Neyveli Lignite Corporation

The Directors have great pleasure in presenting the 52nd Annual Report
 of your Company together with the Audited Accounts for the year ended
 31stMarch, 2008.
 
 Performance Highlights Physical Performance
 
 Overburden Removal
 
 > Overburden removal from all the mines of the Company for the year
 2007-08 at 1358.26 Lakh Cubic Metre (LM3) (previous year 1345.41 LM3)
 was the highest for any year since inception.
 
 Lignite Production
 
 > Lignite production for the Company as a whole during the year 2007-08
 at 215.86 Lakh Tonnes (LT) (previous year 210.14 LT) was the highest
 since inception.
 
 > Lignite production of 33.27 LT from Mine-IA during the year 2007-08
 has exceeded the installed capacity of 30.00 LT for the fourth year in
 succession.
 
 Power Generation
 
 > Power generation at 17456.89 Million Units (MU) (Gross) (previous
 year 15786.58 MU) during the year 2007-08 was the highest since
 inception.
 
 > Power generation from TPS-lr during the year 2007-08 was 10517.69 MU
 (previous year 8540.09 MU) was the highest since inception.
 
 > Power generation at 3267.66 MU (previous year 3264.96 MU) from TPS-I
 Expansion during the year 2007-08 was the highest since inception.
 
 > For the fourth year in a row, TPS-I Expn., has crossed 80% Plant Load
 Factor (PLF).
 
 Financial Performance
 
 > During the year under review, your Company recorded a sales turnover
 of Rs.2981.65 crore when compared to Rs.2108.11 crore achieved in the
 year 2006-07. The profit before tax for the year under review was
 Rs.1421.29 crore (previous year Rs.874.66 crore) while the profit after
 tax was Rs.1101.57 crore (previous year Rs.566.78 crore).
 
 As stated in the highlights of this report, the higher power generation
 during the year 2007-08 was mainly on account of higher lignite
 production from Mine-ll when
 
 compared to the previous year, which is also one of the reasons for
 registering higher sales turnover and corresponding profit, compared to
 the previous year.
 
 The details of profit earned for the financial year ended 31st March,
 2008 and appropriation of the same in comparison with the previous year
 ended 31st March, 2007 are as under:
 
                                          Rs. in crore
 
                                2007-2008  2006-2007
 
 Profit before tax               1421.29     874.66
 
 Tax provision                    319.72     307.88
 
 Prof it after tax               1101.57     566.78
 
 Appropriations:
 
 Transfer to
 
 Interest Differential
 Reserve                            4.15      19.55
 
 General Reserve                   90.00      30.00
 
 Interim Dividend paid            167.77       0.00
 
 Tax on Interim Dividend
 paid                              28.51       0.00
 
 Proposed Final Dividend          167.77     201.33
 
 Tax on proposed Final
 Dividend                          28.51      34.22
 
 Dividend
 
 Your Company during the month of February 2008 paid an Interim Dividend
 @10% for the financial year 2007-08.  The Board of Directors have
 recommended a final dividend @10% on the paid-up share capital of the
 Company. With this the total dividend for the financial year 2007-08
 aggregates to 20% against 12% dividend paid for the year ended 31st
 March, 2007. The total outgo on account of the dividend including
 Distribution Tax for the financial year 2007-08 will be Rs. 392.56
 crore, which works out to 35.64% on Profit After Tax (PAT).
 
 Segment-wise Performance
 
 Mines
 
 Mine-I (10.5 MTPA)
 
 During the year 2007-08, Overburden removal was 485.00 l_M3 (previous
 year 480.91 LM3).  Lignite excavation during the year was 87.82 LT
 (previous year 105.48 LT). The reason for decline in the lignite
 production was on account of unprecedented heavy rain in the months of
 July and Oct. 2007 and also on account of taking up of major repair
 works in 2 nos. of Specialised Mining Equipment.
 
 Mine-IA (3.0 MTPA)
 
 Overburden removal from this mine during the year 2007-08 was 217.12
 LM3 (previous year 237.07 LM3). Lignite excavation during the year was
 33.27 LT (previous year 38.04 LT) exceeding the installed capacity for
 the fourth year in succession.
 
 Mine-ll (10.5 MTPA)
 
 During the year 2007-08, Overburden removal was 541.50 LM3 (previous
 year 562.72 LM3) and the Lignite production during the year was 94.37
 LT (previous year 66.62 LT) registering a growth of 41.65%.
 
 Power Stations
 
 Thermal Power Station-I (600 MW)
 
 During the year 2007-08, 3671.54 MU (previous year 3981.53 MU) of power
 was generated and 2920.98 MU (previous year 3187.30 MU) was exported to
 Tamil Nadu Electricity Board. During the year 2007-08 the Station
 achieved a PLF of 69.66%. As reported in the last years Directors
 Report, this Power Plant has served for nearly 40 years, almost nearing
 its extended life. Because of its age and other factors, the plant was
 operated with restricted boiler parameters. Low operating plant load
 factor coupled with intermittent interruption of lignite supply from
 Mines due to excessive rainfall affected the power generation.  In view
 of the ageing of the plant, the Board of Directors, as reported
 earlier, have decided to taper down the generation from this plant
 between the years 2009 and 2014, depending upon the operating
 conditions of individual unit and to finally shut-down all the units in
 a phased manner. It has also been decided to set up a power plant with
 a capacity of 2x500 MW at Neyveli in order -to enhance the installed
 capacity for power generation at Neyveli.
 
 Thermal Power Station-I Expn. (420 MW)
 
 During the year 2007-08, the power generation was 3267.66 MU (previous
 year 3264.96 MU) and 2994.05 MU (previous year 2988.50 MU) was exported
 to the Southern Grid, which were the highest since inception. The
 Station achieved a PLF of 88.54% crossing the 80% mark for the fourth
 consecutive year.
 
 Thermal Power Station-II (1470 MW)
 
 Power generation during the year 2007-08 was 10517.69 MU (previous year
 8540.09 MU) registering a growth of 23.16%. The power exported to the
 Southern Grid from this plant was 8860.31 MU (previous year 7155.00
 MU).  This plant registered the highest generation for any financial
 year since inception. The Station achieved a PLF of 81.46% during the
 year under review as compared to 66.30% during the previous year ended
 31.03.2007.
 
 Productivity
 
 The output per man-shift during the year 2007-08 as compared with the
 previous year is as below:
 
 Product       Unit       2007-08   2006-07
 
 Lignite      Tonne       10.18       10.16   
 Power        Kw/hr       16369       15365   
 
 Status of Land Acquisition
 
 Your Company for the purpose of mining lignite acquires land through
 the District Administration. Acquisition of land for mining continues
 to be a critical issue, as the non-availability of required quantum of
 land affects the advancement of mine, thereby affecting the mine plan.
 However, your Company with the co-operation of the State Administration
 is actively pursuing the issue and an agreement has been reached
 between the land owners and the Company with regard to the payment of
 enhanced compensation for the current acquisition.  Such enhanced
 compensation is being paid through Lok-Adalat to the land displaced
 persons as a mutual settlement and so far enhanced compensation have
 been paid to land owners for about 343 Hectares of land and
 corresponding land is being formally handed over to the District
 Administration and the physical possession of the land by the Company
 is in progress.
 
 Capital Expenditure
 
 During the year 2007-08, an aggregate amount of Rs.1766.71 crore was
 spent towards plan outlay as against the RE 2007-08 target of Rs.1930
 crore.
 
 Sanctioned Projects
 
 Expansion Programme
 
 Your Company is presently implementing the Mine-ll Expn., (10.5 MTPAto
 15.0 MTPA) linked to TPS-II Expn, (2x250 MW) projects at Neyveli at an
 aggregate capital cost of Rs.4192.06 crore. Your Company is also
 implementing Barsingsar Mine (2.1 MTPA)-cum-Power Project (2x125 MW) at
 Barsingsar in Rajasthan at an aggregate capital cost of Rs.1368.25
 crore.
 
 The status of implementation of the above projects is as under:-
 
 Mine-H Expansion (10.5 MTPA to 15.0 MTPA)
 
 Supplies and erection works for Main Mining Equipment are in progress.
 Erection works of one 1400 L BWE, one 20000 TPH Spreader, three 11000
 TPH MTC, one 20000 TPH CrawleV Mounted Tripper Car and 400 KV
 Sub-station were completed during the year 2007-08. The new Overburden
 system has been commissioned during the year under review. As per the
 Government of India (GOI) sanction, the project is scheduled to be
 commissioned by June 2009. However, on review of the present progress
 of the project it is envisaged that there is a likely delay of about 4
 months for its commissioning. This is mainly due to delay in supply
 and erection of major components of mining equipment.  The
 supply/erection activities are being reviewed and monitored
 periodically at various levels for early commissioning.  The cumulative
 expenditure incurred upto 31st March, 2008 is Rs.1189.78 crore.
 
 TPS -II Expansion (2x250 MW)
 
 Erection works of boiler, turbine and balance of plant are in progress.
 Boiler drum lifting for Unit-I was completed during the year under
 review. As per the GOI sanction, Unit-I of the project is scheduled to
 be commissioned by February 2009 and Unit-ll by June 2009. Based on the
 present status of the progress of the project, it is envisaged that
 there is a likely delay of about 9 months for commissioning the above
 units, the main reason being delay in start of civil works and
 consequent erection works by BHEL, the contractor of the Main Plant
 Package.  The cumulative expenditure incurred upto 31st March, 2008 is
 Rs.1154.95 crore.
 
 Revised Cost Estimate has been arrived at Rs.4749.50 crore for the
 Mine-ll Expn., and TPS-II Expn., project and the same has been
 submitted to GOI for approval.
 
 Barsingsar Mine Project (2 .1 MTPA)
 
 During the year 2007-08, Overburden removal, which has been outsourced,
 was 114.64 LM3 as against 64.71 LM3 in the previous year.
 
 A small portion of incidental lignite production of 40000 Tonnes has
 been made since Dec. 2007 and till 31st March, 2008. It is also
 proposed to out-source the lignite production. The mine is scheduled to
 attain full capacity in the 54th month from the date of sanction and
 the commissioning is expected to be as per schedule viz., June 2009.
 The cumulative expenditure incurred upto 31st March, 2008 is Rs.140.67
 crore.
 
 Barsingsar Thermal Power Project (2x125 MW)
 
 Erection works are in progress in respect of boiler, turbine, lignite
 handling system, switch yard transformer and DM & Water Treatment
 Plant. Drum lifting of both the units has been completed during the
 year 2007-08. Water carrying system was commissioned in June 2008.
 Engineering Co-ordination meetings are held with the contractors
 periodically to review and speed up the project completion. As per the
 GOI sanction, Unit-I of the project is scheduled to be commissioned by
 Dec.2008 and Unit-ll by June 2009. Project execution is delayed due to
 delay in supply for erection of main plant package and other few
 packages.  However, the project is being closely monitored for its
 completion as per schedule.  The cumulative expenditure incurred upto
 31st March, 2008 is Rs.728.66 crore.
 
 Revised Cost Estimate has been arrived at Rs.1880.69 crore for the
 Barsingsar Mine-cum-Power Project and the same has been submitted to
 GOI for approval.
 
 Joint Venture Project
 
 Coal Based Thermal Power Plant at Tuticorin (2x500 MW)
 
 The Joint Venture Project between your Company and the Tamil Nadu
 Electricity Board (TNEB) for setting up of a coal based thermal power
 plant of 1000 MW capacity at Tuticorin, at an estimated cost of
 Rs.4909.54 crore has been sanctioned by the GOI during May 2008. The
 Ministry of Power has accorded Mega Power Project status to the
 Project. Coal linkage for the project has been established with
 Mahanadhi Coal Fields Ltd., (MCL) a subsidiary Company of Coal India
 Ltd.  Tuticorin Port Trust (TPT) has agreed to lease the required land
 for the project on long-term lease basis and an MoU has been signed
 with TPT in this regard. The project will be implemented by the Joint
 Venture Company, in which your Company is presently holding 89% of the
 equity share capital and the balance 11% by TNEB. By virtue of the
 above shareholding the JV Company has become a subsidiary of your
 Company. Tenderprocessfor main plant package and other main packages
 has been initiated. As per the sanction, Unit-I of the project is to be
 commissioned within 46 months from the date of Government sanction and
 the Unit-ll within 51 months. Power Purchase Agreements have been
 signed with TNEB, ESCOMs of Karnataka State, Puducherry Electricity
 Department and Kerala State Electricity Board.
 
 Project Funding
 
 The projected debt funding requirement for the projects presently under
 implementation viz., Mine-ll Expn., TPS-II Expn., and Barsingsar
 Mine-cum-Power Project is around
 
 Rs.4640 crore. Your Company has already tied up rupee loan for Rs.2500
 crore, with a consortium of domestic banks with Canara Bank as the
 consortium leader and EURO 50 million foreign currency loan under
 External Commercial Borrowing (ECB) route, syndicated by Calyon Bank,
 to fund the above projects. Your Company is in the process of tying up
 with the above consortium members for the balance fund requirements. In
 respect of Tuticorin JV project, your Companys share of equity
 investment in the JV Company will be around Rs.1311 crore and the same
 will be met through internal accruals, over a period, depending,upon
 project requirements.
 
 Status of Advance Action Proposals (AAP) sanctioned by Government of
 India (GOI)
 
 Jayamkondam Lignite based Mine-cum- Thermal Power Project
 
 (13.5 MTPA of Lignite Mine and 2x800 MW of Thermal Power Station)
 
 Your Company originally proposed to set up a 1000 MW power plant with a
 linked mine of 9.0 MTPA at Jayamkondam in the State of Tamil Nadu. Your
 Company, after having made detailed exploration of lignite reserves in
 the region, has decided to set up a power project of 2x800 MW with a
 linked lignite mine of 13.5 MTPA. The estimated cost of the above
 mine-cum-power project is Rs.9800 crore. Advance Action Proposal for
 Rs.11.90 crore, for taking up certain preliminary works related to this
 project has been sanctioned by the Ministry of Coal (MOC). Your Company
 has initiated action for obtaining in-principle approval of the State
 Government for acquiring the required extent of land and also for the
 mining lease for the project. Poltegor, Poland has been engaged for
 preparing the Feasibility Report for mine project and Fitchner
 Consulting Engineers, Bangalore has been engaged for preparing the
 Feasibility Report for thermal project.  Preparation of environmental
 reports is under process.
 
 Thermal Power Project (2x500 MW) in Neyveli
 
 As stated earlier, the power generation from TPS-I at Neyveli is
 proposed to be tapered down between 2009-14, due to ageing of the
 Plant.  It has been proposed by your Company to set up a power plant at
 Neyveli with a capacity of 2x500 MW, for which MOC has accorded
 sanction for the Advance Action Proposals for Rs.11.25 crore which also
 includes certain studies in respect of augmentation of existing mines.
 Preliminary activities such as preparation of Feasibility Reports,
 Environmental Studies etc., are being carried out.
 
 Coal based Thermal Power Plant at Orissa (4x500 MW)
 
 Your Company has proposed to set up a coal based mega power plant in
 the State of Orissa at an estimated cost of Rs.8000 crore. Ministry of
 Coal (MOC) has sanctioned Advance Action Proposals for Rs.18.65 crore
 for this project.  In-principle approval of the State Government has
 been sought for allocating the required land for setting up of the
 power project. Action has been initiated for acquiring land at Rengali
 Taluk, through the State Government. Your Company has entered into a
 Joint Venture Agreement with MCL and Hindalco for setting up of a Joint
 Venture Company, with equity participation in the ratio of 70% by MCL
 and 15% each by Hindalco and your Company, for mining coal from
 Talabira. Setting up of JV Company is in process and the JV project is
 being piloted by MCL for the approval of the Government.
 
 Gujarat Power Project (1000 MW) with linked Lignite Mine (8.0 MTPA)
 
 Your Company has plans to set up a Mine-cum-Power project in the State
 of Gujarat, in joint venture with Gujarat Power Corporation Limited at
 an estimated cost of Rs.5640 crore.  Ministry of Coal has sanctioned
 Advance Action Proposal for Rs.6.20 crore for taking up certain
 preliminary activities. Feasibility Report and Environmental Report for
 the Mine and Thermal Power Projects are under finalisation. Detailed
 geological exploration is being carried out and depending upon the
 available lignite reserves the capacity of the project will be firmed
 up.
 
 Barsingsar Thermal Power Project Extension (250 MW) with linked Mine
 (2.1 MTPA) at Bithnok & Hadla
 
 Your Company had earlier proposed to develop a lignite mine at Bithnok
 and a linked Thermal Power Project, at an estimated cost of Rs.1690
 crore. Subsequently, considering the viability of the mine project, it
 has been proposed to develop the lignite mines at Hadla and Palana
 blocks, instead of at Bithnok as was earlier reported. In view of this,
 a power plant of 250 MW is also proposed to be set up at Barsingsar as
 an extension of the existing power project under implementation.  MOC
 has sanctioned the Advance Action Proposal of Rs.10.85 crore for taking
 up certain preliminary activities. The Feasibility Report for the
 mining project is under preparation.  Preparation of Feasibility Report
 for Thermal Power Project and Environmental Study
 
 Reports for both mine and thermal projects are in progress. Action is
 being taken up for transfer of mining lease of Palana block from the
 existing holder.
 
 Power Plant (500 MW) with linked Lignite Mine (4.2 MTPA) at Riri in
 Rajasthan
 
 Your Company had earlier proposed to put up a power plant and lignite
 mine at Riri in the State of Rajasthan. Preliminary study indicates
 that the quantity and the quality of lignite in the said block might
 not be conducive for setting up of a pithead power plant and in view of
 the same further activities in connection with this project are not
 being taken up for the present.
 
 Mine-III (8.0 MTPA) &
 
 Thermal Power Station-III (2x500 MW)
 
 The Feasibility Report with alternative mining technologies has been
 submitted by Norwest Corporation, USA, the Consultant. Based on this
 input, optimum technology will be adopted and necessary action for
 obtaining the approval of the Government will be initiated.
 
 Power Tariff
 
 Members may be aware that Central Electricity Regulatory Commission
 (CERC) determines the tariff for the power generated by all the Central
 power generators. The power tariff petitions in respect of all power
 stations of your Company, for the period 2004-09 were filed before CERC
 and final tariff orders for TPS-I Expn., & TPS-II have since been
 received while for TPS-I, it is still awaited.
 
 Human Resource Development
 
 Your Company maintains its principle of keeping the Human Resource as
 its main asset. It gives top priority to build up their competence
 through in-house training and development as well as through external
 interventions with the assistance from best training institutes in the
 Country.
 
 The Manpower strength as on 31.03.2008 was 18,940 which includes 3,850
 Executives.  In order to bring thrust and fillip in the manpower
 resource, 55 Graduate Engineers/Executive Trainees were recruited
 during the year in various disciplines. Existing facilities for basic
 and specialised training with more emphasis on Management Development
 Programme are being constantly reviewed and upgraded from time to time
 to ensure that adequately trained manpower at all levels is available
 for the development of your Company.  Your Company conducts periodical
 training programme and during the year under review, more than 350
 training programme covering a total of 6562 employees were conducted
 covering advanced Trainers skills, ISO Awareness, ISO Internal Audit,
 Organisational Development, TQM and Benchmarking etc., and 525
 employees were deputed to various training and other programmes within
 the country and few senior level employees were sent for training in
 renowned institutions abroad.
 
 Industrial Relations
 
 Industrial relation scenario in your Company during the year was
 peaceful and cordial.  Through bipartite meeting with the recognised
 Unions and Associations of Engineers and Officers, issues of common
 interest of all employees were taken care of. The functioning of Works
 Committee, Unit and Shop Councils, Safety Committee and Quality Circles
 enabled the identification of issues/problems and also solutions to
 tackle them. This has brought better quality work life in the Company.
 In compliance of the orders passed by Honble High Court of Judicature
 at Chennai for conducting secret ballot to identify the trade unions to
 be recognised for negotiations, the Regional Labour Commissioner
 (Central)/Chennai conducted secret ballot on 28.02.2008 and NLC
 Workers Progressive Union (LPF) and NLC Pattali Thozir Sangam (PTS)
 have been elected to represent the Unionised regular workmen of your
 Company.
 
 Reservation
 
 Your Company scrupulously implements the directives of Government
 relating to the reserved categories such as Scheduled Castes, Scheduled
 Tribes, Physically challenged, Ex-servicemen, etc. Following is the
 status of reservation provided to SC/STason 31.03.2008.
 
            Total             Strength of SC/ST
 Group
            Strength         SC       ST  Total SC/ST
 
 A           3550           711       88         799
 
 B            300            75        6          81       
 
 C          11714          2600      131        2731  
 
 D           3376           656       12         668  
 
 TOTAL      18940          4042      237        4279       
 
           % of SC/ST       
 
 SC            ST       Total SC/ST 
 
 20.03        2.48           22.51
 
 25.00        2.00           27.00
 
 22.20        1.12           23.32
 
 19.43       -0.36           19.79
 
 21.34        1.25           22.59
 
 Implementation of Official Language
 
 Your Company has taken various steps to increase the use of Hindi in
 official work by way of organising Hindi Fortnight, Hindi Workshop and
 Hindi Literacy Programme.  In addition to the above, a one-day National
 Level Seminar on Implementation and Development of Official language in
 Public Sectors was also conducted during the year wherein other PSEs
 had also participated.
 
 Contribution to Development of Women
 
 NLC Chapter of Forum of Women in Public Sector (WIPS) under the aegis
 of SCOPE is being patronised by your Company. This forum organises
 various programmes for the benefit and development of women and also
 undertakes social projects for the benefit of downtrodden sections of
 the society. Your Company provides all the requisite support to the
 Forum for the betterment of the women community in general.
 
 Compliance under Persons with Disabilities Act, 1995
 
 Your Company ensures compliance under the Persons with Disabilities
 Act,1995. Suitable provision/modification is made in the working place
 to meet the requirements of such persons with disability.
 
 Compliance under the Right to Information Act, 2005
 
 Your Company ensures compliance under the Right to Information Act,
 2005. A Central Public Information Officer, Appellate Officer and
 Central Assistant Public Information Officers representing different
 functional areas have been nominated to attend to the queries/appeals
 received under the RTI Act in time bound manner.
 
 During the year 2007-08, 336 requests containing more than 1300 queries
 were received from the general public and 319 requests have been
 complied with while 17 requests were rejected, since these were not
 within the scope, as per the provisions of the Act.
 
 Citizens Charter
 
 Your Company maintains Citizens Charter, indicating details of
 clients/customers under different heads, system of redressal of
 grievance available and nodal authorities for redressal of grievance.
 The Citizens Charter is regularly updated.
 
 e-Governance
 
 Your Company gives major thrust to e-Governance. Online Integrated
 Materials Management System has become a tool for inventory control.
 Computerised Attendance Monitoring System is being implemented in all
 the major units of the Company.  e-procurement has been implemented
 in the Company wherein Single/ Limited Tender Enquiries for procurement
 of materials are being processed in paperless and transparent form and
 facilities have been made for the bidders to submit their offers
 online.
 
 Welfare & Corporate Social Responsibility (CSR)
 
 Township
 
 A well planned township spread over 50 Sq.kms. with around 21,000
 residential quarters has been provided by the Company for its
 employees. The Township is a Model Township with good quality roads,
 top class sanitation and water facilities, shopping facilities, places
 of worship for all religions, theatres, community halls/auditorium,
 clubs and sports avenues like multiple gymnasium, tennis court,
 swimming pool and sports stadium. Your Company continues to provide the
 best transport facilities for the inhabitants of the township.
 
 A new township, Lignite Sakthi Nagar at Barsingsar, in the Bikaner
 district of Rajasthan has been constructed for the employees of the
 Barsingsar project. It is a well planned township laid in an area of 1
 Sq.km. having 302 residential quarters and the township was inaugurated
 during the year.
 
 Medical Services
 
 Your Company maintains a sophisticated 369 bedded General Hospital for
 providing quality medical treatment and occupational health services to
 the employees and their dependants apart from the other inhabitants of
 the Township. The General Hospital is operating an exclusive
 out-patient services unit wherein medical consultation services are
 offered free of cost to the general public.
 
 During the year 2007-08, around 9.55 lakh out-patients and 13108
 in-patients were treated in the NLC Hospital. Around 12000 children
 were administered Polio Vaccination during the Polio Immunisation Camps
 conducted in 2007-08.
 
 Your Company during the year 2007-08 through its hospital has taken the
 following measures for the benefit of the general public from
 peripheral villages and society at large:
 
 > Formation of Crisis Counseling Centre.to provide emotional support to
 the persons having suicidal thoughts.
 
 > Conducted Brain Fever Immunisation Camp jointly with the State Health
 Department and NLC Health Department.
 
 > Conducted Diabetic Retinopathy Screening Camp in association with
 Aravind Eye Hospital, Puducherry benefitting more than 3700 persons.
 
 > Conducted health awareness campaign during the Book Fair and Safety
 week celebrations, in coordination with NGOs, facilitating free Blood
 grouping/Sugar Check, HIV identification, etc.
 
 - Provided medical support for the elderly people residing in Elders
 Village at Thamaraikulam, Cuddalore District, maintained by the Help
 Age India.
 
 Education
 
 Neyveli finds a place in Nations educational map because. of high
 quality educational facilities being provided to the wards of employees
 and to the children from the neighbouring villages. In all, there are
 33 schools including 13 schools run by NLC with grant-in-aid from the
 State Government and one college, catering to the student population of
 around 30,000 located in Neyveli Campus. The Company also plays a
 positive role in encouraging sports activities among the students of
 schools and college by providing coaching and infrastructure facilities
 which has resulted in many students from Neyveli winning several awards
 in State and National level competitions.
 
 Your Company continued to provide scholarships as financial support to
 the wards of employees, under two categories, one under Merit
 Scholarship Scheme and another Scheme for SC/ST Students.
 
 Social Welfare
 
 Your Company is always aware, of its social responsibilities. It has
 provided infrastructure facilities for running the Sneha Opportunity
 School, a day-care centre engaged in providing individual attention to
 train mentally challenged children. The activities in this school
 include yoga, games, sports, vocational courses like arts, crafts,
 weaving, carpentry, gardening, screen printing, doll making, etc. The
 individual attention towards behavior modification enables them to be
 normal and the activities make them self-reliant and fit to survive and
 earn their livelihood.
 
 Your Company also patronises Neyveli Health Promotion and Social
 Welfare Society (NHPSWS) which offers services for the benefit of
 physically handicapped, widows and destitutes by providing training and
 arranging for job opportunities. The society also conducts various
 welfare programmes which includes de-addiction programme, running of a
 school for hearing impaired (Shravanee), family welfare education,
 health education, computer programme, providing artificial limbs, etc.
 
 Recognition of Past Service
 
 In recognition of the past services, your Company is implementing
 schemes for reimbursement of Medical expenses and also extend insurance
 cover for retired employees and their spouses under Retirees Health
 Insurance Scheme. Family Relief and Death Relief Fund Schemes are in
 operation for the benefit of eligible dependents of the employees who
 die while in service.
 
 Safety
 
 Your Company has a well-defined Safety Management System. Various
 participation fora like Works Committee/Plant Safety
 Committee/Bi-Partite/Tripartite Committee are functioning for taking up
 necessary preventive/ corrective actions wherever required and to
 create awareness among the employees on safety and health. A well-laid
 and detailed Emergency Preparedness Plan has been established for every
 mine & thermal units and mock drills are held periodically to meet any
 contingencies that may arise.
 
 Vigilance
 
 To make the administration efficient, effective and clean without
 corruption, multifaceted strategies covering areas of preventive,
 detective and punitive vigilance are continued to be adopted as per the
 guidelines of Central Vigilance Commissioner. Periodical surveillance,
 collection of intelligence information and frequent surprise checks are
 being carried out in various corruption prone areas in order to
 minimise/eradicate various malpractices.
 
 MoU with Transparency International
 
 Your Company is one of the few institutions who have signed the
 Memorandum of Understanding withTransparency International- India. This
 body is the Indian Chapter of Berlin based-Transparency International,
 a not-for-profit and non-governmental organisation committed to curbing
 corruption in any form.
 
 Awards
 
 During the year 2007-08, the following awards were bestowed on your
 Company by various reputed organisations:-
 
 > Best Enterprise Award 2007 (First Position), instituted by the Forum
 of Women in Public Sector under the aegis of SCOPE, for the
 contribution development of women.
 
 > SCOPE Meritorious Award for Environmental Excellence and Sustainable
 Development for the year 2005-06.
 
 NLCs House Journal in English-Brown Coal won the third prize among
 the Corporates of India and first place among the PSEs, in the
 competition organised by Public Relation Society of India.
 
 Energy Conservation and Research & Development
 
 The particulars required under Section 217 (1) (e) of the Companies
 Act,1956 read with the Companies (Disclosure of particulars in the
 Report of the Board of Directors) Rules, 1988 regarding the energy
 conservation measures, technology absorption and expenditure on R&D are
 furnished in Annexure-1.
 
 Ecology and Horticulture
 
 Your Company has accorded the highest priority to ecological balance
 and pollution control measures. Continuous air monitoring through
 thirteen air monitoring stations geographically located in and around
 Neyveli and effluent monitoring helps to maintain the parameters set by
 Central/State Pollution Control Board within the prescribed limits.
 Your Company continues with the mass afforestation programme year after
 year and so far around 18 million trees have been planted in Neyveli
 and its surroundings area. Afforestation programme does not stop with
 mere planting of trees but also includes tree transplantation. Your
 Company also takes care of land reclamation in stages in the de-mined
 area through modern techniques including adoption of Integrated Farming
 System to restore its original fertility.
 
 Visit of Parliamentary Committees
 
 > Parliamentary Standing Committee on Coal & Steel visited on 29th
 July, 2007 and held discussions on Production of Coal and
 Lignite-Projections and Planning.
 
 > Rajya Sabha Committee on Government Assurance visited on 15th
 October, 2007 and held discussions on Disinvestment in NLC.
 
 > Study tour of the Estimates Committee held discussions on
 Environmental Management in NLC on 2nd November, 2007.
 
 > Department related Parliamentary Standing Committee on Personnel,
 Public Grievances, Law and Justice visited on 13th November, 2007 and
 held discussions on Implementation of RTI Act and Reservation Policy
 in Appointment and Promotions.
 
 > Parliamentary Sub-committee for Heavy Industries & Public Enterprises
 visited on 21st January, 2008 and held discussions on Issue of Wage
 Policy in respect of man-power rationalisation.
 
 > Study tour programme of the Standing Committee on Labour visited on
 1S1 February, 2008 and held discussions on Safety, health and welfare
 measures for the mine workers, particularly Contract/Casual Labour.
 
 Management Discussion & Analysis Report and Report on Corporate
 Governance
 
 The Management Discussion & Analysis Report is furnished in Annexure-2.
 The report on Corporate Governance together with the Auditors
 Certificate on the compliance of Corporate Governance conditions
 stipulated by Clause-49 of the Listing Agreement is furnished in
 Annexure-3 and 4 respectively.
 
 Auditors
 
 Cost Audit
 
 S. Mahadevan & Co., Cost Accountants, have been appointed as the Cost
 Auditors for the year 2007-08, to carry out the cost audit for the
 three Power Stations of the Company.
 
 Statutory Audit
 
 P.B. Vijayaraghavan & Co., Chartered Accountants and Ganesan and
 Company, Chartered Accountants, were appointed by the Comptroller and
 Auditor General of India (C&AG), as Joint Statutory Auditors for the
 year 2007-08 under Section 619 (2) of the Companies Act, 1956. The
 Board of Directors of the Company have fixed Rs.7.0 lakh as the
 Statutory Audit fees, to be shared equally by the Joint Auditors in
 addition to reimbursement of actual out of pocket expenses.
 
 Reply to Statutory Auditors observation on the accounts of the Company
 for the year ended 31st March, 2008 is furnished in Annexure-5.
 
 C&AGs Comments
 
 C&AGs comments on the accounts for the year ended 31st March,2008 are
 furnished in Annexure-6.
 
 Directors Responsibility Statement as per Section 217(2AA) of the
 Companies Act, 1956
 
 The Board of Directors declares:
 
 a.  that in the preparation of the annual accounts, the applicable
 accounting standards had been followed along with proper explanation
 relating to material departures;
 
 b.  that the Directors had selected such accounting policies and
 applied them consistently and made judgements and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and of the
 profit of the Company for that period;
 
 c.  that the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safeguarding the assets of the Company and
 for preventing and detecting fraud and other irregularities;
 
 d.  that the Directors had prepared the annual accounts on a going
 concern basis.
 
 Board of Directors
 
 Shri M.F.Farooqui, Secretary to the Government of Tamil Nadu,
 Industries Department, was inducted into the Board on 21.01.2008 in
 the place of Shri Shaktikanta Das, former Secretary to the Government
 of Tamil Nadu, Industries Department.  Shri B.Surender Mohan has been
 appointed as Director (Mines) w.e.f. 01.05.2008.  Shri K.S.Anandan,
 Director (Mines) and Shri S. Jayaraman, Chairman-cum- Managing Director
 relinquished their office on 30.04.2008 and 31.05.2008 respectively, on
 attaining the age of superannuation.  Shri J.N. Prassana Kumar,
 Director (Finance) assumed additional charge of the post of CMD w.e.f.
 01.06.2008 as per the directives of Ministry of Coal. The Board places
 on record its appreciation for the valuable guidance provided by
 Sarvashri Shaktikanta Das, K.S.Anandan and S.  Jayaraman during their
 tenure as Directors of the Company. Sarvashri V.Sethuraman, P.Babu Rao,
 M.S.Ananth, Y.N.Apparao and Shashi Kumar, Directors, retire by rotation
 at the forthcoming Annual General Meeting and being eligible offer
 themselves for re-election.
 
 Particulars of Employees
 
 Particulars of Employees as required under Section 217(2A) of the
 Companies Act,1956, read with the Companies (Particulars of Employees)
 Ruies,1975-Nil.
 
 Acknowledgement
 
 The Board of Directors of your Company places on record their sincere
 appreciation for the continued support and guidance extended by the
 Ministry of Coal, Ministry of Power, Ministry of Environment & Forest,
 Central Electricity Authority, Ministry of Industry, Ministry of
 Labour, Planning Commission, Central Electricity Regulatory Commission
 and as well as State Electricity Boards of Tamil Nadu, Andhra Pradesh,
 Kamataka, Kerala and Puducherry.
 
 The Board of Directors of your Company are also pleased to acknowledge
 with gratitude the co-operation and continued assistance extended by
 the Government of Tamil Nadu and the Cuddalore District
 Administration.  The assistance and co-operation by the Comptroller and
 Auditor General of India, the Statutory Auditors, Director General of
 Mine Safety, the Factory & Boiler Inspectorates, the Chief Inspector of
 Factories, Directorate of Boilers, Central Pollution Control Board,
 State Pollution Control Board, Chief Controller of Explosives, Regional
 Labour Commissioner, Regional Provident Fund Commissioner, the
 Companys Bankers and KfW of Germany need special mention and the
 Directors acknowledge the same.
 
 Your Directors also wish to place on record their deep sense of
 appreciation for the dedicated work putforth by the employees at all
 levels. The positive role played by the recognised Trade Unions and
 Associations of the Engineers and Officers in maintaining cordial
 industrial relations is appreciated.
 
 
                                       for and on behalf of the
                                       Board of Directors
 
 Place : Chennai                       j N Prasanna Kumar
 Date  : 15.07.2008                    CHAIRMAN-CUM-MANAGING DIRECTOR