NHPC Directors Report, NHPC Reports by Directors

Directors Report	Year End : Mar '12 � Mar 11

To the Members of NHPC Limited, The Directors have immense pleasure in presenting the 36th Annual Report on the performance of your Company, along with the Audited Statement of Accounts, Auditors'' Report and the Review of Accounts by the Comptroller & Auditor General of India for the financial year ended 31st March 2012. 1. FINANCIAL RESULTS The financial results for the year ended 31st March 2012 are summarized in Table 1. Table 1 FINANCIAL HIGHLIGHTS (Rs. in crore) Particulars 2011-12 2010-11 Sales 5509.65 4046.59 Profit before Depreciation, Interest and Tax 4752.02 4160.75 Depreciation 892.74 916.74 Profit after Depreciation but before Interest and Tax 3859.28 3244.01 Interest and Finance Charges 342.24 366.60 Profit after Depreciation and Interest but before Tax 3517.04 2877.41 Tax 745.27 710.74 Profit after Depreciation, Interest and Tax 2771.77 2166.67 Surplus of Profit and Loss Account of earlier years 4336.18 3150.50 Amount written back from Bond Redemption Reserve 14.25 14.25 Amount written back from Self- Insurance Reserve - 0.04 Tax on Dividend�written back 3.25 1.80 Balance available for appropriation 7125.45 5333.26 APPROPRIATIONS Transfer to Bond Redemption Reserve 129.13 100.00 Transfer to Self-Insurance Fund 32.48 39.31 Interim Dividend Proposed Final Dividend 861.06* 738.04 Tax on Proposed Dividend 139.68 119.73 Balance carried over to Reserves and Surplus 5963.10 4336.18 * including rounding off difference of Rs. 0.01 crore of last year. 2. POWER GENERATION NHPC''s 12 operating power stations, located in different parts of the country generated 18,683 MUs of power during 2011-12 exceeding the annual MoU target of 18,500 MUs for an ''Excellent'' rating by 183 MUs. The power generation in 2011-12 was higher by 0.42 per cent as compared to the previous year. In addition to above, all the three units of Chamera-III, H.E Project 231 MW (77x3) in Himachal Pradesh have started commercial operations w.e.f. 4th July, 2012. With the commissioning of Chamera-III Project, the installed capacity of NHPC has gone up to 5526 MW including 1520 MW through our subsidiary i.e. NHDC Limited. 3. PROPOSED DIVIDEND Your Directors have recommended a highest ever dividend of Re. 0.70 per share (excluding dividend tax) for the year 2011-12. The dividend will be paid after your approval at the forthcoming Annual General meeting. The total dividend payout for the year amounts to Rs. 861.05 crore representing 31.06 per cent of profits after tax. 4. CAPITAL STRUCTURE Your Company''s paid up capital remained at Rs. 12,300.74 crore during the year. The net-worth of the Company has increased to Rs. 26,353.53 crore as on 31st March 2012 as compared to Rs. 24,583.89 crore at the end of previous year. 5. STATUS OF ONGOING PROJECTS During the year under report, your Company had to face many challenges like geological obstacles, natural calamities and loca problems. But despite all these challenges construction continued at a brisk pace and the projects are in various stages of completion. During the year 2011-12, your Company was engaged in the construction of 10 hydroelectric projects with an installed capacity of 4,502 MW as per the details given in Table 2. Five projects viz. � Teesta Low Dam-III, Nimoo Bazgo, Chutak, Uri-II and Parbati-III are in advanced stages of completion and are likely to be commissioned in the year 2012-13. The work at Subansiri Lower HE Project (2000MW) in Arunachal Pradesh has suffered due to local agitation w.e.f. December, 2011. However at present the pace of work is gearing up and contractors have started mobilizing resources. Table 2: Details of hydroelectric projects under construction during 2011-12 Hydroelectric Project State Proposed Installed Capacity (MW) Teesta Low Dam-III West Bengal 132 Uri-II Jammu and Kashmir 240 Chamera-III Himachal Pradesh 231** Teesta Low Dam-IV West Bengal 160 Nimmo Bazgo Jammu and Kashmir 45 Parbati-III Himachal Pradesh 520 Parbati�II Himachal Pradesh 800 Chutak Jammu and Kashmir 44* Subansiri Lower Assam/ Arunachal Pradesh 2,000 Kishanganga Jammu and Kashmir 330 Total 4,502 Note: * Two units (22 MW) of Chutak HEP (44 MW) in J&K were synchronized during financial year 2011-12. ** All the three units of Chamera-III, H.E Project 231 MW (77x3) in Himachal Pradesh have started commercial operations w.e.f. 4th July, 2012. 6. COMMERCIAL PERFORMANCE Your Company''s commercial performance during the year 2011-12 was highly satisfactory. The sales realization during the year was Rs. 4,415 crore as against Rs. 3,619 crore in the previous year. The bills amounting to Rs. 6,101crore (including arrear bills ofRs. 2605.40 crore against revision of tariff, tax etc. for the previous years) were raised as against the bills of Rs. 3,553 crore in the previous year. Tariff orders for the period 2009-14 have been issued by CERC in respect of 12 Power Stations. The outstanding dues pending for more than 60 days as on 31st March, 2012 were Rs. 1176.02 crores. Your company has made all out efforts to recover the outstanding dues, including regulation of power supply to the defaulting utilities. Most of the beneficiary states are now liquidating their dues in installments. 7. PROJECT MANAGEMENT An online Project Monitoring Centre has been set up at the Corporate Office to support video conferencing and to provide live video feeds from cameras installed at strategic locations in projects under construction. This will facilitate an analysis of physical progress. 8. NEW SCHEMES Details of projects which are under clearance/approval stages are given in Table 3. As a part of its future expansion programme, five projects of your Company with a capacity of 5,115 MW are under various stages of approval. In addition to these five projects, new projects with a capacity of 3,686 MW are to be executed through JVCs with State Governments/PSUs. Table 3: Projects under Clearance/Approval UNDER NHPC STAND ALONE S. No. Name of the Project Capacity (MW) 1 Kotli Bhel I-A, Uttarakhand 195 2 Teesta-IV, Sikkim 520 3 Dibang, Arunachal Pradesh 3,000 4 Tawang-I, Arunachal Pradesh 600 5 Tawang-II, Arunachal Pradesh 800 Total 5,115 MW PROJECTS TO BE EXECUTED THROUGH JOINT VENTURES 6 Loktak Downstream, Manipur 66 7 Pakal Dul and others, Jammu & Kashmir 2,120 8 Tipaimukh, Manipur 1,500 Total 3,686 MW Grand Total 8,801 MW Detailed Project Reports (DPRs) for all these projects have been prepared and a majority of them have also been approved by the competent authorities. Environmental and Forest Clearances are awaited for some of these projects. Construction activity will start once NHPC/JVCs get these approvals. A promoter''s agreement for setting up a Joint Venture Company (JVC) involving NHPC Limited, SJVN Limited and the Government of Manipur for implementing the Tipaimukh hydroelectric project in Manipur was signed in October 2011, in the presence of Shri Sushil Kumar Shinde, Hon''ble Union Minister of Power, Government of India (GoI) and Shri Okram Ibobi Singh, Hon''ble Chief Minister of Manipur. JVCs for Loktak Downstream HE Project in Manipur and Pakul Dul HE Project in J&K have already been incorporated. Ministry of Environment and Forests (MoEF) has declined permission for diversion of forest land to two projects viz. Kotli Bhel Stage- 1B (320 MW) and Kotli Bhel Stage-II (530 MW) in Uttarakhand (not in table). Further, environment clearance accorded to Kotli Bhel-IB was also withdrawn by MoEF subsequent to which NHPC has filed a civil appeal before the Hon''ble Supreme Court of India. 9. PROJECTS UNDER DPR/FR PREPARATION Your Company is in the process of preparing DPRs, Feasibility Reports (FRs) and Survey & Investigation for projects which are presently under various stages of clearance. The details are given in Table 4. Table 4: DPRs, FRs and Survey & Investigation S. No. Projects Capacity (MW) 1 Bursar, J&K 1,020 2 Chungar Chal, Uttarakhand 240 3 Garba Tawaghat, Uttarakhand 630 4 Karmoli Lumti Tulli, Uttarakhand 55 5 Lachen, Sikkim 210 Total 2,155 MW 10. CONSULTANCY & BUSINESS DEVELOPMENT SERVICES NHPC''s major consultancy assignments include those from Central and State Government agencies in India and in neighboring countries like Bhutan, Myanmar and Tajikistan. These consultancy services are in various hydropower fields like river basin studies, survey work, design and engineering, geological studies, geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing and commissioning and operation & maintenance. So far your Company has completed 84 consultancy assignments while another 18 assignments are under progress. Your Company is registered with the World Bank, the Asian Development Bank, the African Development Bank, Kuwait Fund for Arab Economic Development and the Central Water Commission as a consultant in the area of hydropower. Your Company is also making efforts to start unallocated hydro projects with state governments through joint ventures. 11. GLOBAL INITIATIVES Under the ''Action Plan'' on India-Bhutan cooperation for hydropower development of 10,000 MW by 2020, NHPC has been entrusted with the preparation of DPRs for Chamkharchhu-I H.E. Project (770 MW) and for preparing PFRs of Kuri Gongri Reservoir projects in Bhutan. The draft DPR for Chamkharchhu-I H.E. Project (770 MW) was submitted to the Royal Government of Bhutan (RGoB) and Government of India (GoI) in March 2012. The draft PFR for the Kuri Gongri Basin projects was also submitted to RGoB/ GoI in May 2012. Your Company has also signed an agreement with the Mangdechhu Hydroelectric Project Authority for providing engineering and design consultancy services for the construction of the Mangdechhu H.E. Project (720 MW) in Bhutan. It also undertook the following assignments to provide consultancy services: - Investigations and preparation of updated DPRs for the 1,200 MW Tamanthi and 642 MW Shwezaye, Hydropower & Multipurpose projects in Myanmar, as a consultancy assignment from the Ministry of External Affairs (MEA), Government of ndia. The final report for the Tamanthi Hydropower & Multipurpose Project was submitted to the Ministry of External Affairs, Government of India and to the Government of Myanmar. - RMU works of Varzob-I H.E. Project in Tajikistan has been entrusted to NHPC under a tripartite agreement signed amongst MEA, BHEL and NHPC. - Technical due diligence study of the Shiroro Hydroelectric Power Station in Nigeria for M/s Dangote Industries Limited. 12. RGGVY - RURAL ELECTRIFICATION (RE) PROJECTS Your Company is implementing Rural Electrification Projects under the Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) in 27 districts spread over five states of West Bengal, Bihar, Jammu & Kashmir, Chhattisgarh and Odisha at an estimated cost of Rs. 2,900 crore. The scope of work includes electrification of Unelectrified/De-electrified (UE/DE) villages, Partially Electrified (PE) villages and service connections to Below Poverty Line (BPL) households. During 2011-12, NHPC electrified 460 UE/DE villages and provided connections to 1.9 lakh BPL households. In addition to above electrification of 2,020 PE villages were also completed. As on 31st March 2012, the cumulative achievements for UE/DE villages, PE villages and BPL connections were 9,092, 16,439 and 18.2 lakh respectively. 13. RURAL ROADS PROJECT Your Company has signed a MoU with the Ministry of Rural Development, Government of India and the Government of Bihar for constructing rural roads in six districts in the state under the Pradhan Mantri Gram Sadak Yojana (PMGSY) in the year 2004. These roads will be maintained by NHPC for five years. Under the scheme, 762 roads of 3,242.58 km at a cost ofRs. 1,763.49 crore have been cleared by the Ministry of Rural Development, Government of India. As on 31st March 2012, 566 roads of 2,701.24 km had been completed. 14. INFORMATION TECHNOLOGY & COMMUNICATION (IT & C) After implementation of all modules of ERP, the key functions of the organization have now been totally IT enabled and seamlessly integrated with a major focus on the management of projects under construction and also the operation and maintenance of power stations. The IT & C infrastructure was upgraded at over 50 locations to support increased dependence on information technology. All the locations are connected with the Corporate Office through multi-mode, fail-safe communication links using MPLS-VPN (OFC) and the VSAT based satellite network. Applications such as Intranet, Internet, e-mail and ERP are being run to leverage this network. Your Company also launched e-procurement initiatives at all locations to bring about efficiency, transparency and cost reduction in procurement of works, goods and services as per Government of India guidelines. Necessary IT security measures have also been put in place to ensure security of all information assets of the organization. A policy framework has been created for managing the IT systems and assets so that these are optimally used in a secure manner. 15. TRAINING & HUMAN RESOURCE DEVELOPMENT As a part of its commitment to training and development, your Company has set up training centres at various power stations. The training programmes are designed and conducted on existing and upcoming technologies in the power sector. It has also developed learning ventures with leading educational institutions in the country for skill and knowledge enrichment of all sections of its employees. Strategic alliances have been made with IIMs/XLRI/IITs etc. for advance management and leadership development programmes for NHPC employees. 16. EMPLOYEE RELATIONS During the year, industrial relations were cordial and harmonious at all NHPC projects/stations/units. However, at some locations workmen participated in a one day nationwide token strike called by the Central Trade Workers Union to raise their demands though no power generation was affected. 17. RESEARCH & DEVELOPMENT Your Company attaches special attention to Research and Development (R&D) activities to bring in innovations and improvements in its areas of operation. Specific areas in which R&D was carried out include: - Techniques to stop seepage in reservoirs/structures. - Development of a hard coating facility for which the DPR has been prepared. - Computational fluid dynamics analysis of fluid flowing through the surge and pressure shafts of the Teesta-V Power Station and Dam-Spillway of Subansiri H.E. Project. - A National Perspective Plan (NPP) for R&D projects�''Development of Silt erosion resistant material for turbine of hydro generators''. - Undertaking NPP projects sponsored by CPRI for R&D in ''Tunneling in water charged zones under high hydrostatic pressure''. 18. CLEAN DEVELOPMENT MECHANISM (CDM) BENEFITS Carbon credits are expected from NHPCs registered projects under CDM benefits. Nimoo Bazgo (3X15 MW) and Chutak (4X11 MW) projects located in Jammu & Kashmir have been registered with the CDM Executive Board of the United Nations Framework Convention on Climate Change (UNFCCC). These projects will annually reduce emissions of 1,87,893 and 1,66,831 Metric Tons of CO2 equivalent respectively on their commissioning. Carbon credits are also expected under the Verified Emission Reductions (VERs) scheme from projects/power stations like Teesta-V. 19. REHABILITATION & RESETTLEMENT NHPC formulated its own Rehabilitation & Resettlement (R&R) policy-2007 in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007 in consultation with various stakeholders. The Company''s policy provides for certain additional benefits over and above those proposed in NRRP, 2007. Your Company''s policy aims to address issues like loss of land, houses, other resources and means of livelihood or social support systems, which Project Affected Families (PAFs) are likely to suffer due to the construction of a project. Major emphasis is laid on economic sustenance of PAFs. As per NHPCs R&R policy, up to 0.75 per cent of the hard cost of a project is earmarked towards Community and Social Development Plan (CSDP) for implementation in the resettlement zone and affected areas. Further, to implement NHPCs R&R policy in its true spirit, an operational manual for effective implementation of various R&R activities has also been formulated. 20. STRATEGIC DIVERSIFICATION NHPC Limited, a leading company in the Indian hydropower sector, has 14 per cent of the total hydro installed capacity to its credit. During 2011-12, NHPC generated 18,683 MUs of power, which is the highest ever generation since the Company''s inception. Apart from hydro, NHPC also has plans to expand in the areas of thermal and renewable energy. 21. FINANCING OF NEW PROJECTS As per the Central Electricity Regularity Commission''s guidelines, projects need to be financed with a debt to equity ratio of 70:30 for the purposes of tariff fixation. Your Directors believe that internal accruals of your Company will be sufficient to finance the equity component of new projects. Due to its low gearing and strong credit ratings, It is well positioned to raise the required borrowings. The equity component is being funded through IPO proceeds/internal resource accruals. Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion programme. 22. SUSTAINABLE DEVELOPMENT POLICY From 2010-11, the Department of Public Enterprises (DPE) has included Sustainable Development (SD) as a compulsory element for CPSEs under ''Non-Financial Parameters'' in MOU for evaluation of performance of the Company. DPE had issued Guidelines on Sustainable Development in September 2011. The main purpose of this policy is to remove any ambiguities and bring in uniformity in the process of sustainable development by specifying the mandate and scope of activities to be performed by CPSEs. NHPC has formulated its own SD policy in line with DPE''s guidelines on Sustainable Development. During 2011-12, NHPC carried out rehabilitation/rejuvenation of dumping sites at Parbati-III HE project and Parbati�II HE project in Himachal Pradesh by way of slope stabilization and plantation, as an initiative towards Sustainable Development. A DPR for the development of a wind power project in Bidda area near the Salal Power Station in J&K was carried out and a feasibility report also prepared for the installation of wind power monitoring stations at Parbati�II, Parbati-III and Chamera-I projects in Himacha Pradesh and the Nimmo Bazgo Project in J&K. During 2011-12, more than one lakh saplings were planted at NHPCs various project sites under the afforestation drive. 23. VIGILANCE ACTIVITIES Regular and surprise inspections were conducted by the vigilance department at regular intervals. Actionable points identified by Project Vigilance Officers were conveyed to the heads of the projects from time to time for implementing necessary corrections. An intensive examination of the works under progress was also carried out by CVC''s Chief Technical Examiner (CTE) from time to time. An integrity pact was implemented successfully for all procurement works which have a value of more than Rs. 15 crore and for procurement of goods and services which have a value of more than Rs. 25 lakh as per CVC guidelines. Emphasis is laid on preventive vigilance by issuing circulars and guidelines based on inspections/intensive examinations. Various vigilance awareness programmes and vigilance awareness week were also organized to promote transparency and ethics in the working system. Two workshops for Vigilance Officers were organized during the year under report in order to review and improve their functioning. 24. IMPLEMENTATION OF THE FRAUD PREVENTION POLICY The fraud prevention policy has been formulated and implemented in your Company. 25. OFFICIAL LANGUAGE IMPLEMENTATION Your Company complied with the provisions and rules of the Official Language Act. During the year, sincere efforts were made to increase the progressive use of the official language in accordance with the policy of the Government of India. The Parliament sub-committee on official language carried out inspections in Andaman & Nicobar Islands and Salal and has appreciated its implementation. Rajbhasha inspections were conducted in the departments of the Corporate Office and at power stations/projects/regional offices. Regular quarterly meetings of the Official Language Implementation Committee were organized at the Corporate Office. During 2011-12, the All India Official Language Conference was inaugurated by a renowned writer, Dr. Narender Mohan. An All India Kavi Sammelan was also organized in the NCUI auditorium in which renowned Hindi poets including Padambhushan Dr. Gopal Das Neeraj, recited poems. Various incentive schemes were introduced to encourage the use of Hindi in the Company. Your Company has been conferred with the highest award Indira Gandhi Rajbhasha Shield Yojna by the Government of India for the second consecutive year. The award for the year was received from Hon''ble President of India, Smt. Pratibha Devi Singh Patil. First prize for the award Rajbhasha shield and Citation for the year 2010-11 under the NTPC Rajbhasha shield yojna for outstanding work in implementation of Rajbhasha among Power Sector was also received from Hon''ble Union Minister of Power, Shri. Sushilkumar Shinde. 26. PR INITIATIVES/AWARENESS ACTIVITIES Your Company''s achievements were appropriately highlighted through print and electronic media throughout the country, creating awareness among the public about the strengths and capabilities of NHPC in developing hydropower. Your Company has been participating in various exhibitions both in India and abroad and also in sports related activities under the aegis of the Power Sports Control Board, Ministry of Power. During 2011-12, NHPC successfully hosted the 16th Inter-CPSU Bridge and 17th Inter-CPSU Chess tournaments at Faridabad. Corporate films on NHPC and a film on environment were screened on a number of platforms. The bi-monthly ''NHPC NEWS'' and the monthly communiqu� continued to be effective tools for internal communication. As a part of its attempts for propagating ''Energy Conservation Day 2011'', NHPC coordinated a painting competition for school children organized by the Bureau of Energy Efficiency (BEE), Ministry of Power at the national and state levels. 27. AWARDS AND RECOGNITION NHPC received various prestigious awards. Some of these are: - The AMITY Corporate Excellence Award for Innovative Training & HR Practices'' by AMITY International Business School, NOIDA. - The ''India Power Award 2011'' for the ''largest Hydropower Developer (Public Sector)'' at the India Power Awards held on 24th November, 2011. - ''Prashansa Patra'' at the ''NSCI Safety Awards - 2010'' instituted by the National Safety Council on 19th October 2011. - The ''PSE Excellence Award 2011'' in the Miniratna and other category for ''Best Human Resource Management''. - The Best Performing Generation Company (Hydro) in Power Line Awards 2012 from Shri Sushil Kumar Shinde, Hon''ble Union Minister of Power. 28. CORPORATE SOCIAL RESPONSIBILITY The focus of NHPC''s Corporate Social Responsibility (CSR) initiative was on rural India and backward districts of hill states like J&K, Himachal Pradesh, Sikkim, Uttarakhand, Arunachal Pradesh and Assam. With its continued commitment towards CSR and ethical behaviour, NHPC contributed to the economic development and improvements in the quality of life of internal as well as external stakeholders and of society at large. NHPC through its expansive CSR initiatives strives to develop mutual trust with the communities that surround its power stations/projects across the country. NHPC has adopted a structured scheme on CSR in line with DPE guidelines w.e.f. 2010-11. During 2011-12, a budget of 0.5 per cent of PAT was allocated to CSR activities which was subsequently increased to 1% of PAT and the target for the activities will be set accordingly. NHPC undertook a number of community development Initiatives and spent about Rs. 10 crore in the following areas: Education Various skill developments/vocational training and other programmes were organized during financial year 2011-12 to improve the skills and employment opportunities of the people in areas surrounding projects/power stations. More than 800 SC/ST students studying in schools near power stations/projects/townships in the states of J&K, Himachal Pradesh, Uttarakhand and Sikkim and in the north-eastern region of our country were provided scholarships during 2011-12 with the vision that this financial support will light up the lives of these young scholars and play an important part in realizing their dreams. Study material like books, stationery, school bags and school uniforms/sweaters/shoes were distributed among poor and needy students around the Dulhasti Power Station, the Tanakpur Power Station and the Teesta-V Power Station. Bicycles were also given to a number of girl students studying in colleges and schools in the vicinity of the Subansiri Lower Project amounting to Rs. 4.39 lakh. Health A large number of immunization programmes and medical check-ups were organized for children studying in schools near NHPC''s projects and power stations. Besides these, regular health camps focusing women, children, disabled and old age persons were also organized across the northern and eastern regions. Others NHPC has always been in the forefront in times of national emergencies. It has helped the victims of natural calamities and contributed to various relief and rehabilitation measures. Your Company had organized relief and rehabilitation work in the areas devastated by earthquake in Sikkim. It also promoted rural sports and organized annual sports meets in the villages by providing both equipment and other facilities. It also organized a veterinary camp for cattle stock. As part of its environment protection initiatives, special thrust was placed on community plantation and forestry programmes around all its establishments. 29. CORPORATE GOVERNANCE A separate statement on Corporate Governance is enclosed as a part of the Directors'' Report along with the Certificate for Compliance as Annexure�I and the Management Discussion and Analysis Report as Annexure�II to this Report. 30. RIGHT TO INFORMATION ACT, 2005 In compliance with the provisions of the Right to Information Act, 2005, NHPC provided various information on its website during the year under review. To enable nationwide access to this information, Assistant Public Information Officers were appointed at each of the power stations/projects/regional offices/units. All the applications received under this Act were attended to and information furnished to the applicants. Mr. S.K. Dubey, Chief Engineer, is designated as the Central Public Information Officer. 31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo as 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 is given in Annexure-III and forms part of the Directors'' Report. 32. PARTICULARS OF EMPLOYEES Under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, the information is set out in Annexure � IV to the Directors'' Report. The Company (excluding JVs and Subsidiaries) had 11,037 employees as on 31st March, 2012. No employee employed throughout the year was in receipt of remuneration of more than Rs. 60 lakh per annum and 167 employees employed for a part of the year were in receipt of remuneration of more than Rs. 5 lakh per month. 33. STATUTORY AUDITORS The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s S. N. Nanda & Co., M/s Singhi & Co., M/s Baweja and Kaul and M/s Tiwari & Associates were appointed as Joint Statutory Auditors for financial year 2011-12. 34. AUDITORS'' REPORT The Auditors'' Report refers to various notes incorporated by the Company in note no. 14.1 and 35, which are self-explanatory. The report of the Statutory Auditors with comments of the Comptroller & Auditor General of India is enclosed as Annexure - V and VI respectively. The consolidated Financial Statement of the Company along with the Auditor''s Report is given in Annexure - VII. 35. COST AUDITORS As prescribed under the Cost Accounting Records (Electricity Industry) Rules, 2001, cost accounts are being maintained by all Stations of the Company since 2002-03. The cost audit for 2011-12 is under process. The following firms of Cost Auditors were appointed to conduct an audit of cost accounting records of power stations indicated against each firm for the financial year 2011- 12 under Section 233-B of the Companies Act, 1956: Name of the Firm Name of Power Station M/s Ramnath Iyer & Co., New Delhi Uri-I Power Station & Dulhasti Power Station M/s R.M. Bansal & Co., Kanpur(Uttar Pradesh) Sewa-II Power Station & Chamera-I Power Station M/s Chandra Wadhwa & Co., New Delhi Dhauliganga Power Station & Tanakpur Power Station M/s Krishan Singh Berk, Faridabad (Haryana) Bairasiul Power Station & Chamera- II Power Station M/s D. Dutt & Associates, Kolkata (West Bengal) Rangit Power Station & Teesta-V Power Station M/s R.J. Goel & Co., New Delhi Salal Power Station & Loktak Power Station The Cost Audit report for which due date was 27.09.11 were filed for the financial year 2010-11 as per details below. S. Power Name of Cost Membership No. Station Auditor No. 1. Uri-I K. L. Jaisingh and Co. 1222 2. Dulhasti K. L. Jaisingh and Co. 1222 3. Salal R. M. Bansal and Co. 3323 4. Chamera-I K. G. Goyal and 10884 Associates 5. Bairasiul Jugal K. Puri and 3703 Associates 6. Chamera-II Jugal K. Puri and 3703 Associates 7. Loktak D. Dutta & Associates 11633 8. Rangit D. Dutta & Associates 11633 9. Teesta-V R. M. Bansal and Co. 3323 10. Dhauliganga S. K. Adya & Co. 765 11. Tanakpur S. K. Adya & Co. 765 12. Sewa-II K. G. Goyal and 10884 Associates S. Power Address Actual Date of filing No. Station of Cost Audit Report 1. Uri-I J-7, Sector-XI, Jaisingh House, Noida-201301 25/08/2011 2. Dulhasti J-7, Sector-XI, Jaisingh House, Noida-201301 25/08/2011 3. Salal A-201, Twin Towers, LakhanPur, Kanpur, 26/08/2011 Uttar Pradesh-208024 4. Chamera-I 4-A, Pocket 2,Mix Housing, New Kondli, 26/08/2011 Mayur Vihar III, New Delhi � 110096 5. Bairasiul K 19 (GF), South Extension Part-II, New Delhi 29/08/2011 � 110049 6. Chamera-II K 19 (GF), South Extension Part-II, New Delhi 29/08/2011 � 110049 7. Loktak 58, Creek Row, Kolkata � 700014 29/08/2011 8. Rangit 58, Creek Row, Kolkata � 700014 29/08/2011 9. Teesta-V A-201, Twin Towers, Lakhan Pur, Kanpur, 26/08/2011 Uttar Pradesh-208024 10. Dhauliganga 1158/Sector-14, Faridabad- 121007, Haryana 26/08/2011 11. Tanakpur 1158/Sector-14, Faridabad- 121007, Haryana 26/08/2011 12. Sewa-II 4-A, Pocket 2,Mix Housing, New Kondli, 26/08/2011 Mayur Vihar III, New Delhi � 110096 36. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. A statement of the Holding Company''s interest in the Subsidiary Company is annexed to the report. 37. SUBSIDIARY COMPANIES Your Company has two Subsidiary Companies � NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited. Detailed information about these Companies is given in the Management Discussion and Analysis Report. The Annual Accounts along with the Auditors'' Report and the Directors'' Report of NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited are not being attached with the Balance Sheet of the Company. In accordance to the general circular issued by the Ministry of Corporate Affairs, Government of India, any shareholder interested in obtaining a copy of these reports related to Subsidiary Companies may write to the Company Secretary at the Company''s registered office. The information is also available on the NHPC website www.nhpcindia.com. The annual accounts of the Subsidiary will also be kept open for inspection at the Registered Office of the Company and that of the respective of Subsidiary Companies. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiaries. The statement under Section 212 of the Companies Act, 1956 is annexed to this report. 38. DIRECTORS'' RESPONSIBILITY STATEMENT As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following: (i) In the preparation of the annual accounts, applicable accounting standards were followed along with proper explanation relating to material departures; (ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; (iii) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of their knowledge and ability; and (iv) The Directors prepared the annual accounts on a going concern basis. 39. BOARD OF DIRECTORS The present composition of Directors is given in the Corporate Governance Report. Since the last report the following Directors completed their tenures: S. No. Name of the Director Category of Director Date of cessation of directorship 1. Shri K. Dharmarajan Independent Director 03.09.2011 2. Shri Sudhir Kumar Government Nominee Director 01.12.2011 3. Shri Rakesh Jain Government Nominee Director 03.01.2012 Since the last report following Directors joined the Board: S. No. Name of the Director Category of Director Date of joining the Board 1. Shri G. S. Vedi Independent Director 08.11.2011 2. Shri A. K. Mago Independent Director 09.11.2011 3. Shri R. Jeyaseelan Independent Director 12.11.2011 4. Shri G. Sai Prasad Government Nominee Director 20.12.2011 5. Shri A. S. Bakshi Government Nominee Director 17.01.2012 6. Shri Ashoke Kumar Dutta Independent Director 30.03.2012 7. Shri Atul Kumar Garg Independent Director 30.03.2012 8. Shri Shantikam Hazarika Independent Director 24.05.2012 40. ACKNOWLEDGEMENTS Your Directors would like to express their gratitude for the continued support and guidance received from the different wings of the Government of India, particularly from the Ministry of Power, the Ministry of Finance, the Planning Commission, Ministry of Environment and Forests, Department of Public Enterprises, Ministry of Corporate Affairs, the CEA and CWC as well as State Governments, the Regional and State Electricity Board, the beneficiaries drawing power from our power stations as also our other valuable clients for consultancy assignments. Thanks are also due to various international financing institutions as well as Indian financial institutions, bankers, SEBI, stock exchanges, lenders and investors at large for the confidence reposed by them in NHPC. The Board also acknowledges and appreciates the contributions made by contactors, vendors, consultants and others for achieving the desired goals of the Company. Your Directors acknowledge the suggestions received from Statutory Auditors, Cost Auditors and the office of the Comptroller & Auditor General of India and are grateful for their consistent support and cooperation. Your Directors would also like to place on record their deep and sincere appreciation for the hard work, dedication and unstinting efforts of your Company''s employees to ensure that your Company reaches the pinnacle of success. For and On behalf of the Board of Directors (G. Sai Prasad) Place: New Delhi Chairman and Managing Director Date : 30.07.2012 DIN No.: 00325308

Source : Dion Global Solutions Limited

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