DEAR MEMBERS,

Your Directors are pleased to present the 35th Annual Report and the audited accounts
for the year ended March 31, 2011.

During the year 2010-11, your Company has added capacity of 2,490 MW (including 500 MW
through JV) which is the highest ever in a year since its inception. After commissioning
of one unit of 660MW at Sipat in June 2011, the Company has become a 34,854 MW Company
(including 3,364 MW through JV).


1. FINANCIAL RESULTS


  

    
Income
    
2010-11
    
2009-10
  
  

    

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

    
Sale of Energy
    
54704.55
    
12095
    
46168.67
    
10207
  
  

    
Consultancy
    
169.45
    
37
    
153.92
    
34
  
  

    
Other income (Including energy internally consumed)
    
2525.49
    
559
    
2911.29
    
644
  
  

    
Total Income
    
57399.49
    
12691
    
49233.88
    
10885
  
  

    
Expenditure
    

    

    

    

  
  

    
Fuel
    
35373.78
    
7821
    
29462.74
    
6514
  
  

    
Employees Remuneration & Benefits
    
2789.71
    
617
    
2412.36
    
533
  
  

    
Generation, Administration & other expenses
    
2646.01
    
585
    
2094.03
    
463
  
  

    
Interest
    
1386.71
    
307
    
1070.96
    
237
  
  

    
Finance charges
    
762.37
    
168
    
737.97
    
163
  
  

    
Depreciation
    
2485.69
    
550
    
2650.06
    
586
  
  

    
Total Expenditure
    
45444.27
    
10048
    
38428.12
    
8496
  
  

    
Profit before tax, provisions and prior period adjusts.
    
11955.22
    
2643
    
10805.76
    
2389
  
  

    
Tax
    
2947.01
    
651
    
2157.26
    
477
  
  

    
Profit after tax but before provisions and prior period
    
9008.21
    
1992
    
8648.50
    
1912
  
  

    
Less:
    

    

    

    

  
  

    
Prior Period Adjustments (Net)
    
(1638.72)
    
(362)
    
(77.83)
    
(17)
  
  

    
Provisions (Net)
    
1544.34
    
341
    
(1.87)
    
-
  
  

    
Net Profit after tax
    
9102.59
    
2013
    
8728.20
    
1929
  
  

    
Appropriations:
    

    

    

    

  
  

    
Transfer to Bonds Redemption Reserve
    
494.94
    
109
    
497.78
    
110
  
  

    
Interim Dividend
    
2473.63
    
547
    
2473.64
    
547
  
  

    
Proposed Dividend
    
659.63
    
146
    
659.63
    
146
  
  

    
Tax on Dividend
    
514.77
    
114
    
527.62
    
117
  
  

    
Transfer to General Reserve
    
5200.00
    
1150
    
4750.00
    
1050
  
  

    
Transfer to Capital Reserve
    
6.87
    
2
    
4.97
    
1
  


*1US$= Rs. 45.23 as on March 31, 2011


2. FINANCIAL PERFORMANCE

2.1 Income

The total income of your company for the year increased by 16.59% to Rs. 57,399.49
Crore from Rs. 49,233.88 Crore during the previous year.


2.2 Profit After Tax:

The profit after tax but before provisions and prior period adjustments increased by
4.16% to Rs. 9008.21 Crore from Rs. 8648.50 Crore. Net profit after tax increased to Rs.
9102.59 Crore from Rs. 8728.20 Crore registering a growth of 4.29% over last year.


3. DIVIDEND

3.1 Interim and Final Dividend:

In addition to interim dividend of Rs. 3.00 per equity share paid in February 2011,
your Directors have recommended a final dividend of Rs. 0.80 per equity share for the year
2010-11. The total dividend for the year is Rs. 3.80 per equity share of Rs. 10/- each
which is equal to the amount of dividend paid last year. The total dividend payout for the
year amounting to Rs. 3133.26 Crore represents 34.42% of the profits after tax. The total
dividend payout including dividend tax accounts for 40.08% 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 payout
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 shareholders' value.


4. OPERATIONAL PERFORMANCE

4.1 Generation:

During the year, the power stations of your Company generated 220.54 BU of electricity
which was 27.19% (29.18% including JVs) of the total power generated in India. The power
generated by the company has registered an increase of 0.77% over the previous year's
generation of 218.84 BU. Your Company (including JVs) contributed 16.93% of the generation
increase in the country during the year. The total generation contributed by coal stations
is 195.28 BU during the year against generation of 191.26 BU last year registering a
growth of 2.1%. Generation from coal station could have been still higher but for an
unprecedented generation loss of 5.94 BU due to less grid demand. The gas stations having
commercial capacity of 3,955 MW achieved annual generation of 25.26 BU at a PLF of 71.77
as against 27.58 BU last year due to lower grid demand which resulted in generation loss
of 7.29 BUs. The average availability of gas based stations of the year was 92.60% as
compared to 90.64% during previous year. The coal based stations of your company operated
at average Plant Load Factor (PLF) of 88.29% (National PLF 75.08%) and average
Availability Factor of 91.67% on bar during the year. As on 31.03.2011, your Company has
an installed coal based capacity of 26,875 MW excluding 1,424 MW from JV Projects. During
the year, 10 coal based stations out of 15 achieved more than 90% PLF including three
stations registering PLF above 95%.

A detailed discussion on the operations and performance for the year is given in the
"Management Discussion and Analysis", Annexure-I included as a separate section
to this report.


5. COMMERCIAL PERFORMANCE

5.1 Realisation of Dues:

During the year, your Company realized 100% payment of current bills raised for sale of
power for the eighth successive year. All the beneficiaries are paying within 30 days of
billing except UPPCL, BSEB and JSEB which are making payment within the permissible 60
days period.


5.2 Rebate Scheme/ One Time Settlement Scheme for realization of dues:

An innovative rebate scheme of providing incentive for early payment based on
provisional bill has helped in achieving early realization of dues. All the beneficiaries
have established and are maintaining Letters of Credit (LC). As on date, your Company has
monthly LCs of Rs. 4386.03 Crore. RBI, on behalf of State Governments, serviced
redemptions due on bonds and half-yearly interest installments on bonds in time as per One
Time Settlement Scheme. The matter of securitization of outstanding dues amounting to Rs.
1310.83 Crore pertaining to DESU period payable by Government of NOT of Delhi is under
active consideration by the Ministry of Power.


5.3 Power Purchase Agreements:

Your Company had signed Power Purchase Agreements (PPAs) for 49000 MW capacity during
the year. Government of India (Gol) has issued an order for allocation of 50% power to
Home States on 17.01.2011 for 14 upcoming projects of your Company. Gol has allocated 75MW
each from Farakka III (500 MW) and Korba III (500MW) for sale outside long term PPA. It
has issued Scheme for provision of supply of electricity in 5 km area around Central Power
Plants on 27.04.2010. 29 stations and projects of your Company have been identified for
this purpose and implementation of the scheme is under progress.


5.4 Commercial Capacity:

The following units were declared commercial during the year 2010-11, adding 1600 MW to
commercial capacity of your Company:


  

    
Project / Unit
    
Capacity (MW)
    
COD*
  
  

    
Dadri, Unit#6
    
490
    
31.07.2010
  
  

    
Muzaffarpur**, Unit#1
    
110
    
15.10.2010
  
  

    
Jhajjar***, Unit#1
    
500
    
05.03.2011
  
  

    
Korba, Unit#7
    
500
    
21.03.2011
  
  

    
Total
    
1600
    

  


* COD- Commercial Operation Date

** In JointVenturewith Bihar State Electricity Board.

*** InjointVenturewith IPGCPLand HPGCL.


5.5 Determination of Tariff:

Your Company has filed tariff petitions for the five-year period starting 1.4.2009
before CERC for all stations in accordance with the CERC (Terms and Conditions of Tariff)
Regulations, 2009. Pending final orders, CERC has issued provisional tariff orders for 26
stations of your Companyforthe period 2009-2014.


5.6 Strengthening Customer Relationship:

Customer Relationship Management (CRM) initiative has been taken by your company
towards strengthening relationship with our customers. Under this, regular structured
interaction with customers takes place regularly for sharing of feedbacks /experiences /
expectations. These meetings provide a platform for more interaction and sharing of
experiences for mutual benefits. Based on the feedback received from the customers, the
Company provides various support services to them, identifies potential areas of
cooperation and shares best practice on a basis of mutuality. Besides, your Company also
organized Regional Customer Meets, State specific Business Partner Meets and GENCOs Meets
for better interaction and sharing of experience. Starting from 2008-09, NTPC has rolled
out a Customer Satisfaction Index (CSI) for gathering customers' feedback and responding
to their requirement. This initiative serves as a useful tool for further strengthening
Customer Relationship and better appreciation of our business imperatives.


6. INSTALLED CAPACITY

During the year 2010-11, your Company added 2490 MW detailed as under:


  

    
Project / Unit
    
Capacity (MW)
  
  

    
NTPC owned
    

  
  

    
Dadri ,Unit#6
    
490
  
  

    
Korba ,Unit#7
    
500
  
  

    
Simhadri ,Unit#3
    
500
  
  

    
Farakka ,Unit#6
    
500
  
  

    
Under JVs
    

  
  

    
Jhajjar,Unit#1
    
500
  
  

    
Net addition
    
2,490
  



6.1 Installed Capacity of NTPC Group:

The total installed capacity of the NTPC Group has increased from 31,704 MW at the end
of financial year 2009- 10 to 34,194 MW at the end of financial year 2010- 11 as tabulated
below:


  

    
Owned by NTPC
    
Capacity (MW)
  
  

    
Coal based projects
    
26,875
  
  

    
Gas based projects
    
3,955
  
  

    
Sub-total
    
30,830
  
  

    
Joint Ventures & Subsidiaries
    

  
  

    
Coal based projects
    
1,424
  
  

    
Gas based projects
    
1,940
  
  

    
Sub-total
    
3,364
  
  

    
Total
    
34,194
  


Further 660 MW of Sipat Unit#1 was added in June 2011, thereby increasing the total
installed capacity to 34,854 MW.


7. CAPACITY ADDITION PROGRAM

Towards its journey to become the world's largest and best power producer, your company
has embarked upon an ambitious capacity addition program so as to have an installed
capacity of 128GW by 2032. Your Company has adopted a multi-pronged growth strategy which
includes capacity addition through green field projects, brown field expansions, joint
ventures and acquisitions. In addition to furthering capacity addition through Coal / Gas
based thermal power projects, your company has been pursuing enhancement of its power
generation portfolio through Hydro, Renewable Energy and Nuclear energy projects.

At present 1,320 MW Hydro capacity is under implementation together with 291 MW under
bidding. In its endeavor towards Greener Power, your Company plans to add around 1000 MW
from Renewable Energy Sources by 2017.


7.1 Projects under Implementation

As on 31.03.2011, Your Company's various projects having aggregate capacity of 14,748
MW including 3,890 MW, being undertaken by Joint Venture companies, are under
construction, as detailed below:


  

    
Name of the Project
    
Capacity (MW)
  
  

    
I. Project under NTPC Ltd
    

  
  

    
A. Coal Based Projects
    

  
  

    
1. Sipat-I
    
1980 *
  
  

    
2. Barh-I
    
1980
  
  

    
3. Simhadri-ll
    
500
  
  

    
4. Bongaigaon-I
    
750
  
  

    
5. Mauda-I
    
1000
  
  

    
6. Barh-ll
    
1320
  
  

    
7. Rihand-lll
    
1000
  
  

    
8. Vindhyachal-IV
    
1000
  
  

    
Sub Total (A)
    
9530
  
  

    
B. Hydro Electric Power Projects (HEPP)
  
  

    
9. Koldam
    
800
  
  

    
10. Tapovan Vishnugad
    
520
  
  

    
Sub Total(B)
    
1320
  
  

    
C. Renewable Projects
    

  
  

    
H.Singrauli CWHEPP
    
8
  
  

    
Sub Total (C)
    
8
  
  

    
Total I (A)+(B)+(C)
    
10,858
  
  

    
II Projects under JVs
    

  
  

    
Coal Based Projects
    

  
  

    
12. Jhajjar- JV with HPGCL & IPGCL
    
1000
  
  

    
13.Vallur-JVwith TNEB
    
1500
  
  

    
14. Nabinagar- JVwith Railways
    
1000
  
  

    
15. Muzaffarpur Expansion (MTPS)-JVwith BSEB
    
390
  
  

    
Total II
    
3890
  
  

    
Total On-Going Projects
    
14,748
  


* 660 MW of Sipat Unit#1 commissioned on 28.06.2011


7.2 New Projects

Your Company at present has invited bids for Main plant packages, for 18,051 MW
capacity (14,460 MW NTPC owned and 3,591 MW through its JVs and Subsidiaries). For most of
the new projects, your Company is going for setting up Super Critical units of 660 / 800
MW which have higher efficiency and are also environment friendly. Towards this end, your
company has invited bids under Bulk tendering for 5,940 MW capacity through 9 units of 660
MW and 7,200 MW capacity through 9 units of 800 MW respectively. Balance 4911 MW capacity,
apart from 660MW units is envisaged through coal based, Gas based, Hydro and Renewable
Energy projects.

Your Company has also taken up studies / preparation of Feasibility Reports and is
pursuing statutory clearances for various other projects to be taken up in future once
their viability is established.

In order to meet the future challenges of meeting India's electricity needs at
affordable cost with minimum environmental impact, your Company has drawn a long term
Technology Roadmap up to 2032 which involves development, adoption and promotion of safe,
efficient and clean technologies for entire value chain of power generation business. Some
of the technologies which your Company has targeted include setting up of coal fired units
with Ultra Supercritical Parameters, establishment of Indian Coal Based Gasifier & Gas
Cleaning System for IGCC.

NTPC has adopted various technologies like units with advanced steam parameters for
improving efficiency over that of conventional 500MW sub-critical plants. For the new
sub-critical 500 MW Units, reheat temperature has been increased to 565 degree Centigrade
resulting in about 0.7% gain in efficiency. The Company is also adopting technologies like
flue gas desulphurization, ammonia flue gas conditioning system, advanced dust collection
technology, high efficiency motors, energy efficient lighting system, plant C&l
network Security System etc.


7.3 Project Management - A New Approach

Your Company believes that in order to achieve its ambitious capacity addition targets,
it has to build on its capabilities and leverage its expertise in power project execution.
Accordingly, it has revised its delegation of powers and has empowered its regions and
projects to enable faster decision making. Your Company has already established a
state-of-the-art IT enabled Project Monitoring Centre (PMC) for facilitating fast track
project implementation. PMC has some advanced features like Web-based Milestone

Monitoring System (Webmiles), Project Review and Internal Monitoring System (PRIMS),
Enterprise-wide Issues Tracking System etc. The PMC facilitates monitoring of key project
milestones and also acts as Decision Support System for the management. Features like SMS
based information Delivery, Real time Video Capture, Storage & Retrieval Facility and
Video Conference Facility are extensively utilized for project tracking, resolution of
issues and management interventions.


7.4 Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company plans to add capacities through some
of its subsidiaries and joint ventures. The detail of JV Companies/ Subsidiaries along
with details of Joint Venture partners for addition of coal based capacity is as under:


  

    
Name of Company
    
JV Partner
    
Details
  
  

    
NSPCL (NTPC-SAIL Power Co. Pvt. Ltd.)
    
Steel Authority of India Ltd. (SAIL)
    
A 50:50 JVC formed to own and operate captive power plants at Durgapur(120MW),
    Rourkela(120MW)and Bhilai Steel Plant (74 MW). 2X250 MW units have been added at Bhilai
  
  

    
NTECL (NTPC Tamil Nadu Energy Co. Ltd.)
    
Tamil Nadu Electricity Board(TNEB)
    
A 50:50 JVC is implementing 3x500MWcoal based power project at Vallur, Tamil nadu for
    which construction activities at site are under progress.
  
  

    
APCPL (Aravali Power Company Pvt. Ltd.)
    
Indraprastha Power Generation Co Ltd. (IPGCL) and Haryana Power Generation
    Co Ltd. (HPGCL).
    
This JVC is setting up a coal based Indira Gandhi Super Thermal Power Project
    consisting of3unitsof500MW each. NTPC, IPGCL and HPGCL have contributed equity in the
    ratio of 50:25:25. Unit#1 of 500MW has been declared commercial on 05.03.2011 and
    construction and erection activities are under progress for other two units of the plant.
  
  

    
BRBCL (Bhartiya Rail Bijlee Company Ltd.)
    
Ministry of Railways
    
A subsidiary of NTPC, formed as a JVC with Ministry of Railways with equity
    contribution in the ratio of 74:26 respectively for setting up power project of
    1000MW(4X250MW) capacity at Nabinagar in Bihar. Construction work is under progress on
    site.
  
  

    
MUNPL (Meja Urja Nigam Pvt. Ltd.)
    
Uttar Pradesh Rajya Vidut Utpadan Nigam Ltd. (UPRVUNL)
    
A 50:50 JVC formed for setting up 1320 (2X660MW) coal based power project in the state
    Uttar Pradesh. Infrastructure development activities are in progress. Main plant bids are
    under evaluation
  
  

    
KBUNL (Kanti Bijlee Utpadan Nigam Ltd.)
    
Bihar State Electricity Board (BSEB)
    
A subsidiary of NTPC formed as a JVC with BSEB, took over MTPS having 2 units of110 MW
    each from BSEB. The equity of NTPC in this subsidiary is 64.57 %. Unit#2 is operational
    since January2008. Renovation and Modernization of Unit #1 is under progress. The JVC has
    taken up expansion of the station by adding 2 units of195MWeach for which main plant and
    civil works has been awarded and other packages will be awarded soon.
  
  

    
NPGCL (Nabinagar Power Generating Company Pvt.Ltd.)
    
Bihar State Electricity Board GAIL, ICICI, SBI, IDBI, Canara Bank and MSEB Holding Co.
    
A 50:50 JVC for setting up and operation of a 3x660MWCoalbased plant at Nabinagar.
    Main plant bids are under valuation A JVC between NTPC, GAIL, MSEB holding Co. and Indian
    FIs. NTPC is having a stake of 30.17%. All the three Power Blocks with a combined capacity
    of 1940MWarein commercial operation and LNG terminal is mechanically complete and awaiting
    completion of dredging work for receipt of LNG and commissioning.
  
  

    
RGPPL (Ratnagiri Gas and Power Pvt. Ltd.)
    

    

  
  

    
ASHVINI (Anushakti Vidhyut Nigam Ltd.)
    
Nuclear Power Corporation of India Ltd. (NPCIL)
    
ASHVINI was incorporated on 27.01.2011 as a JVC with NPCILhaving51%equity and NTPC
    having 49% equity. The company has been formed for setting up nuclear power project (s)
    and also to explore possibilities of entering in areas of front end fuel cycle like
    uranium mining etc.
  



Other Initiatives:

Your Company has signed MOU with Government of Punjab and Punjab Power Corporation
Limited to set up 2640MW power project at Gidderbaha in the State of Punjab.

Another MOU has been signed with Government of Madhya Pradesh and MP Tradeco Limited to
set up 3960 MW power project at Barethi, Distt. Chhatarpur, Madhya Pradesh.

Your Company has also signed MOU with Ministry of Railways to set up 1320 MW power
plant at Adra, West Bengal.


7.5 Hydro Power

75.1 Your Company is also setting up small and medium sized hydro projects through its
wholly owned subsidiary NTPC Hydro Limited (NHL). Two such projects under development are:


  

    
Project
    
Location
    
Capacity
  
  

    
Lata Tapovan
    
Uttarakhand
    
171 MW
  
  

    
Rammam-lll
    
West Bengal
    
120MW
  


7.5.2 Your Company's Hydro Engineering Group is providing pre-award engineering support
to the above projects. It is also providing detailed engineering support to Koldam
(4X200MW) and Tapovan Vishnugad (4X130MW) Hydro-electric Power Projects.

7.5.3 Further, in pursuance of Memorandum of Agreement signed with Govt, of Mizoram,
Detailed Project Report of Kolodyne HEPP (4X115MW) prepared by Central Water Commission
for Govt, of Mizoram and updated by NTPC has been submitted to CEA for accord of
Techno-Economic Concurrence (TEC). CEA in its 306th meeting considered the project
proposal for accord of concurrence on 07.06.11. Formal communication from CEA is awaited

7.5.4 Your Company has been assigned the job of preparation of Detailed Project Report
(DPR) for Amochhu Reservoir Hydro-electric Project (620MW) in Bhutan. Survey and
Investigation for DPR is in progress and DPR is scheduled to be completed by September
2011.


8. STRATEGIC DIVERSIFICATION- INCREASING SELF-RELIANCE

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

Business opportunities are being continuously explored through market scanning and new
business plans are adopted accordingly.

The details of joint venture companies taking up activities in other sectors is as
under:


  

    
Name of Company
    
JV Partner
    
Activities undertaken
  
  

    
UPL (Utility Powertech Ltd.)
    
Reliance Infrastructure Limited
    
Takes up assignments of construction, erection and supervision of power sector and
    other sectors like O&M services, RLA studies, power distribution, non- conventional
    projects.
  
  

    
NASL (NTPC ALSTOM Power Services Pvt Ltd.)
    
ALSTOM Power Generation AG
    
Takes up renovation and modernization assignments of power plants both in India and in
    SAARC countries.
  
  

    
EESL (Enersy Efficiency Services Ltd.)
    
PFC, PGCIL and REC
    
The Company was formed on December 10, 2009 for implementation of Energy Efficiency
    projects.
  
  

    
NHPTL (National High Power Test Laboratory Pvt. Ltd.)
    
NHPC, PGCIL and DVC
    
The Company was incorporated on 22.05.2009 for setting up facility for short circuit
    testing of transformers and other electrical equipment. Energy Audit contracts have been
    received from various State Govts.
  
  

    
NPEX (National Power Exchange Ltd.)
    
NHPC, PFC TCS, NHPC, BSE, IFCI, Meenakshi, DPSC
    
The Company was formed to facilitate, promote, assist, regulate and manage nation wide
    trading of all forms of Electrical energies and also to settle Trades in a transparent
    fair and open manner. By- laws of Exchange submitted by NPEX to CERC on 30.03.2011
  


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

8.2.1 NTPC-BHEL Power Projects Pvt. Limited (NBPPL), a joint venture of your Company
with BHEL, incorporated on April 28,2008 for taking up activities of Engineering,
procurement and construction of power plants and manufacturing of equipments, has acquired
750 acres of land at Mannavaram in Andhra Pradesh. Construction at site is in progress.
The Company has bagged two contracts for EPC and Balance of Plant for Palatana Combined
Cycle Power

Plant in Tripura and Namrup Combined Cycle Power plant from BHEL on nomination basis.
Your Company is also negotiating with NBPPL for award of EPC contract for Unchahar
Stage-IV (500MW). NBPPL is also exploring technology tie-up for Coal Handling Plant and
Ash Handling Plant.

8.2.2 Another joint venture Company, BF-NTPC Energy Systems Limited was incorporated
with Bharat Forge Limited on June19, 2008 to manufacture castings, forgings, fittings and
high pressure piping required for power projects and other industries. Land acquisition
for establishing manufacturing plant at Sholapur, Maharashtra is in progress. Business/
Technical alliances for key product lines are being actively pursued.

8.2.3 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. The Company plans to augment the existing capacity to
6000MVA. For expansion and upgradation of the facility, technology tie-up is being
pursued.

8.2.4 Apart from the above initiatives, a subsidiary of your Company namely NTPC
Electric Supply Company Limited, has commenced business of distribution of power through
its JVC namely KINESCO Power and Utilities Private Limited, formed with KINFRA.

Please refer to "Management Discussion and Analysis", Annexure-I included as
a separate section to this report for further details.


9. GLOBALISATION INITIATIVES

9.1 Your Company has finalized Joint Venture Agreement and Power Purchase Agreement
with Ceylon Electricity Board for setting up a 2X250MW Coal Based Power Project in
Trincomalee, Sri Lanka. Joint Venture Company with equal equity participation shall be
incorporated as soon as certain issues are resolved with Government of Sri Lanka.

9.2 Your Company has also submitted draft Feasibility Report (FR) of 1320MW Coal Based
Khulna Power Project to Bangladesh Power Development Board (BPDB). FR would be finalized
after BPDB carries out the coal sourcing study.

9.3 Joint Venture Agreement has also been finalized and approved by NTPC Board for
developing a 1320 MW coal based power project with BPDB with equal equity participation.
The same has been forwarded to BPDB for approval at their end.


10. 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 gearing 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 2010-11, your Company has tied up loans of Rs. 3,479 crore including
loan of Rs. 2,000 crore from HUDCO Ltd. and Rs. 1,000 crore from HDFC Bank Limited for
part funding of debt requirement in respect of capex for next three years. In addition,
loans amounting to Rs. 479 crore have also been tied with other banks to fulfill the debt
requirement for next three years.

Your Company has entered into Term Loan Agreement with State Bank of India on
07.07.2011 for Rs. 10,000 crore for financing NTPC's Ongoing Capital Expenditure for
various power generation projects including renovation/ modernization of existing power
plants.

Bonds amounting to Rs. 720 crore were raised from domestic market for financing the
capital expenditure and refinancing of the loans.

Your Company raised USD 500 million senior unsecured fixed rate 10 year bonds under its
USD One Billion MTN programme during July 2011. The bonds carry a coupon of 5.625% p.a.
payable semiannually and are due for maturity in July 2021.


11. FIXED DEPOSITS

The cumulative deposits received by your Company from 244 depositors as at March 31,
2011 stood at Rs. 13.26 Crore. Further, an amount of Rs. 0.19 Crore has not been claimed
on maturity by 22 depositors as on that date.


12. FUEL SECURITY

12.1 Diversified Fuel Mix

Although coal will remain the mainstay for adding generation capacity owing to its
abundant reserves in the country, your Company is progressively diversifying its fuel mix
to increase the share of non-fossil fuel with a view to promote sustainable energy
development and further reduce C02 intensity of power generation.


12.1.1 Coal Supplies

During the year, your Company has signed a 20 years Fuel Supply Agreement with SCCL for
supply of 10.02MMT coal to Ramagundam (2100MW), and has entered into bilateral tie-ups
with Eastern Coalfields Limited for 2.5MMT and with SCCL for supply of 5.0 MMT of coal at
a mutually agreed price.

Your Company has also entered into an Agreement with STC for supply of 12MMT imported
coal from the Financial Year 2011-12.

During the year 2010-11, your Company received 137.3 MMT of coal as against 136.2 MMT
in the previous year. Total import during 2010-11 was 10.56MMT as against 6.3MMT in
2009-10.


12.1.2 Sourcing of coal through E-auction

For supplementing/strengthening the coal supply chain for Farakka and Kahalgaon, your
Company also procured coal (0.08 MMT)through E-auction.


12.2 Gas supplies

During the year 2010-11, your Company received 13.77 MMSCMD of gas/RLNG as against
13.88 MMSCMD received during 2009-10. The gas off-take in 2010-11 includes 9.00 MMSCMD
APM/ PMT gas, 2.86 MMSCMD RLNG and 1.91 MMSCMD of KG D6 basin gas.

Your Company renewed 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 2019. Further, out of 4.46 MMSCMD of KG D6 gas allocated by Government of India
for NCR gas stations, viz. Anta, Auraiya, Dadri & Faridabad, 2.30 MMSCMD has already
been tied up. The balance 2.16 MMSCMD KG D6 gas is under negotiation.

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


12.3 Development of Coal Mining projects

Your Company has been allocated six coal blocks by the Government of India. Further,
Brahmini coal block (including Chichro-Patsimal) has been allocated for joint operation by
Coal India Limited & NTPC. All these mining blocks together have a production
potential of more than 73 million tonnes per annum.

Your Company has appointed Thiess Minecs India Private Limited as Mine Developer cum
Operator for Pakri Barwadih Coal Mining Project.

Rehabilitation Action Plans (RAP) for these coal blocks have been prepared in
association with District Administration and Project affected families. NTPC is providing
adequate compensation and benefits. As a regular income generating scheme for the project
affected families, 'Annuity Scheme1 has been launched in association with LIC. Your
Company is taking up community development activities involving youth and woman
empowerment; skill development,-education encouragement like scholarship to meritorious
students, improvement of school infrastructure, etc.; regular health check-up,-local area
infrastructure development schemes like installation of solar street lights, de-silting of
ponds, distribution of drinking water, construction of community hall, road repairing
work, etc. A new ITI is being set up at Barkagaon in Hazaribagh Distt. for the project
affected persons.

The progress of various ongoing activities in these blocks is as under:


  

    
Particulars
    
Coal Blocks
  
  

    

    
Pakri Barwadih
    
Chatti-Bariatu
    
Kerandari
    
Talaipalli
    
Dulanga
    
Chatti-Bariatu (South)*
  
  

    
Environment Clearance
    
Obtained
    
Obtained
    
Obtained
    
Proposal under process at MOEF
    
Proposal under process at MOEF
    
Draft Mining Plan prepared
  
  

    
Forest Clearance
    
Obtained
    
Obtained
    
Proposal cleared by State Forests Dept. Under Process at MOEF
    
Under process at Chief Conservator of Forests, Raipur
    
Under process at Distt. Forest Department
    
-
  
  

    
Land Acquisition
    
2050 acres including forest land in possession. Payment disbursed for 450.75 acres of
    private land
    
Payment disbursed for 123 acres of private land.
    
Payment disbursed for 74 acres of private land.
    
All notifications under CBA Act completed and RAP finalised
    
All notifications under CBA Act completed. Land rate under finalization.
    
-
  
  

    
Mine Developer- cum- Operator (MDO)
    
Appointed. Mobilsed at site
    
NIT has been issued, RFQ evaluation done.
    
Planned during 201213
    
Appointed
    
Planned during 2012-13
    
-
  
  

    
Status of award of Other Packages
    
Construction of CHP, R&R Colony and Substation awarded.
    
Under various stages of tendering.
    
Under various stages of tendering.
    
Under various stages of tendering
    
Under various stages of tendering
    
-
  


* This block is located in the dip side of Chatti-Bariatu block and will be developed
at the end of mining of the later block i.e. by2037.

In reply to Ministryof Coal (MOC) letter dated 14.06.2011 for de-allocation for Chatti
Bariatu, Chatti Bariatu (South) and Kerandari-A coal blocks of NTPC, Brahmini &
Chichro-Patsimal coal blocks allocated to CIL-NTPC Urja Pvt. Ltd., Your Company requested
MOC for review the decision of de-allocation at the highest level. In addition to this
Secretary (Power) vide letter 07.07.11 has also requested Secretary (Coal) to review the
de-allocation of coal blocks and restore it to NTPC.


12.4 Other initiatives for securing coal supply

To leverage the strength of established players in mining and related areas, your
Company has formed following Joint Venture Companies:


  

    
Name of Company
    
JV Partners
    
Purpose
  
  

    
CIL NTPC Urja Pvt. Ltd.
    
Coal India Ltd.
    
For undertaking the Development, O&M of Brahmini and Chichro Patsimal coal blocks
    and Integrated Power Project(s). The block is regionally explored and requires detailed
    exploration for preparation of Geological Report. CMPDIL has been entrusted with the job
    of detailed exploration.
  
  

    
NTPC SCCL Global Ventures Pvt. Ltd.,
    
Singareni Collieries Company Ltd.
    
For undertaking development and O&M of coal Blocks in India and abroad.
  
  

    
International Coal Ventures Pvt. Ltd.,
    
SAIL, CIL, RINLand NMDC
    
For exploring various opportunities in Australia, Mozambique, Canada, Indonesia and
    USA, etc for acquisition of stake in coking coal and thermal coal mines.
  


Your Company is reviewing the proposal to explore the possibility of using pet coke in
Thermal Power Stations received from Hindustan Petroleum Corporation Limited - Mittal
Energy Investment Private Limited.

Your Company is also receiving proposals from time to time for acquiring coal mines
abroad from Investment bankers as well as from mine owners from countries like Indonesia,
South Africa, Australia and Mozambique. These proposals are under review and discussion
with respective parties.


12.5 Exploration Activities

Under New Exploration Licensing Policy (NELP-VIII), your Company signed Production
Sharing Contracts (PSCs) on 30.06.2010 with Government of India for four Oil/ Gas
Exploration blocks.

One of the blocks allotted under NELP-VIII is held by NTPC with 100% participating
interest and as operator. Exploration activities in this block will commence after grant
of Petroleum Exploration Licence for which application has been made to the Government of
Gujarat. Minimum work programme commitment (MWP) for this block is Rs. 1701.6 million.

The other three blocks are held by your Company in consortium with ONGC as operator and
NTPC's participating interest is 10% in each block. Exploration activities in these blocks
have commenced during the year. NTPC's share of MWP for these blocks is Rs. 810.3 million.


13. BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

In order to give an impetus to the journey towards continuous improvement, NTPC
Business Excellence Model 2010, (an Internal Assessment Model for Excellence) using EFQM
methodology has been developed for the organization suitably integrating the requirements
of all stakeholders, after studying various world class frameworks. This Internal
Assessment Model has been rolled out this year to all operating stations. An e-training
module for Business Excellence Model has been developed for providing awareness to all
employees across the organization.

For employees engagement and development, Quality Circles and Professional Circles are
given thrust by organizing competitive conventions at three levels i.e. station, regional
and national level. Winning teams are encouraged to participate in International
Conventions. There are about 800 Quality Circles and 325 Professional Circles. Every year
one Quality Circle is being sent to International QC Convention.

At strategic level apart from adopting NTPC Business Excellence Model, attempt is also
being made for adopting balanced score card approach by integrating both for achieving
automation of all business processes, meetings and reviews by adopting suitable lead &
lag indicators and strategy maps.


14. RENOVATION & MODERNISATION

14.1 Need for R&M:

Renovation and modernization (R&M) of power plants in the present scenario of
severe resource constraint is considered to be the best option for bridging the gap
between the demand and supply of power as (R&M) schemes are cost effective. To this
end, renovations are being carried out for the purpose of life extension of units,
performance improvements, capacity up rating, availability improvement, and improved
environment compliance. It increases the capacity, 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.


14.2 Strategy by the Company:

Your Company has approved the Strategy to be adopted for Mid Life R&M as well as
Post 25 years Life Extension of Units in coal based stations, based on Tariff Regulations
by CERC for 2009-14. R&M activities are under implementation in the power stations of
Singrauli, Korba, Farakka Stage-I, Rihand Stage -I and Anta Gas Power Station and the take
-over plants of Talcher TPS, Tanda TPS and Unchahar Stage-1 totalling more than 7400 MW.
Approvals for Mid Life R&M of Coal based projects of Talcher Kaniha (2x500 MW),
Ramagundam (3x500 MW), Farakka (2x500 MW), Kahalgaon (4x210 MW), Vindhyachal (6x210+2x500
MW), FGUTPP (2x210+2x210 MW) and Singrauli (2x500 MW) are under process.


14.3 Benefits from R&M:

Through the R&M, there has been substantial improvement in PLF of Tanda and Talcher
Thermal Power Plants in comparison with the time your Company took over these plants. The
details are as under:


  

    
Name of the Plant
    
PLF prior to Take-over
    
PLF in 2010-11
  
  

    
Tanda
    
21.59%
    
92.61%
  
  

    
Talcher
    
19.80%
    
94.22%
  



15. VIGILANCE

15.1 Viligance Mechanism:

Your Company ensures transparency, objectivity and quality in its operation 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 (DIPC), MIS Cell and
Technical Cell (TC) deal with various facets of Vigilance Mechanism. Your Company's
employees also adhere to directives of CVC by submitting record of movable and immovable
property annually to CVO office. The employees can give their suggestions and feedback for
improvement of the vigilance mechanism on Vigilance portal on NTPC Intranet.

Your Company has commenced certain measures like publishing of post bid details of
tenders on website www.ntpctender.com, e-payments to contractors, suppliers, employees and
other parties, use of website for recruitment process, etc to ensure transparency in the
systems and processes.


15.2 Workshops and Vigilance Awareness Week

Preventive Vigilance Workshops are being conducted every year to sensitize employees
about sensitive points and DOs and DONTs in work areas and their role in preventing
corruption.

Vigilance Awareness Week is being organized every year in first week of November to
emphasize upon leveraging IT, creating awareness for transparency accountability, fair
play and objectivity. The issues relating to contractors are also addressed to their
satisfaction during Customer Meet organized during Vigilance Awareness Week.


15.3 Implementation of Integrity Pact

Your Company is committed to bring total transparency to its business processes and as
a step in this direction has 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 Commission for all contracts with values exceeding Rs. 100 crore.


15.4 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 Policy.


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 reflected in the consistent reduction of Man-MW ratio over the years. The
over-all Man-MW ratio for the year 2010-11 excluding JV/subsidiary capacity is 0.77 and
0.74 including capacity of JV/Subsidiary. Generation per employee has increased to 9.27
MUs registering an increase of 0.5% over the last year.

The total employee strength of the Company stood at 25,144 as on 31.3.2011 against
24,955 as on 31.3.2010.


  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
NTPC
    

    

  
  

    
Number of employees
    
23,797
    
23,743
  
  

    
Subsidiaries & Joint Ventures 
    

    

  
  

    
Employees of NTPC in Subsidiaries & Joint Ventures
    
1,347
    
1,212
  
  

    
Total employees
    
25,144
    
24,955
  


The attrition rate of the executives during the year was1.00%.


16.2 Employee Relations

During the year employees' relations climate was peaceful and conducive. The scheme for
employees' participation in management continues to function successfully all over NTPC.
There have been continuous interactions between the management and the apex for a of
workmen and executives -National Bipartite Committee (NBC) and NTPC Executives Federation
of India (NEFI) respectively. The unions and associations and also the individual
employees complimented the efforts of the management in developing and sustaining an
enabling performance culture in the organization. Meetings and workshops for workmen and
executives association were held during the year wherein issues relating to performance
and productivity were discussed. The overall employee relations scenario in NTPC continued
to be cordial marked by industrial harmony and mutual trust.


16.3 Safety

Occupational safety and Health at workplace is one of the concerns of NTPC Management
and utmost importance is given to provide safe working environment and inculcate safety
awareness among the employees.

Regular plant inspection, internal and external safety audits are carried out at each
Project/Station. Safe methods are practised in all areas of Operation and Maintenance
(O&M) and Construction & Erection (C&E) activities. Safety task force for
O&M and Construction activities, height permit and height check list are implemented.
Qualified safety officers are posted at all units as per statutory rules/provisions.
Safety control rooms are established at all construction projects to monitor unsafe
conditions and unsafe acts.

Through our continuous efforts in safeguarding the employees, accidents have come down
by 30% as compared to last year. Many of our plants have been awardedwith prestigious
safety awards in recognition of implementing innovative safety procedure and practices.


16.4 Training and Development

In line with its long-term 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 established
Power Management Institute (PMI) at the corporate level as well as the employee
development centres at the sites. Training imparted is always in tune with new emerging
needs in diverse areas like nuclear power, coal-mining, hydro-power, supercritical
technology, renewable energy etc. and for this purpose every year some new programmes are
included in the annual calendar. Apart from this, the usual programmes include managerial
topics, power station operation & maintenance and 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 had taken the initiative of adopting ITIs near its power
generating stations and a total of 18 ITIs have been adopted under this scheme till
31.03.2011. This activity is being coordinated through PMI which is also facilitating the
construction of eight new ITIs where new projects are coming up. Through this initiative,
PMI has created 1209 extra seats in ITIs.

During 2010-11, your Company organized the following training programmes in power and
energy sectors:

(a) A national conference on Cases & Research in Power Sector to provide a platform
for practising managers, academicians and research scholars to develop, contribute and
present real life cases and action research from business practices in power and energy
sector.

(b) Hands-on training in 660 MW simulator at PMI to 256 participants.

(c) Four Batches of 12-weeks each of the flagship programme on "Thermal Power
Generation" for internal participants as well as external clients.

(d) The Strategic Management Initiative for Leadership & Empowerment (SMILE)
programme for Executive Directors of NTPC during March 14 -17, 2011 which was attended by
15 participants. The programme revitalized the vision for developing strategic orientation
and sustainable leadership practices in the organization.

(e) Internationally accredited prestigious programme -American Society of Mechanical
Engineers (ASME) Boiler and Pressure Vessel Code Section VIII Div. 1-by PMI
facultyauthorized byASME.

(f) An international conference on O&M of power stations was held wherein several
technical papers were presented for experiential learning by professionals from power
sector companies of India as well from other countries.

(g) 396 training programmes were conducted with a participant base of 9,130. The
training mandays clocked was 55,737.


17. INCLUSIVE GROWTH

17.1 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 stakeholder approach covering the environment and social aspects.

With a view to address the domains of socioeconomics issues at national level and in
line with its Corporate Social Responsibility - Community Development Policy, your company
has taken up various activities.


Initiatives undertaken by the Company:

As most of the stations of your Company are located in remote rural areas, various
activities were taken up essentially in the areas of basic infrastructure development like
primary education, community health, drinking water, sanitation, road, vocational training
etc.

In the area of Education, Financial assistance is being given to Ramakrishna Mission
for conducting various activities under the banner "Awakening India" heralding
the 150th Birth Anniversary celebration of Swami Vivekananda.

Further, financial contribution was given to Sri Vedmata Gayatri Trust for construction
of School cum Multipurpose Building in Village Shaulana, Distt. Ghaziabad, UP;and to
District Administration, Visakhapatnam for preparation and development of Audio Study
material for Visually Challenged Persons.

NTPC took up various vocational training programmes, such as web page designing and
computer training, motor rewinding, motor driving, general electrical repairing, and
mobile repairing etc. for youth and various coaching classes etc. for village children,
based on the need of the local community in the neighbourhood of its stations.

In order to contribute in the Conservation of selected National Monuments, NTPC has
committed financial support to Archaeological Survey of India (ASI) and National Culture
Fund (NCF) for conservation of 3 identified sites.

As regards women empowerment, construction of one floor of Girls Hostel in Guntur
district of AP has been completed, the same at Ongole is nearing completion.
Variousvocational training programmes for women in the neighbourhood villages of its
stations including Cutting, Tailoring, Stitching, Dress Designing, Beautician, Embroidery,
food preservation and food processing etc. were taken up. Financial support to Centre of
the Study of Values, Udaipur was extended for vocational training in self reliance for 500
tribal girls/ women Udaipur district.

Committed to its social responsibility, your Company had become a member of Global
Compact, a voluntary initiative of the UN for CSR. Your Company 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".

A report on progress made in this area is enclosed at Annex-IXto Directors' Report.


17.2 NTPC Foundation

NTPC Foundation, registered in December 2004, is engaged in serving and empowering the
physically challenged and economically weaker sections of the society.


Initiatives undertaken by the Company:

The Information and Communication Technology

OCT) Centre, set up jointly by NTPC Foundation and University of Delhi, and similar ICT
facilities to the blind schools in Lucknow, Ajmer, Thiruvanathapuram and Mysore are
helping a large number of physically challenged students to learn IT Skills and move along
with the mainstream society.

NTPC Foundation-NIOH Disability Rehabilitation Centre(NFNDRC)establishedatTanda in
collaboration with National Institute for the Orthopaedically Handicapped (NIOH), Ministry
of Social Empowerment, Govt of India is providing rehabilitation/ restorative surgery to
physically challenged persons like medical interventions and surgical corrections, fitting
of artificial aids and appliances and therapeutic services etc.

New Disability Rehabilitation centers have been started at 4 more stations at Dadri,
Korba, Rihand and Bongaigaon.

In the area of health, Directly Observed Treatment cum Designated Microscopy Centre
(DOT cum DMC) with Mobile Vans, diagnostic equipments and paramedical services have been
started at 10 NTPC hospitals in Farakka, Kahalgaon, Korba, NCPP-Dadri, Ramagundam, Rihand,
Singrauli, Talcher-Kaniha, Unchaharand Vindhyachal respectively for diagnosis and
treatment of the Tuberculosis patients in the neighbourhood villages of the stations. New
centre has been started in 2 more stations i.e. at Anta and Sipat.

NTPC is also supporting the efforts of Distributed Generation (DG)for preparation of
feasibility reports, project insurance and bridging the funding gap between cost of the
projects and available funds, through NTPC Foundation.

15 projects have been supported in the past benefiting 2153 households.


17.3 Rehabilitation & Resettlement

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 line 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.


Initiatives undertaken by the Company:

During the year, R&R Policy has been revised aligning it with the provisions of GOI
National Rehabilitation & Resettlement Policy 2007 and retaining its learnings and
well structured mechanism in the area of R&R.

R&R Plan for Meja and Community Development (CD) for Bongaigoan project were
approved during the year. Other R&R and CD Plans in process for the projects/ plants
continued to be implemented.

Socio-economic Surveywas completed for Mouda-II, Kudgi, Marakkanam and Nabinagar STPP
and is in progress at Muzaffarpur, Darlipalli, Gajamara, Barethi, Lara, Gadarwara and
Khargone Projects.


18. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has made vigorous efforts for the propagation and successful
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 to encourage the employees to maximize the
use of Hindi in official work. 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. Annual Rajbhasha Conference was organized on 8th June 2010
for Hindi Officers under the Chairmanship of Director (Human Resources). To promote Hindi
in Power Sector Meeting of Hindi Advisory Committee was held in Coorg under the
Chairmanship of Minister of Power.

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


19. SUSTAINABLE ENERGY DEVELOPMENT

Vision Statement on Sustainable Energy Development:

"Going Higher on Generation, lowering GHG intensity"


Initiatives undertaken by the Company:

Your Company is committed for development of renewable energy in view of global warming
and fast depletion of fossil fuel.

Your Company envisages capacity addition of 1000 MW through renewable energy sources by
2017. These include wind, solar and small hydro based capacities. In this endeavor,
Ministry of Power has allocated 105MW (Phase-I) of unallocated thermal power from upcoming
projects of NTPC for bundling with solar energy being generated from NTPC's Solar
Projects. Potential sites for 50MW have already been identified within NTPC's generating
stations and land for balance capacity have been identified in Madhya Pradesh and Andaman
& Nicobar.

Your Company has initiated competitive bidding process for implementation of 25MW solar
projects and for the remaining projects. Detailed Project Reports are being finalized.

Solar based projects in Karnataka, Gujarat and Rajasthan for total capacity of 195MW
are under preliminary stages of development.

As a measure to hedge against volatile fuel prices and the uncertain cost of complying
with future environmental regulations, bids have been opened and are under evaluation for
award for 39 MW Wind Energy Projects at Chakala in Maharashtra, 36MW at Modurgudda in
Karnataka and 100MW at Guledagudda in Karnataka.

Your Company has already commissioned 15DG projects with cumulative capacity of 300KW
at Chattisgarh, Uttar Pradesh, Rajasthan and Madhya Pradesh. One micro hydro based DG
project of 2X20 KW is under construction at Nakkiya in Chattisgarh which is scheduled to
be commissioned by December 2011.

Your Company has signed the Joint Venture Agreement with ADB & Kyushu for power
generation (500MW) through renewable energy sources. Joint Venture Company would be
incorporated soon.


20. NETRA - R&D Mission in Power Sector

NTPC Energy Technology Research Alliance (NETRA) focuses on areas such as Climate
Change, Waste Management, New & Renewable Energy, Efficiency improvement, scientific
support to stations, Cost reduction and reliability of stations.

In order to provide utmost benefits to the stations, projects like Artificial
Intelligence based plant performance advisory system, real-time advisory system for
maintaining boiler water chemistry parameters, Radio frequency Identification (RFID) based
fish plate removal detection system, etc have been successfully completed and
deployed/tested at stations.

Research Advisory Council (RAC) comprising eminent scientists and experts from India
and abroad is in place to steer high-end research. Scientific Advisory Council (SAC) with
Regional Executive Directors & Station Heads as its members provides directions for
improving plant performance & reducing cost of generation. Meetings of both the
Advisory Councils were held periodically where members deliberated on various project
activities and gave guidelines for implementation of suggestions. Applications for 15
patent applications are in advanced stage of processing. NETRA provides technical support
to all NTPC stations as well as other Utilities to improve their performance.

As a part of establishing state-of-the art facilities for condition monitoring and
diagnostic techniques, facilities like phased array, lon-chromatograph, alloy analyzer,
High Pressure Liquid Chromatography (HPLC), 8 sensor solar radiation station, etc have
been procured and installed at NETRA. To further expand the infrastructure creating
laboratories and facilities, etc, the Phase II building activities are in advanced stage.

NETRA is in the process of entering into a MOU with KFW, Germany for establishing solar
& PV research facilities at NETRA.


21. ENVIRONMENT MANAGEMENT - CONTINUOUS IMPROVEMENTS

21.1 Your Company is pursuing the objective of sustainable power development. It has
taken a number of initiatives towards protection of the environment by providing advanced
environment protection control systems, regular environment monitoring and judicious use
of natural resources, adoption of high efficiency technologies such as super critical
boilers for the up-coming Greenfield projects. High efficiency Electro-static
Precipitators (ESPs) with efficiency of the order of 99.9% or higher and advanced ESP
control systems have been provided in all coal based plants to keep suspended Particulate
Matter (PM) below the permissible level of 150 mg/ Nm3. All new plants are being provided
with ESPs designed for outlet dust burden of below 100 mg/ Nm3. R&M of ESP is also
underway in old units by providing additional collection area, advanced controllers and
replacement of electrodes etc to keep PM values within limits. Flue Gas Conditioning (FGC)
system has also been provided at our older stations as a short term measure to reduce PM
emissions.

To treat the waste water and reduce consumption of fresh water requirements for the
plants, your Company has installed Liquid Waste Treatment Systems, Ash Water Recirculation
System and closed cycle condenser cooling water systems with higher Cycle of Concentration
(COC) in its stations. The Company is using 3 R's (Reduce, Recycle & Reuse) as guiding
principle for reduction in consumption of water. Further, treated waste water is used in
various plant systems resulting in reduction of fresh water requirement. This has resulted
in considerable reduction in fresh water intake by 20% to 30% and also reduction in
quantity of effluent discharge from the power plants.

Ash dykes in the Company have been engineered to ensure that all safety and environment
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 control of fugitive dust.

As a proactive measure and to effectively utilize biodegradable solid wastes generated
in project canteens and townships, Bio-Methanation Plant has been set up at Faridabad and
Singrauli to convert the waste into useful energy and bio-fertilizer. Methane generated
from these plants is used in canteens to reduce energy requirement for cooking purpose.

In order to monitor key environmental parameters of stacke missions, ambient air and
effluents continuously on real time basis, 61 continuous Ambient Air Quality Monitoring
System (AAQMS) along with Meteorological Sensors have been installed at 20 stations
located all over India.

To understand impact of power plants on flora & fauna and human beings, your
Company has taken up a number of Environment Studies such as Human Health Risk Assessment,
Fly Ash Leachate Study, pollutant Source Apportionment Study and Post Operational
Environment Impact Assessment Study at various stations.

Your Company has planted more than 19 million trees till date in and around its
projects as a measure to take 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.


21.2 Clean Development Mechanism (CDM)

Your Company is pioneer in undertaking climate change issues proactively. The Company
has taken several initiatives in CDM Projects in Power Sector. Its projects i.e. North
karanpura STPP and Tapovan Vishnughad HEPP & energy efficiency projects at Singrauli
STPP have got Host Country Approval from National CDM Authority. The methodology prepared
by NTPC viz. "consolidated base line and monitoring methodology for new grid
connected fossil fuel fired power plants using less GHG intensive technology" for
Super Critical technology has been approved by "United Nations Frame Work Convention
on Climate Change (UNFCCC)" under 'Approved Consolidated Methodology 13'. More green
field energyefficiencyCDM projects are in pipeline.


21.3 Ash Utilisation

During the year 2010-11, 26.03 million tonne of ash had been utilized for various
productive purposes which is 55.14% of the total ash generation against MoU target of 55%.

Important areas of ash utilization are - cement & asbestos industry, ready mix
concrete plants (RMC), Road Embankment, Mine filing, Ash Dyke Raising & Land
Development. Issue of fly ash to cement, RMC and other industries has been 9.88 Million
Tonnes.

Pond ash is being issued free of cost to all ash users from all NTPC Stations. Fund
collected from sale of ash is being maintained in a separate account by the subsidiary
company i.e. NTPC Vidyut Vyapar Nigam Limited and the same is being utilized for
development of infrastructure facilities, promotion and facilitation activities to enhance
ash utilization.


21.4 CenPEEP - towards enhancing efficiency

'Center for Power Efficiency and Environmental Protection1 (CenPEEP), was set up to
take initiatives to address climate change issues. It is a symbol of NTPC's proactive
approach towards Greenhouse Gas (GHG) reduction and commitment towards environmental
protection. The centre has been entrusted with some of the Strategic Initiatives such as
improvement in Efficiency and reliability. The 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) and
risk mitigation by Financial Risk Optimization (FRO).

Through these efforts, over the years, more than 30 million tons of C02 has been
avoided in NTPC. The technical assistance to CenPEEP has been provided by USAID through
USDOE and various other US institutes. CenPEEP has shared its knowledge and expertise of
best practices with 14 State utilities in order to improve their efficiency and reduce
carbon footprint.

A project on 'Study on enhancing Efficiency of Operating Thermal Power Plants in
NTPC-lndia' was completed with Japan International Agency for Cooperation (JICA) where
technical assistance was provided by experts from a consortium of three Japanese utilities
namely Electric Power Development Co., Kyushu Electric Power Co. and The Chugoku Electric
Power Co.


22. RURAL ELECTRIFICATION

NTPC through its wholly owned subsidiary NESCL is carrying out the implementation of
rural electrification in 29 districts in 5 States namely Madhya Pradesh, Chhatisgarh,
Orissa, Jharkhand and West Bengal under Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGW).
4315 un-electrified/ de-electrified (UE/DE) villages were made ready and 12.52 lac Below
Poverty Line Rural household connections were provided during the Financial Year 2010-11.

The cumulative achievement till 31.03.2011 includes 14433 UE/DE villages which have
been electrified and 23.23 lac BPL connections have been provided.

Besides above, 4443 partially electrified villages were also made ready during the
financial year 201011. The cumulative achievement of PE is 11279 till 31.03.2011.


23. 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 projects/
stations/ offices of NTPC.

During the year 2010-11, 831 applications were received under the RTI Act, out of which
813 applications were replied to. Twelve Workshops on RTI Act have been conducted at
regional headquarters/ stations to share and deliberate on latest notifications,
amendments and other issues for smooth implementation apart from the APIO's Conference
held in June 2010. An interaction session with the Delegates from Commonwealth countries
was also organized on 09.02.2011.


24. 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
core business processes and Employee Self Service functionality, the ERP solution also
includes e-procurement, Knowledge Management, Business Intelligence, Document Management
and workflow etc. To take care of the need for process data at desktop for analysis and
monitoring, PI system has been implemented at all plants in operation. PI based
applications for real time performance monitoring analysis have been implemented at many
locations and the remaining locations will be covered soon.

Network connectivity has been strengthened using Multi-Protocol Label Switching-
Virtual Private Network (MPLS-VPN). Bandwidth of communication network has now been
doubled to make ERP operation faster. Further, a parallel communication network from
alternate service provider is being arranged to ensure maximum reliability and
availability of communication network.

A state-of-the-art Data Centre and centralized server facility to cater the entire NTPC
is in operation at NOIDA. A disaster recovery centre is also functional at Hyderabad.

Your company has already implemented Video conferencing at all NTPC Plant locations and
subsidiaries which is being extensively used for Management Committee Meetings and Project
Monitoring on regular basis. This facility at PMI is also now being used for conducting
virtual class room coaching for students located at NTPC sites.


25. NTPC GROUP: JOINT VENTURES AND SUBSIDIARIES

YourCompanyhasformed18jointventure Companies and 5 subsidiary Companies for undertaking
specific business activities. The name of Pipavav Power Development Company Limited, a
wholly owned subsidiary of NTPC has been struck off from the Registrar of Companies, NCT
of Delhi & Haryana w.e.f. 28.01.2011 pursuant to Section 560 of the Companies Act,
1956. As such, the Company stands dissolved w.e.f. 28.01.2011.

The names of Subsidiaries and Joint Venture Companies and the percentage of your
Company's stake in these Companies is 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.


26. STATUTORY AND OTHER INFORMATION 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, technology absorption and foreign exchange
    earnings and outgo
    
III
  
  

    
Information as per Companies (Particulars of Employees) Rules, 1975**
    
IV
  
  

    
Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary
    companies
    
V
  
  

    
Statistical data of the grievances
    
VI
  
  

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

    
Information on Physically Challenged persons
    
VIII
  
  

    
UNGC-Communications on progress 2010-11
    
IX
  
  

    
Project Wise Ash Utilisation
    
X
  



**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 Board's Report. However, such
particulars shall be made available to the shareholders on a specific request made by them
during the course of Annual General Meeting to be held on 20.09.2011.


27. STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor
General of India. M/s Dass Gupta & Associates, K.K. Soni & Co., Varma & Varma,
Parakh & Co., B.C. Jain & Co. and S.K. Mehta & Co. were appointed as Joint
Statutory Auditors for the financial year 2010-11.


28. 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 2010-11.


29. REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comptroller & Auditor General of India, through letter dated 20.05.2011, has
given 'NIL' Comments on the Financial Statements of your Company for the year ended 31st
March 2011 under section 619(4) of the Companies Act,1956. As advised by the Office of the
Comptroller & Auditor General of India (C&AG), the comments of C&AG for the
year 2010-11 are being placed with the report of Statutory Auditors of your Company else
where in this Annual Report.


30. 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 since the year
2002-03. The cost audit for the year 2010-11 has been completed and the Cost Audit reports
are being submitted by the Cost Auditors.


31. BOARD OF DIRECTORS

Shri Arup Roy Choudhury has taken over as Chairman & Managing Director of your
Company w.e.f. September 1, 2010. Shri R.S. Sharma ceased to be the Chairman &
Managing Director of your Company with effect from 31.08.2010 on attaining the age of
superannuation. The Board wishes to place on record its deep appreciation for the valuable
services rendered by Shri R.S. Sharma during his association with NTPC.

Shri S.R Singh, Executive Director has taken over as Director (Human Resources)with
effect from October 16, 2010.

Shri N.N. Misra, Executive Director has taken over as Director (Operations) with effect
from October 19, 2010.

In accordance with the provisions of Article 41(iii) of the Articles of Association of
the company four directors - Shri I.J. Kapoor, Shri A.K. Sanwalka, Shri Kanwal Nath and
Shri Adesh Jain shall retire by rotation at the Annual General Meeting of your Company
and, being eligible, offer themselves for re-appointment.


32. 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 2010-11
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 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.


33. ACKNOWLEDGEMENT

Your Directors 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 Finance, Ministry of Environment & Forests, Ministry of Coal, Ministry of
Petroleum & Natural Gas, Ministry of Railways, 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 of Solicitor 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 the 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


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Date: August 04, 2011


ANNEXURE-I TO DIRECTORS' REPORT 

MANAGEMENT DISCUSSION AND ANALYSIS


INDUSTRY STRUCTURE AND DEVELOPMENTS 

Structure of power market

Power is transacted in India largely through long term Power Purchase Agreements (PPA)
entered between Generating/ Transmission Companies and the Distribution utilities. A small
portion is transacted through various short-term mechanisms like trading through
licensees, bi-lateral trading, trading through power exchanges and balancing market
mechanism (i.e. Unscheduled Interchange (Ul) mechanism).

In the year 2010-11, around 90% of power generated in the Country was transacted
through the long term PPA route. 6.6% of the power was transacted through trading
mechanism which included trading through short term licensees, bi-lateral trading, trading
through power exchanges and the balance 3.4% of the power was transacted through Ul
mechanism. (Source: Central Electricity Regulatory Commission)


SNAP SHOT 2010-11

> Gross annual generation of the country has crossed the 800 BUs mark (811.14 BUs).

> Nuclear generation achieved remarkable growth rate of 40.9% due to improved
availability of nuclear fuel.

> Generation from hydro based plants also improved with a growth rate of 7.11% due
to revival of good monsoon after two successive years of deficient rain fall conditions.

> Total thermal generation achieved growth rate of 3.82%. Coal based generation
recorded growth rate of 3.99 %.

> Average PLF of thermal power projects achieved during the year was 75.08%, as
compared to 77.68% in the previous year.

> 19 thermal power stations with an aggregate installed capacity of 21,995 MW
operated above 90% PLF.

> Availability of thermal stations marginally reduced to 84.24% from 85.10% achieved
during the previous year.

> Single digit peak (9.8%) and energy (8.5%) deficit. 

(Source: Annual Report, Central Electricity Authority)


Existing Installed Capacity

The total installed capacity in the country as on March 31, 2011 was 173,626.40 MW with
State Sector having a share of 47.49%, followed by Central Sector with 31.34% share and
balance 21.17% contributed by Private Sector entities.


  

    
Sector
    
Total Capacity (MW)
    
% share
  
  

    
State
    
82,452.58
    
47.49%
  
  

    
Centre
    
54,412.63
    
31.34%
  
  

    
Private
    
36,761.19
    
21.17%
  
  

    
Total*
    
173,626.40
    
100.00%
  


(Source: Central Electricity Authority)

*Including Renewable Energy Sources capacity (RES) of 18,454.52 MW, but excluding
captive generating capacity connected to the grid (19,509.49 MW as on 31.3.2011).

Capacity addition gained momentum during the year 201011 with 12,160 MW (excluding RES)
of capacity being added as compared to 9,585 MW added during the previous year,
registering a growth of 26.86%.

Out of 14,227.91 MW (including RES) added during the year in the country, the Central
Sector contributed to an addition of about 24.04%, State Sector 21.51% and 54.45% was
contributed by private sector.

The total thermal capacity, including gas stations and diesel generation accounts for
about 65% of installed capacity of the country followed by hydro capacity at 21.6%.
Nuclear stations account for 2.80% and the balance 10.60% is contributed by RES.


  

    
Fuel
    
Total Capacity (MW)
    
% share
  
  

    
Thermal
    
112,824.48
    
65.0%
  
  

    
Hydro
    
37,567.40
    
21.6%
  
  

    
Nuclear
    
4,780.00
    
2.8%
  
  

    
R.E.S.
    
18,454.52
    
10.6%
  
  

    
Total
    
173,626.40
    
100.0%
  


(Source: CEA's monthly report - March 2011)

With 93,918.38 MW of the installed capacity based on coal which is 54.10% of nation's
capacity, coal remains the key fuel for power generation.


Capacity Utilization

Capacity utilisation in the Indian power sector is measured by Plant Load Factor(PLF).


Sector wise PLF (Thermal)


  

    
Sector
    
Plant Load Factor
  
  

    

    
2008-09 
    
2009-10 
    
2010-11 
  
  

    
State
    
71.2
    
71.13
    
66.72
  
  

    
Central
    
84.3
    
85.64
    
85.12
  
  

    
Private
    
91.0
    
82.41
    
76.70
  
  

    
All India
    
77.3
    
77.68
    
75.08
  


PLF of Thermal stations declined from 77.68% to 75.08% while PLF of gas stations
declined from 67.32% clocked in 2009-10 to 66.15% in 2010-11. The decline in PLF was
mainly on backing down/ shut down of units on account of low schedule from beneficiary
states and due to shortage / poor quality of coal.

(Source: Annual report CEA)


Progress during 11th plan

Based on the progress made so far during 11th plan, the Planning Commission in its
mid-term review has assessed that against a target of 78,700 MW, a total capacity of
62,374 MW is expected to be added in the 11th plan.


  

    

    
Capacity in MW
  
  

    
Sector
    
Thermal
    
Hydro
    
Nuclear
    
Total
    
Likely Addition
  
  

    
Central
    
24,840
    
8,654
    
3,380
    
36,874
    
21,222
  
  

    
State
    
23,301
    
3,482
    
0
    
26,783
    
21,355
  
  

    
Private
    
11,552
    
3,491
    
0
    
15,043
    
19,797
  
  

    
Total
    
59,693
    
15,627
    
3,380
    
78,700
    
62,374
  


(Source :Planning Commission)

So far, in the 11th Plan, 34,462.20 MW (excluding RES) capacity has been added (upto
March 31, 2011). In absolute terms, this capacity addition in the 11th plan is much higher
as compared to the capacity added in each of last three five year plans. During financial
year 2011-12, 17,601 MW is expected to be added. The installed capacity added by end of
11th Plan would be 52,063 MW and there would be a shortfall of 16.53% vis-a-vis capacity
envisaged during 11th Plan Mid-Term Appraisal

The main reasons for likely shortfall of capacity addition targets during 11th plan are
delayed supply of equipment, non-sequential supply of material by suppliers, shortage of
skilled manpower for construction and commissioning of projects, contractual disputes
among project authorities contractors and their sub-vendors, delay in readiness of balance
of plants by the executing agencies. Difficulties have been experienced by developers in
land acquisition, rehabilitation of Project Affected People (PAPs), environmental and
forest related issues, inter-state issues and geological surprises in hydro projects.
These issues continue to decelerate the pace of development of power projects.


Approach to 12th Plan

The addition of new capacities in earlier plans has been inadequate. Though the
position has improved substantially in 11th Plan as the capacity added would be more than
the capacity added in the 9th Plan and the 10th Plan put together, still it will fall
short of the target envisaged for the 11th Plan itself. In fact, it will be even below,
the target revised during mid-term appraisal of 11th plan. As regards 12th Plan, capacity
addition close to 1,00,000 MW is anticipated. Projects of 58,083 MW are already under
construction for likely benefit during 12th Plan.


  

    

    
Capacity in MW
  
  

    
Particulars
    
Hydro
    
Thermal
    
Nuclear
    
Total
  
  

    
Central
    
4,772
    
8,526
    
700
    
13,998
  
  

    
State
    
455
    
11,240
    
0
    
11,695
  
  

    
Private
    
620
    
31,770
    
0
    
32,390
  
  

    
Total
    
5,847
    
51,536
    
700
    
58,083
  


(Source: CEA Report)

In the 12th Plan, substantial capacity is expected to be added through Ultra Mega Power
Projects (UMPPs). A total of 4 UMPPs with planned capacity of 16,000 MW have been awarded
and are under various stages of development.

CEA has set up 18th Electric Power Survey (EPS) Committee to forecast electricity
demand in detail for the terminal years of 12th Plan (2016-17) and perspective demand for
terminal year of 13th Plan (2021-22) and 14th Plan (202627). It would also study category
wise consumption pattern of various categories and assess prospective T&D losses in
States. Further, the Planning Commission has set up a Working Group on Power for
finalizing the target for 12th Plan.

To ensure adequate availability of energy for faster economic growth and also to make
the growth truly inclusive by providing energy access to rural population and urban poor,
a multidimensional approach has to be adopted. The pace of addition of power generation
capacities needs to be stepped up. In the proposed capacity, considering limited fuel
resources, the major portion is expected to come through energy efficient super-critical
technology. In order to achieve the 12th Plan target and in order to augment the domestic
manufacturing base of main plant equipment, bulk tendering of supercritical units was
approved by the Cabinet Committee on Infrastructure in August 2009 with emphasis on phased
manufacturing programme so that domestic manufacturing capacity of super-critical units is
established in the country through new manufacturers apart from BHEL.

Increased pace of power capacity addition needs to be coupled with reforms in power
distribution sector since AT&C losses continue to be very high. Further, revision of
tariffs are not taking place regularly and financial losses of State Utilities are
mounting which need to be addressed with specific measures.

With larger addition to power capacities, substantial increase in availability of fuel
would be required. Since, substantial capacity addition would be through coal based
projects, policies need to be developed for exploration and exploitation of substantially
large number of coal deposits while keeping the environmental concerns in mind. Necessary
infrastructure for improving rail-road connectivity and coal jetties needs to be expanded.
Domestic coal production needs to be supplemented with increased imports to meet the
demand. As far as other fuels like gas and oil are concerned, exploration policies need to
be refined to attract major global players, investors and technologies. Shale gas probably
holds the key to ensure large availability of gas which needsto be explored.

Major investments are also required to be made to access fuel resources located in
other energy resource rich countries.


GENERATION

India ranks 5th in the world in terms of total electricity generated (Source: World
Energy Statistics Report, 2010). However, in terms of per capita consumption, it ranks
among the lowest. The National Electricity Policy (NEP) stipulates "power for
all" and annual per capita consumption of electricity to rise to 1000 units by 2012.
The policy aims at inclusive growth of power sector by providing adequate reliable power,
at affordable cost with access to all citizens. As per CEA report, Generation has grown at
a CAGR of 5.17% since 2001-02. During 2010-11, generation has grown by 5.55%. The demand
projections as per 17th EPS for next 10-11 years on all-India basis show that the energy
requirement and annual peak load will be 2.22 times and 2.44 times respectively of the
existing requirement as detailed hereunder:


  

    
Year
    
Energy Requirement (TWh)
    
Annual Peak Load at Power Stn. (GW)
  
  

    
2009-10(Act.)
    
830.594
    
119.166
  
  

    
2010-11 (Act.)
    
861.591
    
122.287
  
  

    
2011-12
    
968.659
    
152.746
  
  

    
2016-17
    
1392.066
    
218.209
  
  

    
2021-22
    
1914.508
    
298.253
  


(Source:17h Electric Power Survey of CEA) Existing Generation

The total power available in the country during the year 2010-11 was 811.14 billion
units as compared to 768.43 billion units during last year, registering a growth of 5.55%
(generation figures exclude generation from hydro stations upto 25 MW).

Sector wise and fuel wise break-up of generation for the year 2010-11 is detailed as
under:


  

    
Sector
    
Total Generation (BUs)
    
% share
  
  

    
State Sector
    
343.30
    
42.32%
  
  

    
Central Sector
    
346.09
    
42.67%
  
  

    
Pvt. Sector
    
116.14
    
14.32%
  
  

    
Others*
    
5.61
    
0.69%
  
  

    
Total
    
811.14
    
100.00%
  



  

    
Fuel Type
    
Total Generation (BUs)
    
% share
  
  

    
Thermal
    
665.00
    
81.98%
  
  

    
Hydro
    
114.26
    
14.09%
  
  

    
Nuclear
    
26.27
    
3.24%
  
  

    
Others*
    
5.61
    
0.69%
  
  

    
Total
    
811.14
    
100.00%
  


• including Import from Bhutan (Source: CEA's Reports)

Although the State Sector accounts for 47.49% of installed capacity, its contribution
to national generation is only 42.32%. Central Sector utilities have better performing
stations as compared to those of State utilities and contribute 42.67% of nation's
generation with a share of 31.34% in installed capacity.

Main reasons for shortfall in generation in 2010-11 visa-vis the target were as under:

• Loss of generation due to delay in commissioning / stabilizing of new units.

• Loss of generation due to backing down of units due to low schedule from
beneficiary states during the year2010-11.

• Generation in some of the thermal power plants was restricted / plants were
closed on account of shortage /receipt of wet/inferior quality of coal.

• During the months of May, June, July & August, some of the power plants in
the Western Region were kept closed on account of acute shortage of water in these areas
due to deficient rainfalls received in the catchment are a during the years 2008-09 and
2009-10.

• After arrival of good Monsoon in the country, there was sudden drop in
agriculture and domestic loads resulting in lower monthly growth rate. During the months
of August & September, it fell below 2.0% against 10.6% & 7.9% monthly growth rate
achieved during the corresponding months in the year 2009-10.


Demand and Supply position

The supply of power improved during the year 2010-11 owing to increase in capacity in
coal as well as gas based plants.

Energy deficit declined on a year-on-year basis in 2010-11 to 8.5% from 10.1%. This is
also attributed to higher capacity addition.

Peak load demand, increased by 2.62% whereas peak supply grew by 6.00% resulting in
declining peak load deficit to 9.8% in 2010-11 from 12.7% in the previous year.

(Source -.CEA reports for April 2011& April 2010)


  

    
Years
    
Peak Deficit %
    
Energy Deficit %
  
  

    
2000-01
    
13.0
    
7.8
  
  

    
2001-02
    
11.8
    
7.5
  
  

    
2002-03
    
12.2
    
8.8
  
  

    
2003-04
    
11.2
    
7.1
  
  

    
2004-05
    
11.7
    
7.3
  
  

    
2005-06
    
12.3
    
8.4
  
  

    
2006-07
    
13.8
    
9.6
  
  

    
2007-08
    
16.6
    
9.8
  
  

    
2008-09
    
11.9
    
11.1
  
  

    
2009-10
    
12.7
    
10.1
  
  

    
2010-11
    
9.8
    
8.5
  
  

    
2011-12
*(Anticipated)
    
12.9
    
10.3
  


*(Source:CEA Load Generation Balancing Report (LGBR) 2011-12)

As per IMF's World Economic Outlook 2011 (April), India's GDP is expected to grow at
7.8%, next only to China which is expected to grow at 9.5% in year 2012. In order to
sustain the growth in GDP, India needs to add power generation capacity commensurate with
this pace since growth of power sector is strongly co-related with the growth in GDP and
going forward it is expected that supply will create further demand.

CEA in its LGBR 2011-12 projected a requirement of 933.741 BUs for financial year
2011-12 as against 17th Electric Power Survey(EPS) projection of 968.659 BUs in 2011-12.
Overall, the sector is characterized by acute shortages. The demand and supply position
during the last seven year in the country is indicated as under: Actual Power Demand-
Supply Position


  

    
Years
    
Requirement
    
Availability
    
Surplus/Deficit (+/-)
  
  

    

    
(MUs) 
    
(MUs) 
    
(MUs) 
    
(%) 
  
  

    
2004-05
    
591,373
    
548,115
    
-43,258
    
-7.3%
  
  

    
2005-06
    
631,554
    
578,819
    
-52,735
    
-8.4%
  
  

    
2006-07
    
690,587
    
624,495
    
-66,092
    
-9.6%
  
  

    
2007-08
    
737,052
    
664,660
    
-72,392
    
-9.8%
  
  

    
2008-09
    
777,039
    
691,038
    
-86,001
    
-11.1%
  
  

    
2009-10
    
830,594
    
746,644
    
-83,950
    
-10.1%
  
  

    
2010-11
    
861,591
    
788,355
    
-73,236
    
-8.5%
  
  

    
2011-12
(Anticipated)
    
933,741
    
837,374
    
-96,367
    
-10.3%
  


MUs denote Million units.

(Source: Executive Summary Reports of CEA and CEA LGBR 2011-12)

The deficit for the year 2011-12 is expected to increase to 10.3%from 8.5% in 2010-11.


Consumption

The end users of power can be broadly classified into industrial, agricultural,
domestic and commercial consumers. These consumers represented approximately 38%, 20%, 23%
and 10% respectively of power consumption measured by units of electricity consumed in
financial year 2009-10 (Source: Ministry of Statistics and Programme Implementation).

India has very low per capita power consumption. The per capita consumption of power in
India has increased from 631.50 units in 2005-06 to 733.5 units in 2008-09 (Source: CEA).
India still has one of the lowest per capita power consumption compared to the world
average of 2750 units in 2006 (Source: World Development Report, 2010).


TRANSMISSION AND DISTRIBUTION

In India, the power transmission and distribution (T&D) system is a three-tier
structure comprising of distribution net-works, state grids and regional grids. The
distribution networks are owned by the distribution licensees and the state grids are
primarily owned and operated by respective State Utilities. In order to facilitate the
transmission of power among neighbouring states, state grids are interconnected to form
regional grids.

The regional grids are being gradually integrated to form a national grid enabling
inter-regional transmission of power facilitating optimal utilization of the national
generating capacity.

An integrated power transmission grid would help to even out supply demand mismatches.
The existing inter-regional transmission capacity of about 22,400 MW connects the
northern, western, eastern, and north-eastern regions in synchronous mode operating at the
same frequency and the southern region in asynchronous mode. This has enabled
inter-regional energy exchanges of about 38,000 million units in financial year 2010-11
(till November 2010), thus contributing to greater utilization of generation capacity and
an improved power supply position. Proposals are under way to have synchronous integration
of the southern region with the rest. (Source: Economic Survey, 2010-11)


Private Sector Participation in Transmission/Distribution

National Electricity Policy, 2006, issued guidelines for encouraging competition in
development of transmission projects and tariff based competitive bidding guidelines for
transmission services. These guidelines aimed at facilitating competition in the sector
through wide participation in providing transmission services and tariff determination
through a process of tariff based competitive bidding. So far, six transmission projects
have been awarded. Further, two schemes in western regional system have been commissioned
by private sector companies.

Apart from the above there is active participation by private sector through public
private partnership through JV route.

Electricity Act, 2003 (EA 2003) provides for private participation in distribution. It
further provides for distribution licensee to appoint a franchisee to distribute power
without applying for distribution license. Even though, privatizing distribution is one of
the simplest form of reform,-since it involve change in ownership and thus directly
affecting the employees, the States have been reluctant to privatize distribution. In this
scenario, distribution franchising is emerging as an alternative solution and some of the
States have taken initiatives in this direction.


POWER TRADING

Trading of power is recognized as a distinct license activity under the EA 2003. The
Central and State Electricity Regulatory Commissions have powers to grant inter-state and
intra-state trading licenses. As per CERC, there are 40 inter-state trading licensees on
March 31, 2011.

Current participants in the power trading business include PTC, NWN, Tata Power Trading
Company Limited and GMR Energy Limited, among others. The following table shows the volume
of power traded in India for the periods indicated:


  

    
PARTICULARS
    
FY 2010-11
    
FY 2009-10
  
  

    
Power traded (in BUs)
    
53.48
    
33.91
  
  

    
Electricity traded as % to total generation
    
6.6%
    
4.44%
  


(Source-. CERC)

India has two power exchanges - Indian Energy Exchange (IEX) and Power Exchange India
Limited (PXIL). During the year 2010-11, 13.54 BUs have been traded through these
exchanges. The trading price range at the above exchanges in the year 2010-11 was between
Rs. 2.04/unit and Rs. 7.75/unit.

Open access in inter-state transmission is fully operational. To boost open access, the
CERC has notified a regulation on connectivity, long-term access and medium-term open
access in inter-state Transmission.

One of the important features of these regulations is that the thermal generating
company of at least 500 MW capacity and hydro generating company of at least 250 MW
capacity, irrespective of ownership (whether government or private sector) can be
connected to the grid directly and there will be no requirement of constructing a
dedicated transmission line to the nearest pooling station of the inter-state transmission
system.

The regulations on open access in inter-state transmission and on inter-state trading
are issued by the Central Electricity Regulatory Commission (CERC). The responsibility for
introduction of open access at distribution level rests with the State Electricity
Regulatory Commissions (SERCs).

The total number of transactions under open access at inter-state level increased from
778 in 2004-05 to 18,128 in 2009-10. The Central Transmission Unit (CTU) has received 225
applications from private developers for long- term open access amounting to 1,62,898 MW.
At State level, as per information available with the Forum of Regulators Secretariat, 24
SERCs have notified terms and conditions of open access regulations, 20 have determined
cross-subsidy surcharge, 25 have allowed open access up to 1 MW, 22 have determined
transmission charges, and 18 have determined wheeling charges. The Power System Operation
Corporation Limited (POSOCO), has been operationalized by the Government of India with
effect from 1st October 2010 to manage load dispatch functions earlier being managed by
the CTU, i.e. POWERGRID. (Source-. Economic Survey2010-11)


RURAL ELECTRIFICATION

As per Central Electricity Authority (CEA), around 90.6% villages have been electrified
by end March 2011. The Central Government launched a scheme "Rajiv Gandhi Grameen
Vidyutikaran Yojana" (RGGW) in April 2005 with the goal of electrifying all (around
118500) un-electrified villages and hamlets and providing access to electricity to all
households in next five years. Under RGGW, 97177 villages have been electrified and
connections to 1.62 crore Below Poverty Line (BPL) households have been released upto
15.05.2011.

(Source: Ministry of Power -RGGW projects)


R-APDRP

Accelerated Power Development and Reforms Programme (APDRP) was modified and renamed as
Restructured APDRP (R-APDRP). R-APDRP is linked to actual demonstrable performance in
terms of AT&C loss reduction to 15% or less by the end of 11th plan through adoption
of IT for energy accounting/auditing, strengthening /up-gradation of distribution network,
capacity building and payment of incentives to utility personnel for bringing down the
AT&C losses below the baseline levels.

APDRP and R-APDRP have been successful in bringing down the AT&C losses from 38.86%
in 2001-02 to 28.44% in 2008-09. However, we are still far behind the target of reducing
AT&C losses to 15% by 2011-12. Further, the impact of the program on financials of
State Utilities has not been significant.


POLICY FRAMEWORK

Indian Power Sector is governed by Electricity Act 2003 (EA 2003) which provides the
overall legislative framework.

EA 2003 has promoted a liberal, transparent and enabling legal framework for power
development for creation of a competitive environment and reforming distribution segment
of power industry. It allows open access in transmission and distribution. It provides for
regulatory oversight for fixation of tariff.

Central Government has also framed following policies for overall development of the
sector:

1. National Electricity Policy, 2005

2. Tariff Policy, 2006

3. Rural Electricity Policy, 2006

4. National Hydro Policy, 2008

5. Revised Mega Power Project Policy, 2009

A few of the major policy / regulatory initiatives of the recent past are:

a) Scheme for Supply of Power to Rural Households notified by Ministry of Power in
April, 2010.

b) Inter-State Trading Margin Regulations, 2010

c) New Indian Electricity Grid Code (IEGC), 2010

d) Amendments to Unscheduled Interchange (Ul) Regulations, 2010

e) Regulations on "Terms and Conditions for Tariff determination from Renewable
Energy Sources", 2009.


RECENT INITIATIVES

(a) CERC (Terms and Conditions for Renewable Energy Certificate for Renewable Energy
Generation) Regulations, 2010.

As per the Section 86 (1) (e) of the EA 2003, the State Electricity Regulatory
Commissions have been authorized to specify a percentage of the total consumption of
electricity in the area of a distribution licensee from renewable energy sources. As per
this provision, most of the SERCs have notified the required Renewable Purchase
Obligations (RPO) for the distribution licensees. In order to promote investments in the
renewable energy generation in the country, CERC has issued CERC (Terms and Conditions for
recognition and issuance of Renewable Energy Certificate for Renewable Energy Generation)
Regulations, 2010 on 14.01.2010. The REC mechanism envisaged in this Regulation aims at
addressing the mismatch between availability of RE resources in the states and requirement
of the obligated entities to meet the renewable purchase obligations. Under this
Regulation, REC will be issued to RE generators not selling electricity from RE sources
through preferential tariff routes. These RE generators can sell the environment
attributes of the generation in the form of RECs, which are tradable in the power
exchanges. These RE Certificates can be procured by the distribution licensees to meet
their renewable purchase obligations.


(b) Amendment of Coal Linkage Policy for 12th Plan Power Projects

Government of India has modified the criteria for coal linkages for power projects in
12th Plan. Now, drawal of coal will be subject to 85% of power being tied up through Long
Term PPAs with Discoms through tariff based competitive bidding (except for PSU projects
where PPAs were signed by 5.1.2011)


(c) Procedure for the implementation of the Mechanism of Renewable Regulatory Fund
(RRF) under Indian Electricity Grid Code Regulation, 2010.

The Central Electricity Regulatory Commission has approved the procedure for mechanism
of Renewable Regulatory Fund applicable for wind farms with a collective capacity of 10 MW
and above and solar plant capacity of 5 MW and above. The fund has been created with a
view to compensate the wind and solar energy rich States for dealing with the variable
generation. This Fund shall be opened by the National Load Despatch Centre (NLDC) on a
national level on the lines of Ul Pool Account at the Regional level. All payments on
account of Renewable Regulatory charges levied under the Regulations, and interest, if
any, received for late payment shall be credited to the RRF.


(d) Sharing of Inter-state Transmission Charges and Losses Regulations, 2010.

CERC has brought in a new approach in pricing of transmission in India by introducing a
regulation called CERC (Sharing of Inter State Transmission Charges and Losses)
Regulation, 2010 on 15.06.2010. As per the new Regulations, the sharing of inter-state
transmission charges & losses will be calculated based on Point of Connection charging
method using load-flow analysis. In the current regime, the transmission charges &
losses for inter-state transmission system are allocated on the basis of regional postage
stamp method. As per the new Regulations, which will be effective from 1.07.2011, network
users shall be charged as per their actual usage of the transmission system rather than
contract paths, thereby rationalizing the pricing mechanism. This Regulation also requires
that all network users including Inter State Generating Stations (ISGS), beneficiaries,
State Transmission Utilities (STUs), bulk consumers, transmission licensees to sign

Transmission Service Agreement as approved by CERC containing various terms &
conditions related to billing & collection of charges. However, for the first two
years (2011-12 & 2012-13), the transmission charges will be calculated with 50%
weightage each for the existing postage stamp method and the new Point of Connection
method. This will be reviewed after two years.


(e) CERC (Terms and Conditions of Tariff) (Second Amendment) Regulations, 2011

The Central Electricity Regulatory Commission has made certain amendments to Tariff
Regulations, 2009 on 21.06.2011. As per this, the following capital expenditure has been
admitted by the Commission, subject to prudence check:

a. In case of gas/liquid fuel based generating stations, any expenditure which become
necessary on renovation of gas turbines after 15 years of operation from its COD and the
expenditure necessary due to obsolescence or non-availability of spares for successful and
efficient operation of the stations.

b. Capital expenditure necessitated on account of modifications required or done in
fuel receipt system arising due to non-materialisation of full coal linkage in respect of
thermal generating stations arising from circumstances not within the control of
generating station.


OPPORTUNITIES AND THREATS

Opportunities

Increasing demand for electricity

Although, the Indian power sector is one of the fastest growing sectors in the world
and energy availability has increased, the demand for power outstrips the supply. There
is, therefore, ample scope for rapid capacity expansion. Although, the peak and energy
deficits have reduced over the years, however, they are expected to remain high. The
anticipated energy requirement in 201112 will be 968.659 BUs. The demand is further
expected to be of the order of1914.508 BUs by 2021-22.


Conducive Regulatory Framework for investment by Private Sector

To accelerate the development of Power Sector Gol has taken several policy initiatives
which have boosted the confidence of private investors to invest in Power Sector. EA 2003
has provided impetus to the participation of Private Sector in Generation and
Transmission. Further, policies on open access and tariff framework have created an
enabling environment for the private sector.


Ultra Mega Power Projects

Gol launched an initiative for the development of coal based Ultra Mega Power Projects
with capacity of 4000 MW each with the objective to ensure cheaper tariffs utilizing
economies of scale, catering to the need of States and to mitigate the risks relating to
tie up of land, fuel, water and other statutory clearances. To tie up the necessary inputs
and clearances shell companies (SPVs) have been set-up as wholly owned subsidiaries of
PFC. These SPVs along with various clearances are subsequently transferred to the
successful developer.

So far, 4 such projects have been awarded through international competitive bidding
route namely Sasan in MP, Mundra in Gujarat, Krishnapatnam in AP and Tilaiya in Jharkhand.
As per Economic Survey 2010-11, two units of 800 MW each of the Mundra UMPP are expected
to be commissioned in the 11th Plan. Government has decided to include an additional
bidding qualification criterion stating that no bidding company or group may hold more
than 3 UMPPs at the pre-commissioning stage.


UMPPs at Glance


  

    
Particulars
    
No. of UMPPs
    
Capacity (MW)
  
  

    
Total UMPPs Envisaged
    
16
    
64000
  
  

    
SPVs Incorporated
    
12
    
48000
  
  

    
Awarded
    
4
    
16000
  


(Source: Power Finance Corporation) 


Transmission

With focus on increasing generation capacity over the next decade, commensurate
investment would also be required in transmission. Since, power generation resources as
well as load centres are unevenly distributed in the country, it is necessary to have an
integrated development of transmission and distribution system. The system should
facilitate transfer of power, absorption of power, taking care of the open access system,
development of secure and efficient electricity market. The regional grids are being
gradually integrated to form a national grid enabling inter-regional transmission of power
facilitating optimal utilization of the national generating capacity thereby providing an
opportunity for investment in transmission projects.


Renewable Energy

Responding to the call for action for maintaining climate and ecological balance, it is
imperative to tap the renewable energy resources available in abundance in the country.
For industry, this represents a significant investment opportunity across the value chain
from R&D, manufacturing to project development


Renewable Energy Sources (RES) Potential

RES account for 10.60% of installed capacity and their share in the total energy basket
is gradually increasing. There is high potential for generation of renewable energy from
various sources- wind, solar, biomass, small hydro and cogeneration bagasse. The total
potential for renewable power generation in the country as on 31.03.2010 is estimated at
90,313 MW. This includes an estimated wind power potential of 48,561 MW (54%), SHP
(small-hydro power) potential of 15,385 MW (17%) and 22,536 MW (25%) from bagasse-based
cogeneration in sugar mills. The estimates of Ministry of New and Renewable Energy for
solar energy potential are estimated at 20-30 MW per Sq.km. for most parts of the country.
(Source Energy Statistics, 2011 by Central Statistics Office, MOSPI)

Under the National Action Plan on Climate Change (NAPCC), Jawaharlal Nehru National
Solar Mission is one of the eight National Missions launched by Govt, on January 11, 2010
with the twin objectives of contributing to India's long-term energy security and its
ecologically sustainable growth. The Mission will be implemented in 3 stages leading to an
installed capacity of 20,000 MW of grid power, 2,000 MW of off-grid solar applications and
20 million sq. metre, solar thermal collector area and solar lighting for 20 million
households by the end of the 13th Five Year Plan in 2022.


Hydro Potential

India is endowed with an estimated hydro power potential of more than 150,000 MW.
However, installed capacity of hydro electric projects is only 37,567 MW as on 31.03.2011.
Development of hydro power resources is important for energy security of the country.
Private sector accounts for only about 3.8% of the installed capacity. Based on the
present status of preparedness, a shelf of 109 candidate hydro projects aggregating to
30,920 MW having higher level of confidence for realizing benefits during 12th Plan has
been finalised. (Source: Hydro Development Plan for 12 Plan-CEA)

The hydroelectric potential has been given thrust by Government of India by launching
New Hydro Power Policy, 2008 offering incentives to investors in order to increase the
installed capacity of hydro projects.


Nuclear Potential

Nuclear generation registered a 40.9% growth during the year 2010-11 mainly due to
improved nuclear fuel conditions and additional generation from the newly commissioned
nuclear unit at Kaiga in January'11. At present, the installed nuclear power capacity in
the country is only 4,780 MW which is about 3% of the total power generating capacity.
Inspite of recent catastrophe in Japan, nuclear energy holds the promise to reduce
demand-supply gap to a great extent. Government of India has planned to have a nuclear
power capacity of 20,000 MW by the year 2020 and about 60,000 MW by the year 2030.

India's Nuclear Power Generation Program has till recently been based on indigenous
development of Pressurised Heavy Water Reactor (PHWR) technologies. Subsequent to Indo-US
Nuclear deal the window of opportunity to deal with other technology providers has i
improved. Accordingly to meet the targets of GOI for the nuclear power generation capacity
addition, Department of Atomic Energy (DAE) is exploring the possibilities of having
PWRtie ups with other technology providers in US, France, Russia etc. (AP-1000/
EPR-1600/WER-1000). With France, DAE is likely to tie up EPR 1600 technology for 2 nos. of
units to be constructed at Jaitapur, Maharashtra, besides, augmenting the capacity based
on indigenous PHWR route of unit size of 700 MW. However, WER technology of Russia is
being used in India by NPCIL for their Project under construction at Kudankulam.

With the above, we expect DAE, GOI would be able to meet its planned targets for year
2020 and beyond.


Threats

Slow investment in power sector

Although 100% FDI is permissible in power sector yet share of FDI in power sector is
hovering around 5% as compared to Telecom sector which is 8% of total FDI during the
period April 2000-March 2011.


  

    

    

    

    
(US $ million)
  
  

    

    
2009-10
    
2010-11
    
Cummulative April 2000-March 2011
  
  

    
Power
    
1437
    
1252
    
5900
  
  

    
Telecom
    
2554
    
1665
    
10589
  


The reason for low FDI inflow in power sector is that there is a lack of
politico-administrative support on containment of commercial losses coupled with poor
financial health of state utilities in addition to capped regulatory returns on equity.
Delays in land, forest and environmental clearances, resulting in cost escalation and
availability of fuel are not only reasons for low inflow of FDI into power sector but also
for delay in setting up power plants.


High AT&C /T&D Losses

Aggregate Technical and Commercial (AT&C) loss captures technical and commercial
losses in the network and also loss due to non realization of billed amount and is an
indicator of total losses in the system.

Internationally, AT&C losses stand at 4-8% in developed countries. High AT&C
losses in India continue to hamper reduction in distribution costs.

Main reasons for AT&C losses include overloading of existing lines and substation
equipments, absence of up gradation of old lines and equipments, poor repair and
maintenance of equipments, low metering/ billing/ collection efficiency, theft and
tampering etc.

AT&C losses are showing a declining trend and have come down from 38.86% in 2001-02
to 28.44% in 2008-09 because of programs like R-APDRP initiated by Gol. However, we are
still far behind the target of reducing AT&C losses to 15% by2011-12 (Source: CEA)


Deteriorating Financials of State Utilities

The book losses of State Power Utilities (SPUs) increased significantly to Rs. 20,920
crore during the year 2008-09 as against Rs. 14,720 crore in the year 2007-08. The losses
without considering subsidy further increased to Rs. 50,585 crore during the year 2008-09
from Rs. 34,237 crores in 200708, a rise of 47.75%. The net losses (financial losses &
subsidies) of State T&D utilities are on the increase and are projected at the level
Rs. 68,643 crore for the year 2010-11 (being over 1% of GDP) and the same poses a high
risk to their commercial viability. (Source: 1Jh Finance Commission Report)

Subsidy booked by utilities selling directly to consumers, increased from Rs. 19,518
crore in the year 2007-08 to Rs. 29,665 crore in 2008-09 (Source: PFC Report on
Performance of the State Power Utilities). The SPUs losses have persisted due to following
reasons:

a) Inability of the state utilities to enhance operating efficiencies and reduce
AT&C losses adequately. Thus, high AT&C losses have increased the purchase levels
and supply costs.

b) Increasing Gap between Cost and Revenue as tariff increase has not kept pace with
cost increases. The average cost of supply increased from Rs. 2.76/kWh in the year 2006-
07 to Rs. 2.93/kWh in 2007-08 and to Rs. 3.40/kWh in 2008-09. The average revenue (without
considering subsidy booked) increased from Rs. 2.27/kWh in the year 2006-07 to Rs.
2.39/kWh in 2007-08 and to Rs. 2.62/kWh in 2008-09. The gap between average cost of supply
and average revenue without subsidy was Rs. 0.48/kWh in 2006-07 which increased to Rs.
0.54/kWh in 2007-08 and to Rs. 0.78/kWh in 2008-09. (Source: PFC report of SPUs).

Recently, some of the SERCs have increased the tariffs which will help the state
utilities in bridging the revenue -costgap.


Fuel Constraints

Power generation in India is predominantly based on fossil fuel i.e coal and gas. About
65% of the installed capacity as on 31.03.2011 uses fossil fuel. Power Generation based on
coal in 2010-11 has increased by 3.99% over 2009-10. The production of coal as well as gas
has not kept pace with the demand. During financial year 2010-11, there was no increase in
coal production over the previous year. To meet the shortfall, an estimated 83 MT of coal
was imported during 2010-11, which is further expected to increase to 142 MT during the
current financial year. As per CEA, growth in coal based generation was constrained due to
92.6% materialization of the requirement of coal resulting in loss of generation of about
7.0 BUs during the year 2010-11.

National energy requirement is expected to grow to almost 4 times of present level to 2
BMT/annum by 2030-31. The domestic coal production has to grow at the rate of 7%-9% range
in order to match with the growth in demand.

The gap between demand and supply of coal is further expected to increase due to
various ecological concerns as well as many of the coal blocks have fallen under the
"No Go Area". The indigenous coal supply has to be augmented to match the growth
in power sector since most of the thermal plants may not use coal blended with more than
15% of imported fuel because of the design of the boilers. Imported coal is also subjected
to wide price fluctuations.

As far as imported coal is concerned, there are infrastructural limitations such as
port and railways infrastructure. Further, there are concerns of rising global prices of
coal. As bulk of the coal is imported from Indonesia and as per recent regulations by
Indonesian Government, coal companies can't sell the coal below a reference price which is
adjustable every twelve months. This may result in huge uncertainty and volatility in
imported coal prices. There are also concerns since Australia, another coal exporting
nation, has introduced a draft law to levy taxes on export of coal. The possibility of
introduction of carbon tax on coal would further push up the coal prices

Inspite of rapid growth in gas demand over the last decade, it accounts for j ust 10%
of total primary energy consumption. However, domestic production of gas is unlikely to
keep pace with demand. The current demand-supply scenario shows that there is wide gap and
the same is expected to increase further in next five years. With limited additional
domestic gas availability and lower production at KG D6 than earlier projected, the gap in
demand and supply is expected to grow. During 2010-11, the total gas demand in the country
for all sectors was about 179 MMSCMD, while the indigenous supply was less than 140
MMSCMD. As per various analysis, the gap is expected to vary between 70 and 100 MMSCMD in
2011-12 and expected to touch 150 MMSCMDby2014-15.

Allocation of around 31 MMSCMD of KG D6 gas to power sector has helped in mitigating
the shortage of existing plants. Unless gas is allocated in advance, future gas based
power projects are difficult to implement. Considering the limited availability of
domestic gas in the country vis-a-vis demand, RLNG will continue to play supplementary
role for power generation. However, the actual fructification of the gas based capacities
will depend upon the price competitiveness of domestic gas/RLNG vis-a-vis the main
competing fuel i.e. Coal. Presently, the gas plants are suffering from low generation
schedules from grid because of high cost of generation on gas/ RLNG vis-a-vis coal. It is
understood that system can absorb additional RLNG to the extent of 10- 20%. Hence, all
efforts need to be done to ensure enhanced production of domestic gas from the existing
fields and the discovered fields.

Thus, non availability of coal and gas in desired quantity would have adverse impact on
the overall performance of the sector. However, Government is taking initiatives for
availability of inputs for the development of the power sector.


Slow development of coal mines allocated to Power Developers

In order to augment coal resources, the Government has allocated captive blocks to
power developers to match rising demand. Over 90 coal blocks with geological reserves of
approximately 28 Billon Tonnes were allocated to various public/private companies. Out of
the above coal blocks,12 coal blocks were allocated to UMPPs with geological reserves of
about 4.5 BT. Out of the total allocated blocks, only 14 blocks (as per Annual Report of
Ministry of Coal) have commenced production as on 31.03.2010 as against a target of 30
blocks. Recently, Gol has issued notices to certain developers seeking reasons for
inordinate delay in commencement of production. Further, Gol has also deallocated certain
blocks for delay in their development.


OTHER RISKS AND CONCERNS

1. Constraint on power equipment manufacturing capacity

2. Lack of availability of skilled manpower

3. Need for speeding up rural electrification

4. Slow Environmental & Forest Clearances for projects and coal blocks

5. Competition in many critical segments of the industry, especially in distribution,
is inadequate, while State-owned distribution companies continue to under perform.


OUTLOOK

During the period 2001-02 to 2010-11, power generation in India has grown at a CAGR of
5.17%. As per 17th EPS, the energy requirement at the end of 12th Plan would be 1392 BUs.
To achieve this target, generation has to grow at a CAGR of over 9.0% and hence, offers
multiple opportunities of growth to public as well as private sector entities.


NTPC LEADERSHIP POSITION IN INDIAN POWER SECTOR

With approximately 18% of total installed capacity of the country, your Company
contributes to around 27% of the country's generation as on 31.03.2011.


  

    

    
All India
    
NTPC
    
% Share
  
  

    
Capacity(MW)
    
173,626
    
30,830
    
17.76
  
  

    
Generation (BUs)
    
811.14
    
220.54
    
27.19
  
  

    
Capacity incl. JVs (MW)
    
173,626
    
34,194
    
19.69
  
  

    
Generation incl. JVs (BUs)
    
811.14
    
236.71
    
29.18
  


(Source: All India Data - CEA's executive summary)

Your Company is the 4th largest in Asia amongst global electric utilities as per Forbes
Global 2000 ranking published in the year 2011. It is also ranked as 348th largest company
in the world in the Forbes Global 2011. It has also been ranked No.1 Independent Power
Producer in Asia and No.2 Independent Power Producer globally in Platts Top 250 Global
Energy Company for 2009. It has also been ranked as the 10th largest electricity producer
in the world and 3rd largest in Asia based on its generation during 200809. Your Company
has been ranked 6th and is the only PSU in the top 25 companies in the Aon Hewitt Best
Employers Study.

During the last financial year, operationally NTPC stations performed better than
collective performance of any other sector.


  

    

    
PLF Comparison (%)
  
  

    

    
2010-11
    
2009-10
  
  

    
Central sector
    
85.12
    
85.64
  
  

    
State sector
    
66.70
    
71.13
  
  

    
Pvt sector
    
76.70
    
82.41
  
  

    
National avg.
    
75.08
    
77.68
  
  

    
NTPC
    
88.29
    
90.81
  


National Availability Factor for coal stations was 84.24% during financial year
2010-11, as against which, your Company's coal stations had AVF of 91.67%.


COMPETITION

Due to the gap between demand and supply in the Indian power sector, there has
generally been a stable market for power generation companies in India. Your Company is
the largest power generating company in the country having a market share of approximately
17.76% in terms of installed capacity and 27.19% in terms of national generation. The
Maharashtra State Power Generation Company Ltd with an installed capacity of 9,996 MW
(Source - website of Mahagenco) with market share of about 6% is the next largest entity.

The share of private sector capacity has increased to 36,761 MW as of March 31, 2011
from 29,014 MW as on March 31, 2010 and going forward, the same is expected to increase
even faster as is evident from capacity added during 11th plan so far. Private sector has
contributed to around 14.33% to total electricity generation in the year 2010-11 as
compared to their share of 12.14% in the previous year.

EA 2003 removed licensing requirements for thermal generators, provided for open access
to transmission and distribution networks and removed restrictions on the right to build
captive generation plants. These reforms provide opportunities for increased private
sector involvement in power generation. Specifically, non-discriminatory open access
regulations of State Regulatory Commissions, which enable generators to sell directly to
bulk consumers, has increased the financial viability of investment in power generation.

Further, as per the National Tariff Policy, all new projects shall be set up on the
basis of competitive bidding effective from5thJan 2011.

Government of India has issued the Competitive Bidding Guidelines which do not bar the
CPSUs from participating in the tariff based bidding process. Both CPSUs and private
sector developers are participating in the tariff based bidding process for securing power
projects including the Ultra Mega Power Projects. There has been positive response on the
initiatives undertaken by Gol to set up large scale power projects through competitive
bidding.

Since notification of the Tariff Policy, power projects totalling around 45,000 MW
(including 16,000 MW of Ultra Mega Power Projects) have been awarded through tariff based
competitive bidding and another 26,000 MW are under process. However, work at most of
these projects is yet to start and successful implementation of these projects, therefore
remains to be tested.

With proven in-house engineering capabilities built in the past and wide ranging
experience of project execution and with long term PPAs of over 90,000 MW in place, we are
confident that we shall be able to retain our leadership position in the industry.
Further, our high operational efficiency enables us to sell power at competitive prices
and achieve savings. We believe that our monitoring and maintenance techniques offer us a
competitive advantage in an industry where reliability and maintenance costs are a
significant determinant of profitability.


RISKS & CONCERNS

For Company

With increasing competition, the Company has to sustain its leadership position in the
country by growing at an appropriate pace and at the same time strive to further improve
its operational efficiency by generating at high PLF and minimizing the outages. The
Company is foraying into hydro, nuclear and renewable energy sources to reduce its
dependence on fossil fuels. As a step in backward integration, the Company has entered
into coal mining business and is also exploring the possibilities in LNG value chain.

To sustain its leadership position in the country and befitting its
"Maharatna" stature, the company has drawn an ambitious Corporate Plan up to the
year 2032 with diversified power generation portfolio based on thermal, hydro, nuclear and
renewable energy sources. Though our growth strategies are built upon the inherent
strengths of the company, various activities undertaken to achieve the targets make us
susceptible to various risks. We recognize and realize that risks are not merely the
hazards to be avoided but in many cases offer opportunities which create value ultimately
leading to enhancement of shareholders wealth.

To effectively manage the risks associated with our business, we have taken adequate
measures to institutionalize risk management process, in the company by implementing an
elaborate Enterprise Risk Management (ERM) framework. As part of implementation of the ERM
framework, an Enterprise Risk Management Committee (ERMC) has been constituted with
Executive Directors representing geographically regions and core functions of the company.
ERMC has been entrusted with the responsibility to identify and review the risks and
formulate action plans and strategies for risk mitigation on short-term as well as
long-term basis. The ERMC has identified 25 key areas out of which following 7 have been
classified as the top risks for the company:

• Fuel supply risks

• Project Implementation delays risks

• Risks related to coal mining and coal washeries

• Risks pertaining to Hydro Projects

• Acquisition of land related risks

• Environmental, pollution and other related regulatory norms including Ash
Utilization related risks

• Risks related to recruitment and retention of skilled employees

These areas are being regularly monitored through reporting of key performance
indicators of identified risks and exceptions with respect to risk assessment criteria are
being reported to the top management. The ERMC meets every quarter to deliberate on
strategies.


INTERNAL CONTROL

Your Company has robust internal control systems and processes in place for smooth and
efficient conduct of business and complies with relevant laws and regulations. A
comprehensive delegation of power exists for smooth decision making which is being further
reviewed to align it with changing business environment and speedier decision making.
Elaborate guidelines for preparation of accounts are followed consistently for uniform
compliance. In order to ensure that all checks and balances are in place and all internal
control systems are in order, regular and exhaustive internal audits are conducted by
experienced firms of Chartered Accountants in close co-ordination with the

Company's own Internal Audit Department. Besides, the Company has two Committees of the
Board viz. Audit Committee and Committee on Management Controls to keep a close watch on
compliance with Internal Control Systems.

A well defined Internal Control Framework has been developed identifying key controls
and supervision of operational efficiency of designed key controls by Internal Audit. The
framework provides elaborate system of checks and balances based on self assessment as
well as audit of controls conducted by Internal Audit at process level. Gap Tracking
report for operating efficiency of controls is reviewed by management regularly and action
is taken to further strengthen the Internal Control System by further standardizing
systems and procedures. The system presents a written assessment of effectiveness of
company's internal control over financial reporting by the process owners, project/office
heads to facilitate certification by CEO and CFO and enhances reliability of assertion.


FINANCIAL DISCUSSION AND ANALYSIS

A detailed financial discussion and analysis is furnished below on Reported Audited
Financial Statements and Adjusted Profit. The Adjusted Profit has been arrived at after
adjustments on account of one-off items/extraordinary items which have been indicated
against each broad category of revenue and expense to explain better the year on year
(YoY) performance.

A Results of Operations 1 Gross Income


  

    

    

    
FY 2010-11
    
FY 2009-10
    
%Change
  
  

    

    
Units of electricity sold (million units)
    
206,582
    
205,091
    
0.73%
  
  

    

    
Income
    
Amount in Rs. Crore
  
  

    
1
    
Energy Sales (Excl Electricity Duty)
    
54,704.55
    
46,168.67
    
18.49%
  
  

    
2
    
Energy Internally Consumed
    
64.68
    
55.10
    
17.39%
  
  

    
3
    
Consultancy & other services
    
169.45
    
153.92
    
10.09%
  
  

    
4
    
Other income (excluding income related to OTSS*)
    
1,610.20
    
1,857.07
    
-13.29%
  
  

    
5
    
Income related to OTSS *
    
850.61
    
999.12
    
-14.86%
  
  

    
6
    
Total (4+5)
    
2,460.81
    
2,856.19
    
-13.84%
  
  

    

    
Gross Income (1+2+3+6)
    
57,399.49
    
49,233.88
    
16.59%
  


*OTSS-One Time Settlement Scheme

The gross income of the Company comprises of income from sale of electricity (net of
electricity duty), consultancy and other services, and interest earned on investments such
as term deposits, bonds (issued under one-time-settlement scheme) and dividend on mutual
funds. The gross income for financial year 2010-11 is Rs. 57,399.49 Crore as against Rs.
49,233.88 Crore in the previous year registering an increase of 16.59%. This gross income
excludes provisions written back. Each element of income is discussed below:


Tariffs for computation of Sale of Energy

The charges for electricity are based on tariff rates determined by the CERC. The
tariff rates consist of a capacity charge for recovery of annual fixed cost based on plant
availability, energy charges for recovery of fuel costs and an unscheduled interchange
charge for the deviation in generation with respect to schedule, payable(or receivable) at
rates linked to frequency prescribed in the regulation to bring grid discipline. The CERC
sets tariff rates for each unit for each stage of a plant in accordance with the tariff
regulations/norms notified by them. CERC has issued new Tariff Regulations for the period
2009-14, Central Electricity Regulatory Commission (Terms and Conditions of Tariff)
Regulations, 2009, which is a balanced regulation for both consumers and investors.


Capacity Charge

The capacity charge for making plant capacity available is allowed to be recovered in
full if plant availability is at least 85%. If the availability of the plant is lower than
85%, the capacity charges are recovered on a pro rata basis. The significant elements of
the capacity charges permissible under the Tariff Regulations 2009 are:

• Return on equity on pre-tax basis at a base rate of 15.5%, to be grossed up by
the normal corporate tax rate as applicable for the respective year on a prescribed 70:30
debt to equity ratio for new projects. For projects commissioned on or after April 1,
2009, there is an additional return of 0.5% if the new projects are completed within the
timeline specified in the 2009 Regulations. In the year, in which the concerned utility
pays Minimum Alternate Tax (MAT), the base rate will be grossed up by applying MAT rate.

• Interest cost incurred on normative debt at weighted average rate of interest on
loan portfolio of the project

• Interest on working capital determined on a normative basis

• Depreciation up to 90% of capital costs, excluding the cost of freehold land,
based upon the rates of depreciation prescribed in the Regulations, for a 12 year period
from the date of commercialization. The remaining depreciable value thereafter, is to be
spread over the balance useful life of the assets.

• Normative operation and maintenance costs determined by the CERC based on
capacity of unit, on a per megawatt basis.

• Normative secondary fuel oil costs for coal-based stations.

• Special allowance per annum per MW for plants in operation beyond their useful
life in lieu of recovery for capital expenditures on renovation and modernization.

• Compensation allowances on a per annum per MW basis to meet expenses on new
capital assets, including minor capital assets, after 10 years of commercial operation.


Energy Charges

Energy charges for the electricity sold are determined on the basis of landed cost of
fuel applied on the quantity of fuel consumption derived on the basis of norms for heat
rate, auxiliary consumption, specific oil consumption etc.


Other Charges

Besides the capacity charges and the energy charges, the other elements of tariff are:

• Cost of hedging in respect of interest and repayment of foreign currency loans
and exchange rate fluctuations for the un-hedged portion of interest and repayment of
foreign currency loans on a normative basis.

• The unscheduled interchange charge payable (or receivable) at rates notified by
the CERC from time to time.

• Deferred tax liability for the period upto 31-3-2009 on generation income is
allowed to be recovered from the customers on materialization.

During financial year 2010-11, final tariff orders including additional capital
expenditure orders for all but one station relating to the period 2004-09 have been
issued. Thus, under Tariff Regulations, 2004, tariff orders have been issued for all but
one station.

However, tariff orders are yet to be issued under CERC Tariff Regulations 2009-14. 


Sale of Electricity

Your Company sells electricity to bulk customers comprising, mainly, electricity
utilities owned by State Governments. Sale of electricity is made pursuant to long-term
Power Purchase Agreements (PPAs) entered into for 25 years in case of most of our
coal-fired plants and for 15 years in case of most of gas-fired plants in line with the
estimated average life of the plants. The actual lives of the stations are often longer
and unless, customer ceases to draw power, contracts continue to be in force until they
are formally extended, renewed or replaced. With the issuance of CERC Tariff Regulation
2009, the estimated average life of the gas stations is also estimated as 25 years. Hence,
the long-term power purchase agreements for new gas stations hence forth will also be for
the same period. Income from sale of electricity for the financial year 201011 was Rs.
54,704.55 Crore which constituted 95% of the gross income. The income from sale of
electricity has increased by 18% over the previous year's income of Rs. 46,168.67 Crore.
During the year, there is an increase in the commercial capacity by 990 MW comprising of
unit 6 of 490 MW of NCTPP Stage-ll w.e.f. 31.07.2010 and unit 7 of 500 MW of Korba Stage
III w.e.f. 21.03.2011. In addition, the commercial capacity of 990 MW comprising unit 5 of
490 MW of NCTPP Stage-ll and unit 7 of 500 MW of Kahalgaon Stage III is also available for
the entire financial year 2010-11 as compared to part of financial year 200910. The
increase in Sales is also partly attributable to pass-through of higher fuel cost.

Tariff Regulations, 2009 provide that the company shall continue to provisionally bill
the beneficiaries with the tariff approved by the CERC and applicable as on 31st March,
2009 till approval of tariff in accordance with these Regulations. The tariff petitions
have been made to CERC for all stations under Tariff Regulations 2009. Pending
determination of station-wise tariff by the CERC, sales of Rs. 48,935.31 crore for
financial year 2010-11 have been recognized on provisional basis (explained in note 2(a)
of Notes on Accounts, Schedule-26). For the units commissioned subsequent to 1st April
2009, namely, unit 5 of NCTPP Stage II, unit 7 of Kahalgaon Stage II, unit 6 of NCTPP
Stage II and unit 7 of Korba Stage-Ill, CERC is yet to issue final tariff orders.
Accordingly, sales of Rs. 4,528.39 crore for financial year 2010-11 relating to these
units/stations have been recognized on provisional basis (explained in note 2(b) of Notes
on Accounts, Schedule-26). It is pertinent to mention that unit 6 (490 MW) of NCTPP,
Stage-ll has commenced commercial operation in financial year 2010-11, within the
normative schedule given by CERC and is eligible for additional 0.5% Return on Equity as
per Tariff Regulations, 2009.

While revising the rates of depreciation and removing the provision for Advance Against
Depreciation (AAD), CERC Tariff Regulations, 2009 also provide that the balance
depreciable value of the each of the existing stations as on 1st April, 2009 shall be
worked out by deducting the cumulative depreciation including AAD as admitted by the CERC
up to 31st March 2009 from the gross depreciable value of the assets thereby merging AAD
with depreciation for tariff recovery. Accordingly, the accounting policy relating to AAD
was revised during the financial year 200910 (please refer to Accounting Policy no.
12.1.2) and the amount of AAD required to meet the shortfall in the component of
depreciation in revenue over the depreciation to be charged off in future years has been
assessed station-wise and wherever an excess has been determined as on 1st April 2009, the
same has been recognised as sales. During the year, AAD amounting to Rs. 79.75 Crore has
been recognized as sales in accordance with accounting policy (refer note 2(e) of Notes on
Accounts, Schedule-26).

As per Tariff Regulations 2009, the deferred tax liability for the period up to 31st
March 2009 whenever it materializes shall be recoverable directly from the beneficiaries.
Accordingly, the deferred tax liability recoverable from beneficiaries has been computed
by identifying the major changes in the deferred tax liability/asset and an amount of Rs.
21.72 Crore has been included in sales (refer Schedule 17 on Sales).

If the income tax/deferred tax recoverable from or payable to beneficiaries is excluded
from income from sale of electricity (pi. refer to Sch.17), it has increased by 17% over
last financial year.

Rs. Crore


  

    

    
FY
    
FY
    
%
  
  

    

    
2010-11
    
2009-10
    
Change
  
  

    
Energy Sales (Excl Electricity Duty)
    
54,704.55
    
46,168.67
    
18%
  
  

    
Less: Tax Recoverable from customers
    
338.51
    
-719.93
    

  
  

    
Less: Deferred tax recoverable from customers
    
21.72
    
248.47
    

  
  

    
Energy Sales (Excl Electricity Duty and tax recoverable from customers)
    
54,344.32
    
46,640.13
    
17%
  


The average tariff for the current year is 263.06 p/kWh as against 227.41 p/kWh in the
previous year. The average tariff includes adjustments pertaining to previous years. If
the impact of such adjustments were to be excluded, the average tariff would be 259.19
p/kWh in the current year as against 226.83 p/kWh in the previous year. The increase in
the average tariff for the current year is mainly due to increase in Energy (Variable)
charges by 26.21 p/kWh primarily due to increased consumption of imported coal.

There has been 100% realization of the dues during the last eight years. All the
beneficiaries have opened and are maintaining Letter of Credit equal to or more than 105%
of average monthly billing as per One-Time Settlement Scheme (OTSS). In order to ensure
prompt and early payment of bills for supply of energy to beneficiaries, your company has
formulated a Rebate Scheme by way of providing graded incentive for early payment based on
the bill(s) raised on State Utilities who are the member of NTPC's rebate Scheme.

Under OTSS, tri-partite agreements are valid up to 31st October, 2016. For the period
beyond October 2016, the supplies which will be made to State Utilities, the same shall be
covered by an escrow arrangement. The supplementary agreements have been signed with all
State Utilities which have a provision of keeping a first charge on their revenue streams
for supplies made by your company. Under the Supplementary Agreements, the State Utilities
have agreed to provide payment security through execution of the Hypothecation Agreement
and the Default Escrow Agreement. Further, this will be over and above the LC requirement
of105% of average monthly billing.


Energy Internally Consumed

Energy internally consumed relates to own consumption of power for construction works
at station(s), township power consumption etc. It is valued at variable cost of generation
and is shown in sales with a debit to respective expense head under power charges. The
increase in energy internally consumed is 17% over the previous year.


Consultancy and other services

Accredited with an ISO 9001:2000 certification, the Consultancy Division of your
Company undertakes the consultancy and turnkey project contracts for domestic and
international clients in the different phases of power plants viz engineering, project
management, construction management, operation and maintenance of power plants.

During the year, Consultancy Division posted an income of Rs. 167.85 crore as against
Rs. 151.24 crore achieved in the last financial year. In the financial year 2010-11, it
has recorded a profit of Rs. 57.07 crore as against Rs. 55.72 crore in the last financial
year. Atotal of 55 orders valued at Rs. 153.72 Crore were secured by the Division during
the year including 14 overseas assignments.


Other Income

'Other income' mainly comprises of income from bonds issued under OTSS, income from
investment of surplus cash, dividend on equity investment in joint ventures &
subsidiaries and miscellaneous income.

'Other income' in financial year 2010-11 was Rs. 2,460.81 crore as compared to Rs.
2,856.19 crore in the financial year 2009-10. Broadly, the break up of other income is as
under:


  

    

    

    
Rs. Crore
  
  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Interest for the year on tax free bonds /Loan to State Govt.
    
850.61
    
999.12
  
  

    
Income on investment of surplus cash including Dividend/Income from mutual funds
    
1,248.49
    
1,410.13
  
  

    
Dividend from JVs and Subsidiaries/Interest from subsidiaries
    
38.29
    
20.81
  
  

    

    

    
Rs. Crore
  
  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Income earned on other heads such as hire charges, profit on disposal of assets, etc.
    
379.73
    
470.63
  
  

    
Total
    
2,517.12
    
2,900.69
  
  

    
Less: Transfer to EDO development of coal mines
    
24.97
    
37.89
  
  

    
Less: Transfer to Deferred Foreign Currency Fluctuation Liability
    
31.34
    
6.61
  
  

    
Net other income
    
2,460.81
    
2,856.19
  


Interest income from OTSS bonds (including loan to State Government) for financial year
2010-11 is Rs. 850.61 crore as compared to Rs. 999.12 crore in financial year 2009-10. The
reduction in interest income to the extent of Rs. 148.51crore is due to redemption of OTSS
bonds amounting to Rs. 1,651.45 crore and repayment of loan amounting to Rs. 47.86 crore
in lieu of settlement of dues. We have earned income of Rs. 1,248.49 crore during
financial year 2010-11 on account of investments made from surplus cash including
Dividend/Income from mutual funds as against 1,410.13 crore earned last year. The income
on investment of surplus cash including Dividend/Income from mutual funds has registered
an 11% decrease over last financial year mainly due to reduction in interest earnings due
to low interest rate regime and also due to lower average investment during the current
year as against previous year.

We have earned Rs. 35.13 crore as dividend from our investments in joint venture and
subsidiary companies. Another Rs. 3.16 crore has been earned as interest from loan of Rs.
21.71 crore extended to Kanti Bijlee Utpadan Nigam Limited, one of our subsidiaries.
Further, an amount of Rs. 379.73 crore has been earned from various other sources mainly
consisting of miscellaneous income of Rs. 153.80 crore, interest of Rs. 116.16 crore from
customers and Rs. 10.81 crore being the surcharge received from customers on late payment
as per CERC regulations. Adjusted Gross Income

The gross income reported for the year includes certain revenues pertaining to previous
years. The revenue from sale of electricity for financial year 2010-11 is reduced by Rs.
800.87 crore pertaining to previous years which have been recognized in sales based on the
orders of the CERC /Appellate Tribunal. However, the net impact on PAT after adjusting
liability towards MPGATSVA tax amounting to Rs. 255.82 crore is Rs. 545.05 crore.
Similarly, for financial year 2009-10, an amount of Rs. 119.33 crore pertaining to
previous years was included in the sales. Impact of Rs. 79.75 crore on account of AAD has
been explained in earlier paragraphs. Further, impact of Fixed Charges of Rs. 40.49 crore
recognized based on CERC orders without considering the five issues challenged by the CERC
before the Hon'ble Supreme Court of India on some issues decided by the ATE in respect of
which the company has submitted that it would not press for determination of the tariff by
the CERC

The gross income of the company after such adjustments is as under:


  

    

    

    
Rs. Crore
  
  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Gross Income
    
57,399.49
    
49,233.88
  
  

    
Less:
    

    

  
  

    
Sales of previous years
    
545.05
    
119.33
  
  

    
AAD Written Back
    
79.75
    
316.80
  
  

    
Impact of Fixed Charges
    
40.49
    
0.00
  
  

    
Adjusted Gross Income
    
56,734.20
    
48,797.75
  



2 Expenditure

2.1 Expenditure related to operations


  

    
Year
    
FY 2010-11
    
FY 2009-10
  
  

    
Commercial Generation -MUs
    
220,379
    
218,439
  



  

    

    

    

    

    
Rs. Crore
  
  

    
Expenditures
    
FY
    
Rs.
    
FY
    
Rs
  
  

    

    
2010-11
    
kWh
    
2009-10
    
kWh
  
  

    
Fuel
    
35,373.78
    
1.60
    
29,462.74
    
1.35
  
  

    
Employees' remuneration and benefits
    
2,789.71
    
0.13
    
2,412.36
    
0.11
  
  

    
Generation, administration and other expenses
    
2,646.01
    
0.12
    
2,094.03
    
0.10
  
  

    
Total
    
40,809.50
    
1.85
    
33,969.13
    
1.56
  


The expenditure incurred on fuel, employees, generation, administration and other
expenses for the financial year 2010-11 was Rs. 40,809.50 crore which is 20% more than the
expenditure of Rs. 33,969.13 crore incurred during the previous year. In terms of expenses
per unit of power produced, it was Rs. 1.85 per unit in financial year 2010-11 in
comparison to Rs. 1.56 per unit in the previous year. This increase is mainly due to
increase in cost of coal and increase in operation and maintenance expenses. The increase
in commercial generation due to additional capitalization has resulted in an additional
operational expenditure ofRs. 1,955.38 crore. A discussion on each of these components is
given below: 


2.1.1 Fuel

Expenditure on fuel constituted 87% of the total expenditure relating to operations.
Expenditure on fuel was Rs. 35,373.78 crore in financial year 2010-11 in comparison to Rs.
29,462.74 crore in financial year 2009-10 representing an increase of 20%. The breakup of
fuel cost in percentage terms is as under:


  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Fuel cost (Rs. /Crore)
    
35,373.78
    
29,462.74
  
  

    

    
% break-up
  
  

    
Coal
    
80%
    
76%
  
  

    
Gas
    
15%
    
14%
  
  

    
Oil
    
1%
    
5%
  
  

    
Naphtha
    
4%
    
5%
  


The higher fuel expenses were mainly on account of increase in cost of coal partly due
to increased consumption resulting from additional capitalization of 990 MW and partly due
to increase in price of coal. Coal India Limited (CIL) and Singareni Collieries Company
Limited (SCCL) increased the prices of coal by about 10%-15% w.e.f. 16.10.2009 and
30.12.2009 respectively depending upon grade of coal. Coal India has further revised rates
of A & B grade coal w.e.f 27.02.2011. Also, the stations generally consumed a greater
proportion of costlier imported coal in financial year 2010-11 than in financial year
2009-10. Also, there has been increase in the price of gas and oil during financial year
201011. Fuel cost per unit generated increased to Rs. 1.60 in financial year 2010-11 from
Rs. 1.35 in financial year 2009-10. The increase in fuel cost due to addition of
commercial capacity is Rs. 1,670.99 crore.

The power plants of the company use coal and natural gas as the primary fuels. Oil is
used as a secondary fuel for coal-fired plants and naphtha as an alternate fuel in
gas-fired plants. Under the tariff norms set by the CERC, your Company is allowed to pass
on fuel charges through the tariff, provided the company meets certain operating
parameters. The company purchases coal under the long term coal supply agreements with
subsidiaries of CIL and with SCCL. A model Coal Supply Agreement (CSA) was signed with CIL
on May 29, 2009. Based on the revised model CSA, coal agreements have been signed with the
various subsidiary coal companies of CIL by the various coal based stations except
Farakka, Kahalgaon and Ramagundam-lll. (explained in note 9 of Notes on Accounts,
Schedule-26).

As per the provisions of the new CSA, the CSA is valid for 20 years and has a provision
for review after every 5 years. The annual quantity envisaged to be supplied to the
existing power stations against the various CSAs is 108.9 million tonnes for capacity
which were under commercial generation as on March 2009. For units commissioned during
financial year 2009-10 and financial year 2010-11 the coal is being supplied under an MOU,
as per the allocation made by CEA / coal company. Presently, supply of coal for Farakka-I
and Kahalgaon-I are as per the CEA nominated annual quantityof15.0 million tonnes.

Further, CSAs for Farakka-I, Kahalgaon-I and Ramagundam-lll for annual quantity of 16.0
million tonnes are expected to be signed shortly. The CSAs contain a provision for payment
of incentive/levy of penalty to/from coal companies on supplies in excess/ short of 90% of
the Annual Contracted Quantity (ACQ).

In an effort to encourage coal companies to supply Annual Contracted Quantity(ACQ), new
CSA provides for incentive payments as a percentage of Weighted Average base price of coal
in the following three slabs:


  

    
Supplies in the range of
    
Rate of Incentive
  
  

    
90%-95%of theACQ
    
10%
  
  

    
95%-100%of theACQ
    
20%
  
  

    
Supplies exceeding ACQ
    
40%
  


CSA also contains clauses of penalty at the same rate as that for payment of incentive
for under supply/ under off-take by coal companies and power plants respectively. The
price and other charges for coal, as per new CSA, will be as notified by CIL for its
subsidiary companies from time to time.

During the financial year 2010-11, coal based stations consumed 136.95 Million Tonnes
of coal as against 134.96 Million Tonnes in the financial year 2009-10. This was including
10.58 Million Tonnes of coal which was imported as compared to 6.76 Million Tonnes
imported in financial year 2009-10.

In order to ensure uninterrupted supply of coal to its power stations, your company
during financial year 2010-11 continued to source coal through e-auction and bilateral
arrangements. A bilateral agreement has been reached with SCCL for supply of 5.0 million
tonnes of C/D/E grade coal. These supplies are at a premium of Rs. 781/MT over SCCL's
revised notified price of 30th Dec 2009. Further, a bilateral agreement has been reached
with Eastern Coalfields Limited (ECL) for supply of 2.50 million tonnes ofA/B/C grade
coal, beyond the annual linkage quantity, to Farakka & Kahalgaon at prices which are
approximately at 100% premium to the notified price. Your Company participated in 24
e-auctions (18 Spot and 6 Forward) announced by various coal subsidiaries of CIL. Against
these e-auctions, about 1.22 Million MT (0.46 MMT in Spot and 0.76 MMT in Forward) of
Grade 'B' to Grade 'F' coal was allotted.

The company sources gas domestically under an administered price mechanism regime. The
main gas supplier is GAIL. Gas prices are fixed by the Ministry of Petroleum and Natural
Gas. 13.77 Million Metric Standard Cubic Meters per Day (MMSCMD) of gas was received
during the financial year 2010-11 as against 13.88 MMSCMD received in financial year
2009-10. This includes 1.17 MMSCMD of spot gas and fall back gas and 1.91 MMSCMD of KG D6
gas.

NTPC has signed Gas Supply Agreements (GSAs) with GAIL for supply of Administered Price
Mechanism (APM) gas and Panna Mukta Tapti (PMT) gas to Anta, Auraiya, Dadri, Faridabad,
Kawas & Gandhar for a combined quantity of 14.76 MMSCMD. The validity of the APM gas
agreements is upto 6th July 2021 while the PMT gas agreements are valid upto 21st Dec
2019. As per the terms of these agreements, the gas price is regulated in terms of the
Government Pricing Orders issued from time to time. The present applicable price of
APM/PMT gas (at APM price) inclusive of royalty is US$ 4.2/ MMBtu as per GOI order dated
31.05.2010. The total quantity of APM & PMT gas supplied during the year 2010-11 was
3,280 MMSCM.

A Long term agreement has been signed with GAIL for supply of 2.0 MMSCMD RLNG on firm
basis and 0.5 MMSCMD on fallback basis for NCR stations viz Anta, Auraiya, Dadri &
Faridabad valid upto 2019. The price is as declared on a monthly basis by Petronet LNG Ltd
as per directives of GOI on "pooled price basis". Around 615 MMSCM of RLNG were
supplied by GAIL during the year 2010-11 under this agreement.

Government of India has allocated 4.46 MMSCMD of KG D6 gas of RIL for NCR stations of
Anta, Auraiya, Dadri & Faridabad. Gas Supply&Purchase Agreements (GSPA) have been
signed with Reliance Industries Ltd. (RIL) and its JV partner Niko for the supply of 2.30
MMSCMD of this gas which is valid till March 2014. TheGSPA for balance quantity of 2.16
MMSCMD is under negotiation. The pricing of this gas is as decided by the Empowered Group
of Ministers (EGOM), which at present is US $ 4.20 /MMBtu. The total quantity of KG D6 gas
supplied during the year 2010-11 was 697 MMSCM.

To meet the shortfall in supply of gas, your Company procures Spot RLNG on limited
tender basis from domestic suppliers and on 'Single Offer' basis from public sector gas
marketing companies. During the year 2010-11, nine rounds of tendering have been done on
spot basis and five on 'Single Offer' basis. The approximate delivered price for these
supplies ranged between US$ 7.83/MMBtu to US$ 17.90/ MMBtu which has been off-taken
strictly in the ascending order of prices. These RLNG supplies are being contracted on
reasonable endeavor basis with no penalty on either party for short supply / short off
take.

Your Company has also entered into fallback agreements with GAIL/IOCL/BPCL/GSPCL for
supply of RLNG on reasonable endeavor basis. The approximate delivered price for these
supplies on 'Pooled Price' basis ranged between US$ 7.87 / MMBtu to US$ 9.56 / MMBtu.

Rajiv Gandhi Combined Cycle Power Project (RGCPP), Kerala generates power on naphtha as
no gas supply is available. Besides RGCPP, other gas based stations also used Naphtha
depending upon the demand from customers and schedule from load dispatch centres. During
the financial year 2010-11, 0.337 million MTs of naphtha was consumed as against 0.578
million MTs in the previous year.


2.1.2 Employees' Remuneration and Benefits

Employees' remuneration and benefits have increased by 15% from Rs. 2,412.36 crore in
financial year 200910 to Rs. 2,789.71 crore in financial year 2010-11 of which Rs. 69.48
crore is due to additional commercial capacity. Employees' remuneration and benefits
expenses include salaries and wages, bonuses, allowances, benefits, contribution to
provident and other funds and welfare expenses. These expenses account for approximately
7% of our operational expenditure in financial year 2010-11.

The main reason for increase in employee cost is normal increments, increase in
Dearness Allowance, one time expenditure towards gold coins distributed to commemorate the
Maharatna Status accorded to NTPC and on account of liveries. There is an increase in the
employee cost per unit of generation from Rs. 0.11 in the previous financial year to Rs.
0.13 in the current financial year.


2.1.3 Generation, Administration and Other Expenses

Generation, administration and other expenses consist primarily of repair and
maintenance of buildings, plant and machinery, power and water charges, security,
insurance, training and recruitment expenses and expenses for travel and communication.
These expenses have remained at approximately 6% of our operational expenditure in
financial year 2010-11. In absolute terms, these expenses increased to Rs. 2,646.01 crore
in financial year 2010-11 from Rs. 2,094.03 crore in financial year 2009-10 registering a
hike of 26%. In terms of expenses per unit of generation, it is Rs. 0.12 in financial year
2010-11 as compared to Rs. 0.10 in previous financial year. An increase of Rs. 18.24 crore
is attributable to addition of commercial capacity during financialyear 2010-11.

Repair & Maintenance expenses constitute 55% of total Generation, Administration
and Other Expenses and have increased to Rs. 1,477.94 crore from Rs. 1,278.36 crore
resulting in an increase of15%.

The other increase in generation & administration expenses is mainly attributable
to increase in water charges. Water charges have increased by 127% from Rs. 129.57 crore
in financial year 2009-10 to Rs. 294.48 crore in financial year 2010-11 due to revision of
water charges in certain stations.

As per CERC Regulations, the generating companies who use the inter-state transmission
network or the associated facilities and services of National Load Despatch Centre and
Regional Load Despatch Centres are required to share the Load Depsatch Centre charges.
Accordingly, an amount of Rs. 98.35 crore was booked towards Regional Load Despatch Centre
charges.


2.1.4 Adjusted Expenditure related to Operations

If the impact of one-off items/extraordinary items is adjusted, the operational
expenditure for the financial year 2010-11 and financial year 2009-10 would be as followa:

Rs. Crore


  

    

    
FY 2010- 11
    
FY 2009-10
  
  

    
Total Expenditure related to Operations
    
40,809.50
    
33,969.13
  
  

    
Less:
    

    

  
  

    
Additional Increment/ Gold Coins
    
117.36
    
-
  
  

    
RLDC Charges
    
98.35
    
-
  
  

    
Additional Water Charges
    
164.91
    
-
  
  

    
Adjusted Expenditure related to Operations
    
40,428.88
    
33,969.13
  



2.2 Depreciation

The depreciation charged to the profit and loss account during the year was Rs.
2,485.69 crore as compared to Rs. 2,650.06 Crore in financial year 200910, registering a
decrease of 6%. The reduction in the amount of depreciation is due to change in the
accounting policy pursuant to the opinion expressed by the Comptroller & Auditor
General of India as mentioned above (refer Note 16 of Schedule 26).

During the year, the Office of the Comptroller & Auditor General of India has
expressed an opinion that power sector companies shall be governed by the rates of
depreciation notified by the CERC for providing depreciation in respect of generating
assets in the accounts instead of the rates as per the Companies Act, 1956. Accordingly,
the Company revised its accounting policies relating to charging of depreciation w.e.f.
1st April 2009 considering the rates and methodology notified by the CERC for
determination of tariff through Regulations, 2009. In case of certain assets, the Company
has continued to charge higher depreciation based on technical assessment of useful life
of those assets. Consequent to this change, depreciation for the year is lower by Rs.
279.62 crore.

During the year, the gross block has increased by Rs. 5,905.08 crore i.e. from Rs.
66,850.07 crore in the previous financial year to Rs. 72,755.15 crore in the current
financial year. The increase in gross block is largely on account of increase in
commercial capacity by 990 MW resulting from additional capitalization amounting to Rs.
4,640 crore mainly on account of unit 6 of NCTPP Stage-ll and unit 7 of Korba Stage III.
Further, depreciation for units 5 of 490 MW of NCTPP Dadri Stage-ll and units 7 of 500 MW
each at Kahalgaon-ll were charged pro-rata during financial year 2009-10 while
depreciation on the same has been charged for the entire financial year 2010-11. The
impact on depreciation from additional capitalization during the financial year 2010-11
isRs. 196.67 crore.


2.3 Provisions made (and written back)

During the financial year 2010-11, the Company had made provisions amounting to Rs.
1,552.15 crore in comparison to Rs. 10.90 crore provided for in financial year 2009-10.
For the current year provisions include an amount of Rs. 1,526.45croretowards tariff
adjustment. This amount has been provided for in view of an appeal by CERC in the Supreme
Court against issues decided by APTEL in favour of NTPC (refer Note 2 (d) Schedule 26) and
CERC draft notification dated 3rd September 2010 (refer Note 3 (b) Schedule 26). During
the financial year 2010-11, the Company had also written back provisions made in earlier
years amounting to Rs. 7.81 crore in comparison to Rs. 12.77 crore of provisions written
back in financial year 200910.


2.4 Interest and Finance Charges

The interest and finance charges for the financial year 2010-11 were Rs. 2,149.08 crore
in comparison to Rs. 1,808.93 crore in financial year 2009-10. The details of interest and
finance charges are tabulated below:


  

    

    

    
Rs. Crore
  
  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Interest Charges:
    

    

  
  

    
Interest on borrowings
    
2,854.39
    
2,480.66
  
  

    
Others
    
75.85
    
38.64
  
  

    
Total Interest charges
    
2,930.24
    
2,519.30
  
  

    
Finance Charges
    
788.60
    
770.34
  
  

    
Exchange differences regarded as adjustment to interest costs
    
174.16
    
0.04
  
  

    
Total
    
3,893.00
    
3,289.68
  
  

    
Less: Adjustments and transfers
    

    

  
  

    
Interest charges capitalised
    
1,695.46
    
1,448.37
  
  

    
Finance charges capitalised
    
26.16
    
32.37
  
  

    
Exchange differences
    
14.63
    
0.01
  
  

    
Transfer to Coal Mines
    
7.67
    
0.00
  
  

    
Interest and finance charges capitalised
    
1,743.92
    
1,480.75
  
  

    
Net interest and finance charges
    
2,149.08
    
1,808.93
  


Interest amount on long term borrowings (including Interest during Construction) has
increased by 15% over last financial year due to increase in long term borrowings (net of
repayment) during the year by Rs. 5,391.02 crore. The average cost of borrowing has
increased marginally to 7.2985% in financial year 201011 from 7.1576% in previous
financial year mainly due to the repayment of loan carrying lower rate of interest and
raising of new loan at comparatively higher rate of interest. Our borrowings are
denominated in Rupees and foreign currencies.

The exchange differences in respect of overseas borrowings relating to fixed
assets/capital work-in-progress are treated in accordance with provisions of Accounting
Standard (AS) 11 issued by ICAI based on guidelines issued under Companies (Accounting
Standards) Rules, 2006 issued by National Advisory Committee on Accounting Standards from
time to time. Out of this, the exchange differences in respect of assets during the period
of construction /renovation and modernisation are capitalized by transfer to EDC.

During the financial year 2010-11, an un favourable exchange rate variation treated as
adjustment to interest costs amounting to Rs. 174.16 crores has increased the interest
expenses as against Rs. 0.04 crores in financial year 2009-10. The reason for substantial
increase in adverse amount of exchange rate variation is the fluctuation in the currencies
of our foreign currency denominated loans against Indian rupee namely, US dollar
marginally reduced by 1%, while Japanese Yen and Euro increased by 12% and 4%
respectively. The USD, Japanese yen and Euro denominated loans contributed to about 67%,
29% and 4% respectively in the loan basket at the end of financial year 2010-11 as
compared to 68%, 28% and 4% in previous financial year.

During financial year 2010-11, increase in interest charges (others) is mainly on
account of interest paid on land compensation cases for one of our gas project.

The finance charges have increased by 2% from Rs. 770.34 crore in financial year
2009-10 to Rs. 788.60 crore in financial year 2010-11. The increase is mainly due to
increase in rebate payable to customers as per the Rebate Scheme of the company from Rs.
693.73 crore in previous financial year to Rs. 711.28 crore in current financial year. In
order to secure 100% realization of amounts billed, the Company had introduced a revised
Rebate Scheme for the year 2010-11. The current Rebate Scheme provides for a rebate of 2%
on the amounts credited to the Company's account on the 6th day of a calendar month which
gets reduced on graded basis for each day's delay upto the 31st day of the month provided
that entire amount is credited to the Company's account. No rebate is allowed beyond last
day of the month.

For the financial year 2010-11, an amount of Rs. 1,736.25 crore (excluding Rs. 7.67
crores transferred to Development of Coal Mines) relating to interest and finance charges
of projects under construction was capitalized while the corresponding amount for the
previous year was Rs. 1,480.75 crore. Thus, interest and finance charges capitalized
registered an increase of 17%.

The interest and finance charges for financial year 2010-11 after these adjustments and
without taking into account the exchange differences treated as adjustment to interest
costs is Rs. 2,149.08 crore.


  

    

    

    
Rs. Crore
  
  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Total Interest charges less interest charges capitalised
    
1,234.78
    
1,070.93
  
  

    
Total Finance charges excluding finance charges capitalized
    
762.44
    
737.97
  
  

    
Net interest and finance charges
    
1,997.22
    
1,808.90
  
  

    
Add : Adjustment of exchange diff. regarded as borrowing cost
    
159.53
    
0.03
  
  

    
Less: Interest cost on account of hydro project/arbitration award
    

    
28.75
  
  

    
Less : Transferred to Development of Coal Mines
    
7.67
    

  
  

    
Total Adjusted Interest and Finance charges
    
2,149.08
    
1,780.18
  



2.5 Prior period income / expenditure

Certain elements of income and expenditure have been charged to the profit and loss
account relating to previous years. For the financial year 2010-11 a net amount of Rs.
1,638.72 crore was booked as prior period income whereas a net amount of Rs. 77.83 crore
was accounted as prior period income to the profit and loss account in the previous year.
During the year, the Company has revised its accounting policies relating to charging of
depreciation w.e.f. 1st April 2009 considering the rates and methodology notified by the
CERC for determination of tariff through Regulations, 2009. Consequent to this change,
prior period depreciation written back is ^1,116.50 crore. Consequently, the amount of AAD
required to meet shortfall in the component of depreciation in revenue over the
depreciation to be charged off in future years has been reassessed and the excess amount
of Rs. 727.49 crore has been recognised as prior period sales. Further, the amount
recoverable form beneficiaries on account of deferred tax materialised for financial year
2009-10 has been reassessed and excess amount of Rs. 212.67 crore has been reversed as
prior period sales, (explained in note 16 of Notes on Accounts, Schedule-26)


3. Profit before tax, provisions and prior period adjustments

The profit of the Company before tax and prior period adjustments for the current and
the previous year, both on reported and adjusted basis, is tabulated bel0W:more


  

    

    
Reported
    
Adjusted
  
  

    

    
FY 2010-11
    
FY 2009-10
    
FY 2010-11
    
FY 2009-10
  
  

    
Gross Income
    
57,399.49
    
49,233.88
    
56,734.20
    
48,797.75
  
  

    
Less:
    

    

    

    

  
  

    
Expenditure related to operations
    
40,809.50
    
33,969.13
    
40,428.88
    
33,969.13
  
  

    
Depreciation
    
2,485.69
    
2,650.06
    
2,765.31
    
2,650.06
  
  

    
Interest and Finance charges
    
2,149.08
    
1,808.93
    
2,149.08
    
1,780.18
  
  

    
One time FERV impact
    

    

    
(84.64)
    

  
  

    
Profit before tax, prov. & prior period adjust.
    
11,955.22
    
10,805.76
    
11,475.57
    
10,398.38
  



4. Provision for Tax

The Company provides for current tax and deferred tax computed in accordance with
provisions of Income Tax Act, 1961.

Under Tariff Regulations, 2009, w.e.f. 1st April 2009, income tax is recoverable on
normative basis as Return on Equity following the applicable rate of tax for respective
year. The actual income tax liability, if any, (more or less than the normative) is to be
borne by the company. Accordingly, provision for current tax has been computed at the
applicable rate of 33.2175% for the financial year 2010-11.

The deferred tax liability related to the period upto 31stMarch 2009 is recoverable
from customers as and when the same materializes. However, the deferred tax
liability/asset for the period after 1st April 2009 is to the account of the company.


Provision for Current Tax

A total provision of Rs. 2,553.32 crore has been made towards current tax for the year.

The amount recoverable form beneficiaries on account of deferred tax materialised for
financial year 2009-10 has been reassessed and excess amount of Rs. 212.67 crore has been
reversed as prior period sales with an equivalent reduction in provision for tax of
earlier years.


Provision for deferred tax

Due to change in Accounting Policy of the company in respect of depreciation charged as
per CERC guidelines w.e.f. 01.04.2009, the Deferred Tax Liability (net) and deferred tax
recoverable from SEBs as at 31st March 2009 has been reworked. The Deferred Tax Liability
arisen during the year on account of timing difference is Rs. 393.69 crore and has been
debited to Profit and Loss Account

Rs. Crore


  

    

    
FY 2009-10
  
  

    

    
Current tax
    
Deferred tax
    
FBT*
    
Total
  
  

    
Provision for R/2009-10
    
2,470.84
    
209.13
    
-
    
2,679.97
  
  

    
Adjust, for earlier years
    
(525.40)
    
-
    
2.69
    
(522.71)
  
  

    
Net prov. as per P&LA/C
    
1,945.44
    
209.13
    
2.69
    
2,157.26
  
  

    

    
FY 2010-11
  
  

    

    
Current tax
    
Deferred tax
    
FBT*
    
Total
  
  

    
Provision for FY2010-11
    
2,497.30
    
133.24
    
-
    
2,630.54
  
  

    
Adjust, for earlier years
    
56.02
    
260.45
    
-
    
316.47
  
  

    
Net prov. as per P&LA/C
    
2,553.32
    
393.69
    
-
    
2,947.01
  


* Fringe Benefit Tax

Net provision of tax for the financial year 2010-11 was Rs. 2,947.01 crore in
comparison to Rs. 2,157.26 crore in the financial year 2009-10, an increase of Rs. 789.75
crore. The net tax was higher during financial year 2010-11 on account of restatement of
Deferred Tax Liability & Deferred Tax Recoverable as on 31.03.2010 and impact of
change in depreciation policy.

5. Profit After Tax before provisions made and written back and prior period
adjustments


  

    

    
Reported (Rs. /Crs)
    
Adjusted (Rs. /Crs)
  
  

    

    
FY 2010-11
    
FY 2009-10
    
FY 2010-11
    
FY 2009-10
  
  

    
Profit before tax, provisions and prior period adjustments
    
11,955.22
    
10,805.76
    
11,475.57
    
10,398.38
  
  

    
Tax as per P&L
    
(2,947.01)
    
(2,157.26)
    
(2,947.01)
    
(2,157.26)
  
  

    
Deferred Tax impact
    

    

    
393.69
    
209.00
  
  

    
Profit after tax (before prov. and prior period adjust.)
    
9,008.21
    
8,648.50
    
8,922.25
    
8,450.12
  


The profits before prior period adjustments and provisions on reported basis have grown
by 4% while on an adjusted basis has increased by 6%.


6. Net Profit After Tax

The net profit after tax after provisions (made and written back) and prior period
adjustments on a reported and adjusted basis are as follows:

Rs. Crore


  

    

    
Reported
    
Adjusted
  
  

    

    
FY 2010-11
    
FY 2009-10
    
FY 2010-11
    
FY 2009-10
  
  

    
Profit after tax (before provisions and prior period adjustments)
    
9,008.21
    
8,648.50
    
8,922.25
    
8,450.12
  
  

    
Provisions (net of write back)
    
(1,544.34)
    
1.87
    
(17.89)
    
1.87
  
  

    
Add: Prior period adjustments
    
1,638.72
    
77.83
    
7.40
    

  
  

    
Net profit after tax
    
9,102.59
    
8,728.20
    
8,911.76
    
8,451.99
  


Prior Period adjustments include Rs. 212.67 crores representing amount recoverable from
beneficiaries on account of deferred tax materialized for financial year 2009-10 which was
re-assessed and excess amount was reversed as prior-period sales with equivalent reduction
in provision for tax of earlier years in P&L. (refer note 16 of schedule 26 - notes on
accounts)

On a reported basis, the net profit after tax for the financial year 2010-11 has
increased by about 4.29% while on an adjusted basis, the net profit after tax has
increased by5.44%.


7. Segment-wise performance

For the purpose of compiling segment-wise results, the business of the Company is
segregated into 'Generation' and 'Other Business'. The Company's principal business is
generation and sale of bulk power. Other business includes providing consultancy, project
management and supervision, oil and gas exploration and coal mining.

The profit before tax and interest in the generation business for the financial year
2010-11 was Rs. 12,094.83 crore as against Rs. 10,152.53 crore for financial year 2009-10.
Excluding income tax payable/recoverable from customers amounting to Rs. 360.23 crore for
financial year 2010-11 and Rs. 471.46 crore for financial year 2009-10, the above has
increased by 10% mainly on account of increased generation. For the profit before tax on
'Other Business' represented by income from consultancy, the same was Rs. 50.20 crore for
financial year 2010-11 and Rs. 58.16 crore for the previous financial year registering a
decline of14%.


B Financial Position

1 Net worth

The net worth of the Company at the end of financial year 2010-11 increased to Rs.
67,892.25 crore from Rs. 62,437.42 crore in the previous year registering an increase of
8.74% due to retained earnings. Correspondingly, the book value per share also increased
from Rs. 75.72 to Rs. 82.34.


2 Loan Funds

The loans as on March 31, 2011 were Rs. 43,188.24 crore in comparison to Rs. 37,797.02
crore as on March 31, 2010. A summary of the loans outstanding is given below: Rs. Crore


  

    

    
As at March 31
    
%
  
  

    

    
2011
    
2010
    
change
  
  

    
Secured Loans
    

    

    

  
  

    
Bonds
    
9,495.00
    
8,550.00
    
11%
  
  

    
Foreign Currency terms loans
    
414.47
    
528.65
    
-22%
  
  

    
Other
    
1.21
    
1.27
    
-5%
  
  

    
Sub-total
    
9,910.68
    
9,079.92
    
9%
  
  

    
Unsecured Loans
    

    

    

  
  

    
Fixed Deposits
    
13.26
    
13.39
    
-1%
  
  

    
Foreign Currency Bonds / Notes
    
1,356.90
    
2,283.50
    
-41%
  
  

    
Foreign Currency loans
    
8,919.59
    
7,541.69
    
18%
  
  

    
Rupee term loans
    
22,912.81
    
18,078.52
    
27%
  
  

    
Bonds
    
75.00
    
800.00
    
-91%
  
  

    
Sub-total
    
33,277.56
    
28,717.10
    
16%
  
  

    
Total
    
43,188.24
    
37,797.02
    
14%
  


Over the last financial year, the debt has registered a growth of 14%. Debt amounting
to Rs. 9,045.79 crore was raised during the year 2010-11. The amount raised through Term
Loans, Bonds and Foreign Currency Borrowings was used for capital expenditure and
refinancing, while amount raised through deposits have been used for working capital
purposes. The domestic debt funds included term loans amounting to Rs. 6,625 crore and
bonds aggregating to Rs. 720.00 crore.


  

    

    

    

    
Rs. Crore
  
  

    
Source
    
Debt Raised & Utilised
    
Repayment
    
Net
  
  

    
Term Loan
    
6,625.00
    
1,790.71
    
4,834.29
  
  

    
Bonds
    
720.00
    
500.00
    
220.00
  
  

    
Foreign Currency Debt
    
1,699.75
    
1,706.55
    
-6.80
  
  

    
Others (Public deposits/ finance lease)
    
1.04
    
1.24
    
-0.20
  
  

    
Total
    
9,045.79
    
3,998.50
    
5,047.29
  
  

    
FERV on FC Borrowings
    

    

    
343.93
  
  

    
Total
    

    

    
5,391.22
  


Banks and Domestic financial institutions continued to show interest in extending term
loans for financing the on-going capacity expansion plans. During the year, fresh
agreements for term loans aggregating Rs. 3,479.00 crore were entered into including the
Loan Agreement of Rs. 2,000 crore with HUDCO Ltd. to finance capital expenditure of power
generation projects, Coal Mining business and Renovation and Modernization activity. The
cumulative amount of domestic loans tied up till March 31, 2011 is Rs. 52,787.35crore.

Your Company has redeemed bonds amounting to Rs. 500 crore during the year. Repayments
amounting to Rs. 1,790.71 crore were made under various term loans extended by Indian
Banks and Indian Financial Institutions. Repayment of Rs. 1,706.55 crore was made during
the year towards foreign currency loans. Fixed Deposits for Rs. 0.6 crore were also
discharged during the year.

The credit rating of the Company as an issuer by CRISIL and ICRA continues to be
highest i.e. 'AAA' and 'IRAAA' respectively. Further, the rating assigned by CRISIL, ICRA
and CARE for rupee bonds program continued to be 'AAA', 'LAAA' and 'CARE AAA'
respectively, being the highest rating. The ratings assigned by CRISIL for Company's Fixed
Deposit Schemes is 'FAAA'. During the rating exercise of our domestic borrowings from
banks including the amounts committed by them both CRISIL and ICRA has assigned the
highest rating i.e. 'AAA' and 'LAAA' respectively.

During the year, Standard and Poors' and Fitch Ratings continued to maintain the
'BBB-/Stable' rating for the company. The Company's foreign currency ratings are at par
with sovereign ratings of India.

The debt to equity ratio at the end of financial year 2010-11 of the Company increased
to 0.64 from 0.61 at the end the previous financial year. The Debt Service

Coverage Ratio (DSCR) for the year is 2.57 and Interest Service Coverage Ratio for
financial year 2010-11 is 11.42.

Formula used for computation of coverage ratios DSCR = Earnings before Interest,
Depreciation and Tax/ (Interest net off transferred to expenditure during construction +
Principal repayment) and ISCR = Earnings before Interest, Depreciation and Tax/(lnterest
net off transferred to expenditure during construction).

The maturity profile of the borrowings by the Company is as under: Rs. Q0re


  

    

    
Rupee Loans incl. Bonds & PDS
    
Foreign Currency loans
    
Total
  
  

    
Within 1 year
    
2,526.10
    
925.33
    
3,451.43
  
  

    
2-3 years
    
6,559.98
    
1,949.58
    
8,509.56
  
  

    
4-5 years
    
6,819.11
    
2,509.76
    
9,328.87
  
  

    
6-10 years
    
13,440.51
    
3,533.09
    
16,973.60
  
  

    
Beyond 10 years
    
3,151.58
    
1,773.20
    
4,924.78
  
  

    
Total
    
32,497.28
    
10,690.96
    
43,188.24
  



3 Fixed Assets

During the year Gross Block of the company increased by 9% over the previous year which
translated to Rs. 5,905.08 Crore. This was on account of capitalization of one unit of
Korba-ll (500MW) Power Project and one unit of Dadri-ll (490MW) Power Project. Net Block
however, increased by 13%. This was due to the fact that the company revised its
depreciation policy in line with opinion expressed by Comptroller & Auditor General of
India (explained in Note 16 of Notes on Accounts, Schedule 26) Dueto increase in
construction activities, there was an addition of Rs. 6,563.95 crore in the
capital-work-in-progress registering an increase of 25% over the last year. There was a
decrease of 7% in Construction Stores and Advances. On overall basis, Capital Works in
Progress and Construction stores and Advances increased by19%. Rs. C[Q[e


  

    

    
As at March 31
    
%
  
  

    

    
2011
    
2010
    
Change
  
  

    
Gross block
    
72,755.15
    
66,850.07
    
9%
  
  

    
Net Block
    
39,235.96
    
34,761.29
    
13%
  
  

    
Capital Work-in-Progress
    
33,326.34
    
26,762.39
    
25%
  
  

    
Construction stores and advances
    
4,944.29
    
5,341.92
    
-7%
  
  

    
CWIP + Construction stores & Adv.
    
38,270.63
    
32,104.31
    
19%
  
  

    
Total fixed assets
    
77,506.59
    
66,865.60
    
16%
  



4 Investments

Investments consist mainly of Bonds issued under One Time Settlement Scheme, Bonds
issued against outstanding dues and equity participation in joint ventures and
subsidiaries. The investments also include the deployment of surplus cash generated out of
operations in various treasury instruments issued by Government of India. During financial
year 2010-11, the investments decreased by about 17%. Broadly, the break-up of investments
is as follows:


  

    

    
As at March 31
  
  

    

    
2011
    
2010
  
  

    
Bonds issued under One time settlement scheme
    
8,170.29
    
9,821.74
  
  

    
Investments in Joint Ventures
    
3,121.63
    
2,480.31
  
  

    
Investment in subsidiaries
    
865.88
    
549.55
  
  

    
Investment of surplus cash in various instruments
    
175.04
    
1,943.49
  
  

    
Others
    
12.00
    
12.00
  
  

    
Total investments
    
12,344.84
    
14,807.09
  


Bonds issued against settlement of receivables account for 66% of total investments at
the end of financial year 2010-11. Bonds under One Time Settlement Scheme (OTSS) amounting
to Rs. 1,651.45 crore were redeemed during the year as per scheduled redemption. These
OTSS bonds carry a 'call option' giving right to SEBs to redeem the bonds before scheduled
redemption date. However, no call option was exercised by any SEB during the year 2010-11.

Your company invested Rs. 641.32 crore in following joint ventures during the year:


  

    
Name of JV
    
Amount
  
  

    
NTPC-Tamil Nadu Energy Company Ltd.
    
200.50
  
  

    
Meja Urja Nigam Private Limited
    
35.00
  
  

    
National Power Exchange Ltd.
    
1.36
  
  

    
Nabinagar Power Generating Company Pvt Ltd.
    
58.00
  
  

    
National High Power Test Laboratory Private Ltd.
    
1.74
  
  

    
International Coal Ventures Ltd.
    
1.30
  
  

    
Aravali Power Co. Pvt Ltd
    
318.96
  
  

    
Energy Efficiency Services Ltd.
    
24.38
  
  

    
CIL-NTPC Urja Pvt Ltd
    
0.08
  
  

    
Total
    
641.32
  


The company also invested Rs. 316.71 crore in subsidiaries as under:


  

    
Name of Subsidiary
    
Amount
  
  

    
NTPC Hydro Ltd.
    
11.91
  
  

    
Bhartiya Rail Bijlee Company Ltd.
    
142.31
  
  

    
Kanti Bijlee Utpadan Nigam Ltd.
    
162.49
  
  

    
Total
    
316.71
  


During the year one subsidiary 'Pipavav Power Development Co. Ltd' (PPDCL) was wound up
and its name was struck off from the register of companies on 28.01.2011. Accordingly,
investment in the PPDCL amounting to Rs. 0.38 crore was set off in full against the amount
received from GPCL in the earlier years in this regard.

There was an investment of surplus funds in short term funds for Rs. 175.04 crore. 


5 Current Assets

The current assets as on March 31,2011 and March 31, 2010 and the changes therein are
as follows:

Rs. crore


  

    
Current Assets
    
As at March31
    
YoY
    
%
  
  

    

    
2011
    
2010
    
Change
    
Change
  
  

    
Inventories
    
3,639.12
    
3,347.71
    
291.41
    
9%
  
  

    
Total Debtors
    
10,291.60
    
7,487.50
    
2,804.10
    
37%
  
  

    
Less: Provisions
    
2,367.29
    
836.04
    
1,531.25
    
183%
  
  

    
Net Sundry Debtors
    
7,924.31
    
6,651.46
    
1,272.85
    
19%
  
  

    
Cash and Bank balances
    
16,185.26
    
14,459.48
    
1,725.78
    
12%
  
  

    
Other Current Assets
    
1,046.97
    
844.04
    
202.93
    
24%
  
  

    
Loans and Advances
    
6,601.13
    
5,513.11
    
1,088.02
    
20%
  
  

    
Total Current Assets
    
35,396.79
    
30,815.80
    
4,580.99
    
15%
  


A major portion of current assets comprised of Cash and Bank balances. As on March 31,
2011, cash and bank balances stood at Rs. 16,185.26 crore being 46% of the total current
assets in comparison to Rs. 14,459.48 crore as at March 31, 2010 which was 47% of the
total current assets as on that date. Of this, ^15,858.92 crore was kept as term deposits
with banks as on March 31, 2011 while the term deposits for the last year was Rs.
13,825.52 crore.

The next largest component of current assets is Sundry Debtors. As on 31st March, 2011,
Total Sundry Debtors amounted toRs. 10,291.60 crore which is 18.7% of sales and equivalent
to 68 days sales. The corresponding figure as on 31st March, 2010 was Rs. 7,487.50 crore
which was 16.2% of sales and equivalent to 51 days sales.

The total sundry debtors include unbilled amount of Rs. 2,698.86 crore (previous year
Rs. 1,001.15 crore) in accordance with Accounting Policy No. 12.1 as explained in Note
3(a) of Notes on Accounts, Schedule 26. The Sundry Debtors outstanding net of unbilled
debtors is Rs. 7,592.74 crore and is equivalent to 51 days sales.

Provision of Doubtful debts/tariff adjustment as on 3103-2011 is Rs. 2,367.29 crore and
the details of such provision are as under:


  

    
S.No
    
Description
    
Amount
  
  

    
1.
    
DVB
    
835.97
  
  

    
2.
    
On Appeals of CERC pending disposal by Hon'ble Supreme Court
    
1,262.86
  
  

    
3.
    
Estimated impact of proposed amendment to Regulations,2009
    
263.59
  
  

    
4.
    
Others
    
4.87
  
  

    

    
Total
    
2,367.29
  


The existing provision of Rs. 835.97 crore in respect of dues of Delhi Vidyut Board is
being maintained pending resolution of the issue of its realization. The Company reviewed
the balance appearing in Sundry Debtors account as on 31-3-2010 and as a matter of
abundant precaution and to present conservative view in the Accounts to various
stakeholders, provision for tariff adjustment has been created for the impact of the
issues challenged by CERC in the Hon'ble Supreme Court on orders of APTEL for the period
2004-09, for the issues where the Company has given an undertaking for not pressing for
determination of tariff by CERC. During the year, the Company has provided an amount of
Rs. 1,262.86 crore as Tariff Adjustment.

During the year, CERC issued draft notification of proposed amendment to Tariff
Regulations,2009 for upfront truing up of Capital Cost as on 1-4-2009, with regard to un
discharged liability for tariff determination. Hence, Rs. 263.59 crore has been provided
as Tariff Adjustment for the impact of liabilities in capital cost for the years 2009-10
& 2010-11. Loans and advances increased by 20% as compared to previous financial year
on account of higher advance tax and tax deducted at source (Net of Provision for tax),
claims recoverable from Government on account of scrapping of project at Loharinagpala and
claims against railways.

The Loan and advances as on 31.03.2011 comprise of Rs. 2,617.90 crore towards advance
tax and tax deducted at source (net of provisions), Rs. 748.82 crore being claim
recoverable towards Loharinagpala (explained in Note 11 of Notes on Accounts, Schedule 26)
and Rs. 781.35 crore being claims against railways. Loan and Advances also include a loan
of Rs. 574.36 crore to the Government of Delhi subsequent to the conversion of the dues of
Delhi Vidyut Board under the one-time-settlement scheme. The Government of Delhi pays 8.5%
tax-free interest on this loan. The other loans and advances are mostly to suppliers and
contractors and also on account of advances extended to employees for various purposes
such as building of house, purchase of vehicles etc. as per the policies of your Company.
The advances to employees have come down from Rs. 153.89 crore as on 31.03.2010 to Rs.
11.61 crore as on 31.03.2011 mainly due to adjustment of adhoc advances to employees
pending pay revision against liability for pay revision appearing in current liabilities.

Inventories as at March 31,2011 were Rs. 3,639.12 crore being 10% of current assets as
against Rs. 3,347.71 crore as on March 31, 2010. Inventories mainly comprise of components
and spares and coal which are maintained for operating plants. Components and spares were
Rs. 1,741.25 crore as againstRs. 1,649.94 crore in previous year end. Coal inventory
amounted toRs. 1,255.50 crore as against Rs. 1,117.54 crore in previous year. 6 Current
Liabilities Rs. aore


  

    

    
As at March 31
    
YoY
    
%
  
  

    

    
2011
    
2010
    
change
    
change
  
  

    
Liabilities
    
10,320.48
    
7,687.58
    
2,632.90
    
34%
  
  

    
Provisions
    
2,752.43
    
3,070.58
    
-318.15
    
-10%
  
  

    
Total Current Liabilities
    
13,072.91
    
10,758.16
    
2,314.75
    
22%
  


The current liabilities as at March 31, 2011 were Rs. 10,320.48 crore as against Rs.
7,687.58 crore in the previous year. The current liabilities mainly comprise of creditors
for capital expenditure, creditors for supply of goods and services, deposits and
retention money from contractors. The creditors and retention money, deposits etc. at the
end of the year stood at Rs. 9,237.65 crore as against Rs. 6,884.40 crore in the previous
year.

The increase is mainly on account of increased construction activities at Barh, Rihand
and Vindhyachal, amount payable to railways and to fuel suppliers. Further, there has been
an increase in retention money from vendors.

Besides these, advances from customers as on 31.03.2011 was Rs. 451.25 crore as against
Rs. 293.54 crore in the previous year. An amount of Rs. 252.22 crores has been shown as
advance from customers pending disposal of certain issues challenged by them before
Hon'ble Supreme Court. (Refer Note 2(f) of Notes on Accounts, Schedule 26.) 


7 Provisions

As on March 31, 2011, your Company had provisions outstanding amounting to Rs. 2,752.43
crore as against Rs. 3,070.58 crore on 31st March 2010. This mainly comprised Rs. 1,731.97
crore (previous year Rs. 2,034.57 crore) being provision for estimated employee benefits
under AS 15 (Revised 2005) -"Employee Benefits" and provision towards employee
pension scheme (refer Note 5 of notes on Accounts, sch. 26). The provision in current year
is lower mainly due to reduction in provision amount after payment of pay revision arrears
to employees on finalization of pay-revision of employees in non-executive category.
Further, provisions include Rs. 659.63 crore on account of proposed dividend which would
be paid subject to approval of our shareholders. The income tax payable on the proposed
dividend is Rs. 103.93 crore included in the Provisions of financial year 2010-11. 8 Cash
flows

Cash, cash equivalents and cash flows on various activities for the past five years are
tabulated below:

Rs. crore


  

    

    
For the year ended March 31
  
  

    

    
2011
    
2010
    
2009
    
2008
    
2007
  
  

    
Opening Cash & cash equivalents
    
14,460
    
16,272
    
14,933
    
13,315
    
8,471
  
  

    
Net cash from operating activities
    
11,095
    
10,611
    
9,688
    
9,786
    
8,066
  
  

    
Net cash used in investing activities
    
-7,659
    
-10,514
    
-7,500
    
-5,819
    
-3,146
  
  

    
Net cash flow from financing activities
    
-1,711
    
-1,909
    
-849
    
-2,349
    
-76
  
  

    
Change in Cash and cash equivalents
    
1,725
    
-1,812
    
1,339
    
1,618
    
4,843
  
  

    
Closing cash & cash equivalents
    
16,185
    
14,460
    
16,272
    
14,933
    
13,315
  


Net cash used in investing activities decreased by 27% and was Rs. 7,659 crore in
financial year 2010-11 as compared to Rs. 10,514 crore in the previous year. Cash flows on
investing activities arise from expenditure on setting up power projects, investment of
surplus cash in various securities, investments in joint ventures and subsidiaries. Cash
invested on purchase of Fixed Assets increased by 3% i.e from Rs. 10,791 crore in 2009- 10
to Rs. 11,115 crore in 2010-11. During the year, there was sale of non-trade investments
and redemption of OTSS Bonds. Cash flows from sale of investment (Net of purchase of
investment) was Rs. 3,420 crore. However, no call option was exercised by SEBs on OTSS
bonds during the financial year 2010- 11. The net investment in Joint Venture companies
and subsidiaries was Rs. 957.65 crore in current financial year as against Rs. 742.51
crore during previous year. Cash generated from investing activities also reduced due to
reduction in interest amount on OTSS bonds.

During the year, out of cash raised from operating activities the company paid net Rs.
1,711 crore of cash for servicing financing activities as against Rs. 1,909 crore in the
previous year. During the financial year 2010-11 the company had an inflow of Rs. 9,845
crore from long term borrowings as against Rs. 6,982 crore in the previous year. Cash used
for repayment of long term borrowings during the current financial year was Rs. 4,797
crore as against Rs. 2,655 crore repaid in the previous year. Cash used for paying
dividend and the tax thereon was Rs. 3,651 crore. BUSINESS AND FINANCIAL REVIEW OF
SUBSIDIARIES Your Company has five subsidiary companies as on 31.03.2011 out of which
three are wholly owned by NTPC. During the year, the Registrar of Companies, Government of
Delhi and Haryana has under Section 560 of the Companies Act, 1956 struck off the name of
Pipavav Power Development Company Limited (wholly owned subsidiary of NTPC Ltd.). The
detailed financial statements of the subsidiaries are included in this Annual Report
elsewhere. The performance of the five subsidiaries is briefly discussed here: 

(a) NTPC Electric Supply Company Limited (NESCL) The financial highlights of the
Company are as under:


  

    
Particulars
    
FY 2010-11
    
FY2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity
    
0.08
    
0.08
  
  

    
Gross Income
    
64.05
    
79.96
  
  

    
Profit After Tax
    
6.01
    
26.59
  
  

    

    
Rs. Per Share
  
  

    
Earnings Per Share
    
743.42
    
3,286.38
  


The company was formed on August 21, 2002 as a wholly owned subsidiary company of NTPC
with an objective to make a foray in the business of distribution and supply of electrical
energy as a sequel to reforms initiated in the power sector. Presently, the company is
undertaking the following activities: The company has been involved in the execution of
work on turnkey basis under the Government's rural electrification program namely
"Rajiv Gandhi Grameen Vidyuti-Karan Yojana" in 29 districts in 5 States, namely,
Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha and West Bengal covering more than 38,000
villages and approximately 27 lakh Below Poverty Line (BPL) connections. 4,315
Un-electrified/De-electrified (UE/ DE) villages were made ready and 12.52 Lakh Below
Poverty Line (BPL) Rural house hold connections were provided during the financial year
2010-11. The cumulative achievement till 31.03.11 is 14,433 UE/DE villages and 23.23 Lakh
BPL connections. Key on-going assignments of NESCL include Project management consultancy
work for setting up 220 kV substations, switch yard and associated facilities at BPCL
Kochi Refinery obtained through competitive bidding process and turnkey execution of 2x20
MVA, 66/11 kV sub-station and augmentation of 66/11 kV sub-station with new 1x30MVA Power
transformer for Union Territory of Chandigarh.

The Company has proposed a final dividend of Rs. 4 crorefor theyear2010-11. Joint
venture of NESCL

The company has made a foray into the distribution sector by formation of a JV company
KINESCO Power & Utility Pvt. Ltd. with Kerala Industrial Infrastructure Development
Corporation (KINFRA) to take up retail distribution of power in various Industrial Parks
developed by KINFRA in Kerala and other SEZs and industrial areas. The new JV Company has
taken over the operations from 1st Feb 2010. As on 31.3.2011, the paid up capital of the
Company is Rs. 0.10 crore and Rs. 0.26 crore of share application money is pending for
allotment, (b) NTPC Vidyut Vyapar Nigam Limited (NVVN)

The financial highlights of the Company are as under:


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity
    
20.00
    
20.00
  
  

    
Gross Income
    
78.95
    
85.13
  
  

    
Profit After Tax
    
30.06
    
28.39
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share
    
15.03
    
14.20
  


The company was formed on November 1, 2002 as a wholly owned subsidiary company of NTPC
with an objective to undertake business of sale and purchase of electric power, to
effectively utilise installed capacity and thus enabling reduction in the cost of power.
During the year 2010-11, the company transacted business with various State Electricity
Boards spread all over the country and traded 6,933 MUs of electricity in comparison to
5,549 MUs traded in the previous year which amounts to an increase of 25% over the
previous year. NWN has been designated as the Nodal Agency by the Ministry of Power (MoP),
Govt, of India for purchase and sale of grid connected solar power upto 1,000 MW as a part
of Phase-I (2009-13) of Jawaharlal Nehru National Solar Mission (JNNSM).The role of NWN
envisages purchase of Solar Power from Solar Power Developers (SPDs) and bundling the same
with equivalent capacity of unallocated power from NTPC Coal Stations to be allocated by
MoP for sale to State Utilities/DISCOMs. The Board of NWN approved the proposal for
entering PPAs with 37 Solar Power Developers for a cumulative Capacity of 620 MW
comprising 30 SPDs for 150 MW of Solar PV Projects and 7 SPDs for Solar Thermal Projects
of 470 MW Capacity under Phase I, Batch I of the Jawaharlal Nehru National Solar Mission.
PPAs have been signed with 36 SPDs.

This is in addition to the already tied up solar capacity of 84 MW under the Migration
Scheme of MNRE under JNNSM.

The Company has proposed a final dividend of Rs. 15.00 crore for the year 2010-11. (c)
NTPC Hydro Limited (NHL)

The financial highlights of the Company are as under:

Rs. Crore


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    
NTPC's investment in equity (incl. share capital deposit)
    
114.46
    
102.55
  
  

    
Loss
    
Nil
    
Nil
  
  

    
Fixed Assets including CWIP
    
108.73
    
97.95
  


In furtherance of its efforts to take forward the hydro capacity addition and to give
exclusive thrust to small and medium sized Hydro Power Projects upto 250MW capacity, NTPC
Ltd. has set up a wholly owned subsidiary company named "NTPC Hydro Ltd." in
December, 2002. Presently the company is implementing the following projects:

• Lata Tapovan hydro electric project (171 MW) in the state of Uttrakhand. All the
statutory clearances have been obtained and entire land required for the project has been
physically acquired. The project has been planned to be executed on EPC route consisting
of two main EPC packages. The EPC package, namely, Civil including Hydro Mechanical Works
is under re-tendering process and award is envisaged during the financial year 2011-12.
The second EPC package, namely, EM Works is also under bidding process. The project shall
be developed as a regional power station with 12% free power to Govt, of Uttarakhand. The
power generated from the project would be provided to the beneficiaries of Northern Region
States. The project is slated for commissioning during 12th Plan period. The estimated
cost of the project is Rs. 792 crores (includes IDC) at Oct' 2005 price level. Annual
generation from the project is estimated as 869 MUs.

• Rammam-III (120 MW) in the state of West Bengal-All the statutory clearances
have been obtained and majority of land acquisition activities have been completed.
Various infrastructure developmental works are under progress. The main EPC package,
namely, Civil & HM Works is currently under tendering process and award is envisaged
during the year 2011-12.The project is for the benefit of West Bengal and Sikkim States
and is slated for commissioning during 12th Plan. Annual generation from this project is
estimated as 476 MUs.

As on 31.3.2011, the paid up capital of the Company is Rs. 113.96 crore and Rs. 0.5
crore of share application money is pending for allotment.


(d) Kanti Bijlee Utpadan Nigam Limited

As per the decision of Govt, of India, a new company named 'Vaishali Power Generating
Company Ltd.' was incorporated on September 6, 2006 as a subsidiary of NTPC to take over
Muzaffarpur Thermal Power Station (MTPS) (2x110 MW). The Companywas rechristened as 'Kanti
Bijlee Utpadan Nigam Limited' on 10.04.2008. The present equity contribution in the
company is 64.57% by NTPC and 35.43% by BSEB. Unit#2of 110MWofstage-lwas declared
commercial in October 2010.Renovation and Modernization (R&M) of existing units 2X110
MW is being carried-out by BHEL.

For stage II (2x195 MW) BSEB has given consent for equity participation. Main Plant
Civil, CW, Offsite Civil Works, Chimney and Chimney Elevator package has been awarded to
HCC on 04.02.11. As on 31.3.2011, the paid up capital of the Company is Rs. 88.51 crore
and Rs. 256.15 crore of share application money pending for allotment. The financial
highlights of the Company are given below:

Rs. Crore


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    
NTPC's investment in equity (incl share capital deposit)
    
221.88
    
59.39
  
  

    
Gross Income
    
51.06
    
-
  
  

    
Loss
    
14.58
    
0.08
  
  

    
Earnings per share (Rs. )
    
(1.66)
    
(0.13)
  



(e) Bhartiya Rail Bijlee Company Limited (BRBCL)

'Bhartiya Rail BijIee Company Limited' was incorporated as a subsidiary of NTPC on
November 22, 2007 having equity participation of 74:26 by NTPC Ltd. and Ministry of
Railways, Govt, of India respectively for setting up of 4 units of 250 MW each of coal
based power plant at Nabinagar, district Aurangabad, Bihar. PPA (Power Purchase Agreement)
signed with Indian Railways on 16.12.2010. A Loan agreement was signed with REC for Rs.
1,498.75 crores on 23.03.2011.Ason31.3.2011, the paid up capital of the Company isRs. 480
crore and Rs. 291.46 crore of share application money is pending for allotment.

The financial highlights of the Company are given below:


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. crore
  
  

    
NTPC's investment in equity (incl. share capital deposit)
    
509.46
    
367.15
  
  

    
Loss
    
0.02
    
0.02
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share
    
(0.00)
    
(0.00)
  



BUSINESS AND FINANCIAL REVIEW OF JOINT VENTURE COMPANIES

a) Utility Powertech Limited (UPL)

The financial highlights of the Company are as under:


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity
    
1.00
    
1.00
  
  

    
Gross Income
    
306.15
    
262.92
  
  

    
Profit After Tax
    
2.79
    
8.98
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share
    
6.97
    
22.45
  


UPL is a 50:50 joint venture company of NTPC and Reliance Infrastructure Limited formed
to take up assignments of construction, erection and supervision in power sector and other
sectors in India and abroad as well as to provide man power to power, telecom and other
sectors. As on 31.03.2011, the paid up equity capital of the Company is Rs. 4 crore with
50% share of your company. NTPC's investment in share capital is Rs. 1.00 crore.


b) NTPC-SAIL Power Company Pvt. Ltd. (NSPCL)

NSPCL, a 50:50 Joint venture Company of your company and SAIL was incorporated on
08.02.1999 for running the Captive Power Plants of SAIL at Durgapur, Rourkela and Bhilai.

NSPCL owns and operates a capacity of 814 MW mostly as captive power plants for SAIL's
steel manufacturing facilities located at Durgapur, Rourkela and Bhilai. Captive power
plants (314 MW) of NSPCL recorded generation of 2,668 MUs at 96.98% PLF which was the
highest ever since inception. Further, both 250 MW units of Bhilai Expansion (2X250MW)
achieved 91.73% PLF and generated 4,018MUs.

As on 31.03.2011, the paid up capital of the Company is Rs. 950.5 crore and out of
this, 50% has been contributed by your company.

The financial highlights of this Company are as under:


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity
    
475.25
    
475.25
  
  

    
Gross Income
    
1,440.98
    
957.09
  
  

    
Profit After Tax
    
191.34
    
83.93
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share
    
2.01
    
0.88
  


NSPCL has recommended a final dividend of Rs. 104.56 crore of which NTPC's share is Rs.
52.28 crore.


c) NTPC-ALSTOM Power Services Private Limited (NASL)

The financial highlights of the Company are as under:


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity
    
3.00
    
3.00
  
  

    
Gross Income
    
28.48
    
28.56
  
  

    
Profit After Tax
    
0.99
    
1.28
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share
    
1.66
    
2.14
  


NASL is a 50:50 joint venture company between NTPC and ASLTOM POWER GENERATION AG,
Germany. The company was formed on 27.09.1999 for taking up Renovation & Modernization
assignments of power plants both in India and SAARC countries. During 201011, NASL has
submitted technical bids for Residual Life Assessment (RLA) studies of Boilers and
Generators at Singrauli, Vishakhapatnam and Rourkela Steel plant etc. The Company has
received an order to the tune of Rs. 123.25 crore from NALCO towards Retrofitting of ESP
units at Angul, Odisha. NASL is also engaged in execution of various contracts in power
station of various State Electricity Boards power stations at Bhatinda, Amarkantak, Tanda,
Talcher etc. As on 31.03.2011, the paid up capital of the Company is Rs. 6 crore with 50%
being contributed by your company.

d) NTPC Tamil Nadu Energy Company Ltd. (NTECL) NTPC Tamil Nadu Energy Company Ltd, was
formed as a 50:50 joint venture between your company and Tamil Nadu Electricity Board
(TNEB) on May 25, 2003 to develop and operate 1500MW power project at Vallur. The project
is named as Vallur Thermal Power Project and is expected to use Ennore port infrastructure
facilities. Mega Power Status was accorded to the project (3x500 MW) on 12.03.08.

The construction work at site is in full swing. Commissioning activities for unit No. 1
of Phase-I has been taken up from 1st Mar'11. For Unit #2 of Phase-I, TG erection has
commenced on 28.03.11. For Phase -II unit, ESP Erection started on 21.01.11. The paid up
capital of the Company is Rs. 1,162 crore and out of this, 50% has been contributed by
your company. Further as on 31.03.2011, the amount of Share Capital Deposit pending for
allotment is Rs. 120 crore out of which NTPC's share is Rs. 60 crore.


e) Ratnagiri Gas and Power Pvt. Limited (RGPPL)

Ratnagiri Gas and Power Private Ltd has been formed as joint venture between NTPC,
GAIL, MSEB Holding Co. Ltd. and Indian Financial institutions with NTPC having a stake of
30.17% for taking over and operating erstwhile Dabhol Power Project assets consisting of
1,967.08 MW Gas based combined cycle Power Block and 5 MMTPA LNG Block. The assets were
transferred to RGPPL in October 2005 and the Power Block, spearheaded by your company, has
been fully revived and under commercial operation since May 19, 2009. The LNG Block,
spearheaded by GAIL, is yet to be commissioned with some marine facilities still to be
completed for bringing in the commissioning cargo.

The total generation from Power Block during 2010-11 was 11,706 MUs against a CERC
target of 67% availability/11,000 MUs. Gol has allocated full quantum of domestic gas from
KG basin required for Power Blocks (about 8.5 MMSCMD). RGPPL had commenced power
generation using domestic gas from KG D-6 basin from September 30, 2009. The current drawl
is around 7.6 MMSCMD. The rehab of 5 gas turbines out of 6 commissioned has been completed
till date.

As on 31.03.2011, the paid up capital of the Company is Rs. 2,297 crore and out of
this, Rs. 692.90 crore (30.17%) has been contributed by your company.

The financial highlights of the Company are as under:

Rs. crore


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    
NTPC's investment in equity(*incl. share capital deposit)
    
692.90
    
692.90*
  
  

    
Gross Income
    
4,565.50
    
3,770.34
  
  

    
Profit
    
504.91
    
48.83
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share (Basic)
    
2.20
    
0.24
  



f) Aravali Power Company Private Limited

Aravali Power Company Private Limited (A Joint Venture Company of NTPC Ltd.,
Indraprastha Power Generating Co. Ltd. [IPGCL] of Delhi Govt, and Haryana Power Generating
Co. Ltd. [HPGCL] of Haryana Govt.) is setting up Aravali Super Thermal Power Project of
1,500 MW (3x500 MW), a coal fired power plant, in Jhajjar District of Haryana. The project
is being set up by NTPC on concept-to-commissioning basis. NTPC Ltd. would also operate
and maintain the station on Management Contract basis for at least 25 years. The power
from this Project will be shared on 50:50 basis, between Haryana and NCT of Delhi.

Unit-I started commercial operation w.e.f. from 05.03.2011. Construction activities for
Unit No. II and Unit No. Ill are in full swing.

As on 31.03.2011, the paid up capital of the Company is Rs. 1,317.05 crore with 50%
being contributed by NTPC Ltd. Further as on 31.03.2011, the amount of Share Capital
Deposit pending for allotment is Rs. 650.94 crore out of which NTPC's share is Rs. 318.96
crore.


  

    

    

    
Rs. crore
  
  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    
NTPC's investment in equity (incl. share capital deposit)
    
977.48
    
658.52
  
  

    
Gross Income
    
47.43
    
-
  
  

    
Profit (Loss)
    
(37.64)
    
(0.33)
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share(Basic)
    
(0.29)
    
-
  



g) NTPC-SCCL Global Venture Pvt. Ltd

NTPC Limited along with Singareni Collieries Company Limited formed a 50:50 joint
venture Company under the name and style of "NTPC-SCCL Global Ventures Private
Limited" on July 31, 2007 to undertake various activities in coal and power sectors
including acquisition of coal/lignite mine blocks, development and operation of integrated
coal based power plants and providing consultancy services. Both NTPC and SCCL hold 50%
equity each. As on 31.03.2011, the paid up capital of the Company is Rs. 0.10 crore, out
of which 50% has been contributed by your company.


h) Meja Urja Nigam Private Limited

NTPC has formed a JV Company with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited
(UPRVUNL) under the name "Meja Urja Nigam Private Limited" on April 2, 2008 for
setting up a power plant of 1,320 MW (2X660 MW) at Meja Tehsil in Allahabad district in
the state of Uttar Pradesh.

All statutory clearances are available for the project. For STG package, LOI has been
issued to Toshiba on 27.01.2011. For Balance of Plant, NIT done for 27 packages and bids
opened for 20 packages.

As on 31.03.2011, the paid up capital of the Company is Rs. 146.86 crore and out of
this, 50% has been contributed by NTPC Ltd. Further as on 31.03.2011, out of Share Capital
Deposit pending for allotment amounting to Rs. 22.00 crore, Rs. 11.00 crore being 50% of
the total Share Capital Deposit has been contributed by your company.

i) NTPC BHEL Power Projects Pvt Ltd. (NBPPL) "NTPC BHEL Power Projects Pvt
Ltd." was formed on April 28, 2008 as a JV Company with Bharat Heavy Electrical Ltd
(BHEL) for carrying out Engineering Procurement and Construction (EPC) activities in the
power sector and to engage in manufacturing and supply of equipment for power plants and
other infrastructure projects in India and abroad. Foundation stone laid for power
equipment manufacturing Plant at Mannavaram in Sept' 2010.

BHEL has given Balance of Plant packages for Palatana Combined Cycle Power Plant in
Tripura and Namrup Combined Cycle Power plant in Assam.

As on 31.03.2011, the paid up capital of the Company is Rs. 50.00 crore, out of this,
50% has been contributed by your company.


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. crore
  
  

    
NTPC's investment in equity
    
25.00
    
25.00
  
  

    
Gross Income
    
108.84
    
4.22
  
  

    
Profit (Loss)
    
9.26
    
(0.76)
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share(Basic)
    
1.85
    
(0.94)
  



j) BF-NTPC Energy Systems Limited

"BF-NTPC Energy Systems Limited" (BFNESL) was formed on June 19, 2008 with
Bharat Forge Limited (BFL) to establish a facility to take up manufacturing of castings,
forgings, fittings and high pressure piping required for power projects and other
industries, Balance of Plant (BOP) equipment for the power sector. 90.17 acres land has
been acquired at Solapur for setting up the factory and award of topography &
geotechnical works for the site is expected shortly. As on 31.03.2011, the paid up capital
of the Company is Rs. 12.00 crore with 49% i.e. 5.88 crore being contributed by your
company. 


k) Nabinagar Power Generating Company Private Limited

'Nabinagar Power Generating Company Private Limited' (NPGCL) was incorporated as a JV
Company on September 9, 2008 with equal equity contribution from Bihar State Electricity
Board for setting-up of a coal based power project at New Nabinagar in district Aurangabad
of State of Bihar. The project will have a capacity of 1,980 MW (3X660 MW). The Company
will also undertake operation & maintenance of the project after its commissioning.

Feasibility Report of the project was approved by NPGCL Board on 02.07.09.Land
acquisition activities have been initiated. MoEF has accorded environmental clearance for
stage - I (3x660 MW) on 27.12.2010. In-principle approval for Coal Linkage received from
the MOC.

As on 31.03.2011, the paid up capital of the Company is Rs. 306.00 crore of which 50%
capital was contributed by your company. 


l) National Power Exchange Limited (NPEX)

'National Power Exchange Limited' (NPEX) was incorporated as a JV Company with NHPC
Ltd., Power Finance Corporation Ltd. and Tata Consultancy Services Ltd. on December 11,
2008 to set up and operate a Power Exchange at National level. This Power Exchange would
provide a neutral and transparent electronic platform for trading of power on "day
ahead basis" and ensure clearing of all trades in a transparent, fair and open manner
with access to all players in the power markets. An in-principle approval by CERC to set
up and operate a national level power exchange was received on July 1, 2009. New
Regulations for power exchange have been issued by Central Electricity Regulatory
Commission on 20th Jan 2010. The Company has initiated action for compliance and aligning
itself to these regulations. NPEX has submitted the revised Rules and Bye Laws for CERC
approval on 30.03.2011. The Company has an authorized share capital of Rs. 50.00 crore.
During the financial year 2010-11, paid-up share capital has been increased from Rs. 5.00
crore to Rs. 13.13 crore. New shareholders have been inducted to have a diversified
shareholding as per Regulations. Percentage shareholding of Tata Consultancy Services has
been reduced from 50% to 19.04%. Holding of Government and non-Government entities is
maintained at 50:50.


m) International Coal Ventures Private Limited (ICVL) 

A JV Company was incorporated on May 20, 2009 under the name "International Coal
Ventures Private Limited" (ICVL) in association with Steel Authority of India (SAIL),
Coal India Limited (CIL), Rashtriya Ispat Nigam Limited (RINL) and NMDC Limited (NMDC).
SAIL, CIL, RINL, NMDC and NTPC shall contribute in the equity share capital of the Company
in the ratio of 2:2:1:1:1 respectively. The Company has been incorporated for the purpose
of carrying on business for overseas acquisition and/ or operation of coal mines or
blocks/ companies for securing coking and thermal coal supplies. ICVL is pursuing coal
opportunities from countries like Australia, Indonesia, Mozambique, South Africa and USA.
As on 31.03.2011, the paid up capital of the Company is Rs. 9.8 crores


n) National High Power Test Laboratory Private Limited (NHPTLPL)

Your Company has formed a JV Company on May 22, 2009 under the name "National High
Power Test Laboratory Private Limited" (NHPTLPL) in association with NHPC Limited
(NHPC), Power Grid Corporation of India Limited (PGCIL) and Damodar Valley Corporation
(DVC). All JV partners have contributed in the equity share capital of the Company. The
Company has been incorporated for setting up an On-line High Power Test Laboratory for
short-circuits test facility in the Country. The project Feasibility Report has been
submitted by Technical Consultants, CSEI, Italy. As on 31.03.2011, the paid up capital of
the Company is Rs. 10.50 crore which includes Rs. 2.62 crore being 25% of paid up equity
capital contributed by NTPC Ltd.


o) Energy Efficiency Services Pvt. Limited

A JV company has been formed on December 10, 2009 under the name "Energy
Efficiency Services Limited" with Power Finance Corporation Limited (PFC), Power grid
Corporation of India Limited (PGCIL) and Rural Electrification Corporation Limited (REC)
to carry on and promote the business of Energy Efficiency and climate change including
manufacture and supply of energy efficiency services and products. NTPC, PFC, PGCIL and
REC hold shares in the equity share capital of the Company equally.

As on 31.03.2011, the paid up capital of the Company is Rs. 2.50 crore and the share
application money pending for allotment in the Company is Rs. 97.50 crore. 


p) Transformers and Electricals Kerala Limited (TELK)

In line with the Business Collaboration and Shareholders Agreement executed between
NTPC Limited, Government of Kerala and Transformers and Electricals Kerala Limited (TELK),
44.6% of paid-up capital of TELK was acquired from Government of Kerala at a total value
of Rs. 31.34 crore. The shares were credited in NTPC's Demat Account on 19.06.2009. TELK
is engaged in manufacturing and repair of heavy duty transformers. During the year
2010-11, TELK produced 5168 MVA transformers. After a long span of 30 years, TELK paid
dividend @ 20 % for the year 2009-10. As on 31.03.2011, the paid-up capital of the Company
is Rs. 42.97 crore with Rs. 31.34 crore contributed by your company for acquiring 44.60%
of the paid-up capital of TELK.


  

    
Particulars
    
FY 2010-11
    
FY 2009-10
  
  

    

    
Rs. Crore
  
  

    
NTPC's investment in equity (incl. share capital deposit)
    
31.34
    
31.34
  
  

    
Gross Income
    
204.42
    
208.55
  
  

    
Profit
    
11.74
    
29.68
  
  

    

    
Rs. Per Share
  
  

    
Earnings per share (Basic)
    
2.73
    
6.91
  



q) CIL NTPC Urja Private Limited

A Joint Venture Company between NTPC Limited and Coal India Limited (CIL) was
incorporated on April 27, 2010 under the name "CIL NTPC Urja Private Limited".
Both NTPC and CIL will contribute equally in the equity share capital of the Company. This
Company has been formed with the aim of undertaking the Development, Operation &
Maintenance of Coal Blocks at Brahmini and Chichro Patsimal in Jharkhand and Integrated
Coal Based Power Plant(s).

The company has decided to commence exploration of Brahmini North (North side of
Brahmini river) in first phase during first quarter of 2011-12. Detailed exploration work
shall commence after section 4 notification. The job of exploration and preparation of
Geological Report has been assigned to Central Mine Planning & Design Institute
Limited. As on 31.03.2011, NTPC's share capital deposit pending allotment is Rs. 0.08
crore. 


r) Anushakti Vidhyut Nigam Limited

A Joint Venture Company between your company and Nuclear Power Corporation of India
Limited (NPCIL) was incorporated on January 27, 2011 under the name "Anushakti
Vidhyut Nigam Limited". NPCIL and NTPC would hold 51% and 49% of the equity share
capital respectively. The Company has been formed for the purpose of development of
nuclear power projects in the country within the framework of Atomic Energy Act, 1962.


Consolidated Financial Statements of NTPC Ltd, its Subsidiaries and Joint Venture
Companies

The consolidated Financial statements have been prepared in accordance with Accounting
Standards (AS)-21 - " Consolidated Financial Statements" and Accounting
Standards(AS) 27 -"Financial reporting of Interests in Joint Ventures" and are
included in this Annual report.

A brief summary of the results on a consolidated basis is given below:


  

    

    
FY 2010-11
    
FY 2009-10
  
  

    
Gross Income
    
60,008.18
    
51,203.56
  
  

    
Profit before Tax
    
12,392.33
    
11,049.11
  
  

    
Profit after Tax
    
9,348.23
    
8,837.65
  
  

    
Net Cash from operating activities
    
12,074.90
    
11,948.93
  



CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis and in the Directors' Report,
describing the Company's objectives, projections and estimates, contain words or phrases
such as "will", "aim", "believe", "expect",
"intend", "estimate", "plan", "objective",
"contemplate", "project" and similar expressions or variations of such
expressions, are "forward-looking" and progressive within the meaning of
applicable laws and regulations. Actual results may vary materially from those expressed
or implied by the forward looking statements due to risks or uncertainties associated
therewith depending upon economic conditions, government policies and other incidental
factors. Readers are cautioned not to place undue reliance on these forward-looking
statements.

For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Date: August 04, 2011


ANNEX-II TO DIRECTORS' REPORT

REPORT ON CORPORATE GOVERNANCE


Corporate Governance Philosophy

In our Company, Corporate Governance philosophy stems from our belief that corporate
governance is a key element in improving efficiency and growth as well as enhancing
investor confidence and accordingly, the Corporate Governance philosophy has been scripted
as under:

"As a good corporate citizen, the Company is committed to sound corporate
practices based on conscience, openness, fairness, professionalism and accountability in
building confidence of its various stakeholders in it thereby paving the way forits long
term success."

Our company believes in Corporate Growth including all the key areas of Corporate
Governance by combining best legal & management practices, ethics, wealth creation
management and foresight. NTPC not only believes in adopting best corporate governance
systems but also in proactive inclusion of public interest in its corporate priorities and
has developed extensive societal outreach.

Besides adhering to provisions of Listing Agreement, we are also following guidelines
on Coporate Governance issued by Department of Public Enterprises, Government of India.


1.2 CORPORATE GOVERNANCE RECOGNITIONS

In recognition of excellence in Corporate Governance, the following accolades have been
conferred on NTPC in recent years:

(i) 'ICSI National Award for Excellence in Corporate Governance - 2009' by the
Institute of Company Secretaries of India

(ii) 'Golden Peacock Global Award for Excellence in Corporate Governance' by World
Council for Corporate Governance in the years 2007 and 2009

(iii) 'Golden Peacock National Award for Excellence in Corporate Governance' by World
Council for Corporate Governance in the year 2008

(iv) SCOPE Meritorious Award for Good Corporate Governance for the year 2005-06.


2. BOARD OF DIRECTORS

2.1 Size of the Board

We are a Government Company within the meaning of section 617 of the Companies Act,
1956 as the President of India presently holds 84.5% of the total paid-up share capital.
As per Articles of Association, the power to appoint Directors vests in the President of
India.

In terms of the Articles of Association of the Company strength of our Board shall not
be less than four Directors or more than twenty Directors. These Directors may be either
whole-time Directors or part-time Directors. The constitution of the Board is as under:

(i) Seven functional Directors including the Chairman & Managing Director,

(ii) Two government nominees and

(iii) Nine independent directors as per the requirement of the Listing Agreement.


2.2 Composition

The Board of Directors have an optimum combination of executive and non-executive
Directors. As on 31st March 2011, the Board comprised eighteen Directors out of which
seven were whole-time Directors including the Chairman & Managing Director. Two
Directors are nominees of the Government of India. The Board also has nine independent
Directors who have been appointed by the Government of India through a Search Committee
constituted for the purpose. The Directors bring to the Board wide range of experience and
skills.

The listing agreements with stock exchanges stipulate half of the Board members to be
independent directors.

We are compliant with Clause 49 (IA) of the Listing Agreement regarding composition of
the Board of Directors.


2.3 Age limit and tenure of Directors

The age limit of the Chairman & Managing Director and other whole-time Directors is
60 Years.

The Chairman & Managing Director and other whole time Directors are appointed for a
period of five years from the date of taking over the charge or until the date of
superannuation of the incumbent, or until further orders from the Government of India,
whichever event occurs earlier.

Government Nominee Directors representing Ministry of Power, Government of India retire
from the Board on ceasing to be officials of the Ministry of Power.

Independent Directors are appointed by the Government of India for tenure of three
years.


2.4 Resume of Directors

The brief resume of Directors retiring by rotation and Additional Directors seeking
appointment including nature of their experience in specific functional areas, names of
companies in which they hold directorship and membership/chairmanship of Board/Committees
is appended to the notice calling the Annual General Meeting.


2.5 Board Meetings

The meetings are convened by giving appropriate advance notice after obtaining approval
of the Chairman of the Board/ Committee. To address specific urgent need, meetings are
also being called at a shorter notice. In case of exigencies or urgency, resolutions are
passed by circulation.

Detailed agenda, management reports and other explanatory statements are circulated in
advance in the defined agenda format amongst the members for facilitating meaningful,
informed and focused decisions at the meetings. Where it is not practicable to circulate
any document or the agenda is of confidential nature, the same is tabled with the approval
of CMD. Sensitive matters are discussed at the meeting without written material being
circulated.

The meetings of the Board of Directors are normally held at the Company's registered
office in New Delhi.

Sixteen Board Meetings were held during the financial year 2010-11 on April 21, April
30, May 17, June 3, June 21, July 26, August 17, August 30, September 21, October 26,
November 12, December 7, 2010, January 31, February 24, March 3 and March 23, 2011. The
maximum interval between any two meetings during this period was 55 days. Details of
number of Board meetings attended by Directors, attendance at last AGM, number of other
directorship/ committee membership (viz., Audit Committee and Shareholders Grievance
Committee as per the Listing Agreement) held by them during the year 2010-11 are tabulated
below:


  

    
S. No.
    
Directors
    
Meeting held during respective tenures of Directors
    
No. of Board Meetings Attended
    
Attendance at the last AGM (held on 23.09.10)
    
Number of other Directorships held on 31.03.11
    
Number of Committee memberships in companies on 31.03.11
    $
  
  

    

    

    

    

    

    

    
As Chairman
    
As Member
  
  

    
Functional Directors 
    

    

    

    

    

    

    

  
  

    
1.
    
Shri Arup Roy Choudhury Chairman & Managing Director (w.e.f.01.09.2010)
    
8
    
8
    
yes
    
7
    

    

  
  

    
2.
    
Shri R.S. Sharma Chairman & Managing Director (upto31.08.2010)
    
8
    
8
    
NA*
    
NA*
    
NA*
    
NA*
  
  

    
3.
    
Sh. Chandan Roy Director (Operations) (upto31.07.2010)
    
6
    
5
    
NA*
    
NA*
    
NA*
    
NA*
  
  

    
4.
    
Shri A.K. Singhal Director(Finance)
    
16
    
16
    
yes
    
8
    
4
    
1
  
  

    
5.
    
Shri R.C. Shrivastav Director(Human Resources) (upto 30.06.2010)
    
5
    
5
    
NA*
    
NA*
    
NA*
    
NA*
  
  

    
6.
    
Shri I.J. Kapoor Director(Commercial)
    
16
    
15
    
yes
    
6
    
-
    
-
  
  

    
7.
    
Shri B.P. Singh Director(Projects)
    
16
    
16
    
yes
    
4
    
1
    
1
  
  

    
8.
    
Shri D.K. Jain Director(Technical) (from 13.05.2010)
    
14
    
13
    
yes
    
5
    

    
1
  
  

    
9.
    
Shri S.P. Singh Director(Human Resources) (from 16.10.2010)
    
7
    
6
    
NA*
    
4
    

    
1
  
  

    
10.
    
Shri N.N. Misra Director(Operations) (from 19.10.2010)
    
7
    
7
    
NA*
    
6
    

    
3
  
  

    
Non-executive Directors (Government Nominees) 
    

    

    

    

    

    

    

  
  

    
11.
    
Shri I.C.P. Keshan JS (Th.), Ministry of Power
    
16
    
15
    
yes
    
1
    
-
    
-
  
  

    
12.
    
Shri Rakesh Jain JS&FA, Ministry of Power
    
16
    
15
    
yes
    
5
    
2
    
3
  
  

    
Independent Directors 
    

    

    

    

    

    

    

  
  

    
13.
    
Shri M.N. Buch Former Secretary, GOI
    
16
    
15
    
No
    
-
    
-
    
-
  
  

    
14.
    
Shri Shanti Narain FormerMember, Railway Board
    
16
    
12
    
yes
    
2
    

    
4
  
  

    
15.
    
Shri P.K. Sengupta FormerCMD, Coal India Ltd.
    
16
    
16
    
No
    
1
    
-
    
1
  
  

    
16.
    
Shri K. Dharmarajan Former DG,IIFT
    
16
    
11
    
No
    
2
    
1
    
-
  
  

    
17.
    
Dr. M. Govinda Rao Director, NIPFP
    
16
    
12
    
yes
    
1
    
1
    
-
  
  

    
18.
    
Shri Kanwal Nath Ex Deputy, C&AG
    
16
    
10
    
yes
    
1
    
-
    
1
  
  

    
19.
    
Shri Adesh Jain President, Project Management Associates, Centre for Excellence in
    Project Management
    
16
    
11
    
No
    
3
    

    

  
  

    
20.
    
Shri A.K. Sanwalka Ex-General Manager, Northeast Frontier Railway
    
16
    
13
    
No
    

    

    
1
  
  

    
21.
    
Shri Santosh Nautiyal Ex-Chairman, National Highway Authority of India
    
16
    
16
    
yes
    
4
    

    
2
  


*NA indicates that concerned person was not a Director on NTPC's Board on the relevant
date.

$ In line with clause 49 of Listing Agreement, only the Audit Committee and
Shareholders/ Investors Grievance Committee have been taken into consideration in
reckoning the number of committee memberships of Directors or Chairman and as Member.


2.6 Information placed before the Board of Directors:

The Board has complete access to any information within the Company. The information
regularly supplied to the Board includes:

> Annual operating plans and budgets and any updates.

> Capital Budgets and any updates.

> Review of progress of ongoing projects including critical issues and areas needing
management attention

> Annual Accounts, Directors' Report, etc.

> Quarterly financial results.

> Minutes of meetings of Audit Committee and other Committees of the Board.

> Minutes of meetings of Board of Directors of subsidiary companies.

> The information on recruitment and promotion of senior officers to the level of
Executive Director which is just below the Board level and Company Secretary.

> Fatal or serious accidents, dangerous occurrences, etc.

> Operational highlights and substantial nonpayment for goods sold by the Company.

> Major investments, formation of subsidiaries and Joint Ventures, Strategic
Alliances, etc.

> Award of large value contracts.

> Disclosure of Interest by Directors about directorship and committee positions
occupied by them in other companies.

> Quarterly Report on foreign exchange exposures.

> Quarterly Report on Foreign Travel of NTPC Employees.

> Quarterly Report on Short Term Deposits and Investments.

> Quarterly Report on Contract awarded on nomination basis.

> Quarterly Report on Reconciliation of Share Capital Audit

> Quarterly Report on Business Activities of various Joint Venture Companies and
Subsidiaries of NTPC

> Quarterly report on Compliance ofvarious laws

> Any significant development in Human Resources/ Industrial Relations like signing
of wage agreement, implementation of Voluntary Retirement Scheme, etc.

> Non-Compliance of any regulatory, statutory or listing requirements and
shareholders services such as non-payment of dividend, delay in share transfer, etc.

> Information relating to major legal disputes.

> Action Taken Report on all pending matters.

> Highlights of important events from last meeting to the current meeting.

> Any other information required to be presented to the Board for information or
approval.


3. COMMITTEES OF THE BOARD OF DIRECTORS

The Board has established the following Committees:-

i) Audit Committee.

ii) Shareholders' / Investors' Grievance Committee.

iii) Remuneration Committee

iv) Committee on Management Controls.

v) Contracts Sub- Committee.

vi) Project Sub-Committee.

vii) Investment/Contribution Sub-Committee.

viii) Committee of the Board for allotment and post-allotment activities of NTPC's
Securities

ix) Committee of Functional Directors for Contracts 


3.1 AUDIT COMMITTEE

The constitution, quorum, scope, etc. of the Audit Committee is in line with the
Companies Act, 1956, provisions of Listing Agreement and Guidelines on Corporate
Governance as issued by Department of Public Enterprises, Govt, of India.


Scope of Audit Committee

1. Discussion with Auditors periodically about internal control systems and the scope
of audit including observations of the auditors.

2. Reviewing, with the management, the quarterly financial statements before submission
to the Board for approval.

3. Ensure Compliance of Internal Control Systems.

4. Oversight of the company's financial reporting process and the disclosure of its
financial information to ensure that the financial statement is correct, sufficient and
credible.

5. Noting appointment and removal of external auditors. Recommending audit fee of
external auditors and also approval for payment for any other service.

6. Reviewing, with the management, the annual financial statements before submission to
the board for approval, with particular reference to:

a. Matters required to be included in the Director's Responsibility Statement to be
included in the Board's report in terms of clause (2AA) of section 217 of the Companies
Act, 1956;

b. Changes, if any, in accounting policies and practices and reasons for the same,-

c. Major accounting entries involving estimates based on the exercise of judgment by
management;

d. Significant adjustments made in the financial statements arising out of audit
findings,-

e. Compliance with listing and other legal requirements relating to financial
statements,-

f. Disclosure of any related party transactions,-

g. Qualifications in the draft audit report.

7. Reviewing, with the management, performance of statutory and internal auditors, the
adequacy of internal control systems and suggestion for improvement of the same.

8. Reviewing the adequacy of internal audit function, including the structure of the
internal audit department, staffing and seniority of the official heading the department,
reporting structure coverage and frequency of internal audit.

9. Discussion with internal auditors any significant findings and follow up there on.
Review of internal audit observations outstanding for more than two years.

10. Reviewing the findings of any internal investigations by the internal auditors into
matters where there is suspected fraud or irregularity or a failure of internal control
systems of a material nature and reporting the matter to the Board.

11. Discussion with statutory auditors before the audit commences, about the nature and
scope of audit as well as have post-audit discussion to ascertain any area of concern.

12. To look into the reasons for substantial defaults in the payment to the depositors,
debenture holders, shareholders (in case of non payment of declared dividends) and
creditors.

13. Review of Observations of C&AG including status of Government Audit paras.

14. To review the functioning of the Whistle Blower mechanism.

15. Investigation into any matter in relation to the items specified above or referred
to it by the Board.

16. To review the follow up action taken on the recommendations of Committee on Public
Undertakings (COPU) of the Parliament.

17. Provide an open avenue of communication between the independent auditors, internal
auditors and the Board of Directors.

18. Review with the independent auditor the co-ordination of audit efforts to assure
completeness of coverage, reduction of redundant efforts, and the effective use of all
audit resources.

19. Consider and review the following with the independent auditor and the management:

a) The adequacy of internal controls including computerized information system controls
and security, and

b) Related findings and recommendations of the independent auditor and internal
auditor, togetherwith the management responses.

20. Consider and review the following with the management, internal auditor and the
independent auditor:

a) Significant findings during the year, including the status of previous audit
recommendations.

b) Any difficulties encountered during audit work including any restrictions on the
scope of activities or access to required information.

21. Reviewing with the management, statement of uses/ application of funds raised
through an issue (public issue, right issue, preferential issue etc.), statement of funds
utilised for purposes other than stated in the offer documents/prospectus/notice and the
report submitted by the monitoring agency monitoring the utilisation of proceeds of a
public or rights issue, and making appropriate recommendations to the board to take up
steps in this matter.


Constitution

The Audit Committee has been constituted with the membership of:

i) Four independent Directors to be nominated by the Board from time to time.

ii) Joint Secretary & Financial Advisor (JS & FA), Ministry of Power (MOP),
Government of India nominated on the Board of NTPC


Composition

As on 31st March 2011, the Audit Committee comprised the following members:-


  

    
Shri K. Dharmarajan
    
Independent Director
  
  

    
Shri P.K. Sengupta
    
Independent Director
  
  

    
Shri Shanti Narain
    
Independent Director
  
  

    
Shri Kanwal Nath
    
Independent Director
  
  

    
Shri Rakesh Jain
    
Government Nominee
  


Director (Finance), Head of Internal Audit Department and the Statutory Auditors are
invited to the Audit Committee Meetings for interacting with the members of the committee.
Besides, Cost Auditors of the Company are also invited to the meetings of the Audit
Committee as and when required. Senior functional executives are also invited as and when
required to provide necessary inputs to the committee.

The Company Secretary acts as the Secretary to the Committee.


Meetings and Attendance

Seven meetings of the Audit Committee were held during the financial year 2010-11 on
April 30, May 17, July 19, July 26, October 26, 2010, January 19 and January 31, 2011.

The details of the meetings of Audit Committee attended by the members are as under:-


  

    
Members of Audit Committee
    
Meetings held during his tenure
    
Meetings attended
  
  

    
Shri K. Dharmarajan
    
7
    
6
  
  

    
Shri P. K. Sengupta
    
7
    
7
  
  

    
Shri Shanti Narain
    
7
    
5
  
  

    
Shri Kanwal Nath
    
7
    
7
  
  

    
Shri Rakesh Jain
    
7
    
6
  


Shri K. Dharmarajan, Independent Director chaired all the meetings of Audit Committee
held during the year 2010-11 except one Meeting which was chaired by Shri P.K. Sengupta,
Independent Director. In the absence of Shri K. Dharmarajan, Chairman of the Audit
Committee in the Annual General Meeting, three other members were present to answer the
queries of the shareholders.

Director (Finance) and Head of Internal Audit were present in all Audit Committee
Meetings held during the year under review as invitees as per requirement of Listing
Agreement.


3.2 SHAREHOLDERS' / INVESTORS' GRIEVANCE

COMMITTEE

The Company has constituted 'Shareholders' / Investors' Grievance Committee'.


Scope of the Committee

This Committee looks into redressal of Shareholders' and Investors' complaints like
delay in transfer of shares, non-receipt of Balance Sheet, non-receipt of declared
dividend etc. as well as complaints/ grievances of the Bondholders.


Constitution

The Committee has been constituted with the membership of:

i) One Nominee Director of Ministry of Power represented on the Board of NTPC

ii) Director (Finance), NTPC and

iii) Director (HR) or Director (Technical), NTPC

iv) One Independent Director.

Composition

Ason 31st March 2011, this committee comprised the following Directors:


  

    
Shri Rakesh Jain
    
Government Nominee
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri S.P. Singh
    
Director(HR)
  
  

    
Shri A.K. Sanwalka
    
Independent Director
  



Meeting and Attendance

Three meetings of the Shareholders' / Investors' Grievance Committee were held during
the financial year 2010-11 on July 19, November 12, 2010 and February 24, 2011.

The details of the meetings of Shareholders'/ Investors' Grievance Committee attended
bythe members are as under:-


  

    
Members of Shareholders' / Investors' Grievance Committee
    
Meetings held
    
Meetings attended
  
  

    
Shri Rakesh Jain
    
3
    
3
  
  

    
Shri A.K. Singhal
    
3
    
3
  
  

    
Shri S.P. Singh (w.e.f. 16.10.2010)
    
2
    
1
  
  

    
Shri A.K. Sanwalka
    
3
    
3
  



Name and designation of Compliance Officer

Shri A.K. Rastogi, Company Secretary is the compliance officer in terms of Clause 47 of
the Listing Agreement.


Investor Grievances

During the financial year ending 31st March 2011, Company has attended its investor
grievances expeditiously except for the cases constrained by disputes or legal
impediments. The details of the complaints received, resolved and disposed off during the
year are as under:


  

    
Particulars
    
Opening Balance
    
Received
    
Resolved
    
Pending
  
  

    
SEBI / Stock Exchange complaints
    
0
    
73
    
68
    
5
  
  

    
Other IPO related complaints
    
0
    
619
    
619
    
0
  
  

    
Other Dividend related complaints
    
5
    
8864
    
8862
    
7
  
  

    
Total
    
5
    
9556
    
9549
    
12
  


Investor complaints shown pending as on March 31, 2011 have been attended subsequently.


Number of pending share transfers

As on March 31, 2011, no share transfer request was pending. Share Transfers have been
affected during the year well within the time prescribed bythe Stock Exchanges and a
certificate to this effect duly signed by a Practising Company Secretary has been
furnished to Stock Exchanges.


3.3 REMUNERATION COMMITTEE

Our Company, being Central Public Sector Undertaking, the appointment, tenure and
remuneration of Directors are decided by the President of India. However, as per the
provisions of the DPE Guidelines, a remuneration committee was constituted to decide the
annual bonus/variable pay pool and policy for its distribution within the prescribed
limits. As on 31st March 2011, the Committee comprised the following Members:


  

    
Shri M.N. Buch
    
Independent Director
  
  

    
Shri P.K. Sengupta
    
Independent Director
  
  

    
Shri Kanwal Nath
    
Independent Director
  
  

    
Shri I.C.P. Keshari
    
Government Nominee
  



Meeting and Attendance

Two meetings were held during the year on August 17 and October 6, 2010.

The details of the meetings of Remuneration Committee attended by the members are as
under:


  

    
Members of Remuneration Committee
    
Meetings held
    
Meetings attended
  
  

    
Shri M.N. Buch
    
2
    
2
  
  

    
Shri P.K. Sengupta
    
2
    
1
  
  

    
Shri Kanwal Nath
    
2
    
1
  
  

    
Shri I.C.P. Keshari
    
2
    
1
  



3.4 COMMITTEE ON MANAGEMENT CONTROLS

On being conferred enhanced autonomy by the Government of India under 'Navratna
Guidelines', this committee was constituted for establishing transparent and effective
system of internal monitoring. This Committee, inter alia, reviews the Management Control
Systems, significant deviations in project implementation and construction, operation and
maintenance budgets, etc.

As on March 31, 2011, the committee comprised the following Directors:


  

    
Shri Rakesh Jain
    
Government Nominee
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Dr. M. Govinda Rao
    
Independent Director
  


As our Company is diversifying in the areas like hydro power, coal mining, oil
exploration, renewable energy, nuclear power etc and also has increased installed capacity
to the tune of 30830 MW, the Board of Directors of our Company has revised the scope of
work of Contracts Sub-Committee, Projects Sub-Committee and has also constituted a
Committee of Functional Directors for Contracts. The revised scope of work of Contracts
Sub-Committee and of Projects Sub-Committee is mentioned here in below. The scope of work
and composition of Committee of Functional Directors for Contracts is also mentioned
elsewhere in this Report.


3.5 CONTRACTS SUB-COMMITTEE

As per the revised scope of work, this Committee approves award of works or purchase
contracts or incurring commitments of value exceeding Rs. 250 crore but not exceeding Rs.
500 crore, Consultancy assignments including foreign consultancy assignements exceeding
Rs. 5 crore each and Appointment of Sponsor / Agents for Overseas Consultancy Assignments
involving sponsorship/ agency commission exceeding Rs. 5 crore each.

As on March 31, 2011, the Contracts Sub-Committee comprised the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri B.P. Singh
    
Director (Projects)
  
  

    
Shri D.K. Jain
    
Director (Technical)
  
  

    
Shri Rakesh Jain
    
Government Nominee
  
  

    
Shri I.C. P. Keshari
    
Government Nominee
  



3.6 PROJECT SUB-COMMITTEE

As per the revised scope of work, the Project Sub-Committee examines and makes
recommendations to the Board on proposals for Investment in New/ Expansion Projects and
Feasibility Reports of new projects. As on 31st March 2011, the Committee comprised the
following members:


  

    
Shri Arup Roy
    
Chairman & Managing
  
  

    
Choudhury
    
Director
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri I.J. Kapoor
    
Director (Commercial)
  
  

    
Shri B.P. Singh
    
Director (Projects)
  
  

    
Shri D.K. Jain
    
Director (Technical)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Shri Rakesh Jain
    
Government Nominee
  
  

    
Shri I.C.P. Keshari
    
Government Nominee
  
  

    
Shri M.N. Buch
    
Independent Director
  
  

    
Shri Adesh Jain
    
Independent Director
  



3.7 INVESTMENT/CONTRIBUTION COMMITTEE

The terms of reference of Investment/Contribution Committee of the Board is for
deployment of surplus funds as per Govt, guidelines issued from time to time and also
approves contribution/donation for national, public, benevolent or charitable cause,
purpose or object or other funds not directly related to the business of the company or
welfare of its employees between Rs. 5 lakh to Rs. 20 lakh subject to maximum limit of Rs.
1 crore in a year.

As on 31st March 2011, the Committee comprised the following Members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing
  
  

    

    
Director
  
  

    
Shri A.K. Singhal
    
Director(Finance)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  


In case of investment of funds and contribution matters Director (HR) and in case of
Commercial matters Director (Commercial) are co-opted in the meeting.


3.8 COMMITTEE FOR ALLOTMENT AND POST-ALLOTMENT ACTIVITIES OF NTPC'S SECURITIES

The Committee has been constituted for Allotment and Post-allotment activities of
Company's Securities. The scope of work of this committee is allotment, issue of
Certificate/Letter of allotment, transfer, transmission, re-materialisation, issue of
duplicate certificates, consolidation/split of NTPC's domestic and foreign Securities.

As on 31st March 2011, the Committee comprised the following Members:


  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  



3.9 COMMITTEE OF FUNCTIONAL DIRECTORS FOR CONTRACTS

This Committee has been constituted for award of works or purchase contracts or
incurring of commitments exceeding Rs. 150 crore but not exceeding Rs. 250 crore.

As on 31st March 2011, the Committee comprised all the Functional Directors including
the Chairman & Managing Director as under:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri I.J. Kapoor
    
Director (Commercial)
  
  

    
Shri B.P. Singh
    
Director (Projects)
  
  

    
Shri D.K. Jain
    
Director (Technical)
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  


The Chairman & Managing Director, Director (Finance), Director (Technical) and
Director (Projects) for contracts related to construction projects or Director
(Operations) for contracts related to operating stations, as the case may be shall
constitute the quorum for meeting of the Committee.


4. GROUP OF DIRECTORS

Apart from Committees as explained above, the Board has constituted a number of Group
of Directors for specific purposes. The scope of work of various Group of Directors and
its Constitution as existed on 31.03.2011 is as under:

(i) Group of Directors for Corporate Social Responsibility: This Group of Directors has
been constituted to have a closer look into various related issues and prepare a roadmap
for operating the scheme for Corporate Social Responsibility of NTPC. This Group of
Directors comprises the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri Santosh Nauityal
    
Independent Director
  


(ii) Group of Directors for Vigilance Matters and Non-Vigilance Matters: Two Group of
Directors have been constituted to examine all the petitions which are submitted before
the Board as appellate/ reviewing authority in terms of CDA rules. The Chief Vigilance
Officer of NTPC is being associated with the Group of Directors for Vigilance Matters. The
Group of Directors for Vigilance Matters comprised the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri I.C.P. Keshari
    
Government Nominee
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri Kanwal Nath
    
Independent Director
  


The Group of Directors for non-vigilance matters comprised the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri I.C.P. Keshari
    
Government Nominee
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Shri Adesh Jain
    
Independent Director
  


(iii) Group of Directors for implementation of DPE Guidelines pertaining to Revision of
Pay Scales:

This Group of Directors has been constituted to work out the details with regard to
implementation of various provisions as per DPE guidelines pertaining to revision of pay
scales. This Group of Directors comprised the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri S.P. Singh
    
Director (HR)
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Shri M.N. Buch
    
Independent Director
  
  

    
Shri Kanwal Nath
    
Independent Director
  
  

    
Shri I.C.P. Keshari
    
Government Nominee
  
  

    
Shri Rakesh Jain
    
Government Nominee
  


(iv) Group of Directors for Import of Coal: This Group of Directors has been
constituted to approve the recommendations of Executive Directors level Committee
authorized to hold discussions with the prospective PSU bidders viz. STC, MMTC and CIL in
a pre-bid conference to explore (a) various options/ bidding strategies to be adopted by
them by which they can ensure maximization of competition amongst the coal suppliers and
(b) pricing methodology. This Group of Directors comprised the following members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Shri A.K. Singhal
    
Director (Finance)
  
  

    
Shri Kanwal Nath
    
Independent Director
  
  

    
Shri A.K. Sanwalka
    
Independent Director
  


(v) Group of Directors for appointment of Financial Consultant for carrying out due
diligence of Coal Mines/ Blocks: This Group of Directors has been constituted to approve
appointment of financial consultant for carrying out due diligence of coal mines/ blocks
abroad on offer for acquisition of stake. This Group of Directors comprise the following
members:


  

    
Shri Arup Roy Choudhury
    
Chairman & Managing Director
  
  

    
Shri N.N. Misra
    
Director (Operations)
  
  

    
Shri A.K. Singhal
    
Director(Finance)
  
  

    
Shri D.K. Jain
    
Director (Technical)
  


(vi) Group of Directors for Examination of proposal for Mine Developer cum Operator:
This Group of Directors had been constituted to examine the award proposal for selecting
Mining Developercum Operator for development and operation of Pakri Barwadih Coal Mining
Block. This Group of Directors comprised the following members:


  

    
Shri P.K. Sengupta
    
Independent Director
  
  

    
Shri K. Dharmarajan
    
Independent Director
  
  

    
Shri A.K. Sanwalka
    
Independent Director
  
  

    
Shri B.P. Singh
    
Director(Projects)
  


Upon selection of Thiess Minecs India Private Limited as Mine Developer cum Operator
for Pakri Barwadih Coal Mining Project, the Group of Directors has ceased to exist.


5. REMUNERATION OF DIRECTORS

As already stated under the heading Remuneration Committee above, the remuneration of
the Functional Directors and sitting fee payable to the Independent Directors is decided
bythe Government of India. The Ministry of Power, Government of India has authorized the
Board of Directors of the Company to determine the sitting fee payable to Independent
Directors within the ceiling prescribed under the Companies Act, 1956. Accordingly, the
Board decides the sitting fee payable to the Independent Directors. Presently, sitting fee
ofRs. 15,000/- for each meeting of the Board, Committees of the Board and Group of
Directors constituted by the Board from time to time, is being paid to each Independent
Director.

Details of remuneration of functional Directors of the Company paid for the financial
year 2010-11:-


  

    
Name of the Director
    
Salary
    
Benefits
    
Bonus/ Commission
    
Performance Linked Incentives
    
Total
  
  

    
Shri Arup Roy Choudhury (w.e.f. 01.09.2010)
    
854,463
    
3,99,580
    
-
    
31,948
    
12,85,991
  
  

    
Shri R.S. Sharma (upto 31.08.2010)
    
23,73,727
    
13,86,187
    
-
    
1,147,666
    
49,07,580
  
  

    
Shri Chandan Roy (upto 31.07.2010)
    
19,82,585
    
13,11,154
    
-
    
8,33,072
    
41,26,811
  
  

    
Shri A.K. Singhal
    
21,87,547
    
8,55,710
    
-
    
8,90,005
    
39,33,262
  
  

    
Shri R.C. Shrivastav (upto 30.06.2010)
    
23,42,051
    
13,64,483
    
-
    
8,33,020
    
45,39,554
  
  

    
Shri I.J. Kapoor
    
19,94,903
    
7,35,378
    
-
    
8,41,962
    
35,72,243
  
  

    
Shri B.P. Singh
    
19,64,540
    
7,03,494
    
-
    
7,29,933
    
33,97,967
  
  

    
Shri D.K. Jain (w.e.f. 13.05.2010)
    
17,71,121
    
6,78,586
    
-
    
4,09,540
    
28,59,247
  
  

    
Shri S.P. Singh (w.e.f. 16.10.2010)
    
7,32,684
    
3,18,855
    
-
    
40,393
    
10,91,932
  
  

    
Shri N.N. Misra (w.e.f. 19.10.2010)
    
7,24,103
    
3,07,845
    
-
    
39,223
    
10,71,171
  


Performance linked incentives paid is based on the incentive scheme of the company.

Details of payments towards sitting fee to Independent Directors during the year
2010-11 are given below:

(in Rs. )


  

    
Name of Part-time non-official Directors
    
Sitting Fees
    
Total
  
  

    

    
Board Meeting 
    
Committee / Group of Directors Meeting 
    

  
  

    
Shri M.N. Buch
    
2,25,000
    
1,65,000
    
3,90,000
  
  

    
Shri Shanti Narain
    
1,80,000
    
75,000
    
2,55,000
  
  

    
Shri P.K. Sengupta
    
2,40,000
    
2,10,000
    
4,50,000
  
  

    
Shri K. Dharmarajan
    
1,65,000
    
1,80,000
    
3,45,000
  
  

    
Dr. M. Govinda Rao
    
1,80,000
    
15,000
    
1,95,000
  
  

    
Shri Kanwal Nath
    
1,50,000
    
1,65,000
    
3,15,000
  
  

    
Shri Adesh Jain
    
1,65,000
    
30,000
    
1,95,000
  
  

    
Shri A.K. Sanwalka
    
1,95,000
    
1,05,000
    
3,00,000
  
  

    
Shri Santosh Nautiyal
    
2,40,000
    
90,000
    
3,30,000
  



6. ACCOUNTABILITY OF DIRECTORS

An annual Memorandum of Understanding (Moll) is entered into by the Company with Govt,
of India (Gol) in the beginning of the year setting the targets in financial and non
financial areas with weightages decided in consultation with Gol. The performance of the
Company is measured at the end of the year vis-avis these targets.

The performance with regard to MOU is reviewed regularly within the Company on monthly
basis and by Ministry of Power on quarterly basis through Quarterly Performance Review
(QPR). Slippages, if any, are identified and necessary remedial actions are suggested in
these forums.

At the end of each financial year, the MoU achievements report is furnished to Ministry
of Power and performance of the company is evaluated by Ministry of Power and Department
of Public Enterprises Task Force on the basis of actual achievement as per signed MoU.

To ensure targets as set in MoU are achieved well within schedule, the Company has a
strong "Internal MoU" system specifying tighter targets drilled down at regional
and station level with suitable stretch and expansion of activities. The entire process
ensures transparency as well as accountability towards stakeholders.


7. RISK MANAGEMENT

As a diversified enterprise, your Company has always had a system-based approach to
business risk management as an integral part of its business processes. In order to
strengthen the same, Enterprise-wide Risk Management Framework was devised by the
Consultant appointed by NTPC. The objective of the Enterprise Risk Management is to
identify and manage risks for sustainable value creation, assessment of key business risks
through continuous measurement, monitoring of key performance indicators, focus on key
risks and reporting to Board Members on risk assessment and minimization procedures.

The Risk Management Framework involves Risk Optimization, Risk Strategy, Risk Reporting
Structure, Risk Measurement & Monitoring and Risk Portfolio.

A committee, namely Enterprise Risk Management Committee (ERMC), consisting of Regional
Executive Directors (Risk Reporters), CEOs of subsidiaries and JVs and Functional Heads at
Executive Director Levels (Risk Owners) has been constituted which identifies risks, makes
risk assessment on the basis of certain criteria and devise methods for mitigation of
risks.

A quarterly meeting of ERMC is being held where Risk Owners report to ERMC based on the
reports by Risk Reporters of risks and action plans received from projects, stations,
corporate functions and subsidiaries. ERMC evolves action plans for effective risk
mitigation, which in turn, reports to the Board about the risks for its overseeing and
approval of risk management strategies and policies.

Three meetings of Enterprise Risk Management Committee were held during the Financial
Year 2010-11.


8. SUBSIDIARY MONITORING FRAMEWORK

The Company has five subsidiary companies, the list of which is given in the Directors'
Report. All subsidiaries of the Company are Board managed with their Boards having the
rights and obligations to manage such companies in the best interest of the stakeholders.
As a majority shareholder, the Company nominates its representatives on the Boards of
subsidiary companies and monitors the performance of such companies periodically.

Performance of the subsidiary companies is reviewed by the Board of the Company as
under:

(i) Minutes of the meetings of the Board of Directors of the subsidiaries are placed
before the Company's Board periodically.

(ii) A statement of all significant transactions and arrangements entered into by the
subsidiary companies are also reviewed bythe Company.

(iii) Subsidiary Companies sign an annual Memorandum of Understanding with NTPC in the
beginning of the year setting the targets in financial and non-financial areas with
weightages in consultation with NTPC.

(iv) The Budget of the subsidiary companies are being approved by the Committee on
Management Control of NTPC.

(v) Certain decision as mentioned in the Articles of Association of the subsidiary
companies can only be taken if they are approved by the Board of NTPC.

The Company does not have any material unlisted subsidiary companies in terms of the
Clause 49 of the Listing Agreement.


9. GENERAL BODY MEETINGS

Annual General Meeting

Date, time and location where the last three Annual General Meetings were held are as
under:


  

    
Date & Time
    
September 17, 2008
    
September 17, 2009
    
September 23, 2010
  
  

    
Time
    
11.30 A.M.
    
11.00 A.M.
    
10.30 A.M.
  
  

    
Venue
    
Air Force
    
Air Force
    
Air Force
  
  

    

    
Auditorium,
    
Auditorium,
    
Auditorium,
  
  

    

    
Subroto Park,
    
Subroto Park,
    
Subroto
  
  

    

    
New Delhi - 110010
    
New Delhi - 110010
    
Park, New Delhi - 110010
  
  

    
Special Resolu- tion
    
Increase in Borrowing Powers of the Board upto Rs. 1,00,000 crore and authority to the
    Board for mortgaging the assets of the company.
    
Amendments in Articles of Association regarding audit of accounts and appointment of
    auditors.
    
-
  


Special Resolution passed through Postal Ballot

No Resolution has been passed through Postal Ballot during the year.

No special resolution requiring Postal Ballot is being proposed at the ensuing Annual
General Meeting.


10. DISCLOSURES

The transactions with related parties contain (i) paymentto companies under Joint
VentureAgreement and on account of contracts for works/ services, (ii) remuneration to key
management personnel and (iii) equity contribution, which are not in nature of potential
conflicts with interest of the company at large. Details of related party transactions are
included in the Notes to the Accounts (Schedule 26) as per Accounting Standard (AS) -18 in
Companies (Accounting Standards) Rules, 2006.

The Company has complied with all the requirements of the Listing Agreement with Stock
Exchanges as well as Regulations and Guidelines prescribed by SEBI. The Company has also
complied with all the requirements of the Guidelines on Corporate Governance for Central
Public Sector Enterprises issued by Ministry of Heavy Industries and Public Enterprises,
Department of Public Enterprises, Government of India.

There were no penalties or strictures imposed on the Company by any statutory
authorities for noncompliance on any matter related to capital markets, during the last
three years.

The Company has adopted all suggested items to be included in the Report on Corporate
Governance. Information on adoption (and compliance) / non-adoption of the non-mandatory
requirements is at Annex-1.

Schedule of Compliances with Presidential Directives during the last three years is at
Annex-2


CEO/CFO Certification

As required by Clause 49 of the Listing Agreement(s), thecertificatedulysignedbyShri
Arup Roy Choudhury, Chairman & Managing Director and Shri A.K. Singhal, Director
(Finance) was placed before the Board of Directors at the meeting held on 10.05.2011 and
is annexed to the Corporate Governance Report.


11. MEANS OF COMMUNICATION

The Company communicates with its shareholders through its Annual Report, General
Meetings and disclosures through web site.

The Company also communicates with its institutional shareholders through a combination
of analysts briefing and individual discussions as also participation at investor
conferences from time to time. Annual analysts and investors meets are held during the
month of August where Board of the Company interacts with the investing community.
Financial results are discussed by way of conference calls regularly after the close of
each quarter.

Information and latest updates and announcement regarding the company can be accessed
at company's website: www.ntpc.co.in including the following:-

• Quarterly/Half-yearly/Annual Financial Results

• Quarterly Shareholding Pattern

• Transcripts of conferences with analysts

• Corporate disclosures made from time to time to Stock Exchanges

Disclosures made to stock exchanges are also made through Corporate Filing &
Disemmination System (CFDS) in terms of Clause 52 of the Listing Agreement.

Quarterly Results


  

    
Newspapers
    
Date of publication of results for the quarter ended
  
  

    

    
30.06.2010
    
30.09.2010
    
31.12.2010
  
  

    
Financial Express
    
27.07.2010
    
-
    
01.02.2011
  
  

    
Jansatta (Hindi)
    
27.07.2010
    
-
    
01.02.2011
  
  

    
Hindustan (Hindi)
    
27.07.2010
    
27.10.2010
    
01.02.2011
  
  

    
Navbharat Times (Hindi)
    
27.07.2010
    
-
    
01.02.2011
  
  

    
Business Standard
    
-
    
-
    
01.02.2011
  
  

    
Hindustan Times
    
-
    
27.10.2010
    
01.02.2011
  
  

    
Economic Times
    
27.07.2010
    
27.10.2010
    
01.02.2011
  
  

    
Financial Chronicle
    
27.07.2010
    
-
    
-
  
  

    
The Hindu
    
27.07.2010
    
-
    
01.02.2011
  
  

    
Mint
    
-
    
-
    
01.02.2011
  



Official Releases and Presentations

The Company's official news releases, other press coverage, presentations made to
institutional investors or to the analysts are also hosted on the website.

In order to make the general public aware of the achievements of the company, a press
conference is held after the close of the financial year where the highlights of the
company for the year are briefed to the Press for information of the stakeholders with
intimation to the Stock Exchanges.


12. CODE OF CONDUCT

The Board of Directors has laid down separate Code of Conduct - one for Board Members
and the other for Senior Management Personnel in alignment with Company's Vision and
Values to achieve the Mission & Objectives and aims at enhancing ethical and
transparent process in managing the affairs of the Company. A copy of the Code of Conduct
is available at the website of the Company.

Declaration as required under clause 49 of the listing Agreement

All the members of the Board and Senior Management Personnel have affirmed compliance
of the Code of Conduct for the financial year ended on March 31,2011.


  

    
New Delhi
    
(Arup Roy Choudhury)
  
  

    
May 06, 2011
    
Chairman & Managing Director
  



13. Code of Internal Procedures and Conduct for Prevention of Insider Trading

In pursuance of the Securities Exchange Board of India (Prohibition of Insider Trading)
Regulations, 1992, the Board has laid down "Code of Internal Procedures and Conduct
for Prevention of Insider Trading"

with the objective of preventing purchase and/or sale of shares of the Company by an
Insider on the basis of unpublished price sensitive information. Under this Code, Insiders
(Officers, Designated Employees and their dependents) are prevented to deal in the
Company's shares during the closure of Trading Window. To deal in Securities beyond limits
specified, permission of Compliance Officer is required. All Directors/Officers/Designated
Employees are also required to disclose related information periodically as defined in the
Code, which in turn is being forwarded to Stock Exchanges, wherever necessary. Company
Secretary has been designated as Compliance Officer for this Code.


14. SHAREHOLDERS' INFORMATION

i) Annual General Meeting


  

    
Date
    
: September20, 2011
  
  

    
Time
    
: 10.30 a.m.
  
  

    
Venue
    
: Air Force Auditorium, Subroto Park,
  
  

    

    
NewDelhi-110 010
  



ii) Financial Calendar for FY 2011-12


  

    
Particulars
    
Date
  
  

    
Accounting Period
    
April 1,2011 toMarch31,2012
  
  

    
Unaudited Financial Results for the first three quarters
    
Announcement within a month from the end of each quarter
  
  

    
Fourth Quarter Results
    
Announcement of Audited Accounts on or before May 31, 2012
  
  

    
AGM(Next year)
    
September 2012 (Tentative)
  



iii) Book Closure

The Register of Members and Share Transfer Books of the Company will remain closed from
September 10, 2011 to September 20, 2011 (both days inclusive).


iv) Payment of Dividend

The Board of Directors of the Company has recommended payment of a final Dividend of
Rs. 0.8 per share (8% on the paid-up share capital) for the financial year ended March 31,
2011 in addition to the Interim Dividend of Rs. 3.0 per share (30% on the paid-up share
capital) paid on February 14,2011 (Dividend paid in Previous Year is Rs. 3133.28 Crore).

The record date for the payment of Dividend is September 09, 2011.


v) Dividend History


  

    
Year
    
Total paid-up capital (Rs. in crore)
    
Total amount of divdend paid (Rs. in crore)
    
Date of AGM in which divdend was declared
    
Date of payment
  
  

    
2005-06
    
8245.46
    
2308.73
    
30.01.2006*
    
27.02.2006
  
  

    

    

    

    
19.09.2006
    
23.09.2006
  
  

    
2006-07
    
8245.46
    
2638.55
    
31.01.2007*
    
14.02.2007
  
  

    

    

    

    
12.09.2007
    
25.09.2007
  
  

    
2007-08
    
8245.46
    
2885.91
    
30.01.2008*
    
13.02.2008
  
  

    

    

    

    
17.09.2008
    
03.10.2008
  
  

    
2008-09
    
8245.46
    
2968.37
    
24.01.2009*
    
13.02.2009
  
  

    

    

    

    
17.09.2009
    
29.09.2009
  
  

    
2009-10
    
8245.46
    
3133.28
    
13.03.2010*
    
23.03.2010
  
  

    

    

    

    
23.09.2010
    
01.10.2010
  
  

    
2010-11
    
8245.46
    
2473.64*
    
31.01.2011*
    
14.02.2011
  


* Date of Board Meeting

# amount represents the interim dividend paid for the year 2010-11 


vi) Listing on Stock Exchanges

NTPC equity shares are listed on the following Stock Exchanges:


  

    
National Stock Exchange of India Limited
    
Bombay Stock Exchange Limited
  
  

    
Scrip Code: NTPC EQ
    
Scrip Code: 532555
  


Stock Code : ISIN - INE733E01010 


vi) Market Price Data - NSE


  

    
Month
    
High
    
Low
    
Closing
  
  

    

    
(Rs. )
    
(Rs. )
    
(Rs. )
  
  

    
April' 10
    
212.55
    
202.90
    
207.55
  
  

    
May'10
    
208.45
    
190.10
    
202.30
  
  

    
June' 10
    
204.90
    
194.10
    
199.60
  
  

    
July' 10
    
206.00
    
197.30
    
198.75
  
  

    
August' 10
    
201.00
    
192.20
    
195.95
  
  

    
Sept' 10
    
221.20
    
190.10
    
216.95
  
  

    
October' 10
    
222.30
    
192.30
    
195.30
  
  

    
Nov' 10
    
198.10
    
175.35
    
184.00
  
  

    
Dec'10
    
203.80
    
182.00
    
200.65
  
  

    
January' 11
    
203.20
    
185.00
    
189.05
  
  

    
February' 11
    
190.75
    
168.30
    
169.85
  
  

    
March' 11
    
195.00
    
170.70
    
193.10
  



viii) Market Price Data - BSE


  

    
Month
    
High
    
Low
    
Closing
  
  

    

    
(Rs. )
    
(Rs. )
    
(Rs. )
  
  

    
April' 10
    
212.20
    
201.50
    
206.95
  
  

    
May'10
    
208.50
    
190.40
    
202.00
  
  

    
June' 10
    
203.90
    
194.00
    
199.15
  
  

    
July' 10
    
205.80
    
197.30
    
198.60
  
  

    
August' 10
    
200.50
    
192.90
    
195.75
  
  

    
Sept' 10
    
221.00
    
195.10
    
216.90
  
  

    
October' 10
    
222.20
    
193.90
    
194.95
  
  

    
Nov'10
    
197.45
    
175.20
    
184.25
  
  

    
Dec' 10
    
202.95
    
182.05
    
200.60
  
  

    
January' 11
    
203.15
    
185.00
    
188.90
  
  

    
February' 11
    
190.00
    
168.60
    
170.05
  
  

    
March' 11
    
194.90
    
171.05
    
193.00
  



x) Registrar and Share Transfer Agent

KarvyComputershare Pvt. Ltd 

Plot No.17to 24, 

Vitthalrao Nagar 

Madhapur Hyderabad-500081 

Tel No.: 91 40 23420818 

Fax No.:91 40 23420814 

E-mail: mailmanager@karvy.com


xi) Share Transfer System

Entire share transfer activities under physical segment are being carried out by Karvy
Computershare Private Limited. The share transfer system consists of activities like
receipt of shares along with transfer deed from transferees, its verification, preparation
of Memorandum of transfers, etc. Shares transfers are approved by Sub-Committee of the
Board for Allotment and Post-Allotment activities of NTPC's Securities.

Pursuant to clause 47-C of the Listing Agreement with Stock Exchanges, certificate on
half-yearly basis confirming due compliance of share transfer formalities bythe Company
from Practicing Company Secretary have been submitted to Stock Exchange within stipulated
time.


xii) Distribution of Shareholding

Shares held by different categories of shareholders and according to the size of
holdings as on 31st March 2011 are given below:


According to Size

a. Distribution of shareholding according to size, % of holding as on March 31, 2011:


  

    
Number of shares
    
Number of shareholders
    
% of shareholders
    
Total No. of shares
    
% of shares
  
  

    
1-5000
    
8,30,118
    
99.71
    
15,87,22,893
    
1.92
  
  

    
5001-10000
    
1,131
    
0.14
    
80,94,461
    
0.10
  
  

    
10001-20000
    
468
    
0.06
    
66,84,336
    
0.08
  
  

    
20001-30000
    
160
    
0.02
    
39,82,821
    
0.05
  
  

    
30001-40000
    
86
    
0.00
    
30,12,724
    
0.04
  
  

    
40001-50000
    
72
    
0.00
    
32,63,510
    
0.04
  
  

    
50001-100000
    
127
    
0.02
    
92,10,374
    
0.11
  
  

    
100001 and above
    
379
    
0.05
    
8,05,24,93,281
    
97.66
  
  

    
Total
    
8,32,541
    
100
    
8,24,54,64,400
    
100
  



b. Shareholding pattern as on March 31, 2011


  

    
Category
    
Total no. of shares
    
% to Equity
  
  

    
GOI
    
6,96,73,61,180
    
84.50
  
  

    
Flls
    
29,12,15,634
    
3.53
  
  

    
Indian Public
    
16,82,87,604
    
2.04
  
  

    
Banks & Fl
    
56,99,68,125
    
6.92
  
  

    
Private Corp. Bodies
    
12,20,88,117
    
1.48
  
  

    
Mutual Funds
    
11,54,21,458
    
1.40
  
  

    
NRI/OCBs
    
42,65,686
    
0.05
  
  

    
Others
    
68,56,596
    
0.08
  
  

    
Total
    
8,24,54,64,400
    
100.00
  



c. Major Shareholders

Details of Shareholders holding more than 1% of the paid-up capital of the Company as
on March 31, 2011 are given below:


  

    
Name of Shareholder
    
No. of Shares
    
% to Paid-up Capital
    
Category
  
  

    
Government of India
    
6967361180
    
84.50
    
Government
  
  

    
Life Insurance Corporation of India
    
293800741
    
3.56
    
IFI
  



xiii) Dematerialisation of Shares and Liquidity

The shares of the Company are in compulsory dematerialsed segment and are available for
trading system of both National Securities Depository Ltd. (NSDL)and Central Depository
Services (India) Limited (CDSL).

Secretarial Audit Report for reconciliation of the share capital of the Company
obtained from Practicing Company Secretary has been submitted to Stock Exchangewithin
stipulated time.


No. of shares held in dematerialized and physical mode


  

    

    
No. of shares
    
% of total capital issued
  
  

    
Held in dematerialized form in CDSL
    
4,06,95,429
    
0.49
  
  

    
Held in dematerialized form in NSDL
    
8,20,46,84,927
    
99.51
  
  

    
Physical
    
84,044
    
0.00
  
  

    
Total
    
8,24,54,64,400
    
100.00
  


The names and addresses of the Depositories are as under:

1. National Securities Depository Ltd. 

Trade World, 4th Floor

Kamala Mills Compound 

Senapathi Bapat Marg, 

Lower Parel, Mumbai-400 013

2. Central Depository Services (India) Limited 

Phiroze Jeejeebhoy Towers

28th Floor, Dalai Street, Mumbai-400 023


xiv) Demat Suspense Account:

Details (in aggregate) of shares in the suspense account opened and maintained after
Initial Public Offering and Further Public Offering of Equity Shares of NTPC as on
31.03.2011 is furnished below:

Details of "KCL Escrow Account NTPC - IPO Offer" (account opened and
maintained after IPO):


  

    
Opening Bal (as on 01.04.2010)
    
Disposed off during 2010-2011
    
Closing Bal (as on 31.03.2011)
  
  

    
Cases
    
Shares
    
Cases
    
Shares
    
Cases
    
Shares
  
  

    
189
    
33568
    
6
    
1181
    
183
    
32387
  


Details of "NTPC LIMITED - FPO Unclaimed Shares Demat Suspense Account"
(account opened and maintained after FPO):


  

    
Opening Bal (as on 01.04.2010)
    
Disposed off during 2010-2011
    
Closing Bal (as on 31.03.2011)
  
  

    
Cases
    
Shares
    
Cases
    
Shares
    
Cases
    
Shares
  
  

    
294
    
53116
    
208
    
39172
    
86
    
13944
  


The voting rights on the shares mentioned in the closing balance of above two accounts
shall remain frozen till the rightful owner of such shares claims the shares.

xv) Outstanding GDRs/ ADRs/ Warrants or any Convertible instruments, conversion date
and likely impact on equity

No GDRs/ADRs/Warrants or any Convertible instruments has been issued bythe Company

Number of Shares held by the Directors as on March 31, 2011


  

    
Directors
    
No. of shares
  
  

    
Shri Arup Roy Choudhury
    
3190
  
  

    
Shri A.K. Singhal
    
10329
  
  

    
Shri I.J. Kapoor
    
4608
  
  

    
Shri B.P. Singh
    
2765
  
  

    
Shri D.K. Jain
    
4188
  
  

    
Shri S.P. Singh
    
10507
  
  

    
Shri N.N. Misra
    
922
  
  

    
Shri I.C.P. Keshari
    
NIL
  
  

    
Shri Rakesh Jain
    
NIL
  
  

    
Shri M.N. Buch
    
NIL
  
  

    
Shri Shanti Narain
    
NIL
  
  

    
Shri P.K. Sengupta
    
NIL
  
  

    
Directors
    
No. of shares
  
  

    
Shri K. Dharmarajan
    
NIL
  
  

    
Dr. M. Govinda Rao
    
NIL
  
  

    
Shri Adesh Jain
    
700
  
  

    
Shri Kanwal Nath
    
NIL
  
  

    
Shri A.K. Sanwalka
    
NIL
  
  

    
Shri Santosh Nautiyal
    
NIL
  



xvii) Locations of NTPC plants 

National Capital Region (NCR-HQ) 

Thermal Power Stations

i) Badarpur Thermal Power Station- Badarpur, New Delhi

ii) National Capital Thermal Power Project- Distt. Gautum Budh Nagar, Uttar Pradesh

iii) Gidderbha Thermal Power Project, Distt. Muktsar, Punjab


Gas Power Stations

i) Anta Gas Power Project - Distt. Baran, Rajasthan

ii) Auraiya Gas Power Project - Distt. Auraiya, Uttar Pradesh

iii) Faridabad Gas Power Project - Distt. Faridabad, Haryana

iv) National Capital Power Project- Distt. Gautum Budh Nagar, Uttar Pradesh


Eastern Region (ER-HQ)- I

Thermal Power Stations

i) Barh SuperThermal Power Project- Distt. Patna, Bihar

ii) Farakka Super Thermal Power Station - Distt. Murshidabad, West Bengal

iii) Kahalgaon Super Thermal Power Project- Distt. Bhagalpur, Bihar

iv) North Karanpura Super Thermal Power Project -Hazaribagh, Jharkhand

v) Katwa Super Thermal Power Project, Distt. Bardhman, West Bengal


Eastern Region (ER-HQ)- II Thermal Power Stations

i) Talcher Super Thermal Power Station- Distt. Angul, Orissa

ii) Talcher Thermal Power Station- Distt. Angul, Orissa

iii) Bongaigaon Thermal Power Project, Distt. Kokrajhar, Assam.

iv) Gajamara Super Thermal Power Project, Distt. Dhenkanal, Orissa

v) Darlipalli Super Thermal Power Project, Distt. Sundergarh, Jharsuguda, Orissa


Northern Region (NR-HQ) Thermal Power Stations

i) Feroze Gandhi UnchaharThermal Power Station - Distt. Raebareli, Uttar Pradesh

ii) Rihand Super Thermal Power Project - Distt. Sonebhadra, Uttar Pradesh

iii) Singrauli Super Thermal Power Station- Distt. Sonebhadra, Uttar Pradesh

iv) Tanda Thermal Power Station- Distt. Ambedkar Nagar, Uttar Pradesh


Southern Region (SR-HQ)

Thermal Power Stations

i) Ramagundam Super Thermal Power Station- Distt. Karimnagar,Andhra Pradesh

ii) Simhadri SuperThermal Power Project-Vishakapatnam, Andhra Pradesh

iii) Kudgi Thermal Power Project, Bijapur, Karnataka 


Gas Power Stations

i) Rajiv Gandhi Combined Cycle Power Project - Distt. Alappuzha, Kerala

Wind Energy Project, Belgaum, Karnataka


Western Region (WR-HQ)-I

Thermal Power Stations

i) Solapur Super Thermal Power Project - Solapur, Maharashtra

ii) Mouda Super Thermal Power Project - Nagpur, Maharashtra


Gas Power Stations

i) Jhanor Gandhar Gas Power Project- Distt. Bharuch, Gujarat

ii) Kawas Gas Power Project- Aditya Nagar, Surat, Gujarat

Western Region (WR-HQ)-II


Thermal Power Stations

i) Korba Super Thermal Power Station- Distt. Korba, Chhattisgarh

ii) Sipat Super Thermal Power Project-Distt. Bilaspur, Chattisgarh

iii) Vindhyachal Super Thermal Power Station- Distt. Sidhi, Madhya Pradesh

iv) Gadarwara SuperThermal Power Project, Kandeli-Narsinghpur, Madhya Pradesh

v) Lara SuperThermal Power Project, Distt. Raigarh, Chattisgarh

vi) Khargone Super Thermal Power Project, Khargone, Madhya Pradesh

vii) Barethi Super Thermal Power Project, Chattarpur, Madhya Pradesh


HYDRO PROJECTS

i) Koldam Hydro Power Project - Distt. Bilaspur, Himachal Pradesh

ii) Tapovan - Vishnugad Hydro Power Project - Distt. Chamoli, Uttarakhand

iii) Loharinag- Pala Hydro Power Project- Distt. Uttarkashi, Uttarakhand

iv) Rupsiyabagar Khasiabara Hydro Power Project - Distt. Pithoragarh, Uttarakhand

v) Kolodyne -II Hydro Power Project, Distt. Saiha Lunglei & Lawngtlai, Mizoram


JOINT VENTURE POWER PROJECTS

i) Rourkela CPP-II - Distt. Sundargarh, Orissa

ii) Durgapur CPP-II - Distt. Burdwan, West Bengal

iii) Bhilai CPP - Bhilai (East), Chattisgarh

iv) Ratnagiri Power Project - Distt. Ratnagiri, Maharashtra

v) VallurThermal Power Project-Chennai, Tamil Nadu

vi) Indira Gandhi Super Thermal Power Project - Distt. Jhajjar, Haryana

vii) Meja Super Thermal Power Project - Tehsil Meja, Allahabad

viii) Nabinagar Super Thermal Power Project - Distt. Aurangabad, Nabinagar, Bihar


POWER PROJECTS UNDER SUBSIDIARY COMPANIES 

Thermal Power Projects

i) Muzaffarpur Thermal Power Station, Muzaffarpur, Bihar

ii) Nabinagar Thermal Power Project, Distt. Aurangabad, Nabinagar, Bihar (in JVwith
Railways)


Hydro Power Projects

i) Lata Tapovan Hydro Power Projects - Distt. Chamoli, Uttarakhand

ii) Rammam Hydro Project - III- Distt. Darjeeling, West Bengal


xviii) Address for correspondence:

NTPC Bhawan, SCOPE Complex 

7, Institutional Area, Lodi Road, 

New Delhi -110003

The phone numbers and e-mail reference for communication aregiven below:


  

    

    
Telephone No.
    
Fax No.
  
  

    
Registered Office
    
2436 0100
    
2436 1018
  
  

    
Investor Services Department
    
2436 7072
    
2436 1724
  
  

    
E- mail id
    
isd@ntpc.co.in
  



  

    

    
Telephone No.
    
Fax No.
  
  

    
Public Spokesperson Mr. K. Sivakumar Executive Director (Finance)
    
2436 9335
    
24365742
  
  

    
E-mail id
    
ksivakumar@ntpc.co.in
  
  

    
CompanySecretary Mr. Anil Kumar Rastogi
    
2436 0071
    
2436 0241
  
  

    
E-mail id
    
akrastogi@ntpc.co.in
  


As per Circular of Securities & Exchange Board of India dated 22.01.2007, exclusive
e-mail id for redressal of investor complaints is isd@ntpc.co.in.

For and on behalf of Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi

Date: May 10, 2011


ANNEX-1

Non - Mandatory Requirements

Besides the mandatory requirements as mentioned in preceeding pages, the status of
compliance with non-mandatory requirements of Clause 49 of the Listing Agreement is
provided below:

1. The Board: The Company is headed by an Executive Chairman. No Independent Director
has been appointed for the period exceeding, in the aggregate, a period of nine years, on
the Board of the Company.

2. Remuneration Committee: Please refer to para3.3 of this Report.

3. Shareholder Rights: The quarterly financial results of the Company are published in
leading newspapers as mentioned under heading 'Means of Communication' and also hosted on
the website of the Company. These results are not separately circulated. Significant
events have been disclosed on the company website: www.ntpc.co.in under
"Announcements" in the "Company Performance" section.

4. Audit Qualification: It is always Company's endeavour to present unqualified
financial statements.

5. Training to Board Members: The Board of Directors have the responsibility of
strategic supervision of the Company and undertake periodic review of various matters
including performance of various stations, construction of power projects, capacity
expansion programme in line with targets set-up by Ministry of Power, resource
mobilisation, etc. In order to fulfil this role, the Board of Directors undergo training
from time to time. The Board of Directors are fully briefed on all business related
matters, risk assessment and mitigating procedures and new initiatives proposed by the
Company. Directors are also briefed on changes/developments in Indian as well as
international corporate and industry scenario including those pertaining to the
statutes/legislation and economic environment.

6. Mechanism for evaluating non-executive Board Members: Non-executive Board Members
(Independent Directors) of NTPC are being appointed by the Search Committee of the
Government of India for a tenure of three years at a time. Their performance is also
evaluated bythe Search Committee of the Government of India and based on their
performance;theyare considered for re-appointment on the Board.

7. Whistle Blower Policy: The Company has not adopted any separate "Whistle
Blower" policy. However, under the provisions of "Fraud Prevention Policy"
adopted bythe Company, a Whistle Blower mechanism is in place for reporting of fraud or
suspected fraud involving employees of the Company as well as representatives of vendors,
suppliers, contractors, consultants, service provider or any other party doing any type of
business with NTPC. All reports of fraud or suspected fraud are investigated with utmost
speed. The mechanism for prevention of fraud is also included in the policy.

Annex-II

Schedule of Compliances with Presidential Directive issued during last three years:


  

    
Year
    
Content of Presidential Directives
    
Compliance
  
  

    
2010-2011
    
NIL
    
NIL
  
  

    

    
1. Vide Presidential Directive No.8/3/2002-TH.II  (Vol. IV) dated 04.09.2009 read
    with letter of even no. dated 07.10.2009, Government of India had directed NTPC for
    induction of supercritical technology through bulk ordering of 660 MW generating units by
    NTPC Limited for itself and on behalf of its Joint Venture Companies and on behalf of
    Damodar Valley Corporation
    
In line with the Presidential Directive, tenders for Steam Generator (SG) package and
    Steam Turbine Generator (STG) package for 660 MW units were invited separately on
    International Competitive Bidding basis on 16.10.2009 (i.e within the stipulated period of
    45 days from issuance of MOP letter dated 04.09.2009).
  
  

    

    

    
In view of only one bidder being qualified for SG package in line with provision of
    bid documents, tenders were re-invited on 23.06.10 and subsequent to re-invitation three
    parties were determined as being qualified for submission of price bids. However, the
    matter is now sub-judice as the disqualified bidder filed a writ petition in the High
    Court of Delhi. NTPC has challenged the decision of High Court of Delhi in Hon'ble Supreme
    Court of India.
  
  

    
2009-10
    

    
In respect of STG Package, Letter of Intent has been issued for Solapur Super Thermal
    Power Project (2x660 MW), Mouda SuperThermal Power Project-ll (2x660 MW) and Meja Super
    Thermal Power Project (2x660 MW). Letter of Intent for STG Package of Nabinagar Super
    Thermal Power Project (3x660 MW) shall be issued after availability of land. Further,
    Damodar Valley Corporation had been advised to take necessary action for issuance of LOI/
    Notification ofAward.
  
  

    

    
2. Vide Presidential Directive No. 5/5/2004-Th.ll dated 03.07.2009, Government of
    India permitted NTPC for winding up of Pipavav Power Development Company Limited (PPDCL)
    through striking off the name of PPDCL under Section 560 of the Companies Act, 1956.
    
Registrar of Companies, through its letter dated 28.01.2011, has informed that the
    name of Pipavav Power Development Company Limited has been struck off from the Register of
    Registrar of Companies, NCT of Delhi & Haryana pursuant to Section 560 of the
    Companies Act, 1956 and the said Company stands dissolved.
  
  

    

    
3. Contract relating to Main Plant Package for Barh Super Thermal Power Project,
    Stage-I (3x660 MW) awarded on Technopromexport, Russia by NTPC Limited
    
NTPC is implementing Main Plant Package Part-A (Steam Generator & Auxiliaries) for
    Barh SuperThermal Power Project Stage-I (3x660MW) through Technopromexport, Russia. MOP/
    GOI furnished decision of Cabinet Committee on Infrastructure (CCI)videits letter dated
    28.05.2010 directing NTPC to take all necessary actions for the early completion of the
    project in view of the CCI decision. In line with the directive, discussions were held
    between NTPC and Technopromexport, Russia and necessary amendments to Contracts have also
    been issued on 29.10.2010 for implementation of Barh STPP Stage-I.
  
  

    
2008-2009
    
1. Vide Presidential Directive No. 3/4/2009-TH.I dated 30.04.2009, Government of India
    has directed NTPC to implement revision of pay and revision of Board Level and below Board
    Level Executives and Non-Unionised Supervisors in Central Public Sector Enterprises
    (CPSEs) w.e.f. 01.01.2007
    
The process of pay revision of wage and benefit structure for employees in Executive
    category and for employees in unionized category (workmen) was completed on 16.09.2009 and
    07.07.2010 respectively.
  
  

    

    
2. Vide Presidential Directive No. 5/5/2004-TH.II dated 03.07.2009, Government of
    India permitted NTPC for winding up of Pipavav Power Development Company Limited (PPDCL)
    by NTPC Limited pending settlement of claims with Gujarat Power Corporation Limited/
    Government of Gujarat.
    
Please refer compliance as mentioned under Point 2 in the year2009-2010.
  
  

    
2007-2008
    
NIL
    
NIL
  



CHIEF EXECUTIVE OFFICER (CEO) & CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION

We, Arup Roy Choudhury, Chairman & Managing Director and A.K. Singhal, Director
(Finance) of NTPC Limited, to the best of our knowledge and belief, certify that:

(a) We have reviewed the Balance Sheet and Profit and Loss Account (Stand Alone and
Consolidated) and all its Schedules and Notes on Accounts and the Cash Flow Statement for
the year ended March 31, 2011 and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any
material fact or contain statements that might be misleading,-

(ii) these statements together present a true and fair view of the Company's affairs
and are in compliance with existing accounting standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by the
Company during the year, which is fraudulent, illegal orviolative of the company'svarious
code(s) of conduct.

(c) We are responsible for establishing and maintaining internal controls for financial
reporting and we have evaluated the effectiveness of the internal control systems of the
Company pertaining to financial reporting and have disclosed to the auditors and the Audit
Committee, deficiencies in the design or operation of internal controls, if any, ofwhich
we are aware and the steps we have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the company's auditors and the Audit Committee of NTPC's Board
of Directors :

(i) significant changes, if any, in internal control over financial reporting during
the year,-

(ii) significant changes, if any, in accounting policies during the year and the same
have been disclosed in the notes to the financial statements,-and

(iii) instances of significant fraud of which we have become aware and the involvement
therein, if any, of the management or an employee having a significant role in the
company's internal control system over financial reporting.


  

    
Place: New Delhi
    
(A.K. Singhal)
    
(Arup Roy Choudhury)
  
  

    
Date: May06, 2011
    
Director(Finance)
    
Chairman & Managing Director
  



AUDITORS' CERTIFICATE

The Members NTPC Limited

We have examined the compliance of conditions of corporate governance by NTPC Limited
for the year ended on March 31, 2011 as stipulated in the clause 49 of the Listing
Agreements in respect of Equity Shares of the said company with Stock Exchanges and as
stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises
issued by Department of Public Enterprises, Ministry of Heavy Industries and Public
Enterprises, Government of India.

The compliance of conditions of corporate governance is the responsibility of the
management. Our examination is limited to procedures and implementation thereof, adopted
by the Company for ensuring the compliance of the conditions of the Corporate Governance.
It is neither an audit nor an expression of opinion on the financial statements of the
Company.

In our opinion and to the best of our information and according to the explanations
given to us, we certify that the Company has complied with the mandatory conditions of
Corporate Governance as stipulated in the Listing Agreements and in the Guidelines on
Corporate Governance for Central Public Sector Enterprises.

We further state that such compliance is neither an assurance as to the future
viability of the company nor the efficiency or effectiveness with which the management has
conducted the affairs of the company.


  

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

    
Chartered Accountants
    
Chartered Accountants
    
Chartered Accountants
  
  

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

    
(Ashok KumarJain)
    
(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:May10, 2011


ANNEX-III TO DIRECTORS' REPORT

PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF
THE BOARD OF DIRECTORS) RULES, 1988:

A. CONSERVATION OF ENERGY:

a) Energy conservation measures taken:

Some of the important energy conservation measures taken during the FY year 2010-2011
in different areas areas under:


ENERGY AUDITS

During FY 2010-11, 96 energy audits in the areas of auxiliary power consumption, water
balance, cooling water system, thermal insulation, compressed air, coal handling plant,
milling system, air conditioning, ash handling system, WHRB performance, lighting etc.
were carried out at different stations of NTPC. A workshop on "Opportunities for APC
reduction and Water conservation" was conducted at Patna.


AUXILIARY POWER CONSUMPTION

Replacement of inefficient BFP cartridges and attending BFP recirculation valves at
Talcher, Farakka, Dadri, Rihand, Singrauli, Unchahar, Kahalgaon, Korba, Badarpur, Kawas,
Kayamkulam etc., Modifying APH sector angle at Tanda, Removal of one stage in CEP at
Vindhyachal, Application of efficiency improvement coating on cooling water pump internals
at Talcher Thermal, Gandhar & Kawas, Installation of VFD's in HFO pressurizing pumps
at Korba and in raw water pumps at Gandhar, Optimization of operation of CW pumps, ARCWand
clarified water pumps & Cooling Tower Fans at Talcher, Kahalgaon, Sipat, Anta,
Auraiya, unchahar, Farakka and Vindhyachal.

Maintaining optimum DP across Feed Regulating Station at Kahalgaon, Korba, Singrauli
and Vindhyachal, Optimizing operation of HP/LP / Seal water pumps at Vindhyachal, Dadri
coal and Rihand, Optimizing operation of air compressors at Singrauli and Talcher.


LIGHTING

Replacement of conventional GLS lamps and conventional FTLs with CFLs at Farakka,
Rihand, Singrauli, Unchahar, Ramagundam, Anta, Auraiya, Kayamkulam, Kawas and Gandhar,
replacement of HPMV lamps with HPSV lamps at Singrauli, replacement of HPSV fixtures with
LED light fixtures at Kayamkulam.


HEAT ENERGY

Commissioning of new mixed bed unit enabling injection water to be sourced from D/A at
Gandhar. External surface cleaning of WHRB tubes with ammonia at Auraiya, Attending /
upgrading thermal insulation at Auraiya, Kawas, Kayamkulam, Rihand and Vindhyachal.
Adopting new chemical treatment of cooling water at Talcher Thermal. Attending passing in
HP heaters / HP drain valves at Ramagundam and Rihand.


MISCELLANEOUS WATER

Reuse of water from ash pond at various stations, Reuse of clarified water after
equipment cooling, Retrieval and reuse of raw water from coal settling pond, attending
leakages in various lines at various stations, etc.


b) Additional investments and proposals for reduction in consumption of energy:

Provision of Rs. 994 lacs has been kept in BE 2011-12 for different energy conservation
schemes like:

- On-Line Energy Management System

- Vapor absorption system for Air Conditioning

- Installation ofVFD in ID fans


c) Impact of measures taken for energy conservation:

Savings achieved during FY 2010-11 on account of specific efforts for energy
conservation:-


  

    
S.No.
    
Area/Activities
    
Energy Unit
    
Savngs Qty. of units
    
Rs. (in Crore)
  
  

    
1
    
Electrical
    
MU
    
102.33
    
19.09
  
  

    
2.a
    
Heat Energy (equivalent MT of coal)
    
MT
    
22774
    
3.29
  
  

    
2.b
    
Heat Energy (equivalent MCM of Gas)
    
MCM
    
6.577
    
6.27
  
  

    
2.c
    
Heat Energy (equivalent MT of Naptha)
    
MT
    
10.298
    
0.041
  
  

    
3
    
MiscellaneousWater
    
M.CuM
    
6.129
    
1.93
  
  

    

    
Grand Total
    

    

    
30.621
  


Savings achieved during 2009-10: Rs. 29.60 Crore


B. Technology Absorption:

Efforts made towards technology as per Form -B (Form-B enclosed)


C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to export initiative taken to increase export, development of new
export markets for products and services and export plan:


  

    
Total Foreign Exchange Used/Earned (2010-2011)
    
Rs. (in Crore)
  
  

    
1. Foreign Exchange Outgo
    

  
  

    
a) Value of Imports calculated on OF basis:
    

  
  

    
Capital Goods
    
965.31
  
  

    
Spare Parts
    
98.73
  
  

    
b) Expenditure:
    

  
  

    
Professional and ConsultancyCharges
    
5.80
  
  

    
Interest
    
514.43
  
  

    
Others
    
12.21
  
  

    
2. Foreign Exchange Earned
    

  
  

    
Consultancy
    
1.01
  
  

    
Interest
    
-
  
  

    
Others
    
0.11
  



FORM B

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION OF TECHNOLOGY

1.0 Specific areas in which NETRA activities have been carried out during 2010 - 11:

a. MOU Projects for 2010 - 11 Completed: Feasibility study for C02 fixation for
development of product /EOR; Feasibility Report for setting up of 100 Kg/day pilot plant
of Micro Algae based C02 capture technology;Award for Solar heating ventilation and air
conditioning (HVAC) system (in final stases); Installation of a demonstration pilot plant
at Dadri Thermal for the proof of concept of the theoretical model developed for
extraction of moisture from flue sas; Field measurement and validation of Integrated
Polarization Depolarization Current -Recovery Voltage measurement (PDC-RVM) apparatus for
Insulation condition monitoring of Transformers;5kW test loop and data generation for
performance study of aqua ammonia cycle for efficiency improvement and setting up of 8
Sensor Solar Radiation Station at NETRA.

b. Developmental Projects undertaken by NETRA: Preparation of TS for 100 TR Flue gas
heat recovery Air Conditioning plant; Field trials of Robotic based inspection system at
one station;Procurement processing for components of Heat pipe based air-preheater pilot
plant;Preparation of feasibility report of 1 MW solar thermal pilot plant; Finalization of
Technical Specifications for 2nd Phase Advanced computing Center; Installation &
Commissioning of integrated biodiesel pilot plant to produce energy for existing biodiesel
plant at Dadri; Experimental set up of thermoelectric Generation;NIT for Pressure swing
absorption (PSA) based C02 capture pilot plant of 100 Kg/hr flue gas capacity.

c. Scientific Support to NTPC Stations:

• NETRA continued to provide scientific support to NTPC stations such as: Trial
Installation of Software for online chemical monitoring & advisory of Water Chemistry
parameters at Singrauli;Trial installation of Artificial Intelligence (Al) based operator
advisory for plant performance improvement at Simhadri Unit # 2;Development and Trials of
Robotic inspection devices at stations,-Retrofitting of VFD drives in existing cooling
tower fan motor at Dadri;CFD modeling of 500 MW boilers of Vindhyachal &
Korba;Development of PDC-RVM Instrument for Condition Monitoring Transformer Insulating
paper; Installation of Integrated biodiesel plant at Dadri;Design of Cathodic protection
system for Control of Corrosion Induced damages to RCC structures at Simhadri (Stage
1);Treatment technology of raw water of Badarpur for use in DM and cooling water,-Post
operational chemical cleaning of 11 boilers,- Installation & Commissioning of 8
Sensors Solar Radiation Stations,-Fabrication, commissioning and trials of pilot plant for
reconditioning FRF at NETRA; Development of Chemical treatment program for cooling water
systems at Tanda, Jhajjar, Dadri, Talcher Kaniha, Talcher Thermal, etc,-Developed
guidelines for cooling water treatment & online corrosion, fouling and microbiological
fouling/corrosion and post operational chemical cleaning of boilers,-Anticorrosive
coatings suitable for DM plant and immersed structures such as condenser water boxes &
pipes has been recommended to Badarpur & other stations that also included design of
cathodic protection system for condenser water boxes of BadarpunRecommendations have been
given for improving the performance of pre-treatment plants of Kahalgaon, Badarpur &
Kawas.

• Environmental Appraisal of 20 stations have been carried out and corrective
actions are being taken bythe stations based on the appraisal.

• Health Assessment: Fact finding of gas turbine components during its major/minor
inspection, Special NDT of generator components (retaining ring, rotor wedge, rotor
coupling ), Referral jobs for health/life management of boiler components (CBB certified
RLA agency).

• Failure Investigations: Failure Investigations of Condenser tubes of Tanda,
Failure investigation of Condenser tubes of Badarpur, Failure Investigations of Clarified
water pipeline at Unchahar, Failure Investigations of Condenser tubes of Tarapore Atomic
Power station.

• Condition Monitoring: 500 number HV transformers through dissolved gas analysis,
over 1300 rotating components through wear-debris analysis, ion-exchange resins of 20
stations.

• Specialized Testings of over 4000 samples in an year.


d. Scientific Support to Other Utilities:

• Scientific services provided to other utilities such as Panipat, Kota Thermal,
Lehra Mohabat, Faridabad, JPL (Raisarh), Neyvelli, IPGCL, DVC, PGCIL. NHPC, etc.

• International Consultancyto Fujairah power plant (UAE) for Root Cause
investigation of BTF in HRSG's.


2.0 Benefits derived as a result of above Research & Technology Development:

NETRA activities as carried out have helped in increasing the availability, reliability
and efficiency of the stations. Chemical treatment and corrosion control measures
suggested is helping the stations in improving the efficiency, availability and life of
various heat exchangers/cooling towers. Techniques developed by NETRA are implemented at
stations, which are enhancing the life of boiler & turbine components.

The timely and scientific failure analysis of various components helped in identifying
the cause of failure and thus providing necessary input for taking corrective action in
preventing re-occurrence of similar failures thereby increasing the availability of power
plant equipment.

Studies on C02 fixation/utilization,-solar thermal;biofuels will result into
development of technologies for reduction in the impact on climate change and technologies
for affordable renewable energy sources. Development of technologies for efficiency
improvement will help in reducing cost of generation.


3.0 FUTURE PLANS

Developmental Projects planned to be taken up:

• Completion of Installation and Commissioning of bench scale test loop at NETRA
of PSA based C02 capture technology.

• Lab scale testing and design of Pilot plant for C02 utilization through
mineralization of fly ash at Ramagundam.

• Supply of equipment and commencement of erection of 40TR solar HVAC plant at
NETRA through in-house design & engineering.

• Development of software and its trials for On-line chemical parameter monitoring
and advisory at one station through in-house efforts.

• Design and preparation of feasibility report & DPR for 1MW solar Thermal
R&D Pilot plant having provision of three type of concentrators.

• Study of micro-algae strains and short listing for detailed C02 capturing
studies to 10 Nos.

• Draft submission to the Management of R&D Policy in line with DPE's
forthcoming guidelines

• Study of low energy absorption building envelope design.

• Specification of bench scale prototype to convert Municipal Solid Waste to fuel.

• Design & Specification of Pilot plant for Moisture Extraction from flue gas
at Ramagundam.

• Deployment of Artificial Intelligence based pilot program for performance
optimization at 1 station (Simhadri)

• NIT of 100TR FGHR-AC Pilot Plant at Ramagundam

• Lab scale studies forThermal Monitoring ofWaterWall tubes to identify level of
deposits in thetubes.

• Assessment of corrosivity of condenser cooling water and recommending corrective
measures at stations. 


4.0 Expenditure on R&D:


  

    
S.No.
    
Description
    
Expenditure in (Rs. /Crore)
  
  

    

    

    
2010 - 2011 
    
2009 - 2010 
  
  

    
a)
    
Capital
    
3.68
    
1.40
  
  

    
b)
    
Recurring
    
28.30
    
20.56
  
  

    
c)
    
Total
    
31.98
    
21.96
  
  

    
d)
    
Total R&D expenditure as a percentage of total turnover
    
0.0583%
    
0.0475%
  



5.0 Technology Absorption, Adaptation and Innovation

Particulars of some of the important technology imported during last five years are as
follows:


  

    
S.No.
    
Technology
    
Year
    
Stations
  
  

    
1.
    
Super critical Technology with 256 Kg/cm2 Steam Pressure and 565/595 CMS/RH steam
    temperature is being adopted for improvement in thermal efficiency and reduced emission of
    green house gasses.
    
2008-10
    
Being Implemented in Barh-ll and further being implemented in 11 units of 660 MW (in
    Mauda, Sholapur, Meja, Nabinagar and Raghunathpur plant) through bulk tendering mechanism
    & envisaged for 800 MW units (Kudgi, Darlipalli, Gajmara & Lara through Bulk
    tendering.)
  
  

    
2
    
Implementing IGCC technology for high ash Indian coal
    
2010
    
Demonstration plant of about 100 MW capacity at Dadri project of NTPC.
  
  

    
3
    
Communicable Numerical Relay Technology (on EC 618500) along with Networking Systems
    introduced in 33 KV/11KV /6.6 KV/3.3 KV and LV System
    
2009
    
Implemented at Dadri-ll, Korba-lll & IGSTPP, Simhadri-ll. Being Implemented in all
    ongoing projects.
  
  

    
4
    
Boiler FlameViewing Camera
    
2009
    
Implemented in Kahalgaon and Sipat-ll
  
  

    
5
    
4000 TPH Capacity & 4.4 Km long pipe conveyors for transporting coal from port to
    plant.
    
2006
    
Implemented in Vallur. This is highest capacity pipe conveyor in Asia.
  
  

    
6
    
Advanced Class Gas Turbines with approx. 60% combined cycle efficiency
    
2011
    
Envisaged for Kawas-ll, Gandhar-ll and Kayamkulam-ll
  
  

    
7
    
As a part of green technology adoption, LED based large video screens have been
    adopted for control rooms, from 660MW bulk tendering projects onwards.
    
2010
    
Incorporated in the Station C&l specifications of 660MW bulk tender projects.
    (Mauda-ll, Sholapur, Meja, Nabinagar).
  
  

    
8
    
Secured & Improved Network design of DDCMIS has been adopted. This secured network
    design has been incorporated in the specifications along with network security policies
    & procedures, provision of security audits and specialized training.
    
2008
    
Incorporated in technical specifications from Bongaigaon onwards. For existing
    projects, these security policies & procedures have been circulated to all sites.
  


For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX-V TO DIRECTORS' REPORT

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY
COMPANIES


  

    

    
NAME OF THE SUBSIDIARY1
    
NTPC ELECTRIC SUPPLY COMPANY LTD.
    
NTPC VIDYUT VYAPAR NIGAM LTD.
    
NTPC HYDRO LTD.
    
KANTI BIJLEE UTPADAN NIGAM LIMITED
    
BHARTIYA RAIL BIJLEE COMPANY LIMITED
  
  

    
1.
    
Financial year of the Subsidiary ended on
    
March31,2011
    
March 31,2011
    
March 31,2011
    
March 31,2011
    
March 31,2011
  
  

    
2.
    
Date from which they became Subsidiary
    
August21,2002
    
Novemberl, 2002
    
December12, 2002
    
September 6, 2006
    
November22, 2007
  
  

    
3.
    
Share of the subsidiary held by the company as on March 31,2011
    

    

    

    

    

  
  

    

    
a) Number&facevalue
    
80,910 equity shares of Rs. 10/-each
    
2,00,00,000 equity shares of Rs. 10/-each
    
11,39,59,500 equity shares of Rs. 10/-each
    
5,71,51,000 equity shares of Rs. 10/-each
    
35,52,00,000 equity shares of Rs. 10/-each
  
  

    

    
b) Extent of holding
    
100%
    
100%
    
100%
    
64.57%
    
74%
  
  

    
4.
    
The net aggregate amount of the subsidiary companies Profit/(loss) so far as it
    concerns the member of the holding company a) Not dealt with in the holding company's
    accounts
    

    

    

    

    

  
  

    

    
i) For the financial year ended March 31,2011
    
6,01,49,800
    
30,05,81,892
    
NIL
    
(14,58,26,762)
    
(2,31,384)
  
  

    

    
ii) Upto the previous financial years of the subsidiarycompany
    
43,19,34,036
    
79,61,907
    
(813,26,692)
    
(7,78,816)
    
(48,87,604)
  
  

    

    
b) Dealtwith in the holding company's accounts
    

    

    

    

    

  
  

    

    
(i) For the financial year ended March 31,2011
    
Nil
    
Nil
    
Nil
    
Nil
    
Nil
  
  

    

    
(ii) For the previous financial year of the subsidiary companysincethey become the
    holding company's subsidiaries
    
Nil
    
Nil
    
Nil
    
Nil
    
Nil
  



(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX- VI TO DIRECTORS' REPORT

STATISTICAL DATA OF GRIEVANCE CASES 2010-2011


  

    
S. No.
    
Particulars
    
Public Grievance
    
Staff Grievances
  
  

    

    

    
Cases
    
Cases
  
  

    
1.
    
Grievance cases outstanding at the beginning of the year
    
-
    
6
  
  

    
2.
    
Grievance cases received during theyear
    
1
    
22
  
  

    
3.
    
Grievance cases disposed of during the year
    
-
    
26
  
  

    
4.
    
Grievance Cases outstanding at the end of the year
    
1
    
2
  


For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX-VII TO DIRECTORS' REPORT 

STATICAL INFORMATION ON RESERVATION OF SCs/STs FOR THE YEAR 2010

Representation of SCs/STs as on 01.01.2011:


  

    
Group
    
Employees on Roll
    
SCs
    
%age
    
STs
    
%age
  
  

    
A
    
14005
    
1674
    
11.95
    
589
    
4.20
  
  

    
B
    
5085
    
788
    
15.49
    
356
    
7.00
  
  

    
C
    
5877
    
1038
    
17.66
    
410
    
6.97
  
  

    
D
    
1137
    
241
    
21.19
    
152
    
13.36
  
  

    
Total
    
26104
    
3741
    
14.33
    
1507
    
5.77
  



Recruitment of SCs/STs during the year 2010:


  

    
Group
    
Total Recruitment
    
SCs
    
%age
    
STs
    
%age
  
  

    
A
    
1129
    
121
    
10.71
    
51
    
4.51
  
  

    
B
    
-
    
-
    
-
    
-
    
-
  
  

    
C
    
132
    
30
    
22.72
    
1
    
0.75
  
  

    
D
    
23
    
8
    
34.78
    
7
    
30.43
  
  

    
Total
    
1284
    
159
    
12.38
    
59
    
4.59
  



Promotions of SCs/STs during the year 2010:


  

    
Group
    
Total
    
SCs
    
%age
    
STs
    
%age
  
  

    
A
    
3154
    
377
    
11.95
    
119
    
3.77
  
  

    
B
    
1084
    
144
    
13.28
    
66
    
6.08
  
  

    
C
    
1237
    
232
    
18.37
    
75
    
6.06
  
  

    
D
    
149
    
31
    
20.80
    
9
    
6.04
  
  

    
Total
    
5624
    
784
    
13.94
    
269
    
4.78
  


The following backlog vacancies reserved for SCs/ STs/ OBCs have been filled through
special recruitment drive/ advertisement of backlog vacancies along with current
vacancies:


  

    
SCS :
    
14
  
  

    
STS :
    
14
  


For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX- VIII TO DIRECTORS' REPORT

PHYSICALLY CHALLENGED PERSONS

With a view to focus on its role as a socially responsible and socially conscious
organization, your Company has endeavored to take responsibility for adequate
representation of physically challenged persons (PCP) in its workforce. In this view, your
Company NTPC launched a massive recruitment drive to make up the shortfall of PCP.
Presently, 470 PCP (94 VH, 106 HH and 270 OH) are on rolls of NTPC. Reservation has been
provided for PH as per rules/ policy. Some of the other initiatives taken for the welfare
of physically challenged persons by NTPC over the years are as under:

- For individual needs of the Visually Hampered employees, screen reading software and
Braille shorthand machines, made available by the Projects of NTPC. A website has been
made PCP friendly particularly for Low Vision Employees.

- "Sign language" training for the employees in general.

- Changes in the existing building have been/ are being made to provide barrier free
access to physically challenged.

- Ramps have also been provided for unhampered movement ofwheel chairs.

- At most of the NTPC Projects, wherever houses are located in multi-storied
structures, allotments to PCP has been made on the ground floor.

- Special parking enclosure near the ramp at the office entrance as well as Physically
Handicapped friendly toilet and lift at CC and Projects.

- Wheel chairs have been provided to employees with orthopedics disabilities. If
required, the assistance of an attendant has also been sanctioned.

- Wherever required, gates/ door of the quarter have been widened.

- At CC, procurement of stationery items like files, envelopes are mainly being done
from NGOs/ Agencies like ADDI, MUSKAN, Blind ReliefAssociation who areworking for
physically challenged therebycreating indirect employment.

- Paintings made by disabled persons have also been procured and placed at different
locations in the Company Offices.

- Medical camps have been organized in various projects of NTPC for treatment and
distribution of aids like artificial limbs, tricycles, wheelchairs, calipers etc.

- Shops have been allotted in NTPC Township to PCP so that they may earn their
livelihood. Similarly, PCOs within/ outside plant premises are also allotted to PCP.

- Regular interactive meetings are being organized with physically challenged
employees.

- Training needs are being fulfilled as per the individual requirement.

- 10 number of Scholarships @ Rs. 1,500/- per month/ per student are given to PH
students pursuing MBA/ PGDBM/Degree in Engineering Courses.

- Petty contracts like book binding, scribbling pad preparation from waste paper, file
binding, furniture repair, screen printing, spiral binding, painting contract are also
being given to disabled persons.

- Physically challenged (Orthopedically Handicapped) employees have been allowed to
purchase a three wheeler vehicle with a hand fitted engine against their normal
entitlement (advance for scooter/ motorcycle/ moped) under NTPC conveyance Advance Rules.

- At all Projects/ Offices, Nodal Officers (Physically Challenged) have been nominated.

- Reimbursement towards low vision aids, dark glasses etc. subject to maximum of Rs.
1,000/- every year has been introduced. Similarly hearing aid behind the ear model for
each ear restricted to Rs. 10,000/- or actual cost whichever is lower has been introduced.
It may be replaced every four years subject to certificate of condemnation by ENT
Specialist.

- Relaxation in qualifying marks for open recruitment: pass marks only and also 10%
relaxation in written test and interview from the year-2002 onwards.

- The minimum performance level marks for promotions within the cluster is relaxed by 3
marks in case of employees belonging to SC/ ST/ Physically Challenged category.

- NTPC had launched special recruitment drive for filling up 18 backlog vacancies for
PCP in Group-A Posts out ofwhich 16 posts have been filled during the year 2010.

For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX-IX TO DIRECTORS' REPORT

UNGC - Communication on Progress (2010-11)

NTPC expresses its continued support for the Global Compact and its commitment to take
action in this regard, as was communicated by the Chairman & Managing Director, NTPC
in his letter dated May 29, 2001 addressed to Secretary General, United Nations.

NTPC has posted the brief of Global Compact and its commitment to the principles of GC
on its website at www.ntpc. co.in . The principles of GC were communicated to all
employees through in - house magazines, internal training programmes and posters. NTPC, a
core member of Global Compact Network (GCN), India, (formerly known as Global Compact
Society) actively participated in the Annual Convention of the Global Compact Network at
Mumbai and Asia Pacific Regional Conclave at New Delhi. NTPC representative contributed as
faculty for various training programmes organized by GCN for Global Compact Member
Organizations in Chennai and Delhi.

NTPC is in the process of preparing its "Corporate Sustainability Report"
covering Economic, Environmental and Social aspects with the "triple bottom
line" approach based on widely accepted and updated Global Reporting Initiative (GRI)
Guidelines.


Human Rights: Principle 1-2

Most of NTPC's operating power stations are located in remote rural areas which are
socio-economically backward and deficient in the basic civic amenities. NTPC, as
responsible corporate citizen has been addressing the issue of community development is
the neighbourhood areas of its stations impacted due to establishment of the project,
initially as part of Resettlement and Rehabilitation (R&R) effort continued
subsequently under the "Community Development (CD) Policy".

Keeping in view the changed Business environment, Global practices and detailed
guidelines issued from DPE, Ministry of Heavy Industry & Public Enterprises, revised
CSR Community Development (CD) policy of NTPC has been approved by Board of Directors in
August 2010.

Under this policy, during 2010-11, your Company has taken up a large number of
activities for carrying out comprehensive Community Development work in the area of
health, education, drinking water and peripheral development in the neighbourhood of 20
operating stations. In addition, Quality Circles (QCs) are functioning in neighborhood
villages of its stations. NTPC employees participate in various CD activities through
Employee Voluntary Organization for Initiative in Community Empowerment (EVOICE).

NTPC supported/ committed support to various Institutions/ Bodies and undertook
initiatives for major activities like self reliance for tribal girls/women, construction
of girls hostel, construction of school sum multi-purpose building, preparation and
development of Audio Study material for visually challenged persons, construction of
houses for affected people due to damage caused by cloud burst in August 2010 in Leh,
construction of road, supply of drinking water through pipeline to villages, construction
of a bridge over drain, etc.

NTPC members were actively involved in reviews of draft preparation of "ISO 26000
Guidance on Social Responsibility and the implications for Developing Countries" by
Bureau of Indian Standard (BIS) and participated regularly in various workshops/ meetings
in the capacity of "industry experts on CSR".

NTPC is also member of Corporate Roundtableon Development of Strategies for Environment
(CoRE) initiated byTERI and is supporting its principles outlined in the CoRE
sustainability Charter drawn from International Chamber of Commerce's Business Charter for
Sustainable Development.

NTPC has also adopted the Social Code framed by India partnership Forum promoted by
Confederation of Indian Industries (Cll) and UNDP and is closely associated with Bureau of
Indian Standard (BIS) in formation of "Standard on Good Governance" and with
Ministry of Corporate Affairs in drafting Draft National Voluntary Guidelines on Social,
Environmental & Economic responsibilities of Business.

Major activities taken up by NTPC in this area are highlighted under the head
"Inclusive Growth" and "NTPC Foundation" under Directors' Report for
the Annual Report 2010-11.


Labour Standard: Principle 3-6

For addressing the issue of labour standard in comprehensive manner, NTPC has decided
to adopt international standards like SA-8000 and OHSAS-18001.

During the year 2010-11, Kawas and Kayamkulam got Accreditation for SA-8000. Anta,
Farakka, Faridabad, Jhanor-Gandhar, and Simhadri stations of NTPC got revalidated for
accreditation for SA-8000 and Surveillance Audit for the same was conducted at 09 Stations
i.e. Anta, Auraiya, Badarpur, Farakka, Faridabad, Jhanor-Gandhar, Kawas, Rihand and
Simhadri. Revalidation for SA-8000 is in process at Ramagundam, Singrauli and Unchahar.


Environment: Principle 7-9

NTPC has taken a number of initiatives towards preservation of the environment by
providing state-of-the art pollution control systems, regular environment monitoring and
judicious use of natural resources, adoption of advanced and high efficiencytechnologies
such as supercritical boilers forthe up-coming projects (Sipat, Stage-I). High efficiency
Electrostatic Precipitators (ESPs) with efficiency of the order of 99.9% or higher with
advanced ESP control systems have been provided in all coal based plants.

For institutional strengthening, NTPC organized specialized training programmes in
2010-11 viz 'Environment Management, Climate Change & Carbon Mitigation' for
executives directly working for Environment functions, 'Environmental Concerns' for the
executives working in non Environment functions and 'Insight into the Environment
Management' for high level executives

Major activities taken up by NTPC in the area of Environment are highlighted under the
head "Environment Management" under Directors' Report for the Annual Report
2010-11.


Anti-corruption: Principle 10

NTPC has a Vigilance Department headed by Chief Vigilance Officer, a nominee of the
Central Vigilance Commission. The four units of Vigilance Deptt, namely Corporate
Vigilance Cell, Departmental Proceeding Cell (DIPC), MIS Cell, Technical Cell (TC) deal
with various facets of Vigilance Mechanism. Exclusive & independent functioning of
these units ensure transparency, objectivity and quality in Vigilance functioning. The
Vigilance Department submits its reports to Competent Authority including the Board of
Directors. The CVO also reports to the Central Vigilance Commission as per their norms.

Major activities taken up by NTPC in the area regarding Implementation of Integrity
Pact, Implementation of Fraud Policy, Preventive Vigilance Workshops and Vigilance
Awareness Week etc. are highlighted under the head "Vigilance" under Directors'
Report for the Annual Report 2010-11.

For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011


ANNEX-X TO DIRECTORS' REPORT

The quantity of ash produced, ash utilized and percentage of such utilization during
the FY 2010-11 from NTPC Stations is as under:


  

    
Sl. No.
    
Stations
    
Ash Produced
    
Ash Utilization
    
% Utilization
  
  

    

    

    
Lakh MTs
    
Lakh MTs
    
%
  
  

    
1
    
Badarpur
    
11.05
    
9.86
    
89.23
  
  

    
2
    
Dadri
    
25.50
    
21.01
    
82.40
  
  

    
3
    
Singrauli
    
40.49
    
24.30
    
60.02
  
  

    
4
    
Rihand
    
29.05
    
17.58
    
60.52
  
  

    
5
    
Unchahar
    
23.21
    
20.27
    
87.33
  
  

    
6
    
Tanda
    
11.59
    
6.96
    
60.04
  
  

    
7
    
Korba
    
53.40
    
21.40
    
40.08
  
  

    
8
    
Vindhyachal
    
50.74
    
32.09
    
63.25
  
  

    
9
    
Sipat
    
22.09
    
2.32
    
10.52
  
  

    
10
    
Ramagundam
    
40.66
    
26.11
    
64.22
  
  

    
11
    
Simhadri
    
21.92
    
13.16
    
60.04
  
  

    
12
    
Farakka
    
24.81
    
21.57
    
86.94
  
  

    
13
    
Kahalgaon
    
38.12
    
9.12
    
23.93
  
  

    
14
    
Talcher-Thermal
    
11.93
    
11.93
    
100.00
  
  

    
15
    
Talcher-Kaniha
    
67.49
    
22.60
    
38.48
  
  

    

    
Total
    
472.05
    
260.28
    
55.14
  


For and on behalf of the Board of Directors


(Arup Roy Choudhury) 

Chairman & Managing Director

Place: New Delhi 

Dated : August 04, 2011