You must read the following before contin - Singapore Exchange

IMPORTANT NOTICE

NOT FOR DISTRIBUTION TO ANY PERSON OR ADDRESS IN THE U.S.

IMPORTANT: You must read the following before continuing. The following applies to the note

offering circular dated 4 August 2016 (the Note Offering Circular and, together with the offering

circular dated 4 November 2015, the Offering Circular) following this page, and you are therefore

advised to read this carefully before reading, accessing or making any other use of the Offering

Circular. In accessing the Offering Circular, you agree to be bound by the following terms and

conditions, including any modifications to them any time you receive any information from us as a

result of such access.

NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF

SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE

IT IS UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE,

REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE

SECURITIES ACT), OR THE SECURITIES LAWS OF ANY STATE OF THE U.S. OR OTHER

JURISDICTION AND THE SECURITIES MAY NOT BE OFFERED OR SOLD WITHIN THE

U.S., EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT

SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND

APPLICABLE STATE OR LOCAL SECURITIES LAWS.

THE FOLLOWING OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED

TO ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER

WHATSOEVER, AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY U.S.

ADDRESS. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS

DOCUMENT IN WHOLE OR IN PART IS UNAUTHORISED. FAILURE TO COMPLY WITH

THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE

APPLICABLE LAWS OF OTHER JURISDICTIONS. ANY INVESTMENT DECISION SHOULD

BE MADE ON THE BASIS OF THE TERMS AND CONDITIONS OF THE SECURITIES AND

THE INFORMATION CONTAINED IN THE OFFERING CIRCULAR. IF YOU HAVE GAINED

ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE FOREGOING

RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO PURCHASE

ANY OF THE SECURITIES DESCRIBED THEREIN.

Confirmation of your Representation: This Offering Circular is being sent at your request and by

accepting the e-mail and accessing this Offering Circular, you shall be deemed to have represented to

us that the electronic mail address that you gave us and to which this e-mail has been delivered is not

located in the U.S. and that you consent to delivery of such Offering Circular by electronic

transmission.

You are reminded that this Offering Circular has been delivered to you on the basis that you are a

person into whose possession this Offering Circular may be lawfully delivered in accordance with the

laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver

this Offering Circular to any other person.

The materials relating to any offering of securities described in the Offering Circular do not constitute,

and may not be used in connection with, an offer or solicitation in any place where offers or

solicitations are not permitted by law. If a jurisdiction requires that the offering be made by a licensed

broker or dealer and the underwriters or any affiliate of the underwriters is a licensed broker or dealer

in that jurisdiction, the offering shall be deemed to be made by the underwriters or such affiliate on

behalf of the Issuer in such jurisdiction.

This Offering Circular has been sent to you in an electronic form. You are reminded that documents

transmitted via this medium may be altered or changed during the process of electronic transmission

and consequently neither Axis Bank, Singapore Branch, The Hongkong and Shanghai Banking

Corporation Limited, MUFG Securities EMEA plc, Standard Chartered Bank nor any person who

controls each of them nor any director, officer, employee nor agent of each of them or affiliate of any

such person accepts any liability or responsibility whatsoever in respect of any difference between the

Offering Circular distributed to you in electronic format and the hard copy version available to you on

request from Axis Bank, Singapore Branch, The Hongkong and Shanghai Banking Corporation

Limited, MUFG Securities EMEA plc and Standard Chartered Bank.

You are responsible for protecting against viruses and other destructive items. Your use of this e-mail

is at your own risk and it is your responsibility to take precautions to ensure that it is free from viruses

and other items of a destructive nature.

To the fullest extent permitted by law, neither Axis Bank, Singapore Branch, The Hongkong and Shanghai Banking Corporation Limited, MUFG Securities EMEA plc, Standard Chartered Bank nor

any person who controls each of them nor any director, officer, employee nor agent of each of them or

affiliate of any such person accept any responsibility for the contents of this Offering Circular or for

any other statement, made or purported to be made by Axis Bank, Singapore Branch, The Hongkong and Shanghai Banking Corporation Limited, MUFG Securities EMEA plc, Standard Chartered Bank

or by any person who controls each of them, or by any director, officer, employee or agent of each of

them or affiliate of any such person in connection with the Issuer, or the Offering. Axis Bank, Singapore Branch, The Hongkong and Shanghai Banking Corporation Limited, MUFG Securities

EMEA plc and Standard Chartered Bank accordingly disclaims all and any liability whether arising in

tort or contract or otherwise which it might otherwise have in respect of this Offering Circular or any such statement.

The Offering Circular has not been and will not be registered, produced or made available to all as an

offer document (whether a prospectus in respect of a public offer or an information memorandum or private placement offer letter or other offering material in respect of any private placement under the

Companies Act, 2013 or any other applicable Indian laws) with the Registrar of Companies of India

(RoC) or the SEBI or any other statutory or regulatory body of like nature in India,

In addition, holders and beneficial owners shall be responsible for compliance with restrictions on the

ownership of the Rupee Denominated Notes imposed from time to time by applicable laws or by any

regulatory authority or otherwise. In this context, holders and beneficial owners of Rupee

Denominated Notes shall be deemed to have acknowledged, represented and agreed that such holders

and beneficial owners are eligible to purchase the Rupee Denominated Notes under applicable laws

and regulations and are not prohibited under any applicable law or regulation from acquiring, owning

or selling the Rupee Denominated Notes. Potential investors should seek independent advice and

verify compliance with FATF Requirements prior to any purchase of the Rupee Denominated Notes.

The holders and beneficial owners of Rupee Denominated Notes shall be deemed to confirm that

for so long as they hold any Rupee Denominated Notes, they will meet the FATF Requirements

and will not be an offshore branch of an Indian bank.

Further, all Noteholders represent and agree that the Rupee Denominated Notes will not be

offered or sold on the secondary market to any person who does not comply with the FATF

Requirements or which is an offshore branch of an Indian bank.

0012018-0003086 HK:20704050.1

NOTE OFFERING CIRCULAR

(incorporated with limited liability in the Republic of India)

Issue of

INR denominated 20,000,000,000 7.375 per cent. Notes due 2021 payable in U.S. Dollars

issued pursuant to the

U.S.$4,000,000,000

Medium Term Note Programme

The INR denominated 20,000,000,000 7.375 per cent. Notes due 2021 payable in U.S. Dollars (the Notes) will be issued by NTPC Limited (the

Issuer or NTPC), pursuant to its U.S.$4,000,000,000 Medium Term Note Programme (the Programme). The Notes will bear interest at the rate of

7.375 per cent. per annum from and including 10 August 2016 to but excluding 10 August 2021 and interest will be payable annually on 10 August of

each year, commencing on 10 August 2017 (the Offering). The Notes will mature on 10 August 2021. All payments of principal and interest on the

Notes will be made in U.S. Dollars. Prior to maturity, the Notes will be redeemable by the Issuer, in whole but not in part, in the event of certain

changes in Indian tax law. See "Terms and Conditions of the Notes".

The Notes will constitute the direct, unconditional, unsubordinated and (subject to Condition 4) unsecured obligations of the Issuer and will rank pari

passu among themselves and (save for certain obligations required to be preferred by law) equally with all other unsecured obligations (other than

subordinated obligations, if any) of the Issuer, from time to time outstanding.

Application has been made to the Financial Conduct Authority in its capacity as competent authority (the UK Listing Authority) for the Notes to be

admitted to the official list of the UK Listing Authority (the London Official List) and to the London Stock Exchange’s Professional Securities

Market (the PSM). The PSM is not a regulated market for the purposes of Directive 2004/39/EC. Application will also be made to the Singapore

Exchange Securities Trading Limited (the SGX-ST). Final permission to list the Notes will be granted when the Notes have been admitted to the

Official List of the SGX-ST (the SGX Official List). The SGX-ST assumes no responsibility for the correctness of any of the statements made or

opinions expressed or reports contained herein. Admission to the SGX Official List of the SGX-ST and quotation of the Notes on the SGX-ST are not

to be taken as an indication of the merits of the Issuer or the Notes. For so long as any Notes are listed on the SGX-ST and the rules of the SGX-ST so

require, such Notes will be traded on the SGX-ST in a minimum board lot size of S$200,000 or its equivalent in other currencies.

Investing in the Notes involves risks. See “Additional and Supplemented Risk Factors” in this offering circular (the Note Offering Circular) and

"Investment Considerations" in the Original Offering Circular (as defined herein) for a discussion of certain factors to be considered in connection

with an investment in the Notes.

The Notes will be rated BBB- by Fitch Ratings Limited and BBB- by S&P Global Ratings, a division of the McGraw-Hill Companies, Inc. Such ratings of the Notes do not constitute a recommendation to buy, sell or hold the Notes and may be subject to revision or withdrawal at any time by

either such rating organisation. Each such rating should be evaluated independently of any other rating of the Notes, of the Issuer's other securities or

of the Issuer.

The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and may not be offered or

sold in the United States unless the Notes are registered under the Securities Act or an exemption from the registration requirements of the Securities

Act is available. The Notes will not be transferable except in accordance with the restrictions described under "Subscription and Sale" in the Note

Offering Circular and the Original Offering Circular and "Transfer Restrictions" in the Original Offering Circular.

The Notes offered outside the United States in reliance on Regulation S (the Regulation S Notes) will be evidenced by a Regulation S Global Note

(as defined in the Original Offering Circular) deposited with a common depositary for Euroclear Bank SA/NV (Euroclear) and Clearstream Banking

S.A. (Clearstream, Luxembourg), and registered in the name of a nominee of such common depositary.

It is expected that delivery of the Regulation S Global Note will be made on 10 August 2016 or such later date as may be agreed (the Closing Date)

by the Issuer and the Joint Lead Managers.

For the purposes of the Notes only, this Note Offering Circular is supplemental to, and should be read in conjunction with, the offering circular dated

4 November 2015 (the Original Offering Circular) (the Original Offering Circular together with this Note Offering Circular, the Offering

Circular).

Words and expressions defined in the Original Offering Circular shall have the same meanings where used in this Note Offering Circular unless the

context otherwise requires or unless otherwise stated herein.

Joint Lead Managers

Axis Bank, Singapore

Branch

HSBC MUFG Standard Chartered

Bank

The date of this Note Offering Circular is 4 August 2016.

0012018-0003086 HK:20704050.1

TABLE OF CONTENTS

PAGE

ABOUT THIS DOCUMENT ............................................................................................................ S-1

GLOSSARY OF TERMS USED IN THIS OFFERING CIRCULAR ................................................. S-2

NOTES BEING ISSUED AS GREEN MASALA BONDS ................................................................ S-3

ADDITIONAL AND SUPPLEMENTED RISK FACTORS .............................................................. S-4

DESCRIPTION OF THE ISSUER .................................................................................................. S-18

SUPERVISION AND REGULATION ............................................................................................ S-19

USE OF PROCEEDS ...................................................................................................................... S-20

THE ISSUER'S GREEN BOND FRAMEWORK ............................................................................ S-21

SUBSCRIPTION AND SALE ......................................................................................................... S-23

PRICING SUPPLEMENT FOR GREEN MASALA BONDS .......................................................... S-25

TAXATION .................................................................................................................................... S-35

RECENT DEVELOPMENTS ......................................................................................................... S-37

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2016 ......................... S-40

0012018-0003086 HK:20704050.1 S-1

ABOUT THIS DOCUMENT

This document is in two parts. The first part is the Note Offering Circular, which describes the

specific terms of the Notes being offered as Green Masala Bonds and also adds to and updates information contained in the Original Offering Circular. The second part, the Original Offering

Circular, provides more general information about the Issuer and the terms and conditions of the

Notes.

This Offering Circular comprises as a whole listing particulars in compliance with the listing rules

made under Section 73A of the Financial Services and Markets Act 2000 by the UK Listing Authority.

In the event of any conflict between the description of the Notes in this Note Offering Circular and the

description of the Notes in the Original Offering Circular, the description of the Notes in this Note

Offering Circular shall prevail.

No future financial statements are to be incporated by reference into this Offering Circular.

The Issuer accepts responsibility for the information contained in this Offering Circular. To the best

of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the

information contained in this Offering Circular is in accordance with the facts and does not omit

anything likely to affect the import of such information.

The reference to the specified office of the Paying Agent being “in London” appearing on page 212 of

the Original Offering Circular shall be deemed to be deleted and replaced “in Dublin”.

0012018-0003086 HK:20704050.1 S-2

GLOSSARY OF TERMS USED IN THIS OFFERING CIRCULAR

All references to the Rupee Bond Circular or the ECB Guidelines in the Original Offering Circular

should be read as the Foreign Exchange Management (Borrowing or Lending in Foreign Exchange)

Regulations, 2000 and the circulars issued thereunder by the RBI, including the Master Direction – External Commercial Borrowing, Trade Credit, Borrowing and Lending in Foreign Currency by

Authorised Dealers and Persons other than Authorised Dealers dated 1 January 2016, as amended.

0012018-0003086 HK:20704050.1 S-3

NOTES BEING ISSUED AS GREEN MASALA BONDS

The Notes being offered as “green masala bonds”, are in alignment with the pre-issuance

requirements of the Climate Bonds Standard Version 2.0 issued by the Climate Bonds Initiative

(Green Masala Bonds). In that regard, KPMG India (KPMG) has issued an independent limited

assurance statement (the Assurance Report) and the Climate Bonds Initiative has issued a certificate

that the issue of the Notes has met the relevant criteria set by the Climate Bonds Standard Board (the

CBI Certificate), in each case with respect to the Issuer's Green Bond Framework (as defined and

described in further detail in the following pages of this Note Offering Circular).

0012018-0003086 HK:20704050.1 S-4

ADDITIONAL AND SUPPLEMENTED RISK FACTORS

Investors should carefully consider the following Risk Factors as well as the other information

contained in this Offering Circular prior to making an investment in the Notes. In making an

investment decision, each investor must rely on its own examination of the Issuer and the terms of the

offering of the Notes. The risks described below are not the only ones that may affect the Notes.

Additional risks not currently known to the Issuer or that the Issuer, based on the information

currently available to it, currently deems immaterial may also impair the Issuer’s business operations.

All of these risks are contingencies which may or may not occur and the Issuer is not in a position to

express a view on the likelihood of any such contingency occurring. If any of the following or any

other risks actually occur, the Issuer’s business, prospects, results and financial condition could be

adversely affected and the price of and the value of investment in the Notes could decline and all or

part of the investments may be lost. These Risk Factors should be read in conjunction with those in

the Original Offering Circular under “Investment Considerations”.

In the event of any conflict between the descriptions under this “Additional and Supplemented

Risk Factors” in this Note Offering Circular and the descriptions under “Investment

Considerations” in the Original Offering Circular, the following descriptions in this Note

Offering Circular shall prevail.

The following Risk Factors are in addition to, and should be read in conjunction with, those in

the Original Offering Circular under “Investment Considerations”.

The Notes may not be a suitable investment for all investors seeking exposure to green assets.

At the Issuer’s request, KPMG has issued the Assurance Report and the Climate Bonds

Initiative has issued the CBI Certificate, in each case with respect to the Issuer's Green Bond

Framework. Neither of the Assurance Report or the CBI Certificate is incorporated into, nor does

either form part of, the Offering Circular. Neither the Issuer nor the Dealers make any representation

as to the suitability of the Assurance Report or the CBI Certificate. Neither of the Assurance Report or

the CBI Certificate is a recommendation to buy, sell or hold securities and each is only current as of

the respective date that it was initially issued. The Issuer has agreed to certain reporting and use of

proceeds obligations as described herein; however, it will not be an Event of Default under the Terms

and Conditions of the Notes if the Issuer fails to comply with such obligations. A withdrawal of the

Assurance Report or the CBI Certificate may affect the value of the Notes and may have

consequences for certain investors with portfolio mandates to invest in green assets.

The following risk factor appearing on page 90 of the Original Offering Circular shall be

deemed to be deleted in its entirety and replaced by the following:

The proposed adoption of Indian Accounting standards converged with IFRS (IND-AS) could have

a material adverse effect on the presentation of the Issuer’s financial statements.

The Issuer has historically prepared its annual and interim financial statements under Indian

GAAP. Public companies in India, including the Issuer, are now required to prepare annual and

interim financial statements under IND-AS in accordance with the roadmap announced on 2 January

2015 by the Ministry of Corporate Affairs, Government of India (the MCA), in consultation with the

National Advisory Committee on Accounting Standards (the MCA Press Release) for convergence

with IFRS. On 16 February 2015, the MCA notified the public of the Companies (Indian Accounting

Standards) Rules, 2015, which have come into effect from 1 April 2016. The Issuer intends to

announce its quarterly financial results pursuant to IND-AS for the first time for the quarter ended 30

0012018-0003086 HK:20704050.1 S-5

June 2016. There can be no assurance that the Issuer’s financial condition, results of operations, cash

flows or changes in shareholders’ equity will not appear materially worse under IND-AS than under

Indian GAAP. In the Issuer’s transition to IND-AS reporting, we may encounter difficulties in the

ongoing process of implementing and enhancing the Issuer’s management information systems.

Moreover, there is increasing competition for the small number of IND-AS-experienced accounting

personnel available as more Indian companies begin to prepare IND-AS financial statements.

Furthermore, there is no significant body of established practice on which to draw in forming

judgments regarding the new system’s implementation and application. There can be no assurance

that the Issuer’s adoption of IND-AS will not adversely affect the Issuer’s reported results of

operations or financial condition and any failure to successfully adopt IND-AS could adversely affect

the Issuer’s business, financial condition and results of operations. In addition, in its transition to

IND-AS reporting, the Issuer may encounter difficulties in the on-going process of implementing and

enhancing its management information systems.

The following risk factor appearing on page 97 of the Original Offering Circular shall be


Rupee Denominated Notes are subject to selling restrictions and may be transferred only to a

limited pool of investors.

Rupee Denominated Notes can only be issued to and held by investors resident in

jurisdictions who are a member of the Financial Action Task Force (FATF) or a member of a FATF-

Style Regional Body and whose securities market regulator is a signatory to the International

Organisation of Securities Commission's (IOSCO’s) Multilateral Memorandum of Understanding

(Appendix A Signatories) or a signatory to bilateral Memorandum of Understanding with the

Securities and Exchange Board of India (SEBI) for information sharing arrangements. Additionally,

investors should not be resident of a country identified in the public statement of the FATF as: (i) a

jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism

deficiencies to which counter measures apply; or (ii) a jurisdiction that has not made sufficient

progress in addressing the deficiencies or has not committed to an action plan developed with the

FATF to address the deficiencies.

The following Risk Factors supplement and update the corresponding risk factor in the Original

Offering Circular under “Investment Considerations”

The Issuer’s operations and the Issuer’s expansion plans have significant fuel requirements and

the Issuer may not be able to ensure the availability of fuel at competitive prices.

The success of the Issuer’s operations and the proposed expansion of its generation capacity

will be dependent on, among other things, the Issuer’s ability to ensure unconstrained availability of

fuels at competitive prices during the life cycle of its existing and planned thermal power stations. The

Issuer’s primary fuels are coal, gas and naphtha, with approximately 87.25 per cent. of its directly

owned installed generating capacity as of 30 June 2016 being coal-fired and approximately 9.99 per

cent. being gas or naphtha-fired. Fuel costs represent the Issuer’s largest operating expense,

constituting approximately 75.0 per cent. of total operating expenses on a stand-alone basis.

The Issuer purchases substantially all of its coal from subsidiaries of Coal India Limited

(CIL) and Singareni Collieries Company Limited (SCCL). The Issuer had signed long-term coal

supply agreements (CSAs) covering units commissioned as of 31 March 2009 for 23,895 MW at its

15 directly owned coal-fired power stations and covering units with a total capacity of 9,620 MW

0012018-0003086 HK:20704050.1 S-6

commissioned after 31 March 2009 or currently under construction. The Issuer has entered into long-

term gas supply agreements with GAIL (India) Limited (GAIL) for the supply of gas to its directly

owned gas-fired power stations. The Issuer has also entered into a long-term regasified liquefied

natural gas (RLNG) supply agreement with GAIL. However, no assurance can be given that the

Issuer’s suppliers will be able to satisfy its contractual commitments and that alternative sources of

supply would be available on reasonable terms.

If the Issuer is unable to obtain supplies from these suppliers on acceptable terms and

conditions, no assurance can be given that it will be able to obtain supplies from alternative suppliers.

Further, coal and gas allocations and gas prices are currently determined by the Government, whilst

coal prices are set by CIL or SCCL, as the case may be. In the event that coal and gas supplies or gas

prices were to be deregulated, no assurance can be given that the Issuer will be able to obtain supplies

of coal and gas at competitive prices and in the required quantities.

As of the date of this Offering Circular, the Issuer has planned to source coal for some of the

power projects under construction from the coal mines allotted to it and is working towards starting

coal production from these mines commensurate with the start of power generation from the linked

end-use power projects. In order to meet the coal requirement in case of any delay in the start of coal

production from the captive mines, the Issuer has already approached the Government for allocation

of tapering coal linkages from the coal mines of CIL. If the Issuer is unable to timely produce coal

from these mines or as per the requirement of the related projects and does not obtain tapering coal

linkages, no assurance can be given that the Issuer will be able to obtain supplies from alternative

sources. Though transportation of coal from two captive mines to its linked end-use power projects

shall be through the Issuer’s own system, the transportation of coal from other mines to the linked

power projects will be made through the Indian railways network (some of which network, as of the

date of this Offering Circular, requires further strengthening). Any delays in development of the

related infrastructure by the railways could constrain the fuel supplies to the Issuer’s projects and no

assurance can be given that the Issuer will be able to transport the coal through alternative means.

Any such constraints on sourcing of coal could have a negative impact on the Issuer’s business,

prospects and financial condition as well as on current and future capacity addition plans.

With respect to coal, while India has substantial proven reserves, significant investments

would be required to exploit and mine these reserves. No assurance can be given that such

investments will be made. The domestic demand for coal is expected to increase significantly in the

future, driven by significant capacity addition in the Indian power sector. High dependence on

domestic coal could therefore expose the Issuer to potential price and availability risks. In the event of

a shortage of coal, not only will the productivity of the Issuer’s coal-fired power stations be reduced

but it will also hinder the Issuer’s expansion plans. The Issuer also sources coal through bilateral short

term memoranda of understanding (MoUs) with SCCL or subsidiaries of CIL, through imports and

through e-auctions conducted by the subsidiaries of CIL. However, there is no assurance that such

sources of coal will continue to be available to the Issuer in the future at reasonable prices or terms or

at all.

With respect to gas, the Issuer’s use has been limited in the past due to inadequate supply of

domestic gas. The Issuer has arranged for the supply of RLNG through long- and short-term contracts

to meet part of its requirements. The short-term RLNG contracts are agreed on a “reasonable

endeavours” basis with no obligation on the part of the Issuer such as “ship-or-pay” or, “take-or-pay”

and no supply or pay obligation on the part of the suppliers. However, due to high RLNG prices, the

offtake of power by distribution companies and beneficiaries and, consequently, RLNG consumption

0012018-0003086 HK:20704050.1 S-7

have been low. The Issuer estimates that it will require 16.39 million metric standard cubic metres of

gas per day in fiscal 2016 to operate its directly owned gas-fired power stations at a plant load factor

(which is a measure equal to the percentage of capacity actually utilised) (PLF) of 85.0 per cent. If

the Issuer experiences a shortage in the supply of gas to its gas-fired power stations, the productivity

of those power stations would be reduced. Although the Issuer is in the process of securing a supply

of gas for the Issuer’s projects at Kawas and Gandhar, there is no assurance that it will be able to

secure an adequate supply of gas for its current gas-fired power stations or future gas-fired projects.

The Issuer’s ability to secure adequate fuel supply for its Kawas and Gandhar projects may also be

affected by its dispute with Reliance Industries Limited (RIL) on the sale and purchase agreement for

gas supply for those projects. See “The Issuer has executed a letter of intent with RIL for the purchase

of gas, which, if not declared as a valid and binding contract between the Issuer and RIL, may

negatively impact the Issuer’s financial condition and results of operation.” below. Any such

constraints on sourcing gas would have a negative impact on the Issuer’s business, prospects and

financial condition as well as current and future capacity addition plans.

The State Electricity Boards (SEBs) and state owned distribution companies account for more than

88 per cent. of the Issuer’s sales of electricity generated from its directly owned power stations and

any change that adversely affects the Issuer’s ability to recover dues from them would adversely

affect its financial position.

The SEBs and the state owned distribution companies are the largest purchasers of power

from the Issuer and accounted for more than 88 per cent. of the Issuer’s sales of electricity generated

from its directly owned power stations in fiscal 2015. The Issuer is obligated to supply power to them

in accordance with the terms of the allocation letters issued by the Government for each of the

Issuer’s power stations. Historically, the Issuer has had significant problems recovering payments

from the SEBs. The Scheme for One Time Settlement of Outstanding Dues (the OTSS) introduced

several measures to address these problems. Tripartite agreements (the Tripartite Agreements) were

signed under which the receivables for past due amounts from the SEBs were securitised, resulting in

the issue to the Issuer of 8.5 per cent. tax free state government special bonds issued under the OTSS

(the Tax Free Bonds). The Tax Free Bonds matured in various stages from 1 October 2006 until 1

April 2016. These agreements, inter-alia, provide that in case of any default in payment of current

dues by any state utility, the outstanding dues can be deducted from the state’s RBI account and paid

to the Issuer. In addition, the Tripartite Agreements require the SEBs to establish letters of credit

(LCs) to cover 105 per cent. of current payments for the sale of electricity generated from the Issuer’s

directly owned power stations. In addition to the Tripartite Agreements, the Issuer’s sales to the SEBs

from its directly owned power stations after 31 October 2016 are secured through supplementary

agreements with the SEBs under which the SEBs have agreed to create a charge over their own

receivables in favour of the Issuer, and in the event of a payment default, to assign their receivables

into an escrow account. If receivables of these SEBs are not received into such escrow accounts for

any reason whatsoever or if the security over such receivables is flawed, payments to the Issuer would

not be secured. Any change that adversely affects the Issuer’s ability to recover its dues from the

SEBs will adversely affect its financial position.

In fiscal 2014, the SEBs incurred losses of approximately Rs.985,950 million without

accounting for subsidy and Rs.624,620 million after accounting for subsidy received. (Source: Power

Finance Corporation Limited report on the performance of state power utilities: July 2015.) In

addition, there have also been instances of state governments promising free power to certain sections

of society, such as farmers. The adoption of such policies by state governments would adversely

affect the financial health of the SEBs, which would in turn adversely affect their ability to make

0012018-0003086 HK:20704050.1 S-8

payments to the Issuer. See “The unbundling of the SEBs pursuant to the Electricity Act could have

an adverse impact on the Issuer’s revenues.” below and the section entitled “The Power Industry in

India.”

There may be other changes to the regulatory framework that could adversely affect the Issuer.

The statutory and regulatory framework for the Indian power sector has changed significantly

in recent years and the full impact of these changes is unclear. There are likely to be more changes in

the next few years, some of which could potentially impose greater legal, compliance and

administrative burdens on the Issuer. The Electricity Act has put in place a framework for reforms in

the sector, but in many areas the details and timing of reforms are yet to be determined. It is expected

that many of these reforms will take time to be implemented. Furthermore, there could be additional

changes in tariff policy, requirements for unbundling of the SEBs, restructuring of companies in the

power sector, open access and parallel distribution and licensing requirements for, and tax incentives

applicable to, companies in the power sector. Such additional changes could adversely affect the

Issuer’s business prospects, financial condition and results of operations. For a discussion on the

regulatory framework of the electricity industry in India, see “Regulations and Policies in India”.

The Issuer’s expansion plans and diversification plans require significant capital expenditure and

if the Issuer is unable to obtain the necessary funds for expansion, its business plans and prospects

may be adversely affected.

The Issuer will need significant additional capital to finance its business plan and in

particular, its plan for capacity expansion. As of the date of the Original Offering Circular, the Issuer

was engaged in construction activities for projects representing 23,004 MW, including 4,495 MW

undertaken by its joint venture companies and subsidiaries, which are in different stages of progress

As of 30 June 2016, 24,059 MW is under construction, including 4,300MW through joint ventures

companies and subsidiaries. The Issuer is also pursuing a number of additional projects, representing

a further increase of more than 27,000 MW of capacity, which are in various stages, including

projects for which tenders have been invited or a feasibility report has been or is being prepared. The

scheduled completion dates of the Issuer’s expansion plans and budgets with respect to its expansion

plans are management estimates only and there is no assurance that such proposed expansion will be

completed or, if completed, that there will not be cost or time overruns.

The Issuer expects approximately 30 per cent. of its proposed capital expenditure to be funded

by internal accruals and/or through the issue of equity shares and the remaining approximately 70 per

cent. to be funded by debt financing. The Issuer’s ability to finance its planned capital expenditure is

subject to a number of risks, contingencies and other factors, some of which are beyond its control,

including the Issuer’s results of operations generally, tariff regulations, interest rates, borrowing or

lending restrictions, if any, changes to applicable laws and regulation, the amount of dividend

required to be paid to the Issuer’s shareholders and other costs and the Issuer’s ability to obtain

financing on acceptable terms. In addition, as of the date of this Offering Circular, there were a

number of large-scale infrastructure projects under development in India which may impair the

Issuer’s ability to obtain additional funding and it may not be able to receive adequate debt funding on

commercially reasonable terms in India. In such event, the Issuer may be required to seek funding

internationally, which would result in exposure to foreign exchange risks and which may require

approvals under, or be restricted by, laws and regulations in India. For further details, see also the

section entitled “Regulations and Policies in India — Foreign Exchange Laws”. If the Issuer is unable

0012018-0003086 HK:20704050.1 S-9

to raise required funds for expansion, its business plans and prospects may be adversely affected. See

also the section entitled “Description of the Issuer — Business — Capacity Expansion”.

The Issuer is also in the process of progressively diversifying the fuel mix of its power

stations. In addition, the Issuer plans to invest in power trading, electricity distribution, coal mining

and oil exploration. These diversification efforts will also require significant additional capital. There

can be no assurance that the Issuer will be able to raise the required capital to implement its

diversification plans on acceptable terms or at all. In the event that the Issuer cannot raise the funds to

diversify its business, its business, financial condition, prospects and results of operation may be

materially and adversely affected.

The Issuer’s expansion plans are subject to a number of risks and uncertainties.

The Issuer’s expansion plans are subject to a number of factors, including the state of the

local and global economy, difficulties in assimilating personal and integrating operations and cultures,

laws and regulations, governmental action, delays in obtaining permits or approvals, global prices of

crude oil and other fuels for transportation, prices of fuel supplies required for power station

operations, accidents, natural calamities, and other factors beyond its control. Power projects

generally have long gestation periods due to the process involved in their commissioning. Contracts

for construction and other activities relating to the projects are awarded at different times during the

course of the projects. In addition, the Issuer’s projects are dependent on external contractors for

construction, installation, delivery and commissioning, as well as the supply and testing of key plant

and equipment. The Issuer may only have limited control over the timing, quality of services,

equipment or supplies provided by these contractors. The Issuer is highly dependent on some of the

external contractors who supply specialised services and sophisticated and complex machinery. There

can be no assurance that the performance of the external contractors will meet the Issuer’s

specifications or performance parameters or that they will remain financially sound. The failure or

delay of the external contractors to perform could result in incremental cost or time overruns, or the

termination of a power project development. For example, the work at the Issuer’s Barh project has

been delayed by the non-performance of the contractor’s work in relation to constructing a steam

generator, pursuant to which the contractor’s contract with the Issuer has been terminated. There can

be no assurance that the Issuer would be able to complete its expansion plans in the time expected, or

at all, or that their gestation period would not be affected by any or all of these factors.

Furthermore, the Issuer’s ability to acquire sites for its expansion plans depends on many

factors, including whether the land is private or state-owned, whether the land is classified in a

manner that allows it to be used as contemplated by the Issuer’s projects, and the willingness of the

owners to sell or lease their land. In many cases, the area identified as a suitable site is owned by

numerous small landowners. Acquisition of private land in India can involve many difficulties,

including litigation relating to ownership, liens on the land, inaccurate title records, negotiations with

numerous land owners and obtaining Government approvals. Acquisition of Government land may

also involve a number of difficulties relating to rehabilitation and resettlement where people’s

livelihood is dependent on the land. Further, in instances where forest land is required to set up a

project, as of the date of this Offering Circular, Government clearance for diversion of forest land for

non-forest purposes is mandatory for a power project as well as its connected mines, and project

development could be severely affected in case of any delay in obtaining such clearances.

The Issuer may also face competing interests with respect to usage of land, as in the case of

the Issuer’s North Karanpura Thermal Power Project where work was put on hold for several years

0012018-0003086 HK:20704050.1 S-10

due to objections that the proposed location of the project is on coal-bearing land. Work on the project

has since been re-started.

The power industry in which the Issuer operates is highly regulated. For example, with

respect to the power business, several licences are required under the Electricity Act, including a

transmission licence, a distribution licence and an electricity trading licence. There is no assurance

that the Issuer or the concerned agency will be able to obtain all the necessary approvals or clearances

with respect to its expansion plans. Any of these factors could have a material adverse effect on the

Issuer’s business, financial condition and results of operation.

The Issuer may be adversely affected by changes in the Government’s policy relating to the Issuer.

The Government owns 69.74 per cent. of the Issuer’s paid-up capital. To date, the

Government’s ownership has been an important factor in some aspects of the Issuer’s business,

including the settlement of electricity dues payable by the SEBs to the Issuer. Any significant changes

in the Government’s shareholding in the Issuer, and/or pursuit by the Government of policies that are

not in the interests of the Issuer, could adversely affect the Issuer’s business.

The Issuer generally manages its business on a day to day basis independently from the

Government. The Government has named the Issuer as a “Maharatna” company as a consequence of

which the Issuer enjoys enhanced autonomy in making financial and other decisions. Adverse changes

in the terms of, or the loss of, “Maharatna” status may decrease the Issuer’s autonomy and the Issuer’s

ability to compete with other participants in the Indian power sector.

The Issuer’s operations create difficult environmental challenges, and changes in environmental

laws and regulations may expose the Issuer to liability and result in increased costs.

The Issuer’s power stations and power generation projects are subject to environmental laws

and regulations promulgated by the Ministry of Environment and Forests (MoEF) and the pollution

control boards of the relevant states. These include laws and regulations that limit the discharge of

pollutants into the air, land and water and establish standards for the treatment, storage and disposal of

hazardous waste materials. The Issuer expects that environmental laws and compliance requirements

will continue to become stricter. Compliance with current and future environmental regulations,

particularly by the Issuer’s older power stations, may require substantial capital expenditure and, in

certain cases, may require the closing down of non-complying power stations. In particular, the Issuer

generates high levels of ash in its operations. There are limited uses for ash and therefore demand for

ash is low. While the Issuer continues to explore methods to utilise or dispose of ash, its ash

utilisation activities are insufficient to dispose of the ash it generates. Furthermore, the Issuer is

required to achieve 100 per cent. ash utilisation on a progressive basis under the MoEF notification

dated 3 November 2009. Compliance with this requirement, as well as any future norms with respect

to ash utilisation, may add to the Issuer’s capital expenditures and operating expenses. In certain cases

where it may not be possible to increase the Issuer’s utilisation of ash to comply with this

requirement, the Issuer may need to reduce the generation of ash through a partial or full shutdown of

its operating power stations, thereby reducing its average PLF which could have a material adverse

effect on the Issuer’s business, financial condition and results of operation.

The Issuer could be subject to substantial civil and criminal liability and other regulatory

consequences in the event that an environmental hazard was to be found at the site of any of its power

stations or if the operation of any of the Issuer’s power stations results in material contamination of

the environment. For instance, in 2006, the Chattisgarh Environment Conservation Board through its

0012018-0003086 HK:20704050.1 S-11

regional officer filed a criminal complaint against the Issuer’s Korba unit alleging air and water

pollution. Financial losses and liabilities as a result of increased compliance costs or due to

environmental damage or criminal liability due to such environmental breaches may affect the

Issuer’s reputation and financial condition.

Furthermore, there is a possibility that environmental compliance norms may be drastically

altered, resulting in substantial capital and operating expenditure to the Issuer, which may have an

adverse impact on the Issuer’s financial condition.

To note a recent example, in December 2015, the Government put forth the Environment

(Protection) Amendment Rules, 2015, stipulating strict requirements regarding water consumption

and emissions of particulate matter, sulphur dioxide, oxides of nitrogen and mercury for thermal power plants. The standards have been revised under three categories in terms of thermal power plants

brought online before 31 December 2003, between 1 January 2003 and 31 December 2016 and after 1

January 2017. The notice provides that thermal power stations brought online before 31 December 2016 shall meet the revised limits prior to 7 December 2017. The Issuer has written to the

Government for certain amendments to the notification citing difficulties in its implementation and for

extending the timeline.

There is no assurance that we can complete the required modifications in the plants to ensure

compliance to the revised regulations before the stipulated date or at all and this can have adverse

implications for the Group.

The Issuer’s business involves numerous risks that may not be covered by insurance.

While the Issuer maintains insurance of its operating plants with ranges of coverage that the

Issuer believes to be consistent with industry practice, the Issuer is not fully insured against all

potential hazards and events incidental to its business and there is no assurance that the Issuer’s

insurance coverage will be adequate and available to cover any loss incurred in relation to such types

of incidents. The Issuer is not covered for certain risks such as war, damage or destruction of data or

records or damage or loss due to pollution or contamination. Further, notwithstanding the Group’s

insurance coverage, any damage to the Group’s buildings, facilities, equipment, or other properties as

a result of occurrences such as fires, floods, water damage, explosions, power losses, typhoons and

other natural disasters may have an adverse effect on the Group’s business, financial condition, results

of operations and growth prospects. The occurrence of any such events not covered by insurance may

have a material adverse effect on the Issuer’s business, financial condition and results of operations

and the trading price of the Notes.

The Issuer may encounter problems relating to the operations of its joint ventures.

As of the date of this Offering Circular, the Issuer has formed 22 joint venture companies

with various third parties for undertaking specific business activities. The Issuer’s joint venture

partners may:

be unable or unwilling to fulfil their obligations, whether of a financial nature or otherwise;

have economic or business interests or goals that are inconsistent with the Issuer’s;

take actions contrary to its instructions or requests or contrary to the Issuer’s policies and

objectives;

take actions that are not acceptable to regulatory authorities;

become involved in litigation;

have financial difficulties; or

0012018-0003086 HK:20704050.1 S-12

have disputes with the Issuer.

Any of the foregoing may have an adverse effect on the business, prospects, financial

condition and results of operations of the Issuer.

The Issuer’s ability to raise foreign capital is constrained by global economic conditions and

conditions in foreign financial markets.

The Issuer has raised and expects to continue to raise capital in foreign markets. The Issuer’s

ability to raise foreign capital is constrained by the conditions of these markets. The global capital and

credit markets have recently been experiencing periods of extreme volatility and disruption. The

global financial crisis, including the continuing sovereign debt crisis in Europe, concerns over

recession, inflation or deflation, energy costs, geopolitical issues, commodity prices and the

availability and cost of credit, have contributed to unprecedented levels of market volatility and

diminished expectations for the global economy and the capital and credit markets. On 23 June 2016,

the United Kingdom held a referendum on its membership of the European Union and voted to leave

(Brexit). There is significant uncertainty at this stage as to the impact of Brexit on general economic

conditions in the United Kingdom and the European Union and any consequential impact on global

financial markets. For example, Brexit could give rise to increased volatility in foreign exchange rate

movements and the value of equity and debt investments. A lack of clarity over the process for

managing the exit and uncertainties surrounding the economic impact could lead to a further

slowdown and instability in financial markets. These factors, combined with others, may impact the

Issuer’s ability to raise capital in foreign markets. An inability to raise foreign capital or access

foreign credit markets would have a material adverse effect on its business and financial condition.

The Issuer’s business, financial condition and results of operations may be materially and

adversely affected if the Issuer is unable to take advantage of certain tax benefits or if there are any

adverse changes to the tax regime in the future.

Section 80-IA of the Income Tax Act, 1961 (the Income Tax Act) provides that, subject to

certain conditions being fulfilled, 100 per cent. of the profits derived from the projects for the

generation, distribution or transmission of power would be entitled for deduction from total income

for 10 consecutive assessment years out of 15 years, beginning from the year in which the project

commences power generation, transmission or distribution of power, if the activity is commenced

before 31 March 2017. If such or other tax benefits become unavailable, the Issuer’s financial

condition, results of operations and business could be materially and adversely affected.

The draft bill on goods and services tax was introduced in December 2014 and the bill has

been pending before the upper house of the parliament for its approval. As the bill has not been

approved, the Issuer is unable to ascertain the full impact of the proposed tax changes on its revenues.

See the investment consideration “The proposed new taxation system could adversely affect the

Issuer’s business and the trading price of the Notes.”

The Issuer has not appointed the requisite number of independent directors on its Board

As the Issuer is a Government company, the power of appointment of its Board is vested with

the President of India, acting through the administrative ministry. As of the date of this Offering

Circular, the Issuer has not been able to maintain the minimum Board composition as required under

the Companies Act, 2013, the rules thereunder and the listing agreements with the Indian stock

exchanges. If the Indian stock exchanges decide to undertake any action against the Issuer including

0012018-0003086 HK:20704050.1 S-13

levying of penalties or if there is any communication with the regulatory agencies in that regard, it

may have a material adverse effect on the Issuer’s reputation, materially and adversely affect the

Issuer’s business, prospects and results of operations.

The Issuer has contingent liabilities under Indian Accounting Standards, which may adversely

affect its financial condition.

As of 31 March 2015, the contingent liabilities appearing in the Issuer’s consolidated

financial statements were as follows:

Category Amount

(Rs. in million) Claims against the Company not acknowledged as debts in respect of:

Capital works ..................................................................................................

81,272 Land compensation cases ................................................................................. 3,143

Fuel claims ...................................................................................................... 5,672

Statutory claims ............................................................................................... 8,964

Disputed income tax/sales tax/excise demand .................................................. 52,595

Other contingent liabilities ............................................................................... 9,142

Total ............................................................................................................... 160,788

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The

amount of contingent liability relating to these appeals is not ascertainable.

Natural calamities could have a negative effect on the Indian economy and cause the Issuer

business to suffer.

India has experienced natural calamities such as earthquakes, floods, droughts including

the flash flood that affected the state of Uttarakhand in June 2013 and the cyclone which affected

various parts of Odisha in October 2013. In fiscal 2015, the agricultural sector was adversely

affected by unseasonal rains and hailstorms in northern India in March 2015. As a result, the gross

value added, which is the value of output less the value of intermediate consumption, in the

agricultural sector decreased by 0.2% in fiscal 2015 as compared to 4.2% growth in fiscal 2014. In

addition, in July 2012, three of India’s inter-connected northern power grids collapsed for several

hours, resulting in widespread power outages across the country. Prolonged power outages, spells

of below normal rainfall in the country or other natural calamities could have a negative impact on

the Indian economy, affecting the Issuer’s business and potentially causing the trading price of the

Notes to decrease.

Political, economic and social developments in India could adversely affect the Issuer’s business.

The Issuer derives virtually all of its revenues and resources such as fuel, equipment and

materials from India. All of the Issuer’s electricity generating facilities and other assets are located

in India and all of the Issuer’s officers and directors are resident in India. The Issuer’s operations

and financial results and the market price and liquidity of the Notes may be affected by changes in

Government policy or taxation or social, ethnic, political, economic or other developments in or

affecting India. Since achieving independence in 1947, India has had a mixed economy with a

large public sector and an extensively regulated private sector. The Government and the state

governments have in the past, among other things, imposed controls on the prices of a broad range

of goods and services, restricted the ability of businesses to expand existing capacity and reduce

the number of employees, and determined the allocation to businesses of raw materials and foreign

0012018-0003086 HK:20704050.1 S-14

exchange. Since 1991, the Government has significantly relaxed most of these restrictions.

Nonetheless, the role of the Government and state governments in the Indian economy as

producers, consumers and regulators, remains significant in ways that directly affect the Issuer and

the electricity industry in India. Moreover, most recent parliamentary elections were completed in

May 2014, which was won by the Bhartiya Janta Party led National Democratic Alliance.

Although the current government has continued India’s economic liberalisation and deregulation

programmes, there can be no assurance that these will continue in the future. The rate of economic

liberalisation is subject to change and specific laws and policies affecting banking and finance

companies, foreign investment, currency exchange and other matters affecting investment in the

Issuer’s securities are continuously evolving as well. Other major reforms that have been proposed

are the goods and services tax, the direct tax code and the general anti-avoidance rules. Any

significant change in India’s economic liberalisation, deregulation policies or other major

economic reforms could adversely affect business and economic conditions in India generally and

the Issuer’s business in particular. India has also witnessed civil disturbances in the past. While

these civil disturbances did not directly affect the Issuer’s operations, it is possible that future civil

unrest as well as other adverse social, economic and political events in India could have an adverse

impact on the Issuer.

Trade deficits could have a negative effect on the Issuer’s business and the trading price of the

Notes.

India’s trade relationships with other countries can influence Indian economic conditions. In

fiscal 2016, the merchandise trade deficit was estimated at U.S.$118.5 billion compared with

U.S.$137.7 billion in fiscal 2015 and U.S.$135.8 billion in fiscal 2014. This large merchandise trade

deficit neutralises the surpluses in India’s invisibles, which are comprised of international trade in

services, income from financial assets, labour and property and cross-border transfers of mainly

workers’ remittances in the current account, resulting in a current account deficit. If India’s trade

deficits increase or become unmanageable, the Indian economy, and therefore the Issuer’s business,

future financial performance and the trading price of the Notes could be adversely affected.

Any downgrading of India’s debt rating by an international rating agency could have a negative

impact on the Issuer’s business.

On 25 April 2012, Standard and Poor’s Ratings Services, a Division of the McGraw Hill

Companies Inc. (S&P) revised the outlook on the long-term ratings on India from “stable” to

“negative” citing the slowdown in India’s investment and economic growth and the widened current

account deficit, resulting in a weaker medium term credit.

On 18 June 2012, Fitch Ratings Ltd. (Fitch) scaled down India’s sovereign credit rating

outlook from “stable” to “negative,” citing structural challenges such as corruption, inadequate

economic reforms, and slow economic growth combined with elevated inflation. On 25 April 2012

and 18 June 2012, respectively, as a result of their downgrading of India’s outlook, both S&P and

Fitch downgraded the outlook on the Issuer’s rating from “stable” to “negative”. In June 2012 and

January 2013, S&P and Fitch, respectively, announced that they may lower India’s sovereign credit

rating below investment grade, citing slowing GDP growth, setbacks or reversals in India’s economic

policy, a widening fiscal deficit and/or increasing spreads of credit default swaps for Indian banks.

S&P reiterated in May 2013 that, although there had been some easing of pressure towards a

downgrade of the rating, there is still a likelihood of such a downgrade unless significant

improvements are seen in factors such as a high fiscal deficit and levels of government borrowing.

0012018-0003086 HK:20704050.1 S-15

However, on 12 June 2013 Fitch revised the outlook on India’s sovereign credit rating from

“negative” to “stable” and consequently the outlook of the Issuer’s rating has been revised from

“negative” to “stable”. Subsequently, in August 2013 Fitch warned that India’s sovereign rating may

be lowered if the India is unable to meet its fiscal deficit target. In September 2013, Moody’s

Investors Service Inc. (Moody’s) put India’s sovereign credit rating on notice, warning that any

changes Moody’s makes to India’s sovereign rating outlook will depend on the depth and extent of

the current economic downturn and the trends in the balance of payments situation. In April 2015,

Moody’s revised India’s sovereign rating outlook from “stable” to “positive” and retained the long-

term rating at “Baa3” as it expected actions of policymakers to enhance India’s economic strength in

the medium term. Similarly, Standard & Poor’s upgraded its outlook on India’s sovereign debt rating

to “stable” in September 2014 and retained such rating in October 2015, while reaffirming the “BBB”

long-term rating. Standard & Poor’s stated that the revision reflects the view that India’s improved

political setting offers an environment which is conducive to reforms that could boost growth

prospects and improve fiscal management.

There can be no assurance that these ratings will not be further revised, suspended or

withdrawn by S&P, Moody’s or Fitch or that any other global rating agency will not also downgrade

the Issuer’s or India’s sovereign credit ratings.

Any adverse revisions to India’s credit ratings for domestic and international debt by

international rating agencies may adversely impact the Issuer’s ability to raise additional financing,

and the interest rates and other commercial terms at which such additional financing is available. This

could have a material adverse effect on the Issuer’s business and future financial performance, the

Issuer’s ability to obtain financing for capital expenditures, and the trading price of the Notes.

Depreciation of the Rupee against foreign currencies may have an adverse effect on the Issuer’s

results of operations and financial conditions.

As of 31 March 2015, the Issuer’s consolidated foreign currency borrowings of approximately

Rs.256.68 billion were denominated in U.S. dollars, Japanese yen and euros, while substantially all of

the Issuer’s revenues are denominated in Rupees. The Rupee has been quite volatile during fiscal

2014 and 2015 when compared against the U.S. dollar. First, it depreciated by 26.7 per cent. from

54.28 per U.S.$1.00 as at 31 March 2013 to an all-time low of 68.82 per U.S.$1.00 as at 28 August

2013 and then appreciated by 12.9 per cent. to close the fiscal 2014 at 59.89 per U.S.$1.00. In fiscal

2015, the Rupee depreciated by 4.4 per cent. to close the year at 62.50 per U.S.$1.00 and in fiscal

2016, the Rupee depreciated by 6.0 per cent., to close the year at 66.25 per U.S.$1.00. Overall, the

Rupee depreciated by 10.6 per cent. over the course of fiscal 2014 through to 2016. Volatility in

India’s currency and the possibility of slower growth pose significant risks for the financial prospects

of companies in India, as well as a greater default risk for Indian companies with foreign-denominated

debt. Depreciation of the Rupee against foreign currencies will increase the Rupee cost to the Issuer of

servicing and repaying the Issuer’s foreign currency borrowings. In addition, in fiscal 2015, imported

coal accounted for 9.8 per cent. of the total coal purchased by the Issuer for its directly owned power

stations. A depreciation of the Rupee would also increase the costs of coal imports by the Issuer. If as

a result of future changes in tariff regulations the Issuer is unable to recover the costs of foreign

exchange variations through its tariffs, the Issuer may be required to use hedging arrangements, which

may not fully protect the Issuer from foreign exchange fluctuations.

0012018-0003086 HK:20704050.1 S-16

Indian accounting principles and audit standards differ from those which prospective investors

may be familiar with in other countries.

As stated in the report of the Issuer’s independent auditors included in this Offering Circular,

the Issuer’s financial statements are in conformity with Indian GAAP, consistently applied during the

periods stated, except as provided in such report, and no attempt has been made to reconcile any of

the information given in this Offering Circular to any other principles or to base it on any other

standards. Indian GAAP differs from accounting principles and auditing standards with which

prospective investors may be familiar in other countries. See “Summary of Significant Differences

between Indian GAAP and IFRS”. Public companies in India, including the Issuer, have been required

to prepare financial statements under the Indian Accounting Standards (IND-AS) according to the

implementation roadmap drawn up by the Indian Ministry of Corporate Affairs. The Issuer may be

adversely affected by this transition.

The insolvency laws of India may differ from other jurisdictions with which holders of the Notes

are familiar.

As the Issuer is incorporated under the laws of India, an insolvency proceeding relating to the

Issuer, even if brought in another jurisdiction, would likely involve Indian insolvency laws, the

procedural and substantive provisions of which may differ from comparable provisions of another

jurisdiction.

An outbreak of avian, swine influenza, MERS or other contagious diseases may adversely affect

the Indian economy and the Issuer’s business.

A number of countries in Asia, including India, as well as countries in other parts of the

world, have had confirmed cases of the highly pathogenic H5N1 strain of avian influenza in birds.

Certain countries in Southeast Asia have reported cases of bird to human transmission of avian

influenza resulting in numerous human deaths. In 2009, there was a global outbreak of a new strain of

influenza virus commonly known as swine flu. Since 2012, an outbreak of the Middle East

Respiratory Syndrome corona virus (MERS) has affected several countries, primarily in the Middle

East. Future outbreaks of avian influenza, swine flu, MERS or a similar contagious disease could

adversely affect the Indian economy and economic activity in the region. As a result, any present or

future outbreak of avian influenza, swine flu or other contagious diseases could have a material

adverse effect on the Issuer’s business.

The Notes are not guaranteed by the Republic of India.

The Notes are not the obligations of, or guaranteed by, the Republic of India. Although the

Government owned 69.74 per cent. of the Issuer’s issued and paid up share capital as of the date of

the Offering Circular, the Government is not providing a guarantee in respect of the Notes. In

addition, the Government is under no obligation to maintain the solvency of the Issuer. Therefore,

investors should not rely on the Government ensuring that the Issuer fulfils its obligations under the

Notes.

The following Risk Factor is deleted in its entirety from the Original Offering Circular

under “Investment Considerations” as it is no long applicable.

0012018-0003086 HK:20704050.1 S-17

Interest on the Notes may be subject to EU withholding under the Savings Directive.

Under Council Directive 2003/48/EC on the taxation of savings income in the form of interest

payments (the Savings Directive), EU Member States are required to provide to the tax authorities of

other EU Member States with details of certain payments of interest or similar income paid or secured

by a person established in an EU Member State to, or for the benefit of, an individual resident in

another EU Member State or certain limited types of entities established in another EU Member State.

For a transitional period, Austria is required (unless during that period it elects otherwise) to operate a

withholding system in relation to such payments (subject to a procedure whereby, on meeting certain

conditions, the beneficial owner of the interest or other income may request that no tax be withheld).

The end of the transitional period is dependent upon the conclusion of certain other agreements

relating to information exchange with certain other countries. A number of non-EU countries and

territories including Switzerland have adopted similar measures (a withholding system in the case of

Switzerland).

On 24 March 2014, the Council of the European Union adopted a Council Directive (the

Amending Directive) amending and broadening the scope of the requirements described above. The

Amending Directive requires EU Member States to apply these new requirements from 1 January

2017, and if they were to take effect the changes would expand the range of payments covered by the

Savings Directive, in particular to include additional types of income payable on securities. They

would also expand the circumstances in which payments that indirectly benefit an individual resident

in a Member State must be reported or subject to withholding. This approach would apply to

payments made to, or secured for, persons, entities or legal arrangements (including trusts) where

certain conditions are satisfied, and may in some cases apply where the person, entity or arrangement

is established or effectively managed outside of the European Union.

However, the European Commission has proposed the repeal of the Savings Directive from 1

January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU Member

States (subject to on-going requirements to fulfil administrative obligations such as the reporting and

exchange of information relating to, and accounting for withholding taxes on, payments made before

those dates). This is to prevent overlap between the Savings Directive and a new automatic exchange

of information regime to be implemented under Council Directive 2011/16/EU on Administrative

Cooperation in the field of Taxation (as amended by Council Directive 2014/107/EU). The new

regime under Council Directive 2011/16/EU (as amended) is in accordance with the Global Standard

released by the Organisation for Economic Co-operation and Development in July 2014. Council

Directive 2011/16/EU (as amended) is generally broader in scope than the Savings Directive,

although it does not impose withholding taxes. The proposal also provides that, if it proceeds,

Member States will not be required to apply the new requirements of the Amending Directive.

If a payment were to be made or collected through an EU Member State which has opted for a

withholding system and an amount of, or in respect of, tax were to be withheld from that payment,

neither the Issuer nor any Paying Agent (as defined in the Terms and Conditions of the Notes) nor any

other person would be obliged to pay additional amounts with respect to any Note as a result of the

imposition of such withholding tax. The Issuer is required to maintain a Paying Agent in an EU

Member State that is not obliged to withhold or deduct tax pursuant to the Savings Directive.

0012018-0003086 HK:20704050.1 S-18

DESCRIPTION OF THE ISSUER

The paragraph on “Renewables” appearing on page 118 of the Original Offering Circular shall be


Renewable Energy

The Issuer has commissioned a solar photo voltaic (PV) project with a capacity of 200 MW at

Anantpur, Andhra Pradesh in April 2016 and a total capacity of 310 MW at various other locations.

Furthermore, the Issuer is augmenting its capacity, through renewable sources of energy, to broad-

base its generation mix to ensure long-term competitiveness, mitigation of fuel risks and promotion of

sustainable power development.

The Issuer has set a target to achieve by 2022 a capacity of 10,000 MW of renewable energy. Various

initiatives in this regard include:

1. signing an MoU with the government of Karnataka for a 1,000 MW solar PV project to be

located in the state of Karnataka;

2. signing a letter of understanding with the government of Madhya Pradesh for the

development of a 750 MW solar PV project in the state of Madhya Pradesh;

3. the construction of a 50 MW solar PV project at Anantapur, in the state of Andhra Pradesh, a

250 MW solar PV project at Mandsuar, in the state of Madhya Pradesh and a 260 MW solar

PV project at Badhla, Phase-II, Jodhpur, in the state of Rajasthan;

4. bidding for a 125 MW new solar PV project at Anantapur, Phase-II, Andhra Pradesh, a 625

MW solar PV project at Anantapur, Phase-III, Andhra Pradesh and a 18 MW solar PV project

at Chiriya Tapu, Andaman & Nicobar;

5. commissioning in July 2016 of a 450 kWp capacity rooftop solar PV project at Vindhyachal

in the state of Madhya Pradesh in addition to commissioning of a 200 MW of solar PV project

in April 2016; and

6. signing an MoU with the Chattisgarh Renewable Energy Development Agency for the

development of the Tattapani Geothermal project in in the state of Chattisgarh.

The Issuer is also planning a 100 MW wind power project in India and a 1,500 kWp rooftop solar PV

project at Kudgi, in the state of Karnataka.

Furthermore, the Issuer has also been nominated as the implementing agency by the Ministry of New

and Renewable Energy for the selection of developers under the National Solar Mission for a total

capacity of 15,000 MW.

0012018-0003086 HK:20704050.1 S-19

SUPERVISION AND REGULATION

The paragraph appearing on page 182 of the Original Offering Circular shall be deemed to be deleted

in its entirety and replaced by the following:

ECB Policy on Issuance of Overseas Rupee-Denominated Bonds

The RBI has set out the regulations relating to issuance of Rupee denominated bonds overseas

(Rupee Denominated Bonds or Rupee Denominated Notes ), in the “Master Direction – External

Commercial Borrowings, Trade Credits, Borrowing and Lending in Foreign Currency by Authorised

Dealers and Persons other than Authorised Dealers” dated January 1, 2016, as modified or replaced

from time to time (the ECB Guidelines). Under the ECB Guidelines, any company or body corporate,

including real estate investment trusts and infrastructure investment trusts, can issue plain vanilla

Rupee Denominated Bonds- with a three-year minimum maturity period. These issuances can be

listed or unlisted and may only be made in a jurisdiction and to can only be subscribed by a resident

of a country that is a member of the FATF or member of a FATF Style Regional Body and whose

securities market regulator is a signatory to the International Organization of Securities Commission's

(IOSCO’s) Multilateral Memorandum of Understanding (Appendix A Signatories) or a signatory to

bilateral Memorandum of Understanding with the Securities and Exchange Board of India (SEBI) for

information sharing arrangements. Additionally, investors should not be resident of a country

identified in the public statement of the FATF as: (i) a jurisdiction having a strategic Anti-Money

Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply;

or (ii) a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not

committed to an action plan developed with the FATF to address the deficiencies.

Banks incorporated in India cannot subscribe to such Rupee-Denominated Bonds; however,

they can act as arrangers and underwriters for such issuances. There is no all-in-cost ceiling for

Rupee-Denominated Bond issuances and pricing is in accordance with market conditions. Issuers can

raise up to Rs.50 billion under the automatic route beyond which an RBI approval would be required.

The proceeds of such issuance can be used for all purposes except for: (i) real estate projects other

than development of integrated township and affordable housing projects; (ii) investment in capital

markets and domestic equity investments; (iii) prohibited activities under the Foreign Direct

Investment Guidelines; (iv) land acquisition; and (v) on-lending to other entities for any of the above

objectives.

Issuers issuing Rupee Denominated Bonds offshore are required to comply with provisions of

the ECB Guidelines in relation to reporting requirement, security creation and parking of proceeds

offshore. The issuance of Notes is being made under the automatic route under the ECB Guidelines.

Furthermore, investors are allowed to hedge their Rupee exposure through permitted

derivative products with an AD Category-I Bank in India; or through the offshore branches or

subsidiaries of Indian banks; or branches of foreign banks with a presence in India on a back to back

basis.

In relation to the Notes, the Issuer is required to provide the list of primary Noteholders

procured from the Dealer to the relevant regulatory authorities in India as and when required.

.

0012018-0003086 HK:20704050.1 S-20

USE OF PROCEEDS

Funding of Eligible Green Projects

The Issuer will apply the net proceeds from the sale of the Notes to finance investments in the

following renewable energy projects (Eligible Green Projects) in accordance with the ECB Guidelines:

a) Solar projects or assets in one or more of the following activities:

(i) solar electricity generation facilities where a minimum of 85% of the electricity

generated from the facility will be derived from solar energy resources; and

(ii) wholly dedicated transmission infrastructure for solar electricity generation facilities.

b) Wind projects or assets in one or more of the following activities:

(i) the development, construction and operation of wind farms; and

(ii) wholly dedicated transmission infrastructure for wind farms.

0012018-0003086 HK:20704050.1 S-21

THE ISSUER'S GREEN BOND FRAMEWORK

Green Bond Framework Overview

The Issuer is committed to generate and provide reliable power at competitive prices in a sustainable

manner by optimising the use of multiple energy resources with innovative eco-friendly technologies, thereby contributing to the economic development of the nation, social growth of the society and

promoting a healthy environment. The Issuer aims to strive for the achievement of the following

objectives:

Contribute towards a clean and sustainable environment with respect to land, water and air;

Conserve resources by reducting, reusing and recycling;

Initiate and support measures to optimise usage of renewable energy, increase energy

efficiency and reduce green house gas emissions;

Support measures for biodiversity conservation by following the practices of protecting,

conserving and restoring ecosystems;

Be transparent, ethical and fair to all stakeholders;

Be supportive in developing and enhancing people's standard of living in and around the

power plant stations; and

Generate awareness, share knowledge and support training programmes on sustainable

development among employees, neighbouring communities and the public at large.

Furthermore, the Issuer has a Board committee titled the "Corporate Social Responsibility and Sustainability Committee" comprising three full time directors, an independent director and a

Government nominee director, which formulates and recommends to the Board the Issuer’s corporate

social responsibility policy (including that of sustainable development) from time to time.

The Issuer’s Green Bond Framework sets out how the Issuer proposes to use the proceeds from the

issuance of the Notes, including any subsequent issuance of green bonds, for the construction of

Eligible Green Projects (as defined below) in a manner consistent with the Issuer's sustainable values, and in turn provide transparency and relevant disclosure to investors for purposes of making their

investment decisions.

The Issuer’s Green Bond Framework has been established in accordance with the Climate Bonds

Standard version 2.0 and also adheres to the Green Bond Principles, 2016, issued by the International

Capital Markets Association.

Selection and Evaluation of Eligible Green Projects

As part of the Issuer’s selection and evaluation of Eligible Green Projects, (as defined below) a

“Feasibility Report” will be prepared prior to any investment in a renewable project and the project

will also be appraised by an independent agency. Thereafter, investment proposals will be reviewed

by a project sub-committee of the Board, and based on the recommendations of the project sub-

committee, necessary approvals will be granted by the Board.

The Issuer's “corporate budget group” will then make an assessment of the potential eligibility of the

projects based on the criteria outlined in the Issuer’s Green Bond Framework and thereafter determine

if the proceeds from the green bond issuance can be deployed for any of those projects. If the criteria

is met, the “corporate budget group” would then recommend the utilisation of the proceeds from the

green bond issuance to the respective eligible green projects (Eligible Green Projects) for further

approval by the Issuer’s Director (Finance).

0012018-0003086 HK:20704050.1 S-22

Management of Proceeds

The Issuer will (i) maintain one or more separate bank account(s) for receiving the proceeds from the

issuance of the Notes, (ii) allocate an amount equal to the net proceeds derived from the issuance of

the Notes for financing various Eligible Green Projects and (iii) establish various internal tracking

systems to monitor and account for the allocation of such proceeds from the issuance of the Notes.

Furthermore, unallocated proceeds from the issuance of the Notes shall be held in various forms of

temporary investment instruments, including cash, corporate liquid term deposits, term deposits with

commercial banks, units of debt mutual funds or government securities that are permitted for purposes

of investments in accordance with the Issuer’s investment policy and applicable guidelines of the RBI.

Reporting

As long as the Notes and any subsequent green bonds issued by the Issuer remain outstanding, the

Issuer will report annually the use of proceeds for the issue of the Notes through its website

http://www.ntpc.co.in/ and provide information, including (i) the project type, capacity and location

for each green bond issuance; (ii) the current allocated and outstanding amounts and contractual

maturity dates of such issuances; (iii) the degree of reduction in green house gases achieved; and (iv)

confirmation that the use of proceeds from the green bond issuances are in conformity with the

Issuer’s Green Bond Framework.

Assurance

The Issuer’s Green Bond Framework will be reviewed by KPMG and will be certified by the Climate

Bonds Initiative for the issue of the Notes. Such certification will also be published on the Issuer’s

website.

The Issuer will also receive post-issuance certification from the Climate Bonds Initiative to assure

continued adherence to the Issuer’s Green Bond Framework with respect to allocation of proceeds,

ongoing eligibility of the projects and assets, adequacy and output of the Issuer’s internal control and

systems and use of unallocated funds. This post issuance certification by the Climate Bonds Initiative

is expected to be obtained within one year after issuance of the Notes and will be published on the

Issuer’s website http://www.ntpc.co.in/.

http://www.ntpc.co.in/

http://www.ntpc.co.in/

0012018-0003086 HK:20704050.1 S-23

SUBSCRIPTION AND SALE

The following selling restrictions are in addition to, and should be read in conjunction with,

those in the Original Offering Circular under “Subscription and Sale”

Additional Selling Restriction for issuance of Rupee Denominated Notes

Each of the Issuer and Dealers represented and agreed that:

(a) the Offering Circular or any material relating to the Rupee Denominated Notes has not been

and will not be circulated or distributed to any prospective investor who does not meet the

FATF Requirements (as defined below) or to any offshore branch of an Indian bank; and

(b) the Rupee Denominated Notes will not be offered or sold and have not been offered or sold as

part of the primary issuance to any person who does not meet the FATF Requirements or to

any offshore branch of an Indian bank, it being agreed that the Dealers have no responsibility

for determining the FATF Requirements compliance status of investors when such Rupee

Denominated Notes are subsequently reoffered or resold.

Disclosure of information relating to holders of the Rupee Denominated Notes

In addition, holders and beneficial owners shall be responsible for compliance with restrictions on the

ownership of the Rupee Denominated Notes imposed from time to time by applicable laws or by any

regulatory authority or otherwise. In this context, holders and beneficial owners of Rupee

Denominated Notes shall be deemed to have acknowledged, represented and agreed that such holders

and beneficial owners are eligible to purchase the Rupee Denominated Notes under applicable laws

and regulations and are not prohibited under any applicable law or regulation from acquiring, owning

or selling the Rupee Denominated Notes. Potential investors should seek independent advice and

verify compliance with FATF Requirements prior to any purchase of the Rupee Denominated Notes.

The holders and beneficial owners of Rupee Denominated Notes shall be deemed to confirm that

for so long as they hold any Rupee Denominated Notes, they will meet the FATF Requirements

and will not be an offshore branch of an Indian bank.

Further, all Noteholders represent and agree that the Rupee Denominated Notes will not be

offered or sold on the secondary market to any person who does not comply with the FATF

Requirements or which is an offshore branch of an Indian bank.

To comply with applicable laws and regulations, the Issuer or its duly appointed agent may from time

to time request Euroclear and Clearstream, Luxembourg to provide them with details of the

accountholders within Euroclear and Clearstream Luxembourg, as may be appropriate, that hold the

Rupee Denominated Notes and the number of Rupee Denominated Notes held by each such

accountholder.

Euroclear and Clearstream, Luxembourg participants which are holders of the Rupee Denominated

Notes or intermediaries acting on behalf of such Noteholders would be deemed to have hereby

authorised Euroclear and Clearstream, Luxembourg, as may be appropriate, to disclose such

information to the Issuer or its duly appointed agent.

For the purposes of this section, FATF Requirements means an investor who is a resident of a country:

a) that is a member of the FATF or a member of a FATF-style regional body;

0012018-0003086 HK:20704050.1 S-24

b) whose securities market regulator is a signatory to the International Organization of Securities

Commission's Multilateral Memorandum of Understanding (Appendix A Signatories) or a

signatory to bilateral Memorandum of Understanding with the Securities and Exchange Board

of India for information sharing arrangements; and

c) which is not identified in a public statement of the FATF as:

(i) being a jurisdiction having a strategic anti-money laundering or combating the financing of terrorism deficiencies to which counter measures apply; or

(ii) being a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies.

Further if a jurisdiction requires that the Offering be made by a licensed broker or dealer and the Joint

Lead Managers or any affiliate of the Joint Lead Managers is a licensed broker or dealer in that

jurisdiction, the Offering shall be deemed to be made by that Joint Lead Manager or its affiliate on

behalf of the Issuer in such jurisdiction.

Each of the Joint Lead Managers and its affiliates may engage in investment or commercial banking

and other dealings in the ordinary course of business with the Issuer or its affiliates from time to time

and may receive fees and commissions for these transactions. In addition to the transactions noted

above, each Joint Lead Manager and its affiliates may, from time to time after completion of the

Offering, engage in other transactions with, and perform services for, the Issuer or its affiliates in the

ordinary course of their business. Each Joint Lead Manager or its affiliates may also purchase Notes

for asset management and/or proprietary purposes but not with a view to distribution or may hold the

Notes on behalf of clients or in the capacity of investment advisors. While each Joint Lead Manager

and its affiliates have policies and procedures to deal with conflicts of interests, any such transactions

may cause a Joint Lead Manager or its affiliates or its clients or counterparties to have economic

interests and incentives which may conflict with those of an investor in the Notes. Each Joint Lead

Manager may receive returns on such transactions and has no obligation to take, refrain from taking or

cease taking any action with respect to any such transactions based on the potential effect on a

prospective investor in the Notes.

0012018-0003086 HK:20704050.1 S-25

PRICING SUPPLEMENT FOR GREEN MASALA BONDS

4 August 2016

NTPC Limited

Issue of INR denominated 20,000,000,000 7.375 per cent. Notes due 2021 payable in U.S. Dollars

(the Notes)

under the U.S.$4,000,000,000


This document constitutes the Pricing Supplement relating to the issue of Notes described

herein.

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions

set forth in the Offering Circular dated 4 November 2015 as supplemented by the Note Offering

Circular dated 4 August 2016 (together, the Offering Circular). This Pricing Supplement contains

the final terms of the Notes and must be read in conjunction with the Offering Circular.

1. Issuer: NTPC Limited

2. (a) Series Number: 06

(b) Tranche Number: 01

(c) Date on which the Notes will be

consolidated and form a single Series:

Not Applicable

3. Specified Currency or Currencies: The lawful currency of India (Indian Rupees

or INR), provided that all payments in respect

of the Notes will be made in United States

Dollars (USD).

4. Aggregate Nominal Amount:

(a) Series: INR20,000,000,000

(b) Tranche: INR20,000,000,000

5. (a) Issue Price: 99.575 per cent. of the Aggregate Nominal

Amount

The Issue Price will be payable in USD and

will be based on the Aggregate Nominal

Amount (in INR) divided by the conversion

rate reported by the RBI and displayed on

Reuters page “RBIB” at approximately 1:30

p.m., Mumbai, on 4 August 2016.

(b) Net proceeds: INR19,915,000,000

6. (a) Specified Denominations: INR10,000,000 and integral multiples thereof

0012018-0003086 HK:20704050.1 S-26

(b) Calculation Amount: INR10,000,000

7. (a) Issue Date: 10 August 2016

(b) Interest Commencement Date: Issue Date

8. Maturity Date: 10 August 2021 (subject to adjustment in

accordance with item 22 below)

9. Interest Basis: 7.375 per cent. Fixed Rate (further particulars

specified below)

10. Redemption/Payment Basis: Redemption at par

11. Change of Interest Basis or

Redemption/Payment Basis:

Not Applicable

12. (a) Date of board approval for issuance of

Notes obtained: 28 April 2016

(b) Date of regulatory approval/consent

for issuance of Notes obtained: Not Applicable

13. Listing: Singapore and London

14. Method of distribution: Syndicated

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15. Fixed Rate Note Provisions: Applicable

(a) Rate(s) of Interest: 7.375 per cent. per annum payable-annually in

arrear on each Interest Payment Date

(b) Interest Payment Date(s): 10 August in each year up to and including the

Maturity Date (each as may be subject to

adjustment in accordance with item 22 below).

(c) Fixed Coupon Amount(s): INR737,500 per Calculation Amount, payable

in USD by applying the following formula:

INR737,500 divided by the Reference Rate (as

defined in item 22 below)

(d) Broken Amount(s): Not Applicable

(e) Day Count Fraction: 30/360

(f) Determination Date(s): Not Applicable

(g) Other terms relating to the method of

calculating interest for Fixed Rate

Notes:

None

16. Floating Rate Note Provisions Not Applicable

0012018-0003086 HK:20704050.1 S-27

17. Zero Coupon Note Provisions Not Applicable

18. Index Linked Interest Note Provisions Not Applicable

19. Dual Currency Interest Note Provisions Not Applicable

PROVISIONS RELATING TO REDEMPTION

20. Issuer Call: Not Applicable

21. Investor Put: Not Applicable

22. Final Redemption Amount: The Final Redemption Amount per Calculation

Amount will be payable in USD and

determined by the Calculation Agent, on the

Rate Fixing Date in respect of the Maturity

Date, as follows:

Calculation Amount divided by the

Reference Rate

Where:

Calculation Agent means Citibank N.A.,

London Branch.

Reference Rate means the rate used on each

Rate Fixing Date which will be the USD/INR

spot rate, expressed as the amount of Indian

Rupees per one United States Dollar, for

settlement in two Fixing Business Days,

reported by the Reserve Bank of India, which

is displayed on Reuters page RBIB (or any

successor page) at approximately 1:30 pm,

Mumbai time, on each Rate Fixing Date. If a

Price Source Disruption Event occurs on the

Scheduled Rate Fixing Date, then the

Reference Rate for such Rate Fixing Date shall

be determined by the Calculation Agent in

accordance with the Fallback Provisions set

out below.

Rate Fixing Date means the Scheduled Rate

Fixing Date, subject to Valuation

Postponement.

Scheduled Rate Fixing Date means the date

which is two Fixing Business Days prior to the

Interest Payment Date or the Maturity Date or

such other date on which an amount in respect

of the Notes is due and payable. If the

Scheduled Rate Fixing Date is an Unscheduled

Holiday, the Rate Fixing Date shall be the next

following relevant Fixing Business Day,

0012018-0003086 HK:20704050.1 S-28

subject to the Deferral Period for Unscheduled

Holiday set out below.

Unscheduled Holiday means a day that is not

a Fixing Business Day and the market was not

aware of such fact (by means of a public

announcement or by reference to other

publicly available information) until a time

later than 9:00 a.m. local time in Mumbai, two

Fixing Business Days prior to the relevant Rate

Fixing Date.

Adjustments to Interest Payment Date and

Maturity Date:

If a Scheduled Rate Fixing Date is adjusted for

an Unscheduled Holiday or if Valuation

Postponement applies, then the Interest

Payment Date or Maturity Date relating to

such Scheduled Rate Fixing Date shall be two

(2) Payment Business Day(s) after the date on

which the Reference Rate for such Interest

Payment Date or Maturity Date is determined.

If any Interest Payment Date or Maturity Date

is adjusted in accordance with the preceding

sentence, then such adjustment (and the

corresponding payment obligations to be made

on such dates) shall apply only to such Interest

Payment Date or the Maturity Date, as

applicable, and no further adjustment shall

apply to the amount of interest payable.

Fallback Provisions:

Price Source Disruption Event means it

becomes impossible to obtain the Reference

Rate on a Rate Fixing Date.

Applicable Price Source Disruption

Fallbacks:

In the event of a Price Source Disruption

Event, the Calculation Agent shall apply each

of the following Price Source Disruption

Fallbacks for the determination of the

Reference Rate, in the following order, until

the Reference Rate can be determined.

1. Valuation

Postponement

(As defined below)

0012018-0003086 HK:20704050.1 S-29

2. Fallback

Reference Price

SFEMC INR

Indicative

Survey Rate

(INR02)

3. Fallback Survey

Valuation

Postponement

(As defined below)

4. Calculation

Agent

Determination

of Reference

Rate

Cumulative Events has the following

meaning: Notwithstanding anything to the

contrary, in no event shall the total number of

consecutive calendar days during which either

(i) valuation is deferred due to an Unscheduled

Holiday, or (ii) a Valuation Postponement shall

occur (or any combination of (i) and (ii)),

exceed 14 consecutive calendar days in the

aggregate.

Accordingly, (x) if, upon the lapse of any such

14 calendar day period, an Unscheduled

Holiday shall have occurred or be continuing

on the day following such period that

otherwise would have been a Fixing Business

Day, then such day shall be deemed to be a

Rate Fixing Date, and (y) if, upon the lapse of

any such 14 calendar day period, a Price

Source Disruption Event shall have occurred

or be continuing on the day following such

period on which the Reference Rate otherwise

would be determined, then Valuation

Postponement shall not apply and the

Reference Rate shall be determined in

accordance with the next Price Source

Disruption Fallback.

Valuation Postponement means that the

Reference Rate will be determined on the

Fixing Business Day first succeeding the day

on which the Price Source Disruption Event

ceases to exist, unless the Price Source

Disruption Event continues to exist (measured

from the date that, but for the occurrence of the

Price Source Disruption Event, would have

been the Rate Fixing Date) for a consecutive

number of calendar days equal to the

0012018-0003086 HK:20704050.1 S-30

Maximum Days of Postponement. In such

event, the Reference Rate will be determined

on the next Fixing Business Day after the

Maximum Days of Postponement (which will,

subject to the provisions relating to Fallback

Survey Valuation Postponement, be deemed to

be the applicable Rate Fixing Date) in

accordance with the next applicable Price

Source Disruption Fallback.

Maximum Days of Postponement: 14

calendar days.

SFEMC INR Indicative Survey Rate

(INR02) means that the Reference Rate for a

given Rate Fixing Date will be the Indian

Rupee/U.S. Dollar Specified Rate for U.S.

Dollars, expressed as the amount of Indian

Rupees per one U.S. Dollar, for settlement in

two Fixing Business Days, as published on the

web site of Singapore Foreign Exchange

Market Committee (SFEMC) at approximately

3:30 p.m. (Singapore time), or as soon

thereafter as practicable, on such date. The

Reference Rate shall be calculated by SFEMC

(or a service provider SFEMC may select in its

sole discretion) pursuant to the SFEMC INR

Indicative Survey (as defined below) for the

purpose of determining the SFEMC INR

Indicative Survey Rate.

SFEMC INR Indicative Survey means a

methodology, dated as of 1 December 2004 as

amended from time to time, for a centralised

industry-wide survey of financial institutions

that are active participants in the Indian

Rupee/U.S. Dollar markets for the purpose of

determining the SFEMC INR Indicative

Survey Rate (INR02).

Fallback Survey Valuation Postponement

means that, in the event that the Fallback

Reference Price is not available on or before

the third Fixing Business Day (or day that

would have been a Fixing Business Day but

for an Unscheduled Holiday) succeeding the

end of either (i) Valuation Postponement for

Price Source Disruption Event, (ii) Deferral

Period for Unscheduled Holiday, or (iii)

Cumulative Events, as applicable, then the

Reference Rate will be determined in

accordance with the next Applicable Price

Source Disruption Fallback on such day

(which will be deemed to be the applicable

Rate Fixing Date). For the avoidance of doubt,

0012018-0003086 HK:20704050.1 S-31

Cumulative Events, if applicable, does not

preclude postponement of valuation in

accordance with this provision.

Payment Business Day means any day on

which commercial banks and foreign exchange

markets settle payments and are open for

general business (including dealings in foreign

exchange and foreign currency deposits) in

London, New York and Mumbai.

Fixing Business Day means any day on which

commercial banks and foreign exchange

markets settle payments and are open for

general business (including dealings in foreign

exchange and foreign currency deposits) in

Mumbai.

Deferral Period for Unscheduled Holiday:

In the event the Scheduled Rate Fixing Date is

postponed due to the occurrence of an

Unscheduled Holiday, and if the Rate Fixing

Date has not occurred on or before the 14th

calendar day after the Scheduled Rate Fixing

Date (any such period being a Deferral

Period), then the next day after the Deferral

Period that would have been a Fixing Business

Day but for the Unscheduled Holiday, shall be

deemed to be the Rate Fixing Date.

23. Early Redemption Amount payable on

redemption for taxation reasons or on event of

default:

The Final Redemption Amount as determined

in accordance with item 22 above; provided

that, for purposes of such determination, the

Scheduled Rate Fixing Date shall be the date

that is two Fixing Business Days prior to the

date upon which the Notes become due and

payable.

GENERAL PROVISIONS APPLICABLE TO THE NOTES

24. Form of Notes: Registered Notes:

Registered Global Note (INR20,000,000,000

nominal amount) registered in the name of a

nominee for a common depositary for

Euroclear and Clearstream, Luxembourg

25. Financial Centre(s): New York, London and Mumbai

26. Talons for future Coupons to be attached to

Definitive Notes in bearer form (and dates on

which such Talons mature):

No

27. Details relating to Partly Paid Notes: amount Not Applicable

0012018-0003086 HK:20704050.1 S-32

of each payment comprising the Issue Price

and date on which each payment is to be made

and consequences of failure to pay, including

any right of the Issuer to forfeit the Notes and

interest due on late payment:

28. Details relating to Instalment Notes: Not Applicable

29. Redenomination applicable: Redenomination not applicable

30. Permitted Security Interest Date: 3 August 2016

31. Other terms or special conditions: Not Applicable

DISTRIBUTION

32. (a) If syndicated, names of Managers: Axis Bank, Singapore Branch, MUFG

Securities EMEA plc, Standard Chartered

Bank and The Hongkong and Shanghai

Banking Corporation Limited

(b) Stabilising Manager(s) (if any): The Hongkong and Shanghai Banking

Corporation Limited

33. Commission and concession: The Issuer has agreed to pay the Managers a

management fee and a discretionary incentive

fee based on the yield of the Notes and total

principal amount of the Notes.

34. If non-syndicated, name of relevant Dealer: Not Applicable

35. Whether TEFRA D or TEFRA C rules

applicable or TEFRA rules not applicable:

TEFRA not applicable

36. Whether Category 1 or Category 2 applicable

in respect of the Notes offered and sold in

reliance on Regulation S:

Category 1

37. Additional selling restrictions: Selling Restriction for Issuance of Rupee

Denominated Rupee Denominated Notes

Each Dealer represents and agrees that:

(a) the Offering Circular or any material

relating to the Rupee Denominated

Notes has not been and will not be

circulated or distributed to any

prospective investor who does not meet

the FATF Requirements (as defined

below) or to any offshore branch of an

Indian bank; and

(b) the Rupee Denominated Notes will not

be offered or sold and have not been

offered or sold as part of the primary

0012018-0003086 HK:20704050.1 S-33

issuance to any person who does not

meet the FATF Requirements or to any

offshore branch of an Indian bank, it

being agreed that the Dealers have no

responsibility for determining the FATF

Requirements compliance status of

investors when such Rupee

Denominated Notes are subsequently

reoffered or resold.

For the purposes of this section, FATF

Requirements means an investor who is a

resident of a country:

(a) that is a member of the FATF or a member of a FATF-style regional body;

(b) whose securities market regulator is a

signatory to the International Organization of Securities Commission's

Multilateral Memorandum of

Understanding (Appendix A

Signatories) or a signatory to bilateral Memorandum of Understanding with the

Securities and Exchange Board of India

for information sharing arrangements; and

(c) which is not identified in a public

statement of the FATF as:

(i) being a jurisdiction having a strategic anti-money laundering or

combating the financing of

terrorism deficiencies to which counter measures apply; or

(ii) being a jurisdiction that has not

made sufficient progress in addressing the deficiencies or has

not committed to an action plan

developed with the FATF to

address the deficiencies.

OPERATIONAL INFORMATION

38. Any clearing system(s) other than Euroclear

and Clearstream, Luxembourg and the relevant

identification number(s):

Not Applicable

39. Delivery: Delivery against payment

40. Additional Paying Agent(s) (if any): Not Applicable

ISIN XS1467374473

Common Code: 146737447

0012018-0003086 HK:20704050.1 S-34

LISTING APPLICATION

This Pricing Supplement comprises the final terms required to list the issue of Notes

described herein pursuant to the U.S.$4,000,000,000 Medium Term Note Programme of NTPC

Limited.

RESPONSIBILITY

The Issuer accepts responsibility for the information contained in this Pricing Supplement.

Signed on behalf of the Issuer:

By: _____________________________

Duly authorised

0012018-0003086 HK:20704050.1 S-35

TAXATION

The “Taxation of gains arising on disposition” section referred to on pages 185 and 186 of the

Original Offering Circular shall be deleted in its entirety and replaced by the following:

Any gains arising to a non-resident investor from disposition of the Notes held (or deemed to be held)

as a capital asset will generally be chargeable for income tax in India if the Notes are regarded as

property situated in India. A non-resident investor generally will not be chargeable for income tax in

India from a disposition of the Notes held as a capital asset provided the Notes are regarded as being

situated outside India. The issue as to where the Notes should properly be regarded as being situated

is not free from doubt. The ultimate decision, however, will depend on the view taken by Indian tax

authorities on the position with respect to the situs of the rights being offered in respect of the Notes.

There is a possibility that the Indian tax authorities may treat the Notes as being located in India as the

Issuer is incorporated in and resident in India.

If the Notes are regarded as situated in India by the Indian tax authorities, upon disposition of a Note:

(i) a non-resident investor, who has held the Notes for a period of more than 36 months

immediately preceding the date of their dispositions, will be liable to pay long term capital

gains tax at rate of 10.0 per cent. of the capital gains (plus applicable surcharge, education

cess and secondary and higher education cess) in accordance with the provisions of the

Income Tax Act. These rates are subject to any lower rate provided for by an applicable tax

treaty;

(ii) a non-resident investor who has held the Notes for 36 months or less will be liable to pay

short term capital gains tax at a rate of up to 40.0 per cent. of capital gains (plus applicable

surcharge, education cess and secondary and higher education cess), depending on the legal

status of the non-resident investor, and his or her taxable income in India, subject to any lower

rate provided for by an applicable Tax Treaty;

(iii) in the case of a non-resident investor, the Finance Act, 2016 provides that any gains arising on

account of appreciation of the Rupee against a foreign currency at the time of redemption of

Rupee Denominated Bonds of an Indian Company subscribed by such non-resident investor,

shall be ignored for the computation of full value of consideration. Accordingly, such gains

arising to the original non-resident investor on account of the appreciation of the Rupee

against a foreign currency at the time of redemption of the Notes subscribed to by such non-

resident investor, shall not be taxable as capital gains. It does not, however, deal with capital

gains tax treatment in respect of:

(a) the gains arising to investors prior to redemption during the life of the Notes; and

(b) gains of the Notes acquired through secondary purchases.

(iv) any income arising to a non-resident investor from a transfer of the Notes held as stock-in-

trade will be considered as business income. Business income will be subject to income tax in

India only to the extent it is attributable to a “business connection in India” or, where a Tax

Treaty applies, to a “permanent establishment” of the non-resident investor in India. A non-

resident investor will be liable to pay Indian tax on such income at a rate of up to 40.0 per

cent. (plus applicable surcharge, education cess and secondary and higher education cess),

depending on the legal status of the non-resident investor and his or her taxable income in

India, subject to any lower rate provided for by a Tax Treaty.

If applicable, under the tax law, tax shall be withheld by the person making any payment to a non-

resident on long-term capital gains at 10.0 per cent. (plus applicable surcharge, education cess and

0012018-0003086 HK:20704050.1 S-36

secondary and higher education cess) and short-term capital gains at 30.0 per cent. or 40 per cent.

(plus applicable surcharge, education cess and secondary and higher education cess), depending on

the legal status of the recipient of income, subject to any lower rate provided for by a Tax Treaty. Tax

payable shall be computed in such manner as prescribed in this regard under the Income Tax Act. For

the purpose of tax withholding, the non-resident Noteholders shall be obliged to provide permanent

account number allotted by the tax authorities and all prescribed information/documents, including a

tax residency certificate (issued by the tax authorities of the country in which the investor is resident)

for claiming the tax treaty benefits.

The “EU Savings Directive” section referred to on page 187 of the Original Offering Circular

shall be deleted.

0012018-0003086 HK:20704050.1 S-37

RECENT DEVELOPMENTS

The following paragraphs set forth comparison of certain line items of the audited consolidated

financial information of the Issuer as of and for the year ended 31 March 2016.

For further details of the Issuer’s consolidated financial statements for the year ended 31 March 2016,

please see page 18 onwards of this Note Offering Circular.

Comparison of certain line items in the Consolidated Financial Information

The Issuer’s non-current liabilities increased by 9.08 per cent. from Rs.993.02 billion as at 31 March

2015 to Rs.1,083.23 billion as at 31 March 2016. This increase was mainly due to an increase in the

Issuer’s long term borrowings in relation to capital expenditure incurred on new projects.

The Issuer’s current liabilities increased by 11.53 per cent. from Rs.359.46 billion as at 31 March 2015

to Rs.400.90 billion as at 31 March 2016. This increase was mainly due to an increase in the short term

borrowings by Rs.15.01 billion, an increase in amounts payable towards capital expenditure by

Rs.19.77 billion and various short term provisions to the amount of Rs.9.37 billion.

The Issuer’s current investments decreased by 81.77 per cent from Rs.18.87 billion as at 31 March

2015 to Rs.3.44 billion as at 31 March 2016. This decrease was mainly due to the redemption of Rs.

16.5 billion of 8.5 per cent. tax free State Government Special Bonds at maturity.

The Issuer’s short-term loans and advances decreased by 5.49 per cent. from Rs.24.57 billion as at 31

March 2015 to Rs.23.22 billion as at 31 March 2016. This decrease was mainly due to a reduction in

security deposits amounting to Rs.1.25 billion and the receipt of Rs.0.48 billion towards installments in

respect of loan to state governments in settlement of dues from customers.

The Issuer’s current assets decreased by 17.31 per cent. from Rs.417.92 billion as at 31 March 2015 to

Rs.345.57 billion as at 31 March 2016. This decrease was mainly due to a reduction in cash and bank

balances by Rs.88.58 billion and a decrease in current investments (which decreased by 81.77 per cent

from Rs.18.87 billion as at 31 March 2015 to Rs.3.44 billion as at 31 March 2016) and short term loans

and advances (which decreased by 5.49 per cent. from Rs.24.57 billion as at 31 March 2015 to

Rs.23.22 billion as at 31 March 2016). The reduction in cash and bank balances was mainly due to the

Issuer’s capital expenditure to finance new projects.

The Issuer’s other income decreased by 40.18 per cent. from Rs.20.63 billion for the year ended 31

March 2015 to Rs.12.34 billion for the year ended 31 March 2016. This decrease was mainly due to

reduction in interest from deposits with banks by Rs.8.45 billion, reduction of Rs.1.40 billion in

interest from 8.5 per cent. tax free State Government Special Bonds due to settlement of these bonds

at maturity, and reduction in dividends from current investments by Rs.1.07 billion.

The Issuer’s finance cost increased by 16.27 per cent. from Rs.35.70 billion for the year ended 31

March 2015 to Rs.41.51 billion for the year ended 31 March 2016. This increase was mainly due to

finance costs charged to revenue in respect of units which commenced commercial operations.

The Issuer’s profit before tax decreased by 3.37 per cent. from Rs.104.56 billion for the year ended 31

March 2015 to Rs.101.04 billion for the year ended 31 March 2016. This decrease was mainly due to a

reduction in other income by Rs.8.29 billion.

0012018-0003086 HK:20704050.1 S-38

Operational Information

As at 31 March 2016 the Issuer’s installed capacity was 46,653MW including 6,641MW through its

joint ventures and subsidiaries. Following the Issuer’s commission of 200MW solar PV capacity and

transfer of 325MW of the Patratu Thermal Power Station to Patratu Vidyut Utpadan Nigam Limited, a

subsidiary of the Issuer, the Issuer's installed capacity was 47,178 MW including 6,966 MW, through

its joint ventures and subsidiaries as at 30 June 2016.

During fiscal 2016, the Issuer's:

generation of electricity was 263.42 billion units including 241.98 billion units from its

directly owned power stations and 21.44 billion units from the power stations owned

through its joint ventures and subsidiaries;

out of total generation, 250.83 billion units, or 95.2 per cent., was generated through

coal-fired power stations, 10.12 billion units, or 3.8 per cent., was generated through

gas-fired power stations and the remaining 2.47 billion units, or 1 per cent., was

generated through solar and hydro power stations;

directly owned coal-fired power plant load factor was 78.61 per cent.;

directly owned coal-fired power plant availability factor was 91.94 per cent.;

directly owned gas and liquid fired power plant load factor was 25.14 per cent.;

directly owned gas and liquid fired power plant availability factor was 97.30 per cent;

hydro plant load factor was 36.23 per cent. for the year ended 31 March 2016; and

hydro plant availability factor was 95.41 per cent.

New Joint Ventures

On 16 May 2016, the Issuer entered into a 50/50 Joint Venture agreement with Coal India Limited to

establish Hindustan Urvarak & Rasayn Limited, which was incorporated on 15 June 2016. This Joint

Venture Company will undertake revival of fertilizer plants of Fertilizer Corporation of India Limited

(FCIL) at Sindri, Bihar and Gorakhpur, Uttar Pradesh, by setting up an ammonia urea plant at each

location.

Shareholder Information

Since the date of the Original Offering Circular, the Government has sold 5 per cent. of its stake in in

the Issuer to the public in February of 2016 and 0.22 per cent. to employees in July of 2016. As a

result, as of the date of this Note Offering Circular, the Government owns 69.74 per cent. of the Issuer

and the remaining 30.26 per cent. is owned by foreign institutional investors, financial institutions,

banks and the general public. The President of India is the beneficial owner of the Government’s

shareholding.

General Information

There has been no significant change in the financial or trading position of the Issuer or of the Group

since the date of the most recently published accounts, whether annual or interim and no material

adverse change in the financial position or prospects of the Issuer or of the Group since the date of the

most recently published audited accounts, whether annual or interim.

0012018-0003086 HK:20704050.1 S-39

There are no governmental, legal or arbitration proceedings (including any proceedings which are

pending or threatened) of which the Issuer is aware in the 12 months preceding the date of this

document which may have or have in such period had a significant effect on the financial position or

profitability of the Issuer or of the Group.

As at the date of this Note Offering Circular, there are no potential conflicts of interest between any

duties owed to the Issuer by the Directors and the private interests and/or other duties owed by these

individuals.

0012018-0003086 HK:20704050.1 S-40

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2016

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF NTPC LIMITED

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of NTPC Limited (hereinafter

referred to as “the Holding Company”) and its subsidiaries (the Holding Company and its subsidiaries

together referred to as “the Group”) and its jointly controlled entities, comprising of the Consolidated

Balance Sheet as at 31st March, 2016, the Consolidated Statement of Profit and Loss, the

Consolidated Cash Flow Statement for the year then ended, and a summary of the significant

accounting policies and other explanatory information (hereinafter referred to as “the consolidated

financial statements”).

Management’s Responsibility for the Consolidated Financial Statements

The Holding Company’s Board of Directors is responsible for the preparation of these consolidated

financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to

as “the Act”) that give a true and fair view of the consolidated financial position, consolidated

financial performance and consolidated cash flows of the Group including its Jointly controlled

entities in accordance with the accounting principles generally accepted in India, including the

Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies

(Accounts) Rules, 2014. The respective Board of Directors of the companies included in the Group

and of its jointly controlled entities are responsible for maintenance of adequate accounting records in

accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing

and detecting frauds and other irregularities; the selection and application of appropriate accounting

policies; making judgments and estimates that are reasonable and prudent; and the design,

implementation and maintenance of adequate internal financial controls, that were operating

effectively for ensuring the accuracy and completeness of the accounting records, relevant to the

preparation and presentation of the financial statements that give a true and fair view and are free

from material misstatement, whether due to fraud or error, which have been used for the purpose of

preparation of the consolidated financial statements by the Directors of the Holding Company, as

aforesaid.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our

audit. While conducting the audit, we have taken into account the provisions of the Act, the

accounting and auditing standards and matters which are required to be included in the audit report

under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under

Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and

plan and perform the audit to obtain reasonable assurance about whether the consolidated financial

statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the

disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s

judgment, including the assessment of the risks of material misstatement of the consolidated financial

statements, whether due to fraud or error. In making those risk assessments, the auditor considers

internal financial control relevant to the Holding Company’s preparation of the consolidated financial

statements that give a true and fair view in order to design audit procedures that are appropriate in the

0012018-0003086 HK:20704050.1 S-41

circumstances. An audit also includes evaluating the appropriateness of the accounting policies used

and the reasonableness of the accounting estimates made by the Holding Company’s Board of

Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other

auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph

below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated

financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the

aforesaid consolidated financial statements give the information required by the Act in the manner so

required and give a true and fair view in conformity with the accounting principles generally accepted

in India, of the consolidated state of affairs of the Group and its jointly controlled entities as at 31st

March, 2016, and their consolidated profit and their consolidated cash flows for the year ended on that

date.

Emphasis of Matter

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

(a) Note No. 12 (i) & 37 (a) in respect of change in accounting of capital expenditure on assets

not owned by the Company with retrospective effect taking guidance available in AS 10

notified by MCA on 30th March 2016 effective from the financial year 2016-17.

(b) Note No. 22 (a) & (b) regarding billing & recognition of sales on provisional basis and

measurement of GCV of coal on ‘as received’ basis after secondary crusher pending disposal

of the matter by CERC/Hon’ble Delhi High Court and related matters as mentioned in said

note;

(c) Note No. 34 in respect of a Company’s ongoing project where the order of NGT has been

stayed by the Hon’ble Supreme Court of India and the matter is sub-judice.

Our opinion is not modified in respect of these matters.

Other Matters

(a) We did not audit the financial statements / financial information of the following subsidiaries

and jointly controlled entities whose financial statements / financial information reflect the

details given below of assets as at 31st March 2016, total revenues and net cash flows for the

year ended on that date to the extent to which they are reflected in the Consolidated Financial

Statements:

(₹in crore)

Name of the Companies Assets Total

Revenues

Net Cash

Flows

Subsidiaries:

1) NTPC Electric Supply Company Ltd 77.69 1.40 (501.93)

2) NTPC Vidyut Vyapar Nigam Ltd. 1,256.01 4,122.62 (13.71)

3) Kanti Bijlee Utpadan Nigam Ltd. 4,241.85 377.62 (39.96)

4) Bhartiya Rail Bijlee Company Ltd. 6,265.75 - 28.31

5) Patratu Vidyut Utpadan Nigam Ltd. 6.78 - 2.09

Total 11,848.08 4,501.64 (525.20)

0012018-0003086 HK:20704050.1 S-42

(₹in crore)


Revenues

Net Cash

Flows

Joint Ventures:

1) Utility Powertech Ltd. 143.64 327.87 6.04

2) NTPC-Alstom Power Services Pvt. Ltd. 66.54 60.37 (3.57)

3) NTPC-SAIL Power Company Pvt. Ltd. 1,560.14 857.90 62.45

4) NTPC Tamilnadu Energy Company Ltd. 4,770.32 1,329.17 9.76

5) Aravali Power Company Pvt. Ltd. 5,206.37 2,144.37 7.26

6) Meja Urja Nigam Pvt. Ltd. 2,948.57 - (20.92)

7) BF-NTPC Energy Systems Ltd. 2.94 0.02 -

8) Nabinagar Power Generating Company Pvt.

Ltd. 3,753.94 - 29.69

9) National High Power Test Laboratory Pvt. Ltd 58.56 - (2.72)

Total 18,511.02 4,719.70 87.99

These financial statements / financial information have been audited by other auditors whose reports

have been furnished to us by the Management upto 25th May 2016 and our opinion on the

consolidated financial statements, in so far as it relates to the amounts and disclosures included in

respect of these subsidiaries and jointly controlled entities, and our report in terms of sub-sections (3)

and (11) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiaries and jointly

controlled entities is based solely on the reports of the other auditors.

(b) We did not audit the financial statements / financial information of the following jointly

controlled entities whose financial statements / financial information reflect the details given

below of assets as at 31st March 2016, total revenues and net cash flows for the year ended on

that date to the extent to which they are reflected in the Consolidated Financial Statements:

(₹in Crore)


Revenues Net Cash

Flows

Joint Ventures:

1) Ratnagiri Gas & Power Pvt. Ltd. 2,540.51 290.25 1.41

2) NTPC-BHEL Power Project Pvt. Ltd 412.24 401.36 (12.02)

3) Transformers and Electricals Kerala Ltd. 58.20 68.90 (1.71)

4) Energy Efficiency Services Ltd. 427.77 206.27 43.75

5) Anushakti Vidyut Nigam Ltd. 0.01 - -

6) CIL NTPC Urja Pvt. Ltd. 0.03 - 0.02

7) Trincomalee Power Company Ltd. 14.56 0.45 3.16

8) Bangladesh India Friendship Power Company Pvt. Ltd. 94.95 - 21.58

Total 3,548.27 967.23 56.19

These financial statements / financial information are unaudited and have been furnished to us by the

Management and our opinion on the consolidated financial statements, in so far as it relates to the

amounts and disclosures included in respect of these jointly controlled entities, and our report in terms

of sub-section (3) of Section 143 of the Act in so far as it relates to the aforesaid jointly controlled

entities, is based solely on such unaudited financial statements / financial information. In our opinion

and according to the information and explanations given to us by the Management, these financial

statements / financial information are not material to the Group.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory

Requirements below, is not modified in respect of the above matters with respect to our reliance on

the work done and the reports of the other auditors and the financial statements / financial information

certified by the Management.

0012018-0003086 HK:20704050.1 S-43

Report on Other Legal and Regulatory Requirements

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

(a) We have sought and obtained all the information and explanations which to the best

of our knowledge and belief were necessary for the purposes of our audit of the

aforesaid consolidated financial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of

the aforesaid consolidated financial statements have been kept so far as it appears

from our examination of those books and the reports of the other auditors.

(c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and

the Consolidated Cash Flow Statement dealt with by this Report are in agreement

with the relevant books of account maintained for the purpose of preparation of the

consolidated financial statements.

(d) In our opinion, the aforesaid consolidated financial statements comply with the

Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the

Companies (Accounts) Rules, 2014.

(e) Being a Government Company, pursuant to the Notification No. GSR 463(E) dated

5th June 2015 issued by Ministry of Corporate Affairs, Government of India,

provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not

applicable to the Holding Company. Further, on the basis of the reports of the

statutory auditors of its subsidiary companies, and jointly controlled companies

incorporated in India, none of the directors of the Group companies, and its jointly

controlled companies incorporated in India is disqualified as on 31st March, 2016

from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting

of the Company and the operating effectiveness of such controls, refer to our separate

Report in Annexure 1.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance

with Rule 11 of the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and

to the best of our information and according to the explanations given to us:

(i) The consolidated financial statements disclose the impact of pending

litigations on the consolidated financial position of the Group and its jointly

controlled entities. Refer Note 34, 35 and 52 to the consolidated financial

statements.

(ii) Provision has been made in the consolidated financial statements, as required

under the applicable law or accounting standards, for material foreseeable

losses, on long- term contracts including derivative contracts.

(iii) There has been no delay in transferring amounts, required to be transferred, to

the Investor Education and Protection Fund by the Holding Company, its

subsidiary and jointly controlled companies incorporated in India, in

accordance with the relevant provisions of the Companies Act, 1956 (1 of

1956) and Rules made thereunder.

0012018-0003086 HK:20704050.1 S-44

For T.R. Chadha & Co LLP

Chartered Accountants

FRN 006711N/N500028

For PSD & Associates


FRN 004501C

For Sagar & Associates


FRN 003510S

(CA. Neena Goel)

Partner

M No.057986

(CA. Thalendra Sharma)

Partner

M No.079236

(CA. V.Vidyasagar Babu)

Partner

M No.027357

For Kalani & Co.


FRN 000722C

For P. A. & Associates


FRN 313085E

For S.K. Kapoor & Co.


FRN 000745C

For B. M. Chatrath & Co.


FRN 301011E

(CA. P.C.Parwal)

Partner

M No. 071411

(CA. S.S.Poddar)

Partner

M No.051113

(CA. V.B.Singh)

Partner

M.No.073124

(CA. P.R.Paul)

Partner

M.No.051675

Place : New Delhi

Dated : 30th May 2016

0012018-0003086 HK:20704050.1 S-45

Annexure 1

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE

CONSOLIDATED FINANCIAL STATEMENTS OF ABC COMPANY LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act, 2013 (“the Act”)

In conjunction with our audit of the consolidated financial statements of the Company as of and for

the year ended 31st March 2016, We have audited the internal financial controls over financial

reporting of NTPC Limited (hereinafter referred to as “the Holding Company”) and its subsidiary

companies, its associate companies and jointly controlled companies, which are companies

incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the Holding company, its subsidiary companies, its associate

companies and jointly controlled companies, which are companies incorporated in India, are

responsible for establishing and maintaining internal financial controls based on the internal control

over financial reporting criteria established by the Company and the components of internal control

stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued

by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design,

implementation and maintenance of adequate internal financial controls that were operating

effectively for ensuring the orderly and efficient conduct of its business, including adherence to the

respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds

and errors, the accuracy and completeness of the accounting records, and the timely preparation of

reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company's internal financial controls over financial

reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit

of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI

and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of

the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both

issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether adequate internal financial controls over financial reporting was established

and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal

financial controls system over financial reporting and their operating effectiveness. Our audit of

internal financial controls over financial reporting included obtaining an understanding of internal

financial controls over financial reporting, assessing the risk that a material weakness exists, and

testing and evaluating the design and operating effectiveness of internal control based on the assessed

risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks

of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained by the other

auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and

appropriate to provide a basis for our audit opinion on the Company’s internal financial controls

system over financial reporting.

0012018-0003086 HK:20704050.1 S-46

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with generally accepted accounting principles. A

company's internal financial control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect

the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that

transactions are recorded as necessary to permit preparation of financial statements in accordance with

generally accepted accounting principles, and that receipts and expenditures of the company are being

made only in accordance with authorizations of management and directors of the company; and (3)

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,

use, or disposition of the company's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the

possibility of collusion or improper management override of controls, material misstatements due to

error or fraud may occur and not be detected. Also, projections of any evaluation of the internal

financial controls over financial reporting to future periods are subject to the risk that the internal

financial control over financial reporting may become inadequate because of changes in conditions, or

that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Holding Company, its subsidiary companies, its associate companies and jointly

controlled companies, which are companies incorporated in India, have, in all material respects, an

adequate internal financial controls system over financial reporting and such internal financial

controls over financial reporting were operating effectively as at 31st March 2016, based on the

internal control over financial reporting criteria established by the Company and the components of

internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial

Reporting issued by the Institute of Chartered Accountants of India.

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of

the internal financial controls over financial reporting insofar as it relates to five subsidiary companies

and nine jointly controlled companies, which are companies incorporated in India, is based on the

corresponding reports of the auditors of such companies incorporated in India.

As regard the financial statements of other six jointly controlled companies incorporated in India,

which are un-audited, their impact on the Internal Financial Control on Financial Reporting of the

Group is not material.

0012018-0003086 HK:20704050.1 S-47

For T.R. Chadha & Co LLP


FRN 006711N/N500028

For PSD & Associates


FRN 004501C

For Sagar & Associates


FRN 003510S

(CA. Neena Goel)

Partner

M No.057986

(CA. Thalendra Sharma)

Partner

M No.079236


Partner

M No.027357

For Kalani & Co.


FRN 000722C

For P. A. & Associates


FRN 313085E

For S.K. Kapoor & Co.


FRN 000745C

For B. M. Chatrath & Co.


FRN 301011E

(CA. P.C.Parwal)

Partner

M No. 071411

(CA. S.S.Poddar)

Partner

M No.051113

(CA. V.B.Singh)

Partner

M.No.073124

(CA. P.R.Paul)

Partner

M.No.051675

Place : New Delhi


0012018-0003086 HK:20704050.1 S-48


Corrigendum to the Independent Auditor’s Report dated 30th

May 2016 on the Consolidated

Financial Statements of NTPC Ltd. for the year ended 31st March 2016

For the year under audit, we have already issued our Independent Auditors’ Report dated 30th May

2016 on the above referred consolidated financial statements of NTPC Ltd. In the said report, the

financial statements of one of the Joint Venture Companies, M/s NTPC Alstom Power Services Pvt.

Ltd., having assets of Rs.66.54 crore, Total Revenue of Rs. 60.37 crore and Net cash flows of Rs. (-)

3.57 crore, were un-audited as on the date of finalization of consolidated financial statements of

NTPC Ltd whereas the same has been inadvertently disclosed as audited. Accordingly, the relevant

portions in the Independent Auditors’ Report may be read as under:

1. In paragraph (a) titled ‘Other Matters’ in the main report, the table in respect of Subsidiaries and

Jointly Controlled Entities whose accounts were audited may be read as under:

(₹ in crore)


Revenue

Net Cash

Flows

Subsidiaries:

1) NTPC Electric Supply Company Ltd. 77.69 1.40 (501.93)

2) NTPC Vidyut Vyapar Nigam Ltd. 1,256.01 4,122.62 (13.71)

3) Kanti Bijlee Utpadan Nigam Ltd. 4,241.85 377.62 (39.96)

4) Bhartiya Rail Bijlee Company Ltd. 6,265.75 - 28.31

5) Patratu Vidyut Utpadan Nigam Ltd. 6.78 - 2.09

Total 11,848.08 4,501.64 (525.20)

Joint Ventures:

1) Utility Powertech Ltd. 143.64 327.87 6.04

2) NTPC-SAIL Power Company Pvt. Ltd. 1,560.14 857.90 62.45

3) NTPC Tamilnadu Energy Company Ltd. 4,770.32 1,329.17 9.76

4) Aravali Power Company Pvt. Ltd. 5,206.37 2,144.37 7.26

5) Meja Urja Nigam Pvt. Ltd. 2,948.57 - (20.92)

6) BF-NTPC Energy Systems Ltd. 2.94 0.02 -

7) Nabinagar Power Generating Company Pvt. Ltd. 3,753.94 - 29.69

8) National High Power Test Laboratory Pvt. Ltd. 58.56 - (2.72)

Total 18,444.48 4,659.33 91.56

2. In the paragraph (b) titled ‘Other Matters’ in the main report, the table in respect of Subsidiaries

and Jointly Controlled Entities whose accounts were un-audited, may be read as under:

(₹ in crore)


Revenue

Net Cash

Flows

Joint Ventures:

1) NTPC-Alstom Power Services Pvt. Ltd. 66.54 60.37 (3.57)

2) Ratnagiri Gas & Power Pvt. Ltd. 2,540.51 290.25 1.41

3) NTPC-BHEL Power Project Pvt. Ltd 412.24 401.36 (12.02)

4) Transformers and Electricals Kerala Ltd. 58.20 68.90 (1.71)

5) Energy Efficiency Services Ltd. 427.77 206.27 43.75

6) Anushakti Vidyut Nigam Ltd. 0.01 - -

7) CIL NTPC Urja Pvt. Ltd. 0.03 - 0.02

8) Trincomalee Power Company Ltd. 14.56 0.45 3.16

0012018-0003086 HK:20704050.1 S-49

9) Bangladesh India Friendship Power Company Pvt. Ltd. 94.95 - 21.58

Total 3,614.81 1,027.60 52.62

3. Para titled ‘Other matters’ in Annexure - I i.e. Report on the Internal Financial Controls under

Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) to the Independent

Auditors’ Report may be read as under:

“Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of

the internal financial controls over financial reporting insofar as it relates to five subsidiary companies

and eight jointly controlled companies, which are companies incorporated in India, is based on the

corresponding reports of the auditors of such companies incorporated in India.

As regard the financial statements of other seven jointly controlled companies incorporated in India,

which are un-audited, their impact on the Internal Financial Control on Financial Reporting of the

Group is not material.”

For T.R. Chadha & Co LLP Chartered Accountants

FRN 006711N/N500028

For PSD & Associates Chartered Accountants

FRN 004501C

For Sagar & Associates Chartered Accountants

FRN 003510S

(CA. Neena Goel)

Partner

M No.057986

(CA. Darshit Gupta)

Partner

M No.415120


Partner

M No.027357

For Kalani & Co. Chartered Accountants

FRN 000722C

For P. A. & Associates Chartered Accountants

FRN 313085E

For S.K. Kapoor & Co. Chartered Accountants

FRN 000745C

For B. M. Chatrath & Co. Chartered Accountants

FRN 301011E

(CA. Vikas Gupta) Partner

M No. 077076

(CA. S.S.Poddar) Partner

M No.051113

(CA. V.B.Singh) Partner

M.No.073124

(CA. P.R.Paul) Partner

M.No.051675

Place : New Delhi

Dated : 29th June 2016

0012018-0003086 HK:20704050.1 S-50

NTPC LIMITED

CONSOLIDATED BALANCE SHEET AS AT 31ST

MARCH 2016

₹ Crore Particulars Note

no. As at

31.03.2016 As at

31.03.2015

EQUITY AND LIABILITIES

Shareholders' funds Share capital 2 8,245.46 8,245.46

Reserves and surplus 3 80,951.05 73,848.52

89,196.51 82,093.98 Deferred revenue 4 1,946.62 1,394.15 Minority interest 892.79 887.94

Non-current liabilities Long-term borrowings 5 1,02,238.28 93,362.92 Deferred tax liabilities (net) 6 1,409.40 1,265.61 Other long-term liabilities 7 3,908.30 3,221.95 Long-term provisions 8 469.42 1,143.37

Regulatory liabilities 8A 297.56 308.55

1,08,322.96 99,302.40

Current liabilities Short-term borrowings 5A 2,141.39 640.15 Trade payables 9 6,826.55 7,107.63 Other current liabilities 10 22,189.00 20,202.14

Short-term provisions 11 8,933.23 7,996.41

40,090.17 35,946.33

TOTAL 2,40,449.05 2,19,624.80

ASSETS

Non-current assets Goodwill on consolidation - 0.62

Fixed assets Tangible assets 12 1,04,211.88 91,579.48 Intangible assets 12 284.06 272.92 Capital work-in-progress 13 81,331.66 67,524.31 Intangible assets under development 13A 218.03 30.38

Non-current investments 14 14.80 14.12 Long-term loans and advances 15 17,885.60 16,631.62

Other non-current assets 15A 1,946.45 1,779.73

2,05,892.48 1,77,833.18

Current assets Current investments 16 343.63 1,887.39 Inventories 17 7,959.16 7,972.46 Trade receivables 18 10,173.98 9,249.92 Cash and bank balances 19 5,393.32 14,251.61 Short-term loans and advances 20 2,231.89 2,456.70

Other current assets 21 8,364.59 5,973.54

34,556.57 41,791.62

TOTAL 2,40,449.05 2,19,624.80

Significant accounting policies 1

0012018-0003086 HK:20704050.1 S-51

The accompanying notes 1 to 55 form an integral part of these financial statements.

For and on behalf of the Board of Directors

(A.K.Rastogi) Company Secretary

(K.Biswal) Director (Finance)

(Gurdeep Singh) Chairman & Managing Director

This is the Consolidated Balance Sheet referred to in our report of even date


Firm Reg. No.006711N/N500028


Firm Reg. No. 004501C


Firm Reg. No. 003510S

(Neena Goel)

Partner M No.057986

(Thalendra Sharma)

Partner M No.079236

(V. Vidyasagar Babu)

Partner M No.027357




Firm Reg. No. 313085E

For S. K.Kapoor & Co Chartered Accountants




(P.C.Parwal) Partner

M No. 071411

(S.S.Poddar) Partner

M No.051113

(V.B. Singh) Partner

M.No.073124

(P.R.Paul) Partner

M.No.051675

Place : New Delhi Dated : 30

th May 2016

0012018-0003086 HK:20704050.1 S-52

NTPC LIMITED

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST

MARCH

2016

₹ Crore Particulars Note

no. For the year

ended

31.03.2016

For the year

ended

31.03.2015

Revenue Revenue from operations (gross) 22 79,545.42 81,356.92

Less: Electricity duty / Excise duty 839.92 744.98

Revenue from operations (net) 78,705.50 80,611.94

Other income 23 1,234.06 2,063.46

Total revenue 79,939.56 82,675.40

Expenses Fuel 46,496.08 51,449.50 Electricity purchased 2,174.90 2,082.64 Employee benefits expense 24 3,836.43 3,840.62 Cost of material and services 1,005.87 631.02 Changes in inventories of finished goods,work-in-progress (41.47) 4.64 Finance costs 25 4,151.26 3,570.37 Depreciation, amortisation and impairment expense 12 6,153.41 5,564.61 Generation, administration & other expenses 26 6,279.21 5,282.57

Prior period items (net) 27 (208.68) (318.22)

Total expenses 69,847.01 72,107.75

Profit before tax and Rate Regulated Activities (RRA) 10,092.55 10,567.65 Add: Regulatory Income / (Expense) (refer Note 49) 10.99 (111.44) Profit before tax 10,103.54 10,456.21

Tax expense

Current tax Current year 2,263.57 2,430.54 Earlier years (2,453.03) (1,952.99)

Tax expense/(saving) pertaining to RRA 2.57 (35.25) Deferred tax 242.57 1023.87 Less :Deferred asset for deferred tax liability 94.47 994.66

MAT credit recoverable 20.10 7.67

Total tax expense (58.89) 463.84

Profit after tax 10,162.43 9,992.37

Less: Share of Profit /(loss)-Minority interest (20.38) 6.03

Group profit after tax 10,182.81 9,986.34

Significant accounting policies 1

Expenditure during construction period (net) 28

Earnings per equity share (Par value of ₹10/- each) 45 Basic & Diluted (₹) 12.35 12.11

0012018-0003086 HK:20704050.1 S-53

The accompanying notes 1 to 55 form an integral part of these financial statements. There are no exceptional or extraordinary items in the above periods.

Total revenue, total expenses and profit after tax includes ₹5,686.93 crore (previous year ₹4,779.76

crore), ₹5,522.48 crore (previous year ₹4,867.10 crore) and ₹52.02 crore (previous year (-) ₹244.16

crore) respectively towards share of jointly controlled entities.


(A.K.Rastogi) Company Secretary

(K.Biswal) Director (Finance)

(Gurdeep Singh) Chairman & Managing Director

This is the Consolidated Statement of Profit & Loss referred to in our report of even date


Firm Reg. No.006711N/N500028





(Neena Goel) Partner

M No.057986

(Thalendra Sharma) Partner

M No.079236

(V. Vidyasagar Babu) Partner

M No.027357










M No. 071411


M No.051113


M.No.073124

(P.R.Paul)

Partner

M.No.051675

Place : New Delhi Dated : 30

th May 2016

0012018-0003086 HK:20704050.1 S-54

NTPC LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST

MARCH 2016

₹ Crore

Particulars

For the year

ended 31.03.2016

For the year

ended 31.03.2015

A. CASH FLOW FROM OPERATING ACTIVITIES

Profit before tax 10,103.54 10,456.21

Adjustment for:

Depreciation, amortisation & impairment expense 6,153.41 5,564.61

Prior period depreciation/amortisation (67.34) 15.62

Provisions 201.83 231.84

Deferred revenue on account of advance against depreciation (129.26) (283.35)

Deferred foreign currency fluctuation asset (88.30) 136.48

Deferred income from foreign currency fluctuation 801.84 (22.50)

Regulatory Liability (10.99) 107.91

Fly ash utilisation reserve fund 87.67 76.74

Exchange differences on translation of foreign currency cash and cash equivalents (0.08) (0.02)

Interest charges 4,109.03 3,528.57

Guarantee fee & other finance charges 42.23 41.80

Interest/income on term deposits/bonds/investment (605.30) (1,581.36)

Dividend income (52.97) (160.22)

Provisions written back (179.15) (187.14)

Profit on disposal of fixed assets (1.67) (4.54)

Loss on disposal of fixed assets 146.69 147.22

10,407.64 7,611.66

Operating profit before working capital changes 20,511.18 18,067.87

Adjustment for:

Trade receivables (924.06) (2,976.09)

Inventories 361.98 (1,677.83)

Trade payables, provisions and other liabilities (307.07) 1,019.90

Loans & advances and other assets (2,773.01) 2,464.63

(3,642.16) (1,169.39)

Cash generated from operations 16,869.02 16,898.48

Direct taxes paid (1,458.41) (2,009.95)

Net cash from operating activities - A 15,410.61 14,888.53

B. CASH FLOW FROM INVESTING ACTIVITIES

Purchase of fixed assets (23,246.98) (19,319.92)

Purchase of investments - 2.12

Sale of investments 1,653.58 1,636.96

Interest/income on term deposits/bonds/investments received 1,037.06 1,847.03

Income tax paid on interest income (137.28) (303.59)

Dividend received 52.97 160.22

Net cash used in investing activities - B (20,640.65) (15,977.18)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from long term borrowings 14,689.80 25,450.85

Repayment of long term borrowings (8,138.26) (5,076.24)

Proceeds from short term borrowings 1,501.24 206.51

Grant received 125.07 20.00

Security premium received 0.12 -

Interest paid (8,285.41) (7,124.72)

Guarantee fee & other finance charges paid (61.93) (112.36)

Dividend paid (including bonus debentures) (2,762.24) (12,388.20)

Tax on dividend (including tax on bonus debentures) (589.02) (2,450.34)

Net cash used in financing activities - C (3,520.63) (1,474.50)

D. Exchange differences on translation of foreign currency cash and cash equivalents 0.08 0.02

Net increase/(decrease) in cash and cash equivalents (A+B+C+D) (8,750.59) (2,563.13)

Cash and cash equivalents at the beginning of the year (see Note 1 & 2 below) 14,487.54 17,050.67

Cash and cash equivalents at the end of the year (see Note 1 & 2 below) 5,736.95 14,487.54

0012018-0003086 HK:20704050.1 S-55

Particulars

For the year

ended 31.03.2016

For the year

ended 31.03.2015

NOTES:

1 Cash and cash equivalents consist of cheques, drafts, stamps in hand, balances with banks

and investments in liquid mutual funds. Cash and cash equivalents included in the cash

flow statement comprise of following balance sheet amounts as per Note-16 and Note-19:

Cash and cash equivalents 1,844.50 659.22

Deposits included in other bank balances 2,729.56 12,830.09

Investments in liquid mutual funds - 9.33

Earmarked balances* 1,162.89 988.90

Cash and cash equivalents as restated 5,736.95 14,487.54

* Earmarked balances consist of:

(a) Towards redemption of bonds due for repayment within one year 100.00 100.00

(b) Fly ash utilisation reserve fund 146.66 193.77

(c) DDUGJY scheme of GOI 521.78 419.86

(d) Towards public deposit repayment reserve - 0.08

(e) Unpaid dividend account balance 15.07 14.97

(f) Amount deposited as per court orders 25.89 24.64

(g) Unpaid interest/refund account balance - bonds 2.15 0.30

(h) Towards unpaid interest on public deposit 0.03 0.03

(i) Security with governement authorities 0.01 0.02

(j) Margin money with banks 7.67 8.63

(k) Investments in liquid mutual funds earmarked for fly ash utilisation reserve fund 343.63 226.60

1,162.89 988.90

2 Reconciliation of cash and cash equivalents as restated

(a) Cash and bank balances-Note-19 5,393.32 14,251.61

(b) Current investments (investments in liquid mutual funds)-Note-16 343.63 235.93

5,736.95 14,487.54

3 Previous year figures have been regrouped/rearranged wherever considered necessary.


(A.K.Rastogi)

Company Secretary

(K.Biswal)

Director (Finance)

(Gurdeep Singh)

Chairman & Managing Director

This is the Consolidated Cash Flow Statement referred to in our report of even date


Firm Reg. No.006711N/N500028





(Neena Goel) Partner

M No.057986

(Thalendra Sharma) Partner

M No.079236

(V. Vidyasagar Babu) Partner

M No.027357










M No. 071411


M No.051113


M.No.073124

(P.R.Paul) Partner

M.No.051675

Place : New Delhi


0012018-0003086 HK:20704050.1 56

NTPC LIMITED

Notes forming part of Consolidated Financial Statements

Summary of significant accounting policies and other explanatory information

Note 1. Significant accounting policies

A. 1. Basis of preparation

These financial statements are prepared on accrual basis of accounting under historical cost

convention in accordance with the generally accepted accounting principles in India,

accounting standards specified under Section 133 of the Companies Act, 2013, read with Rule

7 of the Companies (Accounts) Rules, 2014, the Companies Act, 2013 (to the extent notified

and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the

Electricity Act, 2003 to the extent applicable.

2. Basis of consolidation

The consolidated financial statements relate to NTPC Ltd. (the Company), its Subsidiaries

and interest in Joint Ventures, together referred to as 'Group'.

a) Basis of Accounting:

i) The financial statements of the Subsidiary Companies and Joint Ventures in the

consolidation are drawn up to the same reporting date as of the Company for the

purpose of consolidation.

ii) The consolidated financial statements have been prepared in accordance with

Accounting Standard (AS) 21 - ‘Consolidated Financial Statements’ and

Accounting Standard (AS) 27 – ‘Financial Reporting of Interest in Joint Ventures’

as specified under section 133 of the Companies Act, 2013 read with Rule 7 of

the Companies (Accounts) Rules,2014 and generally accepted accounting

principles.

b) Principles of consolidation:

The consolidated financial statements have been prepared as per the following principles:

i) The financial statements of the Company and its subsidiaries are combined on a

line by line basis by adding together the like items of assets, liabilities, income

and expenses after eliminating intra-group balances, intra-group transactions,

unrealised profits or losses. Minority interest has been separately disclosed.

ii) The consolidated financial statements include the interest of the Company in joint

ventures, which has been accounted for using the proportionate consolidation

method of accounting and reporting whereby the Company’s share of each asset,

liability, income and expense of a jointly controlled entity is considered as a

separate line item.

iii) The consolidated financial statements are prepared using uniform accounting

policies for like transactions and other events in similar circumstances and are

presented to the extent possible, in the same manner as the Company’s separate

financial statements except as otherwise stated in the significant accounting

policies.

0012018-0003086 HK:20704050.1 57

iv) The difference between the cost of investment and the share of net assets at the

time of acquisition of shares in the subsidiaries and joint ventures is identified in

the financial statements as goodwill or capital reserve, as the case may be.

v) Minority interest in the net assets of consolidated subsidiaries consist of the

amount of equity attributable to the minority shareholders.

B. Use of estimates

The preparation of financial statements require estimates and assumptions that affect the reported

amount of assets, liabilities, revenue and expenses during the reporting period. Although such

estimates and assumptions are made on a reasonable and prudent basis taking into account all

available information, actual results could differ from these estimates & assumptions and such

differences are recognized in the period in which the results are crystallized.

C. Grants-in-aid

1. Grants-in-aid received from the Central Government or other authorities towards capital

expenditure as well as consumers’ contribution to capital works are treated initially as capital

reserve and subsequently adjusted as income in the same proportion as the depreciation

written off on the assets acquired out of the grants.

2. Where the ownership of the assets acquired out of the grants vests with the government, the

grants are adjusted in the carrying cost of such assets.

3. Grants from Government and other agencies towards revenue expenditure are recognized over

the period in which the related costs are incurred and are deducted from the related expenses.

D. 1. Fly ash utilisation reserve fund

Proceeds from sale of ash/ash products along-with income on investment of such proceeds are

transferred to ‘Fly ash utilisation reserve fund’ in terms of provisions of gazette notification

dated 3rd

November 2009 issued by Ministry of Environment and Forests, Government of

India. The fund is utilized towards expenditure on development of infrastructure/facilities,

promotion & facilitation activities for use of fly ash.

2. Self Insurance Reserve

In case of Ratnagiri Gas & Power Private Ltd. (25.51% JV), Self Insurance Reserve of ₹50

crore is created as at the end of the year by appropriating current year profit towards future

losses which may arise from un-insured risks till the amount of Self Insurance Reserve

becomes ₹200 crore. Self Insurance Reserve will be written back on getting Insurance cover

for Machinery breakdown.

E. Fixed assets

1. Tangible assets are carried at historical cost less accumulated depreciation/amortisation and

impairment losses, if any.

2. Expenditure on renovation and modernisation of tangible assets resulting in increased life

and/or efficiency of an existing asset is added to the cost of related assets.

3. Intangible assets are stated at their cost of acquisition less accumulated amortisation.

4. Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and

other expenses relatable to land in possession are treated as cost of land.

0012018-0003086 HK:20704050.1 58

5. In the case of assets put to use, where final settlement of bills with contractors is yet to be

effected, capitalisation is done on provisional basis subject to necessary adjustment in the

year of final settlement.

6. Assets and systems common to more than one generating unit are capitalised on the basis of

engineering estimates/assessments.

F. Capital work-in-progress

1. Administration and general overhead expenses attributable to construction of fixed assets

incurred till they are ready for their intended use are identified and allocated on a systematic

basis to the cost of the related assets.

2. Deposit works/cost plus contracts are accounted for on the basis of statements of account

received from the contractors.

3. Unsettled liabilities for price variation/exchange rate variation in case of contracts are

accounted for on estimated basis as per terms of the contracts.

G. Rate Regulated Activities

1. Expense/income recognized in the Statement of Profit & Loss to the extent recoverable from

or payable to the beneficiaries in subsequent periods as per Central Electricity Regulatory

Commission (the CERC) Tariff Regulations are recognized as ‘Regulatory asset/liability’.

2. Regulatory asset/liability is adjusted from the year in which the same becomes recoverable

from or payable to the beneficiaries.

H. Oil and gas exploration costs

1. Oil & gas exploration activities are accounted for on ‘Successful Efforts Method’.

2. Cost of surveys and prospecting activities conducted in search of oil and gas is expensed off

in the year in which it is incurred.

3. Acquisition and exploration costs are initially capitalized as ‘Exploratory wells-in-progress’

under Capital work-in-progress. Such exploratory wells in progress are capitalised in the year

in which the producing property is created or written off in the year when determined to be

dry/abandoned.

I. Development of coal mines

Expenditure on exploration and development of new coal deposits is capitalized as ‘Development

of coal mines’ under capital work-in-progress till the mines project is brought to revenue account.

J. Foreign currency transactions

1. Foreign currency transactions are initially recorded at the rates of exchange at the date of

transaction.

2. At the balance sheet date, foreign currency monetary items are reported using the closing rate.

Non- monetary items denominated in foreign currency are reported at the exchange rate at the

date of transaction.

3. Exchange differences arising from settlement/translation of foreign currency loans,

deposits/liabilities relating to fixed assets/capital work-in-progress in respect of transactions

0012018-0003086 HK:20704050.1 59

entered into prior to 01.04.2004, are adjusted in the carrying cost of related assets. Such

exchange differences arising from settlement/translation of long term foreign currency

monetary items in respect of transactions entered on or after 01.04.2004 are adjusted in the

carrying cost of related assets.

4. Other exchange differences are recognized as income or expense in the period in which they

arise.

5. Derivative contracts in the nature of forward contracts, options and swaps are entered into to

hedge the currency and interest rate risk of foreign currency loans. Premium or discount

arising at the inception of forward exchange contracts is amortised as expense or income over

the life of the contracts. Exchange differences on such contracts, which relate to long-term

foreign currency monetary items referred to in Policy J.3 are adjusted in the carrying cost of

related assets. Other derivative contracts are marked-to- market at the Balance Sheet date and

losses are recognised in the Statement of Profit and Loss. Gains arising on such contracts are

not recognised, until realised, on grounds of prudence.

K. Borrowing costs

Borrowing costs attributable to the qualifying fixed assets during construction/exploration,

renovation and modernisation are capitalised. Such borrowing costs are apportioned on the

average balance of capital work-in progress for the year. Other borrowing costs are recognised as

an expense in the period in which they are incurred.

L. Investments

1. Current investments are valued at lower of cost and fair value determined on an individual

investment basis.

2. Long term investments are carried at cost. Provision is made for diminution, other than

temporary, in the value of such investments.

3. Premium paid on long term investments is amortised over the period remaining to maturity.

M. Inventories

1. Inventories are valued at the lower of, cost determined on weighted average basis and net

realizable value.

2. The diminution in the value of obsolete, unserviceable and surplus stores & spares is

ascertained on review and provided for.

N. Income recognition

1. Sales

1.1 Sale of energy is accounted for based on tariff rates approved by the CERC as modified

by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of

power stations where the tariff rates are yet to be approved, provisional rates are adopted

considering the applicable CERC tariff regulations.

1.2 In the case of NTPC Vidyut Vyapar Nigam Ltd. (a wholly owned subsidiary) which is in

the energy trading business, sale of energy and commission on trading through exchange

is accounted for based on the rates agreed with the customers.

0012018-0003086 HK:20704050.1 60

1.3 In the case of NTPC SAIL Power Company Pvt.Ltd. (50% JV), sale of energy in case of

Captive Power Plants (CPP-II), which are not governed by the CERC, is accounted for

based on the rates provided in the Power Purchase Agreement with SAIL.

1.4 In case of Ratnagiri Gas & Power Private Ltd.(25.51% JV), sale of energy under Power

System Development Fund support scheme for stranded gas based power plants

introduced by GOI, is accounted for based on the tariff rates as decided under the scheme.

Further, revenue from regassification services is recognized when services are rendered.

Revenue from regassification services is net of service tax.

1.5 In the case of NTPC BHEL Power Projects Pvt. Ltd. (50% JV), sales are recorded based

on significant risks and rewards of ownership being transferred in favour of the customer.

Sales include goods dispatched to customers by partial shipment. For construction

contracts, revenue is recognized on percentage completion method based on the

percentage of actual cost incurred up to the reporting date to the total estimated cost of

contract. Further, if it is expected that a contract will make a loss, the estimated loss is

provided for in the books of account, based on technical assessments.

1.6 In the case of Utility Powertech Ltd.(50% JV), income in respect of service contracts is

recognized proportionate to value of work done / services rendered.

1.7 In the case of NTPC Alstom Power Services Pvt.Ltd. (50% JV), revenues are recognised

on a percentage completion method measured by segmented portions of the contract

achieved which coincides with the billing schedules agreed with the customers. The

relevant cost is recognised in the financial statements in the year of recognition of

revenues. Recognition of profit is adjusted to ensure that it does not exceed the estimated

overall contract margin. Further, if it is expected that a contract will make a loss, the

estimated loss is provided for in the books of account, based on technical assessments.

1.8 In the case of Transformers and Electricals Kerala Ltd. (44.60% JV), revenue in respect

of sale of products is recognized when the goods are dispatched to the customers or when

the invoices are raised but the goods are retained at own premises at the request of the

customers to get their site ready for installation.

2. Advance against depreciation considered as deferred revenue in earlier years is included in

sales, to the extent depreciation recovered in tariff during the year is lower than the

corresponding depreciation charged.

3. Exchange differences on account of translation of foreign currency borrowings recoverable

from or payable to the beneficiaries in subsequent periods as per the CERC Tariff Regulations

are accounted as ‘Deferred foreign currency fluctuation asset/liability’. The increase or

decrease in depreciation for the year due to the accounting of such exchange differences as

per accounting policy no. J is adjusted in depreciation.

4. Exchange differences arising from settlement/translation of monetary items denominated in

foreign currency (other than long term) to the extent recoverable from or payable to the

beneficiaries in subsequent periods as per the CERC Tariff Regulations are accounted as

‘Regulatory asset/liability’ during construction period and adjusted from the year in which the

same becomes recoverable/payable.

5. Premium, discount and exchange differences in respect of forward exchange contracts and

mark to market losses in respect of other derivative contracts referred to in accounting policy

no. J.5 recoverable from/payable to the beneficiaries as per the CERC Tariff Regulations, are

recognised in sales.

0012018-0003086 HK:20704050.1 61

6. Interest/surcharge on late payment/overdue sundry debtors for sale of energy is recognized

when no significant uncertainty as to measurability or collectability exists.

7. Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated

damages wherever there is uncertainty of realisation/acceptance are not treated as accrued and

are therefore, accounted for on receipt/acceptance.

8. Income from consultancy services is accounted for on the basis of actual progress/technical

assessment of work executed, in line with the terms of respective consultancy contracts.

Claims for reimbursement of expenditure are recognized as other income, as per the terms of

consultancy service contracts.

9. Scrap other than steel scrap is accounted for as and when sold.

10. Insurance claims for loss of profit are accounted for in the year of acceptance. Other

insurance claims are accounted for based on certainty of realisation.

O. Expenditure

1. Depreciation/amortisation

1.1 Depreciation on the assets of the generation of electricity business is charged on

straight line method following the rates and methodology notified by the CERC Tariff

Regulations in accordance with Schedule II of the Companies Act, 2013.

In case of the Captive Power Plant–II (CPP-II) assets of NTPC SAIL Power Company

Pvt.Ltd. (50% JV), which are not governed by CERC, depreciation is provided at a rate

such that 95% of the gross block is depreciated over the residual life of those assets.

1.2 Depreciation on the assets of the coal mining, oil & gas exploration, consultancy and

other business is charged on straight line method following the useful life specified in

Schedule II of the Companies Act, 2013.

1.3 Depreciation on the following assets is provided on their estimated useful life

ascertained on technical evaluation:

a) Kutcha Roads 2 years

b) Enabling works

residential buildings 15 years

internal electrification of residential buildings 10 years

non-residential buildings including their internal electrification, water

supply, sewerage & drainage works, railway sidings, aerodromes, helipads

and airstrips.

5 years

c) Personal computers & laptops including peripherals 3 years

d) Photocopiers, fax machines, water coolers and refrigerators 5 years

e) Temporary erections including wooden structures 1 year

f) Telephone exchange 15 years

g) Wireless systems, VSAT equipments, display devices viz. projectors,

screens, CCTV, audio video conferencing systems and other communication equipments

6 years

1.4 Assets costing up to ₹5,000/- are fully depreciated in the year of acquisition.

1.5 Cost of software recognized as intangible asset, is amortised on straight line method

over a period of legal right to use or 3 years, whichever is less. Other intangible assets

0012018-0003086 HK:20704050.1 62

are amortized on straight line method over the period of legal right to use or life of the

related plant, whichever is less.

In case of NTPC BHEL Power Projects Pvt.Ltd (50% JV), intangible assets are

amortised over their estimated useful lives not exceeding three years in case of software

and not exceeding ten years in case of others on a straight line pro-rata monthly basis.

1.6 Depreciation on additions to/deductions from fixed assets during the year is charged on

pro-rata basis from/up to the month in which the asset is available for use/disposed.

1.7 Where the cost of depreciable assets has undergone a change during the year due to

increase/decrease in long term liabilities on account of exchange fluctuation, price

adjustment, change in duties or similar factors, the unamortised balance of such asset is

charged off prospectively over the remaining useful life determined following the

applicable accounting policies relating to depreciation/amortisation.

1.8 Where the life and/or efficiency of an asset is increased due to renovation and

modernization, the expenditure thereon along-with its unamortized depreciable amount

is charged off prospectively over the revised useful life determined by technical

assessment.

1.9 Machinery spares which can be used only in connection with an item of plant and

machinery and their use is expected to be irregular, are capitalised and fully depreciated

over the residual useful life of the related plant and machinery, in accordance with

Policy no. O.1.1 stated above.

1.10 Leasehold land and buildings relating to generation of electricity business are fully

amortised over lease period or life of the related plant whichever is lower following the

rates and methodology notified by the CERC Tariff Regulations. Leasehold land

acquired on perpetual lease is not amortised.

In case of the Captive Power Plant –II (CPP-II) assets of NTPC SAIL Power Company

Pvt.Ltd. (50% JV), which are not governed by CERC, leasehold lands other than

acquired on perpetual lease are amortized over the lease period. Leasehold buildings

are amortized over the lease period or 30 years, whichever is lower. Leasehold land

and buildings, whose lease period is yet to be finalized, are amortized over a period

of 30 years.

1.11 Land acquired for mining business under Coal Bearing Areas (Acquisition &

Development) Act, 1957 is amortised on the basis of balance useful life of the project.

Other leasehold land acquired for mining business is amortised over the lease period or

balance life of the project whichever is less.

2. Other expenditure

2.1 Expenses on ex-gratia payments under voluntary retirement scheme, training & recruitment

and research & development are charged to revenue in the year incurred.

2.2 Preliminary expenses on account of new projects incurred prior to approval of feasibility

report/techno economic clearance are charged to revenue.

2.3 Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets

and systems.

0012018-0003086 HK:20704050.1 63

2.4 Prepaid expenses and prior period expenses/income of items of ₹500,000/- and below are

charged to natural heads of accounts.

2.5 Transit and handling losses of coal as per Company's norms are included in cost of coal.

P. Employee benefits

Employee benefits, inter-alia include provident fund, pension, gratuity, post retirement medical

facilities, compensated absences, long service award, economic rehabilitation scheme and other

terminal benefits.

1. Company’s contributions paid/payable during the year to provident fund and pension

fund is recognised in the Statement of Profit and Loss. The same is paid to funds

administered through separate trusts / paid to fund administered by GOI.

2. Company’s liability towards gratuity, leave benefits (including compensated absences),

post retirement medical facility and other terminal benefits is determined by independent

actuary, at year end using the projected unit credit method. Past service costs are

recognised on a straight line basis over the average period until the benefits become

vested. Actuarial gains and losses are recognised immediately in the Statement of Profit

and Loss. Liability for gratuity & post retirement medical facility as per actuarial

valuation is paid to funds administered through separate trusts.

3. Short term employee benefits are recognised as an expense at the undiscounted amount in

the Statement of Profit and Loss for the year in which the related services are rendered.

Q. Leases

1. Finance lease

1.1 Assets taken on finance lease are capitalized at fair value or net present value of the

minimum lease payments, whichever is less.

1.2 Depreciation on the assets taken on finance lease is charged at the rate applicable to

similar type of fixed assets as per accounting policy no. O.1.1 or O.1.2. If the leased

assets are returnable to the lessor on the expiry of the lease period, depreciation is charged

over its useful life or lease period, whichever is less.

1.3 Lease payments are apportioned between the finance charges and outstanding liability in

respect of assets taken on lease

2. Operating lease

Assets acquired on lease where a significant portion of the risk and rewards of the ownership

is retained by the lessor are classified as operating leases. Lease rentals are charged to

revenue.

R. Impairment

The carrying amount of cash generating units is reviewed at each Balance Sheet date where there

is any indication of impairment based on internal/external indicators. An impairment loss is

recognised in the Statement of Profit and Loss where the carrying amount exceeds the recoverable

amount of the cash generating units. The impairment loss is reversed if there is change in the

recoverable amount and such loss either no longer exists or has decreased.

0012018-0003086 HK:20704050.1 64

S. Provisions and contingent liabilities

1. A provision is recognised when the company has a present obligation as a result of a past

event and it is probable that an outflow of resources embodying economic benefits will be

required to settle the obligation and in respect of which a reliable estimate can be made.

Provisions are determined based on management estimate required to settle the obligation at

the balance sheet date and are not discounted to present value. Contingent liabilities are

disclosed on the basis of judgment of the management/independent experts. These are

reviewed at each balance sheet date and are adjusted to reflect the current management

estimate.

2. In case of NTPC BHEL Power Projects Pvt.Ltd (50% JV),

a) For construction contracts, the company provides warranty cost at 2.5% of the revenue

progressively as and when it recognizes the revenue and maintain the same through warranty

period.

b) For other than construction contracts, provision for contractual obligations in respect of

contracts under warranty at the year end is maintained at 2.5% of the value of contract. In the

case of contracts for supply of more than a single product, 2.5% of the value of each

completed product is provided.

c) Warranty claims/expenses on rectification work are accounted for against natural heads as

and when incurred and charged to provisions in the year end.

T. Segment reporting

The policies adopted for segment reporting are in line with the accounting policies of the

Company. Segment revenue, segment expenses, segment assets and segment liabilities are

identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and not

allocable to segments on reasonable basis are included under unallocated

revenue/expenses/assets/liabilities.

U. Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Accounting

Standard (AS) 3 on ‘Cash Flow Statements’.

V. Taxes on income

Current tax is determined on the basis of taxable income in accordance with the provisions of the

Income Tax Act, 1961. Deferred tax liability/asset resulting from 'timing difference' between

accounting income and taxable income is accounted for considering the tax rate & tax laws that

have been enacted or substantively enacted as on the reporting date. Deferred tax asset is

recognized and carried forward only to the extent that there is reasonable certainty that the asset

will be realized in future. Deferred tax assets are reviewed at each reporting date for their

realisability.

NTPC LIMITED Notes forming part of Consolidated Financial Statements

0012018-0003086 HK:20704050.1 65

2. Share capital

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Equity share capital

Authorised

10,00,00,00,000 shares of par value ₹10/- each (previous

year 10,00,00,00,000 shares of par value ₹10/- each) 10,000.00 10,000.00

Issued, subscribed and fully paid-up

8,24,54,64,400 shares of par value ₹10/- each (previous

year 8,24,54,64,400 shares of par value ₹10/- each) 8,245.46 8,245.46

a) During the year, the Company has neither issued nor bought back any shares.

b) The Company has only one class of equity shares having a par value ₹10/- per share. The

holders of the equity shares are entitled to receive dividends as declared from time to time and

are entitled to voting rights proportionate to their share holding at the meetings of

shareholders.

c) During the year ended 31st March 2016, the amount of per share dividend recognised as

distribution to equity share holders is ₹3.35 (previous year ₹2.50).

d) Details of shareholders holding more than 5% shares in the Company:

Particulars As at

31.03.2016

As at 31.03.2015

No. of shares %age

holding

No. of shares %age holding

- President of India 5,76,83,41,760 69.96 6,18,06,14,980 74.96

- Life Insurance Corporation of India (including shares held in various Funds/Schemes)

1,07,05,30,189 12.98 81,75,85,952 9.92


0012018-0003086 HK:20704050.1 66

3. Reserves and surplus

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Capital reserve As per last financial statements 397.60 400.97

Add : Transfer from surplus 0.11 0.12

Grants received during the year 125.07 20.00 Less : Adjustments during the year 26.11 23.49

496.67 397.60

Securities premium account

As per last financial statements 2,228.34 2,228.34

Add : Received during the year 0.12 - 2,228.46 2,228.34

Foreign currency translation reserve 4.02 0.76

Debt service reserve

As per last financial statements 247.42 244.01

Add : Transfer from surplus - 3.41 Less : Transfer to surplus 5.64 -

241.78 247.42

Self insurance reserve


Less : Adjustments during the year 5.10 (21.57) 38.27 43.37

Bonds/Debentures redemption reserve

As per last financial statements 3,624.60 2,764.91

Add : Transfer from surplus 1,284.13 1,156.19

Less : Transfer to surplus 300.00 296.50 4,608.73 3,624.60

Fly ash utilisation reserve fund


Add: Transfer from -Revenue from operations 125.41 115.11

-Other income 26.79 21.08

Less: Utilised during the year

-Capital expenditure 5.26 12.72 -Employee benefits expense 17.45 20.33

-Other administration expenses 41.82 26.37

490.67 403.00

Corporate social responsibility (CSR) reserve As per last financial statements 78.92 -

Add : Transfer from surplus 5.83 78.92

Less : Transfer to surplus 78.92 -

5.83 78.92

General reserve As per last financial statements 66,162.83 71,965.83

Add : Transfer from surplus 6,277.01 7,020.16

Less: Issue of bonus debentures - 10,306.83

Dividend distribution tax on bonus debentures - 2,060.76 Adjustments during the year (85.54) 455.57

72,525.38 66,162.83

Surplus

As per last financial statements 661.68 1,132.02


0012018-0003086 HK:20704050.1 67


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Add: Profit for the year as per Statement of Profit and Loss 10,182.81 9,986.34 Transfer from bonds/debentures redemption reserve 300.00 296.50

Transfer from debt service reserve 5.64 -

Transfer from CSR reserve 78.92 - Less: Transfer to bonds/debentures redemption reserve 1,284.13 1,156.19

Transfer to capital reserve 0.11 0.12

Transfer to CSR reserve 5.83 78.92

Transfer to debt service reserve - 3.41 Transfer to general reserve 6,277.01 7,020.16

Dividend paid 1,319.28 618.42

Tax on dividend paid 292.19 136.17 Proposed dividend 1,442.96 1,442.96

Tax on proposed dividend 296.30 296.83

Net surplus 311.24 661.68

Total # 80,951.05 73,848.52

# Includes (-) ₹ 45.99 crore (previous year ₹ 69.73 crore) share of jointly controlled entities.

a) Addition to securities premium account represents premium received on issue of tax free bonds through private placement.

b) Grant received during the year includes ₹125.00 crore (previous year Nil) from Solar Energy Corporation of India under MNRE Scheme for setting up 1,000 MW of grid connected solar PV

power projects.

c) In accordance with applicable provisions of the Companies Act, 2013 read with Rules and as per decision of Board of Directors, the Company has created Debenture Redemption Reserve (DRR) out of profits of the Company @ 50% of the value of debentures on a prudent basis, every year in

equal installments till the year prior to the year of redemption of debentures/bonds.

d) Pursuant to gazette notification dated 3rd

November 2009, issued by the Ministry of Environment and Forest (MOEF), Government of India (GOI), the amount collected from sale of fly ash and fly

ash based products should be kept in a separate account head and shall be utilized only for the

development of infrastructure or facility, promotion & facilitation activities for use of fly ash until 100 percent fly ash utilization level is achieved.

During the year, proceeds of ₹125.41 crore (previous year ₹115.11 crore) from sale of ash/ash

products, ₹26.79 crore (previous year ₹21.08 crore) towards income on investment have been

transferred to fly ash utilisation reserve fund. An amount of ₹64.53 crore (previous year ₹59.42

crore) has been utilized from the fly ash utilisation reserve fund on expenses incurred for activities as specified in the aforesaid notification of MOEF.

Out of fund balance of ₹490.67 crore, ₹343.63 crore is invested in mutual funds (Note 16). The

balance amount has been kept in cash and bank balances (Note 19).

e) In terms of Section 135 of the Companies Act, 2013 read with guidelines on corporate social responsibility issued by Department of Public Enterprises (DPE), GOI, the Company is required to

spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. The

Group has spent an amount of ₹498.19 crore during the year. The amount equivalent to unspent

CSR expenditure of ₹78.92 crore transferred in earlier year to CSR reserve from surplus has been

transferred to surplus during the year on actual expenditure. Further, an amount of ₹5.83 crore has

been appropriated to reserve from surplus, during the year.

f) Capital reserve includes an amount of ₹211.78 crore (previous year ₹237.86 crore) relating to

grant received from GOI through Government of Bihar for renovation and modernisation of Kanti Bijlee Utpadan Nigam Ltd.


0012018-0003086 HK:20704050.1 68


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

g) Debt service reserve has been created as per the loan agreement equivalent to two quarters' interest and principal repayment in respect of Aravali Power Company Pvt. Ltd..

h) Self insurance reserve has been created by Ratnagiri Gas & Power Private Ltd. to cover machinery break-down for which no insurance cover agreement has been entered.

i) During the year, the Company has paid interim dividend of ₹1.60 (previous year ₹0.75) per equity

share of par value ₹10/- each for the year 2015-16. Further, the Company has proposed final

dividend of ₹1.75 (previous year ₹1.75) per equity share of par value ₹10/- each for the year 2015-

16. Thus, the total dividend (including interim dividend) for the financial year 2015-16 is ₹3.35

(previous year ₹2.50) per equity share of par value ₹10/- each.


0012018-0003086 HK:20704050.1 69

4. Deferred revenue

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

On account of advance against depreciation 279.94 409.20 On account of income from foreign currency fluctuation 1,666.68 984.95

Total # 1,946.62 1,394.15

# Includes ₹Nil (previous year ₹Nil) share of jointly controlled entities.

(a) Advance against depreciation (AAD) was an element of tariff provided under the Tariff

Regulations for 2001-04 and 2004-09 to facilitate debt servicing by the generators since it

was considered that depreciation recovered in the tariff considering a useful life of 25 years is

not adequate for debt servicing. Though this amount is not repayable to the beneficiaries,

keeping in view the matching principle, and in line with the opinion of the Expert Advisory

Committee (EAC) of the Institute of Chartered Accountants of India (ICAI), this was treated

as deferred revenue to the extent depreciation chargeable in the accounts is considered to be

higher than the depreciation recoverable in tariff in future years. Since AAD is in the nature

of deferred revenue and does not constitute a liability, it has been disclosed in this note

separately from shareholders' funds and liabilities.

(b) In line with significant accounting policy no. N.2 (Note 1), an amount of ₹129.26 crore

(previous year ₹75.03 crore) has been recognized during the year from the AAD and included

in energy sales (Note 22).

(c) Foreign exchange rate variation (FERV) on foreign currency loans and interest thereon is

recoverable from/payable to the customers in line with the Tariff Regulations. Keeping in

view the opinion of the EAC of ICAI, the Company is recognizing deferred foreign currency

fluctuation asset by corresponding credit to deferred income from foreign currency fluctuation

in respect of the FERV on foreign currency loans adjusted in the cost of fixed assets, which is

recoverable from the customers in future years as provided in accounting policy no. N.3 (Note

1). This amount will be recognized as revenue corresponding to the depreciation charge in

future years. The amount does not constitute a liability to be discharged in future periods and

hence, it has been disclosed separately from shareholder’s funds and liabilities.


0012018-0003086 HK:20704050.1 70

5. Long-term borrowings

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Bonds / Debentures

Secured

7.37% Tax free secured non-cumulative non-convertible

redeemable bonds - 2015 of ₹1,000/- each redeemable at par

in full on 5th October 2035 (Fifty Sixth Issue – Public Issue -

Series 3A)XI

182.58 -




Series 3B)XI

165.74 --


redeemable bonds of ₹10,00,000/- each redeemable at par in

full on 4th March 2034 (Fifty First Issue C - Private Placement)

III

320.00 320.00



in full on 16th December 2033 (Fiftieth Issue – Public Issue -

Series 3A)VII

312.03 312.03




Series 3B)VII

399.97 399.97




Series 2A)XI

129.05 -




Series 2B)XI

48.29 -


redeemable bonds of ₹10,00,000/- each redeemable at par in

full on 4th March 2029 (Fifty First Issue B - Private Placement)

III

105.00 105.00




Series 2A)VII

249.95 249.95




Series 2B)VII

91.39 91.39


0012018-0003086 HK:20704050.1 71


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

8.19% Secured non-cumulative non-convertible redeemable

taxable bonds of Rs. 10,00,000/- each redeemable at par in full on 15

th December 2025 (Fifty Seventh Issue - Private

Placement)XII

500.00 -


redeemable bonds - 2015 of ₹1,000/- each redeemable at par in full on 5

th October 2025 (Fifty Sixth Issue – Public Issue -

Series 1A)XI

108.38 -


redeemable bonds - 2015 of ₹1,000/- each redeemable at par in full on 5

th October 2025 (Fifty Sixth Issue – Public Issue -

Series 1B)XI

65.96 -


redeemable bonds - 2015 of ₹10,00,000/- each redeemable at par in full on 21

st August 2025 (Fifty Fifth Issue - Private

Placement)IX

300.00 -


taxable bonds of ₹10,00,000/- each redeemable at par in full on 22

nd September 2024 (Fifty Third Issue - Private

Placement)IX

1,000.00 1,000.00



th March 2024 (Fifty Second Issue - Private Placement)

III

750.00 750.00


redeemable bonds - 2013 of ₹10,00,000/- each redeemable at

par in full on 4th March 2024 (Fifty First Issue A - Private

Placement)III

75.00 75.00




Series 1A)VII

488.02 488.02




Series 1B)VII

208.64 208.64


taxable bonds of ₹10,00,000/- each with five equal separately

transferable redeemable principal parts (STRPP) redeemable at

par at the end of 11th year and in annual installments thereafter

upto the end of 15th year respectively commencing from 04

th

May 2023 and ending on 04th May 2027 (Forty Fourth Issue -

Private Placement)VII

500.00 500.00


taxable bonds of ₹10,00,000/- each redeemable at par in full

on 1st May 2023 (Seventeenth Issue - Private Placement)

I

50.00 50.00


0012018-0003086 HK:20704050.1 72


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015



on 4th April 2023 (Forty Ninth Issue - Private Placement)

VII

200.00 200.00


taxable fully paid-up bonus debentures of ₹12.50 each

redeemable at par in three annual installments of ₹2.50, ₹5.00

and ₹5.00 at the end of 8th year, 9

th year and 10

th year on 25

th

March 2023, 25th March 2024 and 25

th March 2025

respectively (Fifty Fourth Issue –Bonus Debentures)X

10,306.83 10,306.83



on 7th March 2023 (Forty Eighth Issue - Private Placement)

VII

300.00 300.00

9.00% Secured non-cumulative non-convertible redeemable taxable bonds of ₹10,00,000/- each with five equal separately


par at the end of 11th year and in annual installments thereafter

upto the end of 15th year respectively commencing from 25

th

January 2023 and ending on 25th January 2027 (Forty Second

Issue - Private Placement)III

500.00 500.00

8.84% Secured non-cumulative non-convertible redeemable taxable bonds of ₹10,00,000/- each redeemable at par in full

on 4th October 2022 (Forty Seventh Issue - Private

Placement)VII

390.00 390.00


on 24th February 2021 (Fifty Ninth Issue - Private

Placement)XII - Securitized in April 2016.

655.00 -


on 19th January 2021 (Thirty Seventh Issue - Private

placement)III

300.00 300.00



st March 2020 (Thirty Third Issue - Private Placement)

III

195.00 195.00



on 9th March 2020 (Thirty First Issue - Private Placement)

III

500.00 500.00


taxable bonds of ₹10,00,000/- each redeemable at par in five

equal annual installments commencing from 6th November

2019 and ending on 6th

November 2023 (Twenty Seventh Issue - Private Placement)

III

350.00 350.00

8.18% Secured non-cumulative non-convertible redeemable 300.00 -


0012018-0003086 HK:20704050.1 73


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015


on 31st December 2020 (Fifty Eight Issue - Private

Placement)XII



on 5th May 2019 (Thirtieth Issue – Private Placement)

III

700.00 700.00


on 4th February 2019 (Twenty Ninth Issue - Private

Placement)III

550.00 550.00


on 12th January 2019 (Nineteenth Issue - Private Placement)

II

50.00 50.00



on 21st November 2018 (Twenty Eighth Issue - Private

Placement)III

1,000.00 1,000.00


taxable bonds of ₹15,00,000/- each with fifteen equal

separately transferable redeemable principal parts (STRPP) redeemable at par at the end of 6

th year and in annual

installments thereafter upto the end of 20th

year respectively

commencing from 20th July 2018 and ending on 20

th July 2032

(Forty Sixth Issue - Private Placement)VII

75.00 75.00






year respectively

commencing from 16th May 2018 and ending on 16

th May

2032 (Forty Fifth Issue - Private Placement)VII

75.00 75.00



on 10th April 2018 (Sixteenth Issue - Private Placement)

I

100.00 100.00

9.2573% Secured non-cumulative non-convertible redeemable taxable bonds of ₹15,00,000/- each with fifteen equal

separately transferable redeemable principal parts (STRPP)

redeemable at par at the end of 6th year and in annual


year respectively commencing from 2

nd March 2018 and ending on 2

nd March

2032 (Forty Third Issue - Private Placement)III

75.00 75.00





year respectively

75.00 75.00


0012018-0003086 HK:20704050.1 74


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

commencing from 23rd

December 2017 and ending on 23rd

December 2031 (Forty First Issue - Private Placement)III






year respectively

commencing from 29th July 2017 and ending on 29

th July 2031

(Fortieth Issue - Private Placement)III

75.00 75.00






th June 2017 and ending on 9

th June 2031

(Thirty Ninth Issue - Private Placement)III

105.00 105.00






nd March 2017 and ending on 22

nd March

2031 (Thirty Eighth Issue - Private Placement)III

70.00 75.00





year respectively

commencing from 15th December 2016 and ending on 15

th

December 2030 (Thirty Sixth Issue - Private Placement)III

70.00 75.00






year respectively

commencing from 15th September 2016 and ending on 15

th

September 2030 (Thirty Fifth Issue - Private Placement)III

112.00 120.00






year respectively

commencing from 10th June 2016 and ending on 10

th June

2030 (Thirty Fourth Issue - Private Placement)III

140.00 150.00




91.00 98.00


0012018-0003086 HK:20704050.1 75


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015




th March 2016 and ending on 25

th March

2030 (Thirty Second Issue - Private Placement)III


taxable bonds of ₹70,00,000/- each with fourteen separately transferable redeemable principal parts (STRPP) redeemable at

par semi-annually commencing from 4th

June 2012 and ending

on 4th December 2018 (Twenty Fifth Issue - Private

Placement)III

142.50 214.00


taxable bonds of ₹70,00,000/- each with fourteen separately


par semi-annually commencing from 4th

June 2012 and ending on 4

th December 2018 (Twenty Sixth Issue - Private

Placement)III

142.50 214.00

8.6077% Secured non-cumulative non-convertible redeemable taxable bonds of ₹20,00,000/- each with twenty equal


redeemable at par semi-annually commencing from 9th

September 2011 and ending on 9th March 2021 (Twenty

Fourth Issue - Private Placement)IV

200.00 250.00


taxable bonds of ₹20,00,000/- each with twenty equal

separately transferable redeemable principal parts (STRPP) redeemable at par semi-annually commencing from 5

th August

2011 and ending on 5th February 2021 (Twenty Third Issue -

Private Placement)IV

200.00 250.00

8.1771% Secured non-cumulative non-convertible redeemable taxable bonds of ₹20,00,000/- each with twenty equal


redeemable at par semi-annually commencing from 2nd

July

2011 and ending on 2nd

January 2021 (Twenty Second Issue - Private Placement)

IV

200.00 250.00



separately transferable redeemable principal parts (STRPP) redeemable at par semi-annually commencing from 2

nd August

2010 and ending on 2nd

February 2020 (Twenty First Issue -

Private Placement)V

300.00 400.00




redeemable at par semi-annually commencing from 23rd

September 2009 and ending on 23

rd March 2019 (Twentieth

Issue - Private Placement)VI

100.00 150.00


0012018-0003086 HK:20704050.1 76


₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

9.55% Secured non-cumulative non-convertible taxable

redeemable bonds of ₹10,00,000/- each with ten equal

separately transferable redeemable principal parts (STRPP) redeemable at par at the end of the 6



year respectively

from 30th April 2002 (Thirteenth Issue - Part B - Private

Placement)VIII

75.00 150.00

9.55% Secured non-cumulative non-convertible taxable

redeemable bonds of₹10,00,000/- each redeemable at par in

ten equal annual installments commencing from the end of 6th

year and upto the end of 15

th year respectively from 18

th April

2002 (Thirteenth Issue -Part A - Private Placement)VIII

75.00 150.00

24,844.83 23,017.83

Foreign currency notes

Unsecured 4.25 % Fixed rate notes due for repayment on 26

th February

2026 3,345.00 -

4.375 % Fixed rate notes due for repayment on 26th November

2024 3,345.00 3,159.50

4.750 % Fixed rate notes due for repayment on 3rd

October

2022 3,345.00 3,159.50

5.625 % Fixed rate notes due for repayment on 14th July 2021 3,345.00 3,159.50

Term loans

From Banks

Secured Rupee loans

XIII 4220.23 6,863.13

Foreign currency loans XIII

341.68 215.98

Unsecured

Foreign currency loans 7,692.59 8,362.55

Rupee loans 25,707.12 20,859.10

From Others

Secured

Rupee loansXIII

12,510.17 7,706.28

Unsecured

Foreign currency loans (guaranteed by GOI) 2,195.80 2,057.20

Other foreign currency loans 3,172.33 2,815.56 Rupee loans 8,091.78 11,918.65

Long term maturities of finance lease obligations

Secured 1.45 -

Unsecured 80.30 68.14

Total# 1,02,238.28 93,362.92

# Includes ₹11,046.47 crore (previous year ₹9,937.76 crore) share of jointly controlled entities.


0012018-0003086 HK:20704050.1 77


a) Details of terms of repayment and rate of interest ₹ Crore

Particulars Non current portion Current portion Total

As at

31.03.2016

As at 31.03.2015

As at

31.03.2016

As at 31.03.2015

As at

31.03.2016

As at 31.03.2015

Term loans

Secured

Rupee loans - Banks 4,220.23 6,863.13 376.09 308.83 4,596.32 7,171.96

Rupee loans - Others 12,510.17 7,706.28 542.93 471.59 13,053.10 8,177.87

Foreign currency

loans - Banks 341.68 215.98 - - 341.68 215.98

17,072.08 14,785.39 919.02 780.42 17,991.10 15,565.81

Unsecured

Foreign currency loans

(guaranteed by

GOI) – Others 2,195.80 2,057.20 175.16 154.61 2,370.96 2,211.81

Foreign currency

loans – Banks 7,692.59 8,362.55 1,328.91 281.82 9,021.50 8,644.37

Other foreign currency loans -

Others 3,172.33 2,815.56 474.99 406.02 3,647.32 3,221.58

Rupee loans - Banks 25,707.12 20,859.10 2,579.25 2,545.98 28,286.37 23,405.08

Rupee loans -

Other 8,091.78 11,918.65 1,534.38 1,584.38 9,626.16 13,503.03

46,859.62 46,013.06 6,092.69 4,972.81 52,952.31 50,985.87 i) Secured rupee term loan from banks carry interest linked to SBI base rate or fixed interest rate ranging from 8.00%

to 11.035% p.a. These loans are repayable in installments as per the terms of the respective loan agreements. The repayment period extends from a period of five to fifteen years after a moratorium period of four to six years from the date of the loan agreement.

ii) Secured rupee term loan from others carry interest linked to SBI base rate, SBI advance rate, rate notified by the

lender for category 'A' public sector undertaking, AAA bond yield rates plus agreed margin or fixed interest rate ranging from 8.00% to 13.00% p.a. These loans are repayable in installments as per the terms of the respective loan agreements. The repayment period extends from a period of three to fifteen years after a moratorium period of six months from the COD or two years from commissioning or four to five years from the date of the loan agreement.

iii) Secured foreign currency term loan facility has been tied up with SBI,Tokyo by one of the joint venture companies

which carries interest rate ranging from 3.00% to 5.17% linked to LIBOR with half yearly rests. The loan is repayble in twenty four half-yearly installments commencing from 28th September 2017.

iv) Unsecured foreign currency loans (guaranteed by GOI) - Others carry fixed rate of interest ranging from 1.80%

p.a. to 2.30% p.a. and are repayable in 17 to 30 semi-annual installments as of 31st March 2016.

v) Unsecured foreign currency loans – Banks include loans of ₹586.98 crore (previous year ₹642.54 crore) which

carry fixed rate of interest of 1.88% p.a. to 4.31% p.a. and loans of ₹8,434.52 crore (previous year ₹8,001.83 crore) which carry floating rate of interest linked to 6M LIBOR. These loans are repayable in 2 to 24 semi annual installments as of 31st March 2016, commencing after moratorium period if any, as per the terms of the respective loan agreements.

vi) Unsecured foreign currency loans – Others include loans of ₹3,153.09 crore (previous year ₹2,516.58 crore)

which carry fixed rate of interest ranging from 1.88% p.a. to 4.31% p.a and loans of ₹494.23 crore (previous year ₹705.00 crore) which carry floating rate of interest linked to 6M LIBOR/6M EURIBOR. These loans are

repayable in 2 to 24 semi annual installments as of 31st March 2016, commencing after moratorium period if any, as per the terms of the respective loan agreements.

vii) Unsecured rupee term loans carry interest rate ranging from 6.571% p.a. to 11.00% p.a. with monthly/half-yearly

rests. These loans are repayable in quarterly/half-yearly/yearly installments as per the terms of the respective loan agreements. The repayment period extends from a period of six years to sixteen years after a moratorium period of six months to six years.


0012018-0003086 HK:20704050.1 78


a) The finance lease obligations are repayable in installments as per the terms of the respective lease agreements generally over a period of four to seven years.

b) There has been no default in repayment of any of the loans or interest thereon as at the end of the year except that M/s Ratnagiri Gas & Power Pvt. Ltd, a Joint Venture Companies in

which the Company has 25.51% share, has defaulted in payment of principal and interest

amounting to ₹792.24 crore and ₹1,158.10 crore respectively as at the end of the year for a period varying from 31 to 899 days.

Details of securities

I. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of title

deeds of the immovable properties pertaining to National Capital Power Station.

II. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai and (II) Hypothecation of all the present and future movable assets

(excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station,

Auraiya Gas Power Station, Barh Super Thermal Power Project, Farakka Super Thermal

Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project,

Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal

Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power Station,

Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power

Station, Feroze Gandhi Unchahar Power Station and Tapovan-Vishnugad Hydro Power

Project as first charge, ranking pari-passu with charge, if any, already created in favour of the

Company's Bankers on such movable assets hypothecated to them for working capital

requirement.

III. Secured by (I) English mortgage, on first pari passu charge basis, of the office premises of the

Company at Mumbai and (II) Equitable mortgage of the immovable properties, on first pari-

passu charge basis, pertaining to Sipat Super Thermal Power Project by extension of charge

already created.

IV. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of the

title deeds of the immovable properties pertaining to Sipat Super Thermal Power Project.

V. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai, (II) Hypothecation of all the present and future movable assets

(excluding receivables) of Barh Super Thermal Power Project on first pari-passu charge basis,

ranking pari passu with charge already created in favour of Trustee for other Series of Bonds

and (III) Equitable mortgage of the immovable properties, on first pari-passu charge basis,

pertaining to Ramagundam Super Thermal Power Station by extension of charge already

created.

VI. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai and (II) Equitable mortgage, by way of first charge, by deposit of title

deeds of the immovable properties pertaining to Ramagundam Super Thermal Power Station.

VII. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai, (II) Equitable mortgage of the immovable properties, on first pari-passu

charge basis, pertaining to National Capital Power Station by extension of charge already

created.


0012018-0003086 HK:20704050.1 79

VIII. Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the

Company at Mumbai, (II) Hypothecation of all the present and future movable assets

(excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station,

Auraiya Gas Power Station, Barh Super Thermal Power Project, Farakka Super Thermal

Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project,

Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal

Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power Station,

Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power

Station, Feroze Gandhi Unchahar Power Station and Tapovan-Vishnugad Hydro Power

Project as first charge, ranking pari-passu with charge, if any, already created in favour of the

Company's Bankers on such movable assets hypothecated to them for working capital

requirement and (III) Equitable mortgage of the immovable properties, on first pari-passu

charge basis, pertaining to Singrauli Super Thermal Power Station by extension of charge

already created.

IX. Secured by English mortgage of the immovable properties pertaining to Solapur Super

Thermal Power Project on first charge basis.

X. Secured by Equitable mortgage of the immovable properties pertaining to Barh Super

Thermal Power Project on first charge basis.

XI. Secured by English mortgage, on pari-passu charge basis, of the immovable properties

pertaining to Solapur Super Thermal Power Project.

XII. Secured by Equitable mortgage, on pari-passu charge basis, of the immovable properties

pertaining to Barh Super Thermal Power Project.

XIII. (i) Secured by equitable mortgage of present and future immoveable property and

hypothecation of moveable fixed assets of Bhilai Expansion Project (CPP-III)

belonging to M/s NTPC SAIL Power Company Pvt. Ltd.

(ii) Secured by equitable mortagage of present and future immoveable property and

hypothecation of moveable fixed assets of CPP-II at Rourkela, Durgapur and Bhilai

belonging to M/s NTPC SAIL Power Company Pvt.Ltd.

(iii) Secured by first charge by way of hypothecation of all moveable assets of Indira

Gandhi Super Thermal Power Project (3 X 500 MW) Coal Based Thermal Power

Project at Jhajjar Distt. in state of Haryana belonging to M/s Aravali Power Company

Pvt.Ltd. (APCPL), comprising its movable plant and machinery, machinery spares,

tools and accessories, furniture & fixture, vehicles and all other movable assets,

present and future, including intangible assets, goodwill, uncalled capital, revenue

and receivable of the project except for specified receivables on which first charge

would be ceded to working capital lenders present and future; and

Secured by first charge by way of mortgage by deposit of title deed of lands (approx

2049.11 acres) and other immovable properties of Indira Gandhi Super Thermal

Power Project (3 x 500 MW) coal based thermal power project at jhajjar district in

State of Haryana together with buildings and structure erected/ constructed/ standing

thereon and all plant and machinery, and equipment attached to the earth or

permanently fastened to the earth comprised therein, in respect of which M/s APCPL,

as a owner seized and possessed of and otherwise well and fully entitled to, both

present and future assets; and

First charge by way of assignment or creation of charge on all rights, title, interest,

benefit, claim and demand whatsoever of M/s APCPL regarding project


0012018-0003086 HK:20704050.1 80

document,letter of credit, guarantees, performance bond and all insurance contracts /

proceeds duly consented by the relevant counter parties; and

Power Finance Corporation Ltd. has ceded first paripassu charge to the extent of

₹1,325.00 crore on the moveable assets,revenue and receivables in favour of the

working capital lenders.

(iv) Secured by equitable mortgage/ hypothecation of all present and future fixed and

movable assets of Nabinagar TPP (4*250) MW of Bhartiya Rail Bijlee Company Ltd.,

a subsidiary company, as first charge, ranking pari passu with charge already created

with PFC for 60% of total debts and balance 40% with REC.

(v) Secured by equitable mortgage/hypothecation of all the present and future fixed

assets and moveable assets of power plant and associated LNG facilities at village

Anjanwel, Guhagar, Distt. Ratnagiri of M/s Ratnagiri Gas & Power Pvt.Ltd.

(vi) Secured by a first priority charge on all assets of the Project, present & future,

movable & immovable and land of 987.9293 acres, in respect of loan from

consortium led by SBI for Kanti Bijlee Utpadan Nigam Ltd. expansion project. The

security will rank pari-pasu with all term lenders of the project. The charge has been

created in favor of Security trustee i.e. SBI Cap Trustee Co. Ltd. Legal mortgage of

land in favor of security trustee has been executed for 877.18 acres of land.

(vii) Secured by Equitable mortgage, by way of first charge, by deposit of the title deeds of

the immovable properties pertaining to Meja Thermal Power Project. Deed of

Hypothecation for all present and future movable assets of Meja Urja Nigam Private

Limited has also been executed with the Security Trustee and the Indenture of

Mortgage with the Security Trustee has been registered with appropriate authority.

(viii) Secured by a first priority charge on all assets of the Nabinagar Power Generating

Company Pvt.Ltd., present and future, movable and immovable through a deed of

hypothecation and simple mortgage of 2,500 acres of land.

(ix) Secured by first charge on all movable and immovable, present and future assets of

the NTPC Tamilnadu Energy Company Ltd.

(x) Secured by first charge by way of hypothecation in favour of the Power Finance

Corporation Ltd. of all the moveable assets of the project (save and except book debts)

including moveable property, machinery spares, tools and accessories, fuel stock,

spares and material at project both present and future of M/s National High Power

Test Laboratory Pvt. Ltd.

XIV. Security cover mentioned at sl. no. I to XIII is above 100% of the debt securities outstanding.


0012018-0003086 HK:20704050.1 81

5A. Short-term borrowings

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Loans repayable on demand

From Banks

Secured

Cash Credit 841.89 640.15

Unsecured

Cash Credit 1,299.50 -

Total # 2,141.39 640.15

# Includes ₹654.12 crore (previous year ₹491.63 crore) share of jointly controlled entities.

a) Secured cash credit includes:

(i) Cash credit secured by hypothecation of stock in trade, book debts of Stage-I of M/s

Kanti Bijlee Utpadan Nigam Ltd. with floating rate of interest linked to the bank's base rate.

(ii) Borrowings secured by way of first pari-passu charge along with Power Finance Corporation

Ltd. on the fixed assets, revenue and receivables of M/s Aravali Power Company Pvt. Ltd..

Rate of interest is applicable at the base rate of the respective banks.

(iii) Cash credit secured by paripassu charge on spares, present and future stock of coal and fuel at

various places of M/s NTPC Tamilnadu Energy Company Limited and Debtors with floating

rate of interest linked to bank's base rate.

(iv) Cash credit secured by way of charge on the assets of M/s Transformers and Electricals Kerala

Ltd.

(v) Cash credit secured by way of hypothecation of stock and book debts of M/s NTPC

BHEL Power Projects Pvt. Ltd.

b) There has been no default in servicing of loan as at the end of the year.


0012018-0003086 HK:20704050.1 82

6. Deferred tax liabilities (net) ₹ Crore

Particulars

As at

01.04.2015

Additions/

(Adjustments)

during the year As at

31.03.2016

Deferred tax liability

Difference in book depreciation and tax depreciation 8,097.63 411.09 8,508.72

Less: Deferred tax assets

Provisions & other disallowances for tax purposes 712.99 124.72 837.71

Disallowances u/s 43B of the Income Tax Act, 1961 464.00 58.22 522.22

6,920.64 228.15 7,148.79

Less: Deferred asset for deferred tax liability 5,655.03 84.36 5,739.39

Total # 1,265.61 143.79 1,409.40


a) The net increase during the year in the deferred tax liability of ₹143.79 crore (previous year increase of ₹29.21 crore) has been debited to Statement of Profit and Loss.

b) Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing laws.

c) CERC Regulations, 2014 provide for recovery of deferred tax liability as on 31st March 2009

from the beneficiaries. Accordingly, deferred tax liability as on 31st March 2009 is

recoverable on materialisation from the beneficiaries. For the period commencing from 1st April 2014, Regulations, 2014 provide for grossing up of the return on equity based on

effective tax rate for the financial year based on the actual tax paid during the year on the

generation income. Deferred asset for deferred tax liability for the year will be reversed in future years when the related deferred tax liability forms part of current tax.


0012018-0003086 HK:20704050.1 83

7. Other long-term liabilities ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Trade payables 9.94 9.22

Other liabilities

Payable for capital expenditure 3,829.10 3,179.44

Others 69.26 33.29

Total # 3,908.30 3,221.95


a) Other liabilities - Others represent deposits received from contractors, customers and other parties

including ₹49.68 crore (previous year ₹Nil) for Deen Dayal Upadhayay Gram Jyoti Yojna

(DDUGJY) Scheme of the GOI. Refer Note 10 d).

8. Long-term provisions ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Provision for

Employee benefits 448.02 1,131.24

Contractual & other obligations 21.40 12.13

Total # 469.42 1,143.37


a) Disclosure as per AS 15 on 'Employee Benefits' has been made in Note 40.

b) Disclosure required by AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets'

has been made in Note 48.

8A. Regulatory liabilities ₹ Crore

Particulars As at 31.03.2016 As at 31.03.2015

Exchange differences# 297.56 308.55

# Includes (-) ₹3.16 crore (previous year (-) ₹0.41 crore) share of jointly controlled entities.

In line with accounting policy no.G (Note 1), regulatory liability has been accounted. Refer Note 49 for detailed disclosures.

9. Trade payables ₹ Crore

Particulars As at 31.03.2016 As at 31.03.2015

For goods and services# 6,826.55 7,107.63



0012018-0003086 HK:20704050.1 84

10. Other current liabilities

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Current maturities of long term borrowings

Bonds - Secured 628.00 600.00

5.875% Foreign currency fixed rates note - Unsecured - 1,895.70

From Banks

Secured

Rupee term loans 376.09 308.83

Unsecured

Foreign currency loans 1,328.91 281.82

Rupee term loans 2,579.25 2,545.98

From Others

Secured


Unsecured

Foreign currency loans (guaranteed by GOI) 175.16 154.61

Other foreign currency loans 474.99 406.02


7,639.71 8,248.93

Current maturities of finance lease obligations - Secured 0.48 -

Current maturities of finance lease obligations - Unsecured 10.84 -

Interest accrued but not due on borrowings 886.01 835.80

Interest accrued and due on borrowings 295.43 167.59

Unpaid dividends 15.07 14.97

Unpaid matured deposits and interest accrued thereon 0.19 0.21

Unpaid matured bonds and interest accrued thereon 2.28 0.72

Unpaid bond refund money-Tax free bonds 0.45 0.16

Book overdraft 400.00 546.01

Advances from customers and others 1,312.69 600.51


Derivative MTM Liability 0.04 4.59

Other payables

Tax deducted at source and other statutory dues 328.56 320.98

Deposits from contractors and others 266.28 764.01

Gratuity obligations - 0.32

Payable to employees 283.52 331.54

Others 1,188.46 783.94

Total # 22,189.00 20,202.14


a) Details in respect of rate of interest and terms of repayment of current maturities of secured and

unsecured long term borrowings indicated above are disclosed in Note 5.

b) Interest accrued and due on borrowings pertains to M/s Ratnagiri Gas & Power Private Limited, a joint

Venture of the Company.

c) Unpaid dividends, matured deposits, bonds and interest include the amounts which have either not been

claimed by the investors/holders of the equity shares/bonds/fixed deposits or are on hold pending legal

formalities etc. Out of the above, the amount required to be transferred to Investor Education and

Protection Fund has been transferred.


0012018-0003086 HK:20704050.1 85


d) Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), previously Rajiv Gandhi Grameen

Vidyutikaran Yojana (RGGVY) Scheme of the GOI is being implemented by the Company (till the end

of previous year, the work was assigned to NESCL, a subsidiary of the company). The funds for the

implementation of these schemes are provided by the agencies nominated by the GOI in this regard.

Advance received for the DDUGJY (including interest thereon) of ₹388.87 crore (previous year

₹531.55 crore) is included in ‘Advance from customers and others’.

e) Payable for capital expenditure includes liabilities of ₹109.92 crore (previous year ₹142.92 crore)

towards an equipment supplier pending evaluation of performance and guarantee test results of steam/turbine generators at some of the stations. Pending settlement, liquidated damages recoverable

for shortfall in performance of these equipments, if any, have not been recognised.

f) The Company had obtained exemption from Ministry of Corporate Affairs (MCA), GOI in respect of

applicability of Section 58A from the erstwhile Companies Act, 1956 in respect of deposits held from

the dependants of employees who die or suffer permanent total disability under the ‘Employees

Rehabilation Scheme’ (said amount is included in Other payable- Others). Consequent upon enactment

of the Companies Act, 2013 the company has written to the MCA for Clarification on continuation of

above exemption granted earlier, which is still awaited. The Company has been advised that the

amount accepted under the Scheme is not a deposit under the Companies Act, 2013.

g) Other payables - Others include amount payable to hospitals, retired employees, parties for stale

cheques, etc.


0012018-0003086 HK:20704050.1 86

11. Short-term provisions ₹ Crore Particulars As at

31.03.2016

As at

31.03.2015

Provision for

Employee benefits 1,255.80 1,186.50

Proposed dividend 1,442.96 1,442.96

Tax on proposed dividend 296.30 300.83

Current tax 200.54 24.01

Obligations incidental to land acquisition 3,886.67 3,244.70

Tariff adjustment 1,239.97 1,263.75

Others 610.99 533.66

Total # 8,933.23 7,996.41


a) Disclosure as per AS 15 on 'Employee Benefits' has been made in Note 40.

b) Disclosure required by AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets' has been

made in Note 48.

c) Provision for tax for the year represents liability after adjustment of advance tax.

d) The Company aggrieved over many of the issues considered by the CERC in the tariff orders for its stations for the period 2004-09 had filed appeals with the Appellate Tribunal for Electricity (APTEL).

The APTEL disposed off the appeals favourably directing the CERC to revise the tariff orders as per

directions and methodology given. Some of the issues decided in favour of the Company by the

APTEL were challenged by the CERC in the Hon’ble Supreme Court of India. Subsequently, the

CERC has issued revised tariff orders for all the stations except one for the period 2004-09, considering

the judgment of APTEL subject to disposal of appeals pending before the Hon’ble Supreme Court of

India. Towards the above and other anticipated tariff adjustments, provision of ₹146.57 crore

(previous year ₹150.22 crore) has been made during the year and in respect of some of the stations, an

amount of ₹157.09 crore (previous year ₹180.16 crore) has been written back.

e) Provision for others comprise ₹65.35 crore (previous year ₹58.64 crore) towards cost of unfinished minimum work programme demanded by the Ministry of Petroleum and Natural Gas (MoP&NG)

including interest thereon in relation to block AA-ONN-2003/2 [Refer Note 31 C.(ii))], ₹514.08 crore

(previous year ₹440.83 crore) towards provision for cases under litigation and ₹1.92 crore (previous

year ₹6.06 crore) towards provision for shortage in fixed assets on physical verification pending

investigation.

NTPC LIMITED


0012018-0003086 HK:20704050.1 87

12. Tangible assets

₹ Crore

Particulars Gross Block Depreciation/Amortisation and Impairment Net Block

As at

01.04.2015 Additions

Deductions/

Adjustments

As at

31.03.2016

Upto

01.04.2015 For the year

Deductions/

Adjustments

Upto

31.03.2016

As at

31.03.2016

As at

31.03.2015

Land

(including development expenses)

Freehold 7,719.44 663.63 (72.22) 8,455.29 - - - - 8,455.29 7,719.44

Leasehold 3,239.95 1,645.01 103.77 4,781.19 517.27 67.26 239.38 345.15 4,436.04 2,722.68

Under submergence (refer footnote f) - - (958.99) 958.99 - 25.09 (239.30) 264.39 694.60 -

Roads,bridges, culverts & helipads 922.60 127.49 (34.79) 1,084.88 265.71 36.40 (0.83) 302.94 781.94 656.89

Buildings

Freehold

Main plant 5,811.86 438.33 (140.28) 6,390.47 1,683.94 187.89 (13.43) 1,885.26 4,505.21 4,127.92

Others 3,496.63 445.98 (68.53) 4,011.14 1,253.90 141.96 (2.14) 1,398.00 2,613.14 2,242.73

Leasehold 51.60 - 0.73 50.87 31.50 1.89 0.15 33.24 17.63 20.10

Temporary erection 45.30 7.64 4.17 48.77 42.61 5.30 1.98 45.93 2.84 2.69

Water supply, drainage & sewerage system 778.73 23.89 (2.05) 804.67 368.73 26.72 0.58 394.87 409.80 410.00

Hydraulic works, barrages, dams, tunnels and power - 4,104.35 (17.48) 4,121.83 - 163.22 - 163.22 3,958.61 -

MGR track and signalling system 1,578.84 75.18 (52.57) 1,706.59 733.01 60.82 - 793.83 912.76 845.83

Railway siding 815.06 110.78 (26.68) 952.52 244.58 39.10 - 283.68 668.84 570.48

Earth dam reservoir 340.91 10.41 (0.26) 351.58 145.45 13.19 0.01 158.63 192.95 195.46

Plant and equipment

Owned 1,16,518.56 8,013.15 (2,014.13) 1,26,545.84 45,682.23 5,749.10 267.95 51,163.38 75,382.46 70,836.33

Leased 60.00 30.00 - 90.00 4.23 4.61 - 8.84 81.16 55.77

Furniture and fixtures 518.56 61.57 (1.61) 581.74 289.89 24.32 1.11 313.10 268.64 228.67

Vehicles including speedboats

Owned 14.04 1.05 0.69 14.40 6.41 1.07 0.40 7.08 7.32 7.63

Leased - 2.13 (0.06) 2.19 - 0.33 - 0.33 1.86 -

NTPC LIMITED


0012018-0003086 HK:20704050.1 88

Office equipment 207.06 35.81 3.12 239.75 101.82 25.64 2.37 125.09 114.66 105.24

EDP, WP machines and satcom equipment 444.27 40.69 34.07 450.89 325.51 80.52 32.68 373.35 77.54 118.76

Construction equipments 218.78 31.94 8.80 241.92 111.56 14.48 0.69 125.35 116.57 107.22

Electrical installations 523.04 62.22 (14.07) 599.33 203.16 24.00 (0.23) 227.39 371.94 319.88

Communication equipments 110.74 13.10 0.19 123.65 62.40 17.26 0.69 78.97 44.68 48.34

Hospital equipments 39.92 3.37 0.88 42.41 18.63 1.54 0.76 19.41 23.00 21.29

Laboratory and workshop equipments 77.65 20.70 0.11 98.24 21.67 4.18 0.01 25.84 72.40 55.98

Assets under 5 KM scheme of the GOI 116.87 - 116.87 - 46.11 - 46.11 - - 70.76

Capital expenditure on assets not owned by the Company 278.16 - 278.16 - 188.77 - 188.77 - - 89.39

Assets of Government 2.81 - - 2.81 - - - - 2.81 2.81

Less: Grants from Government 2.81 - - 2.81 - - - - 2.81 2.81

Assets for ash utilisation 17.30 4.29 (0.97) 22.56 - - - - 22.56 17.30

Less: Adjusted from fly ash utilisation reserve fund 17.30 5.26 - 22.56 - - - - 22.56 17.30

Total# 1,43,928.57 15,969.39 (2,851.19) 1,62,749.15 52,349.09 6,715.89 527.71 58,537.27 1,04,211.88 91,579.48

Previous year 1,31,003.85 9,889.84 (3,034.88) 1,43,928.57 47,046.08 5,848.21 545.20 52,349.09 91,579.48 83,957.77

# Net block includes ₹11,700.52 crore (previous year ₹11,911.66 crore) share of jointly controlled entities.

a) The conveyancing of the title to 10,958 acres of freehold land of value ₹2,277.97 crore (previous year 10,059 acres of value ₹2,006.16 crore), buildings & structures of value ₹50.43 crore (previous year ₹50.43 crore) and also execution of

lease agreements for 16,085 acres of land of value ₹3,182.81 crore (previous year 13,844 acres, value ₹1,729.49 crore) in favour of the Company are awaiting completion of legal formalities.

b) Leasehold land includes 3,044 acres valuing ₹751.08 crore (previous year 2,748 acres valuing ₹606.83 crore) acquired on perpetual lease and accordingly not amortised.

c) Land does not include value of 33 acres (previous year 33 acres) of land in possession of the Company. This will be accounted for on settlement of the price thereof by the State Government Authorities.

d) Land includes 1,306 acres of value ₹234.94 crore (previous year 1,302 acres of value ₹72.55 crore) not in possession of the Company. The Company is taking appropriate steps for repossession of the same.

e) Land includes an amount of ₹262.91 crore (previous year ₹179.65 crore) deposited with various authorities in respect of land in possession which is subject to adjustment on final determination of price.

f) Gross block of land under submergence include ₹496.37 crore (previous year ₹Nil) of freehold land and ₹462.62 crore (previous year ₹Nil) of leasehold land. The land has been amortised considering the rate of depreciation provided by the

CERC in the tariff regulations and the fact that it will not have any economic value due to deposit of silt and other foreign materials.

g) Possession of land measuring 98 acres (previous year 98 acres) consisting of 79 acres of freehold land (previous year 79 acres) and 19 acres of lease hold land (previous year 19 acres) of value ₹0.21 crore (previous year ₹0.21 crore) was

transferred to Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd. (erstwhile UPSEB) for a consideration of ₹0.21 crore. Pending approval for transfer of the said land, the area and value of this land has been included in the total land of the

Company. The consideration received from erstwhile UPSEB is disclosed under Note -10 - ‘Other Current Liabilities' -as other liabilities.

h) Ministry of Power, Government of India vide its notification no. 2/38/99-BTPS (Volume VII) dated 22nd September 2006 transferred land of a power station to the Company on operating lease of 50 years. Lease rent for the year amounting to

NTPC LIMITED


0012018-0003086 HK:20704050.1 89

₹6.24 crore (previous year ₹6.24 crore) has been charged to the Statement of Profit and Loss.

i) Capital expenditure on assets not owned by the Company (enabling assets) was hitherto reflected as a distinct item in capital work in progress till the period of completion and thereafter in the tangible assets and was amortized over a period

of 4 years from the month in which first unit of project concerned came into commercial operation & thereafter from the month in which the relevant asset became available for use. Capitalisation of such expenditure was allowed by the

Guidance Note on Treatment of Expenditure during Construction Period till the financial year 2008-09.

Taking guidance from the Accounting Standards (AS) -10 on ‘Property, Plant & Equipment’ (PPE) notified by the Ministry of Corporate Affairs, GOI vide notification no. GSR 364 (E) dated 30th March 2016 effective from the financial year

2016-17, the Company has changed the treatment and has capitalized such expenditure retrospectively as part of cost of project. As a result, cost amortized till 31st March 2015 amounting to ₹107.45 crore as per earlier policy has been

written back as prior period adjustments and depreciation has been recalculated retrospectively following the rates and methodology notified by the CERC Tariff Regulations amounting to ₹23.25 crore till 31st March 2015. Due to this

change, prior period depreciation (net) till 31st March 2015 is (-) ₹84.20 crore, depreciation for the year is lower by ₹18.26 crore, profit for the year and fixed assets as at 31st March 2016 are higher by ₹102.46 crore. Also, refer Note 37.a).

j) Ministry of Power, GOI vide letter dated 27th April 2010 notified the Scheme for providing electricity in 5 KM area of all existing and upcoming power plants by CPSUs. The Scheme provided that expenditure incurred under this scheme will

be booked by the CPSU under project cost and will be included in the tariff by the appropriate commission. Keeping in view the above, the expenditure incurred by the Company under the scheme was capitalised as a separate asset and was

being depreciated over the remaining useful life of the related plant. During the year, the CERC while giving the tariff orders for some of the stations has directed that the actual expenditure should be reimbursed by the beneficiaries w.e.f. 1st

April 2016 in equal monthly installments in the remaining three years of tariff period till March 2019 along-with interest instead of servicing the same as part of the capital cost. Consequently, cost of such tangible assets of ₹116.87 crore has

been charged off as expenditure for the year and corresponding depreciation of ₹46.11 crore charged till 31st March 2015 has been written back. Consequently, revenue from operations of ₹108.19 crore (including interest of ₹3.05 crore) has

been recognised during the year.

k) From the accounting periods commencing on or after 7th December 2006, the Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items relating to the acquisition of a depreciable

asset to the cost of asset and depreciates the same over the remaining life of the asset.

l) Refer Note 44(a)(ii) regarding plant and equipment under finance lease.

m) Based on assessment, an impairment loss of ₹4.48 crore (previous year Nil) has been recognized during the year in respect of plant and equipment of Andaman Solar PV Station of the Company. Refer Note 47.

n) Deduction/adjustments from gross block and depreciation/amortisation/impairment for the year includes:

₹ Crore

Gross Block

Depreciation/Amortisation/

Impairment

31.03.2016 31.03.2015 31.03.2016 31.03.2015

Disposal of assets 36.21 12.02 32.64 9.75

Retirement of assets 520.05 582.82 256.94 437.86

Cost adjustments including exchange differences (3,357.67) (3,741.64) (0.36) (0.07)

Assets capitalised with retrospective effect/write back of excess

capitalisation

(213.89) (323.18) 70.67 (12.57)

Others 164.11 435.10 167.82 110.23

(2,851.19) (3,034.88) 527.71 545.20

NTPC LIMITED


0012018-0003086 HK:20704050.1 90

o) The borrowing costs capitalised during the year is ₹4,374.13 crore (previous year ₹3,810.43 crore). The Company capitalised the borrowing costs in the capital work-in-progress (CWIP). Exchange differences capitalised are disclosed in the

'Addition' column of CWIP and allocated to various heads of CWIP in the year of capitalisation through 'Deductions/Adjustment ' column of CWIP. Exchange differences in respect of assets already capitalised are disclosed in the

'Deductions/Adjustments' column of fixed assets. Asset-wise details of exchange differences and borrowing costs included in the cost of major heads of fixed assets and CWIP through 'Addition' or 'Deductions/Adjustments' column are given

below:

₹ Crore

₹ Crore

For the year ended 31st March

2016

For the year ended 31st March

2015

Exch.

difference

incl in fixed

assets/

Borrowing

costs incl in

fixed assets/

Exch.

difference

incl in fixed

assets/

Borrowing

costs incl in

fixed assets/

CWIP CWIP CWIP CWIP

Buildings

Main plant 25.45 387.38 (16.90) 248.64

Others 3.23 59.58 (1.71) 60.66

Hydraulic works, barrages, dams, tunnels and power channel 22.99 202.71 - 375.67

MGR track and signalling system 0.21 25.80 - 21.94

Railway siding 0.01 19.14 (1.39) 16.88

Plant and equipment 1,502.11 3,155.72 46.27 2,556.96

Others including pending allocation 439.92 523.80 322.21 529.68

Total 1,993.92 4,374.13 348.48 3,810.43

Intangible assets ₹ Crore

Particulars Gross Block Amortisation Net Block

As at


Deductions/

Adjustments

As at

31.03.2016

Upto

01.04.2015 For the year

Deductions/

Adjustments

Upto

31.03.2016

As at

31.03.2016

As at

31.03.2015

Software 119.98 4.34 (0.04) 124.36 102.38 8.26 0.04 110.60 13.76 17.60

Right of Use- Land 57.89 15.56 (13.30) 86.75 11.02 2.85 - 13.87 72.88 46.87

- Others 251.60 - - 251.60 44.94 11.03 0.56 55.41 196.19 206.66

Licence fee for technical collaboration 2.09 - - 2.09 0.30 0.56 - 0.86 1.23 1.79

NTPC LIMITED


0012018-0003086 HK:20704050.1 91

Total#

431.56 19.90 (13.34) 464.80 158.64 22.70 0.60 180.74 284.06 272.92

Previous year 389.27 26.81 (15.48) 431.56 139.68 19.00 0.04 158.64 272.92 249.59

# Net block includes ₹9.94 crore (previous year ₹10.63 crore) share of jointly controlled entities.

a) The right of use of land & others are amortized over the period of legal right to use or lift of the related plant, whichever is less.

b) Right to use –land includes ₹80.87 crore (previous year ₹52.01 crore) and right to use-others includes ₹248.08 crore (previous year ₹248.08 crore) which are amortised over a period of more than ten years considering the useful life of these

assets as per the related agreements/arrangements.

c) Cost of acquisition of the right for drawl of water amounting to ₹248.08 crore (previous year ₹248.08 crore) and right of use of CW channel amounting to ₹3.52 crore (previous year ₹3.52 crore) are included under intangible assets – Right

of use

d) Deduction/adjustments from gross block and amortisation for the year includes:

₹ Crore

Gross Block Amortisation

31.03.2016 31.03.2015 31.03.2016 31.03.2015

Cost adjustments (13.30) (15.51) - -

Others (0.04) 0.03 0.60 0.04

(13.34) (15.48) 0.60 0.04

Depreciation/amortisation/impairment of tangible and intangible assets for the year is allocated as given below:

₹ Crore

2015-16 2014-15

Charged to Statement of Profit and Loss 6,153.41 5,564.61

Allocated to fuel cost 357.58 306.15

Transferred to expenditure during construction period (net) - Note

28 104.89 84.71

Transferred to development of coal mines 2.60 1.86

Adjustment with deferred income from deferred foreign currency

fluctuation 120.11 (90.12)

6,738.59 5,867.21

NTPC LIMITED


0012018-0003086 HK:20704050.1 92

13. Capital work-in-progress

₹ Crore

Particulars As at


Deductions/

Adjustments Capitalised As at

31.03.2016

Development of land 964.00 330.49 198.54 - 1,095.95

Roads, bridges, culverts & helipads 126.88 71.30 (21.51) 127.48 92.21

Piling and foundation 641.51 34.82 0.63 - 675.70

Buildings

Main plant 3,794.59 1,445.58 373.39 434.61 4,432.17

Others 1,295.89 803.90 72.44 438.63 1,588.72

Temporary erection 55.99 67.06 76.48 4.96 41.61

Water supply, drainage and sewerage system 75.68 35.23 4.45 22.40 84.06

Hydraulic works, barrages, dams, tunnels and power channel 5,268.97 798.72 (1.00) 4,085.56 1,983.13

MGR track and signalling system 329.29 189.42 52.59 75.18 390.94

Railway siding 403.79 350.56 50.86 110.78 592.71

Earth dam reservoir 78.39 41.03 0.25 10.41 108.76

Plant and equipment 45,705.40 23,138.49 800.72 7,762.66 60,280.51

Furniture and fixtures 23.17 16.07 (9.39) 35.71 12.92

Office equipment 1.66 6.09 0.45 5.27 2.03

EDP/WP machines & satcom equipment 3.13 31.60 0.44 3.69 30.60

Construction equipments 2.03 0.31 0.02 2.15 0.17

Electrical installations 474.65 347.85 145.89 57.97 618.64

Communication equipments 2.30 2.53 0.73 1.65 2.45

Hospital equipments 0.13 0.07 - 0.13 0.07

Laboratory and workshop equipments 0.06 2.94 0.01 0.03 2.96

Capital expenditure on assets not owned by the company 78.60 41.48 120.08 - -

Development of coal mines 1,086.49 199.14 - - 1,285.63

60,412.60 27,954.68 1,866.07 13,179.27 73,321.94

Expenditure pending allocation

Survey, investigation, consultancy and supervision charges 415.27 11.98 73.37 - 353.88

Difference in exchange on foreign currency loans 1,531.35 927.11 501.69 - 1,956.77

Pre-commissioning expenses (net) 54.75 177.76 123.13 - 109.38

Expenditure during construction period (net) 739.72 5,598.21 * 28.39 - 6,309.54

Other expenditure directly attributable to project construction - 352.20 (141.42) - 493.62

Less: Allocated to related works - 5,371.15 - - 5,371.15

63,153.69 29,650.79 2,451.23 13,179.27 77,173.98

Less: Provision for unserviceable works 106.00 4.22 10.82 - 99.40

Construction stores (net of provision) 4,476.62 (219.54) - - 4,257.08

Total # 67,524.31 29,427.03 2,440.41 13,179.27 81,331.66

Previous year 53,819.15 25,148.19 2,781.81 8,661.22 67,524.31


* Brought from expenditure during construction period (net) - Note 28

a) Construction stores are net of provision for shortages pending investigation amounting to ₹9.08 crore (previous year ₹5.68 crore).

b) Pre-commissioning expenses for the year amount to ₹332.14 crore (previous year ₹326.53 crore) and after adjustment of pre-commissioning sales of

₹154.98 crore (previous year ₹58.09 crore) resulted in net pre-commissioning expenditure of ₹177.16 crore (previous year ₹268.44 crore).

c) Additions to the development of coal mines include expenditure during construction period (net) of ₹199.14 crore (previous year ₹153.90 crore).

d) In respect of projects which have not been completed till 31st March 2016, the balance of ‘Capital expenditure on assets not owned by the Company’

amounting to ₹120.08 crore has been transferred to ‘Other expenditure directly attributable to project construction’. [Refer Note 12(i)].

NTPC LIMITED


0012018-0003086 HK:20704050.1 93

13A. Intangible Assets Under Development ₹ Crore

Particulars As at


Deductions/

Adjustments Capitalised

As at

31.03.2016

Software 0.10 0.47 (0.01) 0.16 0.42

Right of use - others - 140.19 - - 140.19

Exploratory wells-in-progress 37.92 69.24 22.10 - 85.06

38.02 209.90 22.09 0.16 225.67

Less: Provision for unserviceable works 7.64 - - - 7.64

Total # 30.38 209.90 22.09 0.16 218.03

Previous year 5.81 36.09 (0.76) 12.28 30.38 # Includes ₹0.42 crore (previous year ₹Nil) share of jointly controlled entities.

NTPC LIMITED


0012018-0003086 HK:20704050.1 94

14. Non-current Investments ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Number of

shares/bonds/

securities

Face value

per

share/bond/

security

Current year/

(previous

year)

Current year/

(previous

year) (₹)

Long term-Trade

Equity instruments (fully paid up-unless otherwise

stated)

Quoted

PTC India Ltd. 12000000 10 12.00 12.00

(12000000) (10)

12.00 12.00

Unquoted

Joint venture companies(b)

NTPC-SCCL Global Ventures Private Ltd. 50000 10 0.05 -

(-) (-)

National Power Exchange Ltd. 2188325 10 2.19

(-) (-)

Less: Provision for diminution in value 1.06

1.13 -

International Coal Ventures Private Ltd. 1400000 10 1.40 -

(-) (-)

Pan-Asian Renewables Private Ltd. 1500000 10 1.50

(-) (-)

Less: Provision for diminution in value 1.28

0.22 -

2.80 -

Cooperative societies * *

Non-Trade Investment (at cost) in Shares - 2.12

Total# 14.80 14.12

# Share of jointly controlled entities is Nil (previous year ₹ 2.12 crore).

Aggregate amount of quoted investments

Book value 12.00 12.00

Market value 76.80 97.08

Aggregate amount of unquoted investments

Book value 2.80 2.12

Aggregate amount of provision for diminution in the value of investments 2.34 -

Investments have been valued considering the accounting policy no. L (Note1).

* Equity shares of ₹ 30,200/- (previous year ₹ 30,200/-) held in various employee co-operative societies.

a) The Board of Directors of NTPC Limited in its meeting held on 28th April 2016 accorded in principle approval for withdrawal from

PTC India Ltd. Pending withdrawal, no provision towards the diminution in the value of investment in PTC India Ltd. is required to be

made.

b) During the year, the company has reviewed the investments made in the following Joint Venture Companies considering the

provisions of AS 27-‘Financial Reporting of Interests in Joint Ventures’. The company is of the view that the provisions of AS-27 are

not applicable to the investments made in these JV companies and hence accounted for as per AS-13-'Accounting for Investments' in

the consolidated financial statements:

(i) The Board of Directors of NTPC Limited in its meeting held on 25th March 2015 accorded approval for voluntry winding up of

NTPC SCCL Global Ventures Pvt. Ltd. (a Joint Venture of the Company). The shareholder of NTPC SCCL Global Ventures Pvt.

Ltd.in Annual General Meeting held on 8th

September 2015 approved the voluntry winding up. Winding up of the Company is

underway. Pending winding-up, no provision towards the diminution in the value of investment in NTPC SCCL Global Ventures

Pvt. Ltd. is required to be made.

(ii) The Board of Directors of NTPC Limited in its meeting held on 7th

November 2012 accorded in principle approval for

withdrawal from National Power Exchange Ltd. (NPEX) (a Joint Venture of the Company). Shareholder of NPEX in extra

NTPC LIMITED


0012018-0003086 HK:20704050.1 95

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

ordinary general meeting held on 28th October 2014, approved the proposal for voluntary winding up of NPEX. Winding up of

the Company is underway. Pending winding-up, provision of ₹ 1.06 crore (previous year ₹ 1.06 crore) towards the diminution in

the value of investment has been made based on the audited accounts of NPEX.

(iii) The Board of Directors of NTPC Limited in its meeting held on 27th January 2012 accorded in principle approval for withdrawal

from International Coal Ventures Private Ltd. (a Joint Venture of the Company). Approval of the GoI for the same is awaited,

subsequent to which, the process of withdrawal shall commence. No provision towards the diminution in the value of investment

is required to be made. Further, the holding of the Company in the JV has reduced to 0.13% as at 31st March 2016.

(iv) The Board of Directors of NTPC Limited in its meeting held on 31st October 2014 approved the proposal for voluntary winding

up of Pan-Asian Renewables Private Ltd. (a Joint Venture of the Company). Accordingly, a liquidator has been appointed for

dissolution of the Company. The liquidation process is underway. Pending winding-up, provision of ₹ 1.28 crore (previous year

₹ 1.28 crore) towards the diminution in the value of investment has been made based on the audited accounts of Pan-Asian

Renewables Private Ltd.

NTPC LIMITED


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15. Long-term loans and advances (Considered good, unless otherwise stated) ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Capital Advances

Secured 17.34 19.65

Unsecured

Covered by bank guarantee 4,049.66 4,702.24

Others 3,678.35 3,779.29

Considered doubtful 1.92 2.06

Less: Allowance for bad & doubtful advances 1.92 2.06

7,745.35 8,501.18

Security deposits (unsecured) 152.71 162.73

Loans

Related parties

Unsecured 0.60 -

Employees (including accrued interest)

Secured 409.52 409.24

Unsecured 167.03 139.60

Loan to state government in settlement of dues from customers (unsecured) - 47.86

Others

Secured 30.00 35.00

Unsecured - 0.60

607.15 632.30

Advances

Unsecured

Contractors & Suppliers 2,294.54 2,286.56

Others 4.22 4.04

2,298.76 2,290.60

Advance tax & tax deducted at source 16,858.88 12,232.11

Less: Provision for tax 9,868.09 7,281.71

6,990.79 4,950.40

MAT credit recoverable 90.33 94.07

Cenvat Credit / Service tax recoverable 0.51 0.34

Total # 17,885.60 16,631.62

# Includes ₹ 459.92 crore (previous year ₹ 703.24 crore) share of jointly controlled entities.

a) Capital advances include ₹ 224.48 crore (previous year ₹ 268.72 crore), paid to a contractor pending settlement of certain claims

which are under arbitration. The amount will be adjusted in the cost of related work or recovered from the party, depending u pon the

outcome of the arbitration proceedings.

b) Capital advances include advances to related parties of ₹ 2.56 crore (previous year ₹ 8.98 crore).

c) Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC).

d) Advances to contractors & suppliers include payments to Railways under Customer funding model as per policy on ‘Participative

model for rail-connectivity and capacity augmentation projects’ issued by Ministry of Railways, GOI. As per the policy, the railway

projects agreed between the company and Railways will be constructed, maintained and operated by Railways and ownership of the

line and its operations & maintenance will always remain with them. Railways will pay upto 7% of the amount invested through

freight rebate on freight volumes every year till the funds provided by the Company are recovered with interest at a rate equal to the

prevailing rate of dividend payable by Railways to General exchequer at the time of signing of the agreement, which is pending as at

31st March 2016.

NTPC LIMITED


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15A. Other non-current assets ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Long term trade receivables

Unsecured, considered good 66.66 32.96

Deferred foreign currency fluctuation asset 1,368.79 1,280.49

Claims recoverable 511.00 466.28

Total # 1,946.45 1,779.73


a) In line with accounting policy no. N.3 (Note 1), deferred foreign currency fluctuation asset has been accounted and (-) ₹712.19 crore

(previous year (-) ₹ 110.15 crore) being exchange fluctuations on account of foreign currency loans has been recognised in energy

sales in Note 22.

b) Claims recoverable include ₹ 469.73 crore (previous year ₹ 466.28 crore) towards the cost incurred upto 31st March 2016 in respect

of one of the hydro power projects, the construction of which has been discontinued on the advice of the Ministry of Power (MOP),

GOI which includes ₹ 185.41 crore (previous year ₹ 214.34 crore) in respect of arbitration awards challenged by the Company

before High Court. In the event the High Court grants relief to the Company, the amount would be adjusted against Short Term

Provisions - Others (Note 11). Management expects that the total cost incurred, anticipated expenditure on the safety and stabilisation

measures, other recurring site expenses and interest costs as well as claims of contractors/vendors for various packages for this project

will be compensated in full by the GOI. Hence, no provision is considered necessary.

NTPC LIMITED


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16. Current investments ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Number of

bonds/securities

Current year/

(previous year)

Face value per

bond/security

Current year/

(previous year)

(₹)

Trade

Current maturities of long term investments

Bonds (fully-paid up)

Unquoted

8.50 % Tax-Free State Government Special Bonds of

the Government of

Andhra Pradesh - - - 126.07

(1260650) (1000)

Assam - - - 5.15

(51464) (1000)

Bihar - - - 189.44

(1894400) (1000)

Chattisgarh - - - 48.32

(483220) (1000)

Gujarat - - - 83.73

(837240) (1000)

Haryana - - - 107.50

(1075000) (1000)

Himachal Pradesh - - - 3.34

(33388) (1000)

Jammu and Kashmir - - - 36.74

(367360) (1000)

Jharkhand - - - 96.01

(960136) (1000)

Kerala - - - 100.24

(1002400) (1000)

Madhya Pradesh - - - 83.08

(830840) (1000)

Maharashtra - - - 38.14

(381400) (1000)

Orissa - - - 110.29

(1102874) (1000)

Punjab - - - 34.62

(346230) (1000)

Rajasthan - - - 29.00

(290000) (1000)

Sikkim - - - 3.42

(34196) (1000)

Uttar Pradesh - - - 398.99

(3989900) (1000)

Uttaranchal - - - 39.96

(399650) (1000)

West Bengal - - - 117.42

(1174248) (1000)

- 1,651.46

Investment in mutual funds (unquoted)

UTI Liquid Cash Plan - IP - Direct - DDR* 159.58 151.36

IDBI Liquid Fund - Direct - DDR* 79.30 75.24

SBI Premier Liquid Fund - Direct - DDR* 104.75 -

Reliance liquid fund-Treasury plan-Direct daily dividend

option

- 7.57

Reliance liquid fund-Treasury plan-Direct daily dividend

option

- 0.75

Birla sunlife cash plus - Daily dividend - Direct plan -

Reinvestment

- 1.01

343.63 235.93

Total# 343.63 1,887.39

# Share of jointly controlled entities is ₹ Nil (previous year ₹

9.33 crore). Aggregate amount of unquoted investments

Book value

343.63 1,887.39

* Investments out of fly ash utilization reserve fund.

a) Investments have been valued as per accounting policy no.L (Note 1).

b) The above investments are unquoted and hence market value is not applicable.

NTPC LIMITED


0012018-0003086 HK:20704050.1 99

17. Inventories ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Coal 3,866.66 4,011.52

Fuel oil 264.81 361.21

Naphtha 118.54 139.81

Stores and spares 3,070.05 2,902.13

Chemicals & consumables 81.40 70.30

Loose tools 8.36 7.81

Steel Scrap 27.38 25.48

Others 616.40 541.44

8,053.60 8,059.70

Less: Provision for shortages 6.82 5.52

Provision for obsolete/ unserviceable items/

diminution in value of surplus inventory 87.62 81.72

Total # 7,959.16 7,972.46

# Includes ₹ 725.95 crore (previous year ₹ 491.27 crore) share of jointly controlled

entities.

Inventories include material-in-transit

Coal 423.18 471.73

Stores and spares 47.42 40.89

Chemicals & consumables 1.16 0.38

Loose tools 0.07 0.04

Others 3.96 0.84

475.79 513.88

a) Inventory items, other than steel scrap have been valued as per accounting policy no. M.1 (Note 1). Steel scrap has been valued at

estimated realisable value.

b) Inventories-Others include steel, cement, ash bricks etc.

NTPC LIMITED


0012018-0003086 HK:20704050.1 100

18. Trade Receivables ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Outstanding for a period exceeding six months from the date they are due for payment

Unsecured, considered good 723.73 463.32


812.24 558.35

Others

Unsecured, considered good 9,450.25 8,786.60

Considered doubtful - 0.77

9,450.25 8,787.37

Less: Allowance for bad and doubtful receivables 88.51 95.80

Total # 10,173.98 9,249.92


NTPC LIMITED


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19. Cash and bank balances ₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Cash & cash equivalents

Balances with banks

Current accounts 247.20 289.22

Cash credit accounts 4.59 7.01

Deposits with original maturity upto three months 1,578.56 272.38

Cheques & drafts on hand 14.06 59.68

Balance with Reserve Bank of India - 30.80

Others (cash/stamps on hand) 0.09 0.13

1,844.50 659.22

Other bank balances

Deposits with original maturity of more than three months (a)

2,729.56 12,830.09

Earmarked balances with banks(b)

819.26 762.30

5,393.32 14,251.61

Total #


a) Includes deposits with original maturity of more than twelve months from the date of

deposit amounting to ₹0.04 crore (previous year ₹2,750.23 crore).

b) Earmarked balances with banks consist of: 100.00 100.00

Towards redemption of bonds due for repayment within one year 146.66 193.77

Fly ash utilisation reserve fund* 521.78 419.86

DDUGJY Scheme of the GOI** - 0.08

Towards public deposit repayment reserve 15.07 14.97

Unpaid dividend account balance 25.89 24.64

Amount deposited as per court orders 2.15 0.30

Unpaid interest/refund account balance -bonds 0.03 0.03

Towards unpaid interest on public deposit 0.01 0.02

Security with government authorities 7.67 8.63

Margin money with banks 819.26 762.30

* Refer Note 3(d) regarding fly ash utilisation reserve fund.

** Out of advance for DDUGJY Scheme of the GOI. Refer Note 10 d).

NTPC LIMITED


0012018-0003086 HK:20704050.1 102

20. Short-term loans and advances (Considered good, unless otherwise stated) ₹ Crore

Particulars As at

31.03.2016

As at 31.03.2015

Loans

Related parties

Unsecured - 0.01

Employees(including accrued interest)

Secured 77.34 77.29


Considered doubtful - 0.02

Loan to state government in settlement of dues from customers-


Others

Secured 5.00 5.00

Unsecured - 0.01

Less: Allowance for bad & doubtful loans - 0.02

253.41 273.64

Advances

Related parties


Employees



Contractors & suppliers

Secured 1.38 -

Unsecured 1,169.01 1,216.21


Others

Unsecured 234.13 179.57


Less: Allowance for bad & doubtful advances 3.47 2.65

1,431.96 1,411.73

Cenvat Credit / Service tax recoverable 2.16 11.72

Security deposits (unsecured) 634.36 759.61

Total # 2,321.89 2,456.70


a) Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure Corporation Ltd. (APIIC).

b) Other advances include prepaid expenses amounting to ₹84.52 crore (previous year ₹69.55 crore).

c) Security deposits (unsecured) include ₹32.60 crore (previous year ₹224.15 crore) towards sales tax deposited with sales/commercial tax authorities, ₹346.30 crore (previous year ₹306.30 crore) deposited with Courts and ₹165.51

crore (₹160.97 crore) deposited with LIC for making annuity payments to the land oustees.

NTPC LIMITED


0012018-0003086 HK:20704050.1 103

21. Other current assets

₹ Crore

Particulars As at

31.03.2016

As at

31.03.2015

Interest accrued on

Bonds 35.09 105.28

Term deposits 62.74 424.31

Others 54.21 38.71

152.04 568.30

Claims recoverable

Unsecured, considered good 2,616.34 2,130.34


Less: Allowance for doubtful claims 13.15 13.40

2,616.34 2,130.34

Unbilled revenue

Assets held for disposal 5,563.39 3,243.52

Hedging cost recoverable 2.00 2.19

Others 0.04 4.59

30.78 24.60

Total # 8,364.59 5,973.54


a) Unbilled revenue is net of credits to be passed to beneficiaries at the time of billing and includes ₹7,146.29 crore

(previous year ₹7,072.92 crore) billed to the beneficiaries after 31st March for energy sales, sale of goods and services.

b) Other current assets - Others include amount recoverable from contractors and other parties towards hire charges,

rent/electricity, etc.

NTPC LIMITED


0012018-0003086 HK:20704050.1 104

22. Revenue from operations (gross)

₹ Crore

Particulars For the year ended

31.03.2016

For the year ended

31.03.2015

Energy sales (including electricity duty) 77,700.94 79,818.95

Consultancy, project management and supervision fee 706.39 467.10

Sale of goods (including excise duty) 477.77 354.16

Regasification charges -LNG 90.94 48.74

78,976.04 80,688.95

Sale of fly ash/ash products 125.41 115.11

Less: Transferred to fly ash utilisation reserve fund 125.41 115.11

- -

Energy internally consumed 88.58 90.92

Other operating revenues

Interest from beneficiaries 235.67 332.82

Rebate on energy purchase 47.10 38.38

Provision for tariff adjustments written back 157.09 180.16

Others 40.94 25.69

480.80 577.05

Total# 79,545.42 81,356.92


a) The CERC notified the Tariff Regulations, 2014 in February 2014 (Regulations, 2014). Pending issue of provisional/final tariff orders

w.e.f. 1st April 2014 for all the stations, beneficiaries are billed in accordance with the tariff approved and applicable as on 31

st March

2014 as provided in the Regulations 2014. The energy charges in respect of the coal based stations are provisionally billed based on

the GCV ’as received’ measured after the secondary crusher. The amount provisionally billed for the year ended 31st March 2016 is

₹73,194.98 crore (previous year ₹76,952.89 crore).

b) The Company has filed a writ petition before the Hon'ble Delhi High Court contesting certain provisions of the Tariff Regulations,

2014. On directions from the Hon'ble High Court on the issue of point of sampling for measurement of GCV of coal ‘as received’,

CERC has issued an order dated 25th January 2016 (subject to final decision of the Hon'ble High Court) that samples for measurement

of coal ‘as received’ basis should be collected from loaded wagons at the generating stations. Company has filed a review pet ition in

respect of this CERC order on 1st March 2016 and the matter is still sub-judice.

Pending disposal of the review petition and issue of provisional/final tariff orders under Regulations, 2014 by the CERC, Sales have

been provisionally recognized at ₹71,546.92 crore (previous year ₹73,133.81 crore) on the basis of said Regulations, wherein energy

charges included in sales, in respect of the coal based stations have been recognized based on the GCV ‘as received’ measured after

secondary crusher which is generally within the station and at a distance less than one KM from the unloading point of the wagons.

Further, vide order dated 19th February 2016 in respect of a petition filed by a beneficiary, CERC issued directions that the grade

slippage between the loading point at the mines' end and unloading point at the generating stations is to be passed on through tariff to

the beneficiaries. In the meantime, in compliance to the CERC directions issued vide said order dated 19th February 2016, efforts are

being made to explore the mechanism for measurement of GCV of coal ‘as received’, from the loaded wagons at the generating

stations.

In the absence of suitable measurement mechanism of comparable GCV, the financial impact, if any, of the difference between the

GCV ‘as received’ measured after collection of samples from loaded wagons at the generating stations and that of GCV ‘as received’

measured after secondary crusher, cannot be quantified and considering the distance between both the measuring points the difference

will not be material.

c) Sales for the year ended 31st March 2016 include ₹100.68 crore (previous year ₹679.62 crore) pertaining to previous years

recognized based on the orders issued by the CERC/Appellate Tribunal for Electricity (APTEL).

d) Sales for the year ended 31st March 2016 include (-) ₹1,693.65 crore (previous year (-) ₹1,399.42 crore) on account of income-tax

payable to the beneficiaries as per Regulations, 2004. Sales for the year ended 31st March 2016 also include ₹28.12 crore (previous

year ₹113.96 crore) on account of deferred tax materialized which is recoverable from beneficiaries as per Regulations, 2014.

e) Energy sales include sale of energy by M/s NVVN Ltd. amounting to ₹2,240.16 crore (previous year ₹ 2,116.09 crore).

f) Electricity duty on energy sales amounting to ₹827.44 crore (previous year ₹740.41 crore) has been reduced from sales in the

Statement of Profit and Loss.

g) Revenue from operations include ₹88.58 crore (previous year ₹90.92 crore) towards energy internally consumed, valued at variable

cost of generation and the corresponding amount is included in power charges in Note 26.

h) CERC Regulations provide that where after the truing-up, the tariff recovered is less/more than the tariff approved by the

Commission, the generating Company shall recover/pay from/to the beneficiaries the under/over recovered amount along-with simple

interest. Accordingly, the interest recoverable from the beneficiaries amounting to ₹235.67 crore (previous year ₹332.82 crore) has

been accounted as 'Interest from beneficiaries'. Further, the amount payable to the beneficiaries has been accounted as 'Interest to

beneficiaries' in Note 26.

NTPC LIMITED


0012018-0003086 HK:20704050.1 105


i) One of the power stations of the Company, having three units of 95 MW each and two units of 210 MW each, was issued consent to

operate (Renewal) order by Delhi Pollution Control Committee (DPCC) on 2nd

January 2014 which was valid till 31st January 2018

with a condition that particulate level omission level shall not exceed 150 mg/ Nm3. During the year, in a volte face on 8th July 2015

DPCC issued a Show Cause Notice to the station as to why four units out of five units of plant ought not to be closed down for failing

to bring down its particulate level emission level below 50 mg/ Nm3. Further, vide order dated 31st December 2015, DPCC directed

four units out of five units of plant shall not operate. Further, vide order dated 21st March 2016, DPCC allowed operation of two units

of 210 MW subject to meeting the SPM of 50 mg/Nm3. Company’s petition to direct beneficiaries for payment of fixed charges from

31st December 2015 under change in law is pending disposal before the CERC. Pending disposal of the petition, capacity charges of

₹27.88 crore have not been recognised for the period, these units were not allowed to operate.

NTPC LIMITED


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23. Other income ₹ Crore

Particulars For the year

ended

31.03.2016

For the year

ended

31.03.2015

Interest from

Long-term investments - Government securities (8.5% tax free bonds) 105.28 245.04

Others

Loan to state government in settlement of dues from customers (8.5% tax

free)

10.17 18.31

Loan to employees 30.88 31.78

Advances to contractors 60.60 61.95

Deposits with banks / Reserve Bank of India 472.30 1,317.36

Deposits with banks out of fly ash utilisation reserve fund 9.76 21.76

Less : Transferred to fly ash utilisation reserve fund 9.76 21.76

- -

Deposits with banks - DDUGJY funds 29.40 49.48

Less : Transferred to DDUGJY Advance from customers (refer Note 10 d) 29.40 49.48

- -

Income tax refunds 7.19 48.59

Less : Refundable to beneficiaries - 36.40

7.19 12.19

Others 21.00 21.93

Dividend from

Long-term investments in

Equity instruments

2.64 2.40

Current investments in

Mutual funds

50.33 157.82

Current investments in mutual funds out of fly ash utilisation reserve fund 17.03 1.60

Less : Transferred to fly ash utilisation reserve fund 17.03 1.60

- -

Other non-operating income

Surcharge received from beneficiaries 246.57 54.20

Hire charges for equipment 2.09 4.04

Discount on forward exchange contract 5.07 -

Sale of scrap 61.04 82.98

Profit on redemption of current investments 17.55 0.65

Liquidated damages recovered 10.69 10.91

Excess depreciation written back 44.75 -

Miscellaneous income 152.43 133.60

Profit on disposal of fixed assets 1.67 4.54

Provision written back

Unservicable capital works 10.69 -

Others 11.37 6.98

1,324.31 2,166.68

Less: Transferred to expenditure during construction period (net)-Note 28 88.39 97.60


Total # 1,234.06 2,063.46


a) Interest from others includes interest on advance to APIIC for drawal of water and deposits with LIC towards annuity to the land

oustees.

b) Miscellaneous income includes income from township recoveries and receipts towards insurance claims.

c) Excess depreciation written back relates to 5 KM Scheme of the GOI (Refer Note 12 j)

d) Provisions written back - Others include provision for doubtful loans, advances, claims, debts and provision for shortage/obsolescence

in stores and shortage in fixed assets.

NTPC LIMITED


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24. Employee benefits expense ₹ Crore


ended

31.03.2016

For the year

ended

31.03.2015

Salaries and wages 3,809.55 3,758.44

Contribution to provident and other funds 552.61 526.04

Staff welfare expenses 572.03 597.76

4,934.19 4,882.24

Less: Allocated to fuel cost 225.13 215.78


Transferred to fly ash utilisation reserve fund 17.45 20.33

Transferred to CSR Expenses 51.08 49.07

Reimbursements for employees on deputation 25.52 25.76

Transferred to expenditure during construction period (net)- Note 28 739.59 692.15

Total # 3,836.43 3,840.62


a) Disclosures as per AS 15 in respect of provision made towards various employee benefits are made in Note 40.

b) Salaries and wages include special allowance paid by the Company to eligible employees serving in difficult and far flung areas w.e.f. 26th

November 2008. As per the Office Memorandum dated 26th November 2008 of DPE relating to revision of pay scales w.e.f 1

st January

2007, special allowance can be paid to such employees upto 10% of basic pay as approved by concerned administrative ministry. In line

with the office memorandum dated 22nd

June 2010 of DPE, Board of Directors has approved the special allowance (Difficult and Far Flung

Areas) to eligible employees. The approval of MOP for the same is awaited

NTPC LIMITED


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25. Finance costs ₹ Crore

Particulars For the year ended

31.03.2016

For the year ended

31.03.2015

Interest on

Bonds 1,963.17 1,182.58

Foreign currency term loans 324.95 244.61


Public deposits - 0.03

Foreign currency bonds/notes 720.67 542.72

Cash credit 68.67 48.16

Others 19.16 15.75

8,463.46 7,268.44

Other borrowing costs

Guarantee fee 27.73 31.55

Management/arrangers fee 5.81 40.48

Foreign currency bonds/notes expenses 8.25 17.28

Others 20.14 23.05

61.93 112.36

Sub-Total 8,525.39 7,380.80

Less: Transferred to expenditure during construction period (net)-Note 28 4,266.06 3,722.60


Total # 4,151.26 3,570.37


Other borrowing costs - Others include bond issue & service expenses, commitment charges, exposure premium, upfront fee and insurance

premium & legal expenses on foreign currency loans.

NTPC LIMITED


0012018-0003086 HK:20704050.1 109

26. Generation, administration & other expenses ₹ Crore


ended

31.03.2016

For the year

ended

31.03.2015

Power charges 294.67 250.05

Less: Recovered from contractors & employees 24.81 25.12

269.86 224.93

Water charges 538.03 511.13

Contribution to water conservation fund 303.72 -

Stores consumed 59.84 55.03

Rent 48.09 47.09

Less: Recoveries 10.52 9.58

37.57 37.51

Load dispatch centre charges 3.91 38.04

Repairs & maintenance

Buildings 255.67 201.63

Plant & machinery 2,364.41 2,199.97

Others 173.87 150.05

2,793.95 2,551.65

Insurance 132.05 138.79

Interest to beneficiaries 63.77 98.61

Rates and taxes 56.83 55.61

Water cess & environment protection cess 31.56 36.15

Training & recruitment expenses 34.22 27.32

Less: Receipts 1.37 1.44

32.85 25.88

Communication expenses 63.65 47.92

Travelling expenses 226.50 222.79

Tender expenses 36.05 41.55

Less: Receipt from sale of tenders 2.22 3.30

33.83 38.25

Payment to auditors 4.82 4.37

Advertisement and publicity 19.56 20.88

Security expenses 567.76 472.18

Entertainment expenses 27.13 24.19

Expenses for guest house 27.64 26.13

Less: Recoveries 2.92 3.04

24.72 23.09

Education expenses 40.07 36.39

Donation 0.05 -

Ash utilisation & marketing expenses 28.82 12.69

Directors sitting fee 0.20 0.49

Professional charges and consultancy fees 53.16 46.76

Legal expenses 49.65 40.53

EDP hire and other charges 21.57 19.38

Printing and stationery 16.62 13.60

Oil & gas exploration expenses 32.77 29.63

Hiring of Vehicles 89.84 84.04

Rebate to customers & reimbursement of LC charges on sales realisation 526.41 655.20

Net loss in foreign currency transactions & translations 31.18 (130.25)

Cost of hedging 1.70 8.95

Horticulture expenses 34.56 31.29

Hire charges of helicopter/aircraft 14.93 12.63

Hire charges of construction equipments 10.34 9.44

Transport vehicle running expenses 6.81 7.89

Demurrage charges 2.81 11.62

Goodwill on consolidation written off 0.62 -

Loss on disposal/write-off of fixed assets 146.69 147.22

Miscellaneous expenses 264.47 91.89

NTPC LIMITED


0012018-0003086 HK:20704050.1 110

₹ Crore


ended

31.03.2016

For the year

ended

31.03.2015

6,665.18 5,756.39

Less: Allocated to fuel cost 406.74 352.53

Transferred to fly ash utilisation fund 41.82 26.37


Transferred to Corporate Social Responsibility (CSR) expense 33.72 34.93

Transferred to hedging cost recoverable/(payable) from/to beneficiaries (4.56) 4.59

Transferred to expenditure during construction period(net) - Note 28 574.36 459.45

5,581.15 4,859.47

Corporate Social Responsibility (CSR) expense* 496.23 191.26

Provisions for

Tariff adjustments 146.57 150.22

Obsolescence in stores 8.90 14.19

Unserviceable capital works 4.22 41.95

Unfinished minimum work programme for oil and gas exploration 6.71 5.00

Others 35.43 20.48

201.83 231.84

Total # 6,279.21 5,282.57


a) Spares consumption included in repairs and maintenance 1,197.17 1,140.10

b) Contribution to water conservation fund represents the amount payable by the Company pursuant to the Resolution No. 11011 dated

18th May 2015 of Department of Water Resource, Government of Odisha.

c) Details in respect of payment to auditors:

As auditor

Audit fee 1.46 1.39

Tax audit fee 0.46 0.46

Limited review 0.70 0.70

In other capacity

Other services (certification fee) 0.73 0.59

Reimbursement of expenses 1.03 0.82

Reimbursement of service tax 0.44 0.41

Total 4.82 4.37

d) CERC Regulations provides that where after the truing-up, the tariff recovered is more than the tariff approved by the Commission,

the generating Company shall pay to the beneficiaries the over recovered amount along-with simple interest. Accordingly, the interest

payable to the beneficiaries amounting to ₹ 63.77 crore (previous year ₹ 98.61 crore) has been accounted and disclosed as 'Interest to

beneficiaries'.

e) Miscellaneous expenses include expenditure on books & periodicals, operating expenses of DG sets, brokerage & commission, bank

charges , furnishing expenses etc.

f) An amount of ₹ 0.62 crore was recognized as goodwill on consolidation during the year 2004-05 in accordance with the provisions of

AS-27-Financial Reporting of Interests in Joint Ventures. During the year, goodwill on consolidation has been reviewed and

considering the guidance as per AS-10-Accounting for Fixed Assets and the amount being not material, the same has been written off.

g) Provisions - Others include provision for doubtful loans, advances & claims, debts, arbitration cases and shortage in stores & fixed

assets.

h) * Refer Note 3 e).

NTPC LIMITED


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27. Prior period items (Net) ₹ Crore


ended

31.03.2016

For the year

ended

31.03.2015

Revenue

Sales 139.54 208.32

Others 2.21 (9.56)

141.75 198.76

Expenditure

Fuel 5.34 -

Employee benefits expense (2.39) 0.37

Finance costs

Interest - (132.29)

Depreciation and amortisation (67.34) 15.62

Generation, administration and other expenses

Repairs and maintenance 4.72 4.22

Others (5.56) 12.58

(65.23) (99.50)

Net expenditure/(revenue) (206.98) (298.26)

Less: Transferred to expenditure during construction period (net)-Note 28 1.70 20.51

Transferred to development of coal mines - (0.55)

Total # (208.68) (318.22)

# Includes (-) ₹ 13.46 crore (previous year ₹ 4.68 crore) share of jointly controlled entities.

NTPC LIMITED


0012018-0003086 HK:20704050.1 112

28. Expenditure during construction period (net) ₹ Crore


ended

31.03.2016

For the year

ended

31.03.2015

A. Employee benefits expense

Salaries and wages 594.96 561.19

Contribution to provident and other funds 85.44 79.67

Staff welfare expenses 59.19 51.29

Total (A) 739.59 692.15

B. Finance costs

Interest on

Bonds 1,066.58 623.58

Foreign currency term loans 160.38 102.14


Foreign currency bonds/notes 327.73 221.09


Management/arrangers/upfront fee 5.82 47.51

Foreign currency bonds/notes expenses 7.95 16.41

Others 5.83 6.64

Total (B) 4,266.06 3,722.60

C. Depreciation and amortisation 104.89 84.71

D. Generation, administration & other expenses

Power charges 183.12 147.06

Less: Recovered from contractors & employees 3.64 3.04

179.48 144.02

Water charges 10.28 4.50

Rent 6.14 8.15


Buildings 13.11 10.72

Plant and machinery 0.82 1.85

Others 50.93 42.23

64.86 54.80

Insurance 1.94 1.89

Rates and taxes 17.03 8.98

Communication expenses 9.50 6.76

Travelling expenses 52.40 48.71

Tender expenses 6.78 11.50

Payment to auditors 0.06 0.07

Advertisement and publicity 2.63 1.56

Security expenses 96.06 72.50

Entertainment expenses 6.43 5.55

Expenses for guest house 5.30 5.19

Professional charges and consultancy fee 14.82 13.52

Legal expenses 11.01 7.07

EDP hire and other charges 2.72 2.09

Printing and stationery 2.83 2.18

Miscellaneous expenses 84.09 60.41

Total (D) 574.36 459.45

E. Less: Other income

Interest from contractors 44.97 47.20

Interest others 18.43 16.34

Hire charges for equipment 1.31 1.82

Sale of scrap 0.73 1.09

Miscellaneous income 22.95 31.15

Total (E) 88.39 97.60

F. Prior period items (net) 1.70 20.51

Grand total (A+B+C+D-E+F) # 5,598.21 * 4,881.82 *

* Carried to capital work-in-progress - (Note 13)


0012018-0003086 HK:20704050.1 113

29. Previous year figures have been regrouped /rearranged wherever considered necessary.

30. Amount in the financial statements are presented in ₹crore (upto two decimals) except for per

share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are

disclosed separately.

31. The Subsidiaries and Joint Venture Companies considered in the financial statements are as

follows:

Name of the Company Proportion (%) of

Shareholding as on

31.03.2016 31.03.2015

Subsidiary Companies:

1. NTPC Electric Supply Company Ltd. 100.00 100.00

2. NTPC Vidyut Vyapar Nigam Ltd. 100.00 100.00

3. Kanti Bijlee Utpadan Nigam Ltd. 65.00 65.00

4. Bhartiya Rail Bijlee Company Ltd. 74.00 74.00

5. Patratu Vidyut Utpadan Nigam Ltd. 74.00 -

Joint Venture Companies: Proportion (%) of

Shareholding as on

31.03.2016 31.03.2015

A. Incorporated in India

1. Utility Powertech Ltd. 50.00 50.00

2. NTPC-Alstom Power Services Private Ltd.* 50.00 50.00

3. NTPC-SAIL Power Company Private Ltd. 50.00 50.00

4. NTPC-Tamilnadu Energy Company Ltd. 50.00 50.00

5. Ratnagiri Gas & Power Private Ltd.* 25.51 28.91

6. Aravali Power Company Private Ltd. 50.00 50.00

7. Meja Urja Nigam Private Ltd. 50.00 50.00

8. NTPC - BHEL Power Projects Private Ltd. * (refer note below) $ 50.00 50.00

9. BF - NTPC Energy Systems Ltd. (refer note below)$$ 49.00 49.00

10. Nabinagar Power Generating Company Private Ltd. 50.00 50.00

11. National High Power Test Laboratory Private Ltd. 21.63 21.63

12. Transformers & Electricals Kerala Ltd.* (refer note below)$$$ 44.60 44.60

13. Energy Efficiency Services Ltd. * 28.80 25.00

14. CIL NTPC Urja Private Ltd. * 50.00 50.00

15. Anushakti Vidyut Nigam Ltd.* 49.00 49.00

B. Incorporated outside India

1. Trincomalee Power Company Ltd.* (incorporated in Srilanka) 50.00 50.00

2. Bangladesh -India Friendship Power Company Private Ltd.* (incorporated in Bangladesh)

50.00 50.00

* The financial statements are un-audited and certified by the management of respective companies

and have been considered for Consolidated Financial Statements of the Group. The figures appearing

in their respective financial statements may change upon completion of their audit.

Patratu Vidyut Utpadan Nigam Limited has been incorporated on 15th October 2015 in Joint Venture

with Jharkhand Bijli Vitran Nigam Limited (JBVNL) to acquire, establish, operate, maintain, revive,

refurbish, renovate and modernize the performing existing units and further expand capacity of

Patratu Thermal Power Station, District Ramgarh, Jharkhand. NTPC holds 74% of the equity share

capital in PVUNL and balance 26% of the equity share capital is held by JBVNL.

0012018-0003086 HK:20704050.1 114

$ The Board of Directors of NTPC Limited in its meeting held on 28

th April 2016 accorded in

principle approval for withdrawal from NTPC BHEL Power Projects Private Ltd. (a Joint Venture of

the Company).

$$ The Board of Directors of NTPC Limited in its meeting held on 19

th June 2014 accorded in

principle approval for withdrawal from BF-NTPC Energy Systems Ltd. (a joint venture of the

Company).

$$$ The Board of Directors of NTPC Limited in its meeting held on 28

th April 2016 accorded in

principle approval for withdrawal from Transformers and Electricals Kerala Ltd. (a Joint Venture of

the Company).

C i) The Company along-with some public sector undertakings has entered into Production

Sharing Contracts (PSCs) with GOI for three oil exploration blocks namely KG-OSN-2009/1,

KG-OSN-2009/4 and AN- DWN-2009/13 under VIII round of New Exploration Licensing

Policy (NELP VIII) with 10% participating interest (PI) in each of the blocks.

In the case of Block AN-DWN-2009/13 & KG-OSN-2009/1, the Company along-with the

consortium partners has decided to relinquish both the blocks and Oil and Natural Gas

Commission (ONGC), the operator has submitted an application to Directorate General of

Hydrocarbons (DGH) in this regard.

Based on the un-audited statement of the accounts for the above blocks forwarded by ONGC,

the operator, the Company’s share in respect of assets and liabilities as at 31st March 2016 and

expenditure for the year are given below:

₹ Crore

Item 2015-16

(Un-audited)

2014-15

(Un-audited)

Expenses 7.05 29.67

Assets 0.03 0.62

Liabilities 3.15 2.41

Capital commitments (Unfinished MWP) 30.69 92.54

The exploration activities in block KG-OSN-2009/4 were suspended w.e.f. 11.01.2012 due to

non- clearance by the Ministry of Defence, GOI. Subsequently, DGH vide letter dated

29th April 2013 has informed ONGC that the block is cleared conditionally wherein block

area is segregated between No Go zone, High-risk zone and Permitted zone. As the permitted

area is only 38% of the total block area the consortium has submitted proposal to DGH for

downward revision of MWP of initial exploration period.

(ii) Exploration activities in the block AA-ONN-2003/2 were abandoned in January 2011 due to

unforeseen geological conditions & withdrawal of the operator. Attempts to reconstitute the

consortium to accomplish the residual exploratory activities did not yield result. In the

meanwhile, Ministry of Petroleum & Natural Gas demanded in January 2011 the cost of

unfinished minimum work programme from the consortium with NTPC’s share being USD

7.516 million. During the year, provision in this respect has been updated to ₹65.35 crore

from ₹58.64 crore along with interest. The Company has sought waiver of the claim citing

force majeure conditions at site leading to discontinuation of exploratory activities.

The Company has accounted for expenditure of ₹0.06 crore (previous year (-) ₹0.77 crore)

towards the establishment expenses of M/s Geopetrol International, the operator to complete

the winding up activities of the Block. The Company’s share in the assets and liabilities as at

31st March 2016 and expenditure for the year is as under:

0012018-0003086 HK:20704050.1 115

₹ Crore

Item 2015-16

(Un-audited)

2014-15

(Un-audited)

Expenses* 0.06 (0.77)

Assets 9.19 9.19

Liabilities 1.88 1.82

Contingent liabilities 65.85 57.43

*Expenses for the year 2014-15 are negative due to the difference observed on audit of

accounts for the year 2013-14.

D i) The company is of the view that the provisions of Accounting Standard (AS) 18 ‘Related

Party Disclosures’ and AS 27- ‘Financial Reporting of Interests in Joint Ventures’ are not

applicable to the investment made in PTC India Ltd. and the same has been accounted for as

per the provisions of AS-13- 'Accounting for Investments' in the consolidated financial

statements.

ii) During the year, the company has reviewed the investments made in NTPC SCCL Global

Ventures Pvt. Ltd., National Power Exchange Ltd., Pan Asian Renewable Pvt. Ltd. and

International Coal Ventures Pvt. Ltd., Joint Ventures of the Company, considering the

provisions of AS 27- ‘Financial Reporting of Interests in Joint Ventures’. The company is of

the view that the provisions of AS-27 are not applicable to the investments made in these JV

companies and hence accounted for as per AS-13-'Accounting for Investments' in the

consolidated financial statements. (Refer note-14)

iii) As per the Joint Venture Agreement (JVA) dated 24th July, 2008, KINESCO Power &

Utilities Pvt.Ltd. (KINESCO) was incorporated as a 50:50 JV of KINFRA, a statutory body

of Government of Kerala, & NTPC Electric Supply Company Ltd (NESCL), a wholly owned

subsidiary of NTPC. KINFRA and NESCL collectively held the entire paid-up capital of

₹10,00,000/- in the ratio of 50:50 in accordance with the terms of the JVA. The financial

statements of KINESCO were hither to included in the consolidated financial statements

considering the provisions of AS-21 and AS-27.

During the year, NESCL has withdrawn from the JV and accordingly, KINESCO has not

been considered for consolidation in these financial statements.

32. a) The Company has a system of obtaining periodic confirmation of balances from banks and

other parties. There are no unconfirmed balances in respect of bank accounts and borrowings

from banks & financial institutions. With regard to receivables for sale of energy, the

Company sends demand intimations to the beneficiaries with details of amount paid and

balance outstanding which can be said to be automatically confirmed on receipt of subsequent

payment from such beneficiaries. In addition, reconciliation with beneficiaries and other

customers is generally done on quarterly basis. So far as trade/other payables and loans and

advances are concerned, the balance confirmation letters with the negative assertion as

referred in the Standard on Auditing (SA) 505 (Revised) ‘External Confirmations’, were sent

to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments,

if any will be accounted for on confirmation/reconciliation of the same, which in the opinion

of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than fixed assets and non-current

investments, on realisation in the ordinary course of business, will not be less than the value

at which these are stated in the Balance Sheet.

0012018-0003086 HK:20704050.1 116

33. The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid

under protest as the matters are subjudice at various courts. In case the Company gets

refund/demand from fuel suppliers/tax authorities on settlement of these cases, the same will be

passed on to respective beneficiaries.

34. The environmental clearance (“clearance”) granted by the Ministry of Environment and Forest,

Government of India (MoEF) for one of the Company's ongoing project was challenged before

the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia, directing that the

order of clearance be remanded to the MoEF to pass an order granting or declining clearance to

the project proponent afresh in accordance with the law and the judgment of the NGT and for

referring the matter to the Expert Appraisal Committee ("Committee") for its re-scrutiny, which

shall complete the process within six months from the date of NGT order. NGT also directed that

the environmental clearance shall be kept in abeyance and the Company shall maintain status quo

in relation to the project during the period of review by the Committee or till fresh order is passed

by the MoEF, whichever is earlier. The Company filed an appeal challenging the NGT order

before the Hon’ble Supreme Court of India which stayed the order of the NGT and the matter is

sub-judice. Aggregate cost incurred on the project upto 31st March 2016 is ₹11,774.77 crore

(previous year ₹8,732.44 crore). Management is confident that the approval for proceeding with

the project shall be granted, hence no provision is considered necessary.

35. The Company is executing a hydro power project in the state of Uttrakhand, where all the

clearances were accorded. A case was filed in Hon’ble Supreme Court of India after the natural

disaster in Uttrakhand in June 2013 to review whether the various existing and ongoing hydro

projects have contributed to environmental degradation. Hon’ble Supreme Court of India on 7th

May 2014, ordered that no further construction shall be undertaken in the projects under

consideration until further orders, which included the said hydro project of the Company. In the

proceedings, Hon’ble Supreme Court is examining to allow few projects which have all

clearances which includes the project of the Company where the work has been stopped.

Aggregate cost incurred on the project up to 31st March 2016 is ₹157.31 crore (previous year

₹154.57 crore). Management is confident that the approval for proceeding with the project shall

be granted, hence no provision is considered necessary.

36. M/s Ratangiri Gas & Power Private Ltd (RGPPL), a joint venture of the Company, has postponed

recognition of revenue on conservative basis amounting to ₹1,902.62 crore for the year 2013-14

and 2014-15 in view of dispute raised by Maharashtra State Electricity Distribution Company

Limited (MSEDCL), the beneficiary, though these disputes have already been decided in favour

of the RGPPL by the CERC and the APTEL. During the year, the beneficiary, apart from failure

to make payment to RGPPL, had approached Hon’ble Supreme Court of India against the order of

the APTEL, for stay. The stay application was disposed off by the Hon’ble Court in the absence

of any coercive action against the appellant. Further, the GOI has advised to keep the recovery of

the outstanding amount claimed by RGPPL in abeyance. As a part of efforts for revival, RGPPL

has started operation under Power System Development Support Scheme of the GOI and

supplying around 500 MW power to the Indian Railways. In addition, LNG terminal of RGPPL

has received more than double the quantity of cargos during the year. Further, RGPPL has

obtained in-principle approval from its Board of Directors for demerger of its power generation

business and LNG business into separate companies effective from 1st January 2016. The

management of RGPPL is hopeful that restructuring/concessions from the lenders in the

borrowings and other areas after the aforesaid demerger shall result in further improvement in its

financial position.

37. Disclosure as per Accounting Standard - 1 on 'Disclosure of Accounting Policies'

During the year, following changes in accounting policies have been made:

0012018-0003086 HK:20704050.1 117

a) For more appropriate presentation of the financial statements, the accounting policy relating

to capital expenditure on assets not owned by Company has been discontinued with

retrospective effect. Based on the guidance available in AS 10 notified by MCA on 30th

March 2016 such expenditure on assets not owned by the Company have been capitalised

retrospectively as part of the cost of project. As a result, cost amortized till 31st March

2015 amounting to ₹107.45 crore as per earlier policy has been written back as prior

period adjustments and depreciation has been recalculated retrospectively following the rates

and methodology notified by the CERC Tariff Regulations. Due to this change, prior period

depreciation (net) till 31st March 2015 is (-) ₹84.20 crore, depreciation for the year is lower

by ₹18.26 crore, profit for the year and fixed assets as at 31st March 2016 are higher by

₹102.46 crore. Refer Note 12 i).

b) Consequent to adoption of the guidance note on Rate Regulated Activities issued by the

ICAI, Policy no. G has been inserted. Detailed disclosure in this regard has been made in

Note 49.

c) Considering the adoption of new policy no. G, policy no. N.4 has been modified by

replacing the word 'Deferred foreign currency fluctuation asset/liability' with 'Regulatory

asset/liability'.

d) Policy no. O.2.4 related to charging off of the items of prepaid & prior period

expenses/income to the natural head of accounts has been modified by increasing the

threshold limit from ₹1 lakh to ₹5 lakh. Consequently, Short term loans and advances

(Note 20) are lower by ₹0.88 crore, Generation, Administration and other expenses (Note

26) are higher by ₹4.27 crore, Prior period items (Net) (Note 27) is lower by₹3.48 crore and

profit for the year is lower by₹0.88 crore.

e) Policy N. 1 & O.1.9 related to income recognition & amortization of machinery spares has

been modified for better disclosures.

There is no impact on the accounts due to the changes at sl.no. (c) (d), & (e) above.

38. Disclosure as per Accounting Standard - 5 on 'Net Profit or Loss for the Period' - Change

in accounting estimate

The Company has reviewed and revised the estimated useful life of certain assets as mentioned in

accounting policy no. O 1.3, based on technical evaluation. These assets were earlier depreciated

as per CERC Regulations as mentioned in accounting policy no. O 1.1. Consequently, with

prospectively application, profit for the year ended 31st March 2016 is lower by ₹27.63 crore,

fixed assets as at 31st March 2016 are lower by ₹29.23 crore and capital work-in-progress as at

31st March 2016 are higher by ₹1.60 crore. (Refer Note 1, Policy no. O.1.3).

39. Disclosure as per Accounting Standard - 11 on 'Effects of Changes in Foreign Exchange

Rates'

The effect of foreign exchange fluctuation during the year is as under:

i) The amount of exchange differences (net) debited to the Statement of Profit & Loss is ₹31.18 crore (previous year credit of ₹130.25 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of Fixed Assets is ₹1,993.92 crore (previous year ₹348.48 crore).

0012018-0003086 HK:20704050.1 118

40. Disclosure as per Accounting Standard - 15 on 'Employee Benefits'

General description of various employee benefit schemes are as under:

1. Defined Contribution Plans

A. Provident Fund

The Company pays fixed contribution to provident fund at predetermined rates to a

separate trust, which invests the funds in permitted securities. Contribution to family

pension scheme is paid to the appropriate authorities. The contribution of ₹248.91 crore

(previous year ₹238.96 crore) to the funds for the year is recognised as expense and is

charged to the Statement of Profit and Loss. The obligation of the Company is to make

such fixed contribution and to ensure a minimum rate of return to the members as

specified by GOI. As per report of the actuary, overall interest earnings and cumulative

surplus is more than the statutory interest payment requirement. Hence, no further

provision is considered necessary. The details of fair value of plan assets and

obligitions are as under:

₹ Crore

Particulars 31.03.2016 31.03.2015

Obligations at the end of the year 6,832.89 6,143.59

Fair value of plan assets at the end of the year 6,892.37 6,197.85

B. Pension

The defined contribution pension scheme of the Company for its employees which is

effective from 1st January 2007, is administered through a separate trust. The

obligation of the Company is to contribute to the trust to the extent of amount not

exceeding 30% of basic pay and dearness allowance less employer's contribution

towards provident fund, gratuity, post retirement medical facility (PRMF) or any other

retirement benefits. The contribution of ₹224.62 crore (previous year ₹225.39 crore) to

the funds for the year is recognized as an expense and charged to the Statement of Profit

and Loss.

2. Defined Benefit Plans

A. Gratuity & Pension

(a) The Company has a defined benefit gratuity plan. Every employee who has rendered

continuous service of five years or more is entitled to get gratuity at 15 days salary

(15/26 X last drawn basic salary plus dearness allowance) for each completed year of

service subject to a maximum of₹0.10 crore on superannuation, resignation,

termination, disablement or on death.

(b) The Company has pension schemes at two of its stations in respect of employees

taken over from erstwhile state government power utilities.

The schemes stated at (a) and one of the power stations at (b) above are funded by the

Company and are managed by separate trusts. The liability for gratuity and the pension

schemes as above is recognised on the basis of actuarial valuation. The Company’s

best estimate of the contribution towards gratuity/pension for the next financial year is

₹21.61 crore.

0012018-0003086 HK:20704050.1 119

B. Post-Retirement Medical Facility (PRMF)

The Company has Post-Retirement Medical Facility (PRMF), under which the retired

employees and their spouses are provided medical facilities in the Company

hospitals/empanelled hospitals. They can also avail treatment as out-patient subject to a

ceiling fixed by the Company. The liability for the same is recognised annually on the

basis of actuarial valuation. During the year, a trust has been constituted for its

employees superannuated on or after 1st January 2007, for the sole purpose of

providing post retirement medical benefit to them. The liability as at 31st March 2016

ascertained as per actuarial valuation amounting to ₹890.00 crore has been funded to the

trust by actual payment.

C. Terminal Benefits

Terminal benefits include baggage allowance for settlement at home town for employees

& dependents and farewell gift to the superannuating employees. Further, the Company

also provides for pension in respect of employees taken over from ertwhile State

Government Power Utility at another station referred at 2.A.(b) above. Liability for the

same is recognised based on actuarial valuation.

D. Leave

The Company provides for earned leave benefit (including compensated absences) and

half-pay leave to the employees of the Company which accrue annually at 30 days and

20 days respectively. Earned leave is en-cashable while in service. Half-pay leaves

(HPL) are en-cashable only on separation beyond the age of 50 years up to the

maximum of 300 days. However, total number of leave that can be encashed on

superannuation shall be restricted to 300 days and no commutation of half-pay leave

shall be permissible. The liability for the same is recognised on the basis of actuarial

valuation.

The above mentioned schemes (C and D) are unfunded and are recognised on the basis of

actuarial valuation.

The summarised position of various defined benefits recognised in the Statement of

Profit and Loss, Balance Sheet is as under:

(Figures given in { } are for previous year and figures in ( ) represent negative figures)

i) Expenses recognised in Statement of Profit & Loss

₹ Crore

Gratuity &

Pension

PRMF Leave Terminal

Benefits

Current Service Cost 72.27 22.12 59.67 7.31

{70.90} {17.98} {57.26} {7.34}

Past Service Cost - - - -

{-} {-} {-} {-}

Interest cost on benefit obligation 124.37 58.44 81.46 29.09

{130.20} {47.80} {80.10} {26.60}

Expected return on plan assets (116.59) - - -

{(111.23)} {-} {-} {-}

Net actuarial (gain)/ loss recognised in the year (64.64) 110.41 173.48 3.86

{(88.76)} {125.59} {150.41} {32.82}

Less: Expenses transferred to capital work-in-

progress

(0.84) 7.06 12.05 -

{(1.59)} {6.46} {14.84} {-}

Expenses recognised in the Statement of Profit &

Loss

16.25 183.91 302.56 40.26

{2.70} {184.91} {272.93} {66.76}

Actual return on plan assets 128.60 - - -

{134.56} {-} {-} {-}

0012018-0003086 HK:20704050.1 120

ii) The amount recognised in the Balance Sheet

₹ Crore

Gratuity &

Pension

PRMF Leave Terminal

Benefits

Present value of obligation as at 31.03.2016 1,578.88

{1,554.28}

893.35

{730.48}

1,096.25

{1,018.04}

385.39

{363.66}

Fair value of plan assets as at 31.03.2016 1,475.48

{1,458.96}

890.00

{-}

-

{-}

-

{-}

Net liability recognised in the Balance Sheet 103.40

{95.32}

3.35

{730.48}

1,096.25

{1,018.04}

385.39

{363.66}

iii) Changes in the present value of the defined benefit obligations:

₹ Crore

Gratuity &

Pension

PRMF Leave Terminal

Benefits

Present value of obligation as at 01.04.2015 1,554.28

{1,531.56}

730.48

{562.04}

1,018.04

{942.21}

363.66

{312.98}

Interest Cost 124.37

{130.33}

58.44

{47.80}

81.46

{80.20}

29.09

{26.60}

Current Service Cost 72.27

{70.90}

22.12

{17.98}

59.67

{57.26}

7.31

{7.34}

Benefits paid (119.43)

{(113.87)}

(28.10)

{(22.93)}

(236.40)

{(212.05)}

(18.53)

{(16.08)}

Net actuarial (gain) / loss on obligation (52.61)

{(64.64)}

110.41

{125.59}

173.48

{150.42}

3.86

{32.82}

Present value of the defined benefit obligation as

at 31.03.2016

1,578.88

{1,554.28}

893.35

{730.48}

1,096.25

{1,018.04}

385.39

{363.66}

iv) Changes in the fair value of plan assets:

₹ Crore

Gratuity &

Pension

PRMF Leave Terminal

Benefits

Fair value of plan assets as at 01.04.2015 1458.96

{1,391.67}

-

{-}

-

{-}

-

{-}

Expected return on plan assets 116.59

{111.37}

-

{-}

-

{-}

-

{-}

Contributions by employer 0.22

{39.93}

890.00

{-}

-

{-}

-

{-}

Benefit paid (112.32)

{(108.13)}

-

{-}

-

{-}

-

{-}

Actuarial gain / (loss) 12.03

{24.12}

-

{-}

-

{-}

-

{-}

Fair value of plan assets as at 31.03.2016 1,475.48

{1,458.96}

890.00

{-}

-

{-}

-

{-}

v) other disclosures:

₹ Crore

Gratuity & pension 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Present value of obligation as at 1,578.88 1,554.28 1,531.33 1,444.88 1,298.47

Fair value of plan assets as at 1,475.48 1,458.96 1,391.68 1,263.86 1,169.93

Surplus/(Deficit) (103.40) (95.32) (139.65) (181.02) (128.54)

Experience adjustment on plan liabilities

(loss)/gain

51.56 61.86 3.19 (50.07) (19.58)

Experience adjustment on plan assets (loss)/gain 12.03 24.24 14.52 9.44 12.39

0012018-0003086 HK:20704050.1 121

PRMF 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Present value of obligation as at 893.35 730.48 562.02 452.93 371.11

Fair value of plan assets as at 890.00 - - - -

Surplus/(Deficit) (3.35) (730.48) (562.02) (452.93) (371.11)


(loss)/gain

(110.41) (123.79) (73.98) (19.60) (30.73)

Experience adjustment on plan assets

(loss)/gain

- - - - -

Leave 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Present value of obligation as at 1096.25 1,018.04 941.73 861.46 745.82


(loss)/gain

(173.27) (151.26) (181.31) (179.16) (90.71)

Terminal Benefits 31.03.2016 31.03.2015 31.03.2014 31.03.2013 31.03.2012

Present value of obligation as at 385.39 363.66 312.97 272.38 229.82


(loss)/gain

(3.85) (34.85) (26.37) (25.45) (24.43)

vi) The effect of one percentage point increase/decrease in the medical cost of PRMF

will be as under:

₹ Crore

Particulars Increase by Decrease by

Service and Interest cost 13.53 11.28

Present value of obligation 126.47 113.18

E. Details of the Plan Assets

The details of the plan assets at cost are:

₹ Crore

31.03.2016 31.03.2015

i) State government securities - 0.30

ii) Central government securities 16.77 92.90

iii) Corporate bonds/debentures including fixed deposits with banks 122.50 286.06

iv) Money market instruments - 2.50

v) Investment with insurance companies 1,354.36 1,051.92

Total (excluding interest accrued) 1,493.63 1,433.68

Plan assets of ₹889.00 crore towards the post retirement medical benefit trust has been

invested after 31st March 2016.

The amount included in the value of plan assets in respect of the reporting enterprise's

own financial instruments is Nil (previous year Nil).

F. Actual return on plan assets ₹128.60 crore (previous year ₹134.56 crore).

G. Other Employee Benefits

Provision for Long Service Award and Family Economic Rehabilitation Scheme

amounting to ₹5.54 crore (previous year ₹28.76 crore) for the year have been made on

the basis of actuarial valuation at the year end and debited to the Statement of Profit &

Loss.

H. Actuarial Assumptions

Principal assumptions used for actuarial valuation for the year ended are:

0012018-0003086 HK:20704050.1 122

₹ Crore

31.03.2016 31.03.2015

i) Method used Projected Unit Credit Method

ii) Discount rate 7.90%-8.08% 8.00%

iii) Expected rate of return on assets:

- Gratuity 8.00%-9.00% 8.00%-8.75%

- Pension 7.50% 7.50%

iv) Annual increase in costs 6.00% 6.00%

v) Future salary increase 6.00%-8.05% 6.00%

The estimates of future salary increases considered in actuarial valuation, take account of

inflation, seniority, promotion and other relevant factors, such as supply and demand in

the employment market. Further, the expected return on plan assets is determined

considering several applicable factors mainly the composition of plan assets held,

assessed risk of asset management and historical returns from plan assets.

41. Disclosure as per Accounting Standard - 16 on 'Borrowing Costs'

Borrowing costs capitalised during the year are₹4,374.13 crore (previous year ₹3,810.43 crore).

42. Disclosure as per Accounting Standard - 17 on 'Segment Reporting'

Segment information:

a) Business Segments

The Group's principal business is generation and sale of bulk power to State Power Utilities.

Other business includes providing consultancy, project management and supervision, re-

gassification,oil and gas exploration and coal mining.

b) Segment Revenue and Expense

Revenue directly attributable to the segments is considered as Segment Revenue.

Expenses directly attributable to the segments and common expenses allocated on a

reasonable basis are considered as Segment Expenses.

c) Segment Assets and Liabilities

Segment assets include all operating assets in respective segments comprising of net fixed

assets and current assets, loans and advances. Capital work-in-progress and capital advances

are included in unallocated corporate and other assets. Segment liabilities include operating

liabilities and provisions.

₹ Crore

Business Segments

Total Generation Others

Current

Year

Previous

Year

Current

Year

Previous

Year

Current

Year

Previous

Year

Segment revenue

Sale of energy/consultancy, project

management and supervision fees*

74,697.07 76,969.57 3,551.73 3,044.17 78,248.80 80,013.74

Other income 991.69 923.18 35.31 36.75 1,027.00 959.93

Unallocated corporate interest and

other income

663.76 1,701.73

Total 75,688.76 77,892.75 3,587.04 3,080.92 79,939.56 82,675.40

0012018-0003086 HK:20704050.1 123

₹ Crore

Business Segments

Total Generation Others

Current

Year

Previous

Year

Current

Year

Previous

Year

Current

Year

Previous

Year

Segment result # 14,636.35 13,366.13 79.40 37.77 14,715.75 13,403.90

Unallocated corporate interest and

other income

663.76 1,701.73

Unallocated corporate expenses,

interest and finance charges

5,275.97 4,649.42


Income tax (net) (58.89) 463.84


Other information

Segment assets 1,32,725.14 1,17,139.90 5,920.97 5,222.98 1,38,646.11 1,22,362.88

Unallocated corporate and other

assets

1,01,802.94 97,261.92

Total assets 1,32,725.14 1,17,139.90 5,920.97 5,222.98 2,40,449.05 2,19,624.80

Segment liabilities 17,069.38 16,373.77 3,371.56 2,827.80 20,440.94 19,201.57

Unallocated corporate and other

liabilities

1,30,811.60 1,18,329.25

Total liabilities 17,069.38 16,373.77 3,371.56 2,827.80 1,51,252.54 1,37,530.82

Depreciation (including prior

period) 5,999.79 5,536.29 22.27 5.56 6,022.06 5,541.85

Non-cash expenses other than

depreciation 185.79 224.02 14.97 6.28 200.76 230.30

Capital expenditure 31,191.47 24,732.46 1,320.85 1,058.87 32,512.32 25,791.33

* Includes (-) ₹1,592.97 crore (previous year (-) ₹719.80 crore) for sales related to earlier years.

# Generation segment result would have been ₹16,229.32 crore (previous year ₹14,085.93 crore) without including the

sales related to earlier years.

d) The operations of the Group are mainly carried out within the country and therefore,

geographical segments are not applicable.

43. Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures'

a) Related parties:

i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy

Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd.,

Trincomalee Power Company Ltd. and Bangladesh -India Friendship Power Company

Private Ltd.

ii) Key Management Personnel (KMP): Shri Gurdeep Singh Chairman and Managing Director

1

Shri Arup Roy Choudhury Chairman and Managing Director2

Shri I.J. Kapoor Director (Commercial)3

Shri A.K.Jha Director (Technical)4

Shri U.P.Pani Director (Human Resources)5

Shri S.C.Pandey Director (Projects)

Shri K.Biswal Director (Finance) Shri K.K.Sharma Director (Operations)

Shri A.K.Rastogi Company Secretary

0012018-0003086 HK:20704050.1 124

1. W.e.f. 4th February 2016 2. Upto 31

st August 2015 3. Upto 20th August 2015

4. Acted as Chairman and Managing Director for the period from 1st September 2015 to 3

rd February

2016

5. Holding additional charge of Director (Commercial) w.e.f 2nd September 2015

iii) Others:

NTPC Education and Research Society

b) Transactions with the related parties at sl. a) iii) above are as follows:

₹ Crore

Particulars Current year Previous year

i) Transactions during the year for works/services received by the company 4.28 - ii) Amount recoverable for contracts for works/services received: 0.60 -

c) Remuneration to key management personnel for the year is ₹12.56 crore (previous year

₹11.20 crore) and amount of dues outstanding to the Company as at 31st March 2016 are

₹0.15 crore (previous year ₹0.07 crore). The details of managerial remuneration to

KMP are as under:

₹ Crore Managerial remuneration to Key management personnel Current Year Previous Year A. NTPC Shri Gurdeep Singh 0.05 - Shri A.K.Jha 0.51 0.48 Shri U.P.Pani 0.47 0.43 Shri S.C.Pandey 0.49 0.37 Shri K.Biswal 0.42 0.35 Shri K.K.Sharma 0.47 0.16 Shri Arup Roy Choudhury 0.71 0.50 Shri I.J. Kapoor 0.53 0.56 Shri N.N.Misra - 0.64 Shri A.K. Rastogi 0.47 0.44 Total 4.12 3.93 B. Subsidiaries and Joint Venture Companies Shri N.K Sharma 0.55 0.38 Shri R K Sinha 0.41 0.41 Shri A K Singh 0.41 0.40 Shri Rajkumar 0.44 Shri D Nandy 0.37 Shri RKS Gahlowt 0.16 0.16 Shri Ramesh Taterao (w.e.f.19.07.2014) 0.55 0.31 Shri Rajeev Sharma (Resigned w.e.f.18.07.2014) - 0.12 Shri P.K.Sinha (w.e.f 31.01.2014) 0.41 0.44 Shri Saket Gupta (w.e.f. 29.07.2015) 0.01 - Shri M Sarkar 0.38 0.31 Shri S V Shahi 0.41 0.33 Ms. Umang Vats 0.17 0.16 Shri Thomas Joseph 0.39 0.40 Shri Vipin Kumar 0.33 - Shri A K Garg 0.02 0.39 Shri Pankaj Patel 0.35 - Shri A K Jana 0.03 0.35 Shri V K Padha (01.04.2015 to 22.07.2015)

0012018-0003086 HK:20704050.1 125

₹ Crore Managerial remuneration to Key management personnel Current Year Previous Year Shri S.K Sinha (w.e.f. 23.07.2015) 0.41 0.39 Shri Prabhat Kumar (w.e.f.11.01.2016) 0.06 Shri Manoj Saxena (for the period from 24.11.2015 to 10.01.2016) 0.25 Sh J.N.Singh (Resigned w.e.f.23.11.2015) 0.23 0.34 Shri Atul Saraya Shri Anant N Goyal

Shri A B Ravichandran

Shri S Kannan

Ms. Ritu Arora 1.38 1.36 Shri Jagmohan Bijlawan - 0.11 Shri Vijay K. Neginal 0.05 0.05 Shri Raj Kumar Mishra 0.05 0.02 Shri Deepak Badekar 0.03 - Shri R Ranjan 0.18 0.41 Shri Deepak Trehan (w.e.f. 02.12.2014) Shri Prasad B (w.e.f. 09.01.2016) 0.41 0.43 Total 8.44 7.27

44. Disclosure as per Accounting Standard - 19 on 'Leases'

a) Finance leases

i) The Company has taken on lease certain vehicles and has the option to purchase the

vehicles as per terms of the lease agreements, details of which are as under:

₹ Crore

31.03.2016 31.03.2015

a) Obligations towards minimum lease payments

- Not later than one year 0.71 -

- Later than one year and not later than five years 1.71 -

- Later than five years - -

Total 2.42 -

b) Present value of (a) above

- Not later than one year 0.48 -

- Later than one year and not later than five years 1.46 -

- Later than five years - -

Total 1.94 -

c) Finance charges 0.48 -

ii) The Company has entered into an agreement for coal movement through inland

waterways transport. As per the agreement, the operator shall design, build, operate

and maintain the unloading infrastructure and material handling system ("facility"),

and transfer the same to the Company after expiry of 7 years at ₹1/-. The facility has

been completed and is under operation. Fair value of the entire facility is ₹90 crore.

0012018-0003086 HK:20704050.1 126

₹ Crore

31.03.2016 31.03.2015 a) Obligations towards minimum lease payments - Not later than one year 20.60 15.45 - Later than one year and not later than five years 82.41 82.41 - Later than five years 24.04 46.36

Total 127.05 144.22

b) Present value of (a) above

- Not later than one year 10.83 7.83

- Later than one year and not later than five years 57.88 52.31

- Later than five years 22.42 39.51

Total 91.13 99.65

c) Finance charges 35.92 44.57

d) Contingent rent for the year 9.52 5.16

b) Operating leases

The Group's other significant leasing arrangements are in respect of operating leases

of premises for residential use of employees, offices and guest houses/transit camps for

a period of one to two years. These leasing arrangements are usually renewable on

mutually agreed terms but are not non-cancellable. Note 24 - Employee benefits expense

includes ₹38.46 crore (previous year ₹47.05 crore) towards lease payments (net of

recoveries) in respect of premises for residential use of employees. Lease payments in

respect of premises for offices and guest house/transit camps are included under ‘Rent’

in Note 26 – ‘Generation, administration and other expenses’. Further, the Company has

taken a helicopter on wet lease basis for a period of eleven years and the amount of lease

charges is included in ‘Hire charges of helicopter/aircraft’ in Note 26.

45. Disclosure as per Accounting Standard - 20 on 'Earnings Per Share'

The elements considered for calculation of Earning per share (Basic and Diluted) are as under:

Current Year Previous Year Group profit after tax used as numerator - ₹ crore 10,182.81 9,986.34 Weighted average number of equity shares used as denominator 8,24,54,64,400 8,24,54,64,400 Earning per share (Basic and Diluted) - ₹ 12.35 12.11 Nominal value per share - ₹ 10/- 10/-

46. Disclosure as per Accounting Standard - 26 on 'Intangible Assets'

Research expenditure charged to revenue during the year is₹108.00 crore (previous year ₹97.56 crore).

47. Disclosure as per Accounting Standard - 28 on 'Impairment of Assets'

As required by Accounting Standard (AS) 28 ‘Impairment of Assets’, an assessment of

impairment of assets was carried out and based on such assessment, the Company has

accounted an impairment loss of ₹4.48 crore (previous year Nil) which has been recognised

in ‘Depreciation/Amortisation and Impairment expense’ in the Statement of Profit and Loss in

respect of assets falling under ‘Generation Segment’. Also refer Note 12(l) in this regard.

Further, the amount of impairment loss is not material considering the size of the company,

hence other disclosures required by the AS 28 are not applicable to the Company.

0012018-0003086 HK:20704050.1 127

48. Disclosure as per Accounting Standard - 29 on 'Provisions, Contingent Liabilities and

Contingent Assets' ₹ Crore

Particulars Balance as

at

01.04.2015

Additions

during the

year

Payments

during the

year

Reversal /

adjustments

during the

year

Balance as

at

31.03.2016

Long Term Provisions (Note-8)

Contractual & other obligations 12.13 3.68 0.38 (5.97) 21.40

Short Term Provisions (Note-11)

Provision for obligations incidental to land

acquisition

3,244.70 968.48 278.05 48.46 3,886.67

Provision for tariff adjustment 1,263.75 150.38 - 174.16 1,239.97

Others 533.66 280.93 48.99 154.61 610.99

Total 5,054.24 1,403.47 327.42 371.26 5,759.03

49. Guidance Note (GN) on Rate Regulated Activities issued by the ICAI is applicable

mandatorily from the financial year 2015- 16.

The Company is mainly engaged in generation and sale of electricity. The price to be charged

by the Company for electricity sold to its customers is determined by the CERC through tariff

regulations. The tariff is based on allowable costs like interest, depreciation, operation &

maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as

cost-ofservice regulations which provide the Company to recover its costs of providing the

goods or services plus a fair return. The Company has applied the GN in preparation of

financial statements for the year, considering the provisions of Tariff Regulations issued

by the CERC.

As per the CERC Tariff Regulations, any gain or loss on account of exchange risk variation

during the construction period shall form part of the capital cost from declaration of

Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during

the past period in tariff orders for various stations has allowed exchange differences

incurred during the construction period in the capital cost. Accordingly, exchange difference

arising during the construction period is within the scope of the GN.

In view of the above, exchange differences arising from settlement/translation of monetary

item denominated in foreign currency (other than long term) to the extent recoverable from

or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are

recognized as ‘Regulatory asset/liability’ by credit/debit to ‘Regulatory income/expense’

during construction period and adjusted from the year in which the same becomes recoverable

from or payable to the beneficiaries.

The regulated assets/liability recognized in the books to be recovered from or payable to

beneficiaries in future periods are as follows:

₹ Crore

Particulars Regulatory Liability

A. Opening balance as on 01.04.2015* 308.55

B. Addition during the year (7.38)

C. Amount collected/refunded during the year 3.61

D. Regulatory income/(expense) recognized in the Statement of Profit & Loss (B-

C)

10.99

E. Closing balance as on 31.03.2016 (A-D) 297.56

0012018-0003086 HK:20704050.1 128

*Such exchange differences were hitherto accounted as ‘Deferred foreign currency fluctuation asset/liability’ pursuant to an opinion pronounced by the Expert Advisory Committee of the ICAI. The related figures for the previous year have also been regrouped to make them comparable.

50. Disclosure as per Schedule III to the Companies Act, 2013

Name of the entity Net assets i.e. total assets

minus total liabilities as at

31.03.2016

Share in profit or loss for

the year 2015-16

As % of

consolidated

net assets

Amount

(₹ crore)

As % of

consolidated

profit or loss

Amount

(₹ crore)

1 2 3 4 5

A. Parent

NTPC Ltd. 89.70% 80,809.76 99.56% 10,117.42

B. Subsidiaries

Indian

1. NTPC Electricity Supply Company Ltd. 0.05% 42.65 0.01% 0.91 2. NTPC Vidyut Vyapar Nigam Ltd. 0.26% 232.14 0.50% 50.32

3. Kanti Bijlee Utpadan Nigam Ltd 0.99% 891.37 -0.37% (37.83)

4. Bhartiya Rail Bijlee Company Ltd. 1.32% 1,187.64 0.00% (0.02)

5.Patratu Vidyut Utpadan Nigam Ltd. 0.00% 1.07 0.00% (0.01)

Minority interests in all subsidiaries 0.99% 892.79 -0.20% (20.38)

Name of the entity Net assets i.e. total assets

minus total liabilities as at

31.03.2016

Share in profit or loss for

the year 2015-16

As % of

consolidated

net assets

Amount

(₹ crore)

As % of

consolidated

profit or loss

Amount

(₹ crore)

C. Joint Ventures

Indian

1. Utility Powertech Ltd. 0.03% 31.24 0.10% 10.10

2. NTPC Alstom Power Services Private Ltd. 0.01% 12.53 0.01% 1.18

3. NTPC SAIL Power Company Private Ltd. 0.97% 872.38 1.21% 123.42

4. NTPC Tamilnadu Energy Company Ltd. 1.27% 1,145.84 -1.35% (137.42)

5. Ratnagiri Gas & Power Private Ltd. 0.07% 61.82 -2.72% (276.23)

6. Aravali Power Company Private Ltd. 2.20% 1,981.74 3.45% 350.54

7. Meja Urja Nigam Private Ltd. 0.93% 840.05 0.00% (0.03)

8. NTPC- BHEL Power Projects Private Ltd. 0.05% 43.39 -0.23% (22.93)

9. BF-NTPC Energy Systems Ltd. 0.00% 2.26 0.00% (0.20) 10. Nabinagar Power Generating Company

Private Ltd.

0.86% 775.66 0.00% -

11. National High Power Test Laboratory

Private Ltd.

0.03% 23.40 0.00% -

12. Transformers & Electricals Kerala Ltd. 0.04% 38.55 -0.04% (4.40)

13. Energy Efficiency Services Ltd. 0.13% 118.10 0.08% 7.70

14. CIL NTPC Urja Private Ltd. 0.00% 0.03 0.00% -

15. Anushakti Vidyut Nigam Ltd. 0.00% 0.01 0.00% -

Foreign

1. Trincomalee Power Company Ltd.

(incorporated in Srilanka)

0.01% 10.81 0.00% 0.29

2. Bangladesh India Power Company Private Ltd.

(incorporated in Bangladesh)

0.08% 74.07 0.00% -

Total 90,089.30 10,162.43

0012018-0003086 HK:20704050.1 129

51. Foreign currency exposure

a) Hedged by a derivative instrument

The derivative contracts outstanding as at the year end are as under:

Particulars Currencies Amount in Foreign

Currency (Crore)

Amount (₹ Crore)

31.03.2016 31.03.2015 31.03.2016 31.03.2015

Currency & interest rate swap JPY 10.69 14.96 6.38 7.89

Principal only swap EURO 0.80 1.00 60.74 68.56

MTM loss on the above contract as at 31st March 2016 is as under:

Particulars Amount (₹ Crore)

31.03.2016 31.03.2015

Currency & interest rate swap 0.04 1.15

Principal only swap - 3.44

The derivative contracts entered into by the Company are for hedging currency and/or

interest rate risk on foreign currency loans.

b) Not hedged by a derivative instrument or otherwise

Particulars Currencies Amount in Foreign Currency (Crore)

Amount (₹ Crore)

As at

31.03.2016

As at

31.03.2015 As at

31.03.2016

As at

31.03.2015

Borrowings, including interest accrued

but not due thereon.

USD 359.03 342.19 24,018.71 21,622.72

JPY 5,058.54 5,197.55 3,022.48 2,740.41

EURO 24.00 19.69 1,822.35 1,350.02

Trade payables/deposits and retention

monies

USD 28.90 39.51 1,931.26 2,494.81

EURO 12.55 11.97 953.05 819.95

Others 120.63 148.73 79.95 95.37

Trade receivables and bank balances USD 0.05 1.77 3.30 111.48

Others 1.32 309.47 0.89 468.99

Unexecuted amount of contracts

remaining to be executed

USD 143.79 80.92 9,581.32 5,112.87

EURO 52.02 62.12 3,949.08 4,256.46

Others 1,835.20 1,520.26 1,250.73 919.62

52. Contingent Liabilities:

a) Claims against the Group not acknowledged as debts in respect of:

i) Capital Works

Some of the contractors for supply and installation of equipments and execution of

works have lodged claims for ₹9,492.28 crore (previous year ₹8,127.22 crore) seeking

enhancement of the contract price, revision of work schedule with price escalation,

compensation for the extended period of work, idle charges etc. These claims are being

contested as being not admissible in terms of the provisions of the respective contracts.

0012018-0003086 HK:20704050.1 130

Various options are being pursued under the dispute resolution mechanism available in

the contracts for settlement of these claims. It is not practicable to make a realistic

estimate of the outflow of resources if any, for settlement of such claims pending

resolution.

ii) Land compensation cases

In respect of land acquired for the projects, the erstwhile land owners have claimed

higher compensation before various authorities/courts which are yet to be settled. Against

such cases, contingent liability of ₹334.78 crore (previous year ₹314.30 crore) has been

estimated.

iii) Fuel Suppliers

Pending resolution of the issues with fuel companies, an amount of ₹2,205.16 crore

(previous year ₹567.22 crore) towards surface transportation charges, customs duty on

service margin on imported coal, grade slippage pursuant to third party sampling etc.

has been estimated by the Company as contingent liability.

iv) Others

In respect of claims made by various State/Central Government

departments/Authorities towards building permission fee, penalty on diversion of

agricultural land to non-agricultural use, non agricultural land assessment tax, water

royalty etc. and by others, contingent liability of ₹312.94 crore (previous year ₹896.34

crore) has been estimated.

v) Possible Reimbursement

The contingent liabilities referred to in (i) above, include an amount of ₹1,298.80 crore

(previous year ₹1,172.56 crore) relating to the hydro power project stated in Note 15 A

(b) - Other non current assets, for which Company envisages possible reimbursement

from GOI in full. In respect of balance claims included in (i) and in respect of the claims

mentioned at (ii) above, payments, if any, by the company on settlement of the claims

would be eligible for inclusion in the capital cost for the purpose of determination of

tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii),

the estimated possible reimbursement by way of recovery through tariff as per

Regulations is ₹2,077.00 crore (previous year ₹ 423.36 crore).

b) Disputed Tax Matters

Disputed Income Tax/Sales Tax/Excise and other tax matters pending before various

Appellate Authorities amount to ₹8,747.04 crore (previous year ₹5,259.48 crore).

Many of these matters were disposed off in favour of the respective companies but are

disputed before higher authorities by the concerned departments. In respect of disputed tax

matters, possible reimbursement of ₹4,586.23 crore (previous year ₹2,430.71 crore) is

estimated.

c) Others

Other contingent liabilities amount to ₹577.47 crore (previous year ₹914.22 crore), in

respect of which possible reimbursement of ₹335.69 crore (previous year ₹284.70 crore)

is estimated.

0012018-0003086 HK:20704050.1 131

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The

amount of contingent liability in this regard is not ascertainable.

The contingent liabilities disclosed above include ₹610.38 crore (previous year ₹600.02

crore) share of jointly controlled entitites.

53. Capital and other commitments

a) Estimated amount of contracts remaining to be executed on capital account and not

provided for as at 31st March 2016 is ₹67,250.71 crore (previous year ₹65,787.51 crore)

which includes an amount of ₹9,701.57 crore (previous year ₹6,113.95 crore) in respect

of jointly controlled entities.

b) Company's commitment towards the minimum work programme in respect of oil

exploration activities of joint venture operations has been disclosed in Note 31 C.

c) Group's commitment in respect of lease agreements has been disclosed in Note 44.

d) Company’s commitment towards the minimum work programme in respect of oil

exploration activity of Cambay Block (100% owned by the company) is ₹35.94 crore

(USD 5.42 million) (previous year ₹140.27 crore, USD 22.41 million).

54. Some of the Subsidiaries and Joint Venture Companies followed different accounting

policies from that of the Company and the impact of the same is not material.

55. Statement containing salient features of the financial statements of Subsidiaries/Joint

Ventures of NTPC Ltd. pursuant to first proviso to sub-section (3) of Section 129 read with

Rule 5 of Companies (Accounts) Rules, 2014, in form AOC I is attached.


(A.K.Rastogi) (K.Biswal) (Gurdeep Singh)

Company Secretary Director (Finance) Chairman & Managing Director

These are the notes referred to in Balance Sheet and Statement of Profit and Loss

For T.R. Chadha & Co LLP For PSD & Associates For Sagar & Associates

Chartered Accountants Chartered Accountants Chartered Accountants Firm Reg. No.006711N/N500028 Firm Reg. No. 004501C Firm Reg. No. 003510S

(Neena Goel) (Thalendra Sharma) (V. Vidyasagar Babu)

Partner Partner Partner M No.057986 M No.079236 M No.027357

For Kalani & Co. For P. A. & Associates For S. K.Kapoor & Co. For B. M. Chatrath & Co.

Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants Firm Reg. No. 000722C Firm Reg. No. 313085E Firm Reg. No. 000745C Firm Reg. No. 301011E

(P.C.Parwal) (S.S.Poddar) (V.B. Singh) (P.R.Paul) Partner Partner Partner Partner

M No. 071411 M No.051113 M.No.073124 M.No.051675

Place : New Delhi


0012018-0003086 HK:20704050.1 132

FORM NO.AOC.1 Statement containing salient features of the financial statements of Subsidiaries/Associate

Companies/Joint Ventures of NTPC Ltd.

(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies

(Accounts) Rules, 2014)

Part "A": Subsidiaries (Amount in ₹ Crore)

1. Sl. No. 1 2 3 4 5

2. Name of the Subsidiary NTPC Electric

Supply

Company Ltd.

NTPC Vidyut

Vyapar Nigam

Ltd.

Kanti Bijlee

Utpadan

Nigam Ltd.

Bhartiya Rail

Bijlee

Company Ltd.

Patratu Vidyut

Utpadan Nigam

Ltd.

3. Reporting period for the subsidiary

concerned, if different from the holding

company's reporting period

Same as that

of Holding

Company

(1.04.2015 -

31.03.2016)

Same as that

of Holding

Company

(1.04.2015 -

31.03.2016)

Same as that

of Holding

Company

(1.04.2015 -

31.03.2016)

Same as that

of Holding

Company

(1.04.2015 -

31.03.2016)

For the period from

15.10.2015 (date of

incorporation) to

31.03.2016

4. Reporting currency and exchange rate as on

the last date of the relevant financial year in

the case of foreign subsidiaries.

NA NA NA NA NA

5. Share capital 0.08 20.00 1,061.51 1,584.61 0.10

6. Reserves & surplus 42.57 212.14 262.10 (0.82) (0.01)

7. Total assets 77.69 1,256.01 4,241.85 6,265.75 6.78

8. Total liabilities 35.04 1,023.87 2,918.24 4,681.96 6.69

9. Investments - - - - -

10. Turnover - 4,101.69 376.51 - -

11. Profit before taxation 1.14 77.76 (75.72) (0.03) (0.01)

12. Provision for taxation 0.23 27.44 (17.52) - -

13. Profit after taxation 0.91 50.32 (58.20) (0.03) (0.01)

14. Proposed dividend - - - - -

15. % of Shareholding 100% 100% 65% 74% 74%

Notes:

1. Subsidiaries which are yet to commence operations. Bhartiya Rail Bijlee Company Ltd. & Patratu Vidyut Utpadan Nigam Ltd.

2. Subsidiaries which have been liquidated or sold during the year. Nil

0012018-0003086 HK:20704050.1 133

Part"B": Associates and Joint Ventures

Statement pursuant to Section 129 (3) of the Companies Act, 2013 SI.No. Name of Joint Ventures Utility

Powertech

Ltd.

NTPC -

ALSTOM

Power

Services Pvt.

Ltd.

NTPC-SAIL

Power

Company

Pvt. Ltd.

NTPC

Tamilnadu

Energy

Company Ltd

Ratnagiri Gas

and Power

Pvt. Ltd.

Aravali Power

Company Pvt.

Ltd.

NTPC-SCCL

Global

Ventures Pvt.

Ltd.

Meja Urja

Nigam Pvt.

Ltd.

NTPC-

BHEL

Power

Projects Pvt.

Ltd.

BF-NTPC

Energy

Systems

Ltd.

Nabinagar

Power

Generating

Co. Pvt. Ltd.

National Power

Exchange Ltd.

1. Latest Audited Balance Sheet Date 31.03.2016 31.03.2015 31.03.2016 31.03.2016 31.03.2015 31.03.2016 31.07.2015 31.03.2016 31.03.2015 31.03.2016 31.03.2016 31.08.2014

2. Shares of Joint Ventures held by the

Company on the year end as at

31.03.2016

- Number 20,00,000 30,00,000 49,02,50,050 1,34,56,06,112 97,43,08,300 1,33,20,08,200 50,000 84,14,39,800 5,00,00,000 58,80,000 71,33,00,000 21,88,325

- Amount of Investment in Joint Venture

(₹ Crore)

1.00 3.00 490.25 1,365.61 974.30 1,332.00 0.05 841.44 50.00 5.88 763.30 2.19

- Extent of Holding (%) 50.00% 50.00% 50.00% 50.00% 25.51% 50.00% 50.00% 50.00% 50.00% 49.00% 50.00% 16.67%

3. Description of how there is significant

influence

NA NA NA NA NA NA NA NA NA NA NA NA

4. Reason why the Joint Venture is not

consolidated

NA NA NA NA NA NA Under winding

up

NA NA NA NA Under winding

up

5. Networth attributable to

Shareholding as per latest audited

Balance Sheet (₹ Crore)

31.24 12.53 872.38 1,125.84 61.82 1,981.74 0.05 840.05 43.39 2.26 712.66 1.13

6. Profit/ Loss for the year

i Considered for Consolidation (₹ Crore) 10.10 1.18 123.42 (137.42) (276.23) 350.54 - (0.03) (22.93) (0.20) - -

ii Not Considered in Consolidation NA NA NA NA NA NA NA NA NA NA NA NA

0012018-0003086 HK:20704050.1 134

SI.

No.

Name of Joint Ventures International

Coal Ventures

Pvt. Ltd.

National High

Power Test

Laboratory Pvt.

Ltd.

Transformers

& Electricals

Kerela Ltd.

Energy

Efficiency

Services Ltd.

CIL NTPC

Urja Pvt. Ltd.

Anushakti

Vidhyut Nigam

Ltd.

Pan-Asian

Renewables

Pvt. Ltd.

Trincomalee

Power

Company Ltd.

Bangladesh-

India

Friendship

Power

Company Pvt.

Ltd.

1. Latest Audited Balance Sheet Date 31.03.2015 31.03.2016 31.03.2015 31.03.2015 31.03.2015 31.03.2015 31.03.2014 31.03.2015 30.06.2015

2. Shares of Joint Ventures held by the

Company on the year end as at

31.03.2016

- Number 14,00,000 2,39,00,000 1,91,63,438 4,75,00,000 76,900 49,000 15,00,000 32,86,061 87,50,000

- Amount of Investment in Joint Venture

(₹ Crore)

1.40 23.90 31.34 47.50 0.08 0.05 1.50 15.20 69.68

- Extent of Holding (%) 0.13% 21.63% 44.60% 28.80% 50.00% 49.00% 50.00% 50.00% 50.00%

3. Description of how there is significant

influence

NA NA NA NA NA NA NA NA NA

4. Reason why the Joint Venture is not

consolidated

Cessation of

control &

decision to

withdraw

NA NA NA NA NA Under winding

up

NA NA

5. Networth atributable to Shareholding

as per latest audited Balance Sheet (₹

Crore)

1.40 23.40 38.54 61.08 0.03 0.01 0.21 10.81 74.07

6. Profit/ Loss for the year

i Considered for Consolidation (₹ Crore) - - (4.40) 7.70 - - - 0.29 -

ii Not Considered in Consolidation NA NA NA NA NA NA NA NA NA

0012018-0003086 HK:20704050.1 135

Notes:

A. Names of Joint Ventures which are yet to commence operations.

1 Meja Urja Nigam Private Ltd.

2 BF - NTPC Energy Systems Ltd. 3 Nabinagar Power Generating Company Private Ltd.

4 National High Power Test Laboratory Private Ltd.

5 CIL NTPC Urja Private Ltd. 6 Anushakti Vidyut Nigam Ltd.

7 Trincomalee Power Company Ltd. (incorporated in Srilanka)

8 Bangladesh-India Friendship Power Company Private Ltd. (incorporated in Bangladesh)

B. Names of Associates or Joint Ventures which have been liquidated or sold during the

year.

No Joint Venture or Associate has been liquidated or sold during the year. However,

M/s NTPC SCCL Global Ventures Pvt.Ltd., M/s National Power Exchange Ltd. and

M/s Pan-Asian Renewables Pvt. Ltd are in the process of voluntary winding up.


( A.K.Rastogi) (K.Biswal) (Gurdeep Singh)


For T.R. Chadha & Co LLP For PSD & Associates For Sagar & Associates

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No.006711N/N500028 Firm Reg. No. 004501C Firm Reg. No. 003510S

(Neena Goel) (Thalendra Sharma) (V. Vidyasagar Babu) Partner Partner Partner

M No.057986 M No.079236 M No.027357

For Kalani & Co. For P. A. & Associates For S. K.Kapoor & Co. For B. M. Chatrath & Co. Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants

Firm Reg. No. 000722C Firm Reg. No. 313085E Firm Reg. No. 000745C Firm Reg. No. 301011E

(P.C.Parwal) (S.S.Poddar) (V.B. Singh) (P.R.Paul)

Partner Partner Partner Partner

M No. 071411 M No.051113 M.No.073124 M.No.051675

Place : New Delhi


THE ISSUER

NTPC Limited NTPC Bhawan SCOPE Complex

7, Institutional Area Lodi Road New Delhi 110 003 India

TRUSTEE

Citicorp Trustee Company Limited Citigroup Centre Canada Square Canary Wharf

London E14 5LB

PAYING AGENT AND TRANSFER

AGENT

REGISTRAR

Citibank, N.A. Citigroup Global Markets Deutschland AG 1 North Wall Quay Dublin 1 Reuterweg 16

Ireland 60323 Frankfurt Germany

LEGAL ADVISERS

To the Dealers and To the Issuer as to Indian law

Cyril Amarchand Mangaldas Peninsula Chambers

Peninsula Corporate Park Ganpatrao Kadam

Marg Lower Parel Mumbai 400 013 India

the Trustee as to English law

Allen & Overy 9th Floor

Three Exchange Square Central

Hong Kong

JOINT LEAD MANAGERS

Axis Bank Limited, Singapore Branch 9 Raffles Place

Republic Plaza #48-01/02

Singapore 048619

The Hongkong and Shanghai Banking Corporation Limited

Level 17, HSBC Main Building

1 Queen's Road Central

Hong Kong

MUFG Securities EMEA plc

Ropemaker Place

25 Ropemaker Street London EC2Y 9AJ

United Kingdom

Standard Chartered Bank

8 Marina Boulevard, Level 20

Marina Bay Financial Centre, Tower 1 Singapore 018981

NTPC LIMITED

OFFERING CIRCULAR

NTPC LIMITED(incorporated with limited liability in the Republic of India)

U.S.$4,000,000,000Medium Term Note Programme

On 14 February 2006, NTPC Limited (the Issuer or NTPC) established a U.S.$1,000,000,000 Medium Term Note Programme (theProgramme, as amended, supplemented or restated) and prepared an offering circular dated 14 February 2006. On 10 August 2012, the size ofthe Programme was increased from U.S.$1,000,000,000 to U.S.$2,000,000,000 in accordance with the terms of the Programme. On 29 May 2015,the size of the Programme was further increased from U.S.$2,000,000,000 to U.S.$4,000,000,000. This Offering Circular updates the Programmeand supersedes any previous offering circular describing the Programme. Any Notes (as defined below) issued under the Programme on or afterthe date of this Offering Circular are issued subject to the provisions described herein. This does not affect any Notes issued before the date ofthis Offering Circular.

Under the Programme, the Issuer may from time to time issue notes (the Notes) denominated in any currency agreed between the Issuerand the relevant Dealer (as defined below).

Notes may be issued in bearer or registered form (respectively, Bearer Notes and Registered Notes) The maximum aggregate nominalamount of all Notes from time to time outstanding under the Programme will not exceed U.S.$4,000,000,000 (or its equivalent in other currenciescalculated as described herein), subject to increase as described herein.

The Notes may be issued on a continuing basis to one or more of the Dealers specified under “Summary of the Programme” and anyadditional Dealer appointed under the Programme from time to time by the Issuer (each a Dealer and together the Dealers), which appointmentmay be for a specific issue or on an ongoing basis. References in this Offering Circular to the relevant Dealer shall, in the case of an issue ofNotes being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe to such Notes.

Approval-in-principle has been granted for the listing and quotation of Notes that may be issued pursuant to the Programme and whichare agreed at or prior to the time of issue thereof to be so listed on the Singapore Exchange Securities Trading Limited (the SGX-ST). Suchpermission will be granted when such Notes have been admitted to the Official List of the SGX-ST (the Official List). The SGX-ST assumes noresponsibility for the correctness of any of the statements made or opinions expressed or reports contained herein. Admission to the Official Listand quotation of any Notes on the SGX-ST are not to be taken as an indication of the merits of the Issuer, the Programme or the Notes. Noticeof the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and any other terms and conditionsnot contained herein which are applicable to each Tranche (as defined under “Terms and Conditions of the Notes”) of Notes will be set out ina pricing supplement (the Pricing Supplement) which, with respect to Notes to be listed on the SGX-ST, will be delivered to the SGX-ST onor before the date of issue of the Notes of such Tranche.

The Programme provides that Notes may be listed on such other or further stock exchange(s) as may be agreed between the Issuer andthe relevant Dealer. The Issuer may also issue unlisted Notes.

The Issuer may agree with any Dealer and the Trustee (as defined herein) that Notes may be issued in a form not contemplated by theTerms and Conditions of the Notes herein, in which event (in the case of Notes intended to be listed on the SGX-ST) a supplementary OfferingCircular, if appropriate, will be made available which will describe the effect of the agreement reached in relation to such Notes.

See “Investment Considerations” for a discussion of certain factors to be considered in connection with an investment in the Notes.

Notes to be listed on the SGX-ST will be accepted for clearance through Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking,societe anonyme (Clearstream, Luxembourg).

Each Tranche of Bearer Notes of each series (as defined in “Form of the Notes”) will initially be represented by either a temporary bearerglobal note (a Temporary Bearer Global Note) or a permanent bearer global note (a Permanent Bearer Global Note and, together with aTemporary Bearer Global Note, the Bearer Global Notes, and each a Bearer Global Note) as indicated in the applicable Pricing Supplement,which, in either case, will be delivered on or prior to the original issue date of the Tranche to a common depositary (the Common Depositary)for Euroclear and Clearstream, Luxembourg.

On and after the date (the Exchange Date) which, for each Tranche in respect of which a Temporary Bearer Global Note is issued, is 40days after the Temporary Bearer Global Note is issued, interests in such Temporary Bearer Global Note will be exchangeable (free of charge) upona request as described therein either for (i) interests in a Permanent Bearer Global Note of the same Series or (ii) definitive Bearer Notes of thesame Series.

Registered Notes sold in an “offshore transaction” within the meaning of Regulation S (Regulation S) under the U.S. Securities Act of1933, as amended (the Securities Act), which will be sold outside the United States (U.S.) and, in certain circumstances, only to non-U.S. persons(as defined in Regulation S), will initially be represented by a global note in registered form, without receipts or coupons, (a Registered GlobalNote) deposited with a common depositary for Euroclear and Clearstream, Luxembourg, and registered in the name of a nominee of such commondepositary. Prior to expiry of the distribution compliance period (as defined in Regulation S) (the Distribution Compliance Period) (if any)applicable to each Tranche of Notes, beneficial interests in a Registered Global Note may not be offered or sold to, or for the account or benefitof, a U.S. person, save as otherwise provided in the Terms and Conditions of the Notes and may not be held otherwise than through Euroclearor Clearstream, Luxembourg.

The applicable Pricing Supplement will specify that a Permanent Bearer Global Note will be exchangeable for definitive Bearer Notesin certain limited circumstances.

This Offering Circular has not been and will not be registered as a prospectus or a statement in lieu of a prospectus in respect of a publicoffer, information memorandum or private placement offer letter or any other offering material with the Registrar of Companies in India inaccordance with the Companies Act, 1956, as amended and replaced from time to time, the Companies Act, 2013, as amended and other applicableIndian laws for the time being in force. This Offering Circular has not been and will not be reviewed or approved by any regulatory authorityin India, including, but not limited to, the Securities and Exchange Board of India, any Registrar of Companies or any stock exchange in India.This Offering Circular and the Notes are not and should not be construed as an advertisement, invitation, offer or sale of any securities whetherto the public or by way of private placement to any person resident in India. The Notes have not been and will not be, offered or sold to anyperson resident in India. If you purchase any of the Notes, you will be deemed to have acknowledged, represented and agreed that you are eligibleto purchase the Notes under applicable laws and regulations and that you are not prohibited under any applicable law or regulation from acquiring,owning or selling the Notes. See “Subscription and Sale”.

The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) or with anysecurities regulatory authority of any state or other jurisdiction of the United States and Notes in bearer form are subject to U.S. tax lawrequirements. Subject to certain exceptions, the Notes may not be offered, sold or delivered within the United States or, in certain circumstances,to U.S. persons (as defined in Regulation S under the Securities Act). See “Subscription and Sale”.

Arrangers

Barclays Citigroup Deutsche Bank

Dealers

Barclays Citigroup Deutsche Bank

The date of this Offering Circular is 4 November 2015.

The Issuer accepts responsibility for the information contained in this Offering Circular. To the

best of the knowledge and belief of the Issuer (having taken all reasonable care to ensure that such

is the case) the information contained in this Offering Circular is in accordance with the facts and does

not omit anything that would make the statements therein, in light of the circumstances under which

they were made, misleading. The Issuer, having made all reasonable enquiries, confirms that this

Offering Circular contains or incorporates all information which is material in the context of the

Programme and the Notes, that the information contained or incorporated in this Offering Circular is

true and accurate in all material respects and is not misleading, that the opinions and intentions

expressed in this Offering Circular are honestly held and that there are no other facts the omission of

which would make this Offering Circular or any of such information or the expression of any such

opinions or intentions misleading. The Issuer accepts responsibility accordingly.

No person is or has been authorised by the Issuer to give any information or to make any

representation other than those contained in this Offering Circular or any other information supplied

in connection with the Programme or the Notes and, if given or made by any other person, such

information or representations must not be relied upon as having been authorised by the Issuer, any

of the Arrangers or the Dealers or the Trustee.

Neither the Arrangers, the Dealers nor the Trustee (as defined herein) has separately verified the

information contained herein. Accordingly, no representation, warranty or undertaking, express or

implied, is made and no responsibility or liability is accepted by any of the Arrangers or the Dealers,

the Trustee or any of them as to the accuracy or completeness of the information contained or

incorporated in this Offering Circular or any other information provided by the Issuer in connection

with the Programme.

Neither this Offering Circular nor any other information supplied in connection with the

Programme or any Notes (i) is intended to provide the basis of any credit or other evaluation or (ii)

should be considered as a recommendation by the Issuer, any of the Arrangers or the Dealers or the

Trustee that any recipient of this Offering Circular or any other information supplied in connection

with the Programme or any Notes should purchase any of the Notes. Each investor contemplating

purchasing Notes should make its own independent investigation of the financial condition and affairs,

and its own appraisal of the creditworthiness, of the Issuer. Neither this Offering Circular nor any

other information supplied in connection with the Programme or the issue of any Notes constitutes an

offer or invitation by or on behalf of the Issuer, any of the Arrangers or the Dealers or the Trustee to

any person to subscribe for or to purchase any Notes.

Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Notes shall

in any circumstances imply that the information contained herein concerning the Issuer is correct at

any time subsequent to the date hereof or that any other information supplied in connection with the

Programme is correct as of any time subsequent to the date indicated in the document containing the

same. The Arrangers, the Dealers and the Trustee expressly do not undertake to review the financial

condition or affairs of the Issuer during the life of the Programme or to advise any investor in the

Notes of any information coming to their attention. Investors should review, inter alia, the most

recently published documents incorporated by reference into this Offering Circular when deciding

whether or not to purchase any Notes.

This Offering Circular does not constitute an offer to sell or the solicitation of an offer tobuy any Notes in any jurisdiction to any person to whom it is unlawful to make the offer orsolicitation in such jurisdiction. The distribution of this Offering Circular and the offer or saleof Notes may be restricted by law in certain jurisdictions. The Issuer, the Arrangers, the Dealersand the Trustee do not represent that this Offering Circular may be lawfully distributed, or that

2

any Notes may be lawfully offered, in compliance with any applicable registration or otherrequirements in any such jurisdiction, or pursuant to an exemption available thereunder, orassume any responsibility for facilitating any such distribution or offering. In particular, noaction has been taken by the Issuer, any of the Arrangers or the Dealers or the Trustee whichwould permit a public offering of any Notes or distribution of this Offering Circular in anyjurisdiction where action for that purpose is required. Accordingly, no Notes may be offered orsold, directly or indirectly, and neither this Offering Circular nor any advertisement or otheroffering material may be distributed or published in any jurisdiction, except undercircumstances that will result in compliance with any applicable laws and regulations. Personsinto whose possession this Offering Circular or any Notes may come must inform themselvesabout, and observe, any such restrictions on the distribution of this Offering Circular and theoffering and sale of Notes. In particular, there are restrictions on the distribution of this OfferingCircular and the offer or sale of Notes in the United States, the European Economic Area(including the United Kingdom, Italy and the Netherlands), India, Singapore, Japan and HongKong, see “Subscription and Sale”.

None of the Issuer, the Arrangers, the Dealers and the Trustee makes any representation toany investor in the Notes regarding the legality of its investment under any applicable laws. Anyinvestor in the Notes should be able to bear the economic risk of an investment in the Notes foran indefinite period of time.

There are restrictions on the offer and sale of the Notes in the United Kingdom. All applicable

provisions of the Financial Services and Market Act 2000 (FSMA) with respect to anything done by

any person in relation to the Notes in, from or otherwise involving the United Kingdom must be

complied with. See “Subscription and Sale”.

In connection with the offering of any series of Notes, each Dealer is acting or will act for the

Issuer in connection with the offering and no-one else and will not be responsible to anyone other than

the Issuer for providing the protections afforded to clients of that Dealer nor for providing advice in

relation to any such offering.

For a description of other restrictions, see “Subscription and Sale”.

3

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

The Issuer maintains its financial books and records and prepares its financial statementsin Rupees in accordance with generally accepted accounting principles in the Republic of India(Indian GAAP) which differ in certain important respects from International FinancialReporting Standards as issued by the International Accounting Standards Board (IFRS). For adiscussion of the principal differences between Indian GAAP and IFRS as they relate to theIssuer, see “Summary of Significant Differences Between Indian GAAP and IFRS”. Unlessotherwise stated, all financial data contained herein is that of the Issuer, its subsidiaries and jointventure companies on a consolidated basis. The financial statements for the years ended 31March 2014 and 31 March 2015 included in this Offering Circular have been audited by theauditors as set out in paragraphs 7 and 8 of the section entitled “General Information”. Pleasesee the auditors’ report for fiscal 2015 on pages F-9 to F-19 and the auditors’ report for fiscal2014 on pages F-98 to F-100, which clarify that: (i) the financial statements of the subsidiariesand joint venture companies have not been audited by the Issuer’s auditors and (ii) the financialstatements of certain joint venture companies are unaudited and the figures included in theaudited financial statements for such joint venture companies are based solely on the financialstatements certified by the management of such joint venture companies. The unaudited,standalone financial results of the Issuer for the six months ended 30 September 2015 have beenreviewed by the auditors as set out in paragraph 9 of the section entitled “General Information”,and, together with the auditors’ review report, are set out on pages F-3 to F-8.

CERTAIN DEFINITIONS

In this Offering Circular, references to India are to the Republic of India, references to the

Government are to the Government of India and references to the RBI are to the Reserve Bank of

India. References to specific data applicable to particular subsidiaries or other consolidated entities

are made by reference to the name of that particular entity. References to fiscal or fiscal year are to

the year ended 31 March.

Unless the context otherwise indicates, all references to NTPC or the Issuer are to NTPC

Limited and its subsidiaries and joint venture companies on a consolidated basis.

Industry and market share data in this Offering Circular is derived from data prepared by the

Central Electricity Authority (the CEA) which is the nodal government agency for planning, advising

and monitoring the Indian power sector, the Ministry of Power, Government of India (the MoP), the

erstwhile Planning Commission of India and from industry publications. Industry publications

generally state that the information contained in those publications has been obtained from sources

believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability

cannot be assured. Although the Issuer believes that the industry data used in this Offering Circular

is reliable and takes responsibility for the accurate extraction of such data from publicly available

sources, it has not been independently verified by the Issuer, the Arrangers, the Dealers or the Trustee.

As used in this Offering Circular, the terms Tenth Plan, Eleventh Plan, Twelfth Plan and

Thirteenth Plan refer to the five-year plans of the Government, and mean the Tenth Five-Year Plan

covering the fiscal period 2002-2007, the Eleventh Five-Year Plan covering the fiscal period

2007-2012, the Twelfth Five-Year Plan covering the period 2012-2017 and the Thirteenth Five-Year

Plan covering the period 2017-2022, respectively.

4

All references in this document to U.S. dollars, U.S.$ and $ refer to United States dollars, toRupee, Rupees, INR, Rs. and ` refer to Indian Rupees and to SGD refer to Singapore dollars. Inaddition, references to Sterling, GBP and £ refer to pounds sterling and to euro, EUR and C= referto the currency introduced at the start of the third stage of European economic and monetary unionpursuant to the Treaty on the Functioning of the European Community, as amended.

References to crores and lakhs in the Issuer’s financial statements are to the following:

One lakh . . . . . . . . . . . . . . . . . . . . 100,000 (one hundred thousand)

One crore . . . . . . . . . . . . . . . . . . . 10,000,000 (ten million)

Ten crores . . . . . . . . . . . . . . . . . . . 100,000,000 (one hundred million)

One hundred crores . . . . . . . . . . . . 1,000,000,000 (one thousand million or one billion)

In this Offering Circular, where information has been presented in millions or billions of units,amounts may have been rounded, in the case of information presented in millions, to the nearest tenthousand or one hundred thousand units or, in the case of information presented in billions, one, tenor one hundred million units. Accordingly, the totals of columns or rows of numbers in tables may notbe equal to the apparent total of the individual items and actual numbers may differ from thosecontained herein due to rounding.

FORWARD-LOOKING STATEMENTS

The Issuer has included statements in this Offering Circular which contain words or phrases suchas “will”, “would”, “aimed”, “is likely”, “are likely”, “believe”, “expect”, “expected to”, “willcontinue”, “will achieve”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”,“seeking to”, “target”, “propose to”, “future”, “objective”, “goal”, “projected”, “should”, “can”,“could”, “may” and similar expressions or variations of such expressions, that are “forward-lookingstatements”. Actual results may differ materially from those suggested by the forward-lookingstatements due to certain risks or uncertainties associated with the expectations of the Issuer withrespect to, but not limited to, regulatory changes relating to the power sector in India and the Issuer’sability to respond to them, the Issuer’s ability to successfully implement its strategy, the Issuer’sgrowth and expansion, including the Issuer’s ability to complete its capacity expansion plans,technological changes, the Issuer’s exposure to market risks, general economic and politicalconditions in India which have an impact on the Issuer’s business activities or investments, themonetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates,foreign exchange rates, equity prices or other rates or prices, the performance of the financial marketsin India and globally, changes in domestic and foreign laws, regulations and taxes and changes incompetition in the Issuer’s industry.

For a further discussion on the factors that could cause actual results to differ, see the discussionunder “Investment Considerations” contained in this Offering Circular.

ENFORCEMENT OF FOREIGN JUDGMENTS IN INDIA

The Issuer is a limited liability public company incorporated under the laws of India. All of theIssuer’s directors and executive officers named herein are residents of India and all or a substantialportion of the assets of the Issuer and such persons are located in India. As a result, it may not bepossible for investors to effect service of process on the Issuer or such persons in jurisdictions outsideof India, or to enforce against them judgments obtained in courts outside of India predicated upon civilliabilities of the Issuer or such directors and executive officers under laws other than Indian law,including any judgment predicated upon United States federal securities laws. There is doubt as to theenforceability in India in original actions or in actions for enforcement of judgments of United Statescourts of civil liabilities predicated solely upon the federal securities laws of the United States.

5

India is not a party to any international treaty in relation to the recognition or enforcement of

foreign judgments. The Issuer understands that the statutory basis for recognition and enforcement of

foreign judgments is provided for under section 13 and section 44A of the Indian Code of Civil

Procedure, 1908 (the Civil Code). Section 44A of the Civil Code provides that where a foreign

judgment has been rendered by a superior court in any country or territory outside India which the

Government has by notification declared to be a reciprocating territory, it may be enforced in India

by proceedings in execution as if the judgment had been rendered by the relevant court in India.

However, section 44A of the Civil Code is applicable only to monetary decrees not being in the nature

of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or

other penalty and is not applicable to arbitration awards, even if such awards are enforceable as a

decree or judgment.

The United States has not been declared by the Government to be a reciprocating territory for

the purposes of section 44A of the Civil Code. However, the United Kingdom has been declared by

the Government to be a reciprocating territory and the High Courts in England as the relevant superior

courts. Accordingly, a judgment of a court in the United States may be enforced only by a fresh suit

upon the judgment and not by proceedings in execution, whereas a judgment of a superior court in the

United Kingdom may be enforceable by proceedings in execution, and a judgment not of a superior

court, by a fresh suit resulting in a judgment or order. A judgment of a court in a jurisdiction which

is not a reciprocating territory may be enforced only by a new suit upon the judgment and not by

proceedings in execution. Section 13 of the Civil Code provides that a foreign judgment shall be

conclusive as to any matter thereby directly adjudicated upon except: (i) where it has not been

pronounced by a court of competent jurisdiction; (ii) where it has not been given on the merits of the

case; (iii) where it appears on the face of the proceedings to be founded on an incorrect view of

international law or a refusal to recognise the law of India in cases where such law is applicable; (iv)

where the proceedings in which the judgment was obtained were opposed to natural justice; (v) where

it has been obtained by fraud; or (vi) where it sustains a claim founded on a breach of any law in force

in India. The suit must be brought in India within three years from the date of the judgment in the same

manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court in India

would award damages on the same basis as a foreign court if an action is brought in India.

Furthermore, it is unlikely that an Indian court would enforce a foreign judgment if it viewed the

amount of damages awarded as excessive or inconsistent with Indian practice. A party seeking to

enforce a foreign judgment in India is required to obtain approval from the RBI under the Foreign

Exchange Management Act, 1999 to repatriate outside India any amount recovered pursuant to

execution. Any judgment in a foreign currency would be converted into Rupees on the date of the

judgment and not on the date of the payment. Also, a party may file a suit in India against the Issuer,

its directors or its executive officers as an original action.

6

GLOSSARY OF TERMS USED IN THIS OFFERING CIRCULAR

Below are certain terms relating to the power sector used in this Offering Circular.

2009-14 Regulations . . . . . . . . . . the tariff regulations issued by the CERC for the period from1 April 2009 to 31 March 2014

2014-19 Regulations . . . . . . . . . . the tariff regulations issued by the CERC for the period from1 April 2014 to 31 March 2019

AD Bank . . . . . . . . . . . . . . . . . . Designated authorised dealer category I bank appointed inaccordance with the ECB Guidelines

APDRP . . . . . . . . . . . . . . . . . . . . Accelerated Power Development and Reforms Programme

availability factor. . . . . . . . . . . . . a measure of how often a power station is available togenerate power

CEA. . . . . . . . . . . . . . . . . . . . . . . Central Electricity Authority

CERC . . . . . . . . . . . . . . . . . . . . . Central Electricity Regulatory Commission

Central Sector . . . . . . . . . . . . . . . central sector which comprises of Central Government ownedpower utilities

Companies Act . . . . . . . . . . . . . . The Companies Act, 1956, as amended or replaced from timeto time

CIL . . . . . . . . . . . . . . . . . . . . . . . Coal India Limited

CPSUs . . . . . . . . . . . . . . . . . . . . . Central Power Sector Utilities

ECB . . . . . . . . . . . . . . . . . . . . . . External commercial borrowing raised in accordance with theECB Guidelines

ECB Guidelines . . . . . . . . . . . . . Foreign Exchange Management (Borrowing or Lending inForeign Exchange) Regulations, 2000 and the circulars issuedthereunder by the RBI including the Master Circular —External Commercial Borrowings and Trade Credits dated 1July 2015, as amended from time to time

ECB Rupee Bond Circular . . . . . . RBI ECB policy on issuance of overseas Rupee DenominatedBonds dated 29 September 2015 and as amended from time totime

EDs . . . . . . . . . . . . . . . . . . . . . . Electricity Departments

Electricity Act . . . . . . . . . . . . . . . Electricity Act, 2003, as amended from time to time

GAIL . . . . . . . . . . . . . . . . . . . . . . GAIL (India) Limited

grid . . . . . . . . . . . . . . . . . . . . . . . a national or regional high voltage transmission network

IPP . . . . . . . . . . . . . . . . . . . . . . . independent power producer

kWh. . . . . . . . . . . . . . . . . . . . . . . a kilowatt hour

lakh . . . . . . . . . . . . . . . . . . . . . . . one hundred thousand

7

MoC . . . . . . . . . . . . . . . . . . . . . . Ministry of Coal

MUs . . . . . . . . . . . . . . . . . . . . . . millions of Units

MW . . . . . . . . . . . . . . . . . . . . . . . a megawatt

NEP . . . . . . . . . . . . . . . . . . . . . . . National Electricity Policy

New Companies Act . . . . . . . . . . . The Companies Act, 2013 as amended from time to time

NPCIL . . . . . . . . . . . . . . . . . . . . . Nuclear Power Corporation of India Limited

OTSS . . . . . . . . . . . . . . . . . . . . . . Scheme for One Time Settlement of Outstanding Dues

PLF . . . . . . . . . . . . . . . . . . . . . . . plant load factor, a measure equal to the percentage ofcapacity actually utilised

PPA . . . . . . . . . . . . . . . . . . . . . . . power purchase agreement

PV . . . . . . . . . . . . . . . . . . . . . . . . photovoltaic

RBI . . . . . . . . . . . . . . . . . . . . . . . Reserve Bank of India

Rupee Denominated Notes . . . . . . Notes which are denominated in INR and payable in foreigncurrency pursuant to the ECB Rupee Bond Circular

SCCL. . . . . . . . . . . . . . . . . . . . . . Singareni Collieries Company Limited

SEB . . . . . . . . . . . . . . . . . . . . . . . State Electricity Board

SEUs . . . . . . . . . . . . . . . . . . . . . . State Electricity Utilities, comprising SEBs, unbundledentities of SEBs and EDs

Tariff Policy . . . . . . . . . . . . . . . . Tariff Policy issued by the Government in January 2006

UMPP . . . . . . . . . . . . . . . . . . . . . ultra mega power projects

Unit . . . . . . . . . . . . . . . . . . . . . . . one kWh; that is, the energy contained in a current of onethousand amperes flowing under an electromotive force ofone volt during one hour

8

CONTENTS

Page

Documents Incorporated by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

General Description of the Programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Summary of the Programme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Form of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Form of Pricing Supplement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Terms and Conditions of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Capitalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

Investment Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Description of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

The Power Industry in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Regulation and Policies in India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Subscription and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

Summary of Significant Differences Between Indian GAAP and IFRS . . . . . . . . . . . . . . . . . . 197

General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Index to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) namedas the Stabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in theapplicable Pricing Supplement may over-allot or effect transactions with a view to supporting themarket price of the Notes of the Series (as defined below) of which such Tranche forms part ata level higher than that which might otherwise prevail. However, there is no assurance that theStabilising Manager(s) (or persons acting on behalf of a Stabilising Manager) will undertakestabilisation action. Any stabilisation action may begin on or after the date on which adequatepublic disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun,may be ended at any time, but it must end no later than the earlier of 30 days after the issue dateof the relevant Tranche of Notes and 60 days after the date of the allotment of the relevantTranche of Notes. Any stabilisation action or over-allotment must be conducted by the relevantStabilising Manager(s) (or persons acting on behalf of any Stabilising Manager(s)) in accordancewith all applicable laws and rules.

9

DOCUMENTS INCORPORATED BY REFERENCE

The following documents published or issued from time to time after the date hereof shall be

deemed to be incorporated in, and to form part of, this Offering Circular:

(a) the most recently published, audited, consolidated and non-consolidated annual financial

statements and, if published later, the most recently published audited or reviewed, as the

case may be, interim non-consolidated financial results of the Issuer, (see “General

Information” for a description of the financial statements currently published by the

Issuer); and

(b) all supplements or amendments to this Offering Circular circulated by the Issuer from time

to time.

Any statement contained herein or in a document which is deemed to be incorporated by

reference herein shall be deemed to be modified or superseded for the purpose of this Offering

Circular to the extent that a statement contained in any such subsequent document which is deemed

to be incorporated by reference herein modifies or supersedes such earlier statement (whether

expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed,

except as so modified or superseded, to constitute a part of this Offering Circular.

The Issuer will provide, without charge, to each person to whom a copy of this Offering Circular

has been delivered, upon the request of such person, a copy of any or all of the documents deemed

to be incorporated herein by reference unless such documents have been modified or superseded as

specified above. Requests for such documents should be directed to the Issuer at its office set out at

the end of this Offering Circular. In addition, such documents will be available free of charge from

the principal office of the principal paying agent in London (which for the time being is Citibank,

N.A.) (the Principal Paying Agent) for the Notes listed on the SGX-ST.

If the terms of the Programme are modified or amended in a manner which would make this

Offering Circular, as so modified or amended, inaccurate or misleading, to an extent which is material

in the context of the Programme, a new offering circular will be prepared.

10

GENERAL DESCRIPTION OF THE PROGRAMME

Under the Programme, the Issuer may from time to time issue Notes denominated in any

currency, subject as set out herein. A summary of the terms and conditions of the Programme and the

Notes appears below. The applicable terms of any Notes will be agreed between the Issuer and therelevant Dealer prior to the issue of the Notes and will be set out in the Terms and Conditions of theNotes endorsed on, attached to, or incorporated by reference into, the Notes, as modified andsupplemented by the applicable Pricing Supplement attached to, or endorsed on, such Notes, as morefully described under “Form of the Notes”.

This Offering Circular and any supplement will only be valid for listing Notes on the SGX-STin an aggregate nominal amount which, when added to the aggregate nominal amount then outstandingof all Notes previously or simultaneously issued under the Programme, does not exceedU.S.$4,000,000,000 or its equivalent in other currencies. For the purpose of calculating the U.S. dollarequivalent of the aggregate nominal amount of Notes issued under the Programme from time to time:

(a) the U.S. dollar equivalent of Notes denominated in another Specified Currency (asspecified in the applicable Pricing Supplement in relation to the relevant Notes, describedunder “Form of the Notes”) shall be determined, at the discretion of the Issuer, either as ofthe date on which agreement is reached for the issue of Notes or on the preceding day onwhich commercial banks and foreign exchange markets are open for business in London, ineach case on the basis of the spot rate for the sale of the U.S. dollar against the purchaseof such Specified Currency in the London foreign exchange market quoted by any leadinginternational bank selected by the Issuer on the relevant day of calculation;

(b) the U.S. dollar equivalent of Dual Currency Notes, Index Linked Notes and Partly PaidNotes (each as specified in the applicable Pricing Supplement in relation to the relevantNotes, described under “Form of the Notes”) shall be calculated in the manner specifiedabove by reference to the original nominal amount on issue of such Notes (in the case ofPartly Paid Notes regardless of the subscription price paid); and

(c) the U.S. dollar equivalent of Zero Coupon Notes (as specified in the applicable PricingSupplement in relation to the relevant Notes, described under “Form of the Notes”) andother Notes issued at a discount or a premium shall be calculated in the manner specifiedabove by reference to the net proceeds received by the Issuer for the relevant issue.

The offering of the Notes will be made entirely outside India. This Offering Circular may not bedistributed directly or indirectly in India or to residents of India and the Notes are not being offeredor sold and may not be offered or sold directly or indirectly in India or to, or for the account or benefitof, any resident of India.

Each purchaser of Notes will be deemed to represent that it is neither located in India nor aresident of India and that it is not purchasing for, or for the account or benefit of, any such person,and understands that the Notes may not be offered, sold, pledged or otherwise transferred to anyperson located in India, to any resident of India or to, or for the account of, such persons, unlessdetermined otherwise in compliance with applicable law.

The Issuer will issue Notes under the Programme in accordance with the ECB Guidelines.

The Government does not provide any guarantee or financial support in relation to any paymentor obligation in respect of the Notes and has no commitment or obligation whatsoever in relation toany payment or obligation in respect of the Notes.

11

SUMMARY OF THE PROGRAMME

The following summary does not purport to be complete and is taken from, and is qualified in

its entirety by, the remainder of this Offering Circular and, in relation to the terms and conditions of

any particular Tranche of Notes, the applicable Pricing Supplement. Words and expressions defined

in “Form of the Notes” and “Terms and Conditions of the Notes” shall have the same meanings in

this summary.

Issuer: . . . . . . . . . . . . . . . . . . . . . NTPC Limited

Investment Considerations: . . . . . There are certain factors that may affect the Issuer’s ability tofulfil its obligations under Notes issued under the Programme.These are set out under “Investment Considerations” below.In addition, there are certain factors which are material for thepurpose of assessing the market risks associated with Notesissued under the Programme. These are set out under“Investment Considerations” and include certain risksrelating to the structure of particular Series of Notes andcertain market risks.

Description: . . . . . . . . . . . . . . . . . Medium Term Note Programme

Arrangers: . . . . . . . . . . . . . . . . . . Barclays Bank PLCCitigroup Global Markets LimitedDeutsche Bank AG, Singapore Branch

Dealers: . . . . . . . . . . . . . . . . . . . . Barclays Bank PLCCitigroup Global Markets LimitedDeutsche Bank AG, Singapore Branchand any other Dealers appointed in accordance with theProgramme Agreement (as defined under “Subscription andSale”).

Certain Restrictions: . . . . . . . . . . Each issue of Notes in respect of which particular laws,guidelines, regulations, restrictions or reporting requirementsapply will only be issued in circumstances which comply withsuch laws, guidelines, regulations, restrictions or reportingrequirements from time to time (see “Subscription and Sale”)including the following restrictions applicable at the date ofthis Offering Circular.

Trustee: . . . . . . . . . . . . . . . . . . . . Citicorp Trustee Company Limited

Principal Paying Agent: . . . . . . . . Citibank, N.A.

Transfer Agent: . . . . . . . . . . . . . . Citibank, N.A.

Registrar: . . . . . . . . . . . . . . . . . . . Citigroup Global Markets Deutschland AG

Programme Size: . . . . . . . . . . . . . U.S.$4,000,000,000 (or its equivalent in other currenciescalculated as described under “General Description of theProgramme”) in aggregate nominal amount of Notesoutstanding at any time. The Issuer may increase the amountof the Programme in accordance with the terms of theProgramme Agreement.

12

Distribution: . . . . . . . . . . . . . . . . Notes may be distributed by way of private or publicplacement and in each case on a syndicated or non-syndicatedbasis.

Currencies: . . . . . . . . . . . . . . . . . Subject to any applicable legal or regulatory restrictions, anycurrency agreed between the Issuer and the relevant Dealer.

Redenomination: . . . . . . . . . . . . . The applicable Pricing Supplement may provide that certainNotes may be redenominated in euro. The relevant provisionsapplicable to any such redenomination are contained inCondition 5.

Maturities: . . . . . . . . . . . . . . . . . . Such maturities as may be agreed between the Issuer and therelevant Dealer, subject to such minimum or maximummaturities as may be allowed or required from time to time bythe relevant central bank (or equivalent body) or any laws orregulations applicable to the Issuer including but not limitedto the minimum maturity period specified under the ECBGuidelines, ECB Rupee Bond Circular or the relevantSpecified Currency.

Issue Price: . . . . . . . . . . . . . . . . . Notes may be issued on a fully-paid or a partly-paid basis andat an issue price which is at par or at a discount to, orpremium over, par.

Form of Notes: . . . . . . . . . . . . . . The Notes will be issued in bearer and/or registered form asdescribed in “Form of the Notes”.

Fixed Rate Notes: . . . . . . . . . . . . Fixed interest will be payable at such rate or rates in arrearand on such date or dates as may be agreed between the Issuerand the relevant Dealer, subject to any regulatory requirement(including but not limited to the ECB Guidelines and the ECBRupee Bond Circular) and on redemption and will becalculated on the basis of such Day Count Fraction as may beagreed between the Issuer and the relevant Dealer, subject toany regulatory requirement (including but not limited to theECB Guidelines).

Floating Rate Notes: . . . . . . . . . . Floating Rate Notes will bear interest at a rate, subject to anyregulatory requirement including but not limited to the ECBGuidelines and the ECB Rupee Bond Circular, determined:

(i) on the same basis as the floating rate under a notionalinterest rate swap transaction in the relevant SpecifiedCurrency governed by an agreement incorporating the2006 ISDA Definitions (as published by theInternational Swaps and Derivatives Association, Inc.,and as amended and updated as of the Issue Date of thefirst Tranche of the Notes of the relevant Series); or

(ii) on the basis of a reference rate appearing on the agreedscreen page of a commercial quotation service; or

(iii) on such other basis as may be agreed between the Issuerand the relevant Dealer.

13

The margin (if any) relating to such floating rate will beagreed between the Issuer and the relevant Dealer for eachSeries of Floating Rate Notes, subject to any regulatoryrequirement (including but not limited to the ECBGuidelines).

Floating Rate Notes may also have a maximum interest rate,a minimum interest rate or both.

Index Linked Notes: . . . . . . . . . . Payments of principal in respect of Index Linked RedemptionNotes or of interest in respect of Index Linked Interest Noteswill be calculated by reference to such index and/or formulaor to changes in the prices of securities or commodities or tosuch other factors as the Issuer and the relevant Dealer mayagree, subject to any regulatory requirement (including, butnot limited to, the ECB Guidelines and the ECB Rupee BondCircular).

Other provisions in Floating RateNotes and Index LinkedInterest Notes: . . . . . . . . . . . . .

Floating Rate Notes and Index Linked Interest Notes may alsohave a relation to maximum interest rate, a minimum interestrate or both, subject to any regulatory requirement including,but not limited to, the ECB Guidelines and the ECB RupeeBond Circular.

Interest on Floating Rate Notes and Index Linked InterestNotes in respect of each Interest Period, as agreed prior toissue by the Issuer and the relevant Dealer, will be payable onsuch Interest Payment Dates, and will be calculated on thebasis of such Day Count Fraction, as may be agreed betweenthe Issuer and the relevant Dealer.

Dual Currency Notes:. . . . . . . . . . Payments (whether in respect of principal or interest andwhether at maturity or otherwise) in respect of Dual CurrencyNotes will be made in such currencies, and based on suchrates of exchange, as the Issuer and the relevant Dealer mayagree, subject to any regulatory requirement (including, butnot limited to, the ECB Guidelines and the ECB Rupee BondCircular).

Partly Paid Notes: . . . . . . . . . . . . The Issuer may issue Notes in respect of which the issue priceis paid in separate instalments in such amounts and on suchdates as the Issuer and the relevant Dealer may agree.

Zero Coupon Notes: . . . . . . . . . . . Zero Coupon Notes will be offered and sold at a discount totheir nominal amount and will not bear interest.

Other Notes: . . . . . . . . . . . . . . . . The Issuer may agree with any Dealer and the Trustee thatNotes may be issued in a form not contemplated by the Termsand Conditions of the Notes, in which event the relevantprovisions will be included in the applicable PricingSupplement.

14

Redemption:. . . . . . . . . . . . . . . . . Unless otherwise indicated in the applicable PricingSupplement, the relevant Notes cannot be redeemed prior totheir stated maturity other than (i) in specified instalments, ifapplicable, (ii) for taxation reasons, (iii) following a Changein Control (as defined in Condition 8) or (iv) following anEvent of Default (as defined in Condition 11). Please note thatany redemption of the Notes prior to their average statedmaturity or in the case of Rupee Denominated Notes prior tothe stated maturity will require the prior approval of the RBIor the AD Bank, as the case may be under the ECBGuidelines.

The applicable Pricing Supplement may provide that Notesmay be redeemable in separate instalments in such amountsand on such dates as are indicated in the applicable PricingSupplement, subject to any regulatory requirement including,but not limited to, the ECB Guidelines and the ECB RupeeBond Circular.

Denomination of Notes: . . . . . . . . Notes will be issued in such denominations as may be agreedbetween the Issuer and the relevant Dealer, save that theminimum denomination of each Note will be such as may beallowed or required from time to time by the relevant centralbank (or equivalent body) or any laws or regulationsapplicable to the relevant Specified Currency.

Taxation: . . . . . . . . . . . . . . . . . . . All payments in respect of the Notes will be made withoutdeduction for or on account of withholding taxes imposed byany Tax Jurisdiction (as defined in Condition 9), subject asprovided in Condition 9. In the event that any such deductionis made, the Issuer will, save in certain limited circumstancesprovided in Condition 9, be required to pay additionalamounts to cover the amounts so deducted.

Without prejudice to the Issuer’s obligation to pay additionalamounts as described above, all payments in respect of theNotes will be made subject to any withholding or deductionrequired pursuant to fiscal and other laws, as provided inCondition 7.8.

Negative Pledge: . . . . . . . . . . . . . The terms of the Notes will contain a negative pledgeprovision as further described in Condition 4.

Cross Default: . . . . . . . . . . . . . . . The terms of the Notes will contain a cross default provisionas further described in Condition 11.

Status of the Notes: . . . . . . . . . . . The Notes will constitute direct, unconditional,unsubordinated and, subject to the provisions of Condition 4,unsecured obligations of the Issuer and will rank pari passuamong themselves and (save for certain obligations requiredto be preferred by law) equally with all other unsecuredobligations (other than subordinated obligations, if any) ofthe Issuer, from time to time outstanding.

15

Listing: . . . . . . . . . . . . . . . . . . . . Approval-in-principle has been granted for the listing andquotation of Notes that may be issued pursuant to theProgramme and which are agreed at or prior to the time ofissue thereof to be so listed on the SGX-ST. Such permissionwill be granted when such Notes have been admitted to theOfficial List. The Notes may also be listed on such other orfurther stock exchange(s) as may be agreed between the Issuerand the relevant Dealer in relation to each Series. If theapplication to the SGX-ST to list a particular series of Notesis approved, such Notes listed on the SGX-ST will be tradedon the SGX-ST in a minimum board lot size of at leastSGD200,000.

Unlisted Notes may also be issued.

The applicable Pricing Supplement will state whether or notthe relevant Notes are to be listed and, if so, on which stockexchange(s).

Governing Law: . . . . . . . . . . . . . . The Notes and any non-contractual obligations arising out ofor in connection with the Notes will be governed by, andconstrued in accordance with, English law.

Clearing System: . . . . . . . . . . . . . The Euroclear, Clearstream, Luxembourg (each as defined inCondition 1) and/or any other clearing system, as specified inthe applicable Pricing Supplement (see “Form of Notes”).

Selling Restrictions: . . . . . . . . . . There are restrictions on the offer, sale and transfer of theNotes under the Prospectus Directive and in the United States,the United Kingdom, Italy, the Netherlands, Japan, India,Hong Kong and Singapore and such other restrictions as maybe required in connection with the offering and sale of aparticular Tranche of Notes (see “Subscription and Sale”).

United States SellingRestrictions: . . . . . . . . . . . . . . . . .

Regulation S, Category 1 or 2, TEFRA C or D, or TEFRA notapplicable as specified in the applicable Pricing Supplement.

16

FORM OF THE NOTES

The Notes of each Series will either be in bearer form, with or without interest coupons(Coupons) attached (Bearer Notes), or registered form, without interest coupons attached(Registered Notes). The Notes will be issued outside the United States and, in certain instances, onlyto non-U.S. persons, in reliance on Regulation S.

Notes to be listed on the SGX-ST will be accepted for clearance through Euroclear Bank S.A./N.V. as operator of the Euroclear System (Euroclear) and Clearstream Banking, societe anonyme(Clearstream, Luxembourg).

Bearer Notes

Each Tranche of Bearer Notes will initially be represented by either a temporary bearer globalnote (a Temporary Bearer Global Note) or a permanent bearer global note (a Permanent BearerGlobal Note and, together with a Temporary Bearer Global Note, the Bearer Global Notes, and eacha Bearer Global Note) as indicated in the applicable Pricing Supplement, which, in either case, willbe delivered on or prior to the original issue date of the Tranche to a common depositary (the CommonDepositary) for Euroclear and Clearstream, Luxembourg. Whilst any Note is represented by aTemporary Bearer Global Note, payments of principal, interest (if any) and any other amount payablein respect of the Notes due prior to the Exchange Date (as defined below) will be made againstpresentation of the Temporary Bearer Global Note only to the extent that certification (in a form tobe provided) to the effect that the beneficial owners of interests in such Note are not U.S. persons orpersons who have purchased for resale to any U.S. person, as required by U.S. Treasury regulations,has been received by Euroclear and/or Clearstream, Luxembourg, as applicable, has given a likecertification (based on the certifications it has received) to the Principal Paying Agent.

On and after the date (the Exchange Date) which, for each Tranche in respect of which aTemporary Bearer Global Note is issued, is 40 days after the Temporary Bearer Global Note is issued,interests in such Temporary Bearer Global Note will be exchangeable (free of charge) upon a requestas described therein either for (i) interests in a Permanent Bearer Global Note of the same Series or(ii) definitive Bearer Notes (Definitive Bearer Notes) of the same Series with, where applicable,receipts, interest coupons and talons attached (as indicated in the applicable Pricing Supplement andsubject, in the case of Definitive Bearer Notes, to such notice period as is specified in the applicablePricing Supplement), in each case against certification of beneficial ownership as described above,unless such certification has already been given. The holder of a Temporary Bearer Global Note willnot be entitled to collect any payment of interest, principal or other amount due on or after theExchange Date unless, upon due certification, exchange of the Temporary Bearer Global Note for aninterest in a Permanent Global Note or for Definitive Bearer Notes is improperly withheld or refused.

Payments of principal, interest (if any) or any other amounts on a Permanent Bearer Global Notewill be made through Euroclear and/or Clearstream, Luxembourg against presentation or surrender (asthe case may be) of the Permanent Bearer Global Note without any requirement for certification.

The applicable Pricing Supplement will specify that a Permanent Bearer Global Note will beexchangeable (free of charge), in whole but not in part, for Definitive Bearer Notes with, whereapplicable, receipts, interest coupons and talons attached upon either (i) not less than 60 days’ writtennotice from Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of aninterest in such Permanent Bearer Global Note) to the Principal Paying Agent as described therein or(ii) only upon the occurrence of an Exchange Event.

For these purposes, Exchange Event means that (i) an Event of Default has occurred and iscontinuing, (ii) the Issuer has been notified that both Euroclear and Clearstream, Luxembourg havebeen closed for business for a continuous period of 14 days (other than by reason of holiday, statutory

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or otherwise) or have announced an intention permanently to cease business or have in fact done soand no successor or alternative clearing system satisfactory to the Trustee is available or (iii) theIssuer has or will become subject to adverse tax consequences which would not be suffered were theNotes represented by the Permanent Bearer Global Note in definitive form and a certificate to sucheffect from an authorised officer of the Issuer has been given to the Trustee. The Issuer will promptlygive notice to the Noteholders in accordance with Condition 15 if an Exchange Event occurs. In theevent of the occurrence of an Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting onthe instructions of any holder of an interest in such Permanent Bearer Global Note) or, the Trustee maygive notice to the Principal Paying Agent requesting exchange and, in the event of the occurrence ofan Exchange Event as described in (iii) above, the Issuer may also give notice to the Principal PayingAgent requesting exchange. Any such exchange shall occur not later than 45 days after the date ofreceipt of the first relevant notice by the Principal Paying Agent.

The following legend will appear on all Notes (other than Temporary Global Notes), receipts andinterest coupons relating to such Notes where TEFRA D is specified in the applicable PricingSupplement:

“ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TOLIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THELIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUECODE.”

The sections referred to provide that United States holders, with certain exceptions, will not beentitled to deduct any loss on Notes, receipts or interest coupons and will not be entitled to capitalgains treatment of any gain on any sale, disposition, redemption or payment of principal in respect ofsuch Notes, receipts or interest coupons.

Notes which are represented by a Global Note will only be transferable in accordance with therules and procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be.

Registered Notes

The Registered Notes of each Tranche will initially be represented by a global note in registeredform (a Registered Global Note).

Registered Global Notes will be deposited with, and registered in the name of a nominee of, acommon depositary for Euroclear and Clearstream, Luxembourg, as specified in the applicable PricingSupplement. Persons holding beneficial interests in Registered Global Notes will be entitled orrequired, as the case may be, under the circumstances described below, to receive physical deliveryof definitive Notes in fully registered form (Definitive Registered Notes).

Payments of principal, interest and any other amount in respect of the Registered Global Noteswill, in the absence of provision to the contrary, be made to the person shown on the Register (asdefined in Condition 7.4) as the registered holder of the Registered Global Notes. None of the Issuer,any Paying Agent or the Registrar (each as defined under “Terms and Conditions of the Notes”) willhave any responsibility or liability for any aspect of the records relating to or payments or deliveriesmade on account of beneficial ownership interests in the Registered Global Notes or for maintaining,supervising or reviewing any records relating to such beneficial ownership interests.

Payments of principal, interest or any other amount in respect of the Definitive Registered Noteswill, in the absence of provision to the contrary, be made to the persons shown on the Register on therelevant Record Date (as defined in Condition 7.4) immediately preceding the due date for paymentin the manner provided in that Condition.

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Interests in a Registered Global Note will be exchangeable (free of charge), in whole but not inpart, for Definitive Registered Notes without receipts, interest coupons or talons attached only uponthe occurrence of an Exchange Event (as defined under “Form of the Notes — Bearer Notes”).

The Issuer will promptly give notice to the Noteholders and the Trustee in accordance withCondition 15 if an Exchange Event occurs. In the event of the occurrence of an Exchange Event,Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest insuch Registered Global Note) or the Trustee may give notice to the Registrar requesting exchange and,in the event of the occurrence of an Exchange Event as described in (iii) of the definition of ExchangeEvent under “Form of the Notes — Bearer Notes”, the Issuer may also give notice to the Registrarrequesting exchange. Any such exchange shall occur not later than ten days after the date of receiptof the first relevant notice by the Registrar.

Transfer of Interests

Interests in a Registered Global Note may, subject to compliance with all applicable restrictions,be transferred to a person who wishes to hold such interest in another Registered Global Note. Nobeneficial owner of an interest in a Registered Global Note will be able to transfer such interest,except in accordance with the applicable procedures of Euroclear and Clearstream, Luxembourg, ineach case to the extent applicable.

General

Pursuant to the Agency Agreement (as defined under “Terms and Conditions of the Notes”), thePrincipal Paying Agent shall arrange that, where a further Tranche of Notes is issued which is intendedto form a single Series with an existing Tranche of Notes at a point after the Issue Date of the furtherTranche, the Notes of such further Tranche shall be assigned a common code and ISIN number whichare different from the common code and ISIN assigned to Notes of any other Tranche of the sameSeries until such time as the Tranches are consolidated and form a single Series, which shall not beprior to the expiry of the Distribution Compliance Period applicable to the Notes of such Tranche.

For so long as any of the Notes is represented by a Bearer Global Note or a Registered GlobalNote (each a Global Note) held on behalf of Euroclear and/or Clearstream, Luxembourg, each person(other than Euroclear and/or Clearstream, Luxembourg) who is for the time being shown in the recordsof Euroclear or Clearstream, Luxembourg as the holder of a particular nominal amount of such Notes(in which regard any certificate or other document issued by Euroclear or Clearstream, Luxembourgas to the nominal amount of such Notes standing to the account of any person shall be conclusive andbinding for all purposes save in the case of manifest error) shall be treated by the Trustee, the Issuerand their agents as the holder of such nominal amount of such Notes for all purposes other than withrespect to the payment of principal or interest on such nominal amount of such Notes, for whichpurpose the bearer of the relevant Bearer Global Note or the registered holder of the relevantRegistered Global Note shall be treated by the Trustee, the Issuer and their agents as the holder of suchnominal amount of such Notes in accordance with and subject to the terms of the relevant Global Noteand the Trust Deed, and the expressions Noteholder and holder of Notes and related expressions shallbe construed accordingly.

Any reference herein to Euroclear and/or Clearstream, Luxembourg shall, whenever the contextso permits, be deemed to include a reference to any additional or alternative clearing system specifiedin the applicable Pricing Supplement or otherwise approved by the Issuer, the Trustee and thePrincipal Paying Agent.

No Noteholder, Receiptholder (as defined below) or Couponholder shall be entitled to proceeddirectly against the Issuer unless the Trustee, having become bound so to proceed, fails so to do withina reasonable period and the failure shall be continuing.

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If the applicable Pricing Supplement specifies any modification to the Terms and Conditions of

the Notes as described herein, it is envisaged that, to the extent that such modification relates only to

Conditions 1, 5, 6, 7, 8 (except Condition 8.2), 12, 13, 14, 15 (insofar as such Notes are not listed or

admitted to trade on any stock exchange) or 17, they will not necessitate the preparation of a

supplement to this Offering Circular. If the Terms and Conditions of the Notes of any Series are to be

modified in any other respect, a supplement to this Offering Circular will be prepared, if appropriate.

So long as any Notes are listed on the SGX-ST and the rules of the SGX-ST so require, the Issuer

shall appoint and maintain a paying agent in Singapore, where such Notes may be presented or

surrendered for payment or redemption, in the event that the Global Note representing such Notes is

exchanged for definitive Notes. In addition, an announcement of such exchange will be made through

the SGX-ST. Such announcement will include all material information with respect to the delivery of

the definitive Notes, including details of the paying agent in Singapore.

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FORM OF PRICING SUPPLEMENT

Set out below is the form of Pricing Supplement which will be completed for each Tranche ofNotes issued under the Programme.

[Date]

NTPC Limited

Issue of [Aggregate Nominal Amount of Tranche] [Title of Notes]under the U.S.$4,000,000,000


This document constitutes the Pricing Supplement relating to the issue of Notes described herein.

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions setforth in the Offering Circular dated 4 November 2015 [and the supplement[s] to it dated [ ] and[ ]] (the Offering Circular). This Pricing Supplement contains the final terms of the Notes andmust be read in conjunction with such Offering Circular.

[The following alternative language applies if the first tranche of an issue which is beingincreased was issued under an Offering Circular with an earlier date.

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (theConditions) set forth in the Offering Circular dated [original date] [and the supplement dated [date]].This Pricing Supplement contains the final terms of the Notes and must be read in conjunction withthe Offering Circular dated [current date], save in respect of the Conditions which are extracted fromthe Offering Circular dated [original date] and are attached hereto.]

[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that thenumbering should remain as set out below, even if “Not Applicable” is indicated for individualparagraphs or subparagraphs. Italics denote directions for completing the Pricing Supplement]

1. Issuer: NTPC Limited

2. (a) Series Number: [ ]

(b) Tranche Number: [ ](If fungible with an existing Series, details of thatSeries, including the date on which the Notesbecome fungible)

(c) Date on which the Notes will beconsolidated and form a singleSeries:

The Notes will be consolidated and form a singleSeries with [identify earlier Tranches] on [theIssue Date/exchange of the Temporary GlobalNote for interests in the Permanent Global Note,as referred to in paragraph [ ] below, which isexpected to occur on or about [date]][NotApplicable]

3. Specified Currency or Currencies: [ ]

4. Aggregate Nominal Amount:

(a) Series: [ ]

(b) Tranche: [ ]

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5. (a) Issue Price: [ ] per cent. of the Aggregate Nominal Amount[plus accrued interest from [insert date](in the case of fungible issues only, if applicable)]

(b) [Net proceeds: [ ]]

6. (a) Specified Denominations: [ ](N.B. Notes must have a minimum denomination ofC= 100,000 or equivalent) (Note — where BearerNotes with multiple denominations above[ C= 100,000] or equivalent are being used withrespect to Bearer Notes, the following samplewording should be followed:

“[ C= 100,000] and integral multiples of [ C= 1,000]in excess thereof up to and including [ C= 199,000].No Notes in definitive form will be issued with adenomination above [ C= 199,000].”)

(N.B. If an issue of Notes is (i) NOT admitted totrading on a European Economic Area exchange;and (ii) only offered in the European EconomicArea in circumstances where a prospectus is notrequired to be published under the ProspectusDirective, the C= 100,000 minimum denomination isnot required.)

(In the case of Registered Notes, this means theminimum integral amount in which transfers canbe made.)

(b) Calculation Amount: [ ](If only one Specified Denomination, insert theSpecified Denomination.

If more than one Specified Denomination, insertthe highest common factor. Note: There must be acommon factor in the case of two or moreSpecified Denominations.)

7. (a) Issue Date: [ ]

(b) Interest Commencement Date: [Specify/Issue Date/Not Applicable](N.B. An Interest Commencement Date will not berelevant for certain Notes, for example ZeroCoupon Notes.)

8. Maturity Date: [Fixed rate — Specify date or for Floating ratenotes — Interest Payment Date falling in ornearest to [specify month and year]]

9. Interest Basis: [[ ] per cent. Fixed Rate][[LIBOR/EURIBOR] +/- [ ] per cent.Floating Rate][Zero Coupon][Index Linked Interest][Dual Currency Interest][specify other](further particulars specified below)

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10. Redemption/Payment Basis: [Redemption at par][Index Linked Redemption][Dual Currency Redemption][Partly Paid][Instalment][specify other]

11. Change of Interest Basis orRedemption/Payment Basis:

[Applicable/Not Applicable](If applicable, specify details of any provision forchange of Notes into another Interest Basis orRedemption/Payment Basis)

12. (a) Date of board approval forissuance of Notes obtained:

[ ] [and [ ], respectively]]/[None required](N.B. Only relevant where board (or similar)authorisation is required for the particulartranche of Notes)

(b) Date of regulatoryapproval/consent for issuance ofNotes obtained:

[ ]/[None required](N.B. Only relevant where regulatory (or similar)approval or consent is required for the particulartranche of Notes)

13. Listing: [Singapore/specify other/None](N.B. Consider disclosure requirements under theEU Prospectus Directive applicable to securitiesadmitted to an EU regulated market)

14. Method of distribution: [Syndicated/Non-syndicated]

PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

15. Fixed Rate Note Provisions: [Applicable/Not Applicable](If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Rate(s) of Interest: [ ] per cent. per annum payable in arrear oneach Interest Payment Date

(b) Interest Payment Date(s): [ ] in each year up to and including theMaturity Date (Amend appropriately in the case ofirregular coupons)

(c) Fixed Coupon Amount(s): [ ] per Calculation Amount

(d) Broken Amount(s): [[ ] per Calculation Amount, payable on theInterest Payment Date falling [in/on] [ ]][NotApplicable]

(e) Day Count Fraction: [Actual/Actual (ICMA)] [30/360] [Actual/365(Fixed)] or [specify other]

(f) Determination Date(s): [[ ] in each year][Not Applicable] (Onlyrelevant where Day Count Fraction isActual/Actual (ICMA). In such a case, insertregular interest payment dates, ignoring issue dateor maturity date in the case of a long or shortfirst or last coupon)

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(g) Other terms relating to the methodof calculating interest for FixedRate Notes:

[None/Give details]

16. Floating Rate Note Provisions [Applicable/Not Applicable](If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Specified Period(s)/SpecifiedInterest Payment Dates:

[ ]

(b) Business Day Convention: [Floating Rate Convention/Following BusinessDay Convention/Modified Following Business DayConvention/Preceding Business DayConvention/[specify other]][Not Applicable]

(c) Additional Business Centre(s): [ ]

(d) Manner in which the Rate ofInterest and Interest Amount isto be determined:

[Screen Rate Determination/ISDA Determination]/[specify other]

(e) Party responsible for calculatingthe Rate of Interest and InterestAmount (if not the PrincipalPaying Agent):

[ ]

(f) Screen Rate Determination:• Reference Rate:

Reference Rate: [ ] month [LIBOR/EURIBOR/specify other Reference Rate](Either LIBOR, EURIBOR or other, althoughadditional information is required if other,including fallback provisions in the AgencyAgreement)

• Interest DeterminationDate(s):

[ ](Second London business day prior to the start ofeach Interest Period if LIBOR (other than Sterlingor euro LIBOR), first day of each Interest Periodif Sterling LIBOR and the second day on whichthe TARGET2 System is open prior to the start ofeach Interest Period if EURIBOR or euro LIBOR)

• Relevant Screen Page: [ ](In the case of EURIBOR, if not ReutersEURIBOR 01 ensure it is a page which shows acomposite rate or amend the fallback provisionsappropriately)

(g) ISDA Determination:

• Floating Rate Option: [ ]

• Designated Maturity: [ ]

• Reset Date: [ ](in the case of a LIBOR or EURIBOR-basedoption, the first day of the Interest Period)

(h) Margin(s): [+/-] [ ] per cent. per annum

(i) Minimum Rate of Interest: [ ] per cent. per annum

(j) Maximum Rate of Interest: [ ] per cent. per annum

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(k) Day Count Fraction: [Actual/Actual (ISDA)][Actual/Actual][Actual/365 (Fixed)][Actual/365 (Sterling)][Actual/360][30/360][360/360][Bond Basis][30E/360][Eurobond Basis][30E/360 (ISDA)][specify other](See Condition 6 for alternatives)

17. Zero Coupon Note Provisions [Applicable/Not Applicable](If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Accrual Yield: [ ] per cent. per annum

(b) Reference Price: [ ]

(c) Any other formula/basis ofdetermining amount payable:

[ ]

(d) Day Count Fraction in relation toEarly Redemption Amounts

[30/360][Actual/360][Actual/365][specify other]

18. Index Linked Interest Note Provisions [Applicable/Not Applicable](If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Index/Formula: [give or annex details]

(b) Calculation Agent: [give name]

(c) Calculation Agent responsible forcalculating the interest due:

[ ]

(d) Provisions for determining Couponwhere calculation by reference toIndex and/or Formula isimpossible or impracticable:

[ ] (Need to include a description of marketdisruption or settlement disruption events andadjustment provisions)

(e) Specified Period(s)/SpecifiedInterest Payment Dates:

[ ]

(f) Business Day Convention: [Floating Rate Convention/Following BusinessDay Convention/Modified Following Business DayConvention/Preceding Business DayConvention/specify other]

(g) Additional Business Centre(s): [ ]

(h) Minimum Rate of Interest: [ ] per cent. per annum

(i) Maximum Rate of Interest: [ ] per cent. per annum

(j) Day Count Fraction: [ ]

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19. Dual Currency Interest Note Provisions [Applicable/Not Applicable](If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Rate of Exchange/method ofcalculating Rate of Exchange:

[give or annex details]

(b) Party responsible for calculatingthe Rate of Interest (if not theCalculation Agent) and InterestAmount (if not the PrincipalPaying Agent):

[ ]

(c) Provisions for determining Couponwhere calculation by reference toIndex and/or Formula isimpossible or impracticable:

[need to include a description of marketdisruption or settlement disruption events andadjustment provisions]

(d) Person at whose option SpecifiedCurrency(ies) is/are payable:

[ ]

PROVISIONS RELATING TO REDEMPTION

20. Issuer Call: [Applicable/Not Applicable]

(If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount andmethod, if any, of calculation ofsuch amount(s):

[[ ] per Calculation Amount/specify other/seeAppendix]

(c) If redeemable in part:

(i) Minimum RedemptionAmount:

[ ]

(ii) Maximum RedemptionAmount:

[ ]

(d) Notice period (if other than as setout in the Conditions):

[ ]

(N.B. If setting notice periods which are differentto those provided in the Conditions, the Issuer isadvised to consider the practicalities ofdistribution of information through intermediaries,for example, clearing systems (which require aminimum of five clearing system business days’notice for a call) and custodians, as well as anyother notice requirements which may apply, forexample, as between the Issuer and the PrincipalPaying Agent or the Trustee)

21. Investor Put: [Applicable/Not Applicable]

(If not applicable, delete the remainingsubparagraphs of this paragraph)

(a) Optional Redemption Date(s): [ ]

(b) Optional Redemption Amount ofeach Note and method, if any, ofcalculation of such amount(s):

[[ ] per Calculation Amount/specify other/seeAppendix]

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(c) Notice period (if other than as setout in the Conditions):

[ ]

(N.B. If setting notice periods which are differentto those provided in the Conditions, the Issuer isadvised to consider the practicalities ofdistribution of information through intermediaries,for example, clearing systems (which require aminimum of 15 clearing system business days’notice for a put) and custodians, as well as anyother notice requirements which may apply, forexample, as between the Issuer and the PrincipalPaying Agent or the Trustee)

22. Final Redemption Amount: [ ] per Calculation Amount

23. Early Redemption Amount payable onredemption for taxation reasons or onevent of default:

[[ ] per Calculation Amount/specify other/seeAppendix](N.B. If the Final Redemption Amount is 100 percent. of the nominal value (i.e. par), the EarlyRedemption Amount is likely to be par (butconsider). If, however, the Final RedemptionAmount is other than 100 per cent. of the nominalvalue, consideration should be given as to whatthe Early Redemption Amount should be)

GENERAL PROVISIONS APPLICABLE TO THE NOTES

24. Form of Notes: [Bearer Notes:

[Temporary Bearer Global Note exchangeable fora Permanent Bearer Global Note which isexchangeable for Definitive Bearer Notes [on 60days’ notice given at any time/only upon anExchange Event]]

[Temporary Bearer Global Note exchangeable forDefinitive Bearer Notes on and after the ExchangeDate] [Permanent Bearer Global Noteexchangeable for Definitive Bearer Notes [on 60days’ notice given at any time/only upon anExchange Event]]

(Ensure that this is consistent with the wording inthe “Form of the Notes” section in the OfferingCircular and the Notes themselves. N.B. Theexchange upon notice option should not beexpressed to be applicable if the SpecifiedDenomination of the Notes in paragraph 6includes language substantially to the followingeffect:

27

“[ C= 100,000] and integral multiples of [ C= 1,000]in excess thereof up to and including [ C= 199,000].No Notes in definitive form will be issued with adenomination above [ C= 199,000]”. Furthermore,such Specified Denomination construction is notpermitted in relation to any issue of Notes whichis to be represented on issue by a TemporaryBearer Global Note exchangeable for DefinitiveBearer Notes.)

[Registered Notes:

Registered Global Note ([ ] nominal amount)registered in the name of a nominee for a commondepositary for Euroclear and Clearstream,Luxembourg (specify nominal amounts)]

25. Additional Financial Centre(s): [Not Applicable/give details](Note that this item relates to the date of paymentand not Interest Period end dates to which items16(c) and 18(g) relate)

26. Talons for future Coupons to beattached to Definitive Notes in bearerform (and dates on which such Talonsmature):

[Yes, as the Notes have more than 27 couponpayments, Talons may be required if, on exchangeinto definitive form, more than 27 couponpayments are still to be made/No]

27. Details relating to Partly Paid Notes:amount of each payment comprisingthe Issue Price and date on whicheach payment is to be made andconsequences of failure to pay,including any right of the Issuer toforfeit the Notes and interest due onlate payment:

[Not Applicable/give details. N.B. a new form ofTemporary Bearer Global Note and/or PermanentBearer Global Note may be required for PartlyPaid issues]

28. Details relating to Instalment Notes: [Not Applicable]

(a) [Instalment Amount(s): [give details]]

(b) [Instalment Date(s): [give details]]

29. Redenomination applicable: Redenomination [not] applicable(If Redenomination is applicable, specify theapplicable Day Count Fraction and any provisionsnecessary to deal with floating rate interestcalculation (including alternative reference rates))

30. Permitted Security Interest Date: [ ] (See Condition 4)

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31. [HIRE Act Withholding: The Notes shall be treated as Specified Notes (asdefined in the Offering Circular) for the purposeof Section 871(m) of the U.S. Internal RevenueCode of 1986.] (To be deleted if the Notes do notreference underlying U.S. securities. If the Notesreference underlying U.S. securities, this languageshould only be included if it is determined thatwithholding under Section 871(m) will beapplicable to the Notes.)

32. Other terms or special conditions: [Not Applicable/give details]

DISTRIBUTION

33. (a) If syndicated, names of Managers: [Not Applicable/give names]

(b) Stabilising Manager(s) (if any): [Not Applicable/give name(s)]

34. If non-syndicated, name of relevantDealer:

[ ]

35. Whether TEFRA D or TEFRA C rulesapplicable or TEFRA rules notapplicable:

[TEFRA D/TEFRA C/TEFRA not applicable]

36. Whether Category 1 or Category 2applicable in respect of the Notesoffered and sold in reliance onRegulation S:

[Category 1/Category 2][(Notes offered in reliance on Category 1 must bein registered form)]

37. Additional selling restrictions: [Not Applicable/give details]

OPERATIONAL INFORMATION

38. Any clearing system(s) other thanEuroclear and Clearstream, Luxembourgand the relevant identificationnumber(s):

[Not Applicable/give name(s) and number(s)]

39. Delivery: Delivery [against/free of] payment

40. Additional Paying Agent(s) (if any): [ ]

ISIN: [ ]

Common Code: [ ]

[LISTING APPLICATION

This Pricing Supplement comprises the final terms required to list the issue of Notes described

herein pursuant to the U.S.$4,000,000,000 Medium Term Note Programme of NTPC Limited.]

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RESPONSIBILITY

The Issuer accepts responsibility for the information contained in this Pricing Supplement.

Signed on behalf of the Issuer:

By:

Duly authorised

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TERMS AND CONDITIONS OF THE NOTES

The following, subject to alteration and except for the paragraphs in italics, are the Terms andConditions of the Notes which will be incorporated by reference into each Global Note (as definedbelow) and each definitive Note, in the latter case only if permitted by the relevant stock exchange orother relevant authority (if any) and agreed by the Issuer and the relevant Dealer at the time of issuebut, if not so permitted and agreed, such definitive Note will have endorsed thereon or attachedthereto such Terms and Conditions. The applicable Pricing Supplement in relation to any Tranche ofNotes may specify other terms and conditions which shall, to the extent so specified or to the extentinconsistent with the following Terms and Conditions, replace or modify the following Terms andConditions for the purpose of such Notes. The applicable Pricing Supplement (or the relevantprovisions thereof) will be endorsed upon, or attached to, each Global Note and definitive Note.Reference should be made to “Form of the Notes” for a description of the content of PricingSupplements which will specify which of such terms are to apply in relation to the relevant Notes.

This Note is one of a Series (as defined below) of Notes issued by NTPC Limited (the Issuer)and constituted by a Trust Deed dated 14 February 2006 (as modified and/or supplemented and/orrestated from time to time, the Trust Deed) made between the Issuer and Citicorp Trustee CompanyLimited (the Trustee which expression shall include any successor as Trustee) as amended by theamended and restated Trust Deed dated 25 May 2011 (as modified and/or supplemented and/or restatedfrom time to time, the Amended and Restated Trust Deed) between the Issuer and the Trustee.

References herein to the Notes shall be references to the Notes of this Series and shall mean:

(i) in relation to any Notes represented by a global Note (a Global Note), units of the lowestSpecified Denomination in the Specified Currency;

(ii) any Global Note in bearer form (a Bearer Global Note);

(iii) any Global Note in registered form (a Registered Global Note);

(iv) definitive Notes in bearer form (Definitive Bearer Notes, and together with Bearer GlobalNotes, the Bearer Notes) issued in exchange for a Bearer Global Note; and

(v) definitive Notes in registered form (Definitive Registered Notes, and together withRegistered Global Notes, the Registered Notes), whether or not issued in exchange for aRegistered Global Note.

The Notes, the Receipts (as defined below) and the Coupons (as defined below) have the benefitof an amended and restated Agency Agreement dated 25 May 2011 (such Agency Agreement asamended and/or supplemented and/or restated from time to time, the Agency Agreement) and madebetween the Issuer, the Trustee, Citibank, N.A. as principal paying agent and agent bank (thePrincipal Paying Agent, which expression shall include any successor principal paying agent) and theother paying agents named therein (together with the Principal Paying Agent, the Paying Agents,which expression shall include any additional or successor paying agents) and as transfer agent (theTransfer Agent, which expression shall include any substitute or any additional transfer agentsappointed in accordance with the Agency Agreement) and Citigroup Global Markets Deutschland AGas registrar (the Registrar, which expression shall include any successor registrar and together withthe Paying Agents and Transfer Agents, the Agents).

Interest bearing definitive Bearer Notes have interest coupons (Coupons) and, in the case ofNotes which, when issued in definitive form, have more than 27 interest payments remaining, talonsfor further Coupons (Talons) attached on issue. Any reference herein to Coupons shall, unless the

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context otherwise requires, be deemed to include a reference to Talons. Definitive Bearer Notesrepayable in instalments have receipts (Receipts) for the payment of the instalments of principal(other than the final instalment) attached on issue. Registered Notes and Global Notes do not haveReceipts, Coupons or Talons attached on issue.

The Pricing Supplement for this Note (or the relevant provisions thereof) is attached to orendorsed on this Note and supplements these Terms and Conditions (Conditions) and may specifyother terms and conditions which shall, to the extent so specified or to the extent inconsistent withthese Conditions, replace or modify these Conditions for the purposes of this Note. References to theapplicable Pricing Supplement are to the Pricing Supplement (or the relevant provisions thereof)attached to or endorsed on this Note.

Any reference to Noteholders or holders in relation to any Notes shall mean the holders of theNotes and shall, in relation to any Notes represented by a Global Note, be construed as providedbelow. Any reference herein to Receiptholders shall mean the holders of the Receipts and anyreference herein to Couponholders shall mean the holders of the Coupons and shall, unless thecontext otherwise requires, include the holders of the Talons. The Trustee acts for the benefit of theNoteholders, the Receiptholders and the Couponholders, in accordance with the provisions of the TrustDeed.

As used herein, Tranche means Notes which are identical in all respects (including as to listing)and Series means a Tranche of Notes together with any further Tranche or Tranches of Notes whichare (i) expressed to be consolidated and form a single series and (ii) have the same terms andconditions or terms and conditions which are the same in all respects save for the amount and the dateof the first payment of interest thereon and the date from which interest starts to accrue.

Copies of the Trust Deed and the Agency Agreement are available for inspection during normalbusiness hours at the registered office for the time being of the Trustee (being, at Citigroup Centre,Canada Square, Canary Wharf, London E14 5LB, United Kingdom) and at the specified office of eachof the Principal Paying Agent and the other Paying Agents. Copies of the applicable PricingSupplement are obtainable during normal business hours at the specified office of each of the PayingAgents save that, if this Note is an unlisted Note of any Series, the applicable Pricing Supplement willonly be obtainable by a Noteholder holding one or more unlisted Notes of that Series and suchNoteholder must produce evidence satisfactory to the Issuer and the relevant Agent as to its holdingof such Notes and identity. The Noteholders, the Receiptholders and the Couponholders are deemedto have notice of, and are entitled to the benefit of, and are bound by, all the provisions of the TrustDeed, the Agency Agreement and the applicable Pricing Supplement which are applicable to them. Thestatements in these Conditions include summaries of, and are subject to, the detailed provisions of theTrust Deed and the Agency Agreement.

Words and expressions defined in the Trust Deed and the Agency Agreement or used in theapplicable Pricing Supplement shall have the same meanings where used in these Conditions unlessthe context otherwise requires or unless otherwise stated and provided that, in the event ofinconsistency between the Trust Deed and the Agency Agreement, the Trust Deed will prevail and, inthe event of inconsistency between the Trust Deed or the Agency Agreement and the applicable PricingSupplement, the applicable Pricing Supplement will prevail.

1. FORM, DENOMINATION AND TITLE

The Notes may be in bearer form (Bearer Notes) and/or in registered form (Registered Notes)and, in the case of definitive Notes, will be serially numbered, in the currency (the SpecifiedCurrency) and the denominations (the Specified Denomination(s)) specified in the applicable PricingSupplement. Save as provided in Condition 2, Notes of one Specified Denomination may not beexchanged for Notes of another Specified Denomination.

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This Note may be a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note, an Index LinkedInterest Note, a Dual Currency Interest Note or a combination of any of the foregoing, depending uponthe Interest Basis shown in the applicable Pricing Supplement, which Interest Basis shall be as per theapplicable laws including but not limited to the ECB Guidelines and the ECB Rupee Bond Circular.

This Note may also be an Index Linked Redemption Note, an Instalment Note, a Dual CurrencyRedemption Note, a Partly Paid Note or a combination of any of the foregoing, depending upon theRedemption/Payment Basis shown in the applicable Pricing Supplement.

Definitive Bearer Notes are issued with Coupons attached, unless they are Zero Coupon Notesin which case references to Coupons and Couponholders in these Conditions are not applicable.

Subject as set out below, title to the Bearer Notes, Receipts and Coupons will pass by delivery.Title to Registered Notes will pass upon registration of transfers in the books of the Registrar inaccordance with the provisions of the Agency Agreement. The Issuer, the Trustee, the Principal PayingAgent, any Paying Agent, the Registrar and the Transfer Agent will (except as otherwise ordered bya court of competent jurisdiction or required by law) deem and treat the bearer of any Bearer Note,Receipt or Coupon and any person in whose name a Registered Note is registered as the absoluteowner thereof (whether or not overdue and notwithstanding any notice of ownership or writing thereonor notice of any previous loss or theft thereof) for all purposes but, in the case of any Global Note,without prejudice to the provisions set out in the next succeeding paragraph.

For so long as any of the Notes is represented by a Global Note held on behalf of Euroclear BankS.A./N.V. (Euroclear) and/or Clearstream Banking, societe anonyme (Clearstream, Luxembourg),each person (other than Euroclear or Clearstream, Luxembourg) who is for the time being shown inthe records of Euroclear or Clearstream, Luxembourg as the holder of a particular nominal amount ofsuch Notes (in which regard any certificate or other document issued by Euroclear or Clearstream,Luxembourg as to the nominal amount of such Notes standing to the account of any person shall beconclusive and binding for all purposes save in the case of manifest error) shall be treated by theIssuer, the Trustee, any Paying Agents, the Registrar and the Transfer Agent as the holder of suchnominal amount of such Notes for all purposes other than with respect to the payment of principal orinterest on such nominal amount of such Notes, for which purpose the bearer or registered holder ofthe relevant Global Note shall be treated by the Issuer, the Trustee, any Paying Agent, the Registrarand the Transfer Agent as the holder of such nominal amount of such Notes in accordance with andsubject to the terms of the relevant Global Note and the expressions Noteholder and holder of Notesand related expressions shall be construed accordingly. In determining whether a particular person isentitled to a particular nominal amount of Notes, as aforesaid, the Trustee may rely on such evidenceand/or information and/or certification as it shall, in its absolute discretion, think fit and, if it doesso rely, such evidence and/or information and/or certification shall, in the absence of manifest error,be conclusive and binding on all concerned.

Notes which are represented by a Global Note will be transferable only in accordance with therules and procedures for the time being of Euroclear and Clearstream, Luxembourg, as the case maybe. References to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so permits,be deemed to include a reference to any additional or alternative clearing system specified in theapplicable Pricing Supplement or as may otherwise be approved by the Issuer, the Trustee and thePrincipal Paying Agent.

2. TRANSFERS OF REGISTERED NOTES

2.1 Transfers of Interests in Registered Global Notes

Transfers of beneficial interests in Registered Global Notes will be effected by Euroclear orClearstream, Luxembourg, as the case may be, and, in turn, by other participants and, if appropriate,

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indirect participants in such clearing systems acting on behalf of beneficial transferors and transfereesof such interests. A beneficial interest in a Registered Global Note will, subject to compliance withall applicable legal and regulatory restrictions, be exchangeable for Registered Notes in definitiveform or for a beneficial interest in another Registered Global Note only in the authoriseddenominations set out in the applicable Pricing Supplement and only in accordance with the rules andoperating procedures for the time being of Euroclear or Clearstream, Luxembourg, as the case may be,and in accordance with the terms and conditions specified in the Trust Deed and the AgencyAgreement.

2.2 Transfers of Registered Notes Generally

Registered Notes may not be exchanged for Bearer Notes and vice versa.

Holders of Definitive Registered Notes may exchange such Definitive Registered Notes forinterests in a Registered Global Note of the same type at any time.

Upon the terms and subject to the conditions set forth in the Trust Deed and the AgencyAgreement, a Definitive Registered Note may be transferred in whole or in part (in the authoriseddenominations set out in the applicable Pricing Supplement). In order to effect any such transfer: (i)the holder or holders must (a) surrender the Definitive Registered Note for registration of the transferof the Definitive Registered Note (or the relevant part of the Definitive Registered Note) at thespecified office of the Registrar or any Transfer Agent, with the form of transfer thereon duly executedby the holder or holders thereof or his or their attorney or attorneys duly authorised in writing and (b)complete and deposit such other certifications as may be required by the relevant Transfer Agent and(ii) the Registrar or, as the case may be, the relevant Transfer Agent must, after due and carefulenquiry, being satisfied with the documents of title and the identity of the person making the requestand subject to such reasonable regulations as the Issuer, the Trustee, the Registrar, or as the case maybe, the relevant Transfer Agent may prescribe (such initial regulations being set out in Schedule 4 tothe Agency Agreement). Subject as provided above, the Registrar or, as the case may be, the relevantTransfer Agent will, within three business days (being for this purpose a day on which banks are openfor business in the city where the specified office of the Registrar or, as the case may be, the relevantTransfer Agent is located) of the request (or such longer period as may be required to comply with anyapplicable fiscal or other laws or regulations) authenticate and deliver, or procure the authenticationand delivery of, at its specified office to the transferee or (at the risk of the transferee) send by mailto such address as the transferee may request, a new Definitive Registered Note of a like aggregatenominal amount to the Definitive Registered Note (or the relevant part of the Definitive RegisteredNote) transferred. In the case of the transfer of part only of a Definitive Registered Note, a newDefinitive Registered Note in respect of the balance of the Definitive Registered Note not transferredwill be so authenticated and delivered or (at the risk of the transferor) sent to the transferor.

2.3 Costs of Registration

Registration of transfers will be effected without charge by or on behalf of the Issuer, theRegistrar or the relevant Transfer Agent, but upon payment (or the giving of such indemnity as theRegistrar or the relevant Transfer Agent may reasonably require) in respect of any tax or othergovernmental charges which may be imposed in relation to it provided that the Issuer shall not beresponsible for any documentary stamp tax payable on the transfer of Notes effected in the Republicof India (India) unless the Issuer is the counterparty directly liable for that documentary stamp tax.

3. STATUS

The Notes and any relative Receipts and Coupons are direct, unconditional and (subject to theprovisions of Condition 4) unsecured obligations of the Issuer and (subject as provided above) rankand will rank pari passu, without any preference among themselves, with all other outstandingunsecured and unsubordinated obligations of the Issuer, present and future, but, in the event ofinsolvency, only to the extent permitted by applicable laws relating to creditors’ rights.

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4. NEGATIVE PLEDGE

So long as any of the Notes remains outstanding (as defined in the Trust Deed), the Issuer willnot itself, and will not permit any of its Principal Subsidiaries to, without the approval of anExtraordinary Resolution (as defined in the Trust Deed) of the Noteholders, create or permit to beoutstanding any Security Interest over all or any part of its or of any of its Principal Subsidiaries’present or future revenues or assets except for any Permitted Security Interest.

Indebtedness means any obligation (whether present or future, actual or contingent, secured orunsecured, as principal or surety or otherwise) for the payment or repayment of money.

Permitted Security Interest means:

(a) any Security Interest existing as at the permitted security interest date (the PermittedSecurity Interest Date) specified in the applicable Pricing Supplement and disclosed inwriting in a letter dated on or before the Permitted Security Interest Date from the Issuerto the Trustee and which secures only Indebtedness outstanding as at the Permitted SecurityInterest Date;

(b) any Security Interest securing any Indebtedness denominated in Rupees and obtained in thedomestic markets in India;

(c) any Security Interest securing any Indebtedness denominated in a currency other thanRupees and obtained from any multilateral funding agency;

(d) any Security Interest securing any Indebtedness denominated in any currency and due forrepayment within 12 months from the date of incurring such Indebtedness, and in respectof which no commitment, obligations or arrangement exists to renew, rollover, refinance orotherwise extend the term of such Indebtedness; and

(e) any lien arising by operation of law in the ordinary course of business and securing amountsnot more than 30 days overdue.

Principal Subsidiary means at any time a Subsidiary of the Issuer:

(i) whose net profit before tax and extraordinary items (consolidated in the case of aSubsidiary which itself has Subsidiaries) or whose total assets (consolidated in the case ofa Subsidiary which itself has Subsidiaries) represent in each case (or, in the case of aSubsidiary acquired after the end of the financial period to which the then latest auditedconsolidated accounts of the Issuer and its Subsidiaries relate, are equal to) not less than5 per cent. of the consolidated net profit before tax and extraordinary items of the Issuer,or, as the case may be, consolidated total assets, of the Issuer and its Subsidiaries taken asa whole, all as calculated respectively by reference to the then latest audited accounts(consolidated or, as the case may be, unconsolidated) of such Subsidiary and the then latestaudited consolidated accounts of the Issuer and its Subsidiaries, provided that:

(A) if the then latest audited consolidated accounts of the Issuer and its Subsidiaries showa net loss before tax and extraordinary items for the relevant financial period thenthere shall be substituted for the words “net profit before tax and extraordinary items”the words “total income” for the purposes of this definition; and

(B) in the case of a Subsidiary of the Issuer acquired after the end of the financial periodto which the then latest audited consolidated accounts of the Issuer and itsSubsidiaries relate, the reference to the then latest audited consolidated accounts ofthe Issuer and its Subsidiaries for the purposes of the calculation above shall, untilconsolidated accounts for the financial period in which the acquisition is made have

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been prepared and audited as aforesaid, be deemed to be a reference to suchfirst-mentioned accounts as if such Subsidiary had been shown in such accounts byreference to its then latest relevant audited accounts, adjusted as deemed appropriateby the Issuer;

(ii) to which is transferred the whole or substantially the whole of the undertaking and assetsof a Subsidiary of the Issuer which immediately prior to such transfer is a PrincipalSubsidiary, provided that the transferor Subsidiary shall upon such transfer forthwith ceaseto be a Principal Subsidiary and the transferee Subsidiary shall cease to be a PrincipalSubsidiary pursuant to this subparagraph (ii) on the date on which the consolidatedaccounts of the Issuer and its Subsidiaries for the financial period current at the date of suchtransfer have been prepared and audited as aforesaid but so that such transferor Subsidiaryor such transferee Subsidiary may be a Principal Subsidiary on or at any time after the dateon which such consolidated accounts have been prepared and audited as aforesaid by virtueof the provisions of subparagraph (i) above or, prior to or after such date, by virtue of anyother applicable provision of this definition; or

(iii) to which is transferred an undertaking or assets which, taken together with the undertakingor assets of the transferee Subsidiary, generated (or, in the case of the transferee Subsidiarybeing acquired after the end of the financial period to which the then latest auditedconsolidated accounts of the Issuer and its Subsidiaries relate, generate net profit before taxand extraordinary items equal to) not less than 5 per cent. of the consolidated net profitbefore tax and extraordinary items of the Issuer, or represent (or, in the case aforesaid, areequal to) not less than 5 per cent. of the consolidated total assets of the Issuer and itsSubsidiaries taken as a whole, all as calculated as referred to in subparagraph (i) above,provided that the transferor Subsidiary (if a Principal Subsidiary) shall upon such transferforthwith cease to be a Principal Subsidiary unless immediately following such transfer itsundertaking and assets generate (or, in the case aforesaid, generate net profit before tax andextraordinary items equal to) not less than 5 per cent. of the consolidated net profit beforetax and extraordinary items of the Issuer, or its assets represent (or, in the case aforesaid,are equal to) not less than 5 per cent. of the consolidated total assets of the Issuer and itsSubsidiaries taken as a whole, all as calculated as referred to in subparagraph (i) above, andthe transferee Subsidiary shall cease to be a Principal Subsidiary pursuant to thissubparagraph (iii) on the date on which the consolidated accounts of the Issuer and itsSubsidiaries for the financial period current at the date of such transfer have been preparedand audited but so that such transferor Subsidiary or such transferee Subsidiary may be aPrincipal Subsidiary on or at any time after the date on which such consolidated accountshave been prepared and audited as aforesaid by virtue of the provisions of subparagraph (i)above or, prior to or after such date, by virtue of any other applicable provision of thisdefinition.

A certificate (given at the request of the Trustee) by the Director (Finance) of the Issuer whetheror not addressed to the Trustee that in their opinion a Subsidiary of the Issuer is or is not or was orwas not at any particular time or throughout any specified period a Principal Subsidiary may be reliedupon by the Trustee without further enquiry or evidence and, if relied upon by the Trustee, shall, inthe absence of manifest or proven error, be conclusive and binding on all parties.

Security Interest means any mortgage, charge, lien, pledge or other security interest including,without limitation, anything analogous to any of the foregoing.

Subsidiary means any company (i) in which the Issuer holds a majority of the voting rights or(ii) of which the Issuer is a member and has the right to appoint or remove a majority of the boardof directors or (iii) of which the Issuer is a member and controls a majority of the voting rights, andincludes any company which is a Subsidiary of a Subsidiary of the Issuer.

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5. REDENOMINATION

5.1 Redenomination

Where redenomination is specified in the applicable Pricing Supplement as being applicable, the

Issuer may, without the consent of the Noteholders, the Receiptholders or the Couponholders, on

giving 30 days’ prior notice to the Trustee, the Principal Paying Agent, Euroclear and/or Clearstream,

Luxembourg as applicable, and at least 30 days’ prior notice to the Noteholders in accordance with

Condition 15, elect that, with effect from the Redenomination Date specified in the notice, the Notes

shall be redenominated in euro.

The election will have effect as follows:

(a) the Notes and the Receipts shall be deemed to be redenominated into euro in the

denomination of 0.01 with a nominal amount in euro for each Note and Receipt equal to the

nominal amount of that Note or Receipt in the Specified Currency, converted into euro at

the Established Rate, provided that, if the Issuer determines, with the agreement of the

Principal Paying Agent and the Trustee, that the then market practice in respect of the

redenomination into euro of internationally offered securities is different from the

provisions specified above, such provisions shall be deemed to be amended so as to comply

with such market practice and the Issuer shall promptly notify the Noteholders, the stock

exchange (if any) on which the Notes are for the time being listed and the Paying Agents

of such deemed amendments;

(b) save to the extent that an Exchange Notice has been given in accordance with paragraph (d)

below, the amount of interest due in respect of the Notes will be calculated by reference to

the aggregate nominal amount of Notes presented (or, as the case may be, in respect of

which Coupons are presented) for payment by the relevant holder and the amount of such

payment shall be rounded down to the nearest euro 0.01;

(c) if definitive Notes are required to be issued after the Redenomination Date, they shall be

issued at the expense of the Issuer in the denominations of euro 1,000, euro 10,000, euro

100,000 and (but only to the extent of any remaining amounts less than 1,000 or such

smaller denominations as the Issuer in conjunction with the Principal Paying Agent may

determine) euro 0.01 and such other denominations as the Issuer shall determine and notify

to the Noteholders;

(d) if issued prior to the Redenomination Date, all unmatured Coupons denominated in the

Specified Currency (whether or not attached to the Notes) will become void with effect

from the date on which the Issuer gives notice (the Exchange Notice) that replacement

euro-denominated Notes, Receipts and Coupons are available for exchange (provided that

such securities are so available) and no payments will be made in respect of them. The

payment obligations contained in any Notes and Receipts so issued will also become void

on that date although those Notes and Receipts will continue to constitute valid exchange

obligations of the Issuer. New euro-denominated Notes, Receipts and Coupons will be

issued in exchange for Notes, Receipts and Coupons denominated in the Specified Currency

in such manner as the Principal Paying Agent may specify and as shall be notified to the

Noteholders in the Exchange Notice. No Exchange Notice may be given less than 15 days

prior to any date for payment of principal or interest on the Notes;

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(e) after the Redenomination Date, all payments in respect of the Notes, the Receipts and theCoupons, other than payments of interest in respect of periods commencing before theRedenomination Date, will be made solely in euro as though references in the Notes to theSpecified Currency were to euro. Payments will be made in euro by credit or transfer to aeuro account (or any other account to which euro may be credited or transferred) specifiedby the payee or, at the option of the payee, by a euro cheque;

(f) if the Notes are Fixed Rate Notes and interest for any period ending on or after theRedenomination Date is required to be calculated for a period ending other than on anInterest Payment Date, it will be calculated:

(i) in the case of the Notes represented by a Global Note, by applying the Rate of Interestto the aggregate outstanding nominal amount of the Notes represented by such GlobalNote (or, if they are Partly Paid Notes, the aggregate amount paid up); and

(ii) in the case of definitive Notes, by applying the Rate of Interest to the CalculationAmount;

and, in each case, multiplying such sum by the applicable Day Count Fraction, androunding the resultant figure to the nearest sub-unit of the relevant Specified Currency, halfof any such sub-unit being rounded upwards or otherwise in accordance with applicablemarket convention. Where the Specified Denomination of a Fixed Rate Note in definitiveform is a multiple of the Calculation Amount, the amount of interest payable in respect ofsuch Fixed Rate Note shall be the product of the amount (determined in the mannerprovided above) for the Calculation Amount and the amount by which the CalculationAmount is multiplied to reach the Specified Denomination, without any further rounding;

(g) if the Notes are Floating Rate Notes, the applicable Pricing Supplement will specify anyrelevant changes to the provisions relating to interest; and

(h) such other changes shall be made to these Conditions as the Issuer may decide, afterconsultation with the Trustee and the Principal Paying Agent, and as may be specified inthe notice, to conform them to conventions then applicable to instruments denominated ineuro.

5.2 Definitions

In these Conditions, the following expressions have the following meanings:

Established Rate means the rate for the conversion of the Specified Currency (includingcompliance with rules relating to roundings in accordance with applicable European Unionregulations) into euro established by the Council of the European Union pursuant to Article 140 of theTreaty;

euro and C= means the currency introduced at the start of the third stage of European economicand monetary union pursuant to the Treaty;

Redenomination Date means (in the case of interest bearing Notes) any date for payment ofinterest under the Notes or (in the case of Zero Coupon Notes) any date, in each case specified by theIssuer in the notice given to the Noteholders pursuant to paragraph 5.1 (a) above and which falls onor after the date on which the country of the Specified Currency first participates in the third stageof European economic and monetary union; and

Treaty means the Treaty on the Functioning of the European Union, as amended.

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6. INTEREST

All interest payable on the Notes shall be subject to applicable laws including but not limited tothe ECB Guidelines and, if applicable, the ECB Rupee Bond Circular and in accordance with anyspecific approval received by the Issuer from the RBI or any other regulatory authority.

6.1 Interest on Fixed Rate Notes

Each Fixed Rate Note bears interest on its outstanding nominal amount (or, if it is a Partly PaidNote, the nominal amount paid up) from (and including) the Interest Commencement Date at therate(s) per annum equal to the Rate(s) of Interest. Interest will be payable in arrear on the InterestPayment Date(s) in each year up to (and including) the Maturity Date.

If the Notes are in definitive form, except as provided in the applicable Pricing Supplement, theamount of interest payable on each Interest Payment Date in respect of the Fixed Interest Periodending on (but excluding) such date will amount to the Fixed Coupon Amount. Payments of intereston any Interest Payment Date will, if so specified in the applicable Pricing Supplement, amount to theBroken Amount so specified.

As used in these Conditions, Fixed Interest Period means the period from (and including) anInterest Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first)Interest Payment Date.

Except in the case of Notes in definitive form where an applicable Fixed Coupon Amount orBroken Amount is specified in the applicable Pricing Supplement, interest is required to be calculatedin respect of any period by applying the Rate of Interest to:

(A) in the case of Fixed Rate Notes which are represented by a Global Note, the aggregateoutstanding nominal amount of the Fixed Rate Notes represented by such Global Note (or,if they are Partly Paid Notes, the aggregate amount paid up); or

(B) in the case of Fixed Rate Notes in definitive form, the Calculation Amount;

and, in each case, multiplying such sum by the applicable Day Count Fraction, androunding the resultant figure to the nearest sub-unit of the relevant Specified Currency, half ofany such sub-unit being rounded upwards or otherwise in accordance with applicable marketconvention. Where the Specified Denomination of a Fixed Rate Note in definitive formcomprises more than one Calculation Amount, the amount of interest payable in respect of suchFixed Rate Note shall be the product of the amount (determined in the manner provided above)for the Calculation Amount and the amount by which the Calculation Amount is multiplied toreach the Specified Denomination, without any further rounding.

Each Fixed Rate Note shall have an interest rate which shall be in accordance with Indianregulatory requirements (including but not limited to the ECB Guidelines and, if applicable, theECB Rupee Bond Circular) or any specific approval received by the Issuer from the RBI or anyother regulatory authority.

Day Count Fraction means, in respect of the calculation of an amount of interest inaccordance with this Condition 6.1:

(a) if Actual/Actual (ICMA) is specified in the applicable Pricing Supplement:

(i) in the case of Notes where the number of days in the relevant period from (andincluding) the most recent Interest Payment Date (or, if none, the InterestCommencement Date) to (but excluding) the relevant payment date (the AccrualPeriod) is equal to or shorter than the Determination Period during which the Accrual

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Period ends, the number of days in such Accrual Period divided by the product of (I)the number of days in such Determination Period and (II) the number of DeterminationDates (as specified in the applicable Pricing Supplement) that would occur in onecalendar year; or

(ii) in the case of Notes where the Accrual Period is longer than the Determination Periodduring which the Accrual Period ends, the sum of:

(A) the number of days in such Accrual Period falling in the Determination Periodin which the Accrual Period begins divided by the product of (x) the number ofdays in such Determination Period and (y) the number of Determination Datesthat would occur in one calendar year; and

(B) the number of days in such Accrual Period falling in the next DeterminationPeriod divided by the product of (x) the number of days in such DeterminationPeriod and (y) the number of Determination Dates that would occur in onecalendar year;

(b) if 30/360 is specified in the applicable Pricing Supplement, the number of days in theperiod from (and including) the most recent Interest Payment Date (or, if none, the InterestCommencement Date) to (but excluding) the relevant payment date (such number of daysbeing calculated on the basis of a year of 360 days with 12 30-day months) divided by 360;or

(c) if Actual/365 (Fixed) is specified in the applicable Pricing Supplement, the actual numberof days in the Accrual Period divided by 365.

In these Conditions:

Determination Period means each period from (and including) a Determination Date to (butexcluding) the next Determination Date (including, where either the Interest Commencement Date orthe final Interest Payment Date is not a Determination Date, the period commencing on the firstDetermination Date prior to, and ending on the first Determination Date falling after, such date); and

sub-unit means, with respect to any currency other than euro, the lowest amount of suchcurrency that is available as legal tender in the country of such currency and, with respect to euro, onecent.

6.2 Interest on Floating Rate Notes and Index Linked Interest Notes

(a) Interest Payment Dates

Each Floating Rate Note and Index Linked Interest Note bears interest on its outstanding nominalamount (or, if it is a Partly Paid Note, the amount paid up) from (and including) the InterestCommencement Date and such interest will be payable in arrear on either:

(i) the Specified Interest Payment Date(s) in each year specified in the applicable PricingSupplement; or

(ii) if no Specified Interest Payment Date(s) is/are specified in the applicable PricingSupplement, each date (each such date, together with each Specified Interest Payment Date,an Interest Payment Date) which falls the number of months or other period specified asthe Specified Period in the applicable Pricing Supplement after the preceding InterestPayment Date or, in the case of the first Interest Payment Date, after the InterestCommencement Date.

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Such interest will be payable in respect of each Interest Period. In these Conditions, InterestPeriod means the period from (and including) an Interest Payment Date (or the InterestCommencement Date) to (but excluding) the next (or first) Interest Payment Date.

(b) Rate of Interest

The Rate of Interest payable from time to time in respect of Floating Rate Notes and IndexLinked Interest Notes will be determined in the manner specified in the applicable PricingSupplement. The Rate of Interest shall be in accordance with Indian regulatory requirements(including the ECB Guidelines and the ECB Rupee Bond Circular, if applicable) or any specificapproval received by the Issuer from the RBI or any other regulatory authority.

(i) ISDA Determination for Floating Rate Notes

Where ISDA Determination is specified in the applicable Pricing Supplement as the manner inwhich the Rate of Interest is to be determined, the Rate of Interest for each Interest Period will be therelevant ISDA Rate plus or minus (as indicated in the applicable Pricing Supplement) the Margin (ifany). For the purposes of this sub-paragraph (A), ISDA Rate for an Interest Period means a rate equalto the Floating Rate that would be determined by the Principal Paying Agent under an interest rateswap transaction if the Principal Paying Agent were acting as Calculation Agent for that swaptransaction under the terms of an agreement incorporating the 2006 ISDA Definitions, as published bythe International Swaps and Derivatives Association, Inc. and as amended and updated as of the IssueDate of the first Tranche of the Notes (the ISDA Definitions) and under which:

(A) the Floating Rate Option is as specified in the applicable Pricing Supplement;

(B) the Designated Maturity is a period specified in the applicable Pricing Supplement; and

(C) the relevant Reset Date is the day specified in the applicable Pricing Supplement.

For the purposes of this sub-paragraph (i), Floating Rate, Calculation Agent, Floating RateOption, Designated Maturity and Reset Date have the meanings given to those terms in the ISDADefinitions.

Unless otherwise stated in the applicable Pricing Supplement the Minimum Rate of Interest shallbe deemed to be zero.

(ii) Screen Rate Determination for Floating Rate Notes

Where Screen Rate Determination is specified in the applicable Pricing Supplement as themanner in which the Rate of Interest is to be determined, the Rate of Interest for each Interest Periodwill, subject as provided below, be either:

(A) the offered quotation; or

(B) the arithmetic mean (rounded if necessary to the fifth decimal place, with 0.000005 beingrounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for the Reference Rate which appears or appear, as the casemay be, on the Relevant Screen Page as at 11.00 a.m. (London time, in the case of LIBOR, or Brusselstime, in the case of EURIBOR) on the Interest Determination Date in question plus or minus (asindicated in the applicable Pricing Supplement) the Margin (if any), all as determined by the PrincipalPaying Agent. If five or more of such offered quotations are available on the Relevant Screen Page,

41

the highest (or, if there is more than one such highest quotation, one only of such quotations) and thelowest (or, if there is more than one such lowest quotation, one only of such quotations) shall bedisregarded by the Principal Paying Agent for the purpose of determining the arithmetic mean(rounded as provided above) of such offered quotations.

The Agency Agreement contains provisions for determining the Rate of Interest in the event thatthe Relevant Screen Page is not available or if, in the case of (A) above, no such offered quotationappears or, in the case of (B) above, fewer than three such offered quotations appear, in each case asat the time specified in the preceding paragraph.

(c) Minimum and/or maximum Rate of Interest

If the applicable Pricing Supplement specifies a Minimum Rate of Interest for any InterestPeriod, then, in the event that the Rate of Interest in respect of such Interest Period determined inaccordance with the provisions of paragraph (b) above is less than such Minimum Rate of Interest, theRate of Interest for such Interest Period shall be such Minimum Rate of Interest.

If the applicable Pricing Supplement specifies a Maximum Rate of Interest for any InterestPeriod, then, in the event that the Rate of Interest in respect of such Interest Period determined inaccordance with the provisions of paragraph (b) above is greater than such Maximum Rate of Interest,the Rate of Interest for such Interest Period shall be such Maximum Rate of Interest.

The Rate of Interest shall not exceed the rate of interest as specified under the ECB Guidelines,the ECB Rupee Bond Circular (if applicable) or any specific approval received by the Issuer from theRBI or any other regulatory authority.

(d) Determination of Rate of Interest and calculation of Interest Amounts

The Principal Paying Agent, in the case of Floating Rate Notes, and the Calculation Agent, in thecase of Index Linked Interest Notes, will at or as soon as practicable after each time at which the Rateof Interest is to be determined, determine the Rate of Interest for the relevant Interest Period. In thecase of Index Linked Interest Notes, the Calculation Agent will notify the Principal Paying Agent ofthe Rate of Interest for the relevant Interest Period as soon as practicable after calculating the same.If required to be calculated by it, the Principal Paying Agent or, as the case may be, the CalculationAgent shall cause the Final Redemption Amount, Early Redemption Amount, Optional RedemptionAmount or any Instalment Amount to be notified to the Trustee, the Issuer, each of the Paying Agents,the Noteholders and, if the Notes are listed on a stock exchange and the rules of such stock exchangeor other relevant authority so require, such stock exchange or other relevant authority as soon aspracticable after calculating the same.

The Principal Paying Agent will calculate the amount of interest (the Interest Amount) payableon the Floating Rate Notes or Index Linked Interest Notes for the relevant Interest Period by applyingthe Rate of Interest to:

(A) in the case of Floating Rate Notes or Index Linked Interest Notes which are represented bya Global Note, the aggregate outstanding nominal amount of the Notes represented by suchGlobal Note (or, if they are Partly Paid Notes, the aggregate amount paid up); or

(B) in the case of Floating Rate Notes or Index Linked Interest Notes in definitive form, theCalculation Amount;

and, in each case, multiplying such sum by the applicable Day Count Fraction, and rounding theresultant figure to the nearest sub-unit of the relevant Specified Currency, half of any such sub-unitbeing rounded upwards or otherwise in accordance with applicable market convention. Where theSpecified Denomination of a Floating Rate Note or an Index Linked Interest Note in definitive form

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comprises more than one Calculation Amount, the Interest Amount payable in respect of such Noteshall be the product of the amount (determined in the manner provided above) for the CalculationAmount and the amount by which the Calculation Amount is multiplied to reach the SpecifiedDenomination, without any further rounding.

Each Floating Rate Note or Index Linked Interest Note shall have an interest rate which shall be inaccordance with Indian regulatory requirements (including but not limited to the ECB Guidelines andthe ECB Rupee Bond Circular, if applicable) or any specific approval received by the Issuer from theRBI or any other regulatory authority.

Day Count Fraction means, in respect of the calculation of an amount of interest in accordancewith this Condition 6.2:

(i) if Actual/Actual (ISDA) or Actual/Actual is specified in the applicable PricingSupplement, the actual number of days in the Interest Period divided by 365 (or, if anyportion of that Interest Period falls in a leap year, the sum of (I) the actual number of daysin that portion of the Interest Period falling in a leap year divided by 366 and (II) the actualnumber of days in that portion of the Interest Period falling in a non-leap year divided by365);

(ii) if Actual/365 (Fixed) is specified in the applicable Pricing Supplement, the actual numberof days in the Interest Period divided by 365;

(iii) if Actual/365 (Sterling) is specified in the applicable Pricing Supplement, the actualnumber of days in the Interest Period divided by 365 or, in the case of an Interest PaymentDate falling in a leap year, 366;

(iv) if Actual/360 is specified in the applicable Pricing Supplement, the actual number of daysin the Interest Period divided by 360;

(v) if 30/360, 360/360 or Bond Basis is specified in the applicable Pricing Supplement, thenumber of days in the Interest Period divided by 360, calculated on a formula basis asfollows:

Day Count Fraction =[360 x (Y2 - Y1)] + [30 x (M2 - M1)] + (D2 - D1)

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where:

Y1 is the year, expressed as a number, in which the first day of the Interest Period falls;

Y2 is the year, expressed as a number, in which the day immediately following the last dayof the Interest Period falls;

M1 is the calendar month, expressed as a number, in which the first day of the InterestPeriod falls;

M2 is the calendar month, expressed as a number, in which the day immediately followingthe last day of the Interest Period falls;

D1 is the first calendar day, expressed as a number, of the Interest Period, unless suchnumber is 31, in which case D1 will be 30; and

D2 is the calendar day, expressed as a number, immediately following the last day includedin the Interest Period, unless such number would be 31 and D1 is greater than 29, in whichcase D2 will be 30;

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(vi) if 30E/360 or Eurobond Basis is specified in the applicable Pricing Supplement, thenumber of days in the Interest Period divided by 360, calculated on a formula basis asfollows:


360

where:





D1 is the first calendar day, expressed as a number, of the Interest Period, unless suchnumber would be 31, in which case D1 will be 30; and

D2 is the calendar day, expressed as a number, immediately following the last day includedin the Interest Period, unless such number would be 31, in which case D2 will be 30; and

(vii) if 30E/360 (ISDA) is specified in the applicable Pricing Supplement, the number of daysin the Interest Period divided by 360, calculated on a formula basis as follows:


360

where:





D1 is the first calendar day, expressed as a number, of the Interest Period, unless (i) thatday is the last day of February or (ii) such number would be 31, in which case D1 will be30; and

D2 is the calendar day, expressed as a number, immediately following the last day includedin the Interest Period, unless (i) that day is the last day of February but not the MaturityDate or (ii) such number would be 31, in which case D2 will be 30.

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(e) Notification of Rate of Interest and Interest Amounts

The Principal Paying Agent will cause the Rate of Interest and each Interest Amount for each

Interest Period and the relevant Interest Payment Date to be notified to the Issuer, the Trustee and any

stock exchange on which the relevant Floating Rate Notes or Index Linked Interest Notes are for the

time being listed and notice thereof to be published in accordance with Condition 15 as soon as

possible after their determination but in no event later than the fourth London Business Day thereafter.

Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or

appropriate alternative arrangements made by way of adjustment) without prior notice in the event of

an extension or shortening of the Interest Period. Any such amendment will be promptly notified to

each stock exchange on which the relevant Floating Rate Notes or Index Linked Interest Notes are for

the time being listed and to the Noteholders in accordance with Condition 15. For the purposes of this

paragraph, the expression London Business Day means a day (other than a Saturday or a Sunday) on

which banks and foreign exchange markets are open for business in London.

(f) Determination or Calculation by Trustee

If for any reason at any relevant time the Principal Paying Agent or, as the case may be, the

Calculation Agent defaults in its obligation to determine the Rate of Interest or the Agent defaults in

its obligation to calculate any Interest Amount in accordance with sub-paragraph (b)(i) or

subparagraph (b)(ii) above or as otherwise specified in the applicable Pricing Supplement, as the case

may be, and in each case in accordance with paragraph (d) above, the Trustee shall determine the Rate

of Interest at such rate as, in its absolute discretion (having such regard as it shall think fit to the

foregoing provisions of this Condition, but subject always to any Minimum Rate of Interest or

Maximum Rate of Interest specified in the applicable Pricing Supplement), it shall deem fair and

reasonable in all the circumstances or, as the case may be, the Trustee shall calculate the Interest

Amount(s) in such manner as it shall deem fair and reasonable in all the circumstances and each such

determination or calculation shall be deemed to have been made by the Principal Paying Agent or the

Calculation Agent, as applicable.

(g) Certificates to be final

All certificates, communications, opinions, determinations, calculations, quotations and

decisions given, expressed, made or obtained for the purposes of the provisions of this Condition 6,

whether by the Principal Paying Agent or, if applicable, the Calculation Agent or the Trustee, shall (in

the absence of wilful default, bad faith, manifest error or proven error) be binding on the Issuer, the

Trustee, the Principal Paying Agent, the Registrar, the Calculation Agent (if applicable), the other

Paying Agents and all Noteholders, Receiptholders and Couponholders and (in the absence as

aforesaid) no liability to the Issuer, the Noteholders, the Receiptholders or the Couponholders shall

attach to the Principal Paying Agent or, if applicable, the Calculation Agent or the Trustee in

connection with the exercise or non-exercise by it of its powers, duties and discretions pursuant to

such provisions.

6.3 Interest on Dual Currency Interest Notes

The rate or amount of interest payable in respect of Dual Currency Interest Notes shall be

determined in the manner specified in the applicable Pricing Supplement.

Each Dual Currency Interest Note shall have an interest rate which shall be in accordance with

Indian regulatory requirements (including but not limited to the ECB Guidelines) or any specific

approval received by the Issuer from the RBI or any other regulatory authority.

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6.4 Interest on Partly Paid Notes

In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero Coupon Notes),interest will accrue as aforesaid on the paid-up nominal amount of such Notes and otherwise asspecified in the applicable Pricing Supplement.

Each Partly Paid Note shall have an interest rate which shall be in accordance with Indianregulatory requirements (including but not limited to the ECB Guidelines and the ECB Rupee BondCircular, if applicable) or any specific approval received by the Issuer from the RBI or any otherregulatory authority.

6.5 Accrual of interest

Each Note (or in the case of the redemption of part only of a Note, that part only of such Note)will cease to bear interest (if any) from and including the date for its redemption unless, upon duepresentation thereof, payment of principal is improperly withheld or refused. In such event, interestwill continue to accrue until whichever is the earlier of:

(a) the date on which all amounts due in respect of such Note have been paid; and

(b) as provided in the Trust Deed.

6.6 Definitions

In these Conditions, if a Business Day Convention is specified in the applicable PricingSupplement and (x) if there is no numerically corresponding day on the calendar month in which anInterest Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a daywhich is not a Business Day, then, if the Business Day Convention specified is:

(A) in any case where Specified Periods are specified in accordance with Condition 6.2(a)(ii)above, the Floating Rate Convention, such Interest Payment Date (a) in the case of (x)above, shall be the last day that is a Business Day in the relevant month and the provisionsof (ii) below shall apply mutatis mutandis or (b) in the case of (y) above, shall be postponedto the next day which is a Business Day unless it would thereby fall into the next calendarmonth, in which event (i) such Interest Payment Date shall be brought forward to theimmediately preceding Business Day and (ii) each subsequent Interest Payment Date shallbe the last Business Day in the month which falls the Specified Period after the precedingapplicable Interest Payment Date occurred; or

(B) the Following Business Day Convention, such Interest Payment Date shall be postponed tothe next day which is a Business Day; or

(C) the Modified Following Business Day Convention, such Interest Payment Date shall bepostponed to the next day which is a Business Day unless it would thereby fall into the nextcalendar month, in which event such Interest Payment Date shall be brought forward to theimmediately preceding Business Day; or

(D) the Preceding Business Day Convention, such Interest Payment Date shall be broughtforward to the immediately preceding Business Day.

In these Conditions, Business Day means a day which is:

(a) a day on which commercial banks and foreign exchange markets settle payments and areopen for general business (including dealing in foreign exchange and foreign currencydeposits) in London and any Additional Business Centre (other than TARGET2 System)specified in the applicable Pricing Supplement;

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(b) if TARGET2 System is specified as an Additional Business Centre in the applicable PricingSupplement, a day on which the Trans-European Automated Real-Time Gross SettlementExpress Transfer (TARGET2) System (the TARGET2 System) or any successor system isopen; and

(c) either (i) in relation to any sum payable in a Specified Currency other than euro, a day onwhich commercial banks and foreign exchange markets settle payments and are open forgeneral business (including dealing in foreign exchange and foreign currency deposits) inthe principal financial centre of the country of the relevant Specified Currency (if otherthan London and any Additional Business Centre and which, if the Specified Currency isAustralian dollars or New Zealand dollars, shall be Sydney and Auckland, respectively) or(ii) in relation to any sum payable in euro, a day on which the TARGET2 System or anysuccessor system is open.

7. PAYMENTS

7.1 Method of payment

Subject as provided below:

(a) payments in a Specified Currency other than euro will be made by credit or transfer to anaccount in the relevant Specified Currency maintained by the payee with, or, at the optionof the payee, by a cheque in such Specified Currency drawn on, a bank in the principalfinancial centre of the country of such Specified Currency (which, if the Specified Currencyis Australian dollars or New Zealand dollars, shall be Sydney and Auckland); and

(b) payments in euro will be made by credit or transfer to a euro account (or any other accountto which euro may be credited or transferred) specified by the payee or, at the option of thepayee, by a euro cheque.

Payments will be subject in all cases to (i) any fiscal or other laws and regulations applicablethereto in the place of payment, but without prejudice to the provisions of Condition 9 and (ii)any withholding or deduction required pursuant to an agreement described in Section 1471(b) ofthe U.S. Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections1471 through 1474 of the Code, any regulations or agreements thereunder, any officialinterpretations thereof, or (without prejudice to the provisions of Condition 9) any lawimplementing an intergovernmental approach thereto.

7.2 Presentation of definitive Bearer Notes, Receipts and Coupons

Payments of principal in respect of Definitive Bearer Notes will (subject as provided below) bemade in the manner provided in Condition 6.1 above only against presentation and surrender (or, inthe case of part payment of any sum due, endorsement) of Definitive Bearer Notes, and payments ofinterest in respect of Definitive Bearer Notes will (subject as provided below) be made as aforesaidonly against presentation and surrender (or, in the case of part payment of any sum due, endorsement)of Coupons, in each case at the specified office of any Paying Agent outside the United States (whichexpression, as used herein, means the United States of America and its possessions).

Payments of Instalment Amounts (if any) in respect of Definitive Bearer Notes, other than thefinal instalment, will (subject as provided below) be made in the manner provided in Condition 6.1above against presentation and surrender (or, in the case of part payment of any sum due,endorsement) of the relevant Receipt in accordance with the preceding paragraph. Payment of the finalinstalment will be made in the manner provided in Condition 6.1 above only against presentation andsurrender (or, in the case of part payment of any sum due, endorsement) of the relevant Bearer Notein accordance with the preceding paragraph. Each Receipt must be presented for payment of therelevant instalment together with the Definitive Bearer Note to which it appertains. Receipts presented

47

without the Definitive Bearer Note to which they appertain do not constitute valid obligations of theIssuer. Upon the date on which any Definitive Bearer Note becomes due and repayable, unmaturedReceipts (if any) relating thereto (whether or not attached) shall become void and no payment shallbe made in respect thereof.

Fixed Rate Notes in definitive bearer form (other than Dual Currency Notes, Index Linked Notesor Long Maturity Notes (as defined below)) should be presented for payment together with allunmatured Coupons appertaining thereto (which expression shall for this purpose include Couponsfalling to be issued on exchange of matured Talons), failing which the amount of any missingunmatured Coupon (or, in the case of payment not being made in full, the same proportion of theamount of such missing unmatured Coupon as the sum so paid bears to the sum due) will be deductedfrom the sum due for payment. Each amount of principal so deducted will be paid in the mannermentioned above against surrender of the relative missing Coupon at any time before the expiry of 10years after the Relevant Date (as defined in Condition 9) in respect of such principal (whether or notsuch Coupon would otherwise have become void under Condition 10) or, if later, five years from thedate on which such Coupon would otherwise have become due, but in no event thereafter.

Upon any Fixed Rate Note in definitive bearer form becoming due and repayable prior to itsMaturity Date, all unmatured Talons (if any) appertaining thereto will become void and no furtherCoupons will be issued in respect thereof.

Upon the date on which any Floating Rate Note, Dual Currency Note, Index Linked Note or LongMaturity Note in definitive form becomes due and repayable, unmatured Coupons and Talons (if any)relating thereto (whether or not attached) shall become void and no payment or, as the case may be,exchange for further Coupons shall be made in respect thereof. A Long Maturity Note is a Fixed RateNote (other than a Fixed Rate Note which on issue had a Talon attached) whose nominal amount onissue is less than the aggregate interest payable thereon provided that such Note shall cease to be aLong Maturity Note on the Interest Payment Date on which the aggregate amount of interest remainingto be paid after that date is less than the nominal amount of such Note.

If the due date for redemption of any Definitive Bearer Note is not an Interest Payment Date,interest (if any) accrued in respect of such Note from (and including) the preceding Interest PaymentDate or, as the case may be, the Interest Commencement Date shall be payable only against surrenderof the relevant Definitive Bearer Note.

7.3 Payments in respect of Bearer Global Notes

Payments of principal and interest (if any) in respect of Bearer Notes represented by any BearerGlobal Note will (subject as provided below) be made in the manner specified above in relation toDefinitive Bearer Notes and otherwise in the manner specified in the relevant Bearer Global Noteagainst presentation or surrender of such Bearer Global Note at the specified office of any PayingAgent outside the United States. A record of each payment made against presentation or surrender ofany Bearer Global Note, distinguishing between any payment of principal and any payment of interest,will be made on such Bearer Global Note by the Paying Agent to which it was presented and suchrecord shall be prima facie evidence that the payment in question has been made.

7.4 Payments in respect of Registered Notes

Payments of principal (other than instalments of principal prior to the final instalment) in respectof each Registered Note (whether or not in global form) will be made against presentation andsurrender (or, in the case of part payment of any sum due, endorsement) of the Registered Note at thespecified office of the Registrar or any of the Paying Agents. Such payments will be made by transferto the Designated Account (as defined below) of the holder (or the first named of joint holders) of theRegistered Note appearing in the register of holders of the Registered Notes maintained by theRegistrar (the Register) (i) where in global form, at the close of the business day (being for thispurpose a day on which Euroclear and Clearstream, Luxembourg are open for business) before the

48

relevant due date, and (ii) where in definitive form, at the close of business on the third business day(being for this purpose a day on which banks are open for business in the city where the specifiedoffice of the Registrar is located) before the relevant due date. Notwithstanding the previous sentence,if (i) a holder does not have a Designated Account or (ii) the principal amount of the Notes held bya holder is less than U.S.$250,000 (or its approximate equivalent in any other Specified Currency),payment will instead be made by a cheque in the Specified Currency drawn on a Designated Bank (asdefined below). For these purposes, Designated Account means the account (which, in the case of apayment in Japanese yen to a non resident of Japan, shall be a non resident account) maintained bya holder with a Designated Bank and identified as such in the Register and Designated Bank means(in the case of payment in a Specified Currency other than euro) a bank in the principal financialcentre of the country of such Specified Currency (which, if the Specified Currency is Australiandollars or New Zealand dollars, shall be Sydney and Auckland, respectively) and (in the case of apayment in euro) any bank which processes payments in euro.

Payments of interest and payments of instalments of principal (other than the final instalment)in respect of each Registered Note (whether or not in global form) will be made by a cheque in theSpecified Currency drawn on a Designated Bank and mailed by uninsured mail on the Business Dayin the city where the specified office of the Registrar is located immediately preceding the relevantdue date to the holder (or the first named of joint holders) of the Registered Note appearing in theRegister (i) where in global form, at the close of the business day (being for this purpose a day onwhich Euroclear and Clearstream, Luxembourg are open for business) before the relevant due date,and (ii) where in definitive form, at the close of business on the fifteenth day (whether or not suchfifteenth day is a Business Day) before the relevant due date (the Record Date) at his address shownin the Register on the Record Date and at his risk. Upon application of the holder to the specifiedoffice of the Registrar not less than three business days in the city where the specified office of theRegistrar is located before the due date for any payment of interest in respect of a Registered Note,the payment may be made by transfer on the due date in the manner provided in the precedingparagraph. Any such application for transfer shall be deemed to relate to all future payments of interest(other than interest due on redemption) and instalments of principal (other than the final instalment)in respect of the Registered Notes which become payable to the holder who has made the initialapplication until such time as the Registrar is notified in writing to the contrary by such holder.Payment of the interest due in respect of each Registered Note on redemption and the final instalmentof principal will be made in the same manner as payment of the principal amount of such RegisteredNote.

Holders of Registered Notes will not be entitled to any interest or other payment for any delayin receiving any amount due in respect of any Registered Note as a result of a cheque posted inaccordance with this Condition arriving after the due date for payment or being lost in the post. Nocommissions or expenses shall be charged to such holders by the Registrar in respect of any paymentsof principal or interest in respect of the Registered Notes.

None of the Issuer, the Trustee, the Registrar or any Paying Agent will have any responsibilityor liability for any aspect of the records relating to, or payments made on account of, beneficialownership interests in the Registered Global Notes or for maintaining, supervising or reviewing anyrecords relating to such beneficial ownership interests.

7.5 General provisions applicable to payments

The holder of a Global Note shall be the only person entitled to receive payments in respect ofNotes represented by such Global Note and the Issuer will be discharged by payment to, or to the orderof, the holder of such Global Note in respect of each amount so paid. Each of the persons shown inthe records of Euroclear or Clearstream, Luxembourg as the beneficial holder of a particular nominalamount of Notes represented by such Global Note must look solely to Euroclear or Clearstream,Luxembourg, as the case may be, for his share of each payment so made by the Issuer in respect ofsuch Global Note to, or to the order of, the holder of such Global Note.

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Notwithstanding the foregoing provisions of this Condition, if any amount of principal and/orinterest in respect of Bearer Notes is payable in U.S. dollars, such U.S. dollar payments of principaland/or interest in respect of such Notes will be made at the specified office of a Paying Agent in theUnited States only if:

(a) the Issuer has appointed Paying Agents with specified offices outside the United States withthe reasonable expectation that such Paying Agents would be able to make payment in U.S.dollars at such specified offices outside the United States of the full amount of principaland interest on the Bearer Notes in the manner provided above when due;

(b) payment of the full amount of such principal and interest at all such specified officesoutside the United States is illegal or effectively precluded by exchange controls or othersimilar restrictions on the full payment or receipt of principal and interest in U.S. dollars;and

(c) such payment is then permitted under United States law without involving, in the opinionof the Issuer, adverse tax consequences to the Issuer.

7.6 Payment Day

If the date for payment of any amount in respect of any Note, Receipt or Coupon is not a PaymentDay, the holder thereof shall not be entitled to payment until the next following Payment Day in therelevant place and shall not be entitled to further interest or other payment in respect of such delay.For these purposes, Payment Day means any day which (subject to Condition 11) is:

(a) a day on which commercial banks and foreign exchange markets settle payments and areopen for general business (including dealing in foreign exchange and foreign currencydeposits) in:

(i) in the case of Notes in definitive form only, the relevant place of presentation;

(ii) any Additional Financial Centre (other than TARGET2 System) specified in theapplicable Pricing Supplement;

(b) if TARGET2 System is specified as an Additional Financial Centre in the applicable PricingSupplement, a day on which the TARGET2 System or any successor system is open; and

(c) either (A) in relation to any sum payable in a Specified Currency other than euro, a day onwhich commercial banks and foreign exchange markets settle payments and are open forgeneral business (including dealing in foreign exchange and foreign currency deposits) inthe principal financial centre of the country of the relevant Specified Currency which, if theSpecified Currency is Australian dollars or New Zealand dollars, shall be Sydney andAuckland) or (B) in relation to any sum payable in euro, a day on which the TARGET2System or any successor system is open.

7.7 Interpretation of principal and interest

Any reference in these Conditions to principal in respect of the Notes shall be deemed to include,as applicable:

(a) any additional amounts which may be payable with respect to principal under Condition 9or under any undertaking or covenant given in addition thereto, or in substitution therefor,pursuant to the Trust Deed;

(b) the Final Redemption Amount of the Notes;

(c) the Early Redemption Amount of the Notes;

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(d) the Optional Redemption Amount(s) (if any) of the Notes;

(e) in relation to Notes redeemable in instalments, the Instalment Amounts;

(f) in relation to Zero Coupon Notes, the Amortised Face Amount (as defined in Condition8.4); and

(g) any premium and any other amounts (other than interest) which may be payable by theIssuer under or in respect of the Notes.

Any reference in these Conditions to interest in respect of the Notes shall be deemed to include,as applicable, any additional amounts which may be payable with respect to interest under Condition9 or under any undertaking or covenant given in addition thereto, or in substitution therefor, pursuantto the Trust Deed.

7.8 Payments Subject to Fiscal and Other Laws

Payments will be subject in all cases, to (i) any fiscal or other laws and regulations applicablethereto in the place of payment, but without prejudice to the provisions of Condition 9, and (ii) anywithholding or deduction required pursuant to an agreement described in Section 1471(b) of the U.S.Internal Revenue Code of 1986 (the Code) or otherwise imposed pursuant to Sections 1471 through1474 of the Code, any regulations or agreements thereunder, any official interpretations thereof, or(without prejudice to the provisions of Condition 9) any law implementing an intergovernmentalapproach thereto.

8. REDEMPTION AND PURCHASE

8.1 Redemption at maturity

Unless previously redeemed or purchased and cancelled as specified below, each Note (includingeach Index Linked Redemption Note and Dual Currency Redemption Note) will be redeemed by theIssuer at its Final Redemption Amount specified in, or determined in the manner specified in, theapplicable Pricing Supplement in the relevant Specified Currency on the Maturity Date.

8.2 Redemption for tax reasons

The Notes may be redeemed at the option of the Issuer in whole, but not in part, at any time (ifthe Notes are neither a floating Rate Note, an Index Linked Interest Note, nor a Dual Currency Note)or on any Interest Payment Date (if the Notes are either a Floating Rate Note, an Index Linked InterestNote or a Dual Currency Interest Note), on giving not less than 30 nor more than 60 days’ notice tothe Trustee and the Principal Paying Agent and, in accordance with Condition 15, the Noteholders(which notice shall be irrevocable), if the Issuer satisfies the Trustee immediately before the givingof such notice that:

(a) on the occasion of the next payment due under the Notes, the Issuer has or will becomeobliged to pay additional amounts as provided or referred to in Condition 9 as a result ofany change in, or amendment to, the laws or regulations of a Tax Jurisdiction (as definedin Condition 9) or any change in the application or official interpretation of such laws orregulations, which change or amendment becomes effective on or after the date on whichagreement is reached to issue the first Tranche of the Notes; and

(b) such obligation cannot be avoided by the Issuer taking reasonable measures available to it,

provided that no such notice of redemption shall be given earlier than 90 days prior to the earliest dateon which the Issuer would be obliged to pay such additional amounts were a payment in respect ofthe Notes then due.

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Prior to the publication of any notice of redemption pursuant to this Condition, the Issuer shalldeliver to the Trustee to make available at its specified office to the Noteholders (1) a certificatesigned by an authorised officer of the Issuer stating that the Issuer is entitled to effect such redemptionand setting forth a statement of facts showing that the conditions precedent to the right of the Issuerso to redeem have occurred, and (2) an opinion of independent legal advisers of recognised standingto the effect that the Issuer has or will become obliged to pay such additional amounts as a result ofsuch change or amendment and the Trustee shall be entitled to accept the certificate as sufficientevidence of the satisfaction of the conditions precedent set out above, in which event it shall beconclusive and binding on the Noteholders, the Receiptholders and the Couponholders.

Notes redeemed pursuant to this Condition 8.2 will be redeemed at their Early RedemptionAmount referred to in Condition 8.4 below together (if appropriate) with interest accrued to (butexcluding) the date of redemption.

ECB Guidelines and the ECB Rupee Bond Circular (if applicable) may require the Issuer toobtain the prior approval of the RBI or designated authorised dealer category I bank appointed inaccordance with the ECB Guidelines (AD Bank) as the case may be, before providing notice for oreffecting such a redemption prior to the Maturity Date and such approval may not be forthcoming.

8.3 Redemption upon Change of Control

Within 15 days following any Change in Control, the Issuer will give notice to the Noteholders,the Trustee and the Principal Paying Agent in accordance with Condition 15 stating that a Change inControl has occurred.

Following the occurrence of a Change in Control, each Noteholder will have the right to requirethe Issuer to redeem any of the Notes held by such Noteholder at their principal amount outstandingtogether with interest (including additional amounts pursuant to Condition 9 if any) accrued to (butexcluding) the date of redemption.

To exercise the right to require redemption of any Notes, the holder of the Notes must deliversuch Notes at the specified office of any Paying Agent, in the case of Bearer Notes, or of any TransferAgent or the Registrar, in the case of Registered Notes, on any business day (being, in relation to anyplace, a day (other than a Saturday or a Sunday) on which banks and foreign exchange markets areopen for business in that place) at the place of such specified office falling within the notice period,accompanied by a duly signed and completed notice of exercise in the form (for the time being currentand which may, if this Note is held in a clearing system, be any form acceptable to the clearing systemdelivered in a manner acceptable to the clearing system) obtainable from any specified office of anyPaying Agent, Transfer Agent or the Registrar (a Put Notice) and in which the holder must specify abank account (or, if payment is to be made by cheque, an address) to which payment is to be madeunder this paragraph accompanied by such Notes or evidence satisfactory to the relevant PayingAgent, Transfer Agent or the Registrar, as the case may be, that such Notes will, following the deliveryof the Put Notice, be held to its order or under its control.

Subject to the receipt of RBI or AD Bank approval, as the case may be, the Issuer is obliged toredeem any such Notes on the first business day in the place where such redemption notice is depositedfalling 30 days after such deposit.

A Put Notice given by a holder of any Note shall be irrevocable and no Note deposited with aPaying Agent, Transfer Agent or the Registrar pursuant to this Condition 8.3 may be withdrawnwithout the prior written consent of the Issuer.

The right of any Noteholder to require the Issuer to redeem any Note upon a Change in Controlis not conditional upon a Change in Control notice having been given by the Issuer, but will, if suchnotice is given by the Issuer, be exercised by such Noteholder within 45 days of the giving of suchnotice.

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A Change in Control will have occurred if the Government will at any time cease to own,

directly or indirectly, more than 50 per cent. of the voting securities of the Issuer.

In this Condition 8.3, voting securities means stock (or equivalent interests) having voting

power for the election of directors, commissioners, managers or trustees of a company (or otherwise

the power to control the management and policies of such corporation or other entity).

ECB Guidelines and the ECB Rupee Bond Circular (if applicable) require the Issuer to obtain the

prior approval of the RBI or the AD Bank, as the case may be, before providing notice for or effecting

such a redemption prior to the Maturity Date and such approval may not be forthcoming.

8.4 Early Redemption Amounts

For the purpose of Conditions 8.2 and 8.3 above and Condition 11, each Note will be redeemed

at its Early Redemption Amount calculated as follows:

(a) each Note (other than a Zero Coupon Note) will be redeemed at its Early Redemption

Amount; and

(b) each Zero Coupon Note will be redeemed at an amount (the Amortised Face Amount)

calculated in accordance with the following formula:

Early Redemption Amount = RP x (1 + AY)y

where:

RP means the Reference Price;

AY means the Accrual Yield expressed as a decimal; and

y is the Day Count Fraction specified in the applicable Pricing Supplement which will be

either (i) 30/360 (in which case the numerator will be equal to the number of days

(calculated on the basis of a 360-day year consisting of 12 months of 30 days each) from

(and including) the Issue Date of the first Tranche of the Notes to (but excluding) the date

fixed for redemption or (as the case may be) the date upon which such Note becomes due

and repayable and the denominator will be 360) or (ii) Actual/360 (in which case the

numerator will be equal to the actual number of days from (and including) the Issue Date

of the first Tranche of the Notes to (but excluding) the date fixed for redemption or (as the

case may be) the date upon which such Note becomes due and repayable and the

denominator will be 360) or (iii) Actual/365 (in which case the numerator will be equal to

the actual number of days from (and including) the Issue Date of the first Tranche of the

Notes to (but excluding) the date fixed for redemption or (as the case may be) the date upon

which such Note becomes due and repayable and the denominator will be 365),

or on such other calculation basis as may be specified in the applicable Pricing Supplement.

8.5 Instalments

Instalment Notes will be redeemed in the Instalment Amounts and on the Instalment Dates. In thecase of early redemption, the Early Redemption Amount will be determined pursuant to Condition 8.4above.

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8.6 Partly Paid Notes

Partly Paid Notes will be redeemed, whether at maturity, early redemption or otherwise, inaccordance with the provisions of this Condition and the applicable Pricing Supplement.

8.7 Purchases

The Issuer or any Subsidiary may at any time purchase Notes (provided that, in the case ofdefinitive Bearer Notes, all unmatured Receipts, Coupons and Talons appertaining thereto arepurchased therewith) at any price in the open market or otherwise. Such Notes may be held, reissued,resold or, at the option of the Issuer surrendered to any Paying Agent and/or the Registrar forcancellation.

8.8 Cancellation

All Notes which are redeemed will forthwith be cancelled (together with all unmatured Receipts,Coupons and Talons attached thereto or surrendered therewith at the time of redemption). All Notesso cancelled and any Notes purchased and cancelled pursuant to Condition 8.7 above (together withall unmatured Receipts, Coupons and Talons cancelled therewith) shall be forwarded to the PrincipalPaying Agent (which shall notify the Registrar of such cancelled Notes in the case of RegisteredNotes) and may not be reissued or resold.

8.9 Late payment on Zero Coupon Notes

If the amount payable in respect of any Zero Coupon Note upon redemption of such Zero CouponNote pursuant to Conditions 8.1, 8.2 or 8.3 above or upon its becoming due and repayable as providedin Condition 11 is improperly withheld or refused, the amount due and repayable in respect of suchZero Coupon Note shall be the amount calculated as provided in Condition 8.4(c) above as though thereferences therein to the date fixed for the redemption or the date upon which such Zero Coupon Notebecomes due and payable were replaced by references to the date which is the earlier of:

(i) the date on which all amounts due in respect of such Zero Coupon Note have been paid; and

(ii) five days after the date on which the full amount of the moneys payable in respect of suchZero Coupon Note has been received by the Trustee or the Principal Paying Agent andnotice to that effect has been given to the Noteholders in accordance with Condition 15.

9. TAXATION

9.1 Payment without Withholding

All payments of principal and interest in respect of the Notes, Receipts and Coupons by theIssuer will be made without withholding or deduction for or on account of any present or future taxesor duties of whatever nature imposed or levied by or on behalf of any Tax Jurisdiction unless suchwithholding or deduction is required by law. In such event, the Issuer will pay such additional amountsas shall be necessary in order that the net amounts received by the holders of the Notes, Receipts orCoupons after such withholding or deduction shall equal the respective amounts of principal andinterest which would otherwise have been receivable in respect of the Notes, Receipts or Coupons, asthe case may be, in the absence of such withholding or deduction (the Additional Amounts); exceptthat no such Additional Amounts shall be payable with respect to any Note, Receipt or Coupon:

(a) the holder of which is liable for such taxes or duties in respect of such Note, Receipt orCoupon by reason of his having some connection with a Tax Jurisdiction other than themere holding of such Note, Receipt or Coupon; or

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(b) presented for payment more than 30 days after the Relevant Date (as defined below) exceptto the extent that the holder thereof would have been entitled to an Additional Amount onpresenting the same for payment on such thirtieth day assuming that day to have been aPayment Day (as defined in Condition 7.6); or

(c) where such withholding or deduction is imposed on a payment to an individual and isrequired to be made pursuant to European Council Directive 2003/48/EC on the taxation ofsavings income or any other law implementing or complying with, or introduced in orderto conform to, such Directive; or

(d) presented for payment by or on behalf of a holder who would be able to avoid suchwithholding or deduction by presenting the relevant Note, Receipt or Coupon to anotherPaying Agent in a Member State of the European Union; or

(e) presented for payment by or on behalf of a holder of such Note, Receipt or Coupon who,at the time of such presentation, is able to avoid such withholding or deduction by makinga declaration of non-residence or other similar claim for exemption and does not make suchdeclaration or claim; or

(f) where such withholding or deduction is (i) required pursuant to an agreement described inSection 1471(b) of the Code or otherwise imposed pursuant to Sections 1471 through 1474of the Code, any regulations or agreements thereunder or any official interpretations thereofor (ii) imposed pursuant to Section 871(m) of the Code.

9.2 Interpretation

As used herein:

(i) Relevant Date means the date on which such payment first becomes due, except that, if thefull amount of the moneys payable has not been duly received by the Trustee or thePrincipal Paying Agent or, as the case may be, the Registrar on or prior to such due date,it means the date on which, the full amount of such moneys having been so received, noticeto that effect is duly given to the Noteholders in accordance with Condition 15; and

(ii) Tax Jurisdiction means India or any political subdivision or any authority thereof ortherein having power to tax or any other jurisdiction or any political subdivision or anyauthority thereof or therein having power to tax to which the Issuer becomes subject inrespect of payments made by it of principal and interest in respect of the Notes, Receiptsand Coupons.

Any payments made by the Issuer are required to be within the all-in-cost ceilings prescribedunder the ECB Guidelines and in accordance with any specific approvals from the RBI obtained bythe Issuer in this regard.

9.3 Transfers or Sales

The Issuer has agreed to indemnify any transferor or transferee of a Note (or any beneficialinterest therein), other than a transferor or transferee who is liable to Indian tax by reason of hishaving a connection with India apart from the mere holding of a Note, against any loss resulting fromthe imposition of Indian income, capital gains or gift tax on the transfer or sale of a Note outside India.The foregoing indemnity will terminate upon the Trustee certifying, such certification not to beunreasonably withheld, that it is satisfied, on the basis of an appropriate amendment of the Income TaxAct, 1961 of India and/or a reasoned legal opinion in writing of a practising eminent Indian taxationlawyer acceptable to the Trustee and the Issuer in form and content satisfactory to the Trustee, thatthe Notes are not and are not deemed to be situated in India.

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The Issuer will first obtain approval from the RBI prior to making any payments under suchindemnity, if required.

10. PRESCRIPTION

The Notes (whether bearer or registered form), Receipts and Coupons will become void unlesspresented for payment within a period of 10 years (in the case of principal) and five years (in the caseof interest) after the Relevant Date (as defined in Condition 9) therefor.

There shall not be included in any Coupon sheet issued on exchange of a Talon any Coupon theclaim for payment in respect of which would be void pursuant to this Condition or Condition 7.2 orany Talon which would be void pursuant to Condition 7.2.

11. EVENTS OF DEFAULT AND ENFORCEMENT

11.1 Events of Default

The Trustee at its discretion may, and if so requested in writing by the holders of at least 25 percent. in nominal amount of the Notes then outstanding or if so directed by an Extraordinary Resolutionof the Noteholders shall (subject in each case to being indemnified and/or secured and/or prefundedto its satisfaction), (but, in the case of the happening of any of the events described in paragraphs (b)to (e) inclusive and (h) to (i) inclusive, only if the Trustee shall have certified in writing to the Issuerthat such event is, in its opinion, materially prejudicial to the interests of the holders of the Notes),give notice in writing to the Issuer that each Note is, and each Note shall thereupon, subject to receiptof prior RBI approval or AD Bank approval pursuant to the ECB Guidelines and the ECB Rupee BondCircular, as the case may be, immediately become, due and repayable at its Early Redemption Amounttogether with accrued interest as provided in the Trust Deed if any of the following events (each anEvent of Default) shall occur:

(a) Non-payment

the Issuer fails to pay the principal or interest on, any of the Notes when due and the failurecontinues for a period of seven business days (each being a day (other than a Saturday or a Sunday)on which banks and foreign exchange markets are open for business in London and Delhi) in the caseof principal, or 14 days, in the case of interest, from the due date for such payment; or

(b) Breach of Other Obligations

the Issuer defaults in the performance or observance of or compliance with any of its otherobligations set out in the Notes or the Trust Deed which default is, in the opinion of the Trustee,incapable of remedy or, if in the opinion of the Trustee it is capable of remedy, is not, in the opinionof the Trustee, remedied within 30 days after notice requiring such default to be remedied shall havebeen given to the Issuer by the Trustee; or

(c) Cross-Default

(i) any present or future indebtedness for borrowed money of the Issuer becomes due andpayable prior to its stated maturity by reason of an event of default; or

(ii) any such indebtedness for borrowed money is not paid when due as extended by anyapplicable grace period originally provided for; or

(iii) the Issuer fails to pay when due (or within any applicable grace period originally providedfor) any amount payable by it under any present or future guarantee or indemnity in respectof indebtedness for borrowed money,

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provided that no event described in this subparagraph 11.1(c) shall constitute an Event of Defaultunless the relevant amount of indebtedness or other relative liability due and unpaid, either aloneor when aggregated (without duplication) with other amounts of indebtedness and/or otherliabilities due and relative to all (if any) other events specified in (i) to (iii) above which haveoccurred and are continuing, amounts to at least U.S.$20,000,000 (or its equivalent in any othercurrency); or

(d) Enforcement Proceedings

a distress, attachment, execution or other legal process is levied, enforced or sued upon oragainst any material part of the property, undertaking, assets or revenues of the Issuer and is not eitherdischarged or stayed within 45 days; or

(e) Security Enforced

an encumbrancer takes possession or an administrative or other receiver, manager or othersimilar person is appointed over, or an attachment order is issued in respect of, the whole or anymaterial part of the undertaking, property, assets or revenues of the Issuer and in any such case suchpossession, appointment or attachment is not stayed or terminated or the debt on account of whichsuch possession was taken or appointment or attachment was made is not discharged or satisfiedwithin 45 days of such possession, appointment or the issue of such order; or

(f) Insolvency

the Issuer is declared by a court of competent jurisdiction insolvent or bankrupt or is unable topay its debts, or stops, suspends or threatens to stop or suspend payment of all or, a material part of(or of a particular type of) its debts as they mature, commences negotiations with any one or more ofits creditors with a view to the general readjustment or rescheduling at its indebtedness or makes ageneral assignment for the benefit of or a composition with its creditors or applies for or consents toor suffers its re-organisation, the appointment of an administrator, liquidator, administrative or otherreceiver, manager or other similar person in respect of the Issuer or over the whole or any materialpart of the undertaking, property, assets or revenues of the Issuer and such appointment is notdischarged or stayed within 60 days of its taking effect except, in any such case, for the purpose ofand followed by a reconstruction, amalgamation, reorganisation, merger or consolidation on termsapproved in writing by the Trustee or by an Extraordinary Resolution of the Noteholders; or

(g) Winding-up and Disposals

an order of a court of competent jurisdiction is made or an effective resolution passed for thewinding-up or dissolution of the Issuer, or the Issuer sells or disposes of all or substantially all of itsassets or business whether as a single transaction or a number of transactions, related or not; except,in any such case, for the purpose of and followed by a reconstruction, amalgamation, reorganisation,merger or consolidation on terms approved in writing by the Trustee or by an Extraordinary Resolutionof the Noteholders; or

(h) Expropriation

any governmental authority or agency condemns, seizes, compulsorily purchases or expropriatesall or any material part of the assets or shares of the Issuer without fair compensation; or

(i) Cessation of Business

the Issuer ceases or threatens to cease to carry on its business or operations, except for thepurpose of and followed by a reconstruction, amalgamation, reorganisation, merger or consolidationon terms previously approved in writing by the Trustee or by an Extraordinary Resolution of theNoteholders; or

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(j) Analogous Events

any events occur which under the laws of India have an analogous effect to any of the eventsreferred to in paragraphs (d) to (h) above.

In this Condition, indebtedness for borrowed money means any present or future indebtedness(whether being principal, premium, interest or other amounts) for or in respect of (i) money borrowed,(ii) liabilities under or in respect of any acceptance or acceptance credit or (iii) any notes, bonds,debentures, debenture stock, loan stock or other securities, issued or distributed whether by way ofpublic offer, private placing, acquisition consideration or otherwise and whether issued for cash or inwhole or in part for a consideration other than cash.

Upon any such notice being given to the Issuer, the Notes will immediately become due andrepayable at their outstanding principal amount together with accrued interest as provided in the TrustDeed.

11.2 Enforcement

The Trustee may at any time, at its discretion and without notice, take such proceedings againstthe Issuer as it may think fit to enforce the provisions of the Trust Deed, the Notes, the Receipts andthe Coupons, but it shall not be bound to take any such proceedings or any other action in relation tothe Trust Deed, the Notes, the Receipts or the Coupons unless (i) it shall have been so directed by anExtraordinary Resolution of the Noteholders or so requested in writing by the holders of at least 25per cent. in nominal amount of the Notes then outstanding and (ii) it shall have been indemnified toits satisfaction.

No Noteholder, Receiptholder or Couponholder shall be entitled to proceed directly against theIssuer unless the Trustee, having become bound so to proceed, fails so to do within a reasonable periodand the failure shall be continuing.

12. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS

Should any Note, Receipt, Coupon or Talon be lost, stolen, mutilated, defaced or destroyed, itmay be replaced subject to applicable laws, regulations and relevant stock exchange regulations at thespecified office of the Principal Paying Agent or the Registrar (in the case of Registered Notes) uponpayment by the claimant of such costs and expenses as may be incurred in connection therewith andon such terms as to evidence and indemnity as the Issuer and the Principal Paying Agent mayreasonably require. Mutilated or defaced Notes, Receipts, Coupons or Talons must be surrenderedbefore replacements will be issued.

13. PAYING AGENTS, REGISTRAR AND TRANSFER AGENTS

The names of the initial Paying Agents, the initial Registrar and the other initial Transfer Agentsand their initial specified offices are set out below.

The Issuer is entitled, after consultation with the Trustee, to vary or terminate the appointmentof the Principal Paying Agent, Paying Agent, Registrar or Transfer Agent and/or appoint additional orother Paying Agents, Registrar or Transfer Agents and/or approve any change in the specified officethrough which any Agent acts, provided that:

(a) there will at all times be the Principal Paying Agent and a Registrar;

(b) so long as the Notes are listed on any stock exchange, there will at all times be a PayingAgent, which may be the Principal Paying Agent, and Transfer Agent with a specified officein such place as may be required by the rules and regulations of the relevant stock exchange(or any other relevant authority);

(c) the Issuer will ensure that it maintains a Paying Agent in a Member State of the EuropeanUnion that is not obliged to withhold or deduct tax pursuant to Council Directive2003/48/EC or any other law implementing or complying with, or introduced in order toconform to, such Directive; and

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(d) so long as the Notes are listed on the SGX-ST, if the Notes are issued in definitive form,there will at all times be a Paying Agent in Singapore unless the Issuer obtains anexemption from the SGX-ST.

In addition, the Issuer shall forthwith appoint a Paying Agent having a specified office in NewYork City in the circumstances described in Condition 7.5. Notice of any variation, termination,appointment or change in Paying Agents will be given promptly to the Noteholders in accordance withCondition 15.

In acting under the Agency Agreement, the Paying Agents, Registrar and the Transfer Agents actsolely as agents of the Issuer and, in certain circumstances specified therein, of the Trustee and do notassume any obligation to, or relationship of agency or trust with, any Noteholders, Receiptholders orCouponholders. The Agency Agreement contains provisions permitting any entity into which anyAgent is merged or converted or with which it is consolidated or to which it transfers all orsubstantially all of its assets to become the successor agent.

14. EXCHANGE OF TALONS

On and after the Interest Payment Date on which the final Coupon comprised in any Couponsheet matures, the Talon (if any) forming part of such Coupon sheet may be surrendered at thespecified office of the Principal Paying Agent or any other Paying Agent in exchange for a furtherCoupon sheet including (if such further Coupon sheet does not include Coupons to (and including) thefinal date for the payment of interest due in respect of the Note to which it appertains) a further Talon,subject to the provisions of Condition 10.

15. NOTICES

Notices to holders of Registered Notes will be deemed to be validly given if sent by first classmail or (if posted to an overseas address) by air mail to them at their respective addresses as recordedin the Register and will be deemed to have been validly given on the fourth day after the date of suchmailing and, in addition, for so long as any Registered Notes are listed on a stock exchange or areadmitted to trading by another relevant authority and the rules of that stock exchange or relevantauthority so require, such notice will be published in a daily newspaper of general circulation in theplace or places required by those rules.

All notices regarding the Bearer Notes will be deemed to be validly given if published in aleading daily newspaper of general circulation in Asia or such other English language daily newspaperwith general circulation in Asia as the Trustee may approve. It is expected that such publication willbe made in the Asian Wall Street Journal. The Issuer shall also ensure that notices are duly publishedin a manner which complies with the rules and regulations of any stock exchange (or any otherrelevant authority) on which the Notes are for the time being listed. Any such notice will be deemedto have been given on the date of the first publication or, where required to be published in more thanone newspaper, on the date of the first publication in all required newspapers. If, in the opinion of theTrustee, publication as provided above is not practicable, a notice will be given in such other manner,and will be deemed to have been given on such date, as the Trustee shall approve.

Until such time as any definitive Notes are issued, there may, so long as any Global Notesrepresenting the Notes are held in their entirety on behalf of Euroclear and/or Clearstream,Luxembourg, be substituted for such publication in such newspaper(s) or such mailing the delivery bymail of the relevant notice to Euroclear and/or Clearstream, Luxembourg for communication by themto the holders of the Notes and, in addition, for so long as any Notes are listed on a stock exchangeand the rules of that stock exchange (or any other relevant authority) so require, such notice will bepublished in a daily newspaper of general circulation in the place or places required by the rules ofthat stock exchange (or any other relevant authority). Any such notice shall be deemed to have beengiven to the holders of the Notes on the first day after the day on which the said notice was given toEuroclear and/or Clearstream, Luxembourg.

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Notices to be given by any Noteholder shall be in writing and given by lodging the same,together (in the case of any Note in definitive form) with the relative Note or Notes, with the PrincipalPaying Agent (in the case of Bearer Notes) or the Registrar (in the case of Registered Notes). Whilstany of the Notes are represented by a Global Note, such notice may be given by any holder of a Noteto the Principal Paying Agent or the Registrar through Euroclear and/or Clearstream, Luxembourg, asthe case may be, in such manner as the Principal Paying Agent, the Registrar and Euroclear and/orClearstream, Luxembourg, as the case may be, may approve for this purpose.

Receiptholders and Couponholders will be deemed for all purposes to have notice of the contentsof any notice given to Noteholders in accordance with this Condition 15.

16. MEETINGS OF NOTEHOLDERS, MODIFICATION, WAIVER AND SUBSTITUTION

The Trust Deed contains provisions for convening meetings of the Noteholders to consider anymatter affecting their interests, including the sanctioning by Extraordinary Resolution of amodification of the Notes, the Receipts, the Coupons or any of the provisions of the Trust Deed. Sucha meeting may be convened by the Issuer or the Trustee and shall be convened by the Issuer if requiredin writing by Noteholders holding not less than ten per cent. in nominal amount of the Notes for thetime being remaining outstanding. The quorum at any such meeting for passing an ExtraordinaryResolution is one or more persons holding or representing not less than 50 per cent. in nominal amountof the Notes for the time being outstanding, or at any adjourned meeting one or more persons beingor representing Noteholders whatever the nominal amount of the Notes so held or represented, exceptthat at any meeting the business of which includes the modification of certain provisions of the Notes,the Receipts, the Coupons or the Trust Deed (including, inter alia, modifying the date of maturity ofthe Notes or any date for payment of interest thereon, reducing or cancelling the amount of principalor the rate of interest payable in respect of the Notes or altering the currency of payment of the Notes,the Receipts or the Coupons), the quorum shall be one or more persons holding or representing notless than two-thirds in nominal amount of the Notes for the time being outstanding, or at anyadjourned meeting, such meeting comprising one or more persons holding or representing not less thanone-third in nominal amount of the Notes for the time being outstanding. The Trust Deed provides that(i) a resolution passed at a meeting duly convened and held in accordance with the Trust Deed by amajority consisting of not less than three-fourths of the votes cast on such resolution, (ii) a resolutionin writing signed by or on behalf of the holders of not less than three-fourths in nominal amount ofthe Notes for the time being outstanding or (iii) consent given by way of electronic consents throughthe relevant clearing system(s) (in a form satisfactory to the Trustee) by or on behalf of the holdersof not less than three-fourths in nominal amount of the Notes for the time being outstanding, shall,in each case, be effective as an Extraordinary Resolution of the Noteholders. An ExtraordinaryResolution passed by the Noteholders will be binding on all the Noteholders, whether or not they arepresent at any meeting and whether or not they voted on the resolution, and on all Receiptholders andCouponholders.

The Trustee may agree, without the consent of the Noteholders, Receiptholders orCouponholders, to any modification of, or to the waiver or authorisation of any breach or proposedbreach of, any of the provisions of the Notes or the Trust Deed, or determine, without any such consentas aforesaid, that any Event of Default or potential Event of Default shall not be treated as such,where, in any such case, it is not, in the opinion of the Trustee, materially prejudicial to the interestsof the Noteholders so to do or may agree, without any such consent as aforesaid, to any modificationwhich is of a formal, minor or technical nature or to correct a manifest or proven error. Any suchmodification shall be binding on the Noteholders, the Receiptholders and the Couponholders and anysuch modification shall be notified to the Noteholders in accordance with Condition 15 as soon aspracticable thereafter.

In connection with the exercise by it of any of its trusts, powers, authorities and discretions(including, without limitation, any modification, waiver, authorisation, determination or substitution),the Trustee shall have regard to the general interests of the Noteholders as a class but shall not haveregard to any interests arising from circumstances particular to individual Noteholders, Receiptholdersor Couponholders (whatever their number) and, in particular but without limitation, shall not haveregard to the consequences of any such exercise for individual Noteholders, Receiptholders orCouponholders (whatever their number) resulting from their being for any purpose domiciled orresident in, or otherwise connected with, or subject to the jurisdiction of, any particular territory or

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any political sub-division thereof and the Trustee shall not be entitled to require, nor shall anyNoteholder, Receiptholder or Couponholder be entitled to claim, from the Issuer, the Trustee or anyother person any indemnification or payment in respect of any tax consequences of any such exerciseupon individual Noteholders, Receiptholders or Couponholders except to the extent already providedfor in Condition 9 and/or any undertaking or covenant given in addition to, or in substitution for,Condition 9 pursuant to the Trust Deed.

The Trustee may, without the consent of the Noteholders, agree with the Issuer to the substitutionin place of the Issuer (or of any previous substitute under this Condition) as the principal debtor underthe Notes, the Receipts, the Coupons and the Trust Deed of any Subsidiary, subject to (a) the Notesbeing unconditionally and irrevocably guaranteed by the Issuer, (b) the Trustee being satisfied that theinterests of the Noteholders will not be materially prejudiced by the substitution and (c) certain otherconditions set out in the Trust Deed being complied with.

Any such modification, waiver, authorisation, determination or substitution shall be binding onthe Noteholders, the Receiptholders and the Couponholders and, unless the Trustee otherwise agrees,any such modification or substitution shall be promptly notified to Noteholders by the Issuer inaccordance with Condition 15.

17. INDEMNIFICATION OF THE TRUSTEE AND TRUSTEE CONTRACTING WITH THEISSUER

The Trust Deed contains provisions for the indemnification of the Trustee and for its relief fromresponsibility, including provisions relieving it from taking action unless indemnified to itssatisfaction.

The Trust Deed also contains provisions pursuant to which the Trustee is entitled, inter alia, (a)to enter into business transactions with the Issuer and to act as trustee for the holders of any othersecurities issued or guaranteed by, or relating to, the Issuer, (b) to exercise and enforce its rights,comply with its obligations and perform its duties under or in relation to any such transactions or, asthe case may be, any such trusteeship without regard to the interests of, or consequences for, theNoteholders, Receiptholders or Couponholders and (c) to retain and not be liable to account for anyprofit made or any other amount or benefit received thereby or in connection therewith.

Repatriation of proceeds outside India by the Issuer under an indemnity clause may require theprior approval of the RBI.

18. FURTHER ISSUES

The Issuer shall be at liberty from time to time without the consent of the Noteholders, theReceiptholders or the Couponholders to create and issue further notes having terms and conditions thesame as the Notes or the same in all respects save for the amount and date of the first payment ofinterest thereon and the date from which interest starts to accrue and so that the same shall beconsolidated and form a single Series with the outstanding Notes.

19. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 toenforce any term of this Note, but this does not affect any right or remedy of any person which existsor is available apart from that Act.

20. GOVERNING LAW AND SUBMISSION TO JURISDICTION

20.1 Governing law

The Trust Deed, the Agency Agreement, the Notes, the Receipts, the Coupons and anynon-contractual obligations arising out of or in connection with the Trust Deed, the AgencyAgreement, the Notes, the Receipts and the Coupons are governed by, and shall be construed inaccordance with, English law.

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20.2 Submission to jurisdiction

(a) Subject to Condition 20.2(c) below, the English courts have exclusive jurisdiction to settleany dispute arising out of or in connection with the Trust Deed, the Notes, the Receiptsand/or the Coupons, including any dispute as to their existence, validity, interpretation,performance, breach or termination or the consequences of their nullity and any disputerelating to any non-contractual obligations arising out of or in connection with the TrustDeed, the Notes, the Receipts and/or the Coupons (a Dispute) and accordingly each of theIssuer and the Trustee and any Noteholders, Receiptholders or Couponholders in relation toany Dispute submits to the exclusive jurisdiction of the English courts.

(b) For the purposes of this Condition 20.2, the Issuer waives any objection to the Englishcourts on the grounds that they are an inconvenient or inappropriate forum to settle anyDispute.

(c) To the extent allowed by law, the Trustee, the Noteholders, the Receiptholders and theCouponholders may, in respect of any Dispute or Disputes, take (i) proceedings in any othercourt with jurisdiction; and (ii) concurrent proceedings in any number of jurisdictions.

20.3 Appointment of Process Agent

The Issuer irrevocably appoints State Bank of India, London Branch at 15, King Street, LondonEC2V 8EA, United Kingdom as its agent for service of process in any proceedings before the Englishcourts in relation to any Dispute, and agrees that, in the event of State Bank of India, London Branchbeing unable or unwilling for any reason so to act, it will immediately appoint another personapproved by the Trustee as its agent for service of process in England in respect of any Dispute. TheIssuer agrees that failure by a process agent to notify it of any process will not invalidate service.Nothing herein shall affect the right to serve process in any other manner permitted by law.

20.4 Waiver of immunity

To the fullest extent permitted by law, the Issuer irrevocably and unconditionally:

(a) submits to the jurisdiction of the English courts in relation to any Dispute and waives andagrees not to claim any sovereign or other immunity from the jurisdiction of the Englishcourts in relation to any Dispute (including to the extent that such immunity may beattributed to it), and agrees to ensure that no such claim is made on its behalf;

(b) submits to the jurisdiction of the English courts and the courts of any other jurisdiction inrelation to the recognition of any judgment or order of the English courts or the courts ofany other jurisdiction in relation to any Dispute and waives and agrees not to claim anysovereign or other immunity from the jurisdiction of the English courts or the courts of anyother jurisdiction in relation to the recognition of any such judgment or court order andagrees to ensure that no such claim is made on its behalf; and

(c) consents to the enforcement of any order or judgment made or given in connection with anyDispute and the giving of any relief in the English courts and the courts of any otherjurisdiction whether before or after final judgment including, without limitation: (i) reliefby way of interim or final injunction or order for specific performance or recovery of anyproperty; (ii) attachment of its assets; and (iii) enforcement or execution against anyproperty, revenues or other assets whatsoever (irrespective of their use or intended use) andwaives and agrees not to claim any sovereign or other immunity from the jurisdiction of theEnglish courts or the courts of any other jurisdiction in relation to such enforcement andthe giving of such relief (including to the extent that such immunity may be attributed toit), and agrees to ensure that no such claim is made on its behalf.

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USE OF PROCEEDS

The net proceeds from each issue of Notes will be applied by the Issuer to finance capital

expenditure of ongoing and/or new power projects, coal mining projects, and renovation and

modernisation of power stations of the Issuer in accordance with the ECB Guidelines and in case of

Rupee Denominated Notes in accordance with the ECB Rupee Bond Circular.

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CAPITALISATION

The following table sets forth the consolidated indebtedness and capitalisation of the Issuer as

of 31 March 2015. This table should be read in conjunction with the Issuer’s audited consolidated

financial statements as of 31 March 2015 and notes presented elsewhere herein.

As of 31 March 2015

(Rs. inmillions)

(U.S.$ inmillions)(2)

(audited)

Debt:

Short-term(1)

- Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,103 289

- Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,788 1,131

Total short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,891 1,420

Long-term

- Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378,252 6,043

- Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 555,377 8,873

Total long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933,629 14,916

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,022,520 16,336

Shareholders’ funds:

Issued and fully paid up capital(3) . . . . . . . . . . . . . . . . . . . . . . . . 82,455 1,317

Reserves & surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 738,485 11,799

Total capital and reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 820,940 13,116

Total capitalisation(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,843,460 29,452

Consolidated contingent liabilities of the Issuer as of 31 March 2015 amounted to Rs.160,788

million.

Notes:

(1) Short-term debt is debt maturing within the 12 months following 31 March 2015.

(2) U.S. dollar translations have been made using the exchange rate of U.S.$1.00 = Rs.62.5908 as of 31 March 2015, based

on the reference rate of the RBI prevailing at that date.

(3) As of 31 March 2015, the Issuer’s authorised capital was Rs.100,000 million comprising 10,000 million ordinary shares

of Rs.10 each, of which 8,245.5 million were in issue.

(4) There has been no material change in the consolidated indebtedness or capitalisation of the Issuer since 31 March 2015.

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INVESTMENT CONSIDERATIONS

Investors should carefully consider the following investment considerations as well as the otherinformation contained in this Offering Circular prior to making an investment in the Notes. In makingan investment decision, each investor must rely on its own examination of the Issuer and the terms ofthe offering of the Notes. The risks described below are not the only ones that may affect the Notes.Additional risks not currently known to the Issuer or that the Issuer, based on the informationcurrently available to it, currently deems immaterial may also impair the Issuer’s business operations.All of these risks are contingencies which may or may not occur and the Issuer is not in a positionto express a view on the likelihood of any such contingency occurring. If any of the following or anyother risks actually occur, the Issuer’s business, prospects, results and financial condition could beadversely affected and the price of and the value of investment in the Notes could decline and all orpart of the investments may be lost.

Risks Relating to the Issuer’s Business

The Issuer’s operations and the Issuer’s expansion plans have significant fuel requirements andthe Issuer may not be able to ensure the availability of fuel at competitive prices.

The success of the Issuer’s operations and the proposed expansion of its generation capacity willbe dependent on, among other things, the Issuer’s ability to ensure unconstrained availability of fuelsat competitive prices during the life cycle of its existing and planned thermal power stations. TheIssuer’s primary fuels are coal, gas and naphtha, with approximately 87.49 per cent. of its directlyowned installed generating capacity as of 30 September 2015 being coal-fired and approximately10.20 per cent. being gas or naphtha-fired. Fuel costs represent the Issuer’s largest operating expense,constituting 79.0 per cent. of total operating expenses on a stand-alone basis.

The Issuer purchases substantially all of its coal from subsidiaries of Coal India Limited (CIL)and Singareni Collieries Company Limited (SCCL). The Issuer had signed long-term coal supplyagreements (CSAs) covering units commissioned as of 31 March 2009 for 23,895 MW at its 15directly owned coal-fired power stations and covering units with a total capacity of 9,620 MWcommissioned after 31 March 2009 or currently under construction. The Issuer has entered intolong-term gas supply agreements with GAIL (India) Limited (GAIL) for the supply of gas to itsdirectly owned gas-fired power stations. The Issuer has also entered into a long-term regasifiedliquefied natural gas (RLNG) supply agreement with GAIL. However, no assurance can be given thatthe Issuer’s suppliers will be able to satisfy its contractual commitments and that alternative sourcesof supply would be available on reasonable terms.

If the Issuer is unable to obtain supplies from these suppliers on acceptable terms and conditions,no assurance can be given that it will be able to obtain supplies from alternative suppliers. Further,coal and gas allocations and gas prices are currently determined by the Government, whilst coal pricesare set by CIL or SCCL, as the case may be. In the event that coal and gas supplies or gas prices wereto be deregulated, no assurance can be given that the Issuer will be able to obtain supplies of coal andgas at competitive prices and in the required quantities.

As of the date of this Offering Circular, the Issuer has planned to source coal for some of thepower projects under construction from the coal mines allotted to it and is working towards startingcoal production from these mines commensurate with the start of power generation from the linkedend-use power projects. In order to meet the coal requirement in case of any delay in the start of coalproduction from the captive mines, the Issuer has already approached the Government for allocationof tapering coal linkages from the coal mines of CIL. If the Issuer is unable to timely produce coalfrom these mines or as per the requirement of the related projects and does not obtain tapering coallinkages, no assurance can be given that the Issuer will be able to obtain supplies from alternativesources. Though transportation of coal from two captive mines to its linked end-use power projectsshall be through the Issuer’s own system, the transportation of coal from other mines to the linkedpower projects will be made through the Indian railways network (some of which network, as of the

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date of this Offering Circular, requires further strengthening). Any delays in development of therelated infrastructure by the railways could constrain the fuel supplies to the Issuer’s projects and noassurance can be given that the Issuer will be able to transport the coal through alternative means. Anysuch constraints on sourcing of coal could have a negative impact on the Issuer’s business, prospectsand financial condition as well as on current and future capacity addition plans.

With respect to coal, while India has substantial proven reserves, significant investments wouldbe required to exploit and mine these reserves. No assurance can be given that such investments willbe made. The domestic demand for coal is expected to increase significantly in the future, driven bysignificant capacity addition in the Indian power sector. High dependence on domestic coal couldtherefore expose the Issuer to potential price and availability risks. In the event of a shortage of coal,not only will the productivity of the Issuer’s coal-fired power stations be reduced but it will alsohinder the Issuer’s expansion plans. The Issuer also sources coal through bilateral short termmemoranda of understanding (MoUs) with SCCL or subsidiaries of CIL, through imports and throughe-auctions conducted by the subsidiaries of CIL. However, there is no assurance that such sources ofcoal will continue to be available to the Issuer in the future at reasonable prices or terms or at all.

With respect to gas, the Issuer’s use has been limited in the past due to inadequate supply ofdomestic gas. The Issuer has arranged for the supply of RLNG through long- and short-term contractsto meet part of its requirements. The short-term RLNG contracts are agreed on a “reasonableendeavours” basis with no obligation on the part of the Issuer such as “ship-or-pay” or, “take-or-pay”and no supply or pay obligation on the part of the suppliers. However, due to high RLNG prices, theofftake of power by distribution companies and beneficiaries and, consequently, RLNG consumptionhave been low. The Issuer estimates that it will require 16.39 million metric standard cubic metres ofgas per day in fiscal 2016 to operate its directly owned gas-fired power stations at a plant load factor(which is a measure equal to the percentage of capacity actually utilised) (PLF) of 85.0 per cent. Ifthe Issuer experiences a shortage in the supply of gas to its gas-fired power stations, the productivityof those power stations would be reduced. Although the Issuer is in the process of securing a supplyof gas for the Issuer’s projects at Kawas and Gandhar, there is no assurance that it will be able tosecure an adequate supply of gas for its current gas-fired power stations or future gas-fired projects.The Issuer’s ability to secure adequate fuel supply for its Kawas and Gandhar projects may also beaffected by its dispute with Reliance Industries Limited (RIL) on the sale and purchase agreement forgas supply for those projects. See “The Issuer has executed a letter of intent with RIL for the purchaseof gas, which, if not declared as a valid and binding contract between the Issuer and RIL, maynegatively impact the Issuer’s financial condition and results of operation.” below. Any suchconstraints on sourcing gas would have a negative impact on the Issuer’s business, prospects andfinancial condition as well as current and future capacity addition plans.

The State Electricity Boards (SEBs) and state owned distribution companies account for morethan 88 per cent. of the Issuer’s sales of electricity generated from its directly owned powerstations and any change that adversely affects the Issuer’s ability to recover dues from themwould adversely affect its financial position.

The SEBs and the state owned distribution companies are the largest purchasers of power fromthe Issuer and accounted for more than 88 per cent. of the Issuer’s sales of electricity generated fromits directly owned power stations in fiscal 2015. The Issuer is obligated to supply power to them inaccordance with the terms of the allocation letters issued by the Government for each of the Issuer’spower stations. Historically, the Issuer has had significant problems recovering payments from theSEBs. The Scheme for One Time Settlement of Outstanding Dues (the OTSS) introduced severalmeasures to address these problems. Tripartite agreements (the Tripartite Agreements) were signedunder which the receivables for past due amounts from the SEBs were securitised, resulting in theissue to the Issuer of 8.5 per cent. tax free state government special bonds issued under the OTSS (theTax Free Bonds). The Tax Free Bonds mature in various stages from 1 October 2006 until 1 April2016. These agreements, inter-alia, provide that in case of any default in payment of current dues byany state utility, the outstanding dues can be deducted from the state’s RBI account and paid to theIssuer. In addition, the Tripartite Agreements require the SEBs to establish letters of credit (LCs) to

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cover 105 per cent. of current payments for the sale of electricity generated from the Issuer’s directlyowned power stations. In addition to the Tripartite Agreements, the Issuer’s sales to the SEBs fromits directly owned power stations after 31 October 2016 are secured through supplementaryagreements with the SEBs under which the SEBs have agreed to create a charge over their ownreceivables in favour of the Issuer, and in the event of a payment default, to assign their receivablesinto an escrow account. If receivables of these SEBs are not received into such escrow accounts forany reason whatsoever or if the security over such receivables is flawed, payments to the Issuer wouldnot be secured. Any change that adversely affects the Issuer’s ability to recover its dues from the SEBswill adversely affect its financial position.

In fiscal 2013, the SEBs incurred losses of approximately Rs.1,050,700 million withoutaccounting for subsidy and Rs.689,640 million after accounting for subsidy received. (Source: PowerFinance Corporation Limited report on the performance of state power utilities: September 2014.) Inaddition, there have also been instances of state governments promising free power to certain sectionsof society, such as farmers. The adoption of such policies by state governments would adversely affectthe financial health of the SEBs, which would in turn adversely affect their ability to make paymentsto the Issuer. See “The unbundling of the SEBs pursuant to the Electricity Act could have an adverseimpact on the Issuer’s revenues.” below and the section entitled “The Power Industry in India.”

The unbundling of the SEBs pursuant to the Electricity Act could have an adverse impact onthe Issuer’s revenues.

Under the Electricity Act, 2003 (the Electricity Act), the SEBs are required to unbundle theiroperations into separate generation, transmission and distribution companies. Following unbundling,the Issuer’s power purchase agreements (PPAs) with the SEBs will be assigned to one or more of theunbundled entities. These unbundled entities, particularly distribution companies, may have lowercreditworthiness than the original SEBs. This could adversely affect the ability of such unbundledentities to make payments to the Issuer. Further, upon divestment of ownership or control of a SEBor any of the unbundled entities, as applicable, in favour of any entity not owned or controlled,directly or indirectly, by the applicable, state government, the Tripartite Agreement relating to theSEB or the unbundled entity, as applicable, will expire. In such an event, the SEB or the unbundledentity, as applicable, may no longer establish LCs in favour of the Issuer, which could have an adverseimpact on realisation of dues from the SEB or the unbundled entity, as applicable, by the Issuer.

The Issuer faces competition as a result of deregulation in the Indian power sector.

The Electricity Act, which came into force in June 2003, removed licensing requirements forthermal generators, provided for open access to transmission and distribution networks and removedrestrictions on the right to build captive generation plants. These reforms increased opportunities forthe private sector to enter into the power generation business. Specifically, the non-discriminatoryopen access regulations of state regulatory commissions, by which generators are permitted to selldirectly to bulk consumers, increased the financial viability of private investment in power generation.Large Indian business houses with established commercial power generation companies, significantresources and many years of experience in the commercial power generation business now competewith the Issuer. The Issuer may also face competition from Indian and international companies seekingto set up or expand their power generation business and to obtain the land, coal, water and otherresources required for power projects, in addition to competition from the established central and statepower utilities. Competitive bidding for power procurement further increases the competition amongpower generators. The Issuer’s competitors may have greater resources, better flexibility and lessercontrols on their systems and procedures than the Issuer and may be able to achieve better economiesof scale or to access cheaper sources of fuel than the Issuer, allowing them to bid at more competitiverates. The Issuer may face decreased margins and other unfavourable terms and conditions for the saleof power generated by it due to such competition. Further, as a result of the measures introduced underthe Electricity Act, the OTSS and the scheme for the financial restructuring of state-owneddistribution companies dated 12 October 2012 (see “The Power Industry in India”), SEBs may

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experience improvements in their financial position and may seek to expand their own installedcapacity. There can be no assurance that the Issuer will be able to compete effectively given suchincreased competition. The Issuer’s failure to do so could result in an adverse effect on its businessprospects, financial condition and results of operations.

There may be other changes to the regulatory framework that could adversely affect the Issuer.

The statutory and regulatory framework for the Indian power sector has changed significantly inrecent years and the full impact of these changes is unclear. There are likely to be more changes inthe next few years. The Electricity Act has put in place a framework for reforms in the sector, but inmany areas the details and timing of reforms are yet to be determined. It is expected that many of thesereforms will take time to be implemented. Furthermore, there could be additional changes in tariffpolicy, requirements for unbundling of the SEBs, restructuring of companies in the power sector, openaccess and parallel distribution and licensing requirements for, and tax incentives applicable to,companies in the power sector. Such additional changes could adversely affect the Issuer’s businessprospects, financial condition and results of operations. For a discussion on the regulatory frameworkof the electricity industry in India, see “Regulations and Policies in India”.

The tariff regulations pursuant to the Central Electricity Regulatory Commission (CERC) TariffRegulations 2014-19 and the Tariff Policy 2006, respectively, may adversely affect the Issuer’sresults of operations, its cash flow from operations and could result in an increase in futurecompetition for the Issuer.

The CERC has recently issued the tariff regulations applicable for the period from 1 April 2014to 31 March 2019 (the 2014-19 Regulations) under which it has introduced some changes to the tariffprinciples and has tightened the operational norms applicable for this period. Under the 2014-19Regulations, the return on equity is calculated on a pre-tax basis at a base rate of 15.50 per cent., tobe grossed up by the effective tax rate as applicable for the respective year. For projects commissionedon or after 1 April 2014 there is an additional return of 0.50 per cent. on a post tax basis if the newprojects are completed within the timeline specified in the 2014-19 Regulations. In addition, under the2014-19 Regulations, the Issuer can recover deferred tax liability on the Issuer’s power generationbusiness before 1 April 2009 when the tax liability becomes payable. The recovery of interest cost ondebt and return on equity for all power stations declared in commercial operation on or after 1 April2009 will be based on a prescribed 70/30 debt to equity ratio. Where the equity employed is greaterthan 30 per cent., the amount of equity for determination of the tariff will be limited to 30 per cent.The return on the excess equity can be recovered on the same basis as the recovery on the debtcomponent. Where the equity employed is less than 30 per cent., the actual amounts of equity will beused for purposes of determination of the tariff. In the case of existing power stations, the recoveryof interest costs on debt will be based on the debt to equity ratio previously allowed by the CERC forthe determination of the tariff for the period ending 31 March 2014. With respect to energy charge rate,which shall cover the primary and secondary fuel cost, the 2014-19 Regulations changed the basis ofmeasurement of gross calorific value (GCV) of fuel from an “as fired” to an “as received” basis.Under the 2014-19 Regulations, incentive payments are based on normative annual plant load factorinstead of plant availability and the rate of incentive has also been revised to 50 paise per kWh. TheIssuer believes that the various changes in the 2014-19 Regulations may have an adverse effect on theIssuer’s results of operations and cash flow from operations. In addition, the CERC is progressivelytightening the operating norms, which will also have an adverse effect on the Issuer’s results ofoperations and cash flow from operations.

While the Issuer has approached the High Court of Delhi against some of the provisions of the2014-19 Regulations, an unfavourable decision of the High Court of Delhi will have an adverse effecton the Issuer’s results of operations and cash flow from operations.

In addition, the Government tariff policy issued in January 2006 (the Tariff Policy) provides thatall future requirements for power should be procured through tariff based competitive bidding bydistribution licensees except in cases of expansion of existing projects or where there is a state

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controlled/owned company as an identified developer and where regulators will need to resort to tariffdetermination based on norms provided that expansion of generating capacity by private developersfor this purpose would be restricted to one time addition of not more than 50 per cent. of the existingcapacity. For the public sector projects, capacity addition of all new generation and transmissionprojects shall be decided on the basis of competitive bidding after 6 January 2011, provided that adeveloper of a hydroelectric project would have the option of getting the tariff determined by theappropriate commission subject to conditions specified in the Tariff Policy. Exemptions from thecompetitive bidding route may be adopted in certain transmission projects. For more details see“Modes of participation in power projects — Bid Route” in the “Regulations and Policies in India”section of the Offering Circular. The Government has also issued competitive bidding guidelines. Bothcentral power sector utilities (CPSUs) and private sector developers are participating in the tariffbased bidding process for securing power projects including coal-fired ultra mega power projects(UMPPs).

Competition in hydroelectric power is also likely to increase in the future due to increasedopportunities for private investment in the market as described above and the hydroelectric potentialin India. These changes are likely to further increase future competition for the Issuer and could havea material adverse effect on the Issuer’s business, financial condition and results of operation.

Cancellation of the allocation of coal mines to the Issuer could adversely affect the Issuer’sbusiness, financial condition and results of operation.

The Issuer entered into the business of coal mining to ensure better control, greater reliabilityof production and lower cost of its coal supply. Coal mining is integral to its strategy of achieving fuelsecurity. The MoC allotted 10 coal blocks to the Issuer, including coal blocks Pakri-Barwadih,Chatti-Bariatu, Kerandari, Dulanga, Talaipalli, Chatti-Bariatu (South), Banai, Bhalumuda,Chandrabila and Kudanali-Luburi. These coal blocks are situated in the states of Jharkhand,Chhattisgarh and Odisha. The Issuer expects that coal from these coal blocks will help in meeting itscoal demand for its upcoming coal-fired projects in the current 12th five-year plan period and beyond.

The Supreme Court in September 2014 held that allocation of coal blocks (Coal Blocks) by theGovernment based on the recommendations made in the 36 screening committee meetings betweenJuly 1993 and July 2008 and through the government dispensation route was illegal. The SupremeCourt held that only an undertaking which has a unit engaged in the production of iron and steel,generation of power, washing of coal obtained from the mines or production of cement is entitled toallocation, in addition to such entities as the Government, a Government company or a Governmentcorporation. Therefore the Supreme Court ordered the cancellation of the allocation of these CoalBlocks, except for a few blocks including the Issuer’s Pakri Barawadih coal block, as this was allottedto the Issuer which is a Government company. In accordance with the Supreme Court order, theallocation of five coal blocks to the Issuer, namely Chatti-Bariatu, Talaipalli, Dulanga, Kerandari andChatti Bariatu (South), was cancelled. However, these coal blocks were reallocated to the Issuer inMarch 2015.

Furthermore, although four coal blocks, namely Banai, Bhalumuda, Chandrabila andKudanali-Luburi, were allotted to the Issuer in 2013, the Government modified its decision andallotted the Chandrabila coal block to a different entity in April 2015. There is no assurance that theallotment of the remaining coal blocks will not be further cancelled or amended. Such adversedecisions may have a significant adverse effect on the Issuer’s business and results of operations.

Furthermore, the allocation of mines is subject to certain other additional conditions, includinga scheduled period of development stipulated in the block allocation letters, the non-fulfilment ofwhich could result in de-allocation by the MoC. For example, in June 2011 the MoC de-allocated theChatti-Bariatu, Kerandari and Chatti-Bariatu (South) coal blocks, which were allocated to the Issuer,and the Brahmini and Chichro-Patsimal coal blocks, which were allotted to the joint venture betweenthe Issuer and CIL, citing lack of sufficient progress as per the requirements of the block allocationletters. On review of the justification proposal for the delays in development of these blocks and the

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progress already achieved by the Issuer by the review committee, the MoC withdrew the de-allocationof the Chatti-Bariatu, Kerandari and Chatti-Bariatu (South) coal blocks in January 2013. The MoC,based on the recommendation of an inter-ministerial group, citing delay in meeting various milestonesfor the development of coal blocks at Pakri-Barwadih, required bank guarantees of Rs.1,386 millionin February 2014. In accordance with the allotment agreement dated 30 March 2015 signed by theIssuer with the MoC, the Issuer submitted bank guarantees for an amount of Rs.8,220 million asperformance security for the Chatti-Bariatu, Chatti-Bariatu (South), Kerandari, Dulanga and Talaipallicoal blocks. These bank guarantees are linked with the achievement of stipulated milestones andcompliance with various allotment conditions.

There can be no assurance that the Issuer will be successful in mining coal from the coal blocksthat have been allotted to the Issuer or that these coal blocks will not be cancelled. In case theallocation of one or more of the blocks is cancelled in the future, the availability of fuel for the powerprojects of the Issuer would be negatively impacted and would adversely affect its business, financialcondition and results of operation.

The Issuer’s expansion plans and diversification plans require significant capital expenditureand if the Issuer is unable to obtain the necessary funds for expansion, its business plans andprospects may be adversely affected.

The Issuer will need significant additional capital to finance its business plan and in particular,its plan for capacity expansion. As of the date of this Offering Circular, the Issuer was engaged inconstruction activities for projects representing 23,004 MW, including 4,495 MW undertaken by itsjoint venture companies and subsidiaries, which are in different stages of progress. The Issuer is alsopursuing a number of additional projects, representing a further increase of more than 27,000 MW ofcapacity, which are in various stages, including projects for which tenders have been invited or afeasibility report has been or is being prepared. The scheduled completion dates of the Issuer’sexpansion plans and budgets with respect to its expansion plans are management estimates only andthere is no assurance that such proposed expansion will be completed or, if completed, that there willnot be cost or time overruns.

The Issuer expects approximately 30 per cent. of its proposed capital expenditure to be fundedby internal accruals and/or through the issue of equity shares and the remaining approximately 70 percent. to be funded by debt financing. The Issuer’s ability to finance its planned capital expenditure issubject to a number of risks, contingencies and other factors, some of which are beyond its control,including the Issuer’s results of operations generally, tariff regulations, interest rates, borrowing orlending restrictions, if any, changes to applicable laws and regulation, the amount of dividend requiredto be paid to the Issuer’s shareholders and other costs and the Issuer’s ability to obtain financing onacceptable terms. In addition, as of the date of this Offering Circular, there were a number oflarge-scale infrastructure projects under development in India which may impair the Issuer’s abilityto obtain additional funding and it may not be able to receive adequate debt funding on commerciallyreasonable terms in India. In such event, the Issuer may be required to seek funding internationally,which would result in exposure to foreign exchange risks and which may require approvals under, orbe restricted by, laws and regulations in India. For further details, see also the section entitled“Regulations and Policies in India — Foreign Exchange Laws”. If the Issuer is unable to raise requiredfunds for expansion, its business plans and prospects may be adversely affected. See also the sectionentitled “Description of the Issuer — Business — Capacity Expansion”.

The Issuer is also in the process of progressively diversifying the fuel mix of its power stations.In addition, the Issuer plans to invest in power trading, electricity distribution, coal mining and oilexploration. These diversification efforts will also require significant additional capital. There can beno assurance that the Issuer will be able to raise the required capital to implement its diversificationplans on acceptable terms or at all. In the event that the Issuer cannot raise the funds to diversify itsbusiness, its business, financial condition, prospects and results of operation may be materially andadversely affected.

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The Issuer’s expansion plans are subject to a number of risks and uncertainties.

The Issuer’s expansion plans are subject to a number of factors, including laws and regulations,governmental action, delays in obtaining permits or approvals, global prices of crude oil and otherfuels for transportation, prices of fuel supplies required for power station operations, accidents,natural calamities, and other factors beyond its control. Power projects generally have long gestationperiods due to the process involved in their commissioning. Contracts for construction and otheractivities relating to the projects are awarded at different times during the course of the projects. Inaddition, the Issuer’s projects are dependent on external contractors for construction, installation,delivery and commissioning, as well as the supply and testing of key plant and equipment. The Issuermay only have limited control over the timing, quality of services, equipment or supplies provided bythese contractors. The Issuer is highly dependent on some of the external contractors who supplyspecialised services and sophisticated and complex machinery. There can be no assurance that theperformance of the external contractors will meet the Issuer’s specifications or performanceparameters or that they will remain financially sound. The failure or delay of the external contractorsto perform could result in incremental cost or time overruns, or the termination of a power projectdevelopment. For example, the work at the Issuer’s Barh project has been delayed by thenon-performance of the contractor’s work in relation to constructing a steam generator, pursuant towhich the contractor’s contract with the Issuer has been terminated. There can be no assurance thatthe Issuer would be able to complete its expansion plans in the time expected, or at all, or that theirgestation period would not be affected by any or all of these factors.

Furthermore, the Issuer’s ability to acquire sites for its expansion plans depends on many factors,including whether the land is private or state-owned, whether the land is classified in a manner thatallows it to be used as contemplated by the Issuer’s projects, and the willingness of the owners to sellor lease their land. In many cases, the area identified as a suitable site is owned by numerous smalllandowners. Acquisition of private land in India can involve many difficulties, including litigationrelating to ownership, liens on the land, inaccurate title records, negotiations with numerous landowners and obtaining Government approvals. Acquisition of Government land may also involve anumber of difficulties relating to rehabilitation and resettlement where people’s livelihood isdependent on the land. Further, in instances where forest land is required to set up a project, as of thedate of this Offering Circular, Government clearance for diversion of forest land for non-forestpurposes is mandatory for a power project as well as its connected mines, and project developmentcould be severely affected in case of any delay in obtaining such clearances.

The Issuer may also face competing interests with respect to usage of land, as in the case of theIssuer’s North Karanpura Thermal Power Project where work was put on hold for several years dueto objections that the proposed location of the project is on coal-bearing land. Work on the project hassince been re-started.

The power industry in which the Issuer operates is highly regulated. For example, with respectto the power business, several licences are required under the Electricity Act, including a transmissionlicence, a distribution licence and an electricity trading licence. There is no assurance that the Issueror the concerned agency will be able to obtain all the necessary approvals or clearances with respectto its expansion plans. Any of these factors could have a material adverse effect on the Issuer’sbusiness, financial condition and results of operation.

The Issuer may be adversely affected by changes in the Government’s policy relating to the Issuer.

The Government owns 74.96 per cent. of the Issuer’s paid-up capital. To date, the Government’sownership has been an important factor in some aspects of the Issuer’s business, including thesettlement of electricity dues payable by the SEBs to the Issuer. Any significant changes in theGovernment’s shareholding in the Issuer, and/or pursuit by the Government of policies that are not inthe interests of the Issuer, could adversely affect the Issuer’s business.

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The Issuer generally manages its business on a day to day basis independently from theGovernment. The Government has named the Issuer as a “Maharatna” company as a consequence ofwhich the Issuer enjoys enhanced autonomy in making financial and other decisions. Adverse changesin the terms of, or the loss of, “Maharatna” status may decrease the Issuer’s autonomy and the Issuer’sability to compete with other participants in the Indian power sector.

The Issuer’s operations create difficult environmental challenges, and changes in environmentallaws and regulations may expose the Issuer to liability and result in increased costs.

The Issuer’s power stations and power generation projects are subject to environmental laws andregulations promulgated by the Ministry of Environment and Forests (MoEF) and the pollution controlboards of the relevant states. These include laws and regulations that limit the discharge of pollutantsinto the air, land and water and establish standards for the treatment, storage and disposal of hazardouswaste materials. The Issuer expects that environmental laws and compliance requirements willcontinue to become stricter. Compliance with current and future environmental regulations,particularly by the Issuer’s older power stations, may require substantial capital expenditure and, incertain cases, may require the closing down of non-complying power stations. In particular, the Issuergenerates high levels of ash in its operations. There are limited uses for ash and therefore demand forash is low. While the Issuer continues to explore methods to utilise or dispose of ash, its ash utilisationactivities are insufficient to dispose of the ash it generates. Furthermore, the Issuer is required toachieve 100 per cent. ash utilisation on a progressive basis under the MoEF notification dated 3November 2009. Compliance with this requirement, as well as any future norms with respect to ashutilisation, may add to the Issuer’s capital expenditures and operating expenses. In certain cases whereit may not be possible to increase the Issuer’s utilisation of ash to comply with this requirement, theIssuer may need to reduce the generation of ash through a partial or full shutdown of its operatingpower stations, thereby reducing its average PLF which could have a material adverse effect on theIssuer’s business, financial condition and results of operation.

The Issuer could be subject to substantial civil and criminal liability and other regulatoryconsequences in the event that an environmental hazard was to be found at the site of any of its powerstations or if the operation of any of the Issuer’s power stations results in material contamination ofthe environment. For instance, in 2006, the Chattisgarh Environment Conservation Board through itsregional officer filed a criminal complaint against the Issuer’s Korba unit alleging air and waterpollution. Financial losses and liabilities as a result of increased compliance costs or due toenvironmental damage or criminal liability due to such environmental breaches may affect the Issuer’sreputation and financial condition.

Furthermore, there is a possibility that environmental compliance norms may be drasticallyaltered, resulting in substantial capital and operating expenditure to the Issuer, which may have anadverse impact on the Issuer’s financial condition.

The Issuer may be adversely affected by restrictive covenants in certain joint venture agreementsto which it is a party.

The Issuer has entered into various agreements for the establishment of joint ventures withdifferent parties, some of which prohibit the Issuer from, among other things, disposing of itsshareholding in the joint ventures. Most of the joint venture agreements to which the Issuer is a partycontain clauses pursuant to which the Issuer has undertaken not to encumber or alienate itsshareholding in the joint ventures for specified periods ranging from 3 to 15 years. Further, in severaljoint venture agreements, the Issuer has agreed that it will not transfer its shareholding to any partynor will the Issuer have the right to acquire additional shares in the open market without the priorwritten consent of the other party. These covenants limit the Issuer’s ability to make optimum use ofits investments or exit these joint venture companies at its discretion, which may have an adverseimpact on the Issuer’s financial condition.

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Activities in the power generation business can be dangerous and can cause injury to people orproperty in certain circumstances.

The Issuer’s business is subject to risks generally associated with power generation, capacityaddition and the related receipt, distribution, storage and transportation of fuel, equipment, materials,products and waste. These hazards include explosions, fires, earthquakes and other natural disasters,mechanical failures, accidents, acts of terrorism, operational problems, delay in development bythird-parties of, or congestion in, transmission lines, transportation interruptions, chemical or oilspills, discharges of toxic or hazardous substances or gases and other environmental risks. Thesehazards can cause personal injury and loss of life, environmental damage and severe damage to ordestruction of property and equipment, and may result in the limitation or interruption of the Issuer’sbusiness operations and the imposition of civil or criminal liabilities. The Issuer is also subject to riskssuch as operational failure due to faulty equipment and business interruption due to strikes and workstoppages. Any of these factors could have a material adverse effect on the Issuer’s business, financialcondition and results of operations.

The Issuer’s business involves numerous risks that may not be covered by insurance.

While the Issuer maintains insurance of its operating plants with ranges of coverage that theIssuer believes to be consistent with industry practice, the Issuer is not fully insured against allpotential hazards and events incidental to its business and there is no assurance that the Issuer’sinsurance coverage will be adequate and available to cover any loss incurred in relation to such typesof incidents. The Issuer is not covered for certain risks such as war, damage or destruction of data orrecords or damage or loss due to pollution or contamination. The occurrence of any such events notcovered by insurance may have a material adverse effect on the Issuer’s business, financial conditionand results of operations and the trading price of the Notes.

If the Issuer is unable to adapt to technological changes, its business could suffer.

The Issuer’s future success will depend in part on its ability to respond to technological advancesand emerging power generation industry standards and practices on a cost-effective and timely basis.Changes in technology and high fuel costs of thermal power projects may make newer generationpower projects or equipment more competitive than those of the Issuer or may require the Issuer tomake additional capital expenditures to upgrade its facilities. In addition, there are other technologiesthat can produce electricity, most notably oil, nuclear, hydroelectric, fuel cells, micro turbines,wind-mills, solar thermal and photovoltaic (solar) cells. The Issuer continues to invest in new andmore advanced technologies and equipment to enable it to respond to emerging power generationindustry standards and practices in a cost-effective and timely manner in order to remain competitivewith other thermal power projects and other methods of power generation. The development andimplementation of such technology entails significant technical and business risks. There is noassurance that the Issuer will successfully identify and implement new technologies or adapt itsprocessing systems to customer requirements or emerging industry standards. If the Issuer is unable,for technical, legal, financial or other reasons, to identify and adapt in a timely and cost effectivemanner to changing market conditions, customer requirements or technological changes, its business,financial performance and the trading price of the Notes could be adversely affected.

Any disruptions to the Issuer’s Enterprise Resource Planning (ERP) and disaster recoveryplatforms or to the Issuer’s business systems or to the Issuer’s communication systems couldmaterially adversely affect its ability to carry on its business efficiently.

The Issuer has invested heavily in information technologies designed to help it to better monitorand operate its business. The Issuer’s ERP platform covers almost all business processes and providesa real time view of the performance of the Issuer’s power stations. The Issuer has a centraliseddeployment of ERP through the data centre located at its office in Noida, Uttar Pradesh, which

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captures data that can be accessed by users throughout the Issuer’s network. ERP is implemented atall of the Issuer’s business locations, including projects and subsidiaries. The Issuer’s ability toengage in critical business tasks depends on the efficient and uninterrupted operation of the ERPplatform and communication network.

The Issuer’s ERP servers, data centre facilities and communication networks are vulnerable todamage, power loss, third party disruptions, security breaches, natural calamities, fire and similarevents. Any significant disruption to these servers or other computer or communication systems woulddamage the Issuer’s ability to carry on its business efficiently. Moreover, the Issuer’s disaster recoverysite at Hyderabad is vulnerable to similar events as the Issuer’s ERP servers at Noida. In the event ofany calamity, when the main data centre and the disaster recovery platforms are disrupted at the sametime, this would affect the Issuer’s ability to carry on its business efficiently and may require capitalexpenditure to restore. In addition, as the Issuer sources its hardware and software from third parties,there is no guarantee that there will not be any defects in these products, which may affect or disruptthe Issuer’s business.

The Issuer’s operations and expansion plans have significant water requirements and it may notbe able to ensure regular and adequate availability of water.

Water is a key input for hydroelectric and thermal power generation. The Issuer’s operations andthe proposed expansion of generation capacity will be dependent on, among other things, its abilityto ensure unconstrained and undiminished availability of water during the life cycle of the existing andplanned power stations. Changing weather patterns and inconsistent rainfall can hamper water supplyat the Issuer’s power stations. Although the Issuer creates reservoirs to hold water to cover anytemporary shortfall, these reservoirs do not have sufficient capacity to sustain supply to the powerstations for extended periods of time.

The Issuer relies on water supply arrangements with certain state governments and stategovernment bodies. Such water sources may run through several states and may be the subject ofinterstate water disputes. In addition, with the creation of new states in India, the probability of suchinterstate water disputes may increase. Any interstate water disputes may affect the ability of thesestate governments to supply water to the Issuer. Water is a limited and politically sensitive resource,and is carefully allocated by the state governments for use between several groups of users.Accordingly, due to political pressures, state governments may not fulfil their contractual obligationsto the Issuer under these water supply agreements.

In the event of water shortages, the Issuer’s power projects may be required to reduce their waterconsumption, which would reduce their power generation capability, thereby adversely affecting itsaverage PLF. Expansion of the Issuer’s generation capacity and the development of new powerstations cannot be initiated unless the Issuer has regular and adequate availability of water and/orconfirmation of water availability for these projects. There is no assurance that the Issuer will receiveregular and adequate quantities of water for the construction and/or operation of these power stations.

The Issuer may be unable to effectively execute its power projects and manage its growth or tosuccessfully implement its business plan and growth strategy.

The Issuer expects that the execution of its growth strategy and new power projects will placesignificant strains on its management, financial and other resources. Continued expansion increasesthe challenges involved in financial and technical management, recruitment, training and retainingsufficient skilled technical and management personnel, and developing and improving its internaladministrative infrastructure. The Issuer may consider expansion in the future to pursue existing andpotential market opportunities. The Issuer’s inability to manage its business plan effectively andexecute its growth strategy could have an adverse effect on its operations, results, financial conditionand cash flows. In addition, if it is unable to manage such challenges, the Issuer may also be unable

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to meet the annual performance targets set by the Government pursuant to the annual Memorandum

of Understanding (MoU) which it enters into with the Government. If the Issuer is unable to

successfully implement its business plan and growth strategy, its business, results of operations and

financial condition would be materially and adversely affected.

In order to manage the execution of new power projects and growth effectively, the Issuer must

implement and improve operational systems, procedures and internal controls on a timely basis. If the

Issuer fails to implement and improve these systems, procedures and controls on a timely basis, or if

there are weaknesses in the Issuer’s internal controls that would result in inconsistent internal standard

operating procedures, the Issuer may not be able to meet its expected schedule of project

implementation, hire or retain employees, pursue new business, complete future strategic agreements

or operate its business effectively. There can be no assurance that the Issuer’s existing or future

management, operational and financial systems, procedures and controls will be adequate to support

future operations or establish or develop business relationships beneficial to its future operations.

Power projects generally have long gestation periods and subject us to various operational risks,which may result in an adverse effect on the Issuer’s business, financial condition and prospects.

Power projects generally have long gestation periods, which may entail a significant period oftime before the economic viability of a given project can be established and there may be substantialcapital outflow before the Issuer is able to realise expected benefits or returns on its investment.Moreover, the construction, development or operation of the Issuer’s power projects, coal mines orother facilities may be disrupted or affected by various factors that may be beyond its control. Inparticular, many of the Issuer’s power stations are ageing and may become subject to additional risksto the extent that the Issuer may be required to undertake renovation and modernisation schemesinvolving significant capital expenditure. Any of these factors could have a material adverse effect onthe Issuer’s business, financial condition and results of operations.

Renewable projects generally are subject to higher tariff rates and other risks, which may resultin an adverse effect on the Issuer’s business, financial condition and prospects.

In future, the Issuer intends to add 10,000 MW to its capacity by way of renewable energy basedpower projects. In this regard, the Issuer signed a MoU with the Andhra Pradesh government fordeveloping a 1,000 MW solar photovoltaic project in a phased manner. For this purpose, the AndhraPradesh government also identified 7,554.53 acres of land in the Anantpur district of Andhra Pradesh,for the Issuer to undertake this proposed activity.

In the first phase of the solar photovoltaic power projects, the Issuer is required to build acapacity of 250 MW within a period of one to two years, in the Anantpur district of Andhra Pradesh(Anantpur Project) and in relation to which the Andhra Pradesh government will provide thetransmission and evacuation infrastructure. Any delay in completion of the Anantpur Project andreadiness of associated power evacuation infrastructure is likely to result in an adverse impact on theIssuer’s operations, business prospects and profitability.

Furthermore, the solar projects are subject to other risks, including without limitation, highertariff rates (as compared to conventional coal-based plants) and associated off-take risks, varioustechnology risks and risks associated with sub-optimal performance. Also there are additional risksarising out of transmission systems which are required to be developed by state agencies and centraltransmission utilities that may not be established by the targeted time due to slowdown in investmentor otherwise, grid instability and regulations mandating forecasting and scheduling of solar power andnon-availability of tax benefits. Any of these factors could have a material adverse effect on theIssuer’s business, financial condition and results of operations.

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Default by the state distribution companies in payment of dues on account of solar power generatedor traded by the Issuer under the National Solar Mission may result in an adverse effect on theIssuer’s business, financial condition and prospects.

The Government has designated the Issuer as the nodal agency for selection of solar powerdevelopers for the 15,000 MW grid-connected solar photo voltaic power plants to be developed underthe National Solar Mission for 2014 to 2019. The Issuer is also required to purchase solar power fromthese plants for further sale to state distribution companies.

Any default by the state distribution companies in payment of dues on account of solar powergenerated or traded by the Issuer and foreign currency exchange rate variations or refusal to off-takesolar power is likely to have an adverse impact on the balance sheet of the Issuer affecting the overallcredit-risk, thereby having a material adverse effect on the Issuer’s business, financial condition andresults of operations.

The Issuer has entered into certain transactions with related parties which may involve conflictsof interest.

The Issuer has entered into transactions with several related parties. The Issuer can give noassurance that it could not have achieved more favourable terms had such transactions not beenentered into with related parties or that such transactions do not involve any conflict of interest.Furthermore, it is likely that the Issuer in the future also may enter into related party transactions.There can be no assurance that such transactions, individually or in the aggregate, will not have anadverse effect on the Issuer’s financial condition and results of operations.

For details regarding the Issuer’s related party transactions as of 31 March 2015, please seesection titled “Financial Information”of this Offering Circular.

The Issuer is entering into new businesses that may not be successful.

The Issuer seeks to diversify its operations by taking advantage of opportunities created byregulatory and economic reforms. The Issuer has entered into the power trading business and isconsidering downstream integration into the electricity distribution business. The Issuer isundertaking development activities at Pakri-Barwadih coal mining project and other coal miningblocks allotted to it. The Issuer has also formed a joint venture company with Nuclear PowerCorporation of India Limited (NPCIL) and plans to undertake projects in the nuclear power sector.The Issuer has also formed joint ventures for the manufacture of equipment used in the powerbusiness.

These new businesses are subject to regulation, which may change. Any such changes to theregulatory environment may pose significant challenges to the Issuer’s administrative, financial andoperational resources. The early stage of the Issuer’s new businesses and any changes to the natureof the relevant regulations may make it difficult to predict the economic viability of these newbusinesses. The Issuer does not have operating history or significant experience in these newbusinesses and they may involve risks and difficulties with which the Issuer may not be familiar. Theymay require capital and other resources, as well as management attention, which could place a burdenon the Issuer’s resources and abilities. In addition, the Issuer’s exploration business also runs the riskof non-discovery. The Issuer’s activities in the nuclear power sector may also be subject to a numberof safety concerns. The Issuer may not be successful in these businesses and there can be no assuranceas to the timing and amount of any returns or benefits that the Issuer may receive from these newbusinesses or any other new businesses the Issuer may enter into.

The Issuer’s success will depend on its ability to attract and retain its key personnel.

The Issuer’s future success depends substantially on the continued service and performance ofits senior management team and other key personnel to ensure the continuance of project

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implementation, the management and running of its daily operations and the planning and executionof its business strategy. There is intense competition for experienced senior management and other keypersonnel with technical and industry expertise in the power business and if the Issuer loses theservices of any of these or other key individuals and is unable to find suitable replacements in a timelymanner, its ability to realise its strategic objectives could be impaired. The Issuer faces specificdisadvantages in its efforts to attract and retain its management. As a public sector undertaking, theGovernment policies regulate and control the emoluments and benefits that the Issuer pays to itsemployees, including its key managerial and technical personnel, and these policies may not permitthe Issuer to pay at market rates. Consequently, private sector market participants in power generation,coal mining, oil exploration and production and other related activities that are able to pay at marketrates have been attracting qualified personnel and diluting the talent pool available to public sectorundertakings. Also, since most of the Issuer’s operational activities lie in the remote regions of India,the Issuer faces competitive disadvantages in attracting and retaining key personnel. Additionally, theIssuer may not have in place the necessary training, systems and processes to develop key personnelinternally. The loss of key members of the Issuer’s senior management or other key team members,particularly to competitors, could have an adverse effect on its business and results of operations. TheIssuer’s performance also depends on its ability to attract and train highly skilled personnel. If theIssuer is unable to do so, it would materially and adversely affect its business, prospects and resultsof operations.

Geological difficulties during project execution may negatively impact the Issuer’s time and cost.

The Issuer may experience geological difficulties during the execution of construction projects,especially during the development of hydroelectric power, oil and gas and coal mining projects. TheIssuer’s construction projects are designed based on certain assumptions made about the locations ofsuch projects after studies have been made. However, the Issuer cannot guarantee that suchassumptions are accurate. For example, during the execution of the Issuer’s construction projects, theIssuer may discover adverse rock strata or terrain, or trapped gases or trapped water and its plantdesigns may be unsuitable for dealing with such geology. These geological factors may result in costsand/or time overruns or the project may have to be abandoned due to impossibility or because theproject is no longer economically feasible.

Estimates of coal reserves are subject to assumptions, and if the actual amounts of such reservesare less than estimated, or if the quality of the coal reserves is lower than estimated, the Issuer’sresults of operations and financial condition may be adversely affected.

Actual reserves and production levels in coal mines or any future coal blocks that the Issuer hasbeen allotted, may differ significantly from estimates, as such estimates are subject to variousassumptions such as interpretations of geological data obtained from sampling techniques andprojected rates of production in the future. Additionally, there is no assurance that the mines fromwhich CIL or SCCL intend to source the Issuer’s coal requirements for its power projects, or thatsupplies awarded to the Issuer, would be able to meet all its coal requirements. If the quantity orquality of the Issuer’s coal reserves has been overestimated, the Issuer would deplete its coal reservesmore quickly than anticipated or incur increased costs to process relatively lower levels of coal if thequality of coal is inferior than anticipated and in such event, the Issuer may have to source the requiredcoal in the open market. Prices for coal in the open market may exceed the cost at which the Issuermight otherwise be able to extract coal or obtain from subsidiaries of CIL or SCCL and may involvesubstantial transportation costs, which would increase the Issuer’s operating costs and adversely affectits business, financial condition and results of operations. In addition, there can be no assurance thatthe Issuer will be successful in mining coal from the coal blocks that have been allotted to the Issuerat a cost which is economically attractive or that the coal mined will meet the coal specificationsrequired for use in its power stations. See also — “Investment Considerations — Cancellation of theallocation of coal mines to the Issuer could adversely affect the Issuer’s business, financial conditionand results of operation”.

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The Issuer’s involvement in oil and natural gas exploration involves significant costs and numerousrisks, including dependence on third parties.

The Issuer has begun oil exploration activity since 2005. As of the date of this Offering Circular,the Issuer has two exploration blocks, one in consortium with strategic partners and oneindependently, in which it acts in the role of operator. Oil exploration is typically capital intensive,comprising the cost of survey and drilling of exploratory wells. There is no certainty that after suchsubstantial expenditures, the Issuer will encounter oil or natural gas reservoirs that may becommercially viable for production. In addition, the Issuer does not have experience in oil explorationand is therefore dependent on its strategic partners. In the event that the Issuer does not encounter oilor natural gas reservoirs that are commercially viable or if its strategic partners cease to provideassistance to the Issuer and the Issuer is unable to replace these strategic partners with otherappropriate partners, this would have an adverse effect on its business prospects and financialcondition.

Certain contractors with whom the Issuer operates are subject to U.S. and international traderestrictions, economic embargoes and sanctions.

In response to the recent actions and policies of the Government of the Russian Federation,including recent actions in Ukraine and the purported annexation of Ukraine, the United States and theEU have recently initiated sanctions relating to Russia and Ukraine. Specifically, the U.S. hasauthorised sanctions against: (i) individuals and entities determined to be contributing to the on-goingsituation in Ukraine (U.S. Executive Order 13660); (ii) officials of the Russian Government and anyindividual or entity that is owned or controlled by, that has acted for or on behalf of, or that hasprovided material or other support to, a senior Russian government official (U.S. Executive Order13661); and (iii) persons and entities operating in key Russian business sectors, including financialservices, energy, metals and mining, engineering, and defence and related materials (U.S. ExecutiveOrder 13662). The U.S. has also authorised so-called “sectoral sanctions” against various Russianentities pursuant to U.S. Executive Order 13662 in the form of four Directives which embody specificprohibitions on dealings with these entities. These “sectoral sanctions” are incorporated into theSectoral Sanctions Identification List. Numerous individuals and some entities have been sanctionedpursuant to these measures.

The Issuer is currently working on the construction of a thermal power plant in India called theBarh Stage-I project (the Project). Also involved in the Project is a contractor called Power MachinesOJSC, which is a Russian entity that provides power generation equipment and with whom the Issuerentered into contractual arrangements in 2005 before the implementation of the current set of Russiaand Ukraine related sanctions.

There can be no assurance that further or expanded sanctions with respect to Russia or Ukrainewill not affect the Issuer’s operations that involve the use of Russian contractors. There can be noassurance that other persons and entities that the Issuer, now or in the future, engages in transactionsand employment will not be subject to U.S. and international sanctions, which could have a negativeimpact on its ability to raise funds in international capital markets and on the marketability of itssecurities. Furthermore, as a result of its business activities with entities that are subject to sanctions,the Issuer may be subject to negative media or investor attention, which may affect certain investors’perceptions of the Issuer.

The Issuer has executed a letter of intent with RIL for the purchase of gas, which, if not declaredas a valid and binding contract between the Issuer and RIL, may negatively impact the Issuer’sfinancial condition and results of operation.

As of 30 September 2015, the Issuer has seven gas-fired power stations in India, which accountedfor 10.20 per cent. of the Issuer’s directly owned power generation capacity. Further, the Issuerintends to increase the installed power generation capacity of its gas-fired power stations located atKawas and Gandhar. In order to secure gas for these power stations, the Issuer has invited bids for the

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procurement of gas to obtain 132 trillion British tonnes per unit per annum for a period of 17 years.Short-listed bidders then submitted their technical and financial proposals and, after evaluating theseproposals, the Issuer issued a letter of intent to RIL pursuant to which, the terms and conditions wereto be governed by the provisions of a gas sale and purchase agreement. However, RIL refused toexecute a gas sale and purchase agreement with the Issuer. The Issuer filed a civil suit against RILfor declaration and specific performance before the High Court of Bombay on 20 December 2005. Asof the date of this Offering Circular, the case is pending. Any adverse decision or order against theIssuer could adversely affect the development plans of the Issuer. In such event, the Issuer may haveto pay higher prices for its gas or may not be able to obtain gas in the required quantity at all. Thiswill negatively impact the Issuer’s financial condition and results of operations.

The Issuer is involved in a number of legal proceedings that may be determined against the Issuer.

The Issuer is party to various legal proceedings and claims relating to its business and operationsin India. These legal proceedings are pending at different levels of adjudication before various courts,tribunals and forums. These legal proceedings include civil suits, arbitration claims, proceedingsrelating to taxation, environmental proceedings and other statutory levies initiated against the Issuer,criminal proceedings involving the Issuer and its employees, employment related disputes pertainingto various labour legislations, public interest litigation against the Issuer pertaining to its operationsand business and proceedings involving the acquisition of land by the Issuer for its operations. Variousregulatory authorities may initiate, and have initiated in the past, legal proceedings against the Issuerin relation to non-compliance of certain regulatory provisions under various labour and environmentalstatutes. No assurance can be given that these legal proceedings will be decided in the Issuer’s favour.Any adverse decision may have a significant adverse effect on the Issuer’s, business and results ofoperations. There is also no assurance that similar proceedings will not be initiated against the Issuerin future. Further, should any new developments arise, such as a change in Indian law or rulingsagainst the Issuer by appellate courts or tribunals, the Issuer may need to make provisions in itsfinancial statements, which could increase its expenses and its liabilities.

Further litigation by employees and power sector related litigation initiated or ongoing againstthe Issuer are mentioned in the other investment considerations set out in this section. See also“Description of the Issuer — Legal and Regulatory Proceedings” and “Investment Considerations —Cancellation of the allocation of coal mines to the Issuer could adversely affect the Issuer’s business,financial condition and results of operation”.

The Issuer’s business has risks relating to fraud, bribery and corruption.

While the Issuer maintains anti-corruption training programmes, codes of conduct and othersafeguards designed to prevent the occurrence of fraud, bribery and corruption, it may not be possiblefor the Issuer to detect or prevent every instance of fraud, bribery and corruption by its employees,agents, sub-contractors or joint venture partners. The Issuer or its employees may therefore be subjectto legal proceedings and to reputational damage which could have a material adverse effect on theIssuer’s business.

The Issuer may encounter problems relating to the operations of its joint ventures.

As of the date of this Offering Circular, the Issuer has formed 21 joint venture companies withvarious third parties for undertaking specific business activities. The Issuer’s joint venture partnersmay:

• be unable or unwilling to fulfil their obligations, whether of a financial nature or otherwise;

• have economic or business interests or goals that are inconsistent with the Issuer’s;

• take actions contrary to its instructions or requests or contrary to the Issuer’s policies andobjectives;

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• take actions that are not acceptable to regulatory authorities;

• become involved in litigation;

• have financial difficulties; or

• have disputes with the Issuer.

Any of the foregoing may have an adverse effect on the business, prospects, financial conditionand results of operations of the Issuer.

The Issuer has incurred significant indebtedness and intends to incur additional substantialborrowings in connection with the development of its power projects and other investments.

As of 31 March 2015, the Issuer had total outstanding indebtedness of Rs.1,022.52 billion on aconsolidated basis, including Rs.626.17 billion of unsecured loans. For further details regarding theIssuer’s indebtedness, see the section entitled “Capitalisation”. The indebtedness incurred and therestrictions imposed on the Issuer by its current or future loan arrangements could adversely impactits ability to conduct its business operations and result in other significant adverse consequences,including, but not limited to, the following:

• the Issuer may be required to dedicate a significant portion of its cash flow towardsrepayment of its debt, which will reduce the availability of cash flow to fund workingcapital, capital expenditures, acquisitions and other general corporate requirements;

• the Issuer is, and may in future be, required to maintain certain financial ratios and satisfycertain financial or other covenants. If the Issuer breaches any financial or other covenantscontained in any of its financing arrangements, the Issuer may be required to immediatelyrepay its borrowings either in whole or in part, together with any related costs.Furthermore, certain of the Issuer’s financing arrangements contain cross defaultprovisions, which could be automatically triggered by defaults under other financingarrangements. Additionally, because some of the Issuer’s borrowings are secured against itsassets, lenders may sell those assets to enforce their claims against the debt;

• the Issuer’s ability to obtain additional financing through debt or equity instruments in thefuture may be impaired;

• if the Issuer is unable to service its indebtedness, it could cause the lenders to declare anevent of default under the relevant agreements and the Issuer will be required toimmediately repay its borrowings either in whole or in part together with related costs;

• the Issuer may be required to obtain approval from its lenders, regarding, among otherthings, its reorganisation, amalgamation or merger, its incurrence of additionalindebtedness, the disposition of assets and the expansion of its business and no assurancecan be given that the Issuer will receive such approvals in a timely manner or at all;

• it could limit the Issuer’s flexibility in planning for, or reacting to, changes in its businessand the industry; and

• the Issuer’s project costs may increase since the Issuer capitalises its interest during theconstruction of its facilities.

The Issuer’s ability to meet its debt service obligations and to repay its outstanding borrowingswill depend primarily upon the cash flow generated by its business over time, as well as its ability totap the capital markets as a source of capital. No assurance can be given that the Issuer will generatesufficient cash to enable it to service its existing or future borrowings, comply with covenants or fundother liquidity needs. If the Issuer fails to meet its debt service obligations or financial or other

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covenants required under the financing documents, the relevant lenders could declare the Issuer’s

default under the terms of its borrowings and cancel unutilised facilities, accelerate the maturity of

its obligations or enforce against its security, which may include taking over the power project. No

assurance can be given that, in the event of any such acceleration, the Issuer will have sufficient

resources to repay these borrowings. Failure to meet the Issuer’s obligations under the debt financing

arrangements could have a material adverse effect on its cash flows, business and results of operations.

Future debt financing, if available, may result in increased finance charges, increased financial

leverage, decreased income available to fund further acquisitions and expansions, decreased working

capital and the imposition of restrictive covenants on the Issuer’s business and operations. The

Issuer’s planned and any proposed future expansions and projects may be materially and adversely

affected if the Issuer is unable to obtain funding for such capital expenditures on satisfactory terms,

or at all, including as a result of any of its existing facilities becoming repayable before its due date.

Further, any downgrade in the Issuer’s credit rating may affect its ability to acquire debt financing at

current interest rates, and, may adversely affect its business prospect, result of operation and financial

condition.

India has experienced high levels of inflation in previous years. The average annual inflation

rates in India from 2008 to 2012 was approximately 7.6 per cent. The average headline wholesale price

index inflation after remaining around 8 to 9 per cent. between the years 2010 and 2012 moderated

to 7.35 per cent. in fiscal 2013 (Source: Mid-Year Economic Analysis 2013-2014 issued by Department

of Economic Affairs, Finance Ministry). According to the RBI, the headline inflation rate reached to

2.0 per cent. in fiscal 2015 from 6.0 per cent. in fiscal 2014. In an effort to combat inflation, the RBI

has raised interest rates numerous times since 2010. In the event that inflation remains high or

increases, or if global inflation increases, certain of the Issuer’s costs may increase.

Increases in interest rates will adversely affect the cost of the Issuer’s borrowings.

Increases in interest rates will adversely affect the cost of the Issuer’s borrowings. As of the date

of this Offering Circular, the Issuer has not entered into any material interest rate hedging or swap

transactions in connection with its borrowings. There can be no assurance that the Issuer will be able

to enter into interest hedging contracts or other financial arrangements on commercially reasonable

terms, or that any of such agreements will protect the Issuer fully against its interest rate risk. Any

increase in interest expense may have an adverse effect on its business, prospects, financial condition

and results of operations.

The Issuer’s ability to raise foreign capital is constrained by global economic conditions andconditions in foreign financial markets.

The Issuer has raised and expects to continue to raise capital in foreign markets. The Issuer’s

ability to raise foreign capital is constrained by the conditions of these markets. The global capital and

credit markets have recently been experiencing periods of extreme volatility and disruption. The

global financial crisis, including the continuing sovereign debt crisis in Europe, concerns over

recession, inflation or deflation, energy costs, geopolitical issues, commodity prices and the

availability and cost of credit, have contributed to unprecedented levels of market volatility and

diminished expectations for the global economy and the capital and credit markets. These factors,

combined with others, may impact the Issuer’s ability to raise capital in foreign markets. An inability

to raise foreign capital or access foreign credit markets would have a material adverse affect on its

business and financial condition.

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The Issuer’s business, financial condition and results of operations may be materially and adverselyaffected if the Issuer is unable to take advantage of certain tax benefits or if there are any adversechanges to the tax regime in the future.

Section 80-IA of the Income Tax Act, 1961 (the Income Tax Act) provides that, subject to certain

conditions being fulfilled, 100 per cent. of the profits derived from the projects for the generation,

distribution or transmission of power would be entitled for deduction from total income for 10

consecutive assessment years out of 15 years, beginning from the year in which the project commences

power generation, transmission or distribution of power, if the activity is commenced before 31 March

2017. If such or other tax benefits become unavailable, the Issuer’s financial condition, results of

operations and business could be materially and adversely affected.

The draft bill on goods and services tax was introduced in December 2014 and the service has

been pending before the lower house of the parliament for its approval. As the bill has not been

approved, the Issuer is unable to ascertain the full impact of the proposed tax changes on its revenues.

See the investment consideration “The proposed new taxation system could adversely affect the

Issuer’s business and the trading price of the Notes.”

Some of the Issuer’s immovable properties have certain irregularities in title, as a result of whichthe Issuer’s operations may be impaired.

The majority of the Issuer’s land acquired for power stations and projects was acquired through

the legal procedure prescribed under the Land Acquisition Act, 1894. The land acquisition procedure

prescribed under the Land Acquisition Act, 1894 is yet to be completed and, accordingly, the Issuer

does not yet have clear and absolute title to some of these immovable properties. Further, in respect

of some of these immovable properties, certain litigation and objections have been initiated by the

affected persons and are pending before various forums and courts in India. There are also cases

relating to the acquisition of land for a number of the Issuer’s projects and power stations. These cases

involve claims for additional compensation by claimants and/or disputes relating to the title to the

property. As of 31 March 2015, the contingent liabilities appearing in the Issuer’s consolidated

financial statements with respect to land compensation cases were Rs.3,143 million.

In addition, several of the Issuer’s immoveable properties for its projects or power stations,

offices and residences, which are either owned by the Issuer or leased, have one or more of the

following irregularities of title:

• the conveyance deeds for transfer of property have not been executed;

• the agreements to sell or conveyance deeds have not been registered in the land records

maintained by the concerned Sub-Registrar of Assurances;

• lease deeds have not been executed;

• the agreements to lease or lease deeds have not been registered in the land records

maintained by the concerned Sub-Registrar of Assurances; or

• lease agreements have expired and have not yet been renewed.

Further, a portion of the land acquired for the Issuer’s projects is subject to adverse possession.

Though efforts are being made to obtain possession of such land, failure to repossess such land may

affect the Issuer’s operations, financial condition, prospects and expansion plans adversely.

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The Issuer’s success depends on stable and reliable transportation infrastructure and anydisruption of transportation services could affect its operations.

The Issuer depends on various forms of transport, such as roadways, railways, airways, sea,inland waterways, canals and pipelines to receive fuel, raw materials, equipment and water duringconstruction of its power projects and during their operation. The building of transportationinfrastructure entails obtaining approvals, rights of way and development by the Government or thestate governments and their nominated agencies. As a result, the Issuer does not have total control overthe construction, operation and maintenance of the transportation infrastructure. Undertaking suchdevelopment will require significant capital expenditure and active engagement with the Governmentor state government and its agencies responsible for organising transport infrastructure. Suchtransportation infrastructure may not be constructed in a timely manner, operated on a cost effectivebasis and maintained at adequate levels, which may affect the estimated commissioning dates for itspower projects under construction. Further, disruptions of transportation services because ofweather-related problems, strikes, inadequacies in the road, rail or marine infrastructure, or otherevents could impair delivery of fuel and raw materials and may have an adverse impact on itsoperations.

The Issuer’s results of operations could be adversely affected by strikes, work stoppages orincreased wage demands by its or its contractors’ work force or any other kind of disputes involvingits work force.

The Issuer employs a significant number of employees and engages various contractors inrelation to its power projects. Most of its power stations have unions that are registered under theTrade Unions Act, 1926. The majority of these unions are affiliated with major central employeefederations, namely the All India Trade Union Congress, Bharatiya Mazdoor Sangh, Centre of IndianTrade Unions, the Indian National Trade Union Congress and the Hind Mazdoor Sabha. However,some of the workers’ unions functioning at the Issuer’s power stations are unaffiliated. There has notbeen any major instance of unrest and there has been no loss of generation on this account. However,there can be no assurance that the Issuer will not experience disruptions to its operations due todisputes or other problems with its work force in the future. Any such disruptions may adversely affectthe Issuer’s business and results of operations. Any shortage of skilled personnel or work stoppagescaused by disagreements with the Issuer’s work force and the unions could have an adverse effect onits business, and results of operations.

The Issuer has entered into contracts with independent contractors to complete specifiedassignments and these contractors may be required to engage the workers necessary to complete suchassignments. Although the Issuer does not engage these workers directly, it is possible under Indianlaw that it may be held responsible for wage payments, or benefits and amenities to workers engagedby its independent contractors, should such contractors default on wage payments or in providingbenefits and amenities. Any requirement imposed upon the Issuer to fund such payments mayadversely affect its business, financial condition and results of operations. Furthermore, under Indianlaw, the Issuer may be required to absorb a portion of such contract workers as its employees. Anysuch order from a court or any other regulatory authority or any change in laws may adversely affectits business and results of its operations.

Announcements by the Government relating to increased wages for government and public sectoremployees will increase the Issuer’s expenses.

The Issuer, being a public sector undertaking, will be affected financially in the event that thereis an increase in the pay and benefits of its employees on account of any relevant announcement bythe Government. The next revision of wage and benefits is due in 2017. However, there have beenpersistent demands from employees from many sectors for an increase in pay. In the event that theGovernment agrees to such an increase, this may place an additional financial burden on the Issuer,which may adversely affect its business and results of operations.

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The interests of the Issuer’s directors may cause conflicts of interest in the ordinary course of itsbusiness.

Conflicts of interest may arise in the ordinary course of decision making for the Issuer. Some ofits non-executive directors are also on the board of directors of certain companies which are engagedin businesses similar to the business of the Issuer. There is no assurance that the Issuer’s directors willnot provide competitive services or compete with the Issuer’s business in which it is already presentor will enter into in future.

The Issuer is yet to receive renewal of certain statutory approvals required in the ordinary courseof its business.

The Issuer has certain pending applications for licences/clearances/approvals for its projects,which had expired or were yet to be granted. It also has various pending patent applications for varioustechnologies/processes developed by it before the Controller of Patents in New Delhi and Kolkata.

Failure to obtain any of the foregoing approvals or renewals may adversely affect the operationsand business of the Issuer.

The development or operations at one or more units of the Issuer’s power stations or its coal minescould be disrupted.

The development or operation of the Issuer’s power projects or coal mines may be disrupted forreasons that are beyond its control, including explosions, fires, natural disasters such as cyclones andearthquakes, breakdown, failure or substandard performance of equipment, non-availability of fuel ofdesired quantity and quality, improper installation or operation of equipment, accidents, transmissionor transportation interruptions, environmental disasters, significant social or political disruptionsincluding terrorism and labour disputes. The occurrence of any of the foregoing may result indevelopmental and operational difficulties or interruptions, which may have a material adverse effecton its business, results of operations and prospects. On 30 and 31 July 2012, a transmissioninterruption beyond the Issuer’s control occurred which caused the power supply from several of theIssuer’s power plants to be disrupted. There can be no assurance that such transmission interruptionwill not occur in the future. In June 2013, heavy rainfall and flash floods in Uttarakhand led tosubstantial disruption of work at two of the Issuer’s hydro electric power projects under constructionand landslides damaged various national highways at several locations causing disruption intransportation of goods and movement of persons for several weeks.

Power generation facilities are also subject to mechanical failure and equipment shutdowns. Insuch situations, undamaged units may be dependent on or interact with damaged sections or units and,accordingly, may also be rendered inoperative. Although in certain cases manufacturers are requiredto compensate the Issuer for certain equipment failures and defects, such arrangements may not fullycompensate it for the damage that it suffers as a result of equipment failures and defects or thepenalties under its agreements with its customers. Further, such arrangements do not generally coverindirect losses such as loss of profits or business interruption. If such operational difficulties occurin the future, the ability of the Issuer’s power stations to supply electricity to its customers may beadversely affected. In the event any power generation facility is significantly damaged or forced toshut down for a significant period of time, this would have an adverse effect on its business, financialcondition and results of operation.

The Issuer’s ability to raise foreign capital may be constrained by Indian law.

As an Indian company, the Issuer is subject to exchange controls that regulate borrowing inforeign currencies. Such regulatory restrictions limit the Issuer’s financing sources for power projectsunder development and future investment plans and could constrain its ability to obtain financings on

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competitive terms and refinance existing indebtedness. In addition, no assurance can be given that therequired approvals will be granted to the Issuer without onerous conditions, or at all. The limitationson foreign debt may have an adverse effect on the business growth, financial condition and results ofoperations of the Issuer.

The Issuer intends to establish business operations in several countries and global political andother conditions may adversely affect its operations and financial performance.

The Issuer intends to establish business operations including sourcing of fuel, joint ventures andconsultancy services in several countries. Some of the countries in which the Issuer intends to dobusiness are subject to considerable political and social volatility. Any significant deterioration inworld geopolitical, economic or other conditions in general and in the countries with which the Issuerconducts business in particular may have a material adverse affect on its business and financialperformance.

There can be no assurance that the Issuer will be able to sell its power outside the long term PPAsand this could have an adverse impact on its revenues.

As provided by the National Electricity Policy 2005 (NEP), up to 15 per cent. of the Issuer’s newgenerating capacities may be sold outside long-term PPAs. As of the date of this Offering Circular, 15per cent. of the power from Korba III (500 MW) and FSTPS III (500 MW) has been earmarked forsale outside long-term PPAs. This means it will not be able to guarantee the same revenues made underthese mandated sales as it can under sales made pursuant to the long-term PPAs due to the risk thatthe Issuer may not be able to sell the entire 15 per cent. of its new generating capacities as well asmarket price risks. The Issuer may enter into short-term off-take agreements or sell power on amerchant basis to entities, including entities affiliated with it. Such agreements may create additionalvariability in the Issuer’s revenues and could expose its business to risks of market fluctuations indemand and price for power. If the Issuer is unable to adapt its business model to sell power from itspower stations outside long-term PPAs or sell the power generated by its merchant power stations, itsbusiness, financial results and prospects could be materially and adversely affected.

The Issuer’s PPAs may expose it to certain risks that may affect its future results of operations.

The Issuer’s profitability is largely a function of its ability to operate its power projects atoptimal levels in accordance with minimum performance standards that may be determined from timeto time by national bodies and its ability to manage its costs. Any failure to meet such minimumperformance standard or manage its costs may have an adverse affect on its business and results ofoperation.

Further, the Issuer has entered into long-term PPAs for each power station. Such long-termarrangements have inherent risks which may not be within the control of the Issuer as they restrict itsoperational and financial flexibility. For example, the Issuer’s long-term PPAs provide for the sale ofpower to the customers at tariffs and terms determined by the regulator. Accordingly, if there is anindustry wide increase in tariffs, the Issuer will not be able to take advantage of the increased tariffsor negotiate satisfactory alternative off take arrangements. These limitations affect the ability of theIssuer to enjoy the benefits of an increased tariff rate that its competitors selling power outsidelong-term PPAs may otherwise enjoy.

In addition, the Issuer derives more than 88 per cent. of its sales of electricity generated fromits directly owned power stations from SEBs and state owned distribution companies throughlong-term PPAs. These PPAs are typically renewed or extended after the initial term expires by mutualagreement. However, in the event that such PPAs are terminated prematurely, or not renewed orextended after the initial term expires, and if the Issuer is unable to enter into purchase agreementswith other customers, this may have an adverse effect on its business, financial condition and resultsof operation.

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The Issuer has awarded a majority of procurement contracts to one supplier who may not be ableto keep up with the Issuer’s expansion plans.

The Issuer has awarded a majority of its procurement contracts to one supplier for the supply,erection, testing and commissioning of equipment and machinery for various power projects which areunder construction. These contracts constitute between 40 per cent. to 60 per cent. of power stationcosts. Although there are other suppliers, this supplier, as of the date of this Offering Circular, is oneof the Issuer’s largest suppliers, having won several bids in the international competitive bidding dueto its competitive pricing. In addition, other than its procurement contracts entered into with theIssuer, the supplier may also enter into additional procurement contracts with its other customers. Ifsuch supplier is unable to keep up with the Issuer’s expansion plans coupled with the additionalprocurement contracts that it may enter into, the Issuer may need to seek other suppliers, which couldbe time consuming and expensive, and other suppliers may not be able to offer as competitive apricing. Any delays or increased costs that may result from such supplier’s failure or delay inperforming would have an adverse effect on the Issuer’s business, financial results and prospects.

Opposition from local communities and other parties may adversely affect the Issuer’s results ofoperations and financial condition.

The construction and operation of the Issuer’s current or future power projects, or fueldiversification plans (including coal mining, hydroelectric, renewable or nuclear power projects) mayface opposition from the local communities where these projects are located and from special interestgroups such as environmental groups. In particular, local communities, individuals, the forestauthorities and other authorities may oppose the Issuer’s mining operations, construction ofhydroelectric power stations, land acquisitions and power projects due to various reasons including theperceived negative impact such activities may have on the environment and increased demand onresources such as water from the rivers and reservoirs which may negatively impact or restrict suchlocal communities access to resources. Significant opposition by local communities,non-governmental organisations and other parties to the land acquisition process and construction ofthe Issuer’s power projects and mining operations may delay project implementation and adverselyaffect the Issuer’s prospects, results of operations and financial condition. For example, constructionat the Issuer’s Loharinag-Pala Hydroelectric Power Project has been discontinued at the direction ofthe Government due to an objection concerning the impact of diverting the river. Furthermore allconstruction activity at the Lata Tapovan hydroelectric power project was stopped in May 2014 inaccordance with a Supreme Court order dated 7 May 2014 concerning the biodiversity of theAlaknanda and Bhagirathi river basin. In the future, as the Issuer’s mining activity increases, it mayhave to resettle the local inhabitants. The Issuer may have to incur significant expenditure on any suchresettlement, which may adversely affect its financial condition and result of operations. In addition,it may also face rehabilitation and resettlement claims from local inhabitants, which may prove to betime-consuming, requiring it to incur additional costs which may exceed provisions made in itsfinancial statements with respect to claims, and could involve a significant amount of attention andeffort from its management.

The Issuer has not appointed a woman director and the requisite number of independent directorson its Board.

As the Issuer is a Government company, the power of appointment of its Board is vested withthe President of India, acting through the administrative ministry. As of the date of this OfferingCircular, the Issuer has not been able to maintain the minimum Board composition as required underthe Companies Act, 2013, the rules thereunder and the listing agreements with the Indian stockexchanges. If the Indian stock exchanges decide to undertake any action against the Issuer includinglevying of penalties or if there is any communication with the regulatory agencies in that regard, itmay have a material adverse effect on the Issuer’s reputation, materially and adversely affect theIssuer’s business, prospects and results of operations.

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The Issuer has contingent liabilities under Indian Accounting Standards, which may adverselyaffect its financial condition.

As of 31 March 2015, the contingent liabilities appearing in the Issuer’s consolidated financial

statements were as follows:

Category Amount

(Rs. in million)

Claims against the Company not acknowledged as debts in respect of:Capital works. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,272Land compensation cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,143Fuel claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,672Statutory claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,964Disputed income tax/sales tax/excise demand . . . . . . . . . . . . . . . . . . . . . 52,595Other contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,142

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,788

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount

of contingent liability relating to these appeals is not ascertainable.

Risks Relating to India

Natural calamities could have a negative effect on the Indian economy and cause the Issuerbusiness to suffer.

India has experienced natural calamities such as earthquakes, floods, droughts including the

flash flood that affected the state of Uttarakhand in June 2013 and the cyclone which affected various

parts of Odisha in October 2013. In the past, many parts of India received significantly less than

normal yearly rainfall leading to minimal growth in the agriculture sector for that year. Prolonged

spells of below normal rainfall in the country or other natural calamities could have a negative impact

on the Indian economy, affecting the Issuer’s business and potentially causing the trading price of the

Notes to decrease.

Political, economic and social developments in India could adversely affect the Issuer’s business.

The Issuer derives virtually all of its revenues and resources such as fuel, equipment andmaterials from India. All of the Issuer’s electricity generating facilities and other assets are locatedin India and all of the Issuer’s officers and directors are resident in India. The Issuer’s operations andfinancial results and the market price and liquidity of the Notes may be affected by changes inGovernment policy or taxation or social, ethnic, political, economic or other developments in oraffecting India. Since achieving independence in 1947, India has had a mixed economy with a largepublic sector and an extensively regulated private sector. The Government and the state governmentshave in the past, among other things, imposed controls on the prices of a broad range of goods andservices, restricted the ability of businesses to expand existing capacity and reduce the number ofemployees, and determined the allocation to businesses of raw materials and foreign exchange. Since1991, the Government has significantly relaxed most of these restrictions. Nonetheless, the role of theGovernment and state governments in the Indian economy as producers, consumers and regulators,remains significant in ways that directly affect the Issuer and the electricity industry in India.Moreover, most recent parliamentary elections were completed in May 2014, which was won by theBhartiya Janta Party led National Democratic Alliance. Although the current government hascontinued India’s economic liberalisation and deregulation programmes, there can be no assurancesthat these will continue in the future. Any such event could also affect the Issuer’s business, its future

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financial performance and the trading price of the Notes. India has also witnessed civil disturbancesin the past. While these civil disturbances did not directly affect the Issuer’s operations, it is possiblethat future civil unrest as well as other adverse social, economic and political events in India couldhave an adverse impact on the Issuer.

A slowdown in economic growth in India could cause the Issuer’s business to suffer.

The Indian economy slowed in fiscals 2013, 2014 and 2015, with real gross domestic product(GDP) growing at 4.5 per cent., 4.7 per cent. and 5.9 per cent., respectively. The Indian economy hadpreviously grown at high rates with GDP growth being 8.9 per cent. in fiscal 2011, 8.6 per cent. infiscal 2010, 6.7 per cent. in fiscal 2009 and 9.3 per cent. in fiscal 2008. The index of industrialproduction (IIP) increased to 2.9 per cent. in fiscal 2015, declined by 0.1 per cent. in fiscal 2014 aftergrowing at 1.1 per cent. in fiscal 2013, 2.9 per cent. in fiscal 2012 and 8.2 per cent. in fiscal 2011.Any slowdown in the Indian economy or future volatility of global commodity prices, in particularfuel prices, could adversely affect the Issuer’s business, including its ability to expand, its financialperformance and the trading price of the Notes.

Demand for power in India may not increase as the Issuer anticipates.

It is generally believed that demand for power in India will increase in connection with expectedincreases in India’s GDP. However, there can be no assurance that demand for power in India willincrease to the extent the Issuer expects, or at all. In the event, the demand for power in India doesnot increase as per the Issuer’s expectations, its results of operations and expansion strategy may bematerially and adversely affected.

Trade deficits could have a negative effect on the Issuer’s business and the trading price of theNotes.

India’s trade relationships with other countries can influence Indian economic conditions. India’strade deficit fell to U.S.$144.2 billion in fiscal 2015 from U.S.$147.6 billion in fiscal 2014. If India’strade deficits increase or become unmanageable, the Indian economy, and therefore the Issuer’sbusiness, future financial performance and the trading price of the Notes could be adversely affected.

If regional hostilities, terrorist attacks or social unrest in India increases, the Issuer’s businesscould be adversely affected and the trading price of the Notes could decrease.

India has from time to time experienced social and civil unrest and hostilities, both internally andwith neighbouring countries. Present relations between India and Pakistan continue to be fragile onissues of terrorism, armament and Kashmir. In November 2008, several coordinated shooting andbombing attacks occurred across Mumbai, India’s financial capital, which resulted in the loss of life,property and business. India has also experienced terrorist attacks in other parts of the country. Thesehostilities and tensions could lead to political or economic instability in India and possible adverseeffects on the Issuer’s business, its future financial performance and the trading price of the Notes.Further, India has also experienced social unrest in some parts of the country. If such tensions occurin other parts of the country, leading to overall political and economic instability, it could have anadverse effect on the Issuer’s business, future financial performance and the trading price of the Notes.

Any downgrading of India’s debt rating by an international rating agency could have a negativeimpact on the Issuer’s business.

On 25 April 2012, Standard and Poor’s Ratings Services, a Division of the McGraw HillCompanies Inc. (S&P) revised the outlook on the long-term ratings on India from “stable” to“negative” citing the slowdown in India’s investment and economic growth and the widened currentaccount deficit, resulting in a weaker medium term credit.

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On 18 June 2012, Fitch Ratings Ltd. (Fitch) scaled down India’s sovereign credit rating outlook

from “stable” to “negative,” citing structural challenges such as corruption, inadequate economic

reforms, and slow economic growth combined with elevated inflation. On 25 April 2012 and 18 June

2012, respectively, as a result of their downgrading of India’s outlook, both S&P and Fitch

downgraded the outlook on the Issuer’s rating from “stable” to “negative”. In June 2012 and January

2013, S&P and Fitch, respectively, announced that they may lower India’s sovereign credit rating

below investment grade, citing slowing GDP growth, setbacks or reversals in India’s economic policy,

a widening fiscal deficit and/or increasing spreads of credit default swaps for Indian banks. S&P

reiterated in May 2013 that, although there had been some easing of pressure towards a downgrade of

the rating, there is still a likelihood of such a downgrade unless significant improvements are seen in

factors such as a high fiscal deficit and levels of government borrowing. However, on 12 June 2013

Fitch revised the outlook on India’s sovereign credit rating from “negative” to “stable” and

consequently the outlook of the Issuer’s rating has been revised from “negative” to “stable”.

Subsequently, in August 2013 Fitch warned that India’s sovereign rating may be lowered if the India

is unable to meet its fiscal deficit target. In September 2013, Moody’s Investors Service Inc.

(Moody’s) put India’s sovereign credit rating on notice, warning that any changes Moody’s makes to

India’s sovereign rating outlook will depend on the depth and extent of the current economic downturn

and the trends in the balance of payments situation. S&P continued to have a negative outlook on

India’s sovereign credit rating. In January 2014, Fitch stated that it will assess the next government’s

policy strategies to determine any change in the country’s future sovereign ratings. In 2014, S&P

revised the outlook of the Issuer’s ratings from “negative” to “stable”.

There can be no assurance that these ratings will not be further revised, suspended or withdrawn

by S&P, Moody’s or Fitch or that any other global rating agency will not also downgrade the Issuer’s

or India’s sovereign credit ratings.

Any adverse revisions to India’s credit ratings for domestic and international debt by

international rating agencies may adversely impact the Issuer’s ability to raise additional financing,

and the interest rates and other commercial terms at which such additional financing is available. This

could have a material adverse effect on the Issuer’s business and future financial performance, the

Issuer’s ability to obtain financing for capital expenditures, and the trading price of the Notes.

Depreciation of the Rupee against foreign currencies may have an adverse effect on the Issuer’sresults of operations and financial conditions.

As of 31 March 2015, the Issuer’s consolidated foreign currency borrowings of approximately

Rs.256.68 billion were denominated in U.S. dollars, Japanese yen and euros, while substantially all

of the Issuer’s revenues are denominated in Rupees. In 2013 there has been a sharp depreciation in

the Rupee against foreign currencies, including the U. S. dollar, as a result of growing concerns in

relation to the current account deficit in India and a potential tapering of quantitative easing by the

United States Federal Reserve. Accordingly depreciation of the Rupee against these currencies will

increase the Rupee cost to the Issuer of servicing and repaying the Issuer’s foreign currency

borrowings. In addition, in fiscal 2015, imported coal accounted for 9.8 per cent. of the total coal

purchased by the Issuer for its directly owned power stations. A depreciation of the Rupee would also

increase the costs of coal imports by the Issuer. If as a result of future changes in tariff regulations

the Issuer is unable to recover the costs of foreign exchange variations through its tariffs, the Issuer

may be required to use hedging arrangements, which may not fully protect the Issuer from foreign

exchange fluctuations.

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Indian accounting principles and audit standards differ from those which prospective investorsmay be familiar with in other countries.

As stated in the report of the Issuer’s independent auditors included in this Offering Circular, the

Issuer’s financial statements are in conformity with Indian GAAP, consistently applied during the

periods stated, except as provided in such report, and no attempt has been made to reconcile any of

the information given in this Offering Circular to any other principles or to base it on any other

standards. Indian GAAP differs from accounting principles and auditing standards with which

prospective investors may be familiar in other countries. See “Summary of Significant Differences

between Indian GAAP and IFRS”.

There may be less company information available in the Indian securities markets than securitiesmarkets in developed countries.

There may be differences between the level of regulation and monitoring of the Indian securities

markets and the activities of investors, brokers and other participants and that of the markets in the

United States, the European Union and other developed countries. The Securities and Exchange Board

of India (SEBI) is responsible for approving and improving disclosure and other regulatory standards

for the Indian securities markets. SEBI has issued regulations and guidelines on disclosure

requirements, insider trading and other matters. There may, however, be less publicly available

information about Indian companies than is regularly made available by public companies in

developed countries.

The effects of the adoption of the “Indian Accounting standards converged with IFRS” (IND-AS)are uncertain.

The Ministry of Corporate Affairs, by notification dated 16 February 2015, notified IND-AS and

roadmap for the adoption of IND-AS converged with IFRS. As per the roadmap, any company may

voluntary comply with the IND-AS for the accounting period beginning on or after 1 April 2015.

Further, companies whose equity or debt securities are listed on the stock exchange in India or outside

India are required to mandatorily comply with the IND-AS for the accounting period beginning on or

after 1 April 2016. While the Issuer has opted for compliance with IND-AS for the accounting period

beginning on or after 1 April 2016, it has not determined with any degree of certainty the impact that

such adoption will have on its financial reporting. Therefore, there can be no assurance that the

Issuer’s financial condition, results of operations, cash flows or changes in shareholders’ equity will

not appear materially worse under IND-AS than under current Indian GAAP. In the Issuer’s transition

to IND-AS reporting, the Issuer may encounter difficulties in the ongoing process of implementing

and enhancing its management information systems. Moreover, there is increasing competition for the

small number of experienced accounting personnel familiar with IFRS accounting standards as more

Indian companies begin to prepare IND-AS financial statements. There can be no assurance that the

Issuer’s adoption of IND-AS will not adversely affect its reported results of operations or financial

condition.

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An outbreak of avian or swine influenza or other contagious diseases may adversely affect theIndian economy and the Issuer’s business.

A number of countries in Asia, including India, as well as countries in other parts of the world,

have had confirmed cases of the highly pathogenic H5N1 strain of avian influenza in birds. Certaincountries in Southeast Asia have reported cases of bird to human transmission of avian influenzaresulting in numerous human deaths. In 2009, there was a global outbreak of a new strain of influenzavirus commonly known as swine flu. Future outbreaks of avian influenza, swine flu or a similarcontagious disease could adversely affect the Indian economy and economic activity in the region. Asa result, any present or future outbreak of avian influenza, swine flu or other contagious diseases couldhave a material adverse effect on the Issuer’s business.

The proposed new taxation system could adversely affect the Issuer’s business and the tradingprice of the Notes.

The Government has proposed two major reforms in Indian tax laws, namely the goods andservices tax, and provisions relating to general anti-avoidance rules (GAAR).

In the Union Budget of 2015-16, it was announced that the Government intends to approve thelegislative scheme to enable the introduction of the goods and services tax in the fiscal 2016. Thegoods and services tax would replace the indirect taxes on goods and services such as central exciseduty, service tax, central sales tax, state VAT, surcharge and excise which as of the date of thisOffering Circular is being collected by the central and state governments. As regards GAAR, theprovisions have been introduced by the Finance Act, 2012, scheduled to come into effect from 1 April2017. The GAAR provisions are intended to catch arrangements declared as “impermissible avoidancearrangements”, which is defined in the Finance Act, 2012 as any arrangement, the main purpose ofwhich is to obtain a tax benefit and which satisfy at least one of the following tests: (i) creates rights,or obligations, which are not ordinarily created between persons dealing at arm’s length; (ii) results,directly or indirectly, in misuse, or abuse, of the provisions of the Income Tax Act, 1961; (iii) lackscommercial substance or is deemed to lack commercial substance, in whole or in part; or (iv) isentered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fidepurposes. The onus to prove that the transaction is not an “impermissible avoidance agreement” is onthe assessee. If GAAR provisions are invoked, then the tax authorities have wide powers, includingthe denial of tax benefit or the denial of a benefit under a tax treaty. As the taxation system is intendedto undergo a significant overhaul, the consequential effects on the Issuer cannot be determined as ofnow and there can be no assurance that such effects would not adversely affect the Issuer’s business,future financial performance and the trading price of the Notes.

Risks Relating to an Investment in the Notes

Notes may not be a suitable investment for all investors.

Each potential investor in any Notes must determine the suitability of that investment in light ofits own circumstances. In particular, each potential investor should:

• have sufficient knowledge and experience to make a meaningful evaluation of the relevantNotes, the merits and risks of investing in the relevant Notes and the information containedor incorporated by reference in this Offering Circular or any applicable supplement;

• have access to, and knowledge of, appropriate analytical tools to evaluate, in the contextof its particular financial situation, an investment in the relevant Notes and the impact suchinvestment will have on its overall investment portfolio;

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• have sufficient financial resources and liquidity to bear all of the risks of an investment in

the relevant Notes, including where principal or interest is payable in one or more

currencies, or where the currency for principal or interest payments is different from the

potential investor’s currency;

• understand thoroughly the terms of the relevant Notes and be familiar with the behaviour

of any relevant indices and financial markets; and

• be able to evaluate (either alone or with the help of a financial adviser) possible scenarios

for economic, interest rate and other factors that may affect its investment and its ability

to bear the applicable risks.

Some Notes are complex financial instruments and such instruments may be purchased as a way

to reduce risk or enhance yield with an understood, measured, appropriate addition of risk to their

overall portfolios. A potential investor should not invest in Notes which are complex financial

instruments unless it has the expertise (either alone or with the help of a financial adviser) to evaluate

how the Notes will perform under changing conditions, the resulting effects on the value of such Notes

and the impact this investment will have on the potential investor’s overall investment portfolio.

The Notes are not guaranteed by the Republic of India.

The Notes are not the obligations of, or guaranteed by, the Republic of India. Although the

Government owned 74.96 per cent. of the Issuer’s issued and paid up share capital as of 30 September

2015, the Government is not providing a guarantee in respect of the Notes. In addition, the

Government is under no obligation to maintain the solvency of the Issuer. Therefore, investors should

not rely on the Government ensuring that the Issuer fulfils its obligations under the Notes.

The Notes may have limited liquidity.

The Notes constitute a new issue of securities for which there is no existing market.

Approval-in-principle has been granted for the listing and quotation of the Notes that may be

issued pursuant to the Programme and which are agreed at or prior to the time of issue thereof to be

so listed on the SGX-ST. The offer and sale of the Notes is not conditioned on obtaining a listing of

the Notes on the SGX-ST or any other exchange. Although the Dealers have advised the Issuer that

as of the date of this Offering Circular, they intend to make a market in the Notes, they are not

obligated to do so, and any market-making activity with respect to the Notes, if commenced, may be

discontinued at any time without notice in their sole discretion.

No assurance can be given as to the liquidity of, or the development and continuation of an active

trading market for, the Notes. If an active trading market for the Notes does not develop or is not

maintained, the market price and liquidity of the Notes may be adversely affected. If such a market

were to develop, the Notes could trade at prices that may be higher or lower than the price at which

the Notes are issued depending on many factors, including:

• prevailing interest rates;

• the Issuer’s results of operations and financial condition;

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• political and economic developments in and affecting India;

• the market conditions for similar securities; and

• the financial condition and stability of the Indian power sector.

Definitive Notes may not be available in certain denominations and investors who hold less than theminimum Specified Denomination may be unable to sell their Notes and may be adversely affectedif Definitive Notes are subsequently required to be issued.

In relation to any issue of Notes which have denominations consisting of a minimum SpecifiedDenomination plus one or more higher integral multiples of another smaller amount, it is possible thatsuch Notes may be traded in amounts in excess of the minimum Specified Denomination that are notintegral multiples of such minimum Specified Denomination. In such a case a holder who, as a resultof trading such amounts, holds an amount which is less than the minimum Specified Denomination inhis account with the relevant clearing system would not be able to sell the remainder of such holdingwithout first purchasing a principal amount of Notes at or in excess of the minimum SpecifiedDenomination such that its holding amounts to a Specified Denomination. Further, a holder who, asa result of trading such amounts, holds an amount which is less than the minimum SpecifiedDenomination in his account with the relevant clearing system at the relevant time may not receivea definitive Note in respect of such holding (should definitive Notes be printed) and would need topurchase a principal amount of Notes at or in excess of the minimum Specified Denomination suchthat its holding amounts to a Specified Denomination.

If such Notes in definitive form are issued, holders should be aware that definitive Notes whichhave a denomination that is not an integral multiple of the minimum Specified Denomination may beilliquid and difficult to trade.

Notes which are issued at a substantial discount or premium may experience price volatility inresponse to changes in market interest rates.

The market values of securities issued at a substantial discount (such as Zero Coupon Notes) orpremium to their principal amount tend to fluctuate more in relation to general changes in interestrates than do prices for more conventional interest-bearing securities. Generally, the longer theremaining term of such securities, the greater the price volatility as compared to more conventionalinterest-bearing securities with comparable maturities.

Noteholders are required to rely on the procedures of the relevant clearing system and itsparticipants while the Notes are cleared through the relevant clearing system.

Notes issued under the Programme will be represented on issue by one or more Global Notes thatmay be deposited with a common depositary for Euroclear and Clearstream, Luxembourg. Except inthe circumstances described in each Global Note, investors will not be entitled to receive Notes indefinitive form. Each of Euroclear and Clearstream, Luxembourg and their respective direct andindirect participants will maintain records of the beneficial interests in each Global Note held throughit. While the Notes are represented by a Global Note, investors will be able to trade their beneficialinterests only through the relevant clearing systems and their respective participants.

While the Notes are represented by Global Notes, the Issuer will discharge its payment obligationunder the Notes by making payments through the relevant clearing systems. A holder of a beneficialinterest in a Global Note must rely on the procedures of the relevant clearing system and itsparticipants to receive payments under the Notes. The Issuer has no responsibility or liability for therecords relating to, or payments made in respect of, beneficial interests in any Global Note.

Holders of beneficial interests in a Global Note will not have a direct right to vote in respect ofthe Notes so represented. Instead, such holders will be permitted to act only to the extent that they areenabled by the relevant clearing system and its participants to appoint appropriate proxies.

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Interest on the Notes may be subject to EU withholding under the Savings Directive.

Under Council Directive 2003/48/EC on the taxation of savings income in the form of interest

payments (the Savings Directive), EU Member States are required to provide to the tax authorities of

other EU Member States with details of certain payments of interest or similar income paid or secured

by a person established in an EU Member State to, or for the benefit of, an individual resident in

another EU Member State or certain limited types of entities established in another EU Member State.

For a transitional period, Austria is required (unless during that period it elects otherwise) to

operate a withholding system in relation to such payments (subject to a procedure whereby, on meeting

certain conditions, the beneficial owner of the interest or other income may request that no tax be

withheld). The end of the transitional period is dependent upon the conclusion of certain other

agreements relating to information exchange with certain other countries. A number of non-EU

countries and territories including Switzerland have adopted similar measures (a withholding system

in the case of Switzerland).

On 24 March 2014, the Council of the European Union adopted a Council Directive (theAmending Directive) amending and broadening the scope of the requirements described above. TheAmending Directive requires EU Member States to apply these new requirements from 1 January2017, and if they were to take effect the changes would expand the range of payments covered by theSavings Directive, in particular to include additional types of income payable on securities. Theywould also expand the circumstances in which payments that indirectly benefit an individual residentin a Member State must be reported or subject to withholding. This approach would apply to paymentsmade to, or secured for, persons, entities or legal arrangements (including trusts) where certainconditions are satisfied, and may in some cases apply where the person, entity or arrangement isestablished or effectively managed outside of the European Union.

However, the European Commission has proposed the repeal of the Savings Directive from1 January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU MemberStates (subject to ongoing requirements to fulfil administrative obligations such as the reporting andexchange of information relating to, and accounting for withholding taxes on, payments made beforethose dates). This is to prevent overlap between the Savings Directive and a new automatic exchangeof information regime to be implemented under Council Directive 2011/16/EU on AdministrativeCooperation in the field of Taxation (as amended by Council Directive 2014/107/EU). The new regimeunder Council Directive 2011/16/EU (as amended) is in accordance with the Global Standard releasedby the Organisation for Economic Co-operation and Development in July 2014. Council Directive2011/16/EU (as amended) is generally broader in scope than the Savings Directive, although it doesnot impose withholding taxes. The proposal also provides that, if it proceeds, Member States will notbe required to apply the new requirements of the Amending Directive.

If a payment were to be made or collected through an EU Member State which has opted for awithholding system and an amount of, or in respect of, tax were to be withheld from that payment,neither the Issuer nor any Paying Agent (as defined in the Terms and Conditions of the Notes) nor anyother person would be obliged to pay additional amounts with respect to any Note as a result of theimposition of such withholding tax. The Issuer is required to maintain a Paying Agent in an EUMember State that is not obliged to withhold or deduct tax pursuant to the Savings Directive.

Legal investment considerations may restrict certain investments.

The investment activities of certain investors are subject to investment laws and regulations, orreview or regulation by certain authorities. Each potential investor should consult its legal advisersto determine whether and to what extent (1) the Notes are legal investments for it, (2) the Notes can

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be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or

pledge of the Notes. Financial institutions should consult their legal advisers or the appropriate

regulators to determine the appropriate treatment of the Notes under any applicable risk-based capital

or similar rules.

Noteholders’ right to receive payments is junior to certain tax and other liabilities preferred bylaw.

The Notes are unsecured obligations of the Issuer and will rank subordinated to certain liabilities

preferred by law such as to claims of the Government on account of taxes, and certain liabilities

incurred in the ordinary course of the Issuer’s business as well as all present and future secured

indebtedness of the Issuer. In particular, in the event of bankruptcy, liquidation or winding-up, the

Issuer’s assets will be available to pay obligations on the Notes only after all of the above liabilities

that rank senior to these Notes have been paid. In the event of bankruptcy, liquidation or winding-up,

there may not be sufficient assets remaining, after paying amounts relating to these proceedings, to

pay amounts due on the Notes.

Further, there is no restriction on the amount of Indebtedness that the Issuer may obtain or

Permitted Security Interest that the Issuer may create for any Indebtedness, each as defined under

Condition 4, which will rank above the Notes. Any such Indebtedness of the Issuer may reduce the

amount recoverable by investors in the Notes upon the Issuer’s bankruptcy, winding up or liquidation.

The Notes are governed by English law.

The terms and conditions of the Notes are governed by English law. No assurance can be given

as to the impact of any possible judicial decision or change in English law or administrative practice

after the date of this Offering Circular and any such change could materially adversely impact the

value of any Notes impacted by it.

Decisions may be made on behalf of all Noteholders that may be adverse to the interests ofindividual Noteholders.

The terms and conditions contain provisions for calling meetings of Noteholders to consider

matters affecting their interests generally. These provisions permit defined majorities to bind all

Noteholders, including Noteholders who did not attend and vote at the relevant meeting and

Noteholders who voted in a manner contrary to the majority. The conditions of the Notes also provide

that the Trustee may, without the consent of Noteholders, and without regard to the interests of

particular Noteholders, Couponholders or Receiptholders agree to (i) any modification of, or to the

waiver or authorisation of any breach or proposed breach of, any of the provisions of Notes or (ii)

determine without the consent of the Noteholders that any Event of Default or potential Event of

Default shall not be treated as such, in the circumstances described in the “Terms and Conditions of

the Notes”.

Early redemption of the Notes prior to its stated average maturity or its stated maturity for RupeeDenominated Notes requires the prior approval of the RBI or the AD Bank, as the case may be.

Any early redemption of the Notes (whether due to certain tax events described in Condition 8.2

or due to change of control events described in Condition 8.3 or due to an Event of Default as specified

in Condition 11 or otherwise) may require the prior approval of the RBI or the AD Bank. Compliance

with any conditions specified in any such RBI or AD Bank approval will be required. There can be

no assurance that the RBI or the AD Bank will provide such approval in a timely manner or at all.

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U.S. Foreign Account Tax Compliance Act Withholding.

Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986 (or FATCA) impose a

new reporting regime and, potentially, a 30 per cent. withholding tax with respect to (i) certain

payments from sources within the United States, (ii) “foreign passthru payments” made to certain

non-U.S. financial institutions that do not comply with this new reporting regime, and (iii) payments

to certain investors that do not provide identification information with respect to interests issued by

a participating non-U.S. financial institution.

Whilst the Notes are in global form and held within Euroclear or Clearstream, Luxembourg

(together the ICSDs), in all but the most remote circumstances, it is not expected that FATCA will

affect the amount of any payment received by the ICSDs. However, FATCA may affect payments made

to custodians or intermediaries in the subsequent payment chain leading to the ultimate investor if any

such custodian or intermediary generally is unable to receive payments free of FATCA withholding.

It also may affect payment to any ultimate investor that is a financial institution that is not entitled

to receive payments free of withholding under FATCA, or an ultimate investor that fails to provide itsbroker (or other custodian or intermediary from which it receives payment) with any information,forms, other documentation or consents that may be necessary for the payments to be made free ofFATCA withholding. Investors should choose the custodians or intermediaries with care (to ensureeach is compliant with FATCA or other laws or agreements related to FATCA) and provide eachcustodian or intermediary with any information, forms, other documentation or consents that may benecessary for such custodian or intermediary to make a payment free of FATCA withholding. TheIssuer’s obligations under the Notes are discharged once it has made payment to, or to the order of,the common depositary for the ICSDs (as bearer or registered holder of the Notes) and the Issuer hastherefore no responsibility for any amount thereafter transmitted through the ICSDs and custodians orintermediaries. Further, foreign financial institutions in a jurisdiction which has entered into anintergovernmental agreement with the United States (an IGA) are generally not expected to berequired to withhold under FATCA or an IGA (or any law implementing an IGA) from payments theymake. Prospective investors should refer to the section “Taxation — Foreign Account Tax ComplianceAct.”

Hiring Incentives to Restore Employment Act Withholding.

The U.S. Hiring Incentives to Restore Employment Act (the HIRE Act) imposes a 30 per cent.withholding tax on amounts attributable to U.S. source dividends that are paid or “deemed paid” undercertain financial instruments if certain conditions are met. If the Issuer or any withholding agentdetermines that withholding is required, neither the Issuer nor any withholding agent will be requiredto pay any additional amounts with respect to amounts so withheld. Prospective investors should referto the section “Taxation — Hiring Incentives to Restore Employment Act”.

Risks Relating to an Investment in Rupee Denominated Notes

Rupee Denominated Notes are subject to exchange rate risks and exchange controls.

India maintains a managed floating exchange rate system under which market forces determinethe exchange rate for the INR. Under RBI’s policies, the RBI may intervene in the market to maintainorderly market conditions and limit sharp fluctuations in the exchange rate. Interventions by the RBIhave taken the form of transparent measures and have included clearly delineated periods and amountsinvolved, as well as the explanations for these actions. RBI’s foreign exchange policy objectivesinclude maintaining price stability, promoting and maintaining monetary stability and theconvertibility of the INR, protecting its international reserves during times of impending or on-goingexchange crises or national emergencies.

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Rupee Denominated Notes are denominated in INR and payable in foreign currency. This entails

risks which are not associated with a similar investment in a foreign currency denominated security.

Such risks include, without limitation, the possibility of significant changes in the exchange rate

between INR and the relevant foreign currency if such currency risk is unhedged and the possibility

of imposition or modification of exchange controls by the RBI. Such risks are usually dependent on

various economic and political events over which the Issuer does not have any control. Recently,

exchange rates have been volatile and such volatility is expected in the near future as well, so the risk

pertaining to exchange rate fluctuation persists. However, the recent fluctuations in exchange rates are

not indicative in nature. If INR depreciates against the relevant foreign currency the effective yield

on the Rupee Denominated Notes will decrease below the interest rate on the global bonds, and the

amount payable on maturity may be less than the investment made by the investors. This could result

in a total or substantial loss of the investment made by the investor towards the Rupee Denominated

Notes. Rates of exchange between the foreign currency and INR may be significantly varied over time.

However, historical trends do not necessarily indicate future fluctuations in rates, and should not be

relied upon as indicative of future trends. Political, economic or stock exchange developments in India

or elsewhere could lead to significant and sudden changes in the exchange rate between INR and the

relevant foreign currency.

Furthermore, the overseas investor are eligible to hedge the above mentioned exchange rate risk

only by way of permitted derivative products with (i) AD Category — I banks in India; (ii) the

offshore branches or subsidiaries of Indian Banks; or (iii) branches of foreign banks having a presence

in India.

Rupee Denominated Notes are subject to selling restrictions and may be transferred only to alimited pool of investors.

Rupee Denominated Notes can only be issued to and held by investors from jurisdictions which

are in compliance with the Financial Action Task Force (FATF) recommendations. Furthermore,

foreign branches of Indian banks cannot subscribe or hold the Rupee Denominated Notes. As a result,

the bonds can only be transferred to a limited group of investors resulting in restricted liquidity of the

Rupee Denominated Notes.

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DESCRIPTION OF THE ISSUER

Overview

The Issuer is a Government-owned entity with 74.96 per cent. of its paid-up capital contributedby the Government and the remaining 25.04 per cent. being held with financial institutions, banks,foreign financial institutions and the general public. As of 31 March 2015, the Issuer was the largestpower-generating company in India, both in terms of installed capacity and generated output (Source:CEA). The Issuer’s aggregate installed capacity as of 31 March 2015 was 44,398 MW, whichrepresented approximately 16.3 per cent. of India’s total installed capacity. In fiscal 2015, it generatedaround 260 billion units of power, which was approximately 24.9 per cent. of the total powergeneration of India (Source: CEA).

As of 30 September 2015, the Issuer’s total installed power-generation capacity was 45,548 MW,of which 39,352 MW of capacity is owned by the Issuer directly and 6,196 MW of capacity is ownedthrough its five subsidiaries and joint venture companies. As of 30 September 2015, 87.49 per cent.of its directly owned capacity was operated through 18 coal-fired power stations, 10.20 per cent. wasoperated through seven gas-fired power stations (including one naphtha-fired power station), 2.03 percent. was operated through its hydro power project and 0.28 per cent. was operated through eight solarenergy power plants.

The Issuer operates its power stations at a level of efficiency that exceeds the average Plant LoadFactor (PLF) in India. PLF is a measure of how much of its capacity a power station actually uses togenerate electricity. In fiscal 2015, the Issuer’s directly owned coal-fired power stations operated atan average PLF of 80.23 per cent., compared to the all-India average PLF for coal-fired power stationsof 64.46 per cent. (Source: CEA). In addition, the average availability factor (which is a measure ofthe capability to deliver electricity declared by a generating station) of the Issuer’s directly ownedcoal-fired power stations in fiscal 2015, was 88.27 per cent. In fiscal 2015, the Issuer’s directly ownedgas-fired power stations operated at an average PLF of 32.93 per cent., compared to the all-Indiaaverage PLF for gas-fired power stations of 20.81 per cent. (Source: CEA). In fiscal 2015, the Issuer’sgas-fired power stations operated at an average availability factor of 92.18 per cent. For the six monthsended 30 September 2015, the average availability factor of the Issuer’s directly owned coal-firedpower stations was 89.84 per cent. and these stations operated at an average PLF of 77.42 per cent.The average availability factor of the Issuer’s directly owned gas-fired power stations was 97.08 percent. during the six months ended 30 September 2015 and these stations operated at an average PLFof 27.09 per cent.

As of the date of this Offering Circular, the Issuer engaged in construction activities for projectsrepresenting 23,004 MW of capacity (including 4,495 MW undertaken by its joint venture companiesand subsidiaries).

The Issuer has continued to progressively diversify its fuel mix and during fiscal 2015 the Issuercommissioned solar projects of 35 MW capacity and hydro projects of 400 MW capacity. The Issuerhas also commissioned two hydro units of 200 MW each in fiscal 2016. As of 30 September 2015,hydroelectric power projects with an aggregate capacity of 819 MW were under construction. TheIssuer is also developing other renewable energy projects such as wind, and other non-renewable andnon-conventional projects such as nuclear power projects. The Issuer formed a joint venture company,Anushakti Vidhyut Nigam Limited (ASHVINI), in January 2011 with the Nuclear Power Corporationof India Ltd. (NPCIL) with the objective of setting up nuclear power projects in the country.

As of 30 September 2015, substantially all of the Issuer’s total sales of electricity are madepursuant to long-term PPAs. More than 88 per cent. of the Issuer’s sales of electricity generated fromits directly owned power stations are to SEBs and state-owned distribution companies, for whichpayments are secured through LCs and the tripartite agreements entered into between the Government,

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the RBI and the relevant state to effectuate a settlement of overdue payments owed to the Issuer by

the SEBs and to create incentives for future timely payments. For private distribution company

customers, payments are secured through LCs backed by a first charge created on their receivables in

the Issuer’s favour.

The Issuer has signed various long-term coal supply agreements (CSAs) for a capacity of 23,895MW covering units commissioned as of 31 March 2009 at its 15 coal-fired power stations and coveringunits of a total capacity of 9,620 MW commissioned after 31 March 2009 or under construction at its11 coal-fired power stations. It has also executed long-term gas supply agreements with GAIL for thesupply of gas for its gas-fired power stations.

In order to secure its fuel supply, the Issuer has diversified into coal mining. As of the date ofthis Offering Circular, the Issuer has been allocated ten coal mining blocks by the Government. In2002, it incorporated its power trading subsidiary, NTPC Vidyut Vyapar Nigam Limited (NVVN)(Source: CERC). In addition, the Issuer has developed a consulting business through its consultancydivision to leverage its technical and operational skills and knowledge base domestically andinternationally. The Issuer is also in the process of developing an equipment manufacturing businessto ensure the supply of critical equipment and spare parts and an electricity distribution business.

The Issuer’s consolidated revenue was Rs.827,009 million in fiscal 2015 and Rs.817,107 millionin fiscal 2014. The Issuer’s consolidated profit after tax was Rs.99,863 million in fiscal 2015 andRs.114,036 million in fiscal 2014.

Competitive Strengths

The Issuer believes that the following are its primary competitive strengths:

Leadership position in the Indian power sector

The Issuer is India’s largest power-generating company both in terms of installed capacity andgenerated output (Source: CEA). As of 31 March 2015, the Issuer’s owned, installed capacity was44,398 MW, including 38,202 MW of directly owned units and 6,196 MW through subsidiary and jointventure companies, representing 16.3 per cent. of India’s total installed capacity (Source: CEA). Asof 30 September 2015, the Issuer’s owned, installed capacity was 45,548 MW, including 39,352 MWof directly owned units and 6,196 MW owned through subsidiary and joint venture companies,representing 16.34 per cent. of India’s total installed capacity (Source: CEA). In fiscal 2015, the Issuergenerated 260.58 billion units of electricity, which represented 24.9 per cent. of India’s totalelectricity output (Source: CEA). In calendar year 2015, according to a study conducted by Platts, adivision of the McGraw-Hill Companies, the Issuer was ranked as the number two independent powerproducer (IPP) in the world, on the basis of asset worth, revenues, profits and returns on investedcapital.

Sound customer relations and commercial performance

The Issuer realised 100 per cent. payment of current bills for the sale of electricity generatedfrom its directly owned power stations from its customers for the 12th year in succession, indicatingstrong commercial performance and customer relations. The Issuer has implemented a customerrelationship management (CRM) programme. As a part of the CRM initiative, the Issuer providessupport services to its customers, and technical and managerial training to its employees for skillenhancement, as well as efficiency and performance improvement in the area of customer relations.In order to receive feedback from its customers, the Issuer has also implemented a customersatisfaction index model.

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High operational efficiency of coal-fired power stations

The Issuer’s coal-fired power stations run at high rates of efficiency. In fiscal 2015, its directlyowned coal-fired power stations achieved an average PLF of 80.23 per cent., which comparesfavourably to the national average of 64.46 per cent. (Source: CEA). In fiscal 2015, the Issuer’sdirectly owned coal-fired power stations also achieved an average availability factor of 88.27 per cent.The Issuer monitors its power stations through real-time monitoring systems and systematicallymaintains its power stations to ensure high availability. The Issuer believes that its monitoring andmaintenance techniques offer it a competitive advantage in an industry where reliability andmaintenance costs are a significant determinant of profitability.

Long-term agreements for coal and gas supply

The Issuer believes that its long-term fuel supply contracts help it to generate power atcompetitive prices by allowing it to have greater predictability and better planning of fuel supplies.The Issuer has signed various long-term CSAs with a number of coal companies covering units witha total capacity of 23,895 MW commissioned as of 31 March 2009 at its 15 coal-fired power stationsand covering units with a total capacity of 9,620 MW commissioned after 31 March 2009 or underconstruction at 11 of its coal-fired power stations. The Issuer has also entered into various long-termagreements for the committed supply of gas and liquid fuel for its six gas-fired power stations and oneliquid fuel power station.

Effective project implementation

The Issuer relies on a three-tiered project management system known as the Integrated ProjectManagement Control System (IPMCS), which integrates its engineering management, contractmanagement and construction management control centres. The IPMCS addresses all stages of projectimplementation from concept to commissioning. Through effective resource utilisation and closemonitoring of time and cost, the Issuer has substantially reduced its average implementation time,which is the period between the award of the boiler, turbine and generator contracts andcommissioning of the unit. Since 2000, the implementation time for the majority of the Issuer’s500 MW units has been between 37 and 50 months.

Ability to turn around underperforming power stations

The Issuer has a strong track- record in being able to turn around inefficient power stations andsignificantly enhance their efficiency levels. The PLF of the four underperforming power stations theIssuer acquired, namely, the Unchahar Thermal Power Station, the Talcher Thermal Power Station, theTanda Thermal Power Station and the Badarpur Thermal Power Station, ranged from 53.13 per cent.to 93.90 per cent. in fiscal 2015. The average PLF of these power stations as of the date the Issueracquired them was 22 per cent. For example, the Talcher Thermal Power Station (with an installedcapacity of 460 MW), having an average life of over 39 years, achieved a PLF of93.90 per cent. in fiscal 2015 as compared to a PLF of 18.7 per cent. at the time of the acquisitionin June 1995.

Strong balance sheet

The Issuer has a strong balance sheet, which it believes will help it to make investments requiredfor its growth plan, including borrowings for capital expenditures and investments in research anddevelopment and business diversification. As of 31 March 2015, the Issuer, on a consolidated basis,had a debt-to-equity ratio of 1.25, a debt service coverage ratio of 2.27, and interest service coverageratio of 5.54. The Issuer generated on a consolidated basis net cash of Rs.147,458 million in fiscal2015 from its operating activities, which provides it with flexibility to implement its plans. Inaddition, its strong financial ratios and credit ratings enable it to have ready access to domestic andinternational credit markets. The Issuer’s weighted average rate of interest was 8.07 per cent. perannum in fiscal 2015, on a non-consolidated basis.

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Government support

The Issuer believes that it derives a strategic advantage from its strong relationship with the

Government. The Government is the promoter of the Issuer, and in each year the Issuer enters into an

MoU with the Government providing for its annual performance targets. The Government’s support

was critical in securing the settlement of outstanding dues owed to the Issuer by the SEBs. The grant

of the “Maharatna” status by the Government provides the Issuer with strategic and operational

autonomy and enhanced financial powers to take investment decisions without Government approval.

Competent and committed workforce

The Issuer believes that its employees possess a level of competence and commitment that

provides it with a key differentiator from the competition. Its senior executives have extensive

experience in the Issuer’s industry and many of them have been with the Issuer for a significant

portion of their careers. The Issuer invests significant resources in employee training and

development, and it seeks to recruit elite college graduates to join at entry-level positions. The Issuer

believes that it will benefit from a workforce that consists of young as well as experienced employees.

The Issuer has been consistently rated as one of the best employers/best companies to work for in

various surveys, such as the study conducted by The Economic Times and the Great Place to Work

Institute, India in 2014 in which the Issuer was ranked first in the public sector and first in the energy,

oil and gas sectors. The Issuer (including its subsidiaries and joint venture companies) has a low

attrition rate in its executive workforce, which was about 1.35 per cent. in fiscal 2015.

Emphasis on corporate governance

The Issuer believes that corporate governance is a key element in improving efficiency and that

it is critical that its business be transparent to its stakeholders. The Issuer seeks to engrain corporate

governance in its culture. The Issuer’s operations are subject to three separate audits. The Issuer

adopted an enterprise-wide risk management framework and committed valuable resources to

continuously evaluate its risks and improve its corporate governance framework. The Issuer also

signed an “Integrity Pact” with Transparency International to bring more transparency to its public

procurement process. Furthermore, the Issuer has, on a regular basis, continued to comply with the

corporate governance provisions in the listing agreement it has signed with the Indian stock

exchanges.

Strategy

The Issuer’s corporate vision is “To be the world’s largest and best power producer, powering

India’s growth”. The Issuer believes that the following strategies will enable it to achieve this vision:

Maintain market leadership

The Issuer intends to rapidly increase its generating capacity, maintain and grow its leadership

position and remain the largest Indian power-generating company. The Issuer has prepared a long-term

corporate plan with a target to have an installed capacity of 128,000 MW by 2032. As of the date of

this Offering Circular, the Issuer is constructing additional capacity aggregating 23,004 MW,

consisting of 49 thermal and hydro units at 20 locations and a solar plant of 250 MW. The Issuer is

also pursuing other projects that would add more than 27,000 MW of capacity, which are in various

stages, including projects for which a tender has been invited or in respect of which a feasibility report

has been or is being prepared. The Issuer has updated its contracting, engineering and other processes

in order to enable it to compress its project implementation time.

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Pursue fuel security

The Issuer believes that fuel security is critical to a power-generating company and it intends tocontinue pursuing its fuel requirements by following a multi-pronged strategy of procuring fuelthrough long-term contracts, short-term or spot purchases, developing domestic coal mines andforming partnerships for the development of fuel transportation infrastructure. The Issuer is pursuingoil and gas exploration to ensure better control, greater security and reliability of fuel supply.

Diversify fuel mix

The Issuer intends to diversify its generation capacity. The Issuer has commissioned a total solarcapacity of 110 MW at eight locations and total hydro capacity of 800 MW at its first hydro projectat Koldam. As of the date of this Offering Circular, the Issuer was in the process of implementingvarious hydroelectric projects of 819 MW, and a 250 MW solar photovoltaic based project in additionto developing various wind and nuclear power projects. Going forward, the Issuer intends to graduallyincrease its reliance on non-fossil fuel sources of generation. The Issuer formed a joint venturecompany, ASHVINI, in January 2011 with the NPCIL with the objective of setting up nuclear powerprojects in the country.

Adopt advanced technologies

The Issuer has developed a long-term technology roadmap for the introduction of highly efficientand clean technologies, including supercritical and ultra-supercritical machines at its new powerstations. Its technological roadmap is intended to help it keep pace with global technological advancesin power generation and sustain its operational efficiency levels. For its new coal-fired power stations,the Issuer has adopted supercritical steam parameters to increase efficiency and reduce carbon dioxideemissions. On 26 August 2010, the Issuer entered into an MoU with Bharat Heavy Electricals Limited(BHEL) and Indira Gandhi Centre for Atomic Research (IGCAR) to develop advancedultra-supercritical technology. Furthermore, pre-project research and development of materials forhigh-temperature application, appropriate welding technology and manufacturing technology has alsobeen initiated by this consortium.

Invest in employee development

The Issuer believes that its employees are its most important assets and has therefore adopted a“people first” approach towards its employees. The Issuer intends to continue developing thecapabilities of its employees through an objective and open performance management system. TheIssuer also intends to continue to provide comprehensive training to its employees at various stagesof their careers to familiarise them with technological advances and keep them updated on operationaland management practices in the Issuer’s industry. The Issuer believes that its continuing initiativeswill strengthen its identity as a preferred employer.

History

Prior to the establishment of the Issuer, power generation and capacity augmentation in India waslargely the responsibility of SEBs. The gap between the demand for electricity and the ability of theSEBs to supply it was perceived by the Government as a significant factor affecting the economicdevelopment of India. To address this under-supply, the Government established hydroelectric andthermal generation companies in the central sector which comprised Central Government-ownedpower utilities (the Central Sector). The Issuer was incorporated as a Government company under theCompanies Act on 7 November 1975 as the National Thermal Power Corporation Private Limited. On30 September 1985 the Issuer was converted from a private limited company into a public limitedcompany.

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In December 1976, the Government gave approval for the Issuer to construct its first “super

thermal” (greater than 1,000 MW) power project at Singrauli. The first unit at Singrauli with an

installed capacity of 200 MW was successfully commissioned on 13 February 1982.

Since 1982, through the expansion of existing power stations, the construction of new power

stations and the takeover of power stations from State Electricity Utilities (SEUs), the installed

capacity of the Issuer exceeded 5,000 MW in 1987, 10,000 MW in 1990, 15,000 MW in 1994, 20,000

MW in 2002, 25,000 MW in 2006, 30,000 MW in 2009, 35,000 MW in 2011, 40,000 MW in 2013 and

45,000 MW in 2015.

As of 31 March 2015, the Issuer has grown to become the largest generation utility in India

(Source: CEA) with a total installed capacity of 44,398 MW, including 6,196 MW secured through its

subsidiaries and joint venture companies. Furthermore, as of 30 September 2015, the Issuer’s total

installed capacity was 45,548 MW including 6,196 MW through its subsidiaries and joint venture

companies.

In 2004, the Issuer’s shares were listed on the BSE Limited and the National Stock Exchange of

India Limited. In the same year, the Issuer was allocated its first coal mining block by the MoC. On

28 October 2005, in order to give the Issuer a new corporate identity, the name of the Issuer was

changed from the “National Thermal Power Corporation Limited” to “NTPC Limited” to reflect the

diversification of its business operations beyond thermal power generation to include, among others,

the generation of power from hydro, nuclear and renewable energy sources and the undertaking of coal

mining and oil exploration activities. In 2005, one oil block was allocated under the fifth round of

bidding under the New Exploration Licensing Policy (NELP) to a consortium including the Issuer,

Geopetrol International Inc. and Canaro Resources Limited. In 2011, the Issuer was ranked as the

number one IPP in the world, on the basis of asset worth, revenues, profits and returns on invested

capital, according to a study conducted by Platts, a division of the McGraw-Hill Companies. In

January 2011, the Issuer formed a joint venture company, ASHVINI, with NPCIL to develop nuclear

power projects in India. In 2015, the Issuer commissioned its first hydro project of 800 MW.

The Issuer was conferred the status of a “Navratna” by the Government in 1997, which granted

it operational and financial autonomy. In May 2010 the Issuer was further upgraded to the

“Maharatna” status and was granted enhanced autonomy and recognition.

The Issuer has entered into business outside India by forming two joint venture companies, one

with the Bangladesh Power Development Board in Bangladesh and the other with the Ceylon

Electricity Board in Sri Lanka. The joint venture companies are called the Bangladesh India

Friendship Power Company Pvt. Ltd. and the Trincomalee Power Company Limited, and will be used

to set up thermal power projects in Bangladesh and Sri Lanka, respectively. See “Investment in

projects”.

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Corporate Structure

The following chart provides an overview of the Issuer’s ownership structure and its subsidiariesand joint venture companies as of the date of this Offering Circular.

NTPC LIMITED

Subsidiaries Joint Ventures

100%

100%

65%

74%

NTPC Electric Supply

Company Ltd.

NTPC Vidyut Vyapar Nigam Ltd.

50%

50%

50%Kanti Bijlee Utpadan Nigam Ltd.

Bhartiya Rail Bijlee

Company Ltd.

74% Patratu Vidyut Utpadan

Nigam Limited

50%

50%

50%

Utility Powertech Limited

NTPC GROUP

50%

50%

50%

Aravali Power Company

Pvt. Ltd.

NTPC-SCCL Global Ventures(1)

Nabinagar Power Generating Co. Pvt. Ltd.

44.6%

25.51%

21.63%

16.67%

0.27%

25%

50%

49%

Transformers and Electricals Kerala

Ltd.

Ratnagiri Gas & Power Pvt. Ltd.

National High Power Test Laboratory Pvt. Ltd.

International Coal Ventures Pvt. Ltd.(3)

Energy Efficiency Services Ltd.

CIL NTPC Urja Pvt. Ltd.

Anushakti Vidhyut Nigam Ltd.

49%

NTPC SAIL Power Company Pvt. Ltd.

BF-NTPC Energy Systems Limited

NTPC Tamilnadu Energy Co.Ltd.

Meja Urja Nigam Pvt. Ltd.

NTPC ALSTOM Power Services Pvt.Ltd.

NTPC BHEL Power Projects

Pvt. Ltd.

National Power Exchange Ltd.(2)

50%Trincomalee Power Company

Limited

50%

Pan-Asian Renewables Pvt. Ltd.(4)

50% Bangladesh India Friendship

Power Company Private Limited

(1) As the company was not able to commence its business from its incorporation due to non-availability of any businessprospects as of the date of the Offering Circular, the company is being voluntarily wound up.

(2) In view of certain changes in market conditions and the fact that the Issuer’s objective of forming a joint venture hasnot been met as of the date of this Offering Circular, the Issuer has decided to exit from National Power Exchange Ltd.The board of National Power Exchange Ltd. has now decided on the voluntary winding-up of the company on therecommendation of the promoters.

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(3) The Issuer has decided to exit from International Coal Ventures Pvt. Ltd. The Issuer received approval from the MoP on11 November 2011 to opt out of the joint venture. International Coal Ventures Pvt. Ltd. is working with the Governmentto obtain the requisite approvals.

(4) The company is now under voluntary liquidation and a liquidator has been appointed for its dissolution.

For additional details on the Issuer’s subsidiary and joint venture companies, see “Subsidiaries”and “Joint Venture Companies”.

The Issuer’s Relationship with the Government

As of the date of this Offering Circular, 74.96 per cent. of the Issuer is owned by theGovernment, and the remaining 25.04 per cent. is owned by foreign institutional investors, financialinstitutions, banks and the general public. The President of India is the beneficial owner of theGovernment’s shareholding.

Under the Issuer’s articles of association, the Chairman and Managing Director (the CMD) isappointed by the President of India. The remainder of the Issuer’s board of directors (the Board) isappointed by the President of India in consultation with the CMD, other than the Government’snominee directors and independent directors. Independent directors as well as Government-nominateddirectors are appointed by the President of India. At present, the Board comprises five full-timedirectors, including the CMD, two part-time directors nominated by the Government, and oneindependent director who is a non-official part-time director.

The Issuer’s articles of association vest management power of the Issuer in the Board. However,certain matters are reserved for the decision of the President of India, including matters relating to thebudget of the Issuer (if any deficit is to be met by obtaining funds from the Government) and theannual and five-year plans for development. The President of India also has the power to issuedirectives and instructions to the Issuer which must be put into effect by the directors.

The Issuer was conferred “Navratna” status by the Government in 1997 which granted itoperational and financial autonomy. In May 2010, the Issuer was conferred “Maharatna” status withenhanced autonomy in respect of investments in joint ventures and the creation of positions tofacilitate expansion of its operations, both in domestic as well as global markets.

As a Maharatna, the Issuer is permitted to make capital investment decisions without obtainingprior approval from the Government. It is generally permitted to form joint ventures and subsidiariesup to specified limits, subscribe to equity in these entities, and purchase and receive new technologyand know-how. Furthermore, the Issuer can generally borrow from both the domestic and internationalmarkets. However, in the case of borrowing from the international market, the Issuer is subject toguidelines issued by the Ministry of Finance and/or the RBI. Under the existing ECB Guidelines, theIssuer can borrow up to U.S.$750 million per year from recognised lenders in the international marketthrough the “automatic route” for permitted end uses without seeking any approvals.

The Issuer pays annual dividends to the Government and its other shareholders. Interim dividendpaid and final dividend recommended by the Board for fiscal 2015 amounted to Rs.20,614 million, or20.03 per cent. of the Issuer’s stand-alone profits after tax, or interim dividend of Rs.0.75 per shareon the face value of paid-up equity shares of Rs.10.00 each and final dividend of Rs.1.75 per equityshare in addition to the interim dividend. During fiscal 2015, the Issuer issued a bonus debenturehaving a coupon rate of 8.49 per cent. and amounting to Rs.103,068 million out of its free reserve.The Issuer’s dividend policy takes into account the Issuer’s requirements for internal resources to fundits capacity expansion programme and the guidelines issued by the Ministry of Finance. Thedeclaration and payment of a dividend is recommended by the Board and approved by the shareholdersof the Issuer.

The Issuer enters into an annual MoU with the Government. The MoU sets annual performancetargets. The Government evaluates the Issuer’s actual performance against these targets at the end ofeach fiscal. The Issuer received an “excellent” rating (the highest rating) in 24 of the 27 years sincethe MoU rating system was introduced by the Government.

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Business

Power Generation

The Issuer’s core business is the generation and sale of electricity. It has installed substantial

generation capacities in various locations across India. As of 30 September 2015, its directly owned

total installed capacity was 39,352 MW consisting of 143 units, including 18 coal-fired power stations

(of 34,425 MW capacity) comprising 99 units, seven gas-fired power stations (of 4,017 MW capacity)

comprising 32 units (including one naphtha-fired power station), one hydro-fired power station (of

800 MW capacity) comprising four units and eight solar power stations (of 110 MW capacity). The

Issuer also participates in and manages five subsidiaries and joint venture companies of an aggregate

capacity of 6,196 MW through six coal-fired power stations (of 4,229 MW capacity) comprising

18 units and one gas-fired power station (of 1,967 MW capacity) comprising nine units. The following

table sets out information regarding power stations wholly owned or jointly owned by the Issuer, or

owned through its subsidiaries as of 30 September 2015.

No. of PowerStations

Installed Capacity(MW)

NTPC-Owned

— Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 34,425

— Gas/Liquid Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 4,017

— Solar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 110

— Hydro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 800

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 39,352

Owned through subsidiary and joint venture companies

— Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 4,229

— Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1,967

Sub-Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6,196

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 45,548

In fiscal 2015, the Issuer generated 260.58 billion units of electricity, including 241.26 billion

units from its directly owned power stations and 19.32 billion units from the power stations owned

through its joint ventures and subsidiaries. Out of the generation from the Issuer’s directly owned

power stations, 229.55 billion units, or 95.15 per cent., were generated through its coal-fired power

stations and 11.59 billion units, or 4.8 per cent., were generated through its gas-fired power stations.

The balance of 0.12 billion units, or 0.05 per cent., was through the Issuer’s solar and hydro power

stations.

The operating efficiency of the Issuer’s power stations has improved over the years. The average

availability factor of its directly owned coal-fired power stations has increased from 86.50 per cent.

in fiscal 1994 to 88.27 per cent. in fiscal 2015. The average availability factor of its directly owned

gas-fired power stations has increased from 60.20 per cent. in fiscal 1994 to 92.18 per cent. in fiscal

2015. The average PLF of its directly owned coal-fired power stations has increased from 78.10 per

cent. in fiscal 1994 to 80.23 per cent. in fiscal 2015. In fiscal 2015, the average PLF for coal-fired

power stations in India was 64.46 per cent. (Source: CEA).

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The map below describes the locations of the Issuer’s existing facilities as of the date of thisOffering Circular, as well as those currently under construction. There can be no assurances that thefacilities under construction will be completed.

Sipat 2,980MWLara 1,600MW

Durgapur

(120MW)

Kayamkulam

(350MW)

Vallur

(1,500MW)

Kudgi

(2,400MW)

Ratnagiri

(1,940MW)

Solapur

(1,320MW)

Simhadri

(2,000MW)

Ramagundam

(2,600MW) + (10MW solar)

Mouda (2,320MW)Kawas

(645MW)

Gandhar

(648MW)

Talcher Thermal

(460MW)

Talcher Kaniha

(3,000MW) + 10MW Solar

Bhilai

574MW

Rourkela

(120MW)Korba(2,600MW)

Kahalgaon (2,340MW)

Kanti

(610MW)

Barh 3,300MW

Nabinagar(1,000MW + 1980 MW)

Tanda (1760 MW)

Unchahar (1,550MW) &(10 MW Solar)

Meja (1,320MW)

Vindhyachal (4,760MW)

Singrauli (2,023MW)

Auraiya (652MW)

Anta

(413MW)

Jhajjar (1,500MW)

Badarpur (705MW)NCTPP (1,820MW)

Faridabad (430MW +5MW Solar)Dadri (817MW) Dadri SolarPV (5MW)

Lata Tapovan (171MW)

Koldam

(800MW)

A&N Solar PV (5MW)

Rihand 3,000MW Farakka 2,100MW

Bongaigaon (750MW)

Tapovan Vishnugad (520MW)

Gadarwara (1600 MW)

Rajgarh Solar PV

50 MW Daralipali

(1600MW)

NKP 1980MW

Coal Power Station Ongoing Hydro Power Projects Gas Power Stations

Ongoing Thermal Projects Solar PV

Map not to scale. Includes capaci ty of under construction plants

Rammam (120MW)

Khargone

1320 MW

Anantpur Solar

(250MW)

Hydro Power Station

The Issuer’s coal-fired power stations run at high rates of efficiency, enabling it to sell powerat competitive prices and achieve savings. In fiscal 2015, of its 17 coal-fired power stations, fiveoperated at a PLF of greater than 85.00 per cent. The Issuer monitors its power stations and projectsthrough its real-time monitoring system and systematically maintains its power stations to ensure highavailability. The Issuer believes that its monitoring and maintenance techniques offer it a competitiveadvantage in an industry where reliability and maintenance costs are a significant determinant ofprofitability.

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Power Stations

As of 30 September 2015, the Issuer directly owned the following power stations across India,with an aggregate installed capacity of 39,352 MW:

NTPC-Owned Power Stations

Power Station Location

InstalledCapacity

(MW) Fuel Type

Northern RegionSingrauli . . . . . . . . . . . . . . . . . . . . . . Sonebhadra, Uttar Pradesh 2,000 CoalSingrauli Solar . . . . . . . . . . . . . . . . . Sonebhadra, Uttar Pradesh 15 Solar (PV)Rihand . . . . . . . . . . . . . . . . . . . . . . . Sonebhadra, Uttar Pradesh 3,000 CoalTanda . . . . . . . . . . . . . . . . . . . . . . . . Ambedekar Nagar, Uttar Pradesh 440 CoalUnchahar . . . . . . . . . . . . . . . . . . . . . Rae Bareli, Uttar Pradesh 1,050 CoalUnchahar Solar . . . . . . . . . . . . . . . . . Rae Bareli, Uttar Pradesh 10 Solar (PV)Badarpur . . . . . . . . . . . . . . . . . . . . . . Badarpur, New Delhi 705 CoalDadri Thermal (NCTPP). . . . . . . . . . . Gautam Budh Nagar, Uttar

Pradesh1,820 Coal

Dadri Gas . . . . . . . . . . . . . . . . . . . . . Gautam Budh Nagar, UttarPradesh

830 Gas

Anta. . . . . . . . . . . . . . . . . . . . . . . . . . Baran, Rajasthan 419 GasAuraiya . . . . . . . . . . . . . . . . . . . . . . . Auraiya, Uttar Pradesh 663 GasFaridabad . . . . . . . . . . . . . . . . . . . . . . Faridabad, Haryana 432 GasDadri Solar . . . . . . . . . . . . . . . . . . . . Gautam Budh Nagar, Uttar

Pradesh5 Solar (PV)

Faridabad, Solar . . . . . . . . . . . . . . . . . Faridabad, Haryana 5 Solar (PV)Total Northern Region . . . . . . . . . . . 11,394Western RegionKorba . . . . . . . . . . . . . . . . . . . . . . . . Korba, Chhattisgarh 2,600 CoalVindhyachal . . . . . . . . . . . . . . . . . . . Sidhi, Madhya Pradesh 4,760 CoalSipat . . . . . . . . . . . . . . . . . . . . . . . . . Bilaspur, Chhatisgarh 2,980 CoalKawas . . . . . . . . . . . . . . . . . . . . . . . Surat, Gujarat 656 GasJhanor Gandhar . . . . . . . . . . . . . . . . . Bharuch, Gujarat 657 GasMouda . . . . . . . . . . . . . . . . . . . . . . . Nagpur, Maharashtra 1,000 CoalRajgarh Solar . . . . . . . . . . . . . . . . . . Rajgarh, Madhya Pradesh 50 Solar (PV)Total Western Region . . . . . . . . . . . 12,703Southern RegionRamagundam . . . . . . . . . . . . . . . . . . Karimnagar, Telangana 2,600 CoalSimhadri . . . . . . . . . . . . . . . . . . . . . . Vishakhapatnam, Andhra Pradesh 2,000 CoalKayamkulam . . . . . . . . . . . . . . . . . . . Allappuzha, Kerala 360 NaphthaAndaman and Nicobar Solar . . . . . . . Andaman and Nicobar Islands 5 Solar (PV)Ramagundam (Solar) . . . . . . . . . . . . . Karimnagar, Telangana 10 Solar (PV)Total Southern Region . . . . . . . . . . 4,975Eastern RegionFarakka . . . . . . . . . . . . . . . . . . . . . . Murshidabad, West Bengal 2,100 CoalKahalgaon . . . . . . . . . . . . . . . . . . . . Bhagalpur, Bihar 2,340 CoalBarh . . . . . . . . . . . . . . . . . . . . . . . . . Barh, Bihar 1,320 CoalTalcher STPS . . . . . . . . . . . . . . . . . . Angul, Odisha 3,000 CoalTalcher TPS . . . . . . . . . . . . . . . . . . . Angul, Odisha 460 CoalBongaigaon . . . . . . . . . . . . . . . . . . . . Assam 250 CoalTalcher Solar . . . . . . . . . . . . . . . . . . Angul, Odisha 10 Solar (PV)Total Eastern Region . . . . . . . . . . . 9,480Hydro RegionKoldam . . . . . . . . . . . . . . . . . . . . . . . Bilaspur, Himachal Pradesh 800 HydroGrand Total . . . . . . . . . . . . . . . . . . . 39,352

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The following table set outs the PLF of certain power stations acquired by the Issuer as of the

date of acquisition and 31 March 2015:

Plant Load Factor (%)

Power Station Date of Acquisition

As of thedate of

acquisitionDuring fiscal

2015

Unchahar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 February 1992 18 83Talcher . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 June 1995 19 94Tanda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 January 2000 15 82Badarpur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 April 1978* 32 53

* Date of takeover of management

As of 30 September 2015, the Issuer owned the following power stations with an aggregate

installed capacity of 6,196 MW through its subsidiary and joint venture companies:

Name of the Company Location

InstalledCapacity

(MW) Fuel Type

NTPC-SAIL Power Company Private Ltd. . . . . . Durgapur, West Bengal 120 CoalRourkela, Odisha 120 CoalBhilai, Chhattisgarh 574 Coal

Ratnagiri Gas and Power Private Limited . . . . . Ratnagiri, Maharashtra 1,967 GasAravali Power Company Private Limited . . . . . Jhajjar, Haryana 1,500 CoalKanti Bijlee Utpadan Nigam Limited . . . . . . . . Kanti, Bihar 415 CoalNTPC-Tamilnadu Energy Company Limited . . . Vallur, Tamil Nadu 1,500 CoalTotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,196

Power Purchase Agreements (PPAs)

The capacity of each unit at each power station owned by the Issuer is contracted to various

customers under the PPAs. For the Issuer’s coal-fired power stations, the term of the PPAs for most

power stations is 25 years, while for its gas-fired power stations, the term of the PPAs for most power

stations is 15 years. The term of the PPA for the Issuer’s hydroelectric projects is 35 years. The PPAs

generally provide for the extension of the term subject to mutually agreed conditions. As part of its

investment approval procedure, the Issuer requires PPAs to be in place for all new power stations

before an investment approval is provided. All the existing facilities have contracted 100 per cent. of

their capacity. More than 88 per cent. of the Issuer’s sales of electricity generated from its directly

owned power stations are to SEBs and state-owned distribution companies for which payments are

secured through LCs and various Tripartite Agreements. For private distribution company customers,

payments are secured through LCs backed by a first charge created on their receivables in the Issuer’s

favour.

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As of 31 March 2015, the Issuer’s top ten customers and their respective percentage share in the

Issuer’s revenue from the sale of electricity generated from its directly owned power stations were as

follows:

Customer Percentage Share (%)

Uttar Pradesh Power Corporation Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 11.82Maharashtra State Electricity Distribution Company Ltd. . . . . . . . . . . . 9.34Madhya Pradesh Power Trading Corporation Limited . . . . . . . . . . . . . . 7.01Gujarat Urja Vikash Nigam Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.45Gridco (Odisha) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.92BSES Rajdhani Power Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.37Kerala State Electricity Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.35Tamil Nadu Generation and Distribution Corporation Limited . . . . . . . . 3.98Central Power Distribution Company Limited (Andhra Pradesh) . . . . . . 3.55South Bihar Power Distribution Company Limited . . . . . . . . . . . . . . . . . 3.35Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.14

Historically, the Issuer has had significant problems recovering payments from the SEBs.

However, the introduction of the OTSS in 2002 significantly improved the recovery of payments under

the PPAs with the SEBs. The LC coverage provided by the SEBs has been adequate to cover monthly

billings. From fiscal 2004 to 2015, for 12 successive years, recoveries of dues from SEBs have been

100 per cent., as opposed to 76.7 per cent. in fiscal 2002 and 92.3 per cent. in fiscal 2003 in respect

of the sale of electricity generated from its directly owned power stations. The OTSS, effected by

individual Tripartite Agreements between the Government, the RBI and each state, allows the Issuer

to take certain actions in the case of failure of the SEBs to open or maintain LCs or, in the case of

default, in making payment of current dues within the stipulated period. These actions include the

recovery of payments from the RBI directly, which payments are then debited from the applicable

state’s account with the RBI. These Tripartite Agreements are valid until 31 October 2016. Beyond

2016, the Issuer’s sales are secured through supplementary agreements with its customers under which

the customers have agreed to create a first charge on their own receivables in the Issuer’s favour and,

in the event of a payment default, assign such receivables into an escrow account.

Investment in projects

The Issuer undertakes a detailed assessment before investing in a new project. Investment

decisions are taken by the Issuer only after establishing the economic viability of the proposed project.

Financial appraisals of projects are also conducted by independent institutions. The Issuer takes thedecision to proceed with a new project only once it is satisfied on the availability of land, water, fuel,off-take arrangements and environmental clearances.

Since May 2010, as a Maharatna, the Government has granted a very high level of autonomy tothe Issuer, which includes delegating investment decisions to the Board. The Issuer is empowered totake all investment decisions, including the power to make equity investments in joint ventures, andwholly owned subsidiaries, and to undertake mergers and acquisitions on its own, subject to a ceilingof the lower of 15 per cent. of the Issuer’s net worth and Rs.50,000 million for any one project, andsubject to an overall ceiling of 30 per cent. of its net worth for all such projects. Previously as aNavratna, the applicable ceiling was the lower of 15 per cent. of the Issuer’s net worth and Rs.10,000million for any one project, and subject to an overall ceiling of 30 per cent. of its net worth for allsuch projects. The Issuer’s internal investment decision process involves financial due diligence,assessment by a project sub-committee of the Board, with final investment approval being made bythe Board itself. The CERC finalises the tariff for all of the Issuer’s power stations. During thetariff-setting process, the CERC scrutinises the investments made by the Issuer in the establishing ofany power station.

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Capacity Expansion

Power demand in India is expected to grow significantly as a result of India’s growing economy.The Issuer expects that an energy deficit will exist as has occurred in the past. It has embarked on anaggressive capacity addition programme, in line with the Government’s policy of adding capacity tomeet the demands for energy in India. The Issuer has adopted a multi-pronged strategy that includescapacity addition through green-field projects, brown-field expansions, joint ventures andacquisitions. The Issuer first identifies new potential sites or existing sites that could potentially beexpanded. It then seeks to establish project viability through the preparation of feasibility reports.

The Issuer classifies the projects it is pursuing in the following categories:

• projects under construction;

• projects for which it has invited bids from vendors;

• projects for which the feasibility reports have been approved; and

• projects for which feasibility reports are under preparation.

The current projects which the Issuer is pursuing are described below.

Projects under construction

As of the date of this Offering Circular, the Issuer is engaged in construction activities forprojects representing a capacity of 23,004 MW, including projects representing a capacity of 4,495MW undertaken by its subsidiaries and joint venture companies, which are in different stages ofcompletion, as set out below:

Owned projects under construction

Name of Project State/Union Territory

InstalledCapacity

(MW) Fuel Type

Bongaigaon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assam 500 CoalBarh-I(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bihar 1,980 CoalLara-I(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chhattisgarh 1,600 CoalKudgi-I(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Karnataka 2,400 CoalGadarwara-I(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Madhya Pradesh 1,600 CoalMouda-II(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maharashtra 1,320 CoalSolapur(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maharashtra 1,320 CoalKhargaon(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Madhya Pradesh 1,320 CoalUnchahar-IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uttar Pradesh 500 CoalDarlipalli(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Odisha 1,600 CoalNorth Karanpura(1) . . . . . . . . . . . . . . . . . . . . . . . . . . Jharkhand 1,980 CoalTanda-II(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uttar Pradesh 1,320 CoalTapovan Vishnugad . . . . . . . . . . . . . . . . . . . . . . . . . . Uttarakhand 520 HydroLata Tapovan(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Uttarakhand 171 HydroRammam-III. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . West Bengal 120 HydroSingrauli Small HEPP . . . . . . . . . . . . . . . . . . . . . . . . Uttar Pradesh 8 HydroAnantpur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Andhra Pradesh 250 SolarSub-Total — owned (A) . . . . . . . . . . . . . . . . . . . . . . 18,509

(1) Indicates projects using super critical technology.(2) As of the date of this Offering Circular construction work has been stayed due to a Supreme Court order dated 7 May

2014 by which the Supreme Court stalled work at 24 hydro projects in the state of Uttarakhand, including the LataTapovan project of the Issuer.

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InstalledCapacity

(MW) Fuel Type

Projects under construction — Joint VentureProjectsNabinagar, Joint Venture with the Indian Railways. . . Bihar 1,000 CoalMuzaffarpur-II, Joint Venture with Bihar State PowerGeneration Company Ltd. (BSPGCL) . . . . . . . . . . . . Bihar 195 CoalNabinagar, Nabinagar Power Generating CompanyLtd. (NPGCPL)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . Bihar 1,980 CoalMeja, Joint Venture with Uttar Pradesh Rajya VidyutUttpadan Nigam Ltd. (UPRVUNL)(1) . . . . . . . . . . . . . Uttar Pradesh 1,320 CoalSub-Total — Joint Venture Projects (B) . . . . . . . . . 4,495Grand Total (A+B) . . . . . . . . . . . . . . . . . . . . . . . . . . 23,004

(1) Indicates projects using super critical technology

Projects for which the Issuer has invited bids from vendors


InstalledCapacity

(MW) Fuel Type

Khulna(1) . . . . . . . . . . . . . . . . . . . . . . Bangladesh 1,320 CoalTelangana-I(1) . . . . . . . . . . . . . . . . . . . Telangana 1,600 CoalPudimadaka(1) . . . . . . . . . . . . . . . . . . Andhra Pradesh 4,000 CoalBarethi(1) . . . . . . . . . . . . . . . . . . . . . Madhya Pradesh 2,640 CoalDurgapur PP . . . . . . . . . . . . . . . . . . . West Bengal 40 CoalRourkela TPP . . . . . . . . . . . . . . . . . . Odisha 250 CoalSolar . . . . . . . . . . . . . . . . . . . . . . . . . Andhra Pradesh, Madhya Pradesh

and Rajasthan1,260 Solar

Total . . . . . . . . . . . . . . . . . . . . . . . . 11,110

(1) Indicates projects using super critical technology

PPAs have been signed with the beneficiaries for all of the above projects for which bids havebeen invited. Long-term power off-take agreements are in place for all projects under construction thathave been mentioned above.

Other Projects

Besides projects under construction as of the date of this Offering Circular, the Issuer has anumber of projects with an aggregate capacity of approximately 16,830 MW for which feasibilityreports have been approved or are under preparation.

Tariffs

The tariff for electricity supplied from the Issuer’s power stations are determined based on tariffregulations notified by the CERC from time to time. On 21 February 2014 the CERC notified theregulations applicable for the period from 1 April 2014 to 31 March 2019 (the 2014-2019Regulations). The tariff for the thermal and hydro power stations of the Issuer for this period isdetermined as per these regulations. The components of the tariff of the Issuer’s power stations as perthe 2014-19 Regulations are as follows:

• the Issuer is allowed to recover the capacity charge in full if the relevant power station’savailability factor is at least 83 per cent. (which is to be reviewed after the first three yearsof the tariff period). If the availability factor of the power station is lower than 83 per cent.,a capacity charge is recoverable on a pro rata basis. The capacity charge consists of anumber of components, including:

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o a return on equity on a pre-tax basis at a base rate of 15.5 per cent., to be grossed upby the effective tax rate as applicable to the Issuer for the relevant year. For projectscommissioned on or after 1 April 2014, there is an additional return of 0.5 per cent.if the new projects are completed within the timeline specified in the 2014-19Regulations;

o the recovery of interest cost on debt and return on equity for all power stationsdeclared in commercial operation on or after 1 April 2014, to be based on a prescribed70/30 debt-to-equity ratio. Where the equity employed is greater than 30 per cent., theamount of equity for determination of the tariff will be limited to 30 per cent. Thereturn on the excess equity can be recovered on the same basis as the recovery on thedebt component. Where the equity employed is less than 30 per cent., the actualamounts of debt and equity will be considered for purposes of determination of thetariff. In case of generating power stations existing as of 1 April 2014, recovery ofinterest costs on the debt will be based on the debt-to-equity ratio allowed for thedetermination of the tariff in the previous tariff period ended 31 March 2014;

o interest on working capital to be determined as per the State Bank of India’s normson the base rate as of 1 April of the year plus 3.5 per cent.;

o recovery of depreciation up to 90 per cent. of capital costs, excluding the cost of land,to be based upon the rates of depreciation prescribed in the regulation, for a 12-yearperiod from the commercial operation date. The remaining depreciable valuethereafter is to be spread over the remaining useful life of the assets;

o recovery of operation and maintenance costs to be determined based on the size of thepower station on a per MW basis;

o a special allowance per annum per MW for power stations in operation beyond theiruseful life in lieu of recovery for capital expenditures on renovation andmodernisation; and

o compensation allowances on a per annum per MW basis to meet expenses on newcapital assets, including minor capital assets, after ten years of commercial operation.

• Energy charges for recovery of primary and secondary fuel cost are allowed on the basisof norms for heat rate, specific oil consumption and auxiliary consumption on scheduledenergy.

• Other elements of the 2014-19 Regulations include:

o an incentive linked to the PLF of the station at the rate of Rs.0.50 per kWh abovespecified norms;

o recovery of the cost of hedging of exchange rate risk on the interest on and repaymentof foreign currency loans and exchange rate fluctuations for unhedged interest on andrepayment of foreign currency loans corresponding to the debt component of capitalcost admitted by the CERC; and

o a deviation settlement charge receivable or payable for the supply or off-take ofelectricity at variance with the schedule given by the relevant load dispatch centre.The charge varies depending upon system frequency and is receivable or payable atrates notified by the CERC from time to time.

The Issuer has filed tariff petitions for the period from 1 April 2014 to 31 March 2019 for eachpower station in accordance with the terms and conditions laid down by the CERC.

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On the basis of the CERC tariff orders and principles enunciated in the Tariff Regulations, theaverage selling price per unit of electricity for the Issuer’s directly owned power stations was Rs.3.28in fiscal 2015, Rs.3.30 in fiscal 2014 and Rs.2.96 in fiscal 2013.

Other Activities

Consultancy

The Issuer’s consultancy division provides various services to state generating companies, SEBsand other private power companies, including engineering, procurement, quality assurance andinspection, construction supervision, project management, commissioning, operation andmaintenance, renovation and modernisation, gap analysis and performance improvement plans. Infiscal 2015, its consultancy division earned a total revenue of Rs.1,008 million.

Power Trading

The Issuer believes the existence of a gap between power supply and demand providesopportunities for power trading. The Issuer is engaged in power trading through its wholly ownedsubsidiary, NVVN. In fiscal 2015, NVVN traded 10,315 million units of electricity and transactedbusiness with more than 100 customers, including various state government utilities, private powerutilities and captive power generators in each of the five regions of India.

The Government has designated NVVN as the nodal agency for Phase-I of the Jawaharlal NehruNational Solar Mission for the purchase of up to 1,000 MW solar power from grid-connected solarpower developers and the sale after bundling of an equivalent MW capacity from the Issuer’s powerstations at rates notified by the CERC. As of 31 March 2015, total solar capacity of 718 MW has beencommissioned, and a corresponding capacity allocation from the Issuer’s coal power stations has beenmade, by the MoP. During fiscal 2015, NVVN sold 5,175 MUs of bundled solar power to various stateutilities. The Government has also designated NVVN as the nodal agency for cross-border trading ofpower from Bhutan and Bangladesh. In accordance with the terms of the PPA signed between NVVNand the Bangladesh Power Development Board for 250 MW of power allocated from the Issuer’sstations, the supply of power to Bangladesh commenced on 5 October 2013. The PPA is for a periodof 25 years. For fiscal 2015, NVVN has supplied 1,745 MUs of power to Bangladesh. NVVN alsotraded in ash and cenosphere from the Issuer’s stations and sold 3,622,028 tonnes of fly ash and 365tonnes of cenosphere during fiscal 2015. The business of the disposal of fly ash and ash productsthrough the sale was transferred to the Issuer, with effect from 1 January 2015, in order to enhancefly ash utilisation and to have better co-ordination with potential fly ash users.

In addition, the Issuer is a promoter of, and as of the date of this Offering Circular, owns 4.1 percent. of the paid-up capital of PTC, which was the first power-trading company in India.

Electricity Distribution

The Issuer’s subsidiary, NTPC Electric Supply Company Limited (NESCL), is pursuing anelectricity distribution business. As of the date of this Offering Circular, NESCL was involved inconsultancy services for the implementation of turnkey projects under the Rajiv Gandhi GrameenVidyutikaran Yojana (RGGVY), a flagship programme of the Government for the electrification ofrural villages and households, which involves setting up sub-stations for utilities, constructingdistribution networks and project management. NESCL is also participating in programmes for thedistribution of infrastructural development. On 24 March 2015, the shareholders of NESCL approvedthe transfer of NESCL’S existing business of work under the RGGVY and other consultancy projectsto the Issuer. Furthermore, NESCL formed a joint venture with the Kerala Industrial InfrastructureDevelopment Corporation (KINFRA), a statutory body of the government of Kerala, to pursue the

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retail distribution of power in various industrial parks developed by KINFRA in Kerala, special

economic zones (SEZs) and industrial areas. However, as of the date of this Offering Circular, NESCL

is considering plans to disassociate from KINFRA as future prospects of the joint venture company

do not look very promising.

Coal Mining and Oil Exploration

The Issuer entered into the coal mining business to ensure better control and greater reliability

on coal production. Coal mining is integral to the Issuer’s fuel security strategy. The MoC had allotted

six coal blocks to the Issuer, namely Pakri-Barwadih, Chatti-Bariatu, Kerandari, Dulanga, Talaipalli

and Chatti-Bariatu (South), in the period from 2004 until 2007. In 2013, the MOC granted anin-principle approval allocating four coal blocks to the Issuer, namely Banai, Bhalumuda, Chandrabilaand Kundanali-Luburi. These coal blocks are located in the states of Jharkhand, Chhattisgarh andOdisha.

Out of these coal blocks allotted to the Issuer, the allocation of five coal blocks (namelyChatti-Bariatu, Chatti-Bariatu (South), Kerandari, Dulanga, and Talaipalli) (Coal Blocks) wascancelled by the Supreme Court’s order dated 24 September 2014. Subsequently, the MoC on 24 March2015 reallocated these coal blocks to the Issuer.

The Government issued formal allotment letters to the Issuer in relation to the Banai andBhalumuda coal blocks. Furthermore, the Kundanali-Luburi coal block has been allotted jointly to theIssuer and the Jammu and Kashmir State Power Development Company Limited (J&KSPDCL). As ofthe date of this Offering Circular, a joint venture company between the Issuer and J&KSPDCL is underincorporation for development of the Kundanali-Luburi coal block. In April 2015, the Governmentmodified its decision and allotted the Chandrabila coal block to a different entity.

Additionally on 10 September 2015 the MoC notified the Issuer of the Government’s decision toallocate the Mandakini-B coal block in Odisha to the Issuer for its Telangana Power Project of4,000 MW capacity. Similarly on 11 September 2015, the Issuer was notified of the Government’sin-principle approval for the change of allocation of the Banhardih coal block, in Jharkhand, to thejoint venture company to be formed between the Issuer and the state of Jharkhand.

Out of these ten coal blocks, with an estimated geological reserve of 6.7 billion tonnes, it isestimated that the Issuer will be able to reach a peak coal-production capacity of approximately 104million tonnes per annum, which will be supplied to its power stations.

For the Pakri-Barwadih coal block, all statutory clearances and permissions, includingmine-opening permission from the coal controller, DGMS, and others have been obtained. A newcontract for the appointment of a mine development operator (MDO) for Pakri-Barwadih has beenawarded. In the meantime, short-term contracts for the removal of overburden, extraction andtransportation of coal up-to-the-railway siding are planned as part of the development of thePakri-Barwadih coal block (Eastern pit).

As of the date of this Offering Circular, coal block development activities at Chatti-Bariatu,Kerandari, Dulanga and Talaipalli are in progress. The MoC approved the mining plans for theChatti-Bariatu, Kerandari, Dulanga and Talaipalli projects and the Issuer has obtained environmentalclearance for each of these coal blocks from the MoEF. The Issuer has also obtained both Stage-I andStage-II forest clearance for the Chatti-Bariatu and Talaipalli blocks from the MoEF, as well as Stage-Iforest clearance for the Kerandari and Dulanga blocks. Furthermore, it has obtained mine-openingpermission from the DGMS for the Chatti-Bariatu coal block. A process has already been initiated forthe appointment of an MDO for all of the coal blocks.

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Exploration activities have been completed in the Banai coal block and a detailed geologicalreport is under finalisation, while exploration activities are under progress in relaton to the Bhalumudacoal block. An agency has been appointed to undertake a study to determine the feasibility of coalevacuation from these coal blocks.

In the eighth round of bidding under NELP, the Government awarded the Issuer one oilexploration block with 100.0 per cent. interest along with three other oil exploration blocks in eachof which the Issuer held a 10.0 per cent. interest. Subsequent to exploration activities, two blockswhere the Issuer held a 10.0 per cent interest were relinquished to the Government. As of the date ofthis Offering Circular, exploration activities are in progress in the remaining two blocks.

Diversified Businesses through Joint Ventures

The Issuer has formed various joint venture companies for providing an array of services tovarious entities in the power sector. Utility Powertech Limited (UPL) is a joint venture with RelianceInfrastructure Limited, which provides power station maintenance services. NTPC Alstom PowerService Private Limited (NASL) is a joint venture with Alstom Deutschland AG, Germany. NASLundertakes renovation and modernisation of old and under-performing power stations both in Indiaand other countries of the South Asian Association of Regional Co-operation (SAARC). National HighPower Test Laboratory Private Limited is a joint venture with the NHPC, Powergrid Corporation ofIndia Limited (PGCIL), Damodar Valley Corporation and the Central Power Research Institute todevelop a short-circuit test facility which will provide testing services to power equipmentmanufacturers in India, allowing for cost and time saving. In 2009, the Issuer formed a joint venture,Energy Efficiency Services Limited (EESL), with PFC, PGCIL and the Rural ElectrificationCorporation Limited (REC) for carrying out and promoting the business of energy efficiency, energyconservation and climate change, including the manufacture and supply of energy efficiency servicesand products.

Equipment Manufacturing through Joint Ventures

The Issuer also formed joint venture companies for the manufacture of equipment used in thepower business. The details of the companies are as follows:

• NTPC BHEL Power Projects Pvt. Ltd., a joint venture company formed by the Issuer withBHEL in fiscal 2008 for carrying out engineering, procurement and construction (EPC)activities in the power sector, and to engage in the manufacture and supply of equipmentfor power stations and other infrastructure projects in India and abroad.

• BF-NTPC Energy Systems Limited, a joint venture company formed with Bharat ForgeLimited in June 2008 to establish a facility to take up the manufacturing of castings,forgings, fittings and high-pressure piping required for power projects and other industries,and balance of plant (BOP) equipment for the power sector. Due to delays in clearances ofnew projects, as of the date of this Offering Circular, the Issuer was contemplating variousbusiness alternatives subject to approval from the MoP.

• Transformers & Electricals Kerala Limited (TELK), a joint venture company in which theIssuer acquired a 44.6 per cent. stake in 2007, manufactures and repairs high-voltagetransformers and associated equipment. The Issuer believes this venture will enable it tomeet the requirements of its own power stations, and also service the very large, ageingfleet of transformers in the country.

Fuel Supply

Fuel represents the Issuer’s largest expense. Its primary fuels are coal, gas and naphtha. As of30 September 2015, approximately 87.49 per cent. of its directly owned or installed capacity iscoal-fired and 10.20 per cent. is gas- or naphtha-fired.

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Coal

The Issuer purchases substantially all of its coal requirements from subsidiaries of CIL and fromSCCL. The price of coal is set by the CIL or SCCL, as the case may be. The Issuer had signedlong-term CSAs covering units commissioned as of 31 March 2009 at its 15 coal-fired power stationsfor a capacity of 23,895 MW. In respect of units commissioned after 31 March 2009 or underconstruction, the Issuer signed CSAs for a total capacity of 9,620 MW. The CSAs remain in force fora period of 20 years from the effective date except for power stations with a remaining life of less than20 years, in which case the agreement is limited to the life of the power station. The CSAs have aprovision for a review at the end of every five years in respect of annual contracted quantities (ACQ)and all other related provisions.

Each CSA addresses the quality and quantity of coal supply required for sustained generation.There is also a provision to pay a performance incentive to the coal supplier for delivery in excess of90.0 per cent. of ACQ or a penalty in instances where supply levels fall below 90 per cent. In respectof CSAs signed for units commissioned after 31 March 2009, the revised penalty threshold applied tothe minimum supply level requirements is 80.00 per cent., including imported coal supplies.

The Issuer also sources imported coal to meet the domestic coal shortfall. During fiscal 2015,imported coal comprised 9.8 per cent. of the total amount of coal it received for its directly ownedpower stations. The pricing of coal for these imports is linked to global indices. As of the date of thisOffering Circular, the Issuer was also sourcing coal by way of short-term bilateral MoUs with coalcompanies and through e-auctions conducted by the coal companies. It intends to continue to importcoal to meet the shortfall in the supply of coal from domestic sources.

Many of the Issuer’s power stations are located in proximity to fuel sources. As of 30 September2015, ten out of 18 of its coal-fired power stations, representing around 73.6 per cent. of its directlyowned coal-fired capacity, were located in the range of seven to 80 kilometres from the linked coalmines that supply them. The Issuer has its own merry-go-round (MGR) rail system, or belt conveyorsystem, for transporting coal from the coal mines to the generating power stations. The strategiclocations of its coal-fired power stations and its MGR rail system, or belt conveyor system, enable itto reduce supply interruptions and lower transportation cost. Supplies to the other eight power stationsare provided through the national railway system for which it received the railway’s consent at thetime a linkage was allocated to it.

Gas

The Issuer mainly sources gas domestically, as per the allocation given to it by the Government.The long-term gas supply agreements with GAIL for the supply of gas for its directly owned gas-firedpower stations have all been signed or (as the case maybe) renewed. As per the terms of theseagreements, the gas price is regulated under pricing orders issued by the Government from time totime. It is also sourcing regasified liquefied natural gas (RLNG) on a long-term basis from GAIL. Theremaining requirement of RLNG is sourced from short-term agreements for “spot” or “fall back”RLNG agreements after obtaining the prior consent of its customers for the off-take of energygenerated based on such fuel. The Issuer’s directly owned gas-fired power stations are located alongmajor gas pipelines.

Furthermore, the Issuer won the allocation of imported spot RLNG under the Government’sscheme for the utilisation of gas based operation capacity for its Dadri and Auraiya gas stations fromOctober 2015 until March 2016, which in turn will help increase the PLF of these stations.

Hydropower

The Government has developed a policy to increase hydroelectric capacity to deal with the urgentneed for additional peak load capacity, as well as the shortage of domestic fuels and concern forenvironmental pollution. In line with such policy, the Issuer is setting up hydroelectric power stations.

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In fiscal 2015, the Issuer commissioned its first hydroelectric power station, with an installed capacityof 800 MW, at Koldam, in Himachal Pradesh. Furthermore, three hydroelectric power projects with anaggregate capacity of 811 MW are under construction. Additionally as of the date of this OfferingCircular a small hydroelectric power project of 8 MW is under construction. Furthermore for detailson the Lata Tapovan power project please see “Owned projects under construction” section of thisOffering Circular.

Renewables

The Issuer has commissioned solar photo voltaic (PV) projects with a total capacity of 110 MWat various locations and is augmenting its capacity, through renewable sources of energy, tobroad-base its generation mix to ensure long-term competitiveness, mitigation of fuel risks andpromotion of sustainable power development.

The Issuer has set a target to achieve an additional capacity of 10,000 MW by way of renewableenergy by 2022. Various initiatives in this regard include:

• signing an MoU with the government of Andhra Pradesh for a 1,000 MW solar PV projectat Andhra Pradesh;

• signing a letter of understanding for developing a 750 MW solar PV project in the state ofMadhya Pradesh;

• commissioning of 35 MWp solar PV projects during fiscal 2015;

• construction of 250 MWp solar PV project at Anantapur, Andhra Pradesh;

• bidding for 1,260 MWp new solar PV projects as below:

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

1. . . . . . . . . . . . Badhla, Phase-II, Jodhpur, Rajasthan 2602. . . . . . . . . . . . Mandsuar, Madhya Pradesh 2503. . . . . . . . . . . . Anantapur, Phase-II, Andhra Pradesh 750

• inviting bids for developing a capacity of 450 kWp rooftop solar PV projects atVindhyachal Madhya Pradesh in addition to undertaking plans to develop a 7.45 MWcapacity potential rooftop solar PV projects at existing projects;

• signing an MoU with the Ministry of New and Renewable Energy (MNRE), NationalInstitute of Wind Energy (NIWE), Powergrid, PFC, IREDA, PTC and GPCL for theformation of a joint venture company for developing offshore wind power in India. As ofthe date of this Offering Circular, a joint venture agreement has been approved by the Boardand approval from other partners is awaited; and

• signing an MoU with the Chattisgarh Renewable Energy Development Agency (CREDA)for the development of the Tattapan Geothermal project in Chattisgarh.

Furthermore the Issuer has also been nominated as the implementing agency by the MNRE forthe selection of developers under the National Solar Mission for a total capacity of 15,000 MW.

Nuclear Power

Together with NPCIL, the Issuer formed a joint venture company called ASHVINI on 27 January2011, with the objective of developing nuclear power projects in India. The Issuer holds 49 per cent.equity in ASHVINI.

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Competition

Due to the historical imbalance between demand and supply in the Indian power sector, there hasgenerally been a stable market for power-generation companies in India. As of 31 March 2015, theIssuer was the largest power-generation company in India, with around 61.2 per cent. of the generatingcapacity in the Central Sector, which itself comprises around 26.69 per cent. of the total Indiangenerating capacity (Source: CEA). Although no single SEU has more installed capacity than theIssuer, the SEUs and the other state-owned generation companies combined have 34.99 per cent. ofthe total installed capacity, whereas private power producers account for 38.32 per cent. (Source:CEA).

The Issuer is the largest power-generating company in the country with a market share ofapproximately 16.3 per cent. as of 31 March 2015, in terms of installed capacity and approximately24.9 per cent. in terms of national generation (Source: CEA). The Maharashtra State Power GenerationCompany Ltd. (Mahagenco), with an installed capacity of 11,237 MW and a market share of 4.2 percent., is the second largest entity as of 31 March 2015 (Source: Mahagenco website).

As of 31 March 2015, private sector capacity of 104,122 MW comprised 67,571 MW of thermalcapacity, 33,857 MW of renewable energy capacity and 2,694 MW of hydroelectric capacity (Source:CEA). Total power generation by private sector thermal power stations for fiscal 2015 was 281.75billion units (Source: CEA). The total generation of the Issuer’s power stations including the stationsoperating under its subsidiaries and joint venture companies during the same period, was 260.58billion units.

Category of Generator

Installed Capacity(MW) as of 31

March 2015% of Total

Installed Capacity

SEBs/Union Territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,079 35

Private Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,122 38

Central Sector (excluding the Issuer) . . . . . . . . . . . . . . . . . . . . . 28,123 11

Issuer (including subsidiary and joint venture companies) . . . . . . 44,398 16

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271,722 100.00

(Source: CEA)

The Electricity Act removed licensing requirements for thermal generators, provided for openaccess to transmission and distribution networks and removed restrictions on the right to build captivegeneration power stations. These reforms provide opportunities for increased private sectorinvolvement in power generation. Specifically, non-discriminatory open access regulations of stateregulatory commissions, which enable generators to sell directly to bulk consumers, has increased thefinancial viability of investment in power generation.

Competitive Bidding

As per the Tariff Policy, with effect from 6 January 2011, all future procurement of generationand transmission services shall be only through tariff-based competitive bidding, except for expansionof existing projects of public sector undertakings (PSUs) and developers of hydroelectric projectswhich will be subject to conditions specified in the Tariff Policy. Exemptions from the competitivebidding route may be adopted in certain transmission projects. For more details, see “Modes ofparticipation in power projects — Bid Route” in the “Regulations and Policies in India” section of theOffering Circular. Projects with PPAs entered before this date shall have tariffs fixed by the CERC.

The Government has also issued the competitive bidding guidelines. Both CPSUs and privatesector developers are participating in the tariff-based bidding process for securing power projects,including coal-fired ultra mega power projects (UMPPs). Such competition is likely to further

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increase in the future. The MoP has issued Standard Bidding Guidelines which envisage two types ofbids, i.e. Case-I bids where the location, technology and fuel is not specified by the procurers and thegenerating company has the freedom to choose the site, technology and fuel for the power plant, andCase-II bids where the projects are location specific and fuel specific.

The MoP had issued the revised the Standard Bidding Documents (SBDs) for procurement ofpower through the competitive bidding route in 2013. The SBDs for long-term power procurementunder the design, build, finance, operate and transfer (DBFOT) mode (earlier Case-II mode) wereissued in September 2013. The SBDs for power procurement under the design, build, finance, own andoperate (DBFOO) mode (earlier Case-I mode) were issued in November 2013.

Based on the revised SBDs, various states have initiated bidding processes under the DBFOT aswell as the DBFOO mode. In December 2014, the state of Kerala concluded a long procurement ofpower using the DBFOO mode. Under the DBFOT mode, a two-stage bidding process for two UMPPs,each with a capacity of 4,000 MW (namely Cheyyur UMPP in the state of Tamil Nadu and OdishaUMPP in the state of Odisha) was started in December 2013; however, this was terminated during thesecond stage of bidding in December 2014. As of the date of this Offering Circular, theCase-II/DBFOT bidding documents are being considered for revision.

Competition in hydroelectric power is also likely to increase due to increased opportunities forprivate investment in the market described above, combined with available hydroelectric potential inIndia.

Funding

The Issuer’s funding operations are designed to ensure the Issuer, at all times, has available thefinancial resources necessary to fund the current and proposed expansion of its generation capacity atthe lowest possible funding cost. The Issuer funded its capital expenditures with equity contributionsby the Government, debt financing, internally generating funds and equity raised from the public. TheIssuer relies on both Rupee and foreign currency-denominated borrowings. These include domesticborrowings in Rupee in the form of loans and bonds and foreign currency-denominated borrowings byway of loans from multilateral and bilateral agencies, export credit for imported equipment, foreigncurrency bonds and syndicated loans. The Issuer has both secured and unsecured borrowings withsecured borrowings being generally Rupee-denominated bonds.

The Issuer’s joint ventures and subsidiaries raise debt financing for the projects executed bythem, without recourse to the Issuer, from domestic financial institutions and banks and these debtsare usually secured over the related project assets.

The following table sets out the secured loans on a consolidated basis as of the dates indicated:

As of 31 March 2015 As of 31 March 2014

Amount(Rs. in millions) (%)


Bonds(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 236,178 59.59 129,040 47.53Loans and Advances from Banks andFinancial Institutions . . . . . . . . . . . . . . . . 160,176 40.41 142,468 52.47Other Loans and Advances(2) . . . . . . . . . . 0 0.00 1 0.00*Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396,354 100.00 271,509 100.00

(1) Domestic bonds are secured (usually over the assets of a particular power station) in order to comply with therequirements of Indian law.

(2) Assets taken on lease.

* Other loans and advances represented 0 per cent. as of 31 March 2015.

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The following table sets out the unsecured loans on a consolidated basis as of the dates indicated:

As of 31 March 2015 As of 31 March 2014



Fixed Deposits . . . . . . . . . . . . . . . . . . . . . 0 0.00 5 0.00Foreign Currency Notes . . . . . . . . . . . . . . 113,742 18.16 78,793 14.51Other Loans and Advances From Banksand Financial InstitutionsDenominated in Foreign Currency(1) . . . . 140,558 22.45 115,986 21.36Denominated in Rupees . . . . . . . . . . . . . . 371,184 59.28 347,634 64.02Other Loans and Advances . . . . . . . . . . . . 681 0.11 623 0.11Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626,165 100.00 543,041 100.00

(1) Includes loans guaranteed by the Government of Rs.21,899 million as of 31 March 2015 and Rs.26,294 million as of

31 March 2014.

Risk Management

Risk Management Policy

To effectively manage the risks associated with its business, the Issuer has taken measures to

institutionalise its risk management process by implementing an elaborate enterprise risk management

(ERM) framework. As part of the implementation of the ERM framework, a Risk Management

Committee (RMC) has been constituted. The RMC, as owner of the ERM framework, has been

entrusted with the responsibility of identifying and reviewing risks, and formulating action plans and

strategies for risk mitigation on both a short-term and long-term basis. The areas identified by the

RMC are regularly monitored through the reporting of key performance indicators of identified risks,

and exceptions with respect to risk assessment criteria are reported to the top management. The RMC

meets quarterly to deliberate on risk-mitigating strategies.

Insurance

All the directly owned coal-fired and gas-fired power stations of the Issuer are covered by a

“Mega Risk” policy, which covers all fire risks together with boiler explosion and machinery

breakdown for all plant and machinery, as well as terrorism cover. This “Mega Risk” policy is based

on international reinsurance and is distributed among four nationalised insurance companies. The

Issuer also maintains a package policy for construction plant and machinery, locomotives and wagons,

including terrorism cover. The total coverage under these policies was Rs.1,678,845 million and the

present “Mega Risk” policy for the operating power stations is valid up to 30 November 2015.

For projects under construction, separate insurance cover is taken by the relevant contractors in

line with the conditions specified in the construction contracts. In addition, the Issuer also maintains

marine insurance for transit materials.

Foreign Exchange

While the Issuer’s principal revenues are in Rupees, it has borrowed funds from outside India in

foreign currencies, primarily U.S. dollars, Japanese yen and Euros. Principal and interest payments on

these borrowings are denominated in the respective foreign currencies. As of 31 March 2015, the

Issuer had Rs.254,300 million equivalent of outstanding foreign currency borrowings.

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Under the 2014-19 Regulations, the Issuer can recover the cost of hedging of foreign currencyloans, and exchange rate fluctuations for unhedged interest payment and the repayment of foreigncurrency loans corresponding to the debt component of capital cost admitted by the CERC. See“Investment Considerations — Risks Relating to India — Depreciation of the Rupee against foreigncurrencies may have an adverse effect on the Issuer’s results of operations.”

Interest Rates

Under the current tariff regulations, interest costs are recoverable through the Issuer’s tariffscorresponding to the debt component of capital cost admitted by the CERC. However, the Issuer issubject to risks arising from a variable interest rate on working capital being payable at a higherinterest rate than is factored into the tariff. Recovery of interest on working capital is based on normsfixed by the CERC. If interest rates on working capital loans were to rise, the Issuer may be unableto recover a portion of the interest through its tariffs.

Work Force

As of 31 March 2015, the Issuer had approximately 24,067 employees, comprising 22,496employees on a standalone basis (including 12,486 executives and 10,010 non-executives) and anadditional 1,571 employees at subsidiaries and joint ventures. The Issuer outsources some of itsperipheral activities as per the requirements of the plant from time to time by awarding job contractsto various agencies. In fiscal 2015, the Issuer had a low attrition rate in its executive workforce, beingapproximately 1.35 per cent on a consolidated basis.

Most of the Issuer’s non-executive workforce is unionised. The unions are registered under theTrade Unions Act, 1926 and function at the various projects and power stations. Most of these unionsare affiliated with major central trade union federations, namely the All India Trade Union Congress,the Bhartiya Mazdoor Sangh, the Centre of Indian Trade Unions, the Indian National Trade UnionCongress and the Hind Mazdoor Sabha. The Issuer considers its relations with its employees to begood. The Issuer has never had any major work stoppage.

The Issuer has been consistently rated as one of the best employers or best companies to workfor in various surveys. In 2014, the Issuer was ranked first in the “best companies to work for”category in the Indian public sector and the energy, oil and gas sectors, as per a study conducted bythe Great Place to Work Institute, India and The Economic Times.

Wages

Pay-scales for all categories of employees were last revised with effect from 1 January 2007,while most allowances were revised with effect from 26 November 2008. In the case of the employeesin the workman category, pay and allowances were revised as per government guidelines after arrivingat a negotiated settlement with the recognised representative unions of the different projects andpower stations.

Some employee benefits are linked to a percentage of basic salary. Therefore, any rise in basicsalary would increase the amount of employee benefits. The dearness allowance, which is acompensation for increases in the cost of living, is based on the All India Consumer Price Index forIndustrial Workers notified by the Government. The dearness allowance was reduced to zero in therevised pay structure on 1 January 2007. As of the date of this Offering Circular, the rate of thedearness allowance was 107.9 per cent. of basic pay, which became effective on 1 October 2015.

Benefits Scheme

Employees of the Issuer are eligible to choose from a set of perks and allowances within a ceilingof 47.0 per cent. of basic pay. In addition, employees also receive various benefits such as companyaccommodation, company-leased accommodation or housing rent allowance, access to a medical

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facility for self and dependants, access to a post-retirement medical facility for self and spouse, accessto recreational facilities in company townships, and loans and advances at favourable terms for thepurchase of items such as a house, a computer, furnishings, household items and for higher educationof children.

Employees are entitled to performance-related payments based on the performance of the Issuer.In the case of employees in the executive category, individual performance as assessed through aperformance management system is also taken into account.

The revision that became effective on 1 January 2007 introduced a pension sum based on adefined contribution pattern. Accordingly, the Issuer contributes 30.0 per cent. of basic pay plusdearness allowance towards superannuation benefits comprising a contributory provident fund,gratuity, post-retirement medical facility and a defined contribution pension. Employees are alsoentitled to statutory pension benefit under the Employees Pension Scheme 1995 of the Governmentand a self-contributory pension scheme of the employees.

Legal and Regulatory Proceedings

The Issuer is involved in a number of legal proceedings in the ordinary course of its business.However, excluding the legal proceedings discussed below, the Issuer is not a party to any proceedingsand no proceedings are known by the Issuer to be contemplated by governmental authorities or thirdparties which, if adversely determined, would have a material adverse effect on the Issuer’s financialcondition or results of operations.

• The Issuer has filed a petition before the Delhi High Court contesting certain provisions ofthe CERC Tariff Regulations. Pending issue of provisional/final tariff orders under the2014-19 Regulations by the CERC and disposal of the petition, sales figures in the amountof Rs.769,529 million have been provisionally recognised in relation to fiscal 2015 (ascompared to Rs.687,040 million for fiscal 2014).

• In respect of power stations where the CERC had issued tariff orders applicable from 1April 2004 to 31 March 2009, the Issuer filed appeals with the Appellate Tribunal forElectricity (APTEL) over some issues on the tariff orders. The APTEL ruled in the Issuer’sfavour, directing the CERC to revise the tariff orders. The CERC filed appeals with theSupreme Court on some of the issues decided in favour of the Issuer. The decision of theSupreme Court is pending. Subsequently, the CERC issued revised tariff orders for all thestations except one, for the period from 2004 until 2009, considering the judgment ofAPTEL and subject to the disposal of appeals pending before the Supreme Court. As theappeal of CERC is pending before the Supreme Court, as of 31 March 2015, the Issuer hasmade provisions for a tariff adjustment of Rs.1,502 million in this regard. Some of thebeneficiaries have filed appeals against the tariff orders of the CERC. The amount ofcontingent liability in this regard is unascertainable.

• The Issuer is defending a number of claims in the Indian courts as a co-defendant of variousstate governments brought by persons who have had their land compulsorily acquired by thestate governments for use by the Issuer. The claimants are disputing the adequacy of thecompensation paid in respect of the land acquisitions. The contingent liabilities as of 31March 2015 in respect of such claims were Rs.3,143 million.

• The Issuer is defending a number of claims in the certain courts or tribunals brought bycontractors hired by the Issuer in respect of capital works. The contingent liabilities as of31 March 2015 in respect of such claims were Rs.81,272 million.

• The Issuer is contesting several disputed tax, sales and excise matters before variousappellate authorities. The contingent liabilities as of 31 March 2015 in respect of suchmatters were Rs.52,595 million.

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• The Issuer is contesting a number of claims made by fuel suppliers, various state andcentral departments, agencies and authorities in respect of various payments such as theprice of coal, fees, taxes, water royalties and other matters. The contingent liabilities as of31 March 2015 in respect of such claims were Rs.23,778 million.

• The Issuer has commenced legal proceedings against RIL in the High Court for failing tohonour a sale and purchase agreement relating to gas supply for the Kawas and Gandharprojects. The Issuer has requested RIL to execute the agreement in accordance with the bidconditions and has sought to restrain RIL from selling gas to any other customer while thematter is pending. As of the date of this Offering Circular, the case is pending.

Intellectual Property

NTPC Energy Technology Research Alliance (NETRA) has been granted two patents in the fieldof fly ash-based detergent and in relation to a novel methodology to determine colloidal silica in rawand demineralised water. NETRA has also filed 20 patent applications in the field of monitoring anddiagnostics, carbon adsorptions and fly ash-based products, among others.

NETRA has been accorded two copyrights, one for an artificial intelligence-based plant datavalidation system for plant process improvement and the other for transformer insulation analysissoftware. Furthermore, as of the date of this Offering Circular, four additional software copyrightapplications have been filed.

Environmental

Overview

Environment initiatives and regulations in India are governed by the National EnvironmentPolicy (NEP) and the Environment Protection Act 1986 (EPA). The Central Pollution Control Board(CPCB) and various State Pollution Control Boards have been entrusted with the responsibility ofenforcing the EPA. A well defined procedure has been laid down for the purpose of issuingenvironment clearance in order to set up a new project with the due involvement of stakeholders aswell as for overseeing the environmental performance of operating plants.

The Issuer adopted a comprehensive written environmental policy and environment managementsystem in 1995. The policy adopts the following principles:

• achieving and maintaining a leading role in the area of environment management in thepower sector;

• taking environmental requirements into consideration in all business decisions;

• continuous adoption of ways and means for environment protection and environmentimprovement in its business units;

• adoption of sound environment management practices; and

• compliance with all statutory norms and requirements.

All directly owned operating stations of the Issuer are ISO-14001 EMS (EnvironmentalManagement Systems) certified and/or IMS certified (an amalgamation of ISO-9001, ISO 14001 andISO-18001). Before the expiration of the validity period of certification, a re-certification processmust be undertaken to renew the same. As part of the ISO 14001 procedure, the certifying agenciesand internal auditors conduct surveillance audits and initiate prompt actions to address auditobservations or recommendations. As of the date of this Offering Circular, no major audit observationsor recommendations were pending for action.

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All operating power stations generally comply with environmental norms and, in the event of any

deviation, appropriate measures are taken.

Most of the operating power stations had valid water and air consent orders as of 30 September

2015 and the consent orders for the remaining operating power stations are at the renewal stage and

are expected shortly.

Furthermore, the Issuer is required to apply for environmental clearances for the setting up of

any power project. All projects under construction have valid environmental clearance from the MoEF

and “No Objection Certificates” from the relevant State Pollution Control Boards.

Environment Management and Sustainable Development

Prior to the commencement of any power project, the Issuer undertakes EIA studies and, based

on the various findings, it develops an environment management plan based on its environmental

policy. The Issuer has a dedicated environmental engineering and environment management group at

its corporate office and environment management group at each power station. The Issuer is committed

to complying with all statutory requirements, environmental regulations and quality standards as per

the guidelines published by the MoEF and the Government from time to time. Its power stations use

boilers and burners designed for better efficiency, and the Issuer uses high efficiency electro-static

precipitators in all its power stations to keep suspended particulate matter below the prescribed limits.

For monitoring the quality of ambient air on a real-time basis, the advanced Ambient Air Quality

Monitoring System has been installed at 22 of the Issuer’s directly owned power stations.

The Issuer has developed a long-term plan to reduce its usage of agricultural and homestead

lands, and has put in place a rehabilitation and resettlement policy. Under this policy, the Issuer seeks

to minimise its land requirements for new power stations. The Issuer also implements policies for

affected communities to advance sustainable income, health, education, sanitation and

communication.

The Issuer has adopted a Sustainability Development Policy and a committee of the Board of

Directors has been constituted to implement sustainable development activities in relation to the

Issuer’s core business. The sustainability development projects of the Issuer cover areas such as

energy management and the promotion of renewable energy, waste management, water management,

bio-diversity conservation, reduction in air emissions and life cycle environmental impact assessment.

Energy Efficiency

The Issuer set up the Centre for Power Efficiency and Environmental Protection (CenPEEP),

with technical assistance from the United States Agency of International Development and the United

States Department of Energy for greenhouse gas reduction. Through the CenPEEP, the Issuer has

demonstrated various state-of-the-art technologies and practices for improving efficiency and

reliability in local conditions, which it has disseminated at power stations through hands-on training,

guidelines and workshops. Approximately 40.25 million tonnes of carbon dioxide emissions are

estimated to have been avoided by the NTPC in the last 19 years.

CenPEEP has also supported some of the state generating companies by demonstrating best

practices and training under the Indo-US bilateral Greenhouse Gas Pollution Prevention Project (GEPProject), the multilateral Asia Pacific Partnership on clean development and climate (APPProgramme) and is supporting some state utilities under the Indo-US bilateral Partnership to Advance

Clean Energy — Deployment (PACE-D) Programme. CenPEEP has been conferred with many

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international and national awards for its efforts in propagating climate-friendly technologies andcommitment to quality and excellence, and received the CTI Technology Award (2002) by CTI-Paris,the US EPA Environmental Projection Award (2003), the India Power Award 2008 by CPU-India andthe International Gold Star Quality Award 2009 by BID International, Madrid. CenPEEP has also beenconferred with the Times of India Earth Care Award 2012 for climate change initiatives in SAARCcountries.

Ash Utilisation

The Issuer’s coal-based power stations in operation as of 3 November 2009 are required toachieve 100 per cent. ash utilisation progressively as per the provisions of the MoEF’s notificationdated 3 November 2009. New power stations and units commissioned after 3 November 2009 mustutilise the entire quantity of ash they produce within four years from the date of commissioning. TheGovernment also has interim ash utilisation requirements. Actual ash utilisation has increased from0.3 million tonnes in fiscal 1992 to 23.4 million tonnes in fiscal 2015 (or 39.5 per cent. of total ashproduction from the Issuer’s directly owned power stations). The Issuer’s fly ash is utilised for themanufacturing of cement, asbestos products and ready-mix concrete, road embankment construction,ash dyke raising, mine filling, bricks, blocks, tile manufacturing, landfills, etc. The Issuer has alsocommissioned a mega fly ash brick manufacturing plant with a capacity of 100,000 bricks per day attwo of its plants.

In order to provide dry fly ash to various users, dry ash extraction facilities have been providedat all of the Issuer’s power stations. The Issuer generally supplies ash on a free-of-cost basis toconsumers of ash, who use it in the cement, asbestos and ready-mix concrete industry, buildingproducts including brick making, land developments, road construction and mine filling, amongothers. At some stations, the Issuer also provides dry fly ash to users of ash at a price dependent onthe market conditions. The Government allows the sale of fly ash to users other than brickmanufacturers. However, the proceeds from the sale of fly ash are to be utilised only for thedevelopment of infrastructure and promotional activities for ash utilisation. The Government hasgiven directions to mining companies and the construction industry for mandatory use of ash. TheIssuer believes that these directions may further increase ash utilisation.

Afforestation

The Issuer undertakes an extensive afforestation initiative, although as of the date of thisOffering Circular, it is under no licensing or other regulatory obligation to do so. The Issuer hasplanted more than 21 million trees in and around its projects. It is also attempting to convertabandoned ash ponds and ash mounds into green areas. The Issuer is the single largest corporate ownerof tree wealth in India.

Project Management

The Issuer has adopted an integrated system for the planning, scheduling, monitoring and controlof approved projects under implementation. To co-ordinate and synchronise all the support functionsof project management, the Issuer relies on a three-tiered project management system known as theIntegrated Project Management Control System (IPMCS), which integrates its engineeringmanagement, contract management and construction management control centres. The IPMCSaddresses all stages of project implementation, from concept to commissioning. The Issuer hasreduced the average implementation time, defined as the period between the award of the boiler,turbine and generator contract and unit commissioning.

The Issuer has established a state-of-the-art IT-enabled Project Monitoring Centre (PMC) for thefacilitation of fast-track project implementation and the monitoring of key project milestones. It alsoacts as a decision support system for the Issuer’s management. PMC is integrated across the Issuer’snetwork as a web-based collaborative system, used to facilitate the consolidation of project-relatedissues and their resolution.

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The Issuer has established an integrated Enterprise Resource Planning (ERP) platform tomonitor and control critical project activities spread across various functions, such as engineering,contracts, finance and execution. This will help in decision-making support through the timelyidentification of critical inputs and provide a holistic approach towards project implementation. TheERP platform is expected to deliver certain benefits, such as the focused monitoring of various inputsincluding drawings, materials and execution with respect to major project milestones.

The Issuer has also successfully effected standardisation and bulk ordering in relation tocapacities of 660 MW and 800 MW in order to reduce engineering time and thereby reduce projectexecution time. The Issuer has, as of the date of this Offering Circular, awarded nine 660 MW unitsat Solapur and Mouda in Maharashtra, Meja in Uttar Pradesh (a joint venture with UPRVNL) andNabinagar in Bihar (a joint venture with BSEB) and nine 800 MW units at Kudgi in Karnataka, Larain Chhattisgarh, Darlipalli in Odisha and Gadarwara in Madhya Pradesh.

Engineering and Technology

Energy Technologies

The Issuer’s engineering division has been accredited with ISO-9001 certification by the UnitedKingdom Accreditation Service and the National Accreditation Board of Classification Bodies. It haspioneered the adoption of several new technologies including combined cycle gas-fired powerstations, a distributed digital control and management information system (DDCMIS), high-voltagedirect current (HVDC) transmissions, sliding pressure operation of steam generators, dry ashextraction and disposal, 765 kV switchyards, performance analysis and diagnostic optimisation(PADO), ash water recirculation, liquid waste management systems and supercritical technology.These technologies have contributed to increased efficiency and greater environmental protection inthe Issuer’s operations and have been adopted more widely in the Indian power industry.

As of the date of this Offering Circular, some of the new technologies that the Issuer wasadopting include:

• supercritical parameters with further improved steam parameters for the fleet of 660 MW/800 MW units designed to increase efficiency and lower emissions compared toconventional units;

• high concentration ash slurry disposal and the use of high concentration ash slurry as liningin ash dyke;

• wet lime stone-based flue gas de-sulphurisation for its Bongaigaon project and for Stage-Vof the Vindyachal Super Thermal Power project (STPP), to contain the emission of sulphuroxide gases;

• energy efficient technologies such as high efficiency motors, VFD drives and an energymanagement system; and

• DDCMIS-based plant offsite controls and numerical relays.

The Issuer is also undertaking the following new technological initiatives:

• preparing a detailed project report of a solar thermal hybrid application involving aproposal to inject solar heat into the feed water cycle at one of its power stations;

• working towards building an indigenous advanced ultra-super technology (310 kg/cm2,710˚C/720˚C being the steam parameter) under the proposed national mission on clean coal(carbon) technologies through an MoU entered between the Issuer, BHEL and IGCAR; and

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• working towards building an integrated gasification combined cycle (IGCC) technologydemonstration plant based on high ash Indian coal.

Information Technology

The Issuer has invested heavily in information technology designed to help it to better monitorand run its business. It has deployed an ERP system across its organisation to carry out businesstransactions and to integrate various business processes. The ERP platform also provides a real-timeand close view of the performance of the Issuer’s power stations. The ERP system is deployed througha centralised data centre located at Noida with a full disaster recovery centre in Hyderabad. The Issueralso maintains a robust communication network between its sites and corporate office to enablesmooth conduct of its business transactions and management of information systems.

Research and development

The Issuer intends to continue with its applied research to improve the performance of its powerstations. It intends to invest up to 1.0 per cent. of its annual profit after tax in research anddevelopment initiatives including an investment of 0.5 per cent. in research related to “clean coal” andclimate change related research. These research initiatives are outlined further below.

NTPC Energy Technology Research Alliance (NETRA)

In fiscal 2009, the Issuer established NETRA, a state-of-the-art centre set up to developtechnologies in the power sector and provide scientific support to its generating power stations.NETRA’s work is focused in the areas of climate change, waste management, waste heat recovery, newand renewable energies, economical power generation designed to improve efficiency and networkedresearch, all of which are designed to provide a complete spectrum of scientific services to enable theIssuer’s power stations to retain their technological edge. NETRA also provides scientific services toother national and international utilities, and to power stations in the field of condition monitoring,power station health assessment, corrosion control and specialised analysis.

NETRA is also working on developing technologies for artificial intelligence-based plantperformance advisory systems and an expert system for real-time monitoring of steam cycle chemistry,a radio frequency identification (RFID) based fish plate removal detection system, carbon dioxidefixation and utilisation, solar thermal for power and air-conditioning, solar photovoltaic, integratedbiodiesel plant, conversion of municipal solid waste to energy, liquid ammonia binary cycle,robotic-based automatic devices for speedier inspections of power station equipment, computationalfluid dynamic modelling to improve plant efficiency and reduce auxiliary power consumption and apolarisation-depolarisation current-recovery voltage measurement-based expert system fortransformer condition monitoring.

NETRA has taken up initiatives for setting up pilot plants such as the 40 TR solar thermalplatforms, fixation of carbon dioxide through micro algae and ash mineralisation, the 100 TR FGHRplant through low-grade heat recovery, heat pipe based air pre-heater (APH), pressure swingadsorption (PSA) based CO2 capture technology, etc. NETRA’s laboratories are ISO 17025 accreditedand provide high-end scientific services to all the Issuer’s stations as well as many outside stationsresulting in improved availability and reliability of stations by providing condition assessment, failureanalysis, corrosion control and problem solving.

NETRA has been granted two patents in the field of fly ash-based detergent and a novelmethodology to determine colloidal silica in raw and demineralised water. NETRA has filed 20 patentapplications in the fields of monitoring and diagnostics, carbon adsorptions, fly ash-based products,robotics, variable frequency drive, solar air-conditioning and air-pollution control, among others.Furthermore, NETRA has been accorded two copyrights, one for an artificial intelligence-based plantperformance improvement system and the other for transformer insulation analysis software.

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Corporate Social Responsibility

The Issuer follows the global practice of addressing corporate social responsibility (CSR) issuesin an integrated multi-stakeholder approach, covering the environmental and social aspects. It is amember of the Global Compact, a United Nations initiative and is committed to following its tenprinciples in the areas of human rights, labour standards, the environment and anti-corruption. It alsosubmits communications on progress to Global Compact on an annual basis.

Corporate social responsibility and sustainability programmes undertaken by the Issuer includeactivities specified in Schedule VII of the Companies Act 2013 and rules made thereunder and anyother activity for the benefit of the community at large. Focus areas of the Issuer’s corporate socialresponsibility and sustainability activities include health, sanitation, drinking water, education,capacity building, empowerment of women, social infrastructure development, support to physicallychallenged persons, and activities contributing towards environmental sustainability.

The Issuer is committed to contributing to society and discharging its corporate socialresponsibilities through initiatives that have a positive impact on the society at large, especially in theneighbourhood of its operation, by improving the quality of life of the people, promoting inclusivegrowth and ensuring environmental sustainability.

Preference for corporate social responsibility and sustainability activities is given to local areassurrounding the Issuer’s operations. Therefore, the Issuer ensures that the majority of the CSR fundsis spent on activities in local areas. However, considering inclusive growth and environmentalsustainability and to supplement Governmental efforts, the Issuer’s CSR activities can be taken upanywhere in the country.

During fiscal 2015, special impetus was applied to the “Swachh Vidyalaya Abhiyan” for theconstruction of 24,800 toilets in 15,200 Government schools in 17 states and 83 districts across thecountry.

In line with its CSR community development policy, the Issuer has taken up various activitiesaddressing the socio-economic concerns at a national level as well as in the neighbourhood areas ofoperating power stations. As of the date of this Offering Circular, the Issuer worked in the areas ofeducation, community health, drinking water, sanitation, social infrastructure, empowerment ofwomen, vocational training, environment sustainability, etc. for underprivileged sections of Indiansociety in underdeveloped areas of the country. It also facilitates distributed generation, whichinvolves the use of non-conventional energy sources to provide electricity to remote and rural areas.In the area of education, the Issuer has provided support for the establishment of engineering collegesand polytechnics. Furthermore, in the area of health, the Issuer has provided support for theimprovement in the available infrastructure for hospitals at various locations. The Issuer providesfinancial support to preserve sites of historical heritage and helps in the construction of communitycentres, rural roads, culverts, bus stands and lakes in the areas surrounding the location of its plantsin addition to providing vocational training to local youths.

The Issuer has also set up the NTPC Foundation to help those who are disabled and othermarginalised communities. This foundation has set up information and communication technologycentres for the disabled, provided management services to a disability rehabilitation centre, and isrunning directly observable treatment (DOT) centres for tuberculosis patients.

Sectoral Support

The Issuer has participated in a variety of programmes to further develop and support the powersector in India. It has participated in the MoP’s “Partnership in Excellence Programme” under whichit partners with a local state utility to assist in turnaround efforts of under-performing power stations.

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ITI adoption to improve the quality of India’s skilled workforce

The Industrial Training Institutes (ITIs) provide vocational education in India. The Issuer is

participating in an initiative of the MoP to upgrade the ITIs. Under this programme, it has “adopted”

17 ITIs and plans to set up seven new ITIs near its project locations.

Subsidiaries

The Issuer has five subsidiaries, two of which are wholly owned and, in the remaining three, the

Issuer has a majority shareholding. Although the current level of activity of the subsidiaries is

relatively small in comparison with the operations of the Issuer, they form part of the Issuer’s

diversification plans.

NTPC Electric Supply Company Limited (NESCL)

The Issuer incorporated NESCL, a wholly owned subsidiary, on 21 August 2002 with an

objective to make a foray into the business of distribution and supply of electrical energy as a sequel

to reforms initiated in the power sector. NESCL’s primary goal was to provide consultancy services

for the implementation of turnkey projects under the Rajiv Gandhi Grameen Vidyutikaran Yojana

(RGGVY Programme), the supply of electricity in a 5km area around some of the Issuer’s power

stations, the turnkey execution of power supply arrangements for the coal mining projects of the

Issuer, the turnkey execution of sub-stations for utilities and project management consultancy

projects. On 24 March 2015 the shareholders of NESCL approved the transfer of its existing business

of work under the RGGVY and other consultancy works to the Issuer. NESCL’s joint venture company

with KINFRA, called KINESCO Power and Utilities Pvt. Ltd., is engaged in the retail distribution of

power in industrial parks developed by KINFRA, in SEZs and in other industrial areas. As of the date

of this Offering Circular, NESCL is considering plans to disassociate itself from KINFRA. During

fiscal 2015, NESCL posted a profit after tax of Rs.12.6 million on a gross income of Rs.236.4 million.

NTPC Vidyut Vyapar Nigam Limited (NVVN)

The Issuer’s wholly owned subsidiary NVVN was incorporated on 1 November 2002 to

undertake power trading. Its main objective was to develop a wholesale power market by providing

fair, transparent, secure and reliable systems for power trading. Since its incorporation, it has traded

with major state distribution utilities all over the country and, in fiscal 2015, NVVN traded 10,315

MUs and transacted business with more than 100 customers, including many state government

utilities, private power utilities and captive power generators across the country. NVVN was

designated as the “Nodal Agency” for the first phase of the National Solar Mission for 2010-13 for

1,000 MW and for the sale of such power to the distribution utilities after bundling with equivalent

power at the disposal of the Government from the Issuer’s coal power stations. In fiscal 2015, NVVN

also traded 5,175 MUs of bundled power under the National Solar Mission. Power purchase

agreements with 78 projects for 1,000 MW capacity have been entered into, of which 718 MW of solar

PV and thermal capacity has been commissioned (being 518 MW of solar PV and 200 MW of solar

thermal capacity). NVVN has also been designated as the Nodal Agency for cross-border trading with

Bhutan and Bangladesh. In fiscal 2015, NVVN traded 1,745 MUs with Bangladesh. NVVN also sold

fly ash from the Issuer’s coal stations, mainly to cement and concrete manufacturers, selling 3,622,028

tonnes of fly ash and 365 tonnes of cenosphere during fiscal 2015. The business of fly ash and ash

products disposal through sales has since been transferred to the Issuer with effect from 1 January

2015 in order to enhance better co-ordination with potential fly ash users. In fiscal 2015, NVVN

earned a gross income of Rs.38,879.7 million and a profit after tax of Rs.436.1 million. In fiscal 2015,

the Issuer received a dividend of Rs.200 million from NVVN.

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Kanti Bijlee Utpadan Nigam Limited

Vaishali Power Generating Company Ltd. was incorporated on 6 September 2006 as a subsidiaryof the Issuer, with the Bihar State Power Generation Company Limited (BSPGCL) (the former BiharState Electricity Board (BSEB) holding a minority share), to acquire and revive the MuzaffarpurThermal Power Station (2 x 110 MW). The company was renamed “Kanti Bijlee Utpadan NigamLimited” (KBUNL) on 10 April 2008. The Issuer presently holds 65 per cent. of the equity in KBUNLand the remaining 35 per cent. is held by BSPGCL.

The two 110 MW units have been declared commercially operational and, on 31 March 2015, unit3 was synchronised. As of the date of this Offering Circular, the construction of unit 4 is underprogress.

During fiscal 2015, KBUNL earned a gross income of Rs.4,604.5 million and a profit after taxof Rs.172.4 million.

Bhartiya Rail Bijlee Company Limited (BRBCL)

BRBCL was incorporated on 22 November 2007 as a majority-owned subsidiary of the Issuer toengage in the business of the planning, promotion and organisation of the integrated and efficientdevelopment of electric power to meet the electric power requirements of the Indian railways. TheIssuer holds 74 per cent. of the equity of BRBCL and the Ministry of Railways (MoR) holds theremaining 26 per cent. As of the date of this Offering Circular, BRBCL was constructing a coal-firedpower station with an installed capacity of 1,000 MW at Nabinagar in the state of Bihar. Power fromthe project will be supplied to the Indian railways and the state of Bihar.

Patratu Vidyut Utpadan Nigam Limited (PVUNL)

PVUNL was incorporated on 15 October 2015 and is a 74:26 joint venture of the Issuer and theJharkhand Bijli Vitran Nigam Limited (JBVNL). The objective of PVUNL is to acquire, establish,operate, maintain, revive, refurbish, renovate and modernise the performance of existing units andfurther expand the capacity of the Patratu Thermal Power Station, in the Ramgarh district ofJharkhand. PVUNL has an initial authorised capital of Rs.1 million.

Joint Venture Companies

As of the date of this Offering Circular, the Issuer had 21 joint venture companies, nine of whichare in commercial operation. None are material in the context of the Issuer’s current operations.

Utility Powertech Limited (UPL)

UPL is a joint venture company incorporated on 23 November 1995 and is a 50:50 joint ventureof the Issuer and Reliance Infrastructure Limited. The objective of UPL is to provide basic andvalue-added services for the sustained growth of power and other infrastructural sector. The grossincome and profit after tax of UPL for fiscal 2015 was Rs.5,907.8 million and Rs.232.2 million,respectively. The Issuer received a dividend of Rs.70 million during fiscal 2015 from UPL.

NTPC-SAIL Power Company Private Limited (NSPCL)

NSPCL, a 50:50 joint venture company of the Issuer and SAIL, was incorporated on 8 February1999 for running the captive power stations of SAIL at Durgapur and Rourkela. NSPCL became a jointventure company with effect from 22 March 2001 with the transfer of 50 per cent. of shares in thecompany to the Issuer. In 2006, Bhilai Electric Supply Company Private Limited (BESCL), anotherjoint venture of the Issuer and SAIL, merged with NSPCL. NSPCL owns and operates the powerstations that have a combined installed capacity of 814 MW, of which 314 MW is allocated towardscaptive use by SAIL’s steel manufacturing facilities located at Durgapur, Rourkela and Bhilai and the

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remaining 500 MW is allocated to four beneficiaries, namely the Bhilai steel plant, Daman and Diu,Dadra Nagar state utilities, and Chattisgarh State Electricity Board. As of the date of this OfferingCircular, NSPCL was processing the addition of new coal-based capacity at Rourkela, Durgapur,Salem and Bhilai. In fiscal 2015, NSPCL posted a profit after tax of Rs.2,274.1 million and grossincome of Rs.16,229.9 million. In fiscal 2015, the Issuer received a dividend of Rs.831.4 million fromNSPCL.

NTPC Alstom Power Services Private Limited (NASL)

NASL is a 50:50 joint venture company between the Issuer and Alstom Power Generation AG.NASL was formed on 27 September 1999 for the purposes of renovating and modernising powerstations in India and SAARC countries. NASL is authorised to engage in the business of renovation,modernisation, operations, maintenance and management of power stations and related equipment.During fiscal 2015, NASL earned a profit after tax of Rs.26.2 million on a gross income of Rs.698.5million. In fiscal 2015, the Issuer received a dividend of Rs.6 million from NASL.

Ratnagiri Gas and Power Private Limited (RGPPL)

As a part of the revival and restructuring of assets of Dabhol Power Company Limited (DPCL),the Issuer, GAIL, various Indian financial institutions and MSEB Holding Co. Ltd. formed a jointventure company named RGPPL on 8 July 2005. As of the date of this Offering Circular, the Issuerhad a 25.51 per cent. share in the equity of RGPPL. Projects then engaged in by DPCL were indifferent stages of completion when the construction works were stopped abruptly due to disputes withthe sole off-taker and the projects were abandoned by the owners in June 2001. On 6 October 2005,RGPPL took over the assets of DPCL free of past liabilities and encumbrances through a consent route,under an order of the Bombay High Court. RGPPL’s assets consist of a 1,967 MW combined cyclepower station along with an integrated five million-tonne-per-annum liquefied natural gas (LNG)regasification terminal located at Anjanwel, which is located approximately 340 kilometres south ofMumbai. Since 12 September 2014, the plant has been shut down due to a lack of funds. In accordancewith the shareholder agreement dated 28 September 2005, due to non-payment of loans and interest,a loan of Rs.8,553.7 million that was due on 30 June 2015 was converted into equity. After conversion,the paid-up share capital of the company as of 30 June 2015 increased to Rs.3,820.27 crore and theIssuer’s stake was reduced to 25.51 per cent. Based on the Government scheme for utilisation of gasbased operation capacity for fiscals 2016 and 2017, the MoP allocated 500 MW of power from theproject to the Indian railways for fiscals 2016 and 2017. As of the date of this Offering Circular, therailways are awaiting certain waivers of duties from the Maharashtra Government and regulatorydispensations in order to commence this power supply. Furthermore the project lenders have proposedthe demerger of the LNG terminal and power block to improve the financial viability of the companyand additional borrowings are required for construction purposes to enable full potential utilisation ofthe LNG terminal. As per unaudited financials for fiscal 2015, RGPPL earned a gross income ofRs.1,817.3 million and incurred a loss of Rs.14,017.2 million.

Transformers & Electricals Kerala Limited (TELK)

TELK was incorporated on 19 December 1963 under the Companies Act. TELK is authorised toengage in the manufacture of heavy electrical equipment, such as power transformers of capacityratings of up to 315 MVA and other electrical and allied activities. In line with the businesscollaboration and shareholders’ agreement executed on 23 June 2007 between the Issuer, thegovernment of Kerala and TELK, the Issuer acquired 44.6 per cent. of the paid-up capital of TELKfrom the government of Kerala during the period of 2009 to 2010. In fiscal 2015, TELK earned a grossincome of Rs.1,323.5 million and incurred a loss of Rs.329.3 million.

Aravali Power Company Private Limited (APCPL)

APCPL was incorporated on 21 December 2006 as a 50:25:25 joint venture company between theIssuer, Haryana Power Generation Corporation Limited and Indraprastha Power Generation Company

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Limited. APCPL is engaged in the operation of 3 x 500 MW Indira Gandhi Super Thermal Power

Project (IGSTPP) in the state of Haryana. APCPL has also been granted a transmission licence for the

operation of the 400 kV DC Jhajjar- Mundka transmission line. In fiscal 2015, APCPL achieved a

gross income of Rs.44,514.0 million and earned profit after tax of Rs.1,798.5 million.

NTPC BHEL Power Projects Private Limited (NTPC-BHEL)

NTPC-BHEL was incorporated on 28 April 2008 in which the Issuer and BHEL each hold a 50

per cent. interest. NTPC-BHEL is formed to explore, secure and execute EPC contracts for power

plants and other infrastructure projects in India and abroad, including plant engineering, project

management, quality assurance, quality control, procurement, logistics, site management, erection and

commissioning services. In fiscal 2015, NTPC-BHEL achieved a gross income of Rs.5,925.2 million

and profit after tax of Rs.16.6 million.

Energy Efficiency Services Limited (EESL)

The joint venture company EESL was formed on 10 December 2009 in which each of the Issuer,

PFC, PGCIL and REC holds 25 per cent. interest. EESL is authorised to engage in the business of

carrying on and promoting business of energy efficiency and climate change, including the

manufacture and supply of energy efficiency services and products and the provision consultancy

services in relation to the same. In fiscal 2015, EESL generated a gross income of Rs.703.0 million

and a profit of Rs.103.6 million.

NTPC Tamil Nadu Energy Company Ltd. (NTECL)

NTECL is a joint venture between the Issuer and the Tamil Nadu Electricity Board (TNEB) with

a 50:50 shareholding. NTECL was incorporated in 2003 for the development and operation of a

1,500 MW power project at Vallur, Tamil Nadu. In fiscal 2015, NTECL earned a total revenue of

Rs.19,728.1 million and incurred a loss of Rs.867.8 million.

The table below sets out certain information on the Issuer’s other joint venture companies, each

of which is yet to commence commercial operation. See also “Investment Considerations —

Cancellation of the allocation of coal mines of the Issuer could adversely affect the Issuer’s business,

financial condition and results of operation”.

Name Date of Incorporation Nature of Business

Interest held bythe Issuer as of31 March 2015

Meja Urja NigamPrivate Limited . . . . . .

2 April 2008 Setting up of a power station withan installed capacity of 1,320 MWat Meja, Uttar Pradesh. Allsignificant clearances includingMoEF clearance for the projecthave been obtained and land forthe power station has beenacquired. Award of main plantequipment has been made andmajor BoP packages have beenplaced. Construction work is inprogress.

50 per cent.

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BF-NTPC EnergySystems Limited . . . . .

19 June 2008 Establishment of a facility to takeup the manufacturing of castings,forgings, fittings andhigh-pressure piping required forpower projects and otherindustries, including BoPequipment for the power. Due todelay in receipt of clearances fornew projects, the Issuer iscontemplating various businessalternatives, subject to receipt ofMoP approval.

49 per cent.

Nabinagar PowerGenerating CompanyPrivate Limited . . . . . .

9 September 2008 Establishment of a power projectat New Nabinagar, Bihar with acapacity of 1,980 MW (3 x 660MW). Construction work is inprogress at the site.

50 per cent.

National PowerExchange Limited . . . .

11 December 2008 Establishment and operation of anational power exchange. In viewof the recent changes in marketconditions, and the fact that theIssuer’s objective of forming ajoint venture has not been met asof the date of this OfferingCircular, the Issuer has decided toexit National Power Exchange Ltd.The management of the jointventure company has decided onthe voluntary winding-up of thecompany on the recommendationof the promoters.

16.67 per cent.

NTPC-SCCL GlobalVenture Private Limited

31 July 2007 Mining activities of all forms forthe supply of fuels to the Issuerand other purchasers. The Issuerhas decided to exit from thecompany.

50 per cent.

International CoalVentures PrivateLimited* . . . . . . . . . . .

20 May 2009 Overseas acquisition and/oroperation of coal mines orblocks/companies for securingcoking and thermal coal supplies.The Issuer has decided to exitInternational Coal Ventures Pvt.Ltd. The Issuer received approvalto opt out of the joint venture fromthe MoP on 11 November 2011.International Coal Ventures Pvt.Ltd. is taking action to obtain therequisite approvals.

0.27 per cent.

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National High PowerTest Laboratory PrivateLimited . . . . . . . . . . . .

22 May 2009 Planning, promoting, organisingestablishing, constructing,integrating and developing anonline high-power test laboratoryfacility in India and/or abroad forthe testing and certification ofshort circuits and other testing ofelectrical equipment. The projectimplementation work is inprogress. CPRI has been inductedas the fifth equity partner. The sitefor setting up the laboratory islocated at Bina, Madhya Pradesh.

21.63 per cent.

CIL NTPC Urja PrivateLimited . . . . . . . . . . . .

27 April 2010 Development and operation of theBrahmini and Chichro-Patsimalcoal blocks with geologicalreserves of around 2 billion tonnesto meet the requirements of theIssuer’s Farakka and Kahalgaonexpansion projects and thereafter,if found feasible, consider powerproduction. These blocks havesince been deallocated by theGovernment and assigned to CILwhich has been asked to submit thetimeframe in which these blocksare expected to start production.As of the date of this OfferingCircular, the Issuer is following upwith the MoP for the reallocationof these coal blocks to the jointventure company or to the Issueritself.

50 per cent.

Anushakti VidhyutNigam Limited . . . . . . .

27 January 2011 Setting up nuclear power projectsin India. The project site has beenfinalised and physical possessionof land has been completed, atopographical survey has beencompleted and geotechnicalinvestigation is in progress. As ofthe date of this Offering Circular,the project activities are yet tocommence, as NPCIL’S proposalfor allocation of the project to thejoint venture company is pendingwith the Department of AtomicEnergy.

49 per cent.

Trincomalee PowerCompany Limited . . . . .

26 September 2011 Setting up a 2 x 250 MWcoal-based power project inTrincomalee region in Sri Lanka.

50 per cent.

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Pan-Asian RenewablesPrivate Limited . . . . . .

14 October 2011 Development of renewable energyprojects and establishment of aportfolio of about 500 MW ofrenewable power generationresources in India over an initialperiod of three years. The Issuerhas decided to exit from thecompany. The management of thejoint venture company has decidedon the voluntary winding-up of thecompany on the recommendationof the promoters.

50 per cent.

Bangladesh IndiaFriendship PowerCompany Pvt. Ltd. . . . .

31 October 2012 A joint venture company betweenthe Issuer and Bangladesh PowerDevelopment Board, which hasbeen incorporated for the purposesof the development,implementation, operation andmaintenance of the project inBangladesh on a build, own andoperate basis. As of the date of thisOffering Circular, the companywas developing a 2 x 660 MWcoal-based power project atKhulna, Bangladesh. In relation tothis, a notice inviting tender waspublished on 12 February 2015 andthe company is in the process ofinviting bids to implement theproject.

50 per cent.

Management

The Board

In accordance with its articles of association, the Issuer is managed by the Board. The articlesof association require the Issuer to have not fewer than four and not more than 20 directors. As of thedate of this Offering Circular, the Board comprises eight directors. Out of these, five are full-timefunctional directors, including the CMD, two are part-time directors nominated by the Governmentand one is a non-official part-time director (an Independent Director) appointed by the Government.

Functional Directors

(1) Mr. A.K. Jha

Mr. A.K. Jha (58 years), Director (Technical), is a graduate in mechanical engineering from theBirsa Institute of Technology Sindri, Ranchi University (1977) and has an LLB degree from DelhiUniversity (1996). He joined NTPC in 1977 as a second batch executive trainee. He was directlyassociated with NTPC’s flagship project, Singrauli (5 x 200 MW), as part of the construction team.He has rich and varied experience of 38 years in NTPC in all areas of power projects, including designand engineering, project planning and monitoring and project construction and management.

He has served as the Regional Executive Director (North), where he was responsible formanaging the entire portfolio for the northern region, including four generating stations (5,490 MW),two ongoing projects (1,008 MW) and four upcoming new projects (4,460 MW). As ExecutiveDirector (Project Planning and Monitoring), he has overseen the planning and monitoring of the entireportfolio of NTPC’s capacity addition programme.

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He joined the Board of NTPC in July 2012 as a Director (Technical). He is responsible for theconcept-to-investment approval of projects, the completion of engineering during the development ofa project, engineering support during the operations and maintenance phase of a station and forengineering with regard to the renovation and modernisation of NTPC’s aged power stations, andenhancing the life and efficiency of power plants, in respect of the entire NTPC portfolio, namelythermal, hydro and renewables. With reference to the renewables portfolio, he oversees areas of policyadvocacy, business development, project contracting, engineering and commissioning. He is alsoresponsible for research and development through NTPC’s Energy Technology and Research Alliance(NETRA), the induction of environment-friendly technologies like the ultra-supercritical andadvanced ultra-supercritical technologies and undertaking information technology initiativesincluding enterprise resource planning and environmental engineering.

Since 1 September 2015 he has held the additional positions of Chairman and Managing Director.

(2) Mr. U.P. Pani

Mr. U.P. Pani (59 years), Director (Human Resources), is a graduate in electrical engineeringfrom the Birla Institute of Technology and Science, Pilani (1978) and joined NTPC in November 1978as a third batch executive trainee. He has worked in the areas of construction, rehabilitation andresettlement, and in the technical services department of Korba STPS and Talchar STPS. He has alsoworked as the Business Unit Head of NSPCL, a joint venture between NTPC and SAIL, at Bhilai andDurgapur and headed the NTPC Kahalgaon project. During his tenure, all three 500 MW units ofKahalgaon Stage-II were commercialised. Furthermore, he was the Project Head of NTPC’s biggestplant, Vindhyachal STPP. On 15 March 2010, Mr. Pani took over as the Regional Executive Director(Eastern Region-I) and was responsible for the overall functioning of a number of NTPC’s regionalprojects and projects involving various subsidiaries and joint ventures of NTPC.

As Business Unit Head in the capacity of General Manager and Regional Executive Director atvarious locations and regions, he has also been responsible for various human resources (HR)functions and has steered a number of HR initiatives.

As Director (HR), Mr. Pani is responsible for the HR functions of NTPC. He is also responsiblefor NTPC’s Power Management Institute and other corporate functions, namely resettlement andrehabilitation, land acquisition, corporate social responsibility activities, infrastructure development,medical services and corporate security and co-ordination.

Since 2 September 2015 he has held the additional position of Director (Commercial).

(3) Mr. S. C. Pandey

Mr. S.C. Pandey (58 years), is a graduate in engineering in the area of instrumentation from PuneUniversity. He joined NTPC in November 1978 as a third batch executive trainee. He has over 34 yearsof comprehensive experience in the management of large power projects, including in the areas ofengineering, project construction and power plant operation and maintenance. He has a strongbackground in managing, operating and maintaining some of the largest stations in the country andalso has experience of setting up greenfield projects. He was associated with the erection,commissioning and operation of NTPC’s first thermal power project at Singrauli.

Mr. Pandey’s experience in the power sector includes ten years of senior management levelexperience as the ‘Business Unit Head’ for India’s largest project, Vindhyachal, Ramagundam andSimhadri STPP, as the Engineering Head and as a Regional Head of NTPC projects for EasternRegion-II and the Western Region.

Mr. Pandey has attended several overseas managerial and leadership programmes and technicaltraining programmes to enhance his strategic leadership qualities, broaden his vision and to gain aninsight into the complex national and global business environment. He joined the Board of

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NTPC on 1 October 2013 as Director (Projects). As Director (Projects), he is responsible for theproject planning, execution and implementation of over 23,000 MW projects under construction at 22different locations across the country, and the strategic planning of projects involving a capacity of40,000 MW as well as new projects at various stages.

(4) Mr. Kulamani Biswal

Mr. Kulamani Biswal (54 years), Director (Finance), is a commerce graduate and a fellowmember of the Institute of Cost Accountants of India. He also has a master’s degree in businessadministration from the New Port University of California, USA, a bachelor’s degree in law and adiploma in financial management. Mr. Biswal has vast experience in finance and over 30 years ofexperience in the coal and power sectors and in regulatory affairs. Prior to joining NTPC, he was theDirector (Finance) at Mahanadi Coalfields Limited (MCL) between October 2010 and December 2013and has long experience in the areas of supply, distribution, generation and regulatory affairs. He tookover the post of Director (Finance) at NTPC on 9 December 2013.

Mr. Biswal is responsible for the financial management of the organisation, including financialresource mobilisation from domestic and global sources, ensuring the optimum utilisation of funds,budgetary controls, investment decisions, and the compilation of accounts and audits by statutory andGovernment auditors. As the chief financial officer, he is also responsible for the establishment ofinternal control systems and compliance and he plays an active role in the strategic decisions of theIssuer.

During his stint as the Chief Financial Officer of the Issuer and as a member of the Board, hismajor achievements included raising funds from domestic and international markets on competitiveterms, rewarding shareholders by issuing bonus debentures (being a first of its kind in India by anypublic sector undertaking). Under his leadership, the Issuer has embarked upon various other areas ofbusiness, including business in relation to solar, coal mining and distribution. He has been appointedthe “Owner” under the provisions of the Mines Act, 1952 for the development, operation andmanagement of coal mines allocated to the Issuer.

Mr. Biswal’s leadership has brought the Issuer various plaudits and awards, some of whichinclude: ‘The Best CMA-CFO’ in the public sector undertaking (manufacturing) category by TheInstitute of Cost Accountants of India; the ‘CFO of the Year’ Award by EPC World, with Ernst &Young as the knowledge partner; the GSBA-Top Rankers Excellence Award 2015; the ‘Financial Prideof India’; and the BT-STAR PSU ‘Director Finance of the Year’ Award (Maharatna and Navratna),among others.

During his tenure, the Institute of Chartered Accounts of India conferred on the Issuer the awardfor ‘Excellence in Financial Reporting’ for the year 2013-14 in the infrastructure and constructioncategory for turnover equal to or more than Rs.5,000 million) and the ‘Golden Peacock Global Award’for excellence in corporate governance in the year 2014 in London.

(5) Mr. Kaushal Kishore Sharma

Mr. Kaushal Kishore Sharma (58 years), Director (Operations), is a graduate in mechanicalengineering and has a master’s degree in business administration in finance. He has had a careerspanning over 39 years providing a significant contribution to the areas of mega-budgets for thermal,hydro power and coal mining projects as a professional manager and as a strategic planner andbusiness leader. He has led several strategic initiatives in the execution of projects which have led tothe achievement of operational excellence.

Mr. Sharma was the Business Unit Head of NSPCL’s Durgapur station, General Manager of theFarakka Super Thermal Power Station and General Manager of the Koldam Hydro Electric PowerProject of the Issuer. He was also the regional Executive Director (Hydro Region), Executive Director(Coal Mining/Coal Washeries), Regional Executive Director (East Region-II), and Executive Director

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(Project Planning and Monitoring) of the Issuer, and the Chief Executive Officer of NSPCL. Mr.Sharma, through his multi-disciplinary approach to engineering, operations, management and finance,has brought about a turnaround in NSPCL’s Durgapur station by ramping up the pay load factor from63 per cent. to 81 per cent. and in respect of the Farakka Super Thermal Power Station from 69 percent. to 81 per cent. He has played a pivotal role in resolving resettlement and rehabilitation issuesin Koldam, getting forest and environmental clearances for the captive mines of the Issuer, evolvingbusiness processes for mining development, constructing green field projects, implementing thesystems applications and products in data processing software and introducing the enterprise resourceplanning modules for the online monitoring of projects.

As Director (Operations), Mr. Sharma is responsible for all activities relating to sustainedoperations, including fuel management, of the Issuer’s thermal, hydro and solar power stations.

Part-Time Directors (Government Nominees)

(1) Dr. Pradeep Kumar

Dr. Pradeep Kumar (54 years), an Indian Administrative Service (IAS) Officer of the Keralacadre, has a bachelor of technology degree in electronics, and holds a master’s degree in businessadministration and a master’s diploma in public administration and governance and a doctorate in thearea of integrated freight transport planning.

During a career spanning 27 years as an IAS officer, Mr. Kumar held various administrativepositions in the areas of revenue, finance, transport, shipping, inland-water transportation, waterresources, irrigation, food and civil supplies, consumer affairs and environment and forests. Prior tojoining as the Joint Secretary and Financial Adviser, MoP, he was the Principal Secretary at theEnvironment and Forest Department of the government of Kerala.

(2) Mr. Anil Kumar Singh

Mr. Anil Kumar Singh (46 years) has a bachelor’s degree in civil engineering and a master’sdegree in the engineering of polymer technology from the Delhi College of Engineering. He hasanother master’s degree in business administration and policy from the University of Ljubljana. Mr.Singh is an IAS officer of the 1995 AGMUT cadre.

During his career spanning 19 years as an IAS officer, he held various positions in the fields ofadministration, land revenue, urban development, energy, labour, industrial policy and promotion,khadi and village industries, health and family welfare, home affairs, youth affairs and sports.Thereafter he held the position of Joint Secretary at the MoP from 23 September 2014.

Non-Official Part-Time Directors (Independent Directors)

(1) Mr. Prashant Mehta

Mr. Prashant Mehta (64 years), an IAS officer from the Madhya Pradesh cadre, holds a bachelor’sdegree in science and a postgraduate degree in physics from the University of Jabalpur, MadhyaPradesh. In 2011, he retired as the Director General of the Academy of Administration, Bhopal,Government of Madhya Pradesh and in a career spanning 36 years as an IAS officer, he held variousadministrative positions in the Government as well as in the government of Madhya Pradesh, includingin the fields of education, civil aviation, railways, revenue, mines and forests. He has been activelyassociated with the Madhya Pradesh Cricket Association and was also the Chairman of the OrganisingCommittee for the one-day international cricket matches held between 1996 and 2011 at Gwalior. Asof the date of this Offering Circular, he holds the positions of: Vice-President of the Madhya PradeshCricket Association; Executive President of the Gwalior Division Cricket Association; President of theChambal Division Cricket Association; and Chairman of the World Wide Fund for Nature (Madhya

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Pradesh and Chattisgarh). Furthermore, he was the Managing Director of the Kailaras Sugar FactoryMorena and a Government nominee director on the boards of the National Aluminum CompanyLimited, Bharat Aluminum Company Ltd, Hindustan Zinc Limited and Hindustan Diamonds Limited.

Sub-Committees of the Board:

As of the date of this Offering Circular, the Board has the following sub-committees:

a. Audit Committee;

b. Stakeholders’ Relationship Committee;

c. Remuneration Committee for Performance-Related Pay;

d. Committee on Management Controls;

e. Contracts Sub-Committee;

f. Project Sub-Committee;

g. Investment/Contribution Sub-Committee;

h. Committee for Allotment and Post-Allotment Activities of NTPC’s Securities;

i. Committee of Functional Directors for Contracts;

j. Committee for Vigilance Matters;

k. Committee for the Review of Coal Mining Activities;

l. Committee for Exchange Risk Management;

m. Corporate Social Responsibility and Sustainability Committee;

n. Committee for the Review of Coal Import Policy;

o. Nomination and Remuneration Committee; and

p. Risk Management Committee.

As of the date of this Offering Circular, the composition of the sub-committees of the Board areas below:

a. Audit Committee

(i) Mr. Prashant Mehta, Non-Executive Director (Independent Director);

(ii) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee);

(iii) Mr. A.K. Singh, Non-executive Director (Government Nominee); and

(iv) Mr. K.K. Sharma, Director (Operations).

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The constitution, quorum and scope of the Audit Committee is in line with the New CompaniesAct, the provisions of the Listing Agreement and the Guidelines on Corporate Governance as issuedby the Department of Public Enterprises. However, as of the date of this Offering Circular, a positionfor an Independent Director is vacant on the committee.

b. Stakeholders’ Relationship Committee

(i) Mr. Prashant Mehta, Non-Executive Director (Independent Director);

(ii) Mr. U.P. Pani, Director (HR); and

(iii) Mr. K. Biswal, Director (Finance).

This committee considers and attempts to mitigate the grievances of the various security holdersof the Issuer, including complaints, among others, in relation to the transfer of shares, the non-receiptof balance sheets and the non-receipt of declared dividends etc. As of the date of this OfferingCircular, a position for a Non-Executive Director is vacant on the committee.

c. Remuneration Committee for Performance-Related Pay

(i) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(ii) Mr. Prashant Mehta, Non-Executive Director (Independent Director).

Director (Human Resources) and Director (Finance) are the permanent invitees to the Meetingsof the Remuneration Committee.

As the Issuer is a CPSU, the appointment, tenure and remuneration of its directors are decidedby the President of India. However, as per the provisions of the guidelines from the Department ofPublic Enterprises (DPE), a remuneration committee was set up to decide upon the annual bonus,variable pay pool and the Issuer’s policy for the payment of a bonus and its distribution within theprescribed limits of the DPE guidelines.

As of the date of this Offering Circular, a position for an Independent Director is vacant on thecommittee.

d. Committee on Management Controls

(i) Mr. K. Biswal, Director (Finance);

(ii) Mr. K.K. Sharma, Director (Operations);

(iii) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(iv) Mr. Prashant Mehta, Non-Executive Director (Independent Director).

Upon the Issuer being granted enhanced autonomy by the Government under the ‘NavratnaGuidelines’, the committee was constituted to establish a transparent and effective system of internalmonitoring. Among other duties, the committee reviews management control systems, any significantdeviations in project implementation and construction, and operation and maintenance budgets etc. Italso reviews and approves the manuals and the various criteria for the organisation’s different systemsfrom time to time.

e. Contracts Sub-Committee

(i) Mr. A.K. Jha, CMD;

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(ii) Mr. A.K. Jha, Director (Technical);

(iii) Mr. S.C. Pandey, Director (Projects);

(iv) Mr. K. Biswal, Director (Finance);

(v) Mr. K.K. Sharma, Director (Operations)*;

(vi) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(vii) Mr. A.K. Singh, Non-Executive Director (Government Nominee).

* Director (Operations) is the additional member for all matters relating to the awarding of contracts for the import of

coal.

This committee approves the awarding of works contracts and purchase contracts andcommitments exceeding Rs.2.5 billion but not exceeding Rs.5.0 billion in value, consultancyassignments (including foreign consultancy assignments) exceeding Rs.50.0 million each, and theappointment of sponsors or agents for overseas consultancy assignments involving sponsorship oragency commissions exceeding Rs.50.0 million each.

f. Project Sub-Committee


(ii) Mr. U.P. Pani, Director (Commercial);

(iii) Mr. A.K. Jha, Director (Technical);

(iv) Mr. S.C. Pandey, Director (Projects);

(v) Mr. K. Biswal, Director (Finance);

(vi) Mr. K.K. Sharma, Director (Operations);

(vii) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(viii) Mr. A.K. Singh, Non-Executive Director (Government Nominee).

This committee examines and makes recommendations to the Board on proposals for investmentin new or expanding projects and approves the feasibility reports for new projects. As of the date ofthis Offering Circular, a position for an Independent Director is vacant in the committee.

g. Investment/Contribution Sub-Committee


(ii) Mr. K. Biswal, Director (Finance); and

(iii) Mr. K.K. Sharma, Director (Operations).

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

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This committee approves the deployment of surplus funds as per Government guidelines issuedfrom time to time. It also approves contributions and donations for national, public, benevolent andcharitable causes.

h. Committee for Allotment and Post-Allotment Activities of NTPC’s Securities

(i) Mr. U.P. Pani, Director (commercial)/Director (HR);

(ii) Mr. K. Biswal, Director (Finance)/Mr.K.K. Sharma, Director (Operations); and

(iii) Mr. A.K. Jha, Director (Technical)/Mr. S.C. Pandey, Director (Projects).

This committee has been constituted to consider and examine the allotment and post-allotmentactivities of the Issuer’s securities including the allotment and issue of certificates or letters ofallotment, the transfer, transmission, re-materialisation and issue of duplicate certificates and theconsolidation or splitting of the Issuer’s domestic and foreign securities.

i. Committee of Functional Directors For Contracts


(ii) Mr. U.P. Pani, Director (Commercial);

(iii) Mr. A.K. Jha, Director (Technical);

(iv) Mr. U.P. Pani, Director (HR);

(v) Mr. S.C. Pandey, Director (Projects);

(vi) Mr. K. Biswal, Director (Finance); and

(vii) Mr. K.K. Sharma, Director (Operations).

The CMD, Director (Finance), Director (Technical) and Director (Projects) for contracts relatingto construction projects, and the Director (Operations) for contracts relating to the operation of powerstations, as the case may be, constitute the quorum for meetings of this committee.

This committee has been constituted for the awarding of works and purchase contracts involvinga value of at least Rs.1.5 billion, but no more than Rs.2.5 billion.

j. Committee For Vigilance Matters

(i) Mr. U.P. Pani, Director (HR); and

(ii) Mr. Prashant Mehta, Non-Executive Director (Independent Director).

Where vigilance cases are involved, the Chief Vigilance Officer is co-opted.

This committee has been constituted to examine all the petitions which are submitted to theBoard as an appellate or reviewing authority in terms of the Conduct Discipline and Appeal rules. Italso reviews other major complaints as are referred to it from time to time other than complaintsregistered under the whistleblower mechanism, which is under the purview of the Chief VigilanceOfficer. Where the Director (HR) has acted as a disciplinary authority, any other whole-time Director,as may be decided by the Chairman and Managing Director on a case-by-case basis, replaces theDirector (HR). As of the date of this Offering Circular, a position for an Independent Director is vacantin the committee.

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k. Committee for the Review of Coal Mining Activities

(i) Mr. U.P. Pani, Director (HR);

(ii) Mr. K. Biswal, Director (Finance); and

(iii) Mr. K.K. Sharma, Director (Operations).

This committee looks into the various aspects relating to coal mining and makes necessary

recommendations to the Board on the business model for development and operations of coal blocks

and adoption of coal mining business structures.

l. Committee for Exchange Risk Management


(ii) Mr. U.P. Pani, Director (Commercial)*;

(iii) Mr. K. Biswal, Director (Finance);

(iv) Mr. Prashant Mehta, Non-Executive Director (Independent Director); and

(v) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee).

* In the absence of the Director (Commercial), either the Director (Operations) or Director (Technical) shall attend the

meeting.

This committee reviews the Issuer’s foreign currency loan portfolio, approves proposals for

hedging, approves amendments or modifications to the exchange risk management policy (including

operational procedures), approves new derivative instruments and amends the authorisations given to

officers of the Issuer to undertake derivative transactions. As of the date of this Offering Circular, a

position for an Independent Director is vacant in the committee.

m. Corporate Social Responsibility and Sustainability Committee

(i) Mr. A. K. Jha, CMD;

(ii) Mr. U.P. Pani, Director (HR);

(iii) Mr. K. Biswal, Director (Finance);

(iv) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(v) Mr. Prashant Mehta, Non-Executive Director (Independent Director).

This committee is constituted, amongst others, to formulate and recommend to the Board a CSR

policy as per Schedule VII of the New Companies Act (as amended from time to time), to recommend

the expenditure amount in relation to activities specified in the CSR policy, to monitor the CSR policyof the Issuer from time to time and to deal with any other matter as the Board may delegate from timeto time.

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n. Committee for the Review of Coal Import Policy

(i) Mr. K. Biswal, Director (Finance);

(ii) Mr. K.K. Sharma, Director (Operations);

(iii) Dr. Pradeep Kumar, Non-Executive Director (Government Nominee); and

(iv) Mr. Prashant Mehta, Non-Executive Director (Independent Director).

This committee examines the evolution of the Coal Import Policy from the year 2009 onwards

and identifies reasons for changes made to the policy from time to time, charts out future courses of

action and finalises the provisions of the Coal Import Policy.

o. Nomination and Remuneration Committee


(ii) Mr. Prashant Mehta, Non-Executive Director (Independent Director); and

(iii) Mr. A.K. Singh, Non-Executive Director (Government Nominee).

This committee identifies persons who are qualified to become directors and who may be

appointed to senior management in accordance with the criteria laid down by the Issuer; recommends

to the Board their appointment and removal; undertakes an evaluation of every director’s performance;

formulates criteria for determining the qualifications, positive attributes and level of independence of

a Director; recommends policy relating to the remuneration of Directors, key managerial personnel

and other employees; and devises a policy for ensuring Board diversity.

As the Issuer is a Government company, its Directors (whether Executive or Non-Executive) are

appointed by the President of India as per the Articles of Association of the Issuer. The appointment

of the functional and Independent Directors is made on the basis of approval by the AppointmentCommittee of the Cabinet. The remuneration of employees of Central Public Sector Enterprices isdecided by the Department of Public Enterprises, and an evaluation of the performance of functionalDirectors is made by the CMD and Secretary of the relevant administrative ministry as per theDepartment of Public Enterprises (DPE) Guidelines and that of the Chairman by the Secretary of theadministrative ministry and the relevant Minister. An evaluation of the performance of the Board iscarried out annually by the MoU Task Force of the DPE, as part of an evaluation of the performanceof the Issuer vis-à-vis the targets set out before the commencement of the relevant year. Thus, theremay be practical difficulties in implementing the scope of this committee.

As of the date of this Offering Circular, a position for an Independent Director is vacant in thecommittee.

p. Risk Management Committee

(i) Mr. A.K. Jha, Director (Technical);

(ii) Mr. S.C. Pandey, Director (Projects);

(iii) Mr. K.K. Sharma, Director (Operations);

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(iv) Mr. A.K. Ahuja, Executive Director (Corporate Planning)/Chief Risk Officer (CRO),

Member; and

(v) Mr. Sharad Anand, Regional Executive Director (Coal Mining).*

* Any other Executive Director or Group General Manager or General Manager (in charge of the Department) as

may be nominated by the Chairman and Managing Director

This committee finalises the risk assessment under the Risk Management Framework; monitors

and reviews the risk management plan and framework as approved by the Board; informs the Board

about the assessed risks and the action required to be or already undertaken for mitigating the risks

on a quarterly basis by the Chief Risk Officer; and undertakes any other matter as directed by the

Board from time to time.

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THE POWER INDUSTRY IN INDIA

Unless otherwise indicated, all financial and statistical data relating to the power industry in

India in the following discussion is derived from the MoP’s Annual Report (2014-2015), the Central

Electricity Authority’s Executive Summary March 2015 & April 2015, the Central Electricity

Authority’s Monthly Generation Report March 2015, the Central Electricity Authority’s Monthly All

India Generation Capacity Report of March 2015, the Twelfth Plan published by the Planning

Commission or other publicly available documents prepared by various sources including the RBI and

has not been prepared or independently verified by the Issuer, the Arranger, the Dealers or the Trustee.

The data may have been reclassified by the Issuer for the purpose of presentation. Unless otherwise

indicated, the data presented excludes captive capacity and generation. The term “units” as used

herein refers to kilowatt hours.

Overview of the Indian Economy

India is the third largest economy in the world after the United States of America and China in

purchasing power parity terms (Source: IMF, World Economic Outlook April 2015). The Indian

economy grew at a rate of 8.6 per cent. and 8.9 per cent., respectively, during fiscal 2010 and fiscal

2011, but the growth rate has slowed during fiscal 2012, 2013, 2014 and 2015 to 6.7 per cent., 4.5 per

cent., 4.7 per cent. and 5.9 per cent., respectively. (Source: Economic Survey 2014-15, Government of

India). However, India was one of the fastest growing economies globally during the last decade, with

an average growth rate estimated at 7.4 per cent. per annum (Source: Economic Survey 2014-15,

Government of India). The Indian economy is likely to grow by 8.5 per cent. in fiscal 2016 (Source:

Economic Survey 2014-15, Government of India).

The Government has identified infrastructure inadequacy as a significant constraint in realising

India’s economic growth objectives. In particular, the power sector has been recognised by the

Government as a key infrastructure to sustain economic growth. Under the Twelfth Plan, the financing

requirements of the power sector is estimated at U.S.$290.83 billion. Of the total expected investment

of Rs.18,203 billion in the power sector, Rs.4,738 billion (26.03 per cent.) is expected to be invested

for the central sector, Rs.3,525 billion (19.36 per cent.) for the state sector and Rs.9,940 billion (54.61

per cent.) for the private sector. This includes a Rs.3,186 billion investment in renewable energy.

As per the Twelfth Plan, the estimated funding requirements for the power sector are as follows:

SegmentFunds Required

(Rs. Billion)Funds Required(U.S.$ Billion)*

Central sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,738 75.70

State sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,525 56.32

Private sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,940 158.81

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,203 290.83

Source: Twelfth Plan published by the Planning Commission.

* U.S. dollar conversions have been made using the exchange rate of U.S.$1.00 = Rs.62.59 as of 31 March 2015, based on

the reference rate of the RBI prevailing at that date.

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Organisation of the Power Industry

The following diagram depicts, in schematic form, the structure of the Indian power industry:

Keys to the diagram

CPSUs Central Public Sector Undertakings

IPPs Independent Power Producers

CTU Central Transmission Utility

Overview of the Power Industry

India has total power generation capacity of 271,722 MW as of 31 March 2015. The power

industry in India has been characterised by energy shortages. It is estimated that in fiscal 2015 there

was a shortage of 3.6 per cent. in terms of total energy requirements and 4.7 per cent. in terms of peak

demand requirements. The total energy shortage during this period was 38,130 million units. The low

per capita consumption of electric power in India compared to the world average presents a significant

potential for sustainable growth in the demand for electric power in India.

Although power generation capacity has increased substantially in recent years, it has not kept

pace with the continued growth of the Indian economy, despite very low per capita electricity

consumption. India has one of the lowest electricity consumption levels in the world, at 1,010 units

per capita in 2014-15 (provisional), due in part to unreliable supply and inadequate distribution

networks.

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To address the persistent shortages, the Government has taken significant action to restructure

the industry, attract investment and plan for fast track capacity addition through enabling policy

initiatives. These included measures such as restructuring the SEBs to improve their financial

condition, and regulatory and policy intervention such as the Electricity Act, the National Electricity

Policy, the Tariff Policy, the Tariff Based Bidding Guidelines 2005 and the New Hydro Policy 2008,

among others. The Government has also liberalised policies relating to the transmission and

distribution sectors.

History

At the time of independence in 1947, India had a meagre power generating capacity of 1,362 MW

which has since increased to 271,722 MW as of 31 March 2015. After independence, electricity was

made subject to the concurrent jurisdiction of the state and central governments, although Parliament

was given the ability to exercise pre-emptive power. The Electricity (Supply) Act 1948 led to the

creation of the SEBs. The SEBs were state government agencies with sole responsibility for the

generation, transmission and distribution of electricity within each state. Many of the SEBs have since

been unbundled into state utilities for generation, transmission and distribution. As of 31 March 2015,

the SEBs and the state utilities own or control approximately 35 per cent. of India’s total generating

capacity and have substantial control of most of the distribution assets. The MoP is primarily

responsible for the development of the power sector in the country.

The Government has made a series of investments to develop the power sector in India, to

supplement the efforts of the states. In 1975, the Government created the Issuer (known then as

National Thermal Power Corporation Ltd.) and NHPC Ltd. (known then as National Hydro Electric

Power Corporation Ltd) to establish thermal and hydro generating plants respectively and to install

associated inter-regional transmission systems. In the same year, the Government established the CEA

in its present form to develop a uniform national power policy. Later, North Eastern Electric Power

Corporation, Satluj Jal Vidyut Nigam Limited (formerly Nathpa Jhakri Power Corporation Limited)

and THDC Limited (formerly known as Tehri Hydro Development Corporation Limited) were

incorporated as hydro power generating companies in the central sector. In 1992, the Government

established the central entity known today as PGCIL to construct, operate and maintain inter-state and

inter-regional transmission systems. These entities are collectively referred to as the CPSUs and are

directly accountable to the MoP. The MoP also controls Power Finance Corporation Ltd. and Rural

Electrification Corporation Ltd., both of which are intended to help channel investment into the power

sector. PGCIL, NTPC and PFC promoted India’s first power trading company, Power Trading

Corporation Ltd., in 1999, to allow surplus power supplies to be efficiently traded to utilities with

deficit power supplies.

To supplement public sector investment, the Government took steps in 1991 to attract private

investment to the power industry. The Government permitted 100 per cent. foreign ownership of power

generating assets and provided for assured returns, a five-year tax holiday and low equity

requirements. Some private generators were also furnished with counter-guarantees against

non-payment of dues by SEBs.

Through successive five year plans, the Government implemented a major expansion of

generating assets. From 1982, when the Issuer’s first project was commissioned, to March 2015,

India’s total installed capacity increased from 35,781 MW to 271,722 MW, representing a compound

annual growth rate of 6.34 per cent. In addition, captive generation capacity at the end of fiscal 2015

was approximately 40,726 MW. The transmission and distribution network has been expanded so as

to keep pace with the capacity expansion plans.

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Industry Developments

In recent years, the Government has taken significant action to restructure the industry, attract

investment and plan for fast track capacity addition through new policy initiatives. These actions have

included the restructuring of the SEBs referred to above, and liberalisation of policies relating to the

transmission and distribution sectors.

In order to incentivise the states to take concrete measures to restructure their power operations,

the Government introduced the Accelerated Power Development and Reforms Programme (APDRP).

APDRP was launched in fiscal 2003 to be implemented in the Tenth Plan as additional central

assistance to the states for strengthening and upgrading sub-transmission and distribution systems of

high-density load centres such as towns and industrial areas. The main objectives of the programme

were to reduce aggregate technical and commercial loss and to improve quality and reliability of

supply. The Government subsequently introduced the “Restructured APDRP” which requires actual,

demonstrable performance in terms of sustained loss reduction, establishment of reliable and

automated systems for sustained collection of accurate base line data, and the adoption of information

technology in the areas of energy accounting before taking up the regular distribution strengthening

projects.

The Government also implemented the OTSS, which settled the outstanding dues of the SEBs

payable to the CPSUs, and set up a system to facilitate the full payment of subsequent billings. The

OTSS depended upon a Tripartite Agreement, under which outstanding payables to the CPSUs,

including the Issuer, were securitised in the form of tax-free bonds issued by the RBI on behalf of the

state governments. In addition, the Tripartite Agreement provided for the establishment of LCs by

SEBs equal to 105 per cent. of average monthly billing for ensuring prompt payment of energy bills.

In October 2012, a scheme for the restructuring of state-owned distribution companies called the

“Financial Restructuring of State Distribution Companies” was introduced by the MoP. The scheme is

applicable to all state-owned distribution companies which have accumulated losses and which are

facing difficulty in financing operational losses. The objective of the proposed scheme is to enable the

state governments and the distribution companies to implement a strategy for the financial

rehabilitation of the distribution companies in the state power sector which will be enabled by the

lenders agreeing to restructure or reschedule the existing short-term debt. The main features of the

scheme are set out below:

• 50 per cent. of the outstanding short-term liabilities (STL) up to 31 March 2012 is to be

taken over by the state government. This shall be first converted into bonds to be issued by

distribution companies to participating lenders, backed by a state government guarantee.

The assumption of this liability by the state government from the distribution companies

will occur within two to five years from the date of the conversion by way of special

securities. The repayment of principal and interest will be borne by the state government

until the date of takeover.

• The remaining 50 per cent. of STL will be restructured by rescheduling loans and imposing

a moratorium on the repayment of principal, with the application of the most reasonable

terms for the restructuring to ensure its viability.

• The restructuring or rescheduling of a loan is to be accompanied by measurable action by

the distribution companies and the state government to improve the operational

performance of the distribution utilities. These measures include financial restructuring,

tariff setting and revenue realisation, subsidy, metering, audit and accounts and monitoring.

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• In order to monitor the progress of the rehabilitation plan, two committees, one at each ofthe central and state levels, are proposed to be formed.

• The Government will provide an incentive through a grant equal to the value of theadditional energy saved by way of accelerated aggregate technical and commercial lossreduction beyond the loss trajectory specified under the “Restructured Accelerated PowerDevelopment and Reform Programme”, and capital reimbursement support of 25 per cent.of the principal repayment by the state government on the liability assumed by the stategovernment under the scheme.

The scheme is expected to improve financial discipline in the distribution sector in the states,provide a commercial orientation to the functioning of the distribution companies and placeresponsibility on state governments to ensure a steady flow of revenue to the distribution companiesby improving their operating efficiency.

The Electricity Act, which consolidated all existing laws governing the industry, created aprogramme for restructuring the SEBs, and introduced greater competition and access into certainsegments of the industry.

In December 2014, the Government launched the Deendayal Upadhyaya Gram Jyoti Yojanascheme. The scheme covers works relating to feeder separation, strengthening of sub-transmission anddistribution systems including metering of distribution transformers, feeders, consumers and ruralelectrification. All discoms, including private sector discoms and state power departments, are eligiblefor financial assistance under the scheme.

Demand and Supply

Demand for energy grows in tandem with the growth of the economy. This can be seen from thefollowing table, which shows the growth in real GDP from fiscal 2006 through fiscal 2015 and thegrowth in demand for energy in the same period.

Real GDP Growth and Growth in Demand for Energy

Fiscal YearReal GDP

Growth

Growth inDemand for

Energy

2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.5% 6.8%

2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.7% 9.3%

2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.0% 6.7%

2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.7% 5.4%

2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6% 6.9%

2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3% 3.7%

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2% 8.8%

2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5% 6.5%

2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.7% 0.4%

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9% 6.5%

Source: CEA, Executive Summary and Economics Survey 2014-2015, Base Year 1999-2000, MOSP. CEA, Power SectorExecutive Summaries (April 2014 and April 2015).

Demand-Supply Overview

The Indian power sector has historically been characterised by energy shortages which have beenincreasing over the years. The demand for electricity has consistently exceeded the supply, and the

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demand-supply gap has been widening as may be seen from the table below. In fiscal 2015, the peak

deficit was estimated to be 4.7 per cent. and the total energy requirement deficit was estimated to be

3.6 per cent. The following table sets forth the peak and total shortages of power in India from fiscal

2006 to fiscal 2015:

Peak Demand Energy Requirement

Fiscal Year Demand Availability Deficit Requirement Availability Deficit

(MW) (MW) (MW) % (MU) (MU) (MU) %

2006 . . . . . . . . . 93,255 81,792 11,463 12.3 631,554 578,819 52,735 8.42007 . . . . . . . . . 100,715 86,818 13,897 13.8 690,587 624,495 66,092 9.62008 . . . . . . . . . 108,866 90,793 18,073 16.6 737,052 664,660 72,392 9.82009 . . . . . . . . . 109,809 96,785 13,024 11.9 777,039 691,038 86,001 11.12010 . . . . . . . . . 119,166 104,009 15,157 12.7 830,594 746,644 83,950 10.12011 . . . . . . . . . 122,287 110,256 12,031 9.8 861,591 788,355 73,236 8.52012 . . . . . . . . . . 130,006 116,191 13,815 10.6 937,199 857,886 79,313 8.52013 . . . . . . . . . . 135,453 123,294 12,159 9.0 998,114 911,209 86,905 8.72014 . . . . . . . . . . 135,918 129,815 6,103 4.5 1,002,257 959,829 42,428 4.22015 . . . . . . . . . . 148,166 141,160 7,006 4.7 1,068,943 1,030,800 38,143 3.6

Sources: MoP Annual Report 2013-14, CEA Executive Summary April 2014 and April 2015.

Demand is expected to continue to rise in future years, with a significant demand-supply gap

continuing to exist.

Consumption

Electricity in India is consumed primarily by industrial users. The end users of electricity powercan be broadly classified into industrial, agricultural, domestic and commercial consumers. Theseconsumers represented approximately 43.83 per cent., 18.03 per cent., 22.46 per cent. and 8.72 percent., respectively, of power consumption measured by sales in fiscal 2014 (Source: Ministry ofStatistics and Programme Implementation Energy Statistics 2015).

India has historically had very low per capita power consumption. The per capita consumptionof power in India has increased from 592 units in fiscal 2006 to 1,010 units in fiscal 2015, at acompounded annual growth rate of 6.12 per cent., but India still has one of the lowest per capita powerconsumptions compared to the major world economies.

Per Capita Electricity Consumption in Selected Countries and World Average

CountryPer Capita Electricity

Consumption 2012 (kWh)

India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,010*China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,475Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700Brazil. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,462U.K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,452Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,398U.S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,954World average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,065

Source: World Bank/CEA Executive Summary April 2015.

* Fiscal 2015 (Provisional).

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Demand Projections of Energy and Peak Power

As per the Government’s Integrated Energy Policy Report of the Expert Committee (August

2006), India will have a total energy requirement of 1,425 billion units (at 8.0 per cent. GDP growth)

and, to meet the energy demand, the corresponding installed generating capacity required would be

about 306,000 MW in fiscal 2017. Please refer to the table below for details on the total projected

energy, peak power requirement and the installed capacity required.

Year Billion kWhProjected PeakDemand (GW)

Installed CapacityRequired (GW)

Total EnergyRequirement

@ GDP Growth Rate

Energy Requiredat Bus Bar

@ GDP Growth Rate @ GDP Growth Rate @ GDP Growth Rate

8% 9% 8% 9% 8% 9% 8% 9%2016-17 . . . 1,524 1,687 1,425 1,577 226 250 306 3372021-22 . . . 2,118 2,438 1,980 2,280 323 372 425 4882026-27 . . . 2,866 3,423 2,680 3,201 437 522 575 6852031-32 . . . 3,880 4,806 3,628 4,493 592 733 778 960

Energy demand at bus bar is estimated at 6.5 per cent. auxiliary consumption.

Source: Government of India Integrated Energy Policy, Report of the Expert Committee (August 2006).

Installed Capacity

As of 31 March 2015, India’s power system had an installed generation capacity of

approximately 271,722 MW. Generation capacity is divided into the state sector, the central sector and

the private sector. The private sector represents the largest share of power generation capacity.

Distribution of Generation Capacity by Sector as of March 2015

Total Installed Capacity: MW %

State sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,079 35.0

Central sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,521 27.0

Private sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104,122 38.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271,722 100

Source: CEA Monthly All India Generation Capacity Report — March 2015.

In addition, captive generation capacity was approximately 40,726 MW as of March 2015.

Thermal power plants account for most of India’s current installed generation capacity. Thermal

plants are powered by coal, gas, naphtha or oil. These plants accounted for 69.5 per cent. of the total

power capacity in India as of March 2015. Hydroelectric stations accounted for 15.2 per cent. and

others (including nuclear stations and renewable energy) accounted for 15.30 per cent.

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Installed Generation Capacity in MW by Sector and Fuel Type as of 31 March 2015

Type/Sector Central State Private Total

Thermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,650 65,677 67,571 188,898Hydro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,091 27,482 2,694 41,267Nuclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,780 0 0 5,780Renewables . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 1,919 33,858 35,777Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,521 95,078 104,123 271,722

Source: CEA Monthly All India Generation Capacity Report — March 2015.

Capacity Utilisation

Capacity utilisation in the Indian power sector is measured by the PLF of generating plants. The

following table shows PLF data in the sectors listed, as of the dates indicated:

Average PLF for Coal-Fired Plants in India

Fiscal Year Central State Private Overall

2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.1 67.1 85.4 73.62007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.8 70.6 86.3 76.82008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.7 71.9 90.8 78.62009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.3 71.2 91.0 77.22010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.5 70.9 82.4 77.52011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.1 66.7 76.7 75.12012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82.1 68.0 76.2 73.32013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.2 65.6 64.1 69.92014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.6 59.4 61.7 65.52015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.5 60.1 65.1 64.1

Source: CEA Monthly Generation Report, March 2015.

PLF varies significantly across ownership segments. Coal-fired generating plants owned by the

SEBs operated at an average PLF of around 60.1 per cent. in fiscal 2015, while those owned by private

utility companies operated at an average PLF of 65.1 per cent. However, the average PLF of CPSUs

including the Issuer was 73.5 per cent. during fiscal 2015.

Future Capacity Additions

The Government adopts a system of successive five year plans that set out targets for economic

development in various sectors, including the power sector. Each successive five year plan has

increased the targets for new power generation capacity.

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As per the Twelfth Plan published by the Planning Commission, India aims to add more than118,537 MW of generation capacity, including a capacity addition of 30,000 MW of renewable energy.A sector-wise break-up of the capacity addition programme for non-renewable energy is describedbelow:

Capacity Addition Programme by Type and Sector, Twelfth Plan (in MW)

Type/Sector Central State Private Total

Thermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,878 13,922 43,540 72,340Hydro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,004 1,608 3,285 10,897Nuclear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,300 0 0 5,300Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,182 15,530 46,825 88,537

Source: Twelfth Plan published by the Planning Commission, India

The working group for the Twelfth Plan has estimated a requirement of 1,403 billion units by the year2016-17 after taking into account energy conservation measures and demand-supply management.Without such measures, the generation requirement is projected at 1,463 billion units. Even if themoderate level of 1,403 billion units is taken as the Twelfth Plan target, the projected growth rate inpower generation will be 9.8 per cent.

Development of a Renewable Energy Generation Capacity

It is expected that renewable energy capacity will increase in India over the next several years.The aggregate generation capacity from renewable energy sources as of 31 March 2015 isapproximately 35,777 MW, or 13.2 per cent. of India’s total installed capacity. According to theMNRE, Government of India is aiming to achieve renewable energy capacity additions by 2022 ofapproximately 175,000 MW comprising of 100,000 MW solar, 60,000 MW wind, 10,000 MW biomasspower and 5,000 MW small hydro.

Transmission and Distribution

In India, the transmission and distribution is a three-tier structure comprising regional grids,state grids and distribution networks. The distribution networks and the state grids are owned andoperated by distribution licensees, SEBs or state governments through SEBs. Most of the inter-statetransmission links are owned and operated by PGCIL. In order to facilitate the transfer of powerbetween neighbouring states, state grids are interconnected to form regional grids. The regional gridsfacilitate transfers of power from power surplus states to power deficit states.

The Government gradually integrated the regional grids into a national grid to enableinter-regional power transfers, to optimise the country’s national generating capacity. Inter-regionalpower transmission capacity at the end of the Twelfth Plan is expected to be 65,550 MW. TheGovernment has permitted private investment in the transmission sector, and it has encouraged foreigndirect investment in this sector.

Power Trading

The Electricity Act recognised power trading as a distinct activity from generation, transmissionand distribution. Power trading involves the exchange of power from utilities with surpluses toutilities with deficits. Seasonal diversity in generation and demand, as well as the concentration ofpower generation facilities in the fuel-rich eastern region of India, has created ample opportunities forthe trading of power. The regulatory developments include the announcement of rules and provisionsfor open access and licensing related to inter-state trading in electricity. Several entities have started

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trading operations or have trading licences. Current participants in the power trading business includePTC, the Issuer ’s subsidiary NVVN, Tata Power Trading Company Limited and GMR Energy Limited,among others. The following table shows the volume and prices of power traded in India for theperiods indicated:

Volume of Electricity Transacted through Trading Licensees and Power Exchanges

Particulars Fiscal 2011 Fiscal 2012 Fiscal 2013 Fiscal 2014 Fiscal 2015

Power traded (in billion units) . . . 43.22 51.38 59.66 65.78 63.96Electricity traded as % to total

generation . . . . . . . . . . . . . . . . 5.34% 5.88% 6.57% 6.83% 6.12%Weighted average tariff of power

traded Rs. . . . . . . . . . . . . . . . . 4.32 3.99 4.07 3.64 3.92

Source: Report on Short-term Power Market in India: 2014-15, CERC.

Power Exchanges

The CERC has issued guidelines for setting up power exchanges. Three power exchanges, theIndian Energy Exchange, Power Exchange India Ltd. and the National Power Exchange Limited, havebeen promoted in India, of which the first two are functioning.

The power exchanges are designed to provide a fair and transparent mechanism for efficient pricediscovery of power that is traded, and the exchanges are intended to stabilise the market rate of surpluspower. The trading system is based on an auction mechanism. According to the CERC, as of March2015, only 29.40 BU of surplus power (representing 2.81 per cent. of the total power generated inIndia) was transacted through short term power transactions, which were traded through exchanges.

Merchant Power Plants (MPPs)

MPPs generate electricity for sale at market-driven rates in the open, wholesale market.Typically, MPPs do not have PPAs and are built and owned by power developers. Merchant sales,however, include sale of power under short-term PPAs and on a spot-trade basis. Many new privatesector market entrants are beginning to adopt the MPP model for their projects to generate higherreturns as opposed to selling power through a long term PPA, as the off-take risk is perceived to belower in view of significant power shortages in the country. The MPPs can sell power to the powertrading companies, the SEBs and industrial and bulk consumers, subject to availability of “OpenAccess” for transmission of the merchant power.

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REGULATIONS AND POLICIES IN INDIA

The following description is a summary of the relevant regulations and policies prescribed by theGovernment and other regulatory bodies that are applicable to the Issuer’s business. The informationdetailed below has been obtained from various legislations available in the public domain, and maynot be exhaustive. It is merely intended to provide general information and is neither designed norintended to be a substitute for professional legal advice.

The statements below are based on the current provisions of Indian law, and the judicial andadministrative interpretations thereof, which are subject to change or modification by subsequentlegislative, regulatory, administrative or judicial decisions.

Investors should carefully consider the information described below, together with the otherinformation set out in other sections of the Offering Circular including the financial statements beforemaking an investment decision relating to the Notes, as any changes in the regulations and policiescould have a material adverse effect on the Issuer’s business.

Power Generation

Background

Under the Constitution of India, both the state and central governments have the power toregulate the electricity industry.

The MoP is the administrative ministry of the Government governing the central power sector inthe country and oversees the operation of the CPSUs. The CEA advises the MoP on electricity policyand technical matters, among others.

The development of the electricity industry in India was guided by the Indian Electricity Act,1910 and the Electricity (Supply) Act, 1948. The Indian Electricity Act, 1910 introduced a licensingsystem for the electricity industry and the Electricity (Supply) Act, 1948 introduced greater stateinvolvement in the industry, facilitating regional coordination through state-owned, verticallyintegrated units called SEBs to develop a “Grid System”. The SEBs were responsible for generation,transmission and distribution of electricity within each state of the Indian Union. In the early 1990s,the power sector was liberalised by permitting private participation in the generation and transmissionsectors and establishing regional load dispatch centres (RLDCs). In 1998, the Electricity RegulatoryCommissions Act, 1998 (the ERC Act) established independent electricity regulatory commissions(ERC) at the central and state levels, with the objective of rationalising the electricity tariff regimeand promoting and regulating the electricity industry. The ERC Act, which has been replaced by theElectricity Act, 2003 (the Electricity Act) provided for the formation of state electricity regulatorycommissions (SERCs) in the respective states for the rationalisation of energy tariffs. As of 31 March2013, all states in India have set up their own regulatory commissions and two Joint ElectricityRegulatory Commissions for: (i) the states of Manipur and Mizoram; and (ii) Goa and the UnionTerritories, respectively.

Electricity Act, 2003

The Electricity Act, 2003 is a central legislation relating to generation, transmission,distribution, trading and use of electricity, that replaced the multiple legislations that governed theIndian power sector. The most significant reform initiative under the Electricity Act was the movetowards a multi-buyer, multi-seller system as opposed to the then-existing structure which permittedonly a single buyer to purchase power from power generators. In addition, the Electricity Act grantsthe ERCs freedom in determining tariffs. Under the Electricity Act, no licence is required for thegeneration of electricity if the generating station complies with the technical standards relating toconnectivity with the grid. The Electricity Act was amended in 2007 to exempt captive power

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generation plants from licensing requirements for supply to any licensee or consumer. The ElectricityAct was further amended in 2010 by the notification dated 3 March 2010 to provide that any developerof an SEZ notified under the Special Economic Zones Act, 2005 shall be deemed to be a licensee underthe Electricity Act.

Licensing

The Electricity Act stipulates that no person can transmit, distribute or undertake trading inelectricity, unless such person is authorised to do so by a licence issued by the appropriate CERC orSERC under, or is exempt under, the Electricity Act. The Electricity Act provides for transmissionlicensees, distribution licensees and licensees for electricity trading. There can be a privatedistribution licensee as well.

Generation

As of the date of this Offering Circular, any generating company can establish, operate andmaintain a generating station if it complies with the technical standards relating to connectivity withthe grid. Approvals from the Government, the state government and the techno-economic clearancefrom the CEA are no longer required, except for hydroelectric projects. Power generating companiesare now permitted to sell electricity to any licensees and, where permitted by SERCs, to consumers.In addition, no restriction is placed on the setting-up of captive power plants by any consumer orgroup of consumers for their own consumption. Under the Electricity Act, no surcharge is required tobe paid on wheeling of power from the captive plant to the destination of use by its owner. Thisprovides financial incentive to large consumers to set up their own captive plants. In 2007, Section9 of the Electricity Act was amended to state that no separate licence is required for the supply ofelectricity generated from the captive power plant to any licensee or the consumer. The ERCsdetermine the tariff for the supply of electricity from a generating company to any distributionlicensee, transmission of electricity, wheeling of electricity and retail of electricity. The CERC hasjurisdiction over generating companies owned or controlled by the Government and those generatingcompanies who have entered into or otherwise have a composite scheme for generation and sale inmore than one state. SERCs have jurisdiction over generating stations within the state boundaries,except those under the CERC’s jurisdiction.

Transmission

Transmission, being a regulated activity, involves the intervention of various players. TheGovernment is responsible for facilitating the transmission and supply of electricity, particularlyinter-state, regional and inter-regional transmission. The Electricity Act vests the responsibility ofefficient, economical and integrated transmission and supply of electricity with the Government andempowers it to make regional demarcations of the country for the same. In addition, the Governmentwill facilitate voluntary inter-connections and coordination of facilities for the inter-state, regionaland inter-regional generation and transmission of electricity. The CEA is required to prescribe certaingrid standards under the Electricity Act and every transmission licensee must comply with suchtechnical standards of operation and maintenance of transmission lines. In addition, everytransmission licensee is required to obtain a licence from the CERC and the SERCs, as the case maybe.

The Electricity Act requires the Government to designate one government company as the centraltransmission utility (CTU), which would be deemed as a transmission licensee. Similarly, each stategovernment is required to designate one government company as state transmission utility (STU),which would also be deemed as a transmission licensee. The CTU and STUs are responsible for thetransmission of electricity, planning and coordination of the transmission system, providingnon-discriminatory open access to any users and developing a coordinated, efficient and integrated

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inter-state and intra-state transmission system respectively. The Electricity Act prohibits the CTU andSTUs from engaging in the business of generation of or trading in electricity. Under the ElectricityAct, a transmission licensee may with prior intimation to the appropriate ERC engage in any businessfor the optimum utilisation of its assets.

Under the Electricity Act, the Government was empowered to establish the national loaddespatch centre (the NLDC) and RLDCs. The primary responsibility of the NLDC is to ensure theoptimum scheduling and despatch of electricity among the RLDCs. The RLDCs are responsible for:(i) optimum scheduling and despatch of electricity within the region, in accordance with the contractsentered into with the licensees or the generating companies operating in the region; (ii) monitoringgrid operations; (iii) keeping accounts of the quantity of electricity transmitted through the regionalgrid; (iv) exercising supervision and control over the inter-state transmission system; and (v) carryingout real time operations for grid control and despatch of electricity within the region through secureand economic operation of the regional grid in accordance with the grid standards and grid code.

The transmission licensee is required to comply with the technical standards of operation andmaintenance of transmission lines specified by the CEA. The Electricity Act allows open access totransmission lines. The provision of open access is subject to the availability of adequate transmissioncapacity as determined by the CTU or STU. The Electricity Act also lays down provisions forintra-state transmission where the state commission facilitates and promotes transmission, wheelingand inter-connection arrangements within its territorial jurisdiction for the transmission and supply ofelectricity by economical and efficient utilisation of the electricity.

Trading

The Electricity Act specifies trading in electricity as a licensed activity. Trading has been definedas the purchase of electricity for resale. This may involve wholesale supply (i.e. purchasing powerfrom the generators and selling to the distribution licensees) or retail supply (i.e. purchasing fromgenerators or distribution licensees for sale to end consumers). The licence to engage in electricitytrading is required to be obtained from the appropriate ERC. The CERC, by a notification dated 16February 2009, issued the CERC (Procedure, Terms and Conditions for Grant of Trading License andOther Related Matters) Regulations, 2009, as amended from time to time (the Trading LicenceRegulations) to regulate the inter-state trading of electricity. The Trading Licence Regulations defineinter-state trading as transfer of electricity from the territory of one state for resale to the territory ofanother state, and includes electricity imported from any other country for resale in any state of Indiaor exported to any other country subject to compliance with applicable laws and clearance byappropriate authorities. Under the Trading Licence Regulations, any person desirous of undertakinginter-state trading in electricity shall apply to the CERC for the granting of a licence. Depending uponthe volume of the electricity proposed to be traded and the minimum net worth of the licensee, fourdifferent categories of trading licence are available. The Trading Licence Regulations set out variousqualifications for the grant of a licence for undertaking electricity trading, including certain technicaland professional qualifications, and net worth requirements. An applicant is required to publish noticeof his application in daily newspapers to receive objections, if any, to be filed before the CERC.Further, a licensee is subject to certain conditions including the extent of trading margin, maintenanceof records and submission of auditors’ report. The existing licensees are required to meet the networth, current ratio and liquidity ratio criteria and are required to pay the licence fee as specified bythe CERC, from time to time. The licensees need to submit monthly reports and annual returns onover-the-counter contracts and transaction volumes on a weekly basis. The eligibility criteria includenorms relating to capital adequacy and technical parameters. However, the NLDC and RLDCs, CTUs,STUs and other transmission licensees are not allowed to trade in power, to prevent unfaircompetition. Further, in case of non-compliance with any provision of the Electricity Act or the rulesthereunder, the applicant can be debarred from making an application for up to three years. Therelevant ERCs also have the right to fix a ceiling on trading margins in intra-state trading.

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Distribution and Retail Supply

The Electricity Act does not make any distinction between distribution and retail supply ofelectricity. Distribution is a licensed activity and distribution licensees are allowed to undertaketrading without any separate licence. Under the Electricity Act, no licence is required for the purposesof the supply of electricity. Thus, a distribution licensee can undertake three activities: trading,distribution and supply, through one licence. The distribution licensee with prior permission of theappropriate commission may engage itself in any other activities for optimal utilisation of its assets.

In December 2014, the Government mooted a proposal to amend the Electricity Act 2003 throughthe Electricity (Amendment) Bill, 2014 to segregate the distribution and supply of electricity asdistinct licensed activities. As of the date of this offering circular, the bill is pending for the approvalof the Lok Sabha (the lower house of the parliament). This will effectively separate the networkbusiness and the electricity supply businesses at the retail level, which is expected to facilitate openaccess at the retail supply level.

Unregulated Rural Markets

The licensing requirement does not apply in cases where a person intends to generate anddistribute electricity in rural areas as notified by a state government. However, the supplier is requiredto comply with the requirements specified by the CEA such as protecting the public from dangersinvolved, eliminating or reducing the risks of injury and providing notifications of accidents andfailures of transmission and supply of electricity. It shall also be required to comply with systemspecifications for supply and transmission of electricity. The Electricity Act mandates formulation ofnational policies governing rural electrification and local distribution and rural off-grid supplyincluding those based on renewable and other non-conventional energy sources. This policy initiativeis expected to give impetus to rural electrification and also conceptualise rural power as a businessopportunity.

Tariff Principles

The Electricity Act has introduced significant changes in terms of tariff principles applicable tothe electricity industry. Under the Electricity Act, the appropriate ERCs are empowered to determinethe tariff for the:

• supply of electricity by a generating company to a distribution licensee, provided that theappropriate commission may, in the case of a shortage of supply of electricity, fix theminimum and maximum ceiling of tariff for sale or purchase of electricity in pursuance ofan agreement, entered into between a generating company and a licensee or betweenlicensees, for a period not exceeding one year, to ensure reasonable prices of electricity;

• transmission of electricity;

• wheeling of electricity; and

• retail of electricity, provided that in the case of distribution of electricity in the same areaby two or more distribution licensees, the appropriate commission may, for promotingcompetition among distribution licensees, fix only the maximum ceiling of tariff for retailof electricity.

The appropriate ERC is required to be guided by the following while determining the tariff:

• the principles and methodologies specified by the CERC for the determination of the tariffapplicable to generating companies and licensees;

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• that the generation, transmission, distribution and supply of electricity are conducted oncommercial principles;

• the factors which would encourage competition, efficiency, economical use of theresources, good performance and optimum investments;

• safeguarding consumer interest and also ensuring recovery of the cost of electricity in areasonable manner;

• the principles rewarding efficiency in performance;

• multi-year tariff principles;

• that the tariff progressively reflects the cost of supply of electricity, at an adequate andimproving level of efficiency;

• that the tariff progressively reduces and eliminates cross-subsidies in the manner to bespecified by the CERC;

• the promotion of co-generation and generation of electricity from renewable sources ofenergy; and

• the NEP and the Tariff Policy.

The Electricity Act provides that the ERC shall adopt such tariff that has been determinedthrough a transparent process of bidding in accordance with the guidelines issued by the Government.The MoP has issued detailed guidelines for competitive bidding as well as standard bidding documentsfor competitive bid projects. The determination of tariff for a particular power project would dependon the mode of participation in the project. Broadly, the tariffs can be determined in two ways: (i)based on the tariff principles prescribed by the CERC (cost-plus basis consisting of a capacity charge,an energy charge, an unscheduled interchange charge and incentive payments); or (ii) competitivebidding route where the tariff is purely market-based.

CERC (Terms and Conditions of Tariff) Regulations, 2014

The CERC (Terms and Conditions of Tariff) Regulations, 2014 (the CERC Tariff Regulations)are applicable for the determination of the tariff between 1 April 2014 and 31 March 2019 for agenerating station and a transmission system or its elements including communication systems usedfor inter-state transmission of electricity. They are not applicable to generating stations or inter-statetransmission systems, where tariffs have been discovered through competitive bidding or determinedin accordance with the Central Electricity Regulatory Commission (Terms and Conditions for TariffDetermination from Renewable Energy Sources) Regulations, 2012. The tariff for the supply ofelectricity from a thermal generating station shall comprise two parts, namely, capacity charge (forrecovery of annual fixed cost) and energy charge (for recovery of fuel cost and limestone cost (whereapplicable)). Tariff for the supply of electricity from a hydro generating station shall comprisecapacity charge and energy charge, for the recovery of annual fixed costs through the two charges. Thetariff for the transmission of electricity on the inter-state transmission system shall comprise atransmission charge for the recovery of annual fixed costs.

The capacity charges shall be derived on the basis of annual fixed costs and shall consist of thefollowing components: (i) return on equity; (ii) interest on loan capital; (iii) depreciation; (iv) intereston working capital; and (v) operation and maintenance expenses. Energy charges shall be derived onthe basis of the landed fuel cost of a generating station (excluding the hydro generation station) andshall comprise the following costs: (i) landed fuel cost of primary fuel; and (ii) cost of secondary fueloil consumption.

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Return on equity shall be computed at the base rate of 15.50 per cent. for thermal generatingstations, transmission systems including communications system and the run of the river hydrogenerating stations. The base rate of return on equity shall be grossed up with the effective tax rateof the respective financial year. For this purpose, the effective tax rate shall be considered on the basisof actual tax paid in respect of the financial year. Incentive to a generating station or unit thereof shallbe payable at a flat rate of 50 paise/kWh for ex-bus scheduled energy corresponding to scheduledgeneration in excess of ex-bus energy corresponding to the normative annual plant load factor.

A tariff in respect of a generating station may be determined for the whole generating station ora stage, unit or block of the generating station, and a tariff for the transmission system may bedetermined for the whole of the transmission system or the transmission line or sub-station. For thedetermination of a tariff, the capital cost of the project may be broken into stages and distinct unitsor blocks, transmission lines and sub-systems forming part of the project, if required, provided thatwhere break-up of the capital cost of the project for different stages, units or blocks and transmissionlines or sub-stations is not available and in case of ongoing projects, the common facilities shall beapportioned on the basis of the installed capacity of the units, line length and number of bays and that,in relation to multi-purpose hydro schemes with irrigation, flood control and power components, thecapital cost chargeable to the power component of the scheme only shall be considered for thedetermination of a tariff.

The CERC Tariff Regulations provide that the generating company or the transmission licensee,as the case may be, may apply for the determination of a tariff in respect of a new generating stationor units thereof or a transmission system including a communication system or element thereofcompleted or projected to be completed within 180 days from the date of the anticipated commercialoperation or from the date of filing of the petition, as the case may be. The generating company orthe transmission licensee, as the case may be, shall make an application based on capital expenditureincurred, duly certified by the auditors, or projected to be incurred up to the date of commercialoperation and additional capital expenditure incurred, duly certified by the auditors, or projected tobe incurred during the tariff period of the generating station or the transmission system, as the casemay be.

However, until such time as the tariff for the generating stations is determined by the CERC inaccordance with the CERC Tariff Regulations 2014, the generating company or the transmissionlicensee, as the case may be, shall continue to provisionally bill the beneficiaries or the long-termcustomers with the tariff approved by the CERC and applicable as of 31 March 2014 for the periodstarting from 1 April 2014. On approval of the tariff by the CERC in accordance with the CERC TariffRegulations 2014, adjustment shall be made on a retroactive basis. Where the capital cost consideredin-tariff by the CERC on the basis of projected capital cost or the projected additional capitalexpenditure submitted by the generating company or the transmission licensee, as the case may be,falls short of the actual capital cost incurred on a year-to-year basis by more than five per cent., thegenerating company or the transmission licensee shall be entitled to recover from the beneficiaries orthe long-term transmission customers, as the case may be, the shortfall in tariff corresponding toreduction in capital cost, as approved by the CERC, along with interest at 0.80 times of the bank rateas prevalent on 1 April of the respective year.

Bid Route

Bidding essentially is based on a bulk power tariff structure. The Guidelines for Determinationof Tariff by Bidding Process for Procurement of Power by Distribution Licensees, 2005 (the BiddingGuidelines) recommended bid evaluation on the basis of a levelised tariff. The Bidding Guidelinesenvisaged two types of bids: (i) Case I bids, where the location, technology and fuel is not specifiedby the procurers, i.e. the generating company has the freedom to choose the site and the technologyfor the power plant; and (ii) Case II bids, where the projects are location specific and fuel specific.

The Bidding Guidelines have been repealed by way of resolutions passed by the MoP to theextent of: (i) long-term procurement of electricity through location-specific, coal-based powerprojects referred to as Case II projects; (ii) long-term procurement of electricity where the location,technology or fuel is not specified by the procurer referred to as Case I projects; (iii) procurement ofelectricity for the medium term; and (iv) procurement of peaking power for the medium term.

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The MoP has issued the following guidelines (the Revised Bidding Guidelines) by way ofresolutions:

(i) Guidelines for procurement of electricity from thermal power stations set up on a design,build, finance, operate and transfer (DBFOT) basis dated 21 September 2013. Theapplication of these guidelines is restricted to projects constructed and operated inaccordance with a power purchase agreement for a period of 20 years or more.

(ii) Guidelines for procurement of electricity from thermal power stations set up on a DBFOOmode basis dated 9 November 2013. The application of these guidelines is restricted toprojects constructed and operated in accordance with a power supply agreement for a periodof about 25 years including construction period, with a provision for an extension of fiveyears.

(iii) Guidelines for procurement of electricity for the medium term from power stations set upon a finance, own and operate (FOO) basis dated 10 February 2014. The application of theseguidelines shall be restricted to projects constructed or operated in accordance with anagreement for procurement of power for a period of between one to five years, with aprovision for extension of this period for the lower of 25 per cent. of the initial contractperiod and one year, with mutual consent.

(iv) Guidelines for procurement of peaking power for the medium term dated 24 February 2014.The application of these guidelines shall be restricted to projects constructed or operatedin accordance with an agreement for procurement of peaking power for a period of betweenone to five years, with a provision for extension of this period for the lower of 25 per cent.of the initial contract period and one year, with mutual consent.

All utilities intending to invite prospective power producers to construct and operate powergenerating stations are required to determine tariff through the competitive bidding process based onthe Revised Bidding Guidelines, as may be applicable, comprising the model or standard biddingdocuments (including the model request for qualification (MRFQ), model request for proposals(MRFP), model power supply agreement (MPSA), model power purchase agreement (MPPA) andmodel agreement for procurement of power (MAPP), as the case may be).

The Revised Bidding Guidelines envisage a two-step process for the selection of a bidder. Thefirst stage, i.e. the qualification stage of the process, involves the qualification of interested partiesor consortia that make an application in accordance with the provisions of the MRFQ. At the end ofthis stage, it shall be announced which of the shortlisted suitable pre-qualified applicants will beeligible for participation in the second stage of the bidding process, i.e the bid stage, in accordancewith the provisions of the MRFP.

Generally, the lowest bidder shall be the selected bidder. The remaining bidders shall be kept inreserve and may, in accordance with the process specified in the MRFP, be invited to match the bidsubmitted by the lowest bidder in case such lowest bidder withdraws or is not selected for any reason.In the event that none of the other bidders match the bid of the lowest bidder, the utility may, in itsdiscretion, invite fresh bids from the remaining bidders or annul the bidding process, as the case maybe. Bids will be invited for the project on the basis of a tariff to be offered by a bidder for theproduction and supply of electricity in accordance with the terms of the MPPA, MPSA or MAPP, asthe case may be. For the purposes of bidding, the fixed charge and variable charge (including fuelcharge, transportation expenses and transmission losses) would be taken into consideration.

The MoP has also issued guidelines for the short-term procurement of power by distributionlicensees through a tariff-based bidding process (i.e. for a period of less than or equal to one year) on15 May 2012. The said guidelines prescribe that bids shall be invited on a round-the-clock basis

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through a single-stage bidding process whereby a request for proposal shall be published and the entireprocess shall be conducted necessarily by way of competitive bidding. To ensure competitiveness, theminimum number of bidders should be at least two, other than the generating companies owned by thestate government procuring such bid.

Tariff Policy for Bid Route

The Tariff Policy requires that all procurement of power after 6 January 2006 (except PPAsapproved or submitted for approval before 6 January 2006 or projects whose financing has beenarranged prior to 6 January 2006) by distribution licensees has to be through competitive bidding.There was a special dispensation of five years for CPSUs from the date of issue of the Tariff Policyfor capacity addition through the MoU route. The tariff for all new generation and transmissionprojects shall be decided on the basis of competitive bidding from 6 January 2011, provided that adeveloper of a hydroelectric project would have the option of having the tariff determined by theappropriate commission on the basis of performance-based cost-of-service regulations, subject to thesatisfaction of conditions specified in the Tariff Policy. The expansion of existing projects of PSUsis also exempted from the tariff-based bidding. Exemptions from the competitive bidding route maybe adopted in: (i) the first two experimental works for the 1,200KV HVDC line; (ii) urgent work byCTU/STUs as decided by central government; and (iii) intra-state transmission projects by STUs fortwo years beyond 6 January 2011.

Central Electricity Regulatory Commission (Grant of Connectivity, Long-term Access andMedium-Term Open Access in Inter-State Transmission and Related Matters) Regulations, 2009

The Central Electricity Regulatory Commission (Grant of Connectivity, Long-term Access andMedium-Term Open Access in Inter-State Transmission and Related Matters) Regulations, 2009 (theCERC Regulations) provide various transmission products, standardise procedures, define timelinesand ensure a level playing field between market players. They provide the procedures andrequirements for obtaining connectivity to inter-state transmission systems, obtaining medium-termopen access and obtaining long-term access. There have been amendments to the CERC Regulationsin relation to the appointment of a principal generator on behalf of the renewable energy generatingstations.

Central Electricity Regulatory Commission (Sharing of Inter State Transmission Charges andLosses) Regulations, 2010

The Central Electricity Regulatory Commission (Sharing of Inter State Transmission Chargesand Losses) Regulations, 2010, implement a point of connection method of sharing the transmissioncharges of inter-state transmission systems in India for a five-year period, replacing the earlier systemof regional postage stamps. These regulations provide that the yearly transmission charges, revenuerequirements on account of foreign exchange rate variations, changes in interest rates, and losses willbe shared among the users. All the users will be default signatories to the transmission serviceagreement, which also requires these users to pay the point-of-connection charge, which covers therevenue of transmission licensees. The point of connection tariffs are based on load flow analysis andcapture the utilisation of each network element by the users.

Central Electricity Regulatory Commission (Standards of Performance of Inter-State TransmissionLicensees) Regulations, 2012

The Central Electricity Regulatory Commission (Standards of Performance of Inter-StateTransmission Licensees) Regulations, 2012 (the Standard of Performance Regulations) apply to allthe inter-state transmission licensees to ensure compliance with performance standards and to providefor an efficient, reliable, coordinated and economic system of electricity transmission. The Standardof Performance Regulations also covers the methodology for calculating compensation in the case ofloss on account of non-adherence.

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Draft CERC (Prevention of Adverse Effect on Competition) Regulations, 2012

CERC released the draft CERC (Prevention of Adverse Effect on Competition) Regulations, 2012(the Competition Regulations) which will be applicable to licensees or generating companies withrespect to investigation and enforcement pursuant to sections 60 and 66 of the Electricity Act. Underthe Competition Regulations, the Central Commission may issue appropriate directions to any licenseeor generating company for entering into an agreement or combination which causes or is likely tocause an adverse effect on competition in the electricity industry and for abusing its dominant positionin the electricity industry. As of the date of this Offering Circular, the date for the release of the finalversion of the Competition Regulations has not been confirmed.

National Electricity Policy, 2005

In compliance with Section 3 of the Electricity Act, the Government announced the NEP inFebruary 2005. The NEP aims at achieving the following objectives:

• availability of electricity for all households;

• availability of power on demand;

• overcoming the energy and peaking shortages and to make available adequate spinningreserve;

• supply of reliable and quality power of specified standards in an efficient manner and atreasonable rates;

• per capita availability of electricity to be increased;

• minimum lifeline consumption of one unit per household per day;

• financial turnaround and commercial viability of electricity sector; and

• protection of consumers’ interests.

National Electricity Plan, 2012

The Electricity Act requires the CEA to frame a national electricity plan once in five years andrevise the same from time to time in accordance with the NEP. The CEA has released a NationalElectricity Plan in January 2012 (the National Electricity Plan 2012) which covers the period from2012 to 2017. The National Electricity Plan is for a short-term framework of five years and providesa 15-year perspective on the following:

• short-term and long-term demand forecast for different regions;

• suggested areas/locations for capacity additions in generation and transmission, theeconomics of generation and transmission, losses in the system, load centre requirements,grid stability, security of supply, quality of power including voltage profile, andenvironmental considerations, including rehabilitation and resettlement;

• integration of such possible locations with transmission systems and development of thenational grid, including the type of transmission systems and the requirement ofredundancies;

• different technologies available for efficient generation, transmission and distribution; and

• fuel choices based on economy, energy security and environmental considerations.

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The following recommendations have been proposed in the National Electricity Plan 2012:

• 80,000 MW and 79,200 MW of capacity needs to be added in the country during the 12thplan and 13th plan and issues relating to capacity addition need to be addressedexpeditiously, bearing in mind a low-carbon growth strategy;

• initiatives need to be taken to address issues related to coal and gas availability and gas-based generation and capacity in India;

• adoption of greenhouse gas mitigation strategy is required in order to meet the emissionstandards;

• development of renewable energy sources;

• energy efficiency, conservation of energy and demand-side management need to be activelyexplored;

• plan for at least 2,000 MW gas-based peaking power plants during 2012 to 2017, through400 MW plants in each of the five major Indian metro cities with proper regulatory support;and

• need for a task force under the CERC to consider issues relating to the setting-up of peakingplants and the creation of adequate reserves.

Mining Laws

The Mines and Minerals (Development and Regulations) Act, 1957, as amended from time totime (the MMDR Act), the Mines Act, 1952, as amended from time to time (the Mines Act), theMineral Concession Rules, 1960 (the MC Rules) and the Mineral Conservation and DevelopmentRules, 1988 (the MCD Rules) govern mining rights and the operation of mines in India. The MinesAct and the MMDR Act provide for the development and regulation of mines and minerals in Indiaand regulate the granting, renewal and termination of reconnaissance permits, mining leases andprospecting licences. The Indian Bureau of Mines (the IBM), established in March 1948, is asubordinate office under the Ministry of Mines (the MoM) and the principal Government agency forcompiling exploration data and mineral maps, and performs regulatory functions, including theenforcement of the MMDR Act, the MC Rules and the MCD Rules.

The Government announced the National Mineral Policy in March 2008 (for non-fuel andnon-coal minerals) to sustain and develop mineral resources so as to ensure their adequate supply forthe present needs and future requirements of India in a manner which ensures sustainabledevelopment, takes account of bio-diversity issues and provides measures for restoration of theecological balance.

Grant of a Mining Lease

The MMDR Act empowers state governments to develop and regulate mines and minerals,including in relation to the granting of reconnaissance permits (for preliminary prospecting of amineral through regional, aerial, geophysical or geochemical surveys and geological mapping),prospecting licences (for undertaking operations for exploring, locating or proving mineral deposits)and mining leases (for undertaking operations for mining any mineral). The mining lease governs theterms on which a lessee may use the land for mining operations. If land on which mines are locatedbelongs to private parties, the lessee must acquire surface rights relating to the land from such privateparties. If such land belongs to the Government or a state government, such government may grantsurface rights on application.

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If mining operations result in displacement of persons, the consent of affected persons, theirresettlement and rehabilitation, and payment of benefits in accordance with guidelines of theapplicable state government, including payment for land acquired from displaced persons, need to besettled before the commencement of mining. In respect of minerals listed in the first schedule to theMMDR Act, the Government’s prior approval is required to be obtained by the state government forentering into the mining lease. Government approval is granted on the basis of recommendations ofthe state governments, although the Government has the discretion to overlook recommendations ofthe state governments. On receiving Government clearance, the state government grants the mininglease or prospecting licence. The lease can be executed only after obtaining mine plan approval fromthe IBM, which is valid for five years. No person can acquire one or more mining leases for anymineral or prescribed group of associated minerals in a state covering a total area of more than tensquare kilometres. However, the Government may relax this requirement if necessary in the interestof development of any mineral.

The maximum term of a mining lease is 30 years and the minimum term is 20 years. A mininglease may be renewed for further periods of up to 20 years at the option of the lessee. Renewals aresubject to the lessee not being in default of applicable laws. The MC Rules provide that if a lesseeuses the minerals for its own industry, such lessee is generally entitled to renewal of its mining leasefor 20 years except in cases of illegal mining or unless the lessee applies for a shorter period. Thelessee is required to apply to the relevant state government for renewal of the mining lease at leastone year prior to its expiration. Delay in applying for a renewal of a mining lease may be waived bythe state government if the application for renewal is made prior to expiry of the mining lease. If thestate government does not make orders relating to an application for renewal prior to the expirationof the mining lease, the mining lease is deemed extended until such time that the state governmentmakes the order on the application for renewal. In case the lessee is convicted of illegal mining, thestate government may determine the mining lease, cancel such prospecting licence and/or forfeit allor part of the security deposit.

Protection of the Environment

The MMDR Act also deals with the measures required to be taken by the lessee for the protectionand conservation of the environment from adverse effects of mining. The MCD Rules require everylessee to take all possible precautions for the protection of the environment and control of pollutionwhile conducting mining operations. The required environmental protection measures includeprevention of water pollution, measures in respect of surface water, total suspended solids, groundwater pH, chemicals and suspended particulate matter in respect of air pollution, noise levels, slopestability and impact on flora, fauna and local habitation. The National Mining Policy emphasises thatno mining lease would be granted to any party without a proper mining plan, including anenvironmental plan approved and enforced by statutory authorities and which provides for controllingenvironmental damage and restoration of mined areas and for planting trees according to prescribednorms.

Labour Conditions

Working conditions of mine labourers are regulated by the Mines Act, which sets out standardsof work, including the number of hours of work, leave requirements, medical examinations, weeklydays of rest, night shift requirements and other requirements to ensure the health and safety of workersemployed in mines.

Royalties

Royalties on minerals extracted or a dead rent component, whichever is higher, are payable tothe relevant state government in India by the lessee, in accordance with the MMDR Act. The mineralroyalty is payable in respect of an operating mine from which minerals are removed or consumed and

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is computed by a prescribed formula. The Government has broad powers to modify the royalty scheme

under the MMDR Act, but may not do so more than once every three years. In addition, the lessee must

pay the occupier of the surface land over the mining lease an annual compensation determined by the

state government. The amount depends on whether the land is agricultural or non-agricultural.

Laws relating to Coal Mines

The Coal Mines (Nationalisation) Act, 1973, as amended from time to time (the CoalNationalisation Act), Coking Coal Mines (Nationalisation) Act, 1972, as amended from time to time,

Coal Mines (Taking Over of Management) Act, 1973, as amended from time to time, Coking Coal

Mines (Emergency Provision) Act, 1971, as amended from time to time, Coal Bearing Areas

(Acquisition and Development) Act, 1957, as amended from time to time, and Coal Mines

(Conservation and Development) Act, 1974, as amended from time to time, govern the mining rights

of coal mines and coal mining operations in India. Under the Coal Nationalisation Act, on and from

1 May 1973, the right, title and interest of the owners of coal mines were transferred to the

Government and the Government is required to pay a specified amount for such transfer to the owner.The Coal Nationalisation Act prohibits any person from carrying on coal mining operations in India,except for: (i) the Government or a Government company including corporations owned, managed orcontrolled by the Government; (ii) a person to whom a sub-lease has been granted by the Governmentor such company or corporation mentioned in (i) above; or (iii) a company which is engaged in theproduction of iron and steel, generation of power, washing of coal obtained from a mine, or such otherend-use as the Government may notify.

Coal Distribution Policy, 2007

The New Coal Distribution Policy, 2007 (the NCD Policy) was issued by the MoC to regulatethe distribution of coal. The NCD Policy removes the classification of consumers into core andnon-core sectors, and requires verification of consumers of erstwhile non-core sector consumers andcancellation of allocation to such consumers not found to be bona fide. The NCD Policy also dealswith distribution and pricing of coal to different consumers or sectors such as the defence sector,railways, power utilities, and integrated steel plants, provides for an exclusive distribution policy forconsumers in the small and medium sector, replacement of the linkage system with enforceable fuelsupply agreements, and policies for new consumers and a fresh scheme for e-auction of coal. The NCDPolicy was partially modified in 2013, approving a revised arrangement for the supply of coal toidentified thermal power stations during the period from 1 April 2009 to 31 March 2015 and extendingthe validity of letter of assurance issued to new consumers beyond 12 and 24 years, as applicable.

The Mines (Amendment) Bill, 2011

The Mines (Amendment) Bill, 2011 (the Mines Bill) was introduced in the upper house of theIndian Parliament and proposes several amendments to the Mines Act.

The Mines Bill provides a mechanism for the supervision and safety of the workforce labouringin the mines. The Mines Bill amends the definition of ‘owner’ of a mine from immediate occupier ofthe mine to a person having ‘ultimate control’ over the affairs of the mine and also includes as ‘owner’the managing or whole-time director, in the case of an Indian company, and the principal officer, inthe case of a foreign company. The Mines Bill also makes it mandatory for the owner to appoint aprescribed number of qualified officials to supervise the operation of the mines. The penalty payableby the owner in case of loss of life resulting from a contravention of an inspector’s orders is proposedto be increased from Rs.5,000 to Rs.500,000, for serious bodily injury the penalty is proposed to beincreased from Rs.3,000 to Rs.300,000 and the term of imprisonment is also proposed to be increasedfrom two years to five years.

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Development of hydropower projects and power-sharing formula

The MoP, by a notification dated 8 June 2001, prescribed a three-stage procedure regarding thedevelopment of hydropower projects. The notification prescribes the key activities required to beperformed at each stage and the time period for the completion of such key activities. Details of theactivities to be undertaken during the three stages are set forth below:

(i) Stage-I: Any hydropower generation company proposing to set up a hydropower station isrequired to approach the MoP for sanction of the proposed project. The MoP shall sanctionexpenditure of up to Rs.100 million on survey, investigation and preparation of the detailedproject report (DPR), subject to the same appearing in the five-year plan. If the expenditurefor the proposed project exceeds Rs.100 million, it requires sanction by the PublicInvestment Board.

(ii) Stage-II: This stage involves the preparation of the DPR, pre-construction works,development of infrastructure and land acquisition. In the event that the estimatedcumulative expenditure for Stages I and II exceeds Rs.100 million, the same shall beconsidered by the Public Investment Board. Proposals of over Rs.200 million will beconsidered by the Ministry of Finance and those involving over Rs.500 million require theapproval of the Cabinet Committee on Economic Affairs of the Government.

(iii) Stage-III: The approval of the Public Investment Board/CCEA would be required in respectof the construction of the project. These approvals would be sought after the environmentand forest clearances have been obtained from MoEF and TEC from the CEA.

In addition, the MoP, by its notification dated 1 November 1990, prescribed the formula for thesharing of power and benefits from all Central Sector hydroelectric projects commissioned after 7September 1990. The salient features of the notification are set forth below:

(a) 15 per cent. of the generation capacity will be kept as “unallocated” with the Governmentfor distribution within the region or outside, depending on overall requirements;

(b) 12 per cent. of the energy generated will be supplied free of cost to the concerned statewhere distress is caused by the setting up of the project; and

(c) the remaining 73 per cent. is distributed between the states in the region on the basis ofcentral plan assistance given to various states in the region during the last five years andon the basis of consumption of electricity in the states in the region in the last five years,the two factors being given equal weightage.

Tariff Setting

Tariff Setting for Generators

The Electricity Act empowers the CERC to regulate the tariff of generating companies owned orcontrolled by the Government, other generating companies having a composite scheme for thegeneration and sale of electricity in more than one state and other entities involved in inter-statetransmission operations. Tariffs for state sector generators are regulated by the respective SERCs. TheElectricity Act also provides for the Government to promulgate the NEP and the Tariff Policy. TheCERC and the SERCs are to be guided by these policies while framing tariff regulations.

The tariff for electricity supplied from CPSUs and other entities with inter-state generation isbased on a cost-plus approach with operating and financial parameters on a normative basis. The tariffis designed to provide a reasonable return to the generating company and an incentive for efficientoperation through industry norms. The CERC has issued tariff regulations applicable for the tariffperiod from 1 April 2014 for a period of five years. These regulations provide for tariffs consistingof a capacity charge, a variable charge and deviation settlement charges. For further discussion ontariffs and their impact on the Issuer’s results of operations, see “Investment Considerations — The

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tariff regulations pursuant to the Central Electricity Regulatory Commission (CERC), TariffRegulation 2014-19 and the Tariff Policy 2006, respectively, may adversely affect the Issuer’s resultsof operations, its cash flow from operations and could result in an increase in future competition forthe Issuer”.

The Government is also contemplating introducing a mechanism for the dollarisation of tariffsfor the power generating companies in the solar power sector. This is being contemplated to hedge thecurrency exchange related risk underlying the ECBs raised by companies in the solar power sector.

Tariff Setting for End Consumers

Under the Electricity Act, the retail tariff or tariffs for end customers is set by the respectiveSERCs based on a process of public hearings. The Electricity Act allows state governments to providepower at subsidised rates, but requires them to fund the subsidy out of their respective stategovernment budgets.

While setting the tariff for end consumers, some states have attempted to cross-subsidise tariffsby charging lower rates for agricultural and domestic consumers, and charging higher rates forindustrial and commercial consumers. Tariffs, even with cross-subsidisation, have not kept pace withthe cost of supply. The cost of supply averaged Rs.4.39 per kWh in fiscal 2012, which was an increasefrom Rs.3.97 per kWh in fiscal 2011. The average tariff has not increased proportionately with theincrease in the cost of supply. The average revenue (without subsidy) was Rs.3.31 per kWh in fiscal2012, as compared to Rs.3.03 per kWh in fiscal 2011. The aggregate book losses of all the utilitiesfor fiscal 2013 totalled approximately Rs.1,050,700 million without accounting for subsidy andRs.689,640 million after accounting for subsidy received. (Source: PFC Report on ‘The Performanceof State Power Utilities’ September 2013)

Ultra Mega Power Projects

The Government has announced a policy of encouraging the development of thermal powerprojects with a capacity of approximately 4,000 MW and utilising “supercritical technology,” knownas UMPPs. The development of UMPPs is a component of the Government’s “Power to All” plan.UMPPs are to be developed under the supervision of PFC, utilising tariff-based competitive bidding.As of now, 16 UMPP projects have been identified to be taken up, 13 special-purpose vehicles havebeen incorporated and four UMPPs have been awarded. The four UMPPs awarded include Sasan PowerLimited in Madhya Pradesh, Mundra in Gujarat, Kishnapattnam in Andhra Pradesh and Tilaiya inJharkhand.

Furthermore, the bidding process for two UMPPs, each of 4,000 MW capacity, namely theCheyyur UMPP in the state of Tamil Nadu and the Odisha UMPP in the state of Odisha, was startedin December 2013. However, the same was terminated during the second stage in December 2014. Asof the date of this Offering Circular, the bidding documents were under revision and the followingUMPPs had been identified for implementation:

• the Chhattisgarh Surguja Power Ltd., the Chhattisgarh UMPP, in the Surguja district;

• the Tatiya Andhra Mega Power Ltd., the second Andhra Pradesh UMPP, in the Prakasamdistrict;

• the Deoghar Mega Power Ltd., the second Jharkhand UMPP, in the Deoghar district;

• the Sakhigopal Integrated Power Co. Ltd., the first Orissa additional UMPP, in the Bhadrakdistrict;

• the Ghogarpalli Integrated Power Co. Ltd., the second additional Odisha UMPP, in theKalahandi district;

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• the Coastal Maharashtra Mega Power Ltd., the Maharashtra UMPP, in the Sindhudurgdistrict;

• the Coastal Karnataka Power Ltd., the Karnataka UMPP;

• the Bihar UMPP;

• the second Tamil Nadu UMPP; and

• the second Gujarat UMPP.

In the union budget of fiscal 2016, the Government proposed to set up five new UMPPs, eachof 4,000 MW capacity in the “plug-and-play mode”. The “plug-and-play mode” projects will bedifferent from existing UMPPs as all clearances and linkages will be in place before they are put upfor auction. The estimated investment for these “plug-and-play mode” UMPPs has been projected tobe Rs.1,000 billion and all clearances and linkages will be in place before the projects are awarded.

Rural Electrification Policy, 2006

Under the Common Minimum Programme, the Government and the state governments shalljointly create rural electricity infrastructure to provide access to electricity for all rural areasincluding electrification of households, the agriculture sector, healthcare and small and medium-scaleindustries. To achieve this objective, the Government formed the Rajiv Gandhi Grameen VidyutikaranYojana. As of 31 March 2014, electrification has been completed in 571,155 villages and as of 31 May2014, there are 25,982 villages which are unelectrified. Unelectrified villages are villages which donot have basic infrastructure such as distribution transformers and distribution lines in inhabitedlocalities and public places. De-electrified villages are villages which were electrified in the past, buthave not been able to retain the status of electrified village. REC, a Government enterprise under theMoP, is the nodal agency of the Government to implement the rural electrification programme byproviding loan assistance and coordinating with state governments, state utilities and other concernedagencies for effective implementation of the schemes.

New Hydro Power Policy, 2008

The New Hydro Power Policy was notified by the Government, setting out the followingobjectives: (i) inducing private investment in hydropower development; (ii) harnessing the balance ofhydroelectric potential; (iii) improving resettlement and rehabilitation; and (iv) facilitating financialviability. The salient features of this policy are set forth below:

(a) The existing dispensation available to the public sector regarding exemption fromtariff-based bidding up to January 2011 was extended to private sector hydroelectricprojects.

(b) State governments would be required to follow a transparent procedure for awardingpotential sites to the private sector.

(c) The concerned private developer would be required to follow the existing procedure,including getting the DPR prepared, obtaining concurrence of the CEA/state government,obtaining environment, forest and other statutory clearance and approaching theappropriate regulator. It would be obligatory for the developers to go through aninternational competitive bidding process for award of contract for supply of equipment andconstruction of the project either through a turnkey contract or through a few well-definedpackages.

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(d) Tariff of the project would be decided by the appropriate commission.

(e) Special incentive by way of merchant sales of up to 40 per cent. of the saleable energy isenvisaged for the project(s) meeting the timelines.

(f) An additional one per cent. free power from the project would be provided and earmarkedfor a local area development fund, aimed at providing a regular stream of revenue forincome generation and welfare schemes, creation of additional infrastructure and commonfacilities on a sustained and continued basis over the life of the project. It is furtherrecommended that the host state government would also provide a matching one per cent.from their share of 12 per cent. free power towards this corpus fund. This fund could beoperated by a standing committee headed by an officer of the state government not lowerthan a district magistrate.

(g) For ten years from the date of commissioning of the project, 100 units of electricity permonth would be provided by the project developer to each project-affected family throughthe relevant distribution company.

(h) In the interest of speedy implementation of hydroelectric projects, it is proposed that theresettlement and rehabilitation package be more liberal than the National Resettlement andRehabilitation Policy, 2007.

The National Water Resources Council adopted the National Water Policy 2012 (the NWP 2012)with the objective of assessing the existing situation and to form a plan of action with a unifiednational perspective. The NWP 2012 includes discussion of the following:

• the need for a national water framework law, comprehensive legislation for optimumdevelopment of inter-state rivers and river valleys and the amendment of relevant existinglaws;

• the need to optimise water usage, raise awareness of water as a scarce resource and increasewater availability;

• the consideration of climate change scenarios when planning and implementing waterresource projects;

• the management of demand and increase in water use efficiency, to evolve benchmarks forwater uses for different purposes and incentivising the efficient use of water;

• the principle of differential pricing of water to be retained for ensuring food security andsupporting livelihood for the poor; a planned and scientific conservation of river corridors,water bodies and infrastructure;

• the setting-up of appropriate national and state-level institutions to deliberate issuesrelating to water and obtain consensus, cooperation and reconciliation;

• the aversion of water-related disasters;

• the evolution of a dispute-resolution mechanism between states;

• the maintenance of a database and information system with water-related data; and

• the preparation of a plan of action to implement the NWP 2012.

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Jawaharlal Nehru National Solar Mission

The MNRE has approved a new policy on development of solar energy in India throughJawaharlal Nehru National Solar Mission (the Mission). The Mission recommends the implementationof an installed capacity of 20,000 MW in three stages by the end of the Thirteenth Plan in 2022. Itproposes to establish a single window investor-friendly mechanism, which reduces risk and at thesame time provides an attractive, predictable and sufficiently adequate tariff for the purchase of solarpower for the grid. The key driver for promoting solar power would be through a Renewable PurchaseObligation (RPO) mandated for power utilities, with a specific solar component.

The Mission will adopt a three-phase approach. The remaining period of the National ElectricityPlan 2007 and the first year of the National Electricity Plan 2012 (up to fiscal 2013) will constitutePhase 1, the subsequent four years (2013 to 2017) of the National Electric Plan will constitute Phase2 and the National Electricity Plan 2017 (2017 to 2022) will constitute Phase 3. At the end of each,and at the mid-point of the National Electricity Plan 2012 and the National Electricity Plan 2017, therewill be an evaluation of progress, a review of capacity and targets set for subsequent phases, basedon emerging cost and technology trends, both domestic and global. The immediate aim of the Missionis to focus on setting up an enabling environment for solar technology penetration in the country, bothat a centralised and decentralised level.

The Issuer’s power-trading subsidiary, NVVN, has been designated by the Government as thenodal agency for entering into PPAs with solar power developers who will be setting up solar projectsin the first phase of the Mission, i.e. up to March 2013.

The MoP will provide the equivalent MW of power from the unallocated quota of the Issuer’sstations for bundling with solar power. NVVN will bundle this power and sell this bundled power ata rate fixed as per CERC regulations for a period of 25 years. The Government will review significantprice movements in the market rate. NVVN will supply the bundled power to distribution utilities, andthese distribution utilities will be entitled to use part of the bundled power to meet their RPO, asdetermined by the CERC.

NVVN has successfully conducted and implemented the process of selection of the solar powerdevelopers based on the guidelines issued by the Ministry of New and Renewable Energy under theMigration Projects Scheme of 2010 and New Projects Schemes of 2010 and 2011.

As of 31 March 2015, a total solar capacity of 718 MW has been commissioned and thecorresponding allocation of NTPC coal power has been made by the MoP.

Oil and Gas related Laws

In keeping with the liberalised policy of the Government for attracting private investments in theoil and gas sector, the Government formulated the New Exploration and Licensing Policy (NELP),which came into effect in February 1999. The Directorate General of Hydrocarbons (DGH) is thenodal agency for the implementation of NELP. The key features of NELP are that there would be nomandatory state participation, and exploration acreages and mining blocks would be awarded on acompetitive basis instead of by the earlier system of nomination, there would be freedom tocontractors for marketing of crude oil and gas in the domestic market, companies would be exemptfrom payment of import duty on the goods imported for petroleum operations, a seven-year tax holidayfrom the date of commencement of commercial production would be available, and contractors wouldbe allowed full cost recovery with unlimited carry forward on a contract area basis, unlike the previousregime in which exploration cost was recovered on a contract area basis and development andproduction cost on a field basis. Under NELP, the first round of offer for the exploration of oil andnatural gas was in 1999 and the second to ninth rounds were in 2000, 2002, 2003, 2005, 2006, 2008,2009 and 2011, respectively. According to the report of the DGH on Hydrocarbon Exploration andProduction Activities, 2009-2010, the intention of the Government is to move from NELP to an openacreage licencing policy (OALP).

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Under OALP, companies can choose any block for offer at any time without waiting for bid roundsunder NELP. The blocks will be awarded to the party giving the best bid at any time of the year. DGHis taking steps to implement OALP and it has been suggested that the tenth round of NELP allocationwill have been the last round of allocation through NELP.

The Oilfields (Regulation and Development) Act, 1948, as amended from time to time (theOilfields Act) empowers the Government to make rules for the granting of mining leases in respectof any mineral oil. The holder of a mining lease is required to pay royalty in respect of any mineraloil mined, excavated or collected. The Oil Industry (Development) Act, 1974 provides forestablishment of the Oil Industry Development Board (the OID Board) for the development of the oilindustry and to levy excise duty on crude oil and natural gas, including through financial and otherassistance. The OID Board may apply to courts for relief, including transfer of the management of theoil industrial concern to the OID Board, in case an oil industrial concern or other persons default onrepayments of loans or violate the terms of the assistance agreement. The Oil Mines Regulations,1984, as amended from time to time (the Oil Mines Regulations), prescribe the duties of personsemployed in oil mines, such as workers, managers, installation managers, safety officers and fireofficers, including with respect to the examination of equipment, usage of safeguards, safety devicesand other appliances. The Oil Mines Regulations regulate production activities in oil mines,transportation of oil through pipelines, machinery, plant and equipment, apart from laying downrequirements for protection measures against gases and fires, and general safety provisions. ThePetroleum and Natural Gas (Safety in Offshore Operations) Rules, 2008 (the SOO Rules) requireoperators of offshore installations to obtain consent from the competent authority and to intimate thecompetent authority within 30 days of commencement or cessation of operations. The operator is alsoresponsible for providing health-related resources, establishing a strategy for environmentalpreparedness and a safety management system, carrying out risk assessment, maintaining informationand records for petroleum activities, accidental pollution, recovery, rescue and remedial actions taken,and environment reporting.

The Petroleum Act, 1934, as amended from time to time (the Petroleum Act), and PetroleumRules, 2002 (the Petroleum Rules) regulate import, transport, storage, production, refining andblending of petroleum. Only the holder of a storage licence issued under the Petroleum Rules or hisauthorised agent or a port authority or railway administration or a person authorised under thePetroleum Act to store petroleum without a licence may deliver or dispatch petroleum in India. ThePetroleum Mineral Pipelines (Acquisition of Right of User in Land) Act, 1962 provides for theacquisition of a user’s right in land for the laying of pipelines for the transport of petroleum andminerals. The Petroleum and Natural Gas Rules, 1959, as amended from time to time (the PNG Rules)regulate the prospecting and mining of petroleum and natural gas. Prospecting for petroleum ispermitted only on receiving a petroleum exploration licence (PEL) under the PNG Rules, and miningpetroleum is permitted only on receiving a petroleum mining lease (PML) granted under the PNGRules. A PEL or a PML in respect of any land or mineral underlying the ocean within the territorialwaters or continental shelf of India is granted by the Government. In respect of any land vested in astate government, a PEL or a PML is granted by the state government with previous approval of theGovernment. The PNG Rules require the payment of royalty on petroleum in case PML is granted. ThePEL and PML may be cancelled by the Government or the state government, if the licensee or lesseefails to fulfil, or contravenes, any terms, covenants and conditions contained therein, or fails to usethe land covered by it for the purposes for which it has been granted, or uses such land for a purposeother than that for which it has been granted.

The Petroleum and Natural Gas Regulatory Board Act, 2006, as amended from time to time (thePNGRB Act) provides for the establishment of the Petroleum and Natural Gas Regulatory Board (thePNGR Board) to regulate refining, processing, storage, transportation, distribution, marketing,import, export and sale of petroleum, petroleum products and natural gas, excluding production ofcrude oil and natural gas. Every entity desirous of marketing any notified petroleum or petroleumproducts or natural gas, or establishing or operating a liquefied natural gas terminal, or establishingstorage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may bespecified by regulations and fulfilling eligibility conditions, is required to apply to the PNGR Board

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for its registration. The functions of the PNGR Board include registration of entities in accordance

with the PNGRB Act, declaring pipelines as common or contract carriers, receiving complaints,

adjudicating certain disputes, and such other functions as entrusted to it by the Government to

implement the PNGRB Act. The PNGR Board may notify regulations consistent with the PNGRB Act

and rules thereunder to implement the PNGRB Act. The PNGR Board (Codes of Practices for

Emergency Response and Disaster Management Plan) Regulations, 2010 (the ERDMP Regulations)

cover the identification and classification of emergencies, pre-emergency planning and preparedness

to develop plans for actions when disaster or emergencies occur, responses that mobilise necessary

emergency services and post-disaster recovery, mitigation measures and implementation schedules to

reduce or eliminate risk or disaster. The ERDMP Regulations apply to hydrocarbon processing

installations, natural gas pipelines, commercial petroleum storage facilities and any other installation

notified by the PNGR Board.

In June 2008, the MoPNG issued guidelines for sale of natural gas by NELP contractors (the GasSale Guidelines). The Gas Sale Guidelines apply for an initial period of five years. Contractors are

permitted to sell to consumers in accordance with marketing priorities determined by the Government

on the basis of an approved pricing formula. If consumers in a particular higher priority sector are not

in a position to take gas when it becomes available, it would go to the sector next in the order of

priority. The priority for supply of gas from a particular source would apply only among customers

not connected to an existing and available pipeline network connected to a source.

In February 2012, the MoPNG issued guidelines for the selection of customers for domestic gas

available from small or isolated new or pre-existing fields. These guidelines have been issued so that

small discoveries in places where production levels are low and fields are isolated can be allocated

to customers expeditiously without referring each case to the MoPNG. Based on issues raised by

stakeholders and in line with the aim of continuing to achieve the early monetisation of gas, these

guidelines have been superseded by new guidelines, where small and isolated fields are fields whose

peak production is less than 0.1 million standard cubic metres per day and are: (i) situated more than

ten kilometres away from the gas grid; or (ii) have a gas pressure which is less than the grid pressure.

In March 2012, the MoPNG issued guidelines on the swapping of natural gas (the SwappingGuidelines). The Swapping Guidelines apply to the “swapping” of natural gas transactions whereby

a party (the first party) supplies gas to a second party, at a location specified by the second party,

in exchange for the second party supplying the energy equivalent quantity of gas to the first party or

first party’s representative at another location (along with an appropriate indemnity for so doing). The

Swapping Guidelines require that all parties involved be revenue-neutral over the entire length of the

pipeline and any swapping of gas would need to conform to the tariff and applicable PNGRB Act and

any dispute regarding the same would need to be heard before the PNGR Board.

Environmental Laws

Environment Protection Act, 1986 (EPA)

The EPA, as amended from time to time, is an umbrella legislation in respect of the various

environment protection laws in India. The EPA vests in the Government the power to take any

measures it deems necessary or expedient for protecting and improving the quality of the environment

and preventing and controlling environmental pollution. Penalties for violation of the EPA include

fines or imprisonment of up to five years, or both. The MoEF, in exercise of powers conferred under

the EPA, issued a notification on 6 January 2011 declaring coastal stretches as coastal regulation zones

and thereby imposing restrictions on industries, operations and processes in a coastal regulation zone.

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The MoEF issued a notification dated 2 January 2014 for amending the Environment (Protection)Rules, 1986, laying down that the following coal-based thermal power plants shall be supplied with,and shall use, raw or blended or beneficiated coal with ash content not exceeding 34 per cent. on aquarterly average basis; namely:

(i) a stand-alone thermal power plant (of any capacity), or a captive thermal power plant ofinstalled capacity of 100 MW or above, located beyond 1,000 kilometres from the pit-heador, in an urban area or an ecologically sensitive area or a critically polluted industrial area,irrespective of its distance from the pit-head, except a pit-head power plant, with immediateeffect;

(ii) a stand-alone thermal power plant (of any capacity), or a captive thermal power plant ofinstalled capacity of 100 MW or above, located between 750 kilometres to 1,000 kilometresfrom the pit-head, with effect from 1 January 2015; and

(iii) a stand-alone thermal power plant (of any capacity), or a captive thermal power plant ofinstalled capacity of 100 MW or above, located between 500 kilometres to 749 kilometresfrom the pit-head, with effect from 5 June 2016.

However, for a thermal power plant using circulating fluidised bed combustion or atmospherefluidised bed combustion or pressurised fluidised bed combustion or integrated gasification combinedcycle technologies or any other clean technologies, the provisions of paragraphs (i), (ii) and (iii) setout above shall not be applicable.

The EIA Notification (as defined below) issued under the EPA and the Environment (Protection)Rules, 1986 requires prior MoEF approval if any new project in certain specified areas is proposed tobe undertaken. To obtain environmental clearance, a no-objection certificate must first be obtainedfrom the applicable regulatory authority. This is granted after a notified public hearing, the submissionand approval of an EIA report that sets out the operating parameters such as the permissible pollutionload and any mitigating measures for the mine or production facility and an environmentalmanagement plan. Under the EPA and the Environment (Protection) Rules, 1986, as amended fromtime to time, the Government has issued a notification dated 14 September 2006 (the EIANotification), which requires that prior approval of the MoEF or the State Environment ImpactAssessment Authority (SEIAA), as the case may be, be obtained for the establishment of any newproject and for expansion or modernisation of existing projects specified in the EIA Notification(including power projects). An application for environment clearance is made after identification ofthe prospective site for the project or activity to which the application relates, but prior tocommencing construction activity or preparation of land at the site. Certain projects which requireapproval from an SEIAA may not require an EIA report. For projects that require preparation of anEIA report, public consultation involving public hearing and written responses is conducted by thestate PCB, prior to submission of a final EIA report. The environment clearance (for commencementof the project) is valid for up to 30 years for mining projects and five years for all other projects andactivities. This period of validity may be extended by the concerned regulator for up to five years. TheEIA Notification states that obtaining of prior environment clearance includes four stages, i.e.screening, scoping, public consultation and appraisal.

The MoEF has, by circular dated 1 November 2010 (the November 2010 Circular), decided thatproposals for obtaining environment clearance for projects that rely on the availability of coal as a rawmaterial, including thermal power projects, will be considered only after the availability of firm coallinkage and the status of environment and forestry clearances of the source of the coal, i.e. the linkedcoal mine or block, are known. If a project is dependent on coal sourced from outside India, a copyof a signed MoU between the foreign coal supplier and project proponent is required to be submittedto the MoEF prior to environment clearance being granted. The MoEF clarified, on 19 April 2012, thatcoal linkages could either be in the form of a linkage through a specific mine, or a basket of mines,or through a dedicated coal block, or a fuel supply agreement. The linkage or fuel supply agreementmust provide the details of the coal quality parameters, such as calorific value, mine location, sulphur

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content, ash content and such other parameters prescribed by MoEF. Any change to the coal

parameters requires the project to be referred back to the MoEF to allow it to revisit the environment

clearance granted to assess the adequacy of the conditions already stipulated and to incorporate any

additional condition in the interests of environment protection. The case of thermal power projects

would be processed simultaneously with the granting of environment clearances for such projects and

environment clearance would be issued only after stage-1 forestry clearance for linked mines is

obtained. As of the date of this Offering Circular, all proposals for environment clearance that are

pending either before the MoEF or SEIAA will be deferred and delisted until the conditions of the

November 2010 Circular are complied with by the project proponents.

The MoEF has, by office memorandum dated 12 December 2012, as amended, set out the

procedure to be followed in cases involving violation of the EPA and the rules and regulations made

thereunder. The concerned entity would be required to mandatorily highlight the violation before its

board of directors for consideration of its environmental policy or plan of action, and provide written

commitment in the form of a formal resolution, to the MoEF or the SEIAA within 60 days. If theproject proponent does not file a response with the MoEF within 60 days, it will be assumed that theproject proponent is no longer interested in pursuing the project and the project file will be closed,after which the procedure for obtaining environment clearance will be required to be initiated afreshif the project proponents are desirous of pursuing the project. Additionally, the state government andthe MoEF will take action under the EPA against such violations which can lead to: (i) constructionactivity stopping until environment clearance has been obtained; and/or (ii) production capacity beingrestricted to the capacity mentioned in the previous clearance.

Forest (Conservation) Act, 1980 and Forest Conservation Rules, 2003

The Forest (Conservation) Act, 1980, as amended from time to time (the Forest Act), requiresconsent from the relevant authorities prior to clearing forests by felling trees. Final clearance inrespect of both forests and the environment is given by the Government through the MoEF. However,all applications must be made through the state governments who recommend the application to theGovernment. Penalties for non-compliance may include closure of the mine or prohibition of miningactivity, stoppage of supply of energy, water or other services and monetary penalties on andimprisonment of persons in charge of the conduct of the business of the company.

Water (Prevention and Control of Pollution) Act, 1974

The Water (Prevention and Control of Pollution) Act, 1974, as amended from time to time (theWater Act), aims to prevent and control water pollution and to maintain or restore wholesomeness ofwater. The Water Act provides for a Central and various State Pollution Control Boards to beconstituted to implement its provisions. The Water Act debars any person from establishing anyindustry, operation or process or any treatment and disposal system likely to discharge sewage or tradeeffluents into a water body, without prior consent of the State Pollution Control Board.

Air (Prevention and Control of Pollution) Act, 1981

The Air (Prevention and Control of Pollution) Act, 1981, as amended from time to time (the AirAct), aims to prevent, control and abate air pollution, and stipulates that no person shall, without priorconsent of the State Pollution Control Board, establish or operate any industrial plant which emits airpollutants in an air pollution control area. The Central Pollution Control Board and State PollutionControl Board constituted under the Water Act perform similar functions under the Air Act as well.The provisions of the Air Act do not automatically apply to all parts of India, and the State PollutionControl Board must notify an area as an “air pollution control area” before the restrictions under theAir Act apply.

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Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008

The Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008, asamended from time to time (the Hazardous Waste Rules), regulate the collection, reception,treatment, storage and disposal of hazardous waste by imposing an obligation on every occupier andoperator of a facility generating hazardous waste to dispose of such waste without adverse effect onthe environment. Every occupier and operator of a facility generating hazardous waste must obtainapproval from the applicable State Pollution Control Board. The occupier is liable for damages causedto the environment resulting from the improper handling and disposal of hazardous waste, and any finethat may be levied by the State Pollution Control Board.

Hazardous Substances (Classification, Packaging and Labelling) Rules, 2011

The MoEF issued the draft Hazardous Substances (Classification, Packaging and Labelling)Rules, 2011 (the Draft Rules) on 8 July 2011 with respect to hazardous substances, hazardouschemicals and dangerous goods. The occupier and consigner of a facility generating hazardous wasteare required to assign hazard classes, use proper shipping names, suitable packaging and labelling,requisite labels and marking and use updated safety data sheets for transportation. The Draft Rulesrequire the training of personnel engaged in the handling, storage and transportation of dangerousgoods. The assignment of a United Nations number and proper shipping names has been prescribed inaccordance with its hazard classification and composition.

Water (Prevention and Control of Pollution) Cess Act, 1977

Under the Water (Prevention and Control of Pollution) Cess Act, 1977, as amended from time totime (the Water Cess Act), a lessee carrying on any industry specified under the Water Cess Act isrequired to pay a surcharge calculated on the amount of water consumed and purpose for which thewater is used. Penalties for non-compliance include a penalty not exceeding the cess in arrears,imprisonment up to six months or a fine, or both.

Employment and Labour Laws

Factories Act, 1948

The Factories Act, 1948, as amended from time to time (the Factories Act), regulatesoccupational safety, health and welfare of workers of industries in which ten or more workers areemployed in a manufacturing process being carried out with the aid of power. The Factories Actincludes provisions as to the approval of factory building plans before construction or extension,investigation of complaints, maintenance of registers and the submission of yearly and half-yearlyreturns. Penalties for non-compliance include imprisonment of the occupier and manager for up to twoyears or a fine, or both, and a further fine for each day of continued contravention.

Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947 (the ID Act) sets out the procedure for the investigation andsettlement of industrial disputes. When a dispute exists or is apprehended, the appropriate governmentmay refer the dispute to a labour court, tribunal or arbitrator, to prevent the occurrence or continuanceof the dispute, or to prevent a strike or lock-out while a proceeding is pending. The labour courts andtribunals may grant appropriate relief including ordering the modification of contracts of employmentor the reinstatement of workmen.

Contract Labour (Regulation and Abolition) Act, 1970

The Contract Labour (Regulation and Abolition) Act, 1970, as amended from time to time (theCLRA), regulates the employment of workers hired on the basis of individual contracts in certainestablishments. The CLRA applies to every establishment in which 20 or more workmen are employed

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or were employed on any day of the preceding 12 months as contract labour. The CLRA vests theresponsibility with the principal employer of an establishment to register as an establishment thatengages contract labour. Likewise, every contractor to whom the CLRA applies must obtain a licenceand may not undertake or execute any work through contract labour except in accordance with thelicence issued. Penalties, including both fines and imprisonment, may be levied for contravention ofthe CLRA. Penalties for non-compliance include imprisonment up to three months or a fine, or both.

Minimum Wages Act, 1948

The Minimum Wages Act, 1948, as amended from time to time (the MWA), provides for aminimum wage payable by employers to employees. Under the MWA, every employer is required topay the minimum wage to all employees, whether for skilled, unskilled, manual or clerical work, inaccordance with the minimum rates of wages that have been fixed and revised under the MWA.Workmen are to be paid for overtime at overtime rates stipulated by the appropriate state government.Contravention may result in imprisonment for up to six months or a fine, or both. State governmentsmay stipulate a higher penalty for contravention, if it is deemed fit to do so.

Payment of Wages Act, 1936

The Payment of Wages Act, 1936, as amended from time to time (the PWA), regulates paymentof wages to certain classes of employees and makes every employer responsible for payment of wagesto persons employed by such employer. No deductions are permitted from, nor is any fine permittedto be levied on, wages earned by a person employed except as provided under the PWA. Penaltiesunder the PWA include a fine.

Employee’s Compensation Act, 1923

The Employee’s Compensation Act, 1923, as amended from time to time (the ECA), makes everyemployer liable to pay compensation if injury, disability or death is caused to an employee (includingthose employed through a contractor) due to an accident arising out of or in the course of employment.If the employer fails to pay the compensation due under the ECA within one month from the date itfalls due, the commissioner shall direct the employer to pay the compensation along with interest andmay impose a penalty for non-payment.

Employee State Insurance Act, 1948

The Employee State Insurance Act, 1948, as amended from time to time (the ESIA), requires theprovision of certain benefits to employees or their beneficiaries in the event of sickness, maternity,disability or employment injury. The ESIA contemplates payment of a contribution by the principalemployer and each employee to the Employee State Insurance Corporation of India. Penalties forfailure to make contributions under the ESIA include imprisonment for a term which may extend tothree years (which shall not be less than: (i) one year in the case of failure to pay the employee’scontribution which has been deducted by him from the employee’s wages or a fine; or (ii) six monthsin any other case) and a fine.

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, as amended from timeto time (the EPFA), institutes provident funds for the benefit of employees in factories, industrialundertakings, and other establishments notified by the Government from time to time. Contributionsare required to be made by employers and employees to a provident fund and pension fund establishedand maintained by the Government.

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Payment of Gratuity Act, 1972

Under the Payment of Gratuity Act, 1972, as amended from time to time (the PGA), an employeewho has been in continuous service for five years is eligible for gratuity on retirement, resignation,death or disablement due to accident or disease. Entitlement to gratuity in the event of superannuationor death or disablement due to accident or disease is not contingent on an employee having completedfive years of continuous service.

Payment of Bonus Act, 1965

The Payment of Bonus Act, 1965, as amended from time to time (the PBA), provides for paymentof a minimum annual bonus to all employees regardless of whether the employer has made a profit ora loss in the accounting year in which the bonus is payable. Contravention of the PBA by a companyis punishable by imprisonment up to six months or a fine, or both, against persons in charge of, andresponsible to the company for, the conduct of the business of the company at the time ofcontravention.

Foreign Exchange Laws

The current laws relating to ECBs are embodied in the ECB Guidelines, as amended from timeto time. ECB can be accessed under two routes: (i) the automatic route; and (ii) the approval route.The automatic route does not require a borrower to obtain any RBI approvals, whereas the approvalroute requires a prior RBI approval. Investors are urged to consult their own advisers in connectionwith the applicability of any Indian laws or regulations.

Automatic route

Under the automatic route, recognised borrowers including: (i) companies in industrial sectors,infrastructure sectors and specified service sectors (i.e. hotel, hospital and software sectors); (ii)infrastructure finance companies (IFCs) (except financial intermediaries such as banks, financialinstitutions, housing finance companies and non-banking financial companies (NBFCs) other thanthose specifically permitted by the RBI); (iii) units in SEZS; (iv) micro-finance institutions registeredunder the Societies Registration Act, 1860, the Indian Trust Act, 1882 or national or state-levelcooperative acts; (v) companies registered under Section 25 of the Companies Act involved inmicro-finance activities; (vi) non-government organisations engaged in micro-finance activities; and(vii) Small Industries Development Bank of India, can utilise ECB for on-lending to the micro, smalland medium enterprises sector. Individuals, trusts other than those engaged in micro-finance activitiesand non-profit making organisations are not eligible to raise ECBs.

The foreign lenders eligible to provide ECBs include, inter alia: (i) international banks; (ii)international capital markets; (iii) multilateral financial institutions or regional financial institutionsand Government-owned development financial institutions; (iv) export credit agencies; (v) suppliersof equipment; (vi) foreign collaborators; and (vii) foreign equity holders, other than erstwhileOverseas Corporate Bodies (subject to compliance with threshold requirements).

ECB proceeds can be utilised for, inter alia: (i) investment (such as the import of capital goods,new projects, modernisation or expansion of existing production units) in the real sector (i.e. theindustrial sector including small and medium enterprises, infrastructure sector and specified servicesectors); (ii) overseas direct investment; (iii) acquisition of shares in the Government’s disinvestmentprogramme of public sector units; (iv) lending to self-help groups or for micro-credit or micro finance;(v) payment for spectrum allocation; (vi) utilisation of ECBs by IFCs for up to 75 per cent. of theirowned funds for on-lending to the infrastructure sector subject to compliance with the prescribednorms; (vii) capital expenditure for maintenance and operations of toll systems for roads and

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highways; (viii) payment of interest during construction by companies engaged in the infrastructuresector; (ix) refinancing of bridge finance used for import of capital goods by infrastructure companies;and (x) import of services, technical knowhow and licence fee subject to certain restrictions. ECBproceeds cannot be used for: (a) on-lending or investment in capital markets or for acquisition of acompany in India by a corporate; (b) investment in real estate; or (c) working capital, generalcorporate purpose or repayment of existing Rupee loans. “Infrastructure sector” for the purposes ofthe ECB Guidelines is defined to include: (A) power; (B) telecommunication; (C) railways; (D) roads;(E) sea ports and airports; (F) industrial parks; (G) urban infrastructure; and (H) mining, explorationand refining.

Further, the maximum amount of ECB which can be raised by a corporate entity is U.S.$20million for a three-year minimum average maturity and U.S.$750 for a five-year minimum averagematurity. Corporates in the services sector are allowed to raise ECBs up to U.S.$200 million eachfinancial year. The all-in-cost (which includes rate of interest, other fees and expenses in foreigncurrency but does not include commitment fees, pre-payment fees, payments for withholding tax inRupees or fees payable in Rupees) ceilings for ECBs are:

Average Maturity PeriodAll-in-cost over6-month LIBOR

Three years and up to five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350bpsMore than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500bps

Approval route

All ECBs falling outside the automatic route limits are considered by the RBI under the approvalroute. ECBs which can be obtained with prior RBI approval include, inter alia: (i) IFCs utilising ECBsbeyond 75 per cent. of their owned funds, for on-lending to the infrastructure sector subject to certainconditions; (ii) automatic route-eligible borrowers above U.S.$750 million (other than corporates inservices sectors beyond U.S.$200 million under the approval route); and (iii) NBFCs utilising ECBsto finance import of infrastructure equipment for leasing to infrastructure projects.

Proceeds can be utilised to refinance Rupee loans by apportioning 25 per cent. of ECBs raisedby the infrastructure company and 40 per cent. of the ECB raised by the power company provided theremaining ECB raised is utilised for capital expenditure. Furthermore, repayment of the Rupeeinfrastructure loan through a seven-year ECB is also permitted following compliance with certainconditions.

Filing and regulatory requirements in relation to issuance of Notes

An ECB borrower is required to obtain a loan registration number (LRN) from the RBI beforean issuance of Notes is effected. To obtain this, ECB borrowers are required to submit completed Form83 certified by a company secretary or a chartered accountant to the AD Bank of the ECB borrower.The AD Bank is then required to forward the completed Form 83 to the RBI.

Any ECB borrower is required to submit an ECB-2 Return on a monthly basis via its AD Bankto the RBI.

Procedure in relation to any change to the Terms and Conditions of the Notes

Any change in the Terms and Conditions of the Notes after obtaining the LRN requires the RBI’sprior approval. The ECB borrower is required to apply to the RBI via its AD Bank to obtain suchapprovals. Certain changes (such as amendments to the repayment date, currency, the name of theborrower, recognised lender, the purpose for which the ECB is utilised, all-in costs, cancellation ofLRN, reduction in amount of the ECB or any change to the AD Bank) may be approved by the ADBank under a delegated authority from the RBI subject to certain conditions being complied with.

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ECB Policy on Issuance of Overseas Rupee-Denominated Bonds

On 29 September 2015, the RBI issued a circular entitled “External Commercial Borrowings(ECB) — Issuance of Rupee denominated bonds overseas” setting out the framework for the offshoreissuance of Rupee-Denominated Bonds. Pursuant to the circular, any company or body corporate,including real estate investment trusts and infrastructure investment trusts, can issue plain vanillaRupee-denominated overseas bonds with a five-year minimum maturity period. These issuances canbe listed or unlisted and may only be made in a Financial Action Task Force (FATF) compliantjurisdiction and any investor from such a FATF compliant jurisdiction can invest in suchRupee-Denominated Bonds.

Banks incorporated in India cannot subscribe to such Rupee-Denominated Bonds; however, theycan act as arrangers and underwriters for such issuances. There is no all-in-cost ceiling forRupee-Denominated Bond issuances and pricing is in accordance with market conditions. Issuers canraise up to U.S.$750 million under the automatic route beyond which an RBI approval would berequired. The proceeds of such issuance can be used for all purposes except for: (i) real estate projectsother than development of integrated township and affordable housing projects; (ii) investment incapital markets and domestic equity investments; (iii) prohibited activities under the Foreign DirectInvestment Guidelines; (iv) land acquisition; and (v) on-lending to other entities for any of the aboveobjectives.

The foreign currency to Rupee conversion will be at the market rate on the settlement date.Furthermore, investors are allowed to hedge their Rupee exposure through permitted derivativeproducts with: (a) an AD Bank in India; (b) the offshore branches or subsidiaries of Indian banks; or(c) branches of foreign banks with a presence in India.

Additionally, the RBI has on 23 September 2015 released a draft framework on ECBs for publiccomments which seeks to provide a more liberal regime for Rupee-denominated borrowings under theECB framework.

Corporate Laws

The Issuer is a company incorporated and registered under the Companies Act and hencegoverned by its provisions and the rules made thereunder. In 2013, the Indian Parliament enacted theNew Companies Act, which was notified in the official gazette on 30 August 2013. The NewCompanies Act will replace the Companies Act entirely as and when fully notified. The NewCompanies Act seeks to overhaul the Companies Act so as to make it more adaptable to the changingcircumstances and make it comprehensive. The Ministry of Corporate Affairs (MCA) has to datenotified: (i) 98 sections of the New Companies Act which were made effective from 12 September2013; (ii) Section 135 and Schedule VII of the New Companies Act in relation to corporate socialresponsibility on 27 February 2014, made effective from 1 April 2014; and (iii) 183 sections andSchedule I to XI which were notified on 26 March 2014 and made effective from 1 April 2014. Thesubstantial operative part of the legislation is in the rules, and the rules for implementation of majorityof the chapters of New Companies Act have also been notified and were made effective from 1 April2014.

The New Companies Act strengthens corporate regulation by increasing the robustness of theexisting provisions and introducing new measures, such as by: (a) increasing accountability ofmanagement by making independent directors more accountable; (b) improving corporate governancepractices; (c) enhancing disclosure norms in relation to capital raising; (d) enhancing audit proceduresand audit accountability including establishment of the National Financial Reporting Authority fordealing with matters relating to accounting and auditing policies and standards; (e) increasing investorprotection and activism by way of provisions relating to class action suits; (f) ensuring protection ofminority rights including exit options; (g) promoting e-governance initiatives; (h) ensuring stricterenforcement standards including establishment of Serious Fraud Investigation Office for investigationof frauds relating to companies and special courts for summary trial of offences under the New

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Companies Act; (i) providing for better framework for insolvency regulation; (j) making CSR

mandatory for every company having net worth of Rs.5,000 million or more, or turnover of Rs.10,000

million or more or a net profit of Rs.50 million or more during any financial year; (k) introducing the

National Company Law Tribunal and its appellate authority which is the National Company Law

Appellate Tribunal and replaces the Company Law Board, the Board for Industrial and Financial

Reconstruction and its appellate authority with the intention that all lawsuits relating to companies are

made to one body; (l) providing rules on insider dealing, forward contracts, related party transactions

and acceptance of deposits; and (m) implementing a fixed and variable legislation model with various

provisions of the New Companies Act delegating rule making power to Central Government. The New

Companies Act has introduced various sections which significantly and substantially modify, repeal

and replace the entire framework of law governing Indian companies including the Issuer.

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TAXATION

The information provided below does not purport to be a comprehensive description of all taxconsiderations which may be relevant to a decision to purchase Notes. In particular, the informationdoes not consider any specific facts of circumstances that may apply to a particular purchaser. Neitherthese statements nor any other statements in this Offering Circular are to be regarded as advice onthe tax position of any holder of the Notes or of any person acquiring, selling or otherwise dealingwith the Notes or on any tax implications arising from the acquisition, sale or other dealings in respectof the Notes. The statements do not purport to be a comprehensive description of all the taxconsiderations that may be relevant to a decision to purchase, own or dispose of the Notes and do notpurport to deal with the tax consequences applicable to all categories of investors, some of which(such as dealers in securities) may be subject to special rules.

Prospective purchasers of Notes are advised to consult their own tax advisers as to the taxconsequences of the purchase, ownership and disposition of Notes, including the effect of anystate or local taxes, under the tax laws applicable in India and each country of which they areresidents or countries of purchase, holding or disposition of the Notes. Additionally, in view ofthe number of jurisdictions where local laws may apply, this Offering Circular does not discussthe local tax consequences to a potential holder, purchaser, seller arising from the acquisition,holding or disposition of the Notes. Prospective investors must therefore inform themselves as toany tax, exchange control legislation or other laws and regulations in force relating to thesubscription, holding or disposition of Notes at their place of ordinance, and the countries ofwhich they are citizens or countries of purchase, holding or disposition of Notes.

Indian Taxation

The following is a summary of the existing principal Indian tax consequences for non-residentinvestors subscribing to the Notes issued by the Issuer. The summary is based on existing Indiantaxation law and practice in force at the date of this Offering Circular and is subject to change,possibly with retroactive effect. The summary does not constitute legal or tax advice and is notintended to represent a complete analysis of the tax consequences under Indian law of the acquisition,ownership or disposal of the Notes. Prospective investors should, therefore, consult their own taxadvisers regarding the Indian tax consequences, as well as the tax consequences under any otherapplicable taxing jurisdiction, of acquiring, owning and disposing of the Notes.

Payments through India

Any payments the Issuer makes on the Notes, including additional amounts, made through Indiawill be subject to the regulations of RBI.

Taxation of interest and Withholding Tax

Interest on the Notes may not be subject to taxes in India if the proceeds of the issuance of theNotes are used for the purposes of business carried on by the Issuer outside India. If, however, theproceeds are used for the purposes of the Issuer’s business in India, non-resident investors will beliable to pay tax on the interest paid on the Notes. As of the date of this Offering Circular, the rateof tax for Notes (other than Rupee Denominated Notes) under the Income Tax Act, 1961 (the IncomeTax Act) is 5.0 per cent. (plus applicable surcharge, education cess and secondary and highereducation cess), for any long term bond, including infrastructure bond borrowings in foreign currency,issued between 1 October 2014 and 30 June 2017. The Central Board of Direct Taxes of theGovernment’s Ministry of Finance issued a press release dated 29 October 2015 (the Release)clarifying that withholding tax at the rate of 5.0 per cent. (plus applicable surcharge, education cessand secondary and higher education cess), in the nature of final tax, would be applicable on interestincome from Rupee Denominated Notes in the same way as it is applicable for off-shore dollar

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denominated bonds. Since the interest payable on the Notes is subject to taxation in India, there is arequirement to withhold tax at the applicable rate for Notes, subject to any lower rate of tax providedby an applicable Tax Treaty (as defined later), depending on the legal status of the non-residentinvestor and its taxable income in India.

The rates of tax will stand reduced if the beneficial recipient is a resident of a country with whichthe Government has entered into an agreement for granting relief of tax or for avoidance of doubletaxation (a Tax Treaty) and the provisions of such treaty, which provide for the taxation in India ofincome by way of interest at a rate lower than that stated above, and of the Income Tax Act, arefulfilled. The interest payable will be subject to withholding tax in India, subject to conditions asdetailed below.

A non-resident investor will be obligated to pay such income tax in an amount equal to, or willbe entitled to a refund of, as the case may be, any difference between amounts withheld in respect ofinterest paid on the Notes through India and its ultimate Indian tax liability for such interest, subjectto and in accordance with the provisions of the Income Tax Act. The non-resident Noteholders shallbe obliged to provide all necessary information and documents, as may be required by the Issuer.

Pursuant to the Terms and Conditions of the Notes, all payments of, or in respect of, principaland interest on the Notes, will be made free and clear of and without withholding or deduction onaccount of any present or future taxes within India unless it is required by law, in which case, pursuantto Condition 9.1, the Issuer will pay additional amounts as may be necessary in order that the netamounts received by the Noteholders after the withholding or deduction shall equal the respectiveamounts which would have been receivable in respect of the Notes in the absence of the withholdingor deduction, subject to certain exceptions.

With respect to interest on the Notes that is not subject to taxes in India (where the proceeds ofthe issuance of the Notes are used for the purposes of business carried on by the Issuer outside Indiaor otherwise), the Issuer may be required to apply annually for an exemption from withholding taxunder section 195(2) of the Income Tax Act.

Taxation of gains arising on disposition

Any gains arising to a non-resident investor from disposition of the Notes held (or deemed to beheld) as a capital asset will generally be chargeable for income tax in India if the Notes are regardedas property situated in India. A non-resident investor generally will not be chargeable for income taxin India from a disposition of the Notes held as a capital asset provided the Notes are regarded as beingsituated outside India. The issue as to where the Notes should properly be regarded as being situatedis not free from doubt. The ultimate decision, however, will depend on the view taken by Indian taxauthorities on the position with respect to the situs of the rights being offered in respect of the Notes.There is a possibility that the Indian tax authorities may treat the Notes as being located in India asthe Issuer is incorporated in and resident in India. The Release also states that it has been decided thatthe capital gains, arising in case of appreciation of Rupee between the date of issue and the date ofredemption against the foreign currency in which the investment is made, would be exempted fromcapital gains tax. For this to become law, the necessary changes to the Income Tax Act will beproposed by way of amendments through the Finance Bill, 2016.

If the Notes are regarded as situated in India by the Indian tax authorities, upon disposition ofa Note:

(i) a non-resident investor, who has held the Notes for a period of more than 36 monthsimmediately preceding the date of their dispositions, will be liable to pay long term capitalgains tax at rate of 10.0 per cent. of the capital gains (plus applicable surcharge, educationcess and secondary & higher education cess) in accordance with the provisions of theIncome Tax Act. These rates are subject to any lower rate provided for by an applicable TaxTreaty;

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(ii) a non-resident investor who has held the Notes for 36 months or less will be liable to payshort term capital gains tax at a rate of up to 40.0 per cent. of capital gains (plus applicablesurcharge, education cess and secondary and higher education cess), depending on the legalstatus of the non-resident investor, and his or her taxable income in India, subject to anylower rate provided for by an applicable Tax Treaty; and

(iii) any income arising to a non-resident investor from a transfer of the Notes held asstock-in-trade will be considered as business income. Business income will be subject toincome tax in India only to the extent, it is attributable to a “business connection in India”or, where a Tax Treaty applies, to a “permanent establishment” of the non-resident investorin India. A non-resident investor will be liable to pay Indian tax on such income at a rateof up to 40.0 per cent. (plus applicable surcharge, education cess and secondary and highereducation cess), depending on the legal status of the non-resident investor and his or hertaxable income in India, subject to any lower rate provided for by a Tax Treaty.

If applicable, under the tax law, tax shall be withheld by the person making any payment to anon-resident on long-term capital gains at 10.0 per cent. (plus applicable surcharge, education cess andsecondary and higher education cess) and short-term capital gains at 30.0 per cent. or 40 per cent.(plus applicable surcharge, education cess and secondary and higher education cess), depending on thelegal status of the recipient of income, subject to any lower rate provided for by a Tax Treaty. Taxpayable shall be computed in such manner as prescribed in this regard under the Income Tax Act. Forthe purpose of tax withholding, the non-resident Noteholders shall be obliged to provide PermanentAccount Number allotted by the Tax Authorities and all prescribed information/documents, includinga Tax Residency Certificate (issued by the Tax Authorities of the country in which the investor isresident) for claiming the Tax Treaty benefits.

Potential investors should, in any event, consult their own tax advisers on the tax consequencesof transfer of the Notes.

Wealth Tax

No wealth tax is payable in relation to the Notes.

Taxation of persons ordinarily resident in India

Any income received in respect of the Notes by a person ordinarily resident in India under theprovisions of the Income Tax Act may generally be subject to tax in India according to the personaltax rates applicable.

Estate Duty

No estate duty is payable at present in India in relation to the Notes.

Gift Tax

There is no gift tax payable at present in India in relation to the Notes.

Stamp Duty

A transfer of the Notes outside India will not give rise to any Indian stamp duty liability unlessbrought into India. Stamp duty will be payable if the Notes are brought into India for enforcement orfor any other purpose. The amount of stamp duty payable will depend on the applicable State StampAct and the duty will have to be paid within a period of three months from the date the Notes are firstreceived in India.

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EU Savings Directive

Under the Savings Directive, EU Member States are required to provide to the tax authorities ofother EU Member States details of certain payments of interest or similar income paid or secured bya person established in an EU Member State to or for the benefit of an individual resident in anotherEU Member State or certain limited types of entities established in another EU Member State.

For a transitional period, Austria is required (unless during that period it elects otherwise) tooperate a withholding system in relation to such payments (subject to a procedure whereby, on meetingcertain conditions, the beneficial owner of the interest or other income may request that no tax bewithheld). The end of the transitional period is dependent upon the conclusion of certain otheragreements relating to information exchange with certain other countries. A number of non-EUcountries and territories including Switzerland have adopted similar measures (a withholding systemin the case of Switzerland).

On 24 March 2014, the Council of the European Union adopted the Amending Directiveamending and broadening the scope of the requirements described above. The Amending Directiverequires EU Member States to apply these new requirements from 1 January 2017, and if they wereto take effect the changes would expand the range of payments covered by the Savings Directive, inparticular to include additional types of income payable on securities. They would also expand thecircumstances in which payments that indirectly benefit an individual resident in a Member State mustbe reported or subject to withholding. This approach would apply to payments made to, or secured for,persons, entities or legal arrangements (including trusts) where certain conditions are satisfied, andmay in some cases apply where the person, entity or arrangement is established or effectively managedoutside of the European Union.

However, the European Commission has proposed the repeal of the Savings Directive from1 January 2017 in the case of Austria and from 1 January 2016 in the case of all other EU MemberStates (subject to ongoing requirements to fulfil administrative obligations such as the reporting andexchange of information relating to, and accounting for withholding taxes on, payments made beforethose dates). This is to prevent overlap between the Savings Directive and a new automatic exchangeof information regime to be implemented under Council Directive 2011/16/EU on AdministrativeCooperation in the field of Taxation (as amended by Council Directive 2014/107/EU). The new regimeunder Council Directive 2011/16/EU (as amended) is in accordance with the Global Standard releasedby the Organisation for Economic Co-operation and Development in July 2014. Council Directive2011/16/EU (as amended) is generally broader in scope than the Savings Directive, although it doesnot impose withholding taxes. The proposal also provides that, if it proceeds, Member States will notbe required to apply the new requirements of the Amending Directive.

The proposed financial transactions tax (FTT)

On 14 February 2013, the European Commission published a proposal (the Commission’sProposal) for a Directive for a common FTT in Belgium, Germany, Estonia, Greece, Spain, France,Italy, Austria, Portugal, Slovenia and Slovakia (the participating Member States).

The Commission’s Proposal has very broad scope and could, if introduced, apply to certaindealings in the Notes (including secondary market transactions) in certain circumstances. Primarymarket transactions referred to in Article 5(c) of Regulation (EC) No 1287/2006 are expected to beexempt.

Under the Commission’s Proposal, the FTT could apply in certain circumstances to persons bothwithin and outside of the participating Member States. Generally, it would apply to certain dealingsin the Notes where at least one party is a financial institution, and at least one party is established ina participating Member State. A financial institution may be, or be deemed to be, “established” in a

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participating Member State in a broad range of circumstances, including: (i) by transacting with aperson established in a participating Member State; or (ii) where the financial instrument which issubject to the dealings is issued in a participating Member State. Joint statements issued byparticipating Member States indicate an intention to implement the FTT by 1 January 2016.

However, the FTT proposal remains subject to negotiation between the participating MemberStates and the scope of any such tax is uncertain. Additional EU Member States may decide toparticipate. Prospective holders of Notes are advised to seek their own professional advice in relationto the FTT.

Foreign Account Tax Compliance Act

Sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986 (FATCA) impose a newreporting regime and potentially a 30 per cent. withholding tax with respect to certain payments to:(i) any non-U.S. financial institution (a “foreign financial institution”, or FFI (as defined by FATCA))that does not become a “Participating FFI” by entering into an agreement with the U.S. InternalRevenue Service (the IRS) to provide the IRS with certain information in respect of its accountholders and investors or is not otherwise exempt from or in deemed compliance with FATCA; and (ii)any investor (unless otherwise exempt from FATCA) that does not provide information sufficient todetermine whether the investor is a U.S. person or should otherwise be treated as holding a “UnitedStates account” of the Issuer (a Recalcitrant Holder). The Issuer does not expect to be classified asan FFI.

The new withholding regime is now in effect for payments from sources within the United Statesand will apply to “foreign passthru payments” (a term not yet defined) no earlier than 1 January2019. This withholding would potentially apply to payments in respect of: (i) any Notes characterisedas debt (or which are not otherwise characterised as equity and have a fixed term) for U.S. federal taxpurposes that are issued after the “grandfathering date”, which (a) with respect to Notes that giverise solely to foreign passthru payments, is the date that is six months after the date on which finalU.S. Treasury regulations defining the term foreign passthru payment are filed with the FederalRegister; and (b) with respect to Notes that give rise to a dividend equivalent pursuant to section871(m) of the U.S. Internal Revenue Code of 1986, is 1 July 2016, or which are materially modifiedafter the grandfathering date; and (ii) any Notes characterised as equity or which do not have a fixedterm for U.S. federal tax purposes, whenever issued. If Notes are issued on or before thegrandfathering date, and additional Notes of the same series are issued after that date, the additionalNotes may not be treated as grandfathered, which may have negative consequences for the existingNotes, including a negative impact on market price.

The United States and a number of other jurisdictions have entered into intergovernmentalagreements to facilitate the implementation of FATCA (each, an IGA). Pursuant to FATCA and the“Model 1” and “Model 2” IGAs released by the United States, an FFI in an IGA signatory countrycould be treated as a “Reporting FI” not subject to withholding under FATCA on any payments itreceives. Further, an FFI in an IGA jurisdiction would generally not be required to withhold underFATCA or an IGA (or any law implementing an IGA) (any such withholding being FATCAWithholding) from payments it makes. Under each Model IGA, a Reporting FI would still be requiredto report certain information in respect of its account holders and investors to its home governmentor to the IRS. The United States and India have entered into an agreement the U.S. — India IGA basedlargely on the Model 1 IGA.

If the Issuer is treated as a Reporting FI pursuant to the U.S.-India IGA, it does not anticipatethat it will be obliged to deduct any FATCA Withholding on payments it makes. There can be noassurance, however, that the Issuer will be treated as a Reporting FI, or that it would in the future notbe required to deduct FATCA Withholding from payments it makes. The Issuer and financial

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institutions through which payments on the Notes are made may be required to withhold FATCAWithholding if: (i) any FFI through or to which payment on such Notes is made is not a ParticipatingFFI, a Reporting FI, or otherwise is exempt from or in deemed compliance with FATCA; or (ii) aninvestor is a Recalcitrant Holder.

While the Notes are in global form and held within the ICSDs, it is expected that FATCA willnot affect the amount of any payments made under, or in respect of, the Notes by the Issuer, any payingagent and the common depositary, given that each of the entities in the payment chain between theIssuer and the participants in the ICSDs is a major financial institution whose business is dependenton compliance with FATCA and that any alternative approach introduced under an IGA will beunlikely to affect the Notes. The documentation expressly contemplates the possibility that the Notesmay go into definitive form and therefore that they may be taken out of the ICSDs. If this were tohappen, then a non-FATCA-compliant holder could be subject to FATCA Withholding. However,definitive Notes will only be printed in remote circumstances.

FATCA is particularly complex and its application is uncertain at this time. The abovedescription is based in part on regulations, official guidance and model IGAs, all of which aresubject to change or may be implemented in a materially different form. Prospective investorsshould consult their tax advisers on how these rules may apply to the Issuer and to payments theymay receive in connection with the Notes.

Hiring Incentives to Restore Employment Act

The U.S. Hiring Incentives to Restore Employment Act introduced Section 871(m) of the U.S.Internal Revenue Code of 1986 which treats a “dividend equivalent” payment as a dividend fromsources within the United States. Under Section 871(m), such payments generally would be subject toa 30 per cent. U.S. withholding tax that may be reduced by an applicable tax treaty, eligible for creditagainst other U.S. tax liabilities or refunded, provided that the beneficial owner timely claims a creditor refund from the IRS. A “dividend equivalent” payment is (i) a substitute dividend payment madepursuant to a securities lending or a sale-repurchase transaction that (directly or indirectly) iscontingent upon, or determined by reference to, the payment of a dividend from sources within theUnited States, (ii) a payment made pursuant to a “specified notional principal contract” that (directlyor indirectly) is contingent upon, or determined by reference to, the payment of a dividend fromsources within the United States, and (iii) any other payment determined by the IRS to be substantiallysimilar to a payment described in (i) and (ii). Recently published final U.S. Treasury regulationsissued under Section 871(m) (the Section 871(m) Regulations) will, when effective, requirewithholding on certain non-U.S. holders of the Notes with respect to amounts treated as attributableto dividends from certain U.S. securities. Under the Section 871(m) Regulations, only a Note that hasan expected economic return sufficiently similar to that of the underlying U.S. security, as determinedon the Note’s issue date based on tests set forth in the Section 871(m) Regulations, will be subject tothe Section 871(m) withholding regime (making such Note a Specified Note). The Section 871(m)Regulations provide certain exceptions to this withholding requirement, in particular for instrumentslinked to certain broad-based indices.

Withholding in respect of dividend equivalents will generally be required when cash paymentsare made on a Specified Note or upon the date of maturity, lapse or other disposition by the non-U.S.holder of the Specified Note. If the underlying U.S. security or securities are expected to paydividends during the term of the Specified Note, withholding generally will still be required even ifthe Specified Note does not provide for payments explicitly linked to dividends. If the Issuer or anywithholding agent determines that withholdingis required, neither the Issuer nor any withholdingagent will be required to pay any additional amounts with respect to amounts so withheld.

The Section 871(m) Regulations generally apply to (i) Specified Notes issued in 2016, but onlyfor dividend equivalent payments made in 2018 or later, and (ii) Specified Notes issued beginning in2017, for all dividend equivalent payments. If the terms of a Note are subject to a “significantmodification” such that the Note is treated as retired and reissued, it could lose its “grandfathered”status and might become a Specified Note based on economic conditions in effect at that time.

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Upon the issuance of a series of Notes, the Issuer will state in the Pricing Supplement if it has

determined that they are Specified Notes, in which case a non-U.S. holder of the Notes should expect

to be subject to withholding in respect of any dividend-paying U.S. securities underlying those Notes.

The Issuer’s determination is binding on non-U.S. holders of the Notes, but it is not binding on the

IRS. The Section 871(m) Regulations require complex calculations to be made with respect to Notes

linked to U.S. securities and their application to a specific issue of Notes may be uncertain.

Prospective investors should consult their tax advisers regarding the potential application of Section

871(m) to the Notes.

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SUBSCRIPTION AND SALE

The Dealers have, in an amended and restated programme agreement (amended and restated)dated 25 May 2011 as amended and/or supplemented from time to time (the Programme Agreement),agreed with the Issuer a basis upon which they or any of them may from time to time agree to purchaseNotes. Any such agreement will extend to those matters stated under “Form of the Notes” and “Termsand Conditions of the Notes”. In the Programme Agreement, the Issuer has agreed to reimburse theDealers for certain of their expenses in connection with the establishment of the Programme and theissue of Notes under the Programme and to indemnify the Dealers against certain liabilities incurredby them in connection therewith. The Programme Agreement entitles the Dealers to terminate anyagreement that they make to subscribe Notes in certain circumstances prior to payment for such Notesbeing made to the Issuer.

In order to facilitate the offering of any Tranche of the Notes, a nominated Dealer participatingin the offering of the Tranche may engage in transactions that stabilise, maintain or otherwise affect,which support the market price of the relevant Notes during and after the offering of the Tranche.Specifically, such persons may over-allot or create a short position in the Notes for their own accountby selling more Notes than have been sold to them by the Issuer. Such persons may also elect to coverany such short position by purchasing Notes in the open market. In addition, such persons maystabilise or maintain the price of the Notes by bidding for or purchasing Notes in the open market andmay impose penalty bids, under which selling concessions allowed to syndicate members or otherbroker-dealers participating in the offering of the Notes are reclaimed if Notes previously distributedin the offering are repurchased in connection with stabilisation transactions or otherwise. The effectof these transactions may be to stabilise or maintain the market price of the Notes at a level higherthan that which might otherwise prevail in the open market. The imposition of a penalty bid may alsoaffect the price of the Notes to the extent that it discourages resales thereof. No representation is madeas to the magnitude or effect of any such stabilising or other transactions. Such transactions, ifcommenced, may be discontinued at any time, and must be brought to an end after a limited period.Under U.K. laws and regulations, stabilising activities may only be carried on by the StabilisingManager (or any person acting for the Stabilising Manager) named in the applicable PricingSupplement and only for a period of 30 days following the Issue Date of the relevant Tranche of Notes.

United States

Each Dealer has represented and agreed and each further Dealer appointed under the Programmewill be required to represent and agree that:

(i) the Notes have not been and will not be registered under the Securities Act and may not beoffered or sold within the United States (or, in certain circumstances, to, or for the accountor benefit of, U.S. persons) except in certain transactions exempt from the registrationrequirements of the Securities Act;

(ii) the Notes in bearer form are subject to U.S. tax law requirements and may not be offered,sold or delivered within the United States or its possessions or to a United States person,except in certain transactions permitted by U.S. tax regulations. Notes in bearer form forU.S. federal income tax purposes will be issued in accordance with the provisions of U.S.Treasury Regulation §1.163�5(c)(2)(i)(D) (or any successor United States Treasuryregulation section, including, without limitation, successor regulations issued inaccordance with Internal Revenue Service Notice 2012-20 or otherwise in connection withthe United States Hiring Incentives to Restore Employment Act of 2010), unless therelevant Pricing Supplement specifies that Notes will be issued in accordance with theprovision of U.S. Treasury Regulation §1.163�5(c)(2)(i)(C) (or any successor UnitedStates Treasury regulation section, including, without limitation, successor regulations

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issued in accordance with Internal Revenue Service Notice 2012-20 or otherwise inconnection with the United States Hiring Incentives to Restore Employment Act of 2010)or that TEFRA is not applicable. Terms used in this paragraph have the meanings given tothem by the U.S. Revenue Code of 1986 and regulations promulgated thereunder;

(iii) in connection with any Notes which are offered or sold outside the United States in relianceon an exemption from the registration requirements of the Securities Act provided underCategory 2 of Regulation S (Category 2 Notes), each Dealer has represented and agreed,and each further Dealer appointed under the Programme will be required to represent andagree, that it will not offer, sell or deliver such Category 2 Notes: (i) as part of theirdistribution at any time; or (ii) otherwise until 40 days after the completion of thedistribution, as determined and certified by the relevant Dealer or, in the case of an issueof Notes on a syndicated basis, the relevant lead manager, of all Notes of the Tranche ofwhich such Category 2 Notes are a part, within the United States or to, or for the accountor benefit of, U.S. persons. Each Dealer has further agreed, and each further Dealerappointed under the Programme will be required to agree, that it will send to each dealerto which it sells any Category 2 Notes during the Distribution Compliance Period aconfirmation or other notice setting forth the restrictions on offers and sales of the Category2 Notes within the United States or to, or for the account or benefit of, U.S. persons;

(iv) until 40 days after the commencement of the offering of any Series of Notes, an offer orsale of such Notes within the United States by any dealer (whether or not participating inthe offering) may violate the registration requirements of the Securities Act if such offer orsale is made otherwise than in accordance with an available exemption from registrationunder the Securities Act; and

(v) each issuance of Index Linked Notes or Dual Currency Notes shall be subject to suchadditional U.S. selling restrictions as the Issuer and the relevant Dealer may agree as a termof the issuance and purchase of such Notes, which additional selling restrictions shall beset out in the applicable Pricing Supplement.

European Economic Area

Public Offer Selling Restriction under the Prospectus Directive

In relation to each Member State of the European Economic Area which has implemented theProspectus Directive (each, a Relevant Member State), each Dealer has represented and agreed, andeach further Dealer appointed under the Programme will be required to represent and agree, that witheffect from and including the date on which the Prospectus Directive is implemented in that RelevantMember State (the Relevant Implementation Date) it has not made and will not make an offer ofNotes which are the subject of the offering contemplated by this Offering Circular as completed bythe pricing supplement in relation thereto to the public in that Relevant Member State except that itmay, with effect from and including the Relevant Implementation Date, make an offer of such Notesto the public in that Relevant Member State:

(a) at any time to any legal entity which is a qualified investor as defined in the ProspectusDirective;

(b) at any time to fewer than 150 natural or legal persons (other than qualified investors asdefined in the Prospectus Directive), subject to obtaining the prior consent of the relevantDealer or Dealers nominated by the Issuer for any such offer; or

(c) at any time in any other circumstances falling within Article 3(2) of the ProspectusDirective,

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provided that no such offer of Notes referred to in (a) to (c) above shall require the Issuer or anyDealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive, or supplement aprospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an offer of Notes to the public in relation to anyNotes in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and the Notes to be offered so as to enable an investorto decide to purchase or subscribe the Notes, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression ProspectusDirective means Directive 2003/71/EC (as amended including by Directive 2010/73/EU), and includesany relevant implementing measure in the Relevant Member State.

United Kingdom

Each Dealer has represented and agreed, and each further Dealer appointed under the Programmewill be required to represent and agree, that:

(a) in relation to any Notes which have a maturity of less than one year: (i) it is a person whoseordinary activities involve it in acquiring, holding, managing or disposing of investments(as principal or agent) for the purposes of its business; and (ii) it has not offered or soldand will not offer or sell any Notes other than to persons whose ordinary activities involvethem in acquiring, holding, managing or disposing of investments (as principal or as agent)for the purposes of their businesses or who it is reasonable to expect will acquire, hold,manage or dispose of investments (as principal or agent) for the purposes of theirbusinesses where the issue of the Notes would otherwise constitute a contravention ofSection 19 of the Financial Services and Markets Act 2000 (FSMA) by the Issuer;

(b) it has only communicated or caused to be communicated and will only communicate orcause to be communicated an invitation or inducement to engage in investment activity(within the meaning of Section 21 of the FSMA) received by it in connection with the issueor sale of any Notes in circumstances in which Section 21(1) of the FSMA does not applyto the Issuer; and

(c) it has complied and will comply with all applicable provisions of the FSMA with respectto anything done by it in relation to any Notes in, from or otherwise involving the UnitedKingdom.

Italy

Each Dealer has represented, warranted and undertaken, and each further Dealer appointed underthe Programme will be required to represent, warrant and undertake, that the offering of the Notes hasnot been registered pursuant to Italian securities legislation and, accordingly no Notes may be offered,sold or delivered, nor may copies of the Offering Circular or of any other document relating to theNotes be distributed in the Republic of Italy, except:

(a) to qualified investors (investitori qualificati), as defined in Article 100 of LegislativeDecree No. 58 of February 24, 1998, as amended (the Financial Services Act) and Article34-ter, first paragraph, letter (b) of CONSOB Regulation No. 11971 of May 14, 1999, asamended from time to time (Regulation No. 11971); or

(b) in other circumstances which are exempted from the rules on public offerings pursuant toArticle 100 of the Financial Services Act and Article 34-ter of Regulation No. 11971.

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Any offer, sale or delivery of the Notes or distribution of copies of the Offering Circular or anyother document relating to the Notes in the Republic of Italy under (a) or (b) above must be:

(i) made by an investment firm, bank or financial intermediary permitted to conduct suchactivities in the Republic of Italy in accordance with the Financial Services Act, CONSOBRegulation No. 16190 of 29 October 2007 (as amended from time to time) and LegislativeDecree No. 385 of 1 September 1993, as amended (the Banking Act);

(ii) in compliance with Article 129 of the Banking Act, (as amended), and the implementingguidelines of the Bank of Italy, as amended from time to time, pursuant to which the Bankof Italy may request information on the issue or the offer of securities in the Republic ofItaly; and

(iii) in compliance with any other applicable laws and regulations or requirement imposed byCONSOB or other Italian authority.

Please note that in accordance with Article 100-bis of the Financial Services Act, where noexemption from the rules on public offerings applies under (a) and (b) above, the subsequentdistribution of the Notes on the secondary market in Italy must be made in compliance with the publicoffer and the prospectus requirement rules provided under the Financial Services Act and RegulationNo. 11971. Failure to comply with such rules may result in the sale of such Notes being declared nulland void and in the liability of the intermediary transferring the financial instruments for anydamages suffered by the investors.

The Netherlands

Each Dealer has represented and agreed, and each further Dealer appointed under the Programmewill be required to represent and agree, that any Notes will only be offered in the Netherlands toQualified Investors (as defined in the EU Prospectus Directive), unless such offer is made inaccordance with the Dutch Financial Supervision Act (Wet op het financieel toezicht).

India

Each Dealer has represented and agreed and each further Dealer appointed under the Programmewill be required to represent and agree that: (i) this Offering Circular has not been and will not beregistered or produced or made available to all as an offer document whether as a prospectus in respectof a public offer or information memorandum or private placement offer letter or other offeringmaterial in respect of a private placement under the Companies Act or the New Companies Act (or anyother applicable Indian laws) with the Registrar of Companies, the Securities and Exchange Board ofIndia or any other statutory or regulatory body of like nature in India; and (ii) the Notes will not beoffered or sold, and have not been offered or sold to any person in India by means of any documentand this Offering Circular or any other offering document or material relating to the Notes have notbeen and will not be circulated or distributed, directly or indirectly, to any person or to the public inIndia which would constitute an advertisement, invitation, offer, sale or solicitation of an offer tosubscribe for or purchase any securities in violation of Indian laws.

Singapore

This Offering Circular has not been registered as a prospectus with the Monetary Authority ofSingapore, and the Notes will be offered pursuant to exemptions under the Securities and Futures Act,Chapter 289 of Singapore, as amended (the Securities and Futures Act). Accordingly, each Dealerhas represented, warranted and agreed, and each further Dealer appointed under the Programme willbe required to represent, warrant and agree that the Notes may not be offered or sold or made thesubject of an invitation for subscription or purchase nor may this Offering Circular or any otherdocument or material in connection with the offer or sale or invitation for subscription or purchase ofany Notes be circulated or distributed, whether directly or indirectly, to any person in Singapore other

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than: (i) to an institutional investor pursuant to Section 274 of the Securities and Futures Act; (ii) toa relevant person under Section 275(1) of the Securities and Futures Act, or to any person pursuantto Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specifiedin Section 275 of the Securities and Futures Act; or (iii) otherwise pursuant to, and in accordance withthe conditions of, any other applicable provision of the Securities and Futures Act.

Where the Notes are subscribed or purchased under Section 275 of the Securities and Futures Actby a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of theSecurities and Futures Act)) the sole business of which is to hold investments and the entireshare capital of which is owned by one or more individuals, each of whom is an accreditedinvestor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to holdinvestments and each beneficiary is an individual who is an accredited investor,

securities (as defined in Section 239(1) of the Securities and Futures Act) of that corporation or thebeneficiaries’ rights and interest (howsoever described) in that trust shall not be transferable for sixmonths after that corporation or that trust has acquired the Notes pursuant to an offer under Section275 of the Securities and Futures Act except:

(i) to an institutional investor or to a relevant person defined in Section 275(2) of theSecurities and Futures Act or to any person arising from an offer referred to in Section275(1A) or Section 276(4)(i)(B) of the Securities and Futures Act; or

(ii) where no consideration is or will be given for the transfer; or

(iii) where the transfer is by operation of law; or

(iv) pursuant to Section 276(7) of the Securities and Futures Act or Regulation 32 of theSecurities and Futures (Offers of Investment) (Shares and Debentures) Regulations.

Hong Kong

Each Dealer has represented and agreed, and each further Dealer appointed under the Programmewill be required to represent, warrant and agree that:

(a) it has not offered or sold, and will not offer or sell, in the Hong Kong SpecialAdministrative Region of the People’s Republic of China (Hong Kong), by means of anydocument, any Notes (except for Notes which are a “structured product” as defined in theSecurities and Futures Ordinance (Cap.571) of Hong Kong) other than: (i) to “professionalinvestors” as defined in the Securities and Futures Ordinance and any rules made under thatOrdinance; or (ii) in other circumstances which do not result in the document being a“prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions)Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public withinthe meaning of that Ordinance; and

(b) it has not issued, or had in its possession for the purposes of issue, and will not issue orhave in its possession for the purposes of issue, whether in Hong Kong or elsewhere, anyadvertisement, invitation or document relating to the Notes which is directed at, or thecontents of which are likely to be accessed or read by, the public of Hong Kong (except ifpermitted to do so under the securities laws of Hong Kong) other than with respect to Noteswhich are or are intended to be disposed of only to persons outside Hong Kong or only to“professional investors” as defined in the Securities and Futures Ordinance and any rulesmade under that Ordinance.

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Japan

The Notes have not been and will not be registered under the Financial Instruments and Exchange

Act of Japan (Law No. 25 of 1948, as amended, the FIEA) and each Dealer has represented and

agreed, and each further Dealer appointed under the Programme will be required to represent and

agree, that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit

of, any resident of Japan (as defined under Item 5, Paragraph 1, Article 6 of the Foreign Exchange and

Foreign Trade Act (Act No. 228 of 1949, as amended)), or to others for re-offering or resale, directly

or indirectly, in Japan or to, or for the benefit of, a resident of Japan, except pursuant to an exemption

from the registration requirements of, and otherwise in compliance with, the FIEA and any other

applicable laws, regulations and ministerial guidelines of Japan.

General

Each Dealer has represented, warranted and undertaken and each further Dealer appointed under

the Programme will be required to represent, warrant and undertake that it will (to the best of its

knowledge and belief) comply with all applicable securities laws and regulations in force in any

jurisdiction in which it purchases, offers, sells or delivers Notes or possesses or distributes this

Offering Circular and will obtain any consent, approval or permission required by it for the purchase,

offer, sale or delivery by it of Notes under the laws and regulations in force in any jurisdiction to

which it is subject or in which it makes such purchases, offers, sales or deliveries and neither the

Issuer, the Trustee nor any of the other Dealers shall have any responsibility therefor.

None of the Issuer, the Trustee, the Arrangers and the Dealers represents that Notes may at any

time lawfully be sold in compliance with any applicable registration or other requirements in any

jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for

facilitating such sale.

With regard to each Tranche, the relevant Dealer will be required to comply with such other

restrictions as the Issuer and the relevant Dealer shall agree and as shall be set out in the applicable

Pricing Supplement.

Certain Relationships

The Dealers and certain of their affiliates may have performed certain investment banking and

advisory services for the Issuer and its affiliates from time to time for which they have received

customary fees and expenses and may, from time to time, engage in transactions with and perform

services for the Issuer and its affiliates in the ordinary course of their business. The Dealers or certain

of their affiliates may purchase Notes and be allocated Notes for asset management and/or proprietary

purposes but not with a view to distribution.

The Dealers or their respective affiliates may purchase Notes for their own account and enter into

transactions, including credit derivatives, such as asset swaps, repackaging and credit default swaps

relating to Notes and/or other securities of the Issuer or its subsidiaries or associates, at the same time

as the offer and sale of Notes or in secondary market transactions. Such transactions would be carried

out as bilateral trades with selected counterparties and separately from any existing sale or resale of

Notes to which this Offering Circular relates (notwithstanding that such selected counterparties may

also be purchasers of Notes).

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SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN INDIAN GAAP AND IFRS

The Issuer’s financial statements included in this Offering Circular have been prepared in

accordance with accounting policies followed by the Issuer which conform to the Indian GAAP as

applicable to the Issuer. Indian GAAP differ in certain significant respects from IFRS. Such

differences involve methods for measuring amounts in the financial statements as well as in

disclosures.

The following summarises certain general differences between Indian GAAP and IFRS that could

have a significant impact on the financial position and operations of the Issuer if its financial

statements were prepared under IFRS. The summary below should not be considered exhaustive and

no attempt has been made to identify possible future differences between Indian GAAP and IFRS as

a result of prescribed changes in accounting standards nor to identify future differences that may

affect the Issuer’s financial statements as a result of transactions or events that may occur in future.

No attempt has been made by the Issuer to quantify the effects of those differences, nor has a

reconciliation of Indian GAAP to IFRS been undertaken by the Issuer. Had any such quantification or

reconciliation been undertaken, other potential significant accounting and disclosure differences may

have come to its attention, which are not identified below.

Prospective investors should consult their own professional advisers for an understanding of the

principal differences between Indian GAAP and IFRS and how these differences might affect the

financial statements of the Issuer presented in this Offering Circular.

Summary of Certain Differences

Topic IFRS Indian GAAP

Presentation of FinancialStatements — Components offinancial statements

The requirements for the presentation offinancial statements, the guidelines for theirstructure and content are set out in IAS 1. Acomplete set of financial statements underIFRS comprises: (a) a statement of financialposition; (b) a statement of comprehensiveincome/a statement displaying componentsof profit or loss (separate income statement)and a second statement beginning with profitor loss and displaying components of othercomprehensive income; (c) statement of cashflow; (d) statement of changes in equity; and(e) notes including summary of accountingpolicies and explanatory notes.

The requirements for the presentation offinancial statements are set out in ScheduleIII to the New Companies Act and theaccounting standards notified thereunder(together with New Companies Actcollectively referred to as the IndianGAAP).

The components of financial statements are:(a) balance sheet; (b) statement of profit andloss; (c) cash flow statement; (d) a statementof changes in equity; and (e) explanatorynotes and a summary of accounting policies.

Presentation of FinancialStatements — Disclosure ofReclassification

The disclosure of reclassification ofcomparative amounts includes the nature,amount and reason for reclassification.

A disclosure is made in Financial Statementsthat comparative amounts have beenreclassified to conform to the presentation inthe current period without additionaldisclosure for the nature, amount and reasonfor reclassification.

Presentation of FinancialStatements — Balancesheet/statement of financialposition

An entity is required to present current andnon-current assets, and current andnon-current liabilities, as separateclassifications on the face of the statement offinancial position except when a presentationbased on liquidity provides information thatis more reliable and is more relevant.Minimum line item requirements are set outin IAS 1.

All items of assets and liabilities are to bebifurcated between current and non-currentportions and presented separately on the faceof the balance sheet. Schedule III of the NewCompanies Act sets out the minimumrequirements for disclosure required in thebalance sheet and statement of profit and lossaccount and notes.

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Presentation of FinancialStatements — Presentation ofincome statement

An analysis of expenses is presented using aclassification based on either the nature ofthose expenses or their function bywhichever method that provides informationthat is reliable and most relevant.

If presented by function, specific disclosuresby nature are provided in the notes. Profit orloss attributable to non-controlling interestsand equity holders of the parent are disclosedin the statement of comprehensiveincome/income statement (if presentedseparately) as allocations of profit or loss forthe period.

Schedule III to the New Companies Act onlypermits an analysis of expense by nature.

Presentation of FinancialStatements — Statement ofchanges in equity

A statement of changes in equity is presentedshowing: (a) total comprehensive income forthe period, separately showing the totalamounts attributable to owners of the parentand to NCI; (b) for each component ofequity, the effects of retrospectiveapplication or retrospective restatementrecognised in accordance with IAS 8; and (c)for each component of equity, areconciliation between the carrying amountat the beginning and at the end of the period,separately disclosing changes resulting from:

— Profit or loss;

— OCI; and

— transactions with owners in theircapacity as owners, showingseparately contributions by anddistributions to owners and changes inownership interests in subsidiariesthat do not result in a loss of control.

Movements in share capital, retainedearnings and other reserves are currentlypresented in the notes to financialstatements.

Presentation of FinancialStatements — CriticalJudgments

The critical judgements made by themanagement in applying accounting policiesare to be disclosed separately.

The disclosure of critical judgments thatmanagement has made is not specificallyrequired.

Presentation of FinancialStatements — Disclosure ofCapital

The disclosure of information aboutmanagement of capital and compliance withexternally imposed capital requirements, ifany, is required.

The information regarding management ofcapital is not required to be disclosed.

Presentation of FinancialStatements — Extraordinaryitems

Presentation of any items of income orexpense as extraordinary is prohibited.However, it requires that when items ofincome or expense are material, an entityshall disclose their nature and amountseparately.

Extraordinary items are disclosed separatelyin the statement of profit and loss and areincluded in determination of net profit orloss. Items of income or expense to bedisclosed as extraordinary should be distinctfrom the ordinary activities and aredetermined by the nature of the event ortransaction in relation to the businessordinarily carried out by an entity.

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Inventories — Net realisablevalue

A new assessment of net realisable value isrequired to be made in each subsequentperiod. Write-down of inventory is reversedif circumstances that previously causedinventories to be written down below cost nolonger exist or when there is clear evidenceof an increase in the net realisable valuebecause of changes in economiccircumstances.

No specific guidance in AS 2 for reversal ofwrite-down of inventories. However,reversals may be permitted as AS 5, NetProfit or Loss for the period, Prior PeriodItems and Changes in Accounting Policiesrequires this to be disclosed as a separateline item in the statement of profit or loss.

Cash Flow Statement — Bankoverdrafts

Included if they form an integral part of anentity’s cash management. Usually, thesebank balances often fluctuate between beingin credit and being overdrawn. In such cases,bank overdrafts form a part of cash and cashequivalents.

Bank overdrafts are considered to befinancing activities.

Cash Flow Statement — Cashflows from extraordinary items

As presentation of items as extraordinary isnot permitted in accordance with IAS 1, acash flow statement does not reflect anyitems of cash flow as extraordinary.

Cash flows from items disclosed asextraordinary are classified as arising fromoperating, investing or financing activitiesand are disclosed separately.

Cash Flow Statement —Interest and dividend

May be classified as operating, investing orfinancing activities in a manner consistentfrom period to period.

Interest and dividends received are requiredto be classified as investing activities.Interest and dividends paid are required to beclassified as financing activities other thanfor financial enterprises.

Changes in AccountingPolicies and Errors

Retrospective application of changes inaccounting policies is made by adjusting theopening balance of the affected componentof equity for the earliest prior periodpresented and the other comparative amountsfor each period presented as if the newaccounting policy were always applied. Ifretrospective application is impracticable fora particular prior period, or for a periodbefore those presented, the circumstancesthat led to the existence of that condition anda description of how and from when thechange in accounting policy has been appliedneeds to be stated.

Material prior year errors are correctedretrospectively by restating the comparativeamounts for prior periods presented in whichthe error occurred or if the error occurredbefore the earliest period presented, byrestating the opening statement of financialposition.

Changes in accounting policies are notapplied retrospectively. The cumulativeimpact arising from such change is made inthe financial statements in the period ofchange. If the impact of the change is notascertainable, this should be disclosed.

Material prior year errors are included indetermination of profit or loss in the periodin which the error is discovered and areseparately presented in the profit and loss, sothat the impact can be perceived.

New accountingpronouncements

New accounting pronouncements that havebeen issued but not effective on the date ofthe statement of financial position aredisclosed. Known or reasonably estimableinformation relevant to assessing thepossible impact of the new accountingpronouncements on initial application on thefinancial statements is disclosed.

Not required.

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Events after balance sheetdate/reporting period —Dividends

Liability for dividends declared to holders ofequity instruments are recognised in theperiod when declared.

Dividends are recognised as an appropriationfrom profits and recorded as liability at thebalance sheet date, if proposed or declaredsubsequent to the reporting period but beforeapproval of the financial statements.

Income Taxes — Recognitionof deferred liabilities

Deferred tax liability shall be recognised forall taxable temporary differences except tothe extent they arise from initial recognitionof: (a) goodwill; or (b) an asset or liability ina transaction which is not a businesscombination, and, at the time of thetransaction, affects neither the accountingnor the tax profit.

Deferred tax liabilities are recognised for alltiming differences in respect of recognitionof items of profit or loss for the purposes offinancial reporting and for income taxes.

Income Taxes — Recognitionof deferred tax assets

Deferred tax assets are recognised for carryforward of unused tax losses and unused taxcredits to the extent that it is probable thatfuture taxable profit will be available againstwhich the unused tax losses and tax creditscan be utilised.

Deferred tax assets, where an enterprise hasunabsorbed depreciation or carry forward oflosses under tax laws, are recognised only tothe extent that there is virtual certaintysupported by convincing evidence thatsufficient future taxable income will beavailable against which such deferred taxassets can be realised.

Deferred tax assets in other situations arerecognised only to the extent that there is areasonable certainty that sufficient futuretaxable income will be available againstwhich such deferred tax assets can berealised.

Income Taxes — Recognitionof taxes on items recognisedin other comprehensive incomeor directly in equity

Current tax and deferred tax is recognisedoutside profit or loss if the tax relates toitems that are recognised in the same or adifferent period, outside profit or loss.Therefore the tax on items recognised inother comprehensive income, or directly inequity, is also recorded in othercomprehensive income or in equity, asappropriate.

No specific guidance in AS 22. However, anannouncement made by the Institute ofChartered Accountants of India (the “ICAI”)requires any expense charged directly toreserves and/or securities premium accountsto be net of tax benefits expected to arisefrom the admissibility of such expenses fortax purposes.

Similarly, any income credited directly to areserve account or a similar account shouldbe net of its tax effect.

Income Taxes — Investmentsin subsidiaries, branches andassociates, and interests injoint ventures

Deferred tax should not be recognised fortemporary differences in respect ofinvestment in subsidiaries, branches,associates and interest in joint ventures ifcertain conditions are satisfied.

No deferred tax is recognised.

Income Taxes — Deferred taxon unrealised intra-groupprofits

Deferred tax on unrealised intra-groupprofits is recognised at the buyer’s rate.

Deferred tax expense is an aggregation fromseparate financial statements of each groupentity and no adjustment is made onconsolidation.

Property, Plant and Equipment— Cost of major inspection

Costs of major inspections and overhauls arerecognised as a separate component ofproperty, plant and equipment.

Costs of major inspections are expensedwhen incurred.

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Property, Plant and Equipment— Revaluation

If an entity adopts the revaluation model,revaluations are required to be made withsufficient regularity to ensure that thecarrying amount does not differ materiallyfrom that which would be determined usingfair value at the date of the statement offinancial position.

No specific requirement on frequency ofrevaluation.

Property, Plant and Equipment— Change in Method ofDepreciation

A change in depreciation method isconsidered to be a change in the accountingestimate and accounted for prospectively.

A change in depreciation method is treated asa change in the accounting policy andrequires retrospective re-computation ofdepreciation and any excess or deficit onsuch re-computation is required to beadjusted in the period in which such changeis effected.

Property, Plant and Equipment— Changes in existing,decommissioning, restorationand similar liabilities

Provisions for decommissioning, restorationand similar liabilities that have previouslybeen recognised as part of the cost of an itemof property, plant and equipment are adjustedfor changes in the amount or timing of futurecosts and for changes in market-baseddiscount rates.

No specific guidance in this regard.

Leases — Interest in leaseholdland

Recognised as an operating/finance leaseunless the leasehold interest is accounted foras investment property in accordance withIAS 40 and the fair value model is adopted.

Recognised as tangible fixed assetsregardless of whether title is expected to passto the lessee by the end of the lease term.Assets under lease are separately classifiedunder each class of asset.

Determining whether anarrangement contains a lease

An arrangement that does not take the legalform of a lease but fulfilment of which isdependent on the use of specific assets andwhich conveys the right to use the assets isaccounted for as a lease in accordance withIAS 17.

There is no such requirement.

Lease incentives — OperatingLeases

The lessor and lessee recognise leaseincentives as an increase or reduction ofrental expense over the lease term, on astraightline basis, unless another systematicbasis is representative of the time pattern ofthe lessee’s benefit from use of the leasedasset.

There is no specific guidance.

Revenues — Definition Revenue is the gross inflow of economicbenefits during the period arising in thecourse of the ordinary activities of an entitywhen those inflows result in increases inequity, other than increases relating tocontributions from equity participants.Amounts collected on behalf of third partiessuch as sales and service taxes and valueadded taxes are excluded from revenues.

Revenue is the gross inflow of cash,receivables or other consideration arising inthe course of the ordinary activities. Revenueis measured by the charges made tocustomers for goods supplied and servicesrendered to them and by the charges andrewards arising from the use of resources bythem. Revenue is presented below:

Turnover Rs.100Less: Excise Duty Rs.15Turnover (Net) Rs.85

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Revenues — Measurement Fair value of revenue from the sale of goodsand services when the inflow of cash andcash equivalents are deferred is determinedby discounting all future receipts using animputed rate of interest. The differencebetween the fair value and the nominalamount of consideration is recognised asinterest revenue using the effective interestmethod.

Revenue is recognised at the nominal amountof consideration receivable.

Revenues — Interest Interest income is recognised using theeffective interest method.

Interest is recognised on a time proportionbasis, taking into account the amountoutstanding and the rate applicable.

Employee benefits —Actuarial gains and losses

Actuarial gains and losses shall berecognised immediately in othercomprehensive income.

Actuarial gains and losses should berecognised immediately in the statement ofprofit and loss as income or expense.

Employee benefits — Discountrate

Market yields at the date of the statement offinancial position on high-quality corporatebonds are used as discount rates. In countrieswhere there are no deep markets for suchbonds, market yields on government bondsare used.

Market yields at the balance sheet date ongovernment bonds are used as discount rates.

Government Grants —Non-monetary assets

The asset and the grant may be accounted atfair value. Alternatively, these can beaccounted at nominal value.

If the asset is given by the government at adiscounted price, the asset and the grant areaccounted at the discounted purchase price.All other non-monetary grants are accountedat nominal values.

Government Grants —Repayment

If repayment of a government grant relatingto an asset is recorded by increasing thecarrying amount of the asset, the cumulativeadditional depreciation that would have beenrecognised in the absence of the grant isimmediately recognised as an expense. It isprohibited from being disclosed as anextraordinary item.

If repayment of a government grant relatingto an asset is recorded by increasing thecarrying amount of the asset, the cumulativeadditional depreciation that would have beenrecognised in the absence of the grant isrecognised over the remaining useful life ofthe asset. Disclosed as an extraordinary item.

Effects of Changesin Foreign Exchange Rates —Functional and presentationcurrency

Functional currency is the currency of theprimary economic environment in which theentity operates. Presentation currency is thecurrency in which the financial statementsare presented.

Foreign currency is a currency other than thereporting currency, which is the currency inwhich financial statements are presented. Anenterprise normally uses the currency of thecountry in which it is domiciled to present itsfinancial statements. If it uses a differentcurrency, disclosure of the reason for usingthat currency is required.

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Effects of Changes in ForeignExchange Rates — Exchangedifferences

Exchange differences arising on translationor settlement of foreign currency monetaryitems are recognised in profit or loss in theperiod in which they arise.

Similar to IFRS. However, as per AccountingStandard 11 (AS-11), exchange differencesarising on reporting of long-term foreigncurrency monetary items at rates differentfrom those at which they were initiallyrecorded during the period, or reported inprevious financial statements, in so far asthey relate to the acquisition of a depreciablecapital asset, can be added to or deductedfrom the cost of the asset and shall bedepreciated over the balance life of the assetand, in other cases, can be accumulated in a“Foreign Currency Monetary ItemTranslation Difference Account” andamortised over the balance period of suchlong-term asset/liability by recognition asincome or expense in each of such periods.

Effects of Changes in ForeignExchange Rates — Translationin consolidated financialstatements

Assets and liabilities should be translatedfrom functional to presentation currency atthe closing rate at the date of the statement offinancial position; income and expenses atthe average rate for the period; exchangedifferences are recognised as a separatecomponent of equity and recycled to incomestatement on the disposal of theinvestment/operation.

Translation of financial statements to thereporting currency of the parent depends onthe classification of that operation as integralor non-integral.

Integral Operation: monetary assets aretranslated at the closing rate; non-monetaryitems are translated at the historical rate ifthey are valued at cost and at the closing rateif they are valued on another valuation basis.Income and expense items are translated atthe average rate. Exchange differences areincorporated in the statement of Profit andLoss.

For non-integral operations, the closing ratemethod should be followed, i.e. assets andliabilities are translated at the closing ratewhile Profit and Loss items are translated atactual/average rates. The resulting exchangedifference is taken to reserve and is recycledto Profit and Loss on the disposal of thenon-integral foreign operation.

Borrowing cost — Recognition Capitalised if these costs are attributable tothe acquisition, construction or production ofa qualifying asset.

Interest expense included in borrowing costsis calculated using the effective interestmethod as described in IFRS 9: FinancialInstruments. It is the rate that exactlydiscounts estimated future cash payments orreceipts through the expected life of thefinancial instrument or, when appropriate, ashorter period to the net carrying amount ofthe financial asset or financial liability.Transaction costs are taken into accountwhen determining the initial net carryingamount and their recognition in profit or lossis effectively spread over the life of theinstrument.

Borrowing costs are required to becapitalised if these costs are attributable tothe acquisition, construction or production ofa qualifying asset.

Interest is calculated on the amount of theloan outstanding at the applicable rates.

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Related Party Disclosures —Identification

Related party includes post employmentbenefit plans for the benefit of employees ofthe reporting entity or any entity that is arelated party of the reporting entity.

Post-employment benefit plans are notincluded as related parties.

Related Party Disclosures —Key management personnel

Key management personnel include bothexecutive and non-executive directors.

Key management personnel do not includenon-executive directors.

Related Party Disclosures —Government related entities

Government related entities requiredisclosure of:

(a) The name of the government and itsrelationship with the reporting entity.

(b) The nature and amount of eachsignificant transaction and aqualitative or quantitative indicationof other transactions which aresignificant collectively.

No disclosure is required in the financialstatements of state-controlled enterprises asregards related party relationships with otherstate-controlled enterprises and transactionswith such enterprises.

Consolidated FinancialStatements — Definition ofcontrol of investee

An investor controls an investee when theinvestor is exposed, or has the right, tovariable returns from its involvement withthe investee and has the ability to affectthose returns through its power over theinvestee.

Control is:

(a) The ownership, directly or indirectlythrough a subsidiary (or subsidiaries),of more than one-half of the votingpower of an enterprise; or

(b) control of the composition of theboard of directors in the case of acompany or of the composition of thecorresponding governing body in thecase of any other enterprise so as toobtain economic benefits from itsactivities.

Consolidated FinancialStatements — Potential votingrights

Potential voting rights are considered only ifthey are substantive. For a right to besubstantive it must give the holder thecurrent ability to direct the relevant activitiesof an investee when necessary and the holdermust have the practical ability to exercisethat right.

Potential voting rights are not considered inassessing control.

Consolidated FinancialStatements — Exclusion ofsubsidiaries

If the acquisition of a subsidiary meets thecriteria to be classified as held for sale inaccordance with IFRS 5, it is included in theconsolidation but is accounted for under thatstandard.

Excluded from consolidation if thesubsidiary was acquired with intent todispose of it within twelve months or if itoperates under severe long-term restrictionswhich significantly impair its ability totransfer funds to the parent.

Consolidated FinancialStatements — Reporting dates

The difference between the reporting date ofthe subsidiary and that of the parent shall beno more than three months.

The difference between the reporting date ofthe subsidiary and that of the parent shall beno more than six months.

Consolidated FinancialStatements — Accountingpolicies

Consolidated financial statements areprepared using uniform accounting policiesfor like transactions and other events insimilar circumstances.

Similar to IFRS except if it is impracticableto use uniform accounting policies, that factshould be disclosed together with theproportions of the items in the consolidatedfinancial statements to which differentpolicies have been applied are disclosed.

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Consolidated FinancialStatements — Disposals

Partial disposal of a subsidiary where controlis retained is accounted for as an equitytransaction, and gain or loss is notrecognised. Partial disposal of a subsidiaryresulting in loss of control triggersremeasurement of the residual holding to fairvalue. Any difference between the fair valueand the carrying value is recognised as gainor loss in profit or loss.

No specific guidance.

Separate Financial Statements— Accounting for investmentsin subsidiaries in separatefinancial statements

Accounted either at cost less impairment lossor as available for sale in accordance withIFRS 9.

Accounted at cost less impairment loss.

Investments in Associates andJoint Ventures — Significantinfluence

The existence and effect of potential votingrights that are currently exercisable orconvertible, including potential voting rightsheld by another entity, are considered whenassessing significant influence.

Potential voting rights are not considered inassessing significant influence.

Investments in Associates andJoint Ventures — CapitalReserve/Negative Goodwill

Any excess of the entity’s share of the netfair value of the investee’s identifiable assetsand liabilities over the cost of the investmentis included as income in the determination ofthe entity’s share of the associate or jointventure’s profit or loss in the period in whichthe investment is acquired.

Capital reserve is included in the carryingamount of investment in the associate but isdisclosed separately.

Investments in Associates andJoint Ventures — Reportingdate

The difference between the reporting date ofthe associate and that of the parent shall beno more than three months.

The maximum difference between thereporting date of the associate and that of theparent is not specified.

Investments in Associates andJoint Ventures — Method ofAccounting

Investments in associates or joint venturesare to be accounted for using the equitymethod in consolidated financial statements.

Investments in associates are accounted forusing the equity method whereas investmentsin joint ventures are accounted for using theproportionate consolidation method.

Financial Instruments:Presentation — Classificationof convertible debts

Split the instrument into its liability andequity components at issuance.

Classified as debt based on its legal form andany interest expense is recognised based onthe coupon rate.

Financial Instruments:Presentation — Treasuryshares

If an entity reacquires its own shares(treasury shares), these are shown as adeduction from equity.

Acquiring own shares is permitted only inlimited circumstances. Shares repurchasedshould be cancelled immediately and cannotbe held as treasury shares.

Earnings per share —Extraordinary items

Since IAS 1 prohibits disclosure ofextraordinary items, no separateconsideration is given to such items whilecalculating Earnings Per Share (EPS).

EPS with and without extraordinary items isto be presented.

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Earnings per share —Disclosure

IAS 33 requires separate disclosures for EPSfrom continuing and discontinuedoperations.

Disclosure is also required for instruments(including contingently issuable shares) thatcould potentially dilute basic earnings pershare in the future, but were not included inthe calculation of diluted earnings per sharebecause they are anti-dilutive for the periodspresented.

No such disclosure is required.

Impairment of Assets —Reversal of impairment lossfor goodwill

Impairment loss recognised for goodwill isprohibited from reversal in a subsequentperiod.

Impairment loss for goodwill is reversed ifthe impairment loss was caused by a specificexternal event of an exceptional nature thatis not expected to recur and subsequentexternal events have occurred that reversethe effect of that event.

Provisions, ContingentLiabilities and ContingentAssets — Discounting

Where the effect of time value of money ismaterial, the amount of provision is thepresent value of the expenditure expected tobe required to settle the obligation. Thediscount rate is a pre-tax rate that reflects thecurrent market assessment of the time valueof money and risks specific to the liability.The discount rate does not reflect risk forwhich future cash flow estimates have beenadjusted.

Discounting of liabilities is not permittedand provisions are carried at their full values.

Provisions, ContingentLiabilities and ContingentAssets — Contingent assets

Contingent assets are disclosed in thefinancial statements where an inflow ofeconomic benefits is more likely than not tooccur.

Contingent assets are not disclosed in thefinancial statements.

Intangible assets —Measurement

Intangible assets can be measured at eithercost or revalued amount.

Measured only at cost.

Intangible assets — Useful life Useful life may be finite or indefinite. Useful life may not be indefinite. There is arebuttable presumption that the useful life ofan intangible asset will not exceed ten yearsfrom the date when the asset is available foruse.

Financial Instruments:Recognition and Measurement— Investments, loans andreceivables

Financial assets are classified as at fair valuethrough profit and loss, held-to-maturity,loans and receivables and available-for-sale.Financial assets are classified as held fortrading if these are acquired principally forthe purpose of selling and are part of aportfolio that is managed together and forwhich there is evidence of a recent actualpattern of short-term profit taking.

Investments are classified as long-term orcurrent. Long-term investments are carried atcost less provision for diminution in valuewhich is other than temporary. Currentinvestments are carried at the lower of costand fair value. Loans and receivables aremeasured at cost less valuation allowance.

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Held-to-maturity investments areinvestments with fixed or determinablepayments and fixed maturity for which anentity has positive intent and ability to holdto maturity. Held-to-maturity investmentsare measured at amortised cost using theeffective interest method.

Loans and receivables have fixed ordeterminable payments that are not quoted inthe active market. Loans and receivables aremeasured at amortised cost using theeffective interest method.

Available-for-sale investments are those thatdo not qualify as at fair value through profitor loss, held-to-maturity investments orloans and receivables. Changes in fair valueof available-for-sale investments arerecognised as part of equity and recycled toprofit and loss on disposal of investments.

Unquoted investments whose fair valuescannot be reliably measured are measured atcost.

Financial Instruments:Recognition and Measurement— Impairment

Impairment losses recognised in profit orloss for equity investments cannot bereversed through profit or loss.

Impairment losses recognised in profit orloss for equity investments are reversedthrough profit or loss

Financial Instruments:Recognition and Measurement— Foreign currency contracts

A forward exchange contract is measured atfair value at the statement of financialposition date. If the forward exchangecontract meets the criteria of an effectivehedge in accordance with IFRS 9: FinancialInstruments, the gain or loss arising on fairvaluation is recognised in the statement ofchanges in equity. If the hedge is ineffective,the gain or loss is recognised in thedetermination of net income.

Premium or discount on forward exchangecontracts is amortised and recognised in thestatement of profit and loss over the periodof such contracts. Exchange differences onsuch a contract should be recognised in thestatement of profit and loss in the reportingperiod in which the exchange rates change.

Financial Instruments:Recognition and Measurement— Derivatives and embeddedderivatives

Measured at fair values. Currently there is no equivalent standard onderivatives except for certain forwardexchange contracts within the scope of AS11.

Financial Instruments:Recognition and Measurement— Derivatives and hedgeaccounting

Hedge accounting (recognising the offsettingeffects of fair value changes of both thehedging instrument and the hedged item inthe same period’s profit or loss) is permittedin certain circumstances, provided that thehedging relationship is clearly defined,measurable and actually effective. IFRS 9provides for three types of hedges:

• fair value hedge: if an entity hedges achange in fair value of a recognisedasset or liability or firm commitment,the change in fair values of both thehedging instrument and the hedgeditem are recognised in profit or losswhen they occur;

Currently there is no equivalent standard onderivatives. Forward contracts (includingthose intended for speculative/tradingpurposes) are covered by AS 11. Anannouncement made by the ICAI on 29March 2008 and applicable to financialstatements for the period ending 31 March2008 or thereafter requires an entity toprovide for losses in respect of alloutstanding derivative contracts not coveredby AS 11 by marking them to market at thebalance sheet date.

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• cash flow hedge: if an entity hedgeschanges in the future cash flowsrelating to a recognised asset orliability or a highly probable forecasttransaction, then the change in fairvalue of the hedging instrument isrecognised in other comprehensiveincome until such time as those futurecash flows occur. The ineffectiveportion of the gain or loss on thehedging instrument is recognised inprofit or loss in the period of suchchange; and

• hedge of a net investment in a foreignentity: this is treated as a cash flowhedge.

A hedge of foreign currency risk in a firmcommitment may be accounted for as a fairvalue hedge or as a cash flow hedge.

Non-current assets held forsale — Recognition andmeasurement

Non-current assets to be disposed of areclassified as held for sale when the asset isavailable for immediate sale and the sale ishighly probable.

Depreciation ceases on the date when theassets are classified as held for sale.

Non-current assets classified as held for saleare measured at the lower of their carryingvalue and fair value less costs to sell.

There is no standard dealing withnon-current assets held for sale, though AS10 deals with assets held for disposal. Itemsof fixed assets that have been retired fromactive use and are held for disposal are statedat the lower of their net book value and netrealisable value and are shown separately inthe financial statements.

Any expected loss is recognised immediatelyin the statement of profit and loss.

Non-current assets held forsale — Discontinuedoperations

An operation is classified as discontinuedwhen it has either been disposed of or isclassified as held for sale.

An operation is classified as discontinued atthe earlier of: (a) a binding sale agreementfor sale of the operation; and (b) on approvalby the board of directors of a detailed formalplan and announcement of the plan.

Exploration for and evaluationof mineral resources

Exploration and evaluation assets aremeasured at cost or revaluation lessaccumulated amortisation and impairmentloss. An entity determines the policyspecifying which expenditures arerecognised as exploration and evaluationassets.

There is no equivalent standard. However,there is a Guidance Note on Accounting forOil and Gas Producing Activities. As per thisguidance note, there are two alternativemethods for acquisition, exploration anddevelopment costs, viz. the SuccessfulEfforts Method or the Full Cost Method. TheGuidance Note recommends the former one.AS 28; Impairment of Assets is applicableirrespective of the method of accountingused.

Operating Segments —Determination of segments

Operating segments are identified based onthe financial information that is evaluatedregularly by the chief operating decisionmaker in deciding how to allocate resourcesand in assessing performance.

AS 17 requires an enterprise to identify twosets of segments (business andgeographical), using a risks and rewardsapproach.

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Operating Segments —Measurement

Segment profit or loss is reported on thesame measurement basis as that used by thechief operating decision maker. There is nodefinition of segment revenue, segmentexpense, segment result, segment asset orsegment liability. Requires reconciliation ofsegment performance measures, and segmentassets and liabilities with the correspondingamounts reported in the financial statements.

Segment information is prepared inconformity with the accounting policiesadopted for preparing and presenting thefinancial statements of the enterprise as awhole. Segment revenue, segment expense,segment result, segment asset and segmentliability have been defined.

A reconciliation is presented between theinformation disclosed for reportablesegments and the aggregated information inthe enterprise’s financial statements.

Operating Segments —Entity-wide disclosures

Requires disclosure of: (a) external revenuesfrom each product or service; (b) revenuesfrom customers in the country of domicileand from foreign countries; and (c)geographical information on non-currentassets located in the country of domicile andforeign countries. Information on majorcustomers including total revenues from eachmajor customer is disclosed if revenues fromeach customer are 10 per cent. or more oftotal segment revenues.

Disclosures are required based on theclassification of segments as primary orsecondary. Disclosure requirements forsecondary reporting formats are less detailedthan those required for primary reportingformats.

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GENERAL INFORMATION

Authorisation

1. The establishment and update of the Programme and the issue of Notes have been duly authorised

by resolutions of the Board of Directors of the Issuer dated 7 December 2005, 28 December 2011,

21 January 2013, 19 June 2014 and 28 April 2015.

Consent from Trustee

2. Citicorp Trustee Company Limited has given its consent to act as the Trustee and for its name

to be included in all subsequent periodical communication to be sent to the Noteholders.

Listing

3. Approval-in-principle has been granted for the listing and quotation of Notes that may be issued

pursuant to the Programme and which are agreed at or prior to the time of issue thereof to be so

listed on the SGX-ST. Such permission will be granted when such Notes have been admitted to

the Official List.

Admission to the Official List and quotation of any Notes on the SGX-ST are not to be taken as

an indication of the merits of the Issuer, the Programme or the Notes. So long as the Notes are

listed on the SGX-ST and the rules of the SGX-ST so require, the Issuer shall appoint and

maintain a paying agent in Singapore, where the Notes may be presented or surrendered for

payment or redemption, in the event that the Global Notes is exchanged for definitive Notes. In

addition, in the event that the Global Notes is exchanged for definitive Notes, announcement of

such exchange shall be made through the SGX-ST and such announcement will include all

material information with respect to the delivery of the definitive Notes, including details of the

paying agent in Singapore.

Clearing systems

4. The Notes to be issued under the Programme have been accepted for clearance through Euroclear

and Clearstream, Luxembourg. The appropriate common code and ISIN for each Tranche of

Notes allocated by Euroclear and Clearstream, Luxembourg will be specified in the applicable

Pricing Supplement. If the Notes are to clear through an additional or alternative clearing system,

the appropriate information will be specified in the applicable Pricing Supplement.

No significant change

5. Save as disclosed in this Offering Circular, there has been no significant or material adverse

change in the financial or trading position of the Issuer since 30 September 2015.

Litigation

6. The Issuer is not involved in any legal or arbitration proceedings (including any proceedings

which are pending or threatened of which the Issuer is aware) which may have or have had in

the 12 months preceding the date of this document a significant effect on the financial position

of the Issuer.

210

Accounts

7. The auditors of the Issuer in respect of the financial statements for the year ended 31 March 2014were as follows:

O.P. Bagla & Co.;K.K. Soni & Co.;PKF Sridhar & Santhanam;V. Sankar Aiyar & Co.;Ramesh C Agrawal & Co.; andA.R. & Co.

Such auditors have audited the Issuer’s consolidated financial statements for the year ended 31March 2014 without qualification, in accordance with generally accepted auditing standards inIndia.

8. The auditors of the Issuer in respect of the financial statements for the year ended 31 March 2015and for the unaudited, unconsolidated financial results for the three months ended 30 June 2015were as follows:

O.P. Bagla & Co.;P S D & Associates;PKF Sridhar & Santhanam LLP;V. Sankar Aiyar & Co.;Ramesh C Agrawal & Co.; andA.R. & Co.

Such auditors have audited the Issuer’s consolidated financial statements for the year ended 31March 2015 and have reviewed the unconsolidated financial results for the three months ended30 June 2015, without qualification, in accordance with generally accepted auditing standards inIndia for each of the periods mentioned above.

9. The auditors of the Issuer in respect of the unconsolidated financial results for the three monthsended 30 September 2015, were as follows:

T.R. Chadha & Co.;P S D & Associates;Sagar & Associates;Kalani & Co.;P A & Associates;S.K. Kapoor & Co.; andB.M. Chatrath & Co.

Trust Deed

10. The Trust Deed provides that the Trustee may rely on certificates or reports from the Auditors(as defined in the Trust Deed) or any other person in accordance with the provisions of the TrustDeed as conclusive evidence of the facts stated therein whether or not called for by or addressedto the Trustee and whether or not any such certificate or report or engagement letter or otherdocument entered into by the Trustee and the Auditors or such other person in connectiontherewith contains a monetary or other limit on the liability of the Auditors or such other person.However, the Trustee will have no recourse to the Auditors or such other person in respect ofsuch certificates or reports unless the Auditors or such other person have agreed to address suchcertificates or reports to the Trustee.

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Documents Available

11. So long as Notes are capable of being issued under the Programme, copies of the following

documents will, when published, be available from the corporate office of the Issuer and from

the specified office of the Paying Agent in London:

(a) the audited consolidated and non-consolidated financial statements of the Issuer in respect

of the financial years ended 31 March 2014 and 2015;

(b) the most recently published audited consolidated and non-consolidated annual financial

statements of the Issuer and the most recently published audited or reviewed, as the case

may be, non-consolidated interim financial results of the Issuer;

(c) the Programme Agreement, the Trust Deed, the Agency Agreement and the forms of the

Global Notes, the Notes in definitive form, the Receipts, the Coupons and the Talons;

(d) a copy of this Offering Circular;

(e) any future offering circulars, prospectuses, information memoranda and supplements

including Pricing Supplements (save that a Pricing Supplement relating to an unlisted Note

will only be available for inspection by a holder of such Note and such holder must produce

evidence satisfactory to the Issuer and the Paying Agent as to its holding of Notes and

identity) to this Offering Circular and any other documents incorporated herein or therein

by reference; and

(f) in the case of each issue of listed Notes subscribed pursuant to a subscription agreement,

the subscription agreement (or equivalent document).

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INDEX TO FINANCIAL STATEMENTS

Important information relating to the financial information presented . . . . . . . . . . . . . . . F-2

Unaudited, standalone financial results of NTPC for the six months ended30 September 2015

Auditors’ limited review report on the unaudited, standalone financial results . . . . . . . . . . . . F-3

Unaudited, standalone financial results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Financial statements of NTPC for the year ended 31 March 2015

Independent Auditors’ report on the consolidated financial statements . . . . . . . . . . . . . . . . . . F-9

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-20

Consolidated statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-22

Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-24

Accounting policies and notes forming part of consolidated financial statements . . . . . . . . . . F-26

Financial statements of NTPC for the year ended 31 March 2014

Auditors’ report on the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-98

Consolidated balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-101

Consolidated statement of profit and loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-104

Cash flow statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-106

Accounting policies and notes forming part of consolidated financial statements . . . . . . . . . .F-108

F-1

Important Information Relating to the Financial Information Presented

The financial information included on pages F-9 to F-178 has been extracted without material

adjustment from the Issuer’s audited consolidated financial statements for the years ended 31 March

2014 and 2015. The financial statements presented have been prepared in accordance Indian GAAP,

which differs in certain material respects to IFRS. For a description of certain differences between

Indian GAAP and IFRS, see “Summary of Significant Differences Between Indian GAAP and IFRS”

above.

The Issuer’s auditors are appointed each year by the Comptroller and Auditor General of India

(the C&AG), which is the authority for appointment of auditors of Government companies in terms

of Section 143(5) of the New Companies Act, as amended or replaced from time to time. As of the date

of this Offering Circular, international accounting firms are not permitted to practice in India.

Therefore, local firms of Chartered Accountants appointed by the C&AG undertake the audit of the

Issuer’s financial statements. It is not unusual for large public sector companies in India with

widespread operations to have more than one firm appointed to audit the company’s financial

statements, with each firm given a particular region to audit. The auditors of the Issuer’s financial

statements are set out in paragraphs 7, 8 and 9 under “General Information” above.

F-2

INDEPENDENT AUDITORS’ REVIEW REPORT

ToThe Board of Directors,NTPC Limited,New Delhi.

We have reviewed the accompanying statement of standalone unaudited financial results of NTPC Limitedfor the quarter and half-year ended 30th September 2015 except for the disclosures regarding ‘PublicShareholding’ and ‘Promoter and Promoter Group Shareholding’ which have been traced fromdisclosures made by the management and have not been audited by us. This statement is theresponsibility of the Company’s Management and has been approved by the Board of Directors. Ourresponsibility is to issue a report on these financial statements based on our review.

We have conducted our review in accordance with the Standard on Review Engagement (SRE) 2410,Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by theInstitute of Chartered Accountants of India. This standard requires that we plan and perform the review toobtain moderate assurance as to whether the financial statements are free of material misstatement. Areview is limited primarily to inquiries of company personnel and analytical procedures applied tofinancial data and thus provide less assurance than an audit. We have not performed an audit andaccordingly, we do not express an audit opinion.

Without modifying our report, attention is invited to Note 2 (b) and 4 to the statement of standaloneunaudited financial results referred to above regarding accounting of sales on provisional basis and inrespect of a project where the matter is pending before the Hon’ble Supreme Court of India.

Based on our review conducted as above, nothing has come to our attention that causes us to believe thatthe accompanying statement of standalone unaudited financial results read with notes thereon, prepared inaccordance with applicable accounting standards specified under Section 133 of the Companies Act, 2013read with Rule 7 of the Companies (Accounts) Rules, 2014 and other recognised accounting practices andpolicies thereon has not disclosed the information required to be disclosed in terms of Clause 41 of theListing Agreement with Stock Exchanges including the manner in which it is to be disclosed, or that itcontains any material misstatement.

For T.R. Chadha & Co.Chartered Accountants

FRN 006711N

( Neena Goel )Partner

M. No.057986

For PSD & AssociatesChartered Accountants

FRN 004501C

( Thalendra Sharma )Partner

M. No.079236

For Sagar & AssociatesChartered Accountants

FRN 003510S

(V. Vidyasagar Babu)Partner

M. No.027357

For Kalani & Co.Chartered Accountants

FRN 000722C

( Vikas Gupta )Partner

M. No.077076

For P. A. & AssociatesChartered Accountants

FRN 313085E

( P. S. Panda )Partner

M. No.051092

For S. K. Kapoor & Co.Chartered Accountants

FRN 000745C

( V.B. Singh )Partner

M. No.073124

For B. M. Chatrath & Co.Chartered Accountants

FRN 301011E

( P. R. Paul)Partner

M. No.051675

Place : New DelhiDated : 29th October 2015

F-3

( in Lakhs)Sl.No.

Quarterended

30.09.2015(Unaudited)

Quarterended


Quarterended


Half-Yearended


Half-Yearended


Year ended31.03.2015(Audited)

1 3 4 5 6 7 81

(a) Net sales (net of electricity duty) 1772290 1701869 1658236 3474159 3466883 7263775(b) Other operating income 17561 6589 15427 24150 40455 60830

1789851 1708458 1673663 3498309 3507338 73246052

(a) Fuel cost 1154083 1150914 1143933 2304997 2420446 4884519(b) Employee benefits expense 92168 92276 91801 184444 183642 366978(c) Depreciation and amortisation expense 132291 123795 115158 256086 226705 491165(d) Other expenses 140535 121501 113696 262036 225571 464548

1519077 1488486 1464588 3007563 3056364 62072103 270774 219972 209075 490746 450974 1117395

4 27539 23872 53069 51411 106325 2116325 298313 243844 262144 542157 557299 1329027

6 81453 73088 66741 154541 133532 2743627 216860 170756 195403 387616 423767 1054665

8 - - - - - -9 216860 170756 195403 387616 423767 1054665

10(a) Current tax (refer note 3) (72760) (42861) (2188) (115621) (3516) 32644(b) Deferred tax 1894 8903 9446 10797 19018 88875(c) Less: Deferred asset for deferred tax liability 2102 8821 19018 10923 19018 95940Total tax expense (a+b-c) (72968) (42779) (11760) (115747) (3516) 25579

11 289828 213535 207163 503363 427283 102908612 - - - - - -13 289828 213535 207163 503363 427283 102908614 824546 824546 824546 824546 824546 824546

15 8679087 6956529 859953416 734118917 343885 257916 362460

18(i)

(a) Basic 3.51 2.59 2.51 6.10 5.18 12.48(b) Diluted 3.51 2.59 2.51 6.10 5.18 12.48

18(ii)

(a) Basic 3.51 2.59 2.51 6.10 5.18 12.48(b) Diluted 3.51 2.59 2.51 6.10 5.18 12.48

19 1.00 0.77 1.05

20 1.81 2.05 2.4421 5.22 5.95 6.72

See accompanying notes to the financial results.

2

Tax expense:

Total expenses

Total income from operations (net)

NTPC LIMITEDPART I : Statement of Standalone Unaudited Financial Results for the Quarter and Half-Year ended 30th September 2015

Profit from ordinary activities before finance costs andexceptional items (3+4)

Profit from ordinary activities before tax (7+8)

Profit from ordinary activities after finance costs butbefore exceptional items (5-6)

Income from operations

Particulars

Expenses

Extraordinary items (net of tax expense)

Profit from operations before other income, finance costsand exceptional items (1-2)Other income

Finance costs

Exceptional items

Net profit from ordinary activities after tax (9-10)

Net profit for the period (11-12)

Earnings per share (after extraordinary items) - (of 10/-each) (not annualised) (in ):

Earnings per share (before extraordinary items) - (of 10/-each)(not annualised) (in ):

Paid-up equity share capital(Face value of share 10/- each)

Paid-up debt capitalReserves excluding revaluation reserve as per balance sheetDebenture redemption reserve

Debt equity ratio

Debt service coverage ratio (DSCR)Interest service coverage ratio (ISCR)

F-4

Sl. No. Particulars Quarterended


Quarterended


Quarterended


Half-Yearended


Half-Yearended



1 3 4 5 6 7 8A PARTICULARS OF SHAREHOLDING

12064849420 2064849420 2064849420 2064849420 2064849420 2064849420

25.04 25.04 25.04 25.04 25.04 25.04

2

- - - - - -

- - - - - -

- - - - - -

6180614980 6180614980 6180614980 6180614980 6180614980 6180614980

100.00 100.00 100.00 100.00 100.00 100.00

74.96 74.96 74.96 74.96 74.96 74.96

BQuarter ended 30.09.2015

Received during the quarterDisposed of during the quarterRemaining unresolved at the end of the quarter

1926927

-

Particulars

Pending at the beginning of the quarter

INVESTOR COMPLAINTS

- Number of shares

a) Pledged/encumbered

- Percentage of shareholding

- Number of shares

- Percentage of shares (as a % of the total sharecapital of the company)

- Number of sharesb) Non-encumbered

Promoters and promoter group shareholding

- Percentage of shares (as a % of the totalshareholding of promoter and promoter group)- Percentage of shares (as a % of the total sharecapital of the company)

- Percentage of shares (as a % of the totalshareholding of promoter and promoter group)

NTPC LIMITED

Public shareholding

PART II : Select Information for the Quarter and Half-Year ended 30th September 2015

2

F-5

in LakhsSl.No.

As at 30.09.2015(Unaudited)

As at 31.03.2015(Audited)

A1

824546 8245467848692 73411898673238 8165735

2 183299 1394153

7873094 785323397780 97907

266887 288659119990 111571

8357751 83513704

519335 5953151905219 1680762655065 775875

3079619 305195220293907 19708472

B1

14465526 13534256753731 715407

1805533 1552789218410 169677

17243200 159721292

228839 187806650920 745300768188 760437642441 1287881245837 240759514482 514160

3050707 3736343

20293907 19708472

NTPC LIMITED

Sub-total - Current assets

TOTAL - ASSETS

(a) Current investments(b) Inventories(c) Trade receivables(d) Cash and bank balances(e) Short-term loans and advances(f) Other current assets

(c) Long-term loans and advances(d) Other non-current assets

Sub-total - Non-current assetsCurrent assets

ASSETSNon-current assets

(a) Fixed assets (including capital work-in-progress)(b) Non-current investments

(b) Other current liabilities(c) Short-term provisions

Sub-total - Current liabilitiesTOTAL - EQUITY AND LIABILITIES

(a) Trade payables

(b) Reserves and surplusSub-total - Shareholders' funds

Deferred revenueNon-current liabilities

(a) Long-term borrowings

(c) Other long-term liabilities(d) Long-term provisions

Sub-total - Non-current liabilitiesCurrent liabilities

(b) Deferred tax liabilities (net)

Standalone Statement of Assets and Liabilities

Particulars

EQUITY AND LIABILITIESShareholders' funds

(a) Share capital

F-6

( in Lakhs)Sl. No. Particulars Quarter

ended30.09.2015(Unaudited)

Quarterended


Quarterended


Half-Yearended


Half-Yearended



1 2 3 4 5 6 7 8

1 Segment revenue- Generation 1795028 1711731 1678287 3506759 3514384 7343010- Others 2701 2371 2286 5072 4985 11289 Total 1797729 1714102 1680573 3511831 3519369 7354299

2 Segment results (Profit before tax and interest)- Generation 310930 252496 242405 563426 511943 1255439- Others (2702) (207) 367 (2909) 250 (445) Total 308228 252289 242772 560517 512193 1254994

Less :(i) Unallocated finance costs 81453 73088 66741 154541 133532 274362(ii) Other unallocable expenditure net of unallocable income 9915 8445 (19372) 18360 (45106) (74033)

Profit before tax 216860 170756 195403 387616 423767 1054665

3 Capital employed (Segment assets - Segment liabilities)- Generation 9376801 8908908 7861889 9376801 7861889 8914847- Others 59848 38867 47072 59848 47072 82008- Un-allocated (763411) (566277) 1099305 (763411) 1099305 (831120) Total 8673238 8381498 9008266 8673238 9008266 8165735

NTPC LIMITEDSegment-wise Revenue, Results and Capital Employed for the Quarter and Half-Year ended 30 th September 2015

The operations of the company are mainly carried out within the country and therefore, geographical segments are not applicable.

F-7

Notes:1

2 a)

b)

c)

3

4

5

6

7

8

9

10

The above results have been reviewed by the Audit Committee and approved by the Board of Directors in their respective meetingsheld on 29th October 2015.

Director (Finance)

The Central Electricity Regulatory Commission (CERC) notified the Tariff Regulations, 2014 in February 2014 (Regulations, 2014).Pending issue of provisional/final tariff orders w.e.f. 1st April 2014 for all the stations, beneficiaries are billed in accordance with thetariff approved and applicable as on 31st March 2014 as provided in the Regulations 2014. The amount provisionally billed for thequarter and half-year ended 30th September 2015 is 18,59,213 lakh and 36,30,561 lakh respectively (corresponding previousquarter and half-year 17,06,905 lakh and 35,98,039 lakh).

Other non current assets as at 30th September 2015 include 47,334 lakh ( 46,628 lakh as at 31st March 2015) recoverable fromGovernment of India (GOI) towards the cost incurred in respect of one of the hydro power projects, the construction of which hasbeen discontinued on the advice of the Ministry of Power, GOI. Management expects that the total cost incurred, anticipatedexpenditure on safety and stabilization measures, other recurring site expenses and interest costs as well as claims of variouscontractors/vendors for this project, will be compensated in full by the GOI. Hence no provision is considered necessary.

The Company has filed a petition before the Hon’ble High Court of Delhi contesting certain provisions of the Regulations, 2014.Pending issue of provisional/final tariff orders under Regulations, 2014 by the CERC and disposal of the petition, sales have beenprovisionally recognised at 18,31,134 lakh for the quarter and 36,12,952 lakh for the half-year ended 30th September 2015(corresponding previous quarter and half-year 17,04,549 lakh and 35,63,035 lakh) on the basis of said Regulations. Pendingdisposal of the petition, energy charges included in sales, in respect of the coal based stations for the quarter and half year havebeen recognized based on the GCV ‘as received at the secondary crusher’.

Sales include 27,447 lakh for the quarter and 23,145 lakh for the half-year ended 30th September 2015 (corresponding previousquarter and half-year 9,010 lakh and 32,017 lakh) pertaining to previous years recognized based on the orders issued by theCERC/Appellate Tribunal for Electricity. Sales also include (-) 90,168 lakh for the quarter and (-) 1,69,365 lakh for the half-yearended 30th September 2015 (corresponding previous quarter and half-year (-) 60,502 lakh and 1,38,923 lakh) on account ofincome tax refundable to/recoverable from the beneficiaries as per Regulations, 2004. Sales also include 1,275 lakh for the quarterand 2,549 lakh for the half-year ended 30th September 2015 (corresponding previous quarter and half-year 2,952 lakh and 5,904lakh) on account of deferred tax materialized which is recoverable from beneficiaries as per Regulations, 2014.

Provision for current tax for the quarter and half year ended 30th September 2015 includes tax related to earlier years amounting to(-) 1,19,720 lakh and (-) 2,03,902 lakh respectively (corresponding previous quarter (-) 56,330 lakh and half-year (-) 1,28,893lakh).The environmental clearance (“clearance”) granted by the Ministry of Environment and Forest, Government of India (MoEF) for oneof the Company’s project was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia,directing that the order of clearance be remanded to the MOEF to pass an order granting or declining clearance to the projectproponent afresh in accordance with the law and the judgment of the NGT and for referring the matter to the Expert AppraisalCommittee ("Committee") for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGTalso directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation tothe project during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. TheCompany filed an appeal challenging the NGT order before the Hon’ble Supreme Court of India which stayed the order of the NGTand the matter is sub-judice. Aggregate cost incurred on the project upto 30th September 2015 is 10,36,609 lakh ( 8,73,244 lakh asat 31st March 2015). Management is confident that the approval for proceeding with the project shall be granted, hence no provisionis considered necessary.

Date : 29th October 2015

Formula used for computation of coverage ratios - DSCR = Earning before Interest, Depreciation, Tax and ExceptionalItems/(Interest net of transferred to expenditure during construction + Principal repayment) and ISCR = Earning before Interest,Depreciation, Tax and Exceptional Items/Interest net of transferred to expenditure during construction.

During the quarter, the Company has paid final dividend of 1.75 per share (face value of 10/- each) for the financial year 2014-15.

For and on behalf of Board of Directors

(K. Biswal)

Place : New Delhi

Figures for the previous periods/year have been regrouped/rearranged wherever necessary.

The above financial results have been reviewed by the Statutory Auditors as required under Clause 41 of the Listing Agreements.

During the quarter, four units of 200 MW each at Koldam Hydro Power Project have been declared commercial w.e.f 18 th July 2015.

F-8

INDEPENDENT AUDITOR’S REPORT


Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of NTPC Limited(hereinafter referred to as “the Holding Company”) and its subsidiaries (the Holding Companyand its subsidiaries together referred to as “the Group”) and its jointly controlled entities,comprising of the Consolidated Balance Sheet as at 31st March, 2015, the ConsolidatedStatement of Profit and Loss, the Consolidated Cash Flow Statement for the year then ended, anda summary of the significant accounting policies and other explanatory information (hereinafterreferred to as “the consolidated financial statements”).


The Holding Company’s Board of Directors is responsible for the preparation of theseconsolidated financial statements in terms of the requirements of the Companies Act, 2013(hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financialposition, consolidated financial performance and consolidated cash flows of the Group includingits Jointly controlled entities in accordance with the accounting principles generally acceptedin India, including the Accounting Standards specified under Section 133 of the Act, read withRule 7 of the Companies (Accounts) Rules, 2014. The respective Board of Directors of thecompanies included in the Group and of its jointly controlled entities are responsible formaintenance of adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Group and for preventing and detecting frauds and otherirregularities; the selection and application of appropriate accounting policies; making judgmentsand estimates that are reasonable and prudent; and the design, implementation and maintenance ofadequate internal financial controls, that were operating effectively for ensuring the accuracy andcompleteness of the accounting records, relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from material misstatement,whether due to fraud or error, which have been used for the purpose of preparation of theconsolidated financial statements by the Directors of the Holding Company, as aforesaid.


Our responsibility is to express an opinion on these consolidated financial statements basedon our audit. While conducting the audit, we have taken into account the provisions of the Act,the accounting and auditing standards and matters which are required to be included in the auditreport under the provisions of the Act and the Rules made there under.

F-9

We conducted our audit in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether the consolidated financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the consolidated financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of theconsolidated financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal financial control relevant to the Holding Company’s preparation ofthe consolidated financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Holding Company has an adequate internal financial controls system overfinancial reporting in place and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Holding Company’s Board of Directors, as well asevaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the otherauditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraphbelow, is sufficient and appropriate to provide a basis for our audit opinion on the consolidatedfinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,the aforesaid consolidated financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India, of the consolidated state of affairs of the Group and its jointlycontrolled entities as at 31st March, 2015, and their consolidated profit and their consolidated cashflows for the year ended on that date.

Emphasis of Matter

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

a) Note No 22 (b) in respect of accounting of sales on provisional basis andb) Note No 35 in respect of a project of the Holding Company where the matter is pending

before the Hon’ble Supreme Court of India.

Our opinion is not modified in respect of these matters.

F-10

Other Matters

(a) We did not audit the financial statements / financial information of the following subsidiariesand jointly controlled entities whose financial statements / financial information reflect thedetails given below of assets as at 31st March 2015, total revenues and net cash flows for theyear ended on that date to the extent to which they are reflected in the Consolidated FinancialStatements:

(� in crore)Name of the Companies Assets Total

RevenuesNet Cash

FlowsSubsidiaries:1) NTPC Electric Supply Company Ltd 644.94 23.64 (148.56)2) NTPC Vidyut Vyapar Nigam Ltd. 1,166.21 3,887.97 (290.16)3) Kanti Bijlee Utpadan Nigam Ltd 3,827.87 460.45 34.274) Bhartiya Rail Bijlee Company Ltd. 5,237.45 - 86.32Total 10,876.47 4,372.06 (318.13)Joint Ventures:1) Utility Powertech Ltd. 130.71 295.39 (2.47)2) NTPC-Alstom Power Services Pvt. Ltd. 62.54 34.93 4.143) NTPC-SAIL Power Company Pvt. Ltd. 1,671.00 811.50 (20.10)4) NTPC Tamilnadu Energy Company Ltd. 4,712.71 986.41 (17.83)5) Aravali Power Company Pvt. Ltd. 4,907.60 2,225.70 3.556) Meja Urja Nigam Pvt. Ltd. 1,897.31 - 5.797) Anushakti Vidyut Nigam Ltd. 0.01 - -8) Nabinagar Power Generating Company Pvt. Ltd. 2,055.33 - 17.579) BF-NTPC Energy Systems Ltd. 2.94 - -10) National High Power Test Laboratory Pvt. Ltd 50.71 - 3.33Total 15,490.86 4,353.93 (6.02)

These financial statements / financial information have been audited by other auditors whosereports have been furnished to us by the Management upto 22nd May 2015 and our opinion onthe consolidated financial statements, in so far as it relates to the amounts and disclosuresincluded in respect of these subsidiaries and jointly controlled entities, and our report interms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to theaforesaid subsidiaries and jointly controlled entities is based solely on the reports of the otherauditors.

(b) We did not audit the financial statements / financial information of the following jointlycontrolled entities whose financial statements / financial information reflect the details givenbelow of assets as at 31st March 2015, total revenues and net cash flows for the year ended onthat date to the extent to which they are reflected in the Consolidated Financial Statements:

F-11

(� in crore)

These financial statements / financial information are unaudited and have been furnished tous by the Management and our opinion on the consolidated financial statements, in so faras it relates to the amounts and disclosures included in respect of these jointly controlledentities, and our report in terms of sub-section (3) of Section 143 of the Act in so far as itrelates to the aforesaid jointly controlled entities, is based solely on such unaudited financialstatements / financial information. In our opinion and according to the information andexplanations given to us by the Management, these financial statements / financial informationare not material to the Group.

Our opinion on the consolidated financial statements, and our report on Other Legal andRegulatory Requirements below, is not modified in respect of the above matters with respectto our reliance on the work done and the reports of the other auditors and the financialstatements / financial information certified by the Management.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2015 (“the Order”), issued by theGovernment of India in terms of sub-section (11) of Section 143 of the Act, based on thecomments in the auditors’ reports of the Holding company, its subsidiaries and jointly

Name of the Companies Assets TotalRevenues

Net CashFlows

Joint Ventures:1) Ratnagiri Gas & Power Pvt. Ltd. 2,968.78 52.54 (25.67)2) NTPC-SCCL Global Venture Pvt. Ltd. 0.05 - -3) NTPC-BHEL Power Project Pvt. Ltd 375.98 296.26 (6.85)4) National Power Exchange Ltd. 1.14 0.09 0.035) International Coal Venture Pvt. Ltd. 2.31 - 0.096) Transformers and Electricals Kerala Ltd. 59.81 59.03 (6.54)7) Energy Efficiency Services Ltd. 78.94 17.58 1.198) CIL NTPC Urja Pvt. Ltd. 0.01 - -9) Pan-Asian Renewables Private Ltd. 0.27 0.04 (0.35)10) Trincomalee Power Company Ltd. 7.78 0.29 (1.39)11) Bangladesh India Friendship Power Company Pvt.Ltd. 40.53 - 3.0912) KINESCO Power & Utilities Pvt. Ltd., a 50 %joint venture of NTPC Electric Supply Company Ltd.,(a wholly owned subsidiary of NTPC Ltd. ) withKINFRA, a statutory body of Government of Kerala 12.91 23.52 0.85Total 3,548.51 449.35 (35.55)

F-12

controlled companies incorporated in India, we give in the Annexure a statement on thematters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit of the aforesaidconsolidated financial statements.

b) In our opinion, proper books of account as required by law relating to preparation of theaforesaid consolidated financial statements have been kept so far as it appears from ourexamination of those books and the reports of the other auditors.

c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss, and theConsolidated Cash Flow Statement dealt with by this Report are in agreement with therelevant books of account maintained for the purpose of preparation of the consolidatedfinancial statements.

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

e) On the basis of the written representations received from the directors of the HoldingCompany as on 31st March, 2015 taken on record by the Board of Directors of the HoldingCompany and the reports of the statutory auditors of its subsidiary companies, and jointlycontrolled companies incorporated in India, none of the directors of the Group companies,and its jointly controlled companies incorporated in India is disqualified as on 31st March,2015 from being appointed as a director in terms of Section 164 (2) of the Act.

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

i. The consolidated financial statements disclose the impact of pending litigations onthe consolidated financial position of the Group and its jointly controlled entities.Refer Note 35, 36 and 52 to the consolidated financial statements.

ii. Provision has been made in the consolidated financial statements, as required underthe applicable law or accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts.

F-13

iii. There has been no delay in transferring amounts, required to be transferred, tothe Investor Education and Protection Fund by the Holding Company, its subsidiaryand jointly controlled companies incorporated in India.

Place : New DelhiDated : 29th May 2015

For O. P. Bagla & Co.Chartered AccountantsFirm Reg. No.000018N

[Neeraj Kumar Agarwal]Partner

M. No. 094155

For PSD & AssociatesChartered AccountantsFirm Reg. No.004501C

[Prakash Sharma]Partner

M. No. 072332

For PKF Sridhar & Santhanam LLPChartered Accountants

Firm Reg. No.003990S/S200018

[T.V.Balasubramanian]Partner

M. No.027251

For V. Sankar Aiyar & Co.Chartered Accountants

Firm Reg. No.109208W

[M.S.Balachandran]Partner

M. No. 024282

For Ramesh C. Agrawal & Co.Chartered AccountantsFirm Reg. No.001770C

[Manoj Agrawal]Partner

M. No.076918

For A.R & Co.Chartered AccountantsFirm Reg. No.002744C

[Anil Gaur]Partner

M. No.017546

F-14

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 1 of the Independent Auditors’ Report of even date to the membersof NTPC Limited on the consolidated financial statements as of and for the year ended March31, 2015

(i) (a) In our opinion, and according to the information and explanations given to us, and thereports of the other auditors on the subsidiary and jointly controlled companies incorporatedin India as furnished to us, the Holding Company, its subsidiary and jointly controlledcompanies incorporated in India are maintaining proper records showing full particulars,including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the respective Managements of the HoldingCompany, its subsidiary and jointly controlled companies incorporated in India according toa phased programme designed to cover all the items over a period of one to two years which,in our opinion, is reasonable having regard to the size of the aforesaid Holding Company, itssubsidiary and jointly controlled companies incorporated in India and the nature of its assets.Pursuant to the programme, a portion of the fixed assets has been physically verified by therespective Managements of the aforesaid Holding Company, its subsidiary and jointlycontrolled companies incorporated in India during the year and no material discrepancieshave been noticed on such verification.

(ii) (a) The inventory has been physically verified by the respective Managements of the HoldingCompany, its subsidiary and jointly controlled companies incorporated in India during theyear in respect of those companies which are holding inventory. In our opinion and based onthe reports of the other auditors on the subsidiary and jointly controlled companiesincorporated in India as furnished to us, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by therespective Managements of the Holding Company, its subsidiary and jointly controlledcompanies incorporated in India are reasonable and adequate in relation to the size of theaforesaid Holding Company, its subsidiary and jointly controlled companies incorporated inIndia.

(c) On the basis of our examination of the inventory records and the reports of the otherauditors, in our opinion, the Holding Company, its subsidiary and jointly controlledcompanies incorporated in India are maintaining proper records of inventory. Thediscrepancies noticed on physical verification of inventory of the aforesaid HoldingCompany, its subsidiary and jointly controlled companies incorporated in India as comparedto the respective book records were not material.

F-15

(iii) The Holding Company, its subsidiary and jointly controlled companies incorporated in Indiahave not granted any loans, secured or unsecured, to companies, firms or other partiescovered in the register maintained under Section 189 of the Companies Act, 2013.

Therefore, the provisions of Clauses 3(iii)(a) and 3(iii)(b) of the Order are not applicable tothe Holding Company, its subsidiary and jointly controlled companies incorporated in India.

(iv) In our opinion, and according to the information and explanations given to us, and thereports of the other auditors on the subsidiary and jointly controlled companies incorporatedin India as furnished to us, there is an adequate internal control system commensurate withthe size of the Holding Company, its subsidiary and jointly controlled companiesincorporated in India and the nature of its business for the purchase of inventory and fixedassets and for the sale of goods and services. Further, on the basis of our examination of thebooks and records of the aforesaid Holding Company and the reports of the other auditors onthe subsidiary and jointly controlled companies incorporated in India as furnished to us, andaccording to the information and explanations given to us, we have neither come across, norhave been informed of, any continuing failure to correct major weaknesses in the aforesaidinternal control system.

(v) In our opinion and according to the information and explanations given to us, the HoldingCompany has complied with the directives issued by the Reserve Bank of India, theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013and the rules framed there under with regard to the deposits accepted from the public exceptfor deposits obtained by the Holding Company from the dependants of employees who dieor suffer permanent total disability for which the Company has applied to Ministry ofCorporate Affairs, Government of India for continuation of the exemption earlier obtained inrespect of applicability of Section 58 A of the Companies Act, 1956, which is still awaited.The Subsidiaries and jointly controlled companies incorporated in India have not acceptedany deposits from the public within the meaning of Sections 73 to 76 of the Act and therules framed there under to the extent notified. No order has been passed with respect toSection 73 to 76, by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other Tribunal.

(vi) We have broadly reviewed the accounts and records maintained by the Holding Companyand based on the reports of the other auditors of the subsidiaries and jointly controlledcompanies incorporated in India pursuant to the Rules made by the Central Government forthe maintenance of cost records under sub-section (1) of Section 148 of the Companies Act,2013 and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained, wherever applicable. We have not, however, made detailedexamination of the records with a view to determine whether they are accurate andcomplete.

F-16

(vii)(a) According to the information and explanations given to us and the records of the HoldingCompany examined by us, and based on the reports of the other auditors of the subsidiariesand jointly controlled companies incorporated in India, in our opinion, Holding company, itsSubsidiaries and jointly controlled companies incorporated in India are regular in depositingthe undisputed statutory dues, including provident fund, employees’ state insurance, incometax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cessand other material statutory dues, as applicable, with the appropriate authorities and thereare no undisputed dues outstanding as at 31st March 2015 for a period of more than sixmonths from the date they became payable.

(c) According to the information and explanations given to us and the records of the HoldingCompany examined by us, and based on the reports of the other auditors of the Holdingcompany’s subsidiaries and jointly controlled companies incorporated in India, the followingdues of income tax, sales tax, service tax, wealth-tax, duty of customs, duty of excise, valueadded tax and cess as at March 31, 2015 which have not been deposited on account of adispute:

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

is pending � Crore

1 Central Sales Tax and SalesTax / VAT, Entry tax Acts ofvarious states

Sales Tax/VAT/ EntryTax

Additional Commissionerof Sales Taxes

6.69

Commissioner of SalesTax

14.12

High Court 232.78Sales/Trade Tax Tribunal 20.74Joint Commissioner(Appeal) Trade tax

1.16

Additional Commissionerof Commercial Tax

5.59

Commercial tax officer 76.28

2. Central Excise Act, 1944 Central ExciseDuty/ServiceTax

Appellate Tribunal

CESTAT & AppellateTribunal of CEST

1.00

909.39

Commissioner of servicetax (appeal)

0.55

High Court 14.97

F-17

(c) According to the information and explanations given to us, the Holding Company, itssubsidiary and jointly controlled companies incorporated in India have transferred theamounts to the Investor Education and Protection Fund in accordance with the provisions ofthe Companies Act, 1956 (1 of 1956) and the rules made there under.

(viii) As per the consolidated financial statements, there are no accumulated losses and no cashlosses have been incurred during the financial year covered by our audit and in theimmediately preceding financial year.

(ix) According to the information and explanations given to us and the records of the HoldingCompany examined by us, and based on the reports of the other auditors of the Holdingcompany’s subsidiaries and jointly controlled companies incorporated in India, in ouropinion, Holding company, its Subsidiaries and jointly controlled companies incorporated inIndia have not defaulted in repayment of dues to financial institutions, banks or debentureholders. In case of M/s Ratnagiri Gas & Power Pvt. Ltd., a jointly controlled company inwhich the Company has 28.91% share, whose accounts are un-audited, has defaulted inpayment of principal and interest amounting to � 405.87 crore and � 579.71 crorerespectively as at the end of the year for a period varying from 76 to 533 days.

(x) In our opinion, and based on the reports of the other auditors furnished to us and accordingto the information and explanations given to us, the Holding Company, its subsidiary andjointly controlled companies incorporated in India have not given any guarantee for loanstaken by others from banks or financial institutions during the year. Accordingly, theprovisions of Clause 3(x) of the Order are not applicable to the aforesaid Holding Company,its subsidiary and jointly controlled companies.

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

is pending � Crore

3. Income Tax Act, 1961 Income Tax Income Tax AppellateTribunal

31.89

Income Tax Officer 0.43Dy. Commissioner ofIncome tax

3.82

CIT (Appeal) 46.40High Court 3.35Supreme Court 0.98

Total 1,370.14

F-18

(xi) According to the information and explanations given to us and the records of the HoldingCompany examined by us, and based on the reports of the other auditors of the Holdingcompany’s subsidiaries and jointly controlled companies incorporated in India, in ouropinion, Holding company, its Subsidiaries and jointly controlled companies incorporated inIndia the term loans have been applied for the purpose for which they were obtained.

(xii) During the course of our examination of the books and records of the Holding Companycarried out in accordance with the generally accepted auditing practices in India, andaccording to the information and explanations given to us and based on the reports of theother auditors, we have neither come across any instance of material fraud on or by theHolding Company, its subsidiaries and jointly controlled companies incorporated in India,noticed or reported during the year, nor we have been informed of any such case by theManagement of the aforesaid Holding Company or reported in the audit reports of itssubsidiaries and jointly controlled companies incorporated in India.

For O. P. Bagla & Co.Chartered AccountantsFirm Reg. No.000018N

[Neeraj Kumar Agarwal]Partner

M. No. 094155

For PSD & AssociatesChartered AccountantsFirm Reg. No.004501C

[Prakash Sharma]Partner

M. No. 072332

For PKF Sridhar & Santhanam LLPChartered Accountants

Firm Reg. No.003990S/S200018

[T.V.Balasubramanian]Partner

M. No.027251

For V. Sankar Aiyar & Co.Chartered Accountants


[M.S. Balachandran]Partner

M. No. 024282

For Ramesh C. Agrawal & Co.Chartered AccountantsFirm Reg. No.001770C

[Manoj Agrawal]Partner

M. No.076918

For A.R & Co.Chartered AccountantsFirm Reg. No.002744C

[Anil Gaur]Partner

M. No.017546


F-19

NTPC LIMITED

� CroreParticulars Note 31.03.2015 31.03.2014

EQUITY AND LIABILITIESShareholders' funds Share capital 2 8,245.46 8,245.46 Reserves and surplus 3 73,848.52 79,084.26

82,093.98 87,329.72Deferred revenue 4 1,394.15 1,609.88Minority interest 887.94 680.43

Non-current liabilitiesLong-term borrowings 5 93,362.92 75,542.30Deferred tax liabilities (net) 6 1,265.61 1,239.31Other long-term liabilities 7 3,481.85 3,081.58Long-term provisions 8 1,143.37 896.80

99,253.75 80,759.99

Current liabilitiesShort-term borrowings 5A 640.15 433.64Trade payables 9 7,107.63 7,223.96Other current liabilities 10 20,202.14 14,427.18Short-term provisions 11 7,996.41 7,580.33

35,946.33 29,665.11

TOTAL 2,19,576.15 2,00,045.13

ASSETS

Non-current assetsGoodwill on consolidation 0.62 0.62Fixed assets

Tangible assets 12 91,579.48 83,957.77Intangible assets 12 272.92 249.59Capital work-in-progress 13 67,524.31 53,819.15Intangible assets under development 13A 30.38 5.81

Non-current investments 14 14.12 1,663.46Long-term loans and advances 15 16,631.62 14,157.35Other non-current assets 15A 1,731.08 1,805.99

1,77,784.53 1,55,659.74

CONSOLIDATED BALANCE SHEET AS AT

F-20

NTPC LIMITED



Current assetsCurrent investments 16 1,887.39 1,636.96Inventories 17 7,972.46 5,988.48Trade receivables 18 9,249.92 6,725.66Cash and bank balances 19 14,251.61 17,050.67Short-term loans and advances 20 2,456.70 3,230.15Other current assets 21 5,973.54 9,753.47

41,791.62 44,385.39

TOTAL 2,19,576.15 2,00,045.13Significant accounting policies 1

- -The accompanying notes form an integral part of these financial statements.

- -


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

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

Chartered Accountants Chartered Accountants Chartered AccountantsFirm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C


M No.094155 M No.072332 M No.027251

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

Partner Partner Partner

M No. 024282 M No.076918 M.No.017546

(M.S.Balachandran) (Manoj Agrawal) (Anil Gaur) Partner Partner Partner

(Neeraj Kumar Agarwal) (Prakash Sharma) (T.V.Balasubramanian)



(A.K.Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)Company Secretary Director (Finance) Chairman & Managing Director

F-21

NTPC LIMITED


RevenueRevenue from operations (gross) 22 81,367.02 79,648.12

744.98 697.49Revenue from operations (net) 80,622.04 78,950.63Other income 23 2,078.91 2,760.12Total revenue 82,700.95 81,710.75

ExpensesFuel 51,461.12 47,790.26Electricity purchased 2,082.64 2,189.97Employee benefits expense 24 3,889.69 4,038.63Cost of material and services 631.02 315.81Changes in inventories of finished goods,work-in-progress 4.64 1.66Finance costs 25 3,570.37 3,203.07Depreciation and amortisation expense 12 5,564.61 4,769.99Generation, administration & other expenses 26 5,358.87 4,903.75Prior period items (net) 27 (318.22) 11.85Total expenses 72,244.74 67,224.99


Tax expenseCurrent tax

Current year 2,395.29 3,372.68Earlier years (1,952.99) (438.09)

Deferred taxCurrent year 940.00 158.59Earlier years 83.87 -

Less :Deferred asset for deferred tax liability 994.66 - MAT credit recoverable 7.67 10.82

Total tax expense 463.84 3,082.36


Less: Share of Profit /(loss)-Minority interest 6.03 (0.21)


Significant accounting policies 1Expenditure during construction period (net) 28

Earnings per equity share (Par value of � 10/- each) 45Basic & Diluted (�) 12.11 13.83

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED

Less: Electricity duty / Excise duty

F-22

NTPC LIMITED




For O. P. Bagla & Co. For PSD & Associates For PKF Sridhar & Santhanam LLPChartered Accountants Chartered Accountants Chartered Accountants



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

M No.094155 M No.072332 M No.027251


The accompanying notes form an integral part of these financial statements.

Total revenue, total expenses and profit after tax includes �� 4,779.76 crore (previous year � 4,532.23 crore), � 4,867.10crore (previous year � 4,062.44 crore) and (-) � 244.16 crore (previous year � 349.23 crore) respectively towards share ofjointly controlled entities.

(A.K.Rastogi) (K.Biswal) (Dr.Arup Roy Choudhury)

There are no exceptional or extraordinary items in the above periods.



This is the Consolidated Statement of Profit and Loss referred to in our report of even date


(Neeraj Kumar Agarwal) (Prakash Sharma) (T.V.Balasubramanian) Partner Partner Partner

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

M No. 024282 M No.076918 M.No.017546

F-23

� CroreParticulars 31.03.2015 31.03.2014

A. CASH FLOW FROM OPERATING ACTIVITIESProfit before tax 10,456.21 14,485.76Adjustment for:Depreciation/amortisation 5,564.61 4,769.99Prior period depreciation/amortisation 15.62 3.73Provisions 231.84 160.54Deferred revenue on account of advance against depreciation (283.35) (16.06)

244.39 (215.77)Deferred income from foreign currency fluctuation (22.50) 516.36

76.74 91.30(0.02) (0.19)

Interest charges 3,528.57 3,164.29Guarantee fee & other finance charges 41.80 38.78Interest/income on term deposits/bonds/investment (1,581.36) (2,130.45)Dividend income (160.22) (139.06)Provisions written back (187.14) (200.86)

7,468.98 6,042.60Operating profit before working capital changes 17,925.19 20,528.36

Adjustment for:Trade receivables (2,976.09) (629.02)Inventories (1,677.83) (1,154.24)Trade payables, provisions and other liabilities 1,019.90 1,378.81Loans & advances and other current assets 2,464.63 (906.42)

(1,169.39) (1,310.87)Cash generated from operations 16,755.80 19,217.49Direct taxes paid (2,009.95) (2,686.65)Net cash from operating activities - A 14,745.85 16,530.84

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (19,177.24) (18,948.45)Purchase of investments 2.12 -Sale of investments 1,636.96 1,622.46Interest/income on term deposits/bonds/investments received 1,847.03 2,453.40Income tax paid on interest income (303.59) (775.89)Dividend received 160.22 139.06Net cash used in investing activities - B (15,834.50) (15,509.42)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from long term borrowings 25,450.85 14,523.70Repayment of long term borrowings (5,076.24) (5,189.74)Proceeds from short term borrowings 206.51 51.48Grant received 20.00 20.32Interest paid (7,124.72) (6,088.36)Guarantee fee & other finance charges paid (112.36) (154.55)Dividend paid (including bonus debentures) (12,388.20) (5,018.96)Tax on dividend (including tax on bonus debentures) (2,450.34) (852.95)Net cash used in financing activities - C (1,474.50) (2,709.06)

D. 0.02 0.19

Net increase/(decrease) in cash and cash equivalents (A+B+C+D) (2,563.13) (1,687.45)

Cash and cash equivalents at the beginning of the year (see Note 1 below) 17,050.67 18,738.12Cash and cash equivalents at the end of the year (see Note 1 below) 14,487.54 17,050.67

NTPC LIMITED

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED

Deferred foreign currency fluctuation asset/liability


Exchange differences on translation of foreign currency cash and cash equivalents


F-24

� CroreParticulars 31.03.2015 31.03.2014

NTPC LIMITED


# (0.00) -1

659.22 930.6513,249.95 16,104.91

9.33 -569.04 15.11

14,487.54 17,050.67

(a) Deposits towards redemption of bonds due for repayment within one year 100.00 -(b) Balances with banks earmarked for fly ash utilisation reserve fund 193.77 -(c) Unpaid dividend account balance 14.97 14.21(d) Deposits as per court orders 24.64 -(e) Unpaid interest/refund account balance - tax free bonds 0.30 0.52(f) Deposits towards public deposit repayment reserve 0.08 -(g) Balances with bank towards unpaid interest on public deposit 0.03 0.03(h) Margin money kept with RBI earmarked for fixed deposits from public - 0.02(i) Deposited as security with governement authorities 0.02 0.02(j) Margin money with banks 8.63 0.31(k) Investments in liquid mutual funds earmarked for fly ash utilisation reserve fund 226.60 -

569.04 15.11

2 Reconciliation of cash and cash equivalents as restated(a) Cash and bank balances-Note-19 14,251.61 17,050.67(b) Current investments (investments in liquid mutual funds)-Note-16 235.93 -

14,487.54 17,050.67

3


Partner M.No.024282 M.No.076918

PartnerM.No.017546

Partner

Firm Regd. No. 002744C

(Anil Gaur)

Firm Regd. No. 109208W

For Ramesh C.Agrawal & Co. Chartered Accountants Chartered Accountants Chartered Accountants

For V.Sankar Aiyar & Co. For A.R.& Co.


(M.S.Balachandran) (Manoj Agrawal)

Partner Partner

Firm Regd. No. 003990S/S200018

M.No.094155 M.No.072332 M.No. 027251Partner


(Neeraj Kumar Agarwal) (Prakash Sharma)

Chartered Accountants Chartered AccountantsFor O.P.Bagla & Co.


NOTES:

Cash and cash equivalents

(A. K. Rastogi) (K.Biswal)

Previous year figures have been regrouped/rearranged wherever considered necessary.

Investments in liquid mutual fundsDeposits included in other bank balances

Earmarked balances*Cash and cash equivalents as restated

* Earmarked balances consist of:

Cash and cash equivalents consist of cheques, drafts, stamps in hand, balances with banks and investments in liquid mutual funds. Cashand cash equivalents included in the cash flow statement comprise of following balance sheet amounts as per Note-16 and Note-19:


Chairman & Managing DirectorCompany Secretary (Dr. Arup Roy Choudhury)

Director (Finance)

(T.V.Balasubramanian)

Firm Regd. No. 000018N

For PSD & Associates For PKF Sridhar & Santhanam LLPChartered Accountants

F-25

NTPC LIMITEDNotes forming part of Consolidated Financial Statements

A.

B.

C.

1.

2.

3.

D.

E.

1.2.

3.4.

5.

6.

7.

1. Significant accounting policiesBasis of preparation

These financial statements are prepared on accrual basis of accounting under historical cost convention inaccordance with generally accepted accounting principles in India, accounting standards specified under Section133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, the CompaniesAct, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and theprovisions of the Electricity Act, 2003 to the extent applicable.

Use of estimates

The preparation of financial statements requires estimates and assumptions that affect the reported amount ofassets, liabilities, revenue and expenses during the reporting period. Although such estimates and assumptionsare made on a reasonable and prudent basis taking into account all available information, actual results coulddiffer from these estimates & assumptions and such differences are recognized in the period in which the resultsare crystallized.

Fixed assets

Tangible assets are carried at historical cost less accumulated depreciation/amortisation.Expenditure on renovation and modernisation of tangible assets resulting in increased life and/orefficiency of an existing asset is added to the cost of related assets.Intangible assets are stated at their cost of acquisition less accumulated amortisation.Capital expenditure on assets not owned by the Company relating to generation of electricity business isreflected as a distinct item in capital work-in-progress till the period of completion and thereafter in thetangible assets. However, similar expenditure for community development is charged off to revenue.

Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expensesrelatable to land in possession are treated as cost of land.

Grants-in-aid

Grants-in-aid received from the Central Government or other authorities towards capital expenditure aswell as consumers’ contribution to capital works are treated initially as capital reserve and subsequentlyadjusted as income in the same proportion as the depreciation written off on the assets acquired out of thegrants.

Where the ownership of the assets acquired out of the grants vests with the government, the grants areadjusted in the carrying cost of such assets.

Grants from Government and other agencies towards revenue expenditure are recognized over the periodin which the related costs are incurred and are deducted from the related expenses.


Proceeds from sale of ash/ash products along-with income on investment of such proceeds are transferred to ‘Flyash utilisation reserve fund’ in terms of provisions of gazette notification dated 3rd November 2009 issued byMinistry of Environment and Forests, Government of India. The fund is utilized towards expenditure ondevelopment of infrastructure/facilities, promotion & facilitation activities for use of fly ash.

In the case of assets put to use, where final settlement of bills with contractors is yet to be effected,capitalisation is done on provisional basis subject to necessary adjustment in the year of final settlement.

Assets and systems common to more than one generating unit are capitalised on the basis of engineeringestimates/assessments.

F-26


F.

1.

2.

3.

G. 1.

2.

3.

H.

I.

1.

2.

3.

4.5.

J.

K. 1.

2.

Oil and gas exploration costsThe Company follows ‘Successful Efforts Method’ for accounting of oil & gas exploration activities.

Cost of surveys and prospecting activities conducted in search of oil and gas is expensed off in the year inwhich it is incurred.Acquisition and exploration costs are initially capitalized as ‘Exploratory wells-in-progress’ under Capitalwork-in-progress. Such exploratory wells in progress are capitalised in the year in which the producingproperty is created or written off in the year when determined to be dry/abandoned.

Development of coal minesExpenditure on exploration and development of new coal deposits is capitalized as ‘Development of coal mines’under capital work-in-progress till the mines project is brought to revenue account.

Capital work-in-progress

Administration and general overhead expenses attributable to construction of fixed assets incurred till theyare ready for their intended use are identified and allocated on a systematic basis to the cost of relatedassets.

Deposit works/cost plus contracts are accounted for on the basis of statements of account received fromthe contractors.Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for onestimated basis as per terms of the contracts.

Borrowing costs

Borrowing costs attributable to the qualifying fixed assets during construction/exploration, renovation andmodernisation are capitalised. Such borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are recognised as an expense in the period in which they areincurred.

InvestmentsCurrent investments are valued at lower of cost and fair value determined on an individual investmentbasis.Long term investments are carried at cost. Provision is made for diminution, other than temporary, in thevalue of such investments.

Foreign currency transactions

Foreign currency transactions are initially recorded at the rates of exchange ruling at the date oftransaction.At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items denominated in foreign currency are reported at the exchange rate ruling at the date oftransaction.Exchange differences arising from settlement/translation of foreign currency loans, deposits/liabilitiesrelating to fixed assets/capital work-in-progress in respect of transactions entered prior to 01.04.2004, areadjusted in the carrying cost of related assets. Such exchange differences arising fromsettlement/translation of long term foreign currency monetary items in respect of transactions entered onor after 01.04.2004 are adjusted in the carrying cost of related assets.

Other exchange differences are recognized as income or expense in the period in which they arise.Derivative contracts in the nature of forward contracts, options and swaps are entered into to hedge thecurrency and interest rate risk of foreign currency loans. Premium or discount arising at the inception offorward exchange contracts is amortised as expense or income over the life of the contracts. Exchangedifferences on such contracts, which relate to long-term foreign currency monetary items referred to inPolicy I.3 are adjusted in the carrying cost of related assets. Other derivative contracts are marked-to-market at the Balance Sheet date and losses are recognised in the Statement of Profit and Loss. Gainsarising on such contracts are not recognised, until realised, on grounds of prudence.

F-27


3.

L.1.

2.

M.

1.1.1

1.2

1.3

1.4

1.5

1.6

1.7

2.

3.

Premium paid on long term investments is amortised over the period remaining to maturity.

Exchange differences on account of translation of foreign currency borrowings recoverable from orpayable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are accounted as‘Deferred foreign currency fluctuation asset/liability’. The increase or decrease in depreciation for theyear due to the accounting of such exchange differences as per accounting policy no. I is adjusted indepreciation.

InventoriesInventories are valued at the lower of, cost determined on weighted average basis and net realizable value.

The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained onreview and provided for.

Income recognition

Sales

Advance against depreciation considered as deferred revenue in earlier years is included in sales, to theextent depreciation recovered in tariff during the year is lower than the corresponding depreciationcharged.

In the case of NTPC SAIL Power Company Pvt.Ltd. (50% JV), sale of energy in case of CaptivePower Plants (CPP-II), which are not governed by the CERC, is accounted for based on the ratesprovided in the Power Purchase Agreement with SAIL.In the case of NTPC BHEL Power Projects Pvt. Ltd. (50% JV), sales are recorded based onsignificant risks and rewards of ownership being transferred in favour of the customer. Sales includegoods dispatched to customers by partial shipment. For construction contracts, revenue is recognizedon percentage completion method based on the percentage of actual cost incurred up to the reportingdate to the total estimated cost of contract. Further, if it is expected that a contract will make a loss,the estimated loss is provided for in the books of account, based on technical assessments.

In the case of Transformers and Electricals Kerala Ltd. (44.60% JV), revenue in respect of sale ofproducts is recognized when the goods are dispatched to the customers or when the invoices areraised but the goods are retained at own premises at the request of the customers to get their siteready for installation.

Sale of energy is accounted for based on tariff rates approved by the Central Electricity RegulatoryCommission (CERC) as modified by the orders of Appellate Tribunal for Electricity to the extentapplicable. In case of power stations where the tariff rates are yet to be approved, provisional ratesare adopted.

In the case of Utility Powertech Ltd.(50% JV), income in respect of service contracts is recognizedproportionate to value of work done / services rendered.In the case of NTPC Alstom Power Services Pvt.Ltd. (50% JV), revenues are recognised on apercentage completion method measured by segmented portions of the contract achieved whichcoincides with the billing schedules agreed with the customers. The relevant cost is recognised in thefinancial statements in the year of recognition of revenues. Recognition of profit is adjusted toensure that it does not exceed the estimated overall contract margin. Further, if it is expected that acontract will make a loss, the estimated loss is provided for in the books of account, based ontechnical assessments.

In the case of NTPC Vidyut Vyapar Nigam Ltd. (a wholly owned subsidiary) which is in the energytrading business, sale of energy is accounted for based on the rates agreed with the customers.

F-28


4.

5.

6.

7.

8.

9.

10.

N.1.1.1

1.2

1.3

2 years

- 15 years- 10 years- 5 years

3 years5 years1 year

1.41.5

1.6

Exchange differences arising from settlement/translation of monetary items denominated in foreigncurrency (other than long term) to the extent recoverable from or payable to the beneficiaries insubsequent periods as per CERC Tariff Regulations are accounted as ‘Deferred foreign currencyfluctuation asset/liability’ during construction period and adjusted from the year in which the samebecomes recoverable/payable.

Premium, discount and exchange differences in respect of forward exchange contracts and mark to marketlosses in respect of other derivative contracts referred to in accounting policy no. I.5 recoverablefrom/payable to the beneficiaries as per CERC Tariff Regulations, are recognised in sales.

The surcharge on late payment/overdue sundry debtors for sale of energy is recognized when nosignificant uncertainty as to measurability or collectability exists.

Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damageswherever there is uncertainty of realisation/acceptance are not treated as accrued and are therefore,accounted for on receipt/acceptance.

Income from consultancy services is accounted for on the basis of actual progress/technical assessment ofwork executed, in line with the terms of respective consultancy contracts. Claims for reimbursement ofexpenditure are recognized as other income, as per the terms of consultancy service contracts.

Depreciation on the following assets is provided on their estimated useful life ascertained on technicalevaluation:

a) Kutcha Roadsb) Enabling works

residential buildingsinternal electrification of residential buildingsnon-residential buildings including their internal electrification, water supply,sewerage & drainage works, railway sidings, aerodromes, helipads and airstrips.

Scrap other than steel scrap is accounted for as and when sold.

Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims areaccounted for based on certainty of realisation.

ExpenditureDepreciation/amortisationDepreciation on the assets of the generation of electricity business is charged on straight line methodfollowing the rates and methodology notified by the CERC Tariff Regulations in accordance withSchedule II of the Companies Act, 2013.

Depreciation on the assets of the coal mining, oil & gas exploration and consultancy business, is chargedon straight line method following the useful life specified in Schedule II of the Companies Act, 2013.

In case of the Captive Power Plant–II (CPP-II) assets of NTPC SAIL Power Company Pvt.Ltd. (50% JV),which are not governed by CERC, depreciation is provided at a rate such that 95% of the gross block isdepreciated over the residual life of those assets.

c) Personal computers & laptops including peripheralsd) Photocopiers, fax machines, water coolers and refrigeratorse) Temporary erections including wooden structures

Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basisfrom/up to the month in which the asset is available for use/disposed.

Assets costing up to � 5,000/- are fully depreciated in the year of acquisition.Cost of software recognized as intangible asset, is amortised on straight line method over a period of legalright to use or 3 years, whichever is less. Other intangible assets are amortized on straight line methodover the period of legal right to use or life of the related plant, whichever is less.

F-29


1.7

1.8

1.9

1.10

1.11

1.12

2.2.1

2.2

2.3

2.4

2.5

O.

1.

2.

Where the cost of depreciable assets has undergone a change during the year due to increase/decrease inlong term liabilities on account of exchange fluctuation, price adjustment, change in duties or similarfactors, the unamortised balance of such asset is charged off prospectively over the remaining useful lifedetermined following the applicable accounting policies relating to depreciation/amortisation.

Where the life and/or efficiency of an asset is increased due to renovation and modernization, theexpenditure thereon along-with its unamortized depreciable amount is charged off prospectively over therevised useful life determined by technical assessment.

Machinery spares which can be used only in connection with an item of plant and machinery and their useis expected to be irregular, are capitalised and fully depreciated over the residual useful life of the relatedplant and machinery.

Capital expenditure on assets not owned by the company referred in policy E.4 is amortised over a periodof 4 years from the month in which the first unit of project concerned comes into commercial operationand thereafter from the month in which the relevant asset becomes available for use.

Leasehold land and buildings relating to generation of electricity business are fully amortised over leaseperiod or life of the related plant whichever is lower following the rates and methodology notified byCERC Tariff Regulations. Leasehold land acquired on perpetual lease is not amortised.

Land acquired for mining business under Coal Bearing Areas (Acquisition & Development) Act, 1957 isamortised on the basis of balance useful life of the project. Other leasehold land acquired for miningbusiness is amortised over the lease period or balance life of the project whichever is less.

In case of the Captive Power Plant –II (CPP-II) assets of NTPC SAIL Power Company Pvt.Ltd. (50% JV),which are not governed by CERC, leasehold lands other than acquired on perpetual lease are amortizedover the lease period. Leasehold buildings are amortized over the lease period or 30 years, whichever islower. Leasehold land and buildings, whose lease period is yet to be finalized, are amortized over a periodof 30 years.

Company’s contributions paid/payable during the year to provident fund and pension fund is recognisedin the Statement of Profit and Loss. The same is paid to funds administered through separate trusts.

Company’s liability towards gratuity, leave benefits (including compensated absences), post retirementmedical facility and other terminal benefits is determined by independent actuary, at year end using theprojected unit credit method. Past service costs are recognised on a straight line basis over the averageperiod until the benefits become vested. Actuarial gains and losses are recognised immediately in theStatement of Profit and Loss. Liability for gratuity as per actuarial valuation is paid to a fund administeredthrough a separate trust.

Other expenditureExpenses on ex-gratia payments under voluntary retirement scheme, training & recruitment and research& development are charged to revenue in the year incurred.

Preliminary expenses on account of new projects incurred prior to approval of feasibility report/technoeconomic clearance are charged to revenue.Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.

Prepaid expenses and prior period expenses/income of items of � 100,000/- and below are charged tonatural heads of accounts.

Transit and handling losses of coal as per Company's norms are included in cost of coal.

Employee benefits

Employee benefits inter-alia include provident fund, pension, gratuity, post retirement medical facilities,compensated absences, long service award, economic rehabilitation scheme and other terminal benefits.

F-30


3.

P. 1.

1.1

1.2

1.3

2.

Q.

R.

S.

T.

U.

Short term employee benefits are recognised as an expense at the undiscounted amount in the statement ofprofit and loss for the year in which the related services are rendered.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.Segment revenue, segment expenses, segment assets and segment liabilities are identified to segments on thebasis of their relationship to the operating activities of the segment. Revenue, expenses, assets and liabilitieswhich relate to the Company as a whole and not allocable to segments on reasonable basis are included underunallocated revenue/expenses/assets/liabilities.

Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Accounting Standard (AS)3 on ‘Cash Flow Statements’.Taxes on income

Current tax is determined on the basis of taxable income in accordance with the provisions of the Income TaxAct, 1961. Deferred tax liability/asset resulting from 'timing difference' between accounting income and taxableincome is accounted for considering the tax rate & tax laws that have been enacted or substantively enacted ason the reporting date. Deferred tax asset is recognized and carried forward only to the extent that there isreasonable certainty that the asset will be realized in future. Deferred tax assets are reviewed at each reportingdate for their realisability.

Assets acquired on lease where a significant portion of the risk and rewards of the ownership is retainedby the lessor are classified as operating leases. Lease rentals are charged to revenue.

ImpairmentThe carrying amount of cash generating units is reviewed at each Balance Sheet date where there is anyindication of impairment based on internal/external indicators. An impairment loss is recognised in theStatement of Profit and Loss where the carrying amount exceeds the recoverable amount of the cash generatingunits. The impairment loss is reversed if there is change in the recoverable amount and such loss either no longerexists or has decreased.

Provisions and contingent liabilities

A provision is recognised when the company has a present obligation as a result of a past event and it is probablethat an outflow of resources will be required to settle the obligation and in respect of which a reliable estimatecan be made. Provisions are determined based on management estimate required to settle the obligation at thebalance sheet date and are not discounted to present value. Contingent liabilities are disclosed on the basis ofjudgment of the management/independent experts. These are reviewed at each balance sheet date and areadjusted to reflect the current management estimate.

Segment reporting

LeasesFinance lease

Assets taken on finance lease are capitalized at fair value or net present value of the minimum leasepayments, whichever is less.

Depreciation on the assets taken on finance lease is charged at the rate applicable to similar type offixed assets as per accounting policy no. N.1.1 or N.1.2. If the leased assets are returnable to thelessor on the expiry of the lease period, depreciation is charged over its useful life or lease period,whichever is less.

Lease payments are apportioned between the finance charges and outstanding liability in respect ofassets taken on lease.

Operating lease

F-31


� Crore31.03.2015 31.03.2014

Equity share capitalAuthorised

10,00,00,00,000 shares of par value of �10/- each (previousyear 10,00,00,00,000 shares of par value of �10/- each) 10,000.00 10,000.00


8,24,54,64,400 shares of par value of �10/- each (previous year 8,24,54,64,400 shares of par value of �10/- each) 8,245.46 8,245.46

a) During the year, the Company has neither issued nor bought back any shares.b)

c)

d)

e)

No. of shares %ageholding


618,06,14,980 74.96 618,40,98,300 75.00 81,75,85,952 9.92 70,67,78,072 8.57

During the year ended 31st March 2015, the amount of per share dividend recognised as distribution to equity shareholders is �� 2.50 (previous year � 5.75).

- President of India- Life Insurance Corporation of India

2. Share capital

As at

Details of shareholders holding more than 5% shares in the Company:

Particulars 31.03.2015 31.03.2014

The Company has only one class of equity shares having a par value �10/- per share. The holders of the equity sharesare entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to theirshare holding at the meetings of shareholders.During the year, the Company has issued, out of the free reserves, 8.49% secured non-cumulative non-convertibleredeemable taxable fully paid-up bonus debenture of � 12.50 each for every fully paid-up equity share of par value of �10/-. Refer Note 3 (f).

F-32


3. Reserves and surplus� Crore

As at 31.03.2015 31.03.2014

Capital reserve As per last financial statements 400.97 408.97 Add : Transfer from surplus 0.12 4.98

Grants received during the year 20.00 20.32 Less : Adjustments during the year 23.49 33.30

397.60 400.97Securities premium account As per last financial statements 2,228.34 2,228.11 Add : Received during the year - 0.23

2,228.34 2,228.34

0.76 0.15

Debt service reserve As per last financial statements 244.01 81.84 Add : Transfer from surplus 3.41 162.17

247.42 244.01Self insurance reserve As per last financial statements 21.80 50.11 Less : Transfer to surplus - 27.49

Adjustments during the year (21.57) 0.8243.37 21.80

Bonds/Debentures redemption reserve As per last financial statements 2,764.91 2,535.33 Add : Transfer from surplus 1,156.19 576.08 Less : Transfer to surplus 296.50 346.50

3,624.60 2,764.91Fly ash utilisation reserve fundAs per last financial statements 326.23 234.93 Add: Transfer from

-Revenue from operations 115.11 122.55-Other income 21.08 17.01

Less: Utilised during the year-Capital expenditure 12.72 0.49-Employee benefits expense 20.33 5.73-Other administration expenses 26.37 42.04

403.00 326.23Corporate social responsibility (CSR) reserveAs per last financial statements - - Add : Transfer from surplus 78.92 -

78.92 -General reserve As per last financial statements 71,965.83 66,958.67 Add : Transfer from surplus 7,020.16 5,012.08 Less: Issue of bonus debentures 10,306.83 - Dividend distribution tax on bonus debentures 2,060.76

Adjustments during the year 455.57 4.9266,162.83 71,965.83

Foreign currency translation reserve

Surplus F-33

Eng06

文字方塊

-



As at 31.03.2015 31.03.2014As per last financial statements 1,132.02 732.87Add: Profit for the year as per Statement of Profit and Loss 9,986.34 11,403.61

Transfer from bonds/debentures redemption reserve 296.50 346.50Transfer from self insurance reserve - 27.49

Less: Transfer to bonds/debentures redemption reserve 1,156.19 576.08Transfer to capital reserve 0.12 4.98Transfer to CSR reserve 78.92 -Transfer to fly ash utilisation reserve fund - 17.01Transfer to debt service reserve 3.41 162.17Transfer to general reserve 7,020.16 5,012.08Dividend paid 618.42 3,300.69Tax on dividend paid 136.17 560.96Proposed dividend 1,442.96 1,491.07Tax on proposed dividend 296.83 253.41

Net surplus 661.68 1,132.02

Total # 73,848.52 79,084.26# Includes �� 69.73 crore (previous year � 758.91 crore) share of jointly controlled entities.

a)

b)

c)

d)

(i) Pursuant to gazette notification dated 3rd November 2009, issued by the Ministry of Environmentand Forest (MOEF), Government of India (GOI), the amount collected from sale of fly ash and fly ashbased products should be kept in a separate account head and shall be utilized only for thedevelopment of infrastructure or facility, promotion & facilitation activities for use of fly ash until 100percent fly ash utilization level is achieved. Proceeds from sale of ash/ash products along-with incomeon investment of such proceeds are transferred to ‘Fly ash utilisation reserve fund’ in terms ofprovisions of above notification. The fund is utilized towards expenditure on development ofinfrastructure/facilities, promotion & facilitation activities for use of fly ash.

Capital reserve includes an amount of �� 237.86 crore (previous year � 241.33 crore) relating to grantreceived from GOI through Government of Bihar for renovation and modernisation of Kanti BijleeUtpadan Nigam Ltd.Debt service reserve has been created as per the loan agreement equivalent to two quarters' interest andprincipal repayment in respect of Aravali Power Company Pvt. Ltd..Self insurance reserve has been created by Ratnagiri Gas & Power Private Ltd. to cover machinerybreak-down for which no insurance cover agreement has been entered.

(iii) The above fly ash utilisation reserve fund also includes � 1.83 crore of M/s Aravali PowerCompany Private Ltd. and � 0.03 crore of M/s NTPC SAIL Power Company Private Ltd., jointventures of the Company, pursuant to above notification of MOEF.

(ii) Sale of fly ash and ash products generated at the power stations of the Company was carried out till31st December 2014 by M/s NVVN Ltd., a wholly owned subsidiary of the Company. As per thedecision of the Board of Directors of the Company such sales are directly made by the Company w.e.f1st January 2015.

F-34



As at 31.03.2015 31.03.2014e)

f)

g)

h)

i) During the previous year, an amount of � 112.05 crore was reported by M/s Ratnagiri Gas & PowerPvt. Ltd., a Joint Venture of the Company, as profit after tax in their un-audited accounts, consideredfor consolidation of NTPC Group. Subsequently, the audited accounts of the Company reported a lossof �1,486.47 crore. The consequential impact, in proportion to the Company's share holding in the jointventure, amounting to � 466.56 crore has been included in the adjustments to the general reserveduring the current year.

During the year, the Company, out of free reserves issued one 8.49 % secured non-cumulative non-convertible redeemable taxable fully paid-up debenture of � 12.50 by way of bonus for each fully paid-up equity share of par value � 10/-. The debenture amount of � 10,306.83 crore and dividenddistribution tax thereon of � 2,060.76 crore has been debited to general reserve.

In line with the provisions of Schedule-II to the Companies Act, 2013, the Company revisedaccounting policies related to depreciation. Consequently, � 3.58 crore (net of deferred tax of � 1.89crore) has been adjusted from the opening balance of general reserve where the remaining useful life ofassets is Nil as at 1st April 2014.

In terms of Section 135 of the Companies Act, 2013 read with guidelines on corporate socialresponsibility issued by Department of Public Enterprises (DPE), GOI , the Central Public SectorEnterprises are required to spend, in every financial year, at least two per cent of the average netprofits of the Company made during the three immediately preceding financial years in accordancewith its CSR Policy. Keeping in view the above, an amount of � 78.92 crore has been appropriated toCSR reserve from surplus during the year.

During the year, the Company has paid interim dividend of �� 0.75 (previous year � 4.00) per equityshare of par value � 10/- each for the year 2014-15. Further, the Company has proposed final dividendof � 1.75 (previous year � 1.75) per equity share of par value � 10/- each for the year 2014-15. Thus,the total dividend (including interim dividend) for the financial year 2014-15 is � 2.50 (previous year �5.75) per equity share of par value � 10/- each.

F-35


� CroreAs at 31.03.2015 31.03.2014

409.20 692.55On account of income from foreign currency fluctuation 984.95 917.33

Total # 1,394.15 1,609.88# Includes �� Nil (previous year � Nil) share of jointly controlled entities.

a)

b)

c)

d)

4. Deferred revenue

On account of advance against depreciation

Advance against depreciation (AAD) was an element of tariff provided under the TariffRegulations for 2001-04 and 2004-09 to facilitate debt servicing by the generators since it wasconsidered that depreciation recovered in the tariff considering a useful life of 25 years is notadequate for debt servicing. Though this amount is not repayable to the beneficiaries, keeping inview the matching principle, and in line with the opinion of the Expert Advisory Committee(EAC) of the Institute of Chartered Accountants of India (ICAI), this was treated as deferredrevenue to the extent depreciation chargeable in the accounts is considered to be higher than thedepreciation recoverable in tariff in future years. Since AAD is in the nature of deferred revenueand does not constitute a liability, it has been disclosed in this note separately from shareholders'funds and liabilities.

The balance of AAD as at 31st March 2014 was reviewed considering the accounting policy no.M.2 (Note 1) and excess of depreciation charged in the books over the depreciation recovered intariff, amounting to � 208.32 crore has been recognised as prior period sales (Note 27).

In line with significant accounting policy no. M.2 (Note 1), an amount of �� 75.03 crore (previousyear � 16.05 crore) has been recognized during the year from the AAD and included in energysales (Note 22).

Foreign exchange rate variation (FERV) on foreign currency loans and interest thereon isrecoverable from/payable to the customers in line with the Tariff Regulations. Keeping in view theopinion of the EAC of ICAI, the Company is recognizing deferred foreign currency fluctuationasset by corresponding credit to deferred income from foreign currency fluctuation in respect ofthe FERV on foreign currency loans adjusted in the cost of fixed assets, which is recoverable fromthe customers in future years as provided in accounting policy no. M.3 (Note 1). This amount willbe recognized as revenue corresponding to the depreciation charge in future years. The amountdoes not constitute a liability to be discharged in future periods and hence, it has been disclosedseparately from shareholder’s funds and liabilities.

F-36


� Crore31.03.2015 31.03.2014

Bonds / DebenturesSecured8.61% Tax free secured non-cumulative non-convertible redeemable bonds of �

10,00,000/- each redeemable at par in full on 4th March 2034 (Fifty first issue C -Private Placement) III. Secured during the current year.

320.00 320.00

8.66% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of�1,000/- each redeemable at par in full on 16th December 2033 (Fiftieth issue - PublicIssue - Series 3A)VII

312.03 312.03

8.91% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of� 1,000/- each redeemable at par in full on 16th December 2033 (Fiftieth issue - PublicIssue - Series 3B)VII

399.97 399.97

8.63% Tax free secured non-cumulative non-convertible redeemable bonds of �

10,00,000/- each redeemable at par in full on 4th March 2029 (Fifty first issue B -Private Placement) III. Secured during the current year.

105.00 105.00

8.48% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of� 1,000/- each redeemable at par in full on 16th December 2028 (Fiftieth issue - PublicIssue - Series 2A)VII

249.95 249.95


91.39 91.39

9.17% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 22nd September 2024 (Fifty third issue -Private Placement)IX

1,000.00 -

9.34% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 24th March 2024 (Fifty second issue -Private Placement)III. Secured during the current year.

750.00 750.00

8.19% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of� 10,00,000/- each redeemable at par in full on 4th March 2024 (Fifty first issue A -Private Placement)III. Secured during the current year.

75.00 75.00

8.41% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of� 1,000/- each redeemable at par in full on 16th December 2023 (Fiftieth issue - PublicIssue - Series IA)VII

488.02 488.02


208.64 208.64

9.25% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each with five equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 11th year and in annual installmentsthereafter upto the end of 15th year respectively commencing from 04th May 2023 andending on 04th May 2027 (Forty fourth issue - Private Placement)VII

500.00 500.00

8.48% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 1st May 2023 (Seventeenth issue -Private Placement)I

50.00 50.00

8.80% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 4th April 2023 (Forty ninth issue -Private Placement)VII

200.00 200.00


As at

F-37


� Crore31.03.2015 31.03.2014


As at8.49% Secured non-cumulative non-convertible redeemable taxable fully paid-upbonus debentures of � 12.50 each redeemable at par in three annual installments of �2.50, � 5.00 and � 5.00 at the end of 8th year, 9th year and 10th year on 25th March2023, 25th March 2024 and 25th March 2025 respectively (Fifty fourth issue -BonusDebentures)X - (refer note 5 d)

10,306.83 -

8.73% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 7th March 2023 (Forty eighth issue -Private Placement)VII. Secured during the current year.

300.00 300.00

9.00% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each with five equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 11th year and in annual installmentsthereafter upto the end of 15th year respectively commencing from 25th January 2023and ending on 25th January 2027 (Forty second issue - Private Placement)III

500.00 500.00

8.84% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 4th October 2022 (Forty seventh issue -Private Placement)VII

390.00 390.00

8.93% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 19th January 2021 (Thirty seventh issue- Private Placement)III

300.00 300.00

8.73% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 31st March 2020 (Thirty third issue-Private Placement)III

195.00 195.00

8.78% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 9th March 2020 (Thirty first issue-Private Placement)III

500.00 500.00

11.25% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in five equal annual installments commencingfrom 6th November 2019 and ending on 6th November 2023 (Twenty seventh issue -Private Placement)III

350.00 350.00

7.89% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 5th May 2019 (Thirtieth issue - PrivatePlacement)III

700.00 700.00

8.65% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 4th February 2019 (Twenty ninth issue -Private Placement)III

550.00 550.00

7.50% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 12th January 2019 (Nineteenth issue -Private Placement)II

50.00 50.00

11.00% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 21st November 2018 (Twenty eighthissue - Private Placement)III

1,000.00 1,000.00

9.3473% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 20th July 2018 andending on 20th July 2032 (Forty sixth issue - Private Placement)VII

75.00 75.00

F-38


� Crore31.03.2015 31.03.2014


As at9.4376% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 16th May 2018 andending on 16th May 2032 (Forty fifth issue - Private Placement)VII

75.00 75.00

8.00% Secured non-cumulative non-convertible redeemable taxable bonds of�10,00,000/- each redeemable at par in full on 10th April 2018 (Sixteenth issue -Private Placement)I

100.00 100.00

9.2573% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 2nd March 2018and ending on 2nd March 2032 (Forty third issue - Private Placement)III

75.00 75.00

9.6713 % Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 23rd December2017 and ending on 23rd December 2031 (Forty first issue - Private Placement)III

75.00 75.00

9.558 % Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 29th July 2017 andending on 29th July 2031 (Fortieth issue - Private Placement)III

75.00 75.00

9.3896% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 9th June 2017 andending on 9th June 2031 (Thirty ninth issue - Private Placement)III

105.00 105.00

9.17% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 22nd March 2017and ending on 22nd March 2031 (Thirty eighth issue - Private Placement)III

75.00 75.00

8.8086% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 15th December2016 and ending on 15th December 2030 (Thirty sixth issue - Private Placement)III

75.00 75.00

8.785% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 15th September2016 and ending on 15th September 2030 (Thirty fifth issue - Private Placement)III

120.00 120.00

F-39


� Crore31.03.2015 31.03.2014


As at8.71% Secured non-cumulative non-convertible redeemable taxable bonds of�15,00,000/- each with fifteen equal separately transferable redeemable principalparts (STRPP) redeemable at par at the end of 6th year and in annual installmentsthereafter upto the end of 20th year respectively commencing from 10th June 2016 andending on 10th June 2030 (Thirty fourth issue - Private Placement)III

150.00 150.00

8.8493% Secured non-cumulative non-convertible redeemable taxable bonds of �

15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 25th March 2016 and endingon 25th March 2030 (Thirty second issue - Private Placement)III

98.00 105.00

9.37% Secured non-cumulative non-convertible redeemable taxable bonds of�70,00,000/- each with fourteen separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 4th June 2012 andending on 4th December 2018 (Twenty fifth issue - Private Placement)III

214.00 285.50

9.06% Secured non-cumulative non-convertible redeemable taxable bonds of�70,00,000/- each with fourteen separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 4th June 2012 andending on 4th December 2018 (Twenty sixth issue - Private Placement)III

214.00 285.50

8.6077% Secured non-cumulative non-convertible redeemable taxable bonds of�20,00,000/- each with twenty equal separately transferable redeemable principalparts (STRPP) redeemable at par semi-annually commencing from 9th September2011 and ending on 9th March 2021 (Twenty fourth issue - Private Placement)IV

250.00 300.00

8.3796% Secured non-cumulative non-convertible redeemable taxable bonds of�20,00,000/- each with twenty equal separately transferable redeemable principalparts (STRPP) redeemable at par semi-annually commencing from 5th August 2011and ending on 5th February 2021 (Twenty third issue - Private Placement)IV

250.00 300.00

8.1771% Secured non-cumulative non-convertible redeemable taxable bonds of�20,00,000/- each with twenty equal separately transferable redeemable principalparts (STRPP) redeemable at par semi-annually commencing from 2nd July 2011 andending on 2nd January 2021 (Twenty second issue - Private Placement)IV

250.00 300.00

7.7125% Secured non-cumulative non-convertible redeemable taxable bonds of�20,00,000/- each with twenty equal separately transferable redeemable principalparts (STRPP) redeemable at par semi-annually commencing from 2nd August 2010and ending on 2nd February 2020 (Twenty first issue - Private Placement)V

400.00 500.00

7.552% Secured non-cumulative non-convertible redeemable taxable bonds of�20,00,000/- each with twenty equal separately transferable redeemable principalparts (STRPP) redeemable at par semi-annually commencing from 23rd September2009 and ending on 23rd March 2019 (Twentieth Issue - Private Placement)VI

150.00 200.00

9.55% Secured non-cumulative non-convertible taxable redeemable bonds of�10,00,000/- each with ten equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of the 6th year and in annual installmentsthereafter upto the end of 15th year respectively from 30th April 2002 (Thirteenth issue- Part B - Private Placement)VIII

150.00 225.00

F-40


� Crore31.03.2015 31.03.2014


As at9.55% Secured non-cumulative non-convertible taxable redeemable bonds of�10,00,000/- each redeemable at par in ten equal annual installments commencingfrom the end of 6th year and upto the end of 15th year respectively from 18th April2002 (Thirteenth issue -Part A - Private Placement)VIII

150.00 225.00

23,017.83 12,311.00

Unsecured4.375 % Fixed rate notes due for repayment on 26th November 2024 3,159.50 -4.750 % Fixed rate notes due for repayment on 3rd October 2022 3,159.50 3,030.505.625 % Fixed rate notes due for repayment on 14th July 2021 3,159.50 3,030.505.875 % Fixed rate notes due for repayment on 2nd March 2016 - 1,818.30

Term loansFrom Banks

SecuredRupee loansXI 8,024.13 3,399.34Foreign currency loans XI 237.92 -UnsecuredForeign currency loans 8,362.55 6,290.80Rupee loans 20,835.85 18,905.07

From OthersSecuredRupee loansXI 6,545.28 9,708.46UnsecuredForeign currency loans (guaranteed by GOI) 2,035.26 2,456.03Other foreign currency loans 2,815.56 2,026.88Rupee loans 11,941.90 12,503.04

DepositsUnsecuredFixed deposits - 0.09


Total# 93,362.92 75,542.30

#


Includes �� 9,937.76 crore (previous year � 9,082.32 crore) share of jointly controlled entities.


F-41


a)��rore

31.03.2015 31.03.2014 31.03.2015 31.03.2014 31.03.2015 31.03.2014Term loans

SecuredRupee loans - Banks 8,024.13 3,399.34 308.83 310.00 8,332.96 3,709.34Rupee loans - Others 6,545.28 9,708.46 261.33 395.34 6,806.61 10,103.80

Foreign currency loans - Banks 237.92 - - - 237.92 -

14,807.33 13,107.80 570.16 705.34 15,377.49 13,813.14Unsecured

Foreign currency loans(guaranteed by GOI) - Others 2,035.26 2,456.03 154.61 173.40 2,189.87 2,629.43

Foreign currency loans - Banks 8,362.55 6,290.80 281.82 257.84 8,644.37 6,548.64

Other foreign currency loans -Others 2,815.56 2,026.88 406.02 393.67 3,221.58 2,420.55

Rupee loans - Banks 20,835.85 18,905.07 2,545.98 1,764.06 23,381.83 20,669.13Rupee loans - Others 11,941.90 12,503.04 1,794.64 1,591.23 13,736.54 14,094.27

45,991.12 42,181.82 5,183.07 4,180.20 51,174.19 46,362.02

Fixed deposits (unsecured) - 0.09 - 0.43 - 0.52

i)

ii)

iii)

iv)

v)

vi)


Non current portion Current portionParticulars

Details of terms of repayment and rate of interest

Secured foreign currency term loan facility has been tied up with SBI,Tokyo by one of the joint venture companiesduring the year which carries interest rate ranging from 3.00% to 5.17% linked to LIBOR with half yearly rests. The loanis repayble in twenty four half-yearly installments commencing from 28th September 2017.

Total

Secured rupee term loan from banks carry interest linked to SBI base rate or fixed interest rate ranging from 8% to11.25% p.a., with monthly/quarterly/half-yearly rests. These loans are repayable in quarterly/half-yearly installments asper the terms of the respective loan agreements. The repayment period extends from a period of four to fifteen years aftera moratorium period of six months from the COD or three to five years from the date of the loan agreement.

Secured rupee term loan from others carry interest linked to SBI base rate, SBI Advance Rate,rate notified by the lenderfor category 'A' public scetor undertaking, AAA bond yield rates plus agreed margin or fixed interest rate ranging from7.71% to 13.00 % p.a., with monthly/quarterly/half-yearly rests. These loans are repayable in quarterly/half-yearlyinstallments as per the terms of the respective loan agreements. The repayment period extends from a period of four tofifteen years after a moratorium period of six months from the COD or three to five years from the date of the loanagreement.

Unsecured foreign currency loans (guaranteed by GOI) - Others carry fixed rate of interest ranging from 1.80% p.a. to2.30% p.a. and are repayable in 23 to 32 semi annual installments as of 31 st March 2015.

Unsecured foreign currency loans – Banks include loans of �� 642.54 crore (previous year � 589.81 crore) which carryfixed rate of interest of 1.88% p.a. to 4.31% p.a. and loans of � 8,001.83 crore (previous year � 5,958.83 crore) whichcarry floating rate of interest linked to 6M LIBOR. These loans are repayable in 2 to 24 semiannual instalments as of 31st

March 2015, commencing after moratorium period if any, as per the terms of the respective loan agreements.

Unsecured foreign currency loans – Others include loans of �� 2,516.58 crore (previous year � 1,424.92 crore) whichcarry fixed rate of interest ranging from 1.88% p.a. to 4.31% p.a and loans of � 705.00 crore (previous year � 995.63crore) which carry floating rate of interest linked to 6M LIBOR/6M EURIBOR. These loans are repayable in 4 to 22semiannual installments as of 31st March 2015, commencing after moratorium period if any, as per the terms of therespective loan agreements.

F-42


5. Long-term borrowingsvii)

b)

c)

d)

e) The non current portion of fixed deposits has been repaid during the year in compliance to the provisions of theCompanies Act,2013.

During the year, the Company out of free reserves issued one 8.49% secured non-cumulative non-convertible redeemabletaxable fully paid-up debenture of � 12.50 by way of bonus for each fully paid-up equity share of par value of � 10/-amounting to � 10,306.83 crore. Refer Note 3 f). An amount of � 5,650.00 crore has been utilized till 31st March 2015 forthe purpose mentioned in the Scheme of Arrangement.

There has been no default in repayment of any of the loans or interest thereon as at the end of the year except that M/sRatnagiri Gas & Power Pvt. Ltd, a Joint Venture Companies in which the Company has 28.91% share has defaulted inpayment of principal and interest amounting to � 405.87 crore and � 579.71 crore respectively as at the end of the yearfor a period varying from 31 to 533 days.

Unsecured rupee term loans carry interest rate ranging from 7.00 % p.a. to 12.40 % p.a. with monthly/half-yearly rests.These loans are repayable in quarterly/half-yearly/yearly installments as per the terms of the respective loan agreements.The repayment period extends from a period of seven to ten years after a moratorium period of six months to six years.

The finance lease obligations are repayable in installments as per the terms of the lease agreement over a period of sevenyears.

F-43


I

II

III

IV

V

VI

VII

VIII

IX

X

XI (i) Secured by equitable mortagage of present and future immoveable property and hypothecation of moveablefixed assets of Bhilai Expansion Project (CPP - III) belonging to M/s NTPC SAIL Power Company Pvt.Ltd.

Secured by Equitable mortgage of the immovable properties pertaining to Barh Super Thermal Power Project onfirst charge basis.


Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovable propertiespertaining to National Capital Power Station.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Hypothecation of all the present and future movable assets (excluding receivables) of SingrauliSuper Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal PowerProject, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel PowerProject, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal PowerStation, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super ThermalPower Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar PowerStation and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any,already created in favour of the Company's Bankers on such movable assets hypothecated to them for workingcapital requirement.

Secured by (I) English mortgage, on first pari passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining toSipat Super Thermal Power Project by extension of charge already created.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage, by way of first charge, by deposit of the title deeds of the immovableproperties pertaining to Sipat Super Thermal Power Project.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of Barh SuperThermal Power Project on first pari-passu charge basis, ranking pari passu with charge already created in favourof Trustee for other Series of Bonds and (III) Equitable mortgage of the immovable properties, on first pari-passucharge basis, pertaining to Ramagundam Super Thermal Power Station by extension of charge already created.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovable propertiespertaining to Ramagundam Super Thermal Power Station.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining toNational Capital Power Station by extension of charge already created.Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of SingrauliSuper Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal PowerProject, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel PowerProject, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal PowerStation, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super ThermalPower Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar PowerStation and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any,already created in favour of the Company's Bankers on such movable assets hypothecated to them for workingcapital requirement and (III) Equitable mortgage of the immovable properties, on first pari-passu charge basis,pertaining to Singrauli Super Thermal Power Station by extension of charge already created.

Secured by English mortgage of the immovable properties pertaining to Solapur Super Thermal Power Project onfirst charge basis.

F-44


(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

(x)

XII Security cover mentioned at sl. no. I to XI is above 100% of the debt securities outstanding.

Secured by first charge by way of mortgage by deposit of title deed of lands (approx 2049.11 acres) andother immovable properties of Indira Gandhi Super Thermal Power Project (3 x 500 MW) coal basedthermal power project at jhajjar district in State of Haryana together with buildings and structure erected/constructed/ standing thereon and all plant and machinery, and equipment attached to the earth orpermanently fastened to the earth comprised therein, in respect of which M/s APCPL, as a owner seizedand possessed of and otherwise well and fully entitled to, both present and future assets; and

Secured by equitable mortgage/ hypothecation of all present and future fixed and movable assets ofNabinagar TPP (4*250) MW of Bhartiya Rail Bijlee Company Ltd., a subsidiary company, as first charge,ranking pari passu with charge already created with PFC for 60% of total debts and balance 40% with REC.

Secured by equitable mortgage/hypothecation of all the present and future fixed assets and moveable assetsof power plant and associated LNG facilities at village Anjanwel, Guhagar, Distt. Ratnagiri of M/sRatnagiri Gas & Power Pvt.Ltd.

Secured by equitable mortagage of present and future immoveable property and hypothecation of moveablefixed assets of CPP-II at Rourkela, Durgapur and Bhilai belonging to M/s NTPC SAIL Power CompanyPvt.Ltd.

Secured by first charge by way of hypothecation of all moveable assets of Indira Gandhi Super ThermalPower Project (3 X 500 MW) Coal Based Thermal Power Project at Jhajjar Distt. in state of Haryanabelonging to M/s Aravali Power Company Pvt.Ltd. (APCPL), comprising its movable plant and machinery,machinery spares, tools and accessories, furniture & fixture, vehicles and all other movable assets, presentand future, including intangible assets, goodwill, uncalled capital, revenue and receivable of the projectexcept for specified receivables on which first charge would be ceded to working capital lenders presentand future; and

Secured by a first priority charge on all assets of the Project, present & future, movable & immovable andland, in respect of loan from consortium led by SBI for Kanti Bijlee Utpadan Nigam Ltd. expansion project.The security will rank pari-pasu with all term lenders of the project. The charge has been created in favor ofSecurity trustee i.e. SBI Cap Trustee Co. Ltd. Legal mortgage of land in favor of security trustee has beenexecuted for 877.18 acres of land.

Secured by Equitable mortgage, by way of first charge, by deposit of the title deeds of the immovableproperties pertaining to Meja Thermal Power Project. Deed of Hypothecation for all present and futuremovable assets of Meja Urja Nigam Private Limited has also been executed with the Security Trustee andthe Indenture of Mortgage with the Security Trustee has been registered with appropriate authority.

Secured by a first priority charge on all assets of the Nabinagar Power Generating Company Pvt.Ltd.,present and future, movable and immovable through a deed of hypothecation and simple mortgage of 2,500acres of land.

Secured by first charge by way of hypothecation in favour of the Power Finance Corporation Ltd. of all themoveable assets of the project (save and except book debts) including moveable property, machineryspares, tools and accessories, fuel stock, spares and material at project both present and future of M/sNational High Power Test Laboratory Pvt. Ltd.

Secured by first charge on all movable and immovable, present and future assets of the NTPC TamilnaduEnergy Company Ltd.

First charge by way of assignment or creation of charge on all rights, title, interest, benefit, claim anddemand whatsoever of M/s APCPL regarding project document,letter of credit, guarantees, performancebond and all insurance contracts / proceeds duly consented by the relevant counter parties; and

Power Finance Corporation Ltd. has ceded first paripassu charge to the extent of �1,325.00 crore on themoveable assets,revenue and receivables in favour of the working capital lenders.

F-45


� Crore31.03.2015 31.03.2014

Loans repayable on demandFrom Banks

SecuredCash Credit 640.15 433.64

Total # 640.15 433.64# Includes �� 491.63 crore (previous year � 361.01 crore) share of jointly controlled entities.

a)

b)

c)

d) There has been no default in payment of principal and interest as at the end of the year.


As at

Includes cash credit secured by hypothecation of stock in trade, book debts of Stage-I of M/s Kanti BijleeUtpadan Nigam Ltd. with floating rate of interest linked to the bank's base rate.

Includes borrowings secured by way of first pari-passu charge along with Power Finance Corporation Ltd.on the fixed assets, revenue and receivables of M/s Aravali Power Company Pvt. Ltd.. Rate of interest isapplicable at the base rate of the respective banks.

Includes cash credit secured by paripassu charge on spares, present and future stock of coal and fuel atvarious places of M/s NTPC Tamilnadu Energy Company Limited and Debtors with floating rate ofinterest linked to bank's base rate.

F-46


6. Deferred tax liabilities (net)

� Crore

As at As at01.04.2014 31.03.2015

6,912.65 1,184.98 8,097.63

777.56 (64.57) 712.99393.13 70.87 464.00

5,741.96 1,178.68 6,920.644,502.65 1,152.38 5,655.03

1,239.31 26.30 1,265.61# Includes �� 268.68 crore (previous year � 187.26 crore) share of jointly controlled entities.

a)

b)c) CERC Regulations, 2014 provide for recovery of deferred tax liability as on 31st March 2009 from the beneficiaries.

Accordingly, deferred tax liability as on 31st March 2009 is recoverable on materialisation from the beneficiaries. For theperiod commencing 1st April 2014, Regulations, 2014 provide for grossing up of the return on equity based on effectivetax rate for the financial year based on the actual tax paid during the year on the generation income. Deferred asset fordeferred tax liability for the year will be reversed in future years when the related deferred tax liability forms a part ofcurrent tax.

Less: Deferred tax assetsProvisions & other disallowances for tax purposes

Deferred tax liabilityDifference of book depreciation and tax depreciation

Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing laws.

Additions/(Adjustments)during the year

Disallowances u/s 43B of the Income Tax Act, 1961

Less: Deferred asset for deferred tax liability

Total #

The net increase during the year in the deferred tax liability of �� 29.21 crore (previous year increase of � 158.59 crore)has been debited to Statement of Profit and Loss. Further, an amount of � 2.91 crore has been credited to generalreserve.

F-47


� CroreAs at 31.03.2015 31.03.2014

9.22 6.00

Deferred foreign currency fluctuation liability 259.90 151.99Other liabilities


Others 33.29 69.63


a)

b)

8. Long-term provisions� Crore

Provision for1,131.24 886.71

12.13 10.09

Total # 1,143.37 896.80# Includes �� 27.66 crore (previous year � 17.44 crore) share of jointly controlled entities.

a)b)

� Crore

7,107.63 7,223.96

# Includes �� 556.41 crore (previous year � 287.98 crore) share of jointly controlled entities.

Other liabilities - Others include deposits received from contractors, customers and other parties.

7. Other long-term liabilities

Trade payables

In line with accounting policy no.M.4 (Note 1) deferred foreign currency fluctuation liability to theextent of �� 107.91 crore (previous year � 16.39 crore) has been made during the year.

9. Trade payables

For goods and services#

Employee benefitsContractual obligations

Disclosure as per AS 15 on 'Employee Benefits' has been made in Note-40.Disclosure as per AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets' has beenmade in Note-48.

F-48

Eng06

文字方塊

As at

Eng06

文字方塊

31.03.2015

Eng06

文字方塊

31.03.2014

Eng06

文字方塊

31.03.2014

Eng06

文字方塊

31.03.2015

Eng06

文字方塊

As at


� CroreAs at 31.03.2015 31.03.2014

600.00 593.001,895.70 -

308.83 310.00

281.82 257.842,545.98 1,764.06

261.33 395.34

154.61 173.40406.02 393.67

1794.64 1591.23- 0.43

8,248.93 5,478.97- 0.07

835.80 811.80167.59 47.87

14.97 14.210.21 0.220.72 0.580.16 0.52

546.01 3.07600.51 508.10

7,581.86 5,279.854.59 -

320.98 255.49764.01 952.28

0.32 30.10331.54 288.68783.94 755.37

Total # 20,202.14 14,427.18

# Includes �� 2,151.13 crore (previous year � 1,640.00 crore) share of jointly controlled entities.

Interest accrued but not due on borrowings

Unpaid dividends

Unpaid matured bonds and interest accrued thereonUnpaid matured deposits and interest accrued thereon

Advances from customers and others

Deposits from contractors and othersGratuity obligationsPayable to employeesOthers



Current maturities of finance lease obligations-Secured

Bonds-Secured

Other foreign currency loans

From Banks

Unsecured Foreign currency loans Rupee term loans

Secured Rupee term loans

Rupee term loansUnsecured

5.875% Foreign currency fixed rates note-Unsecured

From OthersSecured

Rupee term loans Fixed deposits

Interest accrued and due on borrowings

Foreign currency loans (guaranteed by GOI)

Derivative MTM Liability

Book overdraftUnpaid bond refund money-Tax free bonds

Tax deducted at source and other statutory duesOther payables

Payable for capital expenditure

F-49



a)

b)

c)

d)

e)

f) Other payables - Others include amount payable to hospitals, retired employees,parties for stale cheques,etc.

Unpaid dividends, matured deposits, bonds and interest include the amounts which have either not beenclaimed by the investors/holders of the equity shares/bonds/fixed deposits or are on hold pending legalformalities etc. Out of the above, the amount required to be transferred to Investor Education andProtection Fund has been transferred.

Details in respect of rate of interest and terms of repayment of current maturities of secured and unsecuredlong term borrowings indicated above are disclosed in Note 5.

The Company had obtained exemption from the Ministry of Corporate Affairs (MCA), GOI in respect ofapplicability of Section 58A of Companies Act,1956 in respect of public deposits, for the employeesrehabilitation scheme deposits obtained from dependants of employees who die or suffer permanent totaldisability. Consequent upon enactment of the Companies Act, 2013, the Company has applied to the MCAfor continuation of above exemption, which is still awaited. The Company has been advised that theexemption earlier granted shall hold good.

Payable for capital expenditure includes liabilities of �� 142.92 crore (previous year � 165.11 crore) towardsan equipment supplier pending evaluation of performance and guarantee test results of steam/turbinegenerators at some of the stations. Pending settlement, liquidated damages recoverable for shortfall inperformance of these equipments, if any, have not been recognised.

Interest accrued and due on borrowings pertains to M/s Ratnagiri Gas & Power Private Limited, a jointVenture of the Company.

F-50


� Crore31.03.2015 31.03.2014

1,186.50 1,088.521,442.96 1,491.06

300.83 253.413,244.70 3,001.721,263.75 1,293.69

557.67 451.93

Total # 7,996.41 7,580.33

# Includes �� 92.98 crore (previous year � 146.50 crore) share of jointly controlled entities.a)

b)

c)

d) Provision for Others include ��58.64 crore (previous year � 53.64 crore) towards cost of unfinishedminimum work programme demanded by the Ministry of Petroleum and Natural Gas (MoP&NG)including interest thereon in relation to block AA-ONN-2003/2, � 440.35 crore (previous year �

378.52 crore) towards provision for litigation cases and � 6.06 crore (previous year � 6.17 crore)towards provision for shortage in fixed assets pending investigation, provision for current tax of �24.05 crore (previous year � 5.20 crore) and provision for custome duty of �23.13 crore (previousyear �23.13 crore).

The Company aggrieved over many of the issues as considered by the CERC in the tariff orders forits stations for the period 2004-09 had filed appeals with the Appellate Tribunal for Electricity(APTEL). The APTEL disposed off the appeals favourably directing the CERC to revise the tarifforders as per directions and methodology given. Some of the issues decided in favour of theCompany by the APTEL were challenged by the CERC in the Hon’ble Supreme Court of India.Subsequently, the CERC has issued revised tariff orders for all the stations except one for theperiod 2004-09, considering the judgment of APTEL subject to disposal of appeals pending beforethe Hon’ble Supreme Court of India. Towards the above and other anticipated tariff adjustments,provision of �� 150.22 crore (previous year � 122.96 crore) has been made during the year and inrespect of some of the stations, an amount of � 180.16 crore ( previous year � 162.56 crore) hasbeen written back.

Others

Disclosure as per AS 15 on 'Employee Benefits' has been made in Note 40.

Disclosure required by AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets' has beenmade in Note 48.

Tariff adjustmentObligations incidental to land acquisition

11. Short-term provisions

As at

Employee benefitsProposed dividendTax on proposed dividend

Provision for

F-51

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re o

f joi

ntly

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titie

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Ass

ets u

nder

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hem

e of

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Pre

viou

s yea

r

Ass

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or a

sh u

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sets

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m G

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ctric

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latio

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mun

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epre

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nitu

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xtur

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stru

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rve

(ref

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ote

3 h)

.

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nder

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hem

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the

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s of M

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mai

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sset

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er N

ote

44 (a

) (ii)

reg

ardi

ng p

lant

and

equ

ipm

ent u

nder

fin

ance

leas

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as re

pres

ente

d th

at su

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ith th

e ex

istin

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ting

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revi

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ote

3 (a

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gard

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ass

ets f

or a

sh u

tilis

atio

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ing

the

year

,IC

AIh

asis

sued

anex

posu

redr

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rope

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lant

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whi

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ould

repl

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exis

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ara

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efin

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the

Min

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ofC

orpo

rate

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airs

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unic

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ts fr

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n se

ttlem

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ereo

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ount

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mou

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sset

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per

the

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Pre

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F-55


� CroreAs at Deductions/ As at

01.04.2014 Additions Adjustments Capitalised 31.03.2015

814.81 306.35 156.86 0.30 964.00159.25 112.73 43.37 101.73 126.88826.33 33.98 218.80 - 641.51

2,993.77 1,353.12 111.52 440.78 3,794.59937.95 741.49 (19.19) 402.74 1,295.89

33.11 35.36 6.52 5.96 55.9965.40 33.94 (16.82) 40.48 75.68

4,755.86 528.18 15.07 - 5,268.97348.45 156.39 9.42 166.13 329.29301.33 290.23 70.11 117.66 403.79

50.23 29.93 1.77 - 78.3934,407.75 19,994.82 1,392.52 7,304.65 45,705.40

19.61 25.91 (1.53) 23.88 23.170.20 - (0.01) 0.21 -3.70 3.06 0.10 5.00 1.662.13 8.21 0.16 7.05 3.130.53 3.66 0.46 1.70 2.03

241.19 271.24 10.98 26.80 474.652.08 1.88 0.79 0.87 2.300.34 0.13 - 0.34 0.130.37 0.24 0.17 0.38 0.06

12.49 5.29 5.35 12.43 -58.03 33.66 10.96 2.13 78.60

Development of coal mines 636.53 449.96 - - 1,086.4946,671.44 24,419.76 2,017.38 8,661.22 60,412.60

Expenditure pending allocation396.19 39.31 20.23 - 415.27

1,500.25 320.56 289.46 - 1,531.35138.16 283.47 366.88 - 54.75629.48 4,881.82 * 93.04 - 5,418.26

- 4,678.54 - - 4,678.5449,335.52 25,266.38 2,786.99 8,661.22 63,153.69

69.23 41.95 5.18 - 106.00Construction stores (net of provision) 4,552.86 (76.24) - - 4,476.62Total # 53,819.15 25,148.19 2,781.81 8,661.22 67,524.31

46,553.36 21,682.40 2,967.16 11,449.45 53,819.15# Includes �� 3,813.72 crore (previous year � 2,944.28 crore) share of jointly controlled entities.

* Brought from expenditure during construction period (net) - Note 28a) Construction stores are net of provision for shortages pending investigation amounting to�� 5.68 crore (previous year � 1.21 crore).b)

c)

d)

Previous year

Pre-commissioning expenses for the year amount to �� 326.53 crore (previous year � 436.68 crore) and after adjustment of pre-commissioningsales of � 58.09 crore (previous year � 37.65 crore) resulted in net pre-commissioning expenditure of � 268.44 crore (previous year � 399.03crore).

Additions to the development of coal mines includes expenditure during construction period (net) of �� 153.90 crore (previous year � 260.37crore).Assets under 5 KM scheme of the GOI represent expenditure on electrification of villages within 5 KM periphery of the generation plants of theCompany in terms of Ministry of Power (MOP), Government of India scheme.

Less: Provision for unserviceable works

Difference in exchange on foreign currency loans

Less: Allocated to related works

Pre-commisioning expenses (net)Expenditure during construction period (net)

Laboratory and workshop equipments

Capital expenditure on assets not owned by the company

Survey, investigation, consultancy and supervision charges

EDP/WP machines & satcom equipment

Communication equipmentsHospital equipments

Construction equipmentsElectrical installations

Assets under 5 KM scheme of the GOI

Buildings

Others


Development of landRoads, bridges, culverts & helipadsPiling and foundation

Main plant

Temporary erection

Plant and equipment

Office equipment

Furniture and fixtures

Earth dam reservoir

MGR track and signalling system

Vehicles

Water supply, drainage and sewerage systemHydraulic works, barrages, dams, tunnels and power channel

Railway siding

F-56


� CroreAs at Deductions/ As at


2.54 5.19 (2.56) 10.19 0.101.34 0.75 - 2.09 -9.57 30.15 1.80 - 37.92

13.45 36.09 (0.76) 12.28 38.027.64 - - - 7.64

Total # 5.81 36.09 (0.76) 12.28 30.381.28 4.46 (0.07) - 5.81

# Includes �� Nil (previous year � 3.88 crore) share of jointly controlled entities.

Exploratory wells-in-progress


License fee for technical colabration

Previous year

13A. Intangible Assets Under Development

Software

F-57


� Crore31.03.2015 31.03.2014

Number of Face value pershares/bonds/ share/bond/securities security

Current year/(previousyear)

Current year/(previous year)(� )

Equity instruments (fully paid up-unless otherwise stated)

Quoted

PTC India Ltd. 12000000(12000000)

10(10)

12.00 12.00

12.00 12.00

Cooperative societies * *Bonds (fully paid up)

Unquoted8.50 % Tax-Free State Government Special Bonds of theGovernment of

Andhra Pradesh -(1260650)

- (1000)

- 126.07

Assam -(51464)

- (1000)

- 5.15

Bihar -(1894400)

- (1000)

- 189.44

Chattisgarh -(483220)

- (1000)

- 48.32

Gujarat -(837240)

- (1000)

- 83.72

Haryana -(1075000)

- (1000)

- 107.50

Himachal Pradesh -(33388)

- (1000)

- 3.34

Jammu and Kashmir -(367360)

- (1000)

- 36.74

Jharkhand -(960136)

- (1000)

- 96.01

Kerala -(1002400)

- (1000)

- 100.24

Madhya Pradesh -(830840)

- (1000)

- 83.08

Maharashtra -(381400)

- (1000)

- 38.14

Orissa -(1102874)

- (1000)

- 110.29

Punjab -(346230)

- (1000)

- 34.62

Rajasthan -(290000)

- (1000)

- 29.00

Sikkim -(34196)

- (1000)

- 3.42

Uttar Pradesh -(3989900)

- (1000)

- 398.99

Uttaranchal -(399650)

- (1000)

- 39.97

West Bengal -(1174248)

- (1000)

- 117.42

- 1,651.46

Non-Trade Investment (at cost) in Shares 2.12 -

Total# 14.12 1,663.46

14. Non-current Investments

As at

Long term-Trade

F-58


� Crore31.03.2015 31.03.2014


As at

# Share of jointly controlled entities is ��2.12 crore (previous year Nil).

Quoted investmentsBook value 12.00 12.00Market value 97.08 81.36

Unquoted investmentsBook value 2.12 1,651.46

* Equity shares of �� 30,200/- (previous year � 30,200/-) held in various employee co-operative societies.

Investments have been valued considering the accounting policy no. K (Note1).

F-59


15. Long-term loans and advances (Considered good, unless otherwise stated)� Crore

31.03.2015 31.03.2014

19.65 21.49

4,702.24 5,266.243,779.29 4,380.64

2.06 2.592.06 2.59

8,501.18 9,668.37

162.73 147.05

- 0.01

409.24 405.97139.60 144.58

47.86 143.59

35.00 40.000.60 0.59- 0.22- 0.22

632.30 734.74

2,286.56 623.784.04 3.66

2,290.60 627.44 12,232.11 9,932.14 7,281.71 7,039.14 4,950.40 2,893.00

MAT credit recoverable 94.07 86.20Cenvat Credit / Service tax recoverable 0.34 0.55

Total # 16,631.62 14,157.35

# Includes �� 703.24 crore (previous year � 906.21 crore) share of jointly controlled entities.,a)

b)

c)

d)

Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure Corporation Ltd.(APIIC).

Advance tax deposit & tax deducted at sourceLess: Provision for current tax

Others

Capital advances include advances to related parties of�� 8.98 crore (previous year � 0.02 crore).

Advances to contractors & suppliers include payments to Railways under Customer funding model as perpolicy on ‘Participative model for rail-connectivity and capacity augmentation projects’ issued byMinistry of Railways, GOI. As per the policy, the railway projects agreed between the company andRailways will be constructed, maintained and operated by Railways and ownership of the line and itsoperations & maintenance will always remain with them. Railways will pay upto 7% of the amountinvested through freight rebate on freight volumes every year till the funds provided by the Company arerecovered with interest at a rate equal to the prevailing rate of dividend payable by Railways to Generalexchequer at the time of signing of the agreement, which is pending as at 31st March 2015.

As at

Capital Advances

SecuredUnsecured

Less: Allowance for bad & doubtful advances

Covered by Bank Guarantee OthersConsidered doubtful

Security deposits (unsecured)

Unsecured

Advances

Less: Allowance for bad & doubtful loans

Loan to state government in settlement of dues from customers(unsecured)

Loans

UnsecuredContractors & Suppliers

Capital advances include �� 268.72 crore (previous year � 252.22 crore), paid to a contractor pendingsettlement of certain claims which are under arbitration. The amount will be adjusted in the cost of relatedwork or recovered from the party, depending upon the outcome of the arbitration proceedings.

Related parties

Employees (including accrued interest)Secured

Secured Unsecured Considered doubtful

Others

Unsecured

F-60


� Crore31.03.2015 31.03.2014

32.96 11.67

1,231.84 1,368.32 466.28 426.00

Total # 1,731.08 1,805.99


a)

b) Claims recoverable represents the cost incurred upto 31st March 2015 in respect of one of the hydro powerprojects, the construction of which has been discontinued on the advice of the Ministry of Power (MOP), GOI.This includes �� 214.34 crore (previous year � 176.22 crore) in respect of arbitration awards challenged by theCompany before High Court. In the event the High Court grants relief to the Company, the amount would beadjusted against Short Term Provisions - Others (Note 11). Management expects that the total cost incurred,anticipated expenditure on the safety and stabilisation measures, other recurring site expenses and interest costsas well as claims of contractors/vendors for various packages for this project will be compensated in full bythe GOI. Hence, no provision is considered necessary.

Claims recoverable

In line with accounting policy no. M.3 & M.4 (Note 1), deferred foreign currency fluctuation asset has beenaccounted and (-) �� 110.15 crore (previous year (-) � 257.31 crore) being exchange fluctuations on account offoreign currency loans has been recognised as energy sales in Note 22.

Deferred foreign currency fluctuation asset

15A. Other non-current assets

As at

Long term trade receivablesUnsecured, considered good

F-61


� Crore31.03.2015 31.03.2014

Number of Face value per

bonds/ bond/securities security

Current year/(previous year)

Current year/(previous year)

(�)Trade

Current maturities of long term investmentsBonds (fully-paid up)

Unquoted8.50 % Tax-Free State Government SpecialBonds of the Government of

Andhra Pradesh 1260650(1260650)

1000(1000)

126.07 126.07

Assam 51464(51464)

1000(1000)

5.15 5.15

Bihar 1894400(1894400)

1000(1000)

189.44 189.44

Chattisgarh 483220(483220)

1000(1000)

48.32 48.32

Gujarat 837240(837240)

1000(1000)

83.73 83.73

Haryana 1075000(1075000)

1000(1000)

107.50 107.50

Himachal Pradesh 33388(33388)

1000(1000)

3.34 3.34

Jammu and Kashmir 367360(367360)

1000(1000)

36.74 36.74

Jharkhand 960136(960120)

1000(1000)

96.01 96.01

Kerala 1002400(1002400)

1000(1000)

100.24 100.24

Madhya Pradesh 830840(830840)

1000(1000)

83.08 83.08

Maharashtra 381400(381400)

1000(1000)

38.14 38.14

Orissa 1102874(1102874)

1000(1000)

110.29 110.29

Punjab 346230(346230)

1000(1000)

34.62 34.62

Rajasthan 290000(145000)

1000(1000)

29.00 14.50

Sikkim 34196(34196)

1000(1000)

3.42 3.42

Uttar Pradesh 3989900(3989900)

1000(1000)

398.99 398.99

Uttaranchal 399650(399650)

1000(1000)

39.96 39.96

West Bengal 1174248(1174248)

1000(1000)

117.42 117.42

1,651.46 1,636.96

Investment in mutual funds (unquoted)UTI Liquid Cash Plan - IP - Direct - DDR*

151.36 -IDBI Liquid Fund - Direct - DDR*

75.24 -Reliance liquid fund-Treasury plan-Direct dailydividend option 7.57 -Reliance liquid fund-Treasury plan-Direct dailydividend option 0.75 -Birla sunlife cash plus - Daily dividend - Direct plan -Reinvestment 1.01 -

235.93 -

Total# 1,887.39 1,636.96

# Share of jointly controlled entities is ��9.33 crore (previous year Nil).

Unquoted investmentsBook value 1,887.39 1,636.96

*

a)b)

16. Current investments

As at

Investments have been valued considering the accounting policy no.K (Note 1).The above investments are unquoted and hence market value is not applicable.

Investments out of fly ash utilization reserve fund.

F-62


17. Inventories� Crore

31.03.2015 31.03.2014

4,011.52 2,185.29361.21 371.89139.81 166.82

2,902.13 2,783.8670.30 68.08

7.81 7.2025.48 28.16

541.44 450.258,059.70 6,061.55

5.52 2.2681.72 70.81

Total # 7,972.46 5,988.48


471.73 164.9940.89 47.78

0.38 0.830.04 0.270.84 4.35

513.88 218.22

a)


Coal

Loose toolsOthers

Stores and spares

Inventory items, other than steel scrap have been valued considering the accounting policy no. L.1 (Note1). Steel scrap has been valued at estimated realisable value.

As at

CoalFuel oil

Stores and sparesNaphtha

Loose tools

Others

Chemicals & consumables

Steel Scrap


diminution in value of surplus inventory

Less: Provision for shortages Provision for obsolete/ unserviceable items/

Inventories include material-in-transit

F-63

NTPC LIMITEDNotes forming part of Consolidated Balance Sheet

� CroreAs at 31.03.2015 31.03.2014

463.32 455.3395.03 0.03

558.35 455.36

8,786.60 6,270.330.77 -

8,787.37 6,270.33

Less: Allowance for bad and doubtful receivables 95.80 0.03Total # 9,249.92 6,725.66

# Includes �� 1,014.78 crore (previous year � 1,177.30 crore) share of jointly controlled entities.

18. Trade Receivables

Unsecured, considered good

Considered doubtfulUnsecured, considered good

Outstanding for a period exceeding six months from the date theyare due for payment

Considered doubtful

Others

F-64


� CroreAs at 31.03.2015 31.03.2014

289.22 164.637.01 0.66

272.38 667.9759.68 66.5230.80 30.79

0.13 0.08659.22 930.65

13,249.95 16,104.91

342.44 15.11

Total # 14,251.61 17,050.67


100.00 -

193.77 -

0.08 -

14.97 14.2112.21 -

12.43 -

0.30 0.520.03 0.03

- 0.020.02 0.028.63 0.31

342.44 15.11* Refer Note 3 regarding fly ash utilisation reserve fund.

Other bank balances

Current accounts

Deposits with original maturity of upto three months

Earmarked balances with banks(b)

19. Cash and bank balances

Balances with banks

Cheques & drafts on handBalance with Reserve Bank of IndiaOthers (cash/stamps on hand)


Cash credit accounts

Security with government authorities

Deposits with original maturity of more than three months (a)

Margin money kept with RBI earmarked for fixed deposits frompublic

Margin money with banks

Unpaid dividend account balance

b) Earmarked balances with banks consist of:Deposits with original maturity of more than three months andmaturing before 31st March 2016 towards redemption of bondsdue for repayment within one year.

Deposits with original maturity upto three months - as per courtorders

Unpaid interest/refund account balance - tax free bonds

Deposits with original maturity of more than three months andmaturing before 31st March 2016 - fly ash utilisation reservefund*

Deposits with original maturity more than three months andmaturing before 31st March 2016- as per court orders

Deposits with original maturity of more than three months andmaturing before 31st March 2016 - towards public depositrepayment reserve

Towards unpaid interest on public deposit

a) Includes deposits with original maturity of more than twelve months from the date of deposit amounting to�� 2,750.23 crore (previous year � 6.07 crore).

F-65


� CroreAs at 31.03.2015 31.03.2014Loans

0.01 0.09

77.29 77.9395.60 95.49

0.02 -

95.73 95.73

5.00 10.000.01 0.060.02 -

273.64 279.30Advances

3.78 1.83

12.17 10.860.03 0.03

1,216.21 1,908.911.61 2.33

191.29 132.701.01 1.03

2.65 3.39 1,423.45 2,054.30

759.61 896.55


a)

b)

c) Security deposits (unsecured) include �� 224.15 crore (previous year � 211.92 crore) towards salestax deposited with sales/commercial tax authorities, � 306.30 crore (previous year � 308.73 crore)deposited with Courts and � 160.97 crore ( � 143.80 crore) deposited with LIC for makingannuity payments to the land oustees.

20. Short-term loans and advances (Considered good, unless otherwise stated)

UnsecuredConsidered doubtful

Unsecured

EmployeesUnsecuredConsidered doubtful

Contractors & suppliers

Related parties


Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure CorporationLtd. (APIIC).Other advances include prepaid expenses amounting to �� 69.55 crore (previous year � 64.92crore).

Related partiesUnsecured

Loan to state government in settlement of dues from customers-Unsecured

Unsecured

Employees(including accrued interest)SecuredUnsecured

Others

Considered doubtful

OthersUnsecuredConsidered doubtful


Secured


F-66


� Crore31.03.2015 31.03.2014

105.28 174.24424.31 621.02

38.71 48.46568.30 843.72

2,130.34 1,743.5013.40 13.7713.40 13.77

2,130.34 1,743.50

3,243.52 7,148.372.19 2.684.59 -

24.60 15.20

Total # 5,973.54 9,753.47


a)

b)


As at

BondsTerm depositsOthers

Interest accrued on

Others include amount recoverable from contractors and other parties towards hire charges, rent/electricity, etc.

Unbilled revenue

Unbilled revenue is net of credits to be passed to beneficiaries at the time of billing and includes �� 7,072.92 crore(previous year � 7,550.01 crore) billed to the beneficiaries after 31st March for energy sales, sale of goods and services.

Claims recoverable

Assets held for disposal

Others

Unsecured, considered goodConsidered doubtfulLess: Allowance for doubtful claims

Hedging cost recoverable

F-67


� CroreFor the year ended 31.03.2015 31.03.2014

79,818.95 78,618.65467.10 410.86354.16 118.95

48.74 27.7380,688.95 79,176.19

115.11 119.66

115.11 119.66- -

90.92 87.08

332.82 131.483.12 1.56

38.38 34.1825.69 16.77

180.16 162.566.98 38.30

187.14 200.86

Total# 81,367.02 79,648.12

a)

b)

c)

Provisions written back

# Includes �� 4,796.14 crore (previous year�� 4,556.46 crore) share of jointly controlled entities.

Others

The CERC notified the Tariff Regulations, 2014 in February 2014 (Regulations, 2014). Pending issue ofprovisional/final tariff orders w.e.f. 1st April 2014 for all the stations, beneficiaries are billed in accordance withthe tariff approved and applicable as on 31st March 2014 as provided in the Regulations 2014. The amountprovisionally billed for the year ended 31st March 2015 is �� 76,952.89 crore (previous year � 68,704.03 crore).

The Company has filed a petition before the Hon'ble High Court of Delhi contesting certain provisions of theRegulations, 2014. Pending issue of provisional/final tariff orders under Regulations, 2014 by the CERC anddisposal of the petition, sales have been provisionally recognised at �� 73,133.81 crore for the year ended 31st

March 2015 (previous year � 69,596.12 crore).

Pending disposal of aforesaid petition, energy charges included in sales, in respect of the coal based stations, forthe period upto July 2014 have been recognized based on the GCV 'as received at boiler end' and thereafter theGCV 'as received at the secondary crusher'.

Sales include �� 679.62 crore for the year ended 31st March 2015 (previous year � 2,086.82 crore) pertaining toprevious years recognized based on the orders issued by the CERC/Appellate Tribunal for Electricity (APTEL).


Energy sales (including electricity duty)

Others

Other operating revenuesInterest from beneficiariesRecognized from deferred foreign currency fluctuation liability

Sale of fly ash/ash productsLess: Transferred to fly ash utilisation reserve fund [refer note 3 a]

Rebate on energy purchase

Regasification charges -LNG

Consultancy, project management and supervision fee

Energy internally consumed

Sale of goods (including excise duty)

Tariff adjustments

F-68


22. Revenue from operations (gross)d)

e)

f)

g)

h)

i) Provisions written back - Others include provision for doubtful loans, advances, claims, debts and provision forshortage/obsolescence in stores, shortage in fixed assets, and unservicable CWIP.

CERC Regulations provides that where after the truing-up, the tariff recovered is less/more than the tariffapproved by the Commission, the generating Company shall recover/pay from/to the beneficiaries the under/overrecovered amount along-with simple interest. Accordingly, the interest recoverable from the beneficiariesamounting to �� 332.82 crore (previous year � 131.48 crore) has been accounted as 'Interest from beneficiaries'.Further, the amount payable to the beneficiaries has been accounted as 'Interest to beneficiaries' in Note 26.

Revenue from operations include �� 90.92 crore (previous year � 87.08 crore) towards energy internallyconsumed, valued at variable cost of generation and the corresponding amount is included in power charges inNote 26.

Electricity duty on energy sales amounting to �� 740.41 crore (previous year � 691.04 crore) has been reducedfrom sales in the Statement of Profit and Loss.

Sales include (-) �� 1,399.42 crore for the year ended 31st March 2015 (previous year (-) � 269.99 crore) onaccount of income-tax payable to the beneficiaries as per Regulations, 2004. Sales also include � 113.96 crore forthe year ended 31st March 2015 (previous year � 77.02 crore) on account of deferred tax materialized which isrecoverable from beneficiaries as per Regulations, 2014.

Energy sales include sale of energy by M/s NVVN Ltd. amounting to �� 2,116.09 crore (previous year � 2,223.77crore)

F-69


23. Other income� Crore

31.03.2015 31.03.2014

245.04 382.95

18.31 26.4431.78 31.2061.95 55.70

1,317.36 1,689.3821.76 -21.76 -

- -48.59 155.2036.40 80.53

12.19 74.6721.93 9.12

- 71.982.40 1.92

157.82 65.161.60 -1.60 -

- -

54.20 92.614.04 3.14

136.64 51.6582.98 85.6010.91 12.89

- 28.530.65 3.15

140.17 180.364.54 12.86

2,302.91 2,879.31Less: Transferred to expenditure during construction period (net)-Note 28 97.60 60.38

Transferred to development of coal mines 5.62 7.16Transferred to deferred foreign currency fluctuation asset/liability 120.78 51.65

Total# 2,078.91 2,760.12

a)

b)c)

Loan to state government in settlement of dues from customers (8.5% tax free)

For the year ended

Interest from

Mutual funds

Others

Income tax refunds

Long-term investments - Government securities (8.5% tax free bonds)

Loan to employees

Deposits with banks / Reserve Bank of India

Others

Contractors


Less : Refundable to beneficiaries

Dividend fromLong-term investments in Joint ventures

Deposits with banks out of fly ash utilisation reserve fundLess : Transferred to fly ash utilisation reserve fund [refer Note 3]

Current investments in mutual funds out of fly ash utilisation reserve fundLess : Transferred to fly ash utilisation reserve fund [refer Note3]


The presentation of dividend from investments in Joint Ventures has been reviewed during the year considering theprovisions of AS-27 and the same for the year amounting to� 90.61 crore has been eliminated.

Equity instruments

Surcharge received from beneficiariesHire charges for equipmentNet gain in foreign currency transactions & translations

Interest from others includes interest on advance to APIIC for drawal of water and deposits with LIC towards annuity to theland losers.Miscellaneous income includes income from township recoveries and receipts towards insurance claims.

Sale of scrapLiquidated damages recovered

Net gain on sale of current investmentsProfit on redemption of current investments

# Includes �� 58.39 crore (previous year�� 48.17 crore) share of jointly controlled entities.

Profit on disposal of fixed assetsMiscellaneous income

F-70


� Crore31.03.2015 31.03.2014

3,758.44 3,556.61526.04 1,013.77597.76 466.36

4,882.24 5,036.74215.78 245.73

20.33 21.2138.53 41.10

Reimbursements for employees on deputation 25.76 17.32692.15 672.75

3,889.69 4,038.63

a)

b) Salaries and wages include special allowance paid by the Company to eligible employees serving in difficult andfar flung areas w.e.f. 26th November 2008. As per the Office Memorandum dated 26th November 2008 of DPErelating to revision of pay scales w.e.f 1st January 2007, special allowance can be paid to such employees upto10% of basic pay as approved by concerned administrative ministry. In line with the office memorandum dated22nd June 2010 of DPE, Board of Directors has approved the Special Allowance (Difficult and Far Flung Areas)to eligible employees. The approval of MOP for the same is awaited.

Disclosures as per AS 15 in respect of provision made towards various employee benefits are made in Note 40.

Transferred to fly ash utilisation reserve fund [refer Note 3]Transferred to development of coal mines


Total # Transferred to expenditure during construction period (net)- Note 28

24. Employee benefits expense

For the year ended

Salaries and wagesContribution to provident and other funds

Less: Allocated to fuel cost

Staff welfare expenses

F-71


� CroreFor the year ended 31.03.2015 31.03.2014

1,182.58 961.67244.61 253.96

5,234.59 4,427.220.03 0.05

542.72 521.7748.16 38.0815.75 26.86

7,268.44 6,229.61

31.55 33.9740.48 16.4117.28 1.0723.05 103.10

112.36 154.55

7,380.80 6,384.16Less: Transferred to expenditure during construction period (net)-Note 28 3,722.60 3,103.05

Transferred to development of coal mines 87.83 78.04Total# 3,570.37 3,203.07

Other borrowing costs - Others include bond issue & service expenses, comittment charges, exposure premium, upfrontfee and insurance premium & legal expenses on foreign currency loans.


Foreign currency bonds/notes


OthersForeign currency bonds/notes expenses

Guarantee feeManagement/arrangers fee

25. Finance costs

Interest onBonds

Others

Foreign currency term loansRupee term loansPublic deposits

Cash credit

F-72


26. Generation, administration & other expenses� Crore

31.03.2015 31.03.2014

250.05 340.3325.12 20.47

224.93 319.86511.13 471.59

55.03 52.0247.09 40.35

9.58 8.0737.51 32.2838.04 146.11

201.63 197.572,199.97 2,024.64

150.05 133.31138.79 130.75

98.61 59.8055.61 42.4436.15 38.58

27.32 29.671.44 3.30

25.88 26.3747.92 47.90

222.79 214.2741.55 33.85

3.30 3.3238.25 30.53

4.37 3.6420.88 15.37

472.18 406.6924.19 15.64

26.13 24.143.04 2.88

23.09 21.2636.39 38.09

113.83 75.91- 0.93

113.83 74.98- 0.22

12.69 11.920.49 0.47

46.76 159.25Professional charges and consultancy fees

Ash utilisation & marketing expensesDirectors sitting fee

Community development and welfare expensesLess: Grants-in-aid

Entertainment expensesExpenses for guest houseLess:Recoveries

Education expenses

Less: Receipt from sale of tenders

Payment to auditors

For the year ended

Power charges

Rent

Buildings

Load dispatch centre charges

Less: Recovered from contractors & employees

Water chargesStores consumed

Less:Recoveries


Donation

OthersPlant & machinery

Insurance

Rates and taxesInterest to beneficiaries

Tender expensesTravelling expenses

Water cess & environment protection cess

Advertisement and publicity

Training & recruitment expensesLess: Receipts

Communication expenses

Security expenses

F-73


26. Generation, administration & other expenses� Crore

31.03.2015 31.03.2014For the year ended40.53 32.5319.38 18.4813.60 14.9429.63 3.4184.04 75.47

655.20 621.126.39 22.578.95 1.89

31.29 26.4612.63 12.74

9.44 10.867.89 8.78

91.89 80.74147.22 75.51

5,995.24 5,721.05352.53 312.03

26.37 23.6719.05 129.63

6.22 6.84 4.59 - 459.45 505.67

5,127.03 4,743.21Provisions for

Tariff adjustments 150.22 122.96Obsolescence in stores 14.19 10.36Unserviceable capital works 41.95 6.63

5.00 7.36Others 20.48 13.23

231.84 160.54

5,358.87 4,903.75


1.39 1.270.46 0.400.70 0.62

0.59 0.580.82 0.440.41 0.334.37 3.64

c)

d)

e)

Reimbursement of service tax Total

CERC Regulations provides that where after the truing-up, the tariff recovered is more than the tariff approved by theCommission, the generating Company shall pay to the beneficiaries the over recovered amount along-with simple interest.Accordingly, the interest payable to the beneficiaries by the Company amounting to �� 98.11 crore (previous year � 59.37crore) has been accounted and disclosed as 'Interest to beneficiaries'.


As auditorAudit feeTax audit feeLimited review

In other capacityOther services (certification fee)

Reimbursement of expenses

Unfinished minimum work programme for oil and gas exploration


Total #

Hedging cost recoverable from beneficiaries

b) Details in respect of payment to auditors:

Net loss in foreign currency transactions & translations

Transferred to expenditure during construction period(net) - Note 28

Transferred to development of coal minesTransferred to deferred foreign currency fluctuation asset/liability

Loss on disposal/write-off of fixed assetsMiscellaneous expenses

Transferred to fly ash utilisation fund

Horticulture expensesHire charges of helicopter/aircraftHire charges of construction equipmentsTransport vehicle running expenses

Cost of hedging

Printing and stationeryOil & gas exploration expenses

Rebate to customers & reimbursement of LC charges on sales realisationHiring of Vehicles

Legal expensesEDP hire and other charges

Miscellaneous expenses include expenditure on books & periodicals, operating expenses of DG sets, brokerage &commission, bank charges , furnishing expenses etc.

Provisions - Others include provision for doubtful loans, advances, claims, debts and provision for shortage/ obsolescencein stores, shortage in fixed assets and arbitration cases.

F-74


27. Prior period items (Net)� Crore

31.03.2015 31.03.2014

208.32 0.41(9.56) 0.96

198.76 1.37Expenditure

0.37 (0.94)

(132.29) -15.62 3.73

4.22 1.3512.58 7.90

(99.50) 12.04Net expenditure/(revenue) (298.26) 10.67Less: Transferred to expenditure during construction period (net)-Note 28 20.51 (1.21)

(0.55) -- 0.03

(318.22) 11.85

a)

b) During the year, the EAC of the ICAI has opined, on a reference by the Company, that interest paid/payable on landcompensation till final award of the Court should be considered as a component of purchase/acquisition price of landsince such interest is the result of the process of acquisition of land as per the Act. Any interest beyond the final award ofthe court should be treated as revenue expenditure and charged to the Statement of Profit and Loss. Accordingly, intereston land compensation amounting to � 132.86 crore charged to Statement of Profit & Loss in previous years has beenreversed and treated as cost of land by credit to prior period interest.

Repairs and maintenanceGeneration, administration and other expenses

Transferred to deferred foreign currency fluctuation asset/liability

# Includes �� 4.68 crore (previous year (-)�� 0.99 crore) share of jointly controlled entities.

Transferred to development of coal mines

Others

Total #

In line with the accounting policy on advance against depreciation, excess of depreciation charged in the books over thedepreciation recovered in tariff, amounting to � 208.32 crore upto 31st March 2014 has been recognised as prior periodsales.

Employee benefits expense

InterestDepreciation and amortisation

For the year ended

RevenueSales

Finance costs

Others

F-75


28. Expenditure during construction period (net)� Crore

For the year ended 31.03.2015 31.03.2014

A. Employee benefits expense Salaries and wages 561.19 509.64 Contribution to provident and other funds 79.67 118.89 Staff welfare expenses 51.29 44.22Total (A) 692.15 672.75

B. Finance costs Interest on

Bonds 623.58 426.37 Foreign currency term loans 102.14 107.68 Rupee term loans 2,705.23 2,146.12 Foreign currency bonds/notes 221.09 284.19 Others - 22.92Other borrowing costs Foreign currency bonds/notes expenses 16.41 1.07

Management/arrangers/upfront fee 47.51 16.41 Others 6.64 98.29

Total (B) 3,722.60 3,103.05


D. Generation, administration & other expenses Power charges 147.06 247.61 Less: Recovered from contractors & employees 3.04 2.22

144.02 245.39 Water charges 4.50 1.76 Rent 8.15 7.58 Repairs & maintenance

Buildings 10.72 7.86 Plant and machinery 1.85 3.68 Others 42.23 30.76

54.80 42.30 Insurance 1.89 1.67 Rates and taxes 8.98 2.94 Communication expenses 6.76 6.85 Travelling expenses 48.71 42.77 Tender expenses 11.50 7.76

Payment to auditors 0.07 0.06 Advertisement and publicity 1.56 2.70 Security expenses 72.50 58.07

F-76


28. Expenditure during construction period (net)� Crore


Entertainment expenses 5.55 2.95 Expenses for guest house 5.19 5.24 Professional charges and consultancy fee 13.52 9.35 Legal expenses 7.07 6.06 EDP hire and other charges 2.09 1.54 Printing and stationery 2.18 1.84 Miscellaneous expenses 60.41 58.84Total (D) 459.45 505.67

E. Less: Other income Interest from contractors 47.20 41.25 Interest others 16.34 3.79

Hire charges for equipment 1.82 2.99 Sale of scrap 1.09 0.33

Miscellaneous income 31.15 12.02Total (E) 97.60 60.38

F. Prior period items (net) 20.51 (1.21)

Grand total (A+B+C+D-E+F) # 4,881.82 * 4,493.44



F-77

29.

30.

31.

A.



v) Minority interest in the net assets of consolidated subsidiaries consist of the amount of equityattributable to the minority shareholders.

Previous year figures have been regrouped /rearranged wherever considered necessary.

BASIS OF CONSOLIDATION

ii) The consolidated financial statements include the interest of the Company in joint ventures, whichhas been accounted for using the proportionate consolidation method of accounting and reportingwhereby the Company’s share of each asset, liability, income and expense of a jointly controlled entityis considered as a separate line item.

The consolidated financial statements relate to NTPC Ltd. (the Company), its Subsidiaries and interestin Joint Ventures, together referred to as 'Group'.


Amount in the financial statements are presented in � crore (upto two decimals) except for per share data andas other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

ii) The consolidated financial statements have been prepared in accordance with Accounting Standard(AS) 21 - ‘Consolidated Financial Statements’ and Accounting Standard (AS) 27 – ‘FinancialReporting of Interest in Joint Ventures’ as specified under section 133 of the Companies Act,2013 readwith Rule 7 of the Companies (Accounts) Rules,2014 and generally accepted accounting principles.

i) The financial statements of the Subsidiary Companies and Joint Ventures in the consolidation aredrawn up to the same reporting date as of the Company for the purpose of consolidation.

i) The financial statements of the Company and its subsidiaries are combined on a line by line basis byadding together of the like items of assets, liabilities, income and expenses after eliminating intra-groupbalances, intra-group transactions, unrealised profits or losses. Minority interest has been separatelydisclosed.

iii) The consolidated financial statements are prepared using uniform accounting policies for liketransactions and other events in similar circumstances and are presented to the extent possible, in thesame manner as the Company’s separate financial statements except as otherwise stated in thesignificant accounting policies.

iv)The difference between the cost of investment and the share of net assets at the time of acquisition ofshares in the subsidiaries and joint ventures is identified in the financial statements as goodwill orcapital reserve, as the case may be.

F-78

B.

31.03.2015 31.03.2014Subsidiary Companies:

100.00 100.00

100.00 100.00 65.00 65.00 74.00 74.00

Joint Venture Companies:

31.03.2015 31.03.2014A. Incorporated in India

50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 28.91 32.86 50.00 50.00 50.00 50.00

50.00 50.00 50.00 50.00

49.00 49.00 50.00 50.00 16.67 16.67 0.27 14.28 21.63 20.00

44.60 44.60

25.00 25.00

50.00 50.00

49.00 49.00 50.00 50.00

B. Incorporated outside India 50.00 50.00

50.00 50.00

1. Trincomalee Power Company Ltd.* (incorporated in Srilanka)

15. Transformers & Electricals Kerala Ltd. *

16. Energy Efficiency Services Ltd. *

17. CIL NTPC Urja Private Ltd. *

18. Anushakti Vidyut Nigam Ltd.

19. Pan-Asian Renewables Private Ltd.* (refer note below)$$$$$

2. NTPC Vidyut Vyapar Nigam Ltd.3. Kanti Bijlee Utpadan Nigam Ltd.

1.NTPC Electric Supply Company Ltd. (including its 50% interest inKINESCO Power & Utilities Private Ltd.* a joint venture withKINFRA, a statutory body of Government of Kerala)

11. Nabinagar Power Generating Company Private Ltd.

14. National High Power Test Laboratory Private Ltd.

4. Bhartiya Rail Bijlee Company Ltd.

10. BF - NTPC Energy Systems Ltd. (refer note below)$$

1. Utility Powertech Ltd.2. NTPC - Alstom Power Services Private Ltd.3. NTPC-SAIL Power Company Private Ltd.4. NTPC-Tamilnadu Energy Company Ltd.5. Ratnagiri Gas & Power Private Ltd.*6. Aravali Power Company Private Ltd.7. NTPC-SCCL Global Ventures Private Ltd.*(refer note below)$

Name of the Company

The Subsidiaries and Joint Venture Companies considered in the financial statements are as follows:

8. Meja Urja Nigam Private Ltd.9. NTPC - BHEL Power Projects Private Ltd. *

Proportion (%) ofShareholding as on

13. International Coal Ventures Private. Ltd. * (refer note below)$$$$


12. National Power Exchange Ltd. * (refer note below)$$$

2. Bangladesh -India Friendship Power Company Private Ltd.*(incorporated in Bangladesh)

F-79

C. i)

Item 2014-15(Un-audited)

2013-14(Un-audited)

Expenses 29.67 2.94Assets 0.62 1.89Liabilities 2.41 2.96Capital commitments (Unfinished MWP) 92.54 65.76

$$$ The Board of Directors of NTPC Limited in its meeting held on 7th November 2012 has accorded inprinciple approval for withdrawal from National Power Exchange Ltd. (NPEX). In the meeting ofGroup of Promoters (GOP) held on 21st March 2014, GOP recommended for voluntary winding up ofNPEX and the same has been adopted by the Board of NPEX in its meeting held on 21st March 2014.Winding up of the Company is underway.

� Crore

$$$$$ The Board of Directors of NTPC Limited in its meeting held on 31st October 2014 approved theproposal for voluntary winding up of Pan-Asian Renewables Private Limited. Accordingly a liquidatorhas been appointed for dissolution of the Company. The liquidation process is underway.

* The financial statements are un-audited and certifed by the management of respective companies andhave been considered for Consolidated Financial Statements of the Group. The figures appearing intheir respective financial statements may change upon completion of their audit.

The Company along-with some public sector undertakings has entered into Production SharingContracts (PSCs) with GOI for three oil exploration blocks namely KG-OSN-2009/1, KG-OSN-2009/4and AN-DWN-2009/13 under VIII round of New Exploration Licensing Policy (NELP VIII) with 10%participating interest (PI) in each of the blocks.

$ The Board of Directors of NTPC Limited in its meeting held on 25th March 2015 has accorded inprinciple approval for withdrawal from NTPC SCCL Global Ventures Pvt. Ltd.

In the case of AN-DWN-2009/13, Gujarat State Petroleum Corporation Ltd. (GSPC) submitted noticefor withdrawal from the block subsequent to completion of Minimum Work Program (MWP) and M/sOil & Natural Gas Corporation Ltd. (ONGC) decided to acquire 10% PI of GSPC. The Companyalongwith consortium partners has decided to relinquish the block AN-DWN-2009/13 and ONGC (theoperator) has submitted an application to Directorate General of Hydrocarbons (DGH) in this regard.

$$$$ The Board of Directors of NTPC Limited in its meeting held on 27th January 2012 has accorded inprinciple approval for withdrawal from International Coal Ventures Private Limited. Approval of GOIfor the same is awaited, subsequent to which, the process of withdrawal shall commence.

Based on the un-audited statement of the accounts for the above blocks forwarded by M/s ONGC, theoperator, the Company’s share in respect of assets and liabilities as at 31st March 2015 and expenditurefor the year are given below:

$$ The Board of Directors of NTPC Limited in its meeting held on 19th June 2014 has accorded inprinciple approval for withdrawal from BF-NTPC Energy Systems Ltd.

F-80

ii)

2014-15 2013-14(Un-audited) (Un-audited)

Expenses (0.77) 0.01Assets 9.19 14.47Liabilities 1.82 2.32Contingent liabilities 57.43 50.71

D. The company is of the view that the provisions of Accounting Standard (AS) 18 ‘Related PartyDisclosures’ and AS 27- ‘Financial Reporting of Interests in Joint Ventures’ are not applicable to theinvestment made in PTC India Ltd. and the same has been accounted for as per the provisions of AS-13-'Accounting for Investments' in the consolidated financial statements.

The exploration activities in block KG-OSN-2009/4 were suspended w.e.f. 11.01.2012 due to non-clearance by the Ministry of Defence, GOI. Subsequently, DGH vide letter dated 29th April 2013 hasinformed ONGC that the block is cleared conditionally wherein block area is segregated between NoGo zone, High-risk zone and Permitted zone. As the permitted area is only 38% of the total block areathe consortium has submitted proposal to DGH for downward revision of MWP of initial explorationperiod.

Exploration activities in the block AA-ONN-2003/2 were abandoned in January 2011 due to unforeseengeological conditions & withdrawal of the operator. Attempts to reconstitute the consortium toaccomplish the residual exploratory activities did not yield result. In the meanwhile, Ministry ofPetroleum & Natural Gas demanded in January 2011 the cost of unfinished minimum work programmefrom the consortium with NTPC’s share being USD 7.516 million. During the year, provision in thisrespect has been updated to �� 58.64 crore from � 53.64 crore along with interest in the previous year.The Company has sought waiver of the claim citing force majeure conditions at site leading todiscontinuation of exploratory activities.

Item

The Company has accounted for expenditure of (-) � 0.77 crore for the year 2014-15 (previous year �

0.01 crore) towards the establishment expenses of M/s Geopetrol International, the operator to completethe winding up activities of the Block. The Company’s share in the assets and liabilities as at 31stMarch 2015 and expenditure for the year is as under:

� Crore

F-81

32. a)

b)

33.

34.

35.

36.

37.

a)

b)

c)

d)

e)

38.

39.

In accordance with the principles approved by the Board of Directors of the Company, the dispute with coal suppliers on account ofGCV has been settled. Accordingly, against the total disputed billed amount of �� 2,578.74 crore (previous year � 4,102.87 crore) as at31st March 2014, during the year the Company has paid � 1,773.51 crore and provided � 25.48 crore and remaining amount of � 779.75crore is settled. Sales corresponding to energy charges recoverable for the amounts paid/provided as above have been recognized onsettlement.

The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters aresubjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases,the same will be passed on to respective beneficiaries.

The environmental clearance (“clearance”) granted by the Ministry of Environment and Forest, Government of India (MoEF) for one ofthe Company's project was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia, directingthat the order of clearance be remanded to the MoEF to pass an order granting or declining clearance to the project proponent afresh inaccordance with the law and the judgment of the NGT and for referring the matter to the Expert Appraisal Committee ("Committee")for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGT also directed that theenvironmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to the project during the periodof review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Company filed an appeal challengingthe NGT order before the Hon’ble Supreme Court of India which stayed the order of the NGT and the matter is sub-judice. Aggregatecost incurred on the project upto 31st March 2015 is �� 8,732.44 crore (previous year � 4,455.73 crore). Management is confident thatthe approval for proceeding with the project shall be granted, hence no provision is considered necessary.

Policy A 'Basis of preparation' has been modified considering the provisions of the Companies Act, 2013.

The Company has revised the accounting policy nos. N.1.1, N.1.2 & N.1.3 regarding depreciation in alignment with Schedule-II tothe Companies Act, 2013 which has become applicable from 1st April 2014. Consequently, profit for the year ended 31st March2015 is lower by �� 14.97 crore and fixed assets as at 31st March 2015 are lower by � 20.44 crore. Further, an amount of � 3.58crore (net of deferred tax of � 1.89 crore) has been recognized in the opening balance of the retained earnings where the remaininguseful life of such assets is Nil as at 1st April 2014 in line with the provisions of Schedule-II to the Companies Act, 2013.

Policy N.1.11 regarding depreciation on leasehold land and buildings has been modified to cover all the tariff regulations of CERCviz. for thermal, hydro and renewable energy sources.Policy S 'Segment reporting' has been added for improved disclosures.

Some of the balances of trade/other payables and loans and advances are subject to confirmation/reconciliation . Adjustments, ifany will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have amaterial impact.

In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realisation in theordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

i) The amount of exchange differences (net) credited to the Statement of Profit & Loss is �� 15.56 crore (previous year debit of �

15.73 crore).

ii) The amount of exchange differences (net) debited to the carrying amount of Fixed Assets is �� 348.48 crore (previous yeardebit of � 1,882.74 crore).

Disclosure as per Accounting Standard - 11 on 'Effects of Changes in Foreign Exchange Rates'The effect of foreign exchange fluctuation during the year is as under:

The Company is executing a hydro power project in the state of Uttrakhand, where all the clearances were accorded. A case was filedin Hon’ble Supreme Court of India after the natural disaster in Uttrakhand in June 2013 to review whether the various existing andongoing hydro projects have contributed to environmental degradation. Hon’ble Supreme Court of India on 7th May 2014, ordered thatno further construction shall be undertaken in the projects under consideration until further orders, which included the hydro project ofthe Company. In the proceedings, Hon’ble Supreme Court is examining to allow few projects which have all clearances which includesthe project of the Company where the work has been stopped. Aggregate cost incurred on the project upto 31st March 2015 is �� 154.57crore (previous year � 145.46 crore). Management is confident that the approval for proceeding with the project shall be granted,hence no provision is considered necessary.

Disclosure as per Accounting Standard - 1 on 'Disclosure of Accounting Policies'

During the year, following changes in accounting policies have been made:

There is no impact on the accounts due to the changes at sl.no. (a) (c), (d) & (e) above.

Policies M.1.2 to M.1.7 have been added and Policies N.1.1 & N.1.11 have been modified to give more clarity and for improveddisclosures.

Disclosure as per Accounting Standard - 12 on 'Accounting for Government Grants'Revenue grants recognised during the year is�� Nil crore (previous year � 0.93 crore).

F-82

1.

31.03.2015 31.03.2014 6,143.59 5,463.94

6,197.85 5,515.53

2.

B. PensionThe defined contribution pension scheme of the Company for its employees which is effective from 1st January 2007, isadministered through a separate trust. The obligation of the Company is to contribute to the trust to the extent of amount notexceeding 30% of basic pay and dearness allowance less employer's contribution towards provident fund, gratuity, PRMF or anyother retirement benefits. The contribution of �� 225.39 crore (previous year � 641.03 crore including � 346.56 crore for theperiods from 1st January 2007 to 31st March 2013) to the funds for the year is recognized as an expense and charged to theStatement of Profit & Loss.

Defined Benefit Plans

The Company has Post-Retirement Medical Facility (PRMF), under which a retired employee and his / her spouse are providedmedical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as out-patient subject to a ceilingfixed by the Company. The liability for the same is recognised on the basis of actuarial valuation.

C. Terminal BenefitsTerminal benefits include baggage allowance for settlement at home town for employees & dependents and farewell gift to thesuperannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhileState Government Power Utility at another station referred at 2.A.(b) above. The liability for the same is recognised on the basis ofactuarial valuation.

Fair value of plan assets at the end of the year

The summarised position of various defined benefits recognised in the Statement of Profit and Loss, Balance Sheet is as under:

D. Leave

The above mentioned schemes (B, C and D) are unfunded and are recognised on the basis of actuarial valuation.

Defined Contribution PlansA. Provident Fund

Disclosure as per Accounting Standard - 15 on 'Employee Benefits'

General description of various employee benefit schemes are as under:

(a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more isentitled to get gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year ofservice subject to a maximum of� 0.10 crore on superannuation, resignation, termination, disablement or on death.

(b) The Company has pension schemes at two of its stations in respect of employees taken over from erstwhile state governmentpower utilities.The existing schemes stated at (a) and one of the power stations at (b) above are funded by the Company and are managed byseparate trusts. The liability for gratuity and the pension schemes as above is recognised on the basis of actuarial valuation. TheCompany’s best estimate of the contribution towards gratuity/pension for the financial year 2015-16 is�� 28.64 crore.

A. Gratuity & Pension

The Company provides for earned leave benefit (including compensated absences) and half-pay leave to the employees of theCompany which accrue annually at 30 days and 20 days respectively. Earned leave is en-cashable while in service. Half-pay leaves(HPL) are en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days (HPL). However, totalamount of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-pay leave shallbe permissible. The liability for the same is recognised on the basis of actuarial valuation.

B. Post-Retirement Medical Facility (PRMF)

(Figures given in { } are for previous year)

� CroreParticularsObligitions at the end of the year

40.

Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permittedsecurities. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of �� 238.96 crore(previous year � 238.30 crore) to the funds for the year is recognised as expense and is charged to the Statement of Profit andLoss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to the members asspecified by GOI. As per report of the actuary, overall interest earnings and cumulative surplus is more than the statutory interestpayment requirement. Hence, no further provision is considered necessary. The details of fair value of plan assets and obligitionsare as under:

F-83

Gratuity &Pension

70.90 17.98 57.26 7.34{70.40} {15.60} {55.04} {6.14}

- - - -{-} {-} {-} {-}

130.20 47.80 80.10 26.60{115.60} {36.24} {68.93} {21.81}

(111.23) - - -{(100.89)} {-} {-} {-}

-88.76 125.59 150.41 32.82{(18.74)} {73.97} {181.89} {26.49}

-1.59 6.46 14.84 -{3.81} {4.46} {13.17} {-}

2.70 184.91 272.93 66.76{62.56} {121.35} {292.69} {54.44}

ii)

Gratuity &Pension

1,554.28 730.48 1,018.04 363.66{1,531.56} {562.04} {942.20} {312.98}

1,458.96 - - -{1,391.67} {-} {-} {-}

95.32 730.48 1,018.04 363.66{139.89} {562.04} {942.20} {312.98}

iii)

Gratuity &Pension

1,531.56 562.04 942.21 312.98{1,445.04} {452.95} {861.74} {272.39}

130.33 47.80 80.20 26.60{115.60} {36.24} {68.93} {21.81}

70.90 17.98 57.26 7.34{70.40} {15.60} {55.04} {6.14}(113.87) (22.93) (212.05) (16.08)

{(95.27)} {(16.72)} {(225.40)} {(13.84)}-64.64 125.59 150.42 32.82

{(4.21)} {73.97} {181.89} {26.48}1,554.28 730.48 1,018.04 363.66

{1,531.56} {562.04} {942.20} {312.98}

iv)

Gratuity &Pension

1391.67 - - -{1,263.85} {-} {-} {-}

111.37 - - -{100.89} {-} {-} {-}

39.93 - - -{102.08} {-} {-} {-}

(108.13) - - -{(89.67)} {-} {-} {-}

24.12 - - -{14.52} {-} {-} {-}

1,458.96 - - -{1,391.67} {-} {-} {-}

Benefit paid

� Crore

The amount recognised in the Balance Sheet

Fair value of plan assets as at 31.03.2015

Net liability recognised in the Balance Sheet

Less: Expenses transferred to capital work-in-progress

Expected return on plan assets

Interest cost on benefit obligation

Leave TerminalBenefits

PRMF

Expenses recognised in the Statement of Profit & Loss

� Crore

Interest cost

Current Service Cost

Actuarial gain / (loss)


Net actuarial (gain)/ loss on obligation

� Crore



Leave

Past Service Cost

i)

PRMF

PRMF Leave TerminalBenefits

TerminalBenefits

Expenses recognised in Statement of Profit & Loss

Net actuarial (gain)/ loss recognised in the year


Changes in the present value of the defined benefit obligations:� Crore

Benefits paid

Present value of obligation as at 31.03.2015



Contributions by employer

Present value of the defined benefit obligation as at 31.03.2015

Changes in the fair value of plan assets:

F-84

v)

Gratuity & pension 31.03.2015 31.03.2014 31.03.2013 31.03.2012 31.03.2011Present value of obligation as at 1,554.28 1,531.33 1,444.88 1,298.47 1,193.00Fair value of plan assets as at 1,458.96 1,391.68 1,263.86 1,169.93 1,039.20Surplus/(Deficit) (95.32) (139.65) (181.02) (128.54) (153.80)Experience adjustment on plan liabilities (loss)/gain 61.86 3.19 (50.07) (19.58) (58.60)Experience adjustment on plan assets (loss)/gain 24.24 14.52 9.44 12.39 5.76

PRMF 31.03.2015 31.03.2014 31.03.2013 31.03.2012 31.03.2011Present value of obligation as at 730.48 562.02 452.93 371.11 313.06Experience adjustment on plan liabilities (loss)/gain (123.79) (73.98) (19.60) (30.73) (33.28)

Leave 31.03.2015 31.03.2014 31.03.2013 31.03.2012 31.03.2011Present value of obligation as at 1018.04 941.73 861.46 745.82 656.75Experience adjustment on plan liabilities (loss)/gain (151.26) (181.31) (179.16) (90.71) (88.59)

Terminal Benefits 31.03.2015 31.03.2014 31.03.2013 31.03.2012 31.03.2011Present value of obligation as at 363.66 312.97 272.38 229.82 192.67Experience adjustment on plan liabilities (loss)/gain (34.85) (26.37) (25.45) (24.43) (23.91)

� CroreIncrease by Decrease by 18.04 (14.23) 105.11 (91.55)

31.03.2015 31.03.20140.30 399.15

92.90 322.97274.58 510.21

2.50 5.621,051.92 95.88

11.48 7.091,433.68 1,340.92

G. Other Employee Benefits

31.03.2015 31.03.2014

8.00% 8.50%

8.00% 8.00%7.50% 7.00%6.00% 6.50%6.00% 6.50%

41.

i) Method used Projected Unit CreditMethod

ii) Discount rateiii) Expected rate of return on assets:

iv) Money market instrumentsv) Investment with insurance companiesvi) Fixed deposits with banksTotal (excluding interest accrued)

The amounts included in the value of plan assets in respect of the reporting enterprise's own financial instrumentsis Nil (previous year � 25.00 crore).

F. Actual return on plan assets �� 134.56 crore (previous year � 114.66 crore).

� Crore

E. Details of the Plan AssetsThe details of the plan assets at cost are:

� Crore

i) State government securitiesii) Central government securitiesiii) Corporate bonds/debentures

Borrowing costs capitalised during the year are�� 3,810.43 crore (previous year � 3,158.17 crore).

vi) The effect of one percentage point increase/decrease in the medical cost of PRMF will be as under:

ParticularsService and Interest costPresent value of obligation

Disclosure as per Accounting Standard - 16 on 'Borrowing Costs'

Other disclosures:

- Gratuity- Pension

iv) Annual increase in costsv) Future salary increase

H. Actuarial Assumptions

Principal assumptions used for actuarial valuation for the year ended are:

The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotion andother relevant factors, such as supply and demand in the employment market. Further, the expected return on plan assets isdetermined considering several applicable factors mainly the composition of plan assets held, assessed risk of asset managementand historical returns from plan assets.

Provision for Long Service Award and Family Economic Rehabilitation Scheme amounting to �� 28.76 crore (previous year �3.48 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit& Loss.

F-85

42.

a)

b)

c)

CurrentYear

PreviousYear

CurrentYear

PreviousYear

Current Year PreviousYear

Segment revenueSale of energy/consultancy, projectmanagement and supervision fees*

76,969.57 75,703.99 3,044.17 2,801.37 80,013.74 78,505.36

Other income 948.73 785.69 36.75 110.40 985.48 896.09Unallocated corporate and other income 1,701.73 2,309.30

Total 77,918.30 76,489.68 3,080.92 2,911.77 82,700.95 81,710.75

Segment result # 13,366.13 16,284.75 37.77 82.83 13,403.90 16,367.58Unallocated corporate interest and otherincome

1,701.73 2,309.30

Unallocated corporate expenses, interestand finance charges

4,649.42 4,191.12

Profit before tax 10,456.21 14,485.76Income tax (net) 463.84 3,082.36Profit after tax 9,992.37 11,403.40Other informationSegment assets 1,17,091.25 1,02,887.26 5,222.98 4,143.41 1,22,314.23 1,07,030.67Unallocated corporate and other assets 97,261.92 93,014.46

Total assets 1,17,091.25 1,02,887.26 5,222.98 4,143.41 2,19,576.15 2,00,045.13Segment liabilities 16,325.12 15,931.93 2,827.80 2,079.11 19,152.92 18,011.04Unallocated corporate and other liabilities 1,18,329.25 94,704.37

Total liabilities 16,325.12 15,931.93 2,827.80 2,079.11 1,37,482.17 1,12,715.41Depreciation (including prior period) 5,536.29 4,736.33 5.56 2.98 5,541.85 4,739.31Non-cash expenses other thandepreciation

224.02 137.62 6.28 7.37 230.30 144.99

Capital expenditure 24,732.46 25,474.76 1,058.87 807.09 25,791.33 26,281.85

d)

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to thesegments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

Segment Assets and LiabilitiesSegment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loansand advances. Capital work-in-progress and capital advances are included in unallocated corporate and other assets.Segment liabilities include operating liabilities and provisions.

* Includes (-) �� 719.80 crore (previous year� 1,816.83 crore) for sales related to earlier years.

(� Crore)Business Segments

# Generation segment result would have been �� 14,085.93 crore (previous year � 14,467.92 crore) without including thesales related to earlier years.The operations of the Group are mainly carried out within the country and therefore, geographical segments areinapplicable.

Generation Others Total

Business SegmentsThe Group's principal business is generation and sale of bulk power to State Power Utilities. Other business includesproviding consultancy, project management and supervision, oil and gas exploration and coal mining.

Segment Revenue and Expense

Segment information:Disclosure as per Accounting Standard - 17 on 'Segment Reporting'

F-86

43.a)

b)

Current year Previous year

522.02 439.74 30.82 0.94 - 0.36

0.02 - 1.16 0.20

0.39 0.25 0.77 0.85 1.77 0.96 0.35 0.33 3.10 1.34

7.00 5.50 0.47 0.30

0.19 0.17 17.96 0.04 - 0.14

81.27 69.49 8.18 6.52

0.01 - 0.12 0.12 1.62 0.55

0.92 -

0.10 0.10 0.53 0.66 1.90 1.12 0.04 - 4.44 1.34

- 1.00 2.54 - 25.31 6.12

viii) Equity contributions made:- Pan-Asian Renewables Private Ltd.- Trincomalee Power Company Ltd.- Bangladesh -India Friendship Power Company Private Ltd.

Director (Operations)1

- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- Trincomalee Power Company Ltd.- Pan-Asian Renewables Private Ltd.- Bangladesh-India Friendship Power Company Private Ltd.

ii) Dividend Received:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.

- BF-NTPC Ltd.- Trincomalee Power Company Ltd.

vi) Amount payable for contracts for works/services provided:- Trincomalee Power Company Ltd.

vii) Amount recoverable on account of deputation of employees:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- Trincomalee Power Company Ltd.

iii) Amount recoverable for contracts for works/services received:

Transactions with the related parties at a (i) above are as follows:� Crore

Shri U.P.Pani Director (Human Resources)Shri S.C.Pandey

Shri Arup Roy Choudhury Chairman and Managing DirectorShri I.J. Kapoor Director (Commercial)Shri A.K.Jha Director (Technical)

Particulars

i) Transactions during the year• Contracts for works/services for services received by the Company:

- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- National Power Exchange Ltd.

• Contracts for works/services for services provided by the Company:- Utility Powertech Ltd.- Trincomalee Power Company Ltd.

• Deputation of Employees:

- NTPC-Alstom Power Services Private Ltd.v) Amount recoverable for contracts for works/services provided:

- Utility Powertech Ltd.

- Utility Powertech Ltd.iv) Amount payable for contracts for works/services received:

- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- National Power Exchange Ltd.

- Pan-Asian Renewables Private Ltd.- Bangladesh-India Friendship Power Company Private Ltd.

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures'Related parties:i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National PowerExchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh -India FriendshipPower Company Private Ltd.

ii) Key Management Personnel:

Shri N.N.Misra Director (Operations)2

1. W.e.f. 1st November 2014 2. Superannuated on 31st October 2014

Director (Projects)Shri K.Biswal Director (Finance)Shri K.K.Sharma

F-87

c)

Current year Previous year0.50 0.52

0.56 0.590.48 0.56

0.43 0.37 0.37 0.21 0.35 0.10 0.16 -

0.64 0.52 - 0.58 - 0.64 3.49 4.09

44.

a)

31.03.2015 31.03.2014

15.45 12.02 82.41 82.41 46.36 49.79 144.22 144.22

7.83 5.27 52.31 45.81 39.51 38.92 99.65 90.00 44.57 54.22 5.16 2.01

b)

· Not later than one year· Later than one year and not later than five years· Later than five years Totalb) Present value of (a) above

· Later than one year and not later than five years

d) Contingent rent for the year

The Group's other significant leasing arrangements are in respect of operating leases of premises for residential use ofemployees, offices and guest houses/transit camps for a period of one to two years. These leasing arrangements are usuallyrenewable on mutually agreed terms but are not non-cancellable. Note 24 - Employee benefits expense includes �� 47.05 crore(previous year � 73.11 crore) towards lease payments (net of recoveries) in respect of premises for residential use ofemployees. Lease payments in respect of premises for offices and guest house/transit camps are included under ‘Rent’ in Note26 – ‘Generation, administration and other expenses’. Further, the Company has taken a helicopter on wet lease basis for aperiod of eleven years and the amount of lease charges is included in ‘Hire charges of helicopter/aircraft’ in Note 26.

The Company has received bank guarantees from Utility Powertech Ltd. for an amount of �� 7.67 crore (previous year � 6.36crore).

Finance leases

a) Obligations towards minimum lease payments

Shri U.P.PaniShri S.C.Pandey

Remuneration to key management personnel for the year is �� 3.49 crore (previous year � 4.09 crore) and amount of duesoutstanding to the Company as at 31st March 2015 are � Nil (previous year � 0.03 crore).

(i) During previous years, the Company took on lease certain vehicles and had option to purchase them as per the terms of thelease agreements. As at 31st March 2015, there are no vehicles on lease.

(ii) The Company has entered into an agreement for coal movement through inland waterways transport. As per the agreement,the operator shall design, build, operate and maintain the unloading infrastructure and material handling system ("facility"),and transfer the same to the Company after expiry of 7 years at � 1/-. The facility shall be constructed in two phases of whichPhase I has been completed and is under operation. Fair value of the entire facility is � 90 crore and the assets and liability inrespect of Phase-I have been recognised at � 60 crore based on technical assessment. The minimum lease payments shall starton completion of Phase-II of the facility. Amounts payable for the coal transported through Phase-I of the facility are disclosedas contingent rent.

� Crore

Shri K.BiswalShri K.K.SharmaShri N.N.MisraShri.B.P.SinghShri A.K. Singhal

Total

· Not later than one year

� Crore

Disclosure as per Accounting Standard - 19 on 'Leases'

Operating leases

· Later than five years Totalc) Finance charges

Managerial remuneration to Key management personnelShri Arup Roy ChoudhuryShri I.J. KapoorShri A.K.Jha

F-88

45.

Current Year Previous Year 9,986.34 11,403.61 8,24,54,64,400 8,24,54,64,400 12.11 13.83

10/- 10/-

46.

47.

48.

Balance as at01.04.2014

Additionsduring the year

Paymentsduring theyear

Reversal /adjustmentsduring the year

Balance as at31.03.2015

10.09 14.77 6.58 6.15 12.13

3,001.72 903.75 275.64 385.13 3,244.70

1,293.69 150.22 - 180.16 1,263.75

451.93 129.30 3.36 20.20 557.67

4,757.43 1,198.04 285.58 591.64 5,078.25

49.

50.

As % ofconsolidated

net assets

Amount(�� crore)

As % ofconsolidatedprofit or loss

Amount(�� crore)

2 3 4 5

89.81% 74530.02 101.82% 10174.25

0.05% 41.75 0.01% 1.270.25% 205.89 0.44% 43.601.07% 884.27 0.11% 11.211.41% 1,172.02 0.00% (0.03)

1.07% 887.94 0.06% 6.03

Corporate Social Responsbility Expenses (CSR)

Research expenditure charged to revenue during the year is�� 97.56 crore (previous year � 98.52 crore).

Particulars

Indian1. NTPC Electricity Supply Company Ltd.2. NTPC Vidyut Vyapar Nigam Ltd.

Long Term Provisions (Note-8)

During the year, an amount of �� 207.43 crore has been spent on CSR activities in accordance with Section 135 of theCompanies Act,2013 and rules thereto. Further, an amount of � 78.92 crore has been appropriated to CSR Reserve fromsurplus during the year. Also refer Note 3.

Total

Contractual Obligations


Provision for tariff adjustment

A. Parent

Disclosure as per Accounting Standard - 29 on 'Provisions, Contingent Liabilities and Contingent Assets'

As required by Accounting Standard (AS) 28 ‘Impairment of Assets’, an assessment of impairment of assets was carried outby the Company and based on such assessment, there has been no impairment loss during the year.

� crore

Disclosure as per Accounting Standard - 20 on 'Earnings Per Share'

Disclosure as per Accounting Standard - 26 on 'Intangible Assets'

Nominal value per share - �

Group profit after tax used as numerator - � croreWeighted average number of equity shares used as denominatorEarning per share (Basic and Diluted) - �

B. Subsidiaries

Disclosure as per Accounting Standard - 28 on 'Impairment of Assets'

3. Kanti Bijlee Utpadan Nigam Ltd.4. Bhartiya Rail Bijlee Company Ltd.

Minority interests in all subsidiaries

The elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:

Provision for obligations incidental to landacquisition

Disclosure as per Schedule III to the Companies Act, 2013

Net assets i.e. totalassets minus total liabilities

as at 31.03.2015

Share in profit or loss for the year2014-15

Name of the entity

1

Others

NTPC Ltd.

F-89

0.03% 27.16 0.12% 11.610.01% 11.34 0.01% 1.310.99% 821.19 1.14% 113.701.50% 1,243.25 -0.43% (43.39)0.32% 262.12 -4.06% (405.24)1.98% 1,643.80 0.90% 89.920.00% 0.05 0.00% -0.65% 539.99 0.00% (0.03)0.08% 66.33 0.01% 0.840.00% 2.46 0.00% (0.15)

0.62% 510.49 0.00% -0.00% 1.14 0.00% 0.020.00% 2.30 0.00% -

0.03% 23.40 0.00% -0.05% 38.33 -0.15% (14.69)0.03% 28.73 0.03% 2.590.00% 0.01 -0.00% 0.01 0.00% -0.00% 0.20 0.00% (0.42)

0.00% 0.60 0.00% 0.20

0.01% 5.10 0.00% (0.23)

0.04% 32.03 0.00% -

82,981.92 9,992.37

51.

31.03.2015 31.03.2014 31.03.2015 31.03.2014JPY 14.96 19.23 7.89 11.38EUR 1.00 - 68.56 -

31.03.2015 31.03.2014 1.15 - 3.44 -

Name of the entityNet assets i.e. total

assets minus total liabilitiesas at 31.03.2015

Share in profit or loss for the year2014-15

The derivative contracts outstanding as at 31st March 2015 are as under:

Foreign currency exposure

Foreign

9. NTPC- BHEL Power Projects Private Ltd.10. BF-NTPC Energy Systems Ltd.

Amount (� Crore)

Principal Only Swap

7. NTPC SCCL Global Ventures Private Ltd.8. Meja Urja Nigam Private Ltd.

C. Joint Ventures

Indian

a) Hedged by a derivative instrument

Currency & Interest Rate Swap

Amount (� Crore)

Particulars Currencies Amount in Foreign Currency(Crore)

Currency & Interest Rate SwapPrincipal Only Swap

11. Nabinagar Power Generating Company Private Ltd.12. National Power Exchange Ltd.13. International Coal Ventures Private Ltd.

2. Bangladesh India Power Company Private Ltd.(incorporated in Bangladesh)

1. Trincomalee Power Company Ltd.(incorporated in Srilanka)

1. Utility Powertech Ltd.2. NTPC Alstom Power Services Private Ltd.3. NTPC SAIL Power Company Private Ltd.4. NTPC Tamilnadu Energy Company Ltd.5. Ratnagiri Gas & Power Private Ltd.6. Aravali Power Company Private Ltd.

Particulars

MTM loss on the above contract as at 31st March 2015 is as under:

Total

14. National High Power Test Laboratory Private Ltd.15. Transformers & Electricals Kerala Ltd.16. Energy Efficiency Services Ltd.17. CIL NTPC Urja Private Ltd.18. Anushakti Vidyut Nigam Ltd.19. Pan-Asian Renewables Private Ltd.

20.Kinesco Power&Utilities Private Ltd.( a 50% JointVenture of wholly owned subsidiary NTPC ElectricSupply Company Ltd.)

The derivative contracts entered into by the Company are for hedging currency and/or interest rate risk on foreign currencyloans.

F-90

31.03.2015 31.03.2014 31.03.2015 31.03.2014USD 342.19 260.54 21,622.72 15,791.13JPY 5,197.55 4,560.37 2,740.41 2,697.46EURO 19.69 13.67 1,350.02 1,143.00USD 39.51 24.79 2,494.81 1,502.52EURO 11.97 11.33 819.95 947.64Others 148.73 92.17 95.37 74.67USD 1.77 0.02 111.48 1.33Others 309.47 0.84 468.99 0.54USD 80.92 125.02 5,112.87 7,577.46EURO 62.12 79.61 4,256.46 6,658.58Others 1,520.26 1,656.34 919.62 1,176.68

52. Contingent Liabilities:(a)

(i) Capital Works

(iv) Others

Currencies Amount in Foreign Currency(Crore)


Particulars

Borrowings, including interest accrued butnot due thereon.

Trade payables/deposits and retentionmonies

Trade receivables and Bank balances

Unexecuted amount of contractsremaining to be executed

In respect of land acquired for the projects, the erstwhile land owners have claimed higher compensation before variousauthorities/courts which are yet to be settled. Against such cases, contingent liability of �� 314.30 crore (previous year �

395.16 crore) has been estimated.

(v) Possible Reimbursement

(iii) Fuel SuppliersPending resolution of the issues with fuel companies, an amount of �� 567.22 crore (previous year � 647.33 crore) towardssurface transportation charges, customs duty on service margin on imported coal, etc. has been estimated as contingentliability.

Amount (� Crore)

Claims against the Group not acknowledged as debts in respect of:

Some of the contractors for supply and installation of equipments and execution of works have lodged claims for �� 8,127.22crore (previous year � 4,290.45 crore) seeking enhancement of the contract price, revision of work schedule with priceescalation, compensation for the extended period of work, idle charges etc. These claims are being contested as being notadmissible in terms of the provisions of the respective contracts.

Various options are being pursued under the dispute resolution mechanism available in the contracts for settlement of theseclaims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of such claimspending resolution.

(ii) Land compensation cases

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee,penalty on diversion of agricultural land to non-agricultural use, non agriculture land assessment tax, water royalty etc. and byothers, contingent liability of �� 896.34 crore (previous year � 1,088.23 crore) has been estimated.

The contingent liabilities referred to in (i) above, include an amount of �� 1,172.56 crore (previous year � 994.83 crore)relating to the hydro power project stated in Note 15 A (b) - Other non-current assets, for which Company envisagespossible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claims mentioned at(ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion in the capital cost forthe purpose of determination of tariff as per CERC Regulations subject to prudence check by the CERC. In case of (iii), theestimated possible reimbursement by way of recovery through tariff as per Regulations is � 423.36 crore (previous year �

637.82 crore).

F-91

(b)

(c) Others

53.

a)

b)

c)

d)

e)

54.� crore


3,058.85 2,524.85 85.65 140.24

12.87 39.18 821.59 775.72 51.25 67.17

%age Amount %age Amount

17.05 8,849.03 14.16 6,925.9682.95 43,053.02 85.84 41,981.22


2.94 3.08 461.03 227.70

Professional & consultancy feeOthers

Other disclosures as per Schedule III of the Companies Act, 2013

Particularsa) Value of imports calculated on CIF basis:

Capital goods Spare parts

b) Expenditure in foreign currency:Professional and consultancy feeInterest

c) Value of components, stores and spare partsconsumed (including fuel):


ImportedIndigenous

d) Earnings in foreign exchange:

Others

The contingent liabilities disclosed above include �� 600.02 crore (previous year � 247.25 crore) share of jointly controlledentitites.

Group's commitment in respect of lease agreements has been disclosed in Note 44.

Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2015 is ��

65,787.51 crore (previous year � 76,636.90 crore) which includes an amount of � 6,113.95 crore (previous year � 9,905.90crore) in respect of jointly controlled entities.

Company's commitment towards the minimum work programme in respect of oil exploration activities of joint ventureoperations has been disclosed in Note 31 C.

Disputed Tax Matters


Other contingent liabilities amount to �� 914.22 crore (previous year � 513.70 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability in thisregard is not ascertainable.

Disputed Income Tax/Sales Tax/Excise and other tax matters pending before various Appellate Authorities amount to ��

5,259.48 crore (previous year � 2,595.87 crore). Many of these matters were disposed off in favour of the respectivecompanies but are disputed before higher authorities by the concerned departments. In respect of disputed tax matters, possiblereimbursement of � 2,430.71 crore (previous year � 852.52 crore) is estimated.

Company’s commitment towards the minimum work programme in respect of oil exploration activity of Cambay Block (100%owned by the company) is �� 140.27 crore (USD 22.41 million) (previous year � 198.21 crore, USD 32.98 million).

F-92

55.

56.


Some of the Subsidiaries and Joint Venture Companies followed different accounting policies from that of the Company andthe impact of the same is not material.

M No.094155 M No.072332 M No.027251

These are the notes referred to in Balance Sheet and Statement of Profit & Loss

Partner Partner Partner M No. 024282 M No.076918 M.No.017546

For V. Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A.R. & Co.Chartered Accountants Chartered Accountants Chartered AccountantsFirm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C





Statement containing salient features of the financial statements of Subsidiaries/Joint Ventures of NTPC Ltd. pursuant to firstproviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014, in form AOC I is attached.

Partner Partner Partner(Neeraj Kumar Agarwal) (Prakash Sharma) (T.V.Balasubramanian)

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

( A.K.Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)

F-93

(Amount in � crore)1. Sl. No. 1 2 3 42. Name of the Subsidiary NTPC Electric Supply

Company Ltd.NTPC Vidyut VyaparNigam Ltd.

Kanti Bijlee UtpadanNigam Ltd.

Bhartiya Rail BijleeCompany Ltd.

3. Reporting period for the subsidiaryconcerned, if different from the holdingcompany's reporting period

Same as that of HoldingCompany (1.04.2014 -31.03.2015)

Same as that of HoldingCompany (1.04.2014 -31.03.2015)

Same as that ofHolding Company(1.04.2014 -31.03.2015)

Same as that ofHolding Company(1.04.2014 -31.03.2015)

4. Reporting currency and exchange rate as onthe last date of the relevant financial year inthe case of foreign subsidiaries.

NA NA NA NA

5. Share capital 0.08 20.00 1,000.00 1,584.616. Reserves & surplus 41.66 185.90 360.42 (0.80)7. Total assets 644.94 1,166.22 3,827.87 5,237.458. Total liabilities 603.20 960.32 2,467.45 3,653.649. Investments - - - -10. Turnover 16.86 3,873.60 459.98 -11. Profit before taxation 1.60 66.48 45.15 (0.04)12. Provision for taxation 0.34 22.87 27.91 -13. Profit after taxation 1.26 43.61 17.24 (0.04)14. Proposed dividend - - - -15. % of Shareholding 100% 100% 65% 74%

Notes:1.2.

FORM NO.AOC.1Statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures of NTPC Ltd.

(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)

Subsidiaries which are yet to commence operations.Subsidiaries which have been liquidated or sold during the year.

Bhartiya Rail Bijlee Company Ltd.Nil

Part "A": Subsidiaries

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F-96

Notes:A. Names of Joint Ventures which are yet to commence operations.

1 NTPC-SCCL Global Ventures Private Ltd.2 Meja Urja Nigam Private Ltd.3 BF - NTPC Energy Systems Ltd.4 Nabinagar Power Generating Company Private Ltd.5 National Power Exchange Ltd.6 International Coal Ventures Private. Ltd.7 National High Power Test Laboratory Private Ltd.8 CIL NTPC Urja Private Ltd.9 Anushakti Vidyut Nigam Ltd.

10 Pan-Asian Renewables Private Ltd.11 Trincomalee Power Company Ltd. (incorporated in Srilanka)12 Bangladesh-India Friendship Power Company Private Ltd. (incorporated in Bangladesh)

B. Names of Associates or Joint Ventures which have been liquidated or sold during the year.

No Joint Venture or Associate has been liquidated or sold during the year. However, M/s National Power Exchange Ltd.and M/s Pan-Asian Renewables Pvt. Ltd are in the process of voluntary winding up.



(A.K.Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)

For V. Sankar Aiyar & Co. For Ramesh C. Agrawal & Co. For A.R. & Co. Chartered Accountants Chartered Accountants Chartered Accountants Firm Reg. No. 109208W Firm Reg. No. 001770C Firm Reg. No. 002744C



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

(Neeraj Kumar Agarwal) (Prakash Sharma) (T.V.Balasubramanian) Partner Partner Partner M No.094155 M No.072332 M No.027251


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

F-97

INDEPENDENT AUDITORS’ REPORTON THE CONSOLIDATED FINANCIAL STATEMENTS

To

The Board of Directors NTPC Limited

We have audited the accompanying Consolidated Financial Statements of NTPC Limited (the “Company”) and its Subsidiary and Joint Venture Companies (collectively referred to as the “Group”),which comprise the Consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.


Management is responsible for the preparation of these Consolidated Financial Statements that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India.

This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


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

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

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

We did not audit the financial statements of the Subsidiary and the Joint Venture Companies.

The financial statements of the following Subsidiary and Joint Venture Companies have been audited by other auditors whose reports have been furnished to us upto 10th May 2014, and in our opinion, so far as it relates to the amounts included in respect of these companies are based solely on the report of these auditors. The details of the assets, revenue and net cash flows in respect of these Subsidiary and Joint Venture Companies to the extent to which they are reflected in the Consolidated Financial Statements are given below:

F-98

` Crore Name of the Companies Assets Revenues Net Cash

FlowsSubsidiaries:1) NTPC Electric Supply Company Ltd (including its 50%interest in KINESCO Power & Utilities Pvt. Ltd., a joint venture with KINFRA, a statutory body of Government of Kerala, with assets ` 11.15 crore, revenues ` 20.19 crore and net cash flows(-) ` 0.06 crore)

731.12 59.08 (136.36)

2) Kanti Bijlee Utpadan Nigam Ltd 3,111.77 162.15 13.163) Bhartiya Rail Bijlee Company Ltd. 4,300.72 - (7.19)Total 8,143.61 221.23 (130.39)Joint Ventures:1) Utility Power tech Ltd. 109.09 250.52 10.542) NTPC -Alstom Power Services Pvt. Ltd. 40.50 17.56 (0.13)3) NTPC- SAIL Power Company Pvt. Ltd. 1,707.88 883.50 15.054) NTPC-Tamilnadu Energy Company Ltd 4,594.66 755.01 5.915) Aravali Power Company Pvt. Ltd. 4,888.45 1,749.24 (0.40)6) Meja Urja Nigam Pvt Ltd. 926.21 - 27.557) Nabinagar Power Generating Company Pvt. Ltd. 984.60 - (5.92)8) Anushakti Vidyut Nigam Ltd. 0.02 - (0.03)Total 13,251.41 3,655.83 52.57

The financial statements of the following Subsidiary & Joint Venture Companies are unaudited and in our opinion so far as it relates to the amounts included in respect of the said Subsidiary and Joint Venture Companies are based solely on the financial statements certified by the management of the respective Company. The details of assets, revenue and net cash flows in respect of these Subsidiary & Joint Venture Companies to the extent to which they are reflected in the Consolidated Financial Statements are given below:

` Crore Name of the Companies Assets Revenues Net Cash

FlowsSubsidiary:1) NTPC Vidyut Vyapar Nigam Ltd. 1,224.44 3,532.32 114.57Total 1,224.44 3,532.32 114.57Joint Ventures:1) Ratnagiri Gas & Power Pvt. Ltd. 4,083.58 728.29 (198.22)2) NTPC-SCCL Global Venture Pvt. Ltd. 0.05 0.01 -3) NTPC-BHEL Power Project Pvt. Ltd 230.44 42.91 31.564) BF-NTPC Energy Systems Ltd. 2.94 - (0.03)5) National Power Exchange Ltd. 1.15 0.11 (0.14)6) International Coal Venture Pvt. Ltd. 3.42 - (0.59)7) National High Power Test Laboratory Pvt. Ltd 21.43 - (4.88)8) Transformers and Electricals Kerala Ltd. 73.38 75.82 3.499) Energy Efficiency Services Ltd. 31.76 8.39 1.3710) CIL NTPC Urja Pvt. Ltd. 0.01 - -11) Pan-Asian Renewables Private Ltd. 0.64 0.04 0.4012) Trincomalee Power Company Ltd. 5.95 0.64 0.4913) Bangladesh India Friendship Power Company Pvt. Ltd. 7.05 - 4.36Total 4,461.80 856.21 (162.19)

F-99

We report that the Consolidated Financial Statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard (AS) 21, ‘Consolidated Financial Statements’ and Accounting Standard (AS) 27, ‘Financial Reporting of Interests in Joint Ventures’ of the Companies (Accounting Standards) Rules, 2006 read with the General Circular 15/2013 dated 13th

September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

Emphasis of Matter

Without qualifying our report, we draw attention to Note 33 in respect of accounting of fuel on GCV based pricing system.

Opinion

Further to our comments in the above paragraphs, we report that on the basis of the information and explanations given to us and on consideration of the separate audit reports of individual audited financial statements of the Group to the extent received as stated above, in our opinion and to the best of our information and according to the explanations given to us, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014;

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

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

For O. P. Bagla & Co. Chartered Accountants Firm Reg. No.000018N

(Neeraj Kumar Agarwal) Partner

M. No. 094155

For K K Soni & Co. Chartered Accountants Firm Reg. No.000947N

(Abhinav Aggarwal) Partner

M. No. 517358

For PKF Sridhar & Santhanam Chartered Accountants Firm Reg. No.003990S

(G.Shankar)Partner

M. No.024042

For V. Sankar Aiyar & Co. Chartered Accountants


(Ajay Gupta) Partner

M. No. 090104

For Ramesh C. Agrawal & Co. Chartered Accountants

Firm Reg. No.001770C

(Monika Agrawal) Partner

M. No.093769

For A.R & Co. Chartered Accountants Firm Reg. No.002744C

(Pawan K Goel) Partner

M. No.072209

Place : New Delhi Dated : 15th May 2014

F-100

NTPC LIMITED

` CroreParticulars Note 31.03.2014 31.03.2013

EQUITY AND LIABILITIESShareholders' funds Share capital 2 8,245.46 8,245.46 Reserves and surplus 3 78,758.03 72,995.49

87,003.49 81,240.95Deferred revenue 4 1,609.88 1,244.05Fly ash utilisation fund 326.23 234.93Minority interest 680.43 644.81

Non-current liabilitiesLong-term borrowings 5 75,542.30 64,587.72Deferred tax liabilities (net) 6 1,239.31 1,080.72Other long-term liabilities 7 3,081.58 2,217.66Long-term provisions 8 896.80 761.20

80,759.99 68,647.30

Current liabilitiesShort-term borrowings 5A 433.64 382.16Trade payables 9 7,427.70 5,862.29Other current liabilities 10 14,223.44 13,165.07Short-term provisions 11 7,575.13 7,289.02

29,659.91 26,698.54

TOTAL 200,039.93 178,710.58


F-101

NTPC LIMITED

ASSETS

Non-current assetsGoodwill on consolidation 0.62 0.62Fixed assets

Tangible assets 12 83,957.77 71,578.34Intangible assets 12 249.59 253.75Capital work-in-progress 13 53,819.15 46,553.36Intangible assets under development 13 5.81 1.28

Non-current investments 14 1,663.46 3,300.42Long-term loans and advances 15 14,151.11 11,058.61Other non-current assets 15A 1,805.99 1,503.91

155,653.50 134,250.29Current assets

Current investments 16 1,636.96 1,622.46Inventories 17 5,988.48 4,575.78Trade receivables 18 6,725.66 6,096.15Cash and bank balances 19 17,050.67 18,738.12Short-term loans and advances 20 3,231.19 1,718.34Other current assets 21 9,753.47 11,709.44

44,386.43 44,460.29

TOTAL 200,039.93 178,710.58Significant accounting policies 1

- -The accompanying notes form an integral part of these financial statements.

- -

F-102

NTPC LIMITED


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

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

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


M No.094155 M No.517358 M No.024042



M No. 090104 M No.093769 M.No.072209

(Ajay Gupta) (Monika Agrawal) (Pawan K Goel) Partner Partner Partner

(Neeraj Kumar Agarwal) (Abhinav Aggarwal) (G.Shankar)



(A.K.Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)Company Secretary Director (Finance) Chairman & Managing Director

F-103

NTPC LIMITED

` CroreParticulars Note 31.03.2014 31.03.2013

RevenueRevenue from operations (gross) 22 79,619.15 72,669.65

697.49 571.56Revenue from operations (net) 78,921.66 72,098.09Other income 23 2,777.44 3,181.16Total revenue 81,699.10 75,279.25

ExpensesFuel 47,790.26 42,827.77Electricity purchased 2,189.97 2,673.49Employee benefits expense 24 4,055.95 3,607.22Cost of material and services 317.47 312.24Finance costs 25 3,203.07 2,480.54Depreciation and amortisation expense 12 4,769.99 3,823.22Generation, administration & other expenses 26 4,874.78 4,545.89Prior period items (net) 27 11.85 (33.78)Total expenses 67,213.34 60,236.59

Profit before tax and exceptional items 14,485.76 15,042.66Exceptional items - 1,568.29Profit before tax 14,485.76 16,610.95

Tax expenseCurrent tax

Current year 3,372.68 3,905.82Earlier years (438.09) (162.01)

Deferred taxCurrent year 158.59 316.23

Less : MAT credit recoverable 10.82 35.31Total tax expense 3,082.36 4,024.73

Profit after tax 11,403.40 12,586.22

Less: Share of Profit /(loss)-Minority interest (0.21) (4.56)


Significant accounting policies 1Expenditure during construction period (net) 28

Earnings per equity share (Par value of ` 10/- each) 45Basic & Diluted (`) 13.83 15.27


Less: Electricity duty / Excise duty

The accompanying notes form an integral part of these financial statements.

F-104

NTPC LIMITED






M No.094155 M No.517358 M No.024042


Total revenue, total expenses and profit after tax includes ` 4,532.23 crore (previous year ` 3,653.98 crore), ` 4,062.44crore (previous year ` 3,492.62 crore) and ` 349.23 crore (previous year ` 75.35 crore) respectively towards share ofjointly controlled entities.

(A.K.Rastogi) (K.Biswal) (Dr.Arup Roy Choudhury)

There are no extraordinary items in the above periods.



This is the Consolidated Statement of Profit and Loss referred to in our report of even date


(Neeraj Kumar Agarwal) (Abhinav Aggarwal) (G.Shankar) Partner Partner Partner

(Ajay Gupta) (Monika Agrawal) (Pawan K Goel)

M No. 090104 M No.093769 M.No.072209

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

F-105

` CroreParticulars 31.03.2014 31.03.2013

A. CASH FLOW FROM OPERATING ACTIVITIESProfit before tax 14,485.76 16,610.95 Adjustment for:Depreciation/amortisation 4,769.99 3,823.22 Prior period depreciation/amortisation 3.73 3.93 Provisions 160.54 272.33 Deferred revenue on account of advance against depreciation (16.06) (9.87)

(215.77) 238.75 Deferred income from foreign currency fluctuation 516.36 79.56

(0.19) - Interest charges 3,164.29 2,457.80 Guarantee fee & other finance charges 38.78 22.74 Interest/income on term deposits/bonds/investment (2,130.45) (2,475.64) Dividend income (139.06) (217.79) Provisions written back (200.86) (908.53)

5,951.30 3,286.50 Operating profit before working capital changes 20,437.06 19,897.45

Adjustment for:Trade receivables (629.02) 1,417.14 Inventories (1,154.24) (186.21) Trade payables, provisions and other liabilities 1,408.65 1,778.39 Loans & advances and other current assets (906.42) (3,419.44)

(1,281.03) (410.12) Cash generated from operations 19,156.03 19,487.33

Direct taxes paid (2,686.65) (2,979.54) Net cash from operating activities - A 16,469.38 16,507.79

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (18,948.45) (20,405.74) Purchase of investments (11,426.58) (17,955.00) Sale of investments 13,049.04 19,583.83 Interest/income on term deposits/bonds/investments received 2,453.40 2,474.48 Income tax paid on interest income (775.89) (760.53) Dividend received 139.06 217.79 Net cash used in investing activities - B (15,509.42) (16,845.17)

C. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from long term borrowings 14,523.70 14,381.51 Repayment of long term borrowings (5,189.74) (4,603.31) Proceeds from short term borrowings 51.48 232.00 Grant received/ Fly ash utilisation fund, etc. 81.78 162.85 Interest paid (6,088.36) (4,922.38) Guarantee fee & other finance charges paid (154.55) (139.40) Dividend paid (5,018.96) (3,550.10) Tax on dividend (852.95) (573.06)

Net cash from financing activities - C (2,647.60) 988.11

D. 0.19 -

Net increase/decrease in cash and cash equivalents (A+B+C+D) (1,687.45) 650.73

Cash and cash equivalents at the beginning of the year (see Note 1 below) 18,738.12 18,087.39 Cash and cash equivalents at the end of the year (see Note 1 below) 17,050.67 18,738.12


NTPC LIMITED


Deferred foreign currency fluctuation asset/liability


F-106

1.

930.65 553.54 16,104.94 18,110.68

15.08 73.90 17,050.67 18,738.12

14.21 15.67 0.52 - 0.02 1.77 0.02 0.01 0.31 56.45

15.08 73.90

2.


5) Margin money with banks

NOTESCash and cash equivalents consist of cheques, drafts, stamps on hand and balances with banks. Cashand cash equivalents included in the cash flow statement comprise of following balance sheet amountsas per Note 19:Cash and cash equivalents Deposits included in other bank balances Other bank balances-Others*Cash and cash equivalents as restated (Note-19-Cash and bank balances)

* Amounts which are not available for use towards:1) Unpaid dividend account balance2) Unpaid refund account balance3) Out of margin money kept with RBI earmarked for fixed deposits from public4) Deposited as security with governement authorities

Previous year figures have been regrouped/rearranged wherever considered necessary.


(A. K. Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)Company Secretary Director (Finance) Chairman & Managing Director


For O.P.Bagla & Co. For K K Soni & Co. For PKF Sridhar & SanthanamChartered Accountants Chartered Accountants Chartered Accountants

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

(Neeraj Kumar Agarwal) (Abhinav Aggarwal) (G.Shankar)Partner Partner Partner

M.No.094155 M.No.517358 M.No. 024042

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

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

(Ajay Gupta) (Monika Agrawal) (Pawan K.Goel)Partner Partner Partner

M.No.090104 M.No.093769 M.No.072209

F-107


A.

B.

C.1.

2.

3.

D.1.2.

3.4.

5.

6.

7.

1. Significant accounting policiesBasis of preparation

The financial statements are prepared on accrual basis of accounting under historical cost convention inaccordance with generally accepted accounting principles in India, accounting standards notified underCompanies (Accounting Standards) Rules, 2006, read with General Circular 15/2013 dated 13th September2013 of the Ministry of Corporate Affairs, provisions of the Companies Act, 1956, the Companies Act, 2013(to the extent notified and applicable), and the provisions of the Electricity Act, 2003 to the extent applicable.

Use of estimates

The preparation of financial statements requires estimates and assumptions that affect the reported amount ofassets, liabilities, revenue and expenses during the reporting period. Although such estimates and assumptionsare made on a reasonable and prudent basis taking into account all available information, actual results coulddiffer from these estimates & assumptions and such differences are recognized in the period in which theresults are crystallized.

Grants-in-aidGrants-in-aid received from the Central Government or other authorities towards capital expenditure aswell as consumers’ contribution to capital works are treated initially as capital reserve and subsequentlyadjusted as income in the same proportion as the depreciation written off on the assets acquired out of thegrants.Where the ownership of the assets acquired out of the grants vests with the government, the grants areadjusted in the carrying cost of such assets.Grants from Government and other agencies towards revenue expenditure are recognized over the periodin which the related costs are incurred and are deducted from the related expenses.

Fixed assetsTangible assets are carried at historical cost less accumulated depreciation/amortisation.Expenditure on renovation and modernisation of tangible assets resulting in increased life and/or efficiencyof an existing asset is added to the cost of related assets.Intangible assets are stated at their cost of acquisition less accumulated amortisation.Capital expenditure on assets not owned by the Company relating to generation of electricity business isreflected as a distinct item in capital work-in-progress till the period of completion and thereafter in thetangible assets. However, similar expenditure for community development is charged off to revenue.

Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expensesrelatable to land in possession are treated as cost of land.In the case of assets put to use, where final settlement of bills with contractors is yet to be effected,capitalisation is done on provisional basis subject to necessary adjustment in the year of final settlement.

Assets and systems common to more than one generating unit are capitalised on the basis of engineeringestimates/assessments.

F-108


E.

1.

2.

3.

F. 1.

2.

3.

G.

H.

1.

2.

3.

4.5.

I.

Capital work-in-progress

Administration and general overhead expenses attributable to construction of fixed assets incurred till theyare ready for their intended use are identified and allocated on a systematic basis to the cost of relatedassets.

Deposit works/cost plus contracts are accounted for on the basis of statements of account received from thecontractors.Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for onestimated basis as per terms of the contracts.

Oil and gas exploration costsThe Company follows ‘Successful Efforts Method’ for accounting of oil & gas exploration activities.

Cost of surveys and prospecting activities conducted in search of oil and gas is expensed off in the year inwhich it is incurred.Acquisition and exploration costs are initially capitalized as ‘Exploratory wells-in-progress’ under Capitalwork-in-progress. Such exploratory wells in progress are capitalised in the year in which the producingproperty is created or written off in the year when determined to be dry/abandoned.

Development of coal minesExpenditure on exploration and development of new coal deposits is capitalized as ‘Development of coal mines’ under capital work-in-progress till the mines project is brought to revenue account.

Foreign currency transactions

Foreign currency transactions are initially recorded at the rates of exchange ruling at the date oftransaction.At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items denominated in foreign currency are reported at the exchange rate ruling at the date oftransaction.Exchange differences arising from settlement/translation of foreign currency loans, deposits/liabilitiesrelating to fixed assets/capital work-in-progress in respect of transactions entered prior to 01.04.2004, areadjusted in the carrying cost of related assets. Such exchange differences arising fromsettlement/translation of long term foreign currency monetary items in respect of transactions entered on orafter 01.04.2004 are adjusted in the carrying cost of related assets.

Other exchange differences are recognized as income or expense in the period in which they arise.Derivative contracts in the nature of forward contracts, options and swaps are entered into to hedge thecurrency and interest rate risk of foreign currency loans. Premium or discount arising at the inception offorward exchange contracts is amortised as expense or income over the life of the contracts. Exchangedifferences on such contracts, which relate to long-term foreign currency monetary items referred to inPolicy H.3 are adjusted in the carrying cost of related assets. Other derivative contracts are marked-to-market at the Balance Sheet date and losses are recognised in the Statement of Profit and Loss. Gainsarising on such contracts are not recognised, until realised, on grounds of prudence.

Borrowing costsBorrowing costs attributable to the qualifying fixed assets during construction/exploration, renovation andmodernisation are capitalised. Such borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are recognised as an expense in the period in which they areincurred.

F-109


J.1.

2.

3.

K.1.

2.

L.

1.

2.

3.

4.

5.

6.

7.

8.

9.10.

InvestmentsCurrent investments are valued at lower of cost and fair value determined on an individual investmentbasis.Long term investments are carried at cost. Provision is made for diminution, other than temporary, in thevalue of such investments.Premium paid on long term investments is amortised over the period remaining to maturity.

InventoriesInventories are valued at the lower of, cost determined on weighted average basis and net realizable value.

The diminution in the value of obsolete, unserviceable and surplus stores and spares is ascertained onreview and provided for.

Income recognition

Sale of energy is accounted for based on tariff rates approved by the Central Electricity RegulatoryCommission (CERC) as modified by the orders of Appellate Tribunal for Electricity to the extentapplicable. In case of power stations where the tariff rates are yet to be approved, provisional rates areadopted.Advance against depreciation considered as deferred revenue in earlier years is included in sales, to theextent depreciation recovered in tariff during the year is lower than the corresponding depreciationcharged.

Exchange differences on account of translation of foreign currency borrowings recoverable from orpayable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are accounted as ‘Deferred foreign currency fluctuation asset/liability’. The increase or decrease in depreciation for the yeardue to the accounting of such exchange differences as per accounting policy no. H is adjusted indepreciation.

Exchange differences arising from settlement/translation of monetary items denominated in foreigncurrency (other than long term) to the extent recoverable from or payable to the beneficiaries in subsequentperiods as per CERC Tariff Regulations are accounted as ‘ Deferred foreign currency fluctuationasset/liability ’ during construction period and adjusted from the year in which the same becomesrecoverable/payable.

Premium, discount and exchange differences in respect of forward exchange contracts and mark to marketlosses in respect of other derivative contracts referred to in accounting policy no. H.5 recoverablefrom/payable to the beneficiaries as per CERC Tariff Regulations, are recognised in sales.

The surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significantuncertainty as to measurability or collectability exists.Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damageswherever there is uncertainty of realisation/acceptance are not treated as accrued and are therefore,accounted for on receipt/acceptance.Income from consultancy services is accounted for on the basis of actual progress/technical assessment ofwork executed, in line with the terms of respective consultancy contracts. Claims for reimbursement ofexpenditure are recognized as other income, as per the terms of consultancy service contracts.

Scrap other than steel scrap is accounted for as and when sold.Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims areaccounted for based on certainty of realisation.

F-110


M.

1.

2.

3.

2 years

- 15 years- 5 years

5 years5 years

12 years4.

5.6.

7.

8.

9.

10.

11.

12.

Expenditurea) Depreciation/amortisation

Depreciation on the assets of the generation of electricity business is charged on straight line methodfollowing the rates and methodology notified by the CERC Tariff Regulations, 2009 in accordance withSection 616 (c) of the Companies Act, 1956.Depreciation on the assets of the coal mining, oil & gas exploration and consultancy business, is chargedon straight line method following the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation on the following assets is provided based on their estimated useful life:

a) Kutcha Roadsb) Enabling works

residential buildings including their internal electrification.non-residential buildings including their internal electrification, water supply,sewerage & drainage works, railway sidings, aerodromes, helipads and airstrips.

c) Personal computers & laptops including peripheralsd) Photocopiers and fax machinese) Water coolers and refrigeratorsDepreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basisfrom/up to the month in which the asset is available for use/disposed.Assets costing up to ` 5000/- are fully depreciated in the year of acquisition.Cost of software recognized as intangible asset, is amortised on straight line method over a period of legalright to use or 3 years, whichever is less. Other intangible assets are amortized on straight line method overthe period of legal right to use or life of the related plant, whichever is less.

Where the cost of depreciable assets has undergone a change during the year due to increase/decrease inlong term liabilities on account of exchange fluctuation, price adjustment, change in duties or similarfactors, the unamortised balance of such asset is charged off prospectively over the remaining useful lifedetermined following the applicable accounting policies relating to depreciation/amortisation.

Where the life and/or efficiency of an asset is increased due to renovation and modernization, theexpenditure thereon along-with its unamortized depreciable amount is charged off prospectively over therevised useful life determined by technical assessment.

Machinery spares which can be used only in connection with an item of plant and machinery and their useis expected to be irregular, are capitalised and fully depreciated over the residual useful life of the relatedplant and machinery.

Capital expenditure on assets not owned by the company referred in policy D.4 is amortised over a periodof 4 years from the month in which the first unit of project concerned comes into commercial operationand thereafter from the month in which the relevant asset becomes available for use.

Leasehold land and buildings relating to generation of electricity business are fully amortised over leaseperiod or life of the related plant whichever is lower following the rates and methodology notified byCERC Tariff Regulations, 2009. Leasehold land acquired on perpetual lease is not amortised.

Land acquired for mining business under Coal Bearing Areas (Acquisition & Development) Act, 1957 isamortised on the basis of balance useful life of the project. Other leasehold land acquired for miningbusiness is amortised over the lease period or balance life of the project whichever is less.

F-111


13.

14.

15.

16.

17.

N.

1.

2.

3.

O.1.

1.1

1.2

1.3

2.

P.

b) Other expenditureExpenses on ex-gratia payments under voluntary retirement scheme, training & recruitment and research &development are charged to revenue in the year incurred.

Preliminary expenses on account of new projects incurred prior to approval of feasibility report/technoeconomic clearance are charged to revenue.Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.

Prepaid expenses and prior period expenses/income of items of ` 100,000/- and below are charged tonatural heads of accounts.Transit and handling losses of coal as per Company's norms are included in cost of coal.

Employee benefitsEmployee benefits consist of provident fund, pension, gratuity, post retirement medical facilities, compensatedabsences, long service award, economic rehabilitation scheme and other terminal benefits.

Company’s contributions paid/payable during the year to provident fund and pension fund is recognised inthe statement of profit and loss. The same is paid to funds administered through separate trusts.

Company’ s liability towards gratuity, leave benefits (including compensated absences), post retirementmedical facility and other terminal benefits is determined by independent actuary, at year end using theprojected unit credit method. Past service costs are recognised on a straight line basis over the averageperiod until the benefits become vested. Actuarial gains and losses are recognised immediately in thestatement of profit and loss. Liability for gratuity as per actuarial valuation is paid to a fund administeredthrough a separate trust.

Short term employee benefits are recognised as an expense at the undiscounted amount in the statement ofprofit and loss for the year in which the related services are rendered.

LeasesFinance lease

Assets taken on finance lease are capitalized at fair value or net present value of the minimum leasepayments, whichever is less.Depreciation on the assets taken on finance lease is charged at the rate applicable to similar type offixed assets as per accounting policy no. M.a.1 or M.a.2. If the leased assets are returnable to thelessor on the expiry of the lease period, depreciation is charged over its useful life or lease period,whichever is less.Lease payments are apportioned between the finance charges and outstanding liability in respect ofassets taken on lease.

Operating lease

Assets acquired on lease where a significant portion of the risk and rewards of the ownership is retained bythe lessor are classified as operating leases. Lease rentals are charged to revenue.

ImpairmentThe carrying amount of cash generating units is reviewed at each balance sheet date where there is anyindication of impairment based on internal/external indicators. An impairment loss is recognised in thestatement of profit and loss where the carrying amount exceeds the recoverable amount of the cash generatingunits. The impairment loss is reversed if there is change in the recoverable amount and such loss either nolonger exists or has decreased.

F-112


Q.

R.

S. Taxes on incomeCurrent tax is determined on the basis of taxable income in accordance with the provisions of the Income TaxAct, 1961. Deferred tax liability/asset resulting from 'timing difference' between accounting income and taxableincome is accounted for considering the tax rate & tax laws that have been enacted or substantively enacted ason the reporting date. Deferred tax asset is recognized and carried forward only to the extent that there isreasonable certainty that the asset will be realized in future. Deferred tax assets are reviewed at each reportingdate for their realisability.

Provisions and contingent liabilities

A provision is recognised when the company has a present obligation as a result of a past event and it isprobable that an outflow of resources will be required to settle the obligation and in respect of which a reliableestimate can be made. Provisions are determined based on management estimate required to settle theobligation at the balance sheet date and are not discounted to present value. Contingent liabilities are disclosedon the basis of judgment of the management/independent experts. These are reviewed at each balance sheetdate and are adjusted to reflect the current management estimate.

Cash flow statementCash flow statement is prepared in accordance with the indirect method prescribed in Accounting Standard(AS) 3 on ‘Cash Flow Statements’.

F-113


` Crore31.03.2014 31.03.2013

Equity share capitalAuthorised

10,00,00,00,000 shares of par value of 10/- each (previousyear 10,00,00,00,000 shares of par value of 10/- each) 10,000.00 10,000.00


8,24,54,64,400 shares of par value of 10/- each (previous year 8,24,54,64,400 shares of par value of 10/- each) 8,245.46 8,245.46

a)



618,40,98,300 75.00 618,40,98,300 75.0070,67,78,072 8.57 63,12,94,191 7.66

- President of India- Life Insurance Corporation of India

2. Share capital

As at

Details of shareholders holding more than 5% shares in the Company:

Particulars 31.03.2014 31.03.2013

F-114


3. Reserves and surplus` Crore

As at 31.03.2014 31.03.2013

Capital reserve As per last financial statements 408.97 391.33 Add : Transfer from surplus 4.98 0.97 Add : Grants received during the year 20.32 41.24 Less : Adjustments during the year 33.30 24.57

400.97 408.97 Securities premium account As per last financial statements 2,228.11 2,228.11 Add : Received during the year 0.23 -

2,228.34 2,228.11 0.15 (0.41)

Debt service reserve As per last financial statements 81.84 - Add : Transfer from surplus 162.17 81.84

244.01 81.84 Self insurance reserve As per last financial statements 50.11 50.11 Less : Transfer to surplus 27.49 - Less : Adjustments during the year 0.82 -

21.80 50.11 Bonds redemption reserve As per last financial statements 2,535.33 2,389.04 Add : Transfer from surplus 576.08 492.79 Less : Transfer to surplus 346.50 346.50

2,764.91 2,535.33 General reserve As per last financial statements 66,958.67 60,339.89 Add : Transfer from surplus 5,012.08 6,643.18 Less: Adjustments during the year 4.92 24.40

71,965.83 66,958.67

As per last financial statements 732.87 632.70 Add: Profit for the year as per Statement of Profit and Loss 11,403.61 12,590.78

Transfer from bond redemption reserve 346.50 346.50 Transfer from self insurance reserve 27.49 -

Less: Transfer to bond redemption reserve 576.08 492.79 Transfer to capital reserve 4.98 0.97 Transfer to fly ash utilisation fund 17.01 12.06 Transfer to debt service reserve 162.17 81.84 Transfer to general reserve 5,012.08 6,643.18 Dividend paid 3,300.69 3,094.07 Tax on dividend paid 560.96 501.94 Proposed dividend 1,491.07 1,718.27 Tax on proposed dividend 253.41 291.99

Net surplus 1,132.02 732.87

Total # 78,758.03 72,995.49 # Includes 758.91 crore (previous year 475.25 crore) share of jointly controlled entities.

Surplus

Foreign currency translation reserve

F-115



b) Debt service reserve has been created as per the loan agreement equivalent to two quarters' interest andprincipal repayment in respect of Aravali Power Company Pvt. Ltd..

c) Self insurance reserve has been created by Ratnagiri Gas & Power Private Ltd. to cover machinerybreak-downfor which no insurance cover agreement has been entered.

a) Addition to Securities premium account represents premium received on issue of tax free bonds through privateplacement.

d) Capital reserve includes an amount of ` 241.33 crore (previous year ` 251.62 crore) relating to grant receivedfrom GOI through Government of Bihar for renovation and modernisation of Kanti Bijlee Utpadan Nigam Ltd.

F-116


` CroreAs at 31.03.2014 31.03.2013

692.55 708.60 On account of income from foreign currency fluctuation 917.33 535.45

Total # 1,609.88 1,244.05 # Includes Nil (previous year Nil) share of jointly controlled entities.

a)

b)

c)

Advance against depreciation (AAD) was an elementof tariff provided under the Tariff Regulationsfor 2001-04 and 2004-09 to facilitate debt servicing by the generators since it was considered thatdepreciation recovered in the tariff considering a useful life of 25 years is not adequate for debtservicing. Though this amount is not repayable to the beneficiaries, keeping in view the matchingprinciple, and in line with the opinion of the Expert Advisory Committee (EAC) of the Institute ofChartered Accountants of India (ICAI), this was treated as deferred revenue to the extentdepreciation chargeable in the accounts is considered to be higher than the depreciation recoverablein tariff in future years. Since AAD is in the nature of deferred revenue and does not constitute aliability, it has been disclosed in this note separately from shareholders' funds and liabilities.

In line with significant accounting policy no. L.2 (Note 1), an amount of ` 16.05 crore (previousyear ` 9.87 crore) has been recognized during the year from the AAD and included in energy sales(Note 22).

Foreign exchange rate variation (FERV) on foreign currency loans and interest thereon isrecoverable from/payable to the customers in line with the Tariff Regulations. Keeping in view theopinion of the EAC of ICAI, the Company is recognizingdeferred foreign currency fluctuation assetby corresponding credit to deferred income from foreign currency fluctuation in respect of theFERV on foreign currency loans adjusted in the cost of fixed assets, which is recoverable from thecustomers in future years as provided in accounting policy no. L.3 (Note 1). This amount will berecognized as revenue corresponding to the depreciation charge in future years. The amount does notconstitute a liability to be discharged in future periods and hence, it has been disclosed separatelyfrom shareholder’s funds and liabilities.

4. Deferred revenue

On account of advance against depreciation

F-117


` Crore31.03.2014 31.03.2013

BondsSecured8.66% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of`1,000/- each redeemable at par in full on 16th December 2033 (Fiftieth Issue - PublicIssue - Series 3A)VII

312.03 -

8.91% Tax free secured non-cumulative non-convertible redeemable bonds - 2013 of `

1,000/- each redeemable at par in full on 16th December 2033 (Fiftieth Issue - PublicIssue - Series 3B)VII

399.97 -


1,000/- each redeemable at par in full on 16th December 2028 (Fiftieth Issue - PublicIssue - Series 2A)VII

249.95 -



91.39 -


1,000/- each redeemable at par in full on 16th December 2023 (Fiftieth Issue - PublicIssue - Series 1A)VII

488.02 -



208.64 -

9.25% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each with five equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 11th year and in annual installments thereafterupto the end of 15th year respectively commencing from 04th May 2023 and ending on04th May 2027 (Forty fourth issue - private placement)VII

500.00 500.00

8.48% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 1st May 2023 (Seventeenth issue -private placement)I

50.00 50.00

8.80% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 4th April 2023 (Forty ninth issue -private placement)VII

200.00 -

8.73% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 7th March 2023 (Forty eighth issue -private placement)VII. Secured during the current year.

300.00 300.00

9.00% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each with five equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 11th year and in annual installments thereafterupto the end of 15th year respectively commencing from 25th January 2023 and endingon 25th January 2027 (Forty second issue - private placement)III

500.00 500.00


As at

F-118


` Crore31.03.2014 31.03.2013


As at8.84% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 4th October 2022 (Forty seventh issue -private placement)VII

390.00 390.00

8.93% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 19th January 2021 (Thirty seventh issue- private placement)III

300.00 300.00

8.73% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 31st March 2020 (Thirty third issue-private placement)III

195.00 195.00

8.78% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 9th March 2020 (Thirty first issue-private placement)III

500.00 500.00

11.25% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in five equal annual installments commencingfrom 6th Nov 2019 and ending on 6th Nov 2023 (Twenty seventh issue - privateplacement)III

350.00 350.00

7.89% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 5th May 2019 (Thirtieth issue - privateplacement)III

700.00 700.00

8.65% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 4th February 2019 (Twenty ninth issue -private placement)III

550.00 550.00

7.50% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 12th January 2019 (Nineteenth issue -private placement)II

50.00 50.00

11.00% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 21st November 2018 (Twenty eighthissue - private placement)III

1,000.00 1,000.00

9.3473% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 20th July 2018 and ending on20th July 2032 (Forty sixth issue - private placement)VII

75.00 75.00

9.4376% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 16th May 2018 and ending on16th May 2032 (Forty fifth issue - private placement)VII

75.00 75.00

F-119


` Crore31.03.2014 31.03.2013


As at8.00% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 10th April 2018 (Sixteenth issue -private placement)I

100.00 100.00

9.2573% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 2nd March 2018 and endingon 2nd March 2032 (Forty third issue - private placement)III

75.00 75.00

9.6713 % Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 23rd December 2017 andending on 23rd December 2031 (Forty first issue - private placement)III

75.00 75.00

9.558 % Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 29th July 2017 and ending on29th July 2031 (Fortieth issue - private placement)III

75.00 75.00

9.3896% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 9th June 2017 and ending on9th June 2031 (Thirty ninth issue - private placement)III

105.00 105.00

9.17% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 22nd March 2017 and endingon 22nd March 2031 (Thirty eighth issue - private placement)III

75.00 75.00

8.8086% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 15th December 2016 andending on 15th December 2030 (Thirty sixth issue - private placement)III

75.00 75.00

8.785% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 15th September 2016 andending on 15th September 2030 (Thirty fifth issue - private placement)III

120.00 120.00

F-120


` Crore31.03.2014 31.03.2013


As at8.71% Secured non-cumulative non-convertible redeemable taxable bonds of`15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 10th June 2016 and ending on10th June 2030 (Thirty fourth issue - private placement)III

150.00 150.00

8.8493% Secured non-cumulative non-convertible redeemable taxable bonds of `15,00,000/- each with fifteen equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of 6th year and in annual installments thereafterupto the end of 20th year respectively commencing from 25th March 2016 and endingon 25th March 2030 (Thirty second issue - private placement)III

105.00 105.00

9.37% Secured non-cumulative non-convertible redeemable taxable bonds of`70,00,000/- each with fourteen separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 4th June 2012 and endingon 4th December 2018 (Twenty fifth issue - private placement)III

285.50 357.00

9.06% Secured non-cumulative non-convertible redeemable taxable bonds of`70,00,000/- each with fourteen separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 4th June 2012 and endingon 4th December 2018 (Twenty sixth issue - private placement)III

285.50 357.00

8.6077% Secured non-cumulative non-convertible redeemable taxable bonds of`20,00,000/- each with twenty equal separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 9th September 2011 andending on 9th March 2021 (Twenty fourth issue - private placement)IV

300.00 350.00

8.3796% Secured non-cumulative non-convertible redeemable taxable bonds of`20,00,000/- each with twenty equal separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 5th August 2011 andending on 5th February 2021 (Twenty third issue - private placement)IV

300.00 350.00

8.1771% Secured non-cumulative non-convertible redeemable taxable bonds of`20,00,000/- each with twenty equal separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 2nd July 2011 andending on 2nd January 2021 (Twenty second issue - private placement)IV

300.00 350.00

7.7125% Secured non-cumulative non-convertible redeemable taxable bonds of`20,00,000/- each with twenty equal separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 2nd August 2010 andending on 2nd February 2020 (Twenty first issue - private placement)V

500.00 600.00

7.552% Secured non-cumulative non-convertible redeemable taxable bonds of`20,00,000/- each with twenty equal separately transferable redeemable principal parts(STRPP) redeemable at par semi-annually commencing from 23rd September 2009 andending on 23rd March 2019 (Twentieth Issue - private placement)VI

200.00 250.00

F-121


` Crore31.03.2014 31.03.2013


As at9.55% Secured non-cumulative non-convertible taxable redeemable bonds of`10,00,000/- each with ten equal separately transferable redeemable principal parts(STRPP) redeemable at par at the end of the 6th year and in annual installmentsthereafter upto the end of 15th year respectively from 30th April 2002 (Thirteenth issue- Part B - private placement)VIII

225.00 300.00

9.55% Secured non-cumulative non-convertible taxable redeemable bonds of`10,00,000/- each redeemable at par in ten equal annual installments commencingfrom the end of 6th year and upto the end of 15th year respectively from 18th April 2002(Thirteenth issue -Part A - private placement)VIII

225.00 300.00

Unsecured*8.61% Tax free secured non-cumulative non-convertible redeemable bonds of `

10,00,000/- each redeemable at par in full on 4th March 2034 (Fifty First Issue C -Private Placement)*

320.00 -

8.63% Tax free secured non-cumulative non-convertible redeemable bonds of `

10,00,000/- each redeemable at par in full on 4th March 2029 (Fifty First Issue B -Private Placement)*

105.00 -

9.34% Secured non-cumulative non-convertible redeemable taxable bonds of`10,00,000/- each redeemable at par in full on 24th March 2024 (Fifty Second Issue -private placement)*

750.00 -


10,00,000/- each redeemable at par in full on 4th March 2024 (Fifty First Issue A -Private Placement)*

75.00 -

12,311.00 9,704.00

Unsecured4.75 % Fixed rate notes due for repayment on 3rd October 2022 3,030.50 2,745.505.625 % Fixed rate notes due for repayment on 14th July 2021 3,030.50 2,745.505.875 % Fixed rate notes due for repayment on 2nd March 2016 1,818.30 1,647.30


F-122


` Crore31.03.2014 31.03.2013


As atTerm loans

From Banks

SecuredRupee loansIX 3,399.34 2,986.65UnsecuredForeign currency loans 6,290.80 4,766.70Rupee loans 18,905.07 13,919.18

From OthersSecuredRupee loansIX 9,708.46 8,313.13UnsecuredForeign currency loans (guaranteed by GOI) 2,456.03 2,604.09Other foreign currency loans 2,026.88 1,864.55Rupee loans 12,503.04 13,090.55

DepositsUnsecuredFixed deposits 0.09 0.52

OthersUnsecuredBonds application money pending allotment - 200.00

Secured - 0.05Unsecured 62.29 -

Total# 75,542.30 64,587.72

#

*

Includes ` 9,082.32 crore (previous year 8,651.80 crore) share of jointly controlled entities.

Formalities for creation of security as per terms of bond issue are in progress.


F-123


a)` Crore

31.03.2014 31.03.2013 31.03.2014 31.03.2013Term loans

SecuredRupee loans - Banks 3,399.34 2,986.65 310.00 192.87 Rupee loans - Others 9,708.46 8,313.13 395.34 357.82 Foreign currency loan (guaranteed by GOI) - Others - - - 96.44

13,107.80 11,299.78 705.34 647.13 Unsecured

Foreign currency loans (guaranteed by GOI) - Others 2,456.03 2,604.09 173.40 171.73 Foreign currency loans - Banks 6,290.80 4,766.70 257.84 233.59 Other foreign currency loans - Others 2,026.88 1,864.55 393.67 576.19 Rupee loans - Banks 18,905.07 13,919.18 1,764.06 1,759.13 Rupee loans - Others 12,503.04 13,090.55 1,591.23 1,367.73

42,181.82 36,245.07 4,180.20 4,108.37

Fixed deposits (unsecured) 0.09 0.52 0.43 0.11

i)

ii)

iii)

iv)

v)

Secured rupee term loan from banks carry interest linked to SBI base rate or fixed interest rate ranging from 8% to11.25% p.a., with monthly/quarterly/half-yearly rests. These loans are repayable in quarterly/half-yearly installments asper the terms of the respective loan agreements. The repayment period extends from a period of four to fifteen years aftera moratorium period of six months from the COD or three to five years from the date of the loan agreement.

Secured rupee term loan from others carry interest linked to SBI base rate, SBI Advance Rate,rate notified by the lenderfor category 'A' public scetor undertaking, AAA bond yield rates plus agreed margin or fixed interest rate ranging from7.71% to 13.00 % p.a., with monthly/quarterly/half-yearly rests. These loans are repayable in quarterly/half-yearlyinstallments as per the terms of the respective loan agreements. The repayment period extends from a period of four tofifteen years after a moratorium period of six months from the COD or three to five years from the date of the loanagreement.

Unsecured Foreign Currency Loans (guaranteed by GOI) - Others carry fixed rate of interest ranging from 1.80% p.a. to2.30% p.a. and are repayable in 25 to 34 semi annual installments as of 31st March 2014.

Unsecured Foreign Currency Loans – Banks include loans of ` 589.81 crore (previous year ` 591.81 crore) which carryfixed rate of interest of 1.88% p.a. to 4.31% p.a. and loans of ` 5,958.83 crore (previous year ` 4,408.48 crore) whichcarry floating rate of interest linked to 6M LIBOR. These loans are repayable in 2 to 24 semiannual instalments as of 31st

March 2014, commencing after moratorium period if any, as per the terms of the respective loan agreements.

Unsecured Foreign Currency Loans – Others include loans of ` 1,424.92 crore (previous year ` 1,071.57 crore) whichcarry fixed rate of interest ranging from 1.88% p.a. to 4.31% p.a. and loans of ` 995.63 crore (previous year ` 1,277.60crore) which carry floating rate of interest linked to 6M LIBOR/6M EURIBOR. These loans are repayable in 6 to 24semiannual installments as of 31st March 2014, commencing after moratorium period if any, as per the terms of therespective loan agreements.


Non current portion Current portionParticulars

Details of terms of repayment and rate of interest

F-124


5. Long-term borrowingsvi)

vii)

b)

c)

d)

Unsecured fixed deposits carry interest ranging from 7.00% to 8.00% p.a. payable quarterly/monthly for non-cumulativeschemes and on maturity in case of cumulative schemes compounded quarterly. As per the terms, deposits are repayableduring a period of one to three years from the date of issue. However, same may be repaid earlier than their respectivematurity in pursuance to applicable provisions and regulations of Companies Act, 2013.

Unsecured rupee term loans carry interest rate ranging from 5.707 % p.a. to 12.40 % p.a. with monthly/quarterly/half-yearly rests. These loans are repayable in quarterly/half-yearly/yearly installments as per the terms of the respective loanagreements. The repayment period extends from a period of seven to fifteen years after a moratorium period of six monthsto five years.

The finance lease obligations are repayable in installments as per the terms of the respective lease agreements generallyover a period of four to seven years.

There has been no default in repayment of any of the loans or interest thereon as at the end of the year except that one ofthe Joint Venture Companies in which the Company has 32.86% share has defaulted in payment of principal and interestamounting to ` 53.48 crore and ` 145.69 crore respectively as at the end of the year for a period varying from 30 to 198days.

During the year, the Company made public issue of `1,750 crore (Fiftieth issue - stated above) pursuant to NotificationNo.61/2013.F.No.178/37/2013-(ITA.I) dated 8th August 2013 issued by the Central Board of Direct Taxes, Department ofRevenue, Ministry of Finance, GOI. The Company has utilised the issue proceeds as per the objects of the issue stated inthe prospectus dated 25th November 2013 i.e funding of capital expenditure and refinancing for meeting the debtrequirement in ongoing projects, including recoupment of expenditure already incurred.

F-125


I

II

III

IV

V

VI

VII

VIII

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of Barh SuperThermal Power Project on first pari-passu charge basis, ranking pari passu with charge already created in favourof Trustee for other Series of Bonds and (III) Equitable mortgage of the immovable properties, on first pari-passucharge basis, pertaining to Ramagundam Super Thermal Power Station by extension of charge already created.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovableproperties pertaining to Ramagundam Super Thermal Power Station.Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining toNational Capital Power Station by extension of charge already created.Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai, (II) Hypothecation of all the present and future movable assets (excluding receivables) of SingrauliSuper Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal PowerProject, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel PowerProject, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal PowerStation, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super ThermalPower Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power Stationand Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any, alreadycreated in favour of the Company's Bankers on such movable assets hypothecated to them for working capitalrequirement and (III) Equitable mortgage of the immovable properties, on first pari-passu charge basis,pertaining to Singrauli Super Thermal Power Station by extension of charge already created.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage, by way of first charge, by deposit of title deeds of the immovableproperties pertaining to National Capital Power Station.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II) Hypothecation of all the present and future movable assets (excluding receivables) of SingrauliSuper Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal PowerProject, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel PowerProject, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal PowerStation, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super ThermalPower Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power Stationand Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge, if any, alreadycreated in favour of the Company's Bankers on such movable assets hypothecated to them for working capitalrequirement.

Secured by (I) English mortgage, on first pari passu charge basis, of the office premises of the Company atMumbai and (II) Equitable mortgage of the immovable properties, on first pari-passu charge basis, pertaining toSipat Super Thermal Power Project by extension of charge already created.

Secured by (I) English mortgage, on first pari-passu charge basis, of the office premises of the Company atMumbai and (II)Equitable mortgage, by way of first charge, by deposit of the title deeds of the immovableproperties pertaining to Sipat Super Thermal Power Project.


F-126


IX (i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

X Security cover mentioned at sl. no. I to IX is above 100% of the debt securities outstanding.

Secured by first charge by way of mortgage by deposit of title deed of lands (approx 2049.11 acres) andother immovable properties of Indira Gandhi Super Thermal Power Project (3 x 500 MW) coal basedthermal power project at jhajjar district in State of Haryana together with buildings and structure erected/constructed/ standing thereon and all plant and machinery, and equipment attached to the earth orpermanently fastened to the earth comprised therein, in respect of which the Joint venture entity, as a ownerseized and possessed of and otherwise well and fully entitled to, both present and future assets.

Secured by equitable mortgage/ hypothecation of all present and future fixed and movable assets ofNabinagar TPP (4*250) MW of Bharitiya Rail Bijilee Company Ltd., a subsidiary company, as first charge,ranking pari passu with charge already created with PFC for 60% of total debts and balance 40% with REC.

Secured by equitable mortgage/hypothecation of all the present and future Fixed Assets and MoveableAssets of Power Plant and associated LNG facilities at village Anjanwel, Guhagar, Distt. Ratnagiribelonging to Joint Venture entity.

Secured by equitable mortagage/hypothecation of all the present and future Fixed Assets and MoveableAssets of Bhilai Expansion Project (CPP - III) belonging to Joint Venture entity.

Secured by equitable mortagage/hypothecation of all the present and future Fixed Assets and MoveableAssets of CPP-II at Rourkela, Durgapur, Bhilai & Corporate office belonging to Joint Venture entity.

Secured by first charge by way of hypothecation of all moveable assets of Indira Gandhi Super ThermalPower Project (3 X 500 MW) Coal Based Thermal Power Project at Jhajjar Distt. in state of Haryanabelonging to Joint Venture entity, comprising its movable plant and machinery, machinery spares, tools andaccessories, furniture & fixture, vehicles and all other movable assets, present and future, includingintangible assets, goodwill, uncalled capital, revenue and receivable of the project except for specifiedreceivables on which first charge would be ceded to working capital lenders present and future and

Secured by a first priority charge on all assets of the Project, present & future, movable & immovable andland, in respect of loan from consortium led by SBI for Kanti Bijlee Utpadan Nigam Ltd. expansion project.The security will rank pari-pasu with all term lenders of the project. The charge has been created in favor ofSecurity trustee i.e. SBI Cap Trustee Co. Ltd. Legal mortgage of land in favor of security trustee has beenexecuted for 594.84 acres out of 987.93 acres.

Secured by Equitable mortgage, by way of first charge, by deposit of the title deeds of the immovableproperties pertaining to Meja Thermal Power Project. Deed of Hypothecation for all present and futuremovable assets of Meja Urja Nigam Private Limited has also been executed with the Security Trustee andthe Indenture of Mortgage with the Security Trustee has been registered with appropriate authority.

Secured by a first priority charge on all assets of the Nabinagar Power Generating Company Pvt.Ltd.,present and future, movable and immovable through a deed of hypothecation and simple mortgage of land.

Secured by first charge on all movable and immovable, present and future assets of the NTPC TamilnaduEnergy Company Ltd.

F-127


` Crore31.03.2014 31.03.2013

Loans repayable on demandFrom Banks

SecuredCash Credit 433.64 382.16

Total # 433.64 382.16# Includes ` 361.01 crore (previous year ` 347.12 crore) share of jointly controlled entities.

a)

b)

c)

d) There has been no default in payment of principal and interest as at the end of the year.


As at

Includes cash credit secured by hypothecation of stock in trade, book debts of Stage-I of Kanti BijleeUtpadan Nigam Ltd. with floating rate of interest linked to the bank's base rate.

Includes borrowings secured by way of first pari-passu charge along with Power Finance Corporation Ltd.on the fixed assets, revenue and receivables of Aravali Power Company Pvt. Ltd.. Rate of interest isapplicable at the base rate of the respective banks.

Includes cash credit secured by charge on spares, present and future stock of coal and fuel at variousplaces of NTPC Tamilnadu Energy Company Limited and Debtors with floating rate of interest linked tobank's base rate.

F-128


6. Deferred tax liabilities (net)

` Crore

As at As at01.04.2013 31.03.2014

6,519.89 392.76 6,912.65

789.64 (12.08) 777.56 334.13 59.00 393.13

5,396.12 345.84 5,741.96 4,315.40 187.25 4,502.65

1,080.72 158.59 1,239.31 # Includes 187.26 crore (previous year 183.23 crore) share of jointly controlled entities.

a)

b)

The net increase during the year in the deferred tax liability of ` 158.59 crore (previous year ` 316.23 crore) has beendebited to Statement of Profit and Loss.Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing laws.

Additions/(Adjustments)during the year

Disallowances u/s 43B of the Income Tax Act, 1961

Less: Recoverable from beneficiaries

Total #

Less: Deferred tax assetsProvisions & other disallowances for tax purposes

Deferred tax liabilityDifference of book depreciation and tax depreciation

F-129


` CroreAs at 31.03.2014 31.03.2013

6.00 6.83

Deferred foreign currency fluctuation liability 151.99 135.60Other liabilities


Others 69.63 4.84

Total # 3,081.58 2,217.66# Includes ` 156.35 crore (previous year ` 21.36 crore) share of jointly controlled entities.

a)

b) Other liabilities - Others include deposits received from contractors, customers and other parties.

7. Other long-term liabilities

Trade payables

In line with accounting policy no.L.3 (Note 1) deferred foreign currency fluctuation liability to theextent of ` 16.39 crore (previous year ` 1.17 crore) has been made during the year.

F-130


8. Long-term provisions

` CroreAs at 31.03.2014 31.03.2013

Provision for886.71 752.48

10.09 8.72

Total # 896.80 761.20 # Includes ` 17.44 crore (previous year ` 21.26 crore) share of jointly controlled entities.

a)b)

Employee benefitsContractual obligations

Disclosure required by AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets'has been made in Note-48.

Disclosure required by AS 15 on 'Employee Benefits' has been made in Note-40.

F-131


` Crore31.03.2014 31.03.2013

7,427.70 5,862.29

# Includes ` 287.98 crore (previous year ` 237.30 crore) share of jointly controlled entities.

9. Trade payables

As at

For goods and services#

F-132


` CroreAs at 31.03.2014 31.03.2013

593.00 693.00

310.00 192.87

257.84 233.591,764.06 1,759.13

395.34 357.82- 96.44

173.40 171.73393.67 576.19

1591.23 1367.730.43 0.11

5,478.97 5,448.610.07 0.29

811.80 670.5547.87 - 14.21 15.67

0.22 0.200.58 0.590.52 - 3.07 20.88

508.10 424.505,279.85 4,218.05

255.49 195.45952.28 1,264.91

30.10 93.12288.68 468.81551.63 343.44

Total # 14,223.44 13,165.07

# Includes ` 1,640.00 crore (previous year ` 1,490.20 crore) share of jointly controlled entities.

Interest accrued but not due on borrowings

Unpaid dividends

Unpaid matured bonds and interest accrued thereonUnpaid matured deposits and interest accrued thereon

Advances from customers and others

Deposits from contractors and othersGratuity obligationsPayable to employeesOthers

Tax deducted at source and other statutory duesOther payablesPayable for capital expenditure



Current maturities of finance lease obligations-Secured

Bonds-Secured

Other foreign currency loans

From Banks

Unsecured Foreign currency loans Rupee term loans

Secured Rupee term loans

Rupee term loans

Unsecured Foreign currency loans (guaranteed by GOI)

Book overdraft

Foreign currency loan (guaranteed by GOI)

Unpaid bond refund money-Tax free bonds

From OthersSecured

Rupee term loans Fixed deposits

Interest accrued and due on borrowings

F-133



a)

b)

c)

d)

e)

Interest accrued and due on borrowings pertains to one of the Joint Venture Companies. Refer Note 5 d).

Other payables - Others include amount payable to hospitals, retired employees etc.

Payable for capital expenditure includes liabilities of ` 165.11 crore (previous year ` 378.77 crore)towards an equipment supplier pending evaluation of performance and guarantee test results ofsteam/turbine generators at some of the stations. Pending settlement, liquidated damages recoverable forshortfall in performance of these equipments, if any, have not been recognised.

Unpaid dividends, matured deposits and bonds including the interest accrued thereon include the amountswhich have either not been claimed by the investors/holders of the equity shares/bonds/fixed deposits orare on hold pending legal formalities etc. Out of the above, no amount is due for payment to investoreducation and protection fund.

Details in respect of rate of interest and terms of repayment of secured and unsecured current maturities oflong term borrowings indicated above are disclosed in Note 5.

F-134


` Crore31.03.2014 31.03.2013

1,088.52 1,429.83 1,491.06 1,718.27

253.41 291.99 3,001.72 2,228.72 1,293.69 1,333.29

6.17 1.09 440.56 285.83

Total # 7,575.13 7,289.02

# Includes ` 146.50 crore (previous year ` 155.18 crore) share of jointly controlled entities.a)

b)

c)

d) Other provisions include ` 53.64 crore (previous year ` 46.27 crore) towards cost of unfinishedminimum work programme demanded by the Ministry of Petroleum and Natural Gas (MoP&NG)including interest thereon in relation to block AA-ONN-2003/2 [Refer Note 31 C (ii)] and ` 378.52crore (previous year ` 200.84 crore) towards provision for litigation cases.

The Company aggrieved over many of the issues as considered by the CERC in the tariff orders forits stations for the period 2004-09 had filed appeals with the Appellate Tribunal for Electricity(APTEL). The APTEL disposed off the appeals favourably directing the CERC to revise the tarifforders as per directions and methodology given. Some of the issues decided in favour of theCompany by the APTEL were challenged by the CERC in the Hon’ble Supreme Court of India.Subsequently, the CERC has issued revised tariff orders for all the stations except one for theperiod 2004-09, considering the judgment of APTEL subject to disposal of appeals pending beforethe Hon’ble Supreme Court of India. Towards the above and other anticipated tariff adjustments,provision of ` 122.96 crore (previous year `166.35 crore) has been made during the year and inrespect of some of the stations, an amount of ` 162.56 crore ( previous year ` 63.11 crore) has beenwritten back.

OthersShortage in fixed assets pending investigation

Disclosure required by AS 15 on 'Employee Benefits' has been made in Note 40.

Disclosure required by AS 29 on 'Provisions, Contingent Liabilities and Contingent Assets' has beenmade in Note 48.

Tariff adjustmentObligations incidental to land acquisition

11. Short-term provisions

As at

Employee benefitsProposed dividendTax on proposed dividend

Provision for

F-135

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17

3.86

268.

38

(2.1

6)

44

4.40

1,99

4.93

1,35

5.27

63

8.27

92

.51

(1

0.93

)

741.

71

206.

89

27

.24

0.08

23

4.05

507.

66

431.

38

5,08

7.31

31

3.51

(18.

36)

5,

419.

18

1,

396.

68

157.

04

2.99

1,

550.

73

3,86

8.45

3,69

0.63

2,

636.

65

255.

71

(4

0.36

)

2,93

2.72

990.

20

11

1.28

(2

.64)

1,10

4.12

1,

828.

60

1,

646.

45

51.6

1

- 0.

02

51.5

9

27

.74

1.

90

-

29.6

4

21.9

5

23.8

7

38.1

7

2.89

0.

11

40.9

5

35

.35

1.

88

0.20

37

.03

3.

92

2.82

68

8.82

37

.05

(3

.91)

72

9.78

32

2.15

23.0

8

0.

09

345.

14

38

4.64

36

6.67

1,

355.

56

33.5

2

(19.

37)

1,

408.

45

63

5.88

49.2

0

-

68

5.08

723.

37

719.

68

497.

71

153.

38

(1

.92)

65

3.01

17

9.73

28.9

2

0.

06

208.

59

44

4.42

31

7.98

33

7.19

0.

16

(1.7

2)

339.

07

111.

84

16

.79

-

128.

63

21

0.44

22

5.35

93,3

36.0

4

10

,538

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(3,0

42.3

5)

106,

916.

81

36

,654

.71

4,60

9.21

210.

72

41,0

53.2

0

65

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56

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-

60.0

0

- 60

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1.06

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1.

06

58

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444.

02

40.0

1

1.88

48

2.15

25

4.85

19.0

4

1.

55

272.

34

20

9.81

18

9.17

11.6

1

1.95

1.

54

12.0

2

6.

08

0.82

1.

20

5.70

6.

32

5.53

2.

33

- 1.

74

0.59

2.

02

0.22

1.

70

0.54

0.

05

0.31

16

4.09

21

.43

2.

70

182.

82

79.2

1

10.9

8

2.

31

87.8

8

94.9

4

84.8

8

402.

62

24.4

2

13.6

1

413.

43

275.

47

28

.18

12.2

2

29

1.43

122.

00

127.

15

175.

36

14.1

1

(2.1

0)

191.

57

90.7

7

11.1

8

1.

47

100.

48

91

.09

84

.59

41

5.99

42

.26

(6

.61)

46

4.86

16

6.43

17.0

8

0.

50

183.

01

28

1.85

24

9.56

98

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7.

63

(0.2

4)

106.

21

53.4

7

5.15

0.

71

57.9

1

48.3

0

44.8

7

32.5

1

4.37

0.

36

36.5

2

16

.27

1.

24

0.22

17

.29

19

.23

16

.24

53

.00

9.

55

(0.1

2)

62.6

7

15

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2.

53

0.04

17

.77

44

.90

37

.72

0.

53

86.2

4

(13.

03)

99

.80

0.01

20

.66

-

20.6

7

79.1

3

0.52

22

5.30

38

.74

4.

55

259.

49

152.

57

16

.82

-

169.

39

90

.10

72

.73

2.

81

- -

2.81

-

- -

-

2.81

2.

81

2.81

-

- 2.

81

- -

-

- 2.

81

2.81

-

0.49

(4

.09)

4.

58

- -

-

- 4.

58

- -

0.49

(4

.09)

4.

58

- -

-

- 4.

58

-

Tot

al#

1

13,4

25.8

0

1

3,37

7.52

(4,

200.

53)

131

,003

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41,

847.

46

5

,429

.88

23

1.26

47,

046.

08

83,

957.

77

7

1,57

8.34

88,5

53.1

9

22

,624

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(2,2

47.8

8)

113,

425.

80

37

,639

.72

4,32

3.29

115.

55

41,8

47.4

6

71

,578

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50

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.47

# N

etbl

ock

incl

udes

11

,204

.26

cror

e (pr

evio

us y

ear

8,2

70.3

5 cr

ore)

shar

e of

join

tly c

ontro

lled

entit

ies.

Ass

ets u

nder

5 K

M sc

hem

e of

the

GO

I

Pre

viou

s yea

r

Ass

ets c

reat

ed fr

om fl

y as

h ut

ilisa

tion

fund

Cap

ital e

xpen

ditu

re o

n as

sets

not

ow

ned

by th

e C

ompa

ny

Les

s:G

rant

s fro

m G

over

nmen

t A

sset

s of G

over

nmen

t

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s: se

t off

aga

inst

fly

ash

utili

satio

n fu

nd

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orat

ory

and

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ksho

p eq

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ents

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ctric

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stal

latio

ns

Hos

pita

l equ

ipm

ents

Com

mun

icat

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equi

pmen

ts

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sed

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epre

ciat

ion/

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ortis

atio

n

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nitu

re a

nd fi

xtur

es

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stru

ctio

n eq

uipm

ents

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sed

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ice

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pmen

t

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ross

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ck

ED

P, W

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achi

nes a

nd sa

tcom

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ipm

ent

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ehol

d

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ng sp

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ned

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nt a

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quip

men

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n pl

ant

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ers

Tem

pora

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Wat

er su

pply

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inag

e &

sew

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e sy

stem

Ow

ned

12. T

angi

ble

asse

ts

Ear

th d

am re

serv

oir

Roa

ds,b

ridge

s, cu

lver

ts &

hel

ipad

s B

uild

ings

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seho

ld

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seho

ld F

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old

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ludi

ng d

evel

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ent e

xpen

ses)

Rai

lway

sidi

ng

Lan

d

MG

R tr

ack

and

sign

allin

g sy

stem

-

F-136

NT

PC

LIM

ITE

DN

otes

for

min

g pa

rt o

f C

onso

lidat

ed F

inan

cial

Sta

tem

ents

a) b) c) d) e) f) g) h) i) j) k) l) m)

The

conv

eyan

cing

ofth

eti

tle

to11

,666

acre

sof

free

hold

land

ofva

lue

`2,

614.

90cr

ore

(pre

viou

sye

ar12

,211

acre

sof

valu

e`

1,78

8.36

cror

e),b

uild

ings

&st

ruct

ures

ofva

lue

`61

.27

cror

e(p

revi

ous

year

`13

6.74

cror

e)an

dal

soex

ecut

ion

ofle

ase

agre

emen

tsfo

r 11

,071

acr

es o

f la

nd o

f va

lue

` 74

9.88

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re (

prev

ious

yea

r 10

,703

acr

es, v

alue

` 4

76.7

0 cr

ore)

in f

avou

r of

the

Com

pany

are

aw

aiti

ng c

ompl

etio

n of

lega

l for

mal

itie

s.

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seho

ld la

nd in

clud

es 8

18 a

cres

val

uing

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9.67

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re (

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ious

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r 2,

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luin

g `

642.

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) ac

quir

ed o

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rpet

ual l

ease

and

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ngly

not

am

orti

sed.

Lan

d do

es n

ot in

clud

e va

lue

of 3

3 ac

res

(pre

viou

s ye

ar 1

,181

acr

es)

of la

nd in

pos

sess

ion

of th

e C

ompa

ny. T

his

wil

l be

acco

unte

d fo

r on

set

tlem

ent o

f th

e pr

ice

ther

eof

by th

e St

ate

Gov

ernm

ent A

utho

riti

es.

Lan

d in

clud

es 1

,523

acr

es o

f va

lue

` 17

3.82

cro

re (

prev

ious

yea

r 1,

233

acre

s of

val

ue `

14.

99 c

rore

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t in

poss

essi

on o

f th

e C

ompa

ny. T

he C

ompa

ny is

taki

ng a

ppro

pria

te s

teps

for

rep

osse

ssio

n of

the

sam

e.

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d in

clud

es a

n am

ount

of

` 1

68.4

1 cr

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(pre

viou

s ye

ar `

152

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cror

e) d

epos

ited

wit

h va

riou

s au

thor

itie

s in

res

pect

of

land

in p

osse

ssio

n w

hich

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ubje

ct to

adj

ustm

ent o

n fi

nal d

eter

min

atio

n of

pri

ce.

Poss

essi

onof

land

mea

suri

ng98

acre

s(p

revi

ous

year

98ac

res)

cons

isti

ngof

79ac

res

offr

eeho

ldla

nd(p

revi

ous

year

79ac

res)

and

19ac

res

ofle

ase

hold

land

(pre

viou

sye

ar19

acre

s)of

valu

e`

0.21

cror

e(p

revi

ous

year

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was

tran

sfer

red

toU

ttar

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esh

Raj

yaV

idyu

tU

tpad

anN

igam

Ltd

.(er

stw

hile

UPS

EB

)fo

ra

cons

ider

atio

nof

`0.

21cr

ore.

Pend

ing

appr

oval

for

tran

sfer

ofth

esa

idla

nd,t

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eaan

dva

lue

ofth

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sbe

enin

clud

edin

the

tota

lla

ndof

the

Com

pany

.The

cons

ider

atio

nre

ceiv

edfr

om e

rstw

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EB

is d

iscl

osed

und

er N

ote

-10

- ‘O

ther

Cur

rent

Lia

bili

ties

-as

oth

er li

abil

itie

s’.

Min

istr

yof

Pow

er,

Gov

ernm

ent

ofIn

dia

vide

its

noti

fica

tion

no.

2/38

/99-

BT

PS(V

olum

eV

II)

date

d22

ndSe

ptem

ber

2006

tran

sfer

red

land

ofa

pow

erst

atio

nto

the

Com

pany

onop

erat

ing

leas

eof

50ye

ars.

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ntfo

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eye

aram

ount

ing

to`

6.24

cror

e(p

revi

ous

year

` 6

.20

cror

e) h

as b

een

char

ged

to th

e St

atem

ent o

f Pr

ofit

& L

oss.

Dur

ing

the

year

,the

acco

unti

ngof

'Exp

endi

ture

tow

ards

dive

rsio

nof

fore

stla

nd'd

iscl

osed

unde

rC

apit

alW

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in-p

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ess

(Not

e-13

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asre

view

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atus

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ith

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quen

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ount

of`

233.

70 c

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bee

n cl

assi

fied

as

Tan

gibl

e A

sset

s-L

ease

hold

land

and

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orti

sed

from

the

effe

ctiv

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te o

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mm

ence

men

t of

leas

e.

The

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rece

ived

anop

inio

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omth

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AC

ofth

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ting

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it&

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ith

the

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ught

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view

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unic

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omIC

AI

rega

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ere

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,ex

isti

ng tr

eatm

ent h

as b

een

cont

inue

d as

per

the

rele

vant

acc

ount

ing

poli

cy.

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ets

unde

r 5

KM

sch

eme

of th

e G

OI

repr

esen

t exp

endi

ture

on

elec

trif

icat

ion

of v

illa

ges

wit

hin

5 K

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erip

hery

of

the

gene

rati

on p

lant

s of

the

Com

pany

in te

rms

of M

inis

try

of P

ower

(M

OP)

,Gov

ernm

ent o

f In

dia

sche

me.

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the

acco

untin

gpe

riod

sco

mm

enci

ngon

oraf

ter

7thD

ecem

ber

2006

,the

Com

pany

adju

sts

exch

ange

diff

eren

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aris

ing

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atio

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tof

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isit

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ble

asse

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the

cost

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set a

nd d

epre

ciat

es th

e sa

me

over

the

rem

aini

ng li

fe o

f th

e as

set.

Ref

er N

ote

44 (

a) (

ii)

rega

rdin

g pl

ant a

nd e

quip

men

t und

er f

inan

ce le

ase.

The

borr

owin

gco

sts

capi

tali

sed

duri

ngth

eye

aren

ded

31st

Mar

ch20

14is

`3,

158.

17cr

ore

(pre

viou

sye

ar`

2,71

8.48

cror

e).T

heC

ompa

nyca

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lise

dth

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ings

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sin

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ess

(CW

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edi

ffer

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the

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IMIT

ED

Not

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solid

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5.9

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89

0

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65.2

0

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33.9

2

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4.24

0.0

319

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12.8

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0.0

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0.0

318

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1

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906.

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73

30

6.57

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1

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sA

djus

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ts31

.03.

2014

01.0

4.20

13th

e ye

ar A

djus

tmen

ts31

.03.

2014

31.0

3.20

1431

.03.

2013

98.4

4

2.78

(0.0

2)

10

1.24

93

.50

3.

41

-

96.9

1

4.33

4.

94

49

.06

5.

17

3.

87

50

.36

4.89

2.97

(0

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8.05

42.3

1

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.17

22

9.85

-

(7

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237.

67

25.2

1

9.51

-

34

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20

2.95

20

4.64

Tot

al#

377.

35

7.

95

(3

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389.

27

123.

60

15

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(0.1

9)

13

9.68

249.

59

253.

75

326.

24

44

.53

(6

.58)

377.

35

108.

84

14

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(0.2

3)

12

3.60

253.

75

217.

40

# Net

blo

ck in

clud

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F-139


` CroreAs at Deductions/ As at


579.25 302.56 67.00 - 814.81 89.10 122.99 (39.67) 92.51 159.25

901.27 95.88 170.82 - 826.33

2,078.87 1,358.43 130.02 313.51 2,993.77 735.41 490.59 32.34 255.71 937.95

6.85 39.66 10.51 2.89 33.11 64.43 43.89 7.04 35.88 65.40

4,096.10 753.09 93.33 - 4,755.86 317.05 94.91 29.99 33.52 348.45 367.15 169.23 81.67 153.38 301.33 50.53 5.47 5.61 0.16 50.23

31,632.21 14,779.41 1,630.17 10,373.70 34,407.75 11.99 23.70 (2.67) 18.75 19.61 0.64 0.21 0.41 0.24 0.203.32 6.07 1.69 4.00 3.70 4.31 1.82 0.17 3.83 2.13 0.11 0.43 0.01 - 0.53

152.51 126.83 (1.25) 39.40 241.19 3.08 1.84 1.32 1.52 2.08 0.15 0.34 - 0.15 0.34 0.16 0.37 0.02 0.14 0.37

58.23 40.79 0.28 86.25 12.49 33.26 55.53 (3.15) 33.91 58.03 7.64 - 7.64 - -

Development of coal mines 376.16 260.37 - - 636.53 41,569.78 18,774.41 2,223.30 11,449.45 46,671.44

Expenditure pending allocation335.55 88.04 27.40 - 396.19 851.36 947.50 298.61 - 1,500.25 234.00 - 234.00 - - 100.39 399.03 361.26 - 138.16 632.24 4,493.44 * (168.57) - 5,294.25

- 4,664.77 - - 4,664.77 43,723.32 20,037.65 2,976.00 11,449.45 49,335.52

71.44 6.63 8.84 - 69.23 Construction stores (net of provision) 2,901.48 1,651.38 - - 4,552.86 Total # 46,553.36 21,682.40 2,967.16 11,449.45 53,819.15

50,396.99 16,375.87 (21.53) 20,241.03 46,553.36 # Includes ` 2,944.28 crore (previous year ` 5,242.45 crore) share of jointly controlled entities.

* Brought from expenditure during construction period (net) - Note 28

Previous year


Difference in exchange on foreign currency loansExpenditure towards diversion of forest land

Less: Allocated to related works

Pre-commisioning expenses (net)Expenditure during construction period (net)

Laboratory and workshop equipments

Capital expenditure on assets not owned by the company

Survey, investigation, consultancy and supervision charges

EDP/WP machines & satcom equipment

Communication equipmentsHospital equipments

Construction equipmentsElectrical installations

Assets under 5 KM scheme of the GOI


Buildings

Others


Development of landRoads, bridges, culverts & helipadsPiling and foundation

Main plant

Temporary erection

Plant and equipment

Office equipment

Furniture and fixtures

Earth dam reservoir

MGR track and signalling system

Vehicles

Water supply, drainage and sewerage systemHydraulic works, barrages, dams, tunnels and power channel

Railway siding

F-140



a) Construction stores are net of provision for shortages pending investigation amounting to 0.27 crore (previous year ` 0.63 crore).b)

c)

d)

e)

` Crore

As at Deductions/ As at01.04.2013 Additions Adjustments Capitalised 31.03.2014

1.28 2.55 1.29 - 2.54 - - (1.34) - 1.34 - 1.91 (7.66) - 9.57

1.28 4.46 (7.71) - 13.45 - - (7.64) - 7.64

Total # 1.28 4.46 (0.07) - 5.81 1.27 0.05 0.04 - 1.28




License fee for technical colabration

Previous year

Intangible Assets Under Development

Software

Pre-commissioning expenses for the year amount to ` 436.68 crore (previous year ` 672.32 crore) and after adjustment of pre-commissioningsales of ` 37.65 crore (previous year ` 300.68 crore) resulted in net pre-commissioning expenditure of ` 399.03 crore (previous year ` 371.64crore).

Additions to the development of coal mines includes expenditure during construction period of ` 260.37 crore (previous year ` 96.42 crore).

Assets under 5 KM scheme of the GOI represent expenditure on electrification of villages within 5 KM periphery of the generation plants ofthe Company in terms of Ministry of Power (MOP), Government of India scheme.

During the year, the accounting of 'Expenditure towards diversion of forest land' was reviewed considering the status of lease agreementsentered with various state authorities. Consequently, an amount of ` 233.70 crore has been classified as Tangible Assets-Leasehold land andan amount of ` 0.31 crore has been classified under Intangible Assets-Right of use-Land, in Note 12.

F-141


` Crore31.03.2014 31.03.2013

Number ofshares/bonds/

securities

Face value pershare/bond/

securityCurrent year/

(previous year)Current year/

(previous year)(` )

Equity Instruments (fully paid up-unless otherwise stated)

Quoted

PTC India Ltd. 12,000,000(12,000,000)

10(10)

12.00 12.00

12.00 12.00

Cooperative societies * *Bonds (fully paid up)

Unquoted8.50 % Tax-Free State Government Special Bonds of theGovernment of

Andhra Pradesh 1,260,650(2,521,300)

1,000(1,000)

126.07 252.13

Assam 51,464(102,928)

1,000(1,000)

5.15 10.29

Bihar 1,894,400(3,788,800)

1,000(1,000)

189.44 378.88

Chattisgarh 483,220(966,440)

1,000(1,000)

48.32 96.64

Gujarat 837,240(1,674,480)

1,000(1,000)

83.72 167.45

Haryana 1,075,000(2,150,000)

1,000(1,000)

107.50 215.00

Himachal Pradesh 33,388(66,776)

1,000(1,000)

3.34 6.68

Jammu and Kashmir 367,360(734,720)

1,000(1,000)

36.74 73.47

Jharkhand 960,136(1,920,256)

1,000(1,000)

96.01 192.03

Kerala 1,002,400(2,004,800)

1,000(1,000)

100.24 200.48

Madhya Pradesh 830,840(1,661,680)

1,000(1,000)

83.08 166.17

Maharashtra 381,400(762,800)

1,000(1,000)

38.14 76.28

Orissa 1,102,874(2,205,748)

1,000(1,000)

110.29 220.57

Punjab 346,230(692,460)

1,000(1,000)

34.62 69.25

Rajasthan 290,000(435,000)

1,000(1,000)

29.00 43.50


As at

Long term-Trade

F-142


` Crore31.03.2014 31.03.2013


As atSikkim 34,196

(68,392)1,000

(1,000)3.42 6.84

Uttar Pradesh 3,989,900(7,979,800)

1,000(1,000)

398.99 797.98

Uttaranchal 399,650(799,300)

1,000(1,000)

39.97 79.93

West Bengal 1,174,248(2,348,496)

1,000(1,000)

117.42 234.85

1,651.46 3,288.42

Total# 1,663.46 3,300.42

# Share of jointly controlled entities is Nil (previous year Nil).

Quoted investmentsBook value 12.00 12.00Market value 81.36 71.94


* Equity shares of 30,200/- (previous year 30,200/-) held in various employee co-operative societies.

Investments have been valued considering the accounting policy no. J (Note1).

F-143


15. Long-term loans and advances (Considered good, unless otherwise stated)` Crore

31.03.2014 31.03.2013

26.56 62.90

5,266.24 4,725.28 4,374.53 3,281.30

2.59 2.54 2.59 2.54

9,667.33 8,069.48

147.05 93.86

0.01 0.03

405.97 400.27 144.58 144.14

143.59 239.31

40.00 14.29 0.59 - 0.22 -

0.22 - 734.74 798.04

623.78 92.18 2.03 0.18

625.81 92.36 9,932.14 11,932.58 7,044.34 10,036.37 2,887.80 1,896.21

MAT credit recoverable 86.20 106.72Cenvat Credit / Service tax recoverable 2.18 1.94

Total # 14,151.11 11,058.61


a)

b)

UnsecuredContractors & Suppliers, including material issued on loan

Capital advances include ` 252.22 crore (previous year ` 226.27 crore), paid to a contractor pendingsettlement of certain claims which are under arbitration. The amount will be adjusted in the cost ofrelated work or recovered from the party, depending upon the outcome of the arbitration proceedings.

Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure Corporation Ltd.(APIIC).

Advance tax deposit & tax deducted at sourceLess: Provision for current tax

Others

As at

Capital Advances

SecuredUnsecured


Covered by Bank Guarantee OthersConsidered doubtful


Unsecured

Advances


Loan to state government in settlement of dues from customers(unsecured)

LoansRelated parties

Employees (including accrued interest)Secured

Doubtful

OthersSecuredUnsecured

Unsecured

F-144


` Crore31.03.2014 31.03.2013

11.67 9.33

1,368.32 1,136.16 426.00 358.42

Total # 1,805.99 1,503.91


a)

b) Claims recoverable represents the cost incurred upto 31st March 2014 in respect of one of the hydro powerprojects, the construction of which has been discontinued on the advice of the Ministry of Power, GOI. Thisincludes ` 176.22 crore (previous year ` 109.65 crore) in respect of arbitration awards challenged/beingchallenged by the Company before High Court. In the event the High Court grants relief to the Company,the amount would be adjusted against Short Term Provisions - Others (Note 11). Management expects thatthe total cost incurred, anticipated expenditure on the safety and stabilisation measures, other recurring siteexpenses and interest costs as well as claims of contractors/vendors for various packages for this projectwill be compensated in full by the GOI. Hence, no provision is considered necessary. Also refer Note 21(c).

Claims recoverable

In line with accounting policy no.L.3 (Note 1), deferred foreign currency fluctuation asset has beenaccounted and (-) ` 257.31 crore (previous year (-) ` 296.96 crore) being exchange fluctuations on accountof foreign currency loans has been recognised as energy sales in Note 22.

Deferred foreign currency fluctuation asset

15A. Other non-current assets

As at

Long term trade receivablesUnsecured, considered good

F-145


` Crore31.03.2014 31.03.2013

Number of bonds/securities

Face value per bond/security

Current year/ (previous year)

Current year/ (previous year)

(`)Trade

Current maturities of long term investmentsBonds (fully-paid up)

Unquoted8.50 % Tax-Free State Government Special Bonds of the Government of

Andhra Pradesh 1,260,650(1,260,650)

1,000 (1,000)

126.07 126.07

Assam 51,464(51,464)

1,000 (1,000)

5.15 5.15

Bihar 1,894,400(1,894,400)

1,000 (1,000)

189.44 189.44

Chattisgarh 483,220(483,220)

1,000 (1,000)

48.32 48.32

Gujarat 837,240(837,240)

1,000 (1,000)

83.73 83.73

Haryana 1,075,000(1,075,000)

1,000 (1,000)

107.50 107.50

Himachal Pradesh 33,388(33,388)

1,000 (1,000)

3.34 3.34

Jammu and Kashmir 367,360(367,360)

1,000 (1,000)

36.74 36.74

Jharkhand 960,120(960,120)

1,000 (1,000)

96.01 96.01

Kerala 1,002,400(1,002,400)

1,000 (1,000)

100.24 100.24

Madhya Pradesh 830,840(830,840)

1,000 (1,000)

83.08 83.08

Maharashtra 381,400(381,400)

1,000 (1,000)

38.14 38.14

Orissa 1,102,874(1,102,874)

1,000 (1,000)

110.29 110.29

Punjab 346,230(346,230)

1,000 (1,000)

34.62 34.62

Rajasthan 145,000(-)

1,000 (-)

14.50 -

Sikkim 34,196(34,196)

1,000 (1,000)

3.42 3.42

Uttar Pradesh 3,989,900(3,989,900)

1,000 (1,000)

398.99 398.99

Uttaranchal 399,650(399,650)

1,000 (1,000)

39.96 39.96

West Bengal 1,174,248(1,174,248)

1,000 (1,000)

117.42 117.42

Total# 1,636.96 1,622.46

# Share of jointly controlled entities is Nil (previous year Nil).


a)b)

16. Current investments

As at

Investments have been valued considering the accounting policy no.J (Note 1).The above investments are unquoted and hence market value is not applicable.

F-146


17. Inventories` Crore

31.03.2014 31.03.2013

2,185.29 1,039.74371.89 400.27166.82 146.77

2,783.86 2,440.6068.08 76.967.20 6.76

28.16 25.89450.25 503.86

6,061.55 4,640.852.26 2.56

70.81 62.51

Total # 5,988.48 4,575.78


164.99 79.7147.78 31.56

0.83 0.620.27 0.054.35 2.75

218.22 114.69

a)


Coal

Loose toolsOthers

Stores and spares

Inventory items, other than steel scrap have been valued considering the accounting policy no. K.1(Note 1). Steel scrap has been valued at estimated realisable value.

As at

CoalFuel oil

Stores and sparesNaphtha

Loose tools

Others


Steel Scrap


dimunition in value of surplus inventory

Less: Provision for shortages Provision for obsolete/ unserviceable items/

Inventories include material-in-transit, valued at cost

F-147

NTPC LIMITEDNotes forming part of Consolidated Balance Sheet

` CroreAs at 31.03.2014 31.03.2013

455.33 204.12 0.03 0.03 0.03 0.03

455.33 204.12

6,270.33 5,892.03

Total # 6,725.66 6,096.15

# Includes ` 1,177.30 crore (previous year ` 517.53 crore) share of jointly controlled entities.

18. Trade Receivables

Others- Unsecured, considered good

Considered doubtfulUnsecured, considered good

Less: Allowance for bad & doubtful receivables

Outstanding for a period exceeding six months from the date theyare due for payment

F-148


` CroreAs at 31.03.2014 31.03.2013

165.29 389.91 667.97 59.53 66.52 74.98 30.79 29.03

0.08 0.09 930.65 553.54

16,104.94 18,110.68

15.08 73.90

Total # 17,050.67 18,738.12


a)

14.21 15.67 0.52 -

0.02 1.77 0.02 0.01 0.31 56.45

15.08 73.90 ##

Other bank balances

Current accountsDeposits with original maturity of upto three months

Others*

Includes bank deposits with original maturity of more than twelve months amounting to ` 6.07 crore(previous year ` 0.02 crore).

19. Cash and bank balances

Balances with banks

Cheques & drafts on handBalance with Reserve Bank of IndiaOthers (stamps on hand)


Security with government authorities

Out of margin money kept with Reserve Bank of India in terms of Rule 3A of the Companies(Acceptance of Deposits) Rules, 1975 for fixed deposits from public.

Deposits with original maturity of more than three months(a)

Balance with Reserve Bank of India##

Margin money with banks

Unpaid dividend account balance* Not available for use to the Company and include:

Unpaid refund account balance

F-149


` CroreAs at 31.03.2014 31.03.2013Loans

0.09 0.04

77.93 76.92 95.49 91.68

95.73 95.73

10.00 35.710.06 -

279.30 300.08 Advances

3.54 4.08

10.86 9.21 0.03 0.11

- 6.71 1,908.24 605.88

2.33 1.53

132.70 131.95 1.03 1.03

3.39 2.67 2,055.34 757.83

896.55 660.43

Total # 3,231.19 1,718.34 # Includes ` 200.87 crore (previous year ` 107.42 crore) share of jointly controlled entities.

a)

b)

c) Security deposit (unsecured) includes ` 211.92 crore (previous year ` 200.35 crore) sales taxdeposited under protest with sales tax authorities.

20. Short-term loans and advances (Considered good, unless otherwise stated)

UnsecuredConsidered doubtful

Unsecured

EmployeesUnsecuredConsidered doubtful

SecuredContractors & suppliers, including material issued on loan

Related parties

Security deposits (Unsecured)

Other loans (secured) represent loan given to Andhra Pradesh Industrial Infrastructure CorporationLtd. (APIIC).Other advances mainly represent prepaid expenses amounting to ` 64.92 crore (previous year `57.89 crore).

Related partiesUnsecured

Loan to state government in settlement of dues from customers-Unsecured

Unsecured

Employees(including accrued interest)SecuredUnsecured

Others

OthersUnsecuredConsidered doubtful


Secured

F-150


` Crore31.03.2014 31.03.2013

174.24 243.19621.02 875.02

48.46 23.98843.72 1,142.19

1,743.50 4,423.5913.77 13.0513.77 13.05

1,743.50 4,423.59

7,148.37 6,127.572.68 3.01

15.20 13.08

Total # 9,753.47 11,709.44


a)

b)

c)


As at

BondsTerm depositsOthers

Claims recoverable are net of the first phase amount of ` 536.30 crore, received from the GOI in September2013 towards the cost incurred in respect of one of the hydro power projects which has been discontinued on theadvice of Ministry of Power, GOI. Balance amount of ` 426.00 crore recoverable from the GOI is disclosed inNote 15A (b).

Unbilled revenue is net of credits to be passed to beneficiaries at the time of billing and includes ` 7,550.01crore (previous year ` 6,508.72 crore) billed to the beneficiaries after 31st March for energy sales, sale of goodsand services.

Interest accrued on

Claims recoverable

Assets held for disposalOthers

Unsecured, considered goodConsidered doubtfulLess: Allowance for doubtful claims

Others include amount recoverable from contractors and other parties towards hire charges, rent/electricity, etc.

Unbilled revenue

F-151


` CroreFor the year ended 31.03.2014 31.03.2013

78,618.65 70,654.25451.51 401.67

78.30 126.6979,148.46 71,182.61

87.08 93.17

119.66 106.52

119.66 106.52- -

131.48 432.601.56 3.52

49.71 49.22

162.56 63.11- 840.67

0.06 0.330.80 1.121.49 0.712.26 1.301.21 0.90

32.48 0.39200.86 908.53

Total# 79,619.15 72,669.65


Energy sales (including electricity duty)

Others

Other operating revenuesInterest from customersRecognized from deferred foreign currency fluctuation liability

Sale of fly ash and cenosphere[net of expenditure of ` 2.89 crore (previous year `2.34 crore)]Less: Transferred to fly ash utilisation fund

Doubtful loans, advances and claimsShortage in construction stores

Consultancy, project management and supervision fee(including turnkey construction projects)

Energy internally consumed

Sale of goods (including excise duty)

Tariff adjustmentDoubtful debts

Provisions written back

# Includes ` 4,556.46 crore (previous year ` 3,642.66 crore) share of jointly controlled entities.

Others

Shortage in storesObsolescence in storesUnserviceable capital works

F-152


22. Revenue from operations (gross)a)

b)

c)

d)

e)

f)

g)

Revenue from operations include ` 87.08 crore (previous year ` 93.17 crore) towards energy internallyconsumed, valued at variable cost of generation and the corresponding amount is included in power charges(Note 26).CERC Regulations provides that where after the truing-up, the tariff recovered is less/more than the tariffapproved by the Commission, the generating Company shall recover/pay from/to the beneficiaries theunder/over recovered amount along-with simple interest. Accordingly, the interest recoverable from thebeneficiaries amounting to ` 131.48 crore (previous year ` 432.60 crore) has been accounted as 'Interestfrom customers'. Further, the amount payable to the beneficiaries has been accounted as 'Interest tocustomers' (Note 26).

The Central Electricity Regulatory Commission (CERC) notified the Tariff Regulations, 2009 in January2009, and First, Second and Third Amendments thereto in May 2011, June 2011 and December 2012respectively (Regulations, 2009). In line with the Regulations, 2009, the CERC has issued provisional/finaltariff orders w.e.f. 1st April 2009 for all the stations except for four stations. Beneficiaries are billed inaccordance with the said provisional/final tariff orders except for four stations where it is done onprovisional basis. The amount billed for the year ended 31st March 2014 on this basis is ` 68,704.03 crore(previous year ` 61,794.68 crore).

In respect of stations for which the CERC has issued final tariff orders under the Regulations, 2009 andRenewable Energy Regulations, 2009, sales have been recognised at ` 66,209.42 crore for the year ended31st March 2014 (previous year ` 61,650.23 crore) after truing up capital expenditure to arrive at the capacitycharges. For other stations, pending determination of station-wise final tariff by the CERC, sales have beenprovisionally recognised at ` 3,386.70 crore for the year ended 31st March 2014 (previous year ` 998.24crore) on the basis of principles enunciated in the said Regulations, 2009 after truing-up capital expenditureto arrive at the capacity charges.

Sales include ` 2,086.82 crore for the year ended 31st March 2014 (previous year ` 1,241.90 crore)pertaining to previous years recognized based on the orders issued by the CERC/Appellate Tribunal forElectricity (APTEL).

Sales include (-) ` 269.99 crore for the year ended 31st March 2014 (previous year ` 246.04 crore) onaccount of income-tax recoverable from the beneficiaries as per Regulations, 2004. Sales also include `

77.02 crore for the year ended 31st March 2014 (previous year ` 53.16 crore) on account of deferred taxmaterialized which is recoverable from beneficiaries as per Regulations, 2009.

Electricity duty on energy sales amounting to ` 691.04 crore (previous year ` 564.35 crore) has been reducedfrom sales in the statement of profit and loss.

F-153


23. Other income` Crore

31.03.2014 31.03.2013

382.95 520.86

26.44 34.5831.20 29.2155.70 43.84

1,689.38 1,920.20155.20 39.4880.53 0.02

74.67 39.469.12 9.36

73.90 103.66

65.16 114.13

92.61 88.673.14 4.35

51.65 28.1285.60 89.0612.89 11.8228.53 -

3.15 0.18197.68 228.45

12.86 4.762,896.63 3,270.71

Less: Transferred to expenditure during construction period (net)-Note 28 60.38 53.35Transferred to development of coal mines 7.16 8.30Transferred to deferred foreign currency fluctuation asset/liability 51.65 27.90

Total# 2,777.44 3,181.16

Sale of scrapLiquidated damages recovered

Net gain on sale of current investments

For the year ended

Interest from

Mutual funds

Others

Income tax refunds

Long-term investments - Government securities (8.5% tax free bonds)

Loan to employees

Deposits with banks / Reserve Bank of India

Profit on redemption of current investments

Miscellaneous income includes income from township recoveries and receipts towards insurance claims.

Others

Contractors


Less : Refundable to customers

Dividend fromLong-term investments in Joint ventures

Loan to state government in settlement of dues from customers (8.5% tax free)



Profit on disposal of fixed assetsMiscellaneous income

Surcharge received from customersHire charges for equipmentNet gain in foreign currency transactions & translations

F-154


` Crore31.03.2014 31.03.2013

3,556.61 3,549.75 1,013.77 566.81

466.36 373.11

5,036.74 4,489.67 245.73 197.62

21.21 6.94 41.10 34.31

672.75 643.58

4,055.95 3,607.22

a)

b)

c)

24. Employee benefits expense

For the year ended

Salaries and wagesContribution to provident and other funds


Staff welfare expenses

Salary and wages include special allowance paid by the Company to eligible employees serving in difficult and farflung areas w.e.f. 26th November 2008. As per the Office Memorandum dated 26th November 2008 of DPE relating torevision of pay scales w.e.f. 1st January 2007, special allowance can be paid to such employees upto 10% of basic payas approved by concerned administrative ministry. In line with the office memorandum dated 22nd June 2010 of DPE,Board of Directors has approved the Special Allowance (Difficult and Far Flung Areas) to eligible employees. Theapproval of MOP for the same is awaited.

During the year, a defined contribution pension scheme of the Company has been implemented effective from 1st

January 2007. Employee benefits expense for the year include ` 346.56 crore as additional contribution for the periodfrom 1st January 2007 to 31st March 2013.

Disclosures required by AS 15 in respect of provision made towards various employee benefits are made in Note 40.

Transferred to fly ash utilisation fundTransferred to development of coal mines


Total #

Transferred to expenditure during construction period (net)- Note 28

F-155


` CroreFor the year ended 31.03.2014 31.03.2013

961.67 900.87253.96 235.33

4,460.84 3,833.620.05 0.16

521.77 345.914.46 21.01

26.86 73.226,229.61 5,410.12

2.34 2.3833.97 40.1916.41 36.24

0.01 23.871.07 6.05

85.39 27.3910.60 0.37

4.76 2.91154.55 139.40

- (350.21)

6,384.16 5,199.31Less: Transferred to expenditure during construction period (net)-Note 28 3,103.05 2,672.25

Transferred to development of coal mines 78.04 46.52Total# 3,203.07 2,480.54


Foreign currency bonds/notes


Exchange differences regarded as an adjustment to interest costs

Others

Foreign currency bonds/notes expensesUp-front fee

Guarantee feeManagement/arrangers fee

Insurance premium on foreign currency loansBond issue expenses

25. Finance costs

Interest onBonds

Others

Bonds servicing & public deposit expenses

Foreign currency term loansRupee term loansPublic deposits

Cash credit

F-156


26. Generation, administration & other expenses` Crore

31.03.2014 31.03.2013

340.33 204.3120.47 18.88

319.86 185.43471.59 508.16

52.02 49.9040.35 37.16

8.07 7.8432.28 29.32

146.11 42.41

197.57 181.082,024.64 1,924.26

133.31 113.35130.75 111.61

59.80 5.7242.44 38.1138.58 35.82

29.67 26.053.30 1.60

26.37 24.4547.90 48.82

214.27 198.8233.85 24.52

3.32 3.1130.53 21.41

3.64 3.2915.37 13.92

406.69 357.7915.64 15.09

24.14 21.262.88 2.75

21.26 18.5110.00 9.41

3.22 3.47104.00 86.96

0.93 0.39103.07 86.57

0.22 0.1411.92 10.93

- 0.0411.92 10.89

0.47 0.353.02 2.72

159.25 41.14Professional charges and consultancy fees

Ash utilisation & marketing expensesLess: Sale of ash products

Directors sitting feeBooks and periodicals

Community development and welfare expensesLess: Grants-in-aid

Entertainment expensesExpenses for guest houseLess:Recoveries

Education expensesBrokerage & commission

For the year ended

Power charges

Rent

Buildings

Load dispatch centre charges

Less: Recovered from contractors & employees

Water chargesStores consumed

Less:Recoveries


Donation

OthersPlant & machinery

Insurance

Rates and taxesInterest to customers

Tender expensesTravelling expenses

Water cess & environment protection cess

Advertisement and publicity

Training & recruitment expensesLess: Receipts

Communication expenses

Security expenses

Less: Receipt from sale of tenders

Payment to auditors

F-157


26. Generation, administration & other expenses` Crore

31.03.2014 31.03.2013For the year ended32.53 28.3418.48 15.3414.94 13.70

3.41 8.7875.47 63.22

590.61 579.811.54 0.608.43 4.90

22.57 6.1126.46 22.7312.74 13.2110.86 14.18

8.78 8.5061.72 54.27

2.33 0.143.91 4.12

75.51 62.255,692.08 4,982.16

312.03 285.8323.67 11.27

129.63 13.62 6.84 2.30 505.67 395.58

4,714.24 4,273.56Provisions for

Tariff adjustments 122.96 166.35Doubtful loans, advances and claims 1.84 0.09Shortage in stores 1.34 2.01Obsolescence in stores 10.36 4.67Shortage in construction stores 1.12 0.39Unserviceable capital works 6.63 49.89

7.36 5.085.44 0.272.15 7.95

Others 1.34 35.63160.54 272.33

4,874.78 4,545.89


b) CERC Regulations provides that where after the truing-up, the tariff recovered is more than the tariff approved by theCommission, the generating Company shall pay to the beneficiaries the over recovered amount along-with simpleinterest. Accordingly, the interest payable to the beneficiaries amounting to ` 59.37 crore (previous year ` 5.72 crore)has been accounted and disclosed as 'Interest to customers'.


Unfinished minimum work programme for oil and gas exploration


Total #

Arbitration casesShortage in fixed assets

Net loss in foreign currency transactions & translations

Transferred to expenditure during construction period(net) - Note 28

Transferred to development of coal minesTransferred to deferred foreign currency fluctuation asset/liability

Stores written offSurvey & investigation expenses written offLoss on disposal/write-off of fixed assets

Miscellaneous expenses

Transferred to fly ash utilisation fund

Horticulture expensesHire charges of helicopter/aircraftHire charges of construction equipmentsTransport vehicle running expenses

Printing and stationeryOil & gas exploration expenses

Rebate to customersReimbursement of L.C.charges on sales realisationBank charges

Hiring of Vehicles

Legal expensesEDP hire and other charges

F-158


27. Prior period items (Net)` Crore

31.03.2014 31.03.2013

0.41 0.060.96 8.581.37 8.64

Expenditure(0.94) (5.13)

- (12.00)- (7.91)

3.73 3.93

1.35 0.777.90 (7.19)

12.04 (27.53)Net Expenditure/(Revenue) 10.67 (36.17)Less: Transferred to expenditure during construction period (net)-Note 28 (1.21) (3.11)

- 0.720.03 -

11.85 (33.78)

Repairs and maintenance


Generation, administration and other expenses

Employee benefits expense

Interest

Depreciation and amortisation

For the year ended

RevenueSales

Finance costs

Others

Transferred to deferred foreign currency fluctuation asset/liability

# Includes (-) ` 0.99 crore (previous year ` 1.25 crore) share of jointly controlled entities.

Transferred to development of coal mines

Others

Total #

F-159


28. Expenditure during construction period (net) ` Crore


A. Employee benefits expense Salaries and wages 509.64 561.24 Contribution to provident and other funds 118.89 45.45 Staff welfare expenses 44.22 36.89Total (A) 672.75 643.58

B. Finance costs Interest on

Bonds 426.37 390.47 Foreign currency term loans 107.68 94.88 Rupee term loans 2,146.12 2,032.61 Foreign currency bonds/notes 284.19 222.88 Others 22.92 20.19Other borrowing costs Foreign currency bonds/notes expenses 1.07 5.54

Management/arrangers/upfront fee 16.41 60.11 Insurance premium on foreign currency loans 85.39 27.39 Others 12.90 3.43

- (185.25)Total (B) 3,103.05 2,672.25


D. Generation, administration & other expenses Power charges 247.61 128.17 Less: Recovered from contractors & employees 2.22 1.92

245.39 126.25 Water charges 1.76 11.19 Rent 7.58 5.85 Repairs & maintenance

Buildings 7.86 9.25 Plant and machinery 3.68 0.97 Others 30.76 28.55

42.30 38.77 Insurance 1.67 2.26 Rates and taxes 2.94 1.39 Communication expenses 6.85 7.61 Travelling expenses 42.77 40.49 Tender expenses 7.77 7.42 Less: Income from sale of tenders 0.01 0.10

7.76 7.32

Exchange differences regarded as an adjustment to interest costs

F-160


28. Expenditure during construction period (net) Crore


Payment to auditors 0.06 0.07 Advertisement and publicity 2.70 1.73 Security expenses 58.07 58.84 Entertainment expenses 2.95 2.77 Guest house expenses 5.24 5.33 Books and periodicals 0.88 0.93 Professional charges and consultancy fee 9.35 9.95 Legal expenses 6.06 5.55 EDP hire and other charges 1.54 1.54 Printing and stationery 1.84 1.61 Miscellaneous expenses 57.96 66.13Total (D) 505.67 395.58

E. Less: Other income Hire charges for equipment 2.99 3.76

Sale of scrap 0.33 1.30 Interest from contractors 41.25 28.10 Interest others 3.79 6.32

Miscellaneous income 12.02 13.87Total (E) 60.38 53.35

F. Prior period items (net) (1.21) (3.11)

Grand total (A+B+C+D-E+F) # 4,493.44 * 3,696.32



F-161

29.

30.

31.

A.



iii) The consolidated financial statements are prepared using uniform accounting policies for liketransactions and other events in similar circumstances and are presented to the extent possible, in thesame manner as the Company’s separate financial statements except as otherwise stated in the notesto the accounts.

Amount in the financial statements are presented in ` crore (upto two decimals) except for per share dataand as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosedseparately.

i) The financial statements of the Subsidiary Companies and Joint Ventures in the consolidation aredrawn up to the same reporting date as of the Company for the purpose of consolidation.

v) Minority interest in the net assets of consolidated subsidiaries consist of the amount of equityattributable to the minority shareholders.

Previous year figures have been regrouped /rearranged wherever considered necessary.

i) The financial statements of the Company and its subsidiaries are combined on a line by line basisby adding together of the like items of assets, liabilities, income and expenses after eliminating intra-group balances, intra-group transactions, unrealised profits or losses and minority interest have beenseparately disclosed.

BASIS OF CONSOLIDATION

ii) The consolidated financial statements include the interest of the Company in joint ventures, whichhas been accounted for using the proportionate consolidation method of accounting and reportingwhereby the Company’ s share of each asset, liability, income and expense of a jointly controlledentity is considered as a separate line item.

The consolidated financial statements relate to NTPC Ltd. (the Company), its Subsidiaries andinterest in Joint Ventures, together referred to as 'Group'.


ii) The consolidated financial statements have been prepared in accordance with AccountingStandard (AS) 21 - ‘ Consolidated Financial Statements ’ and Accounting Standard (AS) 27 – ‘Financial Reporting of Interest in Joint Ventures’ of Companies (Accounting Standards) Rules, 2006and generally accepted accounting principles.

iv)The difference between the cost of investment and the share of net assets at the time of acquisitionof shares in the subsidiaries and joint ventures is identified in the financial statements as goodwill orcapital reserve, as the case may be.

F-162

B.

31.03.2014 31.03.2013Subsidiary Companies:

100.00 100.00

- 100.00 100.00 100.00 65.00 65.00

Joint Venture Companies:

31.03.2014 31.03.2013A. Incorporated in India1. Utility Powertech Ltd. 50.00 50.00

2. NTPC - Alstom Power Services Private Ltd. 50.00 50.00

3. NTPC-SAIL Power Company Private Ltd. 50.00 50.00

4. NTPC-Tamilnadu Energy Company Ltd. 50.00 50.00

5. Ratnagiri Gas & Power Private Ltd. * 32.86 33.41

6. Aravali Power Company Private Ltd. 50.00 50.00

7. NTPC-SCCL Global Ventures Private Ltd.* 50.00 50.00

8. Meja Urja Nigam Private Ltd. 50.00 50.00

9. NTPC - BHEL Power Projects Private Ltd.* 50.00 50.00

10. BF - NTPC Energy Systems Ltd.* 49.00 49.00

50.00 50.00

16.67 16.67

14.28 14.28

20.00 20.00

15. Transformers & Electricals Kerala Ltd.* 44.60 44.60

16. Energy Efficiency Services Ltd. * 25.00 25.00

17. CIL NTPC Urja Private Ltd.* 50.00 50.00

18. Anushakti Vidyut Nigam Ltd. 49.00 49.00

19. Pan-Asian Renewables Private Ltd.* 50.00 50.00B. Incorporated outside India

50.00 50.00

50.00 50.00


3. NTPC Vidyut Vyapar Nigam Ltd.*4. Kanti Bijlee Utpadan Nigam Ltd.

1.NTPC Electric Supply Company Ltd.(including its 50% interest inKINESCO Power & Utilities Private Ltd. a joint venture withKINFRA, a statutory body of Government of Kerala)

74.00 74.00

14. National High Power Test Laboratory Private Ltd.*

Name of the Company

The Subsidiaries and Joint Venture Companies considered in the financial statements are as follows:

12. National Power Exchange Ltd.* (refer note below)$$

13. International Coal Ventures Private. Ltd.* (refer note below)$$$


1. Trincomalee Power Company Ltd.* (incorporated in Srilanka)

2. NTPC Hydro Ltd. (refer note below)$

5. Bhartiya Rail Bijlee Company Ltd.

2. Bangladesh -India Friendship Power Company Private Ltd.*

(incorporated in Bangladesh)

11. Nabinagar Power Generating Company Private Ltd.

F-163

C. i)

Item 2013-14(Un-audited)

2012-13(Un-audited)

Expenses 2.94 2.28Assets 1.89 0.06Liabilities 2.96 1.43Capital Commitments (Unfinished MWP) 65.76 91.49

Based on the un-audited statement of the accounts for the above blocks forwarded by M/s Oil &Natural Gas Corporation Ltd. (ONGC), the operator, the Company’s share in respect of assets andliabilities as at 31st March 2014 and expenditure for the year are given below:

$$ The Board of Directors of NTPC Limited in its meeting held on 7th November 2012 has accordedin principle approval for withdrawal from National Power Exchange Ltd. (NPEX) (a joint venture ofthe Company). In the meeting of Group of Promoters (GOP) held on 21st March 2014, GOPrecommended for voluntary winding of NPEX and the same has been adopted by the Board of NPEXin its meeting held on 21st March 2014. Winding up of the Company is yet to take place.

` Crore

$$$ The Board of Directors of NTPC Limited in its meeting held on 27th January 2012 has accorded inprinciple approval for withdrawal from International Coal Ventures Private Limited (a joint ventureof the Company). Cabinet approval for the same is awaited, subsequent to which, the process ofwithdrawal shall commence.

* The financial statements are un-audited and certifed by the management and have been consideredfor Consolidated Financial Statements of the Group. The figures appearing in their respectivefinancial statements may change upon completion of their audit.

The Company along with some public sector undertakings has entered into Production SharingContracts (PSCs) with GOI for three exploration blocks namely KG-OSN-2009/1, KG-OSN-2009/4and AN-DWN-2009/13 under VIII round of New Exploration Licensing Policy (NELP VIII) with10% participating interest (PI) in each of the blocks.

$ Ministry of Corporate Affairs (MCA) has accorded approval for the Scheme of Amalgamation ofNTPC Hydro Ltd. (NHL), a wholly owned subsidiary of NTPC Ltd. engaged in the business ofsetting up small hydro power projects, with NTPC Ltd. effective from 18th December 2013. As perthe Scheme and order of MCA, all assets and liabilities of NHL have been transferred to and vestedin the Company w.e.f. 1st April 2013. The Company followed Pooling of Interests Method to reflectthe amalgamation. Consequent to the amalgamation, the shares of NHL held by the Company werecancelled and all assets and liabilities of NHL became the assets and liabilities of the Company.Since NHL was a wholly owned subsidiary of the Company, no issue of shares or payment towardspurchase consideration was made and no goodwill or capital reserve was recognised onamalgamation.

F-164

ii)

2013-14 2012-13(Un-audited) (Un-audited)

Expenses 0.01 0.22Assets 14.47 14.64Liabilities 2.32 2.32Contingent liabilities 50.71 41.42

D.

In case of AN-DWN-2009/13, Gujarat State Petroleum Corporation (GSPC) has submitted notice forwithdrawal from the block subsequent to completion of MWP and ONGC has decided to acquire10% PI of GSPC.

The company is of the view that the provisions of Accounting Standard (AS) 18 ‘ Related PartyDisclosures’ and AS 27- ‘Financial Reporting of Interests in Joint Ventures’ are not applicable to theinvestment made in PTC India Ltd. and the same is not included in the consolidated financialstatements.

The exploration activities in block KG-OSN-2009/4 were suspended w.e.f. 11.01.2012 due to non-clearance by the Ministry of Defence, GOI. Subsequently, DGH vide letter dated 29th April 2013 hasinformed ONGC that the block is cleared conditionally wherein block area is segregated between NoGo zone, High-risk zone and Permitted zone. As the permitted area is only 38% of the total blockarea, the consortium has submitted proposal to DGH for downward revision of MWP of initialexploration period.

Exploration activities in the block AA-ONN-2003/2 were abandoned in January 2011 due tounforeseen geological conditions & withdrawal of the operator. Attempts to reconstitute theconsortium to accomplish the residual exploratory activities did not yield result. In the meanwhile,Ministry of Petroleum & Natural Gas demanded in January 2011 the cost of unfinished minimumwork programme from the consortium with NTPC’s share being USD 7.516 million. During the yearprovision in this respect has been updated to ` 53.64 crore from ` 46.27 crore along with interest inthe previous year. The Company has sought waiver of the claim citing force majeure conditions atsite leading to discontinuation of exploratory activities.

Item

The Company has accounted for expenditure of ` 0.01 crore for the year 2013-14 towards theestablishment expenses of M/s Geopetrol International, the operator to complete the winding upactivities of the Block. The Company’s share in the assets and liabilities as at 31st March 2014 andexpenditure for the year is as under:

` Crore

F-165

32. a)

b)

33.

34.

35.

36.

Some of the balances of trade/other payables and loans and advances are subject to confirmation/reconciliation. Adjustments, ifany, will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have amaterial impact.

In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realisation in theordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

The levy of transit fee/entry tax on supplies of fuel to some of the power stations has been paid under protest as the matters are subjudice at various courts. In case the Company gets refund/demand from fuel suppliers/tax authorities on settlement of these cases, thesame will be passed on to respective beneficiaries.

NTPC Vidyut Vyapar Nigam Ltd. (NVVN) inter alia is engaged in sale of fly ash & cenosphere which are given by the company freeof cost. Pursuant to the gazette notification D.O.S.O. 2804(E) dated 3rd November 2009, issued by the Ministry of Environment andForest (MOEF) GOI, the NVVN has created fly ash utilisation fund and a sum of ` 91.30 crore (previous year ` 107.96 crore) hasbeen credited to the fund during the year after netting of related/allocable cost of ` 48.27 crore (previous year ` 20.60 crore) fromthe sale proceeds.

Due to variation in the Gross Calorific Value (GCV) of coal supplied by coal companies and received at power stations, theCompany w.e.f. October/November 2012 released payments on the basis of GCV measured at station end and the difference betweenthe amount billed by the coal companies and the amounts admitted by the Company (“disputed billed amount”) were disclosed ascontingent liability with corresponding possible reimbursements from the beneficiaries. The issue was taken up with the coalcompanies directly and through the Ministry of Power and Ministry of Coal, Govt. of India for resolution. This resulted inincorporation of a provision for “Third party sample collection, preparation, testing and analysis,” at the loading end in place of jointsampling in the Coal Supply Agreement (CSA), 2012 and amendment to CSA, 2009 which have since been signed with subsidiariesof Coal India Ltd.

Based on the advice of Government of India, Board of Directors approved the modalities for extrapolation of the third party sampleanalysis results for the three month period starting October/November 2013 to the supplies during the past period fromOctober/November 2012 till start of third party sampling. On this basis, settlement with some of the CIL subsidiaries has beenreached and matter has been taken up with other CIL subsidiaries for early resolution. Following the principles approved by theBoard, against the disputed billed amount of ` 4,102.87 crore, during the year the Company paid ` 1,438.69 crore and provided `

1,440.39 crore. In respect of the balance disputed billed amount of ` 1,223.79 crore as at 31st March 2014, taking into accountsettlement already reached with some of the CIL Subsidiaries, an amount of `1,055.14 crore (previous year ` 2,531.10 crore) hasbeen estimated as contingent liability with corresponding possible reimbursements from the beneficiaries {Refer Note 50 (a) (iii)}and remaining amount of ` 168.65 crore is considered as settled. Sales corresponding to variable charges recoverable for the amountspaid/provided as above have been recognized.

The environmental clearance ('clearance') granted by the Ministry of Environment and Forest, Government of India (MoEF) for oneof the Company’s projects was challenged before the National Green Tribunal (NGT). The NGT disposed the appeal, inter alia,directing that the order of clearance be remanded to the MOEF to pass an order granting or declining clearance to the projectproponent afresh in accordance with the law and the judgment of the NGT and for referring the matter to the Expert AppraisalCommittee ('Committee') for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGTalso directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to theproject during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Companyfiled an appeal challenging the NGT order before the Hon’ble Supreme Court of India which stayed the order of the NGT and thematter is sub judice. Aggregate cost incurred on the project upto 31st March 2014 is ` 4,455.73 crore (previous year ` 1,691.63crore).

F-166

37.

a)

b)

c)

d)

e)

f)

g)

38.

39.

A.

31.03.2014 31.03.2013 5,463.94 4,755.00 5,515.53 4,812.77

Policy S "Taxes on Income" has been added for improved disclosures.

Disclosure as per Accounting Standard - 15 on 'Employee Benefits'General description of various employee benefit schemes are as under:

Disclosure as per Accounting Standard - 12 on 'Accounting for Government Grants'Revenue grants recognised during the year is ` 0.93 crore (previous year ` 0.39 crore).

40.

Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds inpermitted securities. Contribution to family pension scheme is paid to the appropriate authorities. The contribution of ` 238.30crore (previous year ` 213.69 crore) to the funds for the year is recognised as expense and is charged to the Statement of Profitand Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return to themembers as specified by GOI. As per report of the actuary, overall interest earnings and cumulative surplus is more than thestatutory interest payment requirement. Hence, no further provision is considered necessary. The details of fair value of planassets and obligitions are as under:

Provident Fund

i) The amount of exchange differences (net) debited to the Statement of Profit & Loss is ` 15.73 crore (previous year debit of` 3.59 crore).ii) The amount of exchange differences (net) debited to the carrying amount of Fixed Assets is ` 1,882.74 crore (previous yeardebit of ` 1,056.01 crore).

` CroreParticularsObligitions at the end of the yearFair value of plan assets at the end of the year

Disclosure as per Accounting Standard - 11 on 'Effects of Changes in Foreign Exchange Rates'The effect of foreign exchange fluctuation during the year is as under:

There is no impact on the accounts due to the above changes.

Disclosure as per Accounting Standard - 1 on 'Disclosure of Accounting Policies'During the year, following changes in accounting policies have been made:

Policy A “Basis of Preparation ” has been amended to reflect that the financial statements have been prepared inter alia, inaccordance with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs and the CompaniesAct, 2013 (to the extent notified and applicable).Accounting of capital expenditure on assets not owned by the company for community development is disclosed in accountingpolicy D.4 instead of in M.a.10 for better presentation.Consequent to the revised guidance note on 'Accounting for Oil & Gas Producing Activities' issued by ICAI becoming effectivefrom 1st April 2013, the policy to charge off exploratory wells-in-progress which have been found dry or not planned to bedeveloped after two years from the date of completion of drilling has been modified and henceforth, such expenditure shall becharged off as and when the wells are determined to be dry/abandoned.

Policy M.a.11 has been modified to state that leasehold land and buildings relating to generation of electricity business are fullyamortised over the lease period or life of the related plant whichever is lower, to cover both hydro and thermal power plants.

Policy H.5 and L.5 regarding accounting of derivative contracts and recovery of cost of hedging from the beneficiaries havebeen added consequent upon entering into derivative transactions for hedging as per the exchange risk management policy in thecurrent year.In Policy N.1, contribution to pension fund has been included as an employee benefit following the implementation of acontributory pension scheme in the Company in the current year.

F-167

B.

C.

D.

E.

The above mentioned schemes (C, D and E) are unfunded and are recognised on the basis of actuarial valuation.The summarised position of various defined benefits recognised in the Statement of Profit and Loss, Balance Sheet are as under:

(Figures given in { } are for previous year)

LeaveThe Company provides for earned leave benefit (including compensated absences) and half-pay leave to the employees of theCompany which accrue annually at 30 days and 20 days respectively. Earned leave is en-cashable while in service. Half-payleaves (HPL) are en-cashable only on separation beyond the age of 50 years up to the maximum of 240 days (HPL). However,total amount of leave that can be encashed on superannuation shall be restricted to 300 days and no commutation of half-payleave shall be permissible. The liability for the same is recognised on the basis of actuarial valuation.

(a) The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or moreis entitled to get gratuity at 15 days salary (15/26 X last drawn basic salary plus dearness allowance) for each completed year ofservice subject to a maximum of ` 0.10 crore on superannuation, resignation, termination, disablement or on death.

(b) The Company has pension schemes at two of its stations in respect of employees taken over from erstwhile state governmentpower utilities.The existing schemes stated at (a) and one of the power stations at (b) above are funded by the Company and are managed byseparate trusts. The liability for gratuity and the pension schemes as above is recognised on the basis of actuarial valuation. TheCompany’s best estimate of the contribution towards gratuity/pension for the financial year 2014-15 is 46.52 crore.

(c) During the year, a defined contribution pension scheme of the Company has been implemented effective from 1st January2007, for its employees. The scheme is administered through a separate trust. The obligation of the Company is to contribute tothe trust to the extent of amount not exceeding 30% of Basic Pay and dearness allowance less employer's contribution towardsprovident fund, gratuity, PRMF or any other retirement benefits.

Gratuity & Pension

The Company has Post-Retirement Medical Facility (PRMF), under which a retired employee and his / her spouse are providedmedical facilities in the Company hospitals/empanelled hospitals. They can also avail treatment as out-patient subject to aceiling fixed by the Company. The liability for the same is recognised on the basis of actuarial valuation.

Terminal BenefitsTerminal benefits include baggage allowance for settlement at home town for employees & dependents and farewell gift to thesuperannuating employees. Further, the Company also provides for pension in respect of employees taken over from erstwhileState Government Power Utility at another station referred at B(b) above. The liability for the same is recognised on the basis ofactuarial valuation.

Post-Retirement Medical Facility (PRMF)

F-168

Gratuity &Pension

70.40 15.60 55.04 6.14{66.42} {13.91} {51.14} {5.61}

- - - -{-} {-} {-} {-}

115.60 36.24 68.93 21.81{103.92} {29.69} {59.70} {18.36}

(100.89) - - -{(93.42)} {-} {-} {-}

(18.74) 73.97 181.89 26.49{48.29} {51.09} {185.46} {30.21}

66.37 125.81 305.86 54.44{125.21} {94.69} {296.30} {54.18}

ii)

Gratuity &Pension

1,531.56 562.04 942.20 312.98{1,445.02} {452.94} {861.73} {272.40}

1,391.67 - - -{1,263.83} {-} {-} {-}

139.89 562.04 942.20 312.98{181.19} {452.94} {861.73} {272.40}

iii)

Gratuity &Pension

1,445.04 452.95 861.74 272.39{1,298.60} {371.11} {746.01} {229.83}

115.60 36.24 68.93 21.81{103.92} {29.69} {59.70} {18.36}

70.40 15.60 55.04 6.14{66.42} {13.91} {51.14} {5.61}(95.27) (16.72) (225.40) (13.84)

{(81.65)} {(12.86)} {(180.58)} {(11.61)}(4.21) 73.97 181.89 26.48

{57.73} {51.09} {185.46} {30.21}1,531.56 562.04 942.20 312.98

{1,445.02} {452.94} {861.73} {272.40}

Benefits paid




Interest cost




Net liability recognised in the Balance Sheet

Net actuarial (gain)/ loss on obligation

Changes in the present value of the defined benefit obligations:` Crore

TerminalBenefits

Expenses recognised in Statement of Profit & Loss

Net actuarial (gain)/ loss recognised in the year


Expenses recognised in the Statement of Profit & Loss

` CrorePRMF Leave

Past Service Cost

i)

Interest cost on benefit obligation

Present value of the defined benefit obligation as at 31.03.2014

` Crore


The amount recognised in the Balance Sheet

F-169

iv)

Gratuity &Pension

1263.85 - - -{1,169.90} {-} {-} {-}

100.89 - - -{93.42} {-} {-} {-}102.08 - - -

{68.05} {-} {-} {-} (89.67) - - -

{(76.98)} {-} {-} {-}14.52 - - -

{9.44} {-} {-} {-}1,391.67 - - -

{1,263.83} {-} {-} {-}

` CroreIncrease by Decrease by

12.29 (5.62) 86.96 (71.67)

F. Other Employee Benefits

41.Borrowing costs capitalised during the year are ` 3,158.17 crore (previous year ` 2,718.48 crore).Disclosure as per Accounting Standard - 16 on 'Borrowing Costs'

Provision for Long Service Award and Family Economic Rehabilitation Scheme amounting to ` 3.48 crore (previous year `3.39 crore) for the year have been made on the basis of actuarial valuation at the year end and debited to the Statement of Profit& Loss.

Actuarial gain / (loss)


v) The effect of one percentage point increase/decrease in the medical cost of PRMF will be as under:

Particulars

Service and Interest cost




Benefit paid

Contributions by employer

Present value of obligation

Changes in the fair value of plan assets:` Crore

F-170

42.

a)

b)

c)

CurrentYear

PreviousYear

CurrentYear

PreviousYear

Current Year PreviousYear

Segment revenueSale of energy/consultancy, projectmanagement and supervision fees *

75,703.99 67,470.22 2,801.37 3,277.53 78,505.36 70,747.75

Other income 785.69 1,710.14 81.43 37.57 867.12 1,747.71Exceptional items - 1,684.11 - (115.82) - 1,568.29Unallocated corporate and other income 2,326.62 2,783.79

Total 76,489.68 70,864.47 2,882.80 3,199.28 81,699.10 76,847.54

Segment result # 16,284.75 17,330.24 82.83 (54.48) 16,367.58 17,275.76Unallocated corporate interest and otherincome

2,326.62 2,783.79

Unallocated corporate expenses, interestand finance charges

4,208.44 3,448.60

Profit before tax 14,485.76 16,610.95Income tax (net) 3,082.36 4,024.73Profit after tax 11,403.40 12,586.22Other informationSegment assets 102,974.19 86,923.69 4,686.48 2,506.08 107,660.67 89,429.77Unallocated corporate and other assets 92,379.26 89,280.81Total assets 102,974.19 86,923.69 4,686.48 2,506.08 200,039.93 178,710.58Segment liabilities 15,931.93 12,652.39 2,439.74 2,167.99 18,371.67 14,820.38Unallocated corporate and otherliabilities

94,664.77 82,649.25

Total liabilities 15,931.93 12,652.39 2,439.74 2,167.99 113,036.44 97,469.63Depreciation (including prior period) 4,736.33 3,786.48 2.98 3.32 4,739.31 3,789.80Non-cash expenses other thandepreciation

137.62 169.63 7.37 5.08 144.99 174.71

Capital expenditure 25,474.76 23,494.47 807.09 615.17 26,281.85 24,109.64

d)

Business SegmentsThe Group's principal business is generation and sale of bulk power to State Power Utilities. Other business includesproviding consultancy, project management and supervision, oil and gas exploration and coal mining.

Segment Revenue and Expense

Segment information:Disclosure as per Accounting Standard - 17 on 'Segment Reporting'

Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to thesegments and common expenses allocated on a reasonable basis are considered as Segment Expenses.

(` Crore)Business Segments

# Generation segment result would have been ` 14,467.92 crore (previous year ` 15,842.30 crore) without including thesales related to earlier years.The operations of the Group are mainly carried out within the country and therefore, geographical segments areinapplicable.

Generation Others Total

Segment Assets and LiabilitiesSegment assets include all operating assets in respective segments comprising of net fixed assets and current assets,loans and advances. Construction work-in-progress, construction stores and advances are included in unallocatedcorporate and other assets. Segment liabilities include operating liabilities and provisions.

* Includes ` 1,816.83 crore (previous year ` 1,487.94 crore) for sales related to earlier years.

F-171

43.a)

b)


439.74 393.14 0.94 6.19 0.36 0.84

0.25 0.51 0.85 1.23 0.96 0.82 0.33 - 1.34 0.13

5.50 4.00 0.30 0.36

0.17 0.22 0.04 0.04 0.14 1.06

ii) Dividend Received:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.

iii) Amount recoverable for contracts for works/services received:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- National Power Exchange Ltd.

� Contracts for works/services for services received by the Company:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.

� Deputation of Employees:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- Trincomalee Power Company Ltd.

- Bangladesh-India Friendship Power Company Private Ltd.- Pan-Asian Renewables Private Ltd.

- National Power Exchange Ltd.

Shri A.K. Singhal Director (Finance)3

Shri B.P.Singh Director (Projects)4

1. W.e.f. 1st October 20132. W.e.f. 9th December 20133. Up to 8th October 20134. Superannuated on 30th September 2013

Transactions with the related parties at a (i) above are as follows:` Crore

Particulars

i) Transactions during the year

Shri N.N.Misra Director (Operations)

Shri A.K.Jha Director (Technical)

Shri U.P.Pani Director (Human Resources)

Shri S.C.Pandey Director (Projects)1

Shri K.Biswal Director (Finance)2

Related parties:i) Joint ventures:

Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National PowerExchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh -India FriendshipPower Company Private Ltd.

ii) Key Management Personnel:Shri Arup Roy Choudhury Chairman and Managing Director

Shri I.J. Kapoor Director (Commercial)

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures'

F-172

69.49 64.27 6.52 7.86

0.10 0.66 0.66 1.32 1.12 0.97 1.34 0.13

1.00 - 6.12 -

c)

31.03.2014 31.03.2013

0.52 0.54

0.59 0.45

0.52 0.44

0.56 0.26

0.37 0.02

0.21 -

0.10 -

0.58 0.52

0.64 0.55

- 0.38

- 0.43

4.09 3.59

iv) Amount payable for contracts for works/services received:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.

- Bangladesh -India Friendship Power Company Private Ltd.

The Company has received bank guarantees from Utility Powertech Ltd. for an amount of ` 6.36 crore (previous year `6.35 crore).

Remuneration to key management personnel for the year is ` 4.09 crore (previous year ` 3.59 crore) and amount of dues

outstanding to the Company as at 31st March 2014 are ` 0.03 crore (previous year ` 0.07 crore).

` CroreManagerial remuneration to Key management personnelShri Arup Roy Choudhury

Shri I.J. Kapoor

v) Amount recoverable on account of deputation of employees:- Utility Powertech Ltd.- NTPC-Alstom Power Services Private Ltd.- Trincomalee Power Company Ltd.- Bangladesh-India Friendship Power Company Private Ltd.

vi) Equity contributions made:- Pan-Asian Renewables Private Ltd.

Shri N.N.Misra

Shri A.K.Jha

Shri U.P.Pani

Shri S.C.Pandey

Shri K.Biswal

Shri.B.P.Singh

Shri A.K. Singhal

Shri D.K. Jain

Shri S.P.Singh

Total

F-173

44.

31.03.2014 31.3.2013

0.05 0.28 - 0.09 - - 0.05 0.37

0.05 0.26 - 0.07 - - 0.05 0.33

* 0.04

31.03.2014 31.3.2013

12.02 - 82.41 - 49.79 - 144.22 -

5.27 - 45.81 - 38.92 - 90.00 - 54.22 - 2.01 -

b)

· Later than five years Totalb) Present value of (a) above· Not later than one year· Later than one year and not later than five years· Later than five years Totalc) Finance charges (* `16,979/-)

(ii) The Company has entered into an agreement for coal movement through inland waterways transport. As per theagreement, the operator shall design, build, operate and maintain the unloading infrastructure and material handlingsystem ("facility"), and transfer the same to the Company after expiry of 7 years at ` 1/-. The facility shall be constructedin two phases of which Phase I has been completed and is under operation. Fair value of the entire facility is ` 90 croreand the assets and liability in respect of Phase-I have been recognised at ` 60 crore based on technical assessment. Theminimum lease payments shall start on completion of Phase-II of the facility. Amounts payable for the coal transportedthrough Phase-I of the facility are disclosed as contingent rent.

a) Finance leases

(i) The Group has taken on lease certain vehicles and has the option to purchase the vehicles as per terms of the leaseagreements, details of which are as under:

` Crore

a) Obligations towards minimum lease payments· Not later than one year· Later than one year and not later than five years

` Crore

· Later than five years Totalb) Present value of (a) above· Not later than one year· Later than one year and not later than five years· Later than five years Totalc) Finance chargesd) Contingent rent for the year

a) Obligations towards minimum lease payments· Not later than one year· Later than one year and not later than five years

Disclosure as per Accounting Standard - 19 on 'Leases'

The Company’s other significant leasing arrangements are in respect of operating leases of premises for residential use ofemployees, offices and guest houses/transit camps for a period of one to two years. These leasing arrangements areusually renewable on mutually agreed terms but are not non-cancellable. Note -24 - Employee benefits expense includes `73.11 crore (previous year ` 83.80 crore) towards lease payments (net of recoveries) in respect of premises for residentialuse of employees. Lease payments in respect of premises for offices and guest house/transit camps are included under ‘Rent’ in Note -26 – ‘Generation, administration and other expenses’. Further, the Company has taken a helicopter on wetlease basis for a period of eleven years and the amount of lease charges is included in ‘ Hire charges of helicopter /aircraft' (Note - 26).

Operating leases

F-174

45.

Current Year Previous Year 11,403.61 12,590.78 8,245,464,400 8,245,464,400 13.83 15.27

10/- 10/-

46.

47.

48.

Balance asat

01.04.2013

Additionsduring the

year

Paymentsduring the

year

Reversal /adjustments

during the yearBalance as at

31.03.2014

8.72 1.44 - 0.07 10.09

2,228.72 1,710.84 392.88 544.96 3,001.72

1,333.29 122.96 - 162.56 1,293.69

1.09 5.45 - 0.37 6.17

285.83 193.99 - 39.26 440.56

3,857.65 2,034.68 392.88 747.22 4,752.23

49.

31.03.2014 31.03.2013 31.03.2014 31.03.2013JPY 19.23 - 11.38 -

Foreign currency exposure

Provision for obligations incidental toland acquisitionProvision for tariff adjustment

Provision for shortage in fixed assetspending investigationOthers

Particulars

As required by Accounting Standard (AS) 28 ‘ Impairment of Assets ’ notified under the Companies (AccountingStandards) Rules, 2006, an assessment of impairment of assets was carried out and based on such assessment, there hasbeen no impairment loss during the year.

The derivative contracts entered into by the Company are for hedging currency and/or interest rate risk on foreigncurrency loans.

` crore

Particulars Currencies

Amount in ForeignCurrency (Crore) Amount (` Crore)

Currency Interest Rate Swap

Disclosure as per Accounting Standard - 29 on 'Provisions, Contingent Liabilities and Contingent Assets'

a) Hedged by a derivative instrumentThe derivative contracts outstanding as at 31st March 2014 are as under:

Total

Long Term Provisions (Note-8)Contractual Obligations


Group profit after tax used as numerator - ` croreWeighted average number of equity shares used as denominatorEarning per share (Basic and Diluted) - `

Research expenditure charged to revenue during the year is ` 98.52 crore (previous year ` 91.85 crore).

There is no MTM loss on the above contract as at 31st March 2014.

Disclosure as per Accounting Standard - 20 on 'Earnings Per Share'The elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:

Disclosure as per Accounting Standard - 28 on 'Impairment of Assets'

Disclosure as per Accounting Standard - 26 on 'Intangible Assets'

Nominal value per share - `

F-175

31.03.2014 31.03.2013 31.03.2014 31.03.2013USD 260.54 252.41 15,791.13 13,859.96JPY 4,560.37 4,904.08 2,697.46 2,872.81EURO 13.67 12.22 1,143.00 860.17USD 24.79 21.49 1,502.52 1,179.80EURO 11.33 9.83 947.64 691.99Others 92.17 35.76 74.67 23.98USD 0.02 0.01 1.33 0.78Others 0.84 0.50 0.54 0.30USD 125.02 105.15 7,577.46 5,773.61EURO 79.61 87.49 6,658.58 6,161.41Others 1,656.34 1,472.40 1,176.68 999.89

50. Contingent Liabilities:

(a)

(i) Capital Works

Currencies

Amount in ForeignCurrency (Crore)

Claims against the Group not acknowledged as debts in respect of:

Some of the contractors for supply and installation of equipments and execution of works at our projects have lodgedclaims on the Group for ` 4,290.45 crore (previous year ` 4,031.12 crore) seeking enhancement of the contract price,revision of work schedule with price escalation, compensation for the extended period of work, idle charges etc. Theseclaims are being contested by the respective companies as being not admissible in terms of the provisions of therespective contracts.

The Group is pursuing various options under the dispute resolution mechanism available in the contracts for settlement ofthese claims. It is not practicable to make a realistic estimate of the outflow of resources if any, for settlement of suchclaims pending resolution.

(ii) Land compensation cases

(iii) Fuel Suppliers

Further, an amount of ` 647.33 crore (previous year ` 368.67 crore) towards surface transportation charges, customsduty on service margin on imported coal etc. has been disputed by the Company.

In respect of land acquired for the projects, the erstwhile land owners have claimed higher compensation before variousauthorities/courts which are yet to be settled. Against such cases, contingent liability of ` 395.16 crore (previous year `748.99 crore) has been estimated.

Pending resolution of the issues with coal companies as disclosed in Note 33, the difference between the amount billed bythe coal companies and payment released by the company amounts to ` 1,055.14 crore (previous year ` 2,531.10 crore).

Borrowings, including interest accruedbut not due thereon.

Trade payables/deposits and retentionmonies

Trade receivables and Bank balances

Unexecuted amount of contractsremaining to be executed

Amount (` Crore)


Particulars

F-176

(iv) Others

(b)

(c) Others

51.

a)

b)

c)d)

52

Company’s commitment towards the minimum work programme in respect of oil exploration activity of Cambay Block(100% owned by the company) is ` 198.21 crore (USD 32.98 million) (previous year ` 183.45 crore, USD 33.73million).

Some of the Subsidiaries and Joint Venture Companies followed different accounting policies from that of the Companyand the impact of the same is not considered to be material. The proportion of the items to which different accountingpolicies have been followed are (a) Revenue: ` 2,412.72 crore (b) Depreciation: ` 1.86 crore.

Other contingent liabilities amount to ` 513.70 crore (previous year ` 376.57 crore).

Some of the beneficiaries have filed appeals against the tariff orders of the CERC. The amount of contingent liability inthis regard is not ascertainable.

In respect of claims made by various State/Central Government departments/Authorities towards building permission fee,penalty on diversion of agricultural land to non-agricultural use, nala tax, water royalty etc. and by others, contingentliability of ` 1,088.23 crore (previous year ` 862.81 crore) has been estimated.

Disputed Income Tax/Sales Tax/Excise matters pending before various Appellate Authorities amount to ` 2,595.87 crore(previous year ` 2,215.26 crore). Many of these matters were disposed off in favour of the Group but are disputed beforehigher authorities by the concerned departments. In such cases, the Group estimates possible reimbursement of ` 852.52crore (previous year ` 827.34 crore).

The contingent liabilities referred to in (i) above, include an amount of ` 994.83 crore (previous year ` 961.24 crore)relating to the hydro power project stated in Note 15 A (b) - Other non-current assets, for which Company envisagespossible reimbursement from GOI in full. In respect of balance claims included in (i) and in respect of the claimsmentioned at (ii) above, payments, if any, by the company on settlement of the claims would be eligible for inclusion inthe capital cost for the purpose of determination of tariff as per CERC Regulations subject to prudence check by theCERC. In case of (iii), the estimated possible reimbursement is by way of recovery through tariff as per Regulations, 2009is ` 1,694.00 crore (previous year ` 2,792.06 crore).

Disputed Income Tax/Sales Tax/Excise Matters

(v) Possible Reimbursement

The contingent liabilities disclosed above include ` 247.25 crore (previous year ` 118.75 crore) share of jointly controlledentitites.

Group's commitment in respect of lease agreements has been disclosed in Note 44.

Capital and other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2014 is` 76,636.90 crore (previous year ` 61,339.29 crore) which includes an amount of ` 9,905.90 crore (previous year `6,803.66 crore) in respect of jointly controlled entities.


F-177



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


(Ajay Gupta) (Monika Agrawal) (Pawan K.Goel)

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

M No.094155 M No.517358 M No.024042


(Neeraj Kumar Agarwal) (Abhinav Aggarwal) (G.Shankar)



These are the notes referred to in Balance Sheet and Statement of Profit & Loss


( A.K.Rastogi) (K.Biswal) (Dr. Arup Roy Choudhury)


F-178

THE ISSUER

NTPC LimitedNTPC Bhawan

SCOPE Complex7, Institutional Area

Lodi RoadNew Delhi 110 003

India

TRUSTEE

Citicorp Trustee Company LimitedCitigroup CentreCanada SquareCanary Wharf

London E14 5LB

PAYING AGENTAND TRANSFER AGENT

Citibank, N.A.1 North Wall Quay

Dublin 1Ireland

REGISTRAR

Citigroup Global Markets Deutschland AGReuterweg 16

60323 FrankfurtGermany

LEGAL ADVISERS

To the Dealers andthe Trustee as to English law

Allen & Overy9th Floor

Three Exchange SquareCentral

Hong Kong

To the Issuer as to Indian lawCyril Amarchand Mangaldas

Peninsula ChambersPeninsula Corporate ParkGanpatrao Kadam Marg

Lower ParelMumbai 400 013

India

SINGAPORE LISTING AGENT

Allen & Overy24 Raffles Place

#22-00 Clifford CentreSingapore 048621

DEALERS

Barclays Bank PLC5 The North Colonnade

Canary WharfLondon E14 4BBUnited Kingdom

Citigroup Global Markets LimitedCitigroup CentreCanada SquareCanary Wharf

London E14 5LBUnited Kingdom

Deutsche Bank AG, Singapore BranchOne Raffles Quay

#17-00 South TowerSingapore 048583

NTPC LIMITED

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