TO 

THE MEMBERS OF

NTPC LIMITED

1. We have audited the attached Balance Sheet of NTPC LIMITED as at 31st March
2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these financial
statements based on our audit.

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

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

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

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

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

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

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

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

f) Without qualifying our report, we draw attention to Note no. 2 (a) and (b) (Schedule
26 - Notes on Accounts) in respect of accounting of sales on provisional basis pending
determination of tariff by the Central Electricity Regulatory Commission,-

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

a. in the case of Balance Sheet, of the state of affairs of the Company as at 31st
March 2011,

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

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


  

    
For Dass Gupta & Associates
    
For K K Soni & Co.
    
For Varma and Varma
  
  

    
Chartered Accountants
    
Chartered Accountants
    
Chartered Accountants
  
  

    
Firm Reg. NO.000112N
    
Firm Reg. NO.000947N
    
Firm Reg. NO.004532S
  
  

    
[Ashok Kumar Jain ]
    
[ S.S. Soni ]
    
[ C.G. Pankajakshan]
  
  

    
Partner
    
Partner
    
Partner
  
  

    
M. No. 090563
    
M. No. 094227
    
M. No.020512
  
  

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

    
Chartered Accountants
    
Chartered Accountants
    
Chartered Accountants
  
  

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

    
[V. D. Mantri ]
    
[ Rishabh Jain ]
    
[ Rohit Mehta ]
  
  

    
Partner
    
Partner
    
Partner
  
  

    
M. No. 074678
    
M. No. 400912
    
M. No.091382
  


Place: New Delhi 

Date: 10thMay2011


ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our report of even date to the members of
NTPC LIMITED on the accounts for the year ended 31st March 2011

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

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

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

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

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

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

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

In view of clause (iiiXa) above, the clauses (iiiXb), (iiiXc) and (iiiXd) are not
applicable, (e) The Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in register maintained under Section 301 of the Companies
Act, 1956.

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

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

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

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

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

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

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

(ix) (a) Undisputed statutory dues including provident fund, investor education and
protection fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty,
cess and other statutory dues have generally been regularly deposited with the appropriate
authorities and there are no undisputed dues outstanding as on 31st March 2011 for a
period of more than six months from the date they became payable.

(b) The disputed statutory dues aggregating to Rs. 172.86 crore that have not been
deposited on account of matters pending before appropriate authorities are detailed below:


  

    
Name of Statute
    
Nature of dues
    
Forum where the dispute is pending
    
Rs. crore
  
  

    
1 Central Sales Tax and Sales Tax/VAT Acts of Various States
    
Sales Tax/VAT
    
Additional Commissioner of Sales Taxes
    
25.27
  
  

    

    

    
Commissioner of Sales Tax
    
6.46
  
  

    

    

    
Dy. commissioner of Sales/ Commercial Taxes
    
15.93
  
  

    

    

    
High Court
    
83.38
  
  

    

    

    
Sales Tax Tribunal
    
1.07
  
  

    

    

    
Joint Commissioner (Appeal) Trade tax
    
2.46
  
  

    
2 Water (Prevention & Control of Pollution) Cess Act, 1977
    
Water/Pollution Cess
    
Appellate Authority, Pollution Control Board
    
1.26
  
  

    
3. lndian Stamp Act,1899
    
Land Tax
    
Appellate Authority - Board of Revenue
    
0.96
  
  

    
4. Central Excise Act,1944
    
Central Excise Duty
    
CESTAT
    
0.30
  
  

    
5. lncome Tax Act,1961
    
Income Tax
    
Income Tax Appellate Tribunal/GT
    
0.35
  
  

    

    

    
Allahabad High Court
    
34.70
  
  

    

    

    
Asst. Commissioner
    
0.72
  
  

    
Total
    

    

    
172.86
  


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

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

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

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

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

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

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

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

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

(xix) According to the information and explanations given to us, the Company has
created security or charge in respect of the Bonds issued by the Company during the year
except in respect of certain bonds raised in March 2011 for which security creation is in
process.

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

(xxi) According to the information and explanations given to us, no fraud on or by the
Company has been noticed or reported during the year.


  

    
For Dass Gupta & Associates
    
For K K Soni & Co.
    
For Varma and Varma
  
  

    
Chartered Accountants
    
Chartered Accountants
    
Chartered Accountants
  
  

    
Firm Reg. NO.000112N
    
Firm Reg. NO.000947N
    
Firm Reg. NO.004532S
  
  

    
[Ashok Kumar Jain ]
    
[ S.S. Soni ]
    
[ C.G. Pankajakshan ]
  
  

    
Partner
    
Partner
    
Partner
  
  

    
M. No. 090563
    
M. No. 094227
    
M. No.020512
  
  

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

    
Chartered Accountants
    
Chartered Accountants
    
Chartered Accountants
  
  

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

    
[V. D. Mantri ]
    
[ Rishabh Jain ]
    
[ Rohit Mehta ]
  
  

    
Partner
    
Partner
    
Partner
  
  

    
M. No. 074678
    
M. No.400912
    
M. No.091382
  


Place: New Delhi 

Date: 10thMay2011