you are here:

NTPC Ltd.

BSE: 532555 | NSE: NTPC |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE733E01010 | SECTOR: Power - Generation & Distribution

BSE Live

Jan 25, 16:00
135.20 2.65 (2.00%)
Volume
AVERAGE VOLUME
5-Day
1,350,205
10-Day
1,594,651
30-Day
846,973
243,359
  • Prev. Close

    132.55

  • Open Price

    130.05

  • Bid Price (Qty.)

    134.85 (2)

  • Offer Price (Qty.)

    135.20 (450)

NSE Live

Jan 25, 15:59
135.30 2.70 (2.04%)
Volume
AVERAGE VOLUME
5-Day
13,266,544
10-Day
11,750,790
30-Day
12,040,914
10,007,486
  • Prev. Close

    132.60

  • Open Price

    131.20

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    135.30 (3194)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

The Directors are pleased to present the 31st Annual Report and the audited accounts for the year ended March 31, 2007. FINANCIAL RESULTS Rs. Million 2006-07 2005-06 Income Sale of Energy 325344 266564 Consultancy 608 452 Other income (Including energy internally consumed) 27814 26354 Gross Income 353766 293370 Expenditure Fuel 198181 163947 Employees Remuneration & Benefits 11580 9684 Generation, Administration & other expenses 15619 12721 Interest 9746 4845 Finance charges 8848 12787 Depreciation 20754 20477 Total Expenditure 264728 224461 Profit before tax, provisions and prior period adjustments 89038 68909 Tax 20427 7885 Profit after tax but before provisions and prior period adjustments 68611 61024 Less Prior Period Adjustments (Net) (109) 2488 Provisions (Net) 73 334 Net Profit after tax 68647 58202 Appropriations: Transfer to Bonds Redemption Reserve 3487 2926 Interim Dividend 19789 16491 Proposed Dividend 6596 6596 Tax on Dividend 3896 3238 Transfer to General Reserve 36000 29000 Transfer to Capital Reserve 4 29 FINANCIAL PERFORMANCE Total income of the company for the year increased by 20.59% to Rs. 353,766 million from Rs. 293,370 million during the previous year. Profit after tax but before provisions and prior period adjustments increased by 12.43% to Rs. 68,611 million from Rs. 61,024 million. Net profit after tax increased to Rs. 68,647 million from Rs. 58,202 million registering a growth of 17.95% over last year. DIVIDEND The Directors have recommended a final dividend of Rs.0.80 per share in addition to Rs. 2.40 per share of interim dividend paid in February 2007. The dividend for the year thus aggregates to Rs 3.20 per share as against Rs. 2.80 per share paid last year. The final dividend shall be paid after your approval at the Annual General Meeting. The total dividend pay-out for the year amounting to Rs. 26,385 million represents 38.43 % of the profit after tax as against a dividend pay-out of 39.67% in the previous year. The total dividend pay-out including tax accounts for 44.11% of profit after tax. The dividend has been recommended in accordance with the Company's policy of balancing dividend pay-out with the requirement of deployment of internal accruals for its growth plans. Your Directors believe that growth of the company through capacity addition and also by way of backward and forward integration and strategic diversification of its operations would lead to increase in shareholders value. OPERATIONAL PERFORMANCE During the year, the power stations of the company generated 188.674 billion units of electricity which was 28.5% of the total power generated in India. The power generated by the company has registered an increase of 10.41% over the previous year' s generation of 170.880 billion units. During the year, the coal stations of the company operated at a plant load factor of 89.43% as compared to 87.54% during the previous year. Gas stations of the company operated at a plant load factor of 71.90% as compared to 65.81 % in the previous year. The average availability for coal and gas stations for the year was 90.09% and 85.09% respectively. A detailed discussion on the operations and performance for the year is given in the Management Discussion and Analysis included as a separate section in the annual report. COMMERCIAL PERFORMANCE During the year, your Company realized in full, the amounts due from customers against bills raised for sale of power. For the fourth consecutive year, the Company has been able to achieve 100% realization of current bills. All the states have opened and are maintaining LC equal to or more than 105% of average monthly billing as per One-time Settlement Scheme. INSTALLED CAPACITY During the year, a total capacity of 3155 MW was added to NTPC s installed capacity. Out of the above, 1710 MW was commissioned as expansion projects including 2X500 MW at Vindhyachal, 210 MW at Unchahar and 500 MW at Kahalgaon. Further, Ministry of Power, Govt of India transferred Badarpur Thermal Power Station (BTPS) having an installed capacity of 705 MW w.e.f. 1.6.2006. In addition, 740 MW was added through its Joint Venture, Ratnagiri Gas and Power Private Limited at Dabhol. Recently, in fiscal 2008, a 500 MW unit at Sipat Super Thermal Power Project - Stage - II was commissioned on 27.05.2007. Thus, the total installed capacity of the NTPC Group has increased from 24249 MW to 27904 MW. Details of the capacities are given below: Owned by NTPC MW Coal 22,895 Gas 3,955 Sub-total 26,850 Joint ventures SAIL (Coal) 314 Ratnagiri (Gas) 740 Sub-total 1,054 Total 27,904 CAPACITY ADDITION PROGRAM The Company has adopted multi-pronged growth strategy to become 50000 MW plus company by the year 2012 and to have 75000 MW plus installed capacity by 2017. This is a huge capacity addition programme. The strategy, inter-alia includes capacity addition through green field projects, expansion of existing stations, joint venture and takeover of stations. Besides developing thermal capacity in a major way, your Company is setting up hydro capacity of 1920 MW by 2012. To foray into nuclear power generation business, the Company has amended its Object Clause of the Memorandum of Association through the process of postal ballot, which received overwhelming support from you. The company plans to add 2000 MW of nuclear capacity by 2017. Efforts are also being made to add at least 1000 MW capacity through Non-conventional Energy Resources by 2017. A Memorandum of Understanding was signed with Asian Development Bank on July 23, 2007 to set up as a Joint Venture, a generating Company with equity contribution by your company, ADB and other strategic investors. The company shall, over next three years, establish and hold a portfolio of about 500 MW of renewable generation. PROJECTS PLANNED The Company has envisaged a capacity addition programme of about 22600 MW in XI Plan (2007-2012). After the commissioning of a unit of 500 MW of Sipat stage-II, the balance capacity to be added during this period is 22100 MW. A capacity of 13360 MW is under execution and for the balance, planning and preparation are at advance stage execution. Taking into account all the plans and agreements, the list of the projects which the company is working on for commissioning till the year 2012 and beyond are presently as follows: Scheduled Commissioning Name of the Project Capacity 2007-12 (MW) Coal Based-Ongoing Projects 1. Kahalgaon-II, Phase I, Unit - V 500 500 2. Kahalgaon-II, Phase II 500 500 3. Sipat-II, Unit-V 500 500 4. Sipat-I 1980 1980 5. Barh-I 1980 1980 6. Korba-III 500 500 7. Bhilai Power expansion-JV with SAIL 500 500 8. Farakka-III 500 500 9. NCTPP-II, Dadri 980 980 10. Simhadri-II 1000 1000 Hydro Projects-Ongoing 11. Koldam HEPP 800 800 12. Loharinag Pala HEPP 600 600 13. Tapovan Vishnugad HEPP 520 520 14. Ennore - JV with TNEB 1000 1000 15. Aravali, Jhajjar - Joint Venture with HPGCL & IPGCL 1500 1500 Sub-total of ongoing projects 13360 13360 Coal Based-New projects 16. Barh-II 1320 1320 17. Bongaigaon 750 750 18. North Karanpura 1980 1320 19. Nabinagar-JV with Railways 1000 750 20. Mauda, Maharashtra 1000 1000 21. Badarpur - III 1000 1000 Gas Based-New Projects 22. Kawas - II, Gujarat 1300 1300 23. Jhanor-Gandhar-II, Gujarat 1300 1300 Sub-total of new projects 12150 11240 TOTAL 23010 22100 Out of the above, Korba - Stage-III, Farakka-Stage-III, Loharinag Pala HEPP and Tapovan Vishnugad HEPP are being constructed as merchant power projects. TRANSFER OF BONGAIGOAN POWER PLANT A tripartite transfer Agreement has been signed on May 30, 2007 amongst Govt. of Assam, Assam Power Generating Co. Ltd. and your Company for transfer of existing plant at Bongaigaon and to set up a new plant of 750 MW with 3 units of 250 MW each. CAPACITY ADDITION THROUGH SUBSIDIARIES AND JOINT VENTURES Besides adding capacities on its own, your Company has also plans to add capacities through some of its subsidiaries and joint ventures. Hydro projects planned for implementation by NTPC Hydro Limited, a wholly owned subsidiary of the company are as follows: Project Location Capacity Lata Tapovan Uttaranchal 171 MW Rammam-III West Bengal 120 MW Vaishali Power Generating Company Limited (VPGCL), a newly formed subsidiary Company has taken over Muzaffarpur Thermal Power Station having two units of 110 MW each from Bihar State Electricity Board. Your Company has contributed 51% of equity and balance equity was contributed by Bihar State Electricity Board and its nominees in this company. The equity contribution of your Company is expected to increase upto 74% depending on final transfer value of the station to VPGCL. Details of the projects being implemented through joint ventures are given below: JV Partner Company Details Steel Authority NTPC-SAIL Power Expansion of of India Limited Supply Company existing capacity (SAIL) Pvt. Limited. by adding 2 x 250 MW of coal based units scheduled for commissioning during 2007-08 at Bhilai Tamil Nadu NTPC Tamil A 50:50 joint Electricity Nadu Energy Venture Company Board Company formed for setting Limited. up a coal based project having two units of 500 MW each at Ennore, Tamil Nadu. Substantial land has been acquired. The project has been accorded Mega Project status. Indraprastha Aravali Power A joint Venture Power Company Company formed Generating Private Limited for setting up a Co Ltd. coal based project (IPGCL) and having a capacity Haryana Power of 1500 MW Generating located at Jhajjar, Co Ltd. Haryana. NTPC has (HPGCL) contributed 50% equity and balance equity equally contributed by HPGCL and IPGCL. In addition, your Company has also entered into Memorandum of Understanding with other Joint Venture partners. The status of progress of this JV is furnished hereunder. JV Partner Company Details Indian Railways Company under A thermal Project formation. NTPC having a capacity to contribute of 1000 MW at 74% of equity Nabi Nagar in and 26% equity Bihar. CCEA to be contributed approval received by Indian Railways for the JV project. STRATEGIC DIVERSIFICATION In order to strengthen its competitive advantage in power generation business, the Company also plans to diversify its portfolio to emerge as an integrated power major, with presence across entire energy value chain through backward and forward integration into areas such as coal mining, LNG value chain, power trading, distribution etc. Business opportunities are being continuously explored through environment scanning and new business plans are adopted through mid-course correction. Your Company has signed a Business Collaboration and Shareholders agreement with Transformers and Electricals Kerala Ltd. (TELK) and the Government of Kerala on June 23,2007 for synergy in the field of manufacturing and repair of Power Transformers, Current Voltage Transformers, Circuit Breakers, Isolated Phase, Bus Ducts, Shunt Reactors etc. As a result of this agreement, your Company has agreed to acquire 44.6% stake in TELK from Government of Kerala and its undertakings. GLOBALISATION INITIATIVES The Company is keenly exploring opportunities to mark its footprints in different parts of the world. During the year 2006-2007, the Company signed a Memorandum of Agreement with Government of Sri Lanka and Ceylon Electricity Board for development of a 2X250 MW Coal based power project at Trincomalee in Sri Lanka. The project would be developed through a Joint Venture with Ceylon Electricity Board. A Memorandum of Understanding was also signed between the Company and Ministry of Energy, Federal Government of Nigeria (FGN) for energy cooperation. Under the MoU, FGN shall provide at least 3 Million Tonnes Per Annum (MTPA) of LNG to NTPC on long-term basis at a reasonable price and encourage NTPC to participate in bidding for gas block. Upon successful operation of obligation by FGN, the Company shall set up and operate a 500 MW coal based power plant and a 700 MW gas based power plant in Nigeria on its own or through a Joint Venture. The Company signed a Memorandum of Understanding with KYUSHU Electric Power Company Inc., Japan for establishing an alliance under which experts and information from different areas of the business will be exchanged to promote mutual understanding of the systems, policies, business planning & management and various best practices used by the parties and for exploring the possibility of joint business development. The Company is also seeking investment from West Asian/Middle East countries for its power projects in line with the decision of Ministry of Power, Government of India. High level delegations from your Company/Ministry of Power visited various West Asian countries viz. Oman, Kuwait, Bahrain, UAE and Yemen to explore the possibility of investments by prospective investors in Power Projects of the Company as well as to explore the possibility of offering expertise to West Asian countries for developing mutually beneficial relationship. FINANCING OF NEW PROJECTS All the planned capacity addition programs shall be financed with a debt to equity ratio of 70:30. Your directors believe that internal accruals of the company would be sufficient to finance the equity portion of the investments. Your directors believe that your Company is well positioned to raise the required borrowing, as your Company is presently geared with a debt to equity ratio of 0.50. Your Company would tap domestic as well as overseas markets for borrowings. During the year, your Company has signed an agreement with Asian Development Bank (ADB) for a loan of USD 300 million under Complementary Finance Scheme of ADB in September 2006. ADB has extended this loan for the first time to your Company directly and also without any Sovereign guarantee. FIXED DEPOSITS The cumulative deposits received by your Company from 604 depositors as at March 31, 2007 were Rs 328 million. Further an amount of Rs. 4 million has not been claimed on maturity by 107 depositors as on that date. FUEL SECURITY The Company is the largest consumer of coal in the country for power generation. During the year, your Company obtained long term coal linkages for its various projects from various subsidiary companies of Coal India Limited (CIL). The Company and Coal India initialled a Model Coal Supply Agreement on March 29, 2007 which inter-alia contains various provisions under which coal would be sourced from various subsidiaries of CIL by power stations for a continuous period of 20 years with a provision for review after 5 years of operation of the agreement. The Model Agreement provides for sourcing the present supplies as well as provides a platform for coal agreement for future power stations. The agreement provides for a mechanism of fixing the price derived from a pre decided floor price. To overcome temporary shortages in coal supply, your Company resorted to import of coal of 2.43 million tonnes being 2.14% of total coal consumed during the year 2006-07. Coal Mining On August 25,2006, Ministry of Coal approved the mining plan of 15 MTPA for the first coal mining project i.e. Pakri-Barwadih of your Company. This is the largest ever capacity planned, in the very first phase, in a single mine in the country. Process of selection of Mine Developer cum Operator for this mine is under way. For other coal mining blocks viz Chatti-Bariatu, Kerendari, Dulanga & Talaipalli, besides initiating work on completion of exploration, various studies have also been initiated. As a part of developing strategic alliances as well as deriving technical strengths, your Company has entered into following Memorandae of Understanding: MOU With Nature of Activity Mineral Exploration carrying out detailed exploration Corporation & preparation of Geological Report for coal blocks allotted to NTPC Singareni Collieries forming a Joint Venture Company Company Ltd. to take up coal mining in India and abroad Bharat Earth collaborating and associating for a Movers Limited long term mutually beneficial business association and to maximize/optimize coal production. May also consider BEML for engagement as Mine Developer/Operator for coal blocks owned by NTPC. Coal India Limited for formation of 50:50 Joint Venture Company to undertake development, operation and maintenance of coal blocks at Brahmini (1900 MT) and Chichro Patsimal (356 MT) in Jharkhand Exploration Activities The Company, along with M/s Geopetrol International Inc. and M/s Canoro Resources Ltd., has entered into a Production Sharing Contract with Government of India for exploration activities in the oil block allotted to the company in Arunachal Pradesh. The Company has 40% participating interest and the other two consortium partners each initially had 30 % participating interest in the Block. M/s Canoro Resources have since off-loaded 50% of their participating interest to M/s Brownstone Ventures Inc. The amendment to the Production Sharing Contract is in process. M/s Geopetrol International has been designated as the Operator of the Block. With the issuance of the Petroleum Exploration License by the State Government on February 16, 2006, the Operator has initiated various exploration activities. The Company is also exploring the possibility of equity participation/investment in different elements of Liquefied Natural Gas value chain viz. exploration & production, liquefaction, re-gasification, etc. in various countries. Near Term Strategies In order to mitigate the shortfall of gas at its existing gas based stations, the Company started procurement of spot re-gasified LNG w.e.f. June 2006. As a result of spot procurement of gas, the PLF of gas stations increased from 65.81% during 2005-06 to 71.90% during 2006-07. RENOVATION & MODERNISATION With aging of the units, your Company has made Renovation & Modernization a key thrust area. To meet the current and future requirement, R&M is being undertaken on a project mode akin to new builds with clearly identified unit shutdown dates and alignment of all R&M activities with this date. R&M has been refocused on feasible cost effective technology upgrade, targeting both capacity and efficiency improvements to bring the old units as close as possible to the new units. After successful completion of due diligence, your Company has signed an agreement for a term loan of USD 100 million with KfW of Germany in March 2007. In the past, KfW routed funding for our projects through the Government of India. This is the first loan directly provided by them to your Company. The loan is an unsecured facility without sovereign guarantee. The funds would be utilized to part finance the expenditure on Renovation and Modernization of your Company' s power plants. HUMAN RESOURCE MANAGEMENT The Company takes pride in its highly motivated and trained manpower that has contributed its best to bring the Company to its present strong position. The Company strongly believes in achieving organizational excellence through human resources and follows People First approach to leverage the potential of its employees to fulfill its business plan. The total employees strength of the Company was 24375 as on 31.3.2007 as against 24044 as on 31.3.2006. Fiscal 2007 Fiscal 2006 NTPC Number of employees 23,602 21,870 Man/MW ratio 0.91 0.91 Generation per employee (MUs) 7.99 7.81 Subsidiaries & Joint Ventures Employees of NTPC in subsidiaries and JVs 773 2174 Total employees 24,375 24,044 The overall Man-MW ratio for the year 2006-07 was 0.91 which includes Badarpur taken over by the Company on June 1, 2006. The employee morale remained high facilitating smooth working of the company and contributing to higher generation of power along with setting up of units in tight time frame. The attrition rate among executives during the year was 1.19%. Employee Relations Employee relations in the Company continued to be cordial and harmonious during the year. Workshops for employee representatives from projects were held, at the apex as well as regional level, to sensitize them to the changing business scenario, the opportunities, threats and challenges facing the company in the dynamics of an uncertain business environment and to reiterate their significant role in synergizing the potential of the human resource -the sole differentiating factor of competitive advantage in today' s knowledge economy. The overall industrial relations scenario was peaceful governed by harmony and mutual trust. Training and Development In consonance with corporate vision of being an integrated power major, your Company facilitates the development of all-round competence of its people in new business areas like mining, hydro, nuclear, distribution and other facets of operation and maintenance and project execution skills. The Power Management Institute (PMI) is NTPC s apex training and development centre providing planned as well as need based programmes in technical, managerial and information technology areas both for NTPC employees as well as for other organisations. A total of 340 training programmes in various technical and managerial disciplines were conducted. The programs covered a total of 8990 participants from NTPC and other organizations as compared to 8439 participants who attended training programs last year. CORPORATE SOCIAL RESPONSIBILITY The Company has always appreciated its social responsibility as a part of Corporate Governance philosophy. It follows the global practice of addressing CSR issues in an integrated multi-stake holder approach covering the environment and social aspects. In its endeavour to discharge its responsibility, it has undertaken activities in the areas of community development, environment, distributed generation, resettlement & rehabilitation. The Company has successfully commissioned six Distributed Generation Projects on self sustainable model. These projects were handed over to respective Village Energy Committee(s), the agencies founded by villagers themselves who collect the fuel, run the machines and also collect revenues. The Company is a signatory to Global Compact, an international CSR initiative. A report on progress made in this area is enclosed at Annex-X to Directors' Report. Rehabilitation & Resettlement The Company is committed to help the populace displaced for execution of its projects and has been making efforts to improve the Socio-economic Status of Project Affected Persons (PAPs) and also undertaking community development works in and around the projects. Socio- economic Survey for coal mining and some thermal power projects of NTPC is under progress. Rehabilitation Action Plan for various stations is under implementation. Social Impact Evaluation is also under progress for various projects. Adequate funds are made available to meet obligations under Rehabilitation Action Plan. IMPLEMENTATION OF OFFICIAL LANGUAGE The Company has made vigorous efforts for the propagation and successful implementation of the Official Language Policy of the Government of India. Several Hindi workshops were conducted at projects, regional offices and corporate centre during the year to encourage the employees to use Hindi in maximum official work. Hindi Competitions were held during Hindi fortnight observed during September, 2006 and Hindi Divas was organized on September 14, 2006. All important circulars, advertisements and house journals were released in Hindi. CenPEEP Center for Power Efficiency & Environmental Protection (CenPEEP) is a symbol of Company' s commitment to global environment concerns. CenPEEP is striving to achieve Green House Gas reduction from power sector by implementing various initiatives for optimization of efficiency and maintenance in Thermal Power Plants with technical assistance and training by USAID/USDOE support. Executive exchange program have been organized with some US utilities to give exposure to plant engineers for good overhauling practices. Exchange programs have also been organized under E8 Efficiency Improvement program of European nations. To increase the skill level of power plant engineers of SEBs, CenPEEP team is disseminating best practices extensively to state utilities by organizing training programs at PMI and at SEBs. RESEARCH & DEVELOPMENT R&D provides high end scientific services to all NTPC stations as well as many outside stations, increases the availability & reliability of stations by providing condition assessment, failure analysis and solving and analyzing their specific problem and helping them in increasing the availability & reliability of the units. To carry out these in a structured manner, Indian Institute of Science, Bangalore has been appointed as consultant for Strategic gap analysis, benchmarking with best practices, prepare strategic Road-Map, networking with national and international labs., sourcing of manpower etc. R&D, along with BARC, is developing the technology for detecting on-line turbine blade damage as well as presence and progress of shaft crack. Advance corrective action will prevent catastrophic secondary damages and save significant amount in maintenance cost as well as downtime. Central Boiler Board has granted recognition to NTPC-R&D Centre-Noida as Well known Remnant Life Assessment firm which is valid for 5 years. The Company is in the process of developing Integrated Gasification Combined Cycle (IGCC) technology alongwith Bharat Heavy Electricals Limited suitable for Indian coal having high ash content and plans to set up a 100 MW pilot plant. An Energy Technologies Centre was set up with a mandate of being a world class research institute. The centre shall work in both fundamental and applied research with ultimate objective of developing the technologies through collaborative research. ENVIRONMENT MANAGEMENT The Company is taking a number of initiatives towards preservation of all elements of environment by providing state-of-the-art pollution control systems, strict environment monitoring, judicious use of natural resources (coal, gas, water and land), study of impact on ambient air due to plants' operations etc. Strict control is exercised during operation of the plants to optimize use of fuel (coal & gas). Advanced treatment facilities, recycling plants and closed cycle cooling water systems have been installed at a number of stations to conserve water to the maximum extent. Catchment area treatment, compensatory afforestation, rim plantation, cost of trees etc are finalized in consultation with respective State Governments and approved by the Ministry of Environment and Forests. Provision for the same is made in line with the terms agreed with the respective State Governments. The Company has also designed plants under implementation for use of beneficiated coal and imported low ash coal. The above measures not only help in reducing pollution and minimizing use of precious natural resources but also lead to reduction of CO2 emissions and thereby reducing global warming. The Company is undertaking afforestation programmes covering vast areas of land in and around its projects and till date has planted more than 18.2 million trees at its projects throughout the country. Thrust has also been given to bio-diesel plantation and around 4.8 lakh energy plants including Pongamia and Jatropha have already been planted. As a result of pursuing sound environment management systems and practices, all NTPC stations have been certified as ISO 14001 and IS 18001. Under the Clean Development Mechanism (CDM), the company has identified five projects namely North Karanpura (3X660 MW), Loharinas-Pala (4x150 MW), Tapovan Vishnugad (4x130 MW), Rammam III and Renovation and Modernisation Schemes of Unit 4 & 5 of Badarpur Thermal Power Station. National CDM Authority has accorded host country' s approvals for North Karanpura, Loharinas-Pala and Tapovan Vishnugad. Project Idea Notes are under preparation for Rammam III and Renovation and Modernisation Schemes of BTPS. ASH UTILISATION During the year, about 20.80 million tonnes of ash (53.21% of ash generated) has been utilized for various road embankments, mine filling, Ash Dyke raising and land development. Ash was also utilized in cement and asbestos industry. Ash is also being used for clay ash brick manufactures with the locally developed technology of using more ash than being used in fly ash bricks. MANAGEMENT OF CHANGE-IMPLEMENTATION OF ERP The Company is currently in the process of implementing an Enterprise Resource Planning (ERP) package covering maximum possible processes at all locations of the organization. ERP is expected to help your company achieve improved and faster exchange of information, improved productivity and reduction of costs, better data consistency, knowledge sharing and unification of planning and budgeting process. The roll-out across the Company is expected to be completed by May 2008. To achieve ERP implementation successfully across the Company, the SATCOM Network of NTPC is being strengthened to have full redundancy and secured data flow with alternate Network connectivity via Multi Protocol Label Switching-Virtual Private Network (MPLS-VPN) from M/s. Bharat Sanchar Nigam Limited (BSNL). LEVERAGING COMPANY' S CAPABILITIES FOR SECTOR REFORMS AND DEVELOPMENT The Government of India reposes a lot of confidence on your Company' s abilities in implementing plans and projects. This confidence has led the Government of India to make your Company a partner in a number of its initiatives. Some of the key initiatives are: Rajiv Gandhi Grameen Vidhyutikaran Yojana (RGGVY) Under Rajeev Gandhi Grameen Vidyutikaran Yojana, a Government of India Programme, started in X plan and likely to continue in XI plan too, rural electrification work on turnkey basis in 5 States i.e. Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa and West Bengal and one Union Territory (UT) i.e. Lakshdweep covering approximately 40,000 villages in 31 Districts is to be completed.194 villages have already been charged and electrification work is in progress in 7046 villages. In addition Kerala Government also entrusted rural electrification work on turnkey basis under RGGW covering 6 Districts. Partnership in Excellence Partnership in Excellence (PIE) Programme was launched by Ministry of Power, Government of India in August 2005 with an objective to improve the performance of 22 under-performing power stations in India, identified by CEA. Presently, 13 power stations of the 7 utilities viz, DVC, DPI, IPGCL, JSEB, UPRVUNL, THEB, TVNL with 5050 MW of total operational capacity have been entrusted to your Company, as partner utility. Performance turnaround has taken place at eight power stations. The plants entrusted to your Company recorded an additional generation of power- 2833 MUs - corresponding to an equivalent capacity addition of 430 MW, considering Average PLF as 75%. JOINT VENTURES AND SUBSIDIARIES The Company has formed a number of joint venture and subsidiary companies for undertaking specific business activities. The names of these companies and the percentage of your Company' s stake in them are as follows: The performance of these companies as well as the Consolidated Financial Statements are briefly discussed in the Management Discussion & Analysis section. The financial statements of subsidiaries along with the respective Directors' report are placed elsewhere in this annual report STATUTORY AND OTHER INFORMATION REQUIREMENTS Information required to be furnished as per the Companies Act, 1956, Listing Agreement with Stock Exchanges, Government guidelines etc. is annexed to this report as below: Particulars Annexure Management Discussion & Analysis I Report on Corporate Governance II Information on conservation of energy, technology absorption and foreign exchange earnings and outgo III Information as per Companies (Particulars of Employees) Rules, 1975 IV Statement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiary companies V Review of the Accounts for the year ended March 31, 2007 by C & AG VI Statistical data of the grievances VII Statistical information on persons belonging to Scheduled Caste/ Tribe categories VIII Information on Physically Challenged persons IX UNGC Communications on progress for 2006-07 X STATUTORY AUDITORS The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s Amit Ray & Co., Umamaheswara Rao & Co., Kalani & Co., T.R. Chadha & Co. and S.N. Nanda & Co. were appointed as Joint Statutory Auditors for the financial year 2006-07. MANAGEMENT COMMENTS ON STATUTORY AUDITORS' REPORT In their report, the statutory auditors of the company have drawn the attention of the members to Note no. 3 and 7 of schedule 27 to the financial statements. The note 3 referred by the Auditors explains the basis for recognition of sales revenue. The Central Electricity Regulatory Commission (CERC) has issued final tariff orders for all the stations/units except for five stations/units. In respect of these five stations/units, sales have been recognized based on provisional tariff orders issued by CERC and the sales so recognized are subject to adjustment after final determination of tariff by CERC. This fact has been explained in note no.3(a) of the Annual Accounts. Consequent upon taking over of Badarpur Thermal Power Station, as referred to in note 1 of the Annual Accounts, sales for the ten months period from 1st June 2006 has been provisionally recognized based on the principles enunciated under CERC Regulations, 2004. This fact has been explained in note no.3(b) of the Annual Accounts. Some of the appeals filed by the Company with Appellate Tribunal for Electricity (ATE) against the orders issued by CERC for the period up to 31 st March 2004, were disposed off by ATE with directions to CERC to modify its orders. Further, recognition was given to the orders of CERC for mutual settlement with the beneficiaries to pass on the credits in respect of revision of capital base and benefits of refinancing of the loan for the period up to 31st March 2004. Accordingly, sales have been provisionally recognized pertaining to the period up to 31st March 2004 in line with principles enunciated in the judgements passed by ATE/orders of CERC. These facts have been explained in the note nos. 3(d) and 3(f) of the Annual Accounts. The note 7 pertains to non-recognition of Company' s share of net profits of Badarpur Thermal Power Station for the period 1st April 1986 to 31st May 2006. Till May 31,2006 the company has been managing this station on behalf of the Government of India. In terms of the Management contract with the Government, the company was entitled for a certain fee as well as a share in the net profits of the station. However, the Government of India is yet to sanction in full the share of profits, which are due to the company for the period 1st April 1986 to 31st May 2006. Due to uncertainty of realization in the absence of sanction by the Government of India, the company has not given recognition to the income in its accounts. COST AUDIT The Cost Audit Reports for the year 2005-06 were submitted for the first time to the Cost Audit Branch in August 2006. The cost audit for the year 2006-07 has been completed and the Cost Audit Reports shall be submitted shortly. BOARD OF DIRECTORS Shri K.B. Dubey has taken over as Director (Projects) with effect from January 12, 2007. Shri Rajesh Verma, Joint Secretary and Financial Advisor, Ministry of Power joined the Board of the Company w.e.f. July 23,2007 in place of Shri M. Sahoo who ceased to be a Director of the Company with effect from June 29, 2007. The Board wished to place on record its deep appreciation for the valuable services rendered by Shri M. Sahoo during his association with NTPC. In accordance with the provisions of Article 41(iii) of the Articles of Association of the company three directors - Shri Chandan Roy, Shri G.P Gupta and Shri M.I. Beg shall retire by rotation at the Annual General Meeting of your Company and, being eligible, offer themselves for re- appointment. DIRECTORS' RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act, 1956 your Directors confirm that: 1. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; 2. the Directors had 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 2006-07 and of the profit of the company for that period; 3. the Directors had taken 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; and 4. the Directors had prepared the Annual Accounts on a going concern basis. ACKNOWLEDGEMENT The Directors acknowledge with deep sense of appreciation the co-operation received from the Government of India, particularly the Ministry of Power, Ministry of Finance, Ministry of Environment & Forests, Ministry of Coal, Ministry of Petroleum & Natural Gas, Planning Commission, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, State Governments, Regional Electricity Boards and State Electricity Boards. The directors also convey their gratitude to the shareholders, various International and Indian Banks, Financial Institutions for the confidence reposed by them in the company. The Board also appreciates the contribution of contractors, vendors and consultants in the implementation of various projects of the Company. We also acknowledge the constructive suggestions received from Government and the Statutory Auditors. We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the company continues to grow and excel. For and on behalf of the Board of Directors Place: New Delhi (T. Sankaralingam) Date: July 30, 2007 Chairman & Managing Director PARTICULARS REQUIRED UNDER THE COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF THE BOARD OF DIRECTORS) RULES, 1988: A. CONSERVATION OF ENERGY: (a) Energy conservation measures taken: Some of the important energy conservation measures taken during the year 2006-2007 in different areas are as under: ENERGY AUDITS During the year 2006-07, 105 in-house energy audits in the areas of auxiliary power consumption, water balance, cooling water system, compressed air, coal handling plant, MGR, Lub Oil system, Air Conditioning, Ash handling system, GT Compressors, GT open cycle efficiency, lighting, WHRB performance etc. were carried out at different stations. In addition, special audits/temperature survey on Thermal Insulation in all the coal stations were carried out this year for assessment of heat rate improvement due to heat loss from old insulation. During the year, the Company has also successfully completed external energy audits of auxiliary power consumption of various other utilities, which includes 3 stations of APGENCO, Andhra Pradesh and complete energy audit at one unit (1 x 120 MW) of Tata Power, Jojobera. NTPC has also been entrusted with the energy audit job of 15 units of different power plants in the kingdom of Saudi Arabia. Till now 95 executives of the Company have passed Energy Auditors Examination of Bureau of Energy Efficiency to become accredited energy auditors. In addition, 27 executives have also qualified to be the Certified Energy Managers. The details of various measures taken during the year under various heads of energy conservation are as below: AUXILIARY POWER CONSUMPTION Operation of Circulating Water pumps & cooling towers based on ambient conditions and actual requirement of plants (at Kahalgaon, Kayamkulam, Simhadri, Talcher Thermal, Korba etc), optimization of running of compressors, installation of new fills in cooling tower (at Vindhyachal etc)., use of vapour absorption machine for air conditioning (at Kahalgaon, etc.), use of energy savers for window air conditioners (at Talcher Thermal, Singrauli, Kawas, Korba etc), polymer coating of pump internals to reduce friction and power consumption (at Kawas etc). LIGHTING Installation of timer switches in plant and township lighting (at Anta, Kawas etc), use of energy savers (at Kawas etc), replacement of conventional GLS lamps and conventional FTL' s with CFLs and conventional FTL' s with energy efficient tube lights (at Dadri-gas, Singrauli etc), Lighting voltage optimization, replacement of HPMV Lamps and HPSV lamps and cleaning of light fittings (at Unchahar, Singrauli,Simhadri etc), use of electronic ballasts (at Gandhar, Badarpur, Talcher Thermal & Kayamkulam etc). HEAT ENERGY Re-use of recovered coal from settling tank & yard (at Dadri-coal etc), repair of thermal insulation and cladding (at Vindhyachal, Korba, Farakka, Unchahar, Singrauli, Ramagundam, Badarpur, Dadri etc),Cleaning & replacement of GT inlet air filters (at Auraiya, Gandhar etc.) external cleaning of WHRB tubes with ammonia (at Auraiya etc), conco tube cleaning of condenser tubes (at Talcher Thermal etc). FUEL OIL Using Milling Plant Super Performance internals in coal mills and reduction in unit start-up and shutdown time (at Farakka in 05 units etc). Optimizing oil consumption during starting and stabilizing time (at Vindhyachal, Korba etc.). LUBRICANTS Optimization of topping up of lube oil (at Singrauli etc), use of waste lube oil for marshalling yard fittings works (at Talcher Thermal etc), Attending lube oil leakages and changing/topping up oil on actual condition basis (at Badarpur, Ramagundam and Farakka etc), recycling of used up oils for reuse (at Kahalgaon, Talcher Thermal and Vindhyachal etc). DE-MINERALISED WATER Attending DM water and steam leakages (at Kahalgaon, Singrauli etc), diverting drip of chimney steam condenser to hot well (at Talcher Thermal etc), Installation of SWAS recycle system (at Kawas etc). MISCELLANEOUS WATER Collecting waste water in the sump and re-pumping it to ash water sump (at Talcher Thermal etc), maintaining appropriate Cycle of Concentration in circulating water system (at Jhanor Gandhar), bringing clarified water headers from underground level to ground level for timely detecting and attending water leakages (at Talcher Thermal etc), diversion of cooling water from ID,FD,RAH Lub. oil coolers to cleaner drains for enabling reuse(at Vindhyachal etc.), re-use of rinse water & blow down water for horticulture (at Gandhar etc.). DIESEL/MGR FUEL Adoption of 4 rake operation from 3 rake operation (at Korba), hauling of empty rake with a single loco (at Korba), monitoring and reducing of idle running of locos and dozers, monitoring cycle time of MGR (at Dadri-Coal & Rihand etc). ON-LINE ENERGY MONITORING SYSTEM: By implementing on-line Energy Monitoring system in all the four units, Tanda station has achieved a saving of 8.591 MUs. The system has also been installed at Unchahar, St-I, Dadri-Thermal (03 units), Singrauli (01 unit) and Korba (01 unit) .Savings from these stations are yet to be established. (b) Additional investments and proposals for reduction in consumption of energy: Provision of Rs. 48.1 million has been kept in BE 2007-08 for different energy conservation schemes like: - Energy meters, power analyzers and other portable energy audit instruments and online energy monitoring system. - Vapor absorption system for Air Conditioning. - Energy efficient devices in lighting. B. TECHNOLOGY ABSORPTION Efforts made towards technology as per Form-B (Form-B is enclosed) C. FOREIGN EXCHANGE EARNINGS AND OUTGO Activities relating to export initiative taken to increase export, development of new export markets for products and services and export plan: Total Foreign Exchange Used/Earned (Rs. Million) 1. Foreign Exchange Outgo a) Value of Imports calculated on CIF basis: Capital Goods 7358 Spare Parts 694 b) Expenditure: Professional and Consultancy Charges 30 Interest 2762 Others 623 2. Foreign Exchange Earned Consultancy 6 Interest 3 Others 1 FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO ABSORPTION OF TECHNOLOGY Research & Development (R&D) 1.0 Specific areas in which R&D activities have been carried out during 2006-07: a. Weldability study of hot gas path components made of Inconel - 617. b. Development of testing procedure for eddy current examination of steam turbine blades in in-situ condition, c. Studies on the effectiveness of ion-exchange resin for controlling acidity levels in FRF system w.r.t. fuller earth, d. Studies related to resolving the problem of deposition and fouling of cooling tower fills and cooling water system of Talcher Kaniha and Gandhar stations, e. Number of visits were made by R&D Experts to various stations for condition assessment, failure analysis, solve/analyse their specific problems, and help them in increasing the availability & reliability of the units. f. Studied the failure of condenser tubes and high conductivity of DM water at Badarpur and recommendations have been given for controlling the same, g. Studied the problem of lime sludge formation during softening of cooling water at Faridabad and suggested modifications in chemical treatment program for cooling water, h. Studied the extent of corrosion in condenser tubes and CW system of Ennore and suggested remedial measures including change of tube material to Titanium & installation of waste water treatment facility i. Over 7000 samples of transformer oils, boiler tube deposits, turbine blade deposits, condenser & cooling tower deposits, effluents, waters, etc have been analysed till now and necessary recommendations have been given, j. RSOP project assigned by Ministry of Power through CPRI, on Ways and means of estimating and controlling colloidal silica in raw & DM water has been successfully completed. Under the project, a demonstration plant of 5 m3/hr capacity of ultra filteration was installed at Badarpur which could successfully remove 90% of the colloidal silica from the raw water, k. Carried out health assessment of 6 gas turbines during A, B & C inspections, 4 boilers and 3 steam turbines during overhauls. l. The timely and scientific failure analysis of various components such as HP control valve,- GT cone insert; stacker reclaimer box structure, - etc. helped in identifying the cause of failure and thus providing necessary input for taking corrective action in preventing re-occurrence of similar failures thereby increasing the availability of power plant equipment, m. Condition monitoring of Bearings of various rotating equipment through wear debris analysis has helped in identifying the cause and saving the equipment from an extensive damage on account of wear, n. Environmental Appraisal of all the operating stations assessing air & water quality, condition of monitoring equipment, etc has been carried out and suggestions for necessary actions required to meet the statutory obligations have been given, o. Designed cathodic protection system for condenser water boxes along with recommendations for suitable anti-corrosive coatings for Stage-1 of Badarpur to control the corrosion of condenser water boxes/tube-plates. 2.0 Benefits derived as a result of above R&D: The above R&D activities have helped in increasing the availability, reliability and efficiency of the stations. Chemical treatment and corrosion control measures suggested will help the stations in improving the efficiency, availability and life of various heat exchangers/cooling towers. The timely and scientific failure analysis of various components helped in identifying the cause of failure and thus providing necessary input for taking corrective action in preventing re-occurrence of similar failures thereby increasing the availability of power plant equipment. 3.0 Future Plans 1. Once the recommendations of the Consultants, M/s HSc Bangalore are received for the up-gradation of R&D Centre, the Company will initiate actions for up-gradation of existing labs, creation of new facilities, creation of new Centre' s of Excellence, Networking with National & International Labs, etc. 2. R&D will work on predictive techniques for reducing forced outages such as Advanced Thermal Monitoring and Steam/Water ratio monitoring for reducing boiler tube failures, carrying out comprehensive on-line monitoring of critical rotating equipment, and conducting corrosion audits of power plants, etc. 3. R&D will introduce newer NDT techniques to give quality decision regarding run/repair/replace, which will help in moving towards Risk/knowledge based maintenance thereby reducing cost. These include Small Punch technique for the non-destructive determination of residual mechanical properties of the critical components like rotors & headers, in service, assessment of coating damage for vanes & blades of GTs, Phased array ultrasonic technique, Integrity assessment of cooling holes (both blockages & cracks) of GT components, measurement of temperature of GT blades on real time basis, etc 4. R&D will work on development of techniques for measurement of pollutants such as Mercury, Arsenic, low levels of SOx, NOx, etc as a proactive approach for more stringent environmental requirements that are anticipated. The Company proposes to work on developing schemes for recycling of waste waters from plants. 5. Three research projects will also be undertaken, namely - * Life extension of coal burner tips * To establish application of small punch testing for evaluation of mechanical properties of critical components. * To develop proper cleaning procedures/expertise for generator stator 4.0 Expenditure of R&D (Rs. Million) 2006-07 2005-06 a) Capital 7 5 b) Recurring 54 58 c) Total 61 63 d) Total R&D expenditure as a percentage of total turnover 0.0187% 0.02412% 5.0 Technology Absorption, Adaptation and Innovation Particulars of some of the important technology imported during last five (5) years are as follows: S.No. Technology 1. Performance Analysis, Diagnostics and Optimization Software calculates the Equipment Performance and deviation and deviation from ideal conditions, together with reason for shortfall, indicating losses in Rupee terms. This package also calculates set point, which will result in optimized Heat Rate or Specific Coal consumption. 2. Supercritical Technology with 247 Kg/cm2 Steam Pressure and 540/568 MS/RH steam temperature is adopted for its improvement in thermal efficiency and reduced emission of green house gases. 3. Boiler Flame Analysis System (BFAS) observes the flame intensity and regulates the secondary air flow for achieving optimized combustion. 4. 765 KV Switchyard & associated equipments including 24KV/765KV Generator Step up (GSU) Transformer. 5. Switchyard Control & Data Acquisition (SCADA) System based on universal protocol IEC 61850. Sl. Year Stations No. 1. 2004 Implemented in Simhadri. Will be continued in future Projects. 2. 2004 Being implemented at Sipat (3x660 MW), Barh (3x660MW) and North Karanpura STPP 3. 2005 Implemented in Simhadri. 4. 2005 Being implemented at Sipat 5. 2005 -do- For and on behalf of the Board of Directors Place: New Delhi (T. Sankaralingam) Dated: July 30, 2007 Chairman & Managing Director

Director’s Report