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EXPLANATORY STATEMENT IN RESPECT OF SPECIAL BUSINESS PURSUANT TO SECTION 102 OF
THE COMPANIES ACT, 2013

ITEM NO. 3: BORROWING LIMITS OF THE COMPANY
1. At present the Company can borrow up to ` 3200 Crore or 4 times of the paid-up equity share capital,
whichever is less. This borrowing power was vested on the Company with the approval of Shareholders
at the Extra-ordinary General meeting held on 11/12/2015, in terms of Companies Act, 2013.
2. The total debt of the Company as on 31/03/2020 stands at ` 2950 Crore (Bond issue of ` 1750 Crore + `
1200 Crore Rupee Term Loan facility raised for route electrication and Roha-Veer doubling).
3. The Company is undertaking various capital-intensive projects in India and abroad. Also, Company is in
process of biddings for various infrastructure Projects in India mostly in road and railway tunneling/
bridge works and other works; for which it is expected to have better liquidity for working capital at any
given time.

4. The Company has proposed for major capacity increase which includes doubling of 141 Km in patches
and 18 new crossing stations on Konkan Railway route which would cost approximately ` 4460 Crore
out of which 50% of the cost of the Project would be expected to be borne by the Shareholders through
Equity and the remaining amount would be met through market borrowings. The proposal is awaiting
Cabinet approval and presently being studied by Finance Ministry . Once the proposal is cleared, the
Company shall require to borrow ` 2230 Crore (50% of ` 4460 Crore) from the market for said Project.
5. Considering the future requirement of funds (Equity as well as Debt), the Company has increased the
Authorised share capital from ` 806 Crore to ` 4000 Crore Similarly, to have reasonable nancial
leverage, the borrowing limit has been xed at only 4 times of the Paid-up Equity Share Capital. The
Paid-up Equity Share Capital as on 30/06/2020 is ` 1312.45 Crore. Therefore, borrowing limit has been
proposed at ` 5000 Crore (viz. appx. 4 times of Paid-up Equity Share Capital).
6. Further, the Covid-19 Pandemic lockdown has affected the nancials of the Company adversely
including its working capital requirements therefore, to tide over the crisis Company may resort to short
term borrowings from the market.
7. For increasing the borrowing power of the Company, special resolution is to be passed at the
shareholders meeting as per section 180 (1)(c) of the Companies Act, 2013. The Board of Directors at its
158th meeting held on 05/07/2019 had approved and recommended for approval by the Shareholder to
the proposal of increasing the borrowing power of the Company. Further, in terms of General Circular No.
20/2020 dated May 5, 2020 issued by the Ministry of Corporate Affairs, the matter (regarding borrowing
power of the Company) is considered unavoidable by the Board. Accordingly, the special business is
being proposed before the Members of the Company for their approval.
8. None of the Directors and Key Managerial Personnel are interested or concerned in the above
resolutions. Therefore, the Board of Directors commend the above resolutions.

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