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Directors Report of Neyveli Lignite Corporation Ltd. Company
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Directors Report of Neyveli Lignite Corporation Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 59th Annual Report of your Company together with the Audited Accounts for the year ended 31st March 2015.

Snapshot of Performance

PHYSICAL

Particulars 2014-15 2013-14

Overburden Removal (LM3) 1592.98 1681.72

Lignite Production (LT) 265.43 266.09

Power Generation (MU) 19729.13 19988.65

Power Export (MU) 16671.23 16956.40

LM3 - Lakh Cubic Meter LT - Lakh Tonnes MU - Million Units

* Overburden (OB)* Removal at 624.19 LM3 from Mine-I is the highest for any year since inception.

* Power Generation at 3385.03 MU from Thermal Power Station-I Expansion is the highest for any year since inception. This plant registered a Plant Load Factor (PLF)** of 92% which is the highest ever for any lignite based Power plant in India.

* Export of Power at 3107.25 MU from Thermal Power Station-I Expansion is the highest for any year since inception.

*Rock or soil overlying a mineral deposit.

**A measure of output of a Power Plant compared to the maximum output it could produce.

FINANCIAL

* Total Sales of Rs. 6087.68 crore is the highest for any year since inception.

* Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2014-15 of Rs. 2383.33 crore and Rs. 1579.68 crore respectively are the highest for any year since inception.

Segment-wise Performance

Mines

Your Company is presently operating four lignite mines with a total capacity of 30.60 MTPA. During the year under review 1592.98 LM3 of Overburden was removed as against 1681.72 LM3 in 2013-14. The shortfall of 88.74 LM3 in 2014-15 over the previous year was on account of unscheduled stoppages of conveyor systems in overburden benches of Mine-II for taking up vulcanising works and downtime of certain OB system BWEs of Mine-IA due to mechanical breakdown.

The total Lignite production from all the mines during the year 2014-15 aggregated to 265.43 LT as against 266.09 LT during the previous year 2013-14. However the lignite requirements of Power Plants have been fully met with.

The detailed Mine-wise performance is as under :

Mine-I including Expansion - 10.5 MTPA

During the year 2014-15, Overburden removal was 624.19 LM3 as against 563.39 LM3 achieved during the previous year 2013-14 registering a growth of 10.79%. Lignite excavation during the year 2014-15 was 90.55 LT as against 90.03 LT during the previous year registering a growth of 0.58%.

Mine-IA - 3.0 MTPA

The Overburden removal from Mine-IA during the year under review was 206.62 LM3 as against 279.15 LM3 during the previous year 2013-14. Lignite production during the year under review was 29.15 LT as against 30.01 LT during the previous year 2013-14.

Mine-II including Expansion - 15.0 MTPA

The Overburden removal from this Mine during the year 2014-15 was 691.08 LM3 as against 772.93 LM3 registered during the previous year. Lignite production during the year under review was 132.21 LT as against 130.52 LT during the previous year 2013-14 registering a growth of 1.30%.

Barsingsar Mine - 2.1 MTPA

During the year 2014-15, the Overburden removal was 71.09 LM3 as against 66.25 LM3 registered during the previous year achieving a growth of 7.31%. Lignite production during the year under review was 13.52 LT as against 15.53 LT during the previous year 2013-14. Lignite production was restricted to meet the fuel requirement of the linked power plant.

Sale of lignite to M/s. TAQA and outside agencies

During the year 2014-15, your Company supplied 18.99 Lakh Tonnes of Lignite to TAQA (Independent Power Producer) as per the Fuel Supply Agreement (FSA). Apart from the above, 6.49 lakh Tonnes of Lignite was sold to other parties through open sales.

Power

With the commissioning of Unit-I & Unit-II of TPS-II Expansion, during the year 2015-16, your Company is presently operating five pithead thermal power stations with an aggregate capacity of 3240 MW. Further, your Company has also so far installed nine Wind Turbine Generators of 1.50 MW each, aggregating to 13.50 MW, thereby increasing the overall power generating capacity to 3253.50 MW.

During the year under review, 19729.13 MU of power was generated as against 19988.65 MU in the previous year 2013-14. The power generation would have been still higher but for the surrendering of power by the beneficiary States to the extent of about 93 MU. The average PLF for the Company as a whole was 81.36% as against the national average of 65.11%. The power export during the year was 16671.23 MU as against 16956.40 MU during the previous year 2013-14. The reason for shortfall in the generation and export as compared to the previous year was mainly on account of operation of units of Barsingsar TPS at lower load due to technical problems and that one Unit of TPS-I (100 MW) was under stoppage between 20th May 2014 and 13th August 2014 due to dislodgement of HP heater shell affecting the generation. Further TPS-I, one of the oldest power plant in the Country is serving for more than five decades and so could not be operated to the desired load due to ageing.

The detailed Plant-wise performance is as under:

Thermal Power Station-I - 600 MW

During the year 2014-15, the Power generation from this plant was 3631.05 MU as against 4058.14 MU during the previous year 2013-14 and 2876.12 MU of power was exported to Tamil Nadu power grid as against 3277.22 MU during the previous year 2013-14. During the year under review the Station achieved a PLF of 69.08%. Major Overhaul & Residual Life Assessment study works were carried out in Unit-1 & Unit-9. Annual maintenance works were carried out in all other units. As stated earlier, ageing of the Plant and shutdown of one Unit (100 MW) for a period of around three months had affected the generation during the year 2014-15.

Thermal Power Station-I Expansion - 420 MW

The Power generation from TPS-I Expansion was 3385.03 MU during the year 2014-15 as against 3292.10 MU in 2013-14 registering a growth of 2.82%. The power exported during the year under review was 3107.25 MU as against 3013.59 MU during the previous year 2013-14 registering a growth of 3.11%. This Station achieved a PLF of 92% which is the highest ever for any year since inception and highest for any lignite based Power Plant in India. Annual maintenance works were carried out in both the units during the year under review.

Thermal Power Station-II - 1470 MW

The Power generation during the year 2014-15 was 11131.33 MU as against 11179.16 MU in 2013-14 and 9370.80 MU of power was exported to the Southern Grid as against 9399.53 MU during the previous year 2013-14. This Station achieved a PLF of 86.44% during the year under review. Major overhaul was carried out in Unit-I & Unit-IV and Annual maintenance works were carried out in all other units during the year 2014-15.

Barsingsar Thermal Power Station - 250 MW

The Power generation during the year 2014-15 was 1380.71 MU as against 1438.24 MU in the year 2013-14 and 1190.33 MU of power was exported to the grid as against 1253.03 MU during the previous year 2013-14. This Plant achieved a PLF of 63.05% during the year under review. As stated earlier, this plant could not be operated at full load due to technical problems and steps are being taken to improve the performance of the plant. Annual maintenance works were carried out in both the units during the year under review.

Productivity

The output per man shift during the year 2014-15 as compared with the previous year is given below:

Product Unit 2014-15 2013-14 Growth

Lignite Tonne 12.88 12.64 ( ) 1.89%

Power KwHr 22008 22222 (-) 0.96%

Financial Performance

During the year ended 31st March, 2015, the Company registered a total sales of Rs.6087.68 crore as against Rs.5967.23 crore recorded in the year 2013-14, registering a growth of 2.02%. The sales registered for the year 2014-15 was the highest ever since inception.

The Profit Before Tax (PBT) and Profit After Tax (PAT) for the year 2014-15 were Rs.2383.33 crore and Rs.1579.68 crore, respectively, as against Rs.2209.13 crore and Rs.1501.88 crore, respectively, registered in the year 2013- 14. As compared to the previous year 2013-14, the PBT and the PAT for the year 2014-15 recorded a growth of 7.89% and 5.18%, respectively. The PBT and the PAT for the year ended 31st March, 2015 were the highest for any year since inception.

The reason for increase in the profit for the year 2014-15 was on account of increase in sales consequent to truing up of lignite price for the period 2009-14 and accounting claim of wage revision arrears approved by CERC vide order dated 12.05.2015.

The details of profit earned for the financial year 2014-15 and appropriation of the same in comparison with the previous year 2013-14 are as under:

(Rs. in crore)

2014-15 2013-14

Profit Before Tax 2383.33 2209.13

Tax provision 803.65 707.25

Profit After Tax 1579.68 1501.88

Appropriation :

Transfer to

Bond Redemption Reserve 15.00 15.00

Interest Differential Fund Reserve 11.81 17.07

General Reserve 60.00 155.00

Interim Dividend 301.99 167.77

Tax on Interim Dividend 61.83 28.51

Proposed Final Dividend 167.77 301.99

Tax on proposed Final Dividend 35.11 51.32

Dividend

The Board of Directors of your Company has recommended a final dividend of 10% (Rs.1.00 per share) for the year 2014- 15. An Interim Dividend @18% (Rs.1.80 per share) has already been paid to shareholders during the month of March 2015 and taking into account the same, the total dividend for the year 2014-15 works out to 28% (previous year 28%) and the total dividend outgo including distribution tax will be Rs.566.70 crore (previous year Rs.549.59 crore), which works out to 35.87% of PAT for the year 2014-15.

MoU Rating for the year 2013-14

Your Directors have pleasure to share with the Members that the Company has achieved ''Excellent'' rating for its performance during the year 2013-14 in terms of the Memorandum of Understanding (MoU) entered into with the Ministry of Coal as per DPE guidelines.

Projects under construction/Implementation

Thermal Power Station-II Expansion - 2x250 MW

Members may be aware, the TPS-II Expansion project (2x250 MW) at Neyveli is the Nation''s first project of this unit size with "Circulating Fluidised Bed Combustion (CFBC) Boiler Technology".

As stated in the Directors Report for the previous year 2013-14, M/s. BHEL the Main Plant Package Contractor had carried out modification works in the Fluidised Bed Heat Exchanger (FBHE) coil support system and attended to the refractory damage in Unit-I so as to establish sustainable operation. Similar modification works were also made in Unit-II.

Your Directors are happy to inform the successful commissioning of TPS-II Expn. project and Unit-I & II were declared for commercial operation with effect from 5th July 2015 and 22nd April, 2015, respectively. With this commissioning, the aggregate thermal power generation capacity of the Company has increased to 3240 MW. During the year in-firm power of 199.57 MU was generated and 125.38 MU was exported from this Plant.

Neyveli New Thermal Power Project - 2x500 MW

Your Company is implementing a 1000 MW lignite based Neyveli New Thermal Power Project at Neyveli adopting pulverised fuel firing technology as a replacement to the existing 600 MW TPS-I. The project was sanctioned in June 2011 at a capital cost of Rs. 5907.11 crore with a commissioning schedule of 48 months and 54 months for Unit-I & Unit-II respectively from the zero date.

Contract for execution of Steam Generator (NTA1) and Turbo-Generator (NTA2) packages have been awarded to BHEL and the Contract for Balance of Plant (NTA3) package has been awarded to M/s. Essar Projects (I) Limited. Due to re-tendering of the Steam Generator Package, there are slippages in the original schedule and Unit-I & II are rescheduled to be commissioned in October 2017 & April 2018 respectively.

Detailed engineering activities are in progress and soil investigation work has been completed. Civil works in respect of Boiler and Auxiliaries, Turbo Generator and Auxiliaries, Electrostatic Precipitator, Chimney raw water Pump house etc. are in progress. Supply of materials is in progress. Mechanical erection has commenced for both Unit-I & II Steam Generator area and Power House building.

The Cumulative expenditure incurred upto 31st March 2015 is Rs. 784.75 crore. Implementation of the Project is being closely monitored to expedite the completion as per the revised schedule.

Restructuring of Mine-I and Mine-IA

Your Company is implementing re-structuring of existing Mine-I from 10.5 MTPA to 8.0 MTPA and Mine-IA from 3.0 MTPA to 7.0 MTPA at an estimated cost of Rs.1458.17 crore to meet the requirement of lignite for Neyveli New Thermal Power Project of 1000 MW capacity being implemented in Neyveli. The overall lignite mining capacity will be increased by 1.5 MTPA through this restructuring. Mine-I will continue to operate at 10.5 MTPA until Mine-IA is developed to produce 7.0 MTPA.

Preparation of Feasibility Report has been completed. Draft Mining Plan and Mine closure Plan have been submitted to Ministry of Coal and acquisition of additional land required for the project is in progress. MoE&F has issued "Terms of Reference" for conducting EIA/EMP studies and the final EIA-EMP report has been submitted to MoE&F. The Cumulative expenditure incurred upto 31st March 2015 is Rs.8.19 crore.

Bithnok Thermal Power project - 250 MW with linked Mine - 2.25 MTPA

The Board of Directors of your Company has approved setting up of a lignite based Thermal Power Plant of 250 MW capacity with linked Mine of 2.25 MTPA at Bithnok in Bikaner District, in the State of Rajasthan at an aggregate cost of Rs. 2709.93 crore (Nov 2014). Power Purchase Agreement has been signed with Discoms of Rajasthan. Out of 3091.299 hectares (Ha.) land required for Bithnok TPS and Mine, Government of Rajasthan (GoR) has issued award for acquisition of 1175.87 hectares of private land in Bithnok village and 1863.184 Ha. of Government land will be diverted to your Company by GoR after takeover of the private land. The total land mentioned above included 225 Ha. of land for Thermal Power Station.

State level Environmental Impact Assessment Authority, Rajasthan has already issued Environmental Clearance for TPS. In respect of the linked mine, MOE&F has informed that Environmental Clearance could be considered only after the Stage-I Forestry clearance is obtained for the forest land of 52.245 Ha. involved in the project. Obtaining Stage-I Forestry clearance is in progress. Your Company has entered into an agreement for supply of 25 cusecs of water from IGNP for this project. The Board has accorded investment approval for the project. It is proposed to implement the above project through EPC mode and the project is expected to be commissioned during the year 2019. The Cumulative expenditure incurred upto 31st March 2015 is Rs. 85.04 crore.

Barsingsar Thermal Power Station Extension (BTPSE) - 250 MW linked to Hadla Lignite Mine-1.9 MTPA

The Board of Directors of your Company has approved to develop the Hadla Mine of 1.9 MTPA capacity to set up a 250 MW lignite based thermal power plant in the Bikaner District of Rajasthan, as an extension of the existing Barsingsar Power Project at an aggregate cost of Rs. 2635.04 crore (Nov 2014). The fuel requirement is proposed to be met from Hadla Mine and the Barsingsar Mine. Power Purchase Agreement has been signed with Discoms of Rajasthan. All statutory clearances for both BTPSE and Hadla Mine Project have been obtained. Government of Rajasthan has allocated Mining Lease area of 15.66383 sq.km. It is proposed to implement the above project through EPC mode and the project is expected to be commissioned during the year 2019. The Cumulative expenditure incurred upto 31st March 2015 is Rs. 3.08 crore.

Wind Power Project - 51 MW

Your Company has entered into generation of green energy by setting up a 51 MW Wind Power Project at Kazhuneerkulam, Tirunelveli District, Tamilnadu at a cost of Rs. 347.14 crore. Work order for supply, installation and commissioning of 34 wind turbine generators of 1.5 MW each has been awarded to M/s. Leitwind Shriram Manufacturing Limited, Chennai. The first wind turbine generator was commissioned on 29th August 2014 and so far nine wind turbine generators have been commissioned till July 2015 and the balance is expected to be commissioned during 2015-16. During the year 2014-15, 1.443 MU of power was generated and 1.35 MU was exported to the grid.

Supply and erection of materials for the remaining wind turbine generators are in progress. The project is getting delayed due to slow progress in transfer of lands, supply and erection by the package contractor. The overall physical progress of the project is 60%. The Cumulative expenditure incurred up to 31st March 2015 is Rs. 128.27 crore.

Neyveli Solar Power Project - 10 MW

Members may be aware that your Company is implementing a 10 MW Solar Power Project at Neyveli at a cost of Rs. 77.89 crore in the first phase and it is proposed to install another 15 MW as an expansion in the second phase. Work order has been placed on M/s. BHEL for the first phase of implementation. All the 48000 Solar PV Modules have been received at site. Module mounting structure foundation works has been completed and erection of Solar PV modules is nearing completion. Works in Power Evacuation Sub-Station are also nearing completion. The overall physical progress of the project is 70% as on 30th June 2015. The Project will be commissioned during the year 2015-16. The Cumulative expenditure incurred upto 31st March 2015 is Rs. 30.97 crore.

Barsingsar Solar Power Project - 25 MW

With a view to further harness green energy your Board of Directors of the Company has approved to set up a 25 MW Solar Power Plant at Barsingsar, in the State of Rajasthan, at a sanctioned cost of Rs. 167.29 crore instead of 10 MW Solar Power Project proposed earlier. The project is proposed to be implemented through EPC mode and is scheduled to be commissioned during 2016-17. Work order for technical Consultancy will be issued to M/s.ITCOT, shortly.

Joint Venture Projects

NLC Tamilnadu Power Limited - 2x500 MW

This coal based thermal power project at Tuticorin, Tamil Nadu consisting of two units of 500 MW capacity each is being implemented through NLC Tamilnadu Power Limited (NTPL), a joint venture between your Company and TANGEDCO with equity participation in the ratio of 89:11 at a revised estimated cost of Rs. 6602.74 crore.

Fuel Supply Agreement has been signed with M/s.MCL for the supply of 3.0 MTPA of Coal and in order to meet the shortfall in requirement, a contract has been awarded on M/s. MSTC for supply of 0.864 Million Tonnes of imported coal during the year 2014-15. Unit-I was test synchronised with the Grid on 18 February 2015 and the unit has been declared for commercial operation w.e.f. 18th June 2015. In respect of Unit-II, the unit was synchronised with oil firing of boiler on 9th April 2015 and the unit reached full load operation on 9th July 2015 and the COD of the unit is expected shortly. Financial Closure for the Project has been achieved and your Company as a major Promoter has extended Letter of Comfort to the Lenders for Term Loans availed by NTPL. The Cumulative expenditure incurred upto 31st March 2015 is Rs. 6115.69 crore.

Neyveli Uttar Pradesh Power Limited - 3x660 MW

Your Company is in the process of setting up of 1980 MW (3x660 MW) coal based thermal power project in Ghatampur Tehsil, Kanpur Nagar District in the State of Uttar Pradesh, at an estimated cost of Rs. 14,375 crore. This Joint Venture project is executed by Neyveli Uttar Pradesh Power Limited (NUPPL), a Subsidiary Company, with equity participation of your Company and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) in the ratio of 51:49.

The Public Investment Board, Government of India has recommended the project proposal to the Cabinet Committee on Economic Affairs for sanction. As per the existing policy of MoE&F, Stage-I forest clearance for the linked coal block is a pre-requisite to consider environmental clearance of the project. Since exploratory drilling works in the allocated coal block could not be carried out due to law & order problems delay was anticipated in obtaining stage-I forest clearance.

In order to expedite getting sanction of Ghatampur Thermal Power Project (GTPS), a revised proposal for using imported coal till commencement of coal production from Pachwara South Coal block was submitted to MoE&F for getting Environmental Clearance (EC). Considering the above and based on the recommendations of the Expert Appraisal Committee, MoE&F has issued EC for GTPS project. GOI sanction for this project is awaited. NUPPL has taken into possession of the entire land of 828 hectares required for the project. Contract for carrying out survey and fixing the pillars around the acquired land has been issued to M/s. Techpro Engineers Private Limited, Kanpur and the work is in progress.

Power Purchase Agreement has been signed with Uttar Pradesh Power Corporation Limited. Government of Uttar Pradesh has accorded sanction for supply of 80 cusecs. of water from the West Allahabad branch canal downstream of Bidhnu Kasba Village for the above project. M/s. RITES has been assigned the work of carrying out the feasibility study for railway siding for the proposed coal based thermal power project.

Short-listing of bidders who have responded to Expression of Interest floated for Steam Generator and Turbine Generator packages and also Balance of Plant Package have been completed. Techno commercial specifications have been issued to the shortlisted bidders for SG and TG and pre-bid discussions with the prospective bidders have been completed.

Coal Blocks

Pachwara South

Ministry of Coal, Government of India has allocated Pachwara South Coal block, in the State of Jharkhand with a total reserve of 305 MT of coal to Neyveli Uttar Pradesh Power Limited (NUPPL), a subsidiary of your Company, to cater to the fuel requirement of the 1980 MW Coal based thermal power project proposed to set up in Ghatampur in the State of Uttar Pradesh. MOC has accorded sanction for the Advance Action Proposal of Rs. 19.45 crore for pre-project related activities. Terms of Reference (TOR) has been issued by MoE&F for preparation of EIA -EMP reports for the Coal block.

The coal block falls partly in the forest lands with tribal settlements and the area is dominated by tribal population and because of which the law & order problems are being encountered. CMPDI the agency who were assigned the job of carrying out exploratory drilling in the area had to suspend their operation due to law & order problems. NUPPL has sought support from the District Revenue and Police authorities of Government of Jharkhand for carrying out the drilling & exploration activities, boundary survey, pillar construction and DGPS for further development of Pachwara South Coal Mine Project. This will enable NUPPL to prepare the Geological Report (GR) and subsequently Mining Plan & Feasibility Report. For obtaining the forestry stage-I clearance for the project Mine, which is a pre-requisite for obtaining Environmental Clearance (EC) for the Thermal Power Project, the GR Mining Plan and FR are essential.

Work order was issued to M/s Total Survey Consultancy, Ranchi for conducting DGPS Survey and the firm has expressed their inability to continue their work citing local law and order problems. NUPPL has proposed to float an EOI inviting proposal from Mine Development Operators (MDO) to carry out the entire Mine development activities.

Jilga—Barpali

Ministry of Coal, Government of India has allocated Jilga-Barpali coal block, in the State of Chhattisgarh with a total reserve of 546 MT jointly to your Company and Chhattisgarh Power Generation Corporation Limited to develop the mine and share the coal resources as per GOI allocation. As per the said allocation, 396 MT of coal from this block was proposed to be utilised for the proposed 4000 MW Sirkali Thermal Power Project, in the State of Tamilnadu. Detailed exploration is being carried out by MECL under MOU of CMPDI and about 43% has been completed. However, as it is found that the coal seams are deep seated in this block and there are nine geological earth faults in this region, it will be very difficult to excavate coal even with underground mining technologies and hence your Company has requested MoC for allocation of alternate coal block instead of Jilga-Barpali for Sirkali Thermal Power Project.

MNH Shakti Limited

Members may be aware, M/s. Mahanadi Coalfields Limited (MCL), NLC & Hindalco formed MNH Shakti Limited, a Joint Venture Company with equity participation of 70:15:15 to implement 20.0 MTPA coal mining project in Talabira in the State of Odisha. The Talabira II & III coal blocks allocated for this purpose have been cancelled pursuant to the judgement dated 25th August 2014 of Hon''ble Supreme Court of India and the coal Mines (Special Provisions) Ordinance 2014 dated 21st October 2014. The JV Company has proposed for the winding up and necessary formalities are being worked out by them.

New Projects Under Formulation

Sirkali Thermal Power Project - 4000 MW

Members may be aware that as part of foraying into other type of fuels for power generation, your Company has proposed to set up a 4000 MW coal based thermal power project, in two phases, at Sirkali, Nagapattinam District in the State of Tamil Nadu. In the first Phase 1980 MW (3x660 MW) is proposed to be set up at an estimated cost of Rs. 14,482 crore. The Board of Directors of your Company has accorded approval for AAP of Rs. 56.52 crore for taking up certain pre-project related activities. Feasibility Report (FR) is under finalisation. Site for locating the power plant has been identified at Thirumullaivasal and action has been initiated for acquisition of land through TN Government and for obtaining clearances from various statutory authorities. LOA has been issued to M/s. Bhagavathi Ana Labs for taking up EIA/EMP studies. Budgetary offers have been obtained for conducting Marine EIA/EMP study and DPR for captive coal jetty for the proposed Sirkali TPS. As stated earlier Ministry of Coal has allocated Jilga-Barpali Coal block in the State of Chhattisgarh with reserve of 396 MT to partly meet the fuel requirement of this project. As explained in view of the technical difficulties to exploit the coal reserves in the allocated block your Company has requested MoC for allocation of alternate coal block instead of Jilga-Barpali for Sirkali Thermal Power Project.

Thermal Power Station-II Second Expansion - 1000 MW with linked Mine-III - 9.0 MTPA

Your Company has proposed to increase the power generating capacity by adding another 1000 MW thermal power plant as the second expansion to the existing TPS-II at Neyveli in the State of Tamil Nadu. A new mine, Mine-III of capacity 9.0 MTPA is proposed to be set up to exploit the mineable lignite reserves of about 380 MT available in the South of the existing Mine-II to meet the fuel requirement of the proposed thermal power plant. Ministry of Power has granted exemption to your Company from tariff based competitive bidding for the above project.

The Board of Directors of your Company has accorded approval for the Advanced Action Proposal (AAP) of Rs. 7.05 crore for Mine-III and Rs. 1.80 crore for the TPS-II Second Expansion for taking up certain pre-project related activities. Action has been initiated to enter Power Purchase Agreement with DISCOMs of Southern States.

Mine-II Augmentation - 15.0 MTPA to 18.75 MTPA

The Board of Directors of your Company has accorded approval for the Advance Action Proposal (AAP) of Rs. 2.65 crore for Mine-II Augmentation in order to take up certain pre-project related activities. The increase in capacity is to meet the additional lignite requirements of linked Thermal Power Stations.

Solar Power Projects

Your Company has given Green Energy Commitment to Ministry of New and Renewable Energy (MNRE), GOI, on the occasion on the first Renewable Energy Global Investors Meet (RE- INVEST) 2015 to develop 101 MW of Renewable Energy Project during the five year period 2015-19. The above commitment is based on the Renewable Energy projects which are presently under implementation viz., Wind Power Project of 51 MW, Neyveli Solar Project of 10 MW, Barsingsar Solar Power Project of 25 MW and the proposed 2nd phase of expansion of 15 MW Solar Power Project to the Neyveli Solar Power Project.

In order to enter in to solar power generation in a major way, the Board of Directors of your Company has accorded ''in-principle'' approval for setting up Solar power projects in the States of Telangana, Tamil Nadu and other States in India, subject to techno-commercial viability. The Government of India has accorded top priority for development of green energy and in this regard it has given guidelines for setting up of solar power parks in various States of India. Your Board of Directors has also accorded ''in-principle'' approval for setting up of solar power projects in the solar power parks developed by various States, subject to techno-commercial viability.

Coal Assets Abroad

Your Company proposes to acquire coal assets abroad in order to ensure availability of fuel for un-interrupted operation of the 1000 MW coal based thermal power plant under implementation by NLC Tamilnadu Power Limited, the subsidiary Company and for the proposed 4000 MW coal based Sirkali Thermal Power Plant. Imported coal to the tune of 2 Million Tonnes initially and 10 Million Tonnes at a later period is required for operation of these coal based thermal power plants.

In this regard, your Company has issued an Expression of Interest for acquiring coal assets abroad and short-listing of the offers received in respect of coal blocks in Mozambique, Indonesia and Australia are in process. Work order was issued to M/s SRK Mining Services (India) Pvt. Ltd., Kolkatta for carrying out the Technical Due Diligence Study of the short-listed Coal blocks and the report from the consultant is under scrutiny.

Acquisition of Power Projects

EOI was floated inviting offers of Coal or Lignite based Thermal Power Plants/Projects of unit capacity 100 MW or above for possible acquisition by your Company. Out of nine offers received, Nagai Power Pvt. Ltd., Nagapattinam in the State of Tamilnadu having a capacity of 2x150 MW has been shortlisted subject to the outcome of technical, financial and legal due diligence studies.

Long-term borrowing & Credit Rating

Your Company has entered into long term funding arrangement of Rs. 2500 crore and Rs. 1250 crore from a consortium of Bankers led by Canara Bank for the Mine-II Expansion linked to TPS-II Expansion project & Barsingsar Mine-cum-Thermal Power project. Your Company has also entered into an agreement with Power Finance Corporation Limited for a term loan of Rs. 3000 crore for the NNTPS project. Both the above borrowings have been rated with the highest credit rating of "AAA/Stable" by ICRA & CRISIL and Brickworks.

Commercial

Billing & Realisation

Your Company has made significant improvement in the realisation of dues from Discoms as all the current dues have been realised within the normal credit period of 60 days from all the customers except Discoms of Rajasthan. The total outstanding dues of the Company as on 31.03.2015 towards power dues were Rs. 2064.52 crore, as against Rs.1985.26 crore as on 31.03.2014. Power over dues, which are dues beyond the permissible limit of 60 days as on 31.03.2015 were Rs. 272.04 crore as against Rs. 920.80 crore as on 31.03.2014.

Rebate Scheme for realisation of dues

With a view to encourage early and full realisation of dues, the Company has formulated a special scheme called "NLC Graded rebate scheme" benefitting the customers for making due payment within 60th day of billing.

One Time waiver of surcharge settlement

Your Company during the last year reached a settlement with TANGEDCO for realisation of surcharge amount and in line with the same, settlement schemes were entered into with the Karnataka-Escoms, Andhra Pradesh- Discoms and Telangana Discoms during the year. Under this scheme, old dues, surcharge and interest amounting to Rs. 276.07 crore has been realised during the current year.

Revised PPA with Discoms

Your Company has signed revised PPA with the Discoms of KSEB, Karnataka-Escoms, Andhra Pradesh- Discoms and Telangana-Discoms during the year, in line with the revised PPA already signed with TANGEDCO incorporating the following payment priority clause for appropriation of receipts from the Discoms in the following order of adjustment :

a) towards late payment of Surcharge

b) towards earlier unpaid bills, including arrear bills if any

c) towards statutory dues like IT, other tax, Royalty on the current bills

d) towards other charges in current monthly bills

Tariff Regulations

Pursuant to CERC Tariff Regulations for the Control period 2014-19 dated 21.02.2014, Tariff petitions for the period 2014-19 for TPS-I, TPS-I Expansion, TPS-II and Barsingsar were filed before CERC on 19.08.2014.

Consequent to MoC Guidelines on 02.01.2015, for fixation of Lignite Transfer Price, Tariff revision petition would be filed before CERC for all power stations for the period 2014-19.

Land Acquisition and R&R Policy

The occurrence of lignite mineral deposits in particular regions makes it necessary for your Company to select the project sites for Mines & pithead Power Stations, only in such specific areas. It necessitates the invoking of law for the acquisition of private property leading to involuntary displacement of people in lignite bearing localities for mining and adjacent strategic locations for stationing the production and service facilities.

Your Company has developed several Resettlement Centres (RCs) in the vicinity of the acquired area and these RCs are provided with good infrastructure facilities and amenities better than those in the original villages and also well connected to the main roads. Your Company has been designing and implementing the R&R Packages for the project affected people with their active participation, combining its long experience in the locality and participatory approaches.

Your Company is following the National Rehabilitation and Resettlement Policy, 2007 for the ongoing projects with certain enhancements, aimed at minimising the adverse impacts of the projects on the affected people and for the benefit of the project affected population.

The R&R measures are being implemented as directed by the R&R Administrator as per the National Rehabilitation and Resettlement Policy, 2007 and benefits include allotment of a plot, cash compensation and training.

New Land Acquisition Act

From 01.01.2014 GoI has enacted New Land Acquisition Act viz. - "Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act - 2013". Presently the Government of Tamilnadu acquires land for your Company under the provisions of The Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 (Tamil Nadu Act, 10/99).

During the year 2014 the Govt. of Tamil Nadu has passed an amendment Act - "Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement (Tamil Nadu Amendment) Act - 2014 to exclude the above Act of the State Government from the provisions of the Central Act, except the provisions relating to the determination of the compensation and rehabilitation & resettlement. The rules for implementing the Act / amendment are awaited from GoTN.

Research and Development (R&D)

Centre for Applied Research & Development (CARD) is the In-house R&D centre of your Company. CARD has been granted NABL accreditation for chemical and mechanical testing by National Accreditation Board for Testing and Calibration Laboratories (NABL). The accreditation of the laboratory, which is valid for a period of 2 years from December 2013, is based on the international standard ISO/IEC 17025:2005 and meets the principles of ISO 9001 that are relevant to scope of testing services as well as technical competency of the laboratory.

The total R&D expenditure, incurred during the year 2014-15 was Rs. 13.01 crore which is around 1% of PAT for the year 2014-15. CARD has complied with the MoU guidelines with regard to R&D by successfully completing prescribed targets for 2014-15.

Your Company has filed for grant of patent for the following:

1. Your Company and Vector Control Research Centre, Puducherry jointly filed a patent application for "Fly ash based mosquito larvicidal formulations of Bacillus thuringiensis var. israelensis (serotype H14)". The invention is under the Coal S&T project ''Development of fly ash based pesticide''.

2. Your Company and National Institute of Technology, Trichy jointly filed a patent application for "High longevity coatings and alternate material for erosion and corrosion resistance in mining pumps." The invention is under In-House S&T project.

Coal S&T projects:

Corrosion in Specialised Mining Equipment (SME)

CARD has successfully completed the Coal S&T project on corrosion problems in Specialised Mining Equipment (SME) deployed in mines. Laboratory investigations, corrosion/erosion studies and characterisation of samples were completed. Basic corrosion studies and modelling were completed. One of the coating components has been lab tested and evaluated for field application. The coating materials were prepared by CECRI, Karaikudi and coatings were applied in track carriages of SME and the performance of the coating are being evaluated periodically and it is found that there was no change in the coating thickness after application of the material. Consequent to the specialized coating the life of the track carriages in SME is expected to increase by 7 years as against one year in the case of normal paints.

Enhancement of Life of De-watering Pipes

Your Company presently has taken up a project on "Enhancing Life of De-watering Pipes in Coal/Lignite Mines by prevention of Erosion-corrosion with Nano-Crystalline Surface Engineering Treatments" jointly with NIT, Trichy. The main objective of the project is to study the root causes for erosion and corrosion of de-watering pipes in Neyveli Lignite Mines and to develop a coating based on nano-crystalline surface engineering treatments for enhancing life of de-watering pipes.

In-House S&T Projects:

CARD has also carrying out various research works such as delineation of buried sub surface objects and hard bands in open cast mines, studies on synthesis of zeolites from lignite fly ash and its efficiency in cooling water treatment, reclamation of slag dump areas in Mine-II suitable for development of green cover, study on the stabilisation haul roads inside open cast mines and micropetrographic characterisation of Barsingsar lignite seams.

Development of suitable pilot plant for separation of iron from slag generated in Thermal Power Plants-Neyveli

CARD has taken up R&D project for separation of iron ore, unburnt carbon and sand from the bottom slag generated by Thermal Power Stations. The pilot plant for separation of iron from bottom slag has been successfully commissioned during December 2014.

Utilisation of Bottom Ash

CARD has taken up R&D project along with Civil Department for utilisation of bottom ash as replacement for river sand in construction material. An experimental building using bottom ash as substitute for river sand has been constructed and in this building solid blocks have been made using bottom ash and concrete mixture using bottom ash instead of sand to the extent of 50%.

R&D Initiatives:

Your Company has taken up R&D initiatives in the following areas:

1. Upgradation of Brown Coal (UBC) Based Power Generation

Your Company was approached by M/s. Kobe Steel Limited (M/s KSL), a major Steel & Engineering Company in Japan, to undertake a study on "Up-gradation of Brown Coal" (UBC) through a process involving removal of moisture from lignite and to upgrade the lignite into a high calorific value product having reduced CO, emission. In this connection an MOU has been entered into with M/s. KSL for "Setting up a UBC based Pilot Power Generation Plant in Neyveli" at an estimated cost of Rs. 61.62 lakh to be shared equally. M/s.KSL had earlier undertaken a study on UBC of lignite from Neyveli Mines and successfully test fired the lignite pellets in Ultra Super Critical Boilers in Japan.

2. Dynamic Loading of Conveyors

Your Company has signed an MOU with National Institute of Technology, Trichy for taking up a new R&D Project on "Dynamic Loading of Conveyors drive heads in Mines" aimed at energy saving in the operation of conveyors in the Mines as in-house S&T Project.

3. Coldry and Matmor Process

Your Company has also proposed to enter into a tripartite agreement with M/s. National Mineral Development Corporation (NMDC) and M/s. Environmental Clean Technologies Ltd. (ECT), Australia for taking up a feasibility study on setting up a pilot project of Coldry and Matmor process at Neyveli, using lignite instead of coking coal for use in iron ore purification process.

4. Electronification of GWC & Conveyor Systems in Mines

CARD has also proposed to take up a R&D project on Electronification of ground water control and conveyor systems in Mines for electronically monitoring the operation and performance of GWC pumps and conveyors for improving energy efficiency and productivity of these equipment. This project is proposed to be implemented under Coal S&T project funded by Ministry of Coal.

5. Prevention & Analysis on Premature Failure of BWE Track Systems

CARD has proposed to take up a R&D project on prevention & analysis on premature failure of BWE Track Systems used in Lignite/Coal Mines with the aim of reducing the wear and tear of track plates of SME. This project is to be implemented under Coal S&T project funded by Ministry of Coal.

Silica Sand Beneficiation Plant

Your Company proposes to establish a silica sand beneficiation plant for producing value added silica sand, which is a main raw material for manufacture of glass from the sand available in mines. A consultant has been appointed for preparation of feasibility report for this project.

Human Resource Management

Human Resource

Your Company believes that employees are the primary source of competitiveness and it is necessary to enrich the quality of life of its employees and maximise the productivity. Your organisation promotes adherence to value based culture, encourages/creates an atmosphere of continual learning and competency building. The organisation has reached its current levels through employee commitment, innovation and strong sense of belongingness to the organisation. For a sustainable growth, leadership and competency development continued to be the focus area for the organisation. The total manpower of your Company as on 31st March 2015 was 16,445.

Employee Development

Your Company continues to promote Training / Learning initiatives for skill, competency building and overall development of employees and surrounding society. As part of Leadership Development Programme, 400 executives were imparted training through Development Centre Initiatives programme in 2014-15. Also as part of the above initiative , Senior Executives were deputed to IIM, Kozhikode for enhancing their leadership competencies. Learning and Development Centre (L&DC) of your Company organised programme which included Mentorship Development Programme, Workers'' Education Scheme, Advanced Management Programme, Quality Control Programme etc., besides Apprenticeship Training Programme and other special programme. L&DC plays a main role in the development of multi skilling & skill upgradation of Non Executives. During the year L&DC imparted training covering, 15,252 employees. With a view to benefit the society at large your Company had conducted Entrepreneurial Development Programme, Programme for Student Community and Environmental Programme benefitting around 9000 people.

Industrial Relations

Thrust on participative culture continued during the year under review and the Industrial Relations in various Units and Service Divisions of your Company remained harmonious and cordial but for Contract Labour Strike, which was subsequently resolved. The executives and employees were committed towards the growth of your Company. Discussions and negotiations are in process with the recognized Unions through the conciliation process as per the provisions of Industrial Disputes Act, to arrive at a mutually agreed settlement for revising the wage structure of Unionised categories of employees.

Implementation of Official Language Policy

Your Company continued to promote official language implementation in line with Government of India''s policy and the provisions prescribed under the Official Languages Act, 1963. Employees are encouraged to undertake Hindi courses and 681 employees have been enrolled for correspondence as well as full time courses like Prabodh, Praveen and Pragya.

Hindi Fortnight was organised between 15th September 2014 and 29th September 2014 and Hindi competitions were conducted among employees. Cash Awards and Merit certificates were given to those employees who passed Hindi examinations and to the winners in the competitions.

Reservation of Posts

Your Company has been following the rules of the Government with regard to reservation for SC and ST and the details of Group-wise Men-in-Position as on 31.03.2015 is as under:-

M I P

Group Total Strength Total SC ST SC/ST

A 3,989 825 280 1,105

B 288 61 14 75

C 10,805 2,103 103 2,206

D 1,363 311 2 313

Total 16,445 3,300 399 3,699

Group % of SC/ST Total SC ST SC/ST

A 20.68 7.02 27.70

B 21.18 4.86 26.04

C 19.46 0.95 20.42

D 22.82 0.15 22.96

Total 20.07 2.43 22.49

e-Governance

Your Company has taken up various e-Governance initiatives which include Online Material Management System (OLIMMS), Primavera for Project Management, Mining Equipment Maintenance Management System (MEMMS), Financial Accounting System (FAS), Attendance Monitoring System, Personnel Information and Payroll Accounting System (PIPAS), Activity Based Cost Management System, Vendor Payment System, Information Monitoring System, Engineering Management System etc. Besides the above, your Company is also in the process of implementation of SAP based FICO and HCM modules, Contract Management System, Information Monitoring System.

Environment Management & Sustainable Development Projects

Your Company continues to practice the best environment management and eco conservation measures. Environment Policy with emphasis on clean and green environment is in place and your Company continues to comply with regulatory requirement and other environmental clearance conditions. All the Mines and Thermal Units at Neyveli are accredited with Environment Management Standards of ISO 14001 and Occupational Health and Safety Assessment (OHSAS) 18001.

Reclamation of mined out land with an objective to make it again cultivable and conserve ecosystem is scrupulously carried out in all the operational mines of your Company. During the year 2014-15, 96.42 hectares of land has been reclaimed in all the mines in Neyveli. Slope stabilisation in mines dumping area is also carried out by planting and developing thick green belt which in turn preserves the environment. Also green cover is established in the Industrial units and as well as in the Township by planting more than two lakh trees to maintain the ecological balance.

Members may be aware usage of plastic carry bags has been banned in Neyveli Township area and your Company is also operating a plastic recycle plant wherein waste plastic is converted into tar for use in road formation.

In pursuit of India''s commitment to act early towards climate change, your Company has taken up collaborative studies with Pondicherry Engineering College on "Sequestration of CO2 and production of Bio-Fuel from flue gas of Thermal Power Plants" and in this regard a 100 litre capacity laboratory scale Photobioreactor (PBR) has been installed. It is also proposed to install a 1000 litre capacity pilot scale PBR in TPS-I Expansion.

Your Company is presently disposing the fly ash through supplies to the cement and the brick manufacturing Companies through e-auction besides using in its pre casting yards for manufacture of bricks for its internal use.

Water Conservation and Water Pollution Control

Much emphasis is given by your Company towards conservation of water. As a measure of conservation, a modern water treatment plant of 8000 GPM capacity is in operation to treat storm water from Mine-I for supply to Township for domestic purpose. Also 15000 GPM water of Mine-II storm water is treated and used in TPS-II and TPS-II Expn., which has greatly reduced the ground water pumping. A modern sewage treatment plant of 30 MLD capacity treats the sewage of entire township and part of industrial sewage where the treated water is utilised by the surrounding villages for agricultural purposes. Effluent treatment plants installed in all industrial canteen and waste water from industrial units are also treated in the ETP which is used for gardening and cleaning purposes. The effluents generated from Thermal and Mining Units are regularly monitored by TNPCB and no abnormalities reported. Besides on-line monitoring of effluent flow and quality has been introduced in the Thermal Station-I Expansion and TPS-II.

Air Pollution Control

Your Company takes care of air pollution by dust suppression measures in Mines. Electro Static Precipitators (ESPs) have been installed in all power plants to remove the ash particles from outgoing flue gas. Also stack height of power plants is maintained as per prescribed norms for effective dispersal of Sox and Nox to wider range. To monitor the pollution in the stack, online SPM and gas analysers have been installed. Ambient Air Quality (AAQ) Monitoring is carried out through continuous ambient air quality station and 13 manual stations. The on-line stack emission and AAQ data are uploaded to Centre for Real-time Monitoring (CARE AIR Centre) of Tamil Nadu Pollution Control Board.

Safety

Your Company advocates highest priority towards industrial safety. Risk Assessment and Safety Audits were conducted for Mines and Thermal Power Stations in regular periodicity by engaging accredited external agency. The recommendations submitted by the external agency are being implemented. Safety related trainings like basic, refresher, on the job, are being imparted to all sections of employees in a well designed training centres like Group Vocational Training Centre in Mines, Thermal Training Centre and Learning and Development Centre. Safety awareness among the employees and contract workmen has been increased. Your Company achieved zero accident potential during the year 2014 -2015 at Barsingsar Mine, Thermal Power Station-II and Thermal Power Station-I Expansion.

Risk Management

In order to identify those threats to business and to create ways to reduce their impact, your Company has approved a Risk Management Policy. As per the policy the risks are classified broadly into three categories, viz., Strategic risks, Business Risks and Operational Risks and further categorised based on their impact and the frequency.

Your Company has so far identified 51 risk elements. Based on the assessment, 20 of them have been prioritised for review. Their mitigation plans and the implementations are reviewed by the Risk Management Committee, Audit Committee and by the Board, bi-annually. At present, there are no major risk elements, which may threaten the existence of the Company.

Your Company has developed a comprehensive Integrated Risk Management (IRM) framework and under the framework, Risk Management is practiced in all the units and the possible risks associated with its business are identified and mitigation plans are evolved. Risk Management Committee and the Board of Directors of your Company review the identification of risks and mitigation procedure on a periodical basis.

The organisational structure for risk management is as under:

Vigilance

Having a main focus on the pro-active, preventive and participative vigilance activities, Vigilance Department conducted surprise checks, regular checks, CTE type checks, quality checks and follow up checks resulting in various system improvements and streamlining the procedural lapses.

On the initiative of Vigilance Department, various IT based systems viz., Online TA bills submission, Annual Property Returns, Web based MIS, Detailed Engg. Mgt System, Online SME Erection in addition to publishing of Tenders in the Company website and CPPP, SOP for recruitment, installing surveillance camera at vulnerable locations, e-auction & e-procurement to bring out more transparency and efficiency in the system have been introduced.

The Vigilance Department is the first to introduce a unique "Online Vigilance Clearance-OVC" system with the facility of knowing the file status by the concerned employee and Online Complaint Tracking System for speedy disposal of complaints to enhance the public perception. Vigilance Department has undertaken various other measures like hosting key information in Company website, providing feedback to the genuine complainant after investigation, getting feedback from people through various interactive programme, ensuring appropriate action against the guilty and protecting the innocent etc. A book has also been published by the Vigilance Branch titled "Lessons from Vigilance cases" citing various past cases, for the benefit of user departments. The Contract manual has been updated by the Management and the Purchase Manual & HR Manual are under review for updation.

Annual Book fair and Safety week programme were used as a platform to spread vigilance awareness among the stakeholders. Vigilance Department has introduced "Ethical Awareness" programme to inculcate ethical values to the school children in Neyveli township covering 1300 children in 15 schools.

The Vigilance Department besides conducting classes has taken up customised/tailor made programme so as to reduce the knowledge gap among the employees.

Vigilance Department has been awarded with the prestigious "Corporate Vigilance Excellence Award-2015" by the Institute of Public Enterprises, Hyderabad.

MOU with Transparency International

Your Company has signed a Memorandum of Understanding with Transparency International India, part of Asia Pacific forum comprising 20 nations. Transparency International India is the Indian chapter of Transparency International, based at Berlin.

Township

Neyveli Township established in February 1959 has grown into a self-contained unit with all facilities. It has a total population of about 1,35,000 and spread over 50.Sq.Kms. The Township is provided with all facilities that include Schools, College, sophisticated General Hospital, Central Library, Swimming Pools, Auditorium, Stadium, Community Welfare Centers, Recreation Clubs, Reading Rooms, Parks, Banks, Shopping complexes, Offices of Government Agencies and about 21,277 residential quarters. Township with similar facilities has also been established in Barsingsar.

Medical Services

Your Company maintains a 350 bedded General Hospital at Neyveli that takes care of the health and medical care needs of its regular employees, contract workmen and their eligible dependents.

The Medical Care Delivery system in operation involves full care cycle encompassing the entire range of monitoring, diagnosing, treating and managing medical conditions across various disciplines. The broad service lines of the hospital could be fragmented into General Medicine, General Surgery, Paediatrics, Obstetrics & Gynaecology, Ophthalmology, Orthopaedics, ENT, Dermatology, Chest Medicine and Psychiatry. Renal care, Diabetology, Neonatal and Intensive Care constitute the top line services of the General Hospital.

During 2014-15, 7.56 lakh patients were treated in the out-patient department and 15264 patients were treated in the various Medical, Surgical, Paediatrics and Maternity wards. The General Hospital had organised Family Planning Services, Revised National Tuberculosis Control Programme, National Leprosy Control Programme, AIDS Screening and Control Programme as a part of National Health Programme. General Hospital implements weekly Universal Immunisation Programme in collaboration with the State Health Machinery and administered medicines to protect against viral and bacterial diseases. The hospital continues to implement National Leprosy Eradication Programme as old leprosy cases are followed up at the weekly run in co-ordination with State government personnel and in collaboration with the Tamil Nadu State Aids Control Society plays a lead role in early detection, treatment and management of HIV cases in this region with excellent medical results.

Corporate Social Responsibility (CSR)

* Your Company, as a socially responsible corporate citizen, continues to carry out development works in the surrounding villages, right from its inception, focusing on the socio economic development of the operating regions for achieving inclusive growth.

* In the Year 2014-15, your Company has adopted a new Corporate Social Responsibility Policy covering the various sectors of sustainable socioeconomic development. The Policy is available in the Company''s Website: http://www.nlcindia.com/csr/Board Noted CSR Policy NLC 2014.pdf

* Your Company outlays funds for the CSR projects, programme and activities selected for implementation under the CSR Policy.

* The CSR Committee of the Board is monitoring the implementation of the CSR Projects. The Board of Directors reviews the same and ensures that your Company spends, in every financial year, at least 2% of the average net profits of the Company for the last three years.

* Timeframes and milestones are fixed through Baseline Survey before commencement of the CSR Projects.

* Initiatives of State/Central Government Departments/Agencies are dovetailed/ synergised with the CSR Activities of NLC.

The CSR expenditure of your Company for the year 2014-15 is Rs. 47.49 crore. The manner in which the amount was spent is given in the prescribed format.

The major CSR initiatives undertaken during the year 2014-15 are given below:-

CSR - Peripheral

Members may be aware that a structured system is in operation for executing capital works for developing social infrastructure and building Sustainable Community Assets to benefit the villages surrounding Neyveli in Tamil Nadu and Barsingsar in Rajasthan State. Under this scheme, infrastructure development works like drinking water facility by sinking/maintaining the bore-wells, constructing RCC water tanks, providing roads & access, additional school buildings, laboratories, libraries, bridges, additional Infrastructure for primary health centres, developing medical facilities, de-silting of lakes etc., are being carried out on the basis of needs and priorities. Various works have been carried out during the year under review for the benefit of the population in the areas surrounding the operating localities. This includes the "Walajah Lake De-silting" Project undertaken in Karaimedu Hamlet near Neyveli, by which water holding capacity for irrigation has been increased by about 22.75 lakh Cubic meter, providing direct irrigation to about 11,500 acres of land and benefiting about 60 villages in the region. Continuous supply of water to nearby villages for irrigating over 23,000 acres of land is also continued in the Neyveli region.

Your Company also provides access to the social facilities of the Company''s Townships to the public in the surrounding areas.

CSR - Community

Your Company continues to extend all assistance including grant and infrastructure to Sneha Opportunity Services at Neyveli to run a day care, education and training centre for special children of the region.

Neyveli Health Promotion and Social Welfare Society patronised by your Company has been serving the society by supplying artificial limbs/calipers to the differently-abled, apart from running a school for the hearing impaired and a Computer Centre, imparting training for physically challenged, widows and destitute and gainfully employing them.

During the year 2014-15, CSR focused Training programme were organised for the benefit of the students, teachers and the population of Neyveli locality, in which 4,463 persons participated. 165 women from various peripheral villages were trained Light Motor Vehicle Driving, Tailoring and Beautician Trades. 290 men from various peripheral villages were trained in Operation & Maintenance of Light Motor Vehicles, Heavy Transport Vehicles, Earth Moving Equipment Operation and Vulcanising.

Your Company has contributed Rs. 405 lakh during the year 2014-15, towards the Relief and Rehabilitation of areas affected by Disasters in the States of Andhra Pradesh, Odisha and Jammu & Kashmir.

CSR - Education

Your Company offers best education through its 10 schools - 3 Higher Secondary Schools, 2 High Schools, 3 Middle Schools and 2 Elementary Schools to the students from surrounding villages and also to the wards of employees. During the year under review, the students'' strength in these 10 schools was 6,515.

Your Company has imparted Motivational and Exam-Skills training in the year to 2,184 girls and 1,541 boys of X and XII Standards in Neyveli and 14 peripheral village schools.

Your Company provides infrastructural support and also periodical financial support to Rajiv Gandhi Education Society, Barsingsar for providing quality education and technical training to the children of villages around your Company''s project-sites in addition to the Jawahar Education Society at Neyveli.

The establishment of an Industrial Training Institute in Barsingsar village was completed by your Company in the year 2012-13. NCVT approved Courses in Horticulture and Electrician trades have commenced from October 2012 and Fitter and Welder trades have commenced from October 2013. During the year, 166 students have been imparted Industrial / Technical Training in these trades.

CSR - Health

Your Company provides quality medical treatment and occupational health service through its General Hospital to all inhabitants of the Neyveli Township and its surrounding villages, including comprehensive medical treatment to the Contract Workmen and their family members.

During the year 2014-15:

* Free medical consultation with minimum anti-biotic therapy and vitamins was extended in 86921 instances to out-patients from the rural public. 32574 patients were given emergency treatment for various causes. Community Health Screening for diabetes, Hypertension and HIV covering 12,473 persons during the Annual Book Fair and Safety Week Celebration was carried out and counselled for behavioural change.

* 12 medical camps were conducted in peripheral villages located in the area surrounding Neyveli Township in Cuddalore District. 4,962 persons of these 12 villages were screened and given medical advice and medicines through the camps. During the camps, 713 Random Blood Sugar Tests were taken, 239 Electro Cardio Grams were generated and 439 persons were provided with vision glasses. 933 patients were referred for inpatient treatment of which 428 persons underwent the inpatient treatment.

From February 2013 onwards, your Company is providing nutritious food supplement to the HIV affected children belonging to the Cuddalore District HIV Positive Society, Cuddalore. 285 such children were provided with food supplements during the year 2014-15.

During the year 2013-14, your Company has instituted the "NLC Chair on CSR" with Institute of Public Enterprise, Hyderabad. The second and final installment of Rs. 100 lakh has been provided for the same as corpus, in the year 2014-15.

In addition to the above, the details on specific Corporate Social Responsibility projects undertaken in compliance with Section 135 of the Companies Act, 2013 are placed as Annexure -1.

ISO Certification

Your Company''s Mines and Thermal Power Stations at Neyveli are certified with ISO 9001, ISO 14001 and OHSAS 18001 by reputed agencies for their sound systems and practices. In addition to the above, the Contracts Department, Learning and Development Centre and the Vigilance Department have been certified under ISO 9001.

Contribution to the cause of women

Your Company''s human resource is represented by 7.5% of Women employees. Programme on women empowerment were organised during the year under review. Your Company actively participated and deputed women employees for the programme organised by "Women in Public Sector" (WIPS) under the aegis of SCOPE.

Visit of Parliamentary Committees

During the year the following Parliamentary Committees had visited your Company:

a. Committee on Welfare of Other Backward Classes.

b. Committee on official language.

Awards & Recognition

Awards received by your Company during the year 2014-15 are given below:

* IME Journal Innovation Award instituted by Indian Mining and Engineering Journal for using State-of-the-art Mining Technology with effective CSR & Environment Management.

* Productivity Award instituted by World Academy of Productivity Science (WAPS).

* Greentech Gold Award 2014 instituted by Greentech Foundation for the best safety performance of TPS-II.

* National Award instituted by ''Governance Now'' for Best HR Practices (Training).

* National Energy Conservation Award -2014 for Mine-I instituted by Bureau of Energy Efficiency.

* IE (I) Industry Excellence Award 2014, instituted by Institution of Engineers (India).

* First Prize in the category of Best Public Sector Undertaking Unit implementing Right to Information Act, Instituted by Public Relation Society of India (PRSI).

* Green Rating Project (GRP) Award, instituted by the Centre for Science & Environment for Barsingsar TPS and TPS-II, Neyveli.

Business Responsibility Report (BRR)

The Business Responsibility Report (BRR) for the year 2014-15, covering the initiatives taken by the Company from an environmental, social and governance perspective forms part of this Annual Report 2014-15.

Compliance under Persons with Disabilities Act, 1995

Your Company ensures compliance of provisions under the Persons with Disabilities Act, 1995. Suitable arrangements/modifications are made in the working place to meet the requirements of persons with disability.

Compliance under the Right to Information Act, 2005

Your Company ensures compliance under the Right to Information Act, 2005. 18 Central Assistant Public Information Officers representing different functional areas, one Nodal Officer, one Central Public Information Officer, two Appellate Authorities and one Transparency Officer have been nominated to attend to the queries and appeals received under the RTI Act in a time bound manner.

During the year 2014-15, under the above Act, 307 applications containing 1443 queries were received and 268 applications covering 1134 queries have been replied.

Compliance under Public Procurement Policy

The Ministry of Micro, Small and Medium Enterprises has notified the Public Procurement Policy and in terms of the said notification, an annual target for procurement from MSE was set for the three years beginning from the FY 2012-13. The target set for the FY 2014-15 for procurement of such items which are within the scope of MSEs was 20% and as against the same the achievement was 23.19%.

Citizen''s Charter

Your Company maintains Citizen''s Charter, indicating details of clients, customers under different heads, system of redressal of grievance etc., and the same is regularly updated.

Conservation of Energy, Technology absorption and Foreign Exchange Earnings and outgo

The particulars required under Section 134 (3) (m) of the Companies Act, 2013 regarding conservation of energy, technology absorption and Foreign exchange earnings and outgo are furnished in Annexure-2.

Management Discussion & Analysis Report and Report on Corporate Governance

The Management Discussion & Analysis Report is furnished in Annexure-3. The report on Corporate Governance on the compliance of Corporate Governance conditions stipulated by Clause-49 of the Listing Agreement and the DPE guidelines is furnished in Annexure-4.

The Auditor''s certificate on the compliance of the above Corporate Governance conditions is furnished in Annexure-5.

Statutory Disclosures Under Companies Act, 2013 and Listing Agreement

Extract of Annual Return

The extract of Annual return in terms of Section 134(3) read with 92(3) of the Companies Act, 2013 is placed as Annexure-6.

Particulars of Employees

Particulars of Employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Nil.

Loans, Guarantees and Investments

During the year 2014-15, your Company had subscribed to the equity share capital for an amount of Rs. 197.94 crore and Rs. 47.43 crore in NTPL and NUPPL, respectively. As on 31st March 2015 the share capital held by your Company in NTPL and NUPPL is Rs. 1508.02 crore and Rs. 47.48 crore, respectively. Your Company during the year 2013-14 had entered into a loan agreement with NTPL, the Subsidiary Company, to provide bridge loan of Rs. 1184.92 crore for implementation of its Thermal Power Project at Tuticorin for a period of 364 days at an interest rate of 10.86%. This arrangement was done in order to enable NTPL to get long term loan at a favourable interest rate post-commissioning of the project. As per the terms and conditions of the above loan agreement, during the year an amount of Rs. 980.52 crore was funded and NTPL has repaid Rs. 204.40 crore during the year. Besides the above, your Company has not granted any loan or guarantee or done any investments (other than short term deposits with the Bank in the ordinary course of business) during the year 2014-15.

Transfer to Reserves

During the year 2014-15, Rs.160 crore has been transferred to general reserves.

Deposits

The Company has not accepted any deposit from public.

Status of unclaimed share certificates in terms of Clause 5A II of the Listing Agreement

There were 1100 equity shares pertaining to 6 Shareholders lying unclaimed as on 01.04.2014. During the year 2014-15, no claim was received from any of the above shareholders.

Material Changes affecting financial position occurring between the date of Financial Statement and Directors Report

The final order from CERC for Barsingsar Thermal Power Station was received on 10.07.2015 for the period from COD to 31.03.2014. This has the effect of reducing the sale of power. Based on the legal opinion a review petition has been filed before CERC.

Sexual harassment of women at workplace

A separate Committee has been constituted for looking into the complaints relating to sexual Harassment of women at workplace. During the year 2014-15, no complaint was received in this regard.

Auditors

Statutory Audit

M/s.Sreedhar, Suresh and Rajagopalan, Chartered Accountants and M/s.P.B.Vijayaraghavan & Co., Chartered Accountants, Chennai, were appointed by the Comptroller and Auditor General of India (C&AG) as Joint Statutory Auditors for the year 2014-15 under Section 139 of the Companies Act, 2013. The Board of Directors of your Company has fixed Rs. 18 lakh plus applicable service tax as the Statutory Audit fees, to be shared equally by the Joint Statutory Auditors.

Branch Audit

M/s. Surender K Goyal & Co., Chartered Accountants, Jaipur, has been appointed as the Branch Auditor for the year 2014-15 by C&AG for conducting the audit of Mine and Thermal Units at Barsingsar.

Secretarial Audit

Shri. R. Balasubramaniam, Pracitising Company Secretary, Chennai, was appointed as the Secretarial Auditor for the year 2014-15. The Secretarial Audit report for the year 2014-15 and the reply to observations of the Secretarial Auditor are furnished in Annexure-7.

Cost Audit

M/s.M. Krishnaswamy & Associates, Cost Accountants, Chennai, were appointed as the Cost Auditor for the year 2014-15, to conduct cost audit for Mines & Power Stations of the Company.

M/s.Srinivasan, Sundaram & Associates, Cost Accountants, Chennai, were originally appointed as the Cost Auditor for the year 2013-14 and since the said firm failed to file the audit report with the Ministry of Corporate Affairs (MCA) within the due date i.e., 27.09.2014, extension of time up to 31.01.2015 was obtained from MCA to file the report. M/s.M. Krishnaswamy & Associates, Cost Accountants, Chennai were appointed as the Cost Auditor for conducting Cost Audit for the year 2013-14 and the Cost Audit Report was filed with MCA on 31.01.2015.

C&AG''s Comments

C&AG''s Comments on the accounts for the year ended 31st March, 2015 is furnished in Annexure-8.

Directors'' Responsibility Statement as per Section 134(3)(c) of the Companies Act, 2013

The Board of Directors declares:-

a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis.

e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Board of Directors

Shri. M.S. Ravindranath relinquished the position as a Director on 30.08.2014 on attaining the age of superannuation.

Shri. C. Balakrishnan and Dr. S G Dhande, Non-official part-time Directors resigned from the Board with effect from 24.09.2014.

Shri. Subir Das, Director (Mines) was inducted into the Board w.e.f. 30.09.2014.

Dr. A.K. Dubey, Additional Secretary to the Government of India, Ministry of Coal, relinquished the office of Directorship with effect from 11.06.2015. Smt. Sujata Prasad, Joint Secretary & Financial Advisor, Ministry of Coal has been inducted into the Board as an Additional Director w.e.f. 11.06.2015.

Shri C.V. Sankar, Additional Chief Secretary to Government of Tamilnadu, Industrial Department resigned from the Board w.e.f. 29.06.2015.

Shri Rajesh Lakhoni, Secretary to Government of Tamilnadu, Energy Department, has been inducted into the Board as an Additional Director w.e.f. 15.07.2015.

The Board places on record its appreciation for the valuable contribution made by Sarvashri M.S. Ravindranath, C. Balakrishnan, Dr. S.G. Dhande, Dr. A.K. Dubey and C.V. Sankar during their tenure as Directors on the Board of the Company.

Shri. Sarat Kumar Acharya, Director retire by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-election.

Acknowledgement

The Board of Directors of your Company places on record its sincere appreciation for the continued support and guidance extended by the Ministry of Coal, Ministry of Power, Ministry of Finance, Ministry of Environment & Forest, Ministry of Industry, Ministry of Labour, Ministry of Heavy Industries, Planning Commission, Central Electricity Authority, Central Electricity Regulatory Commission, State Electricity Boards and beneficiaries of Tamil Nadu, Andhra Pradesh, Telangana, Karnataka, Kerala, Puducherry and Rajasthan and also the Joint Venture Partners, viz., Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL), Mahanadi Coalfields Limited (MCL) and Hindalco.

The Board of Directors of your Company is pleased to acknowledge with gratitude the co-operation and continued support extended by the Governments of Tamil Nadu & Rajasthan and the District Administration of Cuddalore and Bikaner. The support and co-operation by the Comptroller and Auditor General of India, the Statutory Auditors, Branch Auditor, Cost Auditor, Secretarial Auditor, Director General of Mines Safety, the Factory & Boiler Inspectorates, Chief Inspector of Factories, the Director of Boilers, Central Pollution Control Board, State Pollution Control Board, Chief Controller of Explosives, Regional Labour Commissioner, Regional Provident Fund Commissioner, the Company''s Bankers and KfW of Germany need special mention and the Directors acknowledge the same.

Your Directors also wish to place on record their appreciation for the dedicated work put forth by the employees at all levels. The positive role played by the recognised Trade Unions and Associations of the Engineers and Officers in maintaining cordial industrial relations deserves special mention.

for and on behalf of the Board of Directors

Place : Chennai B. SURENDER MOHAN Date : 07.08.2015 CHAIRMAN-CUM-MANAGING DIRECTOR


Mar 31, 2014

The Members,

Neyveli Lignite Corporation Limited

The Directors are pleased to present the 58th Annual Report of your Company together with the audited accounts for the year ended 31st March 2014.

Performance 2013-14

Year in retrospect

The year 2013-14 was a year of excellence in all fronts once again and your Company scaled new heights in physical and financial achievements.

Highlights - Physical

Overburden removal from all Mines put together at 1681.72 LM3 is the highest for any year since inception.

Lignite production from all Mines put together at 266.09 LT is the highest for any year since inception.

Power Generation and export from all thermal power stations put together at 19988.65 MU and 16956.40 MU respectively are the highest for any year since inception.

Lignite production of 15.53 LT and power generation of 1438.24 MU from Barsingsar Mine and power plant are the highest for any year since inception.

Highlights - Financial

The total sales of Rs.5967.23 crore is the highest for any year since inception.

The Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2013-14 of Rs.2209.13 crore and Rs.1501.88 crore respectively are the highest for any year since inception.

Segment-wise Performance

Mines

The mining capacity of your Company is 30.60 MTPA as on 31st March 2014. During the year 2013-14 your Company achieved the highest ever performance in Overburden (OB) removal and Lignite production. The total OB removal and Lignite production stood at 1681.72 LM3 (1674.85 LM3 in 2012-13) and 266.09 LT (262.23 LT in 2012-13) registering a growth of 0.41% and 1.47% respectively.

Mine-I (including expansion)

The capacity of this Mine is 10.5 MTPA. This Mine recorded 563.39 LM3 of overburden removal during the year 2013-14 as against 502.15 LM3 registered during the previous year 2012-13 recording a growth of 12.20%. Lignite production during the year was 90.03 LT as against 79.60 LT during the previous year registering a growth of 13.10%.

Mine-IA

The capacity of this Mine is 3.0 MTPA. During the year 2013-14, the overburden removal was 279.15 LM3 as against 281.81 LM3 registered during the previous year 2012-13. Lignite production during the year was 30.01 LT as against 29.40 LT during the previous year 2012-13 registering a growth of 2.07%.

Mine-II (including expansion)

The capacity of this Mine is 15.0 MTPA. During the year 2013-14, the overburden removal was 772.93 LM3 as against 813.36 LM3 registered during the previous year 2012-13. Lignite production during the year was 130.52 LT as against 139.44 LT in the previous year 2012-13. Growth could not be registered due to breakdown in the conveyor systems & SMEs. However, it was ensured that the lignite was produced and maintained upto the maximum capacity of the stock yard almost throughout the year.

Barsingsar Mine

The capacity of this Mine is 2.1 MTPA. During the year 2013-14, overburden removal was 66.25 LM3 as against 77.53 LM3 registered during the previous year 2012-13. Lignite production during the year was 15.53 LT as against 13.79 LT in the previous year 2012-13 registering a growth of 12.62%. Overburden removal was restricted as sufficient quantity of lignite had already been exposed.

Output per Man shift

The output per man shift during the year 2013-14 compared with the previous year 2012-13 is given below:-

Product Unit 2013-14 2012-13 Growth (%)

Lignite Tonne 12.64 11.97 5.60

Power

The total generation capacity of thermal power stations of your Company was 2740 MW as on 31st March 2014. Your Company has surpassed the previous year generation and achieved all time high in power generation and export during the year under review. The aggregate power generation during the year 2013-14 was 19988.65 MU (19902.34 MU in 2012-13) and the export during the year 2013-14 was 16956.40 MU (16841.51 MU in 2012-13) with a growth of 0.43% and 0.68% respectively. The power generation could have been still higher, but for the surrendering of power by the beneficiary States to the extent of about 288 MU.

Thermal Power Station-I

The installed capacity of this thermal power station is 600 MW. Generation of power during the year 2013-14 was 4058.14 MU as against 4035.43 MU in 2012-13. During the year under review 3277.22 MU was exported to TANGEDCO, the sole beneficiary, as against 3215.98 MU during the previous year 2012-13. Power generation and export of power registered a growth of 0.56% and 1.90% respectively and this Station achieved a Plant Load Factor (PLF) of 77.22% during the year under review. Major overhaul & Residual Life Assessment (RLA) study works were carried out in Unit-III and annual maintenance works were carried out in all other units.

Thermal Power Station-I Expansion

The installed capacity of this thermal power station is 420 MW. During the year 2013-14, the power generation from this station was 3292.10 MU as against 3319.77 MU in 2012-13 and 3013.59 MU was exported as against 3035.58 MU during the previous year 2012-13. The Station achieved a PLF of 89.48%. Annual maintenance works were carried out in both the units during the year under review.

Thermal Power Station-II

The installed capacity of this thermal power station is 1470 MW. During the year 2013-14, power generation was 11179.16 MU as against 11238.09 MU in the year 2012-13. Export of Power to the Southern Grid during 2013-14 was 9399.53 MU as against 9455.81 MU during the previous year 2012-13. This Station achieved a PLF of 86.81% during the year under review. Major overhaul was carried out in Unit-I & Unit-V and annual maintenance works were carried out in all other units during the year.

Barsingsar Thermal Power Station

The installed capacity of this thermal power station is 250 MW. During the year 2013-14, power generation was 1438.24 MU as against 1280.85 MU during the previous year 2012-13 and 1253.03 MU of power was exported to the grid as against 1114.33 MU during the previous year 2012-13. This Station achieved a PLF of 65.66% during the year under review. Annual maintenance works were carried out in both the units during the year.

Productivity

The output per man shift during the year 2013-14 compared with the previous year 2012-13 is given below:-

Product Unit 2013-14 2012-13 Growth (%)

Power Kwh 22222 21386 3.91

Financial Performance

During the year ended 31st March, 2014, the Company registered a total sales of Rs.5967.23 crore as against Rs.5590.07 crore recorded in the year 2012-13, registering a growth of 6.75%. The sales registered for the year 2013-14 was the highest ever since inception.

The Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2013-14 were Rs.2209.13 crore and Rs.1501.88 crore, respectively, as against Rs.2047.65 crore and Rs.1459.75 crore, respectively, registered in the year 2012-13. As compared to the previous year 2012-13, the PBT and the PAT for the year 2013-14 recorded a growth of 7.89% and 2.89%, respectively. The PBT and the PAT for the year ended 31st March, 2014 were the highest for any year since inception.

The reason for increase in the profit for the year 2013-14 was on account of higher sales consequent to increased lignite production, generation and export of power.

The details of profit earned for the financial year 2013-14 and appropriation of the same in comparison with the previous year 2012-13 are as under:

(Rs. in crore)

2013-14 2012-13

Profit Before Tax 2209.13 2047.65

Tax provision 707.25 587.90

Profit After Tax 1501.88 1459.75

Appropriation :

Transfer to

Bond Redemption Reserve 15.00 15.00

Interest Differential Fund Reserve 17.07 15.71

General Reserve 155.00 150.00

Interim Dividend 167.77 167.77

Tax on Interim Dividend 28.51 27.22

Proposed Final Dividend 301.99 301.99

Tax on proposed Final Dividend 51.32 51.33

Dividend

The Board of Directors of your Company has recommended a final dividend of 18% (Rs.1.80 per share) for the year 2013-14. An Interim Dividend @10% (Rs.1.00 per share) has already been paid to shareholders during the month of March 2014 and taking into account the final dividend of 18%, the total dividend for the year 2013-14 works out to 28% (previous year 28%) and the total dividend outgo including distribution tax will be Rs.549.59 crore (previous year Rs.548.31 crore), which works out to 36.59% of PAT for the year 2013-14.

MoU Rating for the year 2012-13

Your Directors have pleasure to share with the Members that the Company has achieved ''Excellent'' rating for its performance during the year 2012-13 in terms of the Memorandum of Understanding (MoU) entered into with the Ministry of Coal as per DPE guidelines.

Disinvestment

In order to comply with minimum public shareholding requirement under Securities Contract (Regulation) Rules, 1957 and Clause 40A of Listing Agreement, the Government of India (GOI), during the year under review had disinvested 5,97,01,260 equity shares, which is around 3.56% of the equity share capital of the Company, through Institutional Placement Programme (IPP). Consequent to the above, the GOI shareholding in the Company is reduced to 90% and the balance is held by FIIs/FIs, Banks, Mutual Funds etc. and Public.

Projects under construction/implementation

Thermal Power Station-II Expansion (2x250 MW)

As reported last year, Unit-I of Thermal Power Station-II Expansion was synchronised with lignite firing in May 2011 and after attending the teething problem it was lighted up again on 8th November, 2012. However, the unit had to be taken out of service on 25th November, 2012 to attend to refractory damage in Seal Pot 2 and failures in Fluidised Bed Heat Exchanger (FBHE) coils and spacer rods. In order to rectify the above, design modifications were made by BHEL in the Super Heater/Re-Heater coil supports in all the four FBHEs, in consultation with M/s.Lentjes, the technology provider and the unit was again synchronised on 13th February, 2014. However the unit was not able to achieve sustained operation and the unit could be in operation only intermittently. The unit is currently under shutdown due to failure in the support system in one of the FBHEs. This has been taken up with BHEL at all levels and also the Ministry of Coal and the Department of Heavy Industry. BHEL is in the process of carrying out further modification to make the FBHEs support system more rigid and reliable. This is being closely followed up to commission the unit early.

In respect of Unit-II, the Boiler was lighted up on 24th October, 2013 and the Turbine was rolled to the rated speed of 3000 rpm and the electrical tests were completed on 25th October, 2013. All the pre-commissioning activities have already been carried out. The modification proposed to be carried out in Unit-I will be carried out in this unit also before light up.

The overall physical progress of the project is 94.73%. As per the recent commitment made by BHEL, the commercial operation of the Unit-I is expected by August 2014 and that of Unit-II by September 2014. The Cumulative expenditure incurred up to 31st March, 2014 is Rs.2904.44 crore.

Neyveli New Thermal Power Project (2 x 500 MW)

Government of India (GOI) has sanctioned the Neyveli New Thermal Power project (1000 MW) at a capital cost of Rs.5907.11 crore in June 2011 with a commissioning schedule of 48 months and 54 months for Unit-I & II respectively from the date of sanction. The power station will adopt pulverised fuel firing technology. Two units of 500 MW capacity each will be set up as a replacement of the existing 600 MW TPS-I which has served for more than 50 years. Due to retendering of Steam Generator package, the project has got delayed.

BHEL has been awarded the contract for execution of both Steam Generator Package (NTA 1) and Turbo-Generator Package (NTA 2) at an order value of Rs.2569.24 crore and Rs.1022.68 crore, respectively. Balance of Plant (BOP) Package has been awarded on M/s. Essar Projects Limited at a value of Rs.1159.08 crore. The Cumulative expenditure incurred up to 31st March, 2014 is Rs.339.15 crore. As per the current status, commercial operation of Unit-I and II is expected by October 2017 and April 2018 respectively.

Restructuring of Mine-I & IA

In order to meet the lignite requirement of the Neyveli New Thermal Power Project of 1000 MW capacity being set up at Neyveli, the Board of Directors of your Company had approved the proposal for re-structuring of Mine-I from 10.5 to 8.0 MTPA and Mine-IA from 3.0 to 7.0 MTPA at an estimated cost of Rs.1458.17 crore which would result in increase in the Lignite Mine capacity by 1.5 MTPA.

RWE-Germany has been engaged to prepare the Feasibility Report (FR) for this project. Draft Social Impact Assessment (SIA) report has been received and the Expert Appraisal Committee (EAC) of Ministry of Environment & Forest, Government of India has issued the Terms of Reference for conducting Environmental Impact Assessment and Environment Management Plan study.

The draft EIA/EMP reports have been prepared and submitted to TNPCB, Cuddalore. Public Hearing is expected to be conducted soon and final environmental clearance is expected by October 2014. Administrative sanction for additional land with respect to Mine-I has been obtained from Tamilnadu Government and for Mine-IA, it is expected shortly.

Wind Power Project (51 MW)

Members may be aware that as part of entering into generation of green energy, your Board of Directors has approved for setting up 51MW Wind Power Project at Kazhuneerkulam, Tirunelveli District with Operation & Maintenance for five years from the actual date of commissioning, at an aggregate cost of Rs.347.14 crore. Work Order for setting up of the above project has been issued to M/s Leitwind Shriram Manufacturing Limited, Chennai in August 2013. Commissioning schedule for Wind Power Project is ten months from the date of placing of work order. Supply and erection activities are in progress. The overall physical progress of the project is 33%. The Cumulative expenditure incurred upto 31st March, 2014 is Rs.41.28 crore.

Solar Power Project (10 MW)

As one more step to harness green energy, the Board of Directors of your Company has accorded in principle approval for setting up of 25 MW Solar Power Project at Neyveli, out of which 10 MW will be installed in an area of about 54 acres in first phase and another 15 MW as an expansion in the second phase. M/s.BHEL, Chennai has been awarded the contract for setting up the above 10 MW Solar Power Project at a cost of Rs.74.60 crore, which includes Operation & Maintenance for three years after the warranty period. LOA has been issued to M/s.BHEL, Chennai on 30th April, 2014 and the project is scheduled to be completed within a period of 9 months from the date of LOA.

Coal Block Allocation

Pachwara South

Pachwara South Coal Block in the State of Jharkhand, having a total reserve of 279 MT of coal has been allocated by Ministry of Coal, Government of India to Neyveli Uttar Pradesh Power Limited, a subsidiary of your Company, for meeting the requirement of coal for its proposed thermal power plant at Ghatampur, in the State of Uttar Pradesh. Terms of Reference (TOR) has been issued by MoE&F in February 2014 and Advance Action Proposal (AAP) for Rs.19.45 crore has been sanctioned by Ministry of Coal.

Work order has been issued for preparation of EIA/EMP reports as well as Differential Global Positioning Survey (DGPS). Exploratory drilling is being carried out by CMPDI.

Jilga Barpali

Jilga-Barpali Coal Block, in the State of Chhattisgarh, with a total reserve of 546 MT of coal has been allocated by Ministry of Coal, Government of India, jointly to the Company with Chhattisgarh State Power Generation Company (CSPGCL) to develop the Mine and share the coal resources as per the allocation made by GOI. As per the allocation made 396 MT of coal from this block would be used for the proposed 1980 MW (Phase I ) of the Sirkali Thermal Power Project, in the State of Tamilnadu.

A proposal for JV between your Company and CSPGCL with an equity ratio of 74:26 has been approved by your Board of Directors and the Joint Venture Agreement (JVA) is expected to be signed shortly, with CSPGCL.

Joint Venture Projects

NLC Tamilnadu Power Limited (2x500 MW)

Coal based thermal power plant at Tuticorin is being implemented by your Company as a joint venture with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), at a revised estimated cost of Rs.6602.74 crore. Boiler Hydro Test for Unit-I was carried out on 28th September, 2012 and the Unit was lighted up with oil on 19th March, 2014. All the major pre-commissioning activities of Unit-I have been completed and the Unit is expected to be commissioned in August 2014. Regarding Unit-II, Boiler Hydro Test was carried out on 9th November, 2012. Erection works are in its advanced stage of completion. Boiler light up of Unit-II is planned for August 2014 and the Unit is expected to be commissioned during September 2014. The Cumulative expenditure incurred up to 31st March, 2014 is Rs.5191.62 crore.

MNH Shakti

MNH Shakti Limited a Joint Venture Company promoted by M/s. Mahanadi Coalfields Limited (MCL), NLC & Hindalco with equity participation of 70:15:15 is implementing a 20.0 MTPA coal mining project in Talabira in the State of Odisha. MCL being the major stake holder, is piloting the project. Environmental clearance for this project is yet to be received.

Neyveli Uttar Pradesh Power Limited (3x660 MW)

Members may be aware that your Company had entered into a joint venture with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) for setting up of 1980 MW (3x660) coal based thermal power project in Ghatampur Tehsil, Kanpur Nagar District in the State of Uttar Pradesh, at an estimated cost of Rs.14,375 crore. The JV Company, Neyveli Uttar Pradesh Power Limited (NUPPL) is a Subsidiary Company with equity participation of NLC and UPRVUNL in the ratio of 51:49. Ministry of Coal (MoC) has accorded sanction for the Advance Action Proposal (AAP) for Rs.73.65 crore for carrying out certain preliminary activities. The schedule for completion of the project is 52 months, 58 months and 64 months from the date of sanction by GOI for the 1st, 2nd and 3rd unit of 660 MW each. The Public Investment Board, Government of India has recommended the project proposal for sanction to the Cabinet Committee on Economic Affairs. CCEA would consider the project for sanction once the project gets the environment clearance.

The project was taken up for consideration for issue of environmental clearance by the Expert Appraisal Committee (EAC) and the said Committee had observed that as per the existing policy of MoE&F, the environmental clearance and Stage-I forest clearance for the linked coal block is a pre-requisite. The JV Company has taken necessary steps to obtain environmental clearance and Stage-I Forest Clearance for the linked Pachwara South coal block. For the proposed thermal plant, NUPPL has deposited Rs.131.59 crore with the Land Acquisition Department, Kanpur, Govt. of Uttar Pradesh. The Private land to the extent of 767.27 hectares is being acquired. The Company has been given possession letter for 452.013 hectare as on 31st March, 2014. The JV Company has also taken action to acquire 60.7310 hectare of Government land lying within the project boundary.

Power purchase agreement has been signed with Uttar Pradesh Power Corporation Limited. Government of Uttar Pradesh has accorded sanction for supply of 80 cu. sec. of water from the West Allahabad branch canal downstream of Bidhnu Kasba Village for the above project.

M/s. Desein Private Limited, New Delhi has been appointed as the Consultant for the project. The tenders inviting EOI for the three packages viz., Steam Generator and Auxiliaries, Steam Turbine Generator and the Balance of Plant (all other auxiliary Packages) have been floated and the processing of EOIs are in progress. Preparation of tender specifications is also in progress. M/s. RITES has been assigned the work of carrying out the feasibility study for railway siding for the proposed coal based thermal power project. A site office for the above project has been constructed at Ghatampur and was inaugurated on 24th February, 2014.

New Projects under formulation

Bithnok Thermal Power Project (250 MW) with linked Mine (2.25 MTPA)

Your Company has proposed to set up a lignite based Thermal Power Plant of 250 MW capacity with linked Mine of 2.25 MTPA at Bithnok in Bikaner District, in the State of Rajasthan at an estimated cost of Rs.2298.83 crore. The Board of Directors of your Company has accorded approval for payment of Rs.94.56 crore to Government of Rajasthan towards acquisition of lands for Bithnok Mine Project.

State level Environmental Impact Assessment Authority, Rajasthan has already issued environmental clearance in respect of TPS. For the linked Mine, Expert Appraisal Committee (EAC) of MoE&F has recommended the project for environmental clearance. Environmental clearance will be issued by the authorities only after obtaining the Stage-I Forest clearance for which necessary application has been made by the Company.

Barsingsar Thermal Power Station Extension (BTPSE) (250 MW) linked to Hadla Lignite Mine (1.9 MTPA)

Members may be aware that with a view to utilise the lignite deposits in Hadla lignite block, your Company has proposed to set up a 250 MW lignite based thermal power plant with linked Mine of 1.9 MTPA capacity in Bikaner

District of Rajasthan, as an extension of the existing Barsingsar Power Station. Preparation of Feasibility Report (FR) for Thermal and Hadla Mine have been completed.

Environmental clearance for Hadla Mine Project and for BTPSE project have been obtained. Geological Exploration & Survey Work in the Palana Mine block initiated by your Company could not be taken up due to resistance by villagers. Considering the encroachments on the Palana lands and the resistance from the villagers, it is proposed to drop Palana Mine Project and the fuel requirement of BTPSE will be met by operating the existing Barsingsar Mine and Hadla Mine.

Sirkali Thermal Power Project (4000 MW)

Your Company, has proposed to set up a 4000 MW coal based coastal thermal power project, in two phases, at Sirkali, Nagapattinam District in the State of Tamil Nadu. In the first phase 1980 MW is proposed at an estimated cost of Rs.14,482 crore. The Board of Directors of your Company has accorded approval for AAP of Rs.56.52 crore for taking up pre-project sanction activities. LOA for the Consultancy services for the preparation of Feasibility Report (FR) has been issued to M/s. Tractabel and preparation of FR is in progress.

Action has been initiated for preparation of FR for Coal jetty and Marine EIA study. Your Company has taken up with District Administration to expedite the issue of administrative sanction for acquiring 1221.82 hectares of land for this project.

Barsingsar Solar Power Project (10MW)

A proposal is under consideration to setup a Solar Power Plant of 10MW capacity at Barsingsar, at an estimated cost of R92.83 crore.

Devangudi Mine Project

Your Company had earlier proposed to develop Devangudi Mine Block of 2.0 MTPA capacity at an estimated cost of Rs.542.67 crore to cater to the requirements of small industries around Neyveli. It is proposed to drop the above Mine project at present due to the prevailing non-favorable regional ground water scenario as per the Regional Ground Water Study conducted recently by IIT Chennai and to meet the stipulation of restriction in pumping of water by MoE&F in Neyveli area.

Coal Assets Abroad

In order to ensure fuel security for the coal based power projects, your Company plans to acquire coal assets abroad and in this connection had floated an Expression of Interests (EOI). Based on the response to the EOI it has been decided to further process the offers received from the firms having explored Mine field and are on the lookout for partners to develop the said Mine. Technical, financial and legal due diligence studies in the order of priority with respect to reserve size of the Mine field will be carried out and necessary action has been taken to appoint a consultant for carrying out the above studies.

Power Tariff

The Central Electricity Regulatory Commission (CERC) initially constituted under the Electricity Regulatory Commission Act, 1998 is a statutory body now functioning under the Electricity Act, 2003 which has repealed the ERC Act-1998, has the responsibility to regulate the tariff of Generating Companies owned or controlled by the Central Government and Generators having sale of electricity in more than one State. Tariff orders for the period 2009-14 in respect of TPS-I, TPS-I Expansion and TPS-II have been issued by CERC. Tariff petition has been filed before CERC for the Barsingsar Power Plant and CERC has awarded provisional tariff for the power exported from this project for the period from COD up to 31.03.2014. Filing of tariff petitions for the period 2014-19 is underway.

Dues - Power & Lignite sales

During the year 2013-14, the realisation of power dues of the Company increased considerably with respect to the previous year as a result of ardent efforts put forth by the Company at various levels and with the support of MOC. The outstanding dues of the Company as on 31.03.2014 was Rs.2206.53 crore in which the power dues accounted for Rs.1985.26 crore, comprising normal dues of Rs.1064.46 crore (i.e., dues within the allowable 60 days limit) and over dues of Rs.920.80 crore (viz., dues exceeding the permissible 60 days limit). The corresponding dues as on 31.03.2013 was Rs.3802.37 crore in which the power dues accounted for Rs.3413.47 crore comprising normal dues of Rs.789.08 crore and over dues of Rs.2624.39 crore.

Rebate Scheme/One time Settlement Scheme for Realisation of Dues

Your Company is following a graded rebate scheme to incentivize prompt/early payment of monthly power bills. Your Company also managed to recover Rs.309.61 crore of surcharge income pursuant to a settlement worked out with TANGEDCO. Further, Power Purchase Agreements (PPAs) with TANGEDCO were renewed/amended to incorporate payment security clause in line with the industry practice for appropriation of any payments first against surcharge and then against earlier unpaid bills, statutory dues and then monthly bills. Efforts are on to get the PPAs with other Discoms also amended.

Credit Rating

Your Company has obtained highest credit rating of "AAA/Stable" from ICRA, CRISIL and Brickworks for the loans obtained for its various projects in Neyveli and Barsingsar.

Research and Development (R&D)

Centre for Applied Research & Development (CARD), the In-house R&D centre of your Company had complied with the R&D guidelines successfully by completing five R&D project activities. The total R&D expenditure incurred during the year 2013-14 was Rs.14.34 crore which is around 1% of PAT for the year 2013-14.

Currently two Coal S&T projects on corrosion problems in Specialised Mining Equipment (SME) in mines and development of alternate materials to prevent erosion corrosion in de-watering pipes in mines are in progress. A Memorandum of Understanding (MoU) was signed on 28.03.2014 with Indian Institute of Technology, Madras for a joint research consultancy project "Delineating of buried sub-surface objects, hard bands in open-cast mines". The study aims to find buried objects in mines using Ground Penetration Radar technology. As a measure of expanding its R&D activities, your Company had invited proposals through ''Expression of Interest'' basis for undertaking projects to resolve certain identified problems. The proposals received are under scrutiny for implementing the projects.

CARD has been granted accreditation for chemical and mechanical testing by National Accreditation Board for Testing and Calibration Laboratories (NABL). The Accreditation has been granted for a period of two years from 17th December, 2013. CARD is taking efforts to take up projects on Clean Coal Technologies. Your Company is in discussion with M/s. KOBELCO, Japan to upgrade the lignite for power generation. Discussions are in progress with M/s. Environmental Clean Technology, Australia for developing a technology to produce lignite pellets of high calorific value with less moisture. Further, discussion for possibility of utilising the dried lignite in reduction of iron ore (millings) to iron and also with lignite consuming industries for the suitability of the pellets in their system is also in progress.

Your Company has identified the potential of fly ash as a pozzolanic material and ways and means for gainful utilisation of fly ash. It has also identified the potential use of bottom ash in construction activities as a substitute for sand by 50% and has entered into an MOU with VIT University to undertake a study. The joint research has yielded positive results, proving that bottom ash can replace sand in cement mortar and cement blocks. Based on research experimental building has been constructed in Neyveli using bottom ash.

Human Resource Management

Human Resource

Your Company takes pride in its competent and highly motivated human resource and maintain harmonious relationship that leads to achieving organisational as well as individual goals. The human resource has been the backbone of your Company in driving operational and financial performance. The thrust on achieving higher growth and optimal utilisation of manpower continued in the year under review also. The productivity of the employee has been demonstrated by increase in the lignite production and power generation. The total manpower of your Company as on 31st March, 2014 was 16849.

Employee Development

Your Company has continuously promoted training, learning initiatives for skill and competency building and overall development for not only its own employees but also for the surrounding society. The training programme includes management, mining operation, power station operation and maintenance, project construction, erection, commissioning and information technology. During 2013-14, 550 in-house programmes on the above topics covering 16,000 employees were organised. Leadership development programme was also arranged for senior executives to harness their skills.

Industrial Relations

Your Company continued its faith in participative management and industrial relations remained harmonious and cordial.

Implementation of Official Language

In line with the Government of India policy and the provisions prescribed under the Official Languages Act, 1963 your Company made concerted efforts to promote the official language. Hindi workshops on topics such as usage of Unicode fonts in computers, glossary of standard expressions and phrases used in office noting and correspondence, salient features of the above Act and its rules and official language policy of Union were organised. Third sub-committee of Parliamentary Committee on official language inspected the implementation of official language. Your Company has been conferred with "Rajbhasha Vishista Samman" award instituted by Centre for Training and Development.

Reservation of Posts

Your Company continues to follow the directives of the Government of India with regard to reservation for SC and ST. The details of group-wise Men-in-Position (MIP) as on 31st March, 2014 are as under:

Strength of SC/ST % of SC/ST

Total Group Strength Total Total SC ST SC ST SC/ST SC/ST

A 4251 873 269 1142 20.54 6.33 26.86

B 75 13 21 34 17.33 28.00 45.33

C 11114 2210 109 2319 19.88 0.98 20.87

D 1409 327 9 336 23.21 0.64 23.85

Total 16849 3423 408 3831 20.32 2.42 22.74

Leadership Development

Your Company organised Leadership Development Initiative covering 240 executives involving mix of tools and simulations for mapping their competency against the competency framework. The programme containing individual and group exercises provides an opportunity to display the range of individual behaviour.

Environment Management & Sustainable Development Projects

Your Company is adopting the best Environment management practices and eco conservation measures since inception. The Board of Directors have approved an Environment Policy focusing on clean and green environment.

Your Company''s Mines and Thermal Units are accredited with Environment Management Standards of ISO 14001 and Occupational Health and Safety Assessment (OHSAS) 18001.

Towards conservation of ecosystem, mined out land is reclaimed and converted into agricultural lands, orchards, afforestation and ponds. During the Financial Year 2013-14 an area of about 113 hectares of land has been reclaimed in all the three mines in Neyveli. The slopes that are developed owing to dumping of overburden is stabilised with thick green belt development which has various positive impact on the environment. During this financial year, efforts were undertaken to achieve 100 % utilisation of fly ash generated from the Thermal Power Stations.

The Air environment is continuously monitored by Computer Aided Ambient Air Quality Monitoring Station. Water and effluent quality are periodically analysed to check current pollution levels . The stack emission from Thermal power plants are continuously monitored. Both the Ambient Air quality and stack emission are connected to CARE Air Centre of Tamil Nadu Pollution Control Board (TNPCB) and the pollution levels at Neyveli are monitored at TNPCB office.

Your Company has developed a thick green cover in its Industrial Units as well as in the Township area. More than two lakh trees have been planted in and around the Mine and Thermal units during this year alone to maintain ecological balance.

Usage of plastic carry bags has been banned in Neyveli Township area and your Company is also operating a plastic recycle plant wherein waste plastic is converted into tar for usage in road formation.

Your Company has an approved Sustainable Development Policy and as per the same Sustainable Development Projects are undertaken in the area of climate change, eco conservation, water conservation, energy conservation, green energy and sustainability training. In pursuit of the Nation''s commitment to act early towards climate change, your Company has taken up collaborative studies with Pondicherry Engineering College on "Sequestration of CO2 and production of Bio-fuel from flue gas from Thermal Power Plant" and base line study has been completed. Sustainability development training was imparted to women employees.

The aquifer in the Neyveli and surrounding areas is maintained by conservation as well as recharging methods. Utilisation of storm water for domestic and industrial purpose ensures water conservation. Rainwater harvesting and check dam with percolation wells ensures recharge of the aquifer.

Towards its commitment to reduce the Carbon footprint, your Company is implementing renewable energy Projects viz., 51 MW Wind Power Project at Kazhuneerkulam and 10MW Solar Power Project at Neyveli.

Safety

Your Company is taking best efforts in the industrial safety area. Central Safety Wing of the Company conducts Risk Assessment and Safety Audit separately for Mines and Thermal Power Stations in regular periodicity by engaging accredited external agency and the recommendations are implemented. As a result of the above and the concerted efforts taken in creating increased safety awareness among the employees of both departmental and contractual besides organising training programmes like Refresher & Basic courses, job related briefing etc., your Company could achieve Excellent Level in the safety parameters under MoU with the Government for the year 2013-14 and in addition to this overall achievement, zero accident potential was achieved for the year 2013-14 at Mine and Thermal Power Station of Barsingsar and Thermal Power Station-II at Neyveli.

Risk Management

A Risk Cell headed by Chief Risk Officer with Risk Officers in various units of your Company is in place which identifies the risks and suggests mitigation plans. The Risk Management Committee of Board of Directors periodically reviews the identified risks and also the mitigation plans.

Vigilance

Based on the suggestion of the Vigilance Branch, various circulars/guidelines have been issued for streamlining the rules/procedures etc. Vigilance Awareness Week - 2013 was observed from 28.10.2013 to 02.11.2013. As greater transparency facilitates in improving the system & procedure and minimise the scope for corruption, all efforts are taken to improve the transparency by leveraging technology through e-governance initiatives.

MoU with Transparency International

Your Company has signed a Memorandum of Understanding with Transparency International India, part of Asia Pacific forum comprising 20 nations. Transparency International India is the Indian chapter of Transparency International, based at Berlin .

Township

Your Company''s Neyveli Township spread over 50.Sq.Kms with about 21,000 residential quarters with a total population of about 1,35,000 is a self-contained unit with all infrastructural facilities that include schools, college, sophisticated general hospital, library, swimming pools, air-conditioned auditorium, stadium, community welfare centres, recreation clubs, reading rooms, parks, banks, shopping complexes etc. Township with all facilities has also been established in Barsingsar.

Medical Services

Your Company maintains a 355 bedded General Hospital at Neyveli that takes care of the health and medical care needs of its regular employees, contract workmen and their eligible dependants. Delivery of medical care services includes broad specialties like general medicine, general surgery, paediatrics, obstetrics & gynaecology, orthopaedics, ophthalmology, ENT, dermatology, chest medicine and psychiatry, ayurveda and occupational health services. Ayurveda and occupational health services, renders your Company''s health care model unique. Clinical support services in Anaesthesiology give the hospital the cutting edge to take up general surgeries and specialised surgeries. Diagnostic support services in clinical laboratory and radiology/imaging services provide the hospital the needed expertise in undertaking wide range of investigations that form the basis for diagnosis and disease management.

Your Company has upgraded the emergency care unit and the laboratory facility with state of the art diagnosing devices like bed side Multi-parameter monitors, nebulizers, defibrillators, central oxygen and suction lines besides ECG, including Tele-ECG. The upgraded minor operation theatre facilitates taking up minor surgical procedures in trauma cases.

During the year under review, 8.08 lakh patients were treated at Out-patient Department (OPD) of the General Hospital, besides treating 1,88,532 patients in the Dispensaries located in Block-29 and Block-30. In addition, 15,959 patients were rendered in-patient treatment.

The General Hospital had organised Family Planning Services, Revised National Tuberculosis Control Programme, National Leprosy Control Programme, AIDS Screening and Control Programme as a part of National Health programmes. Your Company has also embedded crisis listening by instituting MITHRAto help individuals in distress particularly adolescent and late adolescent children who are stressed out due to various scholastic pressures, relationship and emotional problems. MITHRA, functioning since October 2013, is managed by a Psychiatrist and trained volunteers.

Corporate Social Responsibility

Your Company, as a socially responsible corporate citizen, continues to carry out development works in the surrounding villages, right from its inception, focusing on the socio economic development of the operating regions for achieving inclusive growth.

- An annual budgetof not less than 1.5% of the profit after tax has been created by your Company and the CSR projects are monitored periodically by a Sub-committee of Board of Directors. Your Board of Directors have sanctioned a budget of 726.30 crore for CSR Projects for the year 2013-14.

- Timeframes and milestones are set through Baseline Survey before commencement of the CSR Projects.

- Initiatives of State/Central Government Departments/Agencies are dovetailed/ synergized with the CSR activities of yourCompany.

The CSR expenditure of your Company for the year 2013-14 is 726.30 crore. The major CSR initiatives undertaken during the year2013-14 are given below:-

CSR-Peripheral

Members may be aware that a structured Development Scheme is in operation for executing capital works for developing social infrastructure and building Sustainable Community Assets which benefits the villages surrounding Neyveli in Tamil Nadu and Barsingsar in Rajasthan State. Infrastructure development works like drinking water facility by sinking/ maintaining the bore-wells, constructing RCC water tanks, roads, additional school buildings, laboratories, libraries, bridges, additional infrastructure for primary health centres for developing medical facilities, de-silting of lakes etc., are being carried out on the basis of needs and priorities. Works numbering 24 for a value of 7583.30 lakh have been carried out during the year under review for the benefit of the population in the areas surrounding the operating localities. Continuous supply of water to nearby villages for irrigating over 23,000 acres of land is continued in the Neyveli region.

CSR-Community

Your Company continues to extend all assistance including grant and infrastructure to Sneha Opportunity Services at Neyveli to run a day-care, education and training centre for special children of the region.

Neyveli Health Promotion and Social Welfare Society at Neyveli patronised by your Company has been serving the society by supplying artificial limbs/calipers to the differently abled, apart from running a school for the hearing impaired and a Computer Centre, imparting training for physically challenged, widows and destitutes and gainfully employing them.

CSR focused training programmes were organised for the benefit of the students, teachers and the population of Neyveli locality, in which 5,064 persons participated. Five women and 205 men from various peripheral villages were trained during the year in operation and maintenance of Light Motor Vehicles, Heavy Transport Vehicles, Earth Moving Equipment Operation, Vulcanising, Solar Instruments Assembly, Service & Maintenance and Air Conditioning Machines Maintenance and Repairs.

During the year 2013-14, your Company has contributed Rs.250 lakh to the Prime Minister''s Relief Fund towards relief and rehabilitation works in the flood affected area of Uttarakhand State.

CSR - Education

Your Company offers best education through its 10 schools - 3 Higher Secondary Schools, 2 High Schools, 3 Middle Schools and 2 Elementary Schools to the wards of employees and also to the students from surrounding villages. During the year under review, the students'' strength in these 10 schools was 6746. Apart from this, in the Neyveli Township 15 other schools are also being run by private institutions catering to around 25,000 student population mostly from the surrounding rural villages.

Your Company has imparted motivational and exam-skills training during the year to 2910 girls and 2356 boys of X and XII Standards in Neyveli and 14 peripheral village schools.

Your Company provides infrastructural support and also periodical financial support to Rajiv Gandhi Education Society, Barsingsarfor providing quality education and technical training to the children of villages around your Company''s project-sites in addition to the Jawahar Education Society at Neyveli.

The establishment of an Industrial Training Institute in Barsingsar village was completed by your Company in the year 2012-13. NCVT approved courses in Horticulture and Electrician trades have commenced from October 2012 and Fitter and Welder trades have commenced from October 2013. During the year, 167 students have been imparted Industrial/Technical Training in these trades.

CSR-Health

Your Company provides quality medical treatment and occupational health service through its General Hospital to all the inhabitants of Neyveli Township and its surrounding villages, including comprehensive medical treatment to the Contract Workmen and theirfamily members.

During the year 2013-14:

- Free medical consultation with minimum anti-biotic therapy and vitamins was extended in 92,912 instances to out-patients from the rural public. Another 25,620 patients were given emergency treatment for various causes.

- Community Health Screening for diabetes, Hypertension and HIV covering 9,740 persons during the Annual Book Fair and Safety Week Celebration was carried out and counseled for behavioural change.

- 12 medical camps were conducted in peripheral villages located in the area surrounding Neyveli Township in Cuddalore District 5204 persons of these 12 villages were screened and given medical advice and medicines through the camps. During the camps, 664 Random Blood Sugar Tests were taken, 229 Electro Cardio Grams were generated and 329 persons were provided with vision glasses. 682 patients were referred for inpatient treatment of which 329 persons underwent the inpatient treatment.

From February 2013 onwards, your Company is providing nutritious food supplement to about 270 HIV affected children belonging to the Cuddalore District HIV Positive Society, Cuddalore.

Your Company has instituted "NLC Chair on CSR" with Institute of Public Enterprise, Hyderabad and contributed Rs.100 lakh for the same, as corpus.

ISO Certification

Your Company''s Mines and Thermal Power Stations at Neyveli are certified with ISO 9001, ISO 14001 and OHSAS 18001 by reputed agencies for their sound systems and practices. In addition to the above, the Contracts Department, Employee Development Centre and the Vigilance Department have been certified under ISO 9001.

General

Contribution to the cause of Women

Your Company''s human resource is represented by 7.5% of Women employees. Programmes on women empowerment were organised during the year under review. Your Company actively participated and deputed women employees for the programmes organised by "Women in Public Sector" (WIPS) under the aegis of SCOPE.

Visit of Parliamentary Committees

During the year the following Parliamentary Committees had visited your Company:

a. Committee on welfare of Other Backward Classes.

b. Committee on Industry and Standing Committee on Coal & Steel.

c. Committee on welfare ofSC& ST.

d. Committee on Vigilance.

e. Committee on Official Language.

Awards & Recognition

Awards received by your Company during the year 2013-14 are given below:

- SCOPE "Meritorious Award for Environmental Excellence & Sustainable Development." for the year 2011 -12, instituted by Standing Conference of Public Enterprises (SCOPE).

- SCOPE award for Excellence and Outstanding contribution to the Public Sector management for the year 2011-12.

- National Energy Conservation Award - ''First Prize under mining domain'' for the year 2013 instituted by Ministry of Power, presented by Hon''ble President of India.

- 14th Annual Greentech Environment Award - 2013 (Gold Category) from Greentech Foundation under Thermal Power Sector and Silver Shield Award to Thermal Power Station-I Expn. for being the best coal/lignite based Thermal Power Stations in respect of Environment Management and Energy efficiency for 2012-13, for the second consequent year.

- Greentech CSRAward-2013from Greentech Foundation, in Silver Category.

Business Responsibility Report (BRR)

The Business Responsibility Report (BRR) for the year 2013-14, covering the initiatives taken by the Company from an environmental, social and governance perspective forms part of this annual report 2013-14.

Compliance under Persons with Disabilities Act, 1995

Your Company ensures compliance of provisions under the Persons with Disabilities Act, 1995. Suitable arrangements/modifications are made in the working place to meet the requirements of persons with disability.

Compliance underthe Right to Information Act, 2005

Your Company ensures compliance under the Right to Information Act, 2005. A Central Public Information Officer, two Appellate Officers, one Transparency Officer, and seventeen Central Assistant Public Information Officers representing different functional areas have been nominated to attend to the queries and appeals received underthe RTI Act in a time bound manner.

During the year 2013-14, under the above Act, 324 numbers of applications containing 1626 queries were received and out of the same 285 applications covering 1432 queries have been replied.

Compliance under Public Procurement Policy

The Ministry of Micro, Small and Medium Enterprises (MSME) has notified the Public Procurement Policy and in terms of the said notification, an annual target for procurement from MSE was set for the three years beginning from the FY 2012-13. The target set for the FY 2013-14 for procurement of such items which are within the scope of MSEs was 15% and as against the same the achievement was 23.01%.

Two Vendor Meets were conducted at Neyveli out of which one meet was conducted exclusively for MSEs.

Citizen''s Charter

Your Company maintains Citizen''s Charter, indicating details of clients, customers under different heads, system of redressal of grievance etc. and the same is regularly updated.

Particulars of Employees

Particulars of Employees as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 – Nil.

Energy Conservation and Research & Development

The particulars required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 regarding energy conservation measures, technology absorption and expenditure on R&D are furnished in Annexure–1.

Management Discussion & Analysis Report and Report on Corporate Governance

The Management Discussion & Analysis Report is furnished in Annexure-2. The report on Corporate Governance and the Auditors'' Certificate on the compliance of Corporate Governance conditions stipulated by Clause-49 of the Listing Agreement and DPE guidelines are furnished in Annexure-3 and 4 respectively.

Auditors

Cost Audit

M/s.Srinivasan, Sundaram & Associates, Cost Accountants, Chennai, were appointed as the Cost Auditor for the year 2013-14, to carry out the cost audit for the Mines & Power Stations of the Company. The Cost Audit Report for the year 2012-13 was filed with the Ministry of Corporate Affairs on 23.09.2013 against the due date of 27.09.2013.

Branch Audit

M/s.Surender K Goyal & Co., Chartered Accountants, Rajasthan, has been appointed as the Branch Auditor for the year 2013-14 by the Comptroller and Auditor General of India (C&AG) for conducting the audit of Mine and Thermal Units at Barsingsar.

Statutory Audit

M/s. Sreedhar, Suresh and Rajagopalan, Chartered Accountants and M/s.P.B.Vijayaraghavan & Co., Chartered Accountants, Chennai, were appointed by the C&AG as the Joint Statutory Auditors for the year 2013-14 under Section 619 (2) of the Companies Act, 1956. The Board of Directors of your Company has fixed Rs.18 lakh plus applicable service tax as the Statutory Audit fees, to be shared equally by the Joint Statutory Auditors.

C&AG''s Comments

C&AG''s Comments on the accounts for the year ended 31st March, 2014 is furnished in Annexure-5.

Directors'' Responsibility Statement as per Section 217(2AA) of the Companies Act, 1956

The Board of Directors declares:- a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis.

Board of Directors

Shri.M.B.N.Rao resigned from the Board w.e.f.09.08.2013. Shri. R.Kandasamy relinquished the position as a Director on 30.09.2013 on attaining the age of superannuation. Shri. N.S. Palaniappan, the then Principal Secretary to Government of Tamilnadu, Industries Department, relinquished his Directorship w.e.f.24.10.2013. Sarvashri. S.K. Roongta, L.N. Vijayaraghavan, A.P.V.N. Sarma, V. Murali, and M.M. Sharma relinquished the position as Directors w.e.f.30.09.2013 on completion of three year tenure and Shri. R.K. Mishra also relinquished the position as a Director w.e.f.24.03.2014 on completion of three year tenure.

Dr. Sanjay G Dhande whose three year term of office ended on 25.06.2013 was re-appointed as a Director w.e.f.06.09.2013. Sarvashri. S. Boopathy, C.V. Sankar (Principal Secretary to Government of Tamilnadu, Industries Department) and C.Balakrishnan were inducted into the Board w.e.f.01.10.2013, 18.12.2013 and 23.12.2013 respectively.

The Board places on record its appreciation for the valuable contribution made by Sarvashri M.B.N.Rao, R. Kandasamy, N.S. Palaniappan, S.K. Roongta, L.N. Vijayaraghavan, A.P.V.N. Sarma, V. Murali, M.M. Sharma and R.K. Mishra during their tenure as Directors on the Board of the Company.

Shri. Rakesh Kumar and Shri S. Rajagopal, Directors, retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-election.

Acknowledgement

The Board of Directors of your Company places on record its sincere appreciation for the continued support and guidance extended by the Ministry of Coal, Ministry of Power, Ministry of Finance, Ministry of Environment & Forest, Ministry of Industry, Ministry of Labour, Ministry of Heavy Industries, Planning Commission, Central Electricity Authority, Central Electricity Regulatory Commission, State Electricity Boards and beneficiaries of Tamil Nadu, Andhra Pradesh, Telengana, Karnataka, Kerala, Puducherry and Rajasthan and also the Joint Venture partners, viz.,Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) and Mahanadi Coalfields Limited (MCL) and Hindalco.

The Board of Directors of your Company is pleased to acknowledge with gratitude the co-operation and continued support extended by the Governments of Tamil Nadu & Rajasthan and the District Administration of Cuddalore & Bikaner. The support and co-operation by the Comptroller and Auditor General of India, Statutory Auditors, Branch Auditor, Cost Auditor, Director General of Mines Safety, the Factory & Boiler Inspectorates, Chief Inspector of Factories, Director of Boilers, Central Pollution Control Board, State Pollution Control Board, Chief Controller of Explosives, Regional Labour Commissioner, Regional Provident Fund Commissioner, Company''s Bankers and KfW of Germany need special mention and the Directors acknowledge the same.

Your Directors also wish to place on record their appreciation for the dedicated work put forth by the employees at all levels. The positive role played by the recognised Trade Unions and Associations of the Engineers and Officers in maintaining cordial industrial relations deserves special mention.

for and on behalf of the Board of Directors

PLACE:Chennai B. SURENDER MOHAN

DATE :14.08.2014 CHAIRMAN-CUM-MANAGING DIRECTOR


Mar 31, 2013

To The Members of Neyveli Lignite Corporation Limited

The Directors are pleased to present the 57th Annual Report of your Company together with the audited accounts for the year ended 31st March, 2013. The financial year 2012-13 was an year of achievements as your Company achieved a record performance in all its operational areas.

Snapshot of Physical Performance

Particulars 2012-13 2011-12 Growth (%)

Overburden removal (in LM3) 1674.85 1651.47 1.42

Lignite Production (in LT) 262.23 245.90 6.64

Power Generation - Gross (in MU) 19902.34 18789.44 5.92

Power Export (in MU) 16841.51 15810.67 6.52

LM3-Lakh Cubic Metre LT-Lakh Tonnes MU-Million Units Highlights

- Highest overburden removal and lignite production in any year since inception.

- All time high generation and export of power.

- Lignite production from Mine-II highest in any year since inception.

- Highest ever lignite production from Barsingsar Mine.

- Highest ever generation and export of power from TPS-II & TPS-I Expansion.

- More than 90% Plant Load Factor achieved by TPS-I Expansion.

Segment-wise Performance Mines

The aggregate installed capacity of all lignite mines stands at 30.6 MTPA as on 31st March, 2013.Your Company has once again achieved the highest ever performance in Overburden (OB) removal and lignite production during the year 2012-13. The aggregate OB removal and lignite production during the year under review were 1674.85 LM3 and 262.23 LT, respectively compared to 1651.47 LM3 and 245.90 LT achieved during the year 2011-12. The OB removal and lignite production during the year 2012-13 registered a growth of 1.42% and 6.64% respectively when compared to the previous year 2011-12.

The details of Mine-wise performance are as under:

Mine-I (including expansion) - 10.5 MTPA

The Overburden (OB) removal from this Mine during the year 2012-13 was 502.15 LM3 as against 528.17 LM3 in 2011-12. The lower performance of OB removal during the year 2012-13 when compared to the previous year was on account of works carried out in system equipment in the year under review. Further, because of reduction in lignite seam thickness frequent conveyor re-arrangement was carried out resulting downtime of the system. Lignite production during the year under review was 79.60 LT as compared to 77.34 LT registering a growth of 2.92% over the previous year 2011-12. Further, in order to meet the lignite requirement of linked power stations TPS-I & TPS-I Expn., additional quantity of 13.80 LT was transferred from other mines.

Mine-IA - 3.0 MTPA

The OB removal from this Mine during the year 2012-13 was 281.81 LM3 as against 215.10 LM3 in 2011-12, registering a growth of 31.01%. Lignite production during the year 2012-13 was 29.40 LT compared to 28.77 LT during 2011-12, registering a growth of 2.19%.

As Members may be aware, the Thermal Power Station - I (TPS-I) is in operation since 1962 and the Government of India (GOI) has sanctioned for implementation of Neyveli New Thermal Power Station (NNTPS) (1000 MW) project as a replacement to TPS-I. Presently, Mine-I (including expansion) with an installed capacity of 10.5 MTPA feeds TPS-I (600 MW) and TPS-I Expn. (420 MW). The Mine-IA of 3.0 MTPA capacity caters to the requirement of an Independent Power Producer and also meets the requirement of lignite sales.

Taking into account the higher capacity of NNTPS Project, the proposal for re-structuring of Mine-I & Mine-IA by adding contiguous lignite blocks so as to raise the aggregate mining capacity to 15.0 MTPA, has been approved by the Board of Directors of your Company. The estimated cost for the above re-structuring of Mines is Rs.1458.17 crore.

Mine-II (including expansion) - 15.0 MTPA

This Mine is linked to TPS-II & TPS-II Expansion project. The OB removal from this Mine was 813.36 LM3 as against 828.05 LM3 during the year 2011-12. The lower performance in OB removal during 2012-13 when compared to the previous year was on account of seepage problems encountered. The Lignite production during the year under review was 139.44 LT as against 130.96 LT during 2011-12 and this was the highest for any year since inception. The lignite production from this Mine registered a growth of 6.48% over the previous year 2011-12.

Barsingsar Mine-2.1 MTPA

During the year 2012-13, overburden removal and lignite production were 77.53 LM3 and 13.79 LT respectively, as against 80.15 LM3 and 8.83 LT, respectively, during the previous year 2011-12. Because of non-stabilisation of operation of the units in the Thermal Power Plant during the year 2012-13, the lignite exposed in earlier years could not be mined out fully and utilised in the power plant and hence the overburden removal was restricted during the year under review. Lignite production from this mine at 13.79 LT achieved during the year 2012-13 was the highest for any year since inception.

Power

The present installed capacity of thermal power plants of your Company is 2740 MW. Your Company has once again achieved the highest power generation and export during the year 2012-13. The aggregate power generation during the year under review was 19902.34 MU as compared to 18789.44 MU generated during the year 2011-12. The aggregate power export during the year 2012-13 was 16841.51 MU as against 15810.67 MU registered during the year 2011-12. The power generation and export during 2012-13 registered a growth of 5.92% and 6.52% respectively over the previous year 2011-12.

The details of Plant-wise performance are as under:

Thermal Power Station - I (600 MW)

During the year 2012-13, power generation from this plant was 4035.43 MU compared to 3987.85 MU in the year 2011-12, registering a growth of 1.19%. The power export from this plant during the year under review was 3215.98 MU as against 3171.82 MU achieved during the year 2011-12, recording a growth of 1.39%. The performance of this plant needs to be specially recorded as it is one of the oldest power plants in the Country and still in operation. This plant achieved a Plant Load Factor (PLF) of 76.77% during the year 2012-13.

Thermal Power Station - I Expansion (420 MW)

The power generation and the export from this Plant during the year 2012-13 were the highest achieved in any year since inception. During the year 2012-13 power generation and export from this plant were 3319.77 MU and 3035.58 MU respectively compared to 3042.68 MU and 2809.97 MU respectively achieved in 2011-12. This plant registered a growth of 9.11% in power generation and 8.03% in export of power, over the previous year 2011-12. This plant achieved a PLF of 90.23% during the year 2012-13.

Thermal Power Station - II (1470 MW)

Power generation during the year 2012-13 was 11238.09 MU as against 11087.65 MU in the year 2011-12, registering a growth of 1.36% and the export during the year under review was 9455.81 MU compared to 9278.76 MU in the year 2011-12, registering a growth of 1.91%. The power generation and the export from this power station during the year under review were the highest in any year since inception. This plant achieved a PLF of 87.27% during the year 2012-13.

Barsingsar Thermal Power Station (250 MW)

During the year 2012-13, power generation and export from this plant were 1280.85 MU and 1114.33 MU respectively compared to 617.68 MU and 510.79 MU respectively achieved in 2011-12. This was the first full year operation for both the Units.

Productivity

The output per man shift during the year 2012-13 as compared with the previous year is given below:

Product Unit 2012-13 2011-12 Growth (%)

Lignite Tonne 11.97 11.18 7.07

Power Kw./hr. 21386 20130 6.23

Financial Performance

During the year ended 31st March, 2013, the Company registered a total sales of Rs.5590.07 crore as against Rs.4866.85 crore recorded for the year 2011-12, registering a growth of 14.86%. The sales registered for the year 2012-13 was the highest ever since inception.

The Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2012-13 were Rs.2047.65 crore and Rs.1459.75 crore, respectively, as against Rs.1983.89 crore and Rs.1411.33 crore, respectively, registered for the year 2011-12. As compared to the previous year 2011-12, the PBT and the PAT for the year 2012-13 recorded a growth of 3.21% and 3.43%, respectively. The PBT and the PAT for the year ended 31st March, 2013 were the highest for any year since inception.

The reason for increase in the profit for the year 2012-13 was on account of higher lignite production, generation and export of power which had resulted in increase in the sales.

The details of profit earned for the financial year 2012-13 and appropriation of the same in comparison with the previous year 2011-12 are as under:

(Rs. in crore)

2012-13 2011-12

Profit Before Tax 2047.65 1983.89

Tax provision 587.90 572.56

Profit After Tax 1459.75 1411.33

Appropriation :

Transfer to Bond Redemption Reserve 15.00 15.00

Interest Differential Fund Reserve 15.71 18.08

General Reserve 150.00 145.00

Interim Dividend 167.77 0.00

Tax on Interim Dividend 27.22 0.00

Proposed Final Dividend 301.99 469.76

Tax on proposed Final Dividend 51.33 76.21

Dividend

The Board of Directors of your Company has recommended a final dividend of 18% (Rs.1.80 per share) for the year 2012-13. An Interim Dividend @10% (Rs.1.00 per share) has already been paid to shareholders during the month of March 2013 and taking into account the final dividend of 18%, the total dividend for the year 2012-13 works out to 28% (previous year 28%) and the total dividend outgo including distribution tax will be Rs.548.31 crore (previous year Rs.545.97 crore), which works out to 37.57% for the year 2012-13.

MoU Rating for the year 2011-12

Your Directors have pleasure to share with the Members that the Company has achieved ''Excellent'' rating for its performance during the year 2011-12 in terms of the Memorandum of Understanding (MoU) entered into with the Ministry of Coal as per guidelines.

Projects under construction/implementation Thermal Power Station-II Expansion (2x250 MW)

Thermal Power Station-II Expansion project linked to Mine-II Expansion is under implementation for expanding the capacity of TPS-II from 1470 MW to 1970 MW. The project was scheduled to be commissioned during the year 2009. Besides initial delay in start of engineering and finalisation of civil and erection sub-contractors for boiler island & power house and slow progress of work by the Main Plant Package contractor, the prolonged delay was also on account of the fact that there were several teething problems during commissioning which had to be overcome.

During the year Unit-I was synchronised again in November 2012 and in-firm power of 28.20 MU was generated and 19.81 MU was exported. The operation of the unit could not be sustained on account of failures in refractory, coil punctures and failure of Fluidized Bed Heat Exchanger (FBHE) coil supporting arrangements. BHEL, the Main Plant Package Contractor along with M/s. Lentjes, the process developer for the CFBC technology, has reviewed all the critical issues causing repeated failure of FBHE coil supports and has suggested for modification. Implementation of the project by BHEL has also been taken up with the MoU Taskforce of the Ministry of Heavy Industries. BHEL has given a commitment to the Taskforce for commissioning of Unit-I by December 2013 and Unit-II by Jan.2014. However, BHEL subsequently assured to expedite the works and furnished a schedule to commission Unit-I in Sep.2013 and to take up the FBHE modification. Refractory dismantling work in FBHE of Unit-I has commenced to facilitate coil removal and it is nearing completion. Tube cutting works are in progress while modification and re-erection of FBHE coil in all the four FBHE of Unit-I is to be carried out. The works are being closely followed up with periodic review with BHEL and are also reviewed periodically by the Ministry of Coal and other agencies of GOI.

Approval has been accorded by your Board of Directors in April 2012 for the second Revised Cost Estimate of Rs.3027.59 crore for this project. The cumulative expenditure incurred up to 31st March, 2013 was Rs.2654.22 crore.

Neyveli New Thermal Power Project (2x500 MW)

Government of India (GOI) has sanctioned the Neyveli New Thermal Power Project (1000 MW) at a capital cost of Rs.5907.11 crore in June 2011 with a commissioning schedule of 48 months and 54 months for Unit-I & II respectively, from the date of sanction. Two units of 500 MW each have been proposed to be set up as a replacement of the existing 600 MW TPS-I which has served for more than 50 years. This power station will adopt pulverised fuel firing technology. Tenders have been floated for Main Plant Packages and Balance of Plant Package and evaluation of the same is in progress. The cumulative expenditure incurred up to 31st March, 2013 was Rs.28.00 crore.

Restructuring of Mines

Members may be aware that the existing TPS-I of 600 MW capacity at Neyveli is continuously in operation since 1962 and it has been decided by your Board of Directors to phase out the operation of the Units and to set up a 1000 MW thermal power plant at Neyveli viz., Neyveli New Thermal Power Station (NNTPS) in its place. As stated earlier, in order to meet the lignite requirement of NNTPS, your Board of Directors has accorded approval for restructuring of Mine-I (including Mine-I Expn.) from 10.5 to 8.0 MTPA and expansion of Mine-IA from 3.0 to 7.0 MTPA, at an aggregate estimated cost of Rs.1458.17 crore.

Wind (50 MW) & Solar (25 MW) Power Project

In order to harness green energy, your Company has proposed to enter into wind and solar based power generation. The proposed wind power project capacity is 50 MW and the estimated cost is Rs.364.75 crore. Tender has been floated for setting up of the above wind farm and the evaluation of the same is in process. In the first phase, a 10 MW capacity solar power plant is proposed to be set up at Neyveli at an estimated cost of Rs.85 crore and as an expansion another 15 MW project will be set up later. Setting up of a 10MW solar power plant at Barsingsar is also on the anvil.

Project Funding

In respect of Mine-II Expn. linked to TPS-II Expn. project and also for Barsingsar Mine-cum-Power project, your Company had availed long term loan of Rs.3575 crore from a consortium of domestic banks with Canara Bank as the consortium leader. In addition to the above, Euro 50 million in the form of foreign currency loan under External Commercial Borrowings (ECB) was availed besides issue of Secured Redeemable Taxable Non-convertible Bonds aggregating to Rs.600 crore for the said projects. So far a sum of Rs.1300 crore has been repaid on the term loan from Canara Bank consortium while the ECB has been repaid in full. To meet part of the debt requirement for the Neyveli New Thermal Power Project, your Company has tied up with State Bank of India for availing rupee term loan of Rs.2500 crore and the balance debt requirement will be met through various other options such as ECB, issue of Bonds etc.

Joint Venture Projects

Thermal Power Plant at Tuticorin (2x500 MW)

Members may be aware that a Coal based thermal power project at Tuticorin (1000 MW) is being implemented by your Company as a joint venture with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), through NLC Tamilnadu Power Limited (NTPL), the Subsidiary Company. Erection of Boiler structures, pressure parts, ESP, Air heaters, Ducts, Fans, TG and Mills in the Main Plant Package and Coal & Ash Handling Systems, Cooling Towers, Chimney and Switchyard etc., are in progress in both the Units. Hydro test of pressure parts of both the boilers was completed during the year. The physical progress of works as on 31st March, 2013 was 71.90%. As per the present status of the project, Unit-I is expected to be commissioned by December 2013 and Unit-II by March 2014.

Fuel linkage for this project is being tied up with Mahanadi Coalfields Limited (MCL), a Subsidiary Company of Coal India Limited. The formal Fuel Supply Agreement (FSA) will be entered into with MCL on completion of all the milestone activities prescribed by the Standing Linkage Committee (Long term) of Ministry of Coal. Excepting clearance from the Forest Department as some portion of the land leased by V.O. Chidambaranar Port Trust has been classified as forest land in the revenue records, all other prescribed milestone activities have been completed. The issue regarding obtaining clearance from the Forest Department has been taken up with the concerned Department and also with the Government of Tamilnadu.

Approval has been accorded by the Board of Directors of NTPL for the Revised Cost Estimate (RCE) of Rs.6540.93 crore and the same has been submitted to the Ministry of Coal for sanction. During the year 2012-13 an agreement was entered into with the Consortium of Bankers led by Bank of India for availing Rupee Term Loan of Rs.937 crore for implementation of the project. This is in addition to the Rupee Term Loan agreement of Rs.2500 crore entered into with Bank of Baroda Consortium and with this, the financial closure for the original sanctioned cost of Rs.4909.54 crore has been completed. The additional debt requirement on account of revision in the cost will be tied up after obtaining sanction from the Government. The cumulative expenditure incurred up to 31st March, 2013 was Rs.4128.29 crore.

MNH Shakti

MNH Shakti Limited is the Joint Venture Company (JVC) promoted by Mahanadi Coalfields Limited (MCL) holding 70% stake, Hindalco and your Company each holding 15% stake. The JVC is implementing a 20.0 MTPA coal mining project at Talabira, Odisha and MCL being the majority stakeholder is piloting the above project.

New Projects under formulation

NLC-UPRVUNL Ghatampur Thermal Power Project (3x660 MW)

In terms of MoU dated 30.11.2010 and Joint Venture Agreement dated 06.10.2012 entered into with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL), a Joint Venture Company (JVC) in the name and style of Neyveli Uttar Pradesh Power Limited (NUPPL) has been incorporated with equity participation in the ratio of 51:49 by NLC and UPRVUNL. The JVC will set up a 1980 MW (3x660 MW) coal based thermal power project in Ghatampur Tehsil, Kanpur Nagar District in the State of Uttar Pradesh at an estimated cost of Rs.14375 crore. The Public Investment Board (PIB) has recommended the above project proposal with the observation that necessary clearance from Ministry of Environment & Forest (MoE&F) is to be obtained at the earliest. The Public Consultation Meeting (Public Hearing) was held by the District Administration as part of the process involved for obtaining MoE&F clearance. The Project proposal will be submitted by the Ministry of Coal to the Cabinet Committee on Infrastructure for sanction shortly. Notifications under Sec.4 & 6 of the Land Acquisition Act, 1894 have been issued for acquisition of 1806 acres of land for the project and a sum of Rs.130.32 crore has been deposited with the Uttar Pradesh Revenue Department towards acquisition of land. The Government of Uttar Pradesh has accorded sanction for supply of 80 cu.secs of water for the above project.

In response to GOI invitation for allotment of coal blocks, NUPPL has been allocated Pachwara-South coal block in the State of Jharkhand. The development and exploitation of the above coal mine will be carried out by NUPPL for captive use for its Ghatampur Thermal Power Project.

Bithnok Thermal Power Project (250 MW) with linked Mine (2.25 MTPA)

Your Company has proposed to set up a Thermal Power Plant of 250 MW capacity with linked Mine of 2.25 MTPA at Bithnok in Bikaner District, in the State of Rajasthan at an estimated cost of Rs.2298.83 crore. The total land required for the Bithnok TPS and Mine is 2883 hectares. Government of Rajasthan has issued award for acquisition of 1175.87 hectares of private land in Bithnok village and the balance government land will be diverted to your Company by the Government of Rajasthan after acquisition of private land. No Objection Certificate from forest department is awaited for forest diversion. Issue of mining lease by Government of Rajasthan is expected after forest diversion. With regard to environmental clearance for the Mine Project, the Expert Appraisal Committee of MoE&F has advised to conduct social cost benefit analysis through a reputed institution. The work has been assigned to Madras School of Economics. MoE&F will be approached again for environmental clearance with social cost benefit analysis report.

Barsingsar Extension Power Project (250 MW) and Hadla & Palana Lignite Mine (2.5 MTPA)

Your Company, by exploiting the lignite deposits in Hadla and Palana lignite blocks, has proposed to set up a 250 MW Power Plant with linked Mine of 2.5 MTPA capacity, in Bikaner District of Rajasthan, as an extension of the existing Barsingsar Power Plant. The aggregate estimated cost of the project is Rs.2041.78 crore. Land acquisition for the said project through Government of Rajasthan is in progress. Action has already been initiated for obtaining mining lease. All statutory clearances for the Thermal Power Project and the Hadla mine project have been obtained. However your Company is facing difficulty in progressing with the Palana mine. Hence as a parallel course, expansion of the existing Barsingsar mine is also being planned by your Company.

Sirkali Thermal Power Project (4000 MW)

Your Company has also proposed to setup a 4000 MW coal based thermal power plant at Sirkali in the coastal district of Nagapattinam, Tamilnadu in two phases. The present cost estimate for the project is Rs.14482 crore for phase-I of 1980 MW. Site for locating the power plant has been identified at Thirumullaivasal and action has been initiated for acquisition of land through the Government of Tamil Nadu and for obtaining clearances from various statutory authorities. The Board of Directors had accorded approval for initiating pre-project sanction activities under Advance Action Proposal for a value of Rs.56.52 crore. Action has also been initiated for appointing a consultant for preparation of Feasibility Report, EIA/EMP Report and other pre-project activities. Your Company has been allocated Jilga-Barpali coal block in the State of Chhattisgarh to meet the fuel requirement for this project.

Devangudi Mine Project

Your Company proposes to develop the Devangudi lignite block, which has a mining area of about 8.56 Sq.km. and a mineable lignite reserve of 42.91 million tonnes, at an estimated cost of Rs.542.67 crore. The capacity of this Mine will be 2.0 MTPA and the lignite mined out will cater to the needs of industries such as cement, paper, brick and other small scale industries in the neighbourhood area.

Coal Assets

As stated in the Directors'' Report of the previous year, your Company had floated ''Expression of Interest'' (EOI) for acquiring coal assets abroad. The offers received in response to the above EOIs are under evaluation. Acquisition of coal assets by your Company would ensure fuel security for the coal based power projects of the Company.

Other Projects

Members may be aware, consequent to the change in the policy of power procurement by Distribution Companies through tariff based competitive bidding route, excepting such power projects for which PPA has been signed prior to 6th Jan. 2011 any new projects could be implemented only when the concerned Distribution Companies formally issue a notification for purchase of power through tariff based competitive bidding process. As stated in the previous year''s report, your Company had addressed to Ministry of Power through Ministry of Coal, seeking exemption from the above requirement for lignite based Power Projects for the reasons that coal and lignite cannot be equated on the same platform. In this regard, Ministry of Power has stated that lignite based power projects can be developed under Case-II bidding route. Under Case-II, the procurer (Distribution Companies) of power specifies location, specific project with specific fuel allocation such as captive mine. Lignite based power project can be set up through this mechanism only when such bids are invited by Distribution Companies who specifying that power should be generated using lignite available at the identified location. In view of the above, the Ministry of Coal has again been addressed to take up with the Ministry of Power to accord exemption to Lignite based Thermal Power Projects.

Power Tariff

The Central Electricity Regulatory Commission (CERC) initially constituted under the Electricity Regulatory Commission Act, 1998 is a statutory body governed by the Electricity Act, 2003 and has the responsibility to regulate the tariff of generating Companies owned or controlled by the Central Government and Generators having sale of electricity in more than one State. The terms and conditions of tariff regulations and tariff order for the period 2009-14 in respect of TPS- I, TPS-I Expn. and TPS-II have been issued by CERC. Tariff petition has been filed before CERC for the Barsingsar Power Plant and CERC during Oct.2012 has awarded provisional tariff for the power exported from this project.

Power Dues

As on 31st March, 2013, the total outstanding power dues from the beneficiaries is Rs.3802.37 crore and out of that the dues from TANGEDCO (erstwhile Tamil Nadu Electricity Board) alone was Rs.2473.97 crore (excluding surcharges). The realisation of power dues has been given top priority and the matter is being closely pursued with the beneficiaries. The Ministry of Coal has taken up the matter with the Government of Tamilnadu for early settlement of dues.

Research and Development (R&D)

Centre for Applied Research and Development (CARD) of your Company has been recognised by Department of Science and Technology since 1975 as an in-house R&D Centre. During the year 2012-13, in addition to eight in-house S&T projects, CARD has been carrying out two Coal S&T projects that mainly concentrate on corrosion problems in Specialised Mining Equipment (SME) in mines and development of suitable treatment to prevent erosion /corrosion in de-watering pipes in mines.

Members may be aware that your Company has already patented the process for the production of "Potassium Humate" from lignite through its R&D efforts. Commercialisation of the above patented process is carried out through National Research Development Corporation.

Further the R&D Centre of your Company jointly with Indian Institute of Technology, Kharagpur has applied for a patent for the process of production of Zeolite from lignite fly ash. Study on solid waste utilisation of bottom ash generated from thermal power stations as substitute for river sand is in progress.

CARD is entering into new developmental activities to cater to the requirement of the Company. In order to up-grade lignite to get higher calorific value and also to utilise the same in Ultra Super Critical Boiler (USCB), your Company has signed a Non-Disclosure Agreement with M/s.KOBELCO, Japan. Your Company is also interested to take up studies on Integrated Gasification Combined Cycle (IGCC), to improve the efficiency of power generation. It is also contemplated to undertake a study in association with firms having expertise in the field to produce diesel from lignite.

Human Resource

With a view to develop and maintain harmonious relationships at workplace and striking a balance between organisational goals and individual goals, your Company continues to have good HR practices and recognise the huge potential of its human resource. The thrust on achieving higher growth coupled with optimal utilisation of manpower continued. The focus on improving productivity and adoption of best practices in every area was relentlessly pursued. Efforts for active participation by employees has been at the core of HR initiatives and interventions. The total manpower of your Company as on 31.03.2013 was 17,364.

Employee Development

Your Company is imparting training/learning initiatives for skill, competency building and overall development of employees and also for the surrounding society. During the year under review, 542 in-house programmes in various categories such as General Management, Technical Training, Safety, Quality Training etc., covering 15,252 employees have been organised. In addition to the regular programmes, "Timeless Leadership Programme" was conducted in association with IIM/Kozhikode for Functional Directors. Focus has also been made on the development of the society at large including the Student community through conducting Entrepreneurial Development Programme benefiting around 9,000 people.

Industrial Relations

Thrust on participative culture continued during the year under review and the Industrial Relations in various Units and Service Divisions of your Company remained harmonious and cordial but for some minor aberrations of Contract labour strike.

Implementation of Official Language Policy

During the year 2012-13, your Company continued its thrust on official language implementation in line with the Government of India''s policy and the provisions prescribed under the Official Languages Act, 1963 and the rules made there under. Employees numbering 419 have been enrolled for courses like Prabodh, Praveen and Pragya through correspondence being conducted.

Hindi Fortnight was organised from 14.09.2012 to 28.09.2012 and Hindi Day was celebrated on 14th Sept. 2012. Various Hindi competitions were conducted among employees. Cash awards and Merit certificates were given to those employees who passed Hindi examinations and to the winners in the competitions. Also workshops with a focus on working in Unicode fonts on Computers were organised and about 193 employees participated and benefited.

Reservation of posts

Your Company has been following the rules of the Government of India with regard to reservation for SC and ST and the details of Group-wise Men-in-Position as on 31.03.2013 are as under:

Strength of SC/ST % of SC/ST Group Total Strength Total Total SC ST SC/ST SC ST SC/ST

A 4168 870 170 1040 20.87 4.08 24.95

B 237 23 124 147 9.70 52.32 62.02

C 11479 2322 117 2439 20.23 1.02 21.25

D 1480 341 10 351 23.04 0.68 23.72

Total 17364 3556 421 3977 20.48 2.42 22.90

Sustainability Development

Your Company firmly believes that sustainability has to be at the heart of the business model with focus on growth and less environmental impact. Your Company continues to carry on its mining and power generation activities in an environmentally sustainable manner. As a socially responsible Company, nine sustainable development projects have been taken up during the financial year 2012-13 that include eco restoration, ground water recharging, protection of bio-diversity, waste utilisation, sustainability training. Your Company has taken up collaborative sustainable development projects with Pondicherry Engineering College towards CO sequestration for producing bio-fuel from flue gas of Thermal Power Plants and Indian Institute of Technology, Kanpur for air pollution apportionment. Residual Life Assessment (RLA) studies of Turbine and replacement of final loop of Re-heater 2 coil in Unit-II (210 MW) of TPS-II have been taken up to improve reliability and operational efficiency.

Environmental Measures Reclamation and afforestation

Your Company is having a well developed Environment Management Plan since its inception and it has revisited its own Comprehensive Environment Policy to safeguard the environment in line with National and International standards. The Environmental Management Plan includes restoring the degraded mined out land, water conservation, waste utilisation and biodiversity conservation. The degraded mined out land is reclaimed to grow agricultural, horticulture crops, forestry, pasture etc., on a continuous basis. During 2012-13, an area of about 126 hectares of land has been reclaimed in all the three mines in Neyveli. As a part of massive afforestation programme, around 18 million trees have been planted so far in and around Neyveli Township. In addition, all out efforts are taken to reduce carbon foot print by implementing latest power generation technology like Circulating Fluidized Bed Combustion, installing best pollution control equipment and improving energy efficiency in processes. A Continuous Ambient Air Quality Monitoring Station is in operation in CARD with real time data display at various places in Neyveli.

All the operating Mines and Thermal Power plants are accredited with ISO 14001 (Environment Management) standards. In recognition of its excellent performance in Environment Management and Eco-care during the year 2012-13, your Company received the prestigious ''Indira Gandhi Paryavaran Puraskar Award-2009'' and has also bagged the prestigious Gold Trophy of "SCOPE Meritorius Award for Environmental Excellence and Sustainable Development" for the year 2011-12.

Safety

Your Company is taking concerted efforts in the industrial safety area. Risk Assessment and Safety Audit are conducted separately for Mines and Thermal Power Stations in regular periodicity by engaging accredited external agencies and their recommendations are implemented. Fire mock drills and emergency preparedness drills are conducted regularly. OHSAS 18001:1999 Certification is obtained for the Occupational Health & Safety for all Mines and Thermal Power Stations at Neyveli.

Zero accident potential was achieved for the year 2012-13 at both Mines and Thermal Power Station (TPS) at Barsingsar, TPS-II and TPS-I Expansion at Neyveli for the year 2012-13. Safety related trainings like Refresher, Basic, On-the-job, job related briefing etc., are being imparted to all sections of employees in well designed training centres like Group Vocational Training Centre in Mines, Thermal Training Centre and Employees Development Centre, besides general awareness campaign is conducted periodically.

Vigilance

Based on the suggestion of the Vigilance Branch, various circulars/guidelines have been issued for streamlining the rules/procedures etc. Vigilance Awareness Week - 2012 was observed in NLC from 29th October, 2012 to 3rd November, 2012 and the updated ''Compendium of CVC Circulars'' was released during the function. As greater transparency facilitates in improving the system & procedure and minimise the scope for corruption, all efforts are taken to improve the transparency by leveraging of technology through e-governance initiatives.

MoU with Transparency International

Members may be aware that your Company has signed a Memorandum of Understanding with Transparency International India, part of Asia Pacific forum comprising 20 nations. Transparency International India is the Indian chapter of Transparency International, an international civil society organisation based at Berlin that has turned the fight against corruption into a worldwide movement.

Township

Neyveli Township spread over 50 Sq.kms with about 21,000 residential quarters has a total population of about 1,35,000. The Township which was established in February 1959 has grown into a self-contained unit with all infrastructural facilities which include schools, college, sophisticated general hospital, library, swimming pools, air-conditioned auditorium, stadium, community welfare centre, recreation clubs, reading rooms, parks, banks, shopping complexes etc. The township is a plastic free zone as use of plastic is totally banned. Waste plastic recycling machine has also been erected and commissioned in Feb. 2012. About 2 tonnes of plastic pellets have been produced by using waste plastic materials collected from residential areas of Neyveli Township and such pellets are used for laying of roads. A 60 MLD water treatment plant is functioning to treat the mine water into potable water for supply to Township. A 30 MLD modern sewage treatment plant is also in operation. Township with all facilities has also been established in Barsingsar.

Medical Services

The General Hospital in Neyveli with 355 beds remains the major provider of service in various base specialties like emergency care, general medicine, surgery, paediatrics, obstetrics & gynaecology, eye, ortho, ENT, skin, psychiatry and chest medicine. The General Hospital undertakes programmes that address health issues at the five major levels of preventive, promotive, curative, rehabilitative and disability limitation strategies. The hospital contributes to the goal of conducting various National Health programme like Family Welfare Programme, Tuberculosis Control Programme, Leprosy Control Programme, Immunisation Programme, Aids Control Programme, Blindness Prevention Control Programme and Breast Feeding Promotion etc.

This hospital fulfils the statutory requirement of meeting the Occupational health and safety needs of miners as per the guidelines of Director General of Mines Safety (DGMS) and thermal employees under requirement of OHSAS18001. NLC''s Occupational Health Services (OHS) has been acclaimed as the centre of excellence. OHS-NLC is also the recognised centre for conducting medical examination to assess fitness of miners as per the directive of DGMS.

Corporate Social Responsibility

Your Company, as a socially responsible corporate citizen, has been carrying out development works in the surrounding villages, right from its inception.

- An Annual CSR budget of not less than 1% of the profit after tax has been created by your Company and the CSR projects are monitored periodically by a Sub-committee of Board of Directors. Your Board of Directors have sanctioned Rs.14.11 crore as budget for CSR projects for the year 2013-14.

- Base line survey is conducted by your Company before commencement of any CSR Projects.

- Time frames and various milestones are fixed before commencement of any Project.

- Initiatives of State Governments/Central Government Departments/Agencies are dovetailed/synergized with the CSR activities of your Company.

The CSR expenditure of your Company for the year 2012-13 is Rs.14.26 crore. The major CSR initiatives undertaken during the year 2012-13 are given below:-

CSR - Peripheral

From the year 1998, the system of executing capital works for the development of social infrastructure in the surrounding villages has been streamlined and a structured Peripheral Development Scheme is in operation for the benefit of the villages surrounding Neyveli. Under this scheme, infrastructure and development works like provision of drinking water by sinking/maintaining bore wells, construction of roads, school buildings, libraries, bridges, developing medical facilities, de-silting of lakes etc., are carried out. Works numbering 19 for a value of Rs.396.64 lakh have been completed during the year 2012-13 for the benefit of population in 16 peripheral villages, while 12 nos. of development works for an estimated value of Rs.837.90 lakh are in progress. Your Company provides water to nearby villages for irrigating over 23,000 acres of land.

CSR - Community

As part of CSR for the community at large, your Company has proposed to provide social infrastructure facilities to the lgloo village in Leh-Ladakh area which was devastated by cloud burst and consequent landslide during August 2010, at an approximate value of Rs.3 crore and this provision is in addition to the allocations under CSR budget. The recent unprecedented flood situation in Uttarakhand had resulted into a large scale damage to the people and property. As this was a national calamity, your Company as part of CSR initiative contributed Rs.2.5 crore to the Prime Minister''s Relief Fund. This was in addition to other CSR Projects taken up for the year 2013-14.

Since 1987, your Company has been extending all assistance including grant and infrastructure to Sneha Opportunity Services to run a day-care education and training centre for special children of the region. Moreover, Neyveli Health Promotion and Social Welfare Society patronised by your Company has been serving the society by supplying artificial limbs/calipers to the differently abled, apart from running a school for the hearing impaired and a Computer Centre imparting training for physically challenged, widows and destitute and gainfully employing them.

Your Company has been conducting various CSR focused training programmes for the benefit of the students, teachers and others of Neyveli region and 8,707 persons have been benefitted during the year 2012-13.

CSR - Education

Your Company recognises the importance of education in human development of the region and offers best education facilities to the students through its 13 schools - 3 Higher Secondary Schools, 2 High Schools, 5 Middle Schools and 3 Elementary Schools under its management. These schools have been providing education to the students from the peripheral villages also along with the wards of your Company''s employees.

Your Company extends infrastructural support and also periodical financial grants to Jawahar Education Society, which provides education not only to the wards of employees but also to the children of villages around Neyveli Township.

An Industrial Training Institute in Barsingsar village is functioning to impart technical skills in various trades to the population around the project site.

CSR - Health

Your Company also provides quality medical treatment and occupational health service through its General Hospital to all inhabitants of the Neyveli Township and its surrounding villages.

During the year 2012-13:

- Free medical consultation was extended in 1,79,972 instances of out-patient treatment to the rural public. 24,600 patients were given emergency treatment for various causes.

- Medical treatment identity books have already been issued to 10,200 eligible contract workmen for availing medical treatment for self and their family members including inpatient treatment at free of cost. Comprehensive health care services were rendered to more than 33,000 contract workmen and their dependents.

- Community Health Screening for diabetes, hypertension and HIV covering 14,814 persons during the Annual Book Fair and Safety Week Celebration and counseled for behavioural change.

- 24 medical camps were conducted in peripheral villages which are located within 15 Kilometer radius of Neyveli Township. 11,824 persons were health-screened and given medical advice and medicines in the camps.

- 4 Eye-camps were conducted in association with the "District Blindness Control Society" of Cuddalore in the identified villages, viz., Mangallore, Periayakurichi, Palakkollai and Eraiyur. 2,265 persons were screened for eye defects. In the follow-up, 232 patients have undergone Cataract Operation.

- From February 2013 onwards, your Company is providing nutritious food supplement to 272 HIV affected children belonging to the Cuddalore District HIV Positive Society, Cuddalore.

Contribution to the cause of Women

NLC Chapter of "Forum of Women in Public Sector" (WIPS) under the aegis of SCOPE is being patronised by your Company. Your Company provides all the requisite support to this forum in organising various programmes for the growth and development of women.

Visit of Parliamentary Committees

- Department related Parliamentary Standing Committee on Science & Technology, Environment & Forest, reviewed the steps taken to mitigate pollution in Steel, Power, Mines & Coal Sectors.

- Parliamentary Standing Committee on Industry reviewed MoU Performance of your Company.

- Study Tour Programme of the Parliamentary Standing Committee on Coal & Steel, reviewed the production of Coal & Lignite - Projections, Planning & Stock study.

- Department related Parliamentary Standing Committee on Industry, reviewed the capacity addition and expansion of manufacturing facilities.

Awards & Recognition

Awards received by your Company during the year 2012-13 are given below:

- Gold Trophy of "SCOPE Meritorius Award for Environmental Excellence and Sustainable Development" for the year 2011-12.

- ''Indira Gandhi Paryavaran Puraskar Award 2009'', (Organisational Category) instituted by Union Ministry of Environment and Forests appreciating the outstanding contribution in the area of environment conservation and creating environment awareness.

- ''India Power Award 2012'' instituted by Council of Power Utilities for developing the energy sector.

- ''IPE CSR Corporate Governance Award'' instituted by Institute of Public Enterprises for the dedicated service to the society.

Compliance under Persons with Disabilities Act, 1995

Your Company ensures compliance of provisions under the Persons with Disabilities Act, 1995. Suitable arrangements/modifications are made in the working place to meet the requirements of persons with disability.

Compliance under the Right to Information Act, 2005

Your Company ensures compliance under the Right to Information Act, 2005. A Central Public Information Officer, two Appellate Officers, one Transparency Officer and seventeen Central Assistant Public Information Officers representing different functional areas have been nominated to attend to the queries and appeals received under the RTI Act in a time bound manner.

During the year 2012-13, 352 number of requests containing 1739 queries were received and as on the date of this report 1727 requests have been complied with.

Compliance under Public Procurement Policy

The Ministry of Micro, Small and Medium Enterprises (MSME) has notified the Public Procurement Policy. In terms of the above notification, an annual target for procurement from MSME was set for the three years beginning from the FY 2012-13. The target set for the FY 2012-13 for procurement of such items which are within the scope of MSMEs was 10% and as against the same the achievement was 27.14%.

Citizen''s Charter

Your Company maintains Citizen''s Charter, indicating details of clients, customers under different heads, system of redressal of grievance etc., and the same is regularly updated.

Particulars of Employees

Particulars of Employees as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

Energy Conservation and Research & Development

The particulars required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 regarding energy conservation measures, technology absorption and expenditure on R&D are furnished in Annexure-1.

Management Discussion & Analysis Report and Report on Corporate Governance

The Management Discussion & Analysis Report is furnished in Annexure-2. The report on Corporate Governance and the Auditors'' Certificate on the compliance of Corporate Governance conditions stipulated by Clause-49 of the Listing Agreement and DPE guidelines are furnished in Annexure-3 and 4 respectively.

Auditors Cost Audit

M/s. M. Krishnaswamy & Associates, Cost Accountants, were appointed as the Cost Auditors for the year 2012-13, to carry out the cost audit for the Mines & Power Stations of the Company. The Cost Audit Report for the year 2011-12 was filed with the Ministry of Corporate Affairs on 15.01.2013 against the due date of 28.02.2013.

Branch Audit

M/s. Surender K Goyal & Co., Chartered Accountants, has been appointed as the Branch Auditors for the year 2012-13 by Comptroller and Auditor General of India (C&AG) for conducting the audit of Mine and Thermal Units at Barsingsar.

Statutory Audit

M/s. L.U. Krishnan & Co., Chartered Accountants and M/s. Sreedhar, Suresh & Rajagopalan, Chartered Accountants, were appointed by the C&AG as Joint Statutory Auditors for the year 2012-13 under Section 619 (2) of the Companies Act, 1956. The Board of Directors of the Company has fixed Rs.12 lakh plus applicable service tax as the Statutory Audit fees, to be shared equally by the Joint Statutory Auditors in addition to reimbursement of out of pocket expenses at actual.

C&AG''s Comments

C&AG''s comments on the accounts for the year ended 31st March 2013 is furnished in Annexure-5.

Directors'' Responsibility Statement as per Section 217(2AA) of the Companies Act, 1956

The Board of Directors declares:

a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis.

Board of Directors

Shri. N. Sundaradevan, the then Principal Secretary to the Government of Tamil Nadu relinquished the Directorship on 30.09.2012 consequent on his superannuation.

Shri. Vikram Kapur, the then Principal Secretary to the Government of Tamil Nadu (GOTN), Industries Department was appointed as a Director w.e.f.14.11.2012 and Shri. Vikram Kapur held the office till 18.12.2012. Shri. N.S. Palaniappan, Principal Secretary to GOTN, Industries Department has been inducted into the Board as an Additional Director w.e.f. 16.01.2013.

Ms. Zohra Chatterji, the then Special Secretary, Ministry of Coal (MOC), Government of India(GOI), relinquished the Directorship w.e.f.01.02.2013. Dr. A.K. Dubey, Additional Secretary, MOC, GOI has been inducted into the Board as an Additional Director w.e.f. 03.04.2013.

Shri. J. Mahilselvan relinquished the position of Director on 28.02.2013 on attaining the age of superannuation. Shri. S. Rajagopal and Shri. M.S. Ravindranath have been inducted into the Board as Additional Directors w.e.f. 01.03.2013 and 23.04.2013 respectively.

The Board places on record its appreciation for the valuable contribution made by Ms. Zohra Chatterji, Sarvashri N. Sundaradevan, Vikram Kapur and J. Mahilselvan during their tenure as Directors on the Board of the Company.

Sarvashri Sarat Kumar Acharya, R.K. Mishra, M.M. Sharma and A.P.V.N. Sarma, Directors, retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-election.

Acknowledgement

The Board of Directors of your Company places on record its sincere appreciation for the continued support and guidance extended by the Ministry of Coal, Ministry of Power, Ministry of Finance, Ministry of Environment & Forest, Ministry of Industry, Ministry of Labour, Ministry of Heavy Industries, Planning Commission, Central Electricity Authority, Central Electricity Regulatory Commission, State Electricity Boards and beneficiaries of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Puducherry and Rajasthan and also the Joint Venture partners viz., Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL), Mahanadi Coalfields Limited (MCL) and Hindalco.

The Board of Directors of your Company is pleased to acknowledge with gratitude the co-operation and continued support extended by the Government of Tamil Nadu and the Cuddalore District Administration. The Board also pleased to acknowledge the support extended by Government of Rajasthan and Uttar Pradesh and also the respective State Departments. The support and co-operation by the Comptroller and Auditor General of India, the Statutory Auditors, Director General of Mines Safety, the Factory & Boiler Inspectorates, the Chief Inspector of Factories, the Director of Boilers, Central Pollution Control Board, State Pollution Control Board, Chief Controller of Explosives, Regional Labour Commissioner, Regional Provident Fund Commissioner, the Company''s Bankers and KfW of Germany need special mention and the Directors acknowledge the same.

Your Directors also wish to place on record their appreciation for the dedicated work put forth by the employees at all levels. The positive role played by the recognised Trade Unions and Associations of the Engineers and Officers in maintaining cordial industrial relations deserves special mention.

for and on behalf of the Board of Directors PLACE : Chennai B. SURENDER MOHAN

DATE : 15.07.2013 CHAIRMAN-CUM-MANAGING DIRECTOR


Mar 31, 2012

To The Members of Neyveli Lignite Corporation Limited

The Directors are pleased to present the 56th Annual Report of your Company together with the audited accounts for the year ended 31st March, 2012. Your Directors are happy to inform that your Company has once again achieved a record performance in lignite production, generation and export of power during the financial year 2011-12.

Snapshot of Physical Performance

Particulars 2011-12 2010-11 Growth (%)

Overburden removal (in LM3) 1651.47 1633.45 1.10

Lignite Production (in LT) 245.90 231.44 6.25

Power Generation - Gross (in MU) 18789.44 17881.08 5.08

Power Export (in MU) 15810.67 14971.26 5.61

LM3-Lakh Cubic Metre LT-Lakh Tonnes MU-Million Units Highlights

- Highest removal of Overburden in any year since inception.

- Highest production of lignite in any year since inception.

- Highest generation (gross) and export of power in any year since inception.

- Overburden removal at 828.05 LM3from Mine-ll - highest in any year since inception.

- Lignite production of 130.96 LT from Mine-ll - highest in any year since inception.

- Power generation (gross) at 11087.65 MU and the export of power at 9278.76 MU from TPS-II - highest in any year since inception.

Segment-wise Performance Mines

The aggregate installed capacity of lignite mines stands at 30.6 MTPA as on 31st March, 2012. Overall, the physical performance of Mines during the year 2011 -12 was excellent as compared to the previous year 2010-11. The detailed Mine-wise performance are as under:

Mine-1 (including expansion) -10.5 MTPA

The overburden removal from this Mine during the year 2011-12 was 528.17 LM3 as against 523.08 LM3 in 2010-11, registering a growth of 0.97%. Lignite production during the year under review was 77.34 LT as compared to 83.05 LT registered during the year 2010-11. Lignite production was affected due to lignite seam washout conditions for about 300 x 200 metre area. As informed in the Directors' Report of the previous year, the restructuring of Mine-1 & IA by adding contiguous lignite blocks to raise the aggregate mining capacity to 15.0 MTPA is in process. The restructuring of the mines is necessitated so as to meet the fuel requirement of the new thermal power project of 1000 MW capacity which is the replacement of the existing 600 MW capacity TPS-I.

Mine-IA-3.0 MTPA

The overburden removal from this Mine during the year 2011-12 was 215.10 LM3 as against 211.91 LM3 in 2010-11, registering a growth of 1.51%. Lignite production during the year 2011-12 was 28.77 LT compared to 27.19 LT during 2010-11, registering a growth of 5.81 %.

Mine-ll (including expansion)-15.0 MTPA

The performance of Mine-ll during the year 2011-12 in terms of overburden removal and lignite production was excellent, achieving the highest ever since the inception. The overburden removal from this Mine was 828.05 LM3 as against 802.55 LM3 during the year 2010-11, registering a growth of 3.18%, while the lignite production during the year under review was 130.96 LT compared to 117.11 LT during 2010-11, registering a growth of 11.83%. Approval has been accorded by your Board of Directors in April 2012 for the Revised Cost Estimate ofRs. 2125.83 crore for the Mine-ll Expansion Project.

Barsingsar Mine -2.1 MTPA

During the year 2011 -12, overburden removal and lignite production were 80.15 LM3 and 8.83 LT respectively, as against 95.91 LM3 and 4.09 LT, respectively, during the previous year 2010-11. As Members may be aware, because of sufficient exposure of lignite, the overburden removal was restricted during the year under review. As regards lignite production, the units of linked Thermal Power Plants were declared for commercial operation only during Dec. 2011/Jan. 2012 and hence the lignite production during the year 2011-12 was restricted to match with the fuel requirement of the power plant. Approval has been accorded by your Board of Directors in March 2012 for the Revised Cost Estimate of Rs. 218.05 crore for this project.

Power

With the declaration of commercial operation of both the thermal units of Barsingsar project during the year 2011-12, the installed capacity of thermal power generation of your Company stands increased to 2740 MW as on 31st March, 2012. Your Company has set a new record in generation and export of power during the year 2011 -12. Plant-wise performance details are as under:

Thermal Power Station-I (600 MW)

During the year 2011-12, power generation and export from this plant were 3987.85 MU and 3171.82 MU, respectively, compared to 3878.65 MU and 3088.83 MU, respectively, during the year 2010-11, registering a growth of 2.82% and 2.69% respectively. This plant is one of the oldest power plants in the Country, serving for more than 40 years, with Unit-I of this plant performing for the last five decades. Considering its age, achieving a Plant Load Factor (PLF) of75.67% by this plant is a remarkable achievement.

Thermal Power Station-I Expansion (420 MW)

The power generation from TPS-I Expansion was 3042.68 MU during the year 2011 -12 as against 2997.04 MU in 2010-11, registering a growth of 1.52% and the power exported during the year under review was 2809.97 MU as against 2743.44 MU during the year 2010-11, registering a growth of 2.42%. This Station achieved a PLF of82.47%.

Thermal Power Station-ll (1470 MW)

The performance of TPS-II during the year 2011-12 was excellent as the generation and the export of power from this plant were the highest since inception. Power generation during the year 2011-12 was 11087.65 MU as against 10739.78 MU, registering a growth of 3.24% and the export to the Southern Grid during the year under review was 9278.76 MU compared to 8945.55 MU in the year 2010-11, registering a growth of 3.73%. This plant achieved a PLF of 85.87% during the year under | review.

Barsingsar Thermal Power Station (250 MW)

Unit-I of Barsingsar Thermal Power Plant was declared for commercial operation during Jan. 2012, while Unit-I I was declared during Dec.2011. The total power generation upto 31st March, 2012 was 617.68 MU and 510.79 MU were exported to Rajasthan DISCOMS. Approval has been accorded by your Board of Directors for the second Revised Cost Estimate of Rs.1868.71 crore in March 2012forthis project.

Productivity

The output per man shift during the year 2011 -12 as compared with the previous year is given below:

Product Unit 2011-12 2010-11 Growth

Lignite Tonne 11.18 11.00 1.64%

Power Kw./hr 20130 17780 13.22%

Financial Performance

During the year ended 31st March, 2012 the Company registered a total sales of Rs.4866.85 crore against Rs.4295.95 crore recorded for the year 2010-11, registering a growth of 13.29%. The sales registered for the year 2011-12 was the highest ever since inception. The Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2011-12 were Rs.1983.89 crore and Rs.1411.33 crore, respectively, as against Rs.1684.55 crore and Rs.1298.33 crore, respectively, for the year 2010-11. As compared to the previous year 2010-11, the PBT and the PAT for the year 2011-12 recorded a growth of around 18% and 9%, respectively. The PBT and the PAT for the year ended 31st March, 2012 were the highest for anyyear since inception.

The main reason for increase in the profit for the year 2011-12 was on account of higher lignite production, higher generation and export of power which had resulted in increased sales. The operation of Barsingsar Power Plant in the last quarter of the financial year 2011 -12 had also contributed for registering higher sales.

The details of profit earned for the financial year ended 31st March, 2012 and appropriation of the same in comparison with the previous year ended 31st March, 2011 are asunder:

(Rs. in crore)

2011-12 2010-11

Profit before tax 1983.89 1684.55

Tax provision 572.56 386.22

Profit after tax 1411.33 1298.33

Appropriation:

Transfer to

Bond Redemption Reserve 15.00 15.00

Interest Differential Fund Reserve 18.08 15.25

General Reserve 145.00 130.00

Proposed Dividend 469.76 385.87

Tax on proposed Dividend 76.21 62.60

Dividend

The Board of Directors of your Company has recommended a dividend of 28% (Rs.2.80 per share) for the year 2011-12 (previous year 23%). The total outgo on account of dividend including distribution tax will be Rs.545.97 crore (previous year Rs.448.47 crore), which works out to 38.68% on Profit After Tax (PAT) for the year2011-12.

Projects under construction/implementation Thermal Power Station-ll Expansion (2x250 MW)

Thermal Power Station-ll Expansion project linked to Mine-ll Expansion is under implementation for expanding the capacity of TPS-II from 1470 MW to 1970 MW. Unit-I was synchronised with the designated fuel in June 2011 and is in the process of stabilisation. This unit generated in-firm power of53.58 MU (Gross) during the year under review. As regards Unit-ll, construction activities are in progress. Declaration of commercial operation of Unit-I is expected in October 2012 and the Unit-ll in March 2013. Execution of works by M/s. BHEL, the Main Plant Package contractor, is being closely monitored and periodically reviewed for early commissioning of the units. Approval has been accorded by your Board of Directors in April 2012 for the second Revised Cost Estimate of Rs.3027.59 crore for this project. The cumulative expenditure incurred upto 31st March, 2012 was Rs.2394.54 crore.

Neyveli New Thermal Power Project (2x500 MW)

Government of India (GOI) has sanctioned the Neyveli New Thermal Power Project (1000 MW) at a capital cost of Rs.5907.11 crore in June 2011 with a commissioning schedule of 48 months and 54 months for Unit-I & II respectively, from the date of sanction. Tendering activities for Main Plant Packages and Balance of Plant Package are in progress. The cumulative expenditure incurred upto 31st March, 2012 was Rs.14.47 crore.

Wind Power Project (50 MW)

Your Company has proposed to enter into generation of green power by setting up a wind power project of capacity of 50 MW at an estimated cost of Rs.364.75 crore. Tender has been floated for setting up of the above wind farm.

Solar Power Project

Your Company has also proposed to set up a 25 MW Solar Power Project to be located in Neyveli and in the first phase 10 MW capacity solar power plant is to be set up at an estimated cost of Rs.133.19 crore. Tender has been floated for design, engineering, manufacture, supply, transport, storage, erection, testing and commissioning of the above 10 MW Solar PV power plant.

Joint Venture Projects

Thermal Power Plant at Tuticorin (2x500 MW)

Coal based thermal power project at Tuticorin (1000 MW) is being implemented by your Company as a joint venture with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), at a sanctioned cost of Rs.4909.54 crore through NLC Tamilnadu Power Limited, the Subsidiary Company. Drum lifting for both the units has been completed in September 2011. Construction of dedicated coal jetty for transportation of coal to the power plant is in advanced stage of completion. Erection of boilers, coal and ash handling plants, switchyard, chimney and cooling towers are in progress. Contract for shore un-loader has been awarded and in respect of coal washery and logistics and other peripheral works tenders have been floated and are in process. Fuel linkage for this project is being tied up with Mahanadi Coalfields Limited, a subsidiary Company of Coal India Limited. The Unit-I is expected to be commissioned in Dec. 2013 and Unit-ll in March 2014. The project activities are closely monitored for early commissioning. The cumulative expenditure incurred upto 31st March, 2012 was 12768.27 crore.

MNH Shakti

MNH Shakti Limited is the Joint Venture Company (JVC) promoted by Mahanadi Coalfields Limited (MCL) holding 70% stake, Hindalco and your Company, each holding 15% stake. The JVC is implementing a 20.0 MTPA coal mining project at Talabira, Odisha and MCL being the majority stakeholder is piloting the above project.

Project Funding

To meet part of the debt requirement for the Neyveli New Thermal Power Project, your Company has tied up with State Bank of India for availing rupee term loan of Rs.2,500 crore and the balance debt requirement will be met through various other options such as External Commercial Borrowing (ECB), issue of Bonds etc. Your Company has also availed long term loan of Rs.3,495 crore for the expansion project from a consortium of domestic banks with Canara Bank as the consortium leader and so far a sum of Rs.937.50 crore has been repaid. In addition to this, Euro 50 million in the form of foreign currency loan under ECB and issue of secured redeemable taxable non-convertible bonds aggregating to Rs.600 crore were also availed for the expansion projects. The above ECB was repaid during the year 2011-12.

New Projects under formulation

As stated in the Directors' Report of the previous year 2010-11, your Company is pursuing the following projects for which Power Purchase Agreements have been entered into with the respective beneficiaries:

Bithnok Thermal Power Project (250 MW) with linked Mine (2.25 MTPA)

Your Company has proposed to set up a Thermal Power Plant of 250 MW capacity with linked Mine of 2.25 MTPA at Bithnok in Bikaner District, in the State of Rajasthan at an estimated cost of Rs.2,298.83 crore. The total land required for the Bithnok TPS and Mine is 2883 hectares and the acquisition of the same through Government of Rajasthan is in process. Government of Rajasthan has been approached for issue of Mining lease for the proposed Mine project. With regard to environmental clearance for the Mine Project, the proposal is under consideration of Expert Appraisal Committee. Being a 'Navratna' Company, the project will be considered for implementation by your Board of Directors on receipt of environmental clearance.

Barsingsar Extension Power Project (250 MW) and Hadla & Palana Lignite Mine (2.5 MTPA)

Your Company, by exploiting the lignite deposits in Hadla and Palana lignite blocks, proposes to set up a 250 MW Power Plant with a linked Mine of 2.5 MTPA capacity, in Bikaner District of Rajasthan, as an extension of the existing Barsingsar Power Plant. The aggregate estimated cost of the project is Rs.2,041.78 crore. Land required for the said project will be acquired through Government of Rajasthan and a proposal has been submitted for grant of mining lease. As far as the power project is concerned, proposal has been placed before MOE&F for issue of environmental clearance and on receipt of the same your Board of Directors will consider the project for implementation.

NLC-UPRVUNL Ghatampur Power Project (1980 MW)

Your Company has entered into an Moll with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) for formation of a Joint Venture Company with equity participation in the ratio of 51:49 to set up a1980 MW (3x660 MW) coal based thermal power project in Ghatampur Tehsil, Kanpur Nagar District in the State of Uttar Pradesh at an estimated cost of Rs.11,128 crore. The Cabinet Committee on Infrastructure (CCI) has approved the above joint venture proposal and the Joint Venture Agreement will be entered into with UPRVUNL shortly. Government of Uttar Pradesh has issued necessary notification for acquisition of about 763 hectares of land and has also allocated 80 cu.secs of water for the project. Ministry of Coal has been approached to allocate coal blocks with an extractable reserve of 600 million tonnes for the above project. Preparation of Feasibility Report and EIA/EMP reports are under progress.

Sirkali Thermal Power Project (4000 MW)

Your Company has also proposed to set up a 4000 MW coal based power plant at Sirkali in the coastal district of Nagapattinam, Tamilnadu in two phases at an estimated cost of Rs.10,395 crore for phase-l of 1980 MW. Site for locating the power plant has been identified at Thirumullaivasal and action has been initiated for acquisition of land through Government of Tamilnadu and for obtaining clearances from various statutory authorities. Ministry of Coal has been approached for allotment of coal blocks for the above project.

Devangudi Mine Project

Your Company proposes to develop the Devangudi lignite block, which has a mining area of about 8.2 Sq.Km and a mineable lignite reserve of 42.5 million tonnes, at an estimated cost of Rs.358 crore. The capacity of this Mine will be 2.0 MTPA and the lignite mined out will cater to the needs of cement, paper, brick and other small industries in the neighbourhood area.

Restructuring of Mines

The TPS-I with a capacity of 600 MW is linked to Mine-I. As stated earlier, since TPS-I is proposed to be replaced with a higher capacity plant of 1000 MW (NNTPS) it has been proposed to take up re-structuring of existing

Mine-1 and Mine-IA by adding contiguous lignite blocks for enhancing the aggregate capacity from 13.5 MTPA to 15.0 MTPA to meet the enhanced requirement of lignite of the proposed new plant. Detailed working is in process.

Coal Assets

As Members may be aware, India is experiencing severe shortage of coal as the domestic demand exceeds the supply. In order to overcome the situation, the Government of India has given guidelines to acquire coal assets abroad so as to have assured long term energy security. The MoU Task-force of GOI has also included 'floating of EOI for acquiring/acquisition/formation of JV for assets abroad' as one of the MoU parameters for your Company for the year 2012-13. In line with the above, your Board of Directors has accorded approval to initiate action within the guidelines of DPE for acquisition of raw material assets abroad to meet the partial/full coal requirement of projects of your Company in various places which are under implementation/formulation. Your Company is also exploring the possibility to tie up with State Governments who are in possession of coal blocks.

Other Projects

As discussed in the last year's report, consequent to the change in the policy of power procurement by States through competitive based tariff route, excepting power projects for which PPA has been signed prior to 6th January, 2011, all other projects could be implemented only when the concerned beneficiaries formally issue a notification for purchase of power through competitive bidding process. In this regard your Company has addressed to Ministry of Coal seeking exemption from the above requirement for lignite based Power projects and the same is awaited. Under these circumstances, it has been decided by the Board of Directors of your Company to keep in abeyance the other envisaged lignite based projects viz., 1000 MW TPS-III linked to 8.0 MTPA (Mine-Ill) in Neyveli and 1000 MW Power Project linked to 8.0 MTPA lignite mine in South Gujarat and not to pursue the 1600 MW Thermal Power project linked to 13.5 MTPA capacity lignite Mine at Jayamkondam and the coal based power project in Odisha. However, on the invitation by the Government of Odisha, your Company has taken initiative to explore the possibility of setting up a power plant as a Joint Venture project with an entity of Government of Odisha.

Power Tariff

The Central Electricity Regulatory Commission (CERC) initially constituted under the Electricity Regulatory Commission Act, 1998 is a statutory body functioning under the Electricity Act, 2003 and has the responsibility to regulate the tariff of generating Companies owned or controlled by the Central Government and Generators having sale of electricity in more than one State. The terms and conditions of tariff regulations for the period 2009-14 were notified by CERC and tariff orders in respect of TPS-I, TPS-I Expn. and TPS-II have been issued by CERC for the above period. Tariff petition has been filed before CERC for the Barsingsar Power Plant for finalising the tariff for the period from the date of declaration of commercial operation till 31.03.2014. Petitions have been filed separately before CERC for each power station TPS-I, TPS-I Expn. and TPS-II for the revision of O&M norms for the period 2007-08 and 2008-09 on account of wage revision with effect from 01.01.2007 and other pay hikes and revision of annual fixed charges accordingly.

Research and Development (R&D)

An in-house R&D centre "CARD" recognised by Department of Science and Technology is functioning since 1975. This Centre takes up various R&D projects on its own and also in association with premier academic institutions in the area of lignite utilisation, waste land reclamation, solid waste utilisation, utilisation of bottom ash generated from thermal plants, corrosion management in SMEs & storm water control pumps etc., besides Coal Science & Technology (Coal S&T) projects funded by Ministry of Coal. Your Company has already patented the process for the production of "Potassium Humate" from lignite through its R&D efforts. Commercialisation of the above patented process for the production of Potassium Humate is being carried out through M/s. National Research Development Corporation. Further, based on the study conducted in association with IIT/Kharagpur, a bench scale production facility has been erected at CARD to establish the production of Zeolite from fly ash. Process for the preparation of Zeolite from Neyveli fly ash has been optimised and patenting the process is in progress.

Your Company is on the look out for any viable project which could offer new avenues for growth in lignite. In this regard, as part of R&D initiative, it is contemplated to undertake a study to produce high strength and high heat value pellets from lignite by reducing the inherent high moisture content which is in the range of 50-55%. This process would increase the calorific value of the lignite from the level of 2600 to 5300 Kcal/kg and would also transform the lignite into a stable and transportable block in the form of pellets for use by various industries. In this regard, it has been decided by the Board of Directors to take up the above process initially at laboratory scale by the in-house R&D Centre in collaboration with other institutions and if the results are found to be techno-economically viable, the process could be enlarged to a larger scale.

Human Resource

Your Company recognises the potential of human resource in providing competitive advantage and considers its employees as the most valuable resource. The Company has achieved its present level of excellence "Navratna" Status through investing and nurturing in its human resource. Your Company continues to work for developing capabilities and realisation of best potential of its people. The thrust on achieving higher growth coupled with optimal utilisation of manpower continued. The focus on improving productivity and adoption of best practices in every area was relentlessly pursued. Efforts for active participation by employees, has been at the core of HR initiatives and interventions. Strategic alignment of HRM to business priorities and objectives facilitated steps for ensuring a smooth transition for upcoming new facilities. The total manpower of your Company as on 31.03.2012 was 17,733.

Employee Development

In pursuit of creating a learning organisation, your Company is carrying out training/learning initiatives for skill, competency building and overall development of employees and surrounding society. Your Company has organised 331 in-house programmes in various categories like general management, technical training, safety, quality training etc., covering 13,034 employees.

Industrial Relations

Thrust on participative culture continued during the year and the industrial relations in various Units and Service Divisions of your Company remained harmonious and cordial. The executives and employees were committed towards the growth of your Company.

Implementation of Official Language Policy

During the year 2011-12, your Company continued its thrust on official language implementation in line with Government of India's policy on Official Languages Act, 1963 and Official Languages Rules, 1976. The employees are encouraged to learn Hindi and also to enroll for courses like Prabodh, Praveen and Pragya through correspondence courses and so far a total of 278 employees have enrolled for the same. Hindi Fortnight was organised from 14.09.2011 to 28.09.2011 and the Hindi Day was celebrated on 14th September, 2011. Various Hindi competitions were conducted among employees and cash awards and merit certificates were distributed. Your Company also organised workshops with a focus on working in Unicode fonts on Computers and about 193 employees participated and benefited.

Reservation of posts

Your Company has been following the rules of the Government with regard to reservation for SC and ST and the details of Group-wise Men-in-Position as on 31.03.2012 are as under:

Strength of SC/ST Total Group Strength SC ST Total SC/ST

A 4,022 829 164 993

B 116 30 14 44

C 11,908 2,488 118 2,606

D 1.687 363 10 373

Total 17,733 3,710 306 4,016

Group % of SC/ST Total SC ST SC/ST

A 20.61 4.08 24.69

B 25.86 12.07 37.93

C 20.89 0.99 21.88

D 21.52 0.59 22.11

Total 20.92 1.73 22.65

Sustainability Development Projects

The Department of Public Enterprises has issued the Sustainable Development (SD) guidelines making it mandatory for the CPSE to include SD as a compulsory element in their Moll, under the non financial parameters with mandatory weightage of 5%. In terms of the above guidelines your Company has proposed to take up SD projects in the area of ecology, reclamation and re-use of land in Mines, development of eco-tourism park in Neyveli township, completion of Residual Life Assessment (RLA) studies of Turbine and replacement of final loop of Re-heater 2 coil in one Unit (210MW) of TPS-II, mandatory training programme on SD for students, sequestration of C02 and production of Bio-fuel from flue gas from Thermal Power Plant, Pollution Source Apportion Study for Neyveli industrial area, Water Management-Recharging of Ground Water, utilisation of fly ash in making Brick/Window and renewable energy project (Solar PV Power Project). The Board of Directors has allocated a budget provision of Rs.1.28 crore to take up the above projects which will be implemented from the year 2012-13.

Environmental Measures Reclamation and afforestation

Reclamation of mine spoil with sterile soil and bringing the mined out land suitable for agricultural, horticulture crops and development of forestry, pasture land etc., is continued. So far, an area of about 2118 hectares of land has been reclaimed besides carrying out afforestation activities in an area of about 1869 hectares of land in all the three mines. As part of massive afforestation programme around 18 million trees have been planted so far in and around Neyveli Township. The recent 'Thane' cyclone had a devastating impact on Neyveli eco system. About 2.5 lakh trees were lost in the plantation area besides loss of avenue trees on the road side and residential area. Steps have been taken to make up the loss of trees by planting more tree sapling in the industrial area and distribution of about 2.0 lakh fruit bearing tree species like cashew, mango, jack, gooseberry etc., to residents in and around Neyveli to balance the eco system. A continuous Ambient Air Quality Monitoring Station is in operation in CARD with real-time data display at various places.

Safety

Your Company is taking pioneering efforts in the industrial safety area by conducting risk assessment and safety audit for Mines and Thermal Power Stations in regular periodicity. Since the year 2004-05, your Company has been achieving 'Excellent' level in terms of accident rate per million mandays in the MoU entered into with the Ministry of Coal, indicating low accident rates. In addition to this overall achievement, zero accident potential has been achieved for the year 2011-12 at TPS-1 & TPS-I I at Neyveli and Mine at Barsingsar. Safety related training like basic, refresher, on-the job, job related briefing etc., are being imparted to all sections of employees in well designed training centres like Group Vocational Training Centre in Mines and Employees Development Centre. Through this exercise, there is a considerable increase in the level of safety awareness among the employees.

Vigilance

Based on the suggestion of the Vigilance Branch, various circulars/guidelines have been issued for streamlining the rules/procedures etc. Vigilance Awareness Period-2011 was observed in NLC from 31st October, 2011 to 5th November, 2011 and the updated 'Compendium of CVC Circulars' was released during the function. As greater transparency facilitates in improving the system & procedure and minimising the scope for corruption, all efforts are taken to improve the transparency through leveraging of technology of e-governance initiatives.

MoU with Transparency International

Members may be aware that your Company has signed a Memorandum of Understanding with Transparency International India, part of Asia Pacific forum comprising 20 nations. Transparency International India is the Indian chapter of Transparency International, an international civil society organisation based at Berlin that has turned the fight against corruption into a worldwide movement.

Township

Neyveli Township established in February 1959 has grown into a self-contained unit with all infrastructural facilities. This Township spread over 50 Sq.kms. with about 21,000 residential quarters has a total population of about 1,50,000 and has all facilities which includes schools, college, sophisticated general hospital, library, swimming pools, air-conditioned auditorium, stadium, community welfare centres, recreation clubs, reading rooms, parks, banks, shopping complexes etc. Township with all facilities have been established for the Barsingsar project also.

Medical Services

The General Hospital in Neyveli with 355 beds remains the major provider of service in various base specialties like emergency care, general medicine, surgery, paediatrics, obstetrics & gynaecology, eye, ortho, ENT, skin, psychiatry and chest medicine. The General Hospital undertakes programmes that address health issues at the five major levels of preventive, promotive, curative, rehabilitative and disability limitation strategies. The hospital contributes to the goal of various National Health Programme like Family Welfare Programme, Tuberculosis Control Programme, Leprosy Control Programme, Immunisation Programme, Aids Control Programme, Blindness Prevention Control Programme and Breast Feeding Promotion etc.

This hospital fulfills the statutory requirement of meeting the occupational health and safety needs of miners as per the guidelines of Director General of Mines Safety (DGMS) and thermal employees under requirement of OHSAS18001. NLC's Occupational Health Services (OHS) has been acclaimed as the centre of excellence. OHS-NLC is also the recognised centre for conducting medical examination to assess fitness of miners as per the directive of DGMS.

Corporate Social Responsibility

Your Company, as a socially responsible corporate citizen, has been carrying out development works in the surrounding villages, right from its inception.

- An Annual CSR budget of not less than 1% of the profit after tax has been created by your Company and the CSR projects are monitored periodically by a Sub-committee of Board of Directors. Your Board of Directors have sanctioned Rs.13 crore as budget for CSR projects for the year2012-13.

- Base line survey is conducted by your Company before commencement of any CSR Projects.

- Time frames and various milestones are fixed before commencement of any Project.

- Initiatives of State Governments/Central Government Departments/Agencies are dovetailed/synergised with the CSR activities of your Company.

The CSR expenditure of your Company for the year 2011-12 is Rs.11.53 crore. The major CSR initiatives undertaken during the year 2011 -12 are given below:

CSR - Peripheral

From the year 1998, the system of executing capital works for the development of social infrastructure in the surrounding villages has been streamlined and a structured Peripheral Development Scheme is in operation for the benefit of the villages surrounding Neyveli. Under this scheme, infrastructure and development works like drinking water provision by sinking/ maintaining bore wells, constructing roads, school buildings, libraries, bridges, developing medical facilities, de-silting of lakes etc., are carried out. An independent and progressing annual fund allocation has been made, which grew from Rs.50 lakh in 1998-99 to the present allocation of Rs.200 lakh per year. Works numbering 37 for a value of Rs.363.59 lakh have been completed during the year 2011-12 for the benefit of population in the peripheral villages, while 22 nos. of development works for an agreement value of Rs.461.42 lakh are in progress. Your Company provides continuous water supply to nearby viIlages for irrigating over23,000 acres of land.

CSR-Community

As part of CSR for the community at large, your Company has proposed to provide social infrastructure facilities to the Igloo village in Leh-Ladakh area which was devastated by cloud burst and consequent landslide during August 2010, at an approximate value of Rs.3 crore and this provision is in addition to the CSR budget provided.

Since 1987 your Company has been extending all assistance including grant and infrastructure to Sneha Opportunity Services to run a day-care education and training centre forspecial children of the region.

Moreover, Neyveli Health Promotion and Social Welfare Society patronised by your Company has been serving the society by supplying artificial limbs/calipers to the differently abled, apart from running a school for the hearing impaired and a Computer Centre, imparting training for physically challenged, widows and destitute and gainfully employing them.

Your Company has been conducting various CSR focused training programmes for the benefit of the students, teachers and others of Neyveli region and 8,653 persons have been benefitted during the year 2011 -12.

CSR-Education

Your Company recognises the importance of education in human development of the region and offers best education facilities to the students through its 13 Schools - 3 Higher Secondary Schools, 2 High Schools, 5 Middle Schools and 3 Elementary Schools under its management. These schools have been providing education to the students from the peripheral villages also along with the wards of your Company's employees.

Your Company provides infrastructural support and also periodical financial grants to Jawahar Education Society which provides quality education not only to the wards of employees but also to the children of villages around Neyveli Township.

An Industrial Training Institute in Barsingsar village was recently inaugurated to impart technical skills in various trades to the population around the project site.

CSR-Health

Your Company also provides quality medical treatment and occupational health service through its General Hospital to all the inhabitants of the Neyveli Township and its surrounding villages, during the year 2011 -12:

- free medical consultation with minimum anti-biotic therapy and vitamins extended to 76,086 out-patients from the rural public. Another 21,324 patients have been given emergency treatment for various causes.

- Medical treatment identity books issued to around 10,200 eligible contract workmen for availing medical treatment for self and theirfamily members including inpatient treatment, free of cost.

- Community Health Screening for diabetes, hypertension and HIV covering persons from rural population during Annual Book Fair and Safety Week Celebration and counseled for behavioural change.

- 14 medical camps were conducted in peripheral villages viz. Iruppu, Kuravankuppam, Matrukkudiyiruppu, Perperiyankuppam, Periyakappankulam, Mettukuppam, C-Keeranur, Iruppukurichi, A-Block, Mudanai, Vadalur, Kattukoodalore, Mudapalli and Kathazhai which are located within about 15 kilometre radius of Neyveli Township and 4,479 persons of these 14 villages have been health-screened and given medical advice and medicines.

Contribution to the cause of Women

NLC Chapter of''Forum of Women in Public Sector" (WIPS) under the aegis of SCOPE is being patronised by your Company. Your Company provides all the requisite support to this forum in organising various programmes for the growth and development of women.

Visit of Parliamentary Committees

- Parliamentary Standing Committee on Coal & Steel visited on 2nd June, 2011 and reviewed the performance of your Company.

- Parliamentary Committee on Official Language Implementation visited on 14th February, 2012 and reviewed the status of implementation of official language in your Company.

Awards & Recognition

Awards received by your Company during this year are given below:

- "Safety and Quality Award" from the Institution of Engineers -India (IEI) at Chennai.

- State Level First Prize for the Pay Roll Saving Scheme Group Leader for the year 2010-11, instituted by Government of Tamilnadu at Chennai.

- Silver Shield at the National Level Environment Award among coal/lignite based Thermal Power Stations instituted by Ministry of Power, Government of India at New Delhi by Thermal Power Station-I Expansion for the year 2010-11.

- "Organisation with Best HR Strategy in line with Business Award" given by Institute of Public Enterprises in HR Leadership Awards 2012.

Compliance under Persons with Disabilities Act, 1995

Your Company ensures compliance of provisions under the Persons with Disabilities Act, 1995. Suitable arrangements/modifications are made in the working place to meet the requirements of persons with disability.

Compliance under the Right to Information Act, 2005

Your Company ensures compliance under the Right to Information Act, 2005. A Central Public Information Officer, one Appellate Officer, one Additional Appellate Officer and Seventeen Central Assistant Public Information Officers representing different functional areas have been nominated to attend to the queries and appeals received under the RTI Act in a time bound manner.

During the year 2011 -12,402 numbers of requests containing more than 2000 queries were received and all the requests have been complied with.

Citizen's Charter

Your Company maintains Citizen's Charter, indicating details of clients, customers under different heads, system of redressal of grievance etc., and the same is regularly updated.

Particulars of Employees

Particulars of Employees as required under Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

Energy Conservation and Research & Development

The particulars required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 regarding energy conservation measures, technology absorption and expenditure on R&D are furnished in Annexure-1.

Management Discussion & Analysis Report and Report on Corporate Governance

The Management Discussion & Analysis Report is furnished in Annexure-2. The report on Corporate Governance and with the Auditors' Certificate on the compliance of Corporate Governance conditions stipulated by Clause-49 of the Listing Agreement and DPE guidelines are furnished in Annexure-3 and 4 respectively.

Auditors Cost Audit

M/s. S. Mahadevan & Co., CostAccountants, have been appointed as the Cost Auditors for the year 2011-12, to carry out the cost audit for the three Power Stations of the Company. The Cost Audit Report for the year 2010-11 was filed with the Ministry of Corporate Affairs on 23.09.2011 against the due date of27.09.2011.

Branch Audit

M/s. Prakash K. Prakash, Chartered Accountants has been appointed as the Branch Auditors by Comptroller and Auditor General of India (C&AG) for conducting the audit of Mine and Thermal Units at Barsingsar.

Statutory Audit

M/s. L.U.Krishnan & Co., Chartered Accountants and M/s. Sreedhar, Suresh & Rajagopalan, Chartered Accountants, were appointed by the C&AG, as Joint Statutory Auditors for the year 2011-12 under Section 619 (2) of the Companies Act, 1956. The Board of Directors of the Company has fixed Rs.12 lakh plus applicable service tax as the Statutory Audit fees, to be shared equally by the Joint Statutory Auditors in addition to reimbursement of out of pocket expenses at actual.

C&AG's Comments

C&AG's comments on the accounts for the year ended 31st March, 2012 is furnished in Annexure-5.

Directors' Responsibility Statement as per Section 217(2AA) of the Companies Act, 1956

The Board of Directors declares:-

a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

c. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis.

Board of Directors

On attaining the age of superannuation Shri A.R. Ansari laid down the office of Chairman-cum-Managing Director on 30.06.2012. The Board places on record its appreciation for the valuable services rendered by Shri A. R. Ansari as Chairman-cum-Managing Director of the Company.

Shri B. Surender Mohan, who was earlier functioning as Director (Mines) has been appointed as Chairman-cum- Managing Director by the Ministry of Coal w.e.f. 01.07.2012.

Shri N. Sundaradevan, Principal Secretary to Government of Tamilnadu, Industries Department, Shri R.K. Mahajan, former Joint Secretary, Ministry of Coal, Smt. Zohra Chatterji, Additional Secretary, Ministry of Coal and Shri Rakesh Kumar were inducted into the Board as Directors w.e.f. 19.07.2011, 12.09.2011, 29.09.2011 and 23.05.2012 respectively..

Sarvashri Rajeev Ranjan, Alok Perti, R.K.Mahajan and K.Sekar relinquished their position as Director w.e.f. 26.05.2011.12.09.2011.23.09.2011 and 31.03.2012 respectively. The Board places on record its appreciation for the valuable contribution made by them during their tenure as Directors on the Board of the Company. Sarvashri R. Kandasamy, Sanjay Govind Dhande, J. Mahilselvan, L.N. Vijayaraghavan, and V. Murali, Directors, retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for the re-election.

Acknowledgement

The Board of Directors of your Company places on record its sincere appreciation for the continued support and guidance extended by Ministry of Coal, Ministry of Power, Ministry of Finance, Ministry of Environment & Forest, Ministry of Industry, Ministry of Labour, Planning Commission, Central Electricity Authority, Central Electricity Regulatory Commission, State Electricity Boards and beneficiaries of Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, Puducherry and Rajasthan.

The Board of Directors of your Company is pleased to acknowledge with gratitude the co-operation and continued support extended by the Government of Tamil Nadu and the Cuddalore District Administration. The support and co-operation by the Comptroller and Auditor General of India, the Statutory Auditors, Director General of Mines Safety, the Factory & Boiler Inspectorates, the Chief Inspector of Factories, the Director of Boilers, Central Pollution Control Board, State Pollution Control Board, Chief Controller of Explosives, Regional Labour Commissioner, Regional Provident Fund Commissioner, the Company's Bankers and KfW of Germany need special mention and the Directors acknowledge the same.

Your Directors also wish to place on record their appreciation for the dedicated work put forth by the employees at all levels. The positive role played by the recognised Trade Unions and Associations of the Engineers and Officers in maintaining cordial industrial relations deserves special mention.

for and on behalf of the Board of Directors

PLACE : Chennai B. SURENDER MOHAN

DATE : 01.08.2012 CHAIRMAN-CUM-MANAGING DIRECTORTo The Members of Neyveli Lignite Corporation Limited

The Directors are pleased to present the 56th Annual Report of your Company together with the audited accounts for the year ended 31st March, 2012. Your Directors are happy to inform that your Company has once again achieved a record performance in lignite production, generation and export of power during the financial year 2011-12.

Snapshot of Physical Performance

Particulars 2011-12 2010-11 Growth (%)

Overburden removal (in LM3) 1651.47 1633.45 1.10

Lignite Production (in LT) 245.90 231.44 6.25

Power Generation - Gross (in MU) 18789.44 17881.08 5.08

Power Export (in MU) 15810.67 14971.26 5.61

LM3-Lakh Cubic Metre LT-Lakh Tonnes MU-Million Units Highlights

- Highest removal of Overburden in any year since inception.

- Highest production of lignite in any year since inception.

- Highest generation (gross) and export of power in any year since inception.

- Overburden removal at 828.05 LM3from Mine-ll - highest in any year since inception.

- Lignite production of 130.96 LT from Mine-ll - highest in any year since inception.

- Power generation (gross) at 11087.65 MU and the export of power at 9278.76 MU from TPS-II - highest in any year since inception.

Segment-wise Performance Mines

The aggregate installed capacity of lignite mines stands at 30.6 MTPA as on 31st March, 2012. Overall, the physical performance of Mines during the year 2011 -12 was excellent as compared to the previous year 2010-11. The detailed Mine-wise performance are as under:

Mine-1 (including expansion) -10.5 MTPA

The overburden removal from this Mine during the year 2011-12 was 528.17 LM3 as against 523.08 LM3 in 2010-11, registering a growth of 0.97%. Lignite production during the year under review was 77.34 LT as compared to 83.05 LT registered during the year 2010-11. Lignite production was affected due to lignite seam washout conditions for about 300 x 200 metre area. As informed in the Directors' Report of the previous year, the restructuring of Mine-1 & IA by adding contiguous lignite blocks to raise the aggregate mining capacity to 15.0 MTPA is in process. The restructuring of the mines is necessitated so as to meet the fuel requirement of the new thermal power project of 1000 MW capacity which is the replacement of the existing 600 MW capacity TPS-I.

Mine-IA-3.0 MTPA

The overburden removal from this Mine during the year 2011-12 was 215.10 LM3 as against 211.91 LM3 in 2010-11, registering a growth of 1.51%. Lignite production during the year 2011-12 was 28.77 LT compared to 27.19 LT during 2010-11, registering a growth of 5.81 %.

Mine-ll (including expansion)-15.0 MTPA

The performance of Mine-ll during the year 2011-12 in terms of overburden removal and lignite production was excellent, achieving the highest ever since the inception. The overburden removal from this Mine was 828.05 LM3 as against 802.55 LM3 during the year 2010-11, registering a growth of 3.18%, while the lignite production during the year under review was 130.96 LT compared to 117.11 LT during 2010-11, registering a growth of 11.83%. Approval has been accorded by your Board of Directors in April 2012 for the Revised Cost Estimate ofRs. 2125.83 crore for the Mine-ll Expansion Project.

Barsingsar Mine -2.1 MTPA

During the year 2011 -12, overburden removal and lignite production were 80.15 LM3 and 8.83 LT respectively, as against 95.91 LM3 and 4.09 LT, respectively, during the previous year 2010-11. As Members may be aware, because of sufficient exposure of lignite, the overburden removal was restricted during the year under review. As regards lignite production, the units of linked Thermal Power Plants were declared for commercial operation only during Dec. 2011/Jan. 2012 and hence the lignite production during the year 2011-12 was restricted to match with the fuel requirement of the power plant. Approval has been accorded by your Board of Directors in March 2012 for the Revised Cost Estimate of Rs. 218.05 crore for this project.

Power

With the declaration of commercial operation of both the thermal units of Barsingsar project during the year 2011-12, the installed capacity of thermal power generation of your Company stands increased to 2740 MW as on 31st March, 2012. Your Company has set a new record in generation and export of power during the year 2011 -12. Plant-wise performance details are as under:

Thermal Power Station-I (600 MW)

During the year 2011-12, power generation and export from this plant were 3987.85 MU and 3171.82 MU, respectively, compared to 3878.65 MU and 3088.83 MU, respectively, during the year 2010-11, registering a growth of 2.82% and 2.69% respectively. This plant is one of the oldest power plants in the Country, serving for more than 40 years, with Unit-I of this plant performing for the last five decades. Considering its age, achieving a Plant Load Factor (PLF) of75.67% by this plant is a remarkable achievement.

Thermal Power Station-I Expansion (420 MW)

The power generation from TPS-I Expansion was 3042.68 MU during the year 2011 -12 as against 2997.04 MU in 2010-11, registering a growth of 1.52% and the power exported during the year under review was 2809.97 MU as against 2743.44 MU during the year 2010-11, registering a growth of 2.42%. This Station achieved a PLF of82.47%.

Thermal Power Station-ll (1470 MW)

The performance of TPS-II during the year 2011-12 was excellent as the generation and the export of power from this plant were the highest since inception. Power generation during the year 2011-12 was 11087.65 MU as against 10739.78 MU, registering a growth of 3.24% and the export to the Southern Grid during the year under review was 9278.76 MU compared to 8945.55 MU in the year 2010-11, registering a growth of 3.73%. This plant achieved a PLF of 85.87% during the year under | review.

Barsingsar Thermal Power Station (250 MW)

Unit-I of Barsingsar Thermal Power Plant was declared for commercial operation during Jan. 2012, while Unit-I I was declared during Dec.2011. The total power generation upto 31st March, 2012 was 617.68 MU and 510.79 MU were exported to Rajasthan DISCOMS. Approval has been accorded by your Board of Directors for the second Revised Cost Estimate of Rs.1868.71 crore in March 2012forthis project.

Productivity

The output per man shift during the year 2011 -12 as compared with the previous year is given below:

Product Unit 2011-12 2010-11 Growth

Lignite Tonne 11.18 11.00 1.64%

Power Kw./hr 20130 17780 13.22%

Financial Performance

During the year ended 31st March, 2012 the Company registered a total sales of Rs.4866.85 crore against Rs.4295.95 crore recorded for the year 2010-11, registering a growth of 13.29%. The sales registered for the year 2011-12 was the highest ever since inception. The Profit Before Tax (PBT) and the Profit After Tax (PAT) for the year 2011-12 were Rs.1983.89 crore and Rs.1411.33 crore, respectively, as against Rs.1684.55 crore and Rs.1298.33 crore, respectively, for the year 2010-11. As compared to the previous year 2010-11, the PBT and the PAT for the year 2011-12 recorded a growth of around 18% and 9%, respectively. The PBT and the PAT for the year ended 31st March, 2012 were the highest for anyyear since inception.

The main reason for increase in the profit for the year 2011-12 was on account of higher lignite production, higher generation and export of power which had resulted in increased sales. The operation of Barsingsar Power Plant in the last quarter of the financial year 2011 -12 had also contributed for registering higher sales.

The details of profit earned for the financial year ended 31st March, 2012 and appropriation of the same in comparison with the previous year ended 31st March, 2011 are asunder:

(Rs. in crore)

2011-12 2010-11

Profit before tax 1983.89 1684.55

Tax provision 572.56 386.22

Profit after tax 1411.33 1298.33

Appropriation:

Transfer to

Bond Redemption Reserve 15.00 15.00

Interest Differential Fund Reserve 18.08 15.25

General Reserve 145.00 130.00

Proposed Dividend 469.76 385.87

Tax on proposed Dividend 76.21 62.60

Dividend

The Board of Directors of your Company has recommended a dividend of 28% (Rs.2.80 per share) for the year 2011-12 (previous year 23%). The total outgo on account of dividend including distribution tax will be Rs.545.97 crore (previous year Rs.448.47 crore), which works out to 38.68% on Profit After Tax (PAT) for the year2011-12.

Projects under construction/implementation Thermal Power Station-ll Expansion (2x250 MW)

Thermal Power Station-ll Expansion project linked to Mine-ll Expansion is under implementation for expanding the capacity of TPS-II from 1470 MW to 1970 MW. Unit-I was synchronised with the designated fuel in June 2011 and is in the process of stabilisation. This unit generated in-firm power of53.58 MU (Gross) during the year under review. As regards Unit-ll, construction activities are in progress. Declaration of commercial operation of Unit-I is expected in October 2012 and the Unit-ll in March 2013. Execution of works by M/s. BHEL, the Main Plant Package contractor, is being closely monitored and periodically reviewed for early commissioning of the units. Approval has been accorded by your Board of Directors in April 2012 for the second Revised Cost Estimate of Rs.3027.59 crore for this project. The cumulative expenditure incurred upto 31st March, 2012 was Rs.2394.54 crore.

Neyveli New Thermal Power Project (2x500 MW)

Government of India (GOI) has sanctioned the Neyveli New Thermal Power Project (1000 MW) at a capital cost of Rs.5907.11 crore in June 2011 with a commissioning schedule of 48 months and 54 months for Unit-I & II respectively, from the date of sanction. Tendering activities for Main Plant Packages and Balance of Plant Package are in progress. The cumulative expenditure incurred upto 31st March, 2012 was Rs.14.47 crore.

Wind Power Project (50 MW)

Your Company has proposed to enter into generation of green power by setting up a wind power project of capacity of 50 MW at an estimated cost of Rs.364.75 crore. Tender has been floated for setting up of the above wind farm.

Solar Power Project

Your Company has also proposed to set up a 25 MW Solar Power Project to be located in Neyveli and in the first phase 10 MW capacity solar power plant is to be set up at an estimated cost of Rs.133.19 crore. Tender has been floated for design, engineering, manufacture, supply, transport, storage, erection, testing and commissioning of the above 10 MW Solar PV power plant.

Joint Venture Projects

Thermal Power Plant at Tuticorin (2x500 MW)

Coal based thermal power project at Tuticorin (1000 MW) is being implemented by your Company as a joint venture with Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), at a sanctioned cost of Rs.4909.54 crore through NLC Tamilnadu Power Limited, the Subsidiary Company. Drum lifting for both the units has been completed in September 2011. Construction of dedicated coal jetty for transportation of coal to the power plant is in advanced stage of completion. Erection of boilers, coal and ash handling plants, switchyard, chimney and cooling towers are in progress. Contract for shore un-loader has been awarded and in respect of coal washery and logistics and other peripheral works tenders have been floated and are in process. Fuel linkage for this project is being tied up with Mahanadi Coalfields Limited, a subsidiary Company of Coal India Limited. The Unit-I is expected to be commissioned in Dec. 2013 and Unit-ll in March 2014. The project activities are closely monitored for early commissioning. The cumulative expenditure incurred upto 31st March, 2012 was 12768.27 crore.

MNH Shakti

MNH Shakti Limited is the Joint Venture Company (JVC) promoted by Mahanadi Coalfields Limited (MCL) holding 70% stake, Hindalco and your Company, each holding 15% stake. The JVC is implementing a 20.0 MTPA coal mining project at Talabira, Odisha and MCL being the majority stakeholder is piloting the above project.

Project Funding

To meet part of the debt requirement for the Neyveli New Thermal Power Project, your Company has tied up with State Bank of India for availing rupee term loan of Rs.2,500 crore and the balance debt requirement will be met through various other options such as External Commercial Borrowing (ECB), issue of Bonds etc. Your Company has also availed long term loan of Rs.3,495 crore for the expansion project from a consortium of domestic banks with Canara Bank as the consortium leader and so far a sum of Rs.937.50 crore has been repaid. In addition to this, Euro 50 million in the form of foreign currency loan under ECB and issue of secured redeemable taxable non-convertible bonds aggregating to Rs.600 crore were also availed for the expansion projects. The above ECB was repaid during the year 2011-12.

New Projects under formulation

As stated in the Directors' Report of the previous year 2010-11, your Company is pursuing the following projects for which Power Purchase Agreements have been entered into with the respective beneficiaries:

Bithnok Thermal Power Project (250 MW) with linked Mine (2.25 MTPA)

Your Company has proposed to set up a Thermal Power Plant of 250 MW capacity with linked Mine of 2.25 MTPA at Bithnok in Bikaner District, in the State of Rajasthan at an estimated cost of Rs.2,298.83 crore. The total land required for the Bithnok TPS and Mine is 2883 hectares and the acquisition of the same through Government of Rajasthan is in process. Government of Rajasthan has been approached for issue of Mining lease for the proposed Mine project. With regard to environmental clearance for the Mine Project, the proposal is under consideration of Expert Appraisal Committee. Being a 'Navratna' Company, the project will be considered for implementation by your Board of Directors on receipt of environmental clearance.

Barsingsar Extension Power Project (250 MW) and Hadla & Palana Lignite Mine (2.5 MTPA)

Your Company, by exploiting the lignite deposits in Hadla and Palana lignite blocks, proposes to set up a 250 MW Power Plant with a linked Mine of 2.5 MTPA capacity, in Bikaner District of Rajasthan, as an extension of the existing Barsingsar Power Plant. The aggregate estimated cost of the project is Rs.2,041.78 crore. Land required for the said project will be acquired through Government of Rajasthan and a proposal has been submitted for grant of mining lease. As far as the power project is concerned, proposal has been placed before MOE&F for issue of environmental clearance and on receipt of the same your Board of Directors will consider the project for implementation.

NLC-UPRVUNL Ghatampur Power Project (1980 MW)

Your Company has entered into an Moll with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) for formation of a Joint Venture Company with equity participation in the ratio of 51:49 to set up a1980 MW (3x660 MW) coal based thermal power project in Ghatampur Tehsil, Kanpur Nagar District in the State of Uttar Pradesh at an estimated cost of Rs.11,128 crore. The Cabinet Committee on Infrastructure (CCI) has approved the above joint venture proposal and the Joint Venture Agreement will be entered into with UPRVUNL shortly. Government of Uttar Pradesh has issued necessary notification for acquisition of about 763 hectares of land and has also allocated 80 cu.secs of water for the project. Ministry of Coal has been approached to allocate coal blocks with an extractable reserve of 600 million tonnes for the above project. Preparation of Feasibility Report and EIA/EMP reports are under progress.

Sirkali Thermal Power Project (4000 MW)

Your Company has also proposed to set up a 4000 MW coal based power plant at Sirkali in the coastal district of Nagapattinam, Tamilnadu in two phases at an estimated cost of Rs.10,395 crore for phase-l of 1980 MW. Site for locating the power plant has been identified at Thirumullaivasal and action has been initiated for acquisition of land through Government of Tamilnadu and for obtaining clearances from various statutory authorities. Ministry of Coal has been approached for allotment of coal blocks for the above project.

Devangudi Mine Project

Your Company proposes to develop the Devangudi lignite block, which has a mining area of about 8.2 Sq.Km and a mineable lignite reserve of 42.5 million tonnes, at an estimated cost of Rs.358 crore. The capacity of this Mine will be 2.0 MTPA and the lignite mined out will cater to the needs of cement, paper, brick and other small industries in the neighbourhood area.

Restructuring of Mines

The TPS-I with a capacity of 600 MW is linked to Mine-I. As stated earlier, since TPS-I is proposed to be replaced with a higher capacity plant of 1000 MW (NNTPS) it has been proposed to take up re-structuring of existing

Mine-1 and Mine-IA by adding contiguous lignite blocks for enhancing the aggregate capacity from 13.5 MTPA to 15.0 MTPA to meet the enhanced requirement of lignite of the proposed new plant. Detailed working is in process.

Coal Assets

As Members may be aware, India is experiencing severe shortage of coal as the domestic demand exceeds the supply. In order to overcome the situation, the Government of India has given guidelines to acquire coal assets abroad so as to have assured long term energy security. The MoU Task-force of GOI has also included 'floating of EOI for acquiring/acquisition/formation of JV for assets abroad' as one of the MoU parameters for your Company for the year 2012-13. In line with the above, your Board of Directors has accorded approval to initiate action within the guidelines of DPE for acquisition of raw material assets abroad to meet the partial/full coal requirement of projects of your Company in various places which are under implementation/formulation. Your Company is also exploring the possibility to tie up with State Governments who are in possession of coal blocks.

Other Projects

As discussed in the last year's report, consequent to the change in the policy of power procurement by States through competitive based tariff route, excepting power projects for which PPA has been signed prior to 6th January, 2011, all other projects could be implemented only when the concerned beneficiaries formally issue a notification for purchase of power through competitive bidding process. In this regard your Company has addressed to Ministry of Coal seeking exemption from the above requirement for lignite based Power projects and the same is awaited. Under these circumstances, it has been decided by the Board of Directors of your Company to keep in abeyance the other envisaged lignite based projects viz., 1000 MW TPS-III linked to 8.0 MTPA (Mine-Ill) in Neyveli and 1000 MW Power Project linked to 8.0 MTPA lignite mine in South Gujarat and not to pursue


Mar 31, 2010

The Directors have great pleasure in presenting the 54th Annual Report of your Company together with theaudited accounts for the year ended 31st March, 2010.

Performance Highlights

Physical Performance

During the year 2009-10 your Company has achieved all around growth since inception in terms of overburden removal, lignite production, generation and export of power as under:

- Overburden removal of 1594.25 Lakh Cubic Metre (LM3) from all Mines put together.

- Total lignite production of 223.38 Lakh Tonnes (LT) from all Mines.

- Aggregate power generationof 17656.04 Million Units (MU) from all Power Stations.

- Export of powerfrom all PowerStations put together at 14828.22 MU.

- Overburden (OB) removal of 782.63 LM3fromMine-ll.

- PowergenerationfromTPS-llat10559.69MU.

Financial Performance

Your Company during the year under review registered a sales turnover of Rs.4121.03 crore and profit aftertax of Rs.1247.46 crore, which are the highest since inception.

Segment-wise Performance Mines

During the year 2009-10, the total Overburden removal was 1594.25 LM3 compared to 1463.44 LM3 achieved in the year 2008-09, registering a growth of 8.94%. The total Lignite production during the year 2009-10 was 223.38 LT as against 213.07 LT achieved in the year 2008-09, recording a growth of 4.84%.

The detailed Mine-wise performance for the year 2009-10 compared to 2008-09 is as below:

2009-10 2008-09

Mine Capacity Overburden Lignite Overburden Lignite (in MTPA) (in LM3) (in LT) (in LM3) (in LT)

Mine-I 10.5 508.52 91.59 501.54 90.40

Mine-IA 3.0 201.86 27.11 200.11 30.56

Mine-II 15.0 782.63 104.43 659.64 91.09

Barsingsar Mine 2.1 101.24 0.25 102.15 1.02

Total 30.6 1594.25 223.38 1463.44 213.07

During the year under review Mine-I had exceeded the last years performance in removal of OB and lignite production. OB removal in Mine-IA during the year 2009-10 was marginally higher compared to the year2008-09 while the lignite production was less compared to the previous year.

Members may be aware that Mine-IA, since commissioning, was working beyond the installed capacity mainly to supplement the lignite requirement of Thermal Power Station-ll as the production of lignite in Mine-ll got affected during the earlier years due to non-availability of required land for mining. As the availability of land for Mine-ll has since improved and the production of lignite in Mine-ll also increased and consequently the production from Mine-IA was maintained at optimum level during the financial year under review.

As seen from the above table, the performance of Mine-ll during the year under review was remarkable. The OB removal in Mine-llduringtheyear2009-10wasthehighestforanyyearsince inception, recording a growth of 18.65% compared to the previous year ended 31st March, 2009, while the lignite production recorded a growth of 14.64% during the year under review compared tothepreviousyear2008-09.

Lignite production from Barsingsar Mine in Rajasthan commenced in November 2009 and attained the rated capacity on 31st January, 2010. Both OB removal and lignite production were less during the year under review as the same were regulated due to slow progress of the work in the linked powerplantunderimplementation and consequent lower requirement of lignite.

Power

During the year 2009-10, the total power generation (Gross) from all power plants of the Company was 17656.04 MU compared to 15767.98 MU recorded during the year 2008-09, registering a growth of 11.97%. The power export during the year under review was 14828.22 MU as against 13204.05 MU made during the year 2008-09, recording a growth of 12.30%. The total power generation and export during the year 2009-10werethehighestsince inception.

The detailed Plant-wise performance for the year2009-10 compared to 2008-09 is as under:

Plant/Capacity 2009-10 2008-09

Gross Export PLF Gross Export PLF Gen.(inMU) (in MU) (%) Gen.(in MU) (in MU) (%)

TPS-I(600MW) 4114.44 3300.45 78.28 3577.49 2835.48 68.06

TPS-I Expn. (420 MW) 2979.43 2720.12 80.98 3126.05 2858.42 84.96

TPS-II(1470MW) 10559.69 8805.17 82.01 9064.44 7510.15 70.39

Barsingsar TPS 2.48 2.48 - - - -

Total 17656.04 14828.22 80.94 15767.98 13204.05 72.29

Thermal Power Station-I is one of the oldest power plants in the country, having served for more than 40 years and almost nearing its extended life. It was a remarkable performance from this plant, to register a growth of 15.01% in the generation during the year 2009-10 compared to the generation of 2008-09. Considering the age of this plant, it was earlier decided to taper down the generation between the years 2009 and 2014 in phases depending upon the condition of the Plant. However, TNEB as well as the Government of Tamil Nadu requested your Company directly and also through Ministry of Coal, to defer the retirement of Units for some more time in view of the prevailing power deficit situation in the State. In view of the above it has been decided to defer the programme of tapering down generation for the time being and firm up the same at a later date depending upon the performance of Units and the Residual Life Assessment (RLA) study results. The RLA study has been completed for two units and the study has indicated that the operation of the said units could be continued for a further period of about 5 years with some minor replacements. In respect of the balance seven units, the RLA study will be carried out for each unit on completion of the extended life period of 15 years.

During the year 2009-10, the power generation from TPS-I Expn., was less compared to the previous year2008-09 by 4.69% due to extended maintenance works carried out in both the units. The power generation from TPS-II during the year 2009-10 was the highest since inception, registering a growth of 16.50% compared to previous year 2008-09. This plant performed exceedingly well compared to previous years on account of availability of required quantum of lignite onsustained basisfrom Mine-Hand thetransportation of surplus lignite from otherMines. The Unit-I of Barsingsar TPS generated in-firm power of 2.48 MU since its synchronisation in October2009.

Financial Performance

During the year under review, your Company recorded a sales turnover of Rs.4121.03 crore compared to Rs.3354.91 crore achieved in the year 2008-09. The profit before tax for the year under review was Rs.1604.86 crore (previous year Rs.1046.01crore) while the profit after tax was Rs. 1247.46 crore (previous year Rs. 821.09 crore).

The increase in the sales turnover and the profit for the year ended 31st March, 2010 compared to previous year ended 31st March, 2009 was mainly on account of higher generation and export of power during the year 2009-10 and also due to adoption of higher tariff rate as per the tariff petitions filed before CERC.

The details of profit earned for the financial year ended 31st March, 2010 and appropriation of the same in comparison with the previous year ended 31st March, 2009 are as under:

(Rs. in crore)

2009-10 2008-09 Profit before tax 1604.86 1046.01

Tax provision 357.40 224.92

Profit after tax 1247.46 821.09

Appropriation:

Transfer to

Exchange rate variation of previous year 0.00 (0.45)

Bond Redemption Reserve 15.00 15.00

Interest Differential Reserve 12.50 20.69

General Reserve 100.00 70.00

Interim Dividend paid 167.77 0.00

Tax on Interim Dividend paid 28.51 0.00

Proposed Final Dividend 167.77 335.54

Tax on proposed Final Dividend 27.86 57.03

Dividend

Your Company paid an Interim Dividend @10% for the financial year 2009-10 during the month of March 2010. The Board of Directors of your Company have recommended a final dividend @10%(Re.1/-pershare)fortheyear2009-10.With this the total dividend for the financial year 2009-10 aggregates to 20% (previous year 20%). The total outgo on account of the dividend for the year 2009-10 including distribution tax will be Rs. 391.91 crore, which works out to 31.42% on Profit AfterTax (PAT).

Status of land acquisition

As stated earlier, the availability of land for mining especially for Mine-ll has improved to a great extent during the year under review. During the year 320 hectares of land have been taken possession and further requisition for 144.04 hectares of land has been placed before the District Administration. Your Company is actively pursuing the issue with the State Government, the District Administration and statutory authorities concerned for continued availability of land for mining. Based on the settlement reached between your Company and the land owners for payment of enhanced compensation for the acquisition, your Company during the year 2009-10 paid enhanced compensation of about Rs.11 crore through LokAdalat.

Sanctioned Projects Expansion Programme

The Government of India had sanctioned implementation of Mine-ll Expn., linked to TPS-IIExpn., project at Neyveli at an aggregate revised capital cost of Rs.4749.50 crore. Your Company is also implementing a Mine-cum-Power Project at Barsingsar in Rajasthan at an aggregate revised capital cost of Rs.1880.69 crore.

The status of implementation of the above projects is as under:

Mine-ll Expansion (10.5 MTPA to 15.0 MTPA)

Your Company has successfully completed the implementation of this project and this Mine attained rated production capacity during March 2010. Mine-ll Expansion was formally dedicated to the Nation on 5th April, 2010 by Shri. Sriprakash Jaiswal, the Honble Union Minister of State (Independent Charge) for Coal, Statistics and Programme Implementation. Overburden removal from Mine-ll Expansion during 2009-10 was 226.55 LM3 against the target of 190.00 LM3. The cumulative expenditure incurred upto 31st March,2010wasRs. 1808.34 crore.

Thermal PowerStation-ll Expansion (2x250 MW)

During the year 2009-10 hydro test of the Boiler for Unit-I and construction of Chimney and Cooling Tower-ll were completed. 400 KV switch yard was also commissioned during the year and the Generator Stator has been lifted and positioned. Erection of Water Treatment and Effluent Treatment Plants and Lignite Handling System are nearing completion. Erection of Boilers and Turbo-generators, Circulating Water System & Fire Protection System, Power Transformers, Ash Handling System and other miscellaneous works are in progress.

The anticipated commissioning of Unit-I and Unit-ll as perthe present progress of implementation is December 2010 and June 2011 respectively. Members may be aware that M/s.BHEL the Main Plant Package contractor, delayed in the initial stages the starting of the civil works and consequent erection works. The erection works are also progressing at a slow pace. Continuous review is being done atvarious levels with the top management of BHEL besides apprising Ministry of Coal, Ministry ofPowerand Ministry of Heavy Industries and also CEAfor expediting the erection activities by BHEL and for early commissioning of the project. The cumulative expenditure incurred upto 31st March, 2010 was Rs. 1948.27 crore.

Barsingsar Mine Project in Rajasthan (2.1 MTPA)

Overburden removal during the year 2009-10 was 101.24 LM3. Lignite excavation commenced on 23rd November, 2009 and production attained the rated capacity on 31st January, 2010.

The Lignite production in this Mine during the year 2009-10 was 0.25 LT against the target of 5.00 LT. As stated earlier production during the year under review was regulated based on the slow progress of the power plant under implementation. The cumulative expenditure incurred upto 31stMarch,2010 wasRs.214.51 crore.

Barsingsar Thermal PowerStation(2x 125 MW)

The Unit-I (125 MW) of the Barsingsar Thermal Power Project was synchronised during October 2009 and was formally dedicated to the Nation on 5th June, 2010 by Shri. Sriprakash Jaiswal, the Honble Union Minister of State (Independent Charge) for Coal, Statistics and

Programme Implementation. The Unit-ll (125MW) of the above project has also been synchronised on 5th June, 2010 after completion of major erection activities and the commissioning of this Unit is expected by September 2010. Project execution got delayed due to initial delay in supply and erection activities of Main Plant Package, Switchyard and Power transformer by M/s. BHEL. The cumulative expenditure incurred upto 31st March, 2010 was Rs.1407.82crore.

Joint Venture Project

Coal based Thermal Power Plant at Tuticorin (2x500 MW)

The Joint Venture Project between your Company and the Tamil Nadu Electricity Board (TNEB) viz., coal based thermal power plant of 2x500 MW capacity at Tuticorin in Tamil Nadu, is being implemented by your Company at a GOI sanctioned cost of Rs.4909.54 crore through NLC Tamil Nadu Power Limited, the Subsidiary Company. The equity participation in the JV Company by NLC and TNEB is in the ratio of 89:11 and share of equity contribution of around Rs.1311 crore to be made by your Company will be met through internal accruals over a period of time. The JV Company had earlier tied up with M/s.Rural Electrification Corporation Limited (REC) for its entire debt requirement of Rs.3437 crore. With a view to reduce the cost of debt component of the project, the JV Company has decided to replace the REC loan partially with a rupee term loan of Rs.2500 crore from Bank of Baroda and Bank of India consortium and this exercise would reduce the overall cost of the project and would also reduce the power tariff for the end consumers. The balance debt requirement has been proposed to be partially tied up through External Commercial Borrowings and through otherforms of borrowing viz., issue of bonds etc.

In respect of Main Plant Package of Steam Generator, Turbo Generator and Electrostatic Precipitator, the contract has been awarded to M/s. BHEL during the month of January 2009. M/s. BHEL has since commenced civil works for Boiler and ESP foundations and the supplies are also in progress. Other major contracts for this project viz., Coal Handling package, Circulating Water System package, Bi-flue Chimney package, Transformer package and Natural Draft Cooling Towers package have also been awarded. In respect of other packages award of work is underfinalisation.

As regards coal handling for the project, it is proposed to have a dedicated coal berth for which Tuticorin Port Trust has been entrusted with the construction and the work is under progress. The cumulative expenditure incurred for this project upto 31st March, 2010 was Rs.725 crore.

As perthe sanction of GOI, Unit-I of the project is to be commissioned by March 2012 and Unit -II by August 2012. Power purchase agreements have been signed with TNEB, ESCOMs of Karnataka State, Puducherry Electricity Department and Kerala State Electricity Board.

Wind Power Project

Your Company, as part of diversification programme to sustain and improve upon the growth rate, has decided to venture into green energy business by setting up a wind based power project, with an initial capacity of 50 MW in Tirunelveli District in the State of Tamil Nadu at an estimated cost of Rs.312.50 crore with a time schedule of 10 months from the zero date i.e. the date of placement of order. However, one machine will be installed within four months from the zero date. Feasibility Report has been prepared by ITCOT Consultancy Services and the Technical Consultant for this project is Centre for Wind Energy Technology (CWET), a R&D department under the Ministry of New & Renewable Energy Resources. Tender has been floated for procuring Wind Turbine Generator and the evaluation of the bids received is in process. Wind energy being a green energy source this project will be entitled to get carbon credit for the power generated which would make the project economicallyviable.

Project Funding

The projected debtfunding requirement for the projects under implementation viz., Mine-ll Expn., TPS-II Expn. and Barsingsar Mine-cum-Power Project is around Rs 4641 crore. Your Company has already tied up rupee term loan for Rs.2500 crore, through a consortium of domestic banks with Canara Bank as the consortium leader and EURO 50 million foreign currency loan under External Commercial Borrowing (ECB) route, syndicated by Calyon Bank presently renamed as Credit Agricole Corporate & Investment Bank to fund the above projects. Your Company has also issued Secured Redeemable Non-convertible Bonds for an aggregate amount of Rs.600 crore through private placement to meet part of the debt requirement for the above projects. The balance fund requirement of Rs. 1250 crore has been tied up in the form of another rupee term loan with a consortium of domestic banks with Canara Bank as the consortium leader.

Status of Advance Action Proposals (AAP) sanctioned by Government of India (GOI) Thermal Power Project in Neyveli

Your Company has proposed to set up a new power plant of 1000 MW capacity as a replacement to the existing Thermal Power Station-I at Neyveli. Ministry of Coal (MOC) had accorded sanction for Advance Action proposals for Rs.17.85 crore that included augmentation studies for the existing mines. The proposal for setting up the above Thermal Power Project (2x500 MW) at an estimated cost of Rs.5596 crore has been submitted to the Government in October 2009 for obtaining sanction. Necessary study for augmentation of lignite from Mine-I and Mine-IAto meet the additional requirement of lignite for the power project is in process. EIA/EMP Report has been submitted to Ministry of Environment and Forests in January 2010 for the issue of environmental clearance and the same has been considered by the Expert Appraisal Committee. NOC from Airport Authority has been received. All the constituent States of Southern Region have expressed their willingness to buy powerfrom this project and signing of Power Purchase Agreement (PPA) is in process. Ministry of Power has been addressed to decide the power allocation to the beneficiary States and also to accord Mega Power Project status for this project so as to avail certain duty concessions.

Bithnok Thermal Power Project with linked Mine

It is proposed to set up a Thermal Power Plant of 250 MW capacity with linked mine of 2.25 MTPA at Bithnok in Bikaner District in the State of Rajasthan. Ministry of Coal (MOC) has approved the Advance Action Proposal (AAP) at an estimated cost of Rs.10.45 crore for carrying out certain pre-project sanction activities for Mine and Power Projects. The Project proposal for setting up of 2.25 MTPA Mine at an estimated cost of Rs. 365.71 crore, with outsourcing option for both overburden and lignite removal and Thermal Power Project of 250 MW at an estimated cost of Rs.1670.54 crore, has been submitted to the Government during October 2009 for obtaining sanction. Public consultation process has been completed for both Mine and Power Projects. Expert Appraisal Committee of Ministry of Environment and Forest has considered the mining project. State Environmental Committee has issued the environmental clearance for the power project. NOC from Airport Authority has been received. Notification has been issued by Government of Rajasthan (GoR) for acquisition of required land for the project. Mining Plan has been approved by MOC and obtaining mining lease from GoR is in process.

Barsingsar Extension Power Project and Hadla & Palana Lignite Mine

Your Company also proposes to set up a Mine (2.5 MTPA) linking both Hadla & Palana lignite Blocks with the 250 MW power plant in Bikaner District of Rajasthan, as an extension of the on-going Barsingsar Power Project and with a view to utilise the lignite deposits in Hadla and Palana lignite blocks. Ministry of Coal has accorded sanction for the Advance Action Proposal (AAP) at an estimated cost of Rs.10.85 crore for carrying out certain pre-project sanction activities. Preparation of Feasibility Report (FR) for Hadla Mine and Thermal Power Project have been completed while the preparation of FR for Palana Block is in process. As per the Feasibility Reports the estimated cost of Hadla Mine project with outsourcing option for both overburden and lignite removal is Rs.350.13 crore while the estimated cost of the power project is Rs. 1691.65 crore. Preparation of EIA/EMP reportfor Mine and Power project is in advanced stage.

Jayamkondam Lignite based Mine-cum-Thermal Power Project

Your Company has proposed to set up a Lignite Mine(13.5 MTPA)-cum-Power (2x800 MW) project at Jayamkondam in the State of Tamil Nadu, at an aggregate estimated cost of Rs.18184 crore. Ministry of Coal has accorded sanction of Rs.11.90 crore for the Advance Action Proposal (AAP) for taking up certain preliminary works related to this project. Administrative sanction of State Government for acquisition of the required extent of land has been sought and also for the mining lease and allocation of water from Kollidam river. Preparation of Feasibility Reports and the composite environmental report covering mine and power projects are under finalisation. Geological exploration, soil investigation, contour survey and pump test have been completed. Socio Impact Assessment Study as per the requirement of National Rehabilitation and Resettlement Plan (NRRP)- 2007 Notification is under progress. Approval forthe mine plan has been received.

Gujarat Power Project with linked Lignite Mine

Your Company has proposed to set up a Mine (8.0 MTPA)-cum- Power (1000 MW) Project in the State of Gujarat, at an aggregate estimated cost of Rs.6400 crore as a Joint Venture with Gujarat

Power Corporation Limited. Ministry of Coal has sanctioned Rs 6.20 crore for the Advance Action Proposal (AAP) for taking up certain preliminary activities. The request of Government of Gujarat for allocation of higher share of power has been referred to Ministry of Power. However, GoG has evinced interest to develop the lignite block on its own to generate power for the State and the issue has been referred to Ministry of Coal.

Coal based Thermal Power Plant at Orissa

A mega coal based Thermal Power Plant of capacity (4x500 MW) has been proposed to be set up in the State of Orissa at an estimated cost of Rs.10000 crore for which Ministry of Coal has accorded sanction for the Advance Action Proposal at an estimated cost of Rs. 18.65 crore for carrying out certain pre-project sanction activities. Allocation of land in Rengali Taluk has been requested with the State Government for setting up the power plant. Participation of Mahanadi Coalfields Limited (MCL) in the above project, as ajoint venture partneris also being contemplated. Mine-Ill and Thermal Power Station-Ill atNeyveli

Your Company is updating the feasibility report prepared earlier to analyse the techno-economical viability of Mine-Ill project of capacity 8.0 MTPA. On completion of the same, the feasibility report fortheThermalPowerStation-lll of capacity of 1000 MWwill be finalised.

New initiatives for Power Generation and Mining Power Project in Uttar Pradesh

Your Company has proposed to enter into a Joint Venture Agreement with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) for setting up a coal based power plant with a capacity of 2000 MW at an estimated cost of Rs. 10000 crore, in the State of Uttar Pradesh. Action has been initiated to sign an MoU with UPRVUNL and also to prepare FR & EIA/EMP reports. MOC has been requested to accord sanction for Advance Action Proposal for the proposed project to take up pre-project activities. Asuitable site in Kanpur Nagar district has been identified for setting up the power plant. Topographical survey of the site is proposed to be carried out by NT, Kanpur. Government of Uttar Pradesh has been requested to provide basic infrastructural facilities like land,waterfrom Yamuna river,supply of power and water for construction etc.

Joint Venture project in Orissa

A Joint Venture Company among Mahanadi Coalfields Limited (MCL), Hindalco and your Company with an equity participation of 70:15:15 respectively has been established for mining coal from Talabira II and III coal blocks. MCL, being the lead partner is carrying out all pre-project activities to establish a Mine of 20.0 MTPA capacity. Mine plan has been approved and land acquisition is in process. The share of coal mined from this block will be shared in the same ratio as equity andwill be utilised by your Company for power generation.

Devangudi Mine Project

Your Company has proposed to explore the possibility of developing the Devangudi mine project of capacity of 1.7 MTPA located in the Neyveli lignite field.

Ultra Mega Power Projects

To meet the growing demand for energy, Government of India (GOI) has planned for developing large size power projects called Ultra Mega Power Projects (UMPP), with a capacity of 4000 MW each in various States. Your Company is exploring the feasibility of taking part in UMPP at Cheyyur in the State of Tamil Nadu, as and when notified by GOI. Energy from other sources

Your Company as a part of diversification has also proposed to set up a 25 MW Solar Power Project. Other sources of energy viz.,hydel and nuclear power projects will also be considered by yourCompany depending upon theirviability

Development of Coal Blocks

Earlier your Company had planned to acquire coal blocks abroad by forming NLC Videsh, a Subsidiary Company, to meet its coal requirements for the new coal based power projects. MOC has advised yourCompany to consider having an arrangement with Coal India Limited (CIL) in the efforts towards acquisition of coal assets abroad and also to consider to associate CIL as a JVPartnerin this regard.

Your Company also intends to take up development of coal blocks allotted to State Government(s) and/or Private Companies either individually or jointly with State Governments and/or private Companies as a Public/Private Partnership project.

Power Project in Madhya Pradesh

Members may be aware that your Company had earlier planned to set up a power plant with a capacity of 1000 MW in the State of Madhya Pradesh, as a joint venture with Northern Coal Fields Limited, with 50:50 equity participation. Preliminary study indicated that the limited source of coal from Block-B might not be adequate for setting up a pithead power plant and in view of the same, further activities in connection with this project are not being taken upforthe present.

Power Tariff

In accordance with the Tariff Regulations 2004, which allows tariff revision twice during the tariff period (2004-09), the Central Electricity Regulatory Commission (CERC) has issued final tariff order during the year, revising the annual fixed charges on the additional capitalisation for the period 2007-09 in respect of all the powerstations of the Company.

During the last year, the Terms and Conditions of Tariff Regulations for the period 2009-14 was notified by CERC. The objective behind the new regulation is to encourage higher performance for which adequate incentives have been provided. While the operating norms have been made more stringent, the return on equity has been increased. Tariff petitions, as per the above Tariff Regulations 2009 in respect of all the existing power stations and the Barsingsar TPS for the period 2009-14 have been filed with the CERC and the hearing is in process.

Human Resource Development

Your Company believes that its growth is engineered by the growth of its people and the quality of its human resources. The total manpower of your company as on 31.03.2010 was 18,356 including 4,051 executives. Your Company continued its efforts in developing the human resources into a rebounding workforce so as to successfully meet challenges and achieve corporate excellence. To infuse young blood, 57 Graduate Executive Trainees were selected during the year through campusinterviews-an attempt madeforthefirsttimeinthehistory of yourCompany.

Training programmes were organised both in-house and through premier institutes in the country for more than 8000 nos. of employees. Under the "Workers Education Scheme" five programmes were conducted during the year under review.

Industrial Relation

Industrial relation scenario was generally peaceful and cordial during the year 2009-10. Your Company has a regular system of holding bi-partite meetings with the recognised unions regarding the issues of common interest of all employees. The new scheme of payment of Quarterly Plant Performance Reward (QPPR) & Productivity Linked Incentive (PLI) were implemented w.e.f. 01.01.2007. Executive pay revision with effect from 01.01.2007 has been implemented and Performance Related Pay for the year 2007-08 was paid during the year under review to executives, following the Department of Public Enterprises (DPE) Guidelines. MoU has been signed with the recognised unions for implementing wage revision for workmen and non-executives with effectfrom 01.01.2007.

Reservation of Posts

Your Company scrupulously follows the directives of the Government of India relating to reservation and welfare of the reserved categories such as Scheduled Caste / Scheduled Tribes, OBCs, Physically challenged, Ex-servicemen etc. Groupwise Men-in-Position and strength of SC/ST as on 31.03.2010 are as under:

Strength of SC/ST % of SC/ST Group Total Strength SC ST Total SC ST Toatl SC/ST SC/ST A 3,632 717 142 859 19.74 3.91 23.65 B 419 109 33 142 26.01 7.88 33.89

C 11,915 2,541 121 2,662 21.33 1.01 22.34

D 2,390 506 11 517 21.17 0.46 21.63

Total 18,356 3,873 307 4,180 21.10 1.67 22.77

Implementation of Official Language Policy

In order to fulfill the statutory provisions under the Official Language Act and also to follow the guidelines of Government of India with regard to implementation of official language, your Company has taken many proactive steps to ensure use of Hindi in official communication, besides offering incentives to employees for passing out prescribed Hindi exams. During the year your Company organised Hindi Fortnight and also Hindi workshops and for the purpose of effective use of Hindi by employees, Spoken Hindi books and Administrative Glossary (Hindi- English and English - Hindi) were distributed to them.

Environmental Measures

Your Company is an environmental friendly Company and accords highest priority for ecological balance and pollution control. Continuous air monitoring, effluent monitoring, mass afforestation programme year after year and implementation of pollution control measures reflect your Companys concern for protecting the nature. Neyveli Township including the mining area is a total green zone with more than 18 million trees which safeguards the ecological balance. Your

Companys concern for environment is also evidenced by its efforts to make the Neyveli Township,

a "Plastic Free Zone".

Safety

Your Company has a well defined safety and health policy which has been formulated in line with the recommendation of Fifth Safety Conference, Ministry of Coal and as per the statutory requirements. All the machinery/ equipment in the Power Stations and in Mines have been customised and automated and have also been incorporated with adequate safety features. Clear commitment at all levels for ensuring safety at work place and area wise responsibility has been fixed to ensure safe working environment. Works Committee, Plant Safety Committee/ Bi-partite/Tripartite Committee are functioning for taking up necessary preventive/corrective actions wherever required and also to create awareness among the employees on safety and health.

Emergency Preparedness Plan is in place in all Mines and Thermal Units to meet any contingencies that may arise.

Your Company has achieved Excellent level in the safety parameter in the MoU entered into with the Ministry of Coal for the past five years.

Vigilance

In consonance with the CVC guidelines preventive vigilance continued to be one of thrust areas of Vigilance Branch of your Company during the year. Circulars and guidelines of the Central Vigilance Commission were issued from time to time for further streamlining the rules, procedures etc. The Vigilance Awareness Week was celebrated during November 2009 and during the celebration the updated compendium of CVC circulars and annual report of the activities of the Vigilance Branch were released. More thrust is given fore-governance initiatives withaviewtofacilitategreatertransparencyin improvingthesystemsand procedures.

MoU with Transparency International

Your Company is one of the few institutions who have signed the Memorandum of Understanding with Transparency International - India. This body is the Indian Chapter of Berlin based Transparency International, a not-for-profit and non-government organisation committed to eradicate corruption in any form.

Township

Neyveli Township spreading over 50 Sq. Kms., has more than 21000 self-contained quarters with all allied facilities and total population of about 1,50,000 as of date. The facilities include schools, college, sophisticated general hospital, library, swimming pools, auditorium, stadium, community welfare centres, recreation clubs, reading rooms, parks, banks, shopping complex, Government agencies, etc. Your Company has installed a water treatment plant in the township to conserve the precious ground water. Your Company has also provided township facilities in Shakthi Nagar to the employees of Barsingsar Project.

Education

Your Company continues to provide quality education to the wards of employees and to the children from the neighbouring villages through 13 schools with good infrastructure and with grant-in-aid from the State Government. Training programmes such as "Counselling Techniques". "Total Quality Teaching", "Innovative Teaching Methods" are arranged for the benefit of the teachers of NLC Schools.

Medical Services

Your Company maintains a sophisticated 369 bedded General Hospital for providing quality medical treatment and occupational health services to the regular employees and contract workers, and their dependants apart from other inhabitants of Neyveli Township. During the year 2009-10, around 7.5 lakh out-patients and 14,947 in-patients were treated in the Hospital. Corporate Social Responsibility (CSR)

Your Company during the year has formally adopted CSR Policy for taking up various projects / activities surrounding the Companys project sites for the welfare of the society at large. It has been decided to earmark 1 % of the profit after tax as the budget for every year towards the CSR activities.

Even prior to formally adopting the CSR policy, your Company has been taking up various CSR related projects/activities for the benefit of inhabitants of neighbouring villages. Some of the initiatives taken earlierand continued during the year under review are asunder:

- Your Company patronises Neyveli Health Promotion and Social Welfare Society (NHPSWS) to support its social welfare activities. This society serves by way of providing training and arranging for job opportunities for the benefit of physically challenged persons, widows and destitutes within a larger ambit of Neyveli. This Society also runs a School "Shravanee" for hearing impaired, ComputerTraining Institute and provide artificial limbs, etc.

- Your Company is also extending all assistance including grant and infrastructure facilities in running the Sneha Opportunity School, a day- care centre for mentally disabled children. This school adopts a holistic approach towards providing individual attention to train children in different skills like arts, crafts, weaving, carpentry, gardening, screen printing, doll making etc., in order to make them self-reliant and fit for earning their livelihood.

- Your Company also provides quality medical treatment and occupational health service through its hospital to all inhabitants of the

Neyveli Township and its surrounding villages. More than one lakh rural population got medical assistance during the year 2009-10. An exclusive out-patient services unit is operated at the General Hospital wherein medical consultation services are offered free of cost to the general public. Medical treatment identity books have been issued to 10,200 eligible contract workmen for availing medical treatment for self and their family members including in-patient treatment, free of cost. A separate dispensary with adequate infrastructure has been opened in April 2009 for extending medical treatment to the contract workmen. Considering the requirements and need to provide medical care to the contract workers augmentation of further facilities in the General Hospital and building up of other infrastructure supportareunderprogress.

- Your Company hospital has taken up CSR health initiatives which involve immunisation programme, peripheral medical camps and community health screening to benefit the surrounding rural population. Ten medical camps were conducted during 2009-10 in peripheral villages viz., Matru Kudiiruppu, Kamaraj Nagar, Uyyakundaravi, Mandarakuppam, Kathazhai, Mettukuppam and Serakuppam, which are located within 15-20 kilometre radius of Neyveli Township. Major objective of the camps was to benefit rural people who had no access to health care and to screen them for ailments like diabetes, hyper-tension, dental problems, cervix cancer and breast cancer for further treatement at NLCGH.

- Two major community health-screening camps in the Annual Book Fair and Safety Week Celebrations were conducted in the year 2009-10 covering around 9,200 visitors who had volunteered screening for HIV, diabetes, hypertension, obesity etc.

- During the year Diabetic Retinopathy Screening Camp was conducted in association with Aravind Eye Hospital, Puducherry benefitting more than 750 persons. Your Company also continued with the medical support for the elderly people residing at Thamaraikulam village in Cuddalore District, maintained by the HelpAge India.

- As part of National Health Programme and also a CSR measure, the following programmes were undertaken during the year 2009-10:

- Anti mosquito control work was carried out effectively under National Malaria Eradication Programme in Neyveli.

- Pulse Polio Immunisation Programme was carried out successfully and 12,472 children were immunised in the surroundings of Neyveli.

- Under Filaria Control Programme medicine was issued to the entire population of Neyveli as a prophylactic measure with the helpof voluntary organisations.

- Your Company provides infrastructural support and also periodical financial grants to Jawahar Education Society which provides quality education not only to the wards of employees but also to the children of villages around Neyveli Township. Further, your Company also provides free school diaries, uniforms and footwear to the students of Elementary and Middle Schools, where themajorityoffhestudentpopulafion is from neighbouring villages.

- Your Company provides continuous supply of water to nearby villages for irrigating over 23,000 acres of land. Sinking of new bore well and maintenance of the existing bore wellsfor providing potable waterto more than 70 villages forms part of CSR activities.

- Construction of bridges, culverts and public toilets in nearby villages were also undertaken besides laying of roads and de-silting of lakes.

- Establishment of an Industrial Training Institute in Barsingsar village to impart technical skills in various trades to the population around the project site is also in process.

- During the year 23 CSR focused training programmes covering 7,871 students and 146 teachers from various schools on various themes such as examination skills, motivation, understanding adolescence, road safety, energy conservation etc., were conducted. 3,615 students were given in-plant training at various units and 1,868 students had undertaken project work in engineering, management, finance and other disciplines.

- In recognition of the past services, your Company is implementing schemes for reimbursement of medical expenses and also extends insurance cover for retired employees and their spouses under "Retirees Health Insurance Scheme". During the year the amount payable towards reimbursement of medical expenses to the retired employees was enhanced from Rs.3,500/- to Rs.6,000/, Family Relief and Death Relief Fund Schemes are also in operation for the benefit of eligible dependents of the employees who die in harness.

Contribution to the cause of Women

NLC Chapter of "Forum of Women in Public Sector" (WIPS) under the aegis of SCOPE is being patronised by your Company. Your Company provides all the requisite support to this Forum in organising various programme forthe growth and development of women.

Awards

- Your Company has been declared as the "Best Establishment of the Region" for the year 2008-09 by the Directorate General of Employment and Training, Ministry of Labour & Employment, Govt, of India.

- Your Company has bagged the "Shramik Shiksha Award" for imparting quality education to its workers. The award was instituted by Central Board of Workers Education (CBWE), Nagpurfunctioning underthe aegis of Ministry of Labourand Employment, Governmentof India.

- Your Company has also bagged the Dalai Street Investment Journal PSU Award, forthe year 2010under"PSUwith highest market capitalisation" category.

- During the year, "The longest accident free year for the State" was received from the Governmentof Tamilnaduforthecalendaryear2006.

- During the year, Quality Circles of the Company participated in the National Convention of Quality Circles organised by QCFI, Bengaluru Chapter and won meritorious and excellence awards.

Compliance under Persons with Disabilities Act, 1995

Your Company ensures compliance under the Persons with Disabilities Act, 1995. Suitable provisions/ modifications are made in the working place to meet the requirements of such persons with disability.

Compliance under the Right to Information Act, 2005

Your Company ensures compliance under the Right to Information Act, 2005. A Central Public Information Officer, Appellate Officer and Central Assistant Public Information Officers representing different functional area have been nominated to attend to the queries/appeals received underthe RTI Act in a time bound manner. During the year 2009-10, 227 nos. of requests containing more than 833 queries were received from the general public and all requests have been complied with. Citizens Charter

Your Company maintains Citizens Charter, indicating details of clients, customers under different heads, system of redressal of grievance available and nodal authorities for redressal of grievance.

The Citizens Charter is regularly updated.

Energy Conservation and Research & Development

The particulars required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 regarding the energy conservation measures, technology absorption and expenditure on R&D are furnished in Annexure-1.

Management Discussion & Analysis Report and Report on Corporate Governance

The Management Discussion & Analysis Report is furnished in Annexure-2. The report on Corporate Governance together with the Auditors Certificate on the compliance of Corporate Governance conditions stipulated by Clause-49 of the Listing Agreement are furnished in Annexure-3 and 4 respectively.

Auditors Cost Audit

S.Mahadevan & Co., Cost Accountants, have been appointed as the Cost Auditors for the year 2009-10 to carry out the cost audit for the three Power Stations of the Company. Statutory Audit Ganesan and Company, Chartered Accountants and L.U.Krishnan & Company, Chartered Accountants, were appointed by the Comptroller & Auditor General of India (C&AG), as Joint Statutory Auditors for the year 2009-10 under Section 619 (2) of the Companies Act, 1956. The Board of Directors of the Company has fixed Rs.9.0 lakh as the StatutoryAudit fees, to be shared equally by the Joint Auditors in addition to reimbursement of out of pocket expenses at actuals. Reply to Statutory Auditors observation on the accounts of the Company for the year ended 31st March, 2010 is furnished in Annexure-5.

C&AGs Comments

C&AGs Comments on the accounts for the year ended 31st March, 2010 are furnished in Annexure-6.

Directors Responsibility Statement as per Section 217(2AA)of the Companies Act, 1956

The Board of Directors declares:-

a. that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profitoftheCompanyforthat period;

c. that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the Directors had prepared the annual accounts on a going concern basis.

Board of Directors

Shri.J.N.Prasanna Kumar and Shri. V.Sethuraman, relinquished their office on 30.09.2009 and 31.03.2010 respectively on attaining their age of superannuation. Dr.M.S.Ananth, Part-time Non-official Director who was on the Board of Directors of the Company relinquished his office w.e.f. 31.10.2009 on completion of three year tenure. Dr. Rajiv Sharma, the then Additional Secretary, Ministry of Coal, Government of India and Shri M.F.Farooqui, the then Secretary to Government of Tamil Nadu, Industries Department, relinquished from the Board of Directors of the Company w.e.f. 31.07.2009 and 07.12.2009 respectively. Sarvashri Y.N. Apparao, Shashi Kumar, Dr. Krishna Kumar, Ravindra Sharma, P.K. Choudhury, Prof. S. Sadagopan and S. Rammohan, Part-time Non-official Directors relinquished their office w.e.f. 01.06.2010 on expiry of the tenure as perthe terms and conditions of their appointment. Sarvashri R.Kandasamy, K.Sekar, Alok Perti and Rajeev Ranjan were inducted into the Board of Directors of the Company during the year under review. Dr. Sanjay Govind Dhande has been inducted as a Part-time Non-official Director on the Board of the Company with effectfrom 26.06.2010.

The Board places on record its appreciation for the valuable contribution and guidance provided by Sarvashri J.N.Prasanna Kumar, V.Sethuraman, Dr.M.S.Ananth, Dr.Rajiv Sharma, M.F.Farooqui, Y.N. Apparao, Shashi Kumar, Dr. Krishna Kumar, Ravindra Sharma, P.K. Choudhury, Prof. S. Sadagopan and S. Rammohan, during their tenure as Directors of the Company. Shri B. Surender Mohan, Director, retires by rotation at the forthcoming Annual General Meeting and being eligible offers himself for re-election.

Particulars of Employees

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975- Nil.

Acknowledgement

The Board of Directors of your Company places on record its sincere appreciation for the continued support and guidance extended by Ministry of Coal, Ministry of Power, Ministry of Environment & Forest, Central Electricity Authority, Ministry of Industry, Ministry of Labour, Planning Commission, Central Electricity Regulatory Commission, State Electricity Boards and DISCOMsof Tamil Nadu,Andhra Pradesh, Karnataka, Kerala and Puducherry. The Board of Directors of your Company is pleased to acknowledge with gratitude the co-operation and continued support extended by the Government of Tamil Nadu and the Cuddalore District Administration. The support and co-operation by the Comptroller and Auditor General of India, the Statutory Auditors, Director General of Mine Safety, the Factory & Boiler Inspectorates, the Chief Inspector of Boilers and Factories, Central Pollution Control Board, State Pollution Control Board, Chief Controller of Explosives, Regional LabourCommissioner, Regional Provident Fund Commissioner, the Companys Bankers and KfW of Germany need special mention and the Directors acknowledge the same.

Your Directors also wish to place on record their appreciation for the dedicated work put-forth by the employees at all levels. The positive role played by the recognised Trade Unions and Associations of the Engineers and Officers in maintaining cordial industrial relations deserves special mention.

for and on behalf of the Board of Directors Place :Chennai A.R.ANSARI

Date : 22.07.2010 CHAIRMAN-CUM-MANAGING DIRECTOR

 
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