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

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

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

XXII. Cash and cash equivalents

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

XXIII. Earnings per share

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

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

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

XXIV. Dividend

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

XXV. Cash Flow Statement

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

XXVI. Regulatory Deferral Accounts

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

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

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

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

XXI. Provisions and Contingent Liability
Recognition and measurement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

done with:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Note 41: Employee benefits

(i) Defined benefit plans:

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

A. Funding

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

i. As a lessee

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

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

(i) Nature of rate regulated activities

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

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

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

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

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

(ii) Recognition and measurement

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

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

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

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

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

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

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

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

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

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

Financial Instruments
Note 47: Capital management

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

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

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

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

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

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

Note 48: Financial risk management

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

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

A) Credit risk

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

Trade receivables

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

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

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

Loans and advances

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

Cash and cash equivalents and deposits with banks

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

(i) Provision for expected credit losses

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

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

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

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

B) Liquidity risk

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

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

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

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

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

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

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

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

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

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

C) Market risk

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

D) Currency risk

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

Fair value sensitivity analysis for fixed-rate instruments

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

Equity price risk

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

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

I Nature of Goods and Services

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

A Revenue from energy sales

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

V. Transaction price allocated to the remaining performance obligations

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

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

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

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

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

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

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

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

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

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

g) Utilisation of Borrowed funds and share premium:

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

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

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

h) There were no scheme of arrangements approved by the competent authority during the year interms of sections 230 to 237
of the Companies Act, 2013.

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

j) Borrowings secured against current assets

The company has availed working capital facility of H 5000 crore (H 4000 crore Fund based and H 1000 crore non fund based)
agreed with SBI and is secured by Hypothecation of entire current assets of the company i.e. raw Materials, Stock in progress,
Consumable stores, Spares and charge on receivables. The outstanding Working Capital loan as on 31.03.2025 is NIL (PY: NIL)
in the form of T-bill linked WCL.

The company has filed quarterly/monthly returns with the banks and financial institutions as per the terms of loans. These returns
are in agreement with books of accounts of the company. There are no material discrepancies in the returns filed by the company
during the FY 2024-25.

Note 58:

(A) Recent Pronouncement

The Ministry of Corporate Affairs (MCA) issued a notification on May 7, 2025, enacting the Companies (Indian Accounting
Standards) Amendment Rules, 2025. These rules amend the Companies (Indian Accounting Standards) Rules, 2015, primarily
focusing on Indian Accounting Standard (Ind AS) 21, which deals with the effects of changes in foreign exchange rates.

The amendments introduce detailed guidance on assessing whether a currency is exchangeable into another currency, estimating
the spot exchange rate when a currency is not exchangeable, and the required disclosures in such circumstances. Definitions and
application guidance are added to clarify terms and processes related to exchangeability for different purposes, such as reporting
foreign currency transactions or translating foreign operations.

These amendments are applicable for annual reporting periods beginning on or after April 1, 2025, with specific transitional
provisions outlined.

(B) Rounding off & Regrouping in Financials

Amount in the financial statements are presented in H Crore (up to two decimals) except for per share data and as other-wise stated.
Certain amounts, which do not appear due to rounding off, are disclosed separately.

C) Disclosures as per IND AS - 8, Accounting policies, Change in Estimates and Errors

During the year the Company has modified its accounting policy with respect to the following so as to align with the industry
practice, Ind AS compliance and for better understanding.

1) Property, Plant and Equipment

a) Spares purchased subsequent to commissioning of the asset

b) Capitalization of land

c) Depreciation and Amortisation

d) Amortization of Mine Development cost

2) Intangible Assets Recognition and measurement

3) Inventories

4) Revenue Recognition - Sale of power generated by Thermal Power stations

Note 59: Additional Disclosures

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

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

c) The Company is facing with deficit in availability of land at Neyveli for lignite mining, which is impacting its operations.
However, the Company is confident of overcoming the challenges on land acquisition at Neyveli mines with sustained
efforts, in the near future. In order to ensure availability of lignite, the company has undertaken contingency mining
with additional cost and resources.

d) As per the requirements of Rule 3(1) of the Companies (Accounts) Rules, 2014, the Company has used SAP for
maintaining its books of account for the financial year ended March 31,2025 which has a feature of recording audit trail of each
and every transaction creating an edit log of each change made in the books of account. This feature of recording audit trail has
operated throughout the year and was not tampered with during the year.

In respect of 7 external applications that are integrated with SAP software, in connection with Auction & tender system,
Integrated Weighment Tracking System, employees advance and reimbursement claims, GST Central Invoicing System
& House Allotment, Rent Accounting & other Township related Management System, Audit trail was enabled since
06.08.2024.

e) Minimum annual dividend as per DIPAM guidelines shall be 30% of PAT or 4% of Net-worth, whichever is higher.
NLCIL has paid/proposed to pay 30% of dividend on face value of share which is 2.38% of net worth and the differential
amount as per DIPAM guidelines is Rs. 282.62 crore for FY 2024-25. NLCIL has requested for exemption to MoC for
the year which is awaited.