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Private & Confidential - Not for Circulation
CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD-TAX FREE MUNICIPAL BONDS
1
INFORMATION MEMORANDUM FOR PRIVATE PLACEMENT OF BONDS
CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD(Statutory Board of the Government Tamil Nadu)
Registered Office: No.1, Pumping Station Road, Chennai - 2.Board Nos:- (044)28534444, 28534994, 28524388 Fax No. :
(044)28531243, 28525544Website: www.chennaimetrowater.com, Email: [email protected]
UNSECURED REDEEMABLE TAX FREE CMWSSB MUNICIPAL BONDS 2004 FORRs. 42 CRORES OF THE FACE VALUE OF RS.10,00,000 LAKH EACH (IN THENATURE OF PROMISSORY NOTES)
CREDIT RATING - CRISIL AA(SO)
HIGHLIGHTSØ Premier state owned Water Supply Board & Government of Tamil Nadu undertaking.Ø Formed under the separate Act of State legislature.Ø Twenty five years in the service of citizens.Ø Sound tariff policy, which is consistently maintained
ISSUE HIGHLIGHTS• Tax Free Municipal Bonds in the nature of Promissory note• Bonds will be issued in Demat form.• Bond Issue carries high investment grade rating from CRISIL i.e. AA(SO)• Bonds are proposed to be listed on The Stock Exchange, Mumbai (BSE)• Tax Free Yield of 5.20% p.a.
ADVISORS & SOLE ARRANGER FACILITATED BY
SPA Merchant Bankers Ltd. Tamilnadu Urban Infrastructure Fin25, C Block, Community Centre Services Ltd., Vairams ComplexJanak Puri, New Delhi – 110 058 112, Sir Theyagaraya RoadPh.: (011) 25517371, 25515086 T Nagar, Chennai 17Fax: (011) 25532644 Phone: 044-28153103
DEBENTURE TRUSTEES BANKERS TO THE ISSUECANARA BANK CANARA BANKDebenture Trust Department, E.T & T Section Circle Office, Chennai51. Stock Exchange Towers, P.O Box No. 27047 583/1, Anna Salai, TeynampetI Cross, J C Road, Bangalore Chennai – 600 018Telephone:(080) 22223170 Telephone: ( 044) 24349731
PLACEMENT DATES WILL BE NOTIFIED TO THE PROSPECTIVE INVESTORS SEPRATELY
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CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD(Statutory Board of the Government Tamil Nadu )
Registered Office: No.1, Pumping Station Road, Chennai - 2.Board Nos:- (044)28534444, 28534994, 28524388 Fax No. :(044)28531243, 28525544
Website: www.chennaimetrowater.com, Email: [email protected]
GENERAL RISKS
Investment in securities involves a degree of risk and investors should not invest anyfunds in this offer unless they can afford to take the risk of losing their investment. Fortaking an investment decision the investors must rely on their own examination of theissuer and the offer including the risk involved. The securities have not beenrecommended or approved by the Securities and Exchange Board of India nor doesSecurities and Exchange Board of India guarantee the accuracy or adequacy of thisdocument. Investors are advised to read the risk factors carefully before taking aninvestment decision in this offering.
ISSUER’S ABSOLUTE RESPONSIBILITY
The issuer, having made all reasonable inquiries, accepts responsibility for, andconfirms that this Offer document contains all information with regard to the issuer andthe issue, which is material in the context of the issue, that the information contained inthis Offer Document is true and correct in all material respects and is not misleading inany material respect, that the opinions and intensions expressed herein are honestlyheld and that there are no other facts, the omission of which makes this document as awhole or any of such information or the expression of any such opinions or intensionsmisleading in any material respect.
CREDIT RATING
For details of the above rating definitions, the investors are advised to refer para on“Credit Rating” in the information memorandum. The Rating is not recommendation tobuy, sell or hold securities and Investors should take their own decisions. The ratingmay be subject to revision or withdrawal at any time by the assigning Rating Agency onthe basis of new information. Each rating should be evaluated independent of any otherrating.
LISTING
The Bonds are proposed to be listed on The Stock Exchange, Mumbai (BSE)
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STOCK EXCHANGE DISCLAIMER CLAUSE:
It is to be distinctly understood that the submission of the information memorandum tothe Stock Exchange should not in any way be deemed or construed that the informationmemorandum has been cleared or approved by Exchange. Stock Exchange does nottake any responsibility either for the financial or other soundness of this Issuer, or theachievements of the object for which placement is proposed to be made or for thecorrectness of the statement made or opinions expressed in the informationmemorandum.
DISCLAIMER STATEMENT FROM THE ADVISORS & SOLE ARRANGER
In light of SEBI circular no. SEBI/MRD/SE/AT/36/2003/30/09 dated September 30, 2003and SEBI circular no. SEBI/MRD/SE/AT/46/2003 dated December 22, 2003, it isadvised that the Issuer Company has exercised self due-diligence to ensure completecompliance of prescribed disclosure norms etc in this Memorandum. The role of theArranger in the assignment is confined to marketing and placement of the bonds on thebasis of this Memorandum as prepared by the Issuer Company. The Arranger haveneither scrutinized or vetted nor has it done any due-diligence for verification of thecontents of this Memorandum. The Arranger shall use this Memorandum for thepurpose of soliciting subscription(s) from qualified institutional investor(s) in the bonds tobe issued by the Issuer Company on private placement basis. It is to be distinctlyunderstood that the aforesaid use of this Memorandum by the Arranger should not inany way be deemed or construed that the Memorandum has been cleared & approvedby Arranger; nor do they in any manner warrant, certify or endorse the correctness orcompleteness of any of the contents of this Memorandum; nor do they takeresponsibility for the financial or other soundness of this Issuer, its promoters, itsmanagement or any scheme or project of this Issuer. The Arranger or any of itsdirectors, employees, affiliates or representatives do not accept any responsibilityand/or liability for any loss or damage arising of whatever nature and extent inconnection with the use of any of the information contained in this Memorandum.
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CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD-TAX FREE MUNICIPAL BONDS
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INDEX – TABLE OF CONTENTS
Contents Page No.Preface 1Disclaimer Statement 2-3Risk Factors & Management Perception 6-7PART IGeneral Information 8Authority & Approvals to the issue 9-13Name & Address : Auditors /
Auditors To the Limited Review /Debenture Trustee / 14-15Registrar & Transfer Agents /Bankers & Collection Centers 16-19Compliance Officer 20Arrangers to the issue 21
Credit Rating 21Rating Letter & Rating Rationale 22-29Instrument at a glance 30Capital Structure & Share Holding Pattern 31Terms of Present Issue 32-35Who can Invest 35-38How to Apply 38Application Form 39-40Instructions To Apply 41Tax Benefits 42PART IICompany Information 43-46Outstanding Debt & Debt Servicing Record 46Members of The Board & Key Personnel 47Operational & Financial Performance of the Company 47-48Change in Board & Key Officials 49-54Change in Auditors 54Auditors Report 55Notes to Accounts & Significant Accounting Policies 56-57Limited Audit Review 58-59Projected Balanse Sheet, Profit & Loss Account & Cash Flow St. 60-62PART IIIMaterial Contracts & Documents Available For Inspection 63PART IVDeclaration 64Force Majeure 64
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DEFINATION / ABBREVIATION USED
BSE : THE STOCK EXCHANGE, MUMBAIC & AG: THE COMPROLLER & AUDITOR GENERALCRISIL: CREDIT RATING INFORMATION SERVICES OF INDIA LTD.CMWSSB: CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE
BOARDNSDL : NATIONAL SECURITIES DEPOSITORY LIMITEDNSE : THE NATIONAL STOCK EXCHANGERBI : RESERVE BANK OF INDIAROC : REGISTRAR OF COMPANIESSEBI : SECURITIES AND EXCHANGE BOARD OF INDIA(SO) : STRUCTURED OBLIGATIONWDM : WHOLESALE DEBT MARKET SEGEMENT
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RISK FACTORS & MANAGEMENT PERCEPTIONS
INTERNAL FACTORS
A. Redemption Reserve: Creation of Redemption Reserve is not envisaged for theproposed issue of Bonds. The same is not required to be created vide General Circular9/2002 clarification no. 6/3/2001-CL.V, Dated 18-04-2002 issued by Department ofCompany Affairs, Ministry of Law, Justice and Company Affairs, Government of India
B. Credit Risk: CMWSSB is into public service of supplying potable water andsewerage services. CMWSSB revenue stream is through collection of water tariff andother taxes as applicable for utilising public resources. Credit risk on the bond issueshould be construed on the basis of tax allocation given by the Ministry of Finance,Government of India along with the ESCROW mechanism, which forms the basis ofcredit rating assigned to this Bond issuance.
C. Market Risk: Increased interest rate volatility exposes CMWSSB to market rate riskarising out of maturity/ rate mismatches. CMWSSB is a public utility Government ofTamil Nadu undertaking for supply of potable water and sewerage activity. Revenuestreams are subsidised. High rate of borrowing would inturn mean high cost of capital.
D. Credit Rating: CMWSSB has taken credit rating from CRISIL for amount of Rs.50.00 Crores. CRISIL has assigned high investment grade rating i.e. AA(SO) (Double AStructured Obligation) to the current tax free bond issue. Copies of the rating lettersalong with rating rationale are enclosed under paragraph “Credit Rating/ (s)”.
E. Asset Concentration: CMWSSB’s asset base is spread in the operationaljurisdiction of CMWSSB, which is now confined to about 192 Sq.Km.
F. Contingent Liabilities: i) Claims against the CMWSS Board not acknowledged asdebt amounts to Rs.838 lakhs (88 cases) as on 31.3.2003, which are under litigation.Out of this, 6 cases involving Rs.786 lakhs are reported to be under arbitration.CMWSSB has engaged advisors to pursue with courts and solve the issues.
ii) Liabilities, pertaining to the periods prior to the Board’s formation are not specificallyprovided for in the opening Balance Sheet for want of information, as on 31.3.2003. Thisis ongoing process and as and when independent items come to light, they would beaccounted relevant account head of CMWSSB.
G. Pending Grievances: In respect of grievances from consumer to whom theCMWSSB serves, a 24-hour round-the-clock complaints cell is functioning at the headoffice. There are also complaints Redressal counters in each of the operational AreaOffices. CMWSSB has a Citizen Charter – the content of which is adopted byCMWSSB for serving the people. In respect of grievances from employees, thepersonnel department initiates action on that.
There are no investor grievances pending with the Board as on Date.
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I. H. Tax Liabilities: There is no overdue of tax liabilities of the Board. Tax deductedby CMWSSB from service contactors, suppliers and employees remitted within the timestipulated. CMWSSB is exempt entity under Income Tax Act as well as Sales Tax Act.
J. Overdues: There are no overdues and outstanding payment or debt obligationswith CMWSSB as on date.
J. Nature of Bonds: Bonds are Redeemable, non-convertible and are in the nature ofpromissory notes. The bonds are offered in DEMAT form. Transfer of these bonds willbe as per the Depository Rules.
EXTERNAL FACTORS
A. Government policies:
Government Policies on tariff may affect the revenues of the Board to a certain extent.GOTN have accorded autonomy to the CMWSSB to revise the tariff for water charges.CMWSSB expects to put in position a revision of tariff by Oct 2004.
B. Water is a natural resource. It is highly dependent on rains and monsoons. Anydecrease in the monsoon level will put a high pressure on ground water, which entails inpoorer quality and hence capital outlay to avoid the same. To obviate such acontingency, CMWSSB has undertaken water augmentation projects.
NOTES1. Allotment against all valid applications for the CMWSSB Bonds will be made on a full
and firm allotment basis.
2. CMWSSB has appointed Canara Bank to act as debenture trustee to theBondholders. CMWSSB and the Trustees will enter into a Trustee Agreement,specifying inter alia, the powers, authorities and obligations of the Trustees andCMWSSB. The bondholders shall, without further act or deed, be deemed to haveirrevocably given their consent to the Trustees or any of their agents or authorizedofficial to do all such acts, deeds matters and things in respect of or relating to theBonds as the Trustees may in their absolute discretion deem necessary or require tobe done in the interest of the bondholders.
3. The net worth of CMWSSB as per provisional figures available on December 31,2003 was Rs. 901.24 Crores.
4. The financial information as contained in the Auditor’s report including the schedules& notes to accounts and significant accounting policies ending 31st March’ 2003have been duly audited by CMWSSB Auditor’s. The same is enclosed in Part III ofthis information memorandum.Where as the financial statement for the period of nine months ending Dec’ 2003have been audited with limited review, Auditors Certificate has been enclosed to thiseffect.
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PART I
CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD(Statutory Board of the Government Tamil Nadu)
Registered Office: No.1, Pumping Station Road, Chennai - 2.Board Nos.: (044) 28534444, 28534994, 28524388
Fax No : (044) 28531243, 28525544Website: www.chennaimetrowater.com, Email: [email protected]
GENERAL INFORMATION: -
CMWSSB is formed by a separate Act of the State Legislature with the main objectivesto promote and secure the planned development, efficient operation, maintenance andeffective regulation of water supply and sewerage system in the Chennai Metropolitanareas to undertake development activities with a view to meet the future requirements ofwater supply and sewerage in the Chennai Metropolitan Area.
A brief information on the project for which the borrowing is made is given below:
The Government in G.O. Ms. No. 105, MA & WS Department, dated 09.08.2001 hasaccorded administrative approval to implement the Chennai Water SupplyAugmentation Project-I by the Chennai Metropolitan Water Supply and Sewerage Boardat an estimated cost of Rs. 720 crores. The project envisages; a) drawal of 190 mld ofraw water from lake at Sethiathope and b) pumping it for a distance of about 20 kmthrough 1795/mm diameter mild steel pipe to the treatment plant at Vadakuthu and c)pumping 180 MLD treated water for a distance of about 8 km through 1775/mmdiameter mild steel pipe to a 3 million litre capacity Break Pressure Tank (BPT) atKadampuliyur; d) conveying the treated water from the Break Pressure Tank atKadampuliyur by gravity for a distance of about 180 km through 1875/mm diametermild steel pipes upto Vandalur and e) then for a distance of about 20 km through 1500mm diameter mild steel pipes upto Porur and then distribute to the city water supplysystem; f) providing Telemetry System for the operation of the entire system. Thecontract for the above works were awarded under five different packages for execution.A separate consultancy contract, for construction management and supervision of theworks, executed by the contractors, mainly for checking and certification of the qualityand the measurements of the works executed was also settled. The preparatory workswere commenced on 25.11.2002. The works are programmed to be completed andcommissioned by June 2004.
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OBJECTS OF THE ISSUE
The object of the issue is to augment the resource for Chennai Water SupplyAugmentation Project (CWSAP)-I, the details as mentioned above.
AUTHORITY TO THE ISSUE
Approval to the issue/(s) has been taken vide Resolution passed by the Board ofDirectors in 241st meeting held on 28/03/2003 vide item no. 19, (Resolution No.103/2003)
AUTHORITY TO ISSUE DOCUMENT & COMPLETE FORMALITIES
The Managing Director is empowered to execute all documents, covenants etc and tocomplete all the necessary formalities connected with this borrowing.
APPROVAL & ALLOCATION TO ISSUE TAX FREE BONDS
Approval to issue tax free municipal bonds has been notified by Ministry of Finance,Government of India to CMWSSB vide Gazette Notification of Government of India no.293, S.O. 392 ( E ) dated 24th March 2004 for an amount of Rs. 42.00 Crores.
FICTITIOUS APPLICATION
As a matter of abundant caution and although not applicable in the case of this issue ofbonds, attention of applicants is specially drawn to the provisions of sub-section (1) ofsection 68A of the Companies Act, which are reproduced below: -“Any person who –
(a) makes, in a fictitious name, an application to a Company for acquiring orsubscribing for, any bonds therein, or
(b) otherwise induces a Company to allot, or register any transfer of, bonds thereinto him, or any other person in a fictitious name, or shall be punishable withimprisonment for term which may extend to five years.”
MINIMUM SUBSCRIPTION
The provisions as to minimum subscription are not applicable to the issue and as perSEBI Guidelines. CMWSSB would be free to retain any amount received in the issue ormay reduce the issue size depending on the circumstances and markets.
UNDERWRITING
The present issue is not underwritten.
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LISTINGThe Board shall apply to The Stock Exchange, Mumbai (BSE) for listing of these bonds.
AUDITORS TO THE ISSUE
R.Palanivelu & CompanyChartered Accountants
No. 17/1, (Old No. 8/1) Sarojini StreetT.Nagar, Chennai 600 0017
Telephone: 044-4341978 & 044-4344235
AUDITOR FOR LIMITED REVIEW
R.Palanivelu & CompanyChartered Accountants
No. 17/1, (Old No. 8/1) Sarojini StreetT.Nagar, Chennai 600 0017
Telephone: 044-4341978 & 044-4344235
Limited audit of the financial statement has been made for the period ending December’2003. Certificate of the Auditor is enclosed in Part III of this Information Memorandum.
REGISTRARS AND TRANSFER AGENTS
CAMEO Corporate Service LtdSubramanian Building, No1 Club House Road Chennai-600002
Phone-(044) 28460390. Fax (044) 28460129Consent of CAMEO Corporate Service Ltd. To act as Registrar & Transfer Agents to the
issue has been received vide their letter Dated 26-03-2004
TRUSTEES TO THE ISSUE
CANARA BANKDebenture Trust Department, E.T & T Section
51. Stock Exchange Towers, P.O Box No. 27047I Cross, J C Road, BangaloreTelephone: 080 22223170
Consent of Canara Bank to act as Debenture Trustee to the issue has been receivedvide their letter No P&DW:ETT:DT-New: 12711:SVB Dated 25-03-2004
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BANKERS TO THE ISSUE
CANARA BANK .Circle Office, Chennai
583/1, Anna Salai, TeynampetChennai – 600 018
Telephone: 044 – 24349731FAX 080-24323722
Consent of Canara Bank to act as bankers to the issue has been received vide theirletter No.CNC MBD PRCELL, 2004 VM Dated 26-03-2004
LIST OF BRANCHES OF CANARA BANK, WHERE THE APPLICATION MONEYCHEQUE / DRAFT CAN BE DEPOSITED ALONGWITH THE APPLICATION FORM.
BRANCH ADDRESS CONTACTPERSON
STDCODE
PHONE NO FAX NO.
BANGALORE CANARA BANKTOWN HALL BRANCHNO.51, I FLOORSTOCK EXCHANGETOWERS1ST CROSS, J C ROADBANGALORE – 560 027
D KALLU RAO,SR.MGR
080 222261702223818622238187
22236631
CHANDIGARH CANARA BANKSECTOR 17 C BRSCO 117-119, SEC 17 CCHANDIGARH – 160 022
Sri R N DasAsst Gen Manager
0172 2704604270169927021162702065
2703450
FARIDABAD –NIT
CANARA BANKFARIDABAD – NIT BR7-A, NEHRU GROUNDSNEW INDUSTRIAL TOWNFARIDABAD 121 001
Sri SBalasubramanian,Asst Gen Manager
0129 2415064241873824167842430426
2416785
GURGAON CANARA BANKGURGAON BRANCH289/7, OLD RAILWAY ROADGURGAON –122 001 HARYANA
Sri D V KoliChief Manager
0124 23228842325004
2327963
JAMMU CANARA BANKJAMMU BRANCHKARAN BHAVAN,SHALIMAR ROADJAMMU 180 001 J & K
Sri R C SidhuChief Manager
0191 254326225766222573107
PATIALA CANARA BANKPATIALA BRANCH759, DHARAMPUR BAZARPATIALA –147 001
Sri O P ChopraChief Manager
0175 221328422010612202697
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CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD-TAX FREE MUNICIPAL BONDS
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SHIMLA CANARA BANKSHIMLA BRANCH67-68, THE MALLSHIMLA –171 001HIMACHAL PRADESH
Sri M R JangipuriaSenior Manager
0177 28021392651569
MOUNT ROADCHENNAI
CANARA BANKMOUNT ROAD BRANCHRAYALA TOWERSANNA SALAICHENNAI – 600 002
SSIVASUBRAMANIAN, MGR
044 28521075 28521075
KUMBAKONAM MAIN
CANARA BANKKUMBAKONAM MAINBRANCHP B NO.40143, TSR BIG BAZAAR STREETKUMBAKONAM 612 001
M NATARAJANOFFICER
0435 24220412422429
--
THANJAVOORMAIN
CANARA BANKTANJAVUR MAIN BRANCH1783-1784, SOUTH MAINSTREETTHANJAVOOR 613 009
L GEORGEOFFICER
04362 231436231992 --
VELLOREMAIN
CANARA BANKVELLORE MAIN BRANCHP B NO.408, IRCS BUILDINGVELLORE 632004
K JANAKIRAMANMGR
0416 22210802221180
TEPPAKULAMTRICHY
CANARA BANKTEPPAKULAM BRANCHP B NO.354VENKATESA MALIGAI26, NANDI KOIL STREETTEPPAKULAMTRICHY – 602 002
C JEYAKUMARAN
SM
0431 2701222-224
KARURCANARA BANKKARUR BRANCH 37 KOVAI ROADKARUR 639 0012
R SAIRAMSM
04324 232074239538232068
49019
PONDICHERRY
CANARA BANKPONDICHERRY BRANCH P B NO.16 45, NSC BOSE ROADPONDICHERRY 605 001
S CHANDRASEKARANSM
0413 2339010 2337054
233182
ABID ROADHYDERABAD
CANARA BANKABID ROAD – HYDERABAD BR4-1-954ABID ROADHYDERABAD 500 001
C HARIPRAKASH RAOSM
0402343863223438633
23438698
M J MARKETHYDERABAD
CANARA BANKM J MARKET-HYDERABAD BRTULJAGUDA COMPLEXAP HOUSING BOARDBUILDINGMOZAMJAHI MARKETHYDERABAD – 500 001
S M SHARIFFSM
040 2343870723438708
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R P ROADSECUNDERABAD
CANARA BANKR P ROAD SECUNDERABAD BRR P ROAD, H NO.311-81SECUNDERABAD 500 003
D LAXMANARAO, SM
040 2343866023438656
DABAGARDENSVISAKHAPATNAM
CANARA BANKDABA GARDENS,VISAKHAPATNAM BRJ MP/30-15-160WARD NO.17MAMIN ROADDABA GARDENSVISAKHAPATNAM – 530 020
P SAIBABA0891 563528
561722564154
N S ROADKOLKOTA
CANARA BANKN S ROAD – KOLKOTABRANCH33/1, N S ROADKOLKOTA –700 001
B K PalSr.ManagerD L Pandey Mgr
033 22200049(Gen22102889(SM22102883(M)
2220 9417
CAPITALMARKETSERVICEBRANCH,MUMBAI
CANARA BANKCAPITAL MARKET SERVICEBRANCHVERMA CHAMBERSGROUND FLOOR,11, HOMJI STREET, FORTMUMBAI 400 001
SRI R VKAMATHMGR
022 226628162266161822692973
22664140
CUFFEPARADEMUMBAI
CANARA BANKCUFFE PARADE MUMBAI BRG D SOMANI SCHOOL BLDGCUFFEE PARADEMUMBAI – 400 005
SRI S C PATILCM
022 221864962215460422186497
22180870
NARIMANPOINTMUMBAI
CANARA BANKNARIMAN POINT BRANCH‘C’ WING, GROUND FLOORMITTAL TOWERS,,NARIMAN POINTMUMBAI 400 021
SRI C RAMESHAGM
022 22831448220428072283 511822835110
2288249222045876
CAPITALMARKETSERVICESBRANCH,NEW DELHI
CANARA BANKCAPITAL MARKET SER BRJEEVAN BHARATIBUILDINGTOWER II, SANSAD MARGNEW DELHI
KANSAL 011 2371954223356864
23719542
JAIPUR (M IROAD)
CANARA BANKJAIPUR M I ROAD BRANCH012, IST FLOOR, ASHOKMARGC-SCHEME NEAR AHIMSACIRCLEJAIPUR –342 001(RAJASTHAN)
KANHAIYALAL
0141 23604672372749
TRICHUR CANARA BANK PPJ NAIR 0487 2426943
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MAIN TRICHUR MAIN BRANCHP B NO.66, I FLOORRAM RAJ BUILDINGROUND SOUTH,TRICHUR 680 001
CM 24228722420836
2426943
PUTHENCHANTHAITIRUVANANTHAPURAM
CANARA BANKPUTHENCHANTHAI TVM BRTC 25/1647DEWASWOM BOARD BLDGM G ROAD,TIRUVANANTHAPURAM 695001
R S KAMATHCM
0471 232040523304992330566
2330916
BROADWAYERNAKULAM
CANARA BANKBROADWAY-ERNAKULAM BRSHENOY’S CHAMBER40/2363. SHANMUGHAM ROADERNAKULAM – 682 031
T S M NAIRCM
0484 23696182361264
CAPITALMARKETSERVICESBRANCHAHMEDABAD
CANARA BANKCAPITAL MARKET SERVICEBR NARAYAN CHAMBERSB/H PATANG HOTEL,NEHRU BRIDGE CORNERASHRAM ROADAHMEDABAD – 380 009
PANKAJ LPALEJACM
0796577487 6575784
TRIKONBAGRAJKOT CANARA BANK
TRIKON BAG, RAJKOTBRANCHP B NO.175, TRIKON BAGRAJKOT – 360 001
S R SHAH, SM 0281 2226936 2223332
K M ROADSURAT
CANARA BANKK M ROAD, SURAT BRANCHP B NO.216, ‘ANNAPURNA’KOTSAFIL MAIN ROADSURAT – 395 003
V B VARTAKCM
0261 24422012432045
2433997
RAOPURAVADODARA
CANARA BANKRAOPURA ROADVADODARA BRP B NO.187, LOHANA BLDG.,PROF MANICK RAO ROADRAOPURA, VADODARA 390001
J G PARMARCM
0265 24396952415273
2432503
DECCANGYMKHANAPUNE
CANARA BANKDECCAN GYMKHANA PUNEBR1259, J M ROADDECCAN GYMKHANAPUNE – 411 004
S S KULKARNISM
020 255317872553174725532939
25533712
CAMP, PUNE CANARA BANKCAMP PUNE BRANCH11, M G ROAD P B NO.21RED CROSS BLDGPUNE – 411 001
R K DANGOFFICER
020 261306322605171626131833
26131832
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COMPLIANCE OFFICER
BOARD SECRETARY CUM GENERAL MANAGERCHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD
(Statutory Board of the Government Tamil Nadu )Registered Office: No.1, Pumping Station Road, Chennai - 2.
Board Nos:- (044)28534444, 28534994, 28524388 Fax No. :(044)28531243, 28525544
Website: www.chennaimetrowater.com, Email: [email protected]
Investors may contact the Compliance Officer in case of any pre – issue or post – issuerelated problems.
FACILITATED BY
Tamilnadu Urban Infrastructure Fin. Services Ltd.,Vairam Complex, 1st floor112 Sir Theagaraya Road
T Nagar, Chennai 17Phone: 044-28153103
ADVISORS & SOLE ARRANGER
SPA Merchant Bankers Ltd.25, C Block, Community Centre
Janak Puri, New Delhi – 110 058Ph.: (011) 25517371, 25515086
Fax: (011) 25532644
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CONTACT ADDRESSES OF THE ADVISORS & SOLE ARRANGER;
CENTRE ADDRESS CONTACT PERSONSTD
CODE TEL. NO. FAX NO.
Delhi 25, C BlockCommunity CentreJanak PuriNew Delhi – 110 058
Mr.Aamir Suliaman /Ms.Ruchi Maheshwari /Mr.Puneet Aggarwal /Ms.Sweta Agarwal /Mr. Sidhart
011 25572340,25531902,25532474
2557276325532644
Mumbai 602 Embassy CentreNariman PointMumbai – 400 021
Mr. Sree Kumar /Mr. Sandeep /Mr. Shailesh /Mr. Bhavesh
022 5633880-456307571
22846318
Kolkata 4/J Red Cross PlaceKolkata – 700 001
Mr. Rakesh Roy /Mr. Abhijeet /Ms. Sandhya
033 30901598,30904278
22100819
Bangalore S-309, 3rd FloorManipal CentreSouth BlockDickenson RoadBangalore
Mr.Vikas Bhalla /Ms. Mona
080 36915051,36916061,5092206,5092207,
5092208
Jaipur UL-15, Amber TowerSanchar Chand RoadJaipur – 302 001
Mr.Rajesh Jajoo 0141 5107044,5107144
5107144
CREDIT RATING
CRISIL has assigned a rating of ‘AA(SO)’ (Pronounced Double A SO) for an amount ofRs. 50.00 Crores vide letter No.PR/RIM/02/2004-028 dated February 9, 2004. to thebond/(s) programme indicating the high degree of safety with regard to timely paymentof interest and principal along with the ‘Structured Obligation’ by ensuring ESCROWmechanism regarding timely fulfillment of the debt obligation.
This is the first time CMWSSB has obtained a Credit Rating. The Credit Rating isAA(SO) assigned by CRISIL, the rating letter is enclosed.
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Confidential
PROVISIONAL RATING LETTER
Ref.: PR/RIN/02/2004-028February 9, 2004
Shri V ThangaveluManaging DirectorChennai Metropolitan Water Supply & Sewerage BoardNo. 1, Pumping Station Road,Chennai – 600 002
Dear Mr. Thangavelu,
Provisional Credit Rating for the proposed Rs. 50.00 crores Bond Programme of ChennaiMetropolitan Water Supply & Sewerage Board backed by Escrow of water & sewerage taxes andwater & sewerage charges.
We refer to your request for a rating for the above captioned debt program. The proposed structuredtransaction and instrument details are briefly described in Annexure a.
Our Rating committee, after due consideration, has assigned a provisional rating of “AA (SO)”(pronounced as “Double A structured obligation”) to the captioned bond issue. This provisional ratingindicates high safety regarding timely payment of financial obligations on the instrument. Thisprovisional rating is based on the strength of the credit enhancement by escrow of water and seweragetaxes and charges to meet all principal and interest obligations on the Bond Program, the paymentstructure designed to ensure full and timely payment to the investors as set out in Annexure-a and also thestrength of the warranties to be given by CMWSSB as set out in Annexure b.
Further, in view of your decision to accept CRISIL’s provisional rating, we request you to apprise us ofthe instrument details (in the enclosed format) as soon as it has been placed. In the event of yourcompany not making the issue within a period of 180 days from the above date, or in the event of anyincrease in the size of the issuance or any change in the structure of your proposed issue, a fresh letter ofrevalidation from CRISIL will be necessary.
Kindly note that the indicated provisional rating would become valid only upon completing the relevantdocumentation requirements. They would be complied with on furnishing, the debenture trusteeagreement, warranties as indicated in Annexure-b, the rating acceptance letter and the InformationMemorandum.
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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CRISIL has assumed that the representations made by the issuer CMWSSB are true and that thestructure, based on which the provisional rating is assigned, shall work and operate asrepresented by the issuer. CRISIL does not guarantee the accuracy, adequacy or completenessof the representations made by the issuer to CRISIL and/or the representations to be made in theOffer Documents. CRISIL is not responsible for any acts of commission or omission of theissuer and/or the Trustee.
CRISIL reserves the right to suspend, withdraw or revise the provisional rating assigned to theabove- mentioned programme, at any time, on the basis of new information, or unavailability ofinformation or other circumstances which CRISIL believes may have an impact on theprovisional rating.
Should you require any clarifications, please feel free to contact us.
With best regards,
Yours sincerely,
________________________ _________________________Anil Kumar. A Ravisankar. PDirector – Infrastructure Ratings Manager – Infrastructure Ratings
Encl.: As above
Ø Annexure a: Instrument detailsØ Annexure b: Warranties to be furnished by the issuerØ Annexure c: Format for intimating placement details of the BondsØ Annexure d: Format for letter from trustee
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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Annexure aInstrument details
Instrument: Chennai Water BondsIssuer: Chennai Metropolitan Water Supply and Sewerage BoardNature of Credit Enhancement: Escrow of water & sewerage taxes and water & sewerage charges from 10
Chennai city zonal accounts (excluding Manali zone) into bondpayment account as per the structure explained below
Face Value of the debentures: Rs. 50 crores (5000 bonds of the face value of Rs.1 lakh each)
Tenure: 7 yearsRepayment: Six semi-annual installments in 5th, 6th and 7th yearsTrustee: To be appointed by the Chennai water boardRating Assigned AA (so)
Credit enhancement and payment mechanism for the instrument:
Repayment obligations on the proposed bond issue are supported through the escrow structure, which would ensurethat the cash flows from water & sewerage charges and water & sewerage taxes captured at source and that adequatefunds are available at the time of meeting the interest and principal obligations to the bondholders. Timely servicingof financial obligations on the proposed bond issue would be facilitated through Tripartite Agreement between theChennai water Board, the account bank and the Trustee of the bondholders. The key features of the tripartiteagreement for ensuring timely payment of dues to bondholders are as follows:
1. The Chennai water board would pay the bondholders, both interest and principal on a semi-annual basis in themonths of December and June of every year.
2. The Chennai Water Board will maintain a trust and retention account known as the Bond Payment Account.3. All the amounts collected by the Chennai Water Board in all the 10 zonal accounts (excluding the zonal account
for the Manali zone), will be transferred to the Bond Payment Account.4. Till the required amount for the fixed deposits accumulates in the Bond Payment Account and the fixed deposits
have been made from time to time, the Chennai Water Board will not be permitted to withdraw funds from theBond Payment Account.
5. All amounts lying in and to the credit of the Bond Payment Account will be exclusively charged to the trustee6. The Bond Payment Account will be operated solely in accordance with the instructions of the trustee
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revised as and whencircumstances so warrant. For the latest rating information on any instrument of any company rated by CRISIL, pleasecontact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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7. The Chennai Water Board will issue irrevocable instructions to the Account Bank to act inaccordance with the aforesaid structure
8. CRISIL will retain the flexibility to change the cash flow mechanism / cash flow collectionmonths, based on any future changes in the skewed cash flows in the collection account.
9. The Bond Payment Account and fixed deposits shall be operated only in terms of a tripartiteagreement to be entered into among the trustee, the account bank and Chennai water board.The tripartite agreement will incorporate the escrow mechanism as stipulated above
Interest payments:
§ The interest payments are to be semi- annual
§ 4 months prior to the payment of each interest installment, the Account Bank will transfer theamounts in the following fashion
Escrowing the CollectionsFor interest paymentsdue on December 31
1/6th of interest payment from August, Octoberand November collections and ½ of interestpayment from September collections in thesame year.
For interest paymentsdue on June 30
1/6th of interest payment from February, Apriland May collections & ½ of interest paymentfrom March collections in the same year.
§ The trustee will have all right title and interest in the maturity proceeds of the fixed deposits
§ 2 business days prior to each interest payment due date, amounts from the fixed deposits willbe transferred to the Bond Payment Account
§ After payments to the investors have been made in full, excess amounts if any, in the BondPayment Account will be transferred to Chennai water board
Principal repayments:
§ The principal repayments will take place semi annually in the 5th, 6th and 7th years
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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§ 4 months prior to the payment of each principal + interest installment, the Account Bank willtransfer the amounts in the following fashion
Escrowing the CollectionsFor principal + interestpayments due onDecember 31
1/6th of principal + interest payments fromAugust, October and November collectionsand ½ of (principal + interest payments) fromSeptember collections in the same year
For principal + interestpayments due on June 30
1/6th of (principal + interest) payments fromFebruary, April and May collections & ½ of(principal + interest) payments from Marchcollections in the same year.
§ The trustee will have all right title and interest in the maturity proceeds of the fixed deposits
§ 2 business days prior to each principal payment due date, amounts from the fixed depositswill be transferred to the Bond Payment Account
After payments to the investors have been made in full, excess amounts if any, in the BondPayment Account will be transferred to the Chennai water board
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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Annexure b
As issuer of the Bonds- Chennai Metropolitan Water Supply & Sewerage Board (the Chennaiwater board) will give the following warranties:
1. All information provided to CRISIL with regard to the operation of the guaranteestructure is true and correct.
2. The executants of the legal documentation on behalf of the Chennai water board has beenduly empowered and authorized to execute the same and to perform all the obligations inaccordance with the terms set out therein.
3. The Chennai water board undertakes to incorporate the instrument details and thepayment structure as proposed by CRISIL in the Information Memorandum of the bondissue.
4. The Chennai water board undertakes to satisfy all the covenants for the Redeemable NonConvertible Bond are valid till the latter are fully redeemed.
5. The Chennai water board would reproduce CRISIL’s Rating letter and rationale inentirety, in the offer document for the aforesaid bonds.
6. Within 60 business days of the date of CRISIL’s Rating Information letter, or 60 businessdays prior to the first due date for payment of interest and / or principal installment forthe bond issue, whichever is earlier, The Chennai water board would do the following
• Open a Designated A/c with a bank approved by CRISIL, for meeting theobligations on the aforesaid bonds.
• Execute all such deeds, documents and Power of Attorney necessary entitling theTrustees to operate the Designated Account
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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Annexure c
Details Of the Rs. 50 crore Bonds Issue of The Chennai Metropolitan Water Supply &Sewerage Board (The Chennai water board)
1st tranche 2nd tranche 3rd trancheInstrument Series:
Amount Placed:
Maturity Period:
Put or Call Options (ifany):
Coupon Rate:
Interest Payment Dates:
Principle RepaymentDetails:
Date Amount Date Amount Date Amount
Investors:
Trustees:
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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Annexure d
Format of the Letter to be obtained from the Trustee within 30 calendar days from the dateof opening of the issue
ToCRISIL LimitedChennai
Re: Rs. 50 crore Bond Programme of Chennai Metro Water Supply & Sewerage Board(CMWSSB) backed by future cash flows
With regard to the captioned transaction, we in our capacity as the Trustee for thetransaction, confirm that all the requisite transaction documents are as per the termsand conditions of the information memorandum and the rating letter and have beenduly executed.
CRISIL has a practice of keeping all its ratings under continuous surveillance and ratings are revisedas and when circumstances so warrant. For the latest rating information on any instrument of anycompany rated by CRISIL, please contact CRISIL RATING DESK at +91 (22) 5691 3001 – 09.
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INSTRUMENT
NON-CONVERTIBLE REDEEMABLE TAXFREE MUNICIPAL BONDS 2004 PRIVATEPLACMENT FOR RS. 42 CRORES ONLY.
(Rs. in Crores)DENOMINATION(Rs. Per Bond)
Rs. 10,00,000/-(Face Value)
RATING AA(SO) by CRISIL
TENURE 7 years
REDEMPTION Six semi annual installments in 5th, 6th and 7th years.
COUPON RATE Payable semi annually yielding 5.20% p.a.
TAX BENEFITS Interest is TAXFREE as per enclosed notification by theGovernment of India.
INTEREST PAYMENT Semi annually, the first payment will be made onDecember 31st 2004.
MINIMUM APPLICATION Application should be for a minimum of 1 Bond.
APPLICATION MONEY 100% of total value of Bonds applied
INTEREST ONAPPLICATION MONEY
Interest shall be payable at the coupon rate from the dateof realization of cheques/Draft till one day prior to thedate of allotment
Note: CMWSSB reserves the right to close the issue at any time prior to the Issueclosing date or keep the subscription open beyond the closing date.
ISSUE TIMETABLE
OPENING DATEEARLIEST CLOSING DATECLOSING DATEDEEMED DATE OF ALLOTMENT
ISSUE TIME TABLE & PLACEMENT DATES WILL BE NOTIFIED TO THEPROSPECTIVE INVESTORS SEPRATELY
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CAPITAL STRUCTURE
(As on 31st December 2003) (Rs. In Crores)
(A) GOVERMENT CONTRIBUTION(B) GOVERNMENT GRANT(C) RESERVE & SURPLUS
NET WOTH
(D) LOAN FUNDS LONG TERM LOANS
CURRENT LIABILITIES
(E) DEFERRED CREDITS &DEPOSITS
334.47 398.09 168.68
1189.18 456.12
236.90
901.24
NOTES :
(1) The Directors / CMWSSB have not entered into standby or similar arrangementsfor the present bond issue.
(2) CMWSSB has not raised any bridge loan or any other similar financialarrangement, the amount of which would be repaid out of the proposed issue ofunsecured Non Convertible Redeemable tax free bonds in the nature ofpromissory notes.
(3) CMWSSB is in the business of providing water supply and sewerage disposalservices for the Chennai City. Therefore, CMWSSB may borrow funds throughprivate placements for its operations and project development andimplementation.
SHAREHOLDING PATTERN AS ON DATE
The Board is entirely owned by the Government of Tamil Nadu.
EQUITY CONTRIBUTION FROM GOVERNMENT
In the form of Contribution and Grants from Government - Rs. 732.56 Crores till date.
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PRINCIPAL TERMS OF THE ISSUE
CMWSSB offers for subscription unsecured redeemable TAXFREE Municipal Bonds inthe nature of Promissory Notes on private placement basis.
NATURE OF BONDS
The Bonds are in the nature of Promissory Notes and are unsecured
OVERSUBSCRIPTION
Issue is on first cum first serve basis and allotment shall be made accordingly.
MARKET LOT
The market lot will be one Bond and in multiples of one bond thereafter.
TERMS OF PAYMENT
The full face value of Rs. 10,00,000 per Bond is payable on application.
FORM & DENOMINATION
CMWSSB will issue a Bond Certificate for the Bonds allotted to the investors indematerialised form only. The applicant may rematerialize their holding in market lots(1Bond) or in other denominations by specifying the same in the Re-materialisationRequest Form (RRF).
CMWSSB Shall not take any responsibility for Re-materialisation.
COMPUTATION OF INTEREST
The first interest payment shall be made on 31st December 2004 based on actualnumber of days from the date of allotment divided by actual number of days in a year.
Subsequently interest payment will be made on 30th June and 31st December of everyyear at the coupon rate on the principal outstanding from the last interest payment datetill the date before the correct interest payment date, upto the date of redemption. Thecalculation will be based on the number of days in a year, as denomination. Themethod of interest will be simple interest
INTEREST PAYMENTS
The cheques for the interest payment will be issued to the Registered Bondholderbefore the due date for payment of interest. These cheques will be valid for a period ofthree months from the date of cheques. In the event of its non-encashment within this
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period, CMWSSB shall revalidate said cheques on receipt of request from registeredbondholders.
On the Interest payment date, interest would be paid by cheques / Pay orders etc. tothose bondholders whose names appear on the list of beneficial owners given by thedepository to CMWSSB. These names would be as per the depository's recorddate/book closure date fixed for the purpose of interest payment. Interest will be paid tothe bond holders whose names appear in the Register of Bond Holders as on the recorddate to be fixed by CMWSSB for this purpose from time to time.
INTEREST ON APPLICATION MONEY
Interest shall be payable at the coupon rate from the date of realization of cheques/Drafttill one day prior to the date of allotment and will be paid along with the first interestpayment.
SUCCESSION (TRANSMISSION)
In the event of demise of the sole holder of the Bond, CMWSSB will recognize theExecutor or Administrator of the deceased Bondholder, or a holder of SuccessionCertificate or other legal representative as having title to the Bonds. CMWSSB shall notbe bound to recognize such executor, administrator or holder unless such executor oradministrator obtains probate or letter of administration or such holder is the holder of asuccession certificate or other legal representation, as the case may be, from a dulyconstituted court in India. In case of joint holding/nomination, the right shall vest in thesurviving joint holders/nominee.
PAYMENT OF PRINCIPAL ON REDEMPTION
On the redemption date, redemption proceeds would be paid by cheques / Pay ordersetc. to those bondholders whose names appear on the list of beneficial owners given bythe depository to CMWSSB. These names would be as per the depository's recorddate/book closure date to be fixed for the purpose of redemption. These bonds will besimultaneously extinguished. It may be noted that in the entire process mentionedabove, no action is required on the part of Bondholders.
In the case of joint-holders, redemption proceeds shall be paid to the one whose namestands first in the list of beneficial owners given by the depository to CMWSSB.
The Bondholder shall not have any claim against CMWSSB in respect of amount sopaid to the registered Bondholders. In such case, any claim for payment of principal onredemption will need to be settled by the transferee(s) with the transferor(s) and not withCMWSSB.
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TRANSFERABILITY OF BONDS
The Bonds would be freely tradable and transferable on the wholesale debt marketsegment of The Stock Exchange, Mumbai (BSE).
BONDS IN DEMATERIALISED FORM
Transfer of Bonds in Dematerialized form would be in accordance with the rules/procedures as prescribed by Depositories Act, 1996
FUTURE BORROWINGS
CMWSSB shall be entitled, from time to time, to make further issue of Bonds and/orBonds to the Public, members of CMWSSB and/or to any other person(s) and/or toraise further loans, advances from financial institutions, banks and/or any otherperson(s) on the security or otherwise of its properties without the consent of theTrustees and without any approval from the Bondholders.
RIGHT TO PURCHASE/ REISSUE THE BOND(S)
CMWSSB may purchase the bonds in the open market, through market makers orotherwise. Such bonds may be cancelled, held, resold or reissued. Where CMWSSBpurchases bonds, CMWSSB shall have and shall be deemed always to have the right tokeep such bonds alive for the purpose of release or reissue and the exercising suchright, CMWSSB shall have and deemed always to had the power to resell or reissue thesame bonds or by issuing other bonds in lieu thereof.
APPLICATION UNDER POWER OF ATTORNEY
In the case of applications made under Power of Attorney or by limited companies,corporate bodies, registered societies, trusts etc. a certified true copy of the Power ofAttorney or the relevant authority, as the case may be alongwith a certified copy of theMemorandum & Articles of Association and /or Bye Laws and /or the Deed of Trust andthe certified true copy of the Board Resolution, must be lodged alongwith the applicationor sent directly to CMWSSB along with a copy of the Application Form.
GOVERNING LAW
The Bonds are governed by and shall be construed in accordance with the existingIndian laws. Any dispute between CMWSSB and the Bondholder will be subject to thejurisdiction at CHENNAI.
POSTAGE OF INSTRUMENTS
The Letter(s) of Allotment/Bond Certificate(s)/Refund Order(s)/Interest cheque(s), as thecase may be will be sent by registered post / courier/ speed post at the risk of the
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applicant/ bondholder, to the sole/ first applicant/ bondholder, well in advance of the duedate.
TERMS OF PAYMENT OF INTEREST FOR DELAY IN DISPATCH OF ALLOTMENTLETTERS/ REFUND ORDERS.
As the whole issue is in dematerialised form / electronic mode dispatch of allotmentletters/ Refund will not arise.
RIGHTS OF BONDHOLDERS
The Bondholders will not be entitled to any other rights and privileges of shareholdersother than those available to them under statutory requirements. The Bonds shall notconfer upon the holders the right to receive notice, or to attend and vote at the GeneralMeeting of CMWSSB. The principal amount and interest on Bonds will be paid to theregistered bondholders only, and in the case of joint holders, to the one whose namestands first. The Bonds shall be subject to the terms and conditions incorporated in thisinformation memorandum, Depository Rules and SEBI guidelines and clarification onprivate placement of debt issues.
MINIMUM APPLICATION
Application should be for a minimum of one bond and thereafter in multiples of onebond.
WHO CAN INVEST
(a) Banks, Financial Institutions.(b) Regional Rural Banks(c) Co-operative Banks(d) Insurance Companies(e) Provident Funds, Superannuation Funds and Gratuity Funds(f) Mutual Funds(g) Foreign Institutional Investors (Subject to existing regulations)(h) Companies, bodies corporate and societies registered under the applicable laws
in India and authorized to invest in the Bonds.(i) Trusts which are authorized to invest in the Bonds.(j) Scientific and / or Industrial Research Organizations, which are authorized to
invest in the Bonds.
APPLICATION BY BANKS
Investment by scheduled commercial banks in bonds issued by CMWSSB qualifies forinvestments in NON SLR categories.
Further, R.B.I made clarification vide circular No.DBOD.NO.BP.BC.53/21.04.141/2003-04 dated December 10’ 2003 para 4(a)(iii) Banks may invest until March 31’ 2004 in the
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existing unlisted securities (those issued on or before November 30’ 2003). With effectfrom April 1, 2004 banks may also invest in the above category of unlisted securitiesuntil December 31, 2004 provided the issuers have applied to the stock exchange (s) forlisting and the security is rated minimum investment grade. Para 4(a)(iv) Banks mayalso invest in unlisted securities issued after November 30, 2003 up to 10% of theincremental Non-SLR investments over the outstanding Non-SLR investments as onNovember 30, 2003 upto December 31, 2004.
These clarifications were made to R.B.I circular DBOB.BP.BC.44/21.04.141/2003-04dated November 12’ 2003 which stated that Banks must not invest in un-rated Non-SLRsecurities. Banks investment in unlisted Non-SLR securities should not exceed 10% ofits total investment in Non-SLR securities as on March 31, of the previous year. Theunlisted Non-SLR securities in which banks may invest upto the limits specified, shouldcomply with the disclosure requirements as prescribed by the SEBI for listedcompanies.
The applications must be accompanied by certified true copies of (a) Power of Attorneyand (b) Specimen Signatures of authorized signatories.
APPLICATIONS BY CORPORATE BODIES/ COMPANIES / STATUTORYCORPORATIONS
The applications must be accompanied by certified true copies of (a) Memorandum andArticles of Association / Constitution / Bye- Laws (b) resolution authorizing investmentand containing operating instructions (c) Specimen Signatures of authorized signatories.
APPLICATION BY ALL-INDIA TERM LENDING AND REFINANCING INSTITUTIONS
R.B.I vide circular DBS.FID.No. C-11 /01.02.00/2003-04 January 8, 2004 has issuedclarifications for FI’s to invest in Non-SLR debt securities. Para 2 sub para of the statedcircular read as under;
a. The FIs may invest until March 31, 2004 in the existing unlisted securities, whichwere issued on or before November 30, 2003. In case, the issuers have applied tothe stock exchange(s) for listing of such unlisted securities and the security is ratedas minimum investment grade, the FIs may continue to invest in such unlistedsecurities even after March 31, 2004 but only until December 31, 2004.
b. As regards the unlisted securities issued after November 30, 2003, the FIs mayinvest, till December 31, 2004, up to 10 per cent of the incremental investments in thecategories covered under these guidelines over the corresponding figure ofoutstanding investments as on November 30, 2003.
c. With effect from January 1, 2005 only those FIs would be eligible to make freshinvestments (up to the prescribed prudential limits) in the unlisted securities coveredin these guidelines whose investments in such securities are within the prudentiallimits prescribed.
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The applications must be accompanied by certified true copies of (i) Memorandum andArticles of Association/Constitution/Bye Laws (ii) resolution authorizing investmentcontaining operation instructions (iii) specimen signatures of the authorized signatoriesand (iv) Form 15AA for claiming exemption from deduction of tax at source on interestincome.
APPLICATION BY CO-OPERATIVE BANKS
The RBI vide its Circular dated August 16, 1994 has clarified that the primary co-operative banks can invest their surplus upto 10% of their deposits in bonds of publicsector undertakings.
Further, reference should be made to Draft prudential guidelines on co-operative banks’investment in non-SLR debt securities issued by R.B.I vide circular RPCD.CO.RF.BC./07.02.03/2003-04 dated November 28, 2003.
The applications must be accompanied by certified true copies of (a) Governmentnotification / Certificate of Incorporation and other document governing the constitution(b) resolution authorizing investment and containing operating instructions (c) SpecimenSignature of authorized signatories.
APPLICATION BY REGIONAL RURAL BANKS (RRBs)
The RBI vide its Circular No. RPCD.RRB.BC.882/03.05.34/96-97 dated December 13,1996 has permitted RRBs to invest their surplus non-SLR funds in bonds of publicsector undertakings. RBI has clarified that no ceiling in regard to such investment willapply.
Further, reference should be made to Draft prudential guidelines on RRBs’ investmentin non-SLR debt securities issued by R.B.I vide circular RPCD.CO.RRB.BC./03.05.34/2003-04 dated November 28, 2003 before making investments in theseBonds.
The applications must be accompanied by certified true copies of (a) Governmentnotification / Certificate of Incorporation and other document governing the constitution(b) resolution authorizing investment and containing operating instructions (c) SpecimenSignatures of authorized signatories.
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APPLICATION BY PROVIDENT FUNDS, SUPERANNUATION FUNDS ANDGRATUITY FUNDS
The Government of India, Ministry of Labour vide notification dated July 9, 2003 hasclarified that the non government Provident Funds, Superannuation Funds and GratuityFunds can invest upto 30% of their investable funds in bonds/securities of “PublicSector Undertaking” as defined under Section-2 (36-A) of Income Tax Act 1961.
The applications must be accompanied by certified true copies of (a) trust deed /byelaws / resolutions (b) resolution authorizing investment and containing operatinginstructions (c) Specimen Signatures of authorized signatories (d) RecognitionCertificate issued by Income tax Department.
APPLICATION BY MUTUAL FUNDS
The applications must be accompanied by certified true copies of (a) SEBI registrationcertificate (b) resolution authorizing investment and containing operating instructions (c)Specimen Signature of authorized signatories.
HOW TO APPLY
Investors have to fill up Application Forms which has to duly completed in all respectand must be accompanied by either a Demand Draft or Cheque of the investmentamount, which should be made payable in favour of “CMWSSB BONDS 2004” andcrossed “Account Payee only”. The full face value of the Bonds has to be paid uponapplication.
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CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD
(Statutory Board of the Government of Tamil Nadu)Registered Office: No.1, Pumping Station Road, Chennai - 2.
Board Nos:- (044)28534444, 28534994, 28524388 Fax No. : (044)28531243, 28525544Website: www.chennaimetrowater.com, Email: [email protected]
APPLICATION FORM - CMWSSB Tax-free Municipal Bonds Series 2004
APPLICATION FORM NO. Adviors & Sole Arranger SPA Merchant Bankers Ltd.
Dear Sir,
Having read and understood the contents of the memorandum of the private placement. I/ we apply for allotment to me/ us of theCMWSSB Tax-free Municipal Bonds 2004. The amount payable on application as shown below is remitted herewith. On allotment,please place my/ our name on the register of Bond Holder. I/ we bind ourselves to the terms & conditions as contained in the termsheet for private placement. I/ we note that the CMWSSB is entitled in its absolute discretion to accept or reject this application,whole or in part without assigning any reason what so ever
FOR OFFICE USE ONLY (CMWSSB)
Date of Receipt of Application Date of Clearance of Cheque(Please Read carefully The Instructions On The Next Page Before Filling Up This Application form.)
No. Of Bonds Applied For (In Words)No. Of Bonds Applied For (In Figures)Amount (Rs.in words)Amount (Rs. In Figures)Cheque/ Demand Draft No. Cheque/ Demand Draft drawn on
(Name of the Bank)Date
(Pls tick Status which ever is applicable)Bank RRB DFI Co-operative Bank AOP OCBIndividual PF/ GF Mutual
FundInsurance Co. NBFC Others
Others, please specify___________________________________________________________________________Ist APPLICANT DETAILName & Address of the investor
PinTelephone No Fax No.
Ist Applicants Signatures2nd APPLICANT DETAILName & Address of the investor
PinTelephone No Fax No.2nd Applicants Signatures
Tax Details PAN/ GIR No. IT/ WARD CIRCLEBank Details Bank Name & Address
Account No. Nature of AccountDEMAT ACCOUNT DETAILS
DP Name Client IDDemat AccountNo.
Depository Participant IDNo.
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ACKNOWLEDGEMENT SLIP
CHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD(Statutory Board of the Government of Tamil Nadu)
Registered Office: No.1, Pumping Station Road, Chennai - 2.Board Nos:- (044)28534444, 28534994, 28524388 Fax No. : (044)28531243, 28525544
Website: www.chennaimetrowater.com, Email: [email protected]
Acknowledgement/ Receipt – CMWSSB Tax-free Municipal Bonds Series 2004
Application Form No. ADVISORS & SOLE ARRANGERS SPA Merchant Bankers Ltd.
(To be filled in by investor)Received FromAddress of Investor
An application for Chq/ DD No.Amount Rs DatedDrawn On, Name of the Bank &Address
Acknowledgement Receipt Stamp
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CMWSSB Tax-free Municipal Bond 2004
INSTRUCTIONS TO THE APPLICATION FORM1. Application form must be completed in full in Block Letters in English .A blank
space must be left between or more parts of the name.
Signature should be made in English or in any of the Indian Languages. Thumbimpressions must be attested by an authorized official of a Bank or by aMagistrate/Notary Public under his /her official seal.
2. Application form duly completed in all respects must be submitted at the office ofbranches of Canara Bank or Office of ADVISORS & SOLE ARRANGER.Cheques/ Demand Drafts should be drawn in favour of “CMWSSB BONDS2004” and crossed “ A/c Payee only”.
3. Cheques/ Demand Draft should be deposited in Current A/c no. 254, CanaraBank.
4. Outstation Cheques, cash, money orders, Postal orders and stock invest willNOT be accepted.
5. As a matter of precaution against possible fraudulent encashment of interestwarrants due to loss/misplacement, applicants are requested to mention the fullparticulars to their bank account as specified in the Application Form. Interestwarrants will then be made out in favour of the bank for credit to the applicant’saccount. In case the full particulars are not given cheques will be issued in thename of the applicant at his / her risk.
6. Receipt of applications will be acknowledged by the Company on the‘Acknowledgment Slip’, appearing below the Application Form. No separatereceipt will be issued.
7. In case of Applications under Power of Attorney or by issued Companies or othercorporate Bodies a certified copy of Power of Attorney or a copy of the approvalof the relevant authority as the case may be & should be deposited along withthe Application form.
8. All applicants should mention their Permanent Account Number or the GIRnumber allotted under Income-Tax ACT 1961 and the Income-Tax Circle/Ward/District. In case where neither the PAN not GIR number has been allotted.The fact of non-allotment should be mentioned in the application form in thespace provided.
A B C D E F G
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9. The application would be accepted as per the terms of the Scheme outlined inthe Memorandum of Private Placement.
SPECIAL TAX BENEFITS FOR THE COMPANY
(i) CMWSSB is a deemed Local Authority and exempt from payment ofincome tax on its income
(ii) Sale of water is exempt from Tamil Nadu Sales Tax(iii) CMWSSB enjoys the concessional sales tax at 4% for purchases of
goods.
TAX BENEFITS TO INVESTORS
1. Interest on Bonds exempt from Income Tax U/S 10(15) (VII) of the Income TaxAct, 1961.
2. The Bonds will be exempt from Wealth Tax within the monetary limit under theWealth Tax Act, 1957.
UNDERTAKING FROM THE ISSUER
CMWSSB hereby undertakes that
a) The complaints in respect of the issue would be attended to expeditiously andsatisfactorily.
b) CMWSSB would get the instrument listed on time and would take necessarysteps for the purpose.
CMWSSB shall cooperate with the rating agencies in providing true and adequateinformation.
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PART II
COMPANY MANAGEMENT & PROJECT
The Board is managed by the Board of Directors constituted by Section 4 of CMWSSAct, 1978 whose details have been given elsewhere in this document. The ManagingDirector is the chief executive of the Board and he is assisted by Executive Director,Finance Director and Engineering Director
The project for which the money raised from this bonds issue will be met is named asChennai Water Supply Augmentation Project –1, the project cost being Rs. 720 crores.Besides the money raised from bonds issue, CMWSSB has obtained contribution fromGovernment of Tamil Nadu for Rs. 236 crores. Loans from other banks and FinancialInstitutions and from Board’s internal funds are the other monies raised for this project.
HISTORY & MAIN OBJECTS & PRESENT BUSINESS OF THE COMPANY
The Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) has beencreated by a separate Act of the State Government (Act No. 28 of 1978) and is engagedin the field of providing water supply and sewerage disposal services to the populationof Chennai City for the past 25 years.
The main objective of the Board is to exclusively attend to growing needs of and forplanned development and appropriate regulation of water supply and sewerageservices in the Chennai Metropolitan Area with particular reference to the protection ofpublic health and for all matters connected therewith or incidental thereto.
In line with objectives, CMWSSB continues to serve the population of Chennai City inrespect of their water needs and sewerage disposal services even as of now as well. Inas much as CMWSSB relies on water sources in the three lakes namely, Redhills,Cholavaram and poondi, which in turn depend on monsoon rains, the quantum of watersupplied to the city is dependent sufficient or normal monsoon rains. In the event offailure of north east monsoon rains last year, the Board is at present supplying around175 mld of water to Chennai City. Supply of water during normal monsoon rains wouldbe 400 mld. CMWSSB takes care of disposal of waste water generated through itssewerage collection and transmission well. This is an ongoing process.
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COMPANY INFORMATION ON ACTIVITIES AND BUSINESS PROSPECTS
MAIN ACTIVITIES
Functions of the Board. : The Board shall perform all, or any of the following functions,namely :-
a. promoting or securing the planned development, efficient operation, maintenanceand regulation of water supply and sewerage system in the Chennai Metropolitan Area;
b. preparing long term plans to meet the future requirements of water supply andsewerage in the Chennai Metropolitan Area, based on estimates of demand, surveys onavailabilities and usage of water and other relevant matters and periodically reviewing,revising and bringing up-to-date such plans;
c. undertaking developmental activities with a view to meet the future requirements ofwater supply and sewerage in the Chennai Metropolitan Area;
d. operating and maintaining the water supply and sewerage services in the ChennaiMetropolitan Area to the best advantage of the inhabitants of that area;
e. such functions relating to water supply or sewerage as the Government may, bynotification, entrust to the Board provided that such entrustment shall be with theBoard’s concurrence, if it does not relate to anything to be done in respect of theChennai Metropolitan Area;
f. any other matter which is supplemental, incidental or consequential to any of theabove functions; and
g. such other functions as may be entrusted to the Board by or under any other law forthe time being in force.
2. In the discharge of its functions the Board shall -
a. have due regard to public health, safety and convenience of the public;
b. consult and collaborate with the Chennai Metropolitan Development Authority inregard to planning and undertaking development activities connected with the watersupply and sewerage systems for the Chennai Metropolitan Area and extend fullassistance to and co-operate with the local authority in relation to matters connectedwith water supply systems or water works or sewerage works or road works or similarworks.
c. be guided by such instructions on questions of policy involving public interest as maybe given to it by the Government and in case of any difference of opinion as to whethera question is or is not a question of policy involving public interest, the decision of theGovernment thereon shall be final.
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3. Subject to the provisions of this Act, the Board shall exercise all powers, perform allfunctions and carry out duties in respect of water supply and sewerage systems in theChennai Metropolitan Area to the exclusion of any department of the Government orany other existing authority.
4. The Board shall endeavour to be financially self-supporting, and shall for thispurpose so conduct its affairs that its income is adequate to meet all its outgoings,provisions for or allocations towards future obligations and costs.
5. The Board shall furnish from time to time to the Government such returns andinformation as the Government may require.
DETAILS OF PROJECTS
Some of the major projects now under execution by CMWSSB are:
World Bank funded Second Chennai Project: The project cost is Rs. 780 crores. Theproject aims at strengthening and development of distribution network. In addition tothe already existing 3 water distribution stations, 16 water distribution stations havebeen constructed and completed under this project. Also, large scale lead detectionwork was also completed. On the organisation side, institutional strengthening hasbeen taken up. Online computing of financial accounting, billing and collection etcwas also taken up under this project. The project is scheduled to close by 31-03-2004
Chennai Water Supply Augmentation Project – 1: The project cost of this project isRs. 720 crores. The project aims at bringing 180 mld water from the Lake situated inCuddalore district – 200 km from Chennai. Construction of intake tower, treatmentplant, transmission mains and receiving reservoir at porur are programmed to beconstructed and completed under this project. The project is scheduled to close atthe end of this years
Chennai City River Conservation Project This project aims to prevent flow of sewegeinto the city water ways namely,Cooum River, Buckingham Canal and Adyar River.Construction of interception lines and prevention of flow of sewage into these rivers isthe primary objective of this project. This project is scheduled to close by the end ofMarch 2005
530 mld capacity water treatment plant at Chembarambakkem CMWSS Board hasalso taken up a project for construction of a 530 mld capacity water treatment plant atChembarambakkam, situated 25 Km from Chennai. The project cost is Rs. 200crores. The project has been taken for execution in the current year and is expected tobe completed in two years.
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The following are the other proejects in the pipeline to be taken up by CMWSSB in thecoming years:
o Chennai Water Supply Project – II - This aims to bring 40 mld ofwater to Chennai city by construction of Checkdams in the palarriver in Chengelpet District
o A.K. Aquifer: CMWSSB also had taken up a project to study thepotential water extraction from the Arani Korattaliar River Basin. Itis estimated that completion of the project will enable to extract 100mld of water safely from this Basin. This project will be taken in thenext year (2004-05) and will be completed in two years.
o Another project named the Third Chennai Water Supply Project isto be taken up by CMWSSB with support from the World Bank.Negotiations with the World Bank are underway to finalise thecrores, out of which Rs.806. project. The project periodis 5 yearsand the project cost is Rs. 750 crores.
FUTURE BUSINESS PROSPECTS
CMWSSB’s ultimate area of operation is 1170 Sq.Km covering the entire ChennaiMetropolitan Area (cma) and its current operational jurisdiction is 190 Sq. Km, which iscurrently the old city area plus adjacent urban area. CMWSSB has prepared a MasterPlan to extend the water supply and sewerage services beyond the city limit and takethe services to the entire CMA. Also as per the Master Plan, CMWSSB plans toincrease the quantity of water supplied that will be required in the increasing populationof Chennai City, which is expected to touch the 7 million mark in the next 10 years.
OUTSTANDING DEBT
The total outstanding debt as on 31.12.2003 is Rs.1189.18 Crores, out of whichRs.806.18 Crores is outstanding to Government of Tamil Nadu.
DEBT SERVICING TRACK RECORD
CMWSSB has a consistent track record of fully paying interest on all loans and principalrepayment, bonds and deposits on due dates. There has been no default or delay inservicing of the debt obligation/ (s) till date.
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MEMBERS OF THE BOARD & THEIR NAMES, ADDRESS & OCCUPATION
I. DIRECTORS OF THE BOARD
Name and Address OccupationThiru K.P.AnbalaganChairman
State Minister, Local Administration and WaterSupply Department
Thiru V.Thangavelu IAS Managing Director. He is also in-charge forExecutive Director and Finance Director as well.
Thiru S.Ranganathan Engineering DirectorThiru L.N. Vijayaraghavan IAS Secretary to Government,
MAWS DepartmentThiru. N.Narayanan IAS Secretary to Government,
Finance DepartmentThiru M.P.Vijayakumar IAS Commissioner, Corporation of
ChennaiThiru S. Karuthia Pandain IAS Managing Director, TWAD
BoardThiru G. Santhanam IAS Member-Secretary, CMDA
Ex-OfficioDirectors
OTHER DIRECTORSHIPS HELD BY THE MANAGING DIRECTOR
Tamil Nadu Slum Clearance BoardTamil Nadu Water and Drainage Board
MANAGEMENT DISCUSSION & ANALYSIS OF THE FINANCIAL CONDITION &RESULTS OF THE OPERATIONS AS REFLECTED IN THE FINANCIALSTATEMENT
FINANCIAL POSITION
BALANCE SHEET
PARTICULARS SCH. As on 31.03.2003 As on 31.03.2002 As on 31.03.2001 Rs. Rs. Rs.
LIABILITIES
Contributions A 306.52 264.22 198.20Grants from Government B 351.25 304.82 200.66Long term Borowings C 903.70 919.88 875.87Deferred Credits & Deposits D 170.14 155.12 146.43Current Liabilities E 414.17 352.60 300.90Accumulated Surplus 165.48 157.90 156.40Total 2311.27 2154.54 1878.46
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ASSETS
Fixed Assets F 1858.46 1702.28 1555.65Current Assets, Loans,Advances &Deposits G 452.81 452.26 322.81Total 2311.27 2154.54 1878.46
WORKING RESULTS
INCOME AND EXPENDITURE
S.No. YEAR As on 2003 As on 2002 As on 2001
INCOME1Sale of Water 146.68 126.64 137.062Water & Sewerage Tax 57.55 56.79 82.253Garants & subsidies-Devolution of Fund 10.45 0.00 0.00
-Drought 5.00 75.00 0.004Other Income 29.19 0.00 28.395Provision for Doubtful debts 0.00 0.00 0.00
-Taxes 1.32 0.00 0.00 - Water charages -Metered 0.00 0.00 0.36 TOTAL 250.18 258.43 248.06
EXPENDITURE1Maintenance (O&M) 48.71 30.77 32.002Payments & Provision to Employees 53.47 50.64 52.573Office Admn. Expenses 2.87 2.53 3.264Prior Period Adjustment 3.55 4.99 6.085Water Lorry Hire Charges 9.27 7.39 23.876Drought Expenditure 8.02 82.68 5.186Depreciation 48.74 44.20 38.257Debt. Service Charges 66.85 56.15 53.888Provision for Doubtful debts 0.00 0.00 0.00
-WaterCharages -Unmetered 0.10 0.69 0.54 - Water charges -Metered 1.04 0.81 0.00 -Taxes 0.00 1.17 2.50
9Excess of Income over Expenditure 7.58 1.50 29.93Total 250.18 283.51 248.06
COMPANIES UNDER THE SAME MANAGEMENT –
There is no company under the same management within the meaning of Section 370(1B) of the Companies Act, 1956.
CHANGE IN DIRECTORS IN THE LAST 3 YEARS
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DIRECTORS OF THE BOARD 2001-2002
1. Thiru Ko.Si.Mani,Hon’ble Minister for Local Administration,Secretariatand Chairman,CMWSS Board.Chennai 600 009.01.04.2001 to 05/2001.
Thiru C. Durai Raj,Hon’ble Minister for Local Administrationand Chairman,CMWSS Board,Chennai 600 009.22.05.2001 to 25.07.2002.
2. Tmt. S. Malathi, I.A.S.,Secretary to Government,M.A. & W.S. Department,Secretariat,Chennai 600 009.01.04.2001 to 31.05.2001
Tmt. Santha Sheela Nair, I.A.S.,Secretary to Government,M.A. & W.S. Department,Secretariat,Chennai 600 009.31.05.2001 to 31.03.2002
3. Thiru R. Santhanam, I.A.S.,Secretary to Government,Finance Department,Secretariat,Chennai 600 009.01.04.2001.
4. 1Dr. Radhakrishnan, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.01.04.2001 to 04.06.2001.
Thiru T. Shanmuga Rajeswaran, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.
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04.06.2001 to 20.06.2001.
Thiru J.T.Acharyulu, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.26.06.2001 to 10.12.2001.
Thiru P.R. Sampath, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.10.12.2001 to 25.01.2002.
Thiru T.N. Ramanathan, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.10.12.2001 to 25.01.2002.Thiru Mutia Kalaivanan, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.30.04.2003.
5. 2Thiru V.K. Jeyakodi, I.A.S.,Member Secretary,C.M.D.A.,Chennai 600 008.01.04.2001 to 28.01.2002.
Thiru P.R. Sampath, I.A.S.,Member Secretary,C.M.D.A.,Chennai 600 008.28.01.2002.
6. 3Thiru A.M. Kasi Viswanathan, I.A.S.,Managing Director,TWAD Board,Chennai 600 005.01.04.2001 to 04.06.2001.
Thiru P. Rama Mohana Rao, I.A.S.,Managing Director,TWAD Board,Chennai 600 005.04.06.2001 to 25.07.2001.
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Thiru K. Deenabandu, I.A.S.,Managing Director,TWAD Board,Chennai 600 005.25.07.2001to 25.07.2002.
Thiru N. Vasudevan, I.A.S.,Managing Director,TWAD Board,Chennai 600 005.25.09.2002 to 30.04.2003.
7. 1Thiru C.P. Singh, I.A.S.,Managing Director,CMWSS Board,Chennai 600 002.01.04.2001 to 06.06.2001.
Dr. Niranjan Mardi, I.A.S.,Managing Director,CMWSS Board,Chennai 600 002.06.06.2001to 25.07.2002.
Thiru K. Deenadhayalan, I.A.S.,Managing Director,CMWSS Board,Chennai 600 002.25.07.2002 to 30.09.2003.
8. 1Thiru Apurva Varma, I.A.S.,Executive Director,CMWSS Board,Chennai 600 002.01.04.2001 to 03.07.2001.
Thiru Sivdas Meena, I.A.S.,Executive Director,CMWSS Board,Chennai 600 002.04.07.2001.
9. 1Thiru S. Prabhu, IA & ASFinance Director,CMWSS Board,Chennai 600 002.
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01.04.2001 to 08.02.2002.
Thiru V. Venkateswaran, ACA.,Finance Director i/c.,CMWSS Board,Chennai 600 002.08.02.2002.
10. 1Thiru R.N. Suryanarayana Singh,Engineering Director,C.M.W.S.S. Board,Chennai 600 002.01.04.2001.
DIRECTORS OF THE BOARD 2002-2003 and 2003-04
1. Thiru M.C. Sampath M.Sc.,Hon’ble Minister for Local Administration,Secretariatand Chairman,CMWSS Board.Chennai 600 009.Upto 30.12.2003.
Thiru K.P. AnlbalaganHon’ble Minister for Information & Publicity andLocal Administration Department and Chairman,CMWSS Board,Chennai 600 009.w.e.f. 04.01.2004.
2. Thiru L.N. Vijayaraghavan, I.A.S.,Secretary to Government,M.A. & W.S. Department,Secretariat,Chennai 600 009.
3. Thiru N. Narayanan, I.A.S.,Secretary to Government,Finance Department,Secretariat,Chennai 600 009.
4. Thiru L. Krishnan, I.A.S.,Special Secretary to Government,Finance Department,
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Secretariat,Chennai 600 009.
5. 2Thiru P.R. Shampath, I.A.S.,Member Secretary,C.M.D.A.,Chennai 600 008.Upto 30.12.2003.
Thiru G. Santhanam, I.A.S.,Member Secretary,C.M.D.A.,Chennai 600 008.From 03.03.2004.
6. 3Thiru S. Karuthiah Pandian, I.A.S.,Managing Director,TWAD Board,Chennai 600 005.From 23.06.2003.
7. 1Thiru M. P. Viyayakumar, I.A.S.,Commissioner,Corporation of Chennai,Chennai 600 003.From 23.06.2003
8. 1Thiru K. Deenadhayalan, I.A.S.,Managing Director,CMWSS Board,Chennai 600 002.06.06.2001 to 30.09.2003.
Thiru V. Thangavelu, I.A.S.,Managing Director,CMWSS Board,Chennai 600 002.01.10.2003.
9. 1Executive Director, (inchare at present)CMWSS Board,Chennai 600 002.
10. 1Finance Director, (inchare at present)CMWSS Board,Chennai 600 002.
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11. 1Thiru R.N. Suryanarayana Singh,Engineering Director,C.M.W.S.S. Board,Chennai 600 002.01.04.2001 to 30.09.2003
Thiru S. Ranganathan, M.E.(Env.Engg.),Engineering Director,C.M.W.S.S. Board,Chennai 600 002.01.10.2003.
CHANGE IN AUDITORS IN THE LAST 3 YEARS
M/s. Sundar & Compnay,Chartered Accountants,
75, Eldams Road, Alwarpet,Chennai – 600 018
Telephone : 044 – 24310596
The above mentioned firm have been functioning as the Auditors of the Board in thepast three years.
NAMES & ADDRESS OF COMPANY SECRETARY
Board Secretary cum General ManagerCHENNAI METROPOLITAN WATER SUPPLY AND SEWERAGE BOARD
(Statutory Board of the Government Tamil Nadu )Registered Office: No.1, Pumping Station Road, Chennai - 2.
Board Nos:- (044)28534444, 28534994, 28524388 Fax No. :(044)28531243, 28525544
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL
The Balance Sheet of CMWSSB do not come under the purview of Comptroller andAuditor General. The balance sheet is audited by independent Chartered Accountantsas per section 39 of CMWSSB Act, 1978.
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AUDITORS REPORT FOR FINANCIAL YEAR 2002-2003
AUDITORS’ REPORT
We have audited the attached balance sheet of Chennai Metropolitan WaterSupply and Sewerage Board, as at 31st March 2003, the Income and Expenditureaccount for the year ended as on that date and the Schedules annexed thereto.These financial statements are the responsibility of the management of theCMWSSB. Our responsibility is to express an opinion on these financial statementbased on our audit.
We conducted our audit in accordance with the Auditing Standards generallyaccepted in India. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatements. An audit also includes assessing the auditing principlesused and significant estimates made by the Management, as well as evaluatingthe overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.
We now report that,
a. We have obtained all the information and explanations, which to the best ofour knowledge and belief, were necessary for the purpose of our audit.
b. The Balance Sheet and the Income and Expenditure Account dealt with inthis report are generally in agreement with the books of accounts, subject tothe comments listed out in the annexure to this report.
c. In our opinion and according to the information and explanations given to usand subject to our observations in the notes forming part of the accounts, theaccounts give a true and fair view.
i. . In the case of the Balance Sheet, of the state of affairs of the Board as at31st March 2003 and
ii.In the case of Income and Expenditure Account, of the surplus for the yearended 31st March 2003.
Place : Chennai for SUNDAR & CO.,
Date : 04.08..2003 Chartered Accountants
T.RAMASWAMY
Partner
SUNDAR & CO., NO5, ANANDHA ROAD, CHARTERED ACCOUNTANTS, ALWARPET , CHENNAI600 018
PHONE 24995863, 24995399
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NOTES TO ACCOUNTS & SIGNIFICANT ACCOUNTING POLICIES
(As covered by: ANNEXURE TO AUDITORS’ REPORT)
1.BASIS OF ACCOUNTING
The financial statements have been prepared on accrual basis in accordance with thegenerally accepted accounting principles and accounting standards issued by ICAI,subject to our observations mentioned in para-1 (vii) on the Notes on the accounts forthe year ended 31st March 2003.
2. FIXED ASSETS
a. Fixed Assets are stated at historical cost less accumulated depreciation
b. Depreciation on Fixed Assets are provided on straight line basis as per the ratesapproved by the Board.
c. In respect of additions during the year depreciation is calculated for one year if it isbrought to account before 30th September and half year if it is brought to account inbetween 1st October to February. Additions in the last month of the year are ignoredfor the purpose of provision of depreciation during the year.
d. During the year excess capitalisation to the extent of Rs. 1.09 Crores have beendeleted from the cost and the corresponding excess depreciation claimed has beenwithdrawn to the tune of Rs.1.19 lakhs
3. INVENTORIES
a. Materials at Main Stores : Weighted average basis
b. Material at Area Stores : First in first out method
The inventory balance of Rs. 3,59,30,165/- includes the following
a. Shortage of Stores : 306.24 lakhs
b. Surplus of Stores : 193.71 lakhs
Shortage and surplus found on verification are brought in the books without ascertainingthe reasons for the same and taking appropriate action.
4. SUNDRY DEBTORS -Provision for bad and doubtful debts
Provision for bad and doubtful debts are made as per the direction of the Board asfollows.
On metered debtors at 20%
On other debtors at 10%
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5. RETIREMENT BENEFITS
Liability in respect of leave encashment benefits has not been ascertained and providedfor in the accounting during the year.
6. INCOME TAX
The Board has been exempted from Income Tax all these years under Sec. 10 (20) ofthe Income Tax act, 1961, giving the Board the status of “ Local Authority”. In view ofthe amended definition of Local Authority with the effect from the financial year 2002-03. a reference has been made to the Central Board of Direct Taxes representing thatthe status of “ Local Authority” has to be extended to the Board for the reasonsmentioned therein to continue the benefits of exemption from Income Tax. Reply isawaited from the Central Board Direct Taxes. In view of this no provision has beenmade for Income Tax in the Books of accounts during the year
7. INTERNAL AUDIT
The Board has an internal audit department which, in our opinion is not commensuratewith the size and nature of the operations of the Board. It has to be strengthenedadequately, to ensure coverage of all important areas of internal control.
8. INTERNAL CONTROL
Adequacy and soundness of internal control procedures requires constant review byInternal Audit.
9. CAPITAL WORKS IN PROGRESS
The value of Project - Work in Progress amounts to Rs.1098.98 lakhs which remainsto be converted as Fixed Assets as on 31st March 2003
Place : Chennai for SUNDAR & CO.,
Date : 04. 08.2003 Chartered Accountants
T.RAMASWAMY
Partner
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REPORT BY AUDITORS TO LIMITED REVIEW
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PROJECTED BALANCE SHEET, PROFIT & LOSS ACCOUNT AND CASH FLOWSTATEMENT (for four financial year)
2004-05 2005-06 2006-07 2007-08IncomeSale of Water 263.27 299.54 316.68 417.66Water and Sewerage Tax 81.81 91.62 102.62 114.93Other Income 40.00 40.00 40.00 40.00Grants & SubsidiesTotal Income 385.07 431.16 459.30 572.59
0 0.00 0.00 0.00Expenditure
Operation & Maintenance expenditure67.45695 69.81 70.64 74.17
Establishment Expenses 55.630188 56.74 57.88 59.04Office Administrative expenses 3.044783 3.14 3.23 3.33Drought expenditure 8 8.00 8.00 8.00Water Lorry Hire charges 10.22 10.73 11.27 11.83Interest Expenditure (Debt Service chg)
134.70 154.64 147.32 138.95Depreciation 69.74 75.74 82.74 89.74Other expenses 5 5 5 5Total Expenses 353.79 383.80 386.07 390.05
Surplus/(Deficit) 31.28 47.36 73.22 182.54
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BALANCE SHEET as on 31-Mar-05 31-Mar-06 31-Mar-07 31-Mar-08
LiabilitiesContributions 346.52 366.52 386.52 406.52Grants from Government 601.25 611.25 621.25 631.25Long Term Borrowings 1358.60 1299.44 1228.28 1145.13Deferred Credits and Deposits 137.81 124.03 111.63 100.47Current Liabilities 370.86 349.21 327.55 305.90Accumulated Surplus 188.53 235.89 309.11 491.65Total Liabilities 3003.57 2986.34 2984.35 3080.91
AssetsFixed Assets 2452.98 2407.24 2354.50 2294.76Current Assets, Loans, Adv & Deposits
327.81 327.81 327.81 327.81Unrestricted Cash including deposits, banksetc 222.78 251.29 302.04 458.34Total Assets 3003.57 2986.34 2984.35 3080.91
Ratio of Depreciation to Fixed Assets2.84 3.15 3.51 3.91
Ratio of Operation & Maintenance to FixedAssets 2.75 2.9 3 3.232004654
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CASHFLOW STATEMENT 2004-05 2005-06 2006-07 2007-08Sources of FundsContributions 20 20.00 20 20Grants 10 10.00 10 10Long Term Borrowings 240 0.00 0 0Sale of Water 263.27 299.54 316.68 417.66Collection of Sewerage & Water tax
81.81 91.62 102.62 114.93Realisation of other income 40.00 40.00 40.00 40.00Total Sources 655.07 461.16 489.30 602.59Application FundsProject costs 470.00 30.00 30.00 30.00Operation & Maintenance expenditure
67.46 69.81 70.64 74.17Establishment Expenses 55.63 56.74 57.88 59.04Office Administrative expenses 3.04 3.14 3.23 3.33Drought expenditure 8.00 8.00 8.00 8.00Water Lorry Hire charges 10.22 10.73 11.27 11.83Repayment of Debt 147.25 213.80 218.48 222.11Repayment of Deferred Credits andDeposits 15.31 13.78 12.40 11.16Payment of Current Liabilities 21.66 21.66 21.66 21.66Others 5.00 5.00 5.00 5.00Total Application 803.57 432.66 438.55 446.28
Opening Balance of Unrestricted cash 371.28 222.78 251.29 302.04Surplus/Deficit -148.49 28.51 50.75 156.31Closing Balance of Unrestricted cash 222.78 251.29 302.04 458.34RATIOSRatio of Debt to Equity 1.43 1.33 1.22 1.10Debt Service Coverage Ratio Net Income 31.3 47.4 73.2 182.5Add: Depreciation 69.7 75.7 82.7 89.7Add: Interest 134.7 154.6 147.3 138.9Net Cash Income 235.7 277.7 303.3 411.2 Total Debt Service 147.2 213.8 218.5 222.1 DSCR 1.60 1.30 1.39 1.85
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PART III
MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS
The following contracts and also documents for inspection referred to hereunder, maybe inspected at the registered office of the company at New Delhi during office hoursfrom the date of this information memorandum until the date of closure of the issue.
MATERIAL CONTRACTS
a) The agreement with NSDL is being coordinate by the R&T Agents, namelyCameo Corporate Services.
b) Letter from Canara Bank giving their consent to act as debenture trustees to theissue.
c) Letter from Cameo Corporate Services giving consent to act as Registrar &Transfer Agents to the issue.
d) Letter from Canara Bank giving consent to act as Bankers to the issue.
DOCUMENTS
a) Papers & documents relating to CMWSSB.b) Copy of the Credit Rating for the current issue.c) Audited accounts for the financial years ending 2003, 2002, 2001 & 1999 and the
Auditors Report thereon along with the tax opinion, if any.d) Copies of the Auditors Certificate on Limited Review upto December 31’ 2003.e) Copy of the Board Resolution authorizing the Bond issue.f) Copy of the Shareholders approval passed at Annual General Meeting.
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PART IV
DISCLAIMERThis memorandum of private placement is neither a Prospectus nor a statement in lieuof Prospectus. It does not constitute an offer or an invitation to subscribe to the bondsissued by CMWSSB. Apart from this memorandum, no offer document or prospectushas been prepared in connection with the offering of the Bond issue or in relation to theIssuer nor is such a prospectus required to be registered under applicable Laws.Accordingly, this memorandum has neither been delivered for registration nor is itintended to be registered.
This memorandum of private placement is not intended to form the basis of evaluationfor the potential investors to whom it is addressed and who are willing and eligible tosubscribe to these Bonds issued by CMWSSB. This memorandum of private placementhas been prepared to give general information regarding CMWSSB to personsproposing to invest in the issue of Bonds and it does not purport to contain all theinformation that any such person may require. CMWSSB believes that the informationcontained in this memorandum of private placement is accurate in all respect as of datehereof. CMWSSB does not undertake to update this memorandum of private placementto reflect subsequent events and thus it should not be relied upon without firstconfirming its accuracy with CMWSSB.
Potential investors are required to make their own independent evaluation andJudgement before making the investment. It is the responsibility of potential investors tohave obtained all consents, approvals or authorizations required by them to make anoffer to subscribe for, and purchase the bonds. Potential investors should also consulttheir tax advisor(s) on the tax implications of the acquisitions, ownership, sale andredemption of Bonds and income arising thereon either by way of interest or capitalgains.
This memorandum of private placement is not intended for distribution and it is meantsolely for the consideration of the person to whom it is addressed and should not bereproduced by the recipient. The Bonds mentioned herein are being issued on a privateplacement basis and this offer does not constitute nor should it be considered a publicoffer/ invitation.
FORCE MAJEURECMWSSB reserves the right to withdraw the issues prior to the closing date in the eventof any unforeseen development adversely affecting the economic regulatoryenvironment.
PLACE: CHENNAI MANAGING DIRECTORDATED: 26-03-2004 CMWSSB