NTPC

1.  We have audited the attached Balance Sheet of NTPC LIMITED as at
 31st March 2009, the Profit and Loss Account and also the Cash Flow
 Statement for the year ended on that date annexed thereto. 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
 financial 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 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 specified 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, Profit and Loss Account and Cash Flow Statement
 dealt with by this report are in agreement with the books of account;
 
 d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
 Flow 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) In our opinion, and to the best of our information and according to
 the explanations given to us, the said accounts read with the
 Accounting Policies and Notes thereon in Schedule 26, 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 2009,
 
 b.  in the case of Profit and Loss Account, of the profit for the year
 ended on that date, and
 
 c.  in the case of Cash Flow Statement, of the cash flows 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 31
 March 2009
 
 (i) (a) The company has senerally maintained proper records showins
 full particulars including quantitative details and situation of fixed
 assets.
 
 (b) All the assets have not been physically verified by the management
 during the year but there is a regular programme of verification 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 verification.
 
 (c) Substantial part of the fixed assets has not been disposed off
 during the year.
 
 (ii) (a) The inventory has been physically verified by the management
 at reasonable intervals.
 
 (b) The procedures of physical verification of inventories 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. The
 discrepancies noticed on physical verification of inventories, wherever
 material, have been properly dealt with in the books of account.
 
 (iii) (a) The company has not granted any loans secured or unsecured to
 any company, firm or other party covered in the register maintained
 under section 301 of the Companies Act, 1956.
 
 In view of clause (iiiXa) above, the clauses (iiiXb), (HiXc) and
 (iiiXd) are not applicable.
 
 (e) The company has not taken any loans secured or unsecured from any
 company, firm, or other parties covered in register maintained under
 section 301 of the Companies Act, 1956.
 
 In view of (iii) (e) above, the clauses (iii) (f) and (iii) (g) 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 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 (v) (a) above, the clause (v) (b) is not applicable.
 
 (vi) In our opinion and according to the information and explanations
 given to us, the company has complied with 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 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 the size and the nature of its 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 within a period of six months from the date they became
 payable except for entry tax ofRs.88.95 million which has since been
 deposited with the appropriate authorities.
 
 (b) The disputed statutory dues aggregating to Rs.593 million that have
 not been deposited on account of matters pending before appropriate
 authorities are detailed below:
 
 SI.No.   Name of Statute                         Nature of dues
 
 1     Central Sales Tax and Sales                Sales Tax/ VAT
     Tax/VAT Acts of Various States
 2       Water (Preverttion & Control of           Water/Pollution Cess
         Pollution) Cess Act, 1977
 3.      Indian Stamp Act, 1899                       Land Tax
 4.       Central Excise Act, 1944                    Central Excise duty ,„
 5.       Income Tax Act, 1961                        Income tax
 
         Total
 
 Forum where the dispute Is pendlns                Rs.million     
 Additional Commissioner of Sales Taxes                65
 Commissioner of Sales Tax                              26
 Dy. commissioner of Sales/ Commercial Taxes           332
 High Court                                             19
 Sales Tax Tribunal                                     43
 Joint Commissioner (Appeal) Trade tax                  14
 Appellate Authority, Pollution Control Board           13  
 Appellate Authority - Board of Revenue                 14
 CESTAT                                                  2
 Income Tax Appellate Tribunal                           5
 Allahabad High Court                                   60
                                                       593
 
 (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
 financial 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
 Companies (Auditors Report) Order, 2003 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 Companies (Auditors Report) Order, 2003 are not
 applicable to the company.
 
 (xv) Company has not given any guarantees for loans taken by others
 from banks or financial institutions.
 
 (xvi) In our opinion, the term loans have been applied for the purpose
 for which they were raised.
 
 (xvti) 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
 investment.
 
 (xviii) According to the information and explanations given to us, the
 company has not made 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 .
 
 
 
 For Varma and Varma        For B.C.Jain & Co.     For Parakh & Co.
 Chartered Accountants     Chartered Accountants Chartered Accountants
 (Cherian K. Baby)         (Ranjeet Singh)      (Aditya Rawat)
 Partner                    Partner               Partner
 M No.16043               M No.73488             M No.71767
 
 For S.K. Mittal & Co.  For Dass Gupta & Associates.  For S.K. Mehta &
 Co.
 Chartered Accountants  Chartered Accountants      Chartered Accountants
 (S.K. Mittal)          (Ashok Kumar Jain)         (Rohit Mehta)
 Partner                 Partner                     Partner
 M No.8506               M No.90563                 M.No.91382
 
 Place: New Delhi
 Dated : 22nd May 2009