Tata Motors AR_2016-17

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placement basis is one of the cost effective sources of long term
borrowings raised by the Company. The Company had obtained
the approval of the Members vide Postal Ballot on June 27, 2014 to
borrow from time to time any sum(s) of monies which, together with
monies already borrowed by the Company (apart from temporary
loans obtained or to be obtained from the Company’s Bankers in
the ordinary course of business) upto an amount not exceeding
`30,000 crores. The borrowings of the Company (on stand-alone
basis excluding Joint operations) as at March 31, 2017 aggregate
approximately `18,578 crores, of which outstanding NCDs aggregate
to ` 7,050 crores. The Company’s Net Debt-Equity ratio (on stand-
alone basis excluding Joint operations) as at March 31, 2017 is 0.78:1
and the Company believes that the aggregate borrowings would be
well within acceptable levels.
Further, theCompany hadobtainedMembers’approval for borrowing
up to `3,000 crores by way of NCDs at the Annual General Meeting
(“AGM”) held on August 09, 2016, which is valid for a period of one year
from date of the said approval. The Company has borrowed `1,300
crores by way of unsecured NCDs up to May 2017, in accordance with
the aforesaid Members’approval.
As per provisions of Sections 23, 42, 71 of the Act read with rule 14 of
the Companies (Prospectus and Allotment of Securities) Rules, 2014,
a company making a private placement of its securities is required to
obtain the approval of the Members by way of a Special Resolution
for each offer or invitation before making such offer. However, in
case of offer for NCDs, it shall be sufficient if the Company passes a
previous Special Resolution only once in a year for all the offers or
invitation for such debentures during the year.
In continuation of its efforts to strengthen its capital structure,
the Company intends to augment the resources through a mix of
internal accruals and long term borrowings to insure that they are
aligned in terms of quamtum, risk, maturity and cost with its earning
profile. Accordingly, it is proposed to issue NCDs and / or Rupee
Denominated Non-Convertible Foreign Currency Bonds on a private
placement basis aggregating upto `3,000 crores, in one or more
series/tranches during the 12-month period from the date of this
AGM, with an intention to finance, inter-alia the repayment of certain
NCDs / term loans from Banks, to fund part of the ongoing capital
expenditure during the next 12 months and for general corporate
purposes. The Company intends to raise NCDs for tenors ranging
between 2 to 10 years and expects the borrowing cost of NCDs to
be lower than 1 year MCLR rate of State Bank of India (prevailing at
8% p.a. as on June 1, 2017) plus a spread of 100 bps, considering
the current credit rating of the Company of AA by ICRA and AA+
by CARE.
It is therefore proposed to pass an enabling Resolution authorizing
the Board of Directors to make specific issuances based on the
Company’s requirements, market liquidity and appetite at the
opportune time.
The above proposal as set out in Item No. 8 of the Notice is in the
interest of the Company and your Directors commend the same for
approval by the Members.
None of the Directors, Key Managerial Personnel or their relatives are
in any way concerned or interested, financially or otherwise in the
resolution set out at Item No. 8 of the Notice.
By Order of the Board of Directors
H K SETHNA
Mumbai Company Secretary
June 5, 2017 FCS No.: 3507
Registered Office:
Bombay House, 24, Homi Mody Street, Mumbai 400 001
Fax:+91 22 6665 7799
Email: ; Website:
CIN - L28920MH1945PLC004520
Notice Board’s Report Management Discussion & Analysis Corporate Governance Report Business Responsibility Report
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