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Auditor Report of NTPC Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of NTPC Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s responsibility for the standalone financial statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016 and its profits and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

(a) Note No. 12 (i) & 35 (a) in respect of change in accounting of capital expenditure on assets not owned by the Company with retrospective effect taking guidance available in AS 10 notified by MCA on 30th March 2016 effective from the financial year 2016-17.

(b) Note No. 22 (a) & (b) regarding billing & recognition of sales on provisional basis and measurement of GCV of coal on ''as received'' basis after secondary crusher pending disposal of the matter by CERC/Hon''ble Delhi High Court and related matters as mentioned in said note;

(c) Note No. 33 in respect of a Company''s ongoing project where the order of NGT has been stayed by the Hon''ble Supreme Court of India and the matter is sub-judice.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Government of India in terms of sub-section (11) of Section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure 1 a statement on the matters specified in the paragraphs 3 and 4 of the said Order.

2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure 2 on the directions and sub-directions issued by The Comptroller and Auditor General of India.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) Being a Government Company, pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure 3.

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note 33, 34 & 52 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long-term contracts including derivative contracts.

iii. There has been no delay in transferring the amounts, required to be transferred, to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.

ANNEXURE 1 TO THE AUDITORS'' REPORT

Referred to in our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2016

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) There is a regular programme of physical verification of all fixed assets over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties are held in the name of the Company except as follows:

Description of Asset No. of Area in Gross Block as Net Block as on Remarks (If Any) cases acres on 31.03.2016 31.03.2016

Land The Company

- Freehold 2,016 10,735 2,210.91 2,210.91 is taking

- Leasehold 1,086 16,085 3,171.86 2,869.11 appropriate steps for completion of Building & Structures 2 - 50.43 17.27 legal formalities

(ii) The inventory has been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such physical verification.

(iii) The Company has not granted any loans, secured or unsecured to any companies, firms, limited liability partnership or other parties covered in register maintained under Section 189 of the Companies Act, 2013. In view of the above, the clauses 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable.

(iv) The Company has not granted any loans or given any guarantee and security covered under Section 185 and 186 of the Companies Act, 2013. In respect of investment in the Subsidiary and Joint Venture Companies, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.

(v) The Company has not accepted deposits from the public. As such, the directives issued by the Reserve Bank of India, the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable to the Company. The Company has obtained deposits from the dependants of employees who die or suffer permanent total disability for which the Company has applied to the Ministry of Corporate Affairs, Government of India for continuation of the exemption earlier obtained in respect of applicability of Section 58 A of the Companies Act, 1956, which is still awaited (refer Note 10 e) of the Financial Statements). No order has been passed with respect to Section 73 to 76, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(vii) (a) Undisputed statutory dues including provident fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2016 for a period of more than six months from the date they became payable. We have been informed that employees'' state insurance is not applicable to the Company.

(b) The disputed statutory dues aggregating to Rs. 891.02 crore that have not been deposited on account of matters pending before appropriate authorities are detailed below:

Sl. Name of Statute Nature of dues Forum where the dispute is pending Amount No (Rs. in crore)

1 Central Sales Tax and Sales Tax/ VAT Additional Commissioner of Sales Tax 9.13 Sales Tax / VAT Acts of various states

Commissioner of Sales Tax 41.39

Dy. Commissioner of Sales Tax 0.02

High Court* 823.34

Sales/Trade Tax Tribunal 3.05

Appellate Tribunal 4.24

2. Central Excise Act, 1944 Central Excise Duty / CESTAT & Appellate Tribunal of CEST 9.63 Service Tax

3. Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal 0.04

Asst. Commissioner of Income Tax 0.18

Total 891.02

* Includes Rs. 538.71 crore towards the demand for electricity duty raised by Dy. Commissioner, Commercial Tax which has been stayed by the Hon''ble High Court.

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(ix) The Company has not raised any money by way of initial public offer or further public offer. According to the information and explanations given to us, the money raised by the Company by way of debt instruments and term loans have been applied for the purpose for which they were obtained.

(x) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the Company and in accordance with generally accepted auditing practices in India, no case of frauds by the Company or any fraud on the company by its officers or employees has been noticed or reported during the year.

(xi) As per notification no. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 is not applicable to the Government Companies. Accordingly, provisions of clause 3 (xi) of the Order are not applicable to the Company.

(xii) The provisions of clause 3 (xii) of the Order, for Nidhi Company, are not applicable to the Company.

(xiii) The Company has complied with the provisions of Section 177 and 188 of the Companies Act, 2013 w.r.t. transactions with the related parties, wherever applicable. Details of the transactions with the related parties have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with the directors or persons connected with them as covered under Section 192 of the Companies Act, 2013.

(xvi) According to information and explanation given to us, the Company is not required to be registered u/s 45-IA of Reserve Bank of India Act, 1934. Accordingly, provision of clause 3(xvi) of the Order is not applicable to the Company.

For T R Chadha & Co LLP For PSD & Associates

Chartered Accountants Chartered Accountants

FRN- 006711N/N500028 FRN - 004501C

[CA. Neena Goel] [CA. Thalendra Sharma]

Partner Partner

M. No. 057986 M. No. 079236

For Sagar & Associates

Chartered Accountants

FRN - 003510S

[CA. V. Vidyasagar Babu]

Partner

M. No.027357

For Kalani & Co. For P. A. & Associates

Chartered Accountants Chartered Accountants

FRN - 000722C FRN - 313085E

[CA. Vikas Gupta] [CA. P. S. Panda]

Partner Partner

M. No. 077076 M. No.051092

For S. K. Kapoor & Co. For B.M. Chatrath & Co.

Chartered Accountants Chartered Accountants

FRN - 000745C FRN - 301011E

[CA. V. B. Singh] [CA. P. R. Paul]

Partner Partner

M.No.073124 M. No. 051675

Place : New Delhi

Dated : 30th May 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of NTPC Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's responsibility for the standalone financial statements

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.

The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2015;

(b) In the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

(a) Note no. 22 (b) in respect of accounting of sales on provisional basis;

(b) Note no. 34 in respect of a project where the matter is pending before the Hon'ble Supreme Court of India. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure 1 a statement on the matters specified in the paragraphs 3 and 4 of the said Order.

2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure 2 on the directions and sub-directions issued by Comptroller and Auditor General of India.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of written representations received from the directors as at 31st March 2015 and taken on record by the Board of Directors, none of the directors is disqualified from being appointed as a director in terms of Section 164(2) of the Act as on 31st March 2015.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. Refer Note 34, 35 & 52 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long-term contracts including derivative contracts.

iii. There has been no delay in transferring the amount to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under by the Company.

ANNEXURE 1 TO THE AUDITORS' REPORT

Annexure referred to in our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2015

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) There is a regular programme of physical verification of all fixed assets over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) (a) The inventory has been physically verified by the management at reasonable intervals.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification

(iii) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties covered in register maintained under Section 189 of the Companies Act, 2013.

In view of the above, the clauses 3 (iii)(a) and 3 (iii)(b) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventory & fixed assets and for sale of electricity, goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed thereunder with regard to the deposits accepted from the public except deposits obtained by the Company from the dependants of employees who die or suffer permanent total disability for which the Company has applied Ministry of Corporate Affairs, Government of India for continuation of the exemption earlier obtained in respect of applicability of Section 58 A of the Companies Act, 1956, which is still awaited (refer Note 10 d). No order has been passed with respect to Section 73 to 76, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal.

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(vii) (a) Undisputed statutory dues including provident fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2015 for a period of more than six months from the date they became payable. We have been informed that employees' state insurance is not applicable to the Company.

(b) The disputed statutory dues aggregating toRs. 288.77 crore that have not been deposited on account of matters pending before appropriate authorities are detailed below:

Sl. No Name of Statute Nature of dues Forum where the dispute is pending Rs. crore

1 Central Sales Tax and Sales Tax/VAT Sales Tax / VAT Additional Commissioner of Sales Taxes 6.69 Acts of various states

Commissioner of Sales Tax 14.12

High Court 231.40

Sales/Trade Tax Tribunal 20.74

Joint Commissioner (Appeal) Trade tax 1.16

Appellate Tribunal 0.13

2. Central Excise Act, 1944 Central Excise CESTAT & Appellate Tribunal of CEST 2.49 Duty/Service tax

3. Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal 11.61

Income Tax Officer 0.43

Total 288.77

(c) According to the information and explanations given to us, the Company has transferred the amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.

(viii) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(x) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xii) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the Company and in accordance with generally accepted auditing practices in India, we have been informed that no case of frauds has been committed on or by the Company during the year.

ANNEXURE 2 TO THE AUDITORS' REPORT

Annexure referred to in our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2015

Sl. No. Directions / Sub-Directions Action Taken Impact on financial statement

A. Directions

1 If the Company has been selected for disinvestment,a The Company has not been selected for Not applicable complete status report in terms of valuation of Assets disinvestment during the financial year 2014-15. (including intangible assets and land) and Liabilities (including Committed and General Reserves) may be examined including the mode and present stage of disinvestment process.

2 Please report whether there are any cases of waiver/ According to information and explanations given Nil write off of debts/loans/ interest etc., if yes, the to us, there are no cases of waiver/write off of reasons therefor and the amount involved. debts/loans/interest etc.

3 Whether proper records are maintained for Proper records are maintained for inventories Nil inventories lying with third parties & assets received lying with third parties and also for assets received as gift from Govt. or other authorities?. as gift from Government or other authorities.

4 A report on age-wise analysis of pending legal/ The Company has 4,126 pending legal/arbitration Nil arbitration cases including the reasons of pendency cases. The age-wise classification obtained from and existence/effectiveness of a monitoring the management is as under: mechanism for expenditure on all legal cases (foreign More than 3 years 2,803 and local) may be given. Two to three years 561

One to two years 378

Less than one year 384

These cases are pending for hearing /disposal at the respective forums. The Company has a system for monitoring expenditure on legal cases (foreign and local) which in our view is effective

B. Sub - Directions

1 Whether proper accounting / disclosure of the In accordance with the principles approved Nil disputed amount with Coal India Limited (CIL) and its by the Board of Directors of the Company, the Subsidiaries related to quality of coal has been made dispute with Coal India Limited (CIL) and its in the books of Accounts of NTPC Limited? Subsidiaries on account of Gross Calorific Value (GCV) has been settled as detailed in Note 32.

2 Whether NTPC has billed / recovered the amount paid The Company has billed the amount paid to CIL Nil to CIL and its subsidiaries on settlement of disputes and its subsidiaries on settlement of disputes relating to quality of coal from the beneficiaries and relating to quality of coal and the amount billed whether any beneficiary disputed such a claim? have been realized or in the process of realization. None of the beneficiaries have disputed the amount billed by the Company on this account.

For O. P. Bagla & Co. For PSD & Associates For PKF Sridhar & Santhanam LLP

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 000018N Firm Reg. No. 004501C Firm Reg. No. 003990S/ S200018

(Rakesh Kumar) (Prakash Sharma) (S. Narasimhan)

Partner Partner Partner

M No.087537 M No.072332 M No.206047

For V. Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A.R. & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C

(Ajay Gupta) (R.C. Agrawal) (Pawan K Goel)

Partner Partner Partner

M No. 090104 M No.070229 M.No.072209

Place : New Delhi

Dated : 29th May 2015


Mar 31, 2014

We have audited the accompanying financial statements of NTPC Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2014, and the Statement of profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash fl ows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014;

(b) In the case of the Statement of profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date. Emphasis of Matter

Without qualifying our report, we draw attention to Note No. 32 to the financial statement in respect of accounting of fuel on GCV based pricing system. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order 2004, ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013

(e) Being a Government Company, pursuant to the Notifi cation No. GSR 829(E) dated 21st October 2003 issued by Government of India, provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Company.

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2014 (i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verifi ed by the management during the year but there is a regular programme of verifi cation to cover all assets over two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifi cation.

(c) Substantial part of the fixed assets has not been disposed off during the year.

(ii) (a) The inventory has been physically verifi ed by the management at reasonable intervals.

(b) The procedures of physical verifi cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verifi cation.

(iii) (a) The Company has not granted any loans secured or unsecured to any companies, fi rms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

In view of the above, the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable.

(e) The Company has not taken any loans, secured or unsecured from companies, fi rms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

In view of the above, the clauses 4(iii) (f) and 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of electricity, goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) (a) According to the information and explanations given to us, during the year under audit there have been no contracts or arrangements which need to be entered in the register maintained under section 301 of the Companies Act, 1956.

In view of the above, the clause 4(v)(b) of the Order is not applicable.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by

the Reserve Bank of India, the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed with respect to Section 58A and 58AA, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of business.

(viii) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2014 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating to Rs. 175.27 crore that have not been deposited on account of matters pending before appropriate authorities are detailed below:

Sl. No. Name of Statute Nature of dues Forum where the dispute is pending Rs. Crore

1. Central Sales Tax and Sales Tax/VAT Acts of Sales Tax/VAT Additional Commis -sioner of Sales Taxes 40.66 Various States

Commissioner of Sales Tax 13.61

Dy. commissioner of Sales/ Commercial Taxes 5.34

High Court 96.42

Sales Tax Tribunal 3.89

Joint Commissioner (Appeal) Trade tax 1.11

2. Central Excise Act, 1944 Central Excise Duty/ CESTAT 2.12 Service tax

3. Income Tax Act, 1961 Income Tax Commissioner of Income Tax 0.03

Income Tax Appellate Tribunal/CIT 11.66

Income Tax Officer 0.43

Total 175.27

(x) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fi nancial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us, Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of the Bonds issued by the Company during the year, except those disclosed in Note 5 of the financial statements.

(xx) According to the information and explanations given to us, the Company has disclosed the end use of money raised by public issue of tax free bonds during the year in Note 5 d) of the financial statements and the same has been verifi ed by us.

(xxi) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the company and in accordance with generally accepted auditing practices in India, we have been informed that one case of frauds involving an aggregate amount of Rs. 0.01 crore towards non deposit of hospital receipts by an employee of the Company has been committed on the Company during the year. The Company has taken appropriate action against the employee and the matters are under investigation.

For O. P. Bagla & Co. For K. K. Soni & Co. For PKF Sridhar & Santhanam

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 000018N Firm Reg. No. 000947N Firm Reg. No. 003990S

(Rakesh Kumar) (S.S. Soni) (V. Kothandaraman)

Partner Partner Partner

M. No. 087537 M No.094227 M. No.025973

For V. Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A. R. & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C

(M. S. Balachandran) ( Manoj Agrawal) (Prabuddha Gupta)

Partner Partner Partner

M No. 024282 M. No.076918 M. No.400189

Place : New Delhi Dated : 15th May 2014


Mar 31, 2013

We have audited the accompanying financial statements of NTPC Limited ("the Company"), which comprise the Balance Sheet as at 31st March 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements responsibility for the financial statements

Management is responsible for the preparation of these financial statements that give a true and fair view ofthe financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fairview and are free from material misstatement, whether due to fraud or error.

Auditors responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation ofthe financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fairview in conformitywith the accounting principles generally accepted in India:

(a) In the case ofthe Balance Sheet, ofthe state of affairs ofthe Companyas at31st March, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date,-and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our report, we draw attention to Note No. 33 to the financial statement in respect of accounting of fuel on GCV based pricing system. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 as amended bythe Companies (Auditors Report) (Amendment) Order 2004, ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of ouraudit;

(b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 ofthe Companies Act, 1956;

(e) Being a Government Company, pursuant to the Notification No. GSR 829(E) dated 21st October 2003 issued by Government of India, provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Company.

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2013.

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets

(b) All the assets have not been physically verified bythe management during the year but there is a regular programme of verification to cover all assets over two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Substantial part of the fixed assets has not been disposed off during the year.

(ii) (a) The inventory has been physically verified bythe management at reasonable intervals.

(b) The procedures of physical verification of inventory followed bythe management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loans secured or unsecured to any companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

In view of the above, the clauses 4(iiiXb), 4(iiiXc) and 4(iiiXd) of the Order are not applicable.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

In view of the above, the clauses 4(iii) (f) and 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of electricity, goods and services. During the course of ouraudit, we have not observed anycontinuing failure to correct major weaknesses in internal control systems.

(v) (a) According to the information and explanations given to us, during the year under audit there have been no contracts or arrangements which need to be entered in the register maintained undersection 301 ofthe CompaniesAct, 1956.

In view of the above, the clause 4(v)(b) of the Order is not applicable.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed with respect to Section 58A and 58AA, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of business.

(viii) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding ason31st March 2013 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating to Rs. 134.43 crore that have not been deposited on account of matters pending before appropriate authorities are detailed below:

SI. No. Name of Statute Nature ofdues

1 Central Sales Tax and Sales Tax/VAT Acts of Sales Tax/VAT Various States

2. Central ExciseAct, 1944 Central Excise Duty/ Service tax

3. Income Tax Act,1961 Income Tax

Name of Statute Forum where the dispute is pending Rs. Crore

Central Sales Tax and Sales Tax/VAT Acts of Various States Additional Commissioner of Sales Taxes 21.06

Commissioner of Sales Tax 21.32

Dy. commissioner of Sales/ Commercial Taxes 0.20

High Court 80.50

Sales Tax Tribunal 3.88

Joint Commissioner (Appeal) Trade tax 1.13

Central Excise Act 1944 CESTAT 1.89

Income Tax Act 1961 Commissioner of Income Tax 1.28

Income Tax Appellate Tribunal/CIT 0.08

Allahabad High Court 2.55

Asst. Commissioner 0.03

Income Tax Officer 0.51

Total 134.43

(x) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us, Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According tothe information and explanationsgiven to us, theterm loans have been applied forthe purpose forwhich theywere obtained.

(xvii) According tothe information and explanations given to us and on an overall examination ofthe balance sheet ofthe Company, we report that no funds raised on short-term basis have been used for long-term investments.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of the Bonds issued by the Company during the year, except those disclosed in Note 5 of the financial statements.

(xx) According to the information and explanations given to us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the company and in accordance with generally accepted auditing practices in India, we have been informed that 2 cases of frauds involving an aggregate amount of Rs.0.01 crore towards fraudulent claim/non deposit of rent by the Contractor have been committed on the Company during the year. The Company has taken appropriate action against the employee/contractor and the matters are under investigation.

For O.P.Bagla & Co. For K.K.Soni & Co. For PKF Sridhar & Santhanam

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg.No.000018N Firm Reg.No.000947N Firm Reg.No.003990S

(Rakesh Kumar) (S.S. Soni) (V.Kothandaraman)

Partner Partner Partner

M No.087537 M No.094227 M No.025973

For V.Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A.R. & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg.No.109208W Firm Reg.No.001770C Firm Reg.No.002744C

(M. S. Balachandran) (Monika Agrawal) (Anil Gaur)

Partner Partner Partner

M No. 024282 M No. 093769 M No.017546

Place : New Delhi

Dated : 10th May 2013


Mar 31, 2012

1. We have audited the accompanying financial statements of NTPC LIMITED (the Company) which comprises the Balance Sheet as at 31st March 2012, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and the significant accounting policies and other explanatory information. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order 2004, issued by the Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in annexure referred to in para 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The balance sheet, statement of profit and loss and cash fl ow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the balance sheet, statement of profit and loss and cash fl ow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) Being a Government Company, pursuant to the Notification no. GSR 829(E) dated 21.10.2003 issued by Government of India, provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956, are not applicable to the Company;

f) Without qualifying our report, we draw attention to note no. 22 a) and 22 b) in respect of accounting of sales on provisional basis pending determination of tariff by the Central Electricity Regulatory Commission;

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with the signifi cant accounting policies and the explanatory notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of balance sheet, of the state of affairs of the Company as at 31st March 2012,

b. in the case of statement of profit and loss, of the profit for the year ended on that date, and

c. in the case of cash fl ow statement, of the cash fl ows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in paragraph (3) of our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2012

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verifi ed by the management during the year but there is a regular programme of verifi cation to cover all assets over two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifi cation.

(c) Substantial part of the fixed assets has not been disposed off during the year.

(ii) (a) The inventory has been physically verifi ed by the management at reasonable intervals.

(b) The procedures of physical verifi cation of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on such verifi cation.

(iii) (a) The Company has not granted any loans secured or unsecured to any companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956.

In view of clause 4(iii)(a) above, the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Order are not applicable. (e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in register maintained under Section 301 of the Companies Act, 1956. In view of 4(iii) (e) above, the clauses 4(iii) (f) and 4(iii) (g) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of electricity, goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems.

(v) (a) According to the information and explanations given to us, during the year under audit there have been no contracts or arrangements which need to be entered in the register maintained under section 301 of the Companies Act, 1956. In view of clause 4(v) (a) above, the clause 4(v) (b) of the Order is not applicable.

(vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed with respect to Section 58A and 58AA, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of business.

(viii) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2012 for a period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating to Rs. 164.77 crore that have not been deposited on account of matters pending before appropriate authorities are detailed below:

Rs. crore

Sl. No. Name of Statute Nature of dues Forum where the dispute is pending Amount

1 Central Sales Tax and Sales Tax/ Sales Tax/VAT Additional Commiss ioner of Sales Taxes 26.53 VAT Acts of Various States Commissioner of Sales Tax 6.46

Dy. commissioner of Sales/ Commercial Taxes 15.92

High Court 83.51

Sales Tax Tribunal 1.81

Joint Commissioner (Appeal) Trade tax 2.05

2 Water (Preve ntion & Control Water/ Pollution Cess Appellate Authority, Pollution Control Board 0.41 of Pollution) Cess Act, 1977 3. Central Excise Act, 1944 Central Excise Duty/Service tax CESTAT 1.61

4. Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal/CIT 1.63

Allahabad High Court 24.11

Asst. Commissioner 0.73

Total 164.77

(x) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fi nancial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us, Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investments.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of the Bonds issued by the Company during the year.

(xx) According to the information and explanations given to us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the company and in accordance with generally accepted auditing practices in India, we have been informed that 3 cases of frauds involving an aggregate amount of Rs. 1.08 crore towards misappropriation of funds by the employees have been committed on the company during the year. The Company has taken appropriate action against these employees and the matters are under investigation.

For O. P. Bagla & Co. For K.K.Soni & Co. For PKF Sridhar & Santhanam

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 000018N Firm Reg. No. 000947N Firm Reg. No. 003990S

(Rakesh Kumar) (S.S. Soni) (S. Narasimhan)

Partner Partner Partner

M No .087537 M No.094227 M No.206047

For V. Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A.R. & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C

(R. Raghuraman) (R.C. Agrawal) (Prabuddha Gupta)

Partner Partner Partner

M No. 081350 M No.070229 M.No.400189

Place : New Delhi

Dated : 10th May 2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of NTPC LIMITED as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These fi nancial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signifi cant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specifi ed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in annexure referred to in para 3 above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) Being a Government company, pursuant to the Notifi cation no. GSR 829(E) dated 21.10.2003 issued by Government of India, provisions of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, are not applicable to the company;

f) We draw attention to Schedule 26 - Notes on Accounts:

i) Note no. 2 (a) and (b) in respect of accounting of sales on provisional basis pending determination of tariff by the Central Electricity Regulatory Commission;

ii) Note no. 2 (e) in respect of accounting of sales of Rs.10,443 million in earlier years (reduced to Rs.10,256 million in the current year) based on the order of the Appellate Tribunal for Electricity in favour of the Company pending disposal of the appeal before the Honble Supreme Court of India.

g) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon in Schedule 26, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. in the case of Balance Sheet, of the state of affairs of the company as at 31st March 2010,

b. in the case of Profit and Loss Account, of the Profit for the year ended on that date, and

c. in the case of Cash Flow Statement, of the cash fl ows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Statement referred to in paragraph (3) of our report of even date to the members of NTPC LIMITED on the accounts for the year ended 31st March 2010

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verifi ed by the management during the year but there is a regular programme of verifi cation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verifi cation.

(c) Substantial part of the fixed assets has not been disposed off during the year.

(ii) (a) The inventory has been physically verifi ed by the management at reasonable intervals.

(b) The procedures of physical verifi cation of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verifi cation of inventories, wherever material, have been properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans secured or unsecured to any Company, fi rm or other parties covered in register maintained under section 301 of the Companies Act, 1956.

In view of clause (iii)(a) above, the clauses (iii)(b), (iii)(c) and (iii)(d) are not applicable. (e) The Company has not taken any loans, secured or unsecured from companies, fi rms or other parties covered in register maintained under section 301 of the Companies Act, 1956.

In view of (iii) (e) above, the clauses (iii) (f) and (iii) (g) are not applicable. (iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of inventory and fixed assets and for sale of electricity, goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control systems. (v) (a) According to the information and explanations given to us, during the year under audit there have been no contracts or arrangements which need to be entered in the register maintained under section 301 of the Companies Act, 1956. In view of clause (v) (a) above, the clause (v) (b) is not applicable. (vi) In our opinion and according to the information and explanations given to us, the Company has complied with the directives issued by the Reserve Bank of India, the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal. (vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of business.

(viii) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues have generally been regularly deposited with the appropriate authorities within a period of six months from the date they became payable which has since been deposited with the appropriate authorities. (b) The disputed statutory dues aggregating to Rs.1,732 million that have not been deposited on account of matters pending before appropriate authorities are detailed below:

Sl. No. Name of Statute Nature of dues Forum where the dispute is pending Rs./million

1 Central Sales Tax and Sales Tax/VAT Sales Tax/VAT Additional Commissioner of Sales Taxes 171 Acts of Various States Commissioner of Sales Tax 65 Dy. commissioner of Sales/ Commercial Taxes 118 High Court 721

Sales Tax Tribunal 129

Joint Commissioner (Appeal) Trade tax 30

2 Water (Prevention & Control of Water/Pollution Cess Appellate Authority, Pollution Control Board 13 Pollution) Cess Act, 1977

3. Indian Stamp Act, 1899 Land Tax Appellate Authority - Board of Revenue 14

4. Central Excise Act, 1944 Central Excise Duty CESTAT 3

5. Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal/CIT 103 Allahabad High Court 142

Asst. Commissioner 116

6. Bihar Electricity Duty Act, 1948 Electricity Duty Patna, High Court 107

Total 1,732

(x) The Company has no accumulated losses and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to fi nancial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us, Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/mutual benefi t fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares during the year.

(xix) According to the information and explanations given to us, the Company has created security or charge in respect of the Bonds issued by the Company during the year except in respect of certain bonds raised in March 2010 for which security creation is in process.

(xx) According to the information and explanations given to us, the Company has not raised any money by public issue during the year.

(xxi) According to the information and explanations given to us, two cases of fraud involving an aggregate amount of Rs.1 million towards missing goods and one case of suspected fraud amounting Rs.5 million have been committed on the Company during the year, which are under investigation. Further, by the Company, no frauds have been reported.

For Dass Gupta & Associates For S. K. Mittal & Co. For Varma and Varma

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No.000112N Firm Reg. No.001135N Firm Reg. No.004532S

[ Naresh Kumar ] [ Krishan Sarup ] [ Cherian K. Baby]

Partner Partner Partner

M. No. 82069 M. No. 010633 M. No. 16043

For Parakh & Co. For B.C. Jain & Co. For S. K. Mehta & Co.

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No.01475C Firm Reg. No.001099C Firm Reg. No.000478N

[V. D. Mantri ] [ Ranjeet Singh ] [ Rohit Mehta ]

Partner Partner Partner

M. No. 74678 M. No. 73488 M. No.91382

Place: New Delhi Date: 17th May 2010


Mar 31, 2000

We have audited the attached Balance Sheet of NATIONAL THERMAL POWER CORPORATION LIMITED as at 31st March 2000 and the Profit and Loss Account of the Company for the year ended on that date, annexed hereto.

We report as follows:

1. As the Company is governed by the Electricity (Supply) Act, 1948, the provisions of the said Act read with the rules thereunder have prevailed wherever the same have been inconsistent with the provisions of the Companies Act, 1956.

2. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph 2 above, we report that:

3.1 Balances shown under advances, debtors, creditors and material-in-transit/under inspection/lying with contractors/fabricators and material issued on loan are pending due to confirmation/reconciliation and consequential adjustments, if any (Refer Note No. 3(a) - Schedule 18).

3.2 No provision has been made for sales tax on works contracts and on materials issued to contractors on account of appeals pending with various authorities (Refer note 4 of Schedule 18).

3.3 The net profit for the year is lower by Rs. 37803.98 lakh due to provision for tariff adjustment as stated in Note no. 6 (a) of Schedule 18.

4. We further report that for the items mentioned at paragraph 3.1 & 3.2 above the impact could not be determined and for the item at paragraph 3.3 above as the Company has made the provision for tariff adjustment amounting to Rs. 37803.98 lakh, the profit for the year and reserves & surplus as at the year end reported at Rs. 363087.54 lakh and Rs. 1509785.30 lakh respectively would have been higher by the said amount to Rs. 400891.52 lakh and Rs. 1547589.28 lakh respectively

5. Attention is invited to Note no. 13 in Schedule 18, regarding changes in certain accounting policies resulting in further lowering of profit for the year by Rs. 24766.16 lakh.

6. Further to above:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) in our opinion proper books of account, as required by law, have been kept by the Company so far as appears from our examination of those books;

c) the Balance sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account;

d) in our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

Subject to our observations referred above and their consequential effect on accounts, in our opinion, and according to the best of our information and according to the explanations given to us, the said accounts read with Accounting Policies and notes thereon in Schedule 18, in so far as these are not inconsistent with Electricity (Supply) Act, 1948, give the information required by the Companies Act, 1956 in the manner so required to give a true and fair view:

a) in the case of Balance sheet, of the state of affairs of the Company as at 31st March 2000

and

b) in the case of Profit and Loss Account, of the profit for the year ended on that date.

1. The Company has generally maintained proper records showing full particulars including quantitative details and situation/location of fixed assets except in some cases where the records are in the process of reconciliation. The management has generally carried out physical verification of a portion of the fixed assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and no material discrepancies were noticed to the extent verification was made during the year.

2. None of the fixed assets has been revalued during the year.

3. Physical verification of inventories has been conducted by the, management at reasonable intervals.

4. According to the information and explanations given to us, in our opinion, the procedures of physical verification of inventories followed by the management are reasonable and generally adequate in relation to (he size of the Company and the nature of its business, except that the extent of its coverage needs to be increased in some of the units.

5. The discrepancies noticed on physical verification of inventories, wherever material, have been properly dealt with in the books of account, except in a few cases, where reconciliation of book balances with physical inventory is in progress. The stores lying with contractors are subject to reconcih^on/confirrnation.

6. hi our opinion, the valuation of inventories and construction stores is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

7. As informed to us, the Company has not taken loans from companies, firms or other parties, listed in register maintained under Section 301 of the Companies Act, 1956 and companies under the same management as defined under sub - section (IB) of Section 370 of the Companies Act, 1956.

8. As informed to us, the Company has not granted any loans, secured or unsecured to companies, firm or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and companies under the same management as defined under sub - section (IB) of Section 370 of the Companies Act, 1956.

9. Loans and Advances in the nature of loans have been given to staff, Employees Consumers Cooperative Stores and other parties. Repayment of the principal amount and payment of interest wherever applicable have generally been received.

10. In our opinion and according to the information and explanations given to us and having regard to the explanations that some of the items purchased are of proprietary nature for which suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of stores, plant and machinery, equipment and other assets and sale of energy.

11. The purchases of goods and materials and sale of services made in pursuance of contracts or arrangements with parries listed in the register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to Rs.50,000/- or more in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices for such goods, materials or services.

12. According to the information and explanations given to us, the Company has a system of determining unserviceable and damaged stores and the same are written off and accounted for in the books as and when any stores and spares are found damaged and/or unserviceable.

13. The Company has accepted deposits from public and the provisions of Section 58A of the Companies Act, 1956 and the rules made thereunder have been complied with.

14. In our opinion, reasonable records have been maintained by the Company for sale and disposal of scrap. The Company has no by-product.

15. The Company has an Internal Audit System, which in our opinion is commensurate with the size of die Company and nature of its business. However, the compliance and implementation mechanism of which needs to be strengthened.

16. Maintenance of cost records has not been prescribed by the Central Government under Section 209(l)(d) of the Companies Act, 1956.

17. The Company has been regular in depositing Provident Fund dues with appropriate authorities. The provisions of the Employees State Insurance Act, 1948 are not applicable to the Company.

18. According to die information and explanations given to us, there were no undisputed amounts payable in respect of Income tax, Wealth tax, Sales tax, Custom duty and Excise duty outstanding as at the last day of the financial year for a period, of more than six months from the date they become payable.

19. According to the information and explanations given to us, no personal expenses have been charged to revenue account, other than those payable under contractual obligations or in accordance with generally accepted business practice.

20. The Company is not a sick industrial company within the meaning of clause (o) of sub - section (1) of Section 3 of Sick Industrial Companies ( Special Provisions) Act, 1985.

21. In regard to the Companys activities relating to consultancy, project management and supervision, we report that:

a) the Company has a reasonable system of allocation of man hours consumed on the respective activities;

b) the Company has a reasonable system of authorisation at proper level and adequate system of internal control on allocation of man hours commensurate with the size of the Company and the nature of its business; and

c) there were no consumption of stores and materials in relation to such activities.

For K.K. Soni & Co. For S.K. Mittal & Co.

For Lakshminiwas & Jain For Vandhaman & Co.

Chartered Accountants Chartered Accountants

(Laxminivas Sharma) Abha Jain

For B.C.Jain & Co. For Kishore & Kishore

Place : New Delhi Dated : 28th July, 2000

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