1.  We have audited the accompanying financial statements of NTPC
 LIMITED (the Company) which comprises the Balance Sheet as at 31st
 March 2012, and the Statement of Profit and Loss and Cash Flow
 Statement for the year then ended, and the significant accounting
 policies and other explanatory information. These financial statements
 are the responsibility of the Companys management. Our responsibility
 is to express an opinion on these financial statements based on our
 audit.
 
 2.  We conducted our audit in accordance with Auditing Standards
 generally accepted in India. Those standards require that we plan and
 perform the audit to obtain reasonable assurance about whether the fi
 nancial statements are free from material misstatement. An audit
 includes examining, on test basis, evidence supporting the amounts and
 disclosures in the financial statements. An audit also includes
 assessing the accounting principles used and significant estimates
 made by the management, as well as evaluating the overall financial
 statement presentation. We believe that our audit provides a reasonable
 basis for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 as
 amended by Companies (Auditors Report) (Amendment) Order 2004, issued
 by the Government of India in terms of sub-section (4A) of section 227
 of the Companies Act, 1956, we enclose in the annexure a statement on
 the matters specifi ed in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in annexure referred to in para 3 above, we
 report that:
 
 a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 b) In our opinion, proper books of account as required by law have been
 kept by the Company so far as it appears from our examination of those
 books;
 
 c) The balance sheet, statement of profit and loss and cash fl ow
 statement dealt with by this report are in agreement with the books of
 account;
 
 d) In our opinion, the balance sheet, statement of profit and loss and
 cash fl ow statement dealt with by this report comply with the
 Accounting Standards referred to in sub-section (3C) of Section 211 of
 the Companies Act, 1956;
 
 e) Being a Government Company, pursuant to the Notification no. GSR
 829(E) dated 21.10.2003 issued by Government of India, provisions of
 clause (g) of sub-section (1) of Section 274 of the Companies Act,
 1956, are not applicable to the Company;
 
 f) Without qualifying our report, we draw attention to note no. 22 a)
 and 22 b) in respect of accounting of sales on provisional basis
 pending determination of tariff by the Central Electricity Regulatory
 Commission;
 
 g) In our opinion, and to the best of our information and according to
 the explanations given to us, the said accounts read with the signifi
 cant accounting policies and the explanatory notes thereon, give the
 information required by the Companies Act, 1956 in the manner so
 required and give a true and fair view in conformity with the
 accounting principles generally accepted in India:
 
 a.  in the case of balance sheet, of the state of affairs of the
 Company as at 31st March 2012,
 
 b.  in the case of statement of profit and loss, of the profit for
 the year ended on that date, and
 
 c.  in the case of cash fl ow statement, of the cash fl ows for the
 year ended on that date.
 
 ANNEXURE TO THE AUDITORS REPORT
 
 Statement referred to in paragraph (3) of our report of even date to
 the members of NTPC LIMITED on the accounts for the year ended 31st
 March 2012
 
 (i) (a) The Company has generally maintained proper records showing
 full particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the assets have not been physically verifi ed by the management
 during the year but there is a regular programme of verifi cation to
 cover all assets over two years which, in our opinion, is reasonable
 having regard to the size of the Company and the nature of its assets.
 No material discrepancies were noticed on such verifi cation.
 
 (c) Substantial part of the fixed assets has not been disposed off
 during the year.
 
 (ii) (a) The inventory has been physically verifi ed by the management
 at reasonable intervals.
 
 (b) The procedures of physical verifi cation of inventory followed by
 the management are reasonable and adequate in relation to the size of
 the Company and the nature of its business.
 
 (c) The Company is maintaining proper records of inventory. No material
 discrepancies were noticed on such verifi cation.
 
 (iii) (a) The Company has not granted any loans secured or unsecured to
 any companies, firms or other parties covered in register maintained
 under Section 301 of the Companies Act, 1956.
 
 In view of clause 4(iii)(a) above, the clauses 4(iii)(b), 4(iii)(c) and
 4(iii)(d) of the Order are not applicable.  (e) The Company has not
 taken any loans, secured or unsecured from companies, firms or other
 parties covered in register maintained under Section 301 of the
 Companies Act, 1956.  In view of 4(iii) (e) above, the clauses 4(iii)
 (f) and 4(iii) (g) of the Order are not applicable.
 
 (iv) In our opinion and according to the information and explanations
 given to us, there is adequate internal control system commensurate
 with the size of the Company and the nature of its business for
 purchase of inventory and fixed assets and for sale of electricity,
 goods and services. During the course of our audit, we have not
 observed any continuing failure to correct major weaknesses in internal
 control systems.
 
 (v) (a) According to the information and explanations given to us,
 during the year under audit there have been no contracts or
 arrangements which need to be entered in the register maintained under
 section 301 of the Companies Act, 1956.  In view of clause 4(v) (a)
 above, the clause 4(v) (b) of the Order is not applicable.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the Company has complied with the directives issued by the
 Reserve Bank of India, the provisions of Sections 58A and 58AA or any
 other relevant provisions of the Companies Act, 1956 and the Companies
 (Acceptance of Deposits) Rules, 1975 with regard to the deposits
 accepted from the public. No order has been passed with respect to
 Section 58A and 58AA, by the Company Law Board or National Company Law
 Tribunal or Reserve Bank of India or any Court or any other tribunal.
 
 (vii) In our opinion, the Company has an internal audit system
 commensurate with its size and nature of business.
 
 (viii) We have broadly reviewed the accounts and records maintained by
 the Company pursuant to the Rules made by the Central Government for
 the maintenance of cost records under section 209 (1) (d) of the
 Companies Act, 1956 and we are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained. We have
 not, however, made detailed examination of the records with a view to
 determine whether they are accurate and complete.
 
 (ix) (a) Undisputed statutory dues including provident fund, investor
 education and protection fund, income tax, sales-tax, wealth tax,
 service tax, custom duty, excise duty, cess and other statutory dues
 have generally been regularly deposited with the appropriate
 authorities and there are no undisputed dues outstanding as on 31st
 March 2012 for a period of more than six months from the date they
 became payable.
 
 (b) The disputed statutory dues aggregating to Rs. 164.77 crore that have
 not been deposited on account of matters pending before appropriate
 authorities are detailed below:
 
                                                       Rs. crore
 
 Sl.
 No.   Name of
       Statute        Nature of 
                      dues           Forum where the 
                                     dispute is pending      Amount
 
 1     Central Sales 
       Tax and Sales
       Tax/           Sales Tax/VAT  Additional Commiss
                                     ioner of Sales Taxes     26.53
       VAT Acts of 
       Various States
                                     Commissioner of 
                                     Sales Tax                 6.46
 
                                     Dy. commissioner of 
                                     Sales/ Commercial Taxes  15.92
 
                                     High Court               83.51
 
                                     Sales Tax Tribunal        1.81
 
                                     Joint Commissioner
                                    (Appeal) Trade tax         2.05
 
 2     Water (Preve
       ntion & 
       Control        Water/
                      Pollution
                      Cess           Appellate Authority,
                                     Pollution Control Board   0.41
       of Pollution)
       Cess Act,
       1977
  
 3.    Central Excise
       Act, 1944      Central Excise
                      Duty/Service
                      tax            CESTAT                    1.61
 
 4.    Income Tax 
       Act, 1961      Income Tax     Income Tax Appellate
                                     Tribunal/CIT              1.63
 
                                     Allahabad High Court     24.11
 
                                     Asst. Commissioner        0.73
 
       Total                                                 164.77
 
 (x) The Company has no accumulated losses and has not incurred cash
 losses during the financial year covered by our audit and the
 immediately preceding financial year.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in repayment of dues to fi
 nancial institutions, banks or debenture holders.
 
 (xii) According to the information and explanations given to us,
 Company has not granted loans and advances on the basis of security by
 way of pledge of shares, debentures and other securities.
 
 (xiii) The Company is not a chit fund or a nidhi/mutual benefit
 fund/society. Therefore, the provisions of clause 4(xiii) of the Order
 are not applicable to the Company.
 
 (xiv) The Company is not dealing in or trading in shares, securities,
 debentures and other investments. Accordingly, the provisions of clause
 4(xiv) of the Order are not applicable to the Company.
 
 (xv) According to the information and explanations given to us, the
 Company has not given any guarantees for loans taken by others from
 banks or financial institutions.
 
 (xvi) According to the information and explanations given to us, the
 term loans have been applied for the purpose for which they were
 obtained.
 
 (xvii) According to the information and explanations given to us and on
 an overall examination of the balance sheet of the Company, we report
 that no funds raised on short-term basis have been used for long-term
 investments.
 
 (xviii) According to the information and explanations given to us, the
 Company has not made any preferential allotment of shares during the
 year.
 
 (xix) According to the information and explanations given to us, the
 Company has created security or charge in respect of the Bonds issued
 by the Company during the year.
 
 (xx) According to the information and explanations given to us, the
 Company has not raised any money by public issue during the year.
 
 (xxi) According to the information and explanations given to us and as
 represented by the Management and based on our examination of the books
 and records of the company and in accordance with generally accepted
 auditing practices in India, we have been informed that 3 cases of
 frauds involving an aggregate amount of Rs. 1.08 crore towards
 misappropriation of funds by the employees have been committed on the
 company during the year. The Company has taken appropriate action
 against these employees and the matters are under investigation.
 
 For O. P. Bagla & Co.   For K.K.Soni & Co.   For PKF Sridhar & Santhanam
 
 Chartered Accountants   Chartered Accountants    Chartered Accountants
 
 Firm Reg. No. 000018N   Firm Reg. No. 000947N    Firm Reg. No. 003990S
 
 (Rakesh Kumar)               (S.S. Soni)             (S. Narasimhan)
 
    Partner                     Partner                   Partner
 
 M No .087537                 M No.094227               M No.206047
 
 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
 
 (R. Raghuraman)             (R.C. Agrawal)          (Prabuddha Gupta)
 
 Partner                         Partner                  Partner
 
 M No. 081350                 M No.070229               M.No.400189
 
 Place : New Delhi
 
 Dated : 10th May 2012