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Directors Report of NTPC Ltd.

Mar 31, 2016

Dear Members,

The Directors are pleased to present the 40th Annual Report on the business and operations of the Company along with audited financial statements for the year ended March 31, 2016.

Financial Year 2015-16 has been yet another year of achievements for your Company. With the addition of 2,255 MW capacity (including 445 MW through Subsidiary Companies) during the year, total installed capacity of your Company (including subsidiaries & JVs) as on 31.03.2016 was 46,653 MW.

With the commissioning of Anantpur Solar PV unit of 250 MW and takeover of Patratu Thermal Power Plant of 325 MW after 31.03.2016, capacity of your Company has become 47,228 MW as on 31.07.2016.

Major highlights for the year 2015-16 are:

- Power projects of 2,255 MW were commissioned.

- Declared 1,960 MW Power Projects on commercial generation.

- PLF of 78.61% as against all India PLF of 62.29% with three NTPC stations recording more than 90% PLF and 11 stations (including JV) in top 25 stations of the country.

- Excellent MOU rating by Government of India for the year 2014-15.

- Capital expenditure (CAPEX) for the year 2015-16 was Rs. 25,959.60 crore (Stand-alone) as against the MoU target of Rs. 23,000.00 crore. Achieved Group Capex of Rs. 32,090.89 crore during FY 2015-16 against Rs. 28,289.56 crore during FY 2014-15.

- 100% realization of current bills from customers.

- Revenue from operations (Net) was Rs. 70,506.80 crore and total revenue was Rs. 71,696.07 crore.Net Profit after Tax (PAT) wasRs. 10,242.91 crore.

- Dividend of Rs. 3.35 per share comprising interim dividend of Rs. 1.60 per equity share paid in February 2016 and recommended final dividend of Rs. 1.75 per equity share for the year 2015-16, subject to approval of the shareholders.

- Cash contribution of Rs. 4,113.30 crore to Government of India''s exchequer through dividend, dividend tax, income tax and wealth tax in the financial year 2015-16.

- Market capitalization of Rs. 1,06,242.81 crore as on 31.03.2016.

- Construction of about 29,000 toilets in schools under Swachh Bharat- Swachh Vidyalaya Abhiyan.

- Planted approx. 5.25 lac trees during 2015-16 to mitigate the GHG emissions arising out of plant operations, thereby bringing total to about 2.3 crore planted trees till end of 31.03.2016.

- About 8 crore bricks produced by fly ash brick plants of NTPC stations, which are being utilised in plant and township.

- Honoured with ASSOCHAM 1st Corporate Governance Excellence Award in listed PSUs category for the year 2014- 15.

- Ranked No. 2 Independent Power Producer and Energy Trader Globally in the Platts Top 250 Global Energy Company Rankings 2015.

- Adjudged 4th among the Asian electric utilities in 2016 rankings as per Forbes Global 2000.

- Honoured with Dun & Bradstreet Corporate Awards 2016 for best performing Company in India in Power Sector.

- For the year 2016, NTPC has been adjudged as the Best Company to work in the Public Sector Category in a study carried out by Great Place to Work and the Economic Times.

- Bagged Golden Peacock Award for Excellence in Training from Institute of Directors for the year 2016.

You will appreciate the fact that the company recorded growth and excellent performance despite numerous challenge before the sector.

1. FINANCIAL RESULTS (STAND ALONE)

2015-16 2014-15 Particulars Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Revenue

Net Revenue from Operations (including Energy Sales, Consultancy, 70,506.80 10,539.13 73,236.94 10,947.23 Energy consumed internally)

Other income 1,189.27 177.77 2,100.42 313.96

Total Revenue 71,696.07 10,716.90 75,337.36 11,261.19

Expenses

Fuel 43,793.25 6,546.08 48,833.57 7,299.49

Employee benefits expense 3,609.32 539.51 3,620.71 541.21

Finance costs 3,230.36 482.86 2,743.62 410.11

Depreciation and amortization expense 5,425.32 810.96 4,911.65 734.18

Generation, administration & other expenses 5,787.39 865.08 4,911.28 734.12

Prior period items (net) (196.15) (29.32) (333.83) (49.90)

Total expenses 61,649.49 9,215.17 64,687.00 9,669.21

Profit before tax and rate regulated activities 10,046.58 1,501.73 10,650.36 1,591.98

Add: Regulatory Income/ (Expenses) 12.09 1.81 (103.71) (15.50)

Profit before tax 10,058.67 1,503.54 10,546.65 1,576.48

Tax expense (184.24) (27.54) 255.79 38.23

Profit for the year 10,242.91 1,531.08 10,290.86 1,538.25

Appropriations: 2015-16 2014-15

Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Transfer to bonds/ debentures redemption reserve 1,284.13 191.95 1,156.19 172.82

Transfer to general reserve 6,000.00 896.86 7,000.00 1,046.34

Transfer to CSR reserve - - 78.30 11.70

Transfer to capital reserve 0.11 0.02 0.12 0.02

Interim dividend 1,319.28 197.20 618.42 92.44

Proposed dividend 1,442.96 215.69 1,442.96 215.69

Tax on dividend 558.25 83.45 417.40 62.39

*1US $= Rs. 66.90 as on March 31, 2016

2.

2.1 OFFER FOR SALE BY THE GOVERNMENT OF INDIA TO THE PUBLIC

Offer for Sale of 5% Equity Share Capital of the Company by the Government of India was made in terms of CCEA''s approval in May 2015. The offer was opened on 23.02.2016 for non-retail investors and on 24.02.2016 for retail investors. Non-retail investors were allowed to place their bids for 80% of unreserved portion and retail investors had reserved portion of 20%. The indicative price was Rs. 122.22 per equity share which was above the floor price (Rs. 122 per equity share) and cut-off price was Rs. 122.05.

Consequent upon sale of 41,22,73,220 shares by Government of India, the equity holding of GOI in NTPC was reduced to 69.96% of the paid-up capital from 74.96%. An amount of Rs. 5,014.55 crore exclusive of STT was garnered through Offer for Sale by the Government of India.

2.2 OFFER FOR SALE BY THE GOVERNMENT OF INDIA TO THE EMPLOYEES

A total of 2,06,13,661 shares were offered to employees, being 5% of stake sold by the Government of India in February 2016. These shares were offered to the employees at Rs. 115.90 per equity share i.e. at 5% discount to OFS price.

10,826 employees participated in the offer and applied for 1,75,82,590 shares being 85.3% of the shares offered under Employee OFS. An amount of Rs. 203.78 crore was garnered through Offer for Sale for Employees by the Government of India.

With the above Offer for Sale to Employees, the holding of Government of India has further reduced to 69.74 %.

3. DIVIDEND

3.1 Interim and Final Dividend:

Your company paid interim dividend of Rs.1.60 per equity share in February 2016 and the Board of your Company have recommended a final dividend of Rs.1.75 per equity share for the year 2015-16. With this, the total dividend for the year is Rs.3.35 per equity share of Rs.10/- each. In the year 2014-15, the total dividend paid was Rs.2.50 per equity share of Rs.10/- each.

The dividend payout is 26.97% and the total dividend payout including dividend tax is 32.42% of profit after tax. The final dividend shall be paid after your approval at the Annual General Meeting.

The dividend has been recommended in accordance with your Company''s policy of balancing dividend pay-out with the requirement of deployment of internal accruals for its growth plans.

4. OPERATIONAL PERFORMANCE

During the year, the power stations of your Company generated 241.98 BUs (263.42 BUs including JVs& Subsidiaries) of electricity (including solar and hydro power) which was 21.95% (23.90% including generation by JVs) of the total power generated in India (without Bhutan import) registering an increase of 0.30% (1.09% including JVs & Subsidiaries) over the previous years'' generation of 241.26 BUs. Generation contributed by hydro stations was 2.308 BUs.

The total generation contributed by coal stations is 230.64 BUs during the year against generation of 229.55 BUs last year registering a growth of 0.5%. Generation from coal based units could have been still higher but due to less generation schedule there was opportunity loss of 37.76 BUs. The coal based stations operated at average Plant Load Factor (PLF) of 78.61% (All India PLF 62.29%) and average Availability Factor of 88.06% on bus bar during the year. The generation loss on account of coal shortage was brought down to 0.18 BUs in the current year from 8.895 BUs in FY 2014-15.

During the year, 3 coal based stations out of 17 (commercial Stations) achieved more than 90% PLF and ranked as the Top 3 stations in the country. 11 stations (including JV) of your Company are in top 25 stations in the country.

The gas stations having a capacity of 4,017 MW achieved annual generation of 8.870 BUs at a PLF of 25.14% as against 11.588 BUs last year mainly due to less generation schedule which accounted for an opportunity loss of 25.529 BUs. The declared capacity of gas based stations for the year was 97.30% as compared to 92.18% during previous year.

5. COMMERCIAL PERFORMANCE

5.1 Billing and Realisation

Your Company has realized 100% of its current bills raised for energy supplied in 2015-16, thus achieving this feat for the 13th consecutive year.

Most of the customers were making their payments within 60 days of billing and had availed rebates as per Company''s Rebate Scheme. Beneficiaries have established and are maintaining Letter of Credits (LCs) at 105% of the average monthly billing.

Apart from LCs, payment of dues is secured by Tri- partite Agreements (TPAs) signed amongst the State Governments, Government of India and Reserve Bank of India. In terms of TPAs, any default in payment by the Discoms of a State can be recovered directly from the account of respective State Governments with RBI. The TPAs are valid upto 31.10.2016. Most of the States have agreed for extension of existing TPA, RBI has also given its no objection for the same. Extension of TPA is under consideration by the Ministry of Power.

5.2 Rebate Scheme for realization of dues:

In order to encourage early and full realization of dues, your Company has revamped ''Rebate Scheme'' for the year 2016-17. In the Scheme for 2016-17, 2% rebate shall be allowed for amounts credited to the account of Company for any advance payment and payments made till 8th day of the billing month. From 9th day of the billing month till 30th day of the month next to billing month, rebate on amounts credited to the account of the Company shall gradually reduce from 1.95% to 0% on 31st of the month next to the billing month. An additional rebate of 0.1% of the monthly billing would be allowed in all months where a customer maintains monthly LCs.

5.3 Commercial Capacity:

The following units were declared commercial during the year 2015-16, adding 1,960 MW to commercial capacity of your Company:

Project/ Unit Capacity COD* (MW)

NTPC Units- Coal Based (I)

Vindhyachal -V, Unit# 13 500 30.10.2015

Barh-II, Unit#5 660 18.02.2016

Total (I) 1,160

NTPC Units - Hydro (II)

Koldam, Unit#1 to 4 800 18.07.2015

Total (II) 800

Total Capacity declared 1,960 commercial during 2015-16(I) (II)

* COD- Commercial Operation Date

In 2016-17, 250 MW of Bongaigaon Unit#1 and 200 MW Anantpur Solar Power Plant have been declared commercial making commercial capacity of Company as on 30.06.2016 as 45,878 MW (including JVs and Subsidiaries) as under:

Owned by NTPC MW

Coal based projects 34,425

Gas based projects 4,017

Renewable Energy Projects 310

Hydro Projects 800

Sub-total 39,552

Joint Ventures & Subsidiaries

Coal based projects 4,359

Gas based projects 1,967

Sub-total 6,326

Total 45,878

5.4 Tariff Related Matters:

In FY 2015-16, your Company has been able to reduce Energy Charge Rate significantly through various measures such as reduced consumption of imported coal, rationalization of coal transportation across its various stations. Tariff petitions with Central Electricity Regulatory Commission (CERC) have been filed for all the operating stations for determination of tariff for the period from 01.04.2014 to 31.03.2019. Hearing on these petitions had started and orders will be issued after completion of hearings.

5.5 Power Purchase Agreements:

Your Company has signed Power Purchase Agreements for Telangana (Phase-I 1600 MW), Patratu (JV with Jharkhand State Electricity Board - 2725 MW) and Solar Capacity of 760 MW (comprising Anantpur -250 MW, Mandsaur- 250 MW and Bhadla - 260 MW).

5.6 Strengthening Customer Relationship:

Customer Relationship Management (CRM) initiative has been taken by your company towards strengthening relationship with the customers. This is also reflected in the Core Values of your Company (BE COMMITTED) which emphasizes ''Customer Focus'' as one of the core values of Company. Under CRM, your Company has designed and executed several structured activities with the objective of sharing of experiences and best practices with the customers, capturing the feedback and expectations. Based on the feedback received from the customers, the Company provides various support services to them and identifies potential areas of cooperation and sharing of others'' best practices. During the year 2015-16, 62 such services were provided to the customers.

Your Company offers training programs to the representatives of beneficiary companies at Power Management Institute (PMI) on free of cost basis. During the year 2015-16, 124 participants from various customer organizations attended training in 73 programs conducted by PMI. Besides above, your Company has put in place a Customer Satisfaction Index (CSI) Survey for gathering customers'' feedback and responding to their requirements. The CSI survey was revamped in 2015-16 to include feedbacks of the Grid Operators with the objective of understanding the view points of grid operators also. This modified Customer and Grid Operator Satisfaction Index Survey has been conducted in 2015-16.

As a part of UDAY Scheme, your Company is helping state generating companies to improve their operational efficiency and reduce the cost of generation. With this objective, two workshops were conducted by your Company with representatives of the Gencos of various states.

5.7 Power Trading in Power Exchange:

Your Company has commenced trading of the Un- requisitioned Surplus (URS) Power in the Power Exchange through its trading arm NVVN from June 2016. As per the amended Tariff Policy, gains from these transactions will be shared in the ratio of 50:50 with the beneficiaries whose URS is sold.

6. INSTALLED CAPACITY

During the year 2015-16, your Company added 2,255 MW to its installed capacity as per details given below

Project/ Unit installed Capacity (MW)

NTPC owned

Coal Based Power Projects

Vindhyachal -V, Unit#13 500

Bongaigaon, Unit#1 250

Mouda-II, Unit#3 660

Hydro Power Projects

Koldam Hydro, Unit#3 and 4 400

Total NTPC owned 1,810

Under JVs & Subsidiaries (Coal Based Power Projects)

Kanti (subsidiary of NTPC in JV with 195 BSPGCL), Unit#4

BRBCL (subsidiary of NTPC in JV with 250 Ministry of Railways)

Total by JV & Subsidiaries 445

Total Addition during FY 2015-16 2,255

With above capacity addition during 2015-16, capacity added in the first four years of 12th Plan Period has reached 9,550 MW against the target of 11,920 MW for 12th Plan Period (as per CEA).

The total installed capacity of the NTPC Group as on 31.03.2016 has become 46,653 MW (44,398 MW as on 31.03.2015) as tabulated below:

Owned by NTPC MW

Coal based projects 35,085

Gas based projects 4,017

Renewable Energy 110 Projects

Hydro Projects 800

Sub-total 40,012

Joint Ventures & Subsidiaries

Coal based projects 4,674

Gas based projects 1,967

Sub-total 6,641

Total 46,653

With the commissioning of Anantpur Solar PV unit of 250 MW and addition of Patratu Thermal Power Plant of 325 MW after 31.03.2016, capacity of your Company has become 47,228 MW as on 31.07.2016.

7. CAPACITY ADDITION PROGRAM

Your Company has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, brown field expansions, expansion through joint ventures and acquisitions, towards its journey to achieve its vision to become world''s largest and best power producer powering India''s Growth. In addition to furthering capacity addition through Coal based power projects, your Company has been pursuing enhancement of its power generation portfolio through Hydro and Renewable Energy projects.

7.1 Projects under Implementation

Your Company''s various projects having aggregate capacity of 24,009 MW including 4,050 MW being undertaken by Joint Venture and subsidiary companies are under implementation at 23 locations across length and breadth of the country as on 31.03.2016. This includes 22,430 MW through coal based projects, 1,579 MW through renewable energy projects, comprising 811 MW through hydro capacity, 8 MW small hydro project and 760 MW of solar power PV projects. The details of such projects are as under:

Ongoing Projects as on 31.03.2016

Capacity (MW)

I. NTPC owned:

A. Coal Based Projects

1. Bongaigaon, Assam 500

2. Barh-I, Bihar 1,980

3. Lara-I, Chattisgarh 1,600

4. North Karanpura, Jharkhand 1,980

5. Kudgi-I, Karnataka 2,400

6. Gadarwara-I, Madhya Pradesh 1,600

7. Mouda-II, Maharashtra 660

8. Solapur, Maharashtra 1,320

9. Darlipalli, Odisha 1,600

10. Unchahar-IV, Uttar Pradesh 500

11. Tanda-II, Uttar Pradesh 1,320

12. Khargone, Madhya Pradesh 1,320

13. Telangana Phase-I, Telangana 1,600

Sub Total (A) 18,380

B. Hydro Electric Power Projects (HEPP)

14. TapovanVishnugad, Uttarakhand 520

15. LataTapovan, Uttarakhand@ 171

16. Rammam Hydro, West Bengal 120

17. Singrauli CW Discharge, Uttar Pradesh 8

Sub Total (B) 819

C. Solar Power Projects

18. Anantpur Solar PV, Andhra Pradesh* 250

19. Mandsaur, Madhya Pradesh 250

20. Bhadla, Rajasthan 260

Sub Total 760

Total I (A) (B) (C) 19,959

II Projects under JVs & Subsidiaries Coal Based Projects

21. Nabinagar- JV with Railways, Bihar 750

22. Nabinagar, JV with BSPGCL, Bihar 1,980

23. Meja, JV with UPRVUNL, Uttar Pradesh 1,320

Total II 4,050

III Total On-Going Projects as on 24,009 31.03.2016 (I) (II)

*Subsequently, 200 MW unit of Anantpur Solar has been commissioned on 01.04.2016 and 50 MW on 29.07.2016.

In addition, 250 MW of Rourkela Project by NSPCL had been awarded on 11.05.2016.

As on 31.07.2016, projects under construction (including JVs and subsidiaries) are 24,009 MW.

@Work of Lata Tapovan HEPP stopped since 08.05.2014 as per orders of the Supreme Court.

7.2 New Projects

Your Company has awarded Telangana, Phase-I (2X800 MW), Thermal Power Project, Mandsaur (250 MW) and Bhadla (260 MW) Solar Projects during the Financial Year 2015-16.

As on 30.06.2016, your Company has projects for 6,640 MW thermal capacity and 768 MW renewable capacity under bidding.

7.3 New Technology & Initiatives

Your company has laid major stress on efficient utilization of resources and use of technological advancements for improving energy efficiency.

With emphasis on efficiency of electricity generation, your Company has adopted ultra super critical technology by improving the steam parameters for North Karanpura (3X660MW) to 260 kg/ cm2, 593oC/ 593oC. For Khargone (2X660MW) and Telangana (2X800 MW) steam parameter are 270 kg/ cm2, 600oC/ 600oC. Plant efficiency of these units is expected to increase by around 8% over that of a conventional sub-critical 500 MW unit and 3% over conventional super critical units using similar coal.

Development of Advance Ultra Super Critical technology:

Your Company has entered into an MOU with BHEL and Indira Gandhi Centre for Atomic Research (IGCAR) for indigenous development of advanced ultra super critical technology. This will have enhanced efficiency of around 46% and about 18% less CO2 emission per unit of power generation as compared to 500 MW sub-critical thermal power units. The program is targeted to deliver a plant having 800 MW unit with steam parameters of 310 kg/sq cm, 710oC/720oC. Approval of Phase-I (R&D phase) of the project is under consideration of Government of India.

Environment Protection:

Your Company as pioneer in Environment monitoring has already installed Ambient Air Quality Monitoring Stations (AAQMS) employing Nox, So, CO, SPM & RSPM analysers in 20 operating stations in 2 x 009-10 and data is made available to CPCB. Similarly, Continuous Emission Monitoring System (CEMS) employing Nox, Sox, CO & CO2 analysers at stack for flue gas have been installed recently in various operating stations. Your company has recently introduced analysers for Mercury monitoring for both AAQMS and CEMS.

7.3.1 Energy Conservation, Technology Absorption

Details of conservation of energy and technology absorption in accordance with section 134(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 forms part of this report as Annex-III.

7.4 Project Management

Your Company has established state-of-the-art IT enabled Project Monitoring Centre (PMC) for facilitating fast track project implementation. PMC has advanced features like Web-based Milestone Monitoring System (Webmiles), Project Review and Internal Monitoring System (PRIMS), etc. PMC facilitates monitoring of key project milestones and also acts as decision support system for the management.

PMC is an integrated enterprise-wide collaborative system to facilitate consolidation of project related issues and their resolution. Features like SMS based information delivery; real time video capture, storage and retrieval facility and video conference facility are extensively utilized for project tracking, issues resolutions and management interventions. PMC has helped in providing effective coordination between the agencies and has provided enhanced/ efficient monitoring of the projects leading to better and faster project implementation.

7.5 Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company develops power projects through its subsidiaries and joint ventures, both in India and abroad.

7.6 Hydro Power

Your Company now has its footprints in renewable energy by developing hydro projects as detailed below:

A. Koldam HEPP (4x200 MW) is on the river Satluj at Barmana, District Bilaspur (Himachal Pradesh). All the four units of 200 MW each have been declared commercially operational on 18.07.2015. Since then the project is running successfully.

B. Tapovan Vishnugad HEPP (4x130 MW) is on River Dhauliganga, District Chamoli (Uttarakhand). Project is under construction with approximately 70% work completed. After completion of 7.65 km out of 12.08 km of Head Race Tunnel (HRT), the contract was terminated on 09.01.2014. Award of balance works of HRT placed on 09.03.2016. Construction of Barrage, Switchyard and Electro-Mechanical & Hydro- Mechanical works are in progress.

C. Lata Tapovan HEPP (3x57 MW) is just upstream of Tapovan-Vishnugad HEPP. The work was stopped by Hon''ble Supreme Court through order dated 07.05.2014 for 24 Hydro Projects in the State of Uttarakhand including Lata-Tapovan. The MOEF&CC constituted an expert body, which submitted its report on 19.10.2015 and MOEF submitted the same in court on 05.11.2015, where Lata Tapovan had been recommended for implementation with compliance of certain additional conditions. Your Company submitted in Court on 19.11.2015 that the conditions recommended by expert body shall be strictly complied. On the hearing held on 26.04.2016, Additional Solicitor General of India represented MOEF and informed the Court that Lata - Tapovan Project must be implemented. The matter is still to be decided by the Supreme Court. For National Board of Wild Life (NBWL) Clearance for Tapovan- Vishnugad and Lata Tapovan HEPPs, the proposal regarding redefining of Eco Sensitive Zone was discussed in Uttarakhand State Cabinet Meeting and shall be forwarded for MOEF&CC, GOI for its approval.

D. Rammam-III HEPP (3x40MW) This project is situated on river Rammam in Teesta Basin, Darjeeling (West Bengal). Civil works of Barrage, Power House, HRT& S/Y are in progress. The river has been diverted through a diversion channel and the work in the river bed has been started for construction of Barrage.

7.7 Capacity Addition through Renewable Energy Sources

Your Company is adding capacity through renewable sources of energy, to broad-base its generation mix to ensure long term competitiveness, mitigation of fuel risks and promotion of sustainable power development.

7.7.1 Under Green Energy Commitment:

Your Company has committed to develop 10 GW of Renewable Energy Projects under green Energy Commitment to Govt. of India.

Your Company has already commissioned 310 MW of solar projects as on 30th June 2016. 560 MW Solar Power Projects are under execution which includes Mandsaur Solar (250 MW), Bhadla Solar (260 MW) and Anantpur Solar (50 MW).

NITs have been issued for 1,750 MW of Solar PV projects to be set up in the states of Andhra Pradesh and Karnataka.

7.7.2 National Solar Mission:

Your Company has been entrusted to develop 15 GW Solar PV through National Solar Mission (NSM) Phase-II in three tranches between 2014-15 to 2018-19, where the Company will be the facilitator/trader between Discoms and developers. Your Company will purchase power from the developers and sell it to the Discoms. Under Tranche-I, 3000 MW of Solar PV capacity upto 2016-17 has been planned. NITs for 3,000 MW of Solar PV capacity to come up in the states of Andhra Pradesh, Rajasthan, Karnataka, Telangana and Uttar Pradesh have been issued and awards placed for 2,520 MW projects till 30th June 2016. The developers have been selected through reverse auction.

8. STRATEGIC DIVERSIFICATION- INCREASING SELF- RELIANCE

8.1 In order to strengthen its competitive advantage in power generation business, your Company has diversified its portfolio to emerge as an integrated power major, with presence across entire power value chain through backward and forward integration into areas such as coal mining, power equipment manufacturing, power trading and distribution.

Your Company continuously explores business opportunities through market scanning and adopts new business plans accordingly.

8.2 The details of subsidiary companies engaged in business other than in power generation are as under:

8.2.1 NTPC Electric Supply Company Limited (NESCL), a wholly owned subsidiary was incorporated to foray into the business of distribution and supply of electrical energy as a sequel to reforms initiated in the power sector. The Company was implementing Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) projects on turnkey basis and undertaken turnkey execution of sub-stations for utilities and project management consultancy.

The shareholders of NESCL have transferred existing business of deposit and consultancy works under RGGVY from NESCL to NTPC on 01.04.2015. This subsidiary had also dis-associated with the business of retail distribution of power in various industrial parks developed by Kerala Industrial Infrastructure Development Corporation (KINFRA), through its Joint Venture Company namely KINESCO Power and Utilities Private Limited, as the future prospects of the JV Company are bleak. The shares held by NESCL had been purchased by KINFRA on 17.12.2015 and thus NESCL had ceased to be the joint venture partner of KINESCO.

8.2.2 NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary is involved in power trading.

During the year 2015-16, the Company transacted business with various State Electricity Boards spread all over the country and traded 12,766 MUs of electricity. The Company is designated Nodal Agency for implementation of Jawahar Lal Nehru National Solar Mission Phase-I by purchasing and selling of grid connected bundled solar power across the country. NVVN has also been designated as the nodal agency for cross border trading of electricity with Bhutan, Bangladesh and Nepal.

PPA was signed on 15.02.2016 between NVVN and Nepal Electricity Authority (NEA) for supply of upto 80 MW power from Feb to Jun 16 through 400 KV Muzaffarpur- Dhalkabar transmission line. Power supply to NEA started on 18th Feb 2016.

NVVN has paid dividend of Rs. 20 Crore to NTPC in FY 2015-16.

9. GLOBALISATION INITIATIVES

9.1 Trincomalee Power Company Limited (TPCL), a 50:50 joint venture between your Company and Ceylon Electricity Board was formed to undertake the development, construction, establishment, operation and maintenance of a coal based electricity generating station of (2X250 MW) capacity at Trincomalee at Sri Lanka. EIA clearance was granted by Central Environmental Authority (CEA) on 02.02.2016 with some specific conditions. However, Secretary, Ministry of Power & Renewable Energy, Govt. of Sri Lanka (GoSL) has requested Secretary (Power), GoI, to form a Joint Working Group to explore the possibility of changing fuel source of Power Project from Coal to LNG.

9.2 Bangladesh-India Friendship Power Company Private Limited, a 50:50 joint venture Company between NTPC and Bangladesh Power Development Board (BPDB) was formed for developing a (2X660 MW) Coal based power project (Maitree Super Thermal Power Plant) at Khulna Division, Rampal, Bangladesh. EPC contract of the project except township had been awarded to BHEL. Other activities are also in progress. An MoU has been signed with Bangladesh Shipping Corporation (BSC) on 24.01.2016 to explore the possibility of BSC taking up part/full coal logistics for the Project.

10. CONSULTANCY SERVICES

Consultancy Wing of your Company offers services like Engineering, Operation & Maintenance Management, Project Management, Contracts & Procurement Management, Quality Management, Training & Development etc.

These services have been provided in international markets in Gulf countries, Bangladesh, Nepal, Sri Lanka and Bhutan.

On international front, Consultancy Wing has been associated with Trincomalee Power Company Ltd. As Owners'' Engineer for setting up their (2x250 MW) Coal Based Power Project. It is also providing O&M Management Services to (2X120 MW) Siddhirganj Peaking Power Plant of Electricity Generation Company of Bangladesh under a World Bank funded contract.

On the domestic front, Consultancy Wing has been effectively sharing its expertise with State, Central PSUs and other clients. This includes Owners Engineer Services to The Singareni Collieries Company Limited for their coal based power project in Adilabad district, Telangana and Project Monitoring Services to MPPGCL for (2x600MW) Shree Singaji TPP & (2x250MW) Satpura TPP by deputing NTPC experts at site.

11. FINANCING OF NEW PROJECTS

The capacity addition programs shall be financed with a debt to equity ratio of 70:30, in case of thermal and hydro projects and that of 80:20 in case of solar projects. Your directors believe that internal accruals of the Company would be sufficient to finance the equity component for the new projects. Given its low geared capital structure and strong credit ratings, your Company is well positioned to raise the required borrowings.

Your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion program.

The details of funding are discussed in the Management and Discussion Analysis Report which forms part of this Report.

12. FIXED DEPOSITS

Your Company has discontinued the acceptance of fresh deposits and renewals of deposits under Public Deposit Scheme with effect from 11.05.2013. As such, there were no deposits which were not in compliance with the requirements of Chapter-V of the Companies Act, 2013

The details relating to deposits, as per the Companies Act, 2013 is as under:

(a) [Accepted during the year Nil

(b) Remained unpaid or unclaimed as 6 Deposits at the end of the year amounting to Rs. 15.91 lakh*

(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved

(i) At the beginning of the year Nil

(ii) Maximum during the year Nil

(iii) At the end of the year Nil

* Pending for completion of legal formalities/ restraint orders/ non-receipt of claims.

13. FUEL SECURITY

13.1 During the year, the supply position of coal and gas is given as under:

13.1.1 Coal Supplies

Your Company has entered into long term Fuel Supply Agreement with Coal India Limited (CIL) and The Singreni Collieries Company Limited (SCCL) for total Annual Contracted Quantity (ACQ) of 152.978 MMT & 11.2 MMT respectively. The total ACQ of 164.2 MMT of coal from CIL & SCCL is signed for 33,515 MW units already commissioned/ to be commissioned.

The Company also had a short-term Memorandum of Understanding (MOU) with SCCL for supply of 3.5MMT of coal for Ramagundam, Simhadri and Kudgi (start-up coal) stations for supply till March 2016. Short-term MOU for one year had been signed with Eastern Coalfields Limited (ECL) for supply of 5.5 MMT of coal. Another short term MOU signed with Northern Coalfields Limited (NCL) in 2014-15, was extended till 31.03.2016, for supply of balance 2.0 MMT of coal to enhance coal supply to non NCL linked stations as per requirement The coal supplies for 2016-17 is tied up mainly through FSA and supplemental through MOU/ e-auction alongwith balance quantity or imported coal of last year.

During the year under review, your Company had made coal tie-up for Barh Stage-II (2X660MW) units through MOU with CCL and ECL for 6.66 MTPA of coal at notified price, which helped stations to eliminate usage of costly coal thereby bringing down the cost of generation. Your Company was also allocated bridge linkages by Special SLC (LT) for Barethi (4X660MW), Barh -II (2X660MW), Darlipalli (2X800MW), Tanda -II (2X660MW), Lara -I (2X800MW), Kudgi -I (3X800MW) and Bilhaur (2X660MW) projects. Your Company was issued Letter of Assurance for tapering coal linkage for Telangana Phase-I (2X800MW) by WCL

13.1.2 Domestic Coal and Imported Coal

During 2015-16, your Company received 161.8 MMT of coal as against 167.4 MMT in 2014-15 marking a decrease of 3.3%.

Total domestic coal supply during 2015-16 was 152.3 MMT as against 151.1 MMT during 2014-15. Out of 152.3 MMT of coal, 145.2 MMT was from Annual Contracted Quantity of coal.

The total coal supply from CIL was 138.5 MMT and from SCCL was 13.8 MMT.6.3 MMT of coal was procured through MOU during 2015-16.

During 2015-16, your Company imported 9.7 MMT (including SWAP) of coal as against 16.4 MMT in 2014-15.Sipat station received 0.53 MMT of domestic coal against swapping of imported coal with GSECL.

During the year under review, approx. 57.2% of coal (domestic and international) was transported through merry-go-round (MGR) system of your Company.

13.1.3 Sourcing of coal through E-auction

Your Company participated in one e-auction for Vindhyachal, Stage-V in the year 2015-16 and approx. 1.88 LMT of coal had been allocated. Total coal received through e-auction was 0.29 MMT during 2015-16 as compared to 0.94 MMT during 2014-15.

13.1.4 Supply through Inland Waterways

During 2015-16, about 0.716 MMT imported coal has been supplied through inland waterways to Farakka station under a Tripartite Agreement with IWAI and service provider.

13.1.5 Rationalisation of Linkage

With the initiatives of Ministry of Power and Ministry of Coal, Inter-Ministerial Task Force has recommended rationalization of linkage for optimization of transportation cost and de-congestion of railway network. In this respect your Company has rationalized the linkage of Ramagundam and Simhadri during 2015-16. For Ramagundam, amendment to FSA was signed on 21.01.2016 with SCCL for ACQ of 11.2 MMT (previous ACQ-10.2 MMT) in lieu of FSA with MCL and SECL for ACQ of 0.5MMT each for Simhadri reducing ACQ with MCL from 9.82 MMT to 8.32MMT and corresponding quantity of 1.5MMT rationalized for ECL Estimated annual saving in transportation cost taking Ramagundam and Simhadri together is around Rs. 35.95 crore.

13.1.6 Swapping of coal with GSECL

Under swapping agreement with GSECL, Sipat station has received around 0.53 MMT of SECL coal with saving of around 150 crore on account of railway freight.

13.1.7 Commencement of third party sampling, CIMFR

In the meeting held under the Chairmanship of Hon''ble Minister of State (I/c) for Power, Coal & NRE on 28.10.2015, tripartite MOU between NTPC, CIL and CSIR-CIMFR was finalized for sampling and analysis at loading end. Member Power Utilities and CIMFR had also finalized the bilateral MOU between Power Utility and CIMFR for sampling and analysis at unloading end. These tripartite and bilateral MOUs have been signed.

Commercially binding bilateral and tri-partite agreements between NTPC, CIL and CSIR-CIMFR have been signed on 12th- 13th July 2016 based on the above mentioned MoUs to enable CIMFR to start sampling and analysis in a phased manner.

CIMFR has started sampling at the loading points at NCL (Jayant, Amlori, Dudhichua and Nigahi) supplying coal to Singrauli, Rihand and Vindhyachal; SECL (Gevra and Dipika) supplying coal to Korba and Sipat, MCL (Lingraj and Kaniha) supplying coal to Talcher-Kaniha and WCL (New Majiri) supplying coal to Mouda with their own resources and facilities from NTPC and the coal companies. For other cases, CIMFR will be taking up sampling & analysis activities in phases.

This will help your Company in reducing the cost of generation as CIMFR can ensure that the grade billed by coal companies is actually supplied to stations of the Company.

13.2 Gas supplies

During 2015-16, your Company received 5.20 MMSCMD of gas and RLNG as against 6.41 MMSCMD received during 2014-15. The gas off-take in 2015-16 included 4.92 MMSCMD of domestic gas, 0.06 MMSCMD of long-term/ spot RLNG and 0.22 MMSCMD of e-bid RLNG. Gas off-take was less due to less availability of generation schedule on RLNG from the beneficiary Discoms.

Your Company has Administered Price Mechanism (APM) gas agreements up to the year 2021 and Panna-Mukta-Tapti (PMT) gas agreements up to the year 2019 with GAIL India Limited. The agreement for non-APM gas with GAIL is valid till November, 2016 and is likely to be extended further. Further, Government of India came out with a unique scheme of Útilisation of Gas Based Generation Capacity wherein RLNG was allocated in reverse e-bidding with discounts/ tax waivers and with Power System Development Fund (PSDF) support from GOI. Your Company participated in Phase-II bidding under the scheme and successfully won and utilised the allocated e-bid RLNG equivalent to ~90MW in Dadri and Auraiya gas stations for the period of October 2015 to March 2016.

For additional gas requirement over and above the supplies under long-term domestic gas/ RLNG agreements, your company has been making arrangements for tie- up and supply of spot RLNG from domestic suppliers on ''Reasonable Endeavour'' basis based on requirement and availability from time and time. There has been no generation loss on account of lack of availability of gas/ RLNG during the year.

13.3 Development of Coal Mining projects

Your Company had been allocated eight coal blocks, namely, Pakri-Barwadih, Chatti-Bariatu, Kerandari, Talaipalli, Dulanga, Banai, Bhalumuda and Mandakini-B by the Government of India. In addition, Government of India has also allocated Kudanali-Luburi coal block jointly to your company and J&K State Power Development Company Limited (J&KSPDCL), with NTPC''s share of coal reserves in this block being two- third. Joint Venture Agreement had been signed between NTPC and J&KSPDCL on 15.06.2015 for formation of 67:33 joint venture company for exploration, development and operation of the coal block.

Similarly, Banhardih coal block, allocated earlier to Jharkhand Urja Utpadan Nigam Limited, has now been allocated to Patratu Vidyut Utpadan Nigam Limited, a subsidiary company incorporated between NTPC and Government of Jharkhand.

With about 7 billion metric tonnes of geological reserves estimated from our own eight coal blocks, altogether your Company expects to produce about 107 Million Metric Tonnes of coal per annum.

In Pakri-Barwadih mining operations have commenced from the western quarry with effect from 17.05.2016. Mining operation is also expected to start from the eastern quarry of this block shortly, after MOEF&CC issues the amendment to the environment clearance. For coal transportation from Pakri-Barwadih, Bandag-Hazaribagh'' Railway siding, funded by NTPC, is now operational with commencement of coal transportation from CCL''s Amarpali block to Barh Power Station of company.

Your Company has progressed well in other coal blocks too. Subsequent to the issuance of Allotment orders by Ministry of Coal, Government of India, forest clearance for Dulanga Coal Block has been accorded by MOEF&CC on 23.12.2015. NITs have been published for appointment of Mine Developer-cum -Operator (MDO) for Talaipalli, Dulanga and Chatti-Bariatu coal blocks and techno-commercial bids have been received.

After completion of detailed exploration in Banai coal block, Geological Report (GR) has been received from CMPDIL on 13.04.2016 and is now under approval at Ministry of Coal. For Bhalumuda coal block, detailed exploration has been completed and draft GR is under finalization by CMPDIL. For Mandakini-B coal block, Company has awarded a contract to CMPDIL for carrying out detailed exploration and for preparation of GR and drilling activities have commenced. Your company has initiated the process for acquisition of mining area land in these three new blocks i.e. Banai, Bhalumuda and Mandakini-B.

The joint venture company, namely, CIL NTPC Urja Private Limited, formed with Coal India Limited, is exploring development and operation of washery reject-based FBC power plants near upcoming/ existing coal washery of Coal India Limited.

13.4 Exploration Activities

In Cambay exploration block (CB-ONN-2009/5), held by your Company, as operator with 100% participating interest drilling of all seven exploratory wells have been completed and testing of wells is in progress.

In the KG basin exploration block viz. KG-OSN-2009/4 where ONGC is the operator and NTPC has 10% stake, the exploration activities are in progress and ONGC has submitted a proposal to the Government of India for reduction in minimum work programme as the permitted area of the block for exploration has been reduced because of non-grant of defence clearance. The other KG basin exploration block viz. KG-OSN-2009/1 and the Andaman basin exploration block viz. AN- DWN-2009/13, where ONGC was the operator and NTPC had 10% stake, had been relinquished to Government of India as per the advice from Operator (ONGC).

14. BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

To achieve higher levels of excellence, your company has developed and adopted its own ''Business Excellence Model'' on the lines of globally reputed Excellence Models such as Malcom Baldrige Model, USA and EFQM Model of Europe.

This model has been deployed at our Business Units (Stations) and your Company carries out assessment of generating stations using this framework of excellence. The assessment process is aimed at identifying the areas for enhancing stakeholders'' engagement, accelerating critical processes and developing leadership potential. The outcome of this model is identification of organizational strengths, opportunities for improvement, issues of concern and best practices.

In the financial year 2015-16, the 6th cycle of assessment was completed in which 21 generating stations were assessed by a team of certified and proficient assessors. Business Excellence Awards for Best Performance to Ramagundam and motivational awards to Sipat and Talcher-Kaniha stations were presented by the Union Minister of Power, GOI, in the Indian Power Stations Conference- 2016 held at New Delhi.

Contemporary quality initiatives and techniques like Quality Circles, Professional Circles, 5S, integrated management system (IMS) etc have been deployed across the organization for continuous improvement. Our Quality Circle teams of workmen have been consistently representing your Company at national and international Quality Circle conventions and bringing many laurels. In the year 2015-16, Aqua Quality Circle from Rihand station represented your Company in the International Convention of Quality Control Circle (ICQCC-2015) held at Changwon, South Korea.

15. RENOVATION & MODERNISATION

In the present scenario of severe resource constraint Renovation and Modernization (R&M) of power plants is considered to be a cost-effective option which can complement new capacity addition as R&M schemes have a shorter gestation period with all clearances, land, water, fuel and beneficiaries available. To this end, R&M is being carried out for the purpose of life extension of units, performance improvements, availability and reliability improvement and improved environment compliance. It ensures safe, reliable and economic electricity production by replacement of worn-out, deteriorated or obsolete electrical, mechanical, instrumentation, controls and protection system by state-of- the-art equipment

Keeping in view the ageing of the fleet over the years, investment approval accorded till date for R&M in 19 stations (Coal & Gas based) is Rs.11,148.80 crore. As against this, cumulative expenditure till 31.03.2016 is Rs. 6,794.36 crore. Out of this, R&M capital expenditure in the financial year 2015-16 was Rs. 924.37 crore

With a view to removing technological obsolescence, renovation of control & instrumentation (C&I) has been taken up in 9 stations at Singrauli-I (5X200MW) & Singrauli - II (2X500 MW), Korba -I (3X200MW) & Korba - II (3X500 MW), Ramagundam -I (3X200MW) & Ramagundam - II (3X500MW), Farakka-II (2X500 MW), Dadri Thermal- I (4X210MW), Unchahar- I (2X210MW), Talcher STPS-I (2X500MW), Kahalgaon-I (4X210 MW) and Rihand - (2X500 MW). During 2015-16, C&I R&M was completed in one 500 MW unit of Singrauli, (3X200 MW) and (3X500 MW) units of Korba, two 200 MW units and three 500 MW units of Ramagundam, four units of 210 MW of Dadri Thermal, two units of 210 MW of FGUTPS, both 500 MW units of Talcher STPS, 500 MW unit of Farakka, one 210 MW unit of Kahalgaon and one 500 MW unit of Rihand and one 500 MW unit of Talcher STPS. On completion of these schemes, C&I systems in these stations have now been brought nearly on par with the new builds.

Owing to very high operating temperatures, R&M of Gas Turbines including their Control & Instrumentation is essential after around 15 years of life. By 31.03.2016, this activity was completed in all 4 Gas Turbines (GT) each in Kawas and in Auraiya and all 3 GTs in Gandhar. R&M activity for GT, C&I, ST, WHRB in Anta, Auraiya and R&M of GT in Gandhar, R&M of C&I systems for Dadri gas is in progress. As a responsible corporate citizen, it has always been your Company''s endeavour to ensure low levels of pollution from its power stations. With a view to maintain a clean atmosphere in and around the power plant, for reducing particulate emission levels from generating stations, Renovation and Retrofitting of Electrostatic Precipitator (ESP) packages have been awarded and work is in progress in Singrauli-I & II (5X200MW 2X500MW), Farakka-I (3X200MW), Unchahar-I (2X210MW), Korba-I & II (3X200MW 3X500MW), Rihand-I (2X500MW), Vindhyachal-I & II (6X210MW 2X500MW), Talcher STPS -I & II (2X500MW 4X500MW) and Talcher TPS-II (2X110MW). During 2015-16, ESP R&M of two units of 210MW and two units (2X210MW) of Badarpur, one unit each of Talcher (110MW) and Rihand (500MW) has been completed. Moving Electrode Electrostatic Precipitator (MEEP) technology is being adopted for the first time in the country in Rihand Stage-I (Unit#1) and work is in advanced stage.

To derive benefits of the latest advancements in technology, in cooperation with CEA, EEC/VGB/ Steag Germany, a study has been taken up on ESP performance improvement using CFD modeling in Unit#6 (500MW) of Ramagundam. CFD modeling is completed and are planned for implementation. In yet another initiative, under the aegis of Ministry of Power, RLA of Unit#3 of 210 MW of Dadri Thermal station was done by JCOAL and draft report has been submitted by them. This is an identified activity under the ongoing CEA-JCOAL cooperation as per India-Japan Energy Dialogue (IJED).

16. HUMAN RESOURCE MANAGEMENT

16.1 Your Company takes pride in its highly motivated and competent Human Resource that has contributed its best to bring the Company to its present heights. The productivity of employees is demonstrated by increase in generation per employee and reduction of Man-MW ratio year after year. The over-all Man-MW ratio for the year 2015-16 excluding JV/subsidiary capacity is 0.55 and 0.51 including capacity of JV/ Subsidiaries. Generation per employee was 11.19 MUs during the year based on generation of NTPC stations.

The total employee strength of the company (including JV/ subsidiary) stood at 23,133 as on 31.3.2016 against 24,067 as on 31.3.2015.

FY 2015-16 FY 2014-15

NTPC

Number of employees 21,633 22,496

Subsidiaries & Joint Ventures

Employees of NTPC in 1,500 1,571 Subsidiaries & Joint Ventures

Total employees 23,133 24,067

The attrition rate of the NTPC executives (including Executive Trainees and those posted in Subsidiaries and JVs) during the year was 1.05%.

16.2 Employee Relations

Employees are the driving force behind the sustained stellar performance of your company over all these years of company''s ascendancy. As a commitment towards your Company''s core values, Employees'' Participation in Management was made effective based on mutual respect, trust and a feeling of being a progressive partner in growth and success. Communication meetings with unions and associations, workshop on production and productivity, etc were conducted at projects, regions and corporate level during the year.

Both, employees and management complemented each other''s efforts in furthering the interest of your company as well as its stakeholders, signifying and highlighting over-all harmony and cordial employee relations prevalent in your Company.

16.3 Safety and Security

Occupational Health and safety at workplace is one of the prime concerns of Company Management and utmost importance is given to provide safe working environment and to inculcate safety awareness among the employees. Your company has a 3-tier structure for Occupational Health and Safety management, namely at Stations/ Projects, at Regional Head Quarters and at Corporate Centre. Safety issues are discussed in the highest forum of management like Risk Management Committee (RMC), Management Committee Meeting (MCM), ORTs, PRTs etc. All of your Company''s stations are certified with OHSAS-18001/IS-18001. Regular plant inspection and review with Head of Project/Station is being done. Internal safety audits by safety officers every year and external safety audits by reputed organizations as per statutory requirement are carried out for each Project/Station. Recommendations of auditors are regularly reviewed and complied with.

Height permit and height check list are implemented to ensure safety of workers while working at height. Adequate numbers of qualified safety officers are posted at all units as per statutory rules/provisions to look after safety of men & materials. For strict compliance & enforcement of safety norms and practices by the contractors, safety clauses are included in General Conditions of Contract/ Erection Conditions of Contract

Detailed emergency plans have been developed and responsibilities are assigned to each concerned to handle the emergency situations. Mock drills are conducted regularly to check the healthiness of the system. Most of your Company''s plants have been awarded with prestigious safety awards conferred by various Institutions/ Body like Ministry of Labour & Employment-Govt. of India, National Safety Council, Institute of Directors, Institution of Engineers (India), in recognition of implementing innovative safety procedures and practices.

Security: Your Company recognizes and accepts its responsibility for establishing and maintaining a secured working environment for all its installations, employees and associates. This is being taken care of by deploying CISF at all units of your Company as per norms of MHA. Concrete steps are being taken for upgrading surveillance systems at all projects/ stations by installing state-of-the-art security systems.

16.4 Training and Development

As the power leader of India, your Company has also always endeavoured to be in the forefront of creation and dissemination of knowledge. Its sustained performance leadership has, to a large extent been achieved on the platform of comprehensive training and development programs for its employees. A large number of professionals from other organizations in the power sector have also benefitted immensely from the training and development programs of your Company. Many organisations in the country adopt practices and systems developed by the Company.

The learning activities are being driven by a comprehensive infrastructure comprising Power Management Institute (PMI) at the corporate level and Employee Development Centers (EDCs) at sites providing learning on management, technical competencies and leadership. At the foundation of the learning structure are the EDCs at Projects and Stations. EDCs take care of training requirements of non- executives and junior level executives at projects and stations. The training requirements of middle and senior level executives are catered to by PMI, the apex learning centre of your Company. This learning grid enables us to provide learning solutions for practically every aspect of the power value chain, covering the strategic, tactical and operational facets right down to the shop floor.

Initiatives taken by PMI:

(i) During 2015-16, PMI conducted almost 400 training programmes covering nearly 7,700 professionals, logging a total of approximately 26,000 training mandays.

(ii) Post Graduate Certificate in Project Management (PGCPM) programme in collaboration with IIM-Indore for developing long term project management competency. Under this initiative, executives from public and private sector utilities/companies from various States have been given skill based training to augment their capacity addition programmes.

(iii) One week exposure at Wharton School in June-July, 2015 under the programme Strategic Management Initiative for Leadership Effectiveness (SMILE), after a 3 days intervention in New Delhi for top management group of 22 General Managers and Executive Directors of NTPC to revitalize their perspective and re-align their strategic orientation for sustainable leadership practices.

(iv) Special programs on Enterprise Risk Management for senior level executives.

(v) Total 6 weeks'' duration programme during July- October, 2015 for ABB at Abu Dhabi on Power Plant Operation and Simulator Training for Combined Cycle Gas Power Plant.

(vi) Conducted 62 training programs through Web conferencing platform at workstations during 2015-16.

(vii) Developed 20 e-learning packages for end users of ERP-SAP.

(viii) Conducted several customized training programmes for the benefit of various State utilities, CPSEs and private sector companies. In all, 1,084 participants from other organizations got trained at PMI during 2015-16.

(ix) Opened "NTPC School of Business" for running 15 months flagship program titled "Executive Post- Graduate Diploma in Management" (EPGDM) from August 2015.

(x) Implementing skill development initiatives of NTPC for the country''s youth as a nodal agency. Till now, your Company has adopted 18 ITIs and set up 8 new ITIs near its power stations, thus associating with total 26 ITIs. These initiatives by your Company resulted in creation of total 1,831 new seats by starting of new trades/units. Cumulatively, a total of 26,448 students benefitted from this initiative till 31.03.2016. For these ITI students, your Company organised 47,992 mandays of industrial training/plant visits. These skill development initiatives resulted in your Company being conferred the ASSOCHAM "Award for Vocational Training 2015-16".

(xi) Your Company has partnered with the Ministry of Skill Development and Entrepreneurship, Government of India, to contribute in realising the vision of "Skill India".

(xii) 10 new programs on Safety have been introduced in PMI''s Training Calendar for 2016-17.

(xiii) A number of programs for establishing Solar and Wind energy projects and for protection of Environment have been added.

17. SUSTAINABLE DEVELOPMENT (SD)

Your company has adopted the ''triple bottom-line'' approach, recognising People, Planet and Profit as the primary pillars of corporate sustainability and believes that Development should not endanger the natural systems. Your company is preparing Sustainability Report based on the Global Reporting Initiative (GRI). Sustainability reporting has helped us in measuring and monitoring our Company''s performance. It has served as an important management tool helping us re-look at our Company''s systems, policies and procedures.

Your company has developed a policy and in accordance with a Sustainable Development Plan prepared for FY 2015-16. The main focus area of Sustainable development Plan covers waste management water management bio- diversity, promotion of renewable energy. Major activities carried out under this plan included plantation of trees in and around NTPC, installation of rooftop of Solar PV on public utilities buildings and on schools, installation of solar powered pump, rain water harvesting, rehabilitation of water bodies, installation of air quality monitoring systems in major cities, studies on impact assessment and carrying capacity river basin. A major activity for conservation of Olive Ridley Sea Turtles has been taken up. Business Responsibility Report is attached as Annex-X and forms part of the Annual Report.

A total expenditure of Rs. 33.85 Crore was incurred on these SD projects during Financial Year 2015-16.

17.1 Inclusive Growth -Initiatives for Social Growth

17.1.1 Corporate Social Responsibility (CSR):

Your Company commits itself to contribute to the society, discharging its corporate social responsibilities through initiatives that have positive impact on society at large, especially the community in the neighborhood of its operations by improving the quality of life of the people, promoting inclusive growth and environmental sustainability.

Focus areas of CSR & Sustainability activities are Health, Sanitation, Drinking Water, Education, Capacity Building, Women Empowerment, Social Infrastructure Development, support to Differently-abled Person and activities contributing towards Environment Sustainability. During the year special thrust has been given to the "Swachh Vidyalaya Abhiyan" making available about 29,000 toilets in government schools for the benefit of students, especially girl children, covering 82 Districts in 17 States across the country. Your Company spent Rs. 491.80 Cr during the financial year 2015-16 towards CSR initiatives. Amount spent i.e. Rs. 491.80 Cr includes unspent amount of Rs. 78.30 crore for the year 2014-15.

17.1.2 NTPC Foundation

NTPC Foundation is engaged in serving and empowering the differently-abled and economically weaker sections of the society.

Details of expenditure incurred and initiatives undertaken by the Company under CSR are covered in the Annual Report on CSR annexed as Annex-VII to this Report.

17.1.3 Rehabilitation & Resettlement (R&R)

Your Company is committed to help the populace displaced for execution of its projects and has been making efforts to improve the socio-economic status of Project Affected Persons (PAPs). In order to meet its social objectives, your Company is focusing on effective R&R of PAPs and undertaking community development activities in and around the projects.

R&R activities are initiated at projects by undertaking need based community development activities in the area of health, education, water, capacity building infrastructure etc by formulating ''Initial Community Development (ICD) Plan in consultation with concerned Panchayat, district administration and opinion makers of the locality. Company addresses R&R issues in line with its R&R Policy with an objective that after a reasonable transition period, the conditions of affected families improve or at least they regain their previous standard of living, earning capacity and production levels. As per the Policy, a detailed Socio- economic Survey (SES)/other Survey is conducted by a professional agency to create a baseline data of PAPs. This follows formulation of a ''Rehabilitation and Resettlement (R&R) Plan'' after adequate consultation with stakeholders in Village Development Advisory Committee (VDAC)'', which comprises representatives of PAPs, Gram Panchayat, your Company and District Administration. R&R Plan consists of measures for rehabilitation, resettlement and need based community development activities. R&R plan expenditure is implemented in a time bound manner so as to complete its implementation by the time the project is commissioned. A social impact evaluation is being conducted by a professional agency to know the efficacy of R&R Plan implementation for future learning and improvements.

17.1.4 R&R achievements during the year:

- ''Initial Community Development (ICD) Plan:

ICD Plan provision for Pudimadaka project enhanced. Implementation of earlier approved ICD activities continued at Bilhaur project - Rehabilitation and Resettlement (R&R) Plan:

R&R Plans for Vindhyachal-V and Rammam-III covering R&R obligations and community development facilities in the area of Health, Education, Sanitation, Drinking water, Infrastructure facilities finalized in consultation with stakeholders and approved. R&R Plan provisions for Lara project enhanced to take care of additional requirement for IIIT, Raipur and for Darlipalli to take care of additional requirement for Sundargarh Medical College & Hospital. R&R activities were implemented at the new Greenfield/Brownfield Thermal projects at Barh, Bongaigaon, Barethi, Darlipali, Gadarwara, Khargone, Muzaffarpur, Korba, Kudgi, Lara, Meja, Mouda, North-Karanpura, Solapur, Tanda, Unchahar-IV, Vallur, Vindhyachal-IV, Hydro projects at Koldam, Lata-Tapovan, Tapovan-Vishnugad and Coal Mining Projects at Pakri-Barwadih, Chhatti-Bariatu, Kerendari, Dulanga and Talaipalli wherein R&R Plans/packages were finalized in consultation and participation of the stakeholders and approved earlier as well as at Rammam-III and Vindhyachal-V projects where the R&R Plans have been approved during the year.

Socio-economic Survey (SES)/ Need assessment Survey (NAS)/ Census and Survey (C&S):

SES for Katwa, Meja railway siding and NAS for Pudimadaka completed. SES for Talcher-Thermal and C&S for Khargone railway siding is under progress.

Focus on Health:

For the benefits of project affected persons and neighbouring population ''Mobile Health Clinic'' under R&R provisions at Kudgi, Nabinagar (NPGCL), Pakri- Barwadih and Nabinagar (BRBCL) projects started earlier continued during the year.

17.2 Environment Management - Initiatives for preserving Environment

Vision Statement on Environment Management: "Going Higher on Generation, lowering GHG intensity" Your Company has always envisaged environment protection as one of its prime responsibilities and focuses its efforts to mitigate the impact of its operation on surrounding environment To meet the environmental challenges of 21st century and beyond, the Company has adopted sound environment management practices and advanced environment protection system to minimize impact of power generation on environment Your Company is undertaking massive renovation & modernization to upgrade air pollution equipments to reduce SPM emissions well below current statutory limits. It has adopted advanced and high efficiency technologies such as super critical boilers for commissioned and upcoming green field projects. Around 12-15% of the project cost is spent on various environment protection equipments such as Electrostatic Precipitators (ESPs), Liquid Waste Treatment Plants (LWTP), Ash Water Recirculation System (AWRS), dry ash extraction system, dust extraction, suppression system, ambient air quality monitoring system, flue gas conditioning system and desulphurization system etc. Your company is augmenting its capacity by installing solar power systems and small hydel power systems attached to its thermal power stations, wherever possible, so as to encourage garnering of renewable energy resources. The These measures are aimed not only to achieve reduction in pollution and minimize use of precious natural resources but also to lead to reduction of CO2 emissions per unit of generation thereby reducing global warming.

17.2.1 Control of Air Emissions:

High efficiency Electro-static Precipitators (ESPs) with efficiency of the order of 99.97% and above, with advanced control systems have been provided in all coal based stations to keep Particulate Matter (PM) below the prevailing permissible limits. All up-coming new plants are being provided with ESPs designed in such a manner that would cater to the notified future stringent norms. Performance enhancement of ESPs operating over the years is being carried out by augmentation of ESPs fields, retrofitting of advanced ESP controllers and adoption of sound O&M practices. Flue Gas Conditioning systems have also been provided at our old units which are helping in reduction of SPM emissions below statutory limits even during coal quality variations due to blending of coal etc. NOx control in coal fired plants is achieved by controlling its production by adopting best combustion practices (primarily through excess air and combustion temperatures controls). Over and above this, since tall stacks are provided in coal stations, gases emitted through stacks is widely dispersed and diluted.

In gas based stations, NOx control systems (hybrid burners or wet DeNOx) have been provided for good combustion practices.

Fugitive emission from ash pond is controlled by maintaining water cover, tree plantation on abandoned ash ponds, water spray and earth cover in inactive lagoons. Providing dust suppression and extraction system in CHP area has further added to reduction in fugitive dust in the vicinity of power stations.

17.2.2 Control of water pollution and promotion of water conservation:

Various water conservation measures have been taken up to reduce water consumption in power generation by using 3Rs (Reduce, Recycle & Reuse) as guiding principle. Provision of advanced treatment facilities such as Liquid Waste Treatment Plants (LWTP), Recycling Systems for Ash Pond Effluent called Ash Water Recirculation System (AWRS) and closed cycle condenser cooling water systems with higher Cycle of Concentration (COC), rain water harvesting wherever possible and reuse of treated sewage effluent for horticulture purposes are some of the measures implemented in most of the stations. All these measures have resulted in reduction of effluent discharge from the power plants of your Company. In view of water stressed scenario, water conservation and reduction in water consumption per unit of generation has assumed great importance. NTPC has taken a proactive approach of making all its power stations to operate with ZLD (Zero liquid discharge) progressively in phases. Implementation of ZLD at six power plants are at various stages of implementation during this fiscal year. In addition drain separation as pre requisite to ZLD has been completed in six stations viz. Singrauli, Faridabad, Ramagundam, Talcher Super, Gandhar and Kayamkulam. This concerted effort of NTPC will not only conserve the water but also will be able the meet the requirements of recently notified environmental norm of water consumption by MoEF&CC

17.2.3 Automation of environment measurement system:

All the existing power stations are equipped with continuous ambient air quality monitoring stations (AAQMS) to capture the real time data of PM 10, PM 2.5, SO , NOx and access thereof viz., and access has been provided to the Regulators such as Central Pollution Control Board and State Pollution Control Boards. Additional ozone analyzers for ambient air are also being provided phase-wise at the existing stations. Continuous Emission Monitoring Systems (CEMS) to monitor emissions of SO2 and NOx in all its existing units on real time basis are installed and commissioned in addition to the opacity meter installed for monitoring of particulate emission. Installation of real time monitors for pollutants in effluents (EQMS) is also completed for all its existing projects. For all the upcoming projects, real time monitors for ambient air, effluents and emissions are included in the engineering packages during design stage itself.

17.2.4 Revised Emission Norms

Till 7th December, 2015, the emission norms for coal based thermal power stations stipulated emission limits for particulate matter only. For the control of gaseous pollutants in ambient air, a minimum stack height was stipulated. However, MOEF&CC vide notification dated 7th December, 2015, has stipulated the emission limits for Oxides of Nitrogen, Oxides of Sulphur and Mercury also. The emission limits depend on the unit size and age of the unit and shall be applicable from 7th December, 2017. This shall require modifications in design of the power plants as well as additional pollution control systems. Your Company is designing its new power plants to comply with new norms. However, in older units, there may be constraints due to Technology being used, Space available for retrofitting and financial viability of the retrofits. The matter has been taken up with MOEF&CC and is being examined on case to case basis with respect to compliance.

17.2.5 Tree Plantation:

Your Company is undertaking tree plantation covering vast areas of land in and around its projects and till date about 23 million trees have been planted throughout the country. The afforestation has not only contributed to the ''aesthetics'' but also helped in carbon sequestration by serving as a ''sink'' for pollutants released from the stations and thereby protecting the quality of ecology and environment. Further, your Company has embarked upon long-term Memorandums with State authorities to assist National Commitment of INDC in COP 21, by planning to plant 10 million trees across the country.

17.2.6 ISO 14001 & OHSAS 18001 Certification:

All of your Company''s stations have been certified with ISO 14001 and OHSAS 18001 by reputed National and International certifying agencies as a result of sound environment management systems and practices.

17.3 Quality Assurance and Inspection (QA&I)

Your company continues to place great emphasis on quality, with the view to secure long term reliability and availability of its productive assets and the investments. This is ensured by committing adequate number of qualified and trained human resources for quality related activities, maintaining field laboratories at the construction sites and pursuing time tested systems & processes, resulting in world class standards of performance of the plants. In your company, quality needs are identified & planned, keeping in mind the interests of all the stake holders, by interacting with major Power Equipment manufacturers of the world, thereby embracing the latest technologies available. The quality requirements associated with such technologies are rigorously pursued during manufacturing, erection & commissioning of various products/ systems/ services. The dynamic feedback system ensures that the gaps, if any, are filled through resetting the methods and standards resulting in continuous improvement Your company''s robust performance on all parameters, is a testimony to the soundness of the quality system deployed. Your Company is represented on various technical committee of ISO and EC and is actively contributing in formulation and updating of power sector technical and quality standards/ guidelines, to serve the national as well as international community at large.

17.4 Clean Development Mechanism (CDM)

Your Company is addressing climate change issues proactively.

Your Company has taken several initiatives in CDM projects in Power Sector. It has gone ahead with six projects in CDM foray. 8MW Small Hydro Power Project at Singrauli, 5MW each solar PV projects at Dadri, Port Blair (Andaman & Nicobar) and Faridabad solar power projects had already been registered with UNFCCC CDM Executive Board with estimated annual Certified Emission Reductions (CERs) potential of approx 68,000. Another two projects i.e. 50 MW Solar PV plant at Rajgarh (MP) and 10 MW Solar PV Project at Unchahar are in advanced stage of registration with estimated annual CERs potential of approx. 88,000.

17.5 Ash Utilisation

During the year 2015-16, 588.28 lac tonnes of ash was generated and 41.35% viz. 243.23 lac tonnes of ash had been utilized for various productive purposes. Important areas of ash utilization are - cement & asbestos industry, ready mix concrete plants (RMC), road embankment, brick making, mine filling, ash dyke raising & land development Pond ash from all stations of your Company is being issued free of cost to all users. Fly ash is also being issued free of cost to fly ash/ clay-fly ash bricks, blocks and tiles manufacturers on priority basis over the other users from all coal based thermal power stations. The funds collected from sale of ash is being maintained in the separate account and this fund is being utilized for development of infrastructure facilities, promotion and facilitation activities to enhance ash utilization.

Your Company has an Ash Utilisation Policy, which is a vision document dealing with the ash utilization issue in an integral way from generation to end product. This policy aims at maximizing utilization of ash for productive usage along with fulfilling social and environmental obligations as a green initiative in protecting the nature and giving a better environment to future generations. The quantity of ash produced, ash utilized and percentage of such utilization during 2015-16 from your Company''s Stations is at Annex-VIII.

17.6 CenPEEP - towards enhancing efficiency and protecting Environment

Your Company initiated a unique voluntary program of GHG emission reduction by establishing ''Center for Power Efficiency and Environmental Protection (CenPEEP)'' and under this program, it is estimated that cumulative CO2 avoided is 43.6 million ton since 1996, by sustained efficiency improvements.

CenPEEP is working for efficiency and reliability improvement in stations through strategic initiatives, development and implementation of systems and introduction of new techniques & practices.

Critical efficiency parameter aberrations and draft power consumption are monitored using PI based real time programs and dashboards. These programs assist operating engineers in tracking the gaps in heat rate and auxiliary power consumption and trending the degradation of equipment performance.

CenPEEP is also working towards reduction in specific water consumption and auxiliary power consumption in coal and gas stations. A dedicated group CEETEM - Centre for Energy Efficient Technology & Energy Management, conducts regular Energy audits to identify potential improvement areas and improvement actions. CenPEEP is actively involved in training and development of power professionals for company and other utilities in the power sector in the areas of Boiler & Auxiliaries, Turbine & Auxiliaries, Cooling Towers, RCM and PdM technologies etc.

CenPEEP coordinated implementation of Perform, Achieve & Trade (PAT) scheme under Prime Minister''s National Mission on Enhanced Energy Efficiency (NMEEE) in NTPC coal & gas plants. Station specific action plans were jointly prepared and implemented. Your Company''s coal and gas stations exceeded the Net Heat Rate improvement targets and earned around 1,69,000 EScerts (Energy saving certificates) in PAT-1 cycle. However, formal notification is awaited.

18. NETRA - R&D Mission in Power Sector

The Company as the leading power utility of the country, has allocated 1% of PAT for R&D activities. Company has focused its research efforts to address the major concerns of the sector as well as the futuristic technology requirements of the sector. In this effort, your company has established NTPC Energy Technology Research Alliance (NETRA) as state-of-the-art centre for research, technology development and scientific services in the domain of electric power to enable seamless work flow right from concept to commissioning. The focus areas of NETRA are - Efficiency Improvement & Cost Reduction; New & Renewable Energy; Climate Change & Environmental protection which includes water conservation, Ash utilization & Waste Management Research Advisory Council (RAC) of NETRA comprising of eminent scientists and experts from India and abroad is in place to steer research direction. Scientific Advisory Council (SAC) provides directions for undertaking specific applied research projects aimed to develop techniques in power plant for efficient, reliable and environment friendly operation with emphasis on reducing cost of generation. NETRA also provides Advanced Scientific Services to all its stations and many other utilities in the area of oil/water chemistry, environment, electrical, Rotor dynamics etc. for efficient performances.

NETRA laboratories are accredited as per ISO 17025 and its NDT laboratory also been recognized as well known "Remnant Life Assessment Organization" under the Boiler Board Regulations,1950.

The details of activities undertaken by NETRA are given in Annex-III which forms part of the Director''s Report

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

Several Steps were taken for the proper propagation and implementation of Official Language Policy of Government of India in your Company.

Meetings of Official Language Implementation Committee were held on 25th June, 21st September, 28th December, 2015 & 24th March, 2016 in which the implementation of Hindi in the Organization was reviewed thoroughly. Various Hindi competitions were organized during Hindi fortnight from 1st to 14th September, 2015 in the corporate office as well as in all other establishments of the Company. Corporate Hindi Magazine "Vidyut Swar" was conferred, special commendation award by the TOLIC (Town Official Language Implementation Committee), Delhi. Hindi workshops were conducted for the various departments of the Company. Renowned Hindi scholars inspired the participants of Hindi workshops to use Hindi in their day- to-day official work. Office orders, formats and circulars were issued in Hindi as well. Important advertisements and house journals were released in bilingual form in Hindi as well as in English. Your Company''s website also has a facility of operating in bilingual form, in Hindi as well as in English.

20. VIGILANCE

20.1 Vigilance Mechanism

Your Company ensures transparency, objectivity and quality of decision making in its operations, and to monitor the same, the Company has a Vigilance Department headed by Chief Vigilance Officer, a nominee of Central Vigilance Commission. Vigilance set up comprises of Vigilance Executives in Corporate Centre and Projects. Corporate Vigilance consists of four cells namely Investigation & Processing Cell, Departmental Proceedings Cell, Technical Examination Cell and MIS Cell deal with various facets of vigilance mechanism. For speedier disposal of vigilance cases, works have been assigned to Vigilance Executive at each of the regions of the Company. 376 surprise checks were made during the period.

20.2 Implementation of Integrity Pact

Your Company is committed to have total transparency to its business processes and as a step in this direction; it signed a Memorandum of Understanding with Transparency International India in December, 2008. The Integrity Pact is being implemented for all contracts having value exceeding Rs. 10 crore. Presently, your Company is having two Independent External Monitors to oversee the implementation of Integrity Pact Programme.

20.3 Implementation of various policies/ circulars

Fraud Prevention Policy and Whistle Blower Policy have been implemented in your Company to build and strengthen a culture of transparency. Your Company has also laid down a comprehensive policy for withholding and banning of business dealings with agencies, wherever the situation so demands.

During 2015-16, 161 complaints were received, out of which 93 complaints were carried to a logical conclusion and the remaining 68 complaints are under various stages of investigation. Appropriate disciplinary action has also been initiated wherever necessary.

20.4 Vigilance Awareness Week and Workshops

During 2015-16, 51 preventive vigilance workshops were conducted at various projects/ places in which 1,371 employees participated.

Vigilance awareness week was observed from October 26, 2015 to October 31, 2015 in all NTPC projects and stations/ establishments. The theme for the Vigilance Week was ''Preventive Vigilance as a Tool of Good Governance'', during which various competitions amongst the employees like slogan writing/ essay writings were held. A special booklet titled ''Handbook for Vigilance Executives'' was also published containing guidelines for vigilance executives for conducting technical examination of packages, investigations alongwith circular issued by the Vigilance Commission.

Besides these, as advised by the Vigilance Commission, NTPC also conducted outreach activities during Vigilance Awareness Week in total 405 Colleges/ Schools/ Institutions all over the country, organizing elocutions, debates, lectures etc on ethics, integrity and corruption and its ill effects for students.

21. REDRESSAL OF PUBLIC GRIEVANCES

Your Company is committed for resolution of public grievance in efficient and time bound manner. Company Secretary has been designated as Director (Grievance) to facilitate earliest resolution of public grievances received from President Secretariat, Prime Minister''s Office, Ministry of Power etc.

In order to facilitate resolution of grievances in transparent and time bound manner, Department of Administrative Reforms & Public Grievances, Department of Personnel & Training, Government of India has initiated web-based monitoring system at www.pgportal.gov.in. As per directions of GOI, public grievances are to be resolved within two months time. If it is not possible to resolve the same within two months period, an interim reply is to be given. Your company is making all efforts to resolve grievances in above time frame.

22. RIGHT TO INFORMATION

Your Company has implemented Right to Information Act, 2005 in order to provide information to citizens and to maintain accountability and transparency. The Company has put RTI manual on website for access to all citizens of India and has designated a Central Public Information Officer (CPIO), an Appellate Authority and APIOs at all sites and offices of the Company.

During 2015-16, 1,456 applications were received under the RTI Act, out of which 1,384 applications were replied to, till 31.03.2016.

23. USING INFORMATION AND COMMUNICATION TECHNOLOGY FOR PRODUCTIVITY ENHANCEMENT

Your Company has implemented an Enterprise Resource Planning (ERP) package covering maximum possible processes across the organization including subsidiaries. In addition to the core business processes and Employee Self Service (ESS) functionality, the ERP solution also includes e-procurement, Knowledge Management, Business Intelligence, Document Management, and Workflow etc. The ERP system is fully managed through in-house expertise from process groups and technical groups. Parallely, in- house solutions have been developed to take care of the non-ERP areas.

A state of the art data centre with centralized server facility for ERP to cater to the entire Company is in Operation at NOIDA A 100% disaster recovery centre is also operational at Hyderabad for change over in case of any emergency. During the year under review, security operation centre had been commissioned to counter and mitigate security risks and no severe threats were observed. Project Monitoring Centre was upgraded to High Definition system. Disaster Recovery mechanism was 100% available during the year. Vendors Bill Tracking system launched for pilot site i.e. Dadri. Online Earnest Money Deposit refund process was implemented.

24. NTPC GROUP: SUBSIDIARIES AND JOINT VENTURES

Your Company has currently 5 subsidiary companies and 22 joint venture companies for undertaking specific business activities.

A statement containing the salient feature of the financial statement of your Company''s Subsidiaries, Associate Companies and Joint Ventures as per first proviso of section 129(3) of the Companies Act, 2013 is included in the consolidated financial statements. It does not contain information about Hindustan Urvarak & Rasayan Limited, which was incorporated on 15.06.2016. The financial statements of subsidiary companies along with the respective Directors'' Report are placed elsewhere in this Annual Report.

25. INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges are as under:

25.1 Statutory Auditors

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. Joint Statutory Auditors for the financial year 2015-16 were (i) M/s T R Chadha & Co., LLP, New Delhi (ii) M/s PSD Associates, Chartered Accountants, New Delhi, (iii) M/s Sagar & Associates, Chartered Accountants, Hyderabad, (iv) M/s Kalani & Co., Chartered Accountants, Jaipur, (v) M/s P. A & Associates, Chartered Accountants, Bhubaneshwar, (vi) M/s S. K. Kapoor & Co., Chartered Accountants, Kanpur and (vii) M/s B. M. Chatrath & Co., Chartered Accountants, Kolkata. The appointment of Statutory Auditors for the financial year 2016-17 has been made by the Comptroller & Auditor General of India.

25.2 Management comments on Statutory Auditors'' Report

The Statutory Auditors of the Company have given an un- qualified report on the accounts of the Company for the financial year 2015-16. However, they have drawn attention under ''Emphasis of Matter'' to 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; 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; and 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. The issues have been adequately explained in the respective Notes referred to by the Auditors.

25.3 Review of accounts by Comptroller & Auditor General of India (C&AG)

As advised by the Office of the C&AG, the comments of C&AG for the year 2015-16 alongwith management replies thereto are placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.

25.4 COST AUDIT

As prescribed under the Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records are being maintained by all stations of your Company. The firms of Cost Accountants appointed under Section 148(3) of the Companies Act, 2013 for the financial year 2015-16 were (i) M/s Bandopadhyay Bhaumik & Co., Kolkata, (ii) M/s S. Dhal & Co., Bhubhaneshwar (iii) M/s Musib & Co., Mumbai, (iv) M/s Sanjay Gupta & Associates, New Delhi, (v) M/s Narasimha Murthy & Co., Hyderabad, and (vi) M/s RJ. Goel & Co., Delhi. The due date for filing consolidated Cost Audit Report in XBRL format for the financial year ended March 31, 2015 was September 30, 2015 and the consolidated Cost Audit Report for your Company was filed with the Central Government on September 22, 2015. The Cost Audit Report for the financial year ended March 31, 2016 shall be filed within the prescribed time period under the Companies (Cost Records & Audit) Rules, 2014.

25.5 Exchange Risk Management

Company is exposed to foreign exchange risk in respect of contracts denominated in foreign currency for purchase of plant and machinery, spares and fuel for its projects/ stations and foreign currency loans. In term of its Exchange Risk Management Policy, during financial year 2015-16, the Company has entered into derivative contracts amounting to USD 62 million equivalent in different currencies in respect of foreign currency loans exposure.

25.6 Performance Evaluation of the Directors and the Board

As required under the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, evaluation of performance of directors including that of the Independent Directors and of the Board is to be carried out either by the Board or by the Nomination and Remuneration Committee or by the Independent Directors. It also requires disclosure of formulated criteria for performance evaluation in Annual Report. In this regard, the Ministry of Corporate Affairs, through Notification dated 05.06.2015, has exempted the Government Companies from these provisions. The appointment of the Functional Directors, Government Nominee Directors and Independent Directors of your Company is made by the Government of India. Their terms & conditions of appointment as well as tenure of all directors are also decided by GOI and there is a well laid down procedure for evaluation of Functional Directors & CMD as well as of Government Directors by Administrative/ respective Ministry. Also, the performance of the Board of the Government Companies is evaluated during the performance evaluation of the MOU signed with the Government of India.

Your Company has made representation to SEBI for exempting Government Companies from evaluation of Directors and the Board. The matter is under consideration by the SEBI.

25.7 Secretarial Audit

The Board has appointed M/s Agarwal S. & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2015-16. The Secretarial Audit Report for the financial year ended March 31, 2016 is annexed herewith marked as Annexure XI to this Report. The Managements'' Comments on Secretarial Audit Report are as under:

Observations Management''s Comments

Regulation 17(1) As per the Listing Agreements of Securities and executed with the Stock Exchanges Exchange Board pursuant to SEBI LODR Regulations, of India (Listing 2015 and DPE Guidelines on Obligation Corporate Governance by CPSEs, & Disclosure the Company should have eight Requirements) Independent Directors since Regulations, Company has six functional 2015 (erstwhile Directors including the Chairman Clause 49 (II) (A) & Managing Director and two & (B) of the Listing Government Nominee Directors Agreement) and on its Board. At present, Company Clause 3.1.2 has three Independent Directors in and 3.1.4 of position.

DPE Guidelines Being a Government Company the on Corporate power to appoint the Directors on Governance the Board of the Company vests for Central with the President of India and Public Sector accordingly, the Company is, from Enterprises w.r.t. time to time, requesting Ministry composition of of Power to appoint requisite the Board of the number of Independent Directors Company. on its Board.

25.8 Particulars of contracts or arrangements with related parties

During the period under review, your Company had not entered into any material transaction with any of its related parties. The Company''s major related party transactions are generally with its subsidiaries and associates. All related party transactions were in the ordinary course of business and were negotiated on an arm''s length basis except with Utility Powertech Limited, which are covered under the disclosure of Related Party Transactions in Form AOC-2 (Annex- IX) as required under Section 134(3)(h) of the Companies Act, 2013. They were intended to further enhance the Company''s interests. Web-link for Policy on Materiality of Related Party Transactions & also on Dealing with Related Party Transactions has been provided in the Report on Corporate Governance, which forms part of the Annual Report.

25.9 Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company''s operations in future: NIL

25.10 Adequacy of internal financial controls with reference to the financial reporting:

The Company has in place adequate internal financial controls with reference to financial reporting. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

25.11 Loans and Investments

Details of Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of financial statement attached as a separate section in the Annual Report FY 2015-16.

Your Company had not granted any loans to parties during 2015-16 covered under Section 186 of the Companies Act, 2013.

25.12 Sexual Harassment of Women at Workplace

The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment All employees (permanent contractual, temporary, trainees) are covered under this policy.

These ICCs have been constituted at all Projects/ stations also. Every three years, the constitution of these committees is changed and new members are nominated. No complaint of sexual harassment was received by the ICC during the year 2015-16.

NTPC PMI has been conducting gender sensitization workshops for building a collaborative work culture across the organisation, in association with the National Commission for Women. In these workshops, employees, both male and female, are sensitized and made aware about issues and laws pertaining to sexual harassment as well as appropriate behavior at the workplace. During 2015-16, PMI has conducted 12 such workshops across the organization covering 250 employees.

25.13 Procurement from MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012. The total procurement made from MSEs (including MSEs owned by SC/ST entrepreneurs) during the year 2015-16 was Rs. 559.51 crore, which was 12.53% of total annual procurement by your Company. Your Company orgainsed 12 vendor development programmes for MSMEs. Annual procurement plan for purchases from MSEs is uploaded on www.ntpc.co.in.

25.14 Particulars of Employees

As per provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each director to the median employee''s remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors'' Report.

However, as per notification dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors'' Report

25.15 Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure VI to this Report.

25.16 Information on Number of Meetings of the Board held during the year, composition of committees of the Board and their meetings held during the year, establishment of vigil mechanism/ whistle blower policy and web-links for familiarization/ training policy of directors, Policy on Materiality of Related Party Transactions and also on Dealing with Related Party Transactions and Policy for determining ''Material'' Subsidiaries have been provided in the Report on Corporate Governance, which forms part of the Annual Report

25.17 Para on development of risk management policy including therein the elements of risks are given elsewhere in the Annual Report.

25.18 No disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

The particulars of annexures forming part of this report are as under:

Particulars Annexure

Management Discussion & Analysis I

Report on Corporate Governance II

Information on conservation of III energy, technology absorption and foreign exchange earnings and outgo

Statistical information on persons IV belonging to Scheduled Caste / Scheduled Tribe categories

Information on Differently abled V persons

Extract of Annual Return VI

Annual Report on CSR Activities VII

Project Wise Ash Utilisation VIII

Disclosure of Related Party IX Transactions in Form AOC-2

Business Responsibility Report for the X year 2015-16

Secretarial Audit Report in Form MR-3 XI

26. BOARD OF DIRECTORS

Shri I.J. Kapoor resigned from the post of Director (Commercial) on 20.08.2015 on being appointed as Technical Member of the Appellate Tribunal for Electricity.

Consequent upon completion of three years'' tenure, Dr. A. Didar Singh had ceased to be the Independent Director w.e.f. August 22, 2015. Shri Rajesh Jain and Dr (Mrs.) Gauri Trivedi had been appointed as Independent Directors w.e.f. 18.11.2015 for a period of three years. Shri Anil Kumar Singh ceased to be the Government Nominee Director w.e.f. 08.12.2015 consequent his transfer from Ministry of Power. Shri Aniruddha Kumar, JS (Thermal), Ministry of Power has joined as Government Nominee Director of the Company with effect from 25.02.2016. Shri Seethapathy Chander has been appointed as the Independent Director on the Board w.e.f. 22.06.2016.

On completion of five years'' tenure, Dr. Arup Roy Choudhury ceased to be the Chairman & Managing Director of the Company w.e.f. 31.08.2015 (A/N). In the absence of regular Chairman & Managing Director, the Ministry of Power, through order dated 28.08.2015, entrusted the additional charge of the post of Chairman & Managing Director, to Shri A.K. Jha, Director (Technical). He held the additional charge from 01.09.2015 to 03.02.2016, after which Shri Gurdeep Singh joined as the Chairman & Managing Director of the Company on 04.02.2016. On Completion of three years'' tenure, Shri Prashant Mehta has ceased to be the Independent Director of the company w.e.f. 29.07.2016 (A/N). The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri I.J. Kapoor, Dr. A. Didar Singh, Dr. Arup Roy Choudhury, Shri Anil Kumar Singh and Shri Prashant Mehta during their association with the Company. In accordance with Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company- Shri S.C. Pandey and Shri K. Biswal shall retire by rotation at the Annual General Meeting of your Company and, being eligible, offers themselves for re-appointment.

27. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

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

2. 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 2015-16 and of the profit of the company for that period;

3. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. the Directors had prepared the Annual Accounts on a going concern basis;

5. 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; and

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

28. ACKNOWLEDGEMENT

The Directors of your Company acknowledge with deep sense of appreciation, the co-operation received from the Government of India, particularly the Prime Minister''s Office, Ministry of Power, Ministry of New & Renewable Energy, Ministry of Finance, Ministry of Environment, Forests & Climate Change, Ministry of Coal, Ministry of Petroleum & Natural Gas, Ministry of Railways, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, Comptroller & Auditor General of India, Appellate Tribunal for Electricity, State Governments, Regional Power Committees, State Utilities and Office of the Attorney General of India.

The Directors of your Company also convey their gratitude to the shareholders, various international and Indian Banks and Financial Institutions for the confidence reposed by them in the Company. The Board also appreciates the contribution of contractors, vendors and consultants in the implementation of various projects of the Company. We also acknowledge the constructive suggestions received from the Office of Comptroller & Auditor General of India and Statutory Auditors. We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the company continues to grow and excel.

For and on behalf of the Board of Directors

(Gurdeep Singh)

Chairman & Managing Director

Place: New Delhi DIN : 00307037

Date: 3rd August , 2016


Mar 31, 2015

Dear Members,

The Directors are pleased to present the 39th Annual Report on the business and operations of the Company along with audited financial statements for the year ended March 31, 2015.

Financial Year 2014-15 has been yet another year of achievements for your Company. With the addition of 1,290 MW capacity (including 195 MW through Subsidiary Company) during the year, total installed capacity of your Company (including subsidiaries & JVs) as on 31.03.2015 was 44,398 MW.

Further, with the commissioning of two hydro units of 200 MW each on 10.04.2015 and 12.06.2015 respectively and a 250 MW thermal unit on 22.06.2015, the total installed capacity of NTPC Group has crossed 45,000 MW.

Major highlights for the year 2014-15 are:

- Made foray into hydro generation with the commissioning of two units of 200 MW each.

- Commissioned solar plants of 35 MW capacity.

- Declared 1,195 MW (including 500 MW through JV Company) on commercial generation.

- Average PLF of 80.23% as against all India PLF of 64.46% with two NTPC stations recording more than 90% PLF.

- Excellent MOU rating by Government of India for the year 2013-14.

- Reallocation of Coal blocks namely, Kerandari, Talaipalli, Dulanga, Chatti-Bariatu, Chatti- Bariatu (South). Now, Banaiand Bhalumuda (both exclusively) and Kundanali-Luburi Qointly with J&K State Power Development Company Limited) have been allocated to your company.

- Capital expenditure (CAPEX) for the year 2014- 15 was Rs.23,239.25 crore as against the target of Rs.22,400 crore.

- 100% realization of current bills from customers.

- Recorded total income of Rs.75,362.37 crore as compared to Rs.74,664.61 crore in the FY 2013-14. Net Profit after Tax (PAT) of Rs.10,290.86 crore.

- Company rewarded its shareholders by issue of one non-convertible, secured, redeemable bonus debenture of face value of Rs.12.50 each for every one equity share of Rs.10 each, aggregating to Rs.10,306.83 crore.

- Dividend of Rs.2.50 per share (total Rs.2,061.38 crore) comprising interim dividend of Rs.0.75 per equity share paid in February 2015 and recommendation of final dividend of Rs.1.75 per equity share for the year 2014-15, subject to approval of the shareholders.

- Company has been adjudged as the 'Best Company to Work for 2015' in a study conducted by Economic Times in Energy, Oil and Gas Industry Category.

You will appreciate the fact that the company recorded growth and excellent performance despite the challenge before the sector.

1. FINANCIAL RESULTS (STAND ALONE)

Revenue 2014-15 2013-14

Rs.Crore US $ Mn* Rs. Crore US $ Mn*

Net Revenue from Operations (including Energy Sales, 73,246.05 11,591.40 72,018.93 11,397.20 Consultancy, Energy consumed internally)

Other Income 2,116.32 334.91 2,645.68 418.69

Total Revenue 75,362.37 11,926.31 74,664.61 11,815.89

Expenses

Fuel 48,845.19 7,729.89 45,829.71 7,252.69

Employee Benefits Expense 3,669.78 580.75 3,824.78 605.28

Finance Costs 2,743.62 434.19 2,406.59 380.85

Depreciation and amortization expense 4,911.65 777.28 4,142.19 655.51

Generation, administration & other expenses 4,979.31 787.99 4,543.85 719.08

Prior period items (net) (333.83) (52.83) 12.84 2.03

Total Expenses 64,815.72 10,257.27 60,759.96 9,615.44

Profit before Tax 10,546.65 1,669.04 13,904.65 2,200.45

Tax Expense 255.79 40.48 2,929.91 463.67

Profit for the year 10,290.86 1,628.56 10,974.74 1,736.78

Appropriations: 2014-15 2013-14

Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Transfer to bond/ debenture redemption reserve 1,156.19 182.97 576.08 91.17

Transfer to general reserve 7,000.00 1,107.77 5,000.00 791.26

Transfer to CSR reserve 78.30 12.39 - -

Transfer to capital reserve 0.12 0.02 4.98 0.79

Interim dividend 618.42 97.87 3,298.19 521.95

Proposed dividend 1,442.96 228.35 1,442.96 228.35

Tax on dividend 417.40 66.05 804.74 127.35

*1US$=Rs.63.19 as on March 31, 2015

2. ISSUE OF BONUS DEBENTURES

During the Financial Year 2014-15, your Company rewarded its shareholders by issue of one secured, non-cumulative, non-convertible, redeemable, taxable, fully paid-up debenture of face value of Rs.12.50 each by way of bonus for every one equity share of Rs.10 each, aggregating to Rs.10,306.83 crore.

These debentures carry a fixed coupon rate of 8.49% p.a. and will be redeemed in three instalments of Rs.2.50, Rs.5.00 and Rs.5.00 per debenture at the end of 8th, 9th and 10th year respectively.

3. DIVIDEND

3.1 Interim and Final Dividend:

Your company paid interim dividend of Rs.0.75 per equity share in February 2015 and Directors of your Company have recommended a final dividend of Rs.1.75 per equity share for the year 2014-15. With this the total dividend for the year is Rs.2.50 per equity share of Rs.10/- each. This is in addition to the Bonus Debenture of Rs.12.50 each issued by the Company in March 2015. In the year 2013-14, the total dividend paid was Rs.5.75 per equity share of Rs.10/- each. The dividend payout is 20.03% and the total dividend payout including dividend tax is 24.09% of profit after tax. The final dividend shall be paid after your approval at the Annual General Meeting.

The dividend has been recommended in accordance with your Company's policy of balancing dividend pay-out with the requirement of deployment of internal accruals for its growth plans.

4. OPERATIONAL PERFORMANCE

During the year, the power stations of your Company generated 241.26 BUs (260.58 BUs including JVs & Subsidiaries) of electricity (including solar and hydro power) which was 23.12% (24.97% including generation by JVs) of the total power generated in India (without Bhutan import) registering an increase of 3.42% (3.93% including JVs & Subsidiaries) over the previous years' generation of 233.28 BUs. The total generation contributed by coal stations is 229.55 BUs during the year against generation of 220.70 BUs last year registering a growth of 4.01%. Generation from coal based units could have been still higher but due to less generation schedule there was opportunity loss of 23.11 BUs. The coal based stations operated at average Plant Load Factor (PLF) of 80.23% (All India PLF 64.46%) and average Availability Factor of 88.27% on bus bar during the year. During the year, 2 coal based stations out of 17 achieved more than 90% PLF. The gas stations having a capacity of 4,017 MW achieved annual generation of 11.588 BUs at a PLF of 32.93% as against 12.569 BUs last year mainly due to less generation schedule which accounted for an opportunity loss of 20.798 BUs. The average declared capacity of gas based stations for the year was 92.18% as compared to 95.24% during previous year.

5. COMMERCIAL PERFORMANCE

5.1 Billing and Realisation

Your Company has realized 100% payment of current bills raised for energy supplied in 2014-15, thus achieving this feat for the 12th consecutive year.

All the customers were making their payments within 60 days of billing and had established LCs at 105% of the average monthly billing.

5.2 Rebate Scheme for realization of dues:

In order to encourage early and full realization of dues, your Company has formulated a special scheme called 'NTPC Rebate Scheme'. In this Scheme for 2014-15, which was aligned with CERC Regulations, graded rebate was given to those customers who were making due payment upto 55th day of billing.

5.3 Commercial Capacity:

The following units were declared commercial during the year 2014-15, adding 1,195 MW to commercial capacity of your Company:

Project/ Unit Capacity COD* (MW)

NTPC Units- Coal Based (I)

Barh-II,Unit#1 660 15.11.2014

Total (I) 660

NTPC Units -Renewable Energy Units (II)

Rajgarh Solar** 20 30.04.2014

Singrauli Solar 15 31.12.2014

Total (II) 35

NTPC's JV Units- Coal Based (III)

Vallur,Unit#3(JV with 500 26.02.2015 TANGEDCO)

Total (III) 500

Total Capacity declared 1,195 commercial during 2014-15 (incl. JVs) (I) (II) (III)

* COD- Commercial Operation Date

* * Out of total capacity of 50 MW, 30 MW capacity of Rajgarh Solar PV was declared on commercial operation on 31.03.2014. Commercial Capacity of NTPC as on 30.07.2015 is as under:

Owned by NTPC MW

Coal based projects 33,015

Gas based projects 4,017

Renewable Energy Projects 110

Hydro Projects 800

Sub-total 37,942

Joint Ventures & Subsidiaries

Coal based projects 4,034

Gas based projects 1,967

Sub-total 6,001

Total 43,943

5.4 Tariff Regulations:

In FY 2014-15, your Company has been able to recover its full capacity charges, there was no under recovery in any of the stations due to less Declared Capability (DC) below the normative DC. Tariff petitions with Central Electricity Regulatory Commission (CERC) have been filed for all the operating stations for determination of tariff for the period from 01.04.2014 to 31.03.2019. Hearing on these petitions had started and orders will be issued after completion of hearings. The company has also filed final true-up petitions for the stations for the period from 01.04.2009 to 31.03.2014 and final orders will be issued after completion of hearings.

5.4.1 Judgements

In case of BSES Rajdhani Power Limited (BRPL) & BSES Yamuna Power Limited (BYPL) writ petitions, Hon'ble Supreme Court directed both discoms to pay the recurring monthly payments (current bills) to the generating/ transmission companies and vacated the stay on regulation of power supply against non-payment.

APTEL, through its judgment dated 24.03.2015, upheld the allowance of employees cost to NTPC by CERC on account of wage revision for the period 2007-09 and dismissed the appeals filed by TPDDL, BYPL and PSCPL against the said CERC order.

CERC allowed capitalization of R&M works in Talcher Thermal Power Station, through its order dated 15.05.2014 with consequential billing/ impact of Rs.740 crore towards revised fixed charges.

5.5 Strengthening Customer Relationship:

Customer Relationship Management (CRM) initiative has been taken by your company towards strengthening relationship with the customers. This is also reflected in the Core Values of your Company (BE COMMITTED) which emphasizes 'Customer Focus' as one of the core values of NTPC.

Under CRM, your Company has designed and executed several structured activities with the objective of sharing of experiences and best practices with the customers, capturing the feedback and expectations. Based on the feedback received from the customers, the Company provides various support services to them and identifies potential areas of cooperation. During the year 2014-15, 62 such services were provided to the customers.

your Company offers training programs to the representatives of beneficiary companies at Power Management Institute (PMI) on free of cost basis. During the year 2014-15, 134 participants from various customer organizations attended training in 58 programs conducted by PMI.

Besides above, your Company has rolled out a Customer Satisfaction Index (CSI) Survey for gathering customers' feedback and responding to their requirements as an essential part of CRM programme. The CSI survey had been conducted in the year 2014-15. The survey is a useful tool for further relationship with the customers.

6. INSTALLED CAPACITY

During the year 2014-15, your Company added 1,290 MW as per details given below:

Project/ Unit installed during FY Capacity 2014-15 (MW)

NTPC owned

Coal Based Power Projects

Barh-II, Unit#2 660

Hydro Power Projects

Koldam Hydro, Unit#1 and 2 400

Solar Power Projects

Rajgarh Solar PV 20

Singrauli Solar PV 15

Under JVs (Coal Based Power Projects)

Kanti (subsidiary of NTPC in JV with 195 BSPGCL), Unit#3

Addition during FY 2014-15 1,290

With above capacity addition during 2014-15, capacity added in the first three years of 12th Plan Period has reached 7,295 MW against the target of 11,920 MW for 12th Plan Period (as per CEA).

The total installed capacity of the NTPC Group as on 31.03.2015 has become 44,398 MW (43,108.31 as on 31.03.2014) as tabulated below:

Owned by NTPC MW

cod based projects 33,675

Gas based projects 4,017

Renewable Energy Projects 110

Hydro Projects 400

Sub-total 38,202

Joint Ventures & Subsidiaries

Coal based projects 4,229

Gas based projects 1,967

Sub-total 6,196

Total 44,398

With the commissioning of two units of 200 MW each of Koldam Hydro Project on 10.04.2015 and 12.06.2015 respectively and 250 MW unit of Bongaigoan thermal power project on 22.06.2015, the total installed capacity of NTPC Group has reached 45,048 MW as on 30.07.2015.

7. CAPACITY ADDITION PROGRAM

Your Company has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, brown field expansions, expansion through joint ventures and acquisitions, towards its journey to achieve its vision to become world's largest and best power producer powering India's Growth.

In addition to furthering capacity addition through Coal based power projects, your Company has been pursuing enhancement of its power generation portfolio through Hydro and Renewable Energy projects.

7.1 Projects under Implementation

Your Company's various projects having aggregate capacity of 23,904 MW including 4,495 MW being undertaken by Joint Venture and subsidiary companies are under implementation at 22 locations across length and breadth of the country as on 31.03.2015. This includes 22,685 MW through coal based projects, 1,219 MW through renewable energy projects, comprising 1,211 MW through hydro capacity and 8 MW mini hydro project. The details of such projects are as under:

Ongoing Projects as on 31.03.2015

Capacity (MW)

I. NTPC owned:

A. Coal Based Projects

1. Bongaigaon, Assam* 750

2. Barh-I, Bihar 1,980

3. Lara-I, Chattisgarh 1,600

4. North Karanpura, Jharkhand 1,980

5. Kudgi-I, Karnataka 2,400

6. Gadarwara-I, Madhya Pradesh 1,600

7. Vindhyachal-V, Madhya Pradesh 500

8. Mouda-II, Maharashtra 1,320

9. Solapur, Maharashtra 1,320

10. Darlipalli,Odisha 1,600

11. Unchahar, Uttar Pradesh 500

12. Tanda,Uttar Pradesh 1,320

13. Khargone, Madhya Pradesh 1,320

Sub Total (A) 18,190

B. Hydro Electric Power Projects (HEPP)

14. Koldam, Himachal Pradesh* 400

15. Tapovan Vishnugad, Uttarakhand 520

16. Lata Tapovan, Uttarakhand 171

17. Rammam Hydro, West Bengal 120

18. Singrauli CW Discharge, Uttar 8 Pradesh

Sub Total (B) 1,219

Total I (A) (B) 19,409

II Projects under JVs & Subsidiaries

Coal Based Projects

19. Nabinagar- JV with Railways, 1,000 Bihar

20. Muzaffarpur Expansion (MTPS)- Subsidiary of NTPC in JV with 195 BSPGCL, Bihar

21. Nabinagar, JV with BSPGCL, Bihar 1,980

22. Meja, JV with UPRVUNL, Uttar 1,320 Pradesh

Total II 4,495

III Total On-Going Projects as on 23,904 31.03.2015 (I) (II)

*Subsequently, 250 MW unit of Bongaigaon and 400 MW of Koldam Hydro Projects has been commissioned till 30.06.2015. In addition, 250 MW of Solar PV Project was awarded on 28.05.2015 to be set up at Anantpur in the State of Andhra Pradesh.

7.2 New Projects

Currently, your Company has projects for 9,850 MW thermal capacity and 510 MW renewable capacity under bidding after investment approval accorded by the Board. Feasibility Reports for 16,830 MW capacity have already been approved by your Board and project development activities are in various stages.

your Company has signed Memorandum of Agreement on 03.05.2015 for acquisition of Patratu Thermal Power Station (770 MW) through a joint venture company to be promoted by NTPC and Jharkhand Bijlee Vitran Nigam Limited. The proposed JVC shall also take up expansion of power project by addition of 3X800 MW units in Phase-I and 2X800 MW units in Phase-ll.

7.3 New Technology

To meet the challenge of fulfilling India's electricity demands at affordable cost with minimum environmental impact, your Company has drawn a long term Technology Roadmap up to 2032. The technology roadmap envisages development, adoption and promotion of safe, efficient and clean technologies for power generation.

your Company is planning to set up coal fired units with ultra supercritical parameters targeting efficiency comparable to best available technology in the world. It is also setting up solar PV plants.

your Company has adopted efficient technologies, system and practices including combined cycle gas-fired power stations, Distributed Digital Control & Management Information System, High Voltage Direct Current transmission, Sliding Pressure Operation of SG, Dry Ash Extraction and Disposal, 765 KV Switchyard, Ash Water Recirculation System, Liquid Waste Management System, Performance Analysis and Diagnostic Optimization, Tunnel Boring Machines and Super Critical Technologies. These technologies have contributed to increased efficiency and greater environmental protection in its operations. They have also been later adopted in the Indian power industry, as well.

With emphasis on efficiency of electricity generation, your Company has adopted super- critical technology for Sipat plant with Steam parameters of 247 kg/cm7537°C/565°C. For Barh Stage-II, higher steam parameters of 247 kg/ cm7565°C/593°C have been adopted, which shall also be adopted for all 660/800 MW units being taken up thereafter. The improved heat rate at these parameters will result in around 5% gain in efficiency over the efficiency of conventional sub- critical 500 MW unit.

Steam parameters have been further improved for North Karanpura to 260 kg/cm2 /593°C/ 593°C. For Khargone even further improved parameter 270 kg/cm2 /600°C/600°C have been adopted, which is expected to give improvement in efficiency by 3.7% over conventional super critical plant. your Company has entered into MOU with BHEL and Indira Gandhi Centre for Atomic Research (IGCAR) for indigenous development of advanced ultra super critical technology. This will have enhanced efficiency of around 45% and about 15-17% less CO2 emission as compared to 500 MW sub-critical units. The program is targeted to deliver a plant having 800 MW unit with steam parameters of 310 kg/cm2/710°C at super heater outlet and 720°C at re-heater outlet.

your Company has issued NIT for hybrid solar thermal plant by integration of solar heat with 210 MW coal based unit at Dadri. Solar heat is being integrated along with feed heaters in the turbine cycle for conversion of solar heat to electrical power with the help of existing steam cycle of 210 MW. Once integrated, this will reduce coal consumption with corresponding reduction in CO, emissions.

7.3.1 Energy Conservation, Technology Absorption

Details of conservation of energy and technology absorption in accordance with section 134(3) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 forms a part of this report at Annex-III.

7.4 Project Management

your Company has an established state-of-the-art IT enabled Project Monitoring Centre (PMC) for facilitating fast track project implementation. PMC has advanced features like Web-based Milestone Monitoring System (Webmiles), Project Review and Internal Monitoring System (PRIMS), Enterprise- wide Issues Tracking System, etc. PMC facilitates monitoring of key project milestones and also acts as decision support system for the management.

PMC is integrated enterprise-wide collaborative system to facilitate consolidation of project related issues and their resolution. Features like SMS based information delivery, real time video capture, storage and retrieval facility and conference facility are extensively utilized for project tracking, issues resolutions and management intervention. PMC has helped in providing effective coordination between the agencies and has provided enhanced/ efficient monitoring of the projects leading to better and faster project implementation.

7.5 Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company develops power projects through its subsidiaries and joint ventures, both in India and abroad.

The information of Indian Subsidiaries and JV Companies along with details of partners of joint ventures engaged in power generation is given below:

Name of Company JV Partner(s) Details

KBUNL Bihar State Power A subsidiary Company in which NTPC holds 65% shares in joint venture with (Kanti Biilee Generation BSPGCL (erstwhile BSEB), took over MTPS having 2 units of 110 MW each Utoadan, Nigam Company Limited from BSEB. Both the units of Stage-I have been declared on commercial Ltd.) (erstwhile (BSEB) operation. Total generation in FY 2014-15 was 875.14 MUs.

The Company has also taken up expansion of the project by 2X195 MW units. Unit#3 of Stage-II has been synchronized on 31.03.2015. Construction activities are in full swing for Unit#4 of Stage-II.

BRBCL Ministry of Railways A subsidiary of NTPC in joint venture with Ministry of Railways with equity (Bhartiva Rail Biilee contribution in the ratio of 74:26 respectively for setting up power project Company Ltd.) of 1000 MW (4X250 MW) capacity at Nabinagar in Bihar. Construction activities are in progress.

In addition, NTPC Limited has signed Memorandum of Understanding with Ministry of Railways to set up 1,320 MW captive power project for Railways at Adra, West Bengal through this Company. Ministry of Railways is taking steps for allocation of coal mine to the proposed project.

NSPCL Steel Authority of A 50:50 Joint Venture Company between NTPC and SAIL, owns and (NTPC SAIL Power India Ltd. (SAIL) operates captive power plants for SAIL at Durgapur (120 MW), Rourkela Co Pvt. Ltd.) (120 MW) & Bhilai (74 MW) and Bhilai PP-III (2X250 MW), which is supplying power to SAIL, Chhattisgarh, DNH and D&D. Its present installed capacity is 814 MW.

Captive power plants (314 MW) recorded generation of 2429.07 MU in FY 2014-15.

Bhilai PP-III (2X250 MW) recorded generation of 3241.06 MU in FY 2014-15.

NSPCL is pursuing Coal based Expansion Power Plants at Rourkela (1x250 MW), Durgapur (2x20 MW) & Bhilai (2x250 MW) and Green Field Lignite based Power Plant at Salem(2x40 MW). Bidding for EPC packages of Rourkela PP-II Expansion (1X250 MW) and Durgapur PP-III (2X20 MW) is presently in process. Feasibility Report is under preparation for Power Plant at Salem.

NTECL Tamilnadu A 50:50 JVC has commissioned 3x500 MW coal based power project at (NTPC Tamil Nadu Generation and Vallur, Tamilnadu. Energy Co. Ltd.) Distribution All the units have been declared on commercial operation. Total generation Corporation Limited of NTECL during FY 2014-15 was 5748.68 MUs. (TANGEDCO) (erstwhile TNEB)

APCPL Indraprastha Power This JVC is operating 3X500 MW coal based Indira Gandhi Super Thermal (Aravali Power Generation Co Ltd. Power Project. NTPC, IPGCL and HPGCL have contributed equity in the Company Pvt. Ltd.) (IPGCL) and Haryana ratio of 50:25:25.

Power Generation Total generation of APCPL during FY 2014-15 was 7025.10 MUs. Co Ltd. (HPGCL).

MUNPL Uttar Pradesh A 50:50 JVC is implementing 1,320 MW (2X660 MW) coal based power (Meja Una Nigam Rajya Vidyut project in the state of Uttar Pradesh. Construction activities are in progress. Pvt Ltd) Utpadan Nigam Ltd. (UPRVUNL)

NPGCL Bihar State Power A 50:50 JVC is setting up a 3x660 MW Coal based plant at Nabinagar. (Nabinagar Power Generation Construction activities are in progress. Generating Company Limited Company Pvt Ltd.) (erstwhile (BSEB)

RGPPL GAIL, ICICI Bank, SBI, NTPC had a stake of 28.91% as on 31.03.2015. All the three Power Blocks (Ratnagiri Gas and IDBI, Canara Bank have been kept at dry preservation since 12.09.2014 due to non- availability Power Pvt. Ltd.) and MSEB Holding of funds. Co. The LNG terminal received and unloaded 10 RLNG cargo(s) during the financial year 2014-15.

Due to non-payment of loans and interest, as per the Shareholders' Agreement, loan of Rs.855.37 crore due upto 30.06.2015 has been converted into equity. After conversion, the paid-up share capital of the Company increased to Rs.3820.27 Crore as on 30.06.2015 and the stake of NTPC was reduced to 25.51% as on 30.06.2015.

Based on the subsidy scheme of the Government of India for the stranded gas power stations for FY 2015-16 and 2016-17, Ministry of Power has allocated 500 MW of power from the project to the Indian Railways for FY 2015-16 and FY 2016-17. Certain waiver of duties from Maharashtra Government and agreement with GAIL is awaited.

ASHVINI Nuclear Power NTPC is having a stake of 49%. The company was formed for setting up (Anushakti Vidhyut Corporation of India nuclear power project (s) and also to explore possibilities of entering Nigam Ltd.) Ltd. (NPCIL) in areas of front end fuel cycle like uranium mining etc. project site at Gorakhpur, Haryana has been finalized for setting up Haryana Atomic Power Plant (2X700 MW) for which physical possession of land has been completed. However, the project is yet to be formally allocated to ASHVINI.

The JV Company may establish the nuclear power project subject to the amendment in the Atomic Energy Act.

7.6 Hydro Power

Your Company is increasing its footprints in renewable energy by developing hydro projects as detailed below:

A. Koldam HEPP (4x200MW) on the river Satluj at Barmana, District Bilaspur (Himachal Pradesh): All the four units are under commercial operation since 18.07.2015.

B. Tapovan Vishnugad HEPP (4x130MW) on River Dhauliganga, District Chamoli (Uttarakhand) is under construction. Approximately 60% work has been completed. Head Race Tunnel (HRT) contract, after completion of 7.65 km out of 12.08 km was terminated due to non performance by agency. Award of balance HRT works is under tendering process and award is expected by Dec'15. Construction of Barrage, Switchyard and Electro-Mechanical & Hydro-Mechanical works are in progress.

C. Lata Tapovan HEPP (3x57MW) is just at upstream of Tapovan-Vishnugad HEPP - The work was stopped by Hon'ble Supreme Court vide order dated 07.05.2014 for 24 Hydro Projects in the State of Uttarakhand including Lata-Tapovan. The Ministry of Environment, Forests & Climate Change has constituted an expert body to look into the various concerns related with environment due to these 24 projects and provided 3 months time to submit their opinion for Lata- Tapovan HEPP & 5 other projects which were having all the Government clearances on their commencement of construction. The expert body had their first meeting on 16.06.2015.

Regarding National Board for Wild Life Clearance for Tapovan Vishnugad HEPP and Lata Tapovan HEPP, the State Board of Wildlife of Uttarakhand has recommended the proposal to NBWL for clearance of both the projects.

D. Ram mam-Ill HEPP (3x40MW) project is situated on river Rammam in Teesta Basin, District Darjeeling (West Bengal). Construction of approach roads and 2 steel bridges for power house and barrage have been completed. Contracts for Civil, HM & EM works have been awarded and Barrage excavation has been started.

E. Loharinag Pala HEPP (4x150MW) on river Bhagirathi in district Uttarkashi of Uttarakhand was discontinued on the advice of Ministry of Power in the year 2010. Possibility of revival was being explored by Cabinet Secretariat in the meeting held on 12.09.2014.

7.7 Capacity Addition through Renewable Energy Sources

your Company is adding capacity through renewable sources of energy, to broad- base its generation mix to ensure long term competitiveness, mitigation of fuel risks and promotion of sustainable power development.

your Company has set a target to add 10,000 MW through Renewable Energy by 2022. Different initiatives in this regard are as under:

A. An MOU has been signed with the Government of Andhra Pradesh for setting up of 1000 MW Solar PV project at AP. A letter of understanding has been signed on 10.10.2014 for developing 750 MW Solar PV project in Madhya Pradesh.

B. Solar PV Projects commissioned during the year-35MWp

Sl. Name of the Project Capacity Commissioned No. (MWp) on

1. Rajgarh Solar, MP 50 20 MWp 30.04.2014 (30 MWp during FY 2013-14)

2. Singrauli Solar, UP 15 31.12.2014

C. Solar PV Project under execution - 250 MWp

Sl. Name of the Project Capacity No.(MWp)

1. Anantpur Solar Phase-I, AP 250(5X50 MW)

D. New Solar PV Projects under bidding - 510 MWp

Sl. Name of the Project Capacity No.(MWp)

1. Solar Project at Badhla, 260 Phase-ll, Jodhpur, Raiasthan

2. Solar Project at Mandsuar, 250 Madhya Pradesh

E. Your Company is planning to add 750 MW of Solar PV Project at Anantpur, AP under Phase- II.

F. The Company has issued NIT for developing 450 KWp rooftop Solar PV Projects at Vindhyachal. The Company is also planning for development of 7.45 MW potential rooftop Solar PV projects at existing projects.

your Company has been nominated as implementing agency by MNRE for the selection of developers under National Solar Mission Batch-2 for total 15,000 MW. Under Tranche-I, 3,000 MW solar capacity is to be added. Out of this, tender for 1,650 MW has been already floated by NTPC in the States of AP and Rajasthan.

your Company has signed an MOU with MNRE, National Institute of Wind Energy (NIWE), Powergrid, PFC, IREDA, PTC and GPCL to form a joint venture company for offshore wind power development in India. JV Agreement has been approved by your Board and approval from other partners is awaited.

your Company has also signed an MOU with Chattisgarh Renewable Energy Development Agency (CREDA) for development of Tatapani Geothermal project in Chattisgarh.

The Joint Venture Company among NTPC Limited, Asian Development Bank and Kyuden International Cooperation, Japan under the name PAN-ASIAN Renewables Private Limited incorporated to develop projects portfolio of about 500 MW of renewable power generation resources in India, is under voluntary wind up as it could not find third investor in spite of great efforts. Termination agreement has been approved by NTPC on 31.10.2014. Liquidator has also been appointed.

8. STRATEGIC DIVERSIFICATION- INCREASING SELF- RELIANCE

8.1 In order to strengthen its competitive advantage in power generation business, your Company has diversified its portfolio to emerge as an integrated power major, with presence across entire power value chain through backward and forward integration into areas such as coal mining, power equipment manufacturing, power trading and distribution.

your Company continuously explores business opportunities through market scanning and adopts new business plans accordingly.

8.2 The details of subsidiary companies engaged in business other than in power generation are as under:

8.2.1 NTPC Electric Supply Company Limited (NESCL), a wholly owned subsidiary was incorporated to foray into the business of distribution and supply of electrical energy as a sequel to reforms initiated in the power sector. The Company was implementing Rajiv Gandhi Gramin Vidyutikaran Vojna (RGGVY) projects on turnkey basis and undertakes turnkey execution of sub-stations for utilities and also takes up project management consultancy.

During 2014-15, had completed nine rural electrification projects on deposit work basis under RGGVY. Cumulatively, out of 30 RGGVY projects, 26 projects have been completed.

NESCL also undertook turnkey execution job on deposit work basis for setting up electrical distribution network within 5 kms of NTPC projects/stations. Out of the eight awarded projects two projects completed in the financial year. Cumulatively, six projects have been completed.

The shareholders of NESCL have now approved the transfer of existing business of deposit and consultancy works under RGGVY from NESCL to NTPC.

This subsidiary is also dis-associating with the business of retail distribution of power in various industrial parks developed by Kerala Industrial Infrastructure Development Corporation (KINFRA), through its Joint Venture Company namely KINESCO Power and Utilities Private Limited, as the future prospects of the JV Company are bleak.

8.2.2 NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary is involved in power trading, sale of fly ash and cenosphere.

During the year 2014-15, the Company transacted business with various state electricity boards spread all over the country and traded 10,315 MUs of electricity.

NVVN has been appointed as the nodal agency for cross border trading of electricity with Bhutan and Bangladesh. The power supply to Bangladesh from NTPC stations under PPA signed between NVVN and Bangladesh Power Development Board has commenced from October 2013.

The Company has also been designated as the Nodal Agency for implementation of Jawahar Lai Nehru National Solar Mission Phase-I by purchasing and selling of grid connected bundled solar power across the country.

NVVN had been actively involved in facilitating the development of a wholesale electricity market in India and has developed significant domain knowledge for development of power market. NVVN has been sharing the learning with other stakeholders in Indian Power market through various workshops and thus contributing to capacity building among stakeholders.

The Board of your Company had decided to transfer ash business and sale of cenospheres earlier carried out by NVVN to be carried out by NTPC stations, in order to enhance fly ash utilization considering market potential in the vicinity of power plant and local issues at stations and to have better co-ordination between potential fly ash users and Ash Management Group at stations.

8.3 The details of joint venture companies which are taking up activities in our business related areas are given below:

Name of JV Partner Activities undertaken Company

UPL Reliance Takes up assignments of (Utility Infrastructure construction, erection and Powertech Limited supervision of business in Ltd.) power sector and other sectors like O & M services, Residual Life Assessment Studies, non-Conventional projects etc.

NASL ALSTOM Takes up renovation and (NTPC Power modernization assignments ALSTOM Generation, of power plants both in India Power AG and in other SAARC countries. Services The Company booked orders Pvt Ltd.) of Rs.386.08 crore in FY 2014-15. Turnover of the Company was Rs.66.49 crore. R&M including RLA work orders are under execution. Bids have also been submitted for other work orders.

EESL PFC,PGCIL The Company was formed (Energy and REC for implementation of Energy Efficiency Efficiency projects and to Services promote energy conservation Ltd) and climate change.

The Company is providing consultancy on Energy Audit of Buildings and Agricultural Pump replacement under Perform Achieve Trade Scheme work and standard & leveling work of BEE, consultancy work, implementing Bachat and agricultural municipal pump replacement for various State Govts.

NHPTL NHPC,PGCIL, The Company has been (National DVC and CPRI formed for setting up facility High for short circuit testing of Power Test transformers and other Laboratory electrical equipment

Pvt Ltd.) High Voltage Transformer (HVTR) Lab and Medium Voltage Transformer (MVTR) Lab at Bina, M.P. for short circuit testing of Transformers upto 765 kV is under construction which is expected to be commissioned in 2015.

NPEX NHPC,PFC The Company was formed (National TCS, BSE, IFCI, to facilitate, promote, Power Meenakshi, assist, regulate and manage Exchange DPSC nationwide trading of all Ltd) forms of electrical energies and also to settle trades in a transparent fair and open manner.

In view of the change in market scenario and the fact that NTPC's objects of joining NPEX has not been met till date, your Company has decided to exit from NPEX The Board of NPEX has now decided to voluntary wind up tte Company on the recommendations of the promoters. The liquidator has been appointed for this purpose.

NBPPL Bharat Heavy The Company was (NTPC-BHEL Electricals incorporated for taking up Power Limited activies of engineering, Projects Pvt. procurement and conduction Limited) (EPC) of power plants and manufacturing of equipments. The manufacturing plant of NBPPL at Mannavaram,Tirupati in Andhra Pradesh for CHP and AHP has commenced production from December 2014.

NBPPL Bharat Heavy The Company is executing (NTPC-BHEL Electricals EPC contracts for balance of Power Limited plants packages of Palatana Projects Pvt. Combined Cycle Power plant Limited) in Tripura, Namrup Combined Cycle Power Plant in Assam, Balance of Plant including Erection & Commissioning works of the entire plant at Monarchak, Tripura for NEEPCO and EPC Contract for Unchahar. Both the units of Palatana have been commissioned and work at other sites is in progress.

The Company's order bookings as on March 31, 2015 was Rs. 35 lakh. Total turnover of the Company was Rs.520 crore (provisional) for the year 2014-15.

(BF-NTPC) Bharat Forge This Company was BF-NTPC Limited incorporated to manufacture Energy castings, forgings, fittings and Systems high pressure piping required Limited for power projects and other industries.

As in the recent past thermal power capacity addition program has suffered a major set back due to a variety of reasons including slow environment clearance of new projects, non- availability of land, shortage of Indian coal and costly imported coal, your company has decided to withdraw from this joint venture company. Report of the Valuer has been accepted by both NTPC and Bharat Forge. The proposal of exit from this company is awarting clearance from Ministry of Power.

TELK Acquisition of The Company deals in (Transfer 44.6% stake manufacturing and repair mers and in TELK from of Power Transformers. Electricals Government TELK order booking as on Kerala of Kerala on 31.03.2015 was Rs.118.58 crore Limited) June 19, 2009 and the total turnover of the Company was Rs.130.02 crore in thefinancial year 2014-15.

9. GLOBALISATION INITIATIVES

9.1 Trincomalee Power Company Limited (TPCL), a 50:50 joint venture Company between your Company and Ceylon Electricity Board was formed to undertake the development, construction, establishment, operation and maintenance of a coal based electricity generating station of 2X250 MW capacity at Trincomalee at Sri Lanka. EIA report was submitted to Central Electricity Authority, Sri Lanka on 09.02.2015. 9.2 Bangladesh-India Friendship Power Company Private Limited, a 50:50 joint venture company between NTPC and Bangladesh Power Development Board (BPDB) has been formed for developing a 2X660 MW Coal based power project at Khulna Division, Rampal, Bangladesh. Project activities at site have commenced.

10. CONSULTANCY SERVICES: Consultancy Wing of your Company offers services like Engineering, Operation & Maintenance Management, Project Management, Contracts & Procurement Management, Quality Management, Training & Development etc.

These services have been provided in international markets in Gulf countries, Bangladesh, Nepal, Sri Lanka and Bhutan.

On international front, Owner's Engineers Services is being provided to Trincomalee Power Company Ltd. for setting up their 2x250MW Coal Based Power Project. Consultancy Wing is also providing O&M Management Services to 2X120 MW Siddhirganj Peaking Power Plant of Electricity Generation Company of Bangladesh under a World Bank funded contract. On the domestic front, Consultancy Wing has been effectively sharing its expertise with State, Central PSUs and other clients. These include Project Monitoring Services to MPPGCL for 2x600MW Shree Singaji TPP & 2x250MW Satpura TPP by deputing NTPC experts at site.

11. FINANCING OF NEW PROJECTS

The capacity addition programs shall be financed with a debt to equity ratio of 70:30. your directors believe that internal accruals of the Company would be sufficient to finance the equity component for the new projects. Given its low geared capital structure and strong credit ratings, your Company is well positioned to raise the required borrowings.

your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion program. The details of funding are discussed in the Management and Discussion Analysis Report which forms part of this Report.

12. FIXED DEPOSITS

your Company has discontinued the acceptance of fresh deposits and renewals of deposits under NTPCs Public Deposit Scheme with effect from 11.05.2013. As such, there was no deposits which were not in compliance with the requirements of Chapter-V of the Companies Act, 2013. The details relating to deposits, as per the Companies Act, 2013 are as under:

(a) Accepted during the year Nil

(b) Remained unpaid or 13 Deposits unclaimed as at the end of amounting to the year Rs.17.51 lakh*

(c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved

(i) At the beginning of the Nil year

(ii) Maximum during the Nil year

(iii) At the end of the year Nil

* Pending for completion of legal formalities/ restraint orders/ non-receipt of claims

13. FUEL SECURITY

13.1 During the year, the supply position of coal and gas is given as under:

13.1.1 Coal Supplies

Presently, long term Coal Supply Agreements are in place for 33,515 MW for the units already commissioned/ to be commissioned.

To enhance coal supply at critical units, short- term Memorandum of Understanding (MOU) has been signed with Eastern Coalfields Limited (ECL) in 2014-15 for supply of 5.0 MMT of coal. Another short term MOU has been signed with Northern Coalfields Limited (NCL) in 2014-15 for supply of 3.0 MMT.

Letter of assurance (LOA) for quantity of 7.039 MMT of erstwhile 'E' grade coal by CCL was issued on 24.03.2015 for North Karanpura Project. For Mouda Unit#2 after considerable persuasion, the pricing of coal had been revised by WCL and 'cost plus' FSA had been signed on 10.02.2015 for an ACQ of 0.6 MMT.

13.1.2 Domestic Coal and Imported Coal

During 2014-15, your Company received 167.4 MMT of coal as against 160.6 MMT in 2013-14 marking an increase of 4.23%.

Total domestic coal supply during 2014-15 was 151.1 MMT as against 149.8 MMT during 2013-14.

The total coal supply from CIL was 138.6 MMT and from SCCL was 12.5 MMT. 7.0 MMT of coal was procured through bilateral MOU during 2014-15.

During 2014-15, your Company imported 16.4 MMT of coal as against 10.8 MMT in 2013-14.

13.1.3 Sourcing of coal through E-auction

Your Company participated in 3 e-auctions for coal procurement during the financial year 2014- 15 in which total coal allotted was 0.19 MMT. Total coal received through e-auction was 0.94 MMT (including receipt of coal out of previous years allocation) during 2014-15 as compared to 3.15 MMT during 2013-14.

13.1.4 Supply through Inland Waterways

During 2014-15, about 5.06 lakh MT imported coal has been supplied through inland waterways to Farakka station.

13.1.5 Rationalisation of Linkage

With the initiatives of Ministry of Power and Ministry of Coal, Inter Ministerial Task Force has recommended rationalisation of linkage for optimization of transportation cost and de- congestion of railway network. In this respect, your company has rationalised the linkage of Mouda station from MCL to SECL which may result in savings upto Rs.45.39 crore per annum.

13.1.6 Swapping of coal with GSECL

In September 2014, NTPC had entered into swapping agreement with Gujarat State Electricity Corporation Limited (GSECL) wherein imported coal of NTPC-Sipat was swapped with GSECL's domestic coal. This will result in substantial savings for both utilities.

13.1.7 Commencement of third party sampling

Third party sampling by agency deployed by power utility has commenced for the first time in the country. Accordingly, all NTPC stations except Ramagundam STPS deployed the third party sampling agents.

13.2 Gas supplies

During 2014-15, your Company received 6.41 MMSCMD of gas and RLNG as against 6.87 MMSCMD received during 2013-14. The gas off- take in 2014-15 includes 6.17 MMSCMD of gas and 0.24 MMSCMD of RLNG. Gas offtake was less due to less availability of generation schedule on RLNG from the beneficiary states.

your Company has Administered Price Mechanism (APM) gas agreements up to the year 2021 and Panna Mukta Tapti (PMT) gas agreements up to the year 2019 for its gas stations. The term sheet for non-APM gas with GAIL is valid till 2016 and long- term RLNG supply agreement with GAIL is valid till 2019.

your Company has been making arrangements for tie-up and supply of spot RLNG or Fallback RLNG from domestic suppliers on 'reasonable endeavour" basis based on requirement and availability from time to time.

The Government extended the guidelines for 'Clubbing/ diversion of gas between two or more power plants' for gas stations of your company for another year w.e.f. 12.02.2015. With the diversion of unutilised gas from NTPC WR stations to NCR stations, additional 2.37 BUs (approx) of electricity has been generated at NCR gas stations during FY 2014-15.

13.3 Development of Coal Mining projects

Your Company was allocated ten coal blocks by the Government of India, out of which, five blocks namely, Chatti-Bariatu, Kerandari, Talaipalli, Dulanga, Chatti-Bariatu (South), were cancelled by the Hon'ble Supreme Court through order dated 24.09.2014. Subsequently, the Ministry of Coal, on 24.03.2015, declared reallocation of four coal blocks to your Company (Chatti-Bariatu and Chatti-Bariatu (South) have been clubbed), for which allotment agreements had been signed between your company and Government of India on 30.03.2015.

Government of India has also issued formal allotment letters to your Company on 31.03.2015 for Banai, Bhalumuda coal blocks. Kundanali- Luburi coal block has been allotted jointly to your company and J&K State Power Development Company Limited (J&KSPDCL). For developing Kundanali-Luburi coal block, a joint venture company is proposed to be formed between your Company and J&KSPDCL.

With the allocation of total 8 coal blocks with estimated geological reserves of over 5 BT, your company expects to produce about 82 million tonnes of coal per annum.

In Pakri-Barwadih coal mining block, all the necessary statutory clearances are available. Mine opening permission has already been received from Coal Controller and DGMS. Fresh contract for appointment of Mine Developer & Operator (MDO) for Pakri-Barwadih is in progress as the earlier contract was terminated due to its poor performance. MDO contract awarded for Chatti- Bariatu was also terminated due to cancellation of the coal block by the Supreme Court.

Meanwhile, as a parallel action, short-term contracts for removal of overburden, coal extraction and transportation upto Railway Siding are planned from a part of Pakri-Barwadih block (Eastern Pit) for which tendering has been done. Your company has received mine opening permission from DGMS for Chatti-Bariatu coal block.

your company is trying for allocation of few more coal blocks in the next round of allotment of coal blocks for Government Companies.

your Company had formed Joint Venture Companies namely CIL NTPC Urja Private Limited, NTPC-SCCL Global Ventures Private Limited and International Coal Ventures Private Limited to explore further avenues in the area of coal mining. However, these JV companies have not been able to achieve their objectives owing to certain constraints like inability of the JV Company to execute the work, government directive etc. In case of CIL NTPC Urja Private Limited, the company has applied to the Government of India for reallocation of coal blocks deallocated from it in 2011.

NTPC-SCCL Global Ventures Private Limited is being wound up voluntarily as the Company could not start its business since its incorporation due to non-availability of any business prospects.

Further, the Company has decided to exit from International Coal Ventures Private Limited for which clearance from cabinet is awaited.

13.4 Exploration Activities

In Cambay exploration block allotted under NELP-VIII, held by NTPC as operator with 100% participating interest, drilling of one explanatory well has been completed and drilling of second well is in progress. Drilling of balance exploration wells is planned in the FY 2015-16.

In one of KG basin exploration blocks viz. KG- OSN-2009/1 where ONGC is the operator and NTPC has 10% stake, drilling of an exploratory well has been completed. Tests conducted did not indicate presence of hydrocarbons in the well. The well has been plugged and abandoned. In other KG basin exploration block viz. KG- OSN-2009/4 where ONGC is the operator and NTPC has 10% stake, the exploration activities are in progress and ONGC has submitted a proposal to the Government of India for reduction on minimum work program as the permitted area of the block has been reduced because of non-grant of defence clearance. It has been decided to relinquish Andaman basin exploration block viz. AN-DWN-2009/13 where ONGC is the operator and NTPC has 10% stake, to the Government of India as per advice from ONGC.

14. BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

To achieve higher levels of excellence, the company has developed and adopted its own 'NTPC Business Excellence Model' on the lines of globally reputed Excellence Models such as Malcom Baldrige Model, USA and EFQM Model of Europe. The model has been deployed at our Business Units (Stations) and your Company carry out assessment of generating stations using this framework of excellence.

In the financial year 2014-15, the 5th cycle of assessment was completed in which 21 generating stations were assessed by a team of certified and proficient assessors. Business Excellence Awards for Best Performance to Dadri and Runner-up shield to Talcher-Thermal stations were presented by the Union Minister of Power, GOI, in the Indian Power Stations Conference- 2015 held at New Delhi.

As a next step on the Journey of Excellence, the company is planning to implement Business Analytics and Information Management initiative to enhance overall strategic focus and alignment.

Contemporary quality initiatives and techniques like Quality Circles, Professional Circles, 5S, integrated management system (IMS) etc have been deployed across the organization for continuous improvement. Our Quality Circle teams of workmen have been consistently representing NTPC at national and international Quality Circle conventions and bringing many laurels.

15. RENOVATION & MODERNISATION

In the present scenario of severe resource constraint, Renovation and Modernization (R&M) of power plants is considered to be the best option for bridging the gap between demand and supply of power, as R&M schemes are cost effective. It increases the life of the plant, improves performance & availability, enhances capacity and ensures safe, reliable and economic electricity production by replacement of worn-out, deteriorated or obsolete electrical, mechanical, instrumentation, controls and protection system by state-of-the-art equipment. It also helps in compliance of environment norms.

With a view to removing technological obsolescence, renovation of control & instrumentation (C&l) is in progress in Singrauli-I & II, Korba -I & II, Ramagundam -I & II, Farakka- II, Dadri Thermal- I, Unchahar- I , Talcher-I and Kahalgaon-I STPS. During 2014-15, C&l R&M was completed in one 500 MW unit of Singrauli, one 200 MW unit & one 500 MW unit of Korba, two 500 MW units of Ramagundam, one 210 MW unit of Dadri Thermal, one 210 MW unit of FGUPTS and one 500 MW unit of Talcher STPS. On completion of these schemes, the C&l systems in these stations will be brought nearly on par with the new power projects.

Because of the very high working temperatures, R&M of Gas Turbines including their Control & Instrumentation is essential after around 15 years of life. During the year, this activity was completed in all the 4 Gas Turbines (GT) each in Kawas and in Auraiya and 2 out of 3 GT in Gandhar.

With a view to comply with increasingly stringent environment norms of reduced emission level prescribed by State Pollution Control Boards, Renovation and Retrofitting of Electrostatic Precipitator (ESP) packages have been awarded and work is in progress in Badarpur-ll, Singrauli-I & II, Farakka-I, Unchahar-I, Korba-I & II, Rihand-I, Vindhyachal-I & II, Talcher STPS -I & II and Talcher TPS-II. Amongst these, Moving Electrode Electrostatic Precipitator technology (MEEP) is being adopted for the first time in the country in Rihand Station. During 2014-15, ESP R&M of Unit#4 of Badarpur was completed. To derive benefits of the latest advancements in technology, in cooperation with CEA, EEC/VGB/ Steag Germany, a study has been taken up on ESP performance improvement using CFD modeling in Unit#6 of Ramagundam, with scheduled completion in December 2015.

16. HUMAN RESOURCE MANAGEMENT

16.1 Your Company takes pride in its highly motivated and competent Human Resource that has contributed its best to bring the Company to its present heights. The productivity of employees is demonstrated by increase in generation per employee and reduction of Man-MW ratio year after year. The over-all Man-MW ratio for the year 2014-15 excluding JV/subsidiary capacity is 0.61 and 0.56 including capacity of JV/ Subsidiaries. Generation per employee was 10.72 MUs during the year based on generation of NTPC stations.

The total employee strength of the company stood at 24,067 as on 31.3.2015 against 25,013 as on 31.3.2014.

FY 2014-15 FY 2013-14

NTPC

Number of 22,496 23,411 employees

Subsidiaries & Joint Ventures

Employees of NTPC in 1,571 1,602 Subsidiaries & Joint Ventures

Total employees 24,067 25,013

The attrition rate of the NTPC executives (including Executive Trainees and those posted in Subsidiaries and JVs) during the year was 1.35%.

16.2 Employee Relations

Employees are the driving force behind the sustained stellar performance of the company over all these years of company's ascendancy. As a commitment towards the Company's core values, Employees' Participation in Management was made effective based on mutual respect, trust and a feeling of being a progressive partner in growth and success. Communication meetings with unions and associations, workshop on production and productivity, etc were conducted at projects, regions and corporate level during the year.

Both, employees and management complemented each other's efforts in furthering the interest of the company as well as its stakeholders, signifying and highlighting over-all harmony and cordial employee relations prevalent in the Company.

16.3 Safety and Security

Occupational health and safety at workplace is one of the prime concerns and utmost importance is given to provide safe working environment and to inculcate safety awareness among the employees. Company recognizes and accepts its responsibility for establishing and maintaining a safe working environment for all its employees and associates. Your Company has 3-tier structure for Occupational health and Safety management, namely at Stations/Projects, at Regional Head Quarters and at Corporate Centre.

All our stations are certified with OHSAS-18001/ IS-18001. Internal safety audits by our own safety officers of various projects/stations and external safety audits by reputed organizations are carried out for each Project/Station.

Cross functional safety task force for O&M and construction projects are functional at all projects/ stations to monitor unsafe working conditions at site and its rectification. For strict compliance & enforcement of safety norms and practices by the contractors, safety clauses are included in General Conditions of Contract/ Erection Condition of Contract.

Many of our plants have been awarded with prestigious safety awards conferred by various Institutions/Body like Ministry of Labour & Employment-Govt. of India, National safety council, Institution of Engineers (India), in recognition of implementing innovative safety procedures and practices.

Security: Your Company recognizes and accepts its responsibility for establishing and maintaining a secured working environment for all its installations, employees and associates. This is being taken care of by deploying CISF at all units of your Company as per norms of MHA. Concrete steps are being taken for upgrading surveillance systems at all projects/ stations by installing state- of-the-art security systems.

16.4 Training and Development

In line with its objective of being a learning organization with skilled and committed employees, your Company has relentlessly promoted training and development of not only its own employees but also other professionals of the power sector. The objective is being driven by a comprehensive infrastructure comprising Power Management Institute (PMI) at the corporate level and Employee Development Centers at its sites. The training imparted is in tune with emerging needs and challenges and for this purpose, the existing training programs are reviewed and some new programs are included in the annual calendar every year.

PMI has taken firm steps to strengthen the Project Management competency in the country through an International Project Management framework. A Post Graduate Certificate in Project Management (PGCPM) programme in collaboration with IIM- Indore is being conducted for developing long term project management competency. PMI has been providing skill based training to various public and private sector utilities/companies. A similar tie-up has been done with IIM-Ahmedabad for knowledge creation.

For all round development of India's power sector, PMI has conducted several customized training programmes for the benefit of State utilities, CPSEs and private sector companies at their locations as well as in PMI. In addition, several individuals from State utilities have benefited from the regular training programmes being conducted at PMI, Noida. In all, 1,163 participants from such other organizations got trained at PMI during 2014-15.

During 2014-15, PMI has conducted total 441 training programmes covering 9,373 executives, logging a total of 36,235 training mandays. PMI conducted 20 training programs through Web Conferencing during 2014-15.

PMI imparts hands-on training to participants from various power utilities on Super Critical Technology through its 660 MW Simulator. So far, over 1000 power plant professionals have been provided training since its inception.

PMI also conducted 3 International Training Programmes, each of total 6 weeks' duration, for ABB Limited in Abu Dhabi on Power Plant Operation and Simulator Training on GE Combined Cycle Gas Power Plant, thus creating a global brand image for itself and Company. A high level programme titled "Strategic Business Sense and Leadership", anchored by renowned faculties, was held exclusively for senior Executives of the Company during 25-28 November, 2014. Programmes on Enterprise Risk Management are also being held for Senior Management personnel at Regional Offices of NTPC.

your Company is among the pioneers to start an Employee Assistance Program (confidential expert counselling service for employees and their family members).

With the objective of grooming professionals into world class power plant managers, PMI has opened "NTPC School of Business" for running PG Diploma in Management approved by AICTE. This 15 months course will also include learning inputs from international faculty and provide exposure to industries outside India.

PMI is mandated to bolster the skills initiative of your Company for development of the country's youth. In line with this, PMI as the nodal agency is facilitating the adoption of existing Government ITIs and setting up of new ITIs in different parts of the country spanning 16 States. Up till now, your Company has adopted 17 ITIs and set up 7 new ITIs near its power stations, thus associating with total 24 ITIs. Of the 17 Govt. ITIs adopted by your Company, 14 ITIs were adopted under the PPP scheme of Gol and 3 ITIs have been adopted under bilateral agreement with different State governments. These initiatives by your Company have resulted in creation of total 1,595 new seats by starting of new trades/units in the adopted & new ITIs, and, till 31.03.2015, cumulatively, a total of 23,131 students have benefitted from this initiative. For these ITI students, NTPC organised total 46,864 mandays of industrial training/ plant visits. Due to all these skill development initiatives, your Company has been conferred two awards "The Education Excellence Award - 2013" and "PMI (India) Award for Community Development-2014".

17. SUSTAINABLE DEVELOPMENT

Your Company believes that growth and development can be sustainable only if they happen in all the three fronts i.e Environment, Economic and Social. In line with NTPC Vision, -Powering India's Growth', the Company adopts business approach which is guided by Sustainable Development i.e. development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Business Responsibility Report is attached as Annex-IX and forms part of the Annual Report.

Initiatives by the Company

your Company has developed a policy on Sustainable Development in accordance with a sustainable development plan prepared for the year 2014-15. The main areas covered were projects on bio-diversity conservation, waste management, reduction in air emissions in addition to promotion of renewable energy. Major activities carried out under this plan included plantation of more than 2 lakh saplings in and around plants, installation of roof top solar PV, solar street lights, rain water harvesting, installation of bio- methanation plant, vermi composting, other techniques for conversion of domestic waste in organic fertilizer. Studies like pollutant source apportionment, human health risk assessment and environment impact assessment are also being taken up.

A total expenditure of Rs. 19.53 crore was incurred on these Sustainable Development Projects during the Financial Year 2014-15.

In its endeavor to achieve the goals of Sustainable Development, your Company is addressing the issues through multi-pronged approach as per the details given below:

17.1 Inclusive Growth -Initiatives for Social Growth

17.1.1 Corporate Social Responsibility:

Your Company has always discharged its social responsibility as a part of its Corporate Governance philosophy. It follows the global practice of addressing CSR issues in an integrated multi stake- holder approach covering the environmental and social aspects.

NTPC CSR initiatives are in focus areas of basic infrastructure development like sanitation, road, drinking water, primary education, community health, vocational training, women empowerment etc. Overall impact of these initiatives includes improvement in health, academic success, reduction in number of girl dropouts, reduced hardship and improved connectivity etc. During the year special thrust has been given to the "Swachh Vidyalaya Abhiyan" for construction of toilets in government schools.

17.1.2 NTPC Foundation

NTPC Foundation is engaged in serving and empowering the physically challenged and economically weaker sections of the society.

Details of expenditure incurred and initiatives undertaken by the Company under CSR are covered in the Annual Report on CSR annexed as Annex-VII to this Report.

17.1.3 Rehabilitation & Resettlement (R&R)

your Company is committed to help the populace displaced for execution of its projects and has been making efforts to improve the socio- economic status of Project Affected Persons (PAPs). In order to meet its social objectives, your Company is focusing on effective R&R of PAPs and undertaking community development activities in and around the projects.

R&R activities are initiated at our projects by undertaking need based community development activities in the area of health, education, water, capacity building infrastructure etc by formulating Initial Community Development (ICD) Plan in consultation with concerned Panchayat, district administration and opinion makers of the locality. As per the policy, a detailed socio-economic survey (SES) is conducted by a professional agency to create a baseline data of PAPs.

R&R plan expenditure is implemented in a time bound manner so as to complete its implementation by the time the project is commissioned. A social impact evaluation is being conducted by a professional agency to know the efficency of R&R Plan implementation for future learning and improvements.

17.1.4 R&R achievements during the year:

(a) Initial Community Plan (ICD):

- ICD plan for Bilhaur project enchanced.

- Community Development plan for Kahalgaon MGR to Hurra Mines approved.

- Implementation of ICD activities continued at Barethi, Darlipalli, Gajmara, Khargone, Nabinagar (BRBCL) and Nabinagar (NPGCL) projects.

(b) Rehabilitation and Resettlement (R&R) Plan:

- R&R plans for Barethi, Mouda-II, Khargone, Darlipalli, Unchahar-IV and Rammam -III projects covering areas like health, education, sanitation, drinking water, infrastructure facilities finalized and approved in consultation with the stakeholders.

- R&R activities were implemented in new green/ brownfield Thermal Projects at Barh, Bongaigaon, Gadarwara, Muzaffarpur, Korba, Kudgi, Lara, Meja, Mouda, North-Karanpura, Solapur, Tanda, Vallur, Vindhyachal. In Hydro Projects at Koldam, Lata-Tapovan, Tapovan- Vishnugad and Coal Mining projects at Pakri-Barwadih, Chhatti- Bariatu, Kerendari, Dulanga and Talaipalli, R&R activities were implemented.

- Provisions made for running expenses for Solapur Power and Industrial Training Institute, with three trades electrician, fitter and welder.

- INT, Raipur - construction is in progress.

- Setting up of mother and child care hub and critical care unit approved for Katwa sub- division hospital, Burdwan as part of R&R expenditure for Katwa Project.

- Mobile Health Clinic at Kudgi, Nabinagar (NPGCL), Pakri-Barwadih, Nabinagar (BRBCL) and Gajmara projects continued this year.

- SES for Bilhaur and Mouda-II projects was completed.

17.2 Environment Management - Initiatives for preserving Environment

Vision Statement on Environment Management:

"Going Higher on Generation, lowering GHG intensity"

your Company is pursuing the objective of environment protection as one of its prime responsibilities and focuses its efforts to mitigate the impact of its operation on surrounding environment To meet the environmental challenges of 21st century and beyond, the Company has adopted sound environment management practices and advanced environment protection system to minimize impact of power generation on environment.

your Company has adopted advanced and high efficiency technologies such as super critical boilers for recently commissioned and the upcoming green field projects. Your company is augmenting its capacity by installing solar power systems and micro hydel power systems attached to its thermal power stations, wherever possible, so as to encourage garnering of renewable energy resources. The Company is also designing its up-coming plants to use beneficiated coal and imported low ash coal. These measures are aimed not only to achieve reduction in pollution and minimize use of precious natural resources but also to lead to reduction of COe emissions per unit of generation thereby reducing global warming.

17.2.1 Control of Air Emissions: High efficiency Electro- static Precipitators (ESPs) with efficiency of the order of 99.97% and above, with advanced control systems have been provided in all coal based stations to keep Suspended Particulate Matter (SPM) below permissible limits. All up-coming new plants are being provided with ESPs designed in such a manner that would cater to the anticipated future norms. Performance enhancement of ESPs operating over the years is being carried out by augmentation of ESPs fields, retrofitting of advanced ESP controllers and adoption of sound O&M practices. Flue Gas Conditioning systems have also been provided at our old units which are helping in reduction of SPM emissions below statutory limits even during coal quality variations due to blending of coal etc.

NOx control in coal fired plants is achieved by controlling its production by adopting best combustion practices. Since tall stacks are provided in coal stations, NOx emitted through stacks is widely dispersed and diluted. In gas based stations, NOx control systems (hybrid burners or wet DeNOx) have been provided for good combustion practices.

Fugitive emission from ash pond is controlled by maintaining water cover, tree plantation on abandoned ash ponds, water spray and earth cover in inactive lagoons. Providing dust suppression and extraction system in CHP area has further added to reduction in fugitive dust in the vicinity of power stations.

17.2.2 Control of water pollution and promotion of water conservation: Various water conservation measures have been taken up to reduce water consumption in power generation by using 3Rs (Reduce, Recycle & Reuse) as guiding principle.

Provision of advanced treatment facilities such as Liquid Waste Treatment Plants (LWTP), Recycling Systems for Ash Pond Effluent called Ash Water Recirculation System (AWRS) and closed cycle condenser cooling water systems with higher Cycle of Concentration (COC), rain water harvesting wherever plausible and reuse of treated sewage effluent for horticulture purposes are some of the measures implemented in most of the stations. All these measures have resulted in reduction of effluent discharge from the power plants of NTPC.

17.2.3 Automation of environment measurement system: 67 continuous ambient air quality monitoring stations (AAQMS) have been installed to capture the real time data and access thereof viz., PM 10, PM 2.5, SO2, NOx and access has been provided to the Central Pollution Control Board and State Pollution Control Boards. Additional ozone analyzers for ambient air are also being provided phase-wise at the stations. Installation of Continuous Emission Monitoring Systems (CEMS) to monitor emissions of SO2, NOx and CO2 in all its existing units on real time basis is in advance stage. It is also installing Effluent Quality Monitoring System (EQMS). For all the upcoming projects, real time monitors for ambient air and emissions are included in the engineering packages during design stage itself.

17.2.4 Environmental Studies: Your Company has taken a number of studies for better environment protection and to develop strong scientific database.

17.2.5Tree Plantation: Your Company has planted 21.783 million trees till date throughout the country as a measure of massive afforestation.

The afforestation has not only contributed to the 'aesthetics' but also helped in carbon sequestration by serving as a 'sink' for C02 released from the stations and thereby protecting the quality of ecology and environment in and around the projects.

17.2.6 ISO 14001 & OHSAS 18001 Certification: All NTPCs stations have been certified with ISO 14001 and OHSAS 18001 by reputed National and International certifying agencies as a result of sound environment management systems and practices.

17.3 Quality Assurance and Inspection (QA&I)

Your company has invested hugely in Quality with the view to secure long term plant reliability. Investment in terms of committing adequate number of qualified and trained human resources for quality related activities, laboratories at the construction sites and, more importantly, robust processes providing for direction methods and standards of performance, for the various tasks associated with quality.

Quality in your company has a much deeper meaning: identification of needs, planning for realization of the needs jointly with the stake holders including the various suppliers and verification whether the needs have been built into the product/service during manufacturing and erection & commissioning. The quality loop is further extended to capture whether the originally indented plant reliability and operation standards have been realized or not. Gaps, if any, are filled through resetting the methods and standards through continuous improvements.

Your company's performance indicators, exceptional by any standards, bears testimony to the soundness of the quality system deployed.

Your Company is represented on various technical committees of ISO and IEC and is actively contributing in formulation and updating of power sector technical and quality standards/ guidelines.

17.4 Clean Development Mechanism (CDM)

Your Company is undertaking climate change issues proactively.

Three of its solar projects namely 5MW each solar PV project at Dadri, Port Blair (Andaman & Nicobar) and Faridabad had already been registered with UNFCCC CDM Executive Board. 8MW Small Hydro Power Project at Singrauli is in advanced stage of validation and is likely to be submitted shortly to UNFCCC for CDM registration. 6173 numbers of CERs for 5MW solar PV Power project at Port Blair (A&N) had already been issued by UNFCCC CDM Executive Board. Verification/ issuance of CERs for 5 MW solar power PV project at Dadri is in process.

17.5 Ash Utilisation

During the year 2014-15, 59.15 million tonnes of ash was generated and 39.52% viz. 23.38 million tonnes of ash had been utilized for various productive purposes.

Important areas of ash utilization are - cement & asbestos industry, ready mix concrete plants (RMC), road embankment, mine filling, ash dyke raising & land development.

Pond ash from all stations of your Company is being issued free of cost to all users. Fly ash is also being issued free of cost to fly ash/ clay-fly ash bricks, blocks and tiles manufacturers on priority basis over the other users from all coal based thermal power stations. The funds collected from sale of ash up to Dec'14 was being maintained in a separate account by NVVN, a wholly- owned subsidiary company. Now this fund has been transferred to your Company and is being maintained in the separate account. This fund is being utilized for development of infrastructure facilities, promotion and facilitation activities to enhance ash utilization.

your Company has also introduced Ash Policy, which is a vision document dealing with the ash utilization issue in an integral way from generation to end product. This policy aims at maximizing utilization of ash for productive usage alongwith fulfilling social and environmental obligations as a green initiative in protecting the nature and giving a better environment to future generations.

The quantity of ash produced, ash utilized and percentage of such utilization during 2014-15 from NTPC Stations is at Annex-VIII.

17.6 CenPEEP - towards enhancing efficiency and protecting Environment

your Company initiated a unique voluntary program of GHG emission reduction by establishing -Center for Power Efficiency and Environmental Protection (CenPEEP)' and under this program, it is estimated that cumulative COe avoided is 40.25 million ton since 1996.

CenPEEP is coordinating the implementation of -Perform, Achieve & Trade (PAT) Scheme' under Prime Minister's National Mission on Enhanced Energy Efficiency (NMEEE) wherein 22 stations of your Company are Designated Consumers (DC). Based on the gap analysis, station specific action plans were prepared & implemented for efficiency improvement and reduction in auxiliary power to achieve the PAT targets.

Thrust has been given for efficiency improvement and sustenance through strategic initiatives of Energy Efficiency Management System (EEMS), and reliability improvement through Reliability Centered Maintenance (RCM) & PdM systems. A pool of over 350 certified Energy Auditors has been created in your Company helping in the culture of energy conservation. A dedicated group CEETEM - Centre for Energy Efficient Technology & Energy Management, coordinates regular Energy audits to induce focused actions and activities for improvement.

Monitoring and analysis of critical efficiency parametric aberrations & draft power consumption is done using PI dashboards & online systems like Thermal Loss Analyser (TLA), Output Loss Analysis (OLA) and System Energy Efficiency Display (SEED). These systems assist the operator in tracking the gaps in heat rate and auxiliary power consumption & facilitate tracking and trending of degradation of equipment performance and formulation of action plans for improvement.

Under Indo-US bilateral program 'Partnership to Advance Clean Energy - Deployment (PACE-D)' supported by USAID, a manual on 'Benchmarking for Super critical Units' was prepared jointly with US experts.

CenPEEP is actively involved in the training and development of power professionals from your Company and other utilities in the power sector. It conducts domain specific workshops in areas of Boiler & Auxiliaries, Turbine & Auxiliaries, Cooling Towers, RCM and PdM technologies etc.

18. NETRA - R&D Mission in Power Sector

your Company, as the leading power utility of the country, has assigned 1% of PAT for R&D activities. Its research efforts are focused to address the major concerns of the sector as well as the futuristic technology requirements of the sector. In this effort, company has established NTPC Energy Technology Research Alliance (NETRA) as state-of-the-art centre for research, technology development and scientific services in the domain of electric power to enable seamless work flow right from concept to commissioning. The focus areas of NETRA are - Efficiency Improvement & Cost Reduction; New & Renewable Energy; Climate Change & Environmental protection and Advanced Scientific Services.

Research Advisory Council (RAC) of NETRA comprising of eminent scientists and experts from India and abroad is in place to steer research direction.

In order to provide maximum possible benefit to the stations while developing green technologies, many projects/activities have been undertaken for implementation.

NETRA continued to provide scientific support to all stations as well as many other utilities stations in the area of oil/water chemistry, environment, electrical, rotor dynamics etc for efficient performances.

NETRA laboratories are accredited as per ISO 17025 and its NDT laboratory has also been recognized as "Well known Remnant Life Assessment Organization" under the Boiler Regulations, 1950. Phase-ll NETRA infrastructure is under construction with approx 21000 sq m floor area and is expected to be completed by Dec'2015. Phase II will have 30 laboratories, workshop, pilot plant bay and an auditorium with seating capacity of 400 persons.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

Several steps were taken for the proper propagation and implementation of Official Language Policy of Government of India in the Company.

Meetings of Official Language Implementation Committee were held on 20th June, 30th September, 30th December, 2014 & 24th March, 2015 in which the implementation of Hindi in the Organization was reviewed thoroughly. Various Hindi competitions were organized during Hindi fortnight from 1st to 14th September, 2014 in the corporate office as well as in all projects of NTPC Limited. Corporate Hindi Magazine "Vidyut Swar" was awarded All India first prize by Hon'ble President of India. Hindi workshops were conducted for the various departments of the Company. Renowned Hindi scholars inspired the participants of Hindi workshops to use Hindi in day-to-day official work.

Most of the office orders, formats and circulars were issued in Hindi as well. Important advertisements and house journals were released in bilingual form- in Hindi and in English.

your Company's website also has a facility of operating in bilingual form- in Hindi as well as in English.

20. VIGILANCE

20.1 Vigilance Mechanism:

your Company ensures transparency, objectivity and quality of decision making in its operations, and to monitor the same, the Company has a Vigilance Department headed by Chief Vigilance Officer, a nominee of Central Vigilance Commission. The four units of Vigilance Department namely Corporate Vigilance Cell, Departmental Proceeding Cell (DPC), MIS Cell and Technical Cell (TC) deal with various facets of vigilance mechanism.

333 surprise checks were conducted in various departments and recovery was made against discrepancies.

Various guidelines were issued during 2014-15 to improve systems in the Company pertaining to procurement, accounting, payments, agreements, enlistment of vendors etc.

20.2 Implementation of Integrity Pact

Your Company is committed to have total transparency to its business processes and as a step in this direction; it signed a Memorandum of Understanding with Transparency International India in December, 2008. The Integrity Pact is being implemented for all contracts having value exceeding Rs.10 crore. Three Independent External Monitors have been nominated by the Central Vigilance Commission for all contracts with value exceeding Rs.100 crore. New format of Integrity Pact as per the Company's requirement and the suggestions given by IEMs were implemented.

20.3 Implementation of various policies/ circulars

Complaint Handling Policy, Fraud Prevention Policy and Whistle Blower Policy have been implemented in the Company to build and strengthen a culture of transparency. A uniform policy for banning of business dealings with the contractors/ vendors has been formulated and implemented.

During 2014-15,159 complaints were received, out of which 84 complaints were carried to a logical conclusion and the remaining 75 complaints are under various stages of investigation. Appropriate disciplinary action has also been initiated wherever necessary.

20.4 Vigilance Awareness Week and Workshops

During 2014-15,41 preventive vigilance workshops were conducted at various projects/ places in which 1,230 employees participated.

Vigilance awareness week was observed from October 27, 2014 to November 2, 2014 in all NTPC projects and stations/ establishments.

21. REDRESSAL OF PUBLIC GRIEVANCES

your Company is committed for resolution of public grievance in efficient and time bound manner. Company Secretary has been designated as Director (Grievance) to facilitate earliest resolution of public grievances received from President Secretariat, Prime Minister's Office, Ministry of Power etc.

In order to facilitate resolution of grievances in transparent and time bound manner, Department of Administrative Reforms & Public Grievances, Department of Personnel & Training, Government of India has initiated web-based monitoring system at www.pgportal.in.

As per directions of GOI, public grievances are to be resolved within two months time. If it is not possible to resolve the same within two months period, an interim reply is to be given. Your company is making all efforts to resolve grievances in above time frame.

22. RIGHT TO INFORMATION

Your Company has implemented Right to Information Act, 2005 in order to provide information to citizens and to maintain accountability and transparency. The Company has put RTI manual on website for access to all citizens of India and has designated a Central Public Information Officer (CPIO), an Appellate Authority and APIOs at all sites and offices of the Company.

During 2014-15, 1,288 applications were received under the RTI Act, out of which 1,242 applications were replied to till 31.03.2015.

23. USING INFORMATION AND COMMUNICATION TECHNOLOGY FOR PRODUCTIVITY ENHANCEMENT

Your Company has implemented an Enterprise Resource Planning (ERP) package covering maximum possible processes across the organization including subsidiaries. In addition to the core business processes and Employee Self Service (ESS) functionality, the ERP solution also includes e-procurement, Knowledge Management, Business Intelligence, Document Management, and Workflow etc. The ERP system is fully managed through in-house expertise from process groups and technical groups. Parallely, in-house solutions have been developed to take care of the non-ERP areas

A state of the art data centre with centralized server facility for ERP to cater to the entire Company is in Operation at NOIDA A100% disaster recovery centre is also operational at Hyderabad for change over in case of any emergency.

24. NTPC GROUP: SUBSIDIARIES AND JOINT VENTURES

Your Company has currently 4 subsidiary companies and 21 joint venture companies for undertaking specific business activities.

A statement containing the salient feature of the financial statement of your Company's Subsidiaries, Associate Companies and Joint Ventures as per first proviso of section 129(3) of the Companies Act, 2013 is included in the consolidated financial statement.

The financial statements of subsidiary companies along with the respective Directors' Report are placed elsewhere in this Annual Report.

25. INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013 and Listing Agreement with Stock Exchanges are as under:

25.1 Statutory Auditors

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s O.P. Bagla & Co., M/s PSD & Associates, M/s PKF Sridhar & Santhanam, M/s V. Sankar Aiyar & Co., M/s Ramesh C. Agrawal & Co. and M/s AR. & Co. were Joint Statutory Auditors for the financial year 2014-15.

The Comptroller & Auditor General of India has appointed (i) M/s T R Chadha & Co., Chartered Accountants, New Delhi, (ii) M/s PSD Associates, Chartered Accountants, New Delhi, (iii) M/s Sagar & Associates, Chartered Accountants, Hyderabad, (iv) M/s Kalani & Co., Chartered Accountants, Jaipur, (v) M/s P A & Associates, Chartered Accountants, Bhubaneshwar, (vi) M/s S K Kapoor & Co., Chartered Accountants, Kanpur and (vii) M/s B M Chatrath & Co., Chartered Accountants, Kolkata as the Joint Statutory Auditors of the Company for the year 2015-16.

25.2 Management comments on Statutory Auditors' Report

The Statutory Auditors of the Company have given an unqualified report on the accounts of the Company for the financial year 2014-15. However, they have drawn attention under 'Emphasis of Matter' to Note-22 (b) to the financial statements relating to accounting of sales on provisional basis and Note 34 in respect of a project where the matter is pending before the Hon'ble Supreme Court of India.

The issues have been adequately explained in the respective Notes referred to by the Auditors.

25.3 Review of accounts by Comptroller & Auditor General of India (C&AG)

As advised by the Office of the C&AG, the comments of C&AG for the year 2014-15 alongwith management replies thereto are placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.

The office of the C&AG has issued two comments on the accounts of the Company for the financial year 2014-15 in respect of disclosure of sales on provisional basis where the Company has filed a petition before the Hon'ble Supreme Court of India contesting certain provisions of the CERC Regulations, 2014 and accounting of capital expenditure on assets not owned by the Company.

25.4 COST AUDIT

As prescribed under the Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records are being maintained by all stations of the Company.

The firms of Cost Accountants appointed under Section 148(3) of the Companies Act, 2013 for the financial year 2013-14 and 2014-15 were (i) M/s Narasimha Murthy & Co., Hyderabad, (ii) M/s Musib & Co., Mumbai, (iii) M/s Sanjay Gupta & Associates, Delhi, (iv) M/s Bandopadhyay Bhaumik & Co., Mumbai, (v) M/s S. Dhal & Co., Bhubhaneshwar and (vi) M/s R.J. Goel & Co., Delhi.

The due date for filing consolidated Cost Audit Report in XBRL format for the financial year ended March 31, 2014 was September 27, 2014 and the consolidated Cost Audit Report for your Company was filed with the Central Government on September 10, 2014.

The Cost Audit Report for the financial year ended March 31,2015 shall be filed within the prescribed time period under the Companies (Cost Records & Audit) Rules, 2014.

25.4 Performance Evaluation of the Directors and the Board

As required under the Companies Act, 2013 and the Listing Agreement, evaluation of performance of directors including that of the Independent Directors and of the Board is to be carried out either by the Board or by the Nomination and Remuneration Committee or by the Independent Directors. It also requires disclosure of formulated criteria for performance evaluation in this Report.

In this regard, the Ministry of Corporate Affairs, through Notification dated 05.06.2015, has exempted the Government Companies from these provisions. The appointment of the Functional Directors, Government Nominee Directors and Independent Directors of your Company is made by the Government of India. Their terms & conditions of appointment as well as tenure of all directors are also decided by GOI and there is a well laid down procedure for evaluation of Functional Directors & CMD as well as of Government Directors by Administrative/ respective Ministry. Also, the performance of the Board of the Government Companies is evaluated during the performance evaluation of the MOU signed with the Government of India.

25.5 Secretarial Audit

The Board has appointed M/s Agarwal S. & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure X to this Report.

The Managements' Comments on Secretarial Audit Report are as under:

Observations Management's Comments

Composition of the As per the Listing Board of Directors of Agreements executed with the Company is not the Stock Exchanges, the in compliance with Company should have nine Second Proviso to Independent Directors Section 149(1) and since Company has seven Section 149(4) of the functional Directors Companies Act, 2013, including the Chairman Clause 49(II)(A) of the & Managing Director and Listing Agreement and two Government Nominee Para 3.1.2 and 3.1.4 Directors on its Board as of the DPE Guidelines against two Independent on Corporate Directors in position at Governance for present. Further, the CPSEs issued by the Company does not have Department of Public any woman Director on the Enterprises Board.

Being a Government Company the power to appoint the Directors on the Board of the Company vests with the President of India and accordingly, the Company is, from time to time, requesting Ministry of Power to appoint woman director and the requisite number of Independent Directors on its Board.

25.6 Particulars of contracts or arrangements with related parties

During the period under review, the Company had not entered into any material transaction with any of its related parties. The Company's major related party transactions are generally with its subsidiaries and associates. All related party transactions were in the ordinary course of business and were negotiated on an arm's length basis. They were intended to further the Company's interests.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

Web-link for Policy on Materiality of Related Party Transactions & also on Dealing with Related Party Transactions has been provided in the Report on Corporate Governance, which forms part of the Annual Report.

25.7 Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future: NIL

25.8 Adequacy of internal financial controls with reference to the financial statements: The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

25.9 Loans and Investments

Details of Loans and Investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of financial statement, attached as a separate section in the Annual Report FY 2014-15.

25.10 Sexual Harassment of Women at Workplace

The Company has in place a Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. In association with the National Commission for Women, PMI has taken the initiative to conduct Gender Sensitization workshops for building a Collaborative Work Culture across your Company. In these workshops, the employees, both male and female, are sensitized and made aware about issues and laws pertaining to sexual harassment as well as appropriate behavior at the workplace. During 2014-15, PMI has conducted 8 such workshops across the organization covering 260 employees. One complaint of sexual harassment was received during the year 2014-15, which was resolved.

25.11 Procurement from MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012. In terms of the said policy, the total eligible value of annual procurement of goods produced and services rendered by MSEs (including MSEs owned by SC/ST entrepreneurs) during the year 2014-2015 was Rs.140 crore. The total procurement made from MSEs (including SC/ST entrepreneurs) was Rs.317.12 crore.

25.12 Particulars of Employees

As per provisions of section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each director to the median employee's remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors' Report. However, as per notification dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors' Report.

25.13 Extract of Annual Return:

Extract of Annual Return of the Company is annexed herewith as Annexure 'VI' to this Report.

25.14 Information on Number of Meetings of the Board held during the year, composition of committees of the Board and their meetings held during the year, establishment of vigil mechanism/ whistle blower policy and web-links for familiarization/ training policy of directors and Policy for determining 'Material' Subsidiaries have been provided in the Report on Corporate Governance, which forms part of the Annual Report.

24.15 Para on development of risk management policy including therein the elements of risks are given elsewhere in the Annual Report.

25.16 No disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

The particulars of annexures forming part of this report are as under:

Particulars Annexure

Management Discussion & Analysis I

Report on Corporate Governance II

Information on conservation of energy, III technology absorption and foreign exchange earnings and outgo

Statistical information on persons IV belonging to Scheduled Caste/ Scheduled Tribe categories

Information on Physically Challenged V persons

Extract of Annual Return VI

Annual Report on CSR Activities VII

Project Wise Ash Utilisation VIII

Business Responsibility Report for the IX year 2014-15

Secretarial Audit Report in Form MR-3 X

26. BOARD OF DIRECTORS

Shri Anil Kumar Singh, JS (Thermal), Ministry of Power has joined as Government Nominee Director of the Company with effect from October 31, 2014. Consequent upon superannuation of Shri N.N. Misra onOctober31,2014,Shri K.K. Sharma has taken over as Director (Operations) with effect from November 1, 2014.

Consequent upon completion of three years' tenure, Shri S.B. Ghosh Dastidar and Shri R.S. Sahoo have ceased to be the Independent Director w.e.f. August 25, 2014 and Shri Ajit M. Nimbalkar and Shri S.R. Upadhyay have ceased to be the Independent Director w.ei. January 19,2015. Further, upon completion of three years' tenure, Ms. H.A. Daruwalla, Shri AN. Chatterji and Prof. Sushil Khanna have ceased to be the Independent Director w.ei. February 27, 2015.

The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri S.B. Ghosh Dastidar, Shri R.S. Sahoo, Shri N.N. Misra, Shri Ajit M. Nimbalkar, Shri S.R. Upadhyay, Ms. H.A. Daruwalla, Shri AN. Chatterji and Prof. Sushil Khanna during their association with the Company. In accordance with Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company -Shri AK. Jha and Shri U.P. Pani shall retire by rotation at the Annual General Meeting of your Company and, being eligible, offers themselves for re-appointment.

27. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

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

2. 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 2014-15 and of the profit of the company for that period;

3. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

4. the Directors had prepared the Annual Accounts on a going concern basis;

5. 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; and 6. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

28. ACKNOWLEDGEMENT

The Directors of your Company acknowledge with deep sense of appreciation, the cooperation received from the Government of India, particularly the Prime Minister's Office, Ministry of Power, Ministry of Finance, Ministry of Environment, Forests & Climate Change, Ministry of Coal, Ministry of Petroleum & Natural Gas, Ministry of Railways, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, Comptroller & Auditor General of India, Appellate Tribunal for Electricity, State Governments, Regional Power Committees, State Utilities and Office of the Attorney General of India. The Directors of your Company also convey their gratitude to the shareholders, various international and Indian Banks and Financial Institutions for the confidence reposed by them in the Company. The Board also appreciates the contribution of contractors, vendors and consultants in the implementation of various projects of the Company. We also acknowledge the constructive suggestions received from Government and Statutory Auditors. We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the company continues to grow and excel.

For and on behalf of the Board of Directors

(Dr.Arup Roy Choudhury)

Chairman & Managing Director

(DIN: 00659908)

Place: New Delhi

Date: 30th July, 2015


Mar 31, 2014

Dear Members,

The Directors are pleased to present the 38th Annual Report and the audited financial statements for the year ended March 31, 2014.

Financial Year 2013-14 has been yet another year of achievements for your Company. With the addition of 1,835 MW capacity (including 610 MW through JV Companies) during the year, your Company crossed 43,000 MW capacity reaching a total capacity of 43,108.31 MW. Major highlights for the year are:

- Commissioned solar plants of 65 MW capacity during the year. With the commercialization of 20 MW Rajgarh Solar Power Project on 30.04.2014, cumulative solar capacity of 95 MW has already been commissioned, which is a substantial contribution to renewable energy.

- Declared 2,675 MW (including 1,110 MW through JV Companies) on commercial generation. Total commercial capacity of NTPC group has become 41,879 MW.

- Average PLF of 81.50% as against all India PLF of 65.55% with four stations recording more than 90% PLF.

- Exceeded the Capital expenditure (CAPEX) target of Rs.20,200 crore. CAPEX target was Rs. 21,797.24 crore as against the previous years target ofRs. 19,925.53 crore.

- 100% realization of current bills from customers.

- Recorded total income of Rs. 74,707.82 crore, an increase of 8.5% as compared to Rs. 68,855.81 crore in the FY 2012-13. Net profit after Tax (PAT) of Rs. 10,974.74 crore against previous years PAT of Rs.12,619.39 crore. (PAT for financial year 2012-13, includes a write-back of provision of Rs.835.97 crore and an Exceptional item of income of Rs.1,684.11 crore towards interest. Both these relates to payment towards settlement of dues of erstwhile DESU).

- Dividend of Rs.5.75 per share (total Rs.4,741.15 crore) which comprises interim dividend of Rs. 4.00 per equity share paid in February 2014 and recommendation for final dividend of Rs. 1.75 per equity share for the year 2013-14, subject to approval of the shareholders.

- Coal Supply Agreements signed for 14,010 MW capacity commissioned/ to be commissioned between April 2009 to March 2015.

- Operation started on Inland Waterways Transportation of Imported Coal for Farakka station and about 2 lac MT imported coal has been supplied through this mode to Farakka.

- Issued Tax-free, Secured, Redeemable Non-Convertible Bonds having tax benefits under Section 10 (15) (iv) (h) of the Income Tax Act, 1961 for an aggregate amount of Rs.2,250 crore. Out of Rs.2,250 crore, bonds of Rs.1,750 crore were issued to the public through the Stock Exchanges, which received over-whelming response and was over- subscribed by 3.7 times and bonds of Rs.500 crore were issued under private placement.

- Excellent MOU rating by Government of India for the year 2012-13.

- NTPC was the only PSU among the top 35 companies, ranked 6th in the prestigious study of The Economic Times and Great Place to Work Institute for 2013 covering 550 companies, 22 industries and close to 1 lac employees.

You will appreciate the fact that even amid the general down turn in the economy and market (including the financial markets), the company demonstrated the tremendous investor confidence enjoyed by it and recorded excellent performance despite the challenge before the sector.

1. FINANCIAL RESULTS

2013-14 2012-13

Revenue Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Net Revenue from Operations (including Energy Sales, 72,018.93 11,882.35 65,737.04 10,845.91 Consultancy, Energy consumed internally)

Other Income 2,688.89 443.64 3,118.77 514.56

Total Revenue 74,707.82 12,325.99 68,855.81 11,360.47

Expenses

Fuel 45,829.71 7,561.41 41,018.25 6,767.57

Employee Benefits Expense 3,867.99 638.18 3,415.96 563.60

Finance Costs 2,406.59 397.06 1,924.36 317.50

Depreciation and amortization expense 4,142.19 683.41 3,396.76 560.43

Generation, administration & other expenses 4,543.85 749.69 4,235.68 698.84

Prior period items (net) 12.84 2.12 (29.72) (4.90)

Total Expenses 60,803.17 10,031.87 53,961.29 8,903.04

Profit before Tax and exceptional items 13,904.65 2,294.12 14,894.52 2,457.43

Exceptional items - - 1,684.11 277.86

Profit before tax 13,904.65 2,294.12 16,578.63 2,735.29

Tax Expense 2,929.91 483.40 3,959.24 653.23

Profit for the year 10,974.74 1,810.71 12,619.39 2,082.06

2013-14 2012-13

Appropriations:

Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Transfer to bond redemption reserve 576.08 95.05 492.79 81.31

Transfer to general reserve 5,000.00 824.95 6,500.00 1,072.43

Transfer to capital reserve 4.98 0.82 0.97 0.16

Interim dividend 3,298.19 544.17 3,092.07 510.16

Proposed dividend 1,442.96 238.07 1,649.09 272.08

Tax on dividend 804.74 132.77 781.87 129.00

*1US $= Rs. 60.61 as on March 31, 2014

2. OFFER FOR SALE TO EMPLOYEES

In terms of CCEAs approval dated 26.11.2012 and Department of Disinvestments communication dated 26.06.2013, Offer for Sale of NTPCs Equity Shares by Government of India to the Eligible Employees was successfully concluded and the proceeds amounting to Rs.48,16,38,656/- was credited to the account of Government of India. A total of 34,83,320 shares were allotted to 3,407 employees.

Consequent upon sale of shares from Government of India to the eligible employees, the equity holding of Government of India in NTPC has reduced to 74.96% from 75%.

3. DIVIDEND

3.1 Interim and Final Dividend:

In addition to interim dividend of Rs. 4.00 per equity share paid in February 2014, your Directors have recommended a final dividend of Rs. 1.75 per equity share for the year 2013-14. With this the total dividend for the year is Rs.5.75 per equity share of Rs.10/- each. In the year 2012-13 also, the total dividend paid was Rs.5.75 per equity share of Rs.10/- each (including special dividend of Rs.1.25 per share).

The total dividend payout is 43.20% and the total dividend payout including dividend tax is 50.53% of profit after tax. The final dividend shall be paid after your approval at the Annual General Meeting.

The dividend has been recommended in accordance with your Companys policy of balancing dividend pay-out with the requirement of deployment of internal accruals for its growth plans.

Your Directors believe that growth of the company through capacity addition, backward and forward integration and strategic diversifi cation of its operations would lead to increase in shareholders value.

4. OPERATIONAL PERFORMANCE

4.1 Generation:

During the year, the power stations of your Company generated 233.284 BUs (248 BUs including JVs) of electricity (including solar power) which was 24.26% (25.80% including that generation by JVs) of the total power generated in India (without Bhutan import).

The total power generated by the Company has registered an increase of 0.54% over the previous years generation of 232.028 BUs. The total generation contributed by coal stations is 220.700 BUs during the year against generation of 212.329 BUs last year registering a growth of 3.94%.

Generation from coal based units could have been still higher but due to less generation schedule there was generation loss of 23.083 BUs. The coal based stations of your company operated at average Plant Load Factor (PLF) of 81.50% (All India PLF 65.55%) and average Availability Factor of 90.32% on bus bar during the year. During the year, 4 coal based stations out of 16 achieved more than 90% PLF.

The gas stations having a capacity of 4,017 MW achieved annual generation of 12.569 BUs at a PLF of 35.72% as against 19.699 BUs last year mainly due to less generation schedule which accounted for a generation loss of 20.652 BUs. The average declared capacity of gas based stations for the year was 95.24% as compared to 93.14% during previous year.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India and as per Guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises, GOI, is presented in Annex-I to this Report.

5. COMMERCIAL PERFORMANCE

5.1 Billing and Realisation

Your Company has realized 100% payment of current bills raised for sale of power, thus achieving this feat for the eleventh consecutive year.

Most of the customers were making their payments within 60 days of billing and had established LCs at 105% of the average monthly billing.

The Company has realized Rs.2,520.08 Crore (Rs. 835.97 crore as principal and Rs. 1,684.11 crore as interest and surcharge) towards DESU dues payable by Government of NCT of Delhi.

5.2 Rebate Scheme for realization of dues:

In order to encourage early and full realization of dues, your Company has formulated a special scheme called NTPC Rebate Scheme. In this Scheme for 2013-14, graded rebate was given to those customers who were making due payment upto 55th day of billing. The Rebate Scheme for 2014-15 has been modifi ed to align with CERC Regulations for 2014-19 keeping other provisions similar to 2013-14.

5.3 Commercial Capacity:

The following units were declared commercial during the year 2013-14, adding 2,675 MW (including 65MW of solar capacity) to commercial capacity of your Company:

Project/ Unit Capacity COD* (MW)

NTPC Units- Coal Based (I)

Rihand-III, Unit#2 500 27.03.2014

Vindhyachal-IV, Unit#2 500 27.03.2014

Mauda-I, Unit#2 500 30.03.2014

Total (I) 1,500 NTPC Units-Renewable Energy Units (II)

Ramagundam Solar PV 10 29.01.2014

Talcher Solar PV 10 28.03.2014

Faridabad Solar PV 5 31.03.2014

Unchahar Solar PV 10 31.03.2014

Rajgarh Solar PV 30 31.03.2014

Total (II) 65

NTPCs JV Units- Coal Based (III)

Jhajjar, Unit#3 (JV with IPGCL 500 26.04.2013 and HPGCL)

Vallur, Unit#2 (JV with 500 25.08.2013 TANGEDCO)

Kanti, Unit#1 (subsidiary of 110 01.11.2013

NTPC in JV with BSPGCL)

Total (III) 1,110

Total Capacity declared 2,675 commercial during 2013- 14(incl. JVs) (I)+(II)+(III)

* COD- Commercial Operation Date

Further, after the close of financial year 2013-14, 20 MW capacity of Rajgarh Solar PV was declared commercial on 30.04.2014.

5.4 Tariff Regulations:

Central Electricity Regulatory Commission (CERC) has issued the CERC (Terms and Conditions of Tariff) Regulations, 2014 on 21.02.2014, which are applicable for the period 01.04.2014 to 31.03.2019. The tariff of electricity generated from NTPC stations would be determined by CERC based on these regulations for the above mentioned period. The salient features of Tariff Regulations 2014-19 are discussed in the Management Discussion and Analysis Report.

Being aggrieved on certain provisions of the CERC (Terms and Conditions of Tariff) Regulations, 2014, your Company has filed a writ petition before the Honble High Court of Delhi.

5.5 Strengthening Customer Relationship:

Customer Relationship Management (CRM) initiative has been taken by your company towards strengthening relationship with the customers. This is also refl ected in the Core Values of your Company (BE COMMITTED) which emphasize Customer Focus as one of the key values of NTPC.

Under CRM, your Company has designed and executed several structured activities with the objective of sharing of experiences, capturing the feedback and expectations. Based on the feedback received from the customers, the Company provides various support services to them, identifi es potential areas of cooperation and shares best practices with the customer utilities. During 2013-14, 62 such services were provided to the customers on the basis of the requirement expressed by various customers.

Your Company conducted Power Meet with top level officials and Business Partner Meets with middle level officials of beneficiaries to discuss various issues and sharing of experiences. In 2013-14, Power Meet was organized with the top officials of Southern Region benefi ciaries and 4 Business Partner Meets were conducted with 9 benefi ciaries of different regions.

Besides the above, NTPC has rolled out a Customer Satisfaction Index (CSI) Survey for gathering customers feedback and responding to their requirements. This initiative serves as a useful tool for further strengthening Customer Relationship and better appreciation of our business.

5.6 Other Activities:

250 MW power has been allocated by the Ministry of Power from the unallocated quota of NTPC stations for export to Bangladesh through NVVN.

6. INSTALLED CAPACITY

6.1 Installed Capacity of NTPC Group:

During the year 2013-14, your Company added 1,835 MW as per details given below:

Project/ Unit installed during Capacity (MW) FY 2013-14

NTPC owned

Coal Based Power Projects

Barh-II, Unit#4 660

Rihand, Unit # 6 500

Renewable Energy Projects

Ramagundam Solar PV 10

Unchahar Solar PV 10

Talcher Kaniha Solar PV 10

Faridabad Solar PV 5

Rajgarh Solar PV 30

Under JVs (Coal Based Power Projects)

Kanti (subsidiary of NTPC in JV with 110 BSPGCL), Unit#1

Vallur (JV with TANGEDCO), Unit# 3 500

Addition during FY 2013-14 1,835

With above capacity addition during 2013-14, capacity added in the fi rst two years of 12th Plan Period has reached 6,005 MW against 12th Plan target of 14,038 MW.

The total installed capacity of the NTPC Group was 41,184 MW as on 31.03.2013. For gas based power projects, till now the capacity was indicated based on Net Guaranteed Output as per Main Plant Specifi cations. It has been revised to capacity at Generator Terminal w.e.f. 01.04.2014. Accordingly, the installed capacity as on 01.04.2014 has become 43,108.31 MW as tabulated below:

Owned by NTPC MW

Coal based projects 33,015.00

Gas based projects 4,017.23

Renewable Energy Projects 75.00

Sub-total 37,107.23 Joint Ventures & Subsidiaries

Coal based projects 4,034.00

Gas based projects 1,967.08

Sub-total 6,001.08

Total 43,108.31

7. CAPACITY ADDITION PROGRAM

Your Company has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, brown field expansions, joint ventures and acquisitions, towards its journey to become the world class integrated power major.

In addition to furthering capacity addition through Coal and Gas based power projects, your Company has been pursuing enhancement of its power generation portfolio through Hydro, Renewable Energy and Nuclear energy projects.

7.1 Projects under Implementation

Your Companys various projects having aggregate capacity of 22,434 MW including 4,690 MW, being undertaken by Joint Venture companies are under implementation as on 31.03.2014. This includes 20,900 MW through coal based projects, 1,534 MW through renewable energy projects, comprising 1,499 MW through hydro capacity and 35 MW through solar energy. The details of such projects are as under:

Capacity Ongoing Projects as on 31.03.2014 (MW)

I. NTPC owned:

A. Coal Based Projects

1. Bongaigaon, Assam 750

2. Barh-I, Bihar 1,980

3. Barh-II, Unit V, Bihar 660

4. Lara-I, Chattisgarh 1,600

5. North Karanpura, Jharkhand 1,980

6. Kudgi-I, Karnataka 2,400

7. Gadarwara-I, Madhya Pradesh 1,600

8. Vindhyachal-V, Madhya Pradesh 500

9. Mouda-II, Maharashtra 1,320

10. Solapur, Maharashtra 1,320

11. Darlipalli, Odisha 1,600

12. Unchahar, Uttar Pradesh 500 Sub Total (A) 16,210

B. Renewable Energy Projects B1. Hydro Electric Power Projects (HEPP)

13. Koldam, Himachal Pradesh 800

14. TapovanVishnugad, Uttarakhand 520

15. LataTapovan, Uttarakhand 171

16. Singrauli CW Discharge (Hydro), Uttar 8 Pradesh

Sub Total (B1) 1,499

B2. Solar Energy Projects

17. Rajgarh Solar PV, Madhya Pradesh* 20

18. Singrauli Solar PV, Uttar Pradesh 15 Sub Total (B2) 35 Total I (A)+(B1)+(B2) 17,744

II Projects under JVs & Subsidiaries Coal Based Projects

19. Nabinagar- JV with Railways, Bihar 1,000

20. Muzaffarpur Expansion (MTPS)– Subsidiary of NTPC in JV with BSPGCL, Bihar 390

21. Nabinagar, JV with BSPGCL, Bihar 1,980

22. Meja, JV with UPRVUNL, Uttar Pradesh 1,320 Total II 4,690

III Total On-Going Projects as on 22,434 31.03.2014 (I)+(II)

*Subsequently declared commercial on 30.04.2014

7.2 New Projects

Currently, your Company has projects for 6,800 MW capacity under bidding. Feasibility Reports of 17,900 MW capacity have already been approved by your Board and project development activities are in various stages of completion.

Further, West Bengal State Government has approved transfer of the proposed 2X800 MW Coal Based Katwa Project from West Bengal Power Development Corporation Limited to NTPC and your Board has also approved the proposal for taking over the Project.

7.3 New Technology

To meet the challenges of fulfilling Indias electricity demands at affordable cost with minimum environmental impact, your Company has drawn a long term Technology Roadmap up to 2032. The technology roadmap envisages development, adoption and promotion of safe, effi cient and clean technologies for entire value chain of power generation business.

Your Company is planning to set up coal fi red units with ultra supercritical parameters targeting effi ciency comparable to best available technology in the world. It is planning to establish integrated gasifi cation combined cycle for high ash Indian coal. It has planned to implement 100MWe IGCC Technology Demonstration Project at NTPC Dadri. The plant is intended to be implemented in two stages with Stage-I comprising installation and stabilization of coal gasifi er, gas clean up and other associated systems and Stage-II comprising gas turbine combined plant. Stage-II shall be implemented after successful completion and stabilization of Stage-I.

Your Company has adopted several new technologies, system and practices including combined cycle gas- fi red power stations, Merry-Go-Round, Distributed Digital Control & Management Information System, High Voltage Direct Current transmission, Sliding Pressure Operation of SG, Dry Ash Extraction and Disposal, 765 KV Switchyard, Ash Water Recirculation System, Liquid Waste Management System, Performance Analysis and Diagnostic Optimization, Tunnel Boring Machines and Super Critical Technologies. Three (03) numbers Super critical units of 660 MW are already under operation at Sipat-I where steam parameters are 247 kg/cm2/537oC/565oC. For all the new sub-critical 500 MW units also, reheat temperature has been increased to 565oC resulting in 0.7% gain in effi ciency over conventional sub-critical 500 MW units.

Your Company has entered into MOU with BHEL and Indira Gandhi Centre for Atomic Research (IGCAR) for indigenous development of advanced ultra super critical technology which will have enhanced effi ciency of around 46% and about 15-20% less CO2 emission as compared to conventional 500 MW sub-critical thermal power plants. The program is targeted to deliver a plant having 800 MW unit with steam parameters of 310 kg/ sq cm-710oC/720oC at super heater outlet and 720oC at re-heater outlet.

Your Company has taken an initiative for hybrid solar thermal plant of about 3.6 MW by integration of solar heat with 210 MW coal based unit at Dadri. Solar heat is being integrated along with feed heaters in the turbine cycle for conversion of solar heat to electrical power by utilizing it in existing steam cycle of 210 MW. Once integrated, this will reduce coal consumption, thereby reducing CO2 emissions.

7.4 Project Management

Your Company has an established state-of-the-art IT enabled Project Monitoring Centre (PMC) for facilitating fast track project implementation. PMC has advanced features like Web-based Milestone Monitoring System (Webmiles), Project Review and Internal Monitoring System (PRIMS), Enterprise-wide Issues Tracking System, etc. PMC facilitates monitoring of key project milestones and also acts as decision support system for the management.

PMC is integrated enterprise-wide collaborative system to facilitate consolidation of project related issues and their resolution. Features like SMS based information delivery, real time video capture, storage and retrieval facility and conference facility are extensively utilized for project tracking, issues resolutions and management intervention. It has helped in providing effective coordination between the agencies and has provided enhanced/ effi cient monitoring of the projects leading to better, faster and holistic approach to project implementation.

7.5 Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company develops power projects through its subsidiaries and joint ventures, both in India and abroad. Details of Joint Ventures abroad are covered under the heading Globalisation Initiatives.

The information of Indian Subsidiaries and JV Companies along with details of partners of joint ventures for capacity addition is given below:

Further, an MOU has been signed on 22.02.2014 among NTPC, Bihar State Power Generation Company Limited (BSPGCL) and Lakhisarai Bijlee Company Private Limited for implementation of 2X660 MW Kajra Coal based power project at Lakhisarai, Bihar. The project is proposed to be developed as a Joint Venture Company between NTPC and BSPGCL.

7.6 Hydro Power

7.6.1 Your Company is setting up hydro projects for increasing its footprints in renewable energy development by developing Koldam Hydro Electric Power Project (800 MW), Tapovan Vishnugad HEPP (520MW), Lata Tapovan HEPP (171MW) and Rammam HEPP (120 MW).

Koldam HEPP is under construction on river Satluj at Barmana, district Bilaspur, Himachal Pradesh. Three units are targeted to be commissioned in Feb-March 2015. 124.054 hectares of forest land in the submergence area of reservoir is falling under Majathal Wild Life area for which Supreme Court of India has already accorded clearance. Proposal for diversion of 44.9585 hectares of this land is in process for Forest Advisory Committee (FAC) clearance.

For Rammam HEPP Stage-III (120 MW), construction of approach roads and bridges for power house and barrage has been completed. Award of contract for barrage and part of head race tunnel package are held up for want of investment approval for which PPA is required. PPA documents have been submitted to WBSEDCL for approval.

Though construction work was in progress in Tapovan – Vishnugad HEPP, Uttarakhand and Lata Tapovan HEPP, Uttarakhand, due to fl ash fl oods in June 2013, there was devastation in the projects which affected their schedule. After this devastation, Supreme Court of India had directed Ministry of Environment and Forests (MOEF) constituted a committee for review of all 24 proposed hydro projects in Uttarakhand, as included in report of Wildlife Institute of India. This included Lata Tapovan HEPP also. Based on the recommendation of the committee constituted by MOEF in this regard, Supreme Court of India in the hearing on 07.05.2014, had directed to stop the construction at Lata Tapovan HEPP till further orders. Since Lata Tapovan HEPP was under construction, review petition has been submitted for modifi cation of order to the extent that the said order may be waived for Lata Tapovan HEPP.

Also, on 31.03.2014, Regional Offi ce of MOEF, Lucknow had directed Government of Uttarakhand that project developers should apply for obtaining clearance from National Board for Wildlife as the projects were falling within 10km periphery of Nandadevi National Park. Your company had submitted proposal for both the projects with Dy. Conservator of Forest, Nandadevi on 30.04.2014.

Loharinag Pala HEPP had been discontinued on the advice of Ministry of Power. The Empowered Committee constituted by GOI for the purpose of settling the claims had approved reimbursement of Rs. 536.30 crore in fi rst Phase to NTPC, which has been received by the Company. As liabilities of the contractors are increasing day by day due to non- settlement of claims in time, Ministry of Power has been requested to constitute a Settlement Commission with single point responsibility to evaluate and settle claims of all the contractors. Further, Government of Uttarakhand has identifi ed Uttaranchal Jal Vidyut Nigam Limited as nodal agency for taking over the closed project on as-is-where-is basis in terms of the MOU signed between NTPC and Government of Uttarakhand.

7.6.2 Hydro Engineering

In pursuance of Memorandum of Agreement signed with Govt. of Mizoram, Detailed Project Report of Kolodyne-II HEPP (4X115MW) prepared by Central Water Commission for Govt. of Mizoram and updated by NTPC has been cleared by Central Electricity Authority.

7.7 Capacity Addition through other Renewable Energy Sources

Your Company is adding capacity through renewable sources of energy as it offers environmentally clean power.

Your Company plans to broad-base its generation mix to ensure long term competitiveness and mitigation of fuel risks and promotion of sustainable power development.

In pursuit of these objectives, 75 MW Solar power capacity has already been commissioned till 31.03.2014 and 20 MW solar capacity has been further added on 30.04.2014. 15 MW capacity solar power projects is presently under execution, details of which are given under the heading project implementation.

A Joint Venture Company among NTPC Limited, Asian Development Bank and Kyuden International Cooperation, Japan under the name PAN-ASIAN Renewables Private Limited was incorporated to develop projects portfolio of about 500 MW of renewable power generation resources in India. Though, the company was searching for another strategic investor for investing in the Company, it could not fi nd the same.

Your Company has signed an MOU with Chattisgarh Renewable Energy Development Agency (CREDA) for development of Tatapani Geothermal project. Another MOU has been signed with Geological Survey of India for detailed study and analysis for preparation of feasibility report.

8. STRATEGIC DIVERSIFICATION- INCREASING SELF- RELIANCE

8.1 In order to strengthen its competitive advantage in power generation business, your Company has diversifi ed its portfolio to emerge as an integrated power major, with presence across entire power value chain through backward and forward integration into areas such as coal mining, power equipment manufacturing, power trading, and distribution.

Your Company continuously explores business opportunities through market scanning and adopts new business plans accordingly.

8.2 The details of other subsidiary companies are as under:

8.2.1 NTPC Electric Supply Company Limited, a wholly owned subsidiary of NTPC was incorporated to foray into the business of distribution and supply of electrical energy as a sequel to reforms initiated in the power sector. The Company is implementing Rajiv Gandhi Gramin Vidyutikaran Yojna projects on turnkey basis and undertakes turnkey execution of sub-stations for utilities and also takes up project management consultancy.

The Company is making continuous efforts for acquisition of distribution circles through various modes including franchisee bidding mode.

This subsidiary is carrying business of retail distribution of power in various industrial parks developed by Kerala Industrial Infrastructure Development Corporation (KINFRA), through its Joint Venture Company namely KINESCO Power and Utilities Private Limited, formed with KINFRA.

8.2.2 NTPC Vidyut Vyapar Nigam Limited (NVVN), a wholly owned subsidiary is involved in power trading, sale of fl y ash and cenosphere.

During the year 2013-14, the Company transacted business with various state electricity boards spread all over the country and traded 9,322 MUs of electricity.

NVVN has been appointed as the nodal agency for cross border trading of electricity with Bhutan and Bangladesh. The power supply to Bangladesh from NTPC stations under PPA signed between NVVN and Bangladesh Power Development Board has commenced from 05.10.2013.

The Company has also been designated as the Nodal Agency for purchase of grid connected solar power upto 1000 MW as a part of Phase-I of JawaharLal Nehru National Solar Mission. The total solar capacity commissioned till 31.03.2014 under JNNSM Phase-I is 548 MW which includes 498 MW of Solar PV Projects and 50 MW of Solar Thermal Project.

8.3 In order to strengthen its competitive advantage in power generation business, the Company has diversifi ed into the area of manufacturing through the following joint ventures:

8.3.1 NTPC-BHEL Power Projects Pvt. Limited (NBPPL), a joint venture with BHEL was incorporated for taking up activities of engineering, procurement and construction (EPC) of power plants and manufacturing of equipments. The manufacturing plant of NBPPL is being set up at Mannavaram, Tirupati in Andhra Pradesh for CHP and AHP.

The Company is executing EPC contracts for balance of plants packages of Palatana Combined Cycle Power plant in Tripura, Namrup Combined Cycle Power Plant in Assam, Balance of Plant including Erection & Commissioning works of the entire plant at Monarchak, Tripura for NEEPCO and EPC Contract for Unchahar.

8.3.2 BF-NTPC Energy Systems Limited was incorporated with Bharat Forge Limited to manufacture castings, forgings, fittings and high pressure piping required for power projects and other industries.

As in the recent past thermal power capacity addition program has suffered a major setback due to a variety of reasons including slow environment clearance of new projects, non- availability of land, shortage of Indian coal and costly imported coal, this JVC is being reconsidered.

8.3.3 Your Company has acquired 44.6% stake in Transformers And Electricals Kerala Limited (TELK) from Government of Kerala on June 19, 2009. The Company deals in manufacturing and repair of Power Transformers. TELK order booking as on 31.03.2014 was Rs.142.59 crore and the total turnover of the Company was Rs.166.07 crore in the financial year 2013-14.

Please refer to "Management Discussion and Analysis", Annexure-I included as a separate section to this report for further details of subsidiary and joint venture companies of NTPC.

9. GLOBALISATION INITIATIVES

9.1 Trincomalee Power Company Limited (TPCL), a 50:50 joint venture Company between NTPC and Ceylon Electricity Board was formed to undertake the development, construction, establishment, operation and maintenance of a coal based electricity generating station of 2X250 MW capacity at Trincomalee at Sri Lanka. All major agreements like Power Purchase Agreement, Implementation Agreement and Board of Investment Agreement have been signed. NTPC has been appointed as the Owners Engineer for the project. TPCL is taking necessary actions for obtaining environmental clearance for the project from Central Environment Authority of Sri Lanka. Public Utilities Commission of Sri Lanka has granted electricity license to TPCL in May 2014.

9.2 Bangladesh-India Friendship Power Company Private Limited, a 50:50 joint venture company between NTPC and Bangladesh Power Development Board (BPDB) has been formed for developing a 2X660 MW Coal based power project at Khulna Division, Rampal, Bangladesh. All major project arrangements like Power Purchase Agreement and Implementation Agreement have been signed. The Company has appointed its Owners Engineer. Project activities at site have commenced.

10. NTPC Consultancy Wing: As a result of the phenomenal success achieved by your Company in executing its own power projects, many utilities from India and abroad approach NTPC to benefit from the rich experience gained by your Company. With this in view, NTPC formally established a Consultancy Wing in 1989. Since then, this wing has been receiving orders from domestic and international clients. Consultancy Wing is now recognized as consultant of repute by several leading domestic and international development and financial institutions and clients. It offers services like Engineering Services, Operation & Maintenance Management Services, Project Management Services, Contracts & Procurement Management Services, Quality Management Services, Training & Development Services etc.

Consultancy Wing has provided various services in international markets in Gulf countries, Bangladesh, Nepal, Sri Lanka and Bhutan. The services include consultancy for training, design review, review engineering, supervision of erection, testing & commissioning, performance monitoring, due diligence, operation of plant, construction of sub-stations, preparation of feasibility reports, site selection, site specific studies etc for various projects. The international projects include 2X660 MW Khulna Power Project at Bangladesh and 2X250 MW Trincomalee Coal Power Project at Sri Lanka. This Wing is also providing O&M Management Services to 2X120 MW Siddhirganj Peaking Power Plant of Electricity Generation Company of Bangladesh under a World Bank funded contract. It has also recently signed a contract for providing entire Owners Engineer Services for proposed 2X250 MW Trincomalee Coal Power Project at Sri Lanka.

On the domestic front too, Consultancy Wing has been effectively sharing its expertise with State and Central PSUs and private utilities.

11. FINANCING OF NEW PROJECTS

The capacity addition programs shall be fi nanced with a debt to equity ratio of 70:30. Your directors believe that internal accruals of the Company would be suffi cient to fi nance the equity component for the new projects. Given its low geared capital structure and strong credit ratings, your Company is well positioned to raise the required borrowings.

Your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion program.

During the year 2013-14, term loan agreements of Rs.5,775 crore were entered into including loan agreement of Rs.2,000 crore each executed with Bank of India and IDFC Limited. The cumulative amount of domestic loans tied up till March 31, 2014 was Rs.63,174.35 crore (excluding undrawn loans short-closed as per agreements).

During 2013-14, an amount of Rs.7,750 crore was drawn from domestic banks and the cumulative drawl upto 31st March 2014 was Rs.51,504.35 crore.

Your Company tied-up two loan facilities with Japan Bank for International Cooperation (JBIC) and a commercial bank for USD 350 million and JPY 8,021 million for its Kudgi project and renovation & modernization of Auraiya Gas Power Station respectively. The Company also signed three facility agreements with Kfw for an aggregate amount of Euro 202 million to part fi nance the capital expenditure on retrofi t of Electrostatic Precipitators of Tanda Stage-II.

In pursuance of CBDT Notifi cation No. 61/2013/F. No. 178/37/2013 – (ITA.I) dated 08.08.2013, Ministry of Finance allocated tax free bonds of Rs.1,750.00 crore to the Company to be raised during financial year 2013-14. The Company made public issue of tax free bonds amounting to Rs.1,750.00 crore during December 2013. Further, tax free bonds amounting to Rs.500.00 crore was also issued on private placement basis in pursuance to CBDT Notifi cation No. 11/2014 F.No. 178/9/2014- (ITA.1) dated 13.02.2014.

For the first time, taxable bonds amounting to Rs.750.00 crore were issued directly on private placement basis to Employees Provident Fund Organisation, which invests through its fund managers. The total bonds issued during financial year 2013-14 aggregated to Rs.3,000.00 crore.

12. FIXED DEPOSITS

The cumulative deposits received by your Company from 71 depositors as at March 31, 2014 stood at Rs.0.52 crore. Further, an amount of Rs.0.18 crore has not been claimed on maturity by 11 depositors as on March 31, 2014.

Your Company has discontinued the acceptance of fresh deposits and renewals of deposits under NTPCs Public Deposit Scheme with effect from 11.05.2013.

13. FUEL SECURITY

13.1 During the year, the supply position of coal and gas is given as under:

13.1.1 Coal Supplies

During Financial Year 2013-14, your Company has signed long term Fuel Supply Agreements (FSA) with subsidiaries of Coal India Limited (CIL) for 14,010 MW including 4,390 MW of JVs for units commissioned after 31st March 2009 and expected to be commissioned by 31st March 2015.

Amendments in FSA have been made to FSA-2009 and FSA-2012 pertaining to Useful Heat Value to Gross Calorifi c Value migration and Third Party Sampling.

The Company has signed short term MOU for one year with The Singreni Collieries Company Limited for supply of 3.5 MMT of coal for Ramagundam and Simhadri stations. Another short term MOU for one year has been signed with Eastern Coalfields Limited for supply of 5.0 MMT to enhance coal supply at critical stations.

Coal linkage of North Karanpura STPP (1980 MW) with Central Coalfields Limited, which was cancelled by Standing Linkage Committee (Long Term) in 2008, has been restored.

13.1.2 Domestic Coal and Imported Coal

During 2013-14, your Company received 160.63 MMT of coal as against 155.06 MMT in 2012-13 marking an increase of 3.59%.

Total domestic coal supply during 2013-14 was 149.79 MMT as against 145.97 MMT during 2012-13. Out of 149.79 MMT of coal, 144.69 MMT was from Annual Contracted Quantity of coal.

The total coal supply from CIL was 138.4 MMT and from SCCL was 11.4 MMT. 2.0 MMT of coal was procured through bilateral MOU during 2013-14.

During 2013-14, your Company imported 10.84 MMT of coal as against 9.09 MMT in 2012-13.

13.1.3 Sourcing of coal through E-auction

Your Company participated in 40 e-auctions for coal procurement during the financial year 2013-14 in which total coal alloted was 4.76 MMT. Total coal received through e-auction was 3.2MMT during 2013-14 as compared to 0.23MMT during 12-13.

13.1.4 Supply through Inland Waterways

During 2013-14, operation was started on inland waterways for transportation of imported coal for Farraka station. About 2 lac MT imported coal has been supplied through this mode to Farakka station.

13.2 Gas supplies

During 2013-14, your Company received 6.87 MMSCMD of gas and RLNG as against 10.67MMSCMD received during 2012-13. The gas off-take in 2013-14 includes 6.72 MMSCMD of gas and 0.15 MMSCMD of RLNG. Gas offtake was less due to less availability of generation schedule on RLNG from the beneficiary states.

Your Company has Administered Price Mechanism (APM) gas agreements up to the year 2021 and Panna Mukta Tapti (PMT) gas agreements up to the year 2019 for its gas stations. The term sheet for non-APM gas with GAIL is valid till 2016 and long-term RLNG supply agreement with GAIL is valid till 2019.

The agreements for KG D6 gas with RIL/Niko/BPEAL expired on 31.03.2014. Now, RIL has forwarded a term sheet for supply of KG D6 gas beyond 31.03.2014 which is under discussion. The entire existing KGD6 production is being supplied to fertilizer sector in line with Empowered Group of Ministers/ MOP&NG directive to supply KG D6 gas as per sectoral priority basis. The supplies to the power sector became NIL from March 2013 and shall pick up only after production is adequate to meet the requirement of fertilizer and Liquifi ed Petroleum Gas sectors.

Your Company has been making arrangements for tie-up and supply of spot RLNG or Fallback RLNG from domestic suppliers on reasonable endeavour basis based on requirement and availability from time to time.

13.3 Development of Coal Mining projects

Your Company was allocated ten coal blocks by the Government of India namely Pakri-Barwadih, Chatti- Bariatu, Kerandari, Talaipalli, Dulanga, Chatti-Bariatu (South), Bhalumuda, Banai, Chandrabila and Kudanali- Luburi with estimated geological reserves of about 5.7 billion tonnes and production potential of about 100 million metric tonnes per annum (MMTPA) which will cater to the requirement of 20,000 MW of generation capacity of NTPC.

Detailed exploration is being carried out in Banai, Bhalumuda and Chandrabila and exploration is going to start in Kudanali-Luburi.

In Pakri-Barwadih coal mining block, all the necessary statutory clearances are available. Mine opening permission has already been received from Coal Controller and DGMS. Mining operations could not be commenced mainly because of adverse law and order situation at project site and non-cooperation of State Government. Also, a termination notice has been served to Theiss, Mine Developer & Operator appointed for Pakri-Barwadih, due to its poor performance.

In Chatti-Bariatu and Kerandari Coal Blocks, mining plan and mine closure plans have been approved by the Ministry of Coal. For Kerandari Coal Block, environment clearance and Stage-I forest clearance has been accorded by Ministry of Environment and Forests. For Chatti-Bariatu, environment clearance and both Stage-I and Stage-II forests clearances have been accorded. The Mine-developer-cum-operator has been appointed for Chatti-Bariatu. NIT has been issued in March 2014 for appointment of the Mine-developer- cum-operator for Kerandari Coal Mine Block.

In Dulanga and Talaipalli Coal Mining Block, mining plan and mine closure plans have been approved by the Ministry of Coal. For Talaipalli Coal Block, environment clearance and both Stage-I and Stage-II forest clearance have been accorded by Ministry of Environment and Forests. For Dulanga Coal Block, environment clearance and Stage-I forest clearance have been accorded by Ministry of Environment and Forests. For Dulanga Coal Block, NIT shall be published shortly for appointment of the Mine-developer-cum-operator.

A joint venture company is proposed to be formed between NTPC and Jammu & Kashmir State Power Development Corporation Limited (J&KSPDCL) for development of Kudanali-Luburi coal block in Odisha which has been jointly allocated to NTPC and J&KSPDCL.

Your Company has formed the Joint Venture Companies

namely CIL NTPC Urja Private Limited, NTPC-SCCL Global Ventures Private Limited and International Coal Ventures Private Limited to explore further avenues in the area of coal mining. However, these JV companies have not been able to achieve their objectives owing to certain constraints like inability of the JV Company to execute the work, Government Directive etc.

13.4 Exploration Activities

In Cambay exploration block allotted under NELP- VIII, held by NTPC as operator with 100% participating interest, 3D Seismic Data Acquisition and processing and interpretation of data has been completed. Based on the results, locations have been identifi ed for drilling of exploratory wells. Exploration drilling is planned in 2014-15.

In the other three blocks, in each of which NTPC has 10% participating interest and Oil and Natural Gas Corporation Limited is the operator, exploration activities are in progress. Drilling of an exploratory well has commenced from March 2014 in one of the blocks in KG basin.

14. BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

In pursuit of actualizing our vision and with a view to achieve higher levels of excellence, the company has developed and adopted its own NTPC Business Excellence Model on the lines of globally reputed Excellence Models such as Malcom Baldrige Model, USA and EFQM Model of Europe.

This model has been deployed at our Business Units (Stations) and we carry out assessment of generating stations using this framework of excellence.

The assessment process is aimed at identifying the areas for enhancing stakeholders engagement, accelerating critical processes and developing leadership potential.

The outcome of this model is identifi cation of organizational strengths, opportunities for improvement, issues of concern and best practices.

In the financial year 2013-14, the 4th cycle of assessment was completed in which 21 generating stations were assessed by a team of certifi ed and profi cient assessors. Business Excellence Awards for Best Performance to Ramagundam and Runner-up shield to Unchahar stations were presented by the Secretary (Power), GOI and Chairperson, CEA in the Indian Power Conference- 2014 held at New Delhi.

As a next step on the Journey of Excellence, the company is planning to implement Corporate Performance Measure and Dashboard initiative to enhance overall strategic focus and speed.

Other TQM initiatives and techniques like Quality Circles, Professional Circles, 5S, integrated management system (IMS) etc have been deployed across the organization for continuous improvement. Our Quality Circle teams of workmen have been consistently representing NTPC at national and international Quality Circle conventions and bringing many laurels. In the year 2013-14, Jyotikiran Quality Circle from Faridabad CCPP represented NTPC in the International Convention of Quality Control Circle (ICQCC-2013) held at Tapie, Taiwan. Team Jyotikiran presented their case study titled Interruption in Natural Gas Supply to Gas Turbines and won Excellence Award. Total 300 Quality Circles from 13 countries participated in this convention.

15. RENOVATION & MODERNISATION

15.1 Need for R&M:

In the present scenario of severe resource constraint, Renovation and Modernization (R&M) of power plants is considered to be the best option for bridging the gap between demand and supply of power, as R&M schemes are cost effective. It increases the life of the plant, improves performance & availability, enhances capacity and ensures safe, reliable and economic electricity production by replacement of worn-out, deteriorated or obsolete electrical, mechanical, instrumentation, controls and protection system by state-of-the-art equipment. It also helps in compliance of environment norms.

Keeping in view the ageing of the fl eet over the years, investment approval accorded for R&M in 19 stations (Coal & Gas based) is Rs.10,993 crore till 31.03.2014. As against this, cumulative expenditure till 31.03.2014 was Rs.4,610 crore. Out of this, R&M capital expenditure in FY 2013-14 alone was Rs.1,162.37 crore.

With a view to removing technological obsolescence, renovation of control & instrumentation (C&I) is in progress in Singrauli-II, Korba –I & II, Ramagundam -I & II, Farakka- II, Dadri Thermal- I, Unchahar- I and Talcher STPS I. On completion of these schemes, the C&I systems in these stations will be brought nearly on par with the new power projects.

Because of the very high working temperatures, R&M of Gas Turbines including their Control & Instrumentation is essential after around 15 years of life. During the year, this activity was completed in 2 out of 4 Gas Turbines (GT) in Kawas and 1 out of 3 GT in Gandhar. In Auraiya, the GT R&M package has been awarded and implementation is planned in 2014-15, in addition to the next GT in Kawas and Gandhar.

With a view to comply with increasingly stringent environment norms of reduced emission level prescribed by State Pollution Control Boards, Renovation and Retrofitting of Electrostatic Precipitator (ESP) packages have been awarded and work is in progress in Badarpur-II, Singrauli-I & II, Farakka-I, Unchahar-I, Korba-I & II, Rihand-I, Vindhyachal-I & II, Talcher STPS –I and Talcher TPS-II. In 2013-14, investment approval was accorded for R&M of ESP of Talcher STPS-II, award of which is in progress.

In the coming years, life extension of coal based stations on completion of 25 years is planned for Singrauli-II, Korba- II, Ramagundam- II, Vindhyachal- I, Farakka- I, Rihand- I and Unchahhar- I units, aimed at extending their useful life and capturing the benefit of latest technological advancements.

The taken-over stations of Tanda and Talcher TPS continued their superior performance levels in 2013-14 on account of R&M intervention. The PLF of Tanda was 92.80% and the PLF of Talcher TPS was 95.02% during 2013-14.

16. HUMAN RESOURCE MANAGEMENT

16.1 Your Company takes pride in its highly motivated and competent human resource that has contributed its best to bring the Company to its present heights. The productivity of employees is demonstrated by increase in generation per employee and reduction of Man-MW ratio. The over-all Man-MW ratio for the year 2013-14 excluding JV/subsidiary capacity is 0.63 and 0.58 including capacity of JV/ Subsidiaries. Generation per employee was 9.96 MUs during the year based on generation of NTPC stations.

The total employee strength of the company stood at 25,013 as on 31.3.2014 against 25,484 as on 31.3.2013.

Fiscal 2014 Fiscal 2013

NTPC

Number of employees 23,411 23,865

Subsidiaries & Joint Ventures

Employees of NTPC in Subsidiaries & Joint 1,602 1,619 Ventures

Total employees 25,013 25,484

The attrition rate of the NTPC executives (including Executive Trainees and those posted in Subsidiaries and JVs) during the year was 1.68%.

16.2 Employee Relations

The Company takes pride in its greatest resource and asset, the employees. The human resource has been the backbone of the Company, in contributing towards the success of the Company and sustaining the same over the years. As a commitment towards the Companys core values, Employees Participation in Management was made effective based on mutual respect, trust and a feeling of being a progressive partner in growth and success. Communication meetings with unions and associations, workshop on production and productivity, etc were conducted at projects, regions and corporate level during the year.

Both, employees and management complemented each others efforts in furthering the interest of the company as well as its stakeholders, signifying and highlighting over-all harmony and cordial employee relations prevalent in the Company.

16.3 Safety and Security

NTPC recognizes and accepts its responsibility for establishing and maintaining a safe working environment for all its employees and associates. Occupational health and safety at workplace is one of the prime concerns of NTPC Management and utmost importance is given to provide safe working environment and inculcate safety awareness among the employees. Your Company has a 3-tier structure for occupational health and safety management, namely at site at Regional Headquarters and at Corporate Centre.

All our stations are certifi ed with OHSAS-18001/IS-18001 (Occupational Health and Safety Management System). Regular plant inspection and review with Head of Project, internal safety audits by our own safety offi cers of various sites and external safety audits by reputed organizations are carried out at each site every year. Recommendations of auditors are regularly reviewed and complied with.

Cross Functional Safety task force for O&M and construction projects are functional at all sites to monitor working conditions at site and their rectifi cation, if required.

Height permit and height check list are implemented to ensure safety of workers at high elevations. Adequate numbers of qualifi ed safety offi cers are posted at all units as per statutory rules and provisions to look after safety of people and property.

For strict compliance and enforcement of safety norms and practices, safety clauses are included in General Conditions of Contract.

To mitigate on-site emergencies at all operating stations, effective engineering controls are provided to indicate and handle emergency situation. Detailed emergency plans have been developed and responsibilities are assigned to each concerned to handle emergency situations. Mock drills are conducted regularly to check healthiness of the system.

Many of our plants have been awarded with prestigious safety awards conferred by various Institutions and Bodies like Ministry of Labour & Employment, Govt. of India, National Safety Council, Institution of Engineers (India) and Greentech Foundations in recognition of implementing innovative safety procedures and practices.

Concrete steps are being taken for upgrading surveillance systems at all of our projects/ stations by installing state-of- the-art security systems. Security and Coordination Group interact with MHA, IB and CISF as well as the State/ District level authorities to augment the security preparedness in our establishment/ power installations.

16.4 Training and Development

In line with its objective of being a learning organization with skilled and committed employees, your Company has relentlessly promoted training and development of not only its own employees but also other professionals of the power sector. The objective is being driven by a comprehensive infrastructure comprising Power Management Institute (PMI) at the corporate level and Employee Development Centers at its sites. The training imparted is in tune with emerging needs and challenges and for this purpose, the existing training programs are reviewed and some new programs are included in the annual calendar every year. The business scenario in our country is changing with new legislations like the fair compensation, R&R and Land Acquisition Act, Companies Act, 2013 and your Company is committed to add large capacities in this changing scenario. Considering the imperative of upgrading the capability in project management, an Integrated International

Project Management framework is being developed through international faculties for achieving competitive advantage, besides entering into a long term institutional tie-up with IIM-Indore in this area. A similar tie-up has been done with IIM-Ahmedabad for knowledge creation.

Apart from this, the usual programs include topics on power project execution, operation & maintenance, ash dyke management, environment management, advanced welding technologies for super critical boilers, performance enhancement of existing plants, electrical protections and relays, information technology and general management areas.

Presently, there are 25 ITIs with which your Company is associated. NTPC has adopted 17 existing Govt. ITIs out of which 14 ITIs have been adopted under the PPP scheme of GoI and 3 Govt. ITIs have been adopted under bilateral agreement with different State governments. Moreover, NTPC is also setting up 8 new ITIs near its plants/stations. These initiatives by your Company have resulted in creation of total 1,595 new seats by starting of new trades/units in the adopted & new ITIs, and, till 31.03.2014, a total of 19,377 students have benefited by taking admission in these ITIs. For these ITI students, NTPC organised total 23,459 mandays of industrial training/plant visits. Due to all these, your Company has been conferred "The Education Excellence Award 2013" for its Skill Development Initiative.

During 2013-14, your Company organized a number of training programmes in power and energy related areas which, inter-alia, included an "Integrated Conclave on Data Analytics, Business Intelligence, Action Research & Cases" in Dubai, a need-based "Workshop on Knowledge Management" in Goa and hands-on training of 197 participants on the 660 MW supercritical simulator at PMI.

Your Company has also formulated Corporate Governance Training Policy as per the requirement of DPE Guidelines on Corporate Governance for imparting training to the Directors. In order to give an impetus to developing leadership orientation at senior Management level, PMI conducted a conclave for NTPC Board members (Directors & CMD) called SIR (Strategic Institutional Renewal) program. PMI also partnered with BHEL to conduct the SMILE (Strategic Management Initiative for Leadership Effectiveness) program for Executive Directors of NTPC and BHEL, conducted consecutively for second year to orient the participants toward cutting edge leadership and strategic thinking. In addition, newly promoted General Managers of the Company were also subjected to an intensive program on developing cross-functional insights and developing Boundary Management skills.

PMI conducted 429 training programmes during 2013-14 with a participant base of 10,811. The training mandays clocked were 37,493.

PMI also conducted 20 training programmes through video conferencing to reach out in one go, to large audiences in remote sites in 2013-14. In addition to this methodology and in order to take training a further step closer to the employees, PMI this year introduced training through Web Conferencing, whereby an employee can undergo training at his or her workstation itself. PMI conducted 3 training programs through this platform during 2013-14.

17. SUSTAINABLE DEVELOPMENT

Corporate Sustainability is a business approach that creates long-term consumer and employee value by creating a green strategy aimed towards the natural environment and taking into consideration every dimension of how a business operates in the social, cultural and economic environment. The sustainability agenda of your Company addresses all aspects related to sustainable development and promotes leadership in environmental management, social responsibility and economic performance (triple bottom line approach).

Your Company has prepared its Sustainability Report 2012-13 based on various initiatives taken in area of environment, economic, labour practices, human rights, society and product responsibility. The report was in line with internationally accepted Global Reporting Initiative guidelines. The report has been assured by an independent external assurance provider.

Business Responsibility Report is attached as Annex-X and forms part of the Annual Report.

Initiatives by the Company

Your Company has developed a Policy on Sustainable Development in accordance with which a sustainable development plan was prepared for the year 2013- 14. It mainly covers area of waste management, water management, bio-diversity conservation, energy management and promotion of renewable energy, life-cycle studies and reduction in air emissions. Major activities carried out under this plan included plantation of more than 4 lac saplings in and around NTPC plants, installation of roof top solar PV, solar street lights at various stations, rehabilitation of water body, rain water harvesting, installation of bio-methanation plant, vermin composting, other techniques for conversion of domestic waste in organic fertilizer, studies like pollutant source apportionment, human health risk assessment and environment impact assessment.

A total expenditure of Rs. 18.58 crore was incurred on these Sustainable Development Projects during the Financial Year 2013-14.

In its endeavor to achieve the goals of Sustainable Development, your Company is addressing the issues through multi-pronged approach as per the details given below:

17.1 Inclusive Growth –Initiatives for Social Growth

17.1.1 Corporate Social Responsibility:

Your Company has always discharged its social responsibility as a part of its Corporate Governance philosophy. It follows the global practice of addressing CSR issues in an integrated multi stake-holder approach covering the environmental and social aspects.

CSR has been synonymous with NTPCs core business of power generation. NTPCs spirit of caring and sharing is embedded in its mission statement. NTPC has a comprehensive Resettlement & Rehabilitation (R&R) policy covering community development (CD) activities which has been revised and updated from time to time. CD activities in green field area are initiated as soon as project is conceived and thereafter extensive community / peripheral development activities are taken up along with the project development. A separate CSR- Community Development Policy, formulated in July 2004 and revised in August 2010 in line with DPE guidelines, covers a wide range of activities including implementation of key programmes through a trust NTPC Foundation.

Your Company, being a member of Global Compact Network, India, confi rms its involvement in various CSR activities in line with 10 Global Compact principles and shares its experience with the representatives of the world through "Communication on Progress". It submits its Communication on Progress (COP) to UN Global Compact on regular basis. A report on progress made in this area is enclosed at Annex- VIII to this Report.

Expenditure incurred towards CSR Activities:

A total expenditure of Rs.109.77 crore was incurred towards Corporate Social Responsibility expenses during the Financial Year 2013-14, which was 0.87% of the net profit after tax of the previous year.

Awards:

Your Company received Golden Peacock Award 2013 for CSR, Appreciation Certifi cate from ASSOCHAM CSR Excellent Award 2013 and Special Jury Commendation from FICCI CSR Award 2012-13.

17.1.2 NTPC Foundation

NTPC Foundation is engaged in serving and empowering the physically challenged and economically weaker sections of the society.

Initiatives undertaken by the Company are covered under Annex-VII to this Report.

17.1.3 Rehabilitation & Resettlement (R&R)

Your Company is committed to help the people affected by its projects and has been making all its efforts to improve the socio-economic status of Project Affected Persons (PAPs). In order to meet its social objectives, your Company is focusing on effective R&R of PAPs and undertaking community development activities in and around the projects.

Land availability for bulk tendered projects for which award was placed during the year was ensured through proactive redressal of R&R issues.

Initial community development (ICD) activities in the area of Health, Education, Sanitation, Drinking water, Infrastructure facilities etc for Bilhaur project was approved after consultation with the stakeholders and for Khargone project, provisions for ICD activities was enhanced during the year. Implementation of earlier approved ICD activities continued at Barethi, Darlipali, Gajmara, Khargone, Jhajjar, Nabinagar (BRBCL) and Nabinagar (NPGC) projects.

R&R activities and CD activities in the area of in the area of Health, Education, Sanitation, Drinking water, Infrastructure facilities, capacity building etc were implemented at the new Greenfield projects after finalization of respective R&R Plan in consultation and participation of the stakeholders at Gadarwara, Lata-Tapovan and Dulanga projects. Provisions under R&R Plans was enhanced for North Karanpura, Tapovan-Vishnugad, Pakri-Barwadih, Chatti-Bariatu and Kerandari projects. At other thermal, hydro and coal mining projects like Barh, Bongaigaon, Dadri, Kanti, Korba, Kudgi, Lara, Mouda, Solapur, Tanda, Vallur, Vindhyachal, Koldam, Talaipalli projects, R&R activities continued throughout the year.

For the benefits of project affected persons and neighbouring population, Mobile Health Clinic was deployed by Kudgi and Nabinagar (NPGC) projects. Toilets have been constructed for PAPs at Kudgi and Khargone projects. Drinking water facility has been augmented for supplying of water for project affected villages at Solapur project.

Socio-economic Survey (SES) for Bilhaur, Mouda-II and Gajmara is in progress.

17.2 Environment Management – Initiatives for preserving Environment

Vision Statement on Environment Management:

"Going Higher on Generation, lowering GHG intensity"

Your Company is pursuing the objective of environment protection as one of its prime responsibilities and focuses its efforts to mitigate the impact of its operation on surrounding environment. Around 12-15% of the project cost is spent on various environment protection equipments. To meet the environmental challenges of 21st century and beyond, the Company has adopted sound environment management practices and advanced environment protection system to minimize impact of power generation on environment.

Your Company has adopted advanced and high effi ciency technologies such as super critical boilers for the upcoming green field projects. Your company is augmenting its capacity by installing solar power systems and micro hydel power systems attached to its thermal power stations, wherever possible, so as to encourage garnering of renewable energy resources. The Company is also designing its up-coming plants to use beneficiated coal and imported low ash coal. These measures are aimed not only to achieve reduction in pollution and minimize use of precious natural resources but also to lead to reduction of CO2 emissions per unit of generation thereby reducing global warming.

17.2.1 Control of Air Emissions: High effi ciency Electro- static Precipitators (ESPs) with effi ciency of the order of 99.97% and above, with advanced control systems have been provided in all coal based stations to keep Suspended Particulate Matter (SPM) below permissible limits. All up-coming new plants are being provided with ESPs designed in such a manner that would cater to the anticipated future norms. Performance enhancement of ESPs operating over the years is being carried out by augmentation of ESPs fields, retrofitting of advanced ESP controllers and adoption of sound O&M practices. Flue Gas Conditioning systems have also been provided at our old units which are helping in reduction of SPM emissions below statutory limits even during coal quality variations due to blending of coal etc. Also, massive R&M program is being undertaken to upgrade air pollution equipments to reduce SPM emissions.

NOX control in plants is achieved by controlling its production by adopting best combustion practices. Since tall stacks are provided in coal stations, NOx emitted through stacks is widely dispersed and diluted. In gas based stations, NOx control systems (hybrid burners or wet DeNOx) have been provided for good combustion practices.

Fugitive emission from ash pond is controlled by maintaining water cover, tree plantation on abandoned ash ponds, water spray and earth cover in inactive lagoons. Providing dust suppression and extraction system in CHP area has further added to reduction in fugitive dust in the vicinity of power stations.

17.2.2 Control of water pollution and promotion of water conservation: Various water conservation measures have been taken up to reduce water consumption in power generation by using 3Rs (Reduce, Recycle & Reuse) as guiding principle.

Provision of advanced treatment facilities such as Liquid Waste Treatment Plants (LWTP), Recycling Systems for Ash Pond Effl uent called Ash Water Recirculation System (AWRS) and closed cycle condenser cooling water systems with higher Cycle of Concentration (COC), rain water harvesting wherever possible and reuse of treated sewage effl uent for horticulture purposes are some of the measures implemented in most of the stations. All these measures have resulted in reduction of effl uent discharge from the power plants of NTPC.

17.2.3 Ash Management: Ash dykes in the stations have been engineered to ensure that all safety and environmental issues are addressed at design stage itself.

Multi-lagoon ash ponds with provision of over-fl ow lagoons and ash pipe garlanding arrangement for change over of ash slurry feed points have been provided for effective settlement of ash particles.

Water sprinklers have been provided in the ash pond areas for spraying water in dried up portion of lagoons for control of fugitive dust. Efforts are made to maximize utilization of ash through use of Dry Ash Extraction System (DAES).

Unutilized ash is sent to ash pond by making ash slurry. The decanted water in Ash Pond is recycled back with the help of Ash Water Recirculation System (AWRS) for making ash slurry again, leading to reduction in water consumption.

17.2.4 Automation of environment measurement system: 67 continuous ambient air quality monitoring stations (AAQMS) have been installed to capture the real time data and access thereof viz., PM 10, PM 2.5, SOx, NOx and access has been provided to the Central Pollution Control Board and State Pollution Control Boards. Additional ozone analyzers for ambient air are also being provided at the stations. Continuous Emission Monitoring Systems (CEMS) to monitor SOx, NOx and CO2 in all its units on real time basis are being installed in all existing units of the Company. For all the upcoming projects, real time monitors for ambient air and emissions are included in the engineering packages during design stage itself.

17.2.5 Environmental Studies: Your Company has taken a number of studies for better environment protection and to develop strong scientifi c database.

17.2.6 Tree Plantation: Your Company has planted about 21 million trees till date in and around its projects as a measure of massive afforestation.

The afforestation has not only contributed to the aesthetics but also helped in carbon sequestration by serving as a sink for CO2 released from the stations and thereby protecting the quality of ecology and environment in and around the projects.

17.2.7 ISO 14001 & OHSAS 18001 Certifi cation: NTPCs stations have been certifi ed with ISO 14001 and OHSAS 18001 by reputed National and International certifying agencies as a result of sound environment management systems and practices.

17.3 Quality Assurance and Inspection (QA&I)

Your Company has a quality assurance and inspection division which mainly focuses on quality assurance in every aspect like quality and timely supplies for large capacity units. It continues to emphasize the strict implementation of quality systems in construction as well as in operations of all the projects/ stations. Regular quality system audits are undertaken at our project construction sites to ensure continuous improvements in implementation of quality system improvements.

Your company has now added four overseas inspection offi ces at Japan, China, Germany and Vietnam.

A recent initiative has been undertaken by your Company to improve the procurement of critical/ bulk spares for power stations, to ensure quality and reliability of spares and standard quality plans for 30 such spares have been prepared by QA&I Department.

Your Company is represented on various technical committees of ISO and IEC and is actively contributing in formulation and updation of power sector technical and quality standards/ guidelines.

17.4 Clean Development Mechanism (CDM)

Your Company is undertaking climate change issues proactively.

The methodology for super critical technology prepared by NTPC viz. "consolidated base line and monitoring methodology for new grid connected fossil fuel fi red power plants using less GHG intensive technology" has been approved by "United Nations Frame Work Convention on Climate Change (UNFCCC)" under Approved Consolidated Methodology 13 (ACM0013).

Two of its solar projects namely 5MW each solar PV project at Dadri and Port Blair, Andaman & Nicobar had already been registered with UNFCCC. Another two projects namely 5MW solar PV project at Faridabad and 8MW Small Hydro Power Project at Singrauli are in advanced stage of validation for submission to UNFCCC for CDM registration. Verifi cation/ issuance of CERs for 5 MW solar power PV project at Dadri and 5MW solar power PV project at A&N are in process.

In addition, your companys projects namely North Karanpura, Tapovan Vishnugad HEPP, energy effi ciency projects at Singrauli and Dadri have got host Country Approval from National CDM Authority.

17.5 Ash Utilisation

During the year 2013-14, 57.83 million tonnes of ash was generated and 25.37 million tonnes of ash had been utilized for various productive purposes. This was 43.88% of the total ash generated.

Important areas of ash utilization are – cement & asbestos industry, ready mix concrete plants (RMC), road embankment, mine fi lling, ash dyke raising & land development. 7.19 million tonnes of ash has been issued to cement, RMC and other industries in the financial year 2013-14.

Pond ash from all stations of NTPC is being issued free of cost to all users. Fly ash is also being issued free of cost to fl y ash/ clay-fl y ash bricks, blocks and tiles manufacturers on priority basis over the other users from all NTPC coal based thermal power stations. The funds collected from sale of ash is being maintained in a separate account by NTPC Vidyut Vyapar Nigam Limited, a wholly-owned subsidiary company of NTPC and the same is being utilized for development of infrastructure facilities, promotion and facilitation activities to enhance ash utilization.

The quantity of ash produced, ash utilized and percentage of such utilization during 2013-14 from NTPC Stations is at Annex-IX.

17.6 RURAL ELECTRIFICATION

NTPC, through its wholly owned subsidiary NESCL, is carrying out the implementation of rural electrifi cation work in 5 States namely Madhya Pradesh, Chhattisgarh, Odisha, Jharkhand and West Bengal under Government of India, fl agship program, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). During this period, 1,442 villages were electrifi ed and 24,742 Below Poverty Line (BPL) connections were provided. The cumulative achievement till 31st March 2014 is 33,807 villages and 26,27,485 BPL connections.

17.7 CenPEEP – towards enhancing effi ciency and protecting Environment

NTPC initiated a unique voluntary program of GHG emission reduction by establishing Center for Power Effi ciency and Environmental Protection (CenPEEP) and under this program, it is estimated that over 37 million tons of CO2 has been avoided since 1996.

CenPEEP is also coordinating the implementation of Perform, Achieve & Trade (PAT) Scheme under Prime Ministers National Mission on Enhanced Energy Effi ciency (NMEEE) in NTPC where all 22 stations of NTPC are designated Consumers (DC). Based on gap analysis, a joint action plan is prepared with Station for improvement of effi ciency and auxiliary power to achieve the PAT targets in the year 2014-15.

Thrust has been given to effi ciency improvement & auxiliary power reduction through strategic initiatives of Energy Effi ciency Management System (EEMS), Energy management System (EMS), Energy Audit System and reliability improvement through Knowledge Based Maintenance systems. Optimization of cooling tower performance and air-preheater has also been taken up as thrust area. Leveraging the use of information technology, new initiatives have been taken with installation of on - line systems such as Thermal Loss Analyser (TLA) and System Energy Effi ciency Display (SEED) for tracking and gap analysis of heat rate and auxiliary power consumption. These systems assist the operator and facilitate the trending of degradation of equipment performance and formulation of action plans for improvement. Evaluation has also been done for use of performance diagnostics off-line tool based on first principle energy / mass balance to help in effi ciency and capacity gap analysis and performance baselining of some of the NTPC units thereby enhancing skill for problem analysis.

Under Indo-US bilateral program Partnership to Advance Clean Energy – Deployment (PACE-D) being implemented with support of USAID, assessment of effi ciencies has been done for two State utilities namely Haryana and Maharashtra and action plans were formulated for them. A Best practices manual for super critical units has been prepared jointly with US experts and was released by Secretary (Power) Govt of India on the occasion of NTPC International O&M Conference 2014. Work on benchmarking methodology document, coal blending impact studies and pilot program on Advanced Pattern recognition (APR) is underway with the help of US experts.

18. NETRA – R&D Mission in Power Sector

NTPC Energy Technology Research Alliance (NETRA), the research & development wing of NTPC focuses on areas of effi ciency & availability improvement; cost reduction; renewable and alternative energy source; climate change & environment protection; and providing scientifi c support to utilities.

Research Advisory Council (RAC) of NETRA comprising eminent scientists and experts from India and abroad is in place to steer research. Scientifi c Advisory Council (SAC) with Executive Directors as its members provides directions for undertaking specific applied research projects aimed to develop techniques in power plant for effi cient, reliable and environment friendly operation with emphasis on reducing cost of generation. The meetings for both these Advisory Councils were held periodically.

In order to provide maximum possible benefit to the stations, many projects/activities have been undertaken for implementation like waste Flue gas based air conditioning system for control rooms at Ramagundam, Computational Fluid Dynamics (CFD) modeling based plant improvement in boiler and CW system for increasing effi ciency and reducing auxiliary power consumption, robotic inspection of boiler pressure parts, PDC-RVM based expert system for transformer condition monitoring etc. Development of many in-house products/technologies is in advance stage like NETRA e Power Plant Solution (NePPS) based on Artifi cial Intelligence Software for real time plant performance monitoring, optimization & diagnostic, Flue gas utilization for pH reduction of re-circulating ash pond water at Ramagundam etc. NETRA continued to provide scientifi c support to all NTPC stations as well as many other utilities stations in the area of oil/water chemistry, environment, electrical, Rotor dynamics etc for effi cient performances.

Some state-of-the-art facilities established for condition monitoring and diagnostic techniques include frequency scanning eddy current system for evaluation of coating on gas turbine blades; portable automated ball indentation for evaluation of in-situ mechanical properties; eddy current array, Time of Flight Diffraction technology for rapid, reliable, accurate inspection of weldments of high pressure and high temperature pipeline and headers, Energy Dispersive X-Ray Fluoresce, Frequency Domain Spectroscopy, Simultaneous Thermal Analyzer, Particle Counter (NAS Value) etc.

NTPC has inked an umbrella MOU with Indian Institute of Science, Bangalore to promote research in CFD, renewable, water chemistry, ash utilization etc.

Agreement has been signed with KFW, Germany for setting up of (i) Advanced Test and Qualifi cation Centre for Concentrating Solar Thermal Technologies with

DLR Germany (ii) Advance pilot test setup for 91kwp concentrating solar PV and PV characterization test lab with ISE-Fraunhofer, Germany.

NETRA laboratories are accredited as per ISO 17025 and its NDT laboratory has also been recognized as "Well known Remnant Life Assessment Organization" under the Boiler Regulations, 1950.

Phase-II NETRA infrastructure is under construction with approx 21,000 sq m fl oor area and is expected to be completed in FY 2014-15. Phase II will have 30 laboratories, workshop, pilot plant bay and an auditorium with seating capacity of 400 persons.

NETRA organized National Workshops during 2013-14 in the area of Sensors for Power Plant Process & Equipment, Metallurgical Aspects in Power Plants, Condition monitoring and Life Assessment of Transformers, and also Coordinated International Conference on "Advance Technologies & Best Practices for Super Critical Thermal Plants" under PACE-D Technical Assistance Program.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has taken several steps for the propagation and implementation of Offi cial language Hindi in the Company. The progress of usage of Hindi was inspected and proper suggestions were given to the Heads of the Offi ces. The quarterly meetings of the Offi cial Language Implementation Committee were held to review the implementation of Hindi in the organization.

Hindi Diwas and Hindi Competitions were organized from 1st to 13th September, 2013 in the Corporate Offi ce as well as in all the Projects and Regional HQ of NTPC. NTPC Limited received All India Indira Gandhi Rajbhasha Second Prize from Honble President of India, Shri Pranab Mukherjee. Various Hindi workshops and Hindi Computer Training were conducted for the employees. Your Company organized Akhil Bhartiya Rajbahsha Sammelan for Power Sector Undertakings on 9th May, 2013. Annual Rajbhasha Conference for the Heads of Rajbhasha was held on 10th & 11th May, 2013.

All offi ce orders, formats and circulars were issued in Hindi as well. Important advertisements and house journals were released in bilingual form- in Hindi and in English. Two issues of half-yearly Hindi magazine Vidyut Swar was published to promote creative writing in Hindi.

Your Companys website also has a facility of operating in bilingual form- in Hindi as well as in English.

20. VIGILANCE

20.1 Vigilance Mechanism:

Your Company ensures transparency, objectivity and quality of decision making in its operations, and to monitor the same, the Company has a Vigilance Department headed by Chief Vigilance Offi cer, a nominee of Central Vigilance Commission. The CVO reports to the Central Vigilance Commission.

The four units of Vigilance Department namely Corporate Vigilance Cell, Departmental Proceeding Cell (DPC), MIS Cell and Technical Cell (TC) deal with various facets of vigilance mechanism. The Vigilance Department submits its report to the Competent Authority and also to the Board of Directors.

Surprise checks are being conducted in various departments and recovery is being made against discrepancies, if any, found. Vigilance department issued various circulars for improvements in systems like import of coal, material handling, single tender awards, owner issue materials, utilization of non-moving items etc. A total of 146 vigilance complaints were received during the year, out of which 82 complaints have been resolved and balance 64 complaints are under various stages of investigations.

As per the directive of DOPT/ MOP, the property returns of all the executives have been published on NTPC Website.

20.2 Workshops and Vigilance Awareness Week

Preventive Vigilance Workshops are being conducted every year to sensitize employees about DOs and DONTs in work areas and their role in preventing corruption. 19 such workshops were held across NTPC in which 529 employees participated.

Vigilance awareness week was observed from October 28, 2013 to November 2, 2013 across all NTPC projects and sites.

20.3 Implementation of Integrity Pact

Your Company is committed to have total transparency to its business processes and as a step in this direction; it signed a Memorandum of Understanding with Transparency International India in December, 2008. The Integrity Pact is being implemented for all contracts having value exceeding Rs. 10 crore. Two Independent External Monitors have been nominated by the Central Vigilance Commission for all contracts with value exceeding Rs. 100 crore. Regular meetings are being organized with Independent External Monitors.

20.4 Implementation of various policies/ circulars

20.4.1 Fraud Prevention Policy

The Fraud Prevention Policy has been formulated and implemented in your Company since 2006. The cases referred by the nodal offi cers are being investigated immediately to avoid fraudulent behaviors as defi ned in the Fraud Prevention Policy.

20.4.2 Complaint Handling Policy

Vigilance department has formulated and implemented Complaint Handling Policy w.e.f. 01.08.2013 which contains the procedure for handling various complaints lodged with the department.

20.4.3 Whistle Blower Policy

Whistle Blower Policy has been issued to build and strengthen a culture of transparency and trust in the organization and to provide employees with a framework/ procedure for responsible and secure reporting of improper activities within the company and to protect employees who raise concern about improper activities/ serious irregularities.

21. RIGHT TO INFORMATION

Your Company has implemented Right to Information Act, 2005 in order to provide information to citizens and to maintain accountability and transparency. The Company has put RTI manual on website for access to all citizens of India and has designated a Central Public Information Offi cer (CPIO), an Appellate Authority and APIOs at all sites and offi ces of NTPC.

During 2013-14, 1,226 applications were received under the RTI Act, out of which 1,171 applications were replied to.

22. USING INFORMATION AND COMMUNICATION TECHNOLOGY FOR PRODUCTIVITY ENHANCEMENT

NTPC has implemented an Enterprise Resource Planning (ERP) package covering maximum possible processes across the organization including subsidiaries. In addition to the core business processes and Employee Self Service (ESS) functionality, the ERP solution also includes e-procurement, Knowledge Management, Business Intelligence, Document Management, Workfl ow etc. The ERP system is fully managed through in-house expertise from process groups and technical groups. Parallely, in- house solutions have been developed to take care of the non-ERP areas.

A state-of-the-art main data center with centralized server facility to cater to the needs of entire Company is located at Noida. There is a disaster recovery center at Hyderabad as a full back up for real time changeover in case of any emergency.

Videoconferencing (VC) facility is widely used for management reviews/ training/ deliberations among locations. The facility has also been augmented to hold VC with external agencies in secured manner.

In order to improve upon effi ciency and bringing transparency in procurement process in NTPC, e-procurement process using SRM module of ERP is widely used.

An emergency response system (ERS) has been deployed and hosted centrally at Noida to cater to different requirements of sending information to the employees using SMS services and emergency alerts during Voice Calls.

Various other applications have been developed to take care of RTI, Parliament Questions Management, legal system, transit camp booking requirement etc.

NTPC tender website www.ntpctender.com is being regularly used for publishing all open tenders on the Internet. Additional Website www.ntpcexemployees. co.in for facilitating superannuated employees has also been hosted.

The Information Technology department at Corporate Center Noida has been awarded certifi cate in recognition of the organizations Quality Management System which complies with ISO 9001:2008 for "Providing IT Enabled Services".

23. NTPC GROUP: SUBSIDIARIES AND JOINT VENTURES

Your Company has currently 4 subsidiary companies and 21 joint venture companies for undertaking specific business activities.

NTPC Hydro Limited, a wholly owned subsidiary of NTPC has been merged with NTPC Limited on 18.12.2013 in terms of Section 391-394 of the Companies Act, 1956.

The names of Subsidiaries and Joint Venture Companies and the percentage of your Companys shareholding in these Companies as on 31.03.2014 are as follows:

The performance of these companies as well as the consolidated fi nancial statements are briefl y discussed in the Management Discussion & Analysis section. The financial statements of subsidiary companies along with the respective Directors Report are placed elsewhere in this Annual Report.

24. INFORMATION AS PER COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975

As per provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, every company is required to provide particular of employees in the Directors Report exceeding the stipulated remuneration limit(s).

However, as per notifi cation dated 31.03.2011 issued by the Ministry of Corporate Affairs, amending provisions of said rules, Government Companies are exempted from including such particulars in the Directors Report.

As your Company is a Government Company, such particulars have not been included in the Directors Report. Any member desirous of obtaining such particulars may write to the Company Secretary at the Registered Offi ce of the Company or download them from the website www.ntpc.co.in. Such particulars shall also be made available to the shareholders on a specific request made by them during the course of Annual General Meeting to be held on 27.08.2014.

25. STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s O.P. Bagla & Co., K.K. Soni & Co., PKF Sridhar & Santhanam, V. Sankar Aiyar & Co., Ramesh C. Agrawal & Co. and A.R. & Co.were appointed as Joint Statutory Auditors for the financial year 2013-14.

26. MANAGEMENT COMMENTS ON STATUTORY AUDITORS REPORT

The Statutory Auditors of the Company have given an unqualifi ed report on the accounts of the Company for the financial year 2013-14. They have drawn attention towards Note-32 to the financial statements in respect of the accounting of fuel on GCV based pricing system.

The issue has been adequately explained in Note 32 of the financial statements of NTPC for FY 2013-14 referred to by the Auditors.

27. REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA

You would be pleased to know that for the fi fth year in a row your organization has received NIL Comments on the Financial Statements for the year from the Comptroller & Auditor General of India (C&AG).

As advised by the Offi ce of the C&AG, the comments of C&AG for the year 2013-14 are being placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.

28. COST AUDIT

As prescribed under the Cost Accounting Records (Electricity Industry) Rules, 2001, the Cost Accounting records are being maintained by all stations of the Company. The particulars of Cost Auditors as required under Section 233(B) of the Companies Act, 1956 read with General Circular No. 15/2011 dated 11.04.2011 issued by Ministry of Corporate Affairs are given below:

The fi rms of Cost Accountants appointed for the financial year 2012-13 were (i) M/s Dhananjay V. Joshi & Associates, Pune, Maharashtra, (ii) M/s Jugal K. Puri & Associates, Gurgaon, Haryana, (iii) M/s Mandal Mukherjee Datta & Associates, Kolkata, West Bengal, (iv) M/s S.C. Mohanty & Associates, Bhubhaneshwar, Orissa, (v) M/s V.P. Gupta & Co., Noida, Uttar Pradesh and (vi) M/s Chandra Wadhwa & Co., Daryaganj, Delhi.

The fi rms of Cost Accountants appointed for the financial year 2013-14 were (i) M/s Narasimha Murthy & Co., Hyderabad, (ii) M/s Musib & Co., Mumbai, (iii) M/s Sanjay Gupta & Associates, Delhi, (iv) M/s Bandopadhyay Bhaumik & Co., Mumbai, (v) M/s S. Dhal & Co., Bhubhaneshwar and (vi) M/s R.J. Goel & Co., Delhi.

The due date for fi ling consolidated Cost Audit Report in XBRL format for the financial year ended March 31,

2013 was September 27, 2013 and the consolidated Cost Audit Report for your Company was filed with the Central Government on September 16, 2013.

The Cost Audit Report for the financial year ended March 31, 2014 shall be filed within the prescribed time period under the Companies Act, 2013.

29. BOARD OF DIRECTORS

Dr. Pradeep Kumar, JS & FA, Ministry of Power has joined as Government Nominee Director of the Company with effect from September 10, 2013 in place of Shri Rakesh Jain who ceased to be the Director of the Company w.e.f. July 9, 2013 consequent upon his transfer from Ministry of Power.

Shri A.K. Singhal, Director (Finance) ceased to be the Director of the Company w.e.f. October 9, 2013 consequent upon his appointment as Member of the Central Electricity Regulatory Commission.

Consequent upon superannuation of Shri B.P. Singh on September 30, 2013, Shri S.C. Pandey has taken over as Director (Projects) with effect from October 1, 2013.

Shri I.C.P. Keshari has ceased to be the Director of your Company w.e.f. September 30, 2013 on ceasing to be the offi cial of Ministry of Power.

Shri G. Sai Prasad, JS (Thermal), Ministry of Power had joined as Government Nominee Director of the Company with effect from December 5, 2013. However, he has ceased to be the Director on the Board w.e.f. June 16, 2014 consequent upon his transfer from Ministry of Power.

Shri Kulamani Biswal, Director (Finance), Mahanadi Coalfields Limited has taken over the charge of the Director (Finance) of the Company with effect from December 9, 2013.

The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri Rakesh Jain, Shri A.K. Singhal, Shri B.P. Singh, Shri I.C.P. Keshari and Shri G. Sai Prasad during their association with the Company.

In accordance with Section 152 of the Companies Act, 2013 and the provisions of Article 41(iii) of the Articles of Association of the Company – Shri I.J. Kapoor shall retire by rotation at the Annual General Meeting of your Company and, being eligible, offers himself for re-appointment.

30. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

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

2. 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 2013-14 and of the profit of the company for that period;

3. the Directors had taken proper and suffi cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

4. the Directors had prepared the Annual Accounts on a going concern basis.

31. INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 1956, Listing Agreement with Stock Exchanges, Government guidelines etc. is annexed to this report as below:

Particulars Annexure

Management Discussion & Analysis I

Report on Corporate Governance II

Information on conservation of energy, III technology absorption and foreign exchange earnings and outgo

Statement pursuant to Section 212 of the IV Companies Act, 1956 relating to subsidiary companies

Statistical data of the grievance cases V

Statistical information on persons VI belonging to Scheduled Caste / Scheduled Tribe categories

Information on Physically Challenged VII persons

UNGC - Communications on progress VIII

Project Wise Ash Utilisation IX

Business Responsibility Report for the year X 2013-14

32. ACKNOWLEDGEMENT

Your Directors acknowledge with deep sense of appreciation, the co-operation received from the Government of India, particularly the Prime Ministers Offi ce, Ministry of Power, Ministry of Finance, Ministry of Environment & Forests, Ministry of Coal, Ministry of Petroleum & Natural Gas, Ministry of Railways, the Planning Commission, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, Comptroller & Auditor General of India, Appellate Tribunal for Electricity, State Governments, Regional Power Committees, State Electricity Boards and Offi ce of the Attorney General of India.

Your Directors also convey their gratitude to the shareholders, various international and Indian Banks and Financial Institutions for the confi dence reposed by them in the Company.

The Board also appreciates the contribution of contractors, vendors and consultants in the implementation of various projects of the Company.

We also acknowledge the constructive suggestions received from Government and Statutory Auditors.

We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the company continues to grow and excel.

For and on behalf of the Board of Directors

Place : New Delhi (Dr. Arup Roy Choudhury)

Date : 11th July 2014 Chairman & Managing Director


Mar 31, 2013

Dear Members,

The Directors are pleased to present the 37th Annual Report and the audited financial statements for the year ended March 31, 2013.

Financial Year 2012-13 has been a year of achievements for your Company as it performed exceedingly well in various areas of its activities. Major highlights for the year are:

- Addition of 4,170 MW capacity (including 1000 MW through JV Companies), by far the highest ever in any single year and declared 4,830 MW (including 1000 MW through JV Companies) on commercial generation, also the highest ever in a year. Awarded contracts forwork of8,521 MW.

- Average PLFof83.08% as against all India PLF of 69.95% with six stations recording more than 90% PLF.

- Capital expenditure (CAPEX) of Rs. 19,925.53 crore which was 24.58% higher than the previousyearsRs. 15,994 crore.

- 100% realization ofcurrent bills from customers.

- Highest ever net profit after tax ofRs. 12,619.39 crore, making an increase by 36.81% over the previous years PAT of Rs. 9,223.73 crore and recorded total income of Rs. 68,775.51 crore, an increase of 6.07% as compared to Rs. 64,841.88 crore in the FY 2011-12.

- Highest-ever dividend ofRs. 5.75 per share (total Rs. 4,741.16 crore) which comprises interim dividend of Rs. 3.75 per equity share paid in March 2013 and recommendation of special dividend of Rs. 1.25 per equity share and final dividend of Rs. 0.75 per equity share for the year 2012-13, subject to approval of the shareholders.

- Approval of the Ministry of Power for implementation of North Karanpura Super Thermal Power Project (3X660 MW) at existing site in the State of Jharkhand by NTPC.

- Withdrawal of de-allocation of Chatti-Bariatu, Chatti-Bariatu (South) and Kerandari Coal Blocks by Ministry of Coal which werede-allocated by Ministry ofCoal inJune 2011.

- Disinvestment of 9.50% holding by Government of India in the equity of your Company, thus reducing its holding from 84.50% to 75.00%.

- Commissioned first two solar power plants of 5 MW each at Dadri and Andaman & Nicobar Islands.

You will appreciate the fact that your Company is imparting a major thrust to the growth of the power sector and recording consistently excellent performance despite the challenge before the sector.

1. FINANCIAL RESULTS

2012-13 2011-12

Revenue Rs. Crore US $ Mn* Rs. Crore US $ Mn*

Net Revenue from Operations(induding Enersy Sales, 65,673.93 11,960.29 62,052.23 11,300.72 Consultancy, Energy consumed internally)

Other Income 3,101.58 564.85 2,789.65 508.04

Total Revenue 68,775.51 12,525.14 64,841.88 11,808.76

Expenses

Fuel 41,018.25 7,470.09 41,635.46 7,582.49

Employee Benefits Expense 3,360.12 611.93 3,101.71 564.87

Finance Costs 1,924.36 350.46 1,711.64 311.72

Depreciation and amortization expense 3,396.76 618.60 2,791.70 508.41

Generation, administration & other expenses 4,211.22 766.93 3,588.79 653.58

Prior period items (net) (29.72) (5.41) (313.58) (57.11)

Total Expenses 53,880.99 9,812.60 52,515.72 9,563.96

Profit before Tax and exceptional items 14,894.52 2,712.54 12,326.16 2,244.80

Exceptional items 1,684.11 306.70 - -

Profit before tax 16,578.63 3,019.24 12,326.16 2,244.80

Tax Expense 3,959.24 721.04 3,102.43 565.00

Profit for the year 12,619.39 2,298.20 9,223.73 1,679.80

2012-13 2011-12 Rs. Croe US $ Mn* Rs. Crore US $ Mn*

Transfer to bond redemption reserve 492.79 89.75 482.38 87.85

Transfer to general reserve 6,500.00 1,183.76 5,200.00 947.00

Transfer to capital reserve 0.97 0.18 0.44 0.08

Interim dividend 3,092.07 563.12 2,885.92 525.57

Proposed dividend 1,649.09 300.33 412.27 75.08

Tax on dividend 781.87 142.39 527.92 96.14

*1US$= Rs. 54.91 as on March 31,2013

2. DISINVESTMENT

One of the major highlights of the year that passed was that the Government of India divested 78,32,62,880 number of equity shares (9.50%) of NTPC on 7th February 2013 using the Offer for Sale through Stock Exchange Mechanism. With this, the GOIs holding in NTPC has reduced from 84.50% to 75.00%. The Offer was over- subscribed by 1.7 times and garnered Rs. 11,469.39 crore at weighted average price of Rs. 146.43. An important feature was that 45% of the subscription came from Fils.

3. DIVIDEND

3.1 Interim, Special and Final Dividend:

In addition to interim dividend ofRs. 3.75 per equity share paid in March 2013, your Directors have recommended a special dividend of Rs. 1.25 per equity share and final dividend ofRs. 0.75 per equity share for theyear 2012-13. With this the total dividend for theyear isRs. 5.75 (including special dividend ofRs. 1.25) per equity share ofRs. 10/- each against Rs. 4.00 per share paid during last year.

The total dividend payout is 37.57% and the total dividend payout including dividend tax is 43.77% of profit after tax. The special and final dividend shall be paid afteryour approval at the Annual General Meeting.

The dividend has been recommended in accordance with your Companys policy of balancing dividend pay-out with the requirement of deployment of internal accruals for its growth plans.

Your Directors believe that growth of the Company through capacity addition, backward and forward integration and strategic diversification of its operations would lead to increase in shareholdersvalue.

4. OPERATIONAL PERFORMANCE

4.1 Generation:

During the year, the power stations of your Company generated 232.028 BUs (247 BUs including JVs) of electricity which was 25.57% (27.22% including JVs) of the total power generated in India (without Bhutan import).

The total power generated by the Company has registered an increase of 4.49% over the previous years generation of 222.068 BUs. The total generation contributed by coal stations is 212.329 BUs during the year against generation of 199.054 BUs last year registering a growth of 6.67%.

Generation from coal based units could have been still higher but due to less grid demand there was generation loss of 7.48 BUs. The coal based stations of your Company operated at average Plant Load Factor (PLF) of 83.08% (All India PLF 69.95%) and average Availability Factor of 90.20% on bus bar during theyear. During theyear, 6 coal based stations out of16achieved more than 90% PLF.

The gas stations having a capacity of 3,955 MW achieved annual generation of 19.699 BUs at a PLF of 55.98% as against 23.014 BUs last year mainly due to less grid demand which accounted for a generation loss of 12.954 BUs. The average declared capacity ofgas based stations of the year was 93.14% as compared to 93.81% during previous year.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India and as per Guidelines on Corporate Governance forCPSEs issued by Department of Public Enterprises, GOI, is presented in Annex-I to this Report.

5. COMMERCIAL PERFORMANCE

Your Company has realized 100% payment of current bills raised for sale of power, thus achieving this feat for the tenth consecutive year.

5.1 Rebate Scheme/ One Time Settlement Scheme for realization of dues:

In order to achieve early realization of dues, your Company gives rebate to its beneficiaries who make payments within time, through its Rebate Schemes.

In the Rebate Scheme for 2012-13 rebate was given to those customers also who were making payment after 30 days and upto 55th day.

Rebate Scheme for 2013-14 contains an additional provision of additional rebate of 0.1% for opening of monthly Letter of Credit (LC) by beneficiaries over and above the Rebate Scheme for 2012-13.

Most of the customers were making their payments within 30 days of billing, barring state utilities from UP, Haryana, Punjab, Himachal Pradesh, Andhra Pradesh, Tamil Nadu, Rajasthan, Meghalaya who were making their payments within allowable 60 days period.

All the beneficiaries have established LC and are maintaining it. As on 31.03.2013, your Company has monthly LCs ofRs. 5,915.60 crore.

The issue of DESU period dues payable by Government of NCT of Delhi has been settled and Government of India had approved settlement ofRs. 2,520.08 Crore (Rs. 835.97 crore as principal and Rs. 1,684.11 crore as interest and surcharge) towards DESU dues. The receipt of amount is being pursued with the Govt.

5.2 Commercial Capacity:

The following units were declared commercial during the year 2012-13, adding 4,830 MW to commercial capacity ofyour Company, the highest ever in a year:

Project/ Unit Capacity COD* (MW)

NTPC Units- Coal Based (I)

Farakka-III, Unit#6 500 04.04.2012

Sipat-I, Unit#2 660 25.05.2012

Sipat-I, Unit#3 660 01.08.2012

Simhadri-II, Unit#4 500 30.09.2012

Rihand-III, Unit#5 500 19.11.2012

Vindhyachal-IV, Unit#11 500 01.03.2013

Mouda-I, Unit#1 500 13.03.2013

Total (I) 3,820

NTPC Units -Renewable Energy Units (II)

Dadri Solar 5 30.03.2013

Andaman & Nicobar 5 31.03.2013 Islands Solar

Total (II) 10

NTPCs JV Units- Coal Based (III)

Jhajjar,Unit#2(JV with 500 21.04.2012 IPGCL and HPGCL)

Vallur, Unit#1 (JV with 500 29.11.2012 TANGEDCO)

Total (III) 1,000

Total Capacity declared 4,830 commercial during 2012- 13(incl. JVs) (I)+(II)+(III)

* COD- Commercial Operation Date

Further, after the financial year 2012-13, Unit#3 of 500 MW of Jhajjar (owned by JV, Aravali Power Company Private Limited) has been declared commercial on 26.04.2013.

5.3 Determination of Tariff:

Your Company had filed tariff petitions for the five- year period starting 1.4.2009 before Central Electricity Regulatory Commission (CERC) for all the stations in accordance with the CERC (Terms and Conditions of Tariff) Regulations, 2009.

Tariff orders have been received for 26 stations till 31.03.2013 out of 35 stations.

True-up petitions for revision of tariff were filed for 20 stations.

CERC had allowed additional reimbursement ofRs. 764.97 crore for 2004-09 period related to pay revision for NTPC employees, CISF and Kendriya Vidyalaya staff.

5.4 Other Activities:

Long term access for evacuation of power has been granted for five projects i.e. Vindhyachal-V, Dadri Solar, Tanda, Lara and Darlipalli.

CERC issued an amendment in the grant of connectivity regulation to allow connectivity to renewable projects having capacity above 5 MW but less than 50 MW being developed in the existing generating stations through the existing electrical system of the stations. This provision would enable your Company to set up renewable capacity within the premises of the existing generating stations.

5.5 Strengthening Customer Relationship:

Customer Relationship Management (CRM) initiative has been taken by your Company towards strengthening relationship with the customers. This is also reflected in the Core Values of your Company which emphasize Customer Focus.

Under CRM, apart from Regional Customer Meets, Business Partner Meets, training programs for officials of customers at PMI, regular structured interaction with customers takes place on an ongoing basis for sharing of feedbacks, experiences and expectations. Based on the feedback received from the customers, the Company provides various support services to them, identifies potential areas of cooperation and shares best practices with the customer utilities. During 2012-13, 58 such services were provided to the customers on the basis ofthe requirement expressed by various customers. Further, 138 participants from various customer utilities attended training in 60 programs conducted by PMI.

Starting from 2008-09, NTPC has rolled out a Customer Satisfaction Index (CSI) Survey for gathering customers feedback and responding to their requirements. This initiative serves as a useful tool for further strengthening Customer Relationship and better appreciation of our business. The CSI Survey was conducted in 2012-13 and detailed action plan has been made based on the response to the survey.

6. INSTALLED CAPACITY

During theyear 2012-13, your Company added 4,170 MW as per details given below:

Project/ Unit installed during FY 2012-13 Capacity (MW)

NTPC owned

Coal Based Power Projects

Sipat-I, Unit #3 660

Vindhyachal- IV, Unit# 11&12 1000

Mouda-I,Unit1&2 1000

Rihand, Unit # 5 500

Renewable Energy Projects Solar PV Project at Andaman & 5 Nicobar Islands

Solar PV Project at Dadri 5

Under JVs (Coal Based Power Projects)

Jhajjar (JV with HPGCL & IPGCL), 500 Unit # 3

Vallur (JV with TANGEDCO), Unit#2 500

Addition during FY 2012-13 4,170

6.1 Installed Capacity of NTPC Group:

The total installed capacity of the NTPC Group has increased from 37,014 MW as on 31.03.2012 to 41,184 MW as on 31.03.2013 as tabulated below:

Owned by NTPC MW

Coal based projects 31,855

Gas based projects 3,955

Renewable Energy Projects 10

Sub-total 35,820

Joint Ventures & Subsidiaries

Coal based projects 3,424

Gas based projects 1,940

Sub-total 5,364

Total 41,184

7. CAPACITY ADDITION PROGRAM

Your Company has adopted a multi-pronged growth strategy which includes capacity addition through green field projects, brown field expansions,jointventures and acquisitions towards its journey to become the worlds largest power producer.

In addition to furthering capacity addition through Coal and Gas based power projects, your Company has been pursuing enhancement of its power generation portfolio through Hydro, Renewable Energy and Nuclear energy projects.

7.1 Projects under Implementation

Your Companys various projects having aggregate capacity of 20,009 MW including 5,190 MW, being undertaken by Joint Venture companies were under construction as on 31.03.2013:

Ongoing Projects as on 31.03.2013

Capacity (MW)

I. Projects under NTPC Ltd

A. Coal Based Projects

1. Bongaigaon-I 750

2. Barh-I 1,980

3. Barh-II 1,320

4. Lara-I 1,600

5. Kudgi-I 2,400

6. Vindhyachal-V 500

7. Gadarwara* 1,600

8. Solapur 1,320

9. Mouda-II 1,320

10. Rihand-III 500

Sub Total (A) 13,290

B. Hydro Electric Power Projects (HEPP)

11. Koldam 800

12. Tapovan Vishnugad 520

13. Lata Tapovan 171

Sub Total (B) 1,491

C. Renewable Energy Projects

14. Singrauli CW Discharge(Hydro) 8

15. Ramagundam Phase-I(Solar PV) 10

16. Talcher Kaniha (Solar PV) 10

17. Unchahar (Solar PV) 10

Sub Total (C) 38

Total I (A)+(B)+(C) 14,819

II Projects under JVs

Coal Based Projects

18. Nabinagar-JV with Railways 1,000

19. Muzaffarpur Expansion (MTPS)- JV 390 with BSPGCL(erstwhile BSEB)

20. Nabinagar,JV with BSPGCL(erstwhile no. BSEB) 1,980

21. Vallur, Phase-II JV with TANGEDCO 500

22. Meja, JVwith UPRVUNL 1,320

Total II 5,190

III Total On-Going Projects as on 20,009 31.03.2013 (I)+(II)

*Gadarwara Project in Madhya Pradesh (2X800 MW) is beins implemented in place of Gajmara project in Odisha as the land for the same was not available.

Further, after the financial year 2012-13, awards have been placed and work has begun for 5 MW Solar Power Plant at Faridabad and 50 MW Solar Power Plant at Rajgarh (Madhya Pradesh). Thus, 20,064 MW projects are under construction byyour Company.

7.2 New Projects

Currently, your Company has projects for 3,555 MW capacity under bidding. Feasibility Reports of 20,715 MW capacity (including 2100 MW through Joint Venture) have already been approved byyour Board.

7.3 New Technology

To meet the future challenges of meeting Indias electricity needs at affordable cost with minimum environmental impact, your Company has drawn a long term Technology Roadmap up to 2032. The technology roadmap envisages development, adoption and promotion of safe, efficient and clean technologies for entire value chain of power generation business.

For most of the new projects, your Company will be setting up super critical and Ultra Super Critical units of 660/ 800 MW which have higher efficiency and are also environmental friendly. Your Company has awarded bulk tendering projects with super critical technology for Kudgi-I (3X800 MW), Lara-I (2X800 MW), Solapur (2X660 MW), Mouda -II (2X660 MW) and Gadarwara (2X800 MW).

Your Company has adopted several new technologies, system and practices including combined cycle gas-fired power stations, Distributed Digital Control & Management Information System, High Voltage Direct Current transmission, Sliding Pressure Operation of SG, Dry Ash Extraction and Disposal, 765 KV Switchyard, Ash Water Recirculation System, Liquid Waste Management System, Performance Analysis and Diagnostic Optimization, Tunnel Boring Machines and Super Critical Technologies. Three (03) numbers Super critical units of 660 MW is already under operation at Sipat-I where steam parameters are 247 kg/cm2/537° C/5650 C. Further, your Company has adopted higher steam parameters for all 660 & 800 MW units from Barh-ll onward resulting in 5% gain in efficiency over the efficiency of conventional sub-critical 500 MW unit using similar coal. For all the new sub-critical 500 MW units also, reheat temperature has been increased to 565 0 C resulting in about 0.7% gain in efficiency.

Your Company has taken initiatives for indigenous development of advance ultra super critical technology for which it has entered into MOU with BHEL and IGCAR. It has potential to enhance thermal efficiency of the power plant to around 46% and result in about 15-20% less C02 emission as compared to conventional 500 MW sub-critical thermal power plants. It envisages installing a technology demonstration plant having 800 MW unitwith steam parameters of310 kg/sq cm7100 C/720 °C.

Your Company is preparing Detailed Project Report for hybrid solar thermal plant of about 3.6 MW by integration of solar heat with 210 MW coal based unit at Dadri. Solar heat is proposed to be integrated along with feed heaters in the turbine cycle for conversion of solar heat to electrical power with the help of existing steam cycle of 210 MW. Once integrated, this will reduce coal consumption thereby reducing C02 emissions.

7.4 Project Management

Your Company has an established state-of-the-art IT enabled Project Monitoring Centre (PMC) for facilitating fast track project implementation. PMC has advanced features like Web-based Milestone Monitoring System (Webmiles), Project Review and Internal Monitoring System (PRIMS), Enterprise-wide Issues Tracking System, etc. PMC facilitates monitoring of key project milestones and also acts as decision support system for the management.

PMC is extensively utilized fortracking and resolving project issues and helps in providing effective coordination between the agencies including management intervention and has provided enhanced and efficient monitoring of projects leading to better, faster and integrated implementation.

Your Company is establishing an integrated ERP Platform for monitoring and controlling of critical project activities spread across various functions like engineering, contracts and finance. This interface will help in getting timely inputs for decision making.

7.5 Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company develops power projects through its subsidiaries and joint ventures, both in India and abroad. Details of Joint Ventures abroad are covered under the heading Globalisation Initiatives.

The information of Indian Subsidiaries and JV Companies along with details of partners ofjoint ventures for capacity addition is given below:

Name of JV Partner(s) Details Company

NSPCL Steel Authority of India A 50:50 JVC formed to own and operate captive power plants for Steel (NTPC-SAILPower Ltd. (SAIL) Authrity of India at Dursapur(120 MW), Rourkela (120 MW) and Bhilai Steel Co Pvt Ltd) plant MW). 2X250 MW units have been implemented at Bhilai.

NTECL Tamilnadu Generation and A 50:50 JVC is implementing 3x500 MW coal based power project at (NTPC TamilNadu Distribution Corporation Vallur,Tamilnadu. Enersy Co Ltd) Limited Unit#1 of the Project was declared commercial on 29.11.2012. Unit #2 (TANGEDCO) (erstwhile was synchronized on 28.02.2013 and achieved full load on 28.03.2013. TNEB) Construction of Unit#3 is in progress.

APCPL Indraprastha Power This JVC is implementing the coal based Indira Gandhi Super Thermal (Aravali Power Generation Co Ltd. Power Project consisting of 3 units of 500 MW each. NTPC, IPGCL and HPGCL Company Pvt (IPGCL) and Haryana have contributed equity in the ratio of 50:25:25. All the three units of the Ltd) Power Generation Co Ltd. project have been synchronized and declared commercial. The third unit (HPGCL). was declared commercial on 26.04.2013.

BRBCL Ministry of Railways A subsidiary of NTPC in joint venture with Ministry of Railways with equity (Bhartiya Rail Bijlee contribution in the ratio of 74:26 respectively for setting up power project Company Ltd )* of 1000 MW (4X250 MW) capacity at Nabinagar in Bihar. Construction work is under progress.

MUNPL Uttar Pradesh Rajya Vidut A 50:50 JVC formed for setting up 1,320 MW (2X660 MW) coal based (Meja Urja Nigam Utpadan Nigam Ltd. power project in the state of Uttar Pradesh. Main plant award (SG and TG pvt Ltd.) (UPRVUNL) Package) has been placed and construction activities are in progress.

KBUNL Bihar State Power A subsidiary of NTPC in joint venture with BSPGCL (erstwhile BSEB), took (Kanti Bijlee Generation Company over MTPS having 2 units of 110 MW each from BSEB. The equity of NTPC Utpadan Nigam Limited (erstwhile (BSEB) in this subsidiary is 65%. Both the units of Stage-I are under Renovation and Ltd) Modernisation. The Company has also taken up expansion of the project by 2X195 MW units forwhich construction work is in progress.

NPGCL Bihar State Power A 50:50 JVC for setting up and operation of a 3x660 MW Coal based (Nabinagar Generation Company plant at Nabinagar. Investment approval has been accorded by NTPC in Power Generating Limited (erstwhile (BSEB) January 2013 and main plant TG & SG packages have been awarded. Land Company Pvt. Ltd.) acquisition activities are in progress.

RGPPL GAIL,ICICI,SBI,IDBI, NTPC is having a stake of 32.86% (as on 30.06.2013). All the three Power (Ratnagiri Gas and Canara Bank and MSEB Blocks with a combined capacity of 1,940 MW are under commercial Power Pvt. Ltd.) Holding Co. operation since May 2009. Power Block generated 5,127 MUs of energy during the FY 2012-13.

The LNG terminal commissioning cargo was received at the Terminal on 28.12.2012 and the re-gasified LNG was injected for the first time on 10.01.2013.In addition to the commissioning cargo, the Company received and unloaded five LNG cargos and re- gasified and supplied 396712200 MMSCM of RLNG in its pipeline.

ASHVINI Nuclear Power Corporation ASHVINI was incorporated on 27.01.2011 as a JVC with NPCIL having 51% (Anushakti of India Ltd. (NPCIL) equity and NTPC having 49% equity. The company has been formed for Vidhyut Nigam setting up nuclear power project (s) and also to explore possibilities of Ltd.) entering in areas of front end fuel cycle like uranium mining etc.

*In addition, NTPC Limited has signed Memorandum of Understanding with Ministry of Railways to set up 1,320 MW power project at Adra, West Bengal through Bhartiya Rail Bijlee Company Limited. Water allocation has been sanctioned from Damodar- Barakar River System and NOC from Airport Authority of India has been obtained. BRBCL has initiated proposal to carry out the remaining site specific studies.

7.6 Hydro Power

7.6.1 Your Company is setting up the following hydro projects for increasing its footprints in renewable energy development:

Project Location Capacity

Koldam HEPP Himachal Pradesh 800 MW

Tapovan-Vishungad Uttarakhand 520MW HEPP

Construction work is in progress in Koldam HEPP and Tapovan - Vishnugad HEPP.

In addition, Lata Tapovan HEPP (171 MW) (under construction) and Rammam-lll HEPP (120 MW) (under bidding) were being implemented by NTPC Hydro Limited, a wholly-owned subsidiary of NTPC.

NTPC Hydro Limited is now being merged with NTPC Limited, for which the Shareholders Meeting of NTPC and Shareholders Meeting of NHL was held on 24.05.2013, as per the Order of the Ministry of Corporate Affairs. The legal process ofamalgamation is in progress.

Loharinag Pala HEPP had been discontinued on the advice of Ministry of Power. The Empowered Committee constituted by GOI for the purpose of settling the claims had approved reimbursement of Rs. 536.30 crore in first Phase to NTPC, your Company is pursuing for release of funds.

The flash flood during June 2013 in the river Dhauliganga have caused damage to barrage and roads approaching to power houses at Lata Tapovan HEPP and Tapovan- Vishnugad HEPP. At Tapovan-Vishnugad HEPP, damages have also been caused to upstream and downstream diversion dyke, roads, besides water logging and silt accumulation in power house cavern & Tail Race Tunnel (TRT). While the exact impact shall be known after receding of flood, however, these factors may influence project commissioning schedule.

7.6.2 Hydro Engineering

In pursuance of Memorandum of Agreement signed with Govt, of Mizoram, Detailed Project Report of Kolodyne-ll HEPP (4X115MW) prepared by Central Water Commission for Govt, of Mizoram and updated by NTPC was submitted to CEA for according Techno-Economic Clearance (TEC). CEA has considered the proposal and accorded Techno-Economic Clearance. As the land required for the project involves Forest Land, the proposal for approval of diversion of Forest Land was submitted to the Government of Mizoram. Government of Mizoram is yet to submit the proposal to Ministry of Environment and Forests.

7.7 Capacity Addition through other Renewable Energy Sources your Company is planning to add capacity through renewable sources of energy. It offers environmentally clean power.

your Company plans to broad-base its generation mix to ensure long term competitiveness, mitigate fuel risks and promote sustainable power development.

In pursuit of these objectives, 10 MW Solar power capacity has already been commissioned. 93 MW capacity comprising 85 MW of Solar Power projects and

8 MW of Small Hydro Power Project is under execution, details of which are given under the heading project implementation. 95 MW comprising 15 MW Solar Power Project at Singrauli and Wind Energy Projects of 40 MW each at Karnataka and Maharashtra are under tendering. Detailed Project Report is under finalization for 3 MW Small Hydro Project at Rihand.

A Joint Venture Company has been incorporated amongst NTPC Limited, Asian Development Bank and Kyuden International Cooperation, Japan under the name PAN- ASIAN Renewables Private Limited to develop projects for portfolio of about 500 MW of renewable power generation resources in India. The Company is preparing its initial business plan.

your Company has signed an MOU with CREDA for exploring the potential of Tatapani Geothermal field and subsequently implementing geothermal based power project at Tatapani in Chattisgarh on Build, Own and Operate Basis.

An MOU has been signed with Government of Kerala (GoK) with the objective to plan and develop around 200 MW wind energy based power projects in Kerala in association with GOK on Build, Own and Operate Basis using state-of-the-art technology subject to establishment of techno-commercial viability.

8. STRATEGIC DIVERSIFICATION- INCREASING SELF- RELIANCE

8.1 In order to strengthen its competitive advantage in power generation business, your Company has diversified its portfolio to emerge as an integrated power major, with presence across entire power value chain through backward and forward integration into areas such as coal mining, power equipment manufacturing, power trading, and distribution.

Our Company continuously explores business opportunities through market scanning and adopts new business plans accordingly.

8.1.1 The details ofjoint venture companies taking up activities in other businesses are given below:

Name of JV Partner Activities Company undertaken

UPL Reliance Takes up assignments of (Utility Infrastructure construction, erection and Powertech Limited supervision of business in Ltd.) power sector and other sectors like O&M services etc

NASL ALSTOM Takes up renovation and (NTPC Power modernization assignments ALSTOM Generation, of power plants both in Power AG India and in other SAARC Services countries. Pvt. Ltd.)

EESL PFC, PGCIL The Company was formed (Energy and REC on December 10, 2009 Efficiency for implementation of Services Energy Efficiency projects Ltd.) and to promote energy conservation and climate change.

The Company is providing consultancy on Energy Audit of Buildings and Agricultural Pump replacement under Perform Achieve Trade Scheme and implementing Bachat Lamp Yojna for various State Govts.

NHPTL NHPC, The Company was (National PGCIL, DVC incorporated on High and CPRI 22.05.2009 for setting up Power Test facility for short circuit Laboratory testing of transformers and Pvt. Ltd.) other electrical equipment. The site for setting up the laboratory is located at Bina , MP. Construction activities and award activities are in progress.

NPEX NHPC, PFC The Company was formed (National TCS, NHPC, to facilitate, promote, Power BSE, IFCI, assist, regulate and manage Exchange Meenakshi, nation wide trading of all Ltd.) DPSC forms of electrical energies and also to settle trades in a transparent fair and open manner.

In view of the change in market scenario and the fact that NTPCs objective of joining NPEX has not been met till date, your Company has decided to exit from NPEX.

8.2 The details of other subsidiary companies are as under:

8.2.1 NTPC Electric Supply Company Limited, a wholly owned subsidiary of NTPC was incorporated to foray into the business of distribution and supply of electrical energy as a sequel to reforms initiated in the power sector. The Company is implementing Rajiv Gandhi Gramin Vidyutikaran Yojna projects on turnkey basis and undertakes turnkey execution of sub-stations for utilities and also takes up project management consultancy.

This subsidiary is carrying business of retail distribution of power in various industrial parks developed by Kerala Industrial Infrastructure Development Corporation (KINFRA), through its Joint Venture Company namely KINESCO Power and Utilities Private Limited, formed with KINFRA.

The Company is making continuous efforts to take up the new business activities in different areas including retail distribution of electricity to bulk industrial consumers in up-coming mega industrial areas/ SEZs.

8.2.2 NTPC Vidyut Vyapar Nigam Limited, a wholly owned subsidiary of NTPC was incorporated to undertake sale and purchase of electric power and to effectively utilize installed capacity and thus enable reduction in the cost of power.

The Company is involved in power trading, sale of fly ash and cenosphere.

It has been appointed as the nodal agency for cross border trading of electricity with Bhutan and Bangladesh. It has signed a Power Purchase Agreementwith Bangladesh Power Development Board for supply of 250MW power for 25 years from various Central Generating Stations of NTPC. The power is likely to commence from the end of July 2013.

The Company has also been designated as the Nodal Agency for purchase of grid connected solar power upto 1000 MW as a part of Phase-I of Jawahar Lai Nehru National SolarMission.

8.3 In order to strengthen its competitive advantage in power generation business, the Company has diversified into the area of manufacturing through the followingjointventures:

8.3.1 NTPC-BHEL Power Projects Pvt. Limited (NBPPL), ajoint venture of your Company with BHEL was incorporated on April 28, 2008 for taking up activities of engineering, procurement and construction of power plants and manufacturing of equipments. The manufacturing plant of NBPPL is being set up at Mannavaram, Tirupati in Andhra Pradesh for CHP and AHP.

The Company is executing EPC contracts for balance of plants packages of Palatana Combined Cycle Power plant in Tripura and Namrup Combined Cycle Power Plant in Assam for BHEL. It is also executing BOP including Erection & Commissioning works of the entire plant at Monarchak, Tripura for NEEPCO.

8.3.2 BF-NTPC Energy Systems Limited was incorporated with Bharat Forge Limited on June 19, 2008 to manufacture castings, forgings, fittings and high pressure piping required for power projects and other industries.

The Company is setting up plant at Solapur for which technical specifications for administrative buildings has been submitted by the consultant.

8.3.3 Your Company has acquired 44.6% stake in Transformers and Electricals Kerala Limited from Government of Kerala on June 19, 2009. The Company deals in manufacturing and repair of Power Transformers. Expansion of plant facilities was completed in January2013.

Please refer to "Management Discussion and Analysis", Annexure-I included as a separate section to this report for further details of subsidiary and joint venture companies of NTPC.

9. GLOBALISATION INITIATIVES

9.1 Trincomalee Power Company Limited, a 50 50 joint venture Company between NTPC and Ceylon Electricity Board was incorporated on 26.09.2011 to undertake the development, construction, establishment, operation and maintenance of a coal based electricity generating station of 2X250 MW capacity at Trincomalee at Srilanka. Finalisation of various agreements between JV Company and CEB is in progress.

9.2 Bangladesh - India Friendship Power Company Private Limited, a 50:50jointventure company between between NTPC and Bangladesh Power Development Board (BPDB) was incorporated on 31.10.2012 for developing a 2X660 MW Coal based power project at Khulna, Bangladesh. Feasibility Report of the Khulna project has already been approved by NTPC.

9.3 your Company has prepared and submitted the DPR for Amochu Hydro-electric project in Bhutan on consultancy basis. The DPR has been cleared by CEA.

10. NTPC Consultancy Wing: As a result of the phenomenal success achieved by your Company in executing its own power projects, many utilities from India and abroad approach NTPC to benefit from the rich experience gained by your Company. With this in view, NTPC formally established a Consultancy Wing in 1989. Since then, this wing has been receiving orders from domestic and international clients. Consultancy Wing is now recognized as Consultant with several leading domestic and international development and financial institutions and clients. It offers services like Engineering Services, Operation & Maintenance Management Services, Project Management Services, Contracts & Procurement Management Services, Quality Management Services, Training & Development Services etc.

Consultancy Wing has provided various services in domestic and international markets in Gulf countries, Bangladesh, Srilanka and Bhutan like preparation of Feasibility Report for Bangladesh Power Development Board, Bangladesh and site selection, site specific studies and preparation of Feasibility Report for the proposed 2X250 MW Trincomalee Coal Power Project at Srilanka. This Wing is also providing O&M Management Services to 2X120 MW Siddhirganj Peaking Power Plant of Electricity Generation Company of Bangladesh under a World Bank funded contract.

On the domestic front too, Consultancy Wing has been effectively sharing its expertise with several power utilities.

11. FINANCING OF NEW PROJECTS

The capacity addition programs shall be financed with a debt to equity ratio of 70:30. your directors believe that internal accruals of the Company would be sufficient to finance the equity component for the new projects. Given its low geared capital structure and strong credit ratings, your Company is well positioned to raise the required borrowings.

your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion program.

During the year 2012-13, term loan agreements of Rs. 6,970 crore were entered into including loan agreement ofRs. 2,000 crore executed with Union Bank of India and loan agreement ofRs. 600 crore executed with J&K Bank Limited. The cumulative amount of domestic loans tied up till March 31, 2013 was Rs. 59,699.35 crore (excluding undrawn loans short-closed as per agreements).

your Company has also tied-up USD 750 million from international debt markets through foreign currency notes and term loan.

The bond offering of the Company received strong investor response.

12. FIXED DEPOSITS

The cumulative deposits received by your Company from 98 depositors as at March 31, 2013 stood atRs. 0.63 crore. Further, an amount ofRs. 0.16 crore has not been claimed on maturity by 9 depositors as on March 31, 2013.

your Company has discontinued the acceptance of fresh deposits and renewals of deposits under NTPCs Public Deposit Scheme with effect from 11.05.2013.

13. FUEL SECURITY

13.1 During the year, the supply position of coal and gas is given as under:

13.1.1 Coal Supplies

your Company has Fuel Supply Agreements (FSA) in place for 20 years for 23,895 MW units commissioned till 31.03.2009. your Company has signed in-principle FSAs for NTPC and its JVs with Coal India Limited for 14,010 MW on 17.07.2013. However, detailed FSAs are signed for 4,760 MW NTPC Stations and 2,250 MW for NTPC JV stations. Further, detailed FSAs will be signed for balance capacity 4,860 for NTPC stations and 2,140 MW for NTPC JV stations shortly.

your Company has obtained Letter of Assurance from Eastern Coalfields Limited for supply of 0.4 MMT of coal for Bongaigaon (2X250MW).

The Company has also tied up coal supply through bilateral MOU for 0.3 MMT coal for Farakka with NEC and for 4.0 MMT with SCCL for Ramgundam and Simhadri at a mutually negotiated price. The total coal supply through bilateral MOU during 2012-13was 3.122 MMT.

13.1.2 Domestic Coal and Imported Coal

During 2012-13, your Company received 155 MMT of coal as against 141 MMT in 2011-12 marking an increase of 10%.

Total domestic coal supply during 2012-13 was 145.9 MMT as against 129 MMT during 2011-12.

The total coal supply from CIL was 132.6MMT and from SCCLwas 13.3 MMT.

During 2012-13, your Company imported 9.1 MMT ofcoal as against 12MMT in 2011-12.

13.1.3 Sourcing of coal through E-auction

For supplementing the coal supply at a few critical stations i.e. Sipat, Simhadri, Unchahar, Dadri and Mouda, your Company received 2.28 MMT ofcoal through E-auction.

13.2 Gas supplies

During 2012-13, your Company received 10.67 MMSCMD of gas and RLNG as against 13.09 MMSCMD received during 2011-12. The gas off-take in 2012-13 includes 8.77 MMSCMD ofgas and 1.90 MMSCMD of RLNG. Gas offtake was less due to less availability of generation schedule from the beneficiary states.

Your Company has APM gas agreements up to the year 2021 and PMT gas agreements up to the year 2019 for its gas stations. The long-term RLNG supply agreement with GAIL is valid till 2019and the term sheet for non-APM gas with GAIL is valid till 2016. Further, out of 4.46 MMSCMD of KG-D6 gas allocated by Government of India for NCR gas stations, viz. Anta, Auraiya, Dadri and Faridabad, 2.30 MMSCMD has already been tied up. The tie-up of balance 2.16 MMSCMD KG D6 gas is under discussions. However, the gas supplies from KG D6 fields have been continuously decreasing. As per Empowered Group of Minister/ MOP&NG directive to supply KG D6 gas as per sectoral priority basis, the supplies to Power Sector (including NTPC stations) have reduced to Nil from March 2013.

your Company has been making arrangements for tie-up and supply of spot RLNG or Fallback RLNG from domestic suppliers on reasonable endeavour basis based on requirement and availability from time to time.

13.3 Development of Coal Mining projects

your Company was allocated six coal blocks by the Government of India namely Pakri-Barwadih, Chatti- Bariatu, Kerandari, Talaipalli, Dulanga and Chatti-Bariatu (South) with estimated geological reserves of over 3 billion tonnes and production of about 53 million tonnes per annum (MTPA).

Ministry of Coal, through letter dated 23.01.2013, has withdrawn de-allocation of Chatti-Bariatu, Kerendari and Chatti-Bariatu (South), which were de-allocated on 14.06.2011 and these coal blocks have been restored to NTPC.

Development activities are in advanced stage in all coal blocks except in Chatti-Bariatu (South), located in dip side of Chatti-Bariatu, which will be developed at the end of mining of Chatti-Bariatu. Mining Plans have been approved by Ministry of Coal for all of these coal blocks, except for Chatti-Bariatu (South). All notifications for mining area land and Socio-Economic Surveys have been completed for all these coal blocks.

Government of Jharkhand has approved the R&R plan and annuity scheme for Pakri-Barwadih coal block in February 2013. Rehabilitation Action Plan for Pakri-Barwadih, Chatti- Bariatu, Kerandari and Talaipalli coal blocks have been approved by the Board of your Company and payment of land compensation to project affected families is under progress.

Ministry of Environment & Forests, Govt, of India (MOEF) has accorded environment clearance for Pakri-Barwadih, Chatti-Bariatu, Kerandari and Talaipalli Coal blocks. In- principle environment clearance has been received from MOEF for Dulanga coal block and final environment clearance will be issued after Stage-I forest clearance.

MOEF had accorded Stage-I & Stage-ll forest clearances for Pakri-Barwadih and Chatti-Bariatu coal blocks and Stage-I forest clearance for Kerandari and Talaipalli coal blocks.

Forest clearance proposal for Dulanga coal block is under consideration at MOEF. Construction of R&R Colony, CHP, Sub-Station, Railway Siding, etc. have commenced in Pakri-Barwadih coal block. Mine Developer-cum- Operator (MDO) has been appointed in Pakri-Barwadih, Chatti Bariatu and Talaipalli coal blocks.

In addition to the above coal blocks, Ministry of Coal has conveyed in-principle approval for allotment of more coal blocks to NTPC in lieu of coal linkages for the following new projects:

(i) Kudgi (2,400MW)

(ii) Gajmara(1,600MW)

(iii) Barethi (3,960 MW)

(iv) Unchahar Stage-IV (500 MW)

Ministry of Coal has allotted fourcoal blocks on 03.07.2013 out of six coal blocks applied for. The estimated geological reserves for these blocks are estimated to be 2 Million tones as listed below:

(i) Bhalumuda, Chattisgarh (550 MT)

(ii) Banai, Chattisgarh (629 MT)

(iii) Chandrabila,Odisha(550MT)

(iv) Kudanali- Luburi, Odisha (266 MT)

Formal letter regarding allotment of coal blocks from Ministry of Coal is likely to be received shortly.

13.4 Other initiatives for securing coal supply

To leverage the strength of established players in mining and related areas, your Company has formed the following Joint Venture Companies:

Name of JV Purpose Company Partners

CIL NTPC Urja Pvt. Coal India For undertaking the Ltd.* Ltd. Development, O&M of Brahmini and Chichro Patsimal coal blocks and Integrated Power Project(s).

NTPC SCCL Singareni For undertaking Global Ventures Collieries development and O&M Pvt. Ltd. Company of coal Blocks in India Ltd. and abroad.

This Company has been appointed as MDO for Talaipalli Coal Block.

International Coal SAIL, CIL, For exploring various Ventures Private RINL and opportunities in Limited** NMDC Australia, Mozambique, Canada, Indonesia and USA for acquisition of stake in coking coal and thermal coal mines

*ln case of Brahmini and Chichro-Patsimal coal blocks, allocated to CIL NTPC Urja Private Limited, Ministry of Coal had de-allocated these blocks for delay in their development though there was no schedule stipulated in the allotment letter. Your Company has taken up the matter with the Ministry of Coal forwithdrawal ofde-allocation. **The Board of NTPC has accorded approval to exit from International Coal Ventures Private Limited. Approval of Ministry of Power permitting NTPC to exit from ICVL has been received. ICVL is pursuing with Cabinet for approval ofexitof NTPC out of it.

13.5 Exploration Activities

In Cambay exploration block allotted under NELP- VIII, held by NTPC as operator with 100% participating interest, 3D Seismic Data Acquisition has been completed and processing and interpretation of data is in progress. Based on the results, exploratory drilling of wells shall be planned.

In the other three blocks, in each ofwhich NTPC has 10% participating interest and ONGC is operator, exploration activities are in progress.

14. BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

In pursuit of actualizing our vision and with a view to achieve higher levels of excellence, your Company has developed and adopted its own NTPC Business Excellence Model on the lines of globally reputed Excellence Models such as Malcom Baldrige Model, USA and EFQM Model of Europe.

This model has been deployed at our Business Units (Stations) and we carry out assessment of generating stations using this framework of excellence.

The assessment process is aimed at identifying the areas for enhancing stakeholder engagement, accelerating critical processes and developing leadership potential. The outcomes of this model are organizational strengths, opportunities for improvement, issues of concern and best practices.

In the financial year 2012-13, the 3rd cycle of assessment was completed. The stations ranking high on excellence level like Korba, Talcher-Thermal and Faridabad were awarded by Honourable Union Minister of State (l/c) for Power.

As a next step on the Journey of Excellence, your Company is implementing Business Balanced Scorecard capturing proper matrices to enhance overall strategic focus and speed.

Other TQM initiatives and techniques like Quality Circles, Professional Circles, 5S, integrated management system (IMS) etc have been deployed across the organization for continuous improvement. Our Quality Circle teams of workmen have been consistently representing NTPC at national and international Quality Circle conventions and bringing many laurels. In the year 2012-13, Prayas Quality Circle team from Talcher-Thermal bagged Gold award at the International Quality Control Circles Convention held at Kualalumpur, Malaysia.

15. RENOVATION & MODERNISATION

15.1 Need for R&M:

In the present scenario of severe resource constraint, Renovation and Modernization (R&M) of power plants is considered to be the best option for bridging the gap between demand and supply of power as R&M schemes are cost effective. It increases the capacity and ensures safe, reliable and economic electricity production by replacement of worn-out, deteriorated or obsolete electrical, mechanical, instrumentation, controls and protection system by state-of-the-art equipment.

To this end, renovations are being carried out for the purpose of life extension of units, performance improvements, capacity enhancement, availability improvement and improved environment compliance. Your Company completed 761 out of 1,109 schemes of R&M, with a cumulative expenditure ofRs. 3,150 crore upto 31st March, 2013.

In year 2012-13, investment approvals were accorded for life extension of Stage-I units of Ramagundam and Kobra and thereafter, investment approval for life extension of Singrauli Stage-I has also been accorded.

With a view to comply with increasingly stringent environment norms prescribed by State Pollution Control Boards, tendering is on for Renovation and Retrofitting of Electrostatic Precipitator (ESP) in stations like Singrauli -1 & II, Farakka -1, Unchahar-1, Talcher STPS Stage-ll etc. With the same objective, implementation of renovatin of ESP is already in progress at BadarpurTPS (2x210 MW).

Awards were placed during the year 2012-13 for Renovation of ESP in Korba -l&ll, Rihand -1, Vindhyachal -l&ll, TalcherSTPS, BadarpurTPS and Talcher TPS-II.

16. VIGILANCE

16.1 Vigilance Mechanism:

Your Company ensures transparency, objectivity and quality of decision making in its operations and to monitor the same, the Company has a Vigilance Department headed by Chief Vigilance Officer, a nominee of Central Vigilance Commission. The CVO reports to the Central Vigilance Commission.

The four units of Vigilance Department namely Corporate Vigilance Cell, Departmental Proceeding Cell (DIPC), MIS Cell and Technical Cell (TC) deal with various facets of vigilance mechanism. The Vigilance Department submits its report to the Competent Authority and also to the Board ofDirectors.

Your Company has made it mandatory for all the projects and stations to award the packages above Rs. 15 lac through e-procurement. As per the directive of DOPT/ MOP, the property returns of all the executives have been published on NTPC Website.

16.2 Workshops and Vigilance Awareness Week Preventive Vigilance Workshops are being conducted every year to sensitize employees about DOs and DONTs in work areas and their role in preventing corruption. During the Vigilance Awareness Week, a compendium of circulars and a Handbook on Preventive Vigilance and Case Studies were also issued.

16.3 Implementation of Integrity Pact

your Company is committed to have total transparency to its business processes and as a step in this direction; it signed a Memorandum of Understanding with Transparency International India in December, 2008. The Integrity Pact is being implemented forall contracts having value exceeding Rs. 10 crore. Two Independent External Monitors have been nominated by the Central Vigilance Commission for all contracts with value exceeding Rs. 100 crore.

16.4 Implementation of Fraud Prevention Policy

The Fraud Prevention Policy has been formulated and implemented in your Company since 2006. The cases referred by the nodal officers are being investigated immediately to avoid fraudulent behaviors as defined in the Fraud Prevention Policy.

17. HUMAN RESOURCE MANAGEMENT

17.1 your Company takes pride in its highly motivated and competent human resource that has contributed its best to bring the Company to its present heights. The productivity of employees is demonstrated by increase in generation per employee and consistent reduction of Man-MW ratio year after year. The over-all Man-MW ratio for the year 2012-13 excluding JV/subsidiary capacity is 0.67 and 0.62 including capacity of JV/ Subsidiary. Generation per employee was 9.72 MUs during the year based on generation of NTPC stations.

The total employee strength of your Company stood at 25,484 as on 31.3.2013 against 25,511 as on 31.3.2012.

Fiscal 2013 Fiscal 2012

NTPC

Number of employees 23,865 24,011

Subsidiaries & Joint Ventures

Employees of NTPC 1,6191 1,500 in Subsidiaries & Joint Ventures

Total employees 25,484 25,511

The attrition rate of the NTPC executives (including Executive Trainees and those posted in Subsidiaries and JVs) during the year was 1.46%.

17.2 Employee Relations

The Company takes pride in its greatest resource and asset, the employees. The human resource has been the backbone of the Company, in driving operational and financial performance. As a commitment towards the Companys core values, Employees Participation in Management was effectualized based on mutual respect, trust and a feeling of being a progressive partner in growth and success. Communication meetings with unions and associations, workshop on production and productivity, etc were conducted at projects, regions and corporate level during theyear.

Both, employees and management complemented each others efforts in furthering the interest of the Company as well as its stakeholders, signifying and highlighting over-all harmony and cordial employee relations prevalent in the Company.

17.3 Safety and Security

NTPC recognizes and accepts its responsibility for establishing and maintaining a safe working environment for all its employees and associates. Occupational health and safety at workplace is one of the prime concerns of NTPC Management and utmost importance is given to provide safe working environment and inculcate safety awareness among the employees. The Company takes all such steps which are reasonably practicable to ensure best possible conditions of work. NTPC has a 3-tier structure foroccupational health and safety management, namely at site at Regional Headquarters and at Corporate Centre.

All our stations are certified with OHSAS-18001/IS-18001. Regular plant inspection and review with Head of Project, internal safety audits by our own safety officers ofvarious sites and external safety audits by reputed organizations are carried out at each site every year. Recommendations of auditors are regularly reviewed and complied with.

Cross Functional Safety task force for O&M and construction projects are functional at all site to monitor unsafeworking conditions at site and its rectification.

Height permit and height check list are implemented to ensure safety of workers while working at height. Adequate numbers of qualified safety officers are posted at all units as per statutory rules and provisions to look after safety of people and property.

For strict compliance and enforcement of safety norms and practices, safety clauses are included in General Conditions of Contract.

To mitigate on-site emergencies at all operating stations, effective engineering controls are provided to indicate and handle emergency situation. Detailed emergency plans have been developed and responsibilities are assigned to each concerned to handle emergency situations. Mock drills are conducted regularly to check healthiness of the system.

Through our continuous efforts in safeguarding the employees, accidents have come down as compared to last year. Many of our plants have been awarded with prestigious safety awards by various Institutions and Bodies like Ministry of Labour & Employment, Govt, of India, National Safety Council and Institution of Engineers in recognition of implementing innovative safety procedures and practices.

Concrete steps are being taken for upgrading surveillance systems at all of our projects/ stations by installing state-of- the-art security systems. Security and Coordination Group interact with MHA, IB and CISFas well as the State/ District level authorities to augment the security preparedness in our establishment/ power installations.

17.4 Training and Development

In line with its objective of being a learning organization, your Company has continuously promoted training and development of not only its own employees but also other professionals of the power sector. In this effort, your Company has endeavored to continuously upgrade the training infrastructure of Power Management Institute (PMI) at the corporate level as well as the Employee Development Centers at the sites. The training imparted is in tune with emerging needs in diverse areas like nuclear power, coal-mining, hydro-power, super-critical technology, renewable energy etc. and for this purpose some new programmers are included in the annual calendar every year. Apart from this, the usual programs include topics on management, power station operation & maintenance, project construction, erection and commissioning and information technology.

Under the on-going scheme of strengthening the Industrial Training Institutes (ITIs) across the country, your Company has taken the initiative of adopting ITIs near its power generating stations and a total of 17 ITIs have been adopted under this scheme till 31.03.2012. This activity is being coordinated through PMI which is also facilitating the construction of nine new ITIs where new projects are coming up. Through this initiative, PMI has created 1,533 extra seats by way of starting new trades/ units in these ITIs.

During 2012-13, your Company organized a number of training programmes in power and energy related areas.

PMI conducted 397 training programmes during 2012-13 with a participant base of 8,938. The training mandays clocked were 47,935.

PMI, for the first time, conducted an all-women training programme titled Lets Cherish Womanhood on the issues and challenges of women executives in managing home and office together.

It also took the initiative of taking training programmes to the doorstep of the site employees.

In collaboration with CC-IT group and CenPEEP department, "Efficiency Overview and Perform Achieve and Trade (PAT) Legislation" programme was launched through Web Conferencing.

In order to promote holistic well-being of employees and their families, Pranic Healing was started through Holistic Wellness Foundation under the aegis of Snehal, a Healing and Creativity Centre at PMI.

18. SUSTAINABLE DEVELOPMENT

Sustainability is an opportunity for business to improve its profitability, competitiveness and market share without compromising the ability of future generations to meet their own needs. The sustainability agenda of your Company addresses all aspects related to sustainable development and promote environmental management, social responsibility and economic performance (triple bottom line approach).

Your Company is a member of "TERI - Business Council for Sustainable Development - India (TERI-BCSD)", the Indian partner of the WBCSD (World Business Council for Sustainable Development), Geneva, and also a member of United Nations Global Compact.

SEBI, through its Circular CIR/CFD/DIL/8/2012 dated August 13, 2012, mandated the top 100 listed entities based on market capitalization at BSE and NSE, to include Business Responsibility Report as a part of the Annual Report describing the initiatives taken by the Company from Environmental, Social and Governance perspective.

Accordingly, a Business Responsibility Report is attached as Annex-X and forms part of the Annual Report.

Initiatives by the Company

your Company has developed a Policy on Sustainable Development in accordance with which a sustainable development plan was prepared for the year 2012-13. Major activities carried out under this plan included plantation of more than 2 lac saplings in and around NTPC plants, reduction of particulate matter emissions at two stations through flue gas conditioning, installation of flue gas conditioning system at one more station and installation of bio-methane plants to treat biodegradable waste and generate bio-gas for use in guest house / canteen kitchens. A total expenditure of Rs. 10.18 crore was incurred on these Sustainable Development Projects during the Financial year2012-13.

During the year, your Company has published its "Sustainability Report 2011-12" in line with the internationally accepted "Global Reporting Initiative (GRI)" Guidelines and the report has been duly assured by an independent external assurance provider as per international standard.

In its endeavor to achieve the goals of Sustainable Development, your Company is addressing the issues through multi-pronged approach as per the details given below:

18.1 Inclusive Growth - Initiatives for Social Growth

18.1.1 Corporate Social Responsibility:

Your Company has always discharged its social responsibility as a part of its Corporate Governance philosophy. It follows the global practice of addressing CSR issues in an integrated multi stake-holder approach covering the environmental and social aspects.

With a view to address the domains of socio-economic issues at national level, it has revised its Corporate Social Responsibility - Community Development (CD) Policy in line with the Guidelines issued by Department of Public Enterprises, Govt, of India.

your Company, being a member of Global Compact Network, India, confirms its involvement in various CSR activities in line with 10 Global Compact principles and shares its experience with the representatives of the world through "Communication on Progress". It submits its Communication on Progress (COP) to UN Global Compact on regular basis. A report on progress made in this area is enclosed at Annex- VIII to this Report.

Expenditure incurred towards CSR Activities:

A total expenditure of Rs. 69.24 crore was incurred towards Corporate Social Responsibility expenses during the Financial year 2012-13, which was 0.75% (against MOU target of 0.5%) of the net profit after tax of the previous year.

In line with revised guidelines on CSR and Sustainability issued by DPE, your Company has enhanced allocation for CSR and Sustainable Development activities to 1% of net profit after tax of previous year with effect from financial year 2013-14.

Awards:

your Company received FICCI Appreciation Plaque for 2011-12, Golden Peacock Award for CSR, 2012 and Greentech Award for CSR 2012.

18.1.2 NTPC Foundation

NTPC Foundation is engaged in serving and empowering the physically challenged and economically weaker sections of the society.

Initiatives undertaken by the Company are covered under Annex-VII to this Report.

18.1.3 Distributed Generation Power Projects

your Company has signed MoU with Swiss Agency for Development and Cooperation for planning and implementing Renewable Energy and Distribution Generation projects. The main focus is on technologies like bio-mass gasification including two stage gasifier, small hydro and solar energy and sustainability of DG projects.

18.1.4 Rehabilitation & Resettlement (R&R)

your Company is committed to help the people affected by its projects and has been making all its efforts to improve the socio-economic status of Project Affected Persons (PAPs). In order to meet its social objectives, your Company is focusing on effective R&R of PAPs and undertaking community development activities in and around the projects.

Land availability for bulk tendered projects for which award was placed during the year was ensured through proactive redressal of R&R issues.

R&R activities were implemented at new Greenfield/ brownfield projects after finalization in consultation and participation of the stakeholders at Kudgi, Lara, Tanda, Gadarwara, Khargone, Barethi, Dadri and Coal Mining projects. At other thermal, hydro and coal mining projects, like Barh, Koldam, Korba, Vindhyachal, Mouda, Solapur, Bongaigaon, Tapovan-Vishnugad, Pakri-Barwadih, Chatti- Bariatu, Kerandari and Talipalli projects, R&R activities continued throughout theyear.

Socio-economic Survey was completed for Darlipalli, Barethi, Lara, Gadarwara, Khargone, Chatti-Bariatu (South) and Dhuvaran Projects and is in progress at Bilhaur Projects.

In the area of health, your Company is providing financial assistance for renovation and refurbishment of "Sundargarh District Hospital in Odisha. Capacity building/ skill upgradation and training activities including those in construction trades were facilitated and commitment for the part contributions towards construction of Engineering Colleges at Raipur and Raigarh, Chattisgarh was made during the year.

18.2 Environment Management - Initiatives for preserving Environment

Vision Statement on Environment Management:

"Going Higher on Generation, lowering GHG intensity"

your Company is pursuing the objective of environment protection as one of its prime responsibilities and focuses its efforts to mitigate the impact of its operation on surrounding environment. Around 12-15% of the project cost is spent on various environment protection equipments. To meet the environmental challenges of 21st century and beyond, the Company has adopted sound environment management practices and advanced environment protection system to minimize impact of power generation on environment.

your Company has adopted advanced and high efficiency technologies such as super critical boilers for the upcoming green field projects. The Company is also designing its up-coming plants to use beneficiated coal and imported low ash coal. The above measures are aimed not only to achieve reduction in pollution and minimize use of precious natural resources but also to lead to reduction of C02 emissions per unit of generation and thereby deal with the global warming.

18.2.1 Control of Air Emissions: High efficiency Electro-static Precipitators (ESPs) with efficiency of the order of 99.9% and above, with advanced control systems have been provided in all coal based stations to keep Suspended Particulate Matter (SPM) below permissible limits. All up-coming new plants are being provided with ESPs designed in such a manner that would cater to the anticipated future norms. Performance enhancement of ESPs operating over the years is being carried out by augmentation of ESPs fields, retrofit of advanced ESP controllers and adoption of sound O&M practices. Flue Gas Conditioning system has also been provided at our old units which are helping in reduction of SPM emissions below statutory limits. Also, massive R&M program is being undertaken to upgrade air pollution equipments to reduce SPM emissions.

NOx control in plants is achieved by controlling its production by adopting best combustion practices. Since tall stacks are provided in coal stations, SOx and NOx emitted through stacks is widely dispersed and diluted. In gas based stations, NOx control systems (hybrid burners or wet DeNOx) have been provided for good combustion practices.

Fugitive emission from ash pond is controlled by maintaining water cover, tree plantation on abandoned ash ponds, water spray, earth cover in inactive lagoons. Providing dust suppression and extraction system in CHP area has further added to reduction in fugitive dust in the vicinity of power stations.

18.2.2 Control of water pollution and promotion of water conservation: Various water conservation measures have been taken up to reduce water consumption in power generation by using 3Rs (Reduce, Recycle & Reuse) as guiding principle.

Provision of advanced treatment facilities such as Liquid Waste Treatment Plants (LWTP), Recycling Systems for Ash Pond Effluent called Ash Water Recirculation System (AWRS) and closed cycle condenser cooling water systems with higher Cycle of Concentration (COC), rain water harvesting wherever possible and reuse of treated sewage effluent for horticulture purposes are some ofthe measures implemented in most of the stations.

18.2.3 Ash Management: Ash dykes in the stations have been engineered to ensure that all safety and environmental issues are addressed at design stage itself.

Multi-lagoon ash ponds with provision of over-flow lagoons and ash pipe garlanding arrangement for change over of ash slurry feed points have been provided for effective settlement of ash particles.

Water sprinklers have been provided in the ash pond areas for spraying water in dried up portion of lagoons for control of fugitive dust. Efforts are made to maximize utilization of ash through use of Dry Ash Extraction System (DAES).

Unutilized ash is sent to ash pond by making ash slurry. The decanted water in Ash Pond is recycled back with the help of Ash Water Recirculation System (AWRS) for making ash slurry again, leading to reduction in water consumption.

18.2.4 Automation of environment measurement system:

67 continuous ambient air quality monitoring stations (AAQMS) have been installed to capture the real time data and access thereof viz., PM 10, PM 2.5, SOx, NOx and access has been provided to Central Pollution Control Board. Additional ozone analyzers for ambient air are also being provided at the stations. Continuous Emission Monitoring Systems (CEMS) to monitor SOx, NOx and C02 in all its units on real time basis are also planned for installation in near future

18.2.5 Environmental Studies: Your Company has taken a number of studies for better environment protection and to develop strong scientific database.

18.2.6 Tree Plantation: Your Company has planted more than 19 million trees till date in and around its projects as a measure of massive afforestation.

The afforestation has not only contributed to the aesthetics but also helped in carbon sequestration by serving as a sink for C02 released from the stations and thereby protecting the quality of ecology and environment in and around the projects.

18.2.7 ISO 14001 & OHSAS 18001 Certification: NTPCs stations have been certified with ISO 14001 and OHSAS 18001 by reputed National and International certifying agencies as a result ofsound systems and practices.

18.3 Clean Development Mechanism (CDM)

Your Company is undertaking climate change issues proactively.

The methodology for super critical technology prepared by NTPC viz. "consolidated base line and monitoring methodology for new grid connected fossil fuel fired power plants using less GHG intensive technology" has been approved by "United Nations Frame Work Convention on Climate Change (UNFCCC)" under Approved Consolidated Methodology13(ACM0013).

Two of its solar projects namely 5MW each solar PV project at Dadri and Port Blair, Andaman & Nicobar had already been submitted to UNFCCC for CDM registration. Another two projects namely 5MW solar PV project at Faridabad and 8MW Small Hydro Power Project at Singrauli are in advanced stage of validation for submission to UNFCCC for CDM registration.

Further, Tapovan Vishnughad HEPP (4X130 MW), North Karanpura STPP (3X660 MW), 15 MW Solar (Thermal) project at Anta, energy efficiency measures at Singrauli STPP and energy efficiency measures at Dadri have already obtained Host Country Approval from National CDM Authority.

18.4 Ash Utilisation

During the year 2012-13, 56.29 million tonnes of ash was generated and 30.97 million tonnes of ash had been utilized for various productive purposes. This was 55.02% of the total ash generated.

Important areas of ash utilization are - cement & asbestos industry, ready mix concrete plants (RMC), road embankment, mine filling, ash dyke raising & land development. 10.74 million tonnes of ash has been issued to cement, RMC and other industries in the financial year 2012-13.

Pond ash from all stations of NTPC is being issued free of cost to all users. The funds collected from sale of ash is being maintained in a separate account by NTPC Vidyut Vyapar Nigam Limited, a wholly-owned subsidiary company of NTPC and the same is being utilized for development of infrastructure facilities, promotion and facilitation activities to enhance ash utilization.

The quantity of ash produced, ash utilized and percentage of such utilization during 2012-13 from NTPC Stations is at Annex-IX.

18.5 CenPEEP - towards enhancing efficiency and protecting Environment Center for Power Efficiency and Environmental Protection (CenPEEP), was set up to take initiatives to address climate change issues. It is a symbol of NTPCs voluntary proactive approach towards Greenhouse Gas (GHG) reduction. The Centre has been entrusted with some of the strategic initiatives such as improvement in efficiency and reliability.

Thrust has been given to efficiency improvement through customized Energy Efficiency Management System (EEMS) and reliability through Knowledge Based Maintenance. The activities include use of advanced analytical tools for efficiency gap analysis, combustion optimization, improvement in performance of condenser, cooling tower, coal mills and air-preheater, maximization of condition based maintenance through systematic Predictive Maintenance Program, reliability improvement strategies by failure mode analysis through Reliability Centered Maintenance (RCM) as a program.

Joint project has also been taken up with NETRA for modification of flue gas duct internals based on computational fluid dynamic (CFD) analysis.

Perform, Achieve&Trade(PAT) Schemeof Government of India under Prime Ministers National Mission on Enhanced Energy Efficiency (NMEEE) is being implemented in NTPC with CenPEEP as the coordinator. All 22 stations of NTPC are Designated Consumers in this program.

The cooperation with USAID was extended under Indo- US bilateral program Partnership to Advance Clean Energy - Deployment (PACE-D). Under this program, study on development of best practices manual for super critical units has been taken up with support of US experts. Assistance is also provided to two State utilities from Haryana and Maharashtra for efficiency improvement under this program. The Heat Rate Improvement Guidelines for Indian Utilities which are prepared by CenPEEP, have been helpful in the program.

CenPEEP has estimated cumulative C02 emission avoided in NTPC since theyear 1996 as 34.8 million tones.

CenPEEP had been conferred with The Times of India Earth Care Award 2012 in recognition of its efforts and achievements for GHG reduction in utilities, contributing to combat climate changes across the SAARC countries.

18.6.1 RURAL ELECTRIFICATION

NTPC, through its wholly owned subsidiary NESCL, is carrying out the implementation of rural electrification work in 5 States namely Madhya Pradesh, Chhattisgarh, Odisha, Jharkhand and West Bengal under Government of India, flagship program, Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGW). NESCL has been entrusted with electrification of total 30 projects in 29 districts in above States with a total scope of 14,729 Un-electrified/ De-electrified (UE/DE) villages, 20,555 partially electrified (PE) villages and electricity connection to 26.42 lakhs below poverty line (BPL) households.

Physical work of 15 projects has been completed till 31st March 2013 and balance projects are expected to be completed in FY 2013-14.

In the FY 2012-13, 22 un-electrified/de-electrified and 2,820 partially electrified villages have been electrified and electricity connections provided to 25,204 BPL households during the F/12-13.

Cumulatively, electrification of 14,719 un-electrified /de- electrified villages and 17,679 partially electrified villages has been completed and electricity connections has been provided to 26.08 lakhs BPL households by Mar2013.

18.6.2 5 KM Scheme around NTPC power plants

MOP, Government of India notified in Apr2010 a scheme for provision of supply of electricity in 5 Km area around the Central Power Plants. The scheme covers the existing and upcoming Power Plants of CPSUs. Under the scheme, total 29 projects were initially identified for implementation around NTPC power plants. NTPC has awarded eight projects where work is in progress. Subsequently, MoP has withdrawn the above scheme for future projects in March 2013. The ongoing projects are expected to be completed during the financial year 2013-14.

19. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has made vigorous efforts for propagation and effective implementation of the Official Language Policy of the Government of India. Several Hindi workshops, meetings, conferences and competitions were conducted at projects, regional offices and corporate centre during the year, in which renowned Hindi Scholars inspired the participants to use Hindi in day-to-day official works.

The progress and usage of Rajbhasha Hindi was inspected in the stations and proper suggestions for compliance were given to the Heads of the Offices. The Sub-committee of Parliament on Official Language appreciated the efforts for Rajbhasha implementation in our projects. Our half-yearly Hindi Magazine Vidyut Swar also received Rajbhasha Award from Ministry of Home Affairs, Government of India.

All office orders, formats and circulars were issued in Hindi as well. Important advertisements and house journals were released in bilingual form- in Hindi and in English. Your Companys website also has a facility of operating in bilingual form- in Hindi aswell as in English.

20. NETRA - R&D Mission in Power Sector

NTPC Energy Technology Research Alliance (NETRA), the research & development wing of NTPC focuses on areas of efficiency & availability improvement;cost reduction,- renewable and alternative energy source;climate change & environment protection,-and providing scientific support to utilities.

Research Advisory Council (RAC) of NETRA comprising of eminent scientists and experts from India and abroad is in place to steer high-end research. Scientific Advisory Council (SAC) with Regional Executive Directors as its members provides directions for improving plant performance & reducing cost of generation. The meetings for both these Advisory Councils were held periodically where members deliberated on various project activities and gave guidelines for implementation of suggestions.

In order to provide maximum possible benefit to the stations, projects like Artificial Intelligence based plant performance advisory system, expert system for real time monitorins of steam cycle chemistry, computational fluid dynamics (CFD) modeling based plant improvement for increasing efficiency and reducing auxiliary power consumption have been implemented at stations. Many products & processes developed by NETRA have been tested successfully at stations like robotic inspection devices,-PDC-RVM based expert system for transformer condition monitoring, C02 utilization through mineralization of fly ash etc.

One Patent (01) has been granted to NETRA and another Twenty one (21) patent applications have been filed and these are in advanced stage of processing. NETRA continued to provide scientific support to all NTPC stations as well as many other utilities stations to improve their performance.

Some state-of-the art facilities for condition monitoring and diagnostic equipments like Scanning Electron Microscope with EDAX, Sixteen Channel Vibration Analyser, Video image scope system with dimensional measurement facility, etc have been inducted.

The Phase-ll infrastructure is being created for new laboratories and facilities like pilot plant bay, 150 KWp Solar PV rooftop systems and an auditorium with seating capacityof400 persons.

NETRA is actively involved in many National activities related to R&D such as developing DPE guidelines on R&D, contribution to Sectoral Innovation Council for Power. NETRA has also taken research Projects under "National Clean Energy Fund" a) Solar Thermal Hybrid with Fossil Fired Power Plant b) Flue Gas based Aqua Ammonia Power Cycle.

NETRA has also organized Round Table Meeting on carbon capture & storage (CCS) for formulating the Policy under the aegis of MoP.

NETRA has undertaken collaborative projects with different institutes like CPRI, Bangalore in the area of coal combustion characterization, non destructive testing, fly ash utilization and with Jadavpur University for Development of polarisation depolarisation current analysis - Recovery voltage measurement (PDC-RVM) system etc.

NETRA laboratories have been reaccredited as per ISO 17025:2005. NETRA is also certified by Central Boiler Board for RLA agencies.

21. RIGHT TO INFORMATION

Your Company has implemented Right to Information Act, 2005 in order to provide information to citizens and to maintain accountability and transparency. The Company has put RTI manual on website for access to all citizens of India and has designated a Central Public Information Officer (CPIO), an Appellate Authority and APIOs at all sites and offices of NTPC.

During 2012-13, 1,181 applications were received underthe RTI Act, out ofwhich 1,158 applicationswere replied to.

Five workshops on RTI Act have been conducted at Corporate Centre, Regional Headquarters and sites to share and deliberate on latest notifications, amendments and other issues for smooth implementation. This includes an interactive session with the delegates from the Institute of Secretarial Training & Management, DoPT to share experience on implementation of RTI Act in the Company.

22. USING INFORMATION AND COMMUNICATION TECHNOLOGY FOR PRODUCTIVITY ENHANCEMENT

NTPC has implemented an Enterprise Resource Planning (ERP) package covering maximum possible processes across the organization including subsidiaries. In addition to the core business processes and Employee Self Service (ESS) functionality, the ERP solution also includes e-procurement, Knowledge Management, Business Intelligence, Document Management, Workflow etc. The ERP system is fully managed through in-house expertise from process groups and technical groups. Parallely, in- house solutions have been developed to take care of the non-ERP areas.

ERP has its main data center at Noida. There is a disaster recovery center at Hyderabad as a full back up for real time changeover in case ofany emergency.

Video conferencing (VC) facility is widely used for deliberations among locations. The facility has also been augmented to hold VC in secured manner, with external agencies also.

In order to improve upon efficiency and bringing transparency in procurement process in NTPC, e-procurement process using SRM module of ERP is widely used.

Athird party audit and review of ERP solution implemented at NTPC has been carried out that included review of business process controls, configuration settings, access controls and review of roles and authorization. The critical remediation points suggested by the external auditor agency have been implemented.

Various other applications have been developed to take care of RTI, Parliament Questions Management, legal system, transit camp booking requirement etc.

NTPC tender website www.ntpctender.com is being regularly used for publishing all open tenders on the Internet. Additional Website www.ntpcexemployees. co.in for facilitating superannuated employees has also been hosted.

The Information Technology department at Corporate Center Noida has been awarded certificate in recognition of the organizations Quality Management System which complies with ISO 9001:2008 for "Providing IT Enabled Services".

23. NTPC GROUP: SUBSIDIARIES AND JOINT VENTURES

Your Company has currently 5 subsidiary Companies and 21 joint venture Companies for undertaking specific business activities.

The names of Subsidiaries and Joint Venture Companies and the percentage of your Companys shareholding in these Companies as on 31.03.2013are as follows:

The performance of these Companies as well as the consolidated financial statements are briefly discussed in the Management Discussion & Analysis section. The financial statements of subsidiary companies along with the respective Directors Report are placed elsewhere in this Annual Report.

24. INFORMATION AS PER COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975

Ministry of Corporate Affairs, through Notification G.S.R. 289(E) dated 31st March 2011 has amended the Companies (Particulars of Employees) Rules, 1975 by providing that the information required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 shall be required to be provided for those employees whose remuneration is more than Rs. 60 lac per financial year, if employed for whole of the year or more than Rs. 5 lac per month, if employed for part of the year. The said Notification further provides that in case of Government Companies such particulars are not required to be included in the Boards Report.

As your Company is a Government Company, such particulars have not been included as part of the Directors Report. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company or download them from the website at www. ntpc.co.in. Such particulars shall also be made available to the shareholders on a specific request made by them during the course of Annual General Meeting to be held on 17.09.2013.

25. STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s O.P. Bagla & Co., K.K. Soni & Co., PKF Sridhar & Santhanam, V. Sankar Aiyar & Co., Ramesh C. Agrawal & Co. and A.R. & Co. were appointed as Joint Statutory Auditors for the financial year 2012-13.

26. MANAGEMENT COMMENTS ON STATUTORY AUDITORS1 REPORT

The Statutory Auditors of the Company have given an unqualified report on the accounts of the Company for the financial year 2012-13. However, they have drawn attention towards Note-33 to the financial statements in respect of the accounting of fuel on GCV based pricing system.

The issue has been adequately explained in Note 33 referred to by the Auditors.

27. REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA

You would be pleased to know that for the fourth year in a row your organization has received NIL Comments on the Financial Statements for the year from the Comptroller & Auditor General of India (C&AG).

As advised by the Office of the C&AG, the comments of C&AG for the year 2012-13 are being placed with the report of Statutory Auditors of your Company elsewhere in this Annual Report.

28. COST AUDIT

As prescribed under the Cost Accounting Records (Electricity Industry) Rules, 2001 applicable for financial years 2011-12 and 2012-13, the Cost Accounting records are being maintained by all stations of the Company. The particulars of Cost Auditors as required under Section 233(B) of the Companies Act, 1956 read with General Circular No. 15/2011 dated 11.04.2011 issued by Ministry of Corporate Affairs are given below:

The firms of Cost Accountants appointed for the financial year 2011-12 are (i) M/s Dhananjay V. Joshi & Associates, Pune, Maharashtra, (ii) M/s Jugal K. Puri & Associates, Gurgaon, Haryana, (iii) M/s Mandal Mukherjee Datta & Associates, Kolkata, West Bengal, (iv) M/s S.C. Mohanty & Associates, Bhubhaneshwer, Orissa, (v) M/s V.P. Gupta & Co., Noida, Uttar Pradesh and (vi) M/s Chandra Wadhwa & Co., Daryasanj, Delhi.

The firms of Cost Accountants appointed for the financial year 2012-13 are (i) M/s Dhananjay V. Joshi & Associates, Pune, Maharashtra, (ii) M/s Jugal K. Puri & Associates, Gursaon, Haryana, (iii) M/s Mandal Mukherjee Datta & Associates, Kolkata, West Bengal, (iv) M/s S.C. Mohanty & Associates, Bhubhaneshwer, Orissa, (v) M/s V.P. Gupta & Co., Noida, Uttar Pradesh and (vi) M/s Chandra Wadhwa & Co., Daryasanj, Delhi.

The due date for filing consolidated Cost Audit Report in XBRL format for the financial year ended March 31,2012 was September 27, 2012 which was subsequently extended upto 28th February 2013 through General Circular No. 2/2013 dated 31.01.2013 issued by Ministry of Corporate Affairs and the consolidated Cost Audit Report for your Company was filed with the Central Government on15.01.2013.

The due date for filing consolidated Cost Audit Report for the financial year ended March 31, 2013 is September 27, 2013 and the consolidated Cost Audit Report as prescribed for the financial year 2012-13 shall be filed within the prescribed time period.

29. BOARD OF DIRECTORS

Dr. Alwyn Didar Singh has joined as Non-Official Part-time Director ofthe Companywith effect from August 23, 2012. Dr. M. Govinda Rao has ceased to be the Non-Official Part- time Directorwith effect from February4, 2013.

Shri U.P. Pani has taken over as Director (Human Resources) with effect from March 1, 2013. Shri S.P. Singh has ceased to be the Director (Human Resources) of your Company with effect from February 28, 2013 on attaining the age of superannuation.

Shri Rakesh Jain has ceased to the Director of your Company w.e.f. July 9,2013 on ceasing to be the official of Ministry of Power.

Shri Prashant Mehta has joined as Non-Official Part-time Director ofthe Companywith effect from July 30, 2013.

The Board wishes to place on record its deep appreciation for the valuable services rendered by Dr. M. Govinda Rao, Shri S.P. Singh and Shri Rakesh Jain during their association with the Company.

In accordance with the provisions of Article 41(iii) of the Articles of Association of the Company four directors - Shri A.K. Singhal, Shri N.N. Misra, Shri S.B. Ghosh Dastidar and Shri R.S. Sahoo shall retire by rotation at the Annual General Meeting ofyour Company and, being eligible, offer themselves for re-appointment.

30. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, your Directors confirm that:

1. in the preparation ofthe annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures,-

2. 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 2012-13 and of the profit of the company for that period;

3. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets ofthe company and for preventing and detecting fraud and other irregularities,- and

4. the Directors had prepared the Annual Accounts on a going concern basis.

31. INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 1956, Listing Agreement with Stock Exchanges, Government guidelines etc. is annexed to this report as below:

Particulars Annexure

Management Discussion &Analysis I

Report on Corporate Governance II

Information on conservation of energy, III technology absorption and foreign exchange earnings and outgo

Statement pursuant to Section 212 of the IV Companies Act, 1956 relating to subsidiary companies

Statistical data of the grievance cases V

Statistical information on persons belonging to VI Scheduled Caste / Scheduled Tribe categories

Information on Physically Challenged persons VII

UNGC - Communications on progress VIII

ProiectWiseAsh Utilisation IX

Business Responsibility Report for the year X 2012-13

32. ACKNOWLEDGEMENT

Your Directors acknowledge with deep sense of appreciation, the co-operation received from the Government of India, particularly the Prime Ministers Office, Ministry of Power, Ministry of Finance, Ministry of Environment & Forests, Ministry of Coal, Ministry of Petroleum & Natural Gas, Ministry of Railways, the Planning Commission, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, State Governments, Regional Power Committees, State Electricity Boards and Office ofthe Attorney General of India. Your Directors also convey their gratitude to the shareholders, various international and Indian Banks and Financial Institutions for the confidence reposed by them in the Company.

The Board also appreciates the contribution of contractors, vendors and consultants in the implementation of various projects of the Company.

We also acknowledge the constructive suggestions received from Government and Statutory Auditors.

We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the Company continues to grow and excel.

For and on behalf of the Board of Directors

Place: New Delhi (Dr. Arup Roy Choudhury)

Date: 2nd August 2013 Chairman & Managing Director


Mar 31, 2000

Not Available

 
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