSRA if letter of credit/bank guarantee is provided in lieu of cash funded DSRA. The amounts accumulated in the DSRA would be utilized only in case of a shortfall in cash flows for meeting debt service requirements from time to time. The Borrower shall invest the funds in DSRA only in permitted investments and securities as approved by Lenders. No dividend distribution will be permitted until the DSRA requirement is fulfilled.

16)

To obtain rating by an external credit

rating agency for the Facility with-in three

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33.

Conditions Disbursement

(3) months from Financial Closure Date. Prior to first disbursement under the Facility, the satisfaction of the Lenders, have complied with the following: 1) 60% of the total equity required for the Project shall have been spent on the Project;

Precedent to First the Borrower/BHL, as the case may be, shall, to

2) The Borrower/BHL shall have firmed up


power sale arrangements for at least 90% of the Project capacity by entering into a long term Power Purchase Agreement with UPPCL with suitable payment security mechanism; 3) Acquire/lease the requisite land for the Project to the satisfaction of the Lenders. 4) Execute contract for BTG and major civil contracts and display readiness to award other major contracts; 5) Initiate steps to make necessary arrangements for transportation of requisite quantity of coal to the Project site;

6) Obtain critical statutory clearances


required for implementation of the Project, as certified by Lenders Independent Engineer (LIE), including NOC from State Pollution Control Board and Environmental Clearance from State Level Expert Appraisal Committee and agree to comply with all the conditions of these clearances. 7) To appoint Lenders Independent Engineer (LIE) on the terms which would include review of project cost, review of project agreements/contracts/clearances,

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and pre-construction due-diligence, monitoring of construction and performance, testing, CoD and monitoring of operations post CoD. 8) Arrange to review the water availability, sourcing plans, etc. by LIE and accordingly have a firm allocation from concerned state government department for the same;

9) To demonstrate that actions have been


initiated for arrangement of evacuation facilities for entire power generated from the Project;; 10) Appoint Lenders Legal Counsel (LLC) and Lenders Insurance Advisor (LIA) and any other agencies as may be deemed necessary for review and monitoring of the Project. The Borrower shall also agree to bear the expenditure incurred for availing the services of these agencies; 11) To ensure that the concerns raised by LIE/LLC in regard to key contracts required for the implementation of the Project are adequately addressed to satisfaction of the lenders.

12)

Make a plan for obtaining

necessary right of way and/or acquisition of land, if any, for laying of water pipeline, if required, and power transmission line to inter-connection point in line with the commissioning schedule of the project (to be reviewed by the LIE); 13) Prepare a schedule for award of Project contracts adhering to or improving

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upon the envisaged; implementation schedule for the Project (to be reviewed by LIE); 14) Open a Trust & Retention Account (TRA) into which the Borrower shall deposit all its cash inflows from the Project to be utilized/ applied in a manner and priority to be stipulated in the TRA Agreement. For this purpose, the Borrower shall have to appoint an acceptable bank/institution as a Trust and Retention Agent and enter into a Trust and Retention Agreement; 15) To appoint Owners Engineer for monitoring of project implementation to the satisfaction of Lenders / LIE; 16) Undertake that all the inter-group transactions relating to the Project are not prejudicial to the interest of BEPL and appropriately disclosed;

17)

Fully insure the Borrowers assets,

offered as security for the Facility, against fire and all such other risks as may be required by the Lenders/ LIA and the policies retained by the Borrower. Ensure that requisite insurance policies have been suitable endorsed in favour of the Lenders which should contain the Lenders Security Stipulation and name the Lenders as loss payees. A copy of this policy should be submitted to the Lenders/ LIA for review. A list of the current insurance policies should be submitted to the Lenders detailing therein the names and addresses of the

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insurer, brief particulars of goods covered, type of cover, amount of cover and date of expiry of each policy. 18) To ensure that Lenders shall have received the final copies of the construction schedule, organization chart, copies and related contracts, the construction budget and disbursement schedule, in accordance with the Base case business plan as agreed between Borrower and the relevant contractors and duly certified by LIE. 19) Furnish an undertaking that Borrower and other contracted parties have complied with the conditions precedent in major project documents and in critical statutory clearances/approvals of the Project. 20) To ensure that all representations and warranties which are made till the date of first drawdown are true in all material 34. Conditions Subsequent to First Disbursement respects. 1) Within 6 months of the date of First Disbursement, the Borrower shall submit to the Facility Agent/Security Trustee No Objection Certificates from the existing lenders of BHL/Bajaj Hindusthan Sugar and Industries Ltd. (BHSIL) for the following:

a. Use of Land, transmission network


and other assets transferred/leased by BHL/BHSIL to the Borrower;

b. Infusion of Equity by BHL in the


Borrower. 2) The Borrower shall execute the Fuel Supply 103

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Agreement and Fuel Transportation Agreement 6 months prior to the CoD and the same shall be vetted by the LE/LLC and the Borrower shall comply with their 35. Negative Covenants observations, if any. During the currency of the Rupee Term Loan, the Borrower shall not without prior approval of the Lenders, which would not be withheld unreasonably:

1) Effect any change in the capital


structure which results in the Long Term Debt to Equity ratio exceeding 75:25; 2) Formulate and effect any scheme of amalgamation or restructuring or reconstruction; 3) Create any Security Interest over the Project assets/ properties and contracts other than those required to be created under the Facility Agreement;

4) Undertake any new project either itself


or through any of its subsidiary(ies).

5) Augment, modernize, expand or


otherwise make material change in the scope of the Project; 6) Make any material modifications to Project Contracts/ Agreements;

7) Enter into borrowing arrangements,


either secured or unsecured, with any other bank or financial institution or undertake any guarantee obligation on behalf of any other borrower (including group companies). The Borrower may however enter into borrowing arrangements for
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refinancing and for meeting its working capital requirements and such additional financing arranged to meet any cost overruns as discussed in this Term Sheet.

8) Allow the following: a. b.


Dilution of equity holding of the Dilution of equity holding of Bajaj Sponsor in BEPL below 51%, and Hindusthan Limited in BEPL below 36. Event of Default 26%. The Lenders may reserve the right to call up the Facility by giving a notice of 30 days upon the happening of any of the following events of Default (each an Event of Default): 1) Any instalment of principal amount or interest on the Facility remaining unpaid for a period exceeding thirty (30) days on their respective due dates. 2) The Borrower committing any breach or default in the performance or observance of the material covenants of the Facility Agreement and such breach or default continues for a period of ninety (90) days after receipt of a notice from the Lenders. 3) Execution or distress being enforced or levied against the whole or any part of the Borrowers property and any order relating thereto is not discharged or stayed within a period of ninety (90) days from the date of enforcement or levy. 4) The Borrower ceasing or threatening to cease to carry on its business for a period exceeding ninety (90) days. 5) A receiver being appointed in respect of 105

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the whole or any part of the property of the Borrower and such appointment is not stayed, quashed or dismissed within a period of ninety (90) days. 6) The occurrence of any event or circumstance which is prejudicial to or imperils or depreciates the security given to the Lenders and such event or circumstance continues to have an effect 37. Other Terms & for a period in excess of ninety (90) days. 1) In case of default in repayment of the principal amount or payment of interest or any other dues on due dates, the Lenders / RBI / CIBIL shall have right to disclose details of the default and/or other information and the name of the Borrower and of its directors as defaulters; 2) The Lenders acting through the Lead Bank will have the right to examine the books of accounts of the Borrower and to have the Project site inspected from time to time by officers of the Lenders and/or outside auditors. Expenses incurred by the Bank in this regard will be borne by the Borrower;

Conditions

3) The Borrower shall ensure that, as


required by the Lenders, approvals and clearances received in the name of Bajaj Hindusthan Limited/Bajaj Hindusthan Sugar and Industries Limited/any other entity shall be transferred in the name of BEPL;

4) Rupee Term Loan will be disbursed after


each drawdown request is certified by the LIE as being in consonance with the project

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implementation schedule/status and by a chartered accountant as being in consonance with the expenditure incurred on the Project. 5) The Borrower shall to the satisfaction of the Lenders: a. Obtain prior approval of the Lenders for incurring and utilizing amount of the loans equivalent to the contingency provision in the Project cost. The disbursement of the contingency provision shall be based on LIE certification. b. Maintain a Debt Service Reserve Account (DSRA) in the TRA for the ensuing 3 months principal and interest payment due to the Lenders from the cash flows available after meeting debt service obligations during the operational phase. DSRA should be topped-up to the required level within 6 months from CoD. The Borrower will have one-time option to provide a letter of credit/ bank guarantee without recourse to project assets and as acceptable to Lenders, for an amount equivalent to ensuing 3 months principal and interest payment to the Lenders, in lieu of cash funded DSRA. No grace period will be allowed for build-up of requisite amount in DSRA if letter of credit/bank guarantee is provided in lieu of cash funded DSRA. The amounts accumulated in the DSRA would be utilized only in case of a shortfall in cash flows for meeting debt service
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requirements from time to time. The Borrower shall invest the funds in DSRA only in permitted investments and securities as approved by Lenders. No dividend distribution will be permitted until the DSRA requirement is fulfilled. c. Make satisfactory arrangements for tie-up of the required working capital facilities prior to start of commercial operations; d. Appoint technical, financial and executive personnel of proper qualification and experience for the key posts and ensure that the organization set up is adequate enough for smooth implementation and operation of the Project; e. Undertake not to declare any dividend during construction/ moratorium period and that during the repayment period of Rupee Term Loan, it shall not, without obtaining prior consent of the lenders declare any dividend on its share capital in case; (i) During the Continuance of an Event of Default, or (ii) if the DSRA is not funded and /or arranged as required by the Lenders; f. Constitute a Project Management Committee of Directors/Senior Executives for the purpose of supervising and monitoring the progress of implementation of the Project. The committee shall be responsible for the management of the Project during construction period and
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monitoring of the implementation of the Project. g. Constitute an Audit Subcommittee of its Directors to the satisfaction of Lenders for monitoring of the companys operations; h. Furnish to the Lenders every year a copy of audited annual accounts of the Borrower immediately on finalisation of the same but in any case not later than 180 days from the end of each relevant accounting period; i. Submit to the Lenders such financial statements as may be required by the Lenders from time to time, apart from the set of such statements to be furnished by the Borrower to the Lenders as on date of publication of the companys annual accounts. j. Provide regular progress reports on the Project both during construction and during operation to the Lenders as may be required by the Lenders; k. Agree to broad-base its Board of Directors with professional nominees and strengthen its management set up to the satisfaction of Lenders; l. Permit the Lenders and their authorized officers or employees to carry out technical, financial and legal inspections of the assets created out of the Facility and to visit any facilities and construction sites included in the Project and to examine any plants, installations, sites, works, buildings,
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properties, equipment, records and documents relevant to the performance of the obligations of Borrower under the Facility agreement. Any such representative of the Lenders shall have access to Borrowers properties upon suitable prior notice and shall receive full cooperation and assistance from the employees of Borrower provided no material disturbance will be caused to the business and operations of Borrower. m. Maintain adequate books of accounts which should correctly reflect its financial position and scale of operations and should not radically change its accounting system without prior notice to the Lenders. n. Keep the Lenders informed of the happening of any event likely to have substantial effect on its profit and business with explanations and the remedial steps proposed to be taken. o. Keep the Lenders advised of any circumstances adversely affecting the financial position of their subsidiaries/group companies or companies or in which it has large investments, including any action taken by the creditor against the said companies legally or otherwise. p. Increase its authorized share capital in line with the envisaged means of 38. Documentation In finance, if required. addition to the terms in this Term and conditions the final

contained

Sheet,

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documentation will contain other customary clauses Borrower, such as & of Financial Warranties Precedent loan and the covenants, from to the the Representation effectiveness

Conditions

Condition

Precedent to each disbursement, Affirmative Covenants by Borrower, Negative Covenants, Additional Covenants, Information Covenants, Events of Defaults by the Borrower and the Consequences of the Event of Default, disclosure norms, as applicable etc. RBI

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12 Annexure
12.1 Annexure I: Historical Financials of BHL Profit & Loss Statement
(Rs.Cror e)

Year ending September 30, INCOME Sales Less: Excise Duty Net Sales Total Income (A) EXPENDITURE Raw Material Consumed Stores Consumed Power & Fuel Repairs & Maintenance Manpower Cost Rent Other Expenses Selling & Distribution expenses (Increase)/ Decrease in Stocks Total Expenses (B) EBITDA (A-B) Less: Interest on Term Loans, Debentures, Fixed Deposits Interest Income Less: Interest on Others Less: Interest on Working Capital Loans
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2006 1526.9 2 79.68 1,447. 24 1,447. 24 951.45 53.34 9.88 32.73 56.60 1.49 25.71 12.12 (6.98) 1,136. 33 310.9 1 27.71 52.20 9.29 11.81

2007 1841.2 2 128.21 1,713. 01 1,713. 01 1,283. 42 108.81 12.79 42.61 112.52 2.44 42.05 22.98 (132.4 1) 1,495. 20 217.8 1 46.18 73.35 38.52 47.24

2008

2009

1879.4 1655.75 9 123.21 72.02 1,756. 1,583.7 28 4 1,756. 1,583.7 28 4 1,390. 33 75.99 18.23 46.22 116.29 3.55 141.52 16.90 816.76 35.46 14.98 19.89 120.83 3.81 51.11 13.04

(224.69 143.73 ) 1,584. 1,219.6 33 0 171.95 364.13 102.99 100. 09 47. 27 65.97 85.57 107.98 115.84 81.34

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(Rs.Cror e)

Year ending September 30, Finance Charges PBDT Less: Depreciation Operating Profit Add: Other Income PBT Less: Income Tax PAT Balance Sheet

2006 1.23 313.0 5 72.39 240.6 6 39.51 280. 17 89.34 190.8 3

2007 5.09 154.1 2 146.8 8 7.24 30.65 37.89 (7.81 ) 45.70

2008 23.31 32.50

2009 12.31 177.06

187.22 202.21 (154.7 (25.16) 2) 46.59 231.16 (108.1 206. 3) 00 (60.44 49. ) 77 (47.6 156. 9) 23

(Rs.Cror e)

As on September 30, ASSETS Fixed Assets Land & Building Plant & Machinery Other Fixed Assets Gross Block Less: Depreciation Net Fixed Assets Capital work in progress Total Fixed Assets & CWIP (A) Investments (B) Current Assets Inventories Raw Materials

2006

2007

2008

2009

261.71 866.17 157.46 1,285. 34 271.86 1,013 .48 1,223. 08 2,236 .56 205.8 1

550.04 643.13 1895.2 2237.22 6 193.96 176.03 2,639. 3,056.3 26 8 418.62 577.56 2,220 2,478.8 .64 3 562.97 2,783. 61 437.4 7 138.69 2,617.5 2 488.26

724.94 2507.8 9 174.65 3,407. 48 774.98 2,632. 50 131.28 2,763. 77 549.11

0.05

305.66

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(Rs.Cror e)

As on September 30,

2006

2007 308.71 59.81 26.31 394.8 3 1.56 108.44 110.0 0 80.10 828.19 586.99 1,495. 28 108.95 2,109. 05 5,330. 13

2008 584.06 44.90 8.28 637.24

2009 0.40 395.37 59.00 40.02 800.45

Work in progress Finished Goods Stores & Spares By products Total Inventories Receivables Outstanding for more than six months (Net) Other debts Total Receivables Loans & Advances Advance Tax Loans to Subsidiaries & Joint Venture Others loans & advances Total Loans & Advances Cash & Bank Balance Total Current Assets

70.83 42.29 9.21 122.3 9 0.50 61.36 61.86 59.47 200.76 274.06 534.2 8 223.31 941.8 3 3,384. 21

2.05 40.25 42.30 99.45 900.73 806.03 1,806.2 1 39.73 2,525. 47 5,631.2 5

0.87 27.70 28.57 110.21 956.21 1,026.6 3 2,093. 05 112.36 3,034. 42 6,347. 30

Total Assets (A+B+C) LIABILITIES Share Capital Share Capital (Equity) Equity Warrants General Reserve Other Reserves Total (D)

14.14 276. 60 1,077. 93 1,368. 67

14.14 281.60

14.14 281.407

17.69 18.90 379.97 1,877.1 1 2,293. 67

1,138. 1,049.56 59 1,434. 1,345.1 33 1

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(Rs.Cror e)

As on September 30, Current Liabilities & Provisions Sundry Creditors Bank Borrowings (Working Capital) Other current liabilities Provisions Total Current Liabilities (E) Long Term Liabilities Secured Loans - From Fis/ Banks - From others - Debentures Unsecured Loans - From promoters - From others Total Long Term Liabilities (F) Deferred Tax Liability/(Asset) (G) Total Liabilities (D+E+F+G)

2006 172.87 95.96 9.168 197.46 475 .45

2007 602.04 984.84 22.5 259.49 1,868 .87

2008 562.75 858.54 47.7 4 207.6 4 1,676. 67

2009 657.35 539.51 25.68 187.42 1,409. 96

330 .90 13.31 1,065 .92 1,410 .13 129.9 6 3,384. 21

800 .54 0.50 250. 00 855.0 1 1,906 .05 120.8 8 5,330. 13

1,377 1345.8 .50 7 7.05 56.35 565. 15.00 00 600. 1,118. 99 42 2,550. 2,535. 53 64 58. 108.04 94 5,631.2 5 6,347. 31

12.2 Annexure II: Detailed Banking Arrangement of BHL S.No (A) Financial Institutions/ Banks from which borrowed. Secured Loan Non Convertible Debentures Loan Amount (Rs crore) Outstanding as on Sanctioned 31.12.2009

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S.No 1.

Financial Institutions/ Banks from which borrowed. GIC Total Non Convertible Debentures (Total a) Working Capital Loans State Bank of India State Bank of Patiala Punjab National Bank HDFC Oriental Bank of Commerce IDBI YES bank Allahabad Bank Total Working Capital Loan(Total b) Term Loans from Banks ECB Loan from BNP/ABN State Bank of Patiala Term Loans State Bank of India Punjab National Bank Oriental Bank of Commerce Yes bank IDBI Term loans From Banks(Total c) Corporate Loans Punjab National Bank Bank of Rajasthan Allahabad Bank Bank Of India Corporation Bank State Bank of Mysore State Bank of Hyderabad State Bank of India Total Corporate Loans(Total d) Term Loans from Others Sugar Development Fund Total Other Loans Others(Total e)

Loan Amount (Rs crore) Outstanding as on Sanctioned 31.12.2009 15.00 15.00 15.00 15.00

2. 3. 4. 5. 6. 7. 8. 9.

750.00 100.00 300.00 10.00 150.00 170.00 50.00 25.00 1,555.00 309.64 150.88 390.25 37.87 20.00 30.00 15.19 953.83 550.00 170.00 100.00 200.00 200.00 50.00 50.00 300.00 1,620.00 123.77 123.77

400.66 90.43 (30.55) 1.99 50.70 1.29 514.52 479.36 17.97 90.25 37.87 20.00 30.00 15.19 690.64 466.67 110.00 83.34 200.00 200.00 50.00 50.00 300.00 1,460.01 70.04 70.04

10. 11. 12. 13. 14. 15. 16.

17. 18. 19. 20. 21. 22. 23. 24.

25.

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S.No

Financial Institutions/ Banks from which borrowed. Total Secured Loans (Total a to e)

Loan Amount (Rs crore) Outstanding as on Sanctioned 31.12.2009 4,267.59 2,750.21

(B) 26.

Unsecured Loan Deposits Public Deposits Total Deposits (Total a) Short Term Loan (STL) Central Bank of India Total STL (Total b) Mutual Funds & Others LIC Mutual Funds JP Morgan Assets Management (Total c) FCCB Total FCCB(Total d) Total Unsecured (Total a to d) Total Loan & Funds (Total A+ B)

0.08 0.08 100.00 100.00 400.00 150.00 550.00 549.22 549.22 1,199.30 5,466.89

0.08 0.08 100.00 100.00 400.00 0.00 400.00 464.80 464.80 964.88 3,715.09

27.

28. 29. 30.

Notes

The sanctioned amount of FCCB is representing the FCCB of 119.50 million. Out of outstanding Foreign Currency Convertible Bonds (FCCBs) aggregating to US$ 119.50 million, FCCBs of the aggregate face value of US$ 19.93 million were repurchased at discount and cancelled during the year 2008-2009. The outstanding amount of FCCB is representing the FCCB of 99.57 million USD (119.50-19.93) The difference in the sanctioned and outstanding amount of ECB is only due to the exchange fluctuation.

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12.3 Annexure III: Project Implementation Schedule

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12.4 Annexure IV: Key Assumptions Particulars Details General Assumptions Total Capacity of the 450 MW (5 x 2 x 45 MW) Project Schedule of CoD of the Project 1st November, 2011

Implementation Phasing Assumptions Quarterly Phasing of Quarte r Expenditure


Ending Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Total

%age of total Expenditur e 18.9% 11.0% 8.7% 18.3% 13.6% 8.3% 9.7% 11.5% 100.0%

Operational & Technical Details Coal (Primary Fuel) GCV: 3865 Kcal/Kg Price: Rs. 1880 per tonne as on 1st April, 2010 Escalated: @ 2.5% p.a. thereafter. LDO (Secondary Fuel) Price: Rs. 24000 per kL as on 1st April, 2010. Escalated: @ 3.0% p.a. thereafter Consumption: 1 ml per KWh (UPERC) Power Block Consumption: 0.3 ml per KWh (Actual) Actual: Station Heat Rate: 2675 kcal/KWh Auxiliary Consumption: 10% PLF: 80% in the first part-year of Operations and 85% thereafter for Plant Life.

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Particulars

Details UPERC Norms: Station Heat Rate: 2675 kcal/KWh Auxiliary Consumption: 10% PLF: 80% in the first part-year of Operations and 85% thereafter for Plant Life Actual: Rs. 12.0 Lacs per MW p.a. (for FY 2009-10) escalated at 5.72% UPERC Norms: Rs. 18.2 Lacs per MW p.a. (for FY 2009-10) escalated at 5.72%. Actual: Margin Money: 25% Interest on Working Capital: 11.75% p.a. Coal Stock: 1.5 Months Fuel Oil Stock: 1.5 Months O&M Expenses: 1 Month Spares: 20% of O&M Expenses Receivables: 1.5 Months For UPERC Tariff Calculation; Coal Stock:2 Months Fuel Oil Stock: 2 Months O&M Expenses: 1 Month Maintenance Spares: 20% of O&M Expenses

O&M Expenses

Working Capital

Receivables: 2 Months Financing Related Assumption: Debt : Equity Ratio 75:25 Upfront Equity 60% Debt Related Assumptions Moratorium from CoD 6 Months of Project Rate of Interest on Rupee Term Loan (for 11.50% p.a.

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Particulars Projections purpose) Tariff Assumptions Power Sale

Details 405 MW (90% of Net Saleable Power) to UPPCL at Regulated Tariff as per UPERC Tariff Norms. Levelized tariff for 25 years works out to Rs. 3.54/kwh. 45 MW (10% of Net Saleable Power) on Merchant basis at Rs. 3.54/kwh in line with the tariff for long-term PPA with UPPCL.

12.5 Annexure V: Award of Coal Linkage for the Project

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12.6 Annexure VI: Brief profile of Contractors Thermax (india) Limited Thermax is an India based solution provider in energy and engineering services for over 30 years. It has teamed up with Babcock & Wilcox Power Generation Group, Inc. (B&W PGG), USA under a technology license agreement for offering B&Ws Radiant line of boilers for power utilities. These radiant boilers are the most thoroughly field-tested and proven sub-critical power utility boiler in the world.
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Some contracts already contracted by Thermax includes Welspun (43 MW), DCW (50 MW), Maral Overseas (10 MW), J K Laxmi Cements (36 MW), CESC-RPG enterprise (40 MW), etc. Projects like Meenakshi Energy Private Limited (270 MW), Brahmani Industries (60 MW), Chemplast Sanmar 50 MW, Jay Kay Cements 50 MW, Madras Cement Limited 40 MW are still under execution. Siemens India Limited The Siemens Group in India is a unique player in the field of electrical and electronics engineering with a business volume aggregating about Rs 11,800 crores. The groups business is represented by various companies that span across three major business segments of Industry, Energy and Healthcare. Siemens Group in India comprises of 20 companies, providing direct employment to over 17,200 persons. Currently, the group has 19 manufacturing plants, a wide network up of Sales and Service offices across the country as well as over 500 channel partners. Thyssenkrupp Industires India Pvt. Limited ThyssenKrupp Industries India Pvt. Ltd. (TKII) in the last five decades has grown to become one of the most trusted names in the fields of Sugar Plants & Machinery, Open Cast Mining & Bulk Material Handling Systems, Cement Plants & Machinery and Steam & Power Generation Plants. The company's nationwide branch network along with the support of ThyssenKrupps global establishments enables it to meet the needs of customers on time. Few of the projects executed by TKII in power generation are as follows: Aditya Cement Limited: 2x25 MW Thermal power plant at Chittorgarh Rajasthan Ultratech Cement Limited: 2x25 MW Thermal power plant at
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Tadipatri Andhra Pradesh Tata Chemicals Limited (TCL): 1x50 MW Thermal Power plant for TCL at Mithapur, Gujarat. The India Cements Limited: 1x50 MW power plant for The India Cement execution ANRAK Aluminium Limited: 2x75 MW thermal power plant at Vishakapatnam, Andhra Pradesh is under execution Mantech Technical Services Private Limited (MTSPL) MTSPL is an engineering consultancy services and specializes in project development and engineering services for the following projects. Coal based Thermal Power Projects, Gas based Power Projects, Renewable Energy Projects, Waste to Energy Projects, Desalination Projects. Limited at Sankarnagar, Tamil Nadu is under

Few of the projects completed by MTSPL are as under: Construction Services for 46 MW Coal Fired CPP Project for L&T Awarpur, Maharashtra 105 MW Diesel Based Power Project of Balaji Power Corporation, Tamil Nadu Lender Engineering Services for Vishnuprayag Hydro Power Project, Uttar Pradesh - Electrical & Balance of plant equipments and substation Installation of 2 X 210 MW steam turbine and auxiliaries at Raichur Thermal Power Project, Karnataka.

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Powertech Engineering Pvt. Limited (PEPL) PEPL is a reputed engineering organizations with well established credentials in the Indian Power Sector. PEPL has an Engineering Consultancy practice as well as an Infrastructure and Management Consultancy practice. The firm has so far executed more than 130 assignments under different categories of services such as Project development (PD), Owners Engineer (OE), Detailed Engineering (DE), etc. Few of the executed assignments by PEPL are as follows: 105.66 MW DG Based Project for Balaji Power Co. Pvt. Ltd in Tamil Nadu 330 MW Combined Cycle IPP of PPN Power Generating Co. Pvt. Ltd., in Tamil Nadu 330 MW Gas Based Combined Cycle Power Project for RRVUNL at Dholpur, Rajasthan. Petron Civil Engineering Pvt Limited (Petron) Petron Civil Engineering Pvt. Ltd. is a privately held organization which was formed in 1980. It is mainly involved in the civil construction works in Industrial and Infrastructure Sector including Heavy Industrial Construction in steel and concrete. Few of the projects undertaken by Petron are as follows: Thermal Power Plant, BHEL, Harduaganj, Uttar Pradesh Thermal Power Plant, BHEL, Bhatinda, Punjab Construction of Cement Plant for Madras Cement Ltd., Ariyalur, Tamil Nadu Construction of Preheater, Gujarat Ambuja Cement Ltd., Darlaghat, Himachal Pradesh ERA Building Systems Ltd (Era)

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Era Building Systems Ltd. is an engineering, construction and services conglomerate infrastructure with operations across the entire spectrum of & development including power transmission

distribution. ERA has successfully completed projects across various sector i.e Power, Highways, Railways, Airports, Urban Infrastructure, Refineries, Industrial Complexes, Commercial and Office buildings, etc. Few of the projects undertaken by Era are as follows: For Thermax, 3 projects at Savali, Vadodara Bajaj Ecotech, Sugar Mills at Paliakalan (U.P.) Civil works, L & T, Hazira Civil Works, Videocon, Kashipur

K.K Construction Builders (KKCB) KKCB started its operations in 1991. The companys core competency is in civil structures interiors, plumbing, electrical working, housing complexes, institutional projects, development work including infrastructure with road and bridges and heavy steel fabrication. Few of the projects executed by KKCB are as follows: Development of 440 KVA sub-station, Uttar Pradesh Elecricity Board, Gorakhpur, Uttar Pradesh Construction of cooling towers, switch yard, control room and township for 4x300 MW Rosa Thermal Power Project (Reliance Energy Limited), Shahjahanpur, Uttar Pradesh Civil works of 27 MW co-generation plant (BHL), at Budhana, Uttar Pradesh Toshiba Plant Systems & Services Corporation India Private Limited (TPSCI)

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Bajaj Energy Private Ltd MW Power Project

Project Information Memorandum 450

Toshiba Plant Systems & Services Corporation India Private Limited (TPSCI) is Engineering, Procurement and Construction company under the flagship of Toshiba Corporation, Japan which has been active in the development of power projects for the last sixty six years. The companys focus and core competence has been on the power projects. TPSCI was registered in India in December, 1998 and is wholly owned by Toshiba Plant Systems & Services Corporation (TPSC) to further strengthen the business interest of Toshiba Corporation in the thermal, combined cycle, diesel based, hydro-electric and non-conventional energy power plants, in India, Middle East and the South East Asia. TPSCI has full-fledged technical support and access to the database of TPSC developed through the principal companys long and rich experience from projects executed across the globe. Few of the projects executed by TPSCI are as follows: 2 x 500 MW Anpara B Thermal Power Plant at Sonebhadra, Uttar Pradesh 2 x 125 MW Hydel Power Station, Ghatghar, Maharashtra 3 x 170 MW Teesta Stage-V, Hydro Power Project, Sikkim 4 x 225 MW Hydro Electric Project, Purulia, West Bengal 172 Combined Cycle Power Project, Vijjesswaram, Andhra Pradesh 4 x 10.5 MW Hydro Electric Project (Modernization and Renovation), Umiam, Meghalaya

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Bajaj Energy Private Ltd MW Power Project

Project Information Memorandum 450

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Project Information Memorandum 450 MW Power Project

12.7 Annexure VII: Projected Financials of Project DSCR Calculations


(Rs. Crores) Particulars Interest Payments Loan Repayments Total Debt Servicing Liability PBDIT + AAD Less: WC Interest Less: Current Tax Amount available for Debt servicing DSCR Minimum DSCR Average DSCR Mar12 81.5 81.5 190.7 6.4 11.4 172.9 2.12 1.35 1.51 Mar13 190.1 174.0 364.1 536.3 17.2 27.5 491.6 1.35 Mar14 170.1 174.0 344.1 519.2 17.3 28.0 473.9 1.38 Mar15 150.1 174.0 324.1 502.2 17.5 28.6 456.2 1.41 Mar16 130.1 174.0 304.1 485.3 17.6 29.2 438.5 1.44 Mar17 110.1 174.0 284.1 468.5 17.8 29.8 420.9 1.48 Mar18 90.0 174.0 264.0 451.7 18.0 30.4 403.3 1.53 Mar19 70.0 174.0 244.0 435.0 18.2 31.0 385.9 1.58 Mar20 50.0 174.0 224.0 418.5 18.4 31.7 368.4 1.64 Mar21 30.0 174.0 204.0 402.0 18.6 32.3 351.1 1.72 Mar22 10.0 174.0 184.0 357.1 18.5 33.3 305.3 1.66

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Project Information Memorandum 450 MW Power Project

Profit & Loss Account (Rs. Crores)


Profit and Loss Statement Revenue Sale of Power Expenditure Coal Cost Oil Cost O& M Cost Total Expenditure PBDIT Interest Interest on Loan Interest on Working Capital Total Interest PBDT Depreciation PBT Tax Income Tax Deferred Tax Total Tax PAT Mar12 393.5 176.7 1.0 25.1 202.8 190.7 81.5 6.4 87.9 102.8 45.5 57.3 11.4 7.6 19.0 38.3 Mar13 982.5 461.7 2.6 63.8 528.2 454.3 190.1 17.2 207.3 247.0 109.2 137.8 27.5 18.3 45.8 92.0 Mar14 980.7 473.3 2.7 67.5 543.5 437.2 170.1 17.3 187.4 249.8 109.2 140.6 28.0 18.7 46.7 93.9 Mar15 979.5 485.1 2.8 71.3 559.2 420.2 150.1 17.5 167.5 252.7 109.2 143.5 28.6 19.1 47.7 95.8 Mar16 978.8 497.3 2.9 75.4 575.5 403.3 130.1 17.6 147.7 255.6 109.2 146.4 29.2 19.5 48.6 97.8 Mar17 978.8 509.7 3.0 79.7 592.4 386.5 110.1 17.8 127.8 258.6 109.2 149.4 29.8 19.8 49.6 99.8 Mar18 979.5 522.4 3.1 84.3 609.7 369.7 90.0 18.0 108.0 261.7 109.2 152.5 30.4 20.3 50.6 101.8 Mar19 980.8 535.5 3.1 89.1 627.7 353.1 70.0 18.2 88.2 264.9 109.2 155.6 31.0 20.7 51.7 103.9 Mar20 982.8 548.9 3.2 94.2 646.3 336.5 50.0 18.4 68.4 268.1 109.2 158.8 31.7 21.1 52.8 106.1 Mar21 985.5 562.6 3.3 99.6 665.5 320.0 30.0 18.6 48.6 271.4 109.2 162.2 32.3 21.5 53.9 108.3 Mar22 990.2 576.7 3.4 105.3 685.4 304.8 10.0 18.5 28.5 276.3 109.2 167.1 33.3 22.2 55.5 111.6

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Balance Sheet
Particulars Liabilities Sharehold ers Funds Equity Reserves & Surplus Net worth Loan Funds Long term borrowings Working Capital Borrowings Sub Total Deferred Tax Liability Deferred Revenue Total Liabilities Assets Fixed Assets Mar10 Mar11 Mar12 Mar13 Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22

438.6 438.6

439.5 439.5 1,195. 7 1,195 .7 1,635 .3

580.0 38.3 618.3 1,740. 0 54.7 1,794 .7 7.6 2,420 .5

580.0 130.3 710.3 1,566. 0 146.1 1,712 .1 25.9 82.0 2,530 .3

580.0 224.2 804.2 1,392. 0 147.3 1,539 .3 44.6 163.9 2,552 .0

580.0 320.0 900.0 1,218. 0 148.5 1,366 .5 63.7 245.9 2,576 .1

580.0 417.7 997.7 1,044. 0 149.9 1,193 .9 83.1 327.9 2,602 .7

580.0 517.5 1,097 .5

580.0 619.3 1,199 .3

580.0 723.2 1,303 .2

580.0 829.3 1,409 .3

580.0 937.6 1,517 .6

580.0 1,049. 2 1,629 .2

438.6

870.0 151.4 1,021 .4 103.0 409.9 2,631 .7

696.0 153.0 849.0 123.2 491.8 2,663 .4

522.0 154.7 676.7 143.9 573.8 2,697 .6

348.0 156.5 504.5 165.0 655.8 2,734 .6

174.0 158.4 332.4 186.5 737.8 2,774 .4

(0.0) 157.8 157.8 208.7 790.0 2,785 .8

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Particulars Gross Block Less: Depreciation Net Block CWIP Sub Total Currents Assets, Loans & Advances Inventories Debtors Maintenanc e & Spares Cash & Bank Balances (including cash in DSRA) Current Liabilities Net Current Assets Total Assets

Mar10 438.6 438.6

Mar11 1,635. 3 1,635 .3

Mar12 2,271. 3 45.5 2,225 .8 2,225 .8

Mar13 2,271. 3 154.8 2,116 .5 2,116 .5

Mar14 2,271. 3 264.0 2,007 .3 2,007 .3

Mar15 2,271. 3 373.3 1,898 .0 1,898 .0

Mar16 2,271. 3 482.5 1,788 .8 1,788 .8

Mar17 2,271. 3 591.8 1,679 .5 1,679 .5

Mar18 2,271. 3 701.0 1,570 .3 1,570 .3

Mar19 2,271. 3 810.2 1,461 .1 1,461 .1

Mar20 2,271. 3 919.5 1,351 .8 1,351 .8

Mar21 2,271. 3 1,028. 7 1,242 .6 1,242 .6

Mar22 2,271. 3 1,138. 0 1,133 .3 1,133 .3

21.9 48.5 0.4

57.3 131.2 1.0

58.7 131.0 1.1

60.2 130.9 1.2

61.7 130.8 1.2

63.2 130.8 1.3

64.8 130.9 1.4

66.4 131.0 1.5

68.1 131.3 1.5

69.8 131.6 1.6

71.5 128.5 1.7

123.9

224.2

353.9

485.9

620.2

756.9

896.0

1,037. 7

1,181. 9

1,328. 8

1,450. 7

438.6

1,635 .3

70.8 2,420 .5

189.5 2,530 .3

190.8 2,552 .0

192.2 2,576 .1

193.7 2,602 .7

195.3 2,631 .7

197.0 2,663 .4

198.9 2,697 .6

200.9 2,734 .6

203.0 2,774 .4

201.8 2,785 .8

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Cash flow Statement


FY Ending March 31, Cash Flow from Operating Activities PBT Add: Depreciation Add: AAD Add: Interest Paid Operating Profit before Working Capital Changes Adjustment for Working Capital Add/(Less) Change in Inventory Change in Maintenance & Spares Change in Receivables Sub Total Less: Income Tax Paid Net Cash from Operating 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

57.3 45.5 87.9 190.7

137.8 109.2 82.0 207.3 536.3

140.6 109.2 82.0 187.4 519.2

143.5 109.2 82.0 167.5 502.2

146.4 109.2 82.0 147.7 485.3

149.4 109.2 82.0 127.8 468.5

152.5 109.2 82.0 108.0 451.7

155.6 109.2 82.0 88.2 435.0

158.8 109.2 82.0 68.4 418.5

162.2 109.2 82.0 48.6 402.0

167.1 109.2 52.3 28.5 357.1

(21.9) (0.4)

(35.3) (0.6)

(1.4) (0.1) 0.2 (1.3) 28.0 489.9

(1.5) (0.1) 0.2 (1.4) 28.6 472.2

(1.5) (0.1) 0.1 (1.5) 29.2 454.6

(1.5) (0.1) 0.0 (1.6) 29.8 437.1

(1.6) (0.1) (0.1) (1.7) 30.4 419.6

(1.6) (0.1) (0.2) (1.9) 31.0 402.2

(1.7) (0.1) (0.2) (2.0) 31.7 384.8

(1.7) (0.1) (0.3) (2.1) 32.3 367.6

(1.7) (0.1) 3.1 1.2 33.3 325.1

(48.5) (82.7) (70.8) (118.7) 11.4 108.4 27.5 390.1

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FY Ending March 31, Activities

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

Cash Flow from Investing Activities Purchase of Fixed Assets (438.6) (1,196.7)(636.0) Net Cash from Investing Activities (438.6) (1,196.7)(636.0) Cash Flow from Financing Activities Infusion of Equity 438.6 0.9 140.5 Add: Proceeds from Long term borrowings 1,195.7 544.3 Add: working Capital Borrowing 54.7 91.4 1.2 1.3 Transfer to DSRA 91.0 (5.0) (5.0) (5.0) Less: Repayment of Loan 174.0 174.0 174.0 Less: Interest Paid 87.9 207.3 187.4 167.5 Net Cash from Financing Activities 438.6 1,196.7 560.5 (284.8) (355.2) (335.3) Increase/Decrea 32.9 105.3 134.7 137.0

1.4 (5.0) 174.0 147.7

1.5 (5.0) 174.0 127.8

1.6 (5.0) 174.0 108.0

1.7 (5.0) 174.0 88.2

1.8 (5.0) 174.0 68.4

1.9 (5.0) 174.0 48.6

(0.6) (46.0) 174.0 28.5

(315.3) (295.4) (275.4) (255.5) (235.6) (215.7) (157.1) 139.3 141.7 144.1 146.7 149.2 151.9 167.9

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FY Ending March 31, se in cash balance Opening Cash Balance Closing Cash Balance Cash Balance in DSRA Closing Cash Balance including DSRA

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

32.9 91.0 123.9

32.9 138.2 86.0 224.2

138.2 272.9 81.0 353.9

272.9 409.9 76.0 485.9

409.9 549.2 71.0 620.2

549.2 690.9 66.0 756.9

690.9 835.0 61.0

835.0

981.7 1,130.9 1,282.8

981.7 1,130.9 1,282.8 1,450.7 56.0 51.0 46.0 -

896.0 1,037.7 1,181.9 1,328.8 1,450.7

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