complete report for financial year 2005-06

Transcription

CORPORATE OBJECTIVES
To realise the vision and mission, eight key corporate objectives have been identified. These objectives would provide the
link between the defined mission and the functional strategies:

Human Resource Development
•
•
To enhance organisational performance by institutionalising an
objective and open performance management system.
•
To align individual and organisational needs and develop
business leaders by implementing a career development
system.
•
To enhance commitment of employees by recognising and
rewarding high performance.
•
To build and sustain a learning organisation of competent
world-class professionals.
•
To institutionalise core values and create a culture of teambuilding, empowerment, equity, innovation and openness
which would motivate employees and enable achievement of
strategic objectives.

Financial Soundness
•
To maintain and improve the financial soundness of NTPC by
prudent management of the financial resources.
•
To continuously strive to reduce the cost of capital through
prudent management of deployed funds, leveraging
opportunities in domestic and international financial markets.
•
To develop appropriate commercial policies and processes
which would ensure remunerative tariffs and minimise
receivables.
•
To continuously strive for reduction in cost of power generation
by improving operating practices.

Sustainable Power Development
•
To contribute to sustainable power development by
discharging corporate social responsibilities.
•
To lead the sector in the areas of resettlement and rehabilitation
and environment protection including effective ash-utilisation,
peripheral development and energy conservation practices.
•
To lead developmental efforts in the Indian power sector
through efforts at policy advocacy, assisting customers in
reform, disseminating best practices in the operations and
management of power plants etc.

Research and Development
•
To pioneer the adoption of reliable, efficient and cost-effective
technologies by carrying out fundamental and applied research
in alternate fuels and technologies.
•
To carry out research and development of breakthrough
techniques in power plant construction and operation that can
lead to more efficient, reliable and environment friendly
operation of power plants in the country.
•
To disseminate the technologies to other players in the sector
and in the long run generating revenue through proprietary
technologies.
Business portfolio growth
To further consolidate NTPC's position as the leading thermal
power generation company in India and establish a presence
in hydro power segment.
• To broad base the generation mix by evaluating conventional
and non-conventional sources of energy to ensure long run
competitiveness and mitigate fuel risks.
• To diversify across the power value chain in India by considering
backward and forward integration into areas such as power
trading, transmission, distribution, coal mining, coal
beneficiation, etc.
• To develop a portfolio of generation assets in international
markets.
• To establish a strong services brand in the domestic and
international markets.
Customer Focus
• To foster a collaborative style of working with customers,
growing to be a preferred brand for supply of quality power.
• To expand the relationship with existing customers by offering a
bouquet of services in addition to supply of power e.g. trading,
energy consulting, distribution consulting, management
practices.
• To expand the future customer portfolio through profitable
diversification into downstream businesses, inter alia retail
distribution and direct supply.
• To ensure rapid commercial decision making, using customer
specific information, with adequate concern for the interests
of the customer.
Agile Corporation
• To ensure effectiveness in business decisions and
responsiveness to changes in the business environment by:
- Adopting a portfolio approach to new business
development.
- Continuous and co-ordinated assessment of the business
environment to identify and respond to opportunities and
threats.
• To develop a learning organisation having knowledge-based
competitive edge in current and future businesses.
• To effectively leverage Information Technology to ensure
speedy decision making across the organisation.
Performance Leadership
• To continuously improve on project execution time and cost
in order to sustain long run competitiveness in generation.
• To operate & maintain NTPC stations at par with the best-run
utilities in the world with respect to availability, reliability,
efficiency, productivity and costs.
• To effectively leverage Information Technology to drive process
efficiencies.
• To aim for performance excellence in the diversification
businesses.
• To embed quality in all systems and processes.
30th Annual Report
1
REFERENCE INFORMATION
Registered Office
Bankers
NTPC Bhawan, SCOPE Complex ,
Allahabad Bank
7,Institutional Area, Lodi Road,
Andhra Bank
New Delhi – 110 003
Bank of Baroda
Phone No. : 011-2436 0100
Canara Bank
Fax No. : 011-2436 1018
Central Bank of India
Web site : www.ntpc.co.in
Dena Bank
Indian Bank
Subsidiaries
Indian Overseas Bank
NTPC Electric Supply Company Ltd.
ICICI Bank Ltd.
NTPC Hydro Ltd.
Jammu & Kashmir Bank Ltd.
NTPC Vidyut Vyapar Nigam Ltd.
Oriental Bank of Commerce
Pipavav Power Development Company Ltd.
Punjab National Bank
Punjab & Sind Bank
Ragistrar & Share Transfer Agent
State Bank of Bikaner & Jaipur
Karvy Computershare Pvt. Ltd.
State Bank of Mysore
Karvy House, 46, Avenue 4, Street No. 1
State Bank of Hydrabad
Banjara Hills, Hyderabad – 500 034
State Bank of India
Phone No. : 040-2331 2454
State Bank of Patiala
Fax No. : 040-2331 1968
State Bank of Travancore
E- Mail – Id : ntpcipo@karvy.com
State Bank of Saurashtra
UCO Bank
Shares listed at
Union Bank of India
National Stock Exchange of India Limited
United Bank of India
Bombay Stock Exchange Limited
Vijaya Bank
Depositories
Auditors
National Securities Depository Limited
M/s Kalani & Co.
Central Depository Services (India) Limited
M/s Amit Ray & Co.
M/s Umamaheswara Rao & Co.
2
Company Secretary
M/s S.N. Nanda & Co.
A.K. Rastogi
M/s T. R. Chadha & Co.
30th Annual Report
CONTENTS
•
Letter to Shareholders ......................................................................................................................................
5
•
Notice of AGM ..................................................................................................................................................
6
•
Awards & Accolades........................................................................................................................................... 11
•
Station-wise Generation ....................................................................................................................................
•
Selected Financial Information….......................................................................................................................... 15
•
Board of Directors...............................................................................................................................................
•
Senior Management Team.................................................................................................................................... 19
•
Directors’ Report..................................................................................................................................................
20
•
Management Discussion and Analysis.................................................................................................................
27
•
Report on Corporate Governance........................................................................................................................ 43
•
Accounting Policies.............................................................................................................................................
•
Balance Sheet....................................................................................................................................................... 74
•
Profit & Loss Account........................................................................................................................................... 75
•
Cash Flow Statement............................................................................................................................................ 106
•
Auditors Report.................................................................................................................................................... 107
•
Employee Cost Summary..................................................................................................................................... 110
•
Revenue Expenditure on Social Overheads......................................................................................................... 110
•
Fund Flow Statement........................................................................................................................................... 111
•
Subsidiary Companies......................................................................................................................................... 112
•
Consolidated Financial Statements ..................................................................................................................... 131
13
16
70
30th Annual Report
3
THE YEAR AT A GLANCE
2006
2005
Million Units
169789
158271
Rs Million
260701
225069
Profit before tax
“
60224
60782
Profit after tax
“
58202
58070
Dividend
“
23087*
19790
Dividend tax
“
3238
2680
Retained Earnings
“
31877
35600
Net Fixed Assets
“
230895
223148
Net Worth
“
449587
417763
Loan Funds
“
201973
170878
Capital Employed
“
523572
500540
Net Cash From Operations
“
62064
50998
Value Added
“
97482
88415
No. of Employees #
“
21870
21420
Rs Million
4.46
4.13
Ratio
0.45
0.41
Return on Capital Employed (%)
%
12.46
12.77
Face Value per share
Rs.
10.00
10.00
Dividend Per share
“
2.80*
2.40
Book Value per Share
“
54.53
50.67
Commercial Generation
Sale of Energy
Value added per employee
Debt to Equity
# excluding JVs, Subsidiaries and BTPS (owned by NTPC w.e.f. 1st June, 2006)
* including final dividend recommended by the Board
4
30th Annual Report
LETTER TO SHAREHOLDERS
Dear Shareholders,
NTPC Ltd. is marching ahead from strength to strength. During the year 2005-06, our stations
performed at the highest ever plant load factor of 87.54% and generated 170.88 billion units
of electricity which was 7.40% higher than the previous year’s generation of 159.11 billion
units and accounted for almost 28% of power generated in India.
Our gross revenues for the year were Rs. 287 billion and grew by more than 15% over the
previous year. Our reported profit after tax for the year was almost the same as in the previous
year at Rs. 58 billion. However, on an adjusted basis the profits grew by almost 18%.
We believe that the Indian Economy is on robust growth trajectory and the Indian Power
Sector also has an immense potential to grow. We believe that we are well positioned to be a part of this growth story
and play our role as one of the growth engines of the economy. Our strategy is to increase our already substantial (nearly
20%) market share in the Indian Power sector through rapid capacity expansion. We are planning to be a 51 GW company
by the year 2012 and 70 GW plus company by 2017. Currently we are a 26 GW company. We are presently executing
projects having capacities of more than 11 GW. We plan to add capacities on our own as well as through joint ventures
and subsidiaries.
We know that there are challenges in the sector. Availability of fuel at an affordable price is a major challenge.
We have adopted a strategy of backward integration and are entering into coal mining and exploration for gas. We would
also be increasing the share of hydro projects in our portfolio and we are also exploring the possibility of putting up
nuclear power projects. We have made arrangements to meet the near-term supplies through coal imports and spotbuying of gas.
The financial health of our customers is also a key concern for us. The reforms taking place in the sector have begun to
yield results and are likely to improve the financial health of the customers. For the third consecutive year, we have been
able to realize 100% of the amounts due from our customers. We are taking a number of initiatives to partner our
customers in improving their operations and management practices and thereby their health.
We are operating in a regulated environment and there are risks attached to it. However, we believe that regulators
would continue to incentivise efficiency and we have strategies to continuously improve our efficiency in operations
through technological upgradations, modernization, adoption of best practices and global benchmarking. We expect
greater infusion of market oriented features in the regulated power sector scenario. To take advantage of such a shift, we
have earmarked some of the upcoming capacities as ‘Merchant Power Plants ’. The formation of two of our subsidiary
companies, one for distribution and the other for power trading are also part of the strategy for leveraging our strengths
in the changed scenario.
Our company has one of the world’s finest teams of power professionals and they are acknowledged for their
‘can do it ’ spirit. We have a very well conceived plan for quantum growth and diversification which our team is fully
equipped to implement. I am sure that you will be happy to be a part of our exciting journey of growth and excellence
and to share the benefits thereof.
With best wishes,
(T. Sankaralingam)
Chairman & Managing Director
30th Annual Report
5
NOTICE
Notice is hereby given that the Thirtieth Annual General Meeting of the members of NTPC Limited will be held on
Tuesday, September 19, 2006 at 11.30 a.m. at NDMC Indoor Stadium, Talkatora Garden, New Delhi – 110 001 to transact
the following business:
Ordinary Business
1. To receive, consider and adopt the audited Balance Sheet as at March 31, 2006 and Profit & Loss Account for the
financial year ended on that date together with Report of the Board of Directors and Auditors thereon.
2. To confirm interim dividend and declare final dividend for the year 2005-06.
3. To appoint a Director in place of Shri R.S. Sharma, who retires by rotation and being eligible, offers himself for reappointment.
4. To appoint a Director in place of Shri R.K. Jain, who retires by rotation and being eligible, offers himself for reappointment.
5. To appoint a Director in place of Shri A.K. Singhal, who retires by rotation and being eligible, offers himself for reappointment.
6. To fix the remuneration of the Auditors.
By order of the Board of Directors
Regd. Office:
NTPC Bhawan, 7, Institutional Area,
Lodi Road, New Delhi-110 003
Date: August 4, 2006
(A.K. Rastogi)
Company Secretary
NOTES :1. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote
instead of himself/herself and the proxy need not be a Member of the Company. In order to be effective,
the Proxy form duly completed should be deposited at the registered office of the company not less than
forty-eight hours before the scheduled time of the Annual General Meeting. Blank proxy form is enclosed.
2. As required by clause 49 of the Listing Agreement entered into with the Stock Exchanges the relevant details of Shri
R.S. Sharma, Shri R.K. Jain and Shri A.K. Singhal, Directors retiring by rotation and seeking re-appointment under Item
No. 3, 4 and 5 aforesaid in accordance with applicable provisions of the Articles of Association of the Company as
well as those directors who have been appointed since the last Annual General Meeting are also annexed. The
tenure of Shri R.S. Sharma, Shri R.K. Jain and Shri A.K. Singhal is upto October 7, 2009, December 31, 2009 and July
31, 2010 respectively as per terms of their appointment by the Government of India.
3. The Register of Members and Share Transfer Books of the Company will remain closed from September 1, 2006 to
September 15, 2006 (both days inclusive). The dividend on equity shares, as recommended by the Board of Directors,
subject to the provisions of section 206A of the Companies Act, 1956, if declared at the Annual General Meeting,
will be paid on or after September 22, 2006 to the Members or their mandates whose names appear on the Company’s
Register of Members on September 15, 2006 in respect of physical shares. In respect of dematerialized shares, the
dividend will be payable to the “beneficial owners” of the shares whose names appear in the Statement of Beneficial
Ownership furnished by National Securities Depository Limited and Central Depository Services (India) Limited at
the close of business hours on August 31, 2006.
6
30th Annual Report
4. Members are requested to:i)
note that copies of Annual Report will not be distributed at the Annual General Meeting.
ii)
bring their copies of Annual Report, Notice and Attendance Slip duly completed and signed at the meeting.
iii)
deliver duly completed and signed Attendance Slip at the entrance of the meeting venue as entry to the Hall
will be strictly on the basis of the entry slip available at the counters at the venue to be exchanged with the
attendance slip.
iv) quote their Folio / Client ID & DP ID Nos. in all correspondence.
v)
note that due to strict security reasons mobile phones, brief cases, eatables and other belongings are
not allowed inside the Hall.
vi)
note that no gifts/coupons will be distributed at the Annual General Meeting.
5. Members are advised to submit their Electronic Clearing System (ECS) mandates, to enable the Company to make
remittance by means of ECS. Those holding shares in physical form may obtain and send the ECS mandate form to
Karvy Computershare Private Limited, Registrar & Transfer Agent of the Company. Those holding shares in Electronic
Form may obtain and send the ECS mandate form directly to their Depository Participant (DP). Those who have
already furnished the ECS Mandate Form to the Company/ Registrar & Transfer Agent /DP with complete details need
not send it again.
The shareholders who do not wish to opt for ECS facility may please mail their bankers’ name, branch address and
account number to Karvy Computershare Private Limited, Registrar & Transfer Agent of the Company to enable them
to print these details on the dividend warrants.
6. Members holding shares in different folios in physical mode are requested to apply to the Company or its Registrar
& Transfer Agent for consolidation and send relevant Share Certificates for consolidation.
7. The Board of Directors in its meeting held on January 30, 2006 had declared an interim dividend @ 20% on the paidup equity share capital of the company. Members who have not received or not encashed their dividend warrants
may approach Karvy Computershare Private Limited, Registrar & Transfer Agent of the Company, for revalidating the
warrants or for obtaining duplicate warrants.
8. Pursuant to Section 205A read with Section 205C of the Companies Act, 1956, the dividend amounts which remain
unpaid / unclaimed for a period of seven years, are required to be transferred to the Investors Education & Protection
Fund of the Central Government. After such transfer, there remains no claim of the members whatsoever on the said
amount. Therefore, Members are advised to encash their Dividend warrants immediately .
9. Members may avail of the facility of nomination in terms of Section 109A of the Companies Act,1956 by nominating
in the Form-2B as prescribed in the Companies (Central Government’s) General Rules and Forms, 1956, any person to
whom their shares in the Company shall vest on occurrence of events stated in the Form. Form-2B is to be submitted
in duplicate to Karvy Computershare Private Limited, Registrar & Transfer Agent of the Company. In case of shares
held in dematerialized form, the nomination has to be lodged with the respective Depository Participant.
10. Annual listing fee for the year 2006-07 has been paid to all Stock Exchanges wherein shares of the Company are listed.
11. Pursuant to Section 619(2) of the Companies Act, 1956, the Auditors of a Government Company are to be appointed
or re-appointed by the Comptroller and Auditor General of India (C & AG) and in terms of Clause (aa) of sub-section (8)
of Section 224 of the Companies Act, 1956 their remuneration has to be fixed by the Company in the Annual General
Meeting. The Members of the Company in the 29th Annual General Meeting held on September 23, 2005 authorised the
Board of Directors to fix the remuneration of Statutory Auditors for the year 2005-06. Accordingly, the Board of Directors
fixed audit fee of Rs.40,00,000/- for the Statutory Auditors for the financial year 2005-06 in addition to applicable
service tax and reimbursement of actual traveling and out-of-pocket expenses for visits to accounting units. Further,
Statutory Auditors of the Company for the year 2006-2007 has been appointed by C&AG of India, the Members may
authorise the Board to fix an appropriate remuneration of Auditors as may be deemed fit by the Board.
30th Annual Report
7
12. Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send
a certified copy of the Board Resolution authorizing their representative to attend and vote on their behalf at the
Meeting.
13. Member are requested to notify immediately any change of address:
i.
to their Depository Participants (DP) in respect of shares held in dematerialized form, and
ii.
to the Company at its Registered Office or to its Registrar & Transfer Agent, Karvy Computershare Pvt. Ltd. in
respect of their physical shares, if any, quoting their folio number.
14. Members desirous of getting any information on any items of business of this Meeting are requested to address their
queries to Shri A.K. Kundu, Executive Director (Finance) and Public Spokesperson of the Company at the registered
office of the company at least ten days prior to the date of the meeting, so that the information required can be
made readily available at the meeting.
15. All documents referred to in the accompanying notice are open for inspection at the registered office of the Company
on all working days (barring Saturday and Sunday) between 11.00 a.m. to 1.00 p.m. prior to the Annual General
Meeting.
BRIEF RESUME OF THE DIRECTORS SEEKING RE-ELECTION AND ALSO OF DIRECTORS APPOINTED SINCE LAST ANNUAL GENERAL MEETING
Directors seeking re-election at the 30th AGM
Name
Shri R.S. Sharma
Shri R.K. Jain
Shri A.K. Singhal
Date of Birth & Age
10.08.1950/ 56 yrs
15.12.1949/ 57 yrs
10.01.1954/ 52 yrs.
Date of Appointment
08.10.2004
05.05.2005
01.08.2005
Qualifications
Graduate in Mechanical Engineering
Graduate in Mechanical Engineering
Chartered Accountant
Expertise in specific
functional area
Shri R.S. Sharma has vast and rich
experience of around 35 years in
Thermal Power Stations. Prior to joining
NTPC, he has worked in Madhya
Pradesh State Electricity Board. He also
served as Executive Director
(Commercial) looking after the
Commercial Functions of the company.
He has been author to a number of
Technical papers on various subjects of
Power Plant Operation & Maintenance.
Shri R.K. Jain has vast experience of
over 34 years in thermal and gas power
projects in the area of Project
Planning, Conceptualisation, Design/
Engineering, Contract & Materials etc.
He has also served as General Manager
(Consultancy & Joint Ventures),
Executive Director (Corporate Contract
& Materials) and Executive Director
(National Capital Region).
Shri A.K. Singhal has with him
vast and rich professional
experience of over 29 years of
handling all the facets in
Corporate Finance and Accounts.
Prior to joining NTPC in 2001, he
was the Executive Director
(Finance) in National Fertilizers
Limited (NFL) as head of Finance
& Accounts department. He held
various managerial positions in
Krishak Bharati Cooperative
Limited (KRIBHCO) and
Engineering Projects of India
Limited (EPIL).
Directorship held
in other companies
Part-time Chairman
1 NTPC SAIL Power Co. Pvt. Ltd.
2 Bhilai Electric Supply Company
Private Limited
Part-time Director
1 NTPC Tamil Nadu Energy Co. Ltd.
2 NTPC Electric Supply Company
Ltd.
Part-time Chairman
1. Utility Powertech Limited
Part-time Director
1. NTPC-Electric
Supply
Company Ltd.
2. NTPC Vidyut Vyapar Nigam Ltd.
3. NTPC Tamil Nadu Energy Co.
Ltd.
4. NTPC Hydro Ltd.
5. NTPC-SAIL Power Company
Pvt. Ltd.
6. Bhilai Electric Supply Company
Pvt. Ltd.
7. NTPC Alstom Power Services
Pvt. Ltd.
8. Ratnagiri Gas and Power Pvt.
Ltd.
Part-time Director
1. NTPC Electric Supply Co. Ltd.
2. NTPC Vidyut Vyapar Nigam Ltd.
3. PTC India Ltd.
8
30th Annual Report
Memberships/
Chairmanship of
Committees across all
Public Companies
Member – Audit Committee
NTPC Limited
Member – Shareholders/ Investors
Grievance Committee
NTPC Hydro Limited
Directors appointed since last Annual General Meeting held on September 23, 2005
Name
Prof. Ashok Misra
Dr. R.K. Pachauri
Shri G.P. Gupta
Shri M. I. Beg
Shri R.C. Shrivastav
Date of Birth & Age
30.07.1947/59 yrs
20.08.1940/66 yrs
11.01.1941/65 yrs
30.06.1939/67 yrs
08.06.1950/56 yrs
Date of Appointment
30.01.2006
30.01.2006
30.01.2006
30.01.2006
24.05.2006
Qualifications
Chemical Engineering
from IIT, M. Sc. and
Ph.D. in Polymer
Science & Engineering
Ph.D in Industrial
Engineering and Ph.D
in Economics,
Master of Science in
Industrial
Engineering
Post Graduate in
Commerce
Master in Economics
and Bachelor of
Science in Electrical
Engineering
Graduate in Electrical
Engineering
Expertise in specific
functional area
Prof. Ashok Misra is a
Bachelor of
Technology in
Chemical
Engineering from
Indian Institute of
Technology and a
Chemical
Engineering from
Tufts University, USA.
He also did his
Master of Science
and Ph.D. in Polymer
Science &
Engineering from
University of
Massachusetts, USA.
Prof. Ashok Misra
also successfully
completed his EDP
from Kellogs School
of Management,
Northwestern
University, USA.
Currently he is a
Director, Indian
Institute of
Technology,
Mumbai.
Dr. R.K. Pachauri, a
Padma Bhushan
awardee, obtained a
Industrial
Engineering,
Ph.D in Industrial
Engineering and
Ph.D in Economics
from North Carolina
State University,
Raleigh, North
Carolina, USA. He
assumed his current
responsibilities as
the head of Tata
Energy Research
Institute, New Delhi
(now known as The
Energy and
Resources Institute)
in 1981, first as
Director and since
April 2001, as
Director-General.
Shri G.P. Gupta has
been the Chairman
and Managing
Director of IDBI &
Chairman of UTI. He
has 40 years of
experience in
various financial
institutions and held
Directorships in
various organizations
like LIC, GIC, EXIM
Bank, IFCI and BHEL
in the past.
Shri Mirza Ishtiaq
Beg is former
Chairman of Central
Electricity Authority
& Ex-officio
Secretary to the
Government of India.
He obtained Master
degree in Economics
and Bachelor of
Science in Electrical
Engineering. Shri M.I.
Beg was with Central
Electricity Authority
for 34 years and has
been earlier on the
Board of Power
Finance Corporation
Limited and Nuclear
Power Corporation
of India Limited.
Shri R.C. Shrivastav
has a rich and
diverse experience
of more than 30
years in the power
sector. He started
his carrier in power
plant operation in
captive power
plant of Steel
Authority of India
Limited. He joined
NTPC in 1981 and
worked in various
capacities in the
areas of
construction,
commissioning and
operation &
maintenance of
power stations as
well as corporate
operation services.
Part-time Director
1. Reliance
Industries
Limited
Part-time Director
1. Oil and Natural
Gas Corporation
Limited
Part-time Chairman
1. EMKAY Share &
Stock Brokers
Limited
Part-time Director
1. PTC India Limited
2. Jammu and
Kashmir Bank
Limited
3. Swaraj Engines
Limited
Directorship held in
other companies
–
–
–
30th Annual Report
9
4. Aditya Birla Nuvo
Limited
5. Su-Raj Diamonds
& Jewellery
Limited
6. Birla Sun Life
Insurance
Company Limited
7. M.P. Power
Generating
Company Limited
8. SIDBI Venture
Capital Limited
9. Power Finance
Corporation
Limited
10. Shree Digvijay
Cement
Company Limited
11. Hindustan
Aeronautics Ltd.
Memberships/
Chairmanship of
Committees across
all Public Companies
10
30th Annual Report
–
NTPC Limited
Member – Audit
Committee
NTPC Limited
NTPC Limited
Chairman – Audit
Member – Audit
Committee
Committee
Power Finance
Corporation
Limited
Chairman – Audit
Committee
Jammu and Kashmir
Bank Limited
Member – Audit
Committee
Member –Investors
Grievance
Committee
Swaraj Engines
Limited
Member – Audit
Committee
Birla Sun Life
Insurance Company
Limited
Member – Audit
Committee
Aditya Birla Nuvo
Limited
Member – Audit
Committee
PTC India Limited
Member – Audit
Committee
Hindustan
Aeronautics Ltd.
Member – Audit
Committee
Shree Digvijay
Cement Company
Limited
Member – Audit
Committee
NTPC Limited
Member –
Shareholders/
Investors Grievance
Committee
AWARDS & ACCOLADES
NTPC has received the International Project Management
Award 2005 for its Simhadri project at the International Project
Management Association World Congress. NTPC is the only Asian
Company to receive this award.
Shri C.P. Jain, ex CMD, NTPC has been adjudged Ernst and Young
Manager Entrepreneur of the Year for the year 2005
NTPC was recipient of Golden Peacock Environment
Management Award instituted by the “World Environment
Foundation” for the year 2006
Amity Excellence in Corporate Social Responsibility Award
for Social Welfare was awarded to NTPC during the International
Business Summit in February, 2006
NTPC was ranked as Third Great Place to Work for in India for the second time in succession by a survey conducted by
Grow Talent and Business World 2005
NTPC was awarded MOU Award for Excellence in Performance for 2003-04 and ranked first among the top ten Public
Sector Enterprises.
NTPC has received the award for Innovative HR Practices at world HR Congress in February, 2006.
NTPC has bagged the Platts Global Energy Award 2005 for the “Community Development Programme of the Year”.
NTPC has bagged the BML Munjal Award for encouraging Learning and Development and using it as a strategic HR tool.
30th Annual Report 11
12
30th Annual Report
STATION-WISE GENERATION 2005-06
STATIONS
Northern Region
Singrauli
Rihand
Unchahar
Tanda
National Capital Region
Dadri ( Coal )
Anta ( Gas )
Auraiya ( Gas )
Dadri ( Gas )
Faridabad ( Gas )
Western Region
Korba
Vindhyachal
Kawas ( Gas )
Jhanor Gandhar ( Gas )
Eastern Region
Farakka
Kahalgaon
Talcher - Kaniha
Talcher -Thermal
Southern Region
Ramagundam
Simhadri
Rajiv Gandhi CCP ( Liquid Fuel )
Total
Badarpur (Owned by NTPC w.e.f. 1st June, 2006)
Capacity(MW)
Gen. (MU)Gross
5280
2000
2000
840
440
3152
840
413
652
817
430
5653
2100
2260
645
648
5900
1600
840
3000
460
3950
2600
1000
350
23935
705
36465
15503
10591
7041
3330
22206
6768
2809
4282
5394
2953
41668
16001
18305
2884
4478
42751
11464
6572
21185
3530
27791
19691
7742
358
170880
5380
14
30th Annual Report
SELECTED FINANCIAL INFORMATION
A) Operating Income
Earned from
Sale of Energy
Consultancy & Other Income
Total
Paid & Provided for
Fuel
Employees Remuneration & Benefits
Generation, Administration & other expenses
Provision (Net)
Prior Period/Extra Ordinary Items
Profit before depreciation, Interest & Finance Charges and Tax
Depreciation
Profit before Interest & Finance Charges and Tax
Interest & Finance Cost
Profit before tax
Tax (Net)
Profit after tax
Dividend
Dividend tax
Retained Profit
B) What is Owned
Gross Fixed Assets
Less : Depreciation
Net block
Capital Work-in-progress, Construction Stores & Advances
Investments
Current Assets, Loans & Advances
Total Net Assets
C) What is Owed
Long Term Loans
Working Capital Loans
Current Liabilities & Provisions
Total Liabilities
D) Others
Deferred Revenue - Advance against deprectiaion
Development surcharge fund
Total
E) Net Worth
Share Capital
Reserves & Surplus
Miscellaneous Expenditure (To the extent not written off or adjusted)
Net Worth
F) Capital Employed
G) Value Added
H) No. of Shares
I) No. of Employees*
J) Ratios
Return on Capital Employed (%)
Return on Net Worth (%)
Book Value per Share (Rs.)
Current Ratio
Debt to Equity
Value Added/Employee (Rs. Million)
Rs. in Million
2002-03 2001-02
2005-06
2004-05
2003-04
260701
26806
287507
225069
24110
249179
188178
61816
249994
190019
4492
194511
177697
7076
184773
163947
9684
12721
334
2488
98333
20477
77856
17632
60224
2022
58202
23087
3238
31877
137235
8823
12062
(6160)
(102)
97321
19584
77737
16955
60782
2712
58070
19790
2680
35600
122150
8835
9813
(3813)
183
112826
20232
92594
33697
58897
6289
52608
10823
1387
40398
110312
8268
10814
1567
803
62747
15291
47456
9916
37540
1465
36075
7080
395
28600
103991
8036
11531
1730
(500)
59985
13784
46201
8680
37521
2125
35396
7079
28317
460396
229501
230895
136340
192891
157245
717371
431062
207914
223148
99285
207977
129073
659483
400281
187736
212545
74953
173380
135468
596346
366106
167456
198650
63863
36674
194132
493319
328912
152131
176781
65550
40281
167799
450411
201195
778
61402
263375
166719
4159
67467
238345
149415
5113
80941
235469
127090
5067
45850
178007
113161
2651
48146
163958
4408
4408
3374
3374
1591
3784
5375
271
271
-
82455
367132
449587
523572
97482
8245464400
21870
82455
335308
417763
500540
88415
8245464400
21420
12.46
14.16
54.53
2.56
0.45
4.46
12.77
14.33
50.67
1.91
0.41
4.13
78125
78125
78125
277376
237002
208400
(87)
(72)
355501
315040
286453
458267
386343
356526
66749
88084
80889
7812549400 7812549400 78125494
20971
21408
21383
12.93
14.94
45.50
1.67
0.43
3.18
10.88
12.13
40.32
4.23
0.42
4.11
11.93
12.98
3666.58
3.49
0.40
3.78
* Excluding JVs, Subsidiaries, BTPS (owned by NTPC w.e.f. 1st June, 2006) & BALCO
DIRECTORS’ PROFILE
Shri T.Sankaralingam (58 yrs) has been serving the power sector for the past 37 years. Before joining
NTPC in 1977, he was associated with TNEB and BHEL. Prior to taking over as Chairman and Managing
Director, NTPC Limited, on April 01, 2006, he has been Director (Projects) since August 2001.
Shri Sankaralingam has rich hands-on experience in all facets of electricity generation and
transmission. In recognition of his expertise, he has been elected as Vice-Chairman of CIGRE,
India and awarded ‘Eminent Engineer Award’ by Institution of Engineers. He is a Member of
IEEE, USA; Honorary Fellow of Project Management Association; Member of the Committee
appointed by Government of India to evaluate adoption of 800 MW Super Critical Units; Member
of Expert Committee of CERC to formulate the Operational Norms for Tariff under ABT Regime;
Member of the Board of University of Petroleum and Energy Studies; Member of Steering
Committee of Centre for Research on Energy Security, TERI.
Shri T. Sankaralingam was holding 8894 equity shares in the company as on March 31, 2006.
Shri Chandan Roy (56 yrs), Director (Operations) is a graduate in Mechanical Engineering. A
power engineer of repute with rich and varied experience of about 34 years in different areas of
power station design, engineering and O&M. He has held various responsible positions in India
and abroad. In NTPC, he has served various divisions like Engineering, Operation Services and
Regional Head Quarter. Prior to joining us, he worked for ACC Vickers Babcock Ltd. and Babcock
& Wilcox, London. He joined the Board in January 2004. He is also Chairman of Ratnagiri Gas and
Power Private Limited, a Joint Venture of NTPC and GAIL (India) Limited.
Shri Chandan Roy was holding 14516 equity shares in the company as on March 31, 2006.
Shri R.S. Sharma (56 Yrs.), started his career in Madhya Pradesh State Electricity Board in Power
Generation in the year 1971 and worked in unit operation and various areas of plant maintenance.
He joined NTPC in early February, 1980 and headed various projects of NTPC, prior to joining as
Executive Director (Corporate Planning). He also served as Executive Director (Commercial) looking
after the Commercial Functions of the company. He has taken over as Director (Commercial) since
October, 2004. He has very vast and varied experience of around 35 years in various functions of
large thermal power stations in the country. He has been the author of number of Technical Papers
on various subjects of Power Plant Operation & Maintenance.
Shri R.S. Sharma was holding 2304 equity shares in the company as on March 31, 2006.
Shri R.K. Jain (57 Yrs), Director (Technical) since May 5, 2005, has vast experience of over 34 years
in thermal and gas power projects in the area of Project Planning, Conceptualisation, Design/
Engineering, Contract & Materials etc. He has also served as General Manager (Consultancy & Joint
Ventures), Executive Director (Corporate Contract & Materials) and Executive Director (National
Capital Region). Prior to joining NTPC in 1977, he worked with Central Electricity Authority. As Director
(Technical), he is responsible for Engineering/Design of Thermal and Hydro Power Plants, Consultancy
Services and Information Technology, induction of new technologies like Supercritical Units, nonconventional energy resources. He has also been responsible for NTPC’s globalisation initiatives in
the areas of Operation & Maintenance and Engineering Services for Power Plants in other countries.
Shri R.K. Jain was holding 369 equity shares in the company as on March 31, 2006.
16
30th Annual Report
Shri A.K. Singhal (52 yrs), Director (Finance) since August 2005, comes with rich experience of 29
years of Corporate Finance Management. He is also a member of All India Management Association
(AIMA) and Institute of Internal Auditors (IIA). Prior to joining NTPC in 2001, he was the Executive
Director (Finance) in National Fertilizers Limited (NFL) as head of Finance & Accounts department.
He held various managerial positions in Krishak Bharati Cooperative Limited (KRIBHCO) and Engineering
Projects of India Limited (EPIL). As Finance Director on the Board of NTPC, he is responsible for
formulating financial strategies and plans to enable the company in achieving its Vision. He gives
directions with respect to the entire gamut of Financial Management of the organization including
timely financial resource mobilization at minimum possible cost from Domestic & Global sources including equity issues,
optimum utilization of funds, formulation of company’s annual financial budget and undertaking budgetary controls. He
is also responsible for designing internal control systems commensurate with the size of the organization and for ensuring
compliance of such systems. Being responsible for compliances of Company Law and other statutory requirements, he
also gives direction to the Corporate Governance framework of the company. After company became listed, he has been
acting as one of the vital links between the shareholders of the company and the rest of the Board.
Shri A.K. Singhal was holding 10829 equity shares in the company as on March 31, 2006.
Shri R.C. Shrivastav (56 yrs.), Director (Human Resources) is a Graduate in Electrical Engineering. He
has a rich and diverse experience of more than 30 years in the power sector. He started his carrier in
power plant operation in captive power plant of Steel Authority of India Limited. He joined NTPC in
1981 and worked in various capacities in the areas of construction, commissioning and operation &
maintenance of power stations as well as corporate operation services. He headed a number of
power stations of NTPC and was elevated to the post of Executive Director (Southern Region) in
2002. He later handled the responsibility as Chief Executive Officer of NTPC Electric Supply Company
Limited, a wholly owned subsidiary Company of NTPC engaged in electricity distribution before
appointment as Director (HR) of NTPC in May 2006. As Director (HR) Shri Shrivastav is overall in-charge of Human Resource
function for the entire organization. He is also responsible for Power Management Institute of NTPC and other corporate
functions such as Industrial Safety, Resettlement & Rehabilitation, Corporate Communication and Corporate Social
Responsibility.
Shri R.C. Shrivastav was holding 2304 equity shares in the company as on March 31, 2006.
Shri M. Sahoo (52 yrs), is an Indian Administrative Services Officer from Andhra Pradesh State
cadre. Prior to joining Ministry of Power, Government of India, with effect from July 1, 2002, Shri M.
Sahoo has held the positions of Secretary, Finance and Secretary, Urban Development, Government
of Andhra Pradesh. He is on the Board of the Company as a part-time Director nominated by the
Government of India with effect from July 2002.
Shri M. Sahoo was holding 18440 equity shares in the company as on March 31, 2006.
Shri Harish Chandra (59 yrs.), an Indian Administrative Services officer of Uttar Pradesh Cadre, has
over 30 yrs. of experience in various Deptts. of Government of Uttar Pradesh. Prior to joining as Joint
Secretary, Ministry of Power, Government of India, he has held the positions of Commissioner, Deptt.
of Revenue, Secretary, Deptt. of Public Enterprises, Secretary, Deptt. of Finance and Principal Secretary,
Deptt. of Revenue in Government of Uttar Pradesh. As Joint Secretary of the Union Ministry of Power,
he is on the Board of the Company as Government of India nominee with effect from July 11, 2005.
Shri Harish Chandra was holding NIL equity shares in the company as on March 31, 2006.
Dr. R.K. Pachauri (66 yrs), a Padma Bhushan awardee, obtained a Master of Science in Industrial
Engineering in 1972, Ph.D in Industrial Engineering and a Ph.D in Economics from North Carolina
State University, Raleigh, North Carolina, USA. He assumed his current responsibilities as the head of
Tata Energy Research Institute, New Delhi (now known as The Energy and Resources Institute) in
1981, first as Director and since April 2001, as Director-General. He has been on the Board of the
Company with effect from January 30, 2006 as a non-official part-time director.
Dr. R.K. Pachauri was holding 1850 equity shares in the company as on March 31, 2006.
Prof. Ashok Misra (59 yrs) is a Bachelor of Technology in Chemical Engineering from Indian Institute
of Technology and a Master of Science in Chemical Engineering from Tufts University, USA. He also
did his Master of Science and Ph.D. in Polymer Science & Engineering from University of Massachusetts,
USA. Prof. Ashok Misra also successfully completed his EDP from Kellogs School of Management,
Northwestern University, USA. Currently he is a Director at Indian Institute of Technology, Mumbai.
He authored one book on Polymers, published several articles in international journals and has been
awarded six patents. He is a member of several scientific associations and societies. He is also on
the Board of Reliance Industries Limited. He has been on the Board of the Company with effect
from January 30, 2006 as a non-official part-time director.
Prof. Ashok Misra was holding 369 equity shares in the company as on March 31, 2006.
Shri Gian Prakash Gupta (65 yrs), Post Graduate in Commerce, was the Chairman and Managing
Director of IDBI & Chairman of UTI. He has 40 years of experience in various financial institutions and
held Directorships in various organizations like LIC, GIC, EXIM Bank, IFCI and BHEL in the past. He is
presently on the Board of various companies namely NALCO, Hindustan Aeronautics Ltd., PTC and
Indo Gulf Fertilizers Limited. He has been on the Board of the Company with effect from January
30, 2006 as a non-official part-time director.
Shri Gian Prakash Gupta was holding 3714 equity shares in the company as on March 31, 2006.
Shri Mirza Ishtiaq Beg (67 yrs) is former Chairman of Central Electricity Authority & Ex-officio Secretary
to the Government of India. He obtained Master degree in Economics and Bachelor of Science in
Electrical Engineering. Shri M.I. Beg was with Central Electricity Authority for 34 years and has been
on the Board of Power Finance Corporation Limited and Nuclear Power Corporation of India Limited.
He has undergone 6 months training in Design and Construction of Power Project at New Brunswiek,
Canada. He has been on the Board of the Company with effect from January 30, 2006 as a nonofficial part-time director.
Shri Mirza Ishtiaq Beg was holding 214 equity shares in the company as on March 31, 2006.
Shri G.S. Sarna (51 yrs), is an Indian Revenue Service Officer. Prior to the present deputation as the
Chief Vigilance Officer, NTPC Ltd., he was Commissioner of Central Excise. In the Customs he has
held similar senior appointments at the International Airport and the Air Cargo at Delhi besides
having been also on deputation in the Commerce Ministry.
18
30th Annual Report
SENIOR MANAGEMENT TEAM
S. No. Executive Directors
S. No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Dubey,Kailash Bihari
Jha,M.
Trivedi,S.
Agarwal,G.K.
Sonde,R.R.
Rao,Karanam Prakasa
Singh,B.P.
Jha,J.
Yadav,S.R.
Sharma,R.S.
Kapoor,L.M.
Parswal,I.S.
Misra,Narendra Nath
Dave,Ambarish Nath
Kundu,A.K.
Perwaiz,M.A.A.
Kumar,Swatantra
Sharma,S.C.D.
Kumar,Dinesh
Pandey, I. B.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
General Managers
Pandey,S.N.
Chakrabarti,A.K.
Nebhnani,M.C.
Ray,Manoj Kumar
Maitra,A.K.
Mohapatra,J.
Vishwa Roop
Banerjee,Some Nath
Gupta,Vijay
Choudhary,V.N.
Chakraborty,Pradip Kumar
Prasad,L.
Chatterjee,T.K.
Chowdhury,B.
Jiban Krishna, S.
Jain,V.B.K.
Dr Chandra,S.
Sen,R.N.
Mattoo,R.L.
Krishnamurthy,R.
Jawada,Vinod Kumar
Bose,Sankar Lal
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
S. No.
Chatterjee,Subir
Chaturvedi,A.
Gupta,L.D.
Datt,R.
Modi,P.K.
Binepal,H.S.
Sharma,N.K.
Soin,Malvinder Singh
Agrawal,G.D.
Kapoor,I.J.
Chawla,M.S.
Banerji,Ashok Kumar
Gopal,Ram
De,S.B.
Kurien,Ashoka
Roy,P.K.
Pradhan,Bisikeshan
Agrawal,P.K.
Maken,O.P.
Kristam,Siva Kumar
Sohal,T.R.
R Ramesh
Dutta,S.K.
Krishna,Gopal
Kumar,A.
Gupta,R.P.
Joshi,D.P.
Sharma,Vinod
Jha,A.K.
Agrawal,D.K.
Kishore Sharma,K.
Ganeshan,Amudhan
Anand,Sharad
Pandey,S.C.
Deshpande,G.J.
Reddy,V.K.
Ahuja,Anil Kumar
Seth,K.K.
Kumbhaj,P.C.
Sikri,R.K.
Mehrotra,R.N.
Alapati,Radhakrishna
Paranjothi,Muthu Kumar
Gupta,Vinay Kumar
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
Saha,N.K.
Bose,Suprakash Kumar
Pathak,Ram Bachan
Chatterjee,A.
Gahlowt,Rajendra Kumar Singh
Singh,M.P.
Kumar,A.
Dhar,S.K.
Singh,Radhey Shyam
Yadav,B.N.
Agrawal,D.
Khetarpal,Rakesh
Goel,S.N.
Ganguly,Satyendranath
Chudhari,A.
Sharma,A.K.
Gupta,V.K.
Bisht,B.S.
Rao,M.K.V.R.
Gaur,R.K.
Panda,K.K.
Posted in Subsidiary/Joint Venture
Companies and others
S. No. Executive Directors
1.
Agrawal, S.B.
2.
Ghosh, B.C.
3.
Singh, Shailendra Pal
4.
Sivaramakrishnan, Krishnamurthy
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
General Managers
Banerjee, Mukul
Sinha, Shiva Kumar
Agarwal, Kamal Kumar
Jain, D.K.
Saxena, A.K.
Choudhary, Dilip Kumar
Dhup, Rakesh Chander
Mehta, J.K.
Mukherjee, Biswanath
Narayanan, Kannan
Pani, U.P.
Roy, Saptarshi
R, Venkateswaran
DIRECTORS’ REPORT
Dear Members,
Your Directors are pleased to present the 30th Annual Report
and the audited accounts for the year ended March 31,
2006.
FINANCIAL RESULTS
2005-06
Rs. Million
2004-05
Sale of Energy
Consultancy
Other income (Including
energy internally consumed)
260701
452
26354
225069
333
23777
Gross Revenue
287507
249179
163947
9684
137235
8823
12721
4845
12787
20477
224461
12062
5830
11125
19584
194659
63046
54520
Income
Expenditure
Fuel
Employees Remuneration
& Benefits
Generation, Administration &
other expenses
Interest
Finance charge
Depreciation
Total Expenditure
Profit before tax, provisions
and prior period adjustments
Tax
Profit after tax but before
provisions and prior period
adjustments
Less :
Prior Period Adjustments (Net)
Provisions (Net)
Net Profit after tax
2022
61024
2712
51808
2488
334
58202
(102)
(6160)
58070
Appropriations:
Transfer to Bonds Redemption
Reserve
Interim Dividend
Proposed Dividend
Tax on Dividend
Transfer to General Reserve
Transfer to Capital Reserve
2926
16491
6596
3238
29000
29
2351
9895
9895
2680
33000
22
CHANGE OF NAME
As approved by you in last Annual General Meeting, your
company had changed its name from “National Thermal
Power Corporation Limited” to “NTPC Limited”.
20
30th Annual Report
FINANCIAL PERFORMANCE
Total revenues of the company for the year increased by
15.38% to Rs. 287,507 million from Rs. 249,179 million
during the previous year. Profit after tax but before
provisions and prior period adjustments increased by
17.79% to Rs. 61,024 million from Rs. 51,808 million. Net
profit after tax increased marginally to Rs. 58,202 million
from Rs. 58,070 million.
DIVIDEND
Your Directors have recommended a final dividend of Rs.
0.80 per share in addition to Rs. 2 per share of interim
dividend paid in February 2006. The dividend for the year
thus aggregates to Rs.2.80 per share as against Rs. 2.40 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. 23,087
million represents 40% of the profits after tax as against a
dividend pay-out of 34% in the previous year. The dividend
has been recommended in accordance with the Company’s
policy of balancing dividend pay-out with the need of
internal accruals for its growth plans. Your Directors believe
that growth of the company through capacity addition
would lead to increase in shareholder value.
OPERATIONAL PERFORMANCE
During the year the power stations of the company
generated 170.88 billion units of electricity which was
27.68% of the total power generated in India. The power
generated by the company has registered an increase of
7.40% over the previous year’s generation of 159.11 billion
units. During the year the coal stations of the company
operated at a plant load factor of 87.54% as compared to
87.51% during the previous year. Gas stations of the
company operated at a plant load factor of 65.81% as
compared to 65.35% in the previous year. The average
availability for coal and gas stations for the year was 89.91%
and 82.15% respectively.
COMMERCIAL PERFORMANCE
During the year, your company realized in full, the amounts
due from customers against bills raised for sale of power.
The Company would also make all efforts to ensure that the
realizations are maintained at these levels in the future.
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.
INSTALLED CAPACITY
Presently your company owns 25,140 MW and partly owns
1,054 MW through joint venture companies. Details of the
capacities are given below:
MW
Owned by NTPC
Coal
Gas
Sub-total
Joint ventures
SAIL (Coal)
Ratnagiri (Gas)
Sub-total
Total
21,185
3,955
25,140
314
740
1,054
26,194
setting up two units of 490 MW each at the National Capital
Power Station at Dadri. All these power projects except
Dadri are envisaged to be set up as merchant power plants.
Thus, capacities cumulating to 11,050 MW are under
construction. Out of these efforts are being made to
commission 3210 MW in the year 2006-07.
The company has also prepared feasibility / detailed project
reports in respect of certain projects and these are under
various stages of clearances.
The company is also identifying new sites for setting up of
power projects and based on availability of infrastructure,
fuel availability, etc. these locations would be added to
the plans at a future date.
The company has also submitted a Request for Qualification
for the ultra mega project having a capacity of 4000 MW
located at Sasan in the state of Madhya Pradesh.
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
Details of the projects being implemented and planed for
implementation through joint ventures are given below:
JV Partner
Company
Project location
and capacity
CAPACITY ADDITION PROGRAM
Your company had announced a capacity addition program
of about 26000 MW for the period 2002-2012. During the
year the company commissioned the second unit at its
Rihand project ahead of schedule. A 500 MW unit of
Vindhyachal project has also been commissioned in July 2006.
Thus the capacities aggregating to 4500 MW out of the
announced program have already been commissioned.
Steel Authority NTPC-BHILAI
of India Limited Electric Supply
(SAIL)
Company
Private
Limited
During the year, your directors have given investment
approval for putting up a 500 MW unit at the existing power
plant located at Korba. In June 2006, your directors have
approved investment proposal for setting up of a 600 MW
hydro-electric power plant located at Loharinag Pala in the
state of Uttaranchal. The project would comprise four units
of 150 MW each. In July 2006, investment approvals have
been given for a 500 MW unit at Farakka power plant and
Expansion of existing
capacity by adding
2x 250 MW of coal
based units. The
expansion is under
execution and is
scheduled
for
commissioning by the
year 2008.
Tamil Nadu
Electricity
Board
A coal based project
having a capacity of
1000 MW located at
Ennore in the State of
Tamil Nadu.
NTPC Tamil
Nadu Energy
Company Ltd
Indian Railways. Company under
NTPC will have formation
49% equity
participation
and 51% will
be contributed
by Railways
A coal based project
having a capacity of
1000 MW located at
Nabinagar in the
State of Bihar.
Gujarat Power
Corporation
Limited and
Gujarat
Electricity
Board. An MOU
was signed for
forming a Joint
Venture
Company
A coal based power
plant
having
a
capacity of 1000 MW
located at Pipavav in
the State of Gujarat.
Presently
Pipavav Power
Development
Corporation
Limited,
is a wholly
owned
subsidiary
of NTPC
CAPACITY ADDITION THROUGH ACQUISITIONS
During the year your company made an investment of
Rs. 5000 million for a 28.33% stake in Ratnagiri Gas and Power
Private Limited, a company formed as a joint venture
between your company, GAIL, Indian Financial Institutions
and Maharashtra SEB Holding Co. Ltd. to take over the 2150
MW(net) gas based Dabhol Power Project. The joint venture
company has already restarted the existing capacity of 740
MW.
Your company entered into an understanding with the
Government of Bihar and the Bihar State Electricity Board
for takeover of 220 MW Muzzafarpur Thermal Power Station
by setting up of a joint venture company of NTPC and Bihar
State Electricity Board. Your company will have a minimum
of 51% and upto 74% stake in this joint venture company.
Your company is also contemplating to take over an existing
power plant located at Bongaigaon in the state of Assam.
The existing assets would be dismantled and a new plant
with 500/750 MW capacity comprising two or three units
of 250 MW each would be constructed at the same location.
The Government of India has transferred the generation
assets of the 705 MW Badarpur Thermal Power Station
located at New Delhi to your company w.e.f. 1st June 2006.
Until now, your company was managing this power station
on behalf of the government. The power station is being
taken over at net book value, excluding land; land is being
given on a 50 years lease. The consideration to be paid by
the company is to be communicated by government. The
power station has been performing well with the Plant Load
Factor of the station for the year being 87%. The tariff for
the station would be determined by the regulator as per
22
30th Annual Report
the existing regulations. Your company would be drawing
up plans for renovation and modernization of the station
and would also consider expansion of the power station.
GLOBALISATION INITIATIVES
Your company is keenly pursuing proposals to increase its
footprint in different parts of the world. The company
provides consultancy services in engineering, project
management, construction management, operation and
maintenance of power plants to clients within as well as
outside India. In order to scout for more business
opportunities in the Middle East countries, your company
is in the process of setting up a representative office in
Dubai.
PROJECTS PLANNED
Initially the Company had a capacity addition programme
of 17,333 MW in XI Plan, which has now been enhanced to
21,941 MW. Taking into account all the plans and
agreements, the list of the projects which the company is
working on for commissioning upto the year 2012 and
beyond are presently as follows:
Sr. Name of the
no. Project
Capacity
By
March
2007
500
1000
500
210
1000
1980
1980
500
500
800
600
500
1000
500
210
1000
MW
2007-12
Ongoing Projects
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Vindhyachal-III
Kahalgaon-II, Phase I
Kahalgaon-II, Phase II
Unchahar-III
Sipat –II
Sipat-I
Barh
Korba-III
Bhilai Power expansion
Koldam HEPP
Loharinag Pala HEPP
12. Farakka-III
500
13. NCTPP-II, Dadri
980
Sub-total of ongoing
11050
projects
New Projects
14. Tapovan Vishnugad HEPP
520
15. North Karanpura
1980
16. Nabinagar-JV with
1000
Railways
1980
1980
500
500
800
600
3210
500
980
7840
520
1980
1000
17. Lata Tapovan HEPP
171
through NTPC Hydro Ltd.
18. Rammam III HEPP through
NTPC Hydro Ltd
120
19. Rajiv Gandhi-II CCPP
1950
20. Ennore -JV with TNEB
1000
21. Simhadri-II
1000
22. Barh-II
1320
23. Darlipali - Integrated
Power Project
3200
24. Bongaigaon, Assam
500
25. Mauda, Maharashtra
1000
26. Ultra Mega Power Project
4000
27. Kawas-II, Gujarat
1300
28. Gandhar-II, Gujarat
1300
Sub-total of new
projects
20361
TOTAL
31411
171
120
1950
1000
1000
660
(MTN) programme for USD 1 billion to finance its capital
expenditure requirement. The first offering off the MTN shelf
was made by issuing 10-year Fixed Rate Notes amounting
to USD 300 million. The issue was the first corporate deal
out of India for a 10-year bond deal since 1997. The issue
was over-subscribed by more than five times. The Notes,
maturing in March 2016, were priced at 140 bps over the
benchmark ten-years US Treasury with a coupon of 5.875%.
FUEL SECURITY
800
500
1000
800
1300
1300
3210
14101
21941
FINANCING OF NEW PROJECTS
Your company is undertaking an aggressive capacity
addition program after having assessed the requirement of
finances for putting up these capacities. All the planned
capacity addition programs are to 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. As far as the debt
component is concerned, 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
Fuel is one of the vital inputs for maintaining continued
operation of a power plant and it is the responsibility of
the generator to ensure availability of fuel for its power
stations. Your company has a policy of securing long term
tie-up for fuel before investment decisions are made for a
project. Even though the cost of fuel is a pass- through to
the customers, your company always attempts to procure
fuel for its stations at the most competitive rates to ensure
that the tariff of its stations is competitive. With a view to
ensure fuel supply for its power plants and competitive
price of fuel, the company had evolved a strategy for
backward integration to enter into coal mining and oil &
gas exploration activities.
COAL MINING
The Government of India has allotted six coal mining blocks
to the company for captive use. The government has also
allotted two mining blocks to be developed through a joint
venture between the company and Coal India Limited. All
these mining blocks together have a production potential
of more than 50 million tonnes per annum. Your company
has initiated activities for development of these mines and
first of these mines is expected to start production of coal
by the year 2008.
EXPLORATION ACTIVITIES
A consortium comprising NTPC Ltd, Canoro Resources Ltd
and Geopetrol International has been allotted a petroleum
block in the state of Arunachal Pradesh under the fifth round
New Exploration Licensing Policy (NELP-V) of the
Government of India. The Production Sharing Contract has
been signed with the government and exploration activities
at site have commenced. Your company is also planning to
bid for more exploration blocks under the next round of
bidding.
ratio of 0.45. Your company would tap domestic as well as
overseas markets for raising borrowings. During the year your
company had successfully established a Medium Term Note
The company is also exploring the possibility of equity
participation / investment in different elements of Liquified
Natural Gas (LNG) Value Chain viz. Exploration & Production
(E&P), Liquefaction, Re-gasification etc in various countries.
The company is also exploring the possibility of sourcing
gas from Nigeria.
NEAR TERM STRATEGIES
Besides the above long term strategies for securing fuel for
its power plants, your company has also adopted measures
to secure coal and gas in the short term for its existing
stations. The company would resort to import of coal to
overcome any temporary shortages. Your directors have also
approved a proposal of the company to secure gas supplies
in the spot market subject to the customers of the company
agreeing to the prices at which such gas is procured. The
company has also entered into an understanding with
Petronet LNG Limited for exploring supply of gas for its
existing stations.
JOINT VENTURES AND SUBSIDIARIES
Your 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:
NTPC Limited
Subsidiaries
NTPC Vidyut
Vyapar Nigam
Limited
100%
Pipavav Power
Development
Co. Ltd
100%
NTPC Electric
Supply Co.
Limited
100%
NTPC Hydro
Limited
100%
Joint Ventures
LEVERAGING COMPANY’S
GOVERNMENT INITIATIVES
CAPABILITIES
FOR
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 in which your company is
partnering the government are:
RAJIV GANDHI GRAMEEN VIDHYUTIKARAN YOJANA (RGGVY)
Ministry of Power has introduced the scheme Rajiv Gandhi
Grameen Vidhyutikaran Yojana (RGGVY) which aims at
providing electricity in all villages and habitations in four
years and provides access to electricity to all rural
households. Subsidy towards capital expenditure to the
tune of 90% under the scheme will be provided, through
Rural Electrification Corporation Limited (REC),a Government
of India enterprise, which is the nodal agency for
implementation of the scheme. Your company has entered
into an understanding with the REC for assisting them in the
execution of Rural Electrification projects in the States of
Chattisgarh, Madhya Pradesh and Orissa.
PARTNERSHIP IN EXCELLENCE
Central electricity authority (CEA) has identified 26 power
stations which are operating at a PLF of less than 60%. Under
Accelerated Generation & Supply Programme (AG&SP) of
Ministry of Power, it has been decided that these stations
would enter into partnership with better performing utilities,
so as to achieve an improvement in performance in shortest
possible time. Your Company has been made a partner in
15 of these stations.
24
30th Annual Report
NTPC-SAIL
Power Company
Pvt. Limited
50%
NTPC Alstom
Power Services
Pvt. Limited
50%
Bhilai Electric
Supply Co. Pvt.
Limited
50%
NTPC Tamilnadu
Energy Co.
Limited
50%
PTC India
Limited
8%
Utility
Powertech
Limited
50%
Ratnagiri Gas
and Power
Private Ltd
28.33%
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
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
Management Discussion & Analysis
Report on Corporate Governance
Information on conservation of energy,
technology absorption and foreign
exchange earnings and outgo
Information as per Companies (Particulars of
Employees) Rules, 1975
Statement pursuant to Section 212 of
the Companies Act, 1956 relating to
subsidiary companies
Annexure
I
II
III
IV
V
Review of the Accounts for the year
ended March 31, 2006 by C& AG
Statistical data of the grievances
Statistical information on persons belonging
to Scheduled Caste / Tribe categories
Information on Physically Challenged persons
UNGC Communications on progress 2005-06
VI
VII
VIII
IX
X
FIXED DEPOSITS
The cumulative deposits received by your company from
1068 depositors as at March 31, 2006 stood at Rs 778
million. Further an amount of Rs. 8 million has not been
claimed on maturity by 148 depositors as on that date.
STATUTORY AUDITORS
The Statutory Auditors of your Company are appointed by
the Comptroller & Auditor General of India. M/s. Kalani &
Co., Amit Ray & Co., Umamaheswara Rao & Co., S.N. Nanda
& Co.and T.R. Chadha & Co. were appointed as Joint
Statutory Auditors for the financial year 2005-06.
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 5 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 directed by notification
that pending determination of tariff effective from 1st April
2004, billing of sales shall continue to be done on the same
basis as on 31st March 2004. The amount so billed shall
however be subject to adjustment after final determination
of tariff. Sales as per CERC regulations are likely to be lower
than the billed amount and accordingly, the same has been
dealt with in the books of accounts by provisionally
recognizing sales on the basis of tariff worked out as per
CERC regulations pending final determination of tariff by
CERC. This fact has been explained in note no. 3(a) of the
Annual Accounts.
The note 5 pertains to non-recognition of company’s share
of net profits of Badarpur Thermal Power Station for the
years 1986-87 to 2004-05. 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 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 198687 to 2004-05. 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
Subsequent to Department of Company Affairs notifying
Cost Accounting Records (Electricity Industry) Rules, 2001
in December 2001, Cost Audit Branch of the Ministry of
Company Affairs issued orders dated 16th September 2005,
directing audit of the cost accounts maintained at the
company’s generating stations, from the financial year 200506 onwards. Cost Auditors for the year 2005-06 were
appointed with the approval of Central Government for
conduct of cost audit and have submitted the Cost Audit
report in terms of the said orders and the Cost Audit (Report)
Rules, 2001.
BOARD OF DIRECTORS
Prof. Ashok Misra, Dr. R.K. Pachauri, Shri M.I. Beg, Shri G.P.
Gupta took over as non-official part-time Directors w.e.f
January 30, 2006.
Shri C.P. Jain ceased to be the Chairman & Managing Director
of the Company with effect from March 31, 2006 on
superannuation. The Board wishes to place on record its
deep appreciation for the valuable services rendered by
Shri C.P. Jain during his association with NTPC.
Shri T. Sankaralingam took over as the Chairman & Managing
Director with effect from April 1, 2006.
Shri R.C. Shrivastav has taken over as Director (Human
Resources) with effect from May 24, 2006.
In accordance with the provisions of Article 41(iii) of the
Articles of Association of the company, S/Shri R.S. Sharma,
R.K. Jain and A.K. Singhal, Directors shall retire by rotation
at the Annual General Meeting of your company and, being
eligible, offer themselves for re-election.
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 2005-06 and
of the profit of the company for that period;
3.
4.
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
the Directors had prepared the Annual Accounts on a
going concern basis.
ACKNOWLEDGEMENT
Your 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.
26
30th Annual Report
Your 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
Date: July 31, 2006
(T. Sankaralingam)
Annex-I to Directors’ Report
MANAGEMENT DISCUSSION AND ANALYSIS
INDUSTRY OVERVIEW
Capacities
As on March 31, 2006, India’s power system had an installed
generation capacity of 124,287 MW. During the year 200506 the total power generated in the country was 617.38
billion.
As far as the ownership of the power generating capacities
are concerned, the state government owned generating
utilities accounted for 55% of the capacities, while the
Central Government owned power utilities accounted for
approximately 32% and private players accounted for
approximately 13%. The capacities owned by us (including
through joint ventures) were 24,249 MW as on 31st March
2006 which represents a share of 19.51% of the country’s
capacity while our share in generation was 27.68% with a
generation of 170.88 billion units.
consumption of electricity during the fiscal 2005 was
approximately 36%, 23%, 25% and 8% respectively. The
balance of sales pertained to various other consumers. The
per capita consumption of electricity is quite low in
comparison to the global average. The following table
compares per capita electricity consumption in India, with
some other countries and the world average consumption
as of 2002.
Country
Per Capita Electricity
Consumption in Kwh
United States of America
13456
Australia
11299
United Kingdom
6614
Brazil
2183
China
1484
Demand and Supply
Egypt
1287
Although electricity generation capacity has increased
substantially in recent years, the demand for electricity in
India is still substantially higher than the available supply. In
the year 2005-06, India faced an energy shortage of
approximately 8.3% of total energy requirement and 12.3%
of peak demand requirement.
India
569
The following table presents data showing the gap between
the total requirement for electricity versus its availability from
fiscal 2002 to fiscal 2006.
Actual Power Supply Position
Fiscal Requirement
Year
(million
units)
Availability
(million
units)
Surplus/Deficit
(+/-)
(million
(%)
units)
2002
522,537
483,350
-39,817
-7.5%
2003
545,983
497,890
-48,093
-8.8%
2004
559,264
519,398
-39,866
-7.1%
2005
591,373
548,115
-43,258
-7.3%
2006
631,024
578,511
-52,513
-8.3%
Source: Ministry of Power Annual Report, CEA Executive Summary,
March 2006
Consumption
The end users of power in India can be broadly classified
into industrial, agricultural, domestic and commercial
categories. The share of each of these categories in the
World Average
2465
Source: UNDP Human Development Indicators 2005
Capacity Utilisation
Capacity utilisation in the Indian power sector, as measured
by plant load factor (PLF) has been improving over the years
and the PLF for coal-fired plants has increased from 63.0%
in fiscal 1996 to 73.6% in fiscal 2006.
Transmission and Distribution
In India, the power transmission and distribution (T&D)
system is a three-tier structure comprising regional grids,
state grids and distribution networks. The distribution
network and the state grids are owned and operated by
SEBs or state governments through SEBs. Most of the interstate transmission links are owned and operated by
Powergrid Corporation of India Limited. In order to facilitate
the transfer of power between neighbouring states, state
grids are interconnected to form regional grids.
Peak demand does not occur simultaneously in all states
giving rise to situations in which there is surplus of power
in one state while another state faces a deficit. The regional
grids facilitate transfers of power from a surplus state to a
deficit state. The grids also facilitate the optimal scheduling
of maintenance outages and better co-ordination between
the power plants. The regional grids are to be gradually
integrated to form a national grid enabling interregional
transfer of power thereby facilitating a more optimal
utilisation of the national generating capacity. At present,
the national grid has a capacity of 9,000 MW and it is
expected that same would be of the order of 30,000 MW
by fiscal 2012.
reliable and quality power, per capita availability of
electricity to be increased to over 1000 units by 2012,
commercial viability of electricity sector and protection of
consumers’ interests.
The T&D system in India is characterized by high losses
including technical as well as commercial losses which on
an average were 31% during 2004-05 as compared to T&D
losses of 10 to 15% in developed countries.
The Policy has set the goal of adding new generation
capacity of more than one lakh MW by the year 2012
including a spinning reserve of 5% in the system.
Regulatory Framework
Responsibility for the development of the power industry
is shared between the Central Government and the State
governments. The Electricity Act 2003 provides the overall
legislative framework for the sector.
The Ministry of Power (MoP) oversees the operation of all
Central Sector Power utilities. The government has also set
up Central Electricity Authority which advises the MoP on
electricity policy and technical matters. The government
has also constituted Central Electricity Regulatory
Commission (“CERC”) as per legislative requirement to
regulate the tariffs for the Central Power utilities and other
entities with interstate generation or transmission operations.
The Electricity Act also requires state governments to set
up State Electricity Regulatory Commissions for the
rationalization of energy tariffs and the formulation of policy
within each state. As of March 31, 2006, twenty-four states
have set up their regulatory commissions.
Recent Policy Initiatives of Government with respect to
Power Sector
Ultra Mega Power Projects
The Ministry of Power, Govt. of India, in association with
CEA and Power Finance Corporation Ltd., has launched an
initiative for development of coal based Ultra Mega Power
Projects in India, each with a capacity of 4000 MW or above.
These projects will be awarded to developers on the basis
of tariff based competitive bidding. The government has
identified seven sites for setting up ultra mega projects.
Request For Qualification (RFQ) documents have been
sought by the government for two of these projects namely,
Sasan in Madhya Pradesh and Mundra in Gujarat. NTPC has
submitted RFQ for the Sasan project.
National Electricity Policy
Government of India has also formulated the National
Electricity Policy as required under the Electricity Act. The
policy aims to accelerate development of the power sector,
provide supply of electricity to all areas and protect interests
of consumers and other stakeholders. The objectives of the
policy include access to electricity to all households by
the year 2012, power demand to be fully met, supply of
28
30th Annual Report
Tariff Policy
As required under the Electricity Act the Government of
India has notified a Tariff Policy. The tariff policy is aimed at
providing policy framework for regulators both at the central
and State level for determining tariff for various constituents
in the power sector. The policy emphasises the need to
balance the requirement for promoting investments in the
power sector against the need to reduce end-user tariff. It
also requires regulators to continue with the systems of
setting norms for operations which would provide incentive
for efficiency in operations.
Competition
NTPC is the largest power generating company in India
having a market share of nearly 20% of the installed capacity
in the country and nearly 28% of the electricity generated
in the country. The reforms taking place in the sector are
expected to bring in more investments into sector and thus
competition is expected to increase. We believe that NTPC
is well positioned to take benefit of the opportunities in
the sector and maintain its market share.
Risk Management
The strategies we have adopted for our growth are rapid
capacity expansion by adding larger capacities in shorter
time spans, foray into hydroelectric power, securing fuel
supply by undertaking mining business and stepping into
natural gas value chain. We also have the strategy of
maintaining high levels of operational efficiencies so that
we are always assured of high availability and generation
of our plants which also enable us to earn efficiency gains
from our operations. We are aware of the fact that the
execution of these strategies may be impacted by certain
risks. Since the inception of the company we are having
systems and practices which have helped us in identifying
risks and taking measures to mitigate those risks. As a further
step towards institutionalising this system we have now put
in place a Risk Management Policy. As an initial step the
policy has identified the risks being faced by the company,
the short-term as well long-term measures to mitigate those
risks and also a reporting system which would enable critical
risks beyond certain tolerance levels to be reported for
further action. We are also in the process of putting a risk
management tool across the company which would enable
smooth implementation of the Risk Management Policy and
integrate the same at all working levels.
The risk assessment which has been carried by the company
has identified the following risks:
Fuel Risk
Fuel availability & Pricing
Operational
Risks
Machine/ System breakdown & spares
availability, water availability
Project
Implementation Risks
Suppliers’/Agencies not meeting the
project requirements, Hydro-Geological
Surprises, Dependence on single source,
Equipment, technology, experience of
contractor/ supplier/ manufacturer, New
Technological product/ systems, proven
ness of equipment
Company has two Committees of the Board viz. Audit
Committee and Committee on Management Controls which
periodically review the important findings of different
Audits keeping a close watch on compliance with Internal
Control System.
Performance During The Year
Operations
The power stations of the company performed well during
the year. Details of the electricity generated and capacity
utilisation levels are as follows:
Gross generation
Commercial generation
Electricity sold out of
commercial generation
Fiscal 2006 Fiscal 2005
Million units
170880
159110
169789
158271
159019
147792
Plant Load Factor in %
87.54
87.51
65.81
65.35
Regulatory
Risks
Adverse change in tariff Regulation,
policy, environment regulation etc.
Business Risks
Non-compliance of contractual
commitments in international business ,
Entry in newer business areas
Customer Risk
Revenue Realisation, Transmission risk
Human Resources
Asset Risks
Natural calamities like storm, hurricane
earthquake ,flood etc Fire- explosion/
implosion and other major accidents
The employees on the rolls of the company and
productivity parameters for fiscal 2006 and 2005 are given
below:
Financial Risks
Funding Risk, Foreign Exchange
Fluctuations, Financial Frauds
Human
Resource risk
Attraction / Retention of quality people,
Safety & Security
IT Risks
Failure of servers for Business
Applications, Failure of Business
Applications
The company has identified mitigation measures for all of
these risks and the same are also communicated to various
levels In the company.
Internal Control
The Company has a sound system of Internal Controls for
financial reporting of various transactions, efficiency of
operations and compliance with relevant laws and
regulations. Suitable delegation of powers and guidelines
for accounting has been issued for uniform compliance.
In order to ensure that all checks and balances are in place
and all internal control systems are in order, regular and
exhaustive internal audits are conducted by experienced
firms of Chartered Accountants in close co-ordination with
Company’s own Internal Audit Department. Besides, the
Coal-fired stations
Gas-fired stations
NTPC
Number of Employees
Man / MW ratio
Generation per employee
Subsidiaries & Joint Ventures
Employees of NTPC
posted in subsidiaries and
joint ventures
Total Number of employees
21,870
0.91
7.81
21,420
0.91
7.43
2174
2071
24,044
23,491
The success of human resource initiatives of the company
is reflected in the low attrition rate of 0.41% for the
executives of the company. NTPC has been ranked fifth
among the top ten “Best companies to work for in India”
by Mercer HR Consulting-Business Today Survey 2005 and
the 3rd “Great Place to work for in India” by a reputed
Human Resources consultant Grow Talent and Business
World .
To achieve the ambitious growth targets, the company has
evolved a Leadership Assessment and Development
system for identifying potential leaders for strengthening
the succession planning process. For this purpose the
company has partnered Ernst & Young, one of the leading
international HR consulting firm and has developed a
comprehensive Leadership Competency Model.
Training And Development
Continual training and upgradation of skills of its employees
is an area of special focus of the company. The Power
Management Institute (PMI) located at NOIDA near Delhi is
the company’s apex training and development centre
providing planned as well as need-based programmes in
technical, managerial and information technology areas.
Employees of other companies in the power sector too
participate in the training programs conducted by the
institute.
During the fiscal 2006, 330 training programs were
conducted against 321 programs in the previous year. The
number of participants to whom training was given during
the year was 8439 as against 7855 in the previous year.
The institute was awarded ‘The Golden Peacock National
Training Award’ for the year 2005 by the Institute of Directors,
New Delhi in recognition of PMI’s outstanding contribution
in the area of training and development of power
professionals across the nation. This was the third successive
year that PMI received this award.
Corporate Social Responsibility
The Company has always appreciated its social
responsibility as a part of its 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 endeavor to
discharge its responsibility, it has undertaken activities in
the following areas:
Resettlement & Rehabilitation:
The company is committed to help the people who are
displaced because of execution of its projects and has
been making efforts to improve the Socio-economic status
of Project Affected Persons (PAPs). In line with its social
objective, the company has focused on effective
resettlement and rehabilitation of its PAPs and also
Community Development works in and around the projects.
The Company has formulated policies which are aligned
with “National Policy on R&R” of Govt. of India.
The company has also formulated and adopted CSR-CD
policy for carrying out CSR activities in remote rural areas
adjoining the company stations, which are socioeconomically backward and deficient in basic civic
amenities. Under this policy, company is providing financial
support essentially in the areas of Primary Education,
Community Health, Basic Infrastructure Development, and
Vocational Training etc in rural areas. Starting of Quality
30
30th Annual Report
circles, establishment of District Disability Rehabilitation
Centres and similar such efforts are being made in the
villages in the periphery of company stations as a part of
this policy.
Global Compact
The Global Compact of UN is the largest voluntary corporate
responsibility initiative, with nearly 2000 companies
participating from over 80 countries. Keenly conscious of
its social responsibilities, the company became member
of Global Compact. The company is committed to adhering
to the principles of global compact.
As per the recent policy of Global Compact Office on
Communication on Progress, a report on the progress made
in this area is at Annex-X to the Directors’ Report.
Distributed Generation
As a part of its CSR activities, the company for the past two
years has been taking up Distributed Generation projects
for rural electrification through non-conventional energy
sources. To take this initiative forward, the company has
entered into an understanding with The Energy and
Resources Institute (TERI) for implementation of distributed
generation projects in villages in India. TERI would provide
assistance in identifying potential villages, preparation of
pre-feasibility report(s), achieving financial closure for such
projects with maximum grant component from local and
international sources.
NTPC Foundation
The Company has set up a Foundation for addressing the
niche domains of social development at National level with
special focus on Physically Challenged Persons. A
Development Centre for the Physically Challenged Persons
is planned to be developed by the Foundation and land
has already been acquired for setting up the same.
During the year the company made a contribution of Rs. 65
million to Uttaranchal Forest Trust Hospital, Haldwani for
purchase of advanced Medical Equipment. A contribution
of Rs. 30 million was also made to the Government of
Uttaranchal to create an ‘NTPC Chair’ to serve as Director of
‘Centre of Excellence in Public Policy, Regulatory and
Strategic Studies’ in the School of Social Sciences. In the
month of June 2006, the company has committed a financial
assistance of Rs. 22.50 million to Hyderabad Eye Research
Foundation for establishing special services at Bhubaneswar
Eye Institute.
Technological Developments
New Initiatives: The company is constantly looking to
introduce new technologies in its effort to attain higher
levels of efficiency and economy in its operation. Some of
the technologies being introduced by the company are:
•
Introduction of 800 MW capacity units: Presently the
largest unit sizes of units being set up by the company
are 660 MW which are under construction at two
locations. Higher size super critical units are planned for
integrated coal based thermal power projects with
captive mining in the states of Orissa and Chattisgarh.
This technology will not only result in improvement in
thermal efficiency but also reduce emissions of
greenhouse gases significantly. Such integrated plants
shall have benefits of fuel availability at lower cost and
low project cost due to economy of scale.
• Integrated Gasification Combined Cycle (IGCC)
Technology: The company is implementing a plan for
development of an IGCC pilot plant of a capacity of
100 MW for power generation. IGCC is an upcoming
clean coal technology which is likely to give efficiency
level higher than the conventional coal fired plants.
• Energy Technologies Centre: The company has set up
an Energy Technologies Centre with a mandate of being
a world class Research Institute. The Center will work in
both fundamental and applied research with ultimate
objective of developing the technologies both within
and outside India. The center would develop
technologies through collaborative research with best
of the R&D and academic institutions in India.
The Company has a Research and Development centre
which provides technical support to all power stations
of the company as well as of other power utilities. The
engineers at the R&D centre have examined, analysed
and solved various operational problems referred by
stations. R&D centre has developed Fly-Ash based
product for part replacement of cement to be used
for general building construction. R&D centre took
initiative for Distributed Power Generation in rural areas
through Bio-Diesel, which can be produced locally at
village level by a simple method developed by R&D.
This probably is the first initiative to use Bio Diesel for
Distributed Power Generation.
Environment
The Company has taken a number of measures for
improvements in the area of Environment Management. It
has initiated several measures for mitigating green house gas
(GHG) emission by adopting more efficient technology such
as adoption of super critical parameters, renovation and
modernization of older stations etc. As a result of sound
environment management systems and practices adopted,
all operating stations of the company have been accredited
with ISO-14001 Certification.
The reduction in GHG emission is one of the critical issues
internationally. The Kyoto Protocol, which has been adopted
by more than 150 countries, is an international treaty that
requires the member countries to reduce their GHG
emissions. This treaty recognizes the Clean Development
Mechanism (CDM) as one of the means available to the
industrialized countries to reduce their GHG emission by
investing in emission reducing projects in developing
countries as an alternative to costly emission reductions in
their own countries. As India is also one such investing
destination for industrialized countries, post Kyoto scenario
is seen by the Company as an opportunity for further
demonstrate its commitment for clean environment. The
Company is identifying the potential areas to take advantage
on CDM benefits by working on a number of projects which
fulfils the emission reduction requirement.
Financial Discussion and analysis
A Results of operations
1 Gross Revenue
Rs Million
Units of electricity sold
159019
147792
(million units)
Revenues
Amount in Rs. Million
Energy Sales (Excl.
260,701
225,069
Electricity Duty)
Energy Internally Consumed
276
248
Consultancy
452
333
Other income (excluding
8,003
6,525
income related to one time
settlement scheme & surcharge)
Gross Revenue (excl. income
269,432
232,175
related to one time settlement
& surcharge)
Income related to one time
18,075
17,004
settlement scheme
& surcharge
Gross Revenue
287,507
249,179
The gross revenue of the company comprises sale of
electricity, revenue from consultancy and other services,
and interest earned on investments such as term deposits
and bonds issued under one-time-settlement scheme. The
gross revenue of the company for the fiscal 2006 was Rs.
287,507 million as against Rs. 249,179 million in the previous
year registering an increase of 15.38%.
1.1 Sale of Electricity
Revenue from sale of electricity for the fiscal 2006 were
Rs. 260,701 million which constituted 90.68% of gross
revenue. The revenue from sale of electricity has
increased by 15.83% over the previous year’s revenue
of Rs. 225,069 million primarily because of a 7.6%
increase in units sold, as a result of increase in the
commercial capacity by 1,000 MW and higher PLF of
existing capacities and higher variable charges. Our
average selling price this year was Rs. 1.64 per unit
compared to Rs.1.52 per unit in the previous year.
We sell electricity to bulk consumers comprising mainly
electricity utilities owned by State Governments. Sale
of electricity is made pursuant to long-term power
purchase agreements, which run for 25 years in the case
of most of our coal-fired plants and 15 years in the case
of most of our gas-fired plants, which is the estimated
average life of the plants. The agreements are typically
renewed or extended upon expiry of the initial term.
In the past, we have had difficulty recovering our dues
from the SEBs. After the implementation of the One
Time Settlement Scheme and signing of Tripartite
Agreements under which the SEBs were required to
establish letters of credit (“LCs”) to cover 105% of our
average monthly billing to them for the preceding 12
months the realization of the amounts due from the
customers for the sale of electricity has been 100%
for the past three years.
1.2 Tariffs
Our charges for electricity are based on tariff rates set
by the Central Electricity Regulatory Commission
(CERC). The tariff rates reflect a fixed charge based on
plant availability, variable charges based primarily on
fuel costs and an unscheduled interchange charge
which is a payment (or penalty) designed to create
incentives for grid discipline. The CERC sets our tariff
rates on a plant-by-plant basis on the basis of the tariff
norms it has promulgated.
From April 1, 2004, our tariffs are determined pursuant
to the CERC’s tariff regulations that are applicable for
fiscal 2005 to fiscal 2009. The following are the
significant elements of the fixed charges permissible
under the regulations:
•
•
•
•
•
32
The return on equity at 14%, on a post-tax basis
based on a prescribed 70:30 debt to equity ratio
for new projects
Actual interest cost incurred on debt
Interest on working capital determined on a
normative basis
Depreciation on plant and machinery calculated
at 3.6% for coal based stations and 6% for gas
based stations
Operation and maintenance costs determined
normatively by the CERC based on class of unit,
on a per megawatt basis
30th Annual Report
•
•
•
Variable charges on the electricity sold are
determined on the basis of landed cost of fuel
applied on quantity of fuel determined on the basis
of norms for heat rate, auxiliary consumption,
specific oil consumption etc.
Besides the fixed capacity charges and the variable
charges, the other elements of tariff are:
Incentives payable at the rate of Rs. 0.25 per unit
for operating plants at PLF of more than 80%
Exchange rate variations as per Regulations
The unscheduled interchange charge payable (or
receivable) at rates prescribed in the regulations
1.3 Provisional Tariffs
In any fiscal year, there are a number of stations for which
CERC tariffs are unavailable because the CERC has not
yet fixed the final tariff. However, we book revenues
based on our assessment of the likely final tariff based
on the CERC regulations. When CERC fixes the final tariff for
these stations, we make adjustments to our revenues on
the basis of the final order to the extent of the difference
between the provisionally booked revenues and the
revenues based on the tariffs determined by CERC.
1.4 Consultancy Services
We also earned Rs. 452 million as revenue from
consultancy services as against Rs. 333 million in the
previous year and other sources. We intend to expand
our consultancy business and enter certain new
businesses.
1.5 Other Income
Our other income in fiscal 2006 was Rs. 26,078 million as
compared to Rs.23,529 million in the fiscal 2005. The
other income earned by us comprised the following:
Rs Million
Income related to one-timesettlement scheme & surcharge
i) Interest for the year
ii) Previous year interest
(non-recurring)
iii) Late payment Surcharge
(non-recurring)
Sub-total
Income on investment of
surplus cash
Dividend from JVs and
Subsidiaries
15,413
14,763
2,278
(219)
384
2,460
18,075
17,004
6,401
4,839
148
117
Income earned on other heads
such as hire charges, profit on
disposal of assets, etc
Total
Less: Transfer to incidental
expenditure during
construction period
Net other income
2
2,111
26,735
2,628
24,588
657
26,078
1,059
23,529
1.6 Adjusted Gross Revenue
The gross revenue reported for the year includes certain
revenues pertaining to previous years. The revenues
from sale of electricity for the fiscal 2006 includes
Rs.3,522 million pertaining to previous years which have
been recognized in sales due to revision in the amounts
billed based on the orders of the CERC /Appellate
Tribunal issued during the year , issue of final tariff
orders by CERC for the period upto 31st March 2004 for
certain stations and CERC admitting additional capital
expenditure for some of the stations. Similarly, for fiscal
2005, an amount of Rs.3,689 million pertaining to
previous years were included in the sales. Interest on
bonds under one time settlement scheme recognized
during the year includes arrear interest of Rs.2,278
million pursuant to issue of bonds by the states of Bihar
and Jharkhand retrospectively with effect from October
1, 2001. In the last fiscal, the amount of long-term
advance to Government of National Capital Territory of
Delhi was reduced with effect from October 1, 2001
resulting in an adjustment of interest amounting to
Rs.219 million. If the revenues relating to previous years
are adjusted, the gross revenue for the fiscal 2006 and
fiscal 2005 would be as follows:
Rs. Million
Gross Revenue
287,507
249,179
Sales of previous years
3,522
3,689
Arrears of interest on bonds
under one time settlement
scheme and Late payment
surcharge
2,662
2,241
Less:
Adjusted Gross Revenue
281,323
243,249
Expenditures
2.1 Expenditure related to operations
Rs.Million
Expenditures
Commercial
Generation (Mus)
Fuel
Employees’
remuneration
and benefits
Generation,
administration and
other expenses
Total
Fiscal
2006
169789
163,947
9,684
12,721
186,352
Rs per
kwh
Fiscal Rs per
2005
kwh
158271
0.97 137,235
0.06
8,823
0.87
0.06
0.07
12,062
0.08
1.10 158,120
1.00
The expenditure incurred on fuel, employees,
generation, administration and other expenses for the
fiscal 2006 was Rs. 186,352 million which is 17.85% more
than the expenditure of Rs. 158,120 million on these
heads in the last year. In terms of expenses per unit of
power produced it was Rs. 1.10 per unit in fiscal 2006
in comparison to Rs. 1.00 per unit in the previous year. A
discussion on each of these heads is given below.
2.1.1 Fuel
The primary fuels we use in power generation are
coal and natural gas. We also use oil as a
secondary fuel for our coal-fired plants and use
naphtha as an alternate fuel in our gas-fired plants.
Expenditure on fuel constituted 88% of the total
expenditure on the above heads as compared to
87% in the previous year. Expenditure on fuel was
Rs. 163,947 million in fiscal 2006 in comparison
to Rs. 137,235 million in fiscal 2005 representing
an increase of 19.46%. The higher fuel expenses
were mainly due to increases in fuel prices, use
of imported coal as well as increased fuel
consumption due to higher generation. Fuel cost
per unit generated increased to Rs. 0.97 in fiscal
2006 from Rs. 0.87 in fiscal 2005.
Under the tariff norms set by the CERC, we are
allowed to pass on our fuel charges through the
tariff, provided we meet certain operating
parameters.
We purchase coal pursuant to long term coal
supply arrangements with subsidiaries of Coal
India Limited and with Singareni Collieries
Limited. The price is determined by a formula
comprising a base price with an agreed price
adjustment mechanism. The price also depends
on the heat value of the coal. During the year
our coal based stations consumed 105 million
tones of coal as against 94 million tones in the
fiscal 2005. To overcome temporary shortages
in the coal supply, we have also resorted to
import of coal during the fiscal 2006. The
company during the year tied up with MMTC Ltd.
and State Trading Corporation Ltd. for supplies
of 2.1 million metric tones and 1.9 million metric
tones respectively of imported coal of which 3.3
million metric tones has been received.
We source gas domestically under an
administered price and supply regime. Our main
gas supplier is GAIL. Gas prices are fixed by the
Ministry of Petroleum and Natural Gas. We
received a supply of 10.91 MMSCMD of gas
during the fiscal 2006 as against 10.37 MMSCMD
received in fiscal 2005. The company is making
all efforts to source gas from open market for its
existing stations so as to improve the capacity
utilization at these stations.
Some of our gas based stations also use Naptha
for operations depending upon the demand
from our customers.
2.1.2 Employees’ Remuneration and Benefits
Employees’ remuneration and benefits expenses
include salaries and wages, bonuses,
allowances, benefits, contribution to provident
and other funds and welfare expenses.
Employee pay scales are determined by our
Board based on the guidelines provided by the
Government. For our unionised employees, pay
scales are decided by our Board as part of a
negotiated settlement based on the DPE
guidelines. For our employees are affiliated with
workers’ unions, we have a 10 year agreement
that fixes their wages and benefits which is valid
until December 2006. For our non-unionised
employees, pay scales are decided by our Board
as per Government guidelines after consulting
with the relevant employee associations. These
pay scales are valid until December 2006.
Employees’ remuneration and benefits expenses
represent approximately 5% of our operational
expenses. Employees’ remuneration and other
34
30th Annual Report
benefits increased by 9.76% to Rs. 9,684 million
in fiscal 2006 from Rs. 8,823 million in fiscal 2005.
This increase was primarily due to regular annual
pay increments, which are generally 4% ,
increases in dearness allowance which is linked
to price index and also due to increase in number
of employees. We had 24,044 employees on our
payroll as of March 31, 2006, compared to
23,491 employees as of March 31, 2005. The
employee cost per unit of generation was Rs. 0.06
– the same as in the previous year.
2.1.3 Generation, Administration and Other Expenses
Generation, administration and other expenses
consist primarily of repair and maintenance of
buildings, plant and machinery, power and water
charges, security, insurance, training and
recruitment expenses and expenses for travel and
communication. These expenses represent
approximately 7% of our operational
expenditures in fiscal 2006. These expenses
increased by 5.5% to Rs. 12,721 million in fiscal
2006 from Rs.12,062 million in fiscal 2005.
However, in terms of expenses per unit of
generation it was Rs. 0.07 in fiscal 2006 as against
Rs. 0.08 in the previous year.
One of the main items of expenditure under this
head is Repair & Maintenance which has
increased by 11.63% to Rs.7,813 million from
Rs.6,999 million. In terms of expenses per unit of
generation, repair and maintenance on plant and
machinery was Rs. 0.05 per unit – almost the same
as in the previous year.
2.2 Depreciation
The depreciation charged to the profit and loss account
increased during the year to Rs. 20,477 million as
compared to Rs.19,584 million in fiscal 2005, mainly
because of the increase in gross block to Rs. 460,396
million from Rs. 431,062 million in the fiscal 2005. The
increase in gross block is largely on account of
commencement of commercial operation of 2 units of
500 MW each at Rihand and Talcher.
As per the accounting policy of the company,
depreciation is charged on straight line method as per
the rates given in schedule set forth in the Companies
Act, 1956 except for some items for which depreciation
at higher rates is charged.
settlement scheme amounting to Rs. 8047 million in
comparison to Rs. 6813 million in the previous year.
The increase includes arrears of rebate amounting to
Rs. 892 million paid on bonds which were issued this
year with retrospective effect from October 1, 2001.
In the last fiscal, the amount of long-term advance to
Government of National Capital Territory of Delhi was
reduced with effect from October 1, 2001 resulting in
an adjustment in rebate under Scheme for settlement
of SEB dues amounting to Rs.134 million.
2.3 Provisions made (and written back)
During the fiscal 2006, the company had made
provisions amounting to Rs. 357 million in comparision
to Rs. 75 million provided for in fiscal 2005. The
provisions were made mainly in respect of doubtful
advances and claims and for other items. During the
fiscal 2006, the company had also written back
provisions made in earlier years amounting to Rs. 23
million in comparison to Rs. 6,235 million of provisions
written back in fiscal 2005.
The adjusted interest and finance charges without taking
into account the exchange differences considered as
adjustment to interest costs and rebate paid in arrears
are as follows:
2.4 Interest and Finance Charges
The interest and finance charges for the fiscal 2006 were
Rs. 17,632 million in comparison to Rs. 16,955 million
in fiscal 2005. The details of interest and finance charges
are tabulated below:
Rs.Million
2006
2005
Interest on borrowings
11,852
10,308
Finance Charges
13,159
12,315
Total
25,011
22,623
Less: Adjustments and transfers
Exchange differences regarded
2,469
568
as adjustment to interest costs
Interest and finance charges
4,910
5,100
capitalised
Net interest and finance charges
17,632
16,955
Our borrowings are denominated in Rupees and foreign
currencies. The exchange differences in respect of
overseas borrowings relating to fixed assets/capital
work-in-progress acquired from a country outside India
is treated as part of carrying cost. However, in case the
fixed assets/capital work-in-progress is acquired within
India, the exchange differences are added to when
unfavourable (and reduced from, if favourable) to
interest cost to the extent regarded as interest charges
as per the accounting standards applicable in India.
During the fiscal 2006, a favorable exchange rate
variation amounting to Rs. 2,469 million was reduced
from the interest expenses while an amount of Rs. 568
million was reduced from interest cost in fiscal 2005.
For the fiscal 2006 an amount of Rs. 4,910 million relating
to interest and finance charges of projects under
construction were capitalized while the corresponding
amount for the previous year was Rs. 5,100 million.
The Finance charges also include, among other things,
the rebates to customers paid pursuant to one time
2006
7,314
11,895
19,209
Rs. Million
2005
6,398
11,259
17,657
Adjusted interest cost
Adjusted finance charges
Adjusted Interest and
Finance charges
The rebate under one time settlement scheme at the
rate of 4% of the bond issued under the scheme was
payable upto March 31, 2006. Taking into account 100%
realization of amounts billed during the last three years,
the company has decided to continue with a modified
rebate scheme. Under the revised scheme (made
effective from April 1, 2006) an incentive at the rate of
2% (1% semi annual) per annum of the bonds
outstanding may be paid to customers who are making
the payments as per the company’s revised scheme.
2.5 Prior period income / expenditure
Certain elements of income and expenditure have been
charged to the profit and loss account relating to
previous years. For the fiscal 2006 a net amount of Rs.
2,488 million was charged to the profit and loss account
as prior period expenditure while a net amount of Rs.
102 million was booked as prior period income in the
previous year.
Of the net prior period expenditure amounting to Rs.
2,488 million, a sum of Rs. 1,986 million relates to
adjustment consequent upon the change in accounting
of exchange differences on loans contracted prior to
1st April 2000 as explained in note 13(a) of the Notes
on Accounts(Schedule 27).
3
Profit before tax, provisions and prior period adjustments
The profit of the company before tax and prior period
adjustments for the current and the previous year both
on reported and adjusted basis is tabulated below:
Rs.Million
Rs.Million
Reported
Fiscal Fiscal
2006
2005
Reported
Adjusted
Fiscal
Fiscal
2006
2005
Fiscal
2006
Gross Revenue
287,507 249,179 281,323 243,249
Expenditure related 186,352 158,120 186,352 158,120
to operations
Profit before tax,
provisons and prior
period adjustments
Depreciation
Tax
20,477 19,584 20,477 19,584
Interest and Finance 17,632 16,955 19,209 17,657
charges
Profit before tax,
63,046 54,520 55,285 47,888
provisons and prior
period adjustments
4
Provision for Tax
The company provides for current tax, deferred tax and
fringe benefit tax computed in accordance with
provisions of Income Tax Act, 1961. As per tariff
regulations, the company recovers actual tax payments
in respect of generation business from its customers
while taxes on the income from all other activities are
borne by the company.
Provision
for current
year
13,497
Adjustment
for earlier
years
(5,536)
(Recoverable (5,666)
from) /
payable
to customers
Fiscal 2006
Deferred Fringe
tax benefit
tax
2,654
209 16,360
- (5,536)
(2,654)
Total
(332)
Fiscal 2005
Current Deferred
tax
tax
Total
10,390
(1,710)
8,680
-
(332)
-
(197) (8,517) (7,346)
1,710 (5,636)
Capitalised
(275)
-
(10)
(285)
-
-
-
Net
provision
2,020
-
2
2,022
2,712
-
2,712
Net provision of tax for the fiscal 2006 was Rs. 2022 million
in comparison to Rs. 2712 million in the fiscal 2005. The
reduction in the tax is mainly on account of adjustment of
taxes for earlier years.
5
36
Profit After Tax before provisions made and written back
and prior period adjustments
30th Annual Report
Fiscal
2005
2,712
2,022
2,712
61,024 51,808 53,263
45,176
The profits as above on a reported basis have grown by
17.79% while on an adjusted basis have grown by 17.90%.
6
Net Profit After Tax
The net profit after tax after provisions (made and
written back) and prior period adjustments on a
reported and adjusted basis are as follows:
Rs.Million
Reported
Fiscal
2006
Rs.Million
Current
tax
Fiscal
2006
63,046 54,520 55,285 47,888
2,022
Profit after tax
(before provisions
and prior period
adjustments)
Fiscal
2005
Adjusted
Profit after tax
(before provisions
and prior period
adjustments)
Provisions (net of
write back)
Prior period
adjustments
Net profit after tax
Fiscal
2006
Fiscal
2005
61,024 51,808 53,263
45,176
-334
Fiscal
2005
Adjusted
6,160
-2,488
102
58,202 58,070 53,263
45,176
On a reported basis, the net profit after tax for the current
fiscal has remained almost at the same level in
comparison to previous fiscal. However, on an adjusted
basis, the net profit after tax has grown by 17.90%.
7
Segment-wise performance
For the purpose of compiling segment-wise results, the
business of the company is segregated into
‘Generation’ and ‘other business’. The company’s
principal business is generation and sale of bulk power.
Other business includes providing consultancy, project
management and supervision, oil and gas exploration
and coal mining.
We also issued US$ 300 million Fixed Rate Notes (Rs.
13,485 million) during the year with coupon of 5.875%
p.a. payable semi-annually and maturity of 10 years.
These Notes were issued under Medium Term Note
Programme of USD 1 billion established during
February 2006 to finance capital expenditure of our
projects.
The profit before tax and interest for the Generation
business for the fiscal 2006 was Rs. 45,837 million and
for the Other Business it was Rs. 224 million.
B
Financial Condition
1
Net worth
The networth of the company at the end of fiscal 2006
was Rs. 449,587 million an increase of Rs. 31,824 million
over the previous year mainly due to retained earnings.
2
The credit rating by CRISIL and ICRA of the company as
an issuer, the rating for rupee bonds issued and fixed
deposits program continued to be ‘AAA’. The foreign
currency rating for the company is BB+ with positive
outlook which is at par with the sovereign rating of the
country. The ratings have been assigned by Standard &
Poors’ and Fitch Ratings.
Loan Funds
Our loans outstanding as at March 31, 2006 stood at
Rs. 201,973 million in comparision to Rs. 170,878 million
as at March 31, 2005. A summary of the loans
outstanding is given below:
The debt to equity ratio at the end of fiscal 2006 of the
company went up to 0.45 from 0.41 at the end the
previous fiscal.
Rs.Million
As at March 31st
2006
Secured Loans
Bonds
Foreign Currency
terms loans
Other
Sub-total
Unsecured Loans
Fixed Deposits
Bonds
Foreign Currency
Bonds / Notes
Foreign Currency
Term loans
Rupee term loans
Loans from
Government
of India
Sub-total
Total
2005 % change
47,044
32,077
47%
10,274
9
57,327
12,319
11
44,407
-17%
-18%
29%
778
22,475
33,336
87,821
4,159
5,000
-81%
-100%
8,814
155%
32,608
75,339
The maturity profile of the borrowings by the Company
is as under:
Rs.Million
Rupee
Foreign
Loans
Currency
Total
loans
2%
17%
Within 1 year
12,115
3,467
15,582
1 – 3 years
36,609
6,385
42,994
3 – 5 years
38,987
15,619
54,606
5 – 10 years
37,677
24,631
62,308
Beyond 10 years
10,500
15,983
26,483
135,888
66,085
201,973
Total
3
Fixed Assets
Rs.Million
236
144,646
201,973
551
126,471
170,878
-57%
14%
18%
The change in the loans outstanding is mainly because
of the borrowings and repayments made during the
year. During the year the company issued one series of
rupee denominated bonds through private placement
amounting to Rs.10,000 million. The bonds carry a
coupon of 7.125% p.a.. The bonds have been issued
for a period of 14 years with redemptions in equal semiannual installments beginning at the end of three years.
As at March 31st
2006
2005 % Change
Gross block
460,396
431,062
7%
Net Block
230,895
223,148
3%
Capital Work-inProgress
103,999
67,063
55%
32,341
32,189
0%
367,235
322,400
14%
Construction stores
and advances
Total fixed assets
development surcharge was required by CERC
regulations to be kept invested in various interest
yielding tax free instruments till the time they were
utilized in construction of projects as permissible under
the Regulations. However, the recovery of development
surcharge has been done away with in subsequent
regulations and these investments are to be transferred
back to the customers from whom they were
recovered. We have since returned these to all of our
customers after completing certain formalities.
During the year we added Rs. 29,334 million to our
gross block mainly on account of capitalization of the
capital-works-in-progress pertaining to projects which
were commercialized during the year. With capital
expenditure being incurred on various on-going
projects the capital-work-in-progress has shown a
substantial increase.
4
Investments
Our investments comprise bonds issued by various state
governments under the one-time-settlement scheme,
equity investments in joint venture and subsidiary
companies and investments out of surplus cash in various
instruments as per the policy of the company. The broad
break-up of our investments is as follows:
5
Current Assets
The current assets and current liabilities as at March
31, 2006 and March 31, 2005 and the changes therein
were as follows:
Rs.Million
Rs.Million
As at March 31
2006
st
As at March 31
2006
2005
Bonds issued under One time
settlement scheme
171,762
Investments in Joint Ventures
6,818
Investment in subsidiaries
304
Investment of surplus cash in
various instruments
8,508
Others
Bonds against dues (issued prior
to one time settlement scheme)
5,306
Investments of development
surcharge on behalf of customers
193
Total investments
192,891
164,107
1,318
252
32,504
7,428
2,368
207,977
The State governments of Bihar and Jharkhand had
during the year issued bonds under the one-timesettlement scheme amounting to Rs. 7,655 million.
During the year, we invested Rs. 5,000 million for a stake
of 28.33% as a joint venture partner in Ratnagiri Gas
and Power Private Ltd which was formed for taking over
the assets of the erstwhile Dabhol Power Project. A
major portion of surplus cash during the year was kept
as term deposit with banks and are included in the
current assets. There has been decrease in our
investments during the year due to maturity of many of
these instruments and also return of investments made
against development surcharge explained below .
Investments of Development Surcharge
During the earlier years, we had recovered
development surcharge from our customers, as
provided under the tariff regulations at that time. Such
38
30th Annual Report
st
2005
Current Assets
Amount
Inventories
Sundry
Debtors
Cash and
Bank balances
Other Current
Assets
Loans and
Advances
Total Current
Assets
23,405
15%
8,678
Change
% of
current
assets
Amount
%
17,819
14%
5,586
31%
6%
13,747
11%
-5,069
-37%
84,714
54%
60,783
47%
23,931
39%
10,161
6%
9,764
7%
397
4%
30,287
19%
26,993
21%
3,294
12%
100% 129,106
100%
28,139
22%
157,245
% of Amount
current
assets
A major part of current asset comprised Cash and Bank
balances. As at March 31, 2006, the cash and bank
balances stood at Rs. 84,714 million being 54% of the
total current assets in comparison to Rs. 60,783 million
as at March 31, 2005 which was 47% of the total current
assets as on that date. Of these, Rs. 82,887 million were
kept as term deposits with banks as on March 31, 2006
while the term deposits for the last year was Rs. 57,050
million.
The next largest component of our current assets is Loans
and Advances which mainly include a sum of Rs. 9,573
million as loan to the government of Delhi subsequent
to the conversion of the dues of Delhi Vidyut Board into
loan under the one-time-settlement scheme. The
government of Delhi pays us 8.5% tax-free interest on
these Bonds. The other loans and advances are mostly
loan and advances to employees given for various
purposes such as building of house, purchase of vehicles
etc. as per the policies of the company.
Inventories as at March 31, 2006 were Rs. 23,405 million
being 15%of current assets as against Rs. 17,819 million
as on March 31, 2005 which was 14% of the current
assets as on that date. Our inventories mainly comprise
components and spares and coal which we maintain
for operating our plants. Components and spares were
Rs. 12,894 million as against Rs. 11,904 million in the
last year. Coal inventories amounted to Rs. 7,476 million
as against Rs. 3,115 million in the previous year
indicating improved coal supply position.
6
Current Liabilities
Rs.Million
As at March 31st
2006
Current Assets
Amount
2005
Change
% of Amount
% of
current
current
liabilities
liabilities
Amount
%
Liabilities
49,102
80%
52,306
78%
-3,204
-6%
Provisions
12,300
20%
15,161
22%
-2,861
-19%
Total Current
Liabiities
61,402
100%
67,467
100%
-6,065
-9%
We also had a provision outstanding of Rs. 4,770 million
towards retirement benefits payable to our employees.
8
Cash flows
The cash and cash equivalents and cash flows on
various activities for the past five years are tabulated
below:
Rs.Million
st
For the year ended March 31
2006
2005
2004
2003
2002
Opening Cash
and cash
equivalents
60,783
66,351
23,894
13,659
12,015
Net cash from
operating
activities
62,064
50,998
58,118
47,402
29,372
Net cash used
in investing
activities
(27,136)
(64,136)
(24,597)
(31,881)
(28,377)
Net cash flow
from financing
activities
(10,997)
7,570
8,873
(5,271)
630
63
(15)
19
Intangibles
Our current liabilities as at March 31, 2006 were
Rs. 49,102 million as against Rs. 52,306 million in the
previous year. Our current liabilities mainly comprise
creditors for capital expenditure, creditors for supply
of goods and services, deposits and retention money
from contractors. The liabilities for these at the end of
the year stood at Rs. 36,057 million as against Rs. 33,168
million in the previous year. Besides these, we also
owed a sum of Rs. 9,886 million to our customers as
against Rs. 14,431 million in the previous year. These
sums include amount payable to the customers since
we are billing our customers for electricity on
provisional tariffs as per directions of CERC, which are
higher than the tariffs estimated by us as per CERC
Regulations. These amounts would be paid or adjusted
against future billings as and when the final tariff for
various stations are determined by the regulator.
7
Provisions
As at March 31, 2006 we had provisions for certain
liabilities outstanding amounting Rs. 12,300 million as
against Rs. 15,161 million on 31st March 2005. This mainly
comprised Rs. 6,596 million as proposed dividend
which we would be paying to our shareholders after
they approve the same in the shareholders’ meeting.
Change in Cash
and cash
equivalents
23,931
(5,568)
42,457
10,235
1,644
Closing cash
and cash
equivalents
84,714
60,783
66,351
23,894
13,659
Our net cash from operating activities for the year
ended March 31, 2006 increased by 22% from the
previous year. The net cash from operating activities
was Rs. 62,064 million as against Rs. 50,998 million for
the previous year.
Our net cash used in investing activities decreased to
Rs 27,136 million in fiscal 2006 from Rs. 64,136 million
in the previous year. Cash flows on investing activities
arise from expenditure on setting up power projects,
investment of surplus cash in various securities,
investments of development surcharge recovered from
customers (refer para 4.1 above), investments in joint
ventures and subsidiaries. The cash utilised for purchase
of fixed assets increased by 25% from Rs. 53,699 million
in the previous year to Rs. 66,956 million during this
year. Cash was also realized on maturity of certain
investments during the year.
During the year we used Rs. 10,997 million of cash on
financing activities. In the previous year we had a net
inflow of Rs. 7,570 million from financing activities
mainly due to receipt of Rs. 26,841 million as proceeds
from our initial public offering of shares. During the
current year we had inflow of Rs. 48,226 million from
long term borrowings as against Rs. 29,592 million in
the previous year. The cash used for repayment of long
term borrowings this year was Rs. 17,131 million as
against Rs. 13,242 million repaid in the previous year.
The cash used for paying dividend and the tax thereon
was Rs. 30,087 million as against Rs. 23,397 million in
the previous year.
Project management and supervision services to Madhya
Kshetra Vidyut Vitaran Company Ltd., a distribution
company of the government of Madhya Pradesh.
The Company has proposed a dividend of Rs.1 million
this fiscal year.
b) NTPC Vidyut Vyapar Nigam Limited (NVVN)
The financial highlights of the Company are as under:
Particulars
Fiscal 2006
NTPC’s investment in equity
Gross Income
Profit After Tax
200
4,441
33
Book Value per share
Earnings per share
12.95
1.66
Business and Financial Review of Subsidiaries
The company has formed four wholly owned subsidiaries.
The financial statements of these subsidiaries are included
in this Annual Report elsewhere. Their performance is briefly
discussed here:
a) NTPC Electric Supply Company Limited (NESCL)
Particulars
Rs.Million
0.8
0.8
Gross Income
92
75
4.52
0.40
Profit After Tax
Rs Per Share
50.93
14.18
Earnings Per Share
55.86
4.96
The company was formed with an objective to
undertake business of trading of electric power. During
the year the company transacted business with 18
utilities spread all over the country and traded 1643
million units of electricity in comparison to 2616 million
units traded in the previous year. NVVN is also engaged
in facilitating development of Power exchange in India.
The Company has during this fiscal paid an interim
dividend of Rs.10 million and recommended final
dividend of Rs.10 million.
c) NTPC Hydro Limited (NHL)
Particulars
NESCL was incorporated with the main object of
undertaking business of distribution and supply of
electrical energy. The company is exploring business
opportunities in various states of the country. However,
the company has not yet been assigned any distribution
circle. The company is however carrying out the work
of “Advisor-cum-consultant” for Ministry of Power,
Government of India for implementation of schemes
under the Accelerated Power Development and
Reforms Program (APDRP). The company is also involved
in the execution of work under the government’s rural
electrification program namely “Rajiv Gandhi Grameen
Vidyuti-Karan Yojana”. The Company is also rendering
40
30th Annual Report
Fiscal 2005
Rs.Million
200
5,992
57
Rs. Per Share
12.43
2.87
Loss
Earnings per share
Fiscal 2006
100
33
1.89
(5.71)
Fiscal 2005
Rs.Million
48
30
Rs per share
0.08
(13.85)
The company was formed with an objective to develop
small and medium hydroelectric power projects up to
250 MW. Presently the company is implementing two
projects namely, Lata Tapovan hydro electric project
(171 MW) in the state of Uttranchal. and Rammam-III
(120 MW) in the state of West Bengal. Implementation
activities for the above projects have been initiated
and the projects are scheduled to be commissioned
by March 2012.
d) Pipavav Power Development Company Limited
The financial highlights of the company are given
below:
Particulars
(Rs. Million)
Loss (Rs.)
Book Value per share (Rs)
Earnings per share (Rs)
Fiscal 2006
3.7
Fiscal 2005
3.65
40,083
24,252
0.03
-
(0.11)
(0.07)
We had entered into an understanding with Gujarat
Power Corporation Ltd (GPCL) and Gujarat Electricity
Board to set up 1000 MW Thermal Power Project at
Pipavav in Gujarat through a joint venture between NTPC
and GPCL. The company is presently a wholly owned
subsidiary of NTPC and shall be converted to a Joint
venture Company by transferring 50% of our
shareholding to GPCL. Site Specific Studies for the
project are in progress. Draft Shareholders Agreement
is ready and shall be finalized and signed after
allocation of Distribution Circle.
Business And Financial Review Of Joint Venture Companies
a) PTC India Limited
Particulars
Gross Income
Profit After Tax
Earnings per share
Fiscal 2006
120
31,206
406
16.30
2.71
Fiscal 2005
Rs.Million
120
20,373
240
Rs per Share
14.59
1.60
The main objective of the company includes trading
of power, import/export of power and purchase of
power from identified private power projects and sells
it to identified SEBs/others. The Company has a paidup capital of Rs.1500 million had 8% equity
contribution each from NTPC, Power Grid Corporation
of India Ltd., Power Finance Corporation Limited and
NHPC and the balance from Damodar Valley
Corporation, Financial Institutions, Banks and general
public. PTC has traded a total 10,119 MUs in the fiscal
2006 as compared to 8,887 MUs in fiscal 2005
registering an increase of 13.86%.
The Company has paid a dividend of 150 million for
financial year 2005-06 as compared to 120 million for
financial year 2004-05 and correspondingly share of
NTPC dividend increased to 12 million from 9.6 million.
b) Utility Powertech Limited (UPL)
Particulars
Fiscal 2006
Gross Income
Profit After Tax
10
1,478
61
Earnings per share
67.41
30.50
Fiscal 2005
Rs.Million
10
1,125
57
Rs Per Share
54.01
28.63
UPL is a 50:50 joint venture company of NTPC and
Reliance Energy Limited formed to take up assignments
of construction, erection and supervision in power
sector and other sectors in India and abroad.
The company has in the current year paid the same
dividend @150%, being Rs.30 million as in the previous
year. NTPC’s share amounts to Rs.15 million.
c) NTPC-SAIL Power Company Pvt. Ltd. (NSPCL) and Bhilai
Electric Supply Company Private Limited (BESCL)
The financial highlights of these companies are as under:
Particulars
NTPC’s investment
in equity
Gross Income
Profit After Tax
Fiscal 2006
NSPCL BESCL
586.5
1,316
243
1,066
577
64
Book Value per share 13.38
Earnings per share
2.07
10.91
0.30
Fiscal 2005
NSPCL BESCL
Rs Million
586.5
566
1,322
607
233
61
Rs. Per Share
11.95 11.30
1.99
0.54
These joint venture companies were formed for
operating and maintaining the captive power plants of
Steel Authority of India Limited (SAIL). The total capacity
under operation of these companies is 314 MW. These
companies generated 2454 MU in the current year as
compared to 2447 MU last year.
BESCL is also implementing the expansion of power
plant at Bhilai by adding two 250 MW units.
Construction activities are progressing as per schedule
at the site.
NSPCL and BESCL have declared a dividend of Rs.75
million and Rs.15 million respectively.
e) NTPC-ALSTOM Power Services Private Limited (NASL)
Particulars
Gross Income
Profit After Tax
Earnings per share
Fiscal 2006
30
730
31
16.30
5.11
Fiscal 2005
Rs.Million
30
1021
21
Rs Per Share
12.56
3.50
NASL is a joint venture company with equal equity
contribution from NTPC and Alstom Power Generation
AG, Germany. The company was formed for taking up
Renovation & Modernization assignments of power
plants both in India and abroad.
The company has proposed a dividend of Rs.7.2
million and the share of NTPC is Rs. 3.6 million.
f)
NTPC Tamil Nadu Energy Company Ltd.
The company is formed as a 50:50 joint venture
between NTPC and Tamil Nadu Electricity Board to set
up a coal-based power station of 1000 MW capacity,
at Ennore, using Ennore port infrastructure facilities. All
site specific studies have been completed. The draft
Feasibility Report is ready and would be finalized after
receiving data on the price of land and allocation of
coal mine block
The construction activities are yet to commence. The
expenses incurred by the company during the year
resulted in a loss of Rs.3 million for the fiscal 2006 as
against a loss of Rs.2 million in the previous year.
Company Limited and Indian Financial institutions with
NTPC having a stake of 28.33% for taking over and
operating erstwhile Dabhol Power Project.
Consolidated Financial Statements of NTPC Ltd, its
Subsidiaries and Joint Venture Companies
The consolidated Financial statements have been
prepared in accordance with Accounting Standards
(AS)-21 –” Consolidated Financial Statements” and
Accounting Standards(AS)27-”Financial reporting of
Interests in Joint Ventures” and are included in this
Annual Report. A brief summary of the results on a
consolidated basis is given below:
Rs million
Gross Revenue
Profit before tax
Profit after Tax
Net Cash from operating
activities
Fiscal 2006
296,124
60,510
58,408
Fiscal 2005
265,125
61,075
58,286
63,037
51,545
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis and
in the Directors’ Report, describing the Company’s
objectives, projections and estimates, contain words or
phrases such as “will”, “aim”, “believe”, “expect”, “intend”,
“estimate”, “plan”, “objective”, “contemplate”, “project” and
similar expressions or variations of such expressions, are
“forward-looking” and progressive within the meaning of
applicable laws and regulations. Actual results may vary
materially from those expressed or implied by the forward
looking statements due to risks or uncertainties associated
therewith depending upon economic conditions,
government policies and other incidental factors. Readers
are cautioned not to place undue reliance on these forwardlooking statements.
g) Ratnagiri Gas And Power Pvt. Limited
Ratnagiri Gas and Power Pvt Ltd has been formed as
joint venture between NTPC, GAIL, MSEB Holding
42
30th Annual Report
Place: New Delhi
Date: July 31, 2006
(T. Sankaralingam)
Annex-II to Directors’ Report
REPORT ON CORPORATE GOVERNANCE
Corporate Governance is a process that aims to meet
shareholders aspirations and societal expectations. It is a
commitment that is backed by the fundamental belief of
maximising shareholders value, transparency in functioning,
values and mutual trust amongst all the constituents of
organisation. Its not a discipline imposed by a Regulator,
rather a culture that guides the Board, management and
employees to function towards best interest of
stakeholders.
In our Company, Corporate Governance philosophy stems
from our belief that corporate governance is a key element
in improving efficiency and growth as well as enhancing
investor confidence and accordingly the Corporate
Governance philosophy has been scripted as under:
“As a good corporate citizen, the Company is committed
to sound corporate practices based on conscience,
openness, fairness, professionalism and accountability in
building confidence of its various stakeholders in it thereby
paving the way for its long term success.”
We are making continuous efforts to adopt the best
practices in corporate governance and we believe that the
practices we are putting into place for the company shall
go beyond adherence to regulatory framework. Our
corporate structure, business and disclosure practices have
been aligned to our Corporate Governance Philosophy.
2. BOARD OF DIRECTORS
2.1 Size of the Board
We are a Government Company within the meaning of
section 617 of the Companies Act, 1956 as the President
of India presently holds 89.5% of the total paid-up share
capital. As per Articles of Association of the company,
the powers to appoint Directors rest with the President
of India.
In terms of the Articles of Association of the Company
strength of our Board shall not be less than four Directors
or more than twenty Directors. These Directors may be
either whole-time functional Directors or part-time
Directors.
2.2 Composition of the Board
As on 31st March 2006 the Board comprised twelve
directors out of which six were whole-time functional
directors including the Chairman & Managing Director.
Two directors are nominees of the Government of India.
The Board also has four independent directors who have
been appointed by the Government of India through a
search committee constituted for the purpose. The
directors bring to the Board wide range of experience
and skills. Brief profile of the Directors is set out
elsewhere in the Annual Report.
The listing agreements with stock exchanges stipulate
that half of the board members to be independent
directors. The company has requested Government of
India to initiate necessary steps for appointment of
adequate number of independent Directors so that
Board composition be in compliance with the Listing
Agreement.
Details regarding Independent Directors on the Board
of the Company during the year is as under:
Period
April 1, 2005 to
August 26, 2005
August 27, 2005 to
January 29, 2006
January 30, 2006 to
March 31, 2006
Requirement
Actual
4
1
4
-
6
4
2.3 Age limit and tenure of Directors
The age limit of the Chairman & Managing Director and
other whole-time functional directors is 60 Years.
The Chairman & Managing Director and other whole time
Functional Directors are appointed for a period of five
years from the date of taking over of charge or till the
date of superannuation of the incumbent, or till further
instructions from the Government of India, whichever
event occurs earlier.
Government Nominees representing Ministry of Power,
Government of India retire from the Board on ceasing
to be officials of the Ministry of Power.
Independent Directors are appointed by the
Government of India usually for tenure of three years.
2.4 Board Meetings
The meetings of the Board of Directors are normally held
at the Company’s registered office in New Delhi. The
Company has defined procedures for meetings of the
Board of Directors and Committees thereof so as to
facilitate decision-making in an informed and efficient
manner.
Thirteen Board Meetings were held during the financial
year 2005-06 on April 8, May 28, June 13, July 9, July
27, August 12, September 10, September 27, October
27, December 7, 2005, January 30, March 14, March 24,
2006. Details of number of Board meetings attended
by Directors, attendance at last AGM, number of other
directorships/committee memberships (viz., Audit
Committee and Shareholders Grievance Committee as
per SEBI’s Corporate Governance Code) held by them
during the year 2005-06 are tabulated below:
S.
No.
Directors
Meeting
held during
respective
tenures of
Directors
No. of
Board
Meetings
Attended
Attendance
at the last
AGM
(held on
23.09.2005)
Number
of other
Directorships
held on
31.03.06
Number of
Committee
memberships in
companies
on 31.03.06
As Chairman As Member
Functional Directors
1
Sh. C.P.Jain
13
13
Yes
4
-
-
2
Sh. K.K. Sinha
Director (HR)
(Upto 27.06.2005)
3
3
NA*
NA*
NA*
NA*
3
Sh. P.Narasimharamulu
Director (Finance)
(Upto 31.07.2005)
5
5
NA*
NA*
NA*
NA*
4
Sh. T. Sankaralingam
Director (Projects)
13
12
Yes
3
-
-
5
Sh. Chandan Roy
Director (Operations)
13
13
Yes
5
-
-
Shri R.S. Sharma
Director (Commercial)
13
12
Yes
6
-
-
Shri R.K. Jain
Director (Technical)
(From 05.05.2005)
12
10
Yes
2
-
1
Shri A.K. Singhal
Director (Finance)
(From 01.08.2005)
8
8
Yes
9
-
3
6
7
8
Non-executive Directors
(Government Nominees)
9
Sh. M.Sahoo
JS&FA,Ministry of Power
13
12
Yes
11
1
3
10
Sh. Arvind Jadhav
JS (Thermal), Ministry of Power
(Upto 11.07.2005)
4
2
NA*
NA*
NA*
NA*
11
Shri Harish Chandra
JS(Thermal), Ministry of Power
(From 11.07.2005)
Independent Directors
Dr. R.K. Pachauri
Director-General, TERI
(Upto 26.08.2005 and
from 30.01.2006)
9
7
No
-
-
-
8
1
NA*
-
-
1
12
13
Prof. Ashok Misra
Director IIT, Powai
(From 30.01.2006)
2
2
NA*
1
-
-
14
Shri G.P. Gupta
Ex-CMD, IDBI
(From 30.01.2006)
2
2
NA*
11
-
9
-
1
15
Shri M.I. Beg
Ex-Chairman, CEA
(From 30.01.2006)
2
2
NA*
*NA indicates that concerned person was not a Director on NTPC’s Board on the relevant date.
44
30th Annual Report
2.5 Information placed before the Board of Directors, inter
alia, include:
The Board has complete access to any information
within the Company. The information regularly supplied
to the Board includes:
• Annual operating plans and budgets and any
updates.
• Capital Budgets and any updates.
• Annual Accounts, Directors’ Report etc.
• Quarterly results of the company.
• Minutes of meetings of Audit Committee and other
Committees of the Board.
• The information on recruitment and promotion of Sr.
Officers to the level of Executive Director which is
just below the Board level and of Company Secretary.
• Fatal or serious accidents, dangerous occurrences
etc.
• Operational highlights and substantial non-payment
for goods sold by the company.
• Major investments, formation of subsidiaries and
Joint Ventures, Strategic Alliances etc.
• Award of large contracts.
• Disclosure of Interest by Directors about directorship
and committee positions occupied by them in other
companies.
• Quarterly Report on foreign exchange exposures.
• Any significant development in Human Resources/
Industrial Relations front like signing of wage
agreement, implementation of Voluntary Retirement
Scheme, etc.
• Non-Compliance of any regulatory, statutory or listing
requirements and shareholders services such as nonpayment of dividend, delay in share transfer etc.
• Short term investment of surplus funds.
• Information relating to major legal disputes.
• Other materially important information.
3. COMMITTEES OF THE BOARD OF DIRECTORS
The Board has established the following
Committees:i)
Audit Committee.
ii)
Shareholders’/Investors’ Grievance Committee.
iii) Committee on Management Controls.
iv) Contracts Sub- Committee.
v)
Project Sub Committee.
vi) Investment/Contribution Sub-Committee.
vii) Committee of the Board for allotment and postallotment activities of NTPC’s Securities.
3.1 AUDIT COMMITTEE
The constitution, quorum, scope etc. of the Audit
Committee are in line with the Navratna Guidelines, the
Companies Act, 1956 and provisions of Listing
Agreement.
Scope of Audit Committee
1. Discussion with Auditors periodically about internal
control systems and the scope of audit including
observations of the auditors.
2. Reviewing, with the management, the quarterly and
half-yearly financial statements before submission
to the Board for approval.
3. Ensure Compliance of Internal Control Systems.
4. Oversight of the company’s financial reporting
process and the disclosure of its financial
information to ensure that the financial statement
is correct, sufficient and credible.
5. Noting appointment and removal of external
auditors. Recommending the fixation of audit fee
of external auditors and also approval for payment
for any other services.
6. Reviewing, with the management, the annual
financial statements before submission to the
board for approval, with particular reference to:
a.
Matters required to be included in the
Director’s Responsibility Statement to be
included in the Board’s report in terms of
clause (2AA) of section 217 of the Companies
Act, 1956;
b. Changes, if any, in accounting policies and
practices and reasons for the same;
c. Major accounting entries involving estimates
based on the exercise of judgment by
management;
d. Significant adjustments made in the financial
statements arising out of audit findings;
e. Compliance with listing and other legal
requirements relating to financial statements;
ii) Three independent Directors to be nominated by the
Board from time to time.
f.
Composition
During the year the composition of the Audit Committee
underwent changes from time to time. However,
it became compliant with the Listing requirements
w.e.f. February 15th 2006 consequent to the appointment
of Independent Directors by the Government of India.
Disclosure of any related party transactions;
g. Qualifications in the draft audit report.
7. Reviewing, with the management, performance of
statutory and internal auditors, the adequacy of
internal control systems and suggestion for
improvement of the same.
8. Reviewing the adequacy of internal audit function,
including the structure of the internal audit
department, staffing and seniority of the official
heading the department, reporting structure
coverage and frequency of internal audit.
9. Discussion with internal auditors any significant
findings and follow up there on. Review of internal
audit observations outstanding for more than two
years.
10. Reviewing the findings of any internal investigations
by the internal auditors into matters where there is
suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting
the matter to the Board.
11. Discussion with statutory auditors before the audit
commences, about the nature and scope of audit
as well as have post-audit discussion to ascertain
any area of concern.
12. To look into the reasons for substantial defaults in
the payment to the depositors, debenture holders,
shareholders (in case of non payment of declared
dividends) and creditors.
13. Review of observations of C&AG including status
of Government Audit paras.
14. To review the functioning of the Whistle Blower
mechanism, as and when the same is formulated
and made effective.
15. Investigation into any matter in relation to the items
specified above or referred to it by the Board.
Constitution
The Audit Committee has been constituted with the
membership of:
i)
46
Joint Secretary & Financial Advisor (JS & FA), Ministry
of Power (MOP), Government of India nominated on
the Board of NTPC and
30th Annual Report
During the year details of composition of Audit
Committee has been as under:
Period
Membership
Independent
Directors
Requirement Actual Requirement Actual
April 1, 2005 to
August 26, 2005
3
3
2
1
August 27, 2005 to
December 6, 2005
3
2
2
0
December 7, 2005 to
3
3
2
0
3
4
3
3
February 14, 2006
February 15, 2006 to
March 31, 2006
As on 31st March 2006, the Audit Committee comprised
the following members:Shri G.P. Gupta
Shri M. Sahoo
Dr. R.K. Pachauri
Independent Director
JS & FA, MOP
Shri M.I. Beg
Senior most independent Director on the Audit Committee
shall be Chairman of the Audit Committee.
Director (Finance), Head of Internal Audit and the Statutory
Auditors are invited in the Audit Committee Meeting for
interacting with the members of the committee. Senior
executives from various functions are also invited as and
when required to provide necessary inputs to the
committee.
Meetings and Attendance
Six meetings of the Audit Committee were held during the
financial year 2005-06 on April 20, June 13, July 27, August
11, October 27, 2005 and January 30, 2006.
The details of the meetings of Audit-Committee attended
by the members are as under:-
Members of
Audit Committee
Shri M. Sahoo
Dr. R.K. Pachauri
(upto 26.08.2005
and from 15.02.2006 )
Shri Arvind Jadhav
(upto 11.07.2005)
Shri Harish Chandra
(11.07.2005 to 15.02.2006)
Shri T. Sankaralingam
(07.12.2005 to15.02.2006)
Shri G.P. Gupta
(from 15.02.2006)
Shri M.I. Beg
(from 15.02.2006)
Meetings held
during his tenure
Meetings
attended
6
6
4
4
Members of
Shareholders / Investors
Grievance Committee
2
1
Shri M. Sahoo
Shri R.K. Jain
Shri A.K. Singhal
4
3
1
1
No meetings were
held during their tenure
Director (Finance), Head of Internal Audit were present in
all Audit Committee Meetings held during the year under
review as invitees as per requirement of Listing Agreement.
3.2 SHAREHOLDERS’/INVESTORS’ GRIEVANCE COMMITTEE
The Company has constituted ‘Shareholders’ / Investors’
Grievance Committee’.
Scope of the Committee
This Committee looks into redressal of Shareholders’ and
Investors’ complaints like delay in transfer of shares, nonreceipt of Balance Sheet, non-receipt of declared dividend
etc. as well as complaints/grievances of the Bondholders
and also of the Depositors under the Public Deposit Scheme.
Constitution
The Committee has been constituted with the
membership of:
i) One Nominee Director of Ministry of Power represented
on the Board of NTPC
ii) Director (Finance), NTPC and
iii) Director (HR) or Director (Technical), NTPC.
Composition
As on 31st March 2006, this committee comprised the
following Directors :
Shri M. Sahoo
Shri R.K. Jain
Shri A.K. Singhal
Government Nominee
Director (Finance)
Shri M. Sahoo is the Chairman of the Committee.
Meeting and Attendance
Two meeting of the Shareholders’/Investors’ Grievance
Committee were held during the financial year 2005-06 on
July 27, 2005 and February 16, 2006.
Meetings
held
Meetings
attended
2
2
2
2
1
2
Name and designation of Compliance Officer
Shri A.K. Rastogi, Company Secretary is the compliance
officer in terms of Clause 47 of the Listing Agreement.
Investor Grievances
During the financial year ending 31st March 2006, Company
has attended its investor grievances expeditiously except
for the cases constrained by disputes or legal impediments.
The status of the complaints during the year are as
under:
Particulars
SEBI / Stock
Exchange complaints
Other IPO related
complaints
Other Dividend
related complaints
Total
Opening Received Resolved Pending
Balance during during as on
the year the year 31.03.06
269
269
NIL
26
2307
2331
2
8
5084
5085
7
34
7660
7685
9
Investor complaints shown pending as on March 31, 2006
have been attended subsequently.
Number of pending share transfers
As on March 31, 2006, no share transfer request was
pending. Share Transfers have been effected during the year
well within the time prescribed by the Stock Exchanges
and a certificate to this effect duly signed by a Practicing
Company Secretary has been furnished to Stock
Exchanges.
3.3 COMMITTEE ON MANAGEMENT CONTROLS
On being conferred enhanced autonomy by the
Government of India under ‘Navratna Guidelines’, this
committee was constituted for establishing transparent and
effective system of internal monitoring. This Committee,
inter alia, reviews the Management Control Systems,
significant deviations in project implementation and
construction, operation and maintenance budgets etc.
As on March 31, 2006, the committee comprised the
following Directors:
Shri M. Sahoo
Government nominee
Shri Chandan Roy
Shri A.K. Singhal
Director (Finance)
Prof. Ashok Misra
3.4 COMMITTEE FOR CONTRACTS
This Committee has been constituted for approval of award
of contracts of value exceeding Rs. 25 crore but not
exceeding Rs.100 crore and consultancy assignments
exceeding Rs. 2 crore each. As on March 31, 2006, the
Committee for Contracts comprised the following members:
Shri C.P.Jain
Director (Projects)
Shri M.Sahoo
Government nominee
Shri R.K. Jain
Shri Harish Chandra
Government nominee
Shri A.K. Singhal
Director (Finance)
3.5 PROJECT COMMITTEE
The Project Committee examines and makes
recommendations to the Board on proposals for Investment
in New/Expansion Projects and Feasibility Reports of new
projects. As on 31st March 2006, the Committee comprised
the following members:
As on 31st March 2006, the Committee comprised the
following Members:
Shri C.P.Jain
Shri Chandan Roy
Shri A.K. Singhal
Director (Finance)
In case of investment of funds and contribution matters
Director (HR) and in case of Commercial matters Director
(Commercial) are co-opted in the meeting.
3.7 COMMITTEE FOR ALLOTMENT AND POST-ALLOTMENT
ACTIVITIES OF NTPC’S SECURITIES
The Committee has been constituted for Allotment and
Post-allotment activities of Company’s Securities. The scope
of work of this committee is allotment, issue, Certificate/
Letter of allotment, transfer, transmission, re-materialisation,
issue of duplicate certificates, consolidation/split of NTPC’s
domestic and foreign Securities. As on 31st March 2006,
the Committee comprised the following Members:
Shri C.P.Jain
Director (Projects)
Director (Projects)
Shri A.K. Singhal
Director (Finance)
Shri M. Sahoo
Government nominee
Shri Chandan Roy
Shri Chandan Roy
Shri R.K. Jain
Shri R.S. Sharma
Shri R.K. Jain
Shri Harish Chandra
Government nominee
Shri A.K. Singhal
Director (Finance)
Shri M.I. Beg
3.6 INVESTMENT/CONTRIBUTION COMMITTEE
The terms of reference of Investment/Contribution
Committee of the Board is for deployment of surplus funds
as per Govt. Guidelines issued from time to time, and
acceptance of Bonds/Debt Instruments in lieu of settled
dues with State Electricity Boards or State Transmission
48
Companies and deciding terms and conditions thereof.
This committee also approves contribution/donation for
national, public, benevolent or charitable cause, purpose
or object or other funds not directly related to the business
of the company or welfare of its employees between Rs. 5
lakh to Rs. 20 lakh subject to maximum limit of Rs. 1 crore in
a year.
30th Annual Report
3.8 REMUNERATION COMMITTEE/ REMUNERATION OF
DIRECTORS
Our Company, being a Central Public Sector Undertaking,
the appointment, tenure and remuneration of Directors are
decided by the President of India. Hence, the Board does
not decide remuneration of the Directors. Independent
Directors are paid only sitting fees at rate fixed by the Board
within the ceiling fixed under the Companies Act, 1956
and approved by the Government for attending the Board
Meetings as well as Committee Meetings.
Details of remuneration of functional Directors of the
company:
(in Rupees)
Sl. Name of the Director
No.
1
2
3
4
5
6
7
8
Salary
Sh. C.P.Jain
1,741,471
Sh. K.K. Sinha (upto 27.06.2005)
716,467
Sh. P.Narasimharamulu (upto 31.07.2005)
901,139
597,912
Sh. Chandan Roy
576,600
Sh. R.S. Sharma
868,490
Shri R.K. Jain (From 05.05.2005)
722,928
Shri A.K. Singhal (From 01.08.2005)
514,192
Benefits
Bonus/
Commission
Performance
Linked
Incentives
Total
282,730
184,214
153,078
170,319
691,211
182,662
116,138
78,124
-
149,036
49,446
84,396
163,130
152,877
155,619
123,352
103,796
2,173,237
950,127
1,138,613
931,361
1,420,688
1,206,771
962,418
696,112
Performance linked incentives paid is based on the incentive scheme applicable to all employees of the company.
Details of payments towards sitting fees to independent Directors during the year 2005-06 are given below:
(in Rupees)
Name of Part-time non-official Directors
Sitting Fees
Total
Board Meeting
Committee Meeting
Dr. R.K. Pachauri(Upto 26.08.2005 and From 30.01.2006)
Prof. Ashok Misra (From 30.01.2006)
Shri G.P. Gupta (From 30.01.2006)
Shri M.I. Beg (From 30.01.2006)
10,000
20,000
20,000
20,000
40,000
10,000
10,000
50,000
30,000
20,000
30,000
4. GENERAL BODY MEETINGS
Annual General Meeting
Date, time and location where the last three Annual General Meetings were held are as under:
Date
September 24, 2003
July 29, 2004
September 23, 2005
Time
3.00 P.M
2.00 P.M.
10.00 A.M.
Venue
NTPC Bhawan, SCOPE Complex, 7, Institutional Area,
Lodi Road, New Delhi -110 003
Siri Fort Auditorium Complex, August
Kranti Marg, New Delhi – 110 049
Special
Resolution
NIL
Change of name of the Company
from National Thermal Power
Corporation Limited to NTPC Limited
NIL
Special Resolution passed through Postal Ballot
Company has passed a Special Resolution to amend the
existing Clause 4 of the Main Objects under the Object
Clause of the Memorandum of Association of the Company
by bifurcating it in two separate sub-clauses in a more
enlarged and explicit manner for undertaking diversified
range of fuel related activities. Notice dated 23rd April 2005
was served to all shareholders for voting through postal
ballot as per provisions of section 192A of the Companies
Act, 1956, read with the Companies (Passing of the
Resolution by Postal Ballot) Rules, 2001 and said special
resolution was approved by the Shareholders on 26th May
2005.
Ms. Madhurima Mukherjee, partner, M/s. Amarchand &
Mangaldas & Suresh A. Shroff & Co. was appointed as
scrutinizer to conduct Postal Ballot. Out of total 40,520 Ballot
Papers received 37,867 (representing 99.90% of total votes
cast) voted in favour of the resolution.
No special resolution is proposed to be passed through
Postal Ballot at the Annual General Meeting.
5. DISCLOSURES
The transactions with related parties contain (i) payment to
companies under Joint Venture Agreement and on account
of contracts for works/ services, (ii) remuneration to key
management personnel and (iii) equity contribution to
subsidiaries, which are not in nature of potential conflicts
with interest of the company at large. Details of related party
transactions are included in the Notes to the Accounts as
per Accounting Standard – 18 issued by the Institute of
Chartered Accountants of India.
The company has complied with all the requirements of
the Listing Agreement with Stock Exchanges as well as
Regulations and Guidelines prescribed by SEBI. There were
no penalties or strictures imposed on the company by any
statutory authorities for non-compliance on any matter
related to capital markets, during the last three years.
The Company has adopted all suggested items to be
included in the Report on Corporate Governance.
Information on adoption (and compliance) / non-adoption
of the non-mandatory requirements is at Annex-1.
6. MEANS OF COMMUNICATION
The Company communicates with its shareholders through
its Annual Report, General Meetings and disclosures through
web site.
The Company also communicates with its institutional
shareholders through a combination of analysts briefing and
individual discussions as also participation at investor
conferences from time to time.
Information and latest updates and announcement
regarding the company can be accessed at company’s
website: www.ntpc.co.in including the following:
• Quarterly / Half-yearly / Annual Financial Results
• Shareholding Pattern
• Transcripts of conferences with analysts
• Corporate disclosures made from time to time to Stock
Exchanges
Quarterly results
Newspapers
Date of publication of results for the
quarter ended
30.06.2005 30.09.2005 31.12.2005
Financial Express 28.07.2005 28.10.2005 31.01.2006
Jansatta
28.07.2005 28.10.2005 31.01.2006
These results are also displayed at Company’s website
www.ntpc.co.in
•
Official Releases and Presentations
The Company’s official news releases, other press coverage,
50
30th Annual Report
presentations made to institutional investors or to the
analysts were also made on the website.
In order to make the general public aware of the
achievements of the company, a press conference is held
after the close of the financial year where the highlights of
the company during the year are briefed to the Press for
information of the stakeholders with prior intimation to the
Stock Exchanges.
7. CODE OF CONDUCT
The Board of Directors has laid down two separate Codes
of Conduct - one for Board Members and another for Senior
Management Personnel in alignment with Company’s Vision
and Values to achieve the Mission & Objectives and aims
at enhancing ethical and transparent process in managing
the affairs of the Company. A copy each of the Codes of
Conduct is available at the website of the Company.
Based on the affirmation received from Board Members
and Senior Management Personnel, declaration regarding
compliance of Codes of Conduct made by the Chairman &
Managing Director is given below:
All the members of the Board and Senior Management
Personnel have affirmed compliance of respective Code
of Conduct for the financial year ended on March 31, 2006.
(T. Sankaralingam)
8. Code of Insider Trading
In pursuance of the Securities Exchange Board of India
(Prohibition of Insider Trading) Regulations, 1992 the Board
has laid down “Code of Conduct for Prevention of Insider
Trading” with the objective of preventing purchase and/or
sale of shares of the Company by an Insider on the basis of
unpublished price sensitive information. Under this Code,
Insiders (Officers and Designated Employees) are
prevented from dealing in the Company’s shares during
the closure of Trading Window. To deal in Securities,
beyond limits specified permission of Compliance Officer
is required. All Directors/Officers/Designated Employees
are also required to disclose related information
periodically as defined in the Code, which in turn, is being
forwarded to Stock Exchanges, wherever necessary.
Company Secretary has been designated as Compliance
Officer for this Code.
9.
SHAREHOLDERS’ INFORMATION
i) Annual General Meeting
Date
: September 19, 2006
Time
: 11.30 a.m.
Venue : NDMC Indoor Stadium, Talkatora Garden,
New Delhi – 110 001
ii) Financial Calendar for FY 2006-07
Particulars
Accounting Period
Unaudited financial results for the
first three quarters
FourthQuarter Results
AGM (Next year)
Date
April 1, 2006 to March 31, 2007
Announcement within a month from the
end of each quarter
Announcement of Audited Accounts on or before June 30, 2007
September 2007 (Tentative)
iii) Book Closure
The Register of Members and Share Transfer Books of the Company will remain closed from September 1, 2006
to September 15, 2006 (both days inclusive).
iv) Payment of Dividend
The Board of Directors of the Company has recommended payment of a final Dividend of 8% (Rs. 0.8 per share)
for the financial year ended March 31, 2006 in addition to the Interim Dividend of 20% (Rs. 2 per share) paid on
February 27, 2006.
The record date for the payment of Dividend is August 31, 2006.
v)
Dividend History
Year
Total paid-up
capital
(Rs. in crore)
Total amount of
dividend paid
(Rs. in crore)
Date of AGM in
which dividend
was declared
Date of payment
2000-01
2001-02
2002-03
2003-04
2004-05
7812.55
7812.55
7812.55
7812.55
8245.46
747.00
707.93
708.00
1082.30
1978.90
2005-06
8245.46
1649.09
25.09.2001
23.09.2002
24.09.2003
29.07.2004
23.09.2005
12.02.2005*
30.01.2006*
26.09.2001
25.09.2002
24.09.2003
30.07.2004
27.09.2005
10.03.2005
27.02.2006
* Date of Board Meeting for interim dividend.
vi) Listing on Stock Exchanges
NTPC equity shares are listed on the following Stock Exchanges:
National Stock Exchange of India Limited
Bombay Stock Exchange Limited
Scrip Code: NTPC EQ
Scrip Code: 532555
Stock Code : ISIN – INE733E01010
vii)
viii) Market Price Data –BSE
Market Price - NSE
Month
April
May
June
July
August
September
October
November
December
January
February
March
High (Rs.)
99.00
86.00
87.70
97.90
102.65
109.75
109.75
107.75
113.90
118.00
135.00
142.00
Low (Rs.) Closing (Rs.)
80.00
82.15
81.15
83.50
82.00
83.00
82.95
93.80
93.20
102.05
99.00
105.95
91.80
97.15
95.95
104.25
101.00
112.00
110.20
114.50
114.60
131.15
130.55
134.10
Month
April
May
June
July
August
September
October
November
December
January
February
March
High (Rs.)
88.30
86.00
88.10
97.85
102.50
109.50
110.25
107.70
113.90
117.40
135.60
142.00
Low (Rs.) Closing (Rs.)
80.90
82.20
80.10
83.45
82.20
83.05
83.40
93.85
93.00
102.05
98.05
106.00
91.80
97.15
95.10
101.40
102.50
112.10
109.50
114.55
114.60
131.10
130.00
134.00
ix)
Performance in comparison to indices
xii) Distribution of Shareholding
Shares held by different categories of shareholders and
according to the size of holdings as on 31st March 2006
are given below:
According to Size
a. Distribution of shareholding according to size, % of
holding as on March 31 2006:
Number
of shares
x) Registrar and Transfer Agent
Karvy Computershare Pvt. Ltd
Karvy House, 46, Avenue 4, Street No. 1
Banjara Hills, Hyderabad – 500 034
Phone No. : 040-2331 2454
Fax No. : 040-2331 1968
Email-id : ntpcipo@karvy.com
xi) Share Transfer System
Entire share transfer activities under physical segment
are being carried out by Karvy Computershare Private
Limited. The share transfer system consists of activities
like receipt of shares along with transfer deed from
transferees, its verification, preparation of Memorandum
of transfers etc. Shares transfers are approved by SubCommittee of the Board for Allotment and Postallotment activities of NTPC’s Securities.
Pursuant to clause 47(C) of the Listing Agreement with
Stock Exchanges, certificate on half-yearly basis
confirming due compliance of share transfer formalities
by the Company from Practicing Company Secretary
have been submitted to Stock Exchange within
stipulated time.
52
30th Annual Report
Number % of
of share share
holders holders
1-5000
596434 93.51%
500110000
23399
3.67%
1000120000
10052
1.58%
2000130000
3348
0.52%
3000140000
1191
0.19%
4000150000
914
0.14%
50001100000
1214
0.19%
100001
and above
1252
0.20%
Total
637804
100%
Total No.
of shares
% of
shares
99170377
1.20%
17859826
0.22%
14468899
0.18%
8265947
0.10%
4200064
0.05%
4230227
0.05%
8687335
0.11%
8088581725 98.10%
8245464400 100%
b. Shareholding pattern as on March 31, 2006
Category
Total no. of shares
% to Equity
GOI
7379634400
89.50
FIIs
582968040
7.07
Indian Public
167152659
2.03
Banks & FI
45792086
0.56
Private Corp. Bodies
24977300
0.30
Mutual Funds
38898556
0.47
NRI / OCBs
2805654
0.03
Others
3235705
0.04
8245464400
100.00
Total
c.
Major Shareholders
Details of Shareholders holding more than 1% of the
paid-up capital of the Company as on March 31, 2006
are given below:
Name of
Shareholder
Government
of India
Capital
Research
MNGT.Co.
A/C Capt.
World
Growth &
income
fund
No. of
Shares
% to Paid- Category
up Capital
7379634400
89.50
Government
115168548
1.40
Foreign
Institutional
Investor
xv) Locations of NTPC plants
xiii) Dematerialisation of Shares
The shares of the Company are in compulsory dematerialsed
segment and are available for trading system of both National
Securities Depository Ltd. (NSDL) and Central Depository
Services (India) Limited (CDSL).
Secretarial Audit Report for reconciliation of the share
capital of the Company obtained from Practicing Company
Secretary have been submitted to Stock Exchange within
stipulated time.
No. of shares held in dematerialized and physical mode
No. of shares
Held in
dematerialized
form in CDSL
Held indematerialized
form in NSDL
Physical
Total
% of total
capital issued
19162138
0.23
8226253910
48352
8245464400
99.77
0.00
100.00
The names and addresses of the Depositories are as under:
1. National Securities Depository Ltd.
Trade World, 4th Floor
Kamala Mills Compound
Senapathi Bapat Marg,
Lower Parel, Mumbai-400 013
2. Central Depository Services (India) Limited
Phiroze Jeejeebhoy Towers
28th Floor, Dalal Street, Mumbai-400 023
xiv) Outstanding GDRs/ADRs/Warrants or any Convertible
instruments, conversion date and likely impact on
equity
No GDRs/ADRs/Warrants or any Convertible instruments
has been issued by the Company
i)
Address for correspondence:
NTPC Bhawan, SCOPE Complex
7, Institutional Area, Lodi Road,
New Delhi – 110003
The phone numbers, fax numbers and e-mail ids for
communication are given below:
Registered Office
Investor Services
Department
e-mail id
Public Spokesperson
Mr. A.K. Kundu,
Executive Director
(Finance)
e-mail id
Company Secretary
Mr. Anil Kumar Rastogi
e-mail id
Telephone No.
2436 0100
2436 7072
Fax No.
2436 1018
2436 1724
isd@ntpc.co.in
2436 9335
24365742
akkundu@ntpc.co.in
2436 0071
2436 0241
akrastogi@ntpc.co.in
For and on behalf of Board of Directors
Place: New Delhi
Date: 31st July, 2006
(T. Sankaralingam)
Annex-1
Non-Mandatory requirements
1.
The Board: The Company is headed by an executive Chairman. No Independent Director has been appointed for the
period exceeding, in the aggregate, a period of nine years, on the Board of the company.
2.
Remuneration Committee: This aspect has been dealt elaborately in para 3.8 of this Report.
3.
Shareholders' rights: Separate half-yearly report has not been sent to each household of shareholders. However, the
financial results for the half-year ended September 30, 2005 were published in Financial Express and Jansatta dated
October 28, 2005 and also put up on website of the company.
4.
Audit Qualification: The financial statement for the year 2005-06 has no audit qualifications.
5.
Training to Board Members: Board Members are deputed to attend various training programmes, seminars, conferences,
meets etc. from time to time.
6.
Mechanism for evaluating non-executive Board Members: Not yet adopted by the Company.
7.
Whistle Blower Policy: The Company has not adopted/introduced Whistle Blower Policy. However, the Company has not
denied access to any employee to approach the Management.
To the Members
NTPC Limited
We have examined the compliance of conditions of corporate governance by NTPC Limited, for the year ended on March 31,
2006 as stipulated in clause 49 of Listing Agreements in respect of Equity Shares of the said Company with Stock Exchanges.
The compliance of conditions of corporate governance is the responsibility of the management. Our examination is limited to
procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the
Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us, we certify that, except the
composition of the Board of Directors and Audit Committee as reported in para 2.2 and para 3.1 of Report on Corporate
Governance, the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreements.
We further state that, such compliance is neither an assurance as to the future viability of the Company nor the efficiency or
effectiveness with which the management has conducted the affairs of the Company.
For Kalani & Co.
Chartered Accountants
For Amit Ray & Co.Chartered
Accountants
(K.L. Jhanwar)
Partner
M. No. 14080
(Amitava Ray)
Partner
M. No. 06947
For Umamaheswara Rao & Co.
For S.N. Nanda & Co.
(G. Sivaramakrishna Prasad)
Partner
M. No. 24860
(S.N. Nanda)
Partner
M.No. 5909
For T.R. Chadha & Co.
(Sanjay Gupta)
Partner
M. No. 87563
Place: New Delhi
Date: 31st July, 2006
54
30th Annual Report
Annex-III to Directors’ Report
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 2005-2006 in different areas are as under:
ENERGY AUDITS
During the year 2005-06, 103 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, WHRB performance, lighting, thermal insulation etc. were carried
out at different stations of NTPC. In addition, a workshop on Energy Conservation Potential in Air Pre-heaters and Draft
System was also conducted at NTPC- Dadri. During the year, bids for carrying out energy audits of 14 external power
utilities and other industries were also submitted through the Consultancy Wing of NTPC.
Till now 446 executives of NTPC have passed the Energy Auditors Examination of Bureau of Energy Efficiency to
become accredited energy auditors. In addition, 9 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 CW pumps & cooling towers based on ambient conditions and actual requirement of plants (at Anta,
Simhadri, Kawas, Dadri-gas & Coal and Unchahar etc) monitoring of running hours for auxiliary cooling water pumps,
air compressors etc (at Farakka, Kahalgaon, Talcher Thermal, Unchahar, Rihand, Simhadri, Vindhyachal etc.), use of
vapour absorption system for air conditioning (at Ramagundam, Korba, Farakka, Vindhyachal), 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) are some of the measures taken to reduce APC.
LIGHTING
Installation of timer switches in plant and Township lighting (at Anta etc), use of energy savers (at Kawas etc), replacement
of conventional GLS lamps and conventional FLTs with CFLs and conventional FLTs with energy efficient tube lights (at
Dadri-gas etc), Lighting voltage optimization, replacement of HPMV Lamps with HPSV lamps and cleaning of light
fittings (at Unchahar, Singrauli etc), use of electronic ballasts (at Gandhar & Kayamkulam etc) use of CFLs, HPSV lamps,
metal halide lamps and energy efficient tube lights (at Singrauli etc).
HEAT ENERGY
Re-use of recovered coal from settling tank & yard (at Dadri-Coal etc), repair of thermal insulation and cladding (at
Farakka, Unchahar, Singrauli, Ramagundam, Badarpur etc), external cleaning of WHRB tubes with ammonia (at Auraiya
etc), conco tube cleaning of condenser tubes (at Talcher Thermal etc).
FUEL OIL
Using MPSP internals in coal mills and reduction in unit start-up and shut-down time (at Farakka etc),
LUBRICANTS
On-line centrifuging mill gear box lub. oil (at Kahalgaon etc), use of waste lub.oil for marshalling yard fittings works (at
Badarpur etc), Attending lub oil leakages and changing / topping up oil on actual condition basis (at Badarpur and
Farakka etc), recycling of used up oils for reuse (at Kahalgaon, Talcher Thermal and Vindhyachal etc).
DM WATER
Attending DM water / steam leakages (at Kahalgaon 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
COC 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).
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).
NON CONVENTIONAL ENERGY
Using solar water heaters in canteen and guest houses (Talcher Thermal etc).
b) Additional investments and proposals for reduction in consumption of energy:
Provision of Rs. 26.5 millions has been kept in BE 2006-07 for different energy conservation schemes like :
- Energy meters, power analysers and other portable energy audit instruments and on-line energy monitoring
system
- Vapor absorption system for Air Conditioning
- Energy efficient devices in lighting
- Solar water heaters, solar PV lighting and solar PV pumps.
c) Impact of measures taken for energy conservation :
Savings achieved during 2005-2006 on account of specific efforts for energy conservation :S.No
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Area/Activities
Electricals (including 4.995 MU savings in lighting)
Heat Energy (equivalent MT of coal)
Fuel Oil
D. M. Water
Miscellaneous Water
Diesel/MGR Fuel
Lubricants
Miscellaneous/NCES
Energy Unit
Savings
Qty. of units
MU
MT
KL
MT
M.Cu.M
KL
KL
126.96
78264
1767.3
90384.5
4.21
922.6
75.68
Grand Total
Rs. (Million)
174.780
89.812
35.35
1.54
16.31
31.07
4.35
0.06
353.272
Savings achieved during 2004-05 was Rs. 414 Million
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
1.
2.
56
Foreign Exchange Outgo
a) Value of Imports calculated on CIF basis:
Capital Goods
Spare Parts
b) Expenditure:
Professional and Consultancy Charges
Interest
Others
Foreign Exchange Earned
Consultancy
Interest
Others
30th Annual Report
Rs./Million
6380
518
10
1849
2618
3
3
1
Form-B
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 2005- 06:
a. Rejuvenation studies of aged corrugated liner using solution heat treatment & analysis of microstructure &
mechanical properties.
b. Process optimization of trans-esterification for bio-diesel preparation by villagers from non-edible oil.
c. Study of metallurgical degradation of blade coating in gas turbines.
d. Development of technique for rapid assessment of integrity of paints/organic coatings.
e. Number of visits were made by R&D Experts to various stations for condition assessment, failure analysis and to
solve/analyse their specific problems, and help them in increasing the availability & reliability of the units.
f.
R&D has developed Fly-Ash based product for part replacement of cement to be used for general building
construction and has also developed fly-ash based Utensil Cleaning Powder which also contains Satritha as an
organic content.
g. R&D has signed a MOU with BARC for developing software for on-line blade failure & shaft crack detection in
turbine generators.
h. Problem of high exit gas temperature at Auraiya has been studied and root cause analysis has been carried out.
Recommendations for controlling high exit gas temperatures have been given. Fouled HRSGs were cleaned
using alkaline water washing procedure developed by R&D.
i.
Detailed investigations are being carried out to improve the performance of cooling towers and chemical
treatments based on non-proprietary chemicals are being developed for Talcher Kaniha, Unchahar, Gandhar
and Auraiya.
j.
RSOP project assigned by Ministry of Power through CPRI, on “Ways and means of estimating and controlling
colloidal silica in raw & DM water” is on the verge of completion.
k.
Environmental Appraisal of all the operating stations assessing air & water quality, condition of monitoring
equipment, etc has been carried out.
l.
R&D provided Consultancy for oxide characterization & solvent selection for acid cleaning of boilers at IP Station,
Delhi; Panipat Thermal station, Haryana; Lehra Mohabbat Station, Punjab; Muzzaffarpur station, etc
2.0 Benefits derived as a result of above R&D:
R&D activities as carried out have helped in increasing the availability, reliability and efficiency of the stations. Development
of value added products from flyash will help in generating new markets and thus help in increasing its utilization.
Process of trans-esterification as developed will make available bio-diesel fuel for distributed generation. Rejuvenation
studies will help in refurbishment of GT components thereby increasing their life. Consultancy provided to various
utilities in terms of characterization of oxides selection of solvent for chemical cleaning of boiler tubes will help the
utilities in improving the efficiency of boilers.
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. It is intended to appoint Indian Institute of Science (IISc) Bangalore as consultants for up-gradation of R&D
Centre to make it World –class. The Consultants will carry out benchmarking & gap analysis, recommend the
Centres of Excellence to be created, and prepare the road map.
2. R&D will be working with BARC for hardware procurement & software development for developing techniques
for online blade damage detection & shaft crack detection.
3. R&D will work on application of techniques of fracture toughness through Small Punch & coating assessment
through eddy current and for further reducing boiler tube failures by employing predictive method of Boiler
Tube Failure at critical locations.
4. Four research projects will also be undertaken, namely - Weldability study of Hot gas path components made of
Inconel – 617, development of testing procedure for eddy current examination of steam turbine blades in insitu condition, to study the effectiveness of ion-exchange resin for controlling acidity levels in FRF system w.r.t.
fuller earth and to resolve the problem of deposition and fouling of cooling tower fills and cooling water system
of Talcher Kaniha and Gandhar stations.
4.0 Expenditure of R&D
(Rs./Millions)
2005-06
2004-2005
a) Capital
5
3
b) Recurring
58
42
c) Total
63
45
d) Total R&D expenditure as a percentage of total turnover
0.02412%
0.0199%
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.
1.
Technology
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.
Year
2004
Stations
Implemented in Simhadri will be
continued in future Projects.
2
Super critical 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 gasses.
2004
Being implemented at Sipat
(3x660 MW), Barh (3x660MW)
and North Karanpura STPP.
3
Boiler Flame Analysis System (BFAS) observes the flame
intensity and regulates the secondary air flow for achieving
optimized combustion.
2005
Implemented in Simhadri.
4
765 KV Switchyard & associated equipments including
24KV/ 765KV Generator Step up (GSU) Trans-former.
2005
Being implemented at Sipat
5
Switchyard Control & Data Acquisition (SCADA) System
based on universal protocol IEC 61850.
2005
- do -
Place: New Delhi
Dated: July 31, 2006
58
30th Annual Report
(T. Sankaralingam)
Designation and
Nature of duties
Sr. Mgr. (AUD), CC
GM (F&A) , CC
Pattanayak N G
Raghavaiha B V S
AGM (CP), CC
390992
511644
972248
1258293
993257
1121282
2004629
1126460
708240
3206192
1010344
825424
712145
917415
3.
Remuneration
B.Sc. Mech. Engg., PG Dip.
Comp. Sc., PG Dip.Bus. Mgt.
ITI (D.Man)
B.A. (Hons.) Economics,
M.A. Labr. & Social Welfr.
BE, ME
PGDPM
FCWA
B.Tech.
CA, LLB, M.Com.
B.Com.
M.Sc. (Mech. Engg.)
BE (Elect), MBA
SAS
Dip. (Mech)
M.Sc. Elec. Engg.
4.
Qualification
01.12.77
01.03.80
05.07.84
15.04.82
01.02.80
06.02.86
23.02.84
12.09.79
01.09.79
09.10.80
17.11.77
28.12.82
21.12.86
31.12.87
28
25
21
23
26
19
21
26
26
25
28
23
19
17
Date of
Exp.
Commencement (Yrs.)
of Employment
5.
6.
50
60
58
60
60
60
56
60
56
56
60
60
60
59
7.
Age
(Yrs.)
Escorts Employees
Ancillaries Limited
CEA
HSCL
Tata Consult. Engg.
Ballarpur Industries Limited
HCL
Indo Nippon Precision
Bearings Ltd.
BHEL
EIL
Renusagar Power Plant
Scooter India Limited
Inspector of Engg. Deptt.
BHEL
8.
Last Employment
held
Resigned
Retired
Resigned
Retired
Retired
Retired
VRS
Retired
Expired
VRS
Retired
Retired
Retired
Resigned
Remarks
Annex- IV to Directors’ Report
Place: New Delhi
Date: July 31, 2006
(T. Sankaralingam)
Notes:
1 Persons named above were Directors/ employees of the Company.
2 Remuneration includes salary, allowances, leave encashment, leave travel concession, payment for subsidized leased accommodation, reimbursement of
medical expenses to employees and employer’s contribution to Provident Fund and other funds. However, it does not include the monetary value of the
medical treatment provided in the Company’s dispensaries/hospitals at Project sites, since it can not be quantified employees-wise. In addition, the
employees are entitled to gratuity/group insurance in accordance with Company’s Rules.
3 None of the employees listed above is related to any director of the company.
4 Remuneration mentioned above is inclusive of retirement /separation benefits paid during the year and is not indicative of any regular remuneration
structure of Directors/ employees of the Company
AE (PE-C&I) , CC
Vadhera Sudhir
Director (HR)
Sinha K K
Singh Mohar
ED (OS) , CC
Sharma D S
GM, CC
Director (Finance)
Rawat Ganesh Singh
Dy. Mgr. (F&A), CC
GM (ES), CC
Kalia Om Prakash
Narasimharamulu P
GM (R&D), CC
Hirani M
Kaushik A K
Mgr. (PE), CC
GM (Fin.), CC
Gupta O P
Executive Director
Chohdda S P
Bajaj H L
1.
2.
Employed for whole of the Year
NIL
Employed for the part of the Year
Name
PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 217(2A) OF THE COMPANIES ACT, 1956
Annex-V to Directors’ Report
STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARY
COMPANIES
NAME OF THE
SUBSIDIARY
PIPAVAV
POWER
DEVELOPMENT
COMPANY LTD.
NTPC
ELECTRIC
SUPPLY
COMPANY
LTD.
NTPC VIDYUT
VYAPAR NIGAM
LTD.
NTPC HYDRO
LTD.
1.
Financial year of the Subsidiary
ended on
March 31, 2006
March 31, 2006
March 31, 2006
March 31, 2006
2.
Date from which they became
Subsidiary
December 20, 2001
August 21, 2002
November 1, 2002 December 12, 2002
3.
Share of the subsidiary held by the
company as on March 31, 2006
a) Number & face value
370000 equity
shares of Rs. 10/each
80910 equity
20000000 equity
10000000 equity
100%
100%
100%
100%
(Rs. 40083)
Rs. 4519915
Rs. 33269919
(Rs. 33427394)
(Rs. 24252)
Rs. 401003
Rs. 57364365
(Rs. 30467227)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
b) Extent of holding
4.
The net aggregate amount of the
subsidiary companies Profit/(loss)
so far as it concerns the member of
the holding company
a) Not dealt with in the holding
company’s accounts
i) For the financial year ended
March 31, 2006
ii) Upto the previous financial years
of the subsidiary company
b) Dealt with in the holding
company’s accounts
i) For the financial year ended
March 31, 2006
ii) For the previous financial year of
the subsidiary company since
they become the holding
company’s subsidiaries
Place : New Delhi
Dated : July 31, 2006
60
30th Annual Report
(T. Sankaralingam)
Annex-VI to Directors’ Report
REVIEW OF ACCOUNTS OF NTPC LIMITED ( FORMERLY NATIONAL THERMAL POWER CORPORATION LTD.), NEW
DELHI FOR THE YEAR ENDED 31ST MARCH 2006 BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA .
NOTE: This review of accounts has been prepared without taking into account comments under Section 619(4) of the
Companies Act, 1956, and qualifications contained in the Statutory Auditor’s Report.
1. FINANCIAL POSITION
The table below summaries the financial position of the Company under broad headings for the last three years
(Rs. in Million)
2003-2004
2004-2005
2005-2006
78125
-
73796
831
4802
3026
73796
847
5830
1982
b) Reserves and Surplus
i ) Free Reserves and Surplus
ii) Share Premium Account
iii) Foreign Project Reserve
iv) Capital Reserve
276113
4
1259
311693
22334
2
1279
343543
22281
1308
c) Borrowings
i) From Government of India
ii) From Financial Institutions
iii) Foreign Currency Loans
iv) Cash Credit
v) Others
vi) Interest Accrued and Due
984
57675
58642
37227
-
551
75339
53741
41247
-
236
87821
66085
47831
-
d) i) Current Liabilities & Provisions
ii) Provision for Gratuity
80565
376
67237
230
61184
218
e) i) Deferred Tax Liability
ii) Advance Against Depreciation
iii) Development Surcharge Fund
1
1591
3784
1
3374
-
1
4408
-
596346
659483
717371
400281
187736
212545
74953
173380
135468
-
431062
207914
223148
99252
207977
129106
-
460396
229501
230895
136340
192891
157245
-
596346
659483
717371
Liabilities
a) Paid up capital
i) Government
ii) Indian banks and financial institutions
iii) Foreign banks and foreign companies/institutions
iv) Public in India and/or outside
Total
Assets
f) Gross Block
g) Less: Depreciation
h) Net Block
i) Capital Work-in-Progress & Construction Stores & Advances
j ) Investments
k) Current Assets, Loans & Advances
l) Deferred Tax Assets
m) Misc. Expenditure (to the extent not written off or adjusted)
n) Accumulated Loss
Total
o)
p)
q)
r)
Working Capital [k- d(i) -c (vi)]
Capital Employed [h + o]
Net Worth [a+ b (i)+b (ii) - (n + m)]
Net Worth per rupee of Paid-up Capital (in Rs.)
54903
267448
354238
4.53
61869
285017
416482
5.05
96061
326956
448279
5.44
2. SOURCES AND UTILISATION OF FUNDS
Funds amounting to Rs.127004 Million from internal and external sources were realised and utilised during the year
as detailed below:
(Rs. in Million)
Sources of Funds
a) Funds from operations:
Profit after tax
58202
Add: Depreciation
21587
79789
b) Increase in Borrowings
31095
c) Increase in Advance Against Depreciation
1034
d) Decrease in Investments
15086
Total
127004
Utilisation of funds
a) Increase in Working Capital
(excluding Proposed Dividend & Tax on Proposed Dividend)
b) Increase in Capital Work in Progress and Construction Stores & Advances
c) Increase in Fixed assets
d) Dividend & Dividend Tax paid
30495
37088
29334
30087
Total
127004
3. WORKING RESULTS
The working results of the Company for the last three years ending 31st March 2006 are given below
(i) Turnover (including Electricity Duty & Consultancy Income )
(ii) Other income
(iii) Profit Before Tax, Prior Period & Extra Ordinary Items
(iv) Prior Period & Extra Ordinary Items
(v) Profit Before Tax
(vi) Provision for Taxation
(vii) Profit After Tax
(viii) Interim Dividend and Dividend Tax
(ix) Proposed Dividend and Dividend Tax
2003-2004
2004-2005
(Rs. in Million)
2005-2006
189923
61310
59080
183
58897
6289
52608
12210
227076
23529
60680
(102)
60782
2712
58070
11187
11283
262910
26078
62712
2488
60224
2022
58202
18804
7521
4. RATIO ANALYSIS
Some important ratios on the financial health and working of the Company at the end of the last three years ending
31st March 2006 are as under:
i)
ii)
62
Liquidity ratio
Current ratio [k/{d(i)+c(vi)}]
Debt equity ratio
Long term debt to net worth {c(i to iii)+c (v)/q)]
30th Annual Report
2003-2004
2004-2005
2005-2006
1.68
1.92
2.57
0.44
0.41
0.45
Profitabily Ratios (in percentage)
a) Profit Before Tax to :
i) Capital Employed {3(v)/p}
ii) Net Worth {3(v)/q}
iii) Turnover (including Electricity Duty &
Consultancy income ) {3(v)/3(i)}
b) Profit After Tax to Equity
c) Earning per Share (in Rs)
22.02
16.63
21.33
14.59
18.42
13.43
31.01
67.34
6.73
26.77
70.43
7.26
22.91
70.59
7.06
5. INVENTORY LEVELS
The inventory levels at the close of the last three years ending 31st March 2006 are as under:
(Rs. in Million)
i)
ii)
iii)
iv)
v)
6
2003-2004
2004-2005
2005-2006
4407
661
11742
47
696
4583
670
11904
41
817
9053
759
12894
42
881
Coal, Fuel Oil and Naptha
Chemicals and Consumables
Components and Spares
Loose tools
Others
SUNDRY DEBTORS
The Sundry debtors and Sales in the last three years ending 31st March 2006 are as follows:
(Rs. in Million)
As at
31st March
2004
2005
2006
Sundry Debtors
Considered
Good
4699
13747
8678
Considered
Doubtful
14287
8360
8363
Turnover
(including Electricity
Duty &
Consultancy )
Pecentage
of Sundry
Debtors to
Turnover
Total
18986
22107
17041
189923
227076
262910
10.00
9.74
6.48
Sundry debtors to turnover decreased from 9.74 percent in 2004-2005 to 6.48 percent in 2005-2006
The age-wise break-up of the Sundry debtors at the end of 31st March 2006 is as under:
Debtors Outstanding for
Less than six months
Six months to one year
One year to three years
More than three years
Total
Place: New Delhi
Dated: 7th July, 2006
(Rs. in Million)
8022
75
584
8360
17041
(Meera Swraup)
Principal Director of Commercial Audit and
Ex-officio Member Audit Board-III,
New Delhi
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE COMPANIES
ACT, 1956, ON THE ACCOUNTS OF NTPC LIMITED, NEW DELHI, FOR THE YEAR ENDED 31 MARCH 2006
I have to state that the Comptroller and Auditor General of India has no comments upon or supplement to the Auditors’
Report under Section 619(4) of the Companies Act, 1956, on the accounts of NTPC Limited, New Delhi for the year
ended 31st March 2006.
Place: New Delhi
Dated: 7th July, 2006
64
30th Annual Report
(Meera Swraup)
Ex-officio Member Audit Board-III,
New Delhi
Annex- VII to Directors’ Report
STATISTICAL DATA OF GRIEVANCE CASES
2005-06
S. No. Particulars
Public Grievance Cases
Staff Grievances Cases
Grievance cases outstanding at the
beginning of the year
-
02
2.
Grievance cases received during the year
-
34
3.
Grievance cases disposed of during the year
-
31
4.
Grievance Cases outstanding at the end of
the year
-
5
1.
Place : New Delhi
(T. Sankaralingam)
Annex-VIII to Directors’ Report
STATISTICAL INFORMATION ON RESERVATION OF SCs/STs FOR THE YEAR 2005
Representation of SCs/STs as on 01.01.2006:
Group
A
B
C
D
Total
Employees on Roll
10054
2868
8355
2609
23886
SCs
1022
379
1429
533
3363
%age
10.16
13.21
17.10
20.42
14.07
STs
225
169
521
264
1179
%age
2.23
5.89
6.23
10.11
4.93
SCs
(3)
111
3
114
%age
(4)
13.80
8.57
13.55
STs
(5)
81
1
82
%age
(6)
10.07
2.85
9.75
SCs
(3)
230
110
295
11
646
%age
(4)
11.23
14.51
20.06
19.64
14.91
STs
(5)
35
44
81
7
167
%age
(6)
1.70
5.80
5.51
12.50
3.85
Recruitment of SCs/STs during the year 2005.
Group
(1)
A
B
C
D
Total
Total Recruitment
(2)
804
35
2
841
Promotions of SCs/STs during the year 2005.
Group
(1)
A
B
C
D
Total
-
Total
(2)
2048
758
1470
56
4332
The guidelines on reservation were followed in letter and spirit.
Welfare measures as under were taken by NTPC for SC/ST employees and students:
i) Award of Annual Scholarship to SC/ST students pursuing Degree/ Diploma in Engineering courses and MBA/
PGDBM (HR/Finance) courses.
Degree (Engg.)/MBA/PGDBM(HR/Finance)
: Rs.1500/-pm
Diploma (Engg.)
: Rs.1000/-pm
ii) NTPC Gold medal award with XISS, Ranchi for one student each topping the merit list of SC/ST candidates in
Personnel Management course and Rural Development course.
iii) Liaison Officers for SC/STs have been nominated at each project/RHQ for handling SC/ST related matters.
iv) Annual Conference of Liaison Officers was organized to make such officers aware of developments in reservation
policy so as to ensure proper implementation of the same.
Place : New Delhi
66
30th Annual Report
(T. Sankaralingam)
Annex-IX to Directors’ Report
PHYSICALLY CHALLENGED PERSONS
With a view to focus on its role as a socially responsible and socially conscious organization, NTPC has endeavoured to
take responsibility for adequate representation of physically challenged persons in its workforce. 128 and 169 physically
challenged persons were recruited in separate phases. With this there are a total of 406 physically challenged persons
on the rolls of NTPC. Some of the other initiatives taken for the welfare of physically challenged persons by NTPC are as
under:
-
Screen reading software and Braille shorthand machines has been made available.
-
Sign language’ training for the employees in general, where hearing impaired candidates is posted.
-
Barrier free access to physically challenged has been provided.
-
Allotments of quarters to physically challenged are being generally made on the ground floor.
-
Special parking enclosure near the ramp at the office entrance as well as PH friendly toilet and lift at CC and Projects.
-
Wherever required, gates/door of the quarter has been widened and wider covers provided on drains to facilitate
movement.
-
At CC procurement of stationery items like files, envelopes are mainly being done from NGOs/Agencies like ADDI,
MUSKAN, Blind Relief Association who are working for physically challenged thereby creating indirect employment.
-
Shops have been allotted in NTPC Townships to challenged persons so that they may earn their livelihood. Similarly,
PCOs within/outside plant premises are also allotted to physically challenged persons.
-
Regular Interactive meetings are being organized with physically challenged employees.
-
05 number of Scholarships @ Rs. 1500/- per month/ per student are given to PH students pursuing Degree in Engineering
Course.
-
05 number of Scholarships @ Rs. 1500/- per month/ per student are given to PH students pursuing MBA/ PGDBM
Course.
-
13 Telephone booths have been installed in different corners of Delhi for disabled persons, to support VRC’s efforts
for financial assistance to disabled persons who were allotted such booths.
-
In our Vindhyachal Project, a school named Asha Kiran for deaf/ dumb and mentally retarded children, is running.
-
Inclusive education at all the three schools located at Dadri project has started.
-
Petty contracts like book binding, scribbling pad preparation from waste paper, file binding, furniture repair, screen
printing, spiral binding, painting contract are also being given to disabled persons.
-
Physically challenged (Orthopaedically handicapped) employees have been allowed to purchase a three wheeler
vehicle with a hand fitted engine against their normal entitlement (advance for scooter /motorcycle /moped) under
NTPC Conveyance Advance Rules.
-
Reimbursement towards low vision aids, dark glasses etc, subject to maximum of Rs. 1000/- every year has been
introduced. Similarly hearing aid: behind the ear model for each ear restricted to Rs. 10,000/- or actual cost, whichever
is lower has been introduced.
Representation of Physically challenged in NTPC:
Group
Emp. on Roll
No. of Persons
with Physically
disabilities
actually employed
Percentage
Backlog
Vacancies*
A
10054
38
0.38
25
B
2868
6
0.21
-
C
8355
241
2.88
-
D
2609
121
4.64
-
Total
23886
406
1.70
25
* vacancies have been advertised for filling up in the ongoing recruitment exercise as backlog vacancies.
Place : New Delhi
68
30th Annual Report
(T. Sankaralingam)
Annex-X to Directors’ Report
UNGC – Communications on Progress (2005-06)
NTPC expresses its continued support for the Global Compact and its commitment to take action in this regard, as was
communicated by the Chairman & Managing Director, NTPC in his letter dated May 29, 2001 addressed to Secretary
General, United Nations.
NTPC has posted the brief of Global Compact and its commitment to the principles of GC on its website at www.ntpc.co.in.
The principles of GC were also communicated to all employees through in-house magazines, internal training programmes
and posters. NTPC actively participated in the 2nd National Convention of Global Compact Society held at Delhi on 2nd
Feb. 2006 wherein NTPC’s initiatives in implementing the Global Compact principles were shared with the participants
of the Convention.
Human Rights: Principle 1-2
Most of NTPC’s 20 operating power stations are located in remote rural areas which are socio-economically backward
and deficient in the basic civic amenities. NTPC, as responsible corporate citizen has been addressing the issue of
community development in the neighbourhood areas of its stations, which had been impacted due to establishment of
the project.
While, this has been initially administered as part of resettlement and rehabilitation effort, NTPC recognized its social
responsibility to continue community and peripheral development works where the same has been closed under R&R
policy. Towards this, NTPC during 2004-05 adopted “Corporate Social Responsibility – Community Development (CSRCD) Policy”, July’ 04.
Under this policy NTPC allocated a fund of Rs. 54 million to 20 operating stations for carrying out community development
work in the area of health, education, drinking water and peripheral development.
NTPC provided financial assistance to various Institutions/ Bodies as detailed below:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
Rs. 65.0 million to Uttaranchal Forest Trust Hospital, Haldwani for purchase of advanced Medical Equipment.
Rs. 1.5814 million for setting up 3 Community Information Centres in Lakshwadeep Islands.
Rs. 1.0 million to Him Jyoti Foundation, Dehradun for two perpetual student’s scholarships.
Rs. 0.972 million to Mahavir International, Delhi for Mobile Clinic.
Rs. 0.25 million to M/s VIDYA, Delhi for support to their capacity building programme for 200 women.
Rs. 0.15 million to Business & Community Foundation, Delhi for organizing Abilities MELA.
Rs 0.13 million to Rath Mahavidyalaya, Uttaranchal for purchase of Personal Computers.
Rs. 0.1 million to M/s APARNA, Delhi for their environment based project and apprenticeship training for youth.
Labour Standard: Principle 3-6
For addressing the issue of labour standard in comprehensive manner, NTPC has decided to adopt international standards
like SA-8000 and OHSAS-18001.
During the year 2005-06, three of the NTPC stations viz. Badarpur, Simhadri and Talcher Thermal received SA-8000
accreditation while Anta, Auraiya and Simhadri were accredited in 2004-05 and Ramagundam was accredited in the
year 2003-04.
Similarly, three of NTPC stations viz. Rihand, Singrauli and Badarpur received accreditation under OHSAS 18001 during
2005-06 bringing all the 20 operating stations under accreditation of OHSAS 18001.
Environment: Principle 7-9
Towards its commitment to environment NTPC has decided to adopt ISO-14001 and obtained accreditation for all its 20
operating stations.
During the year 2005-06, Talcher Thermal and Talcher Kaniha have been re-certified.
Place : New Delhi
(T. Sankaralingam)
ACCOUNTING POLICIES
1.
GRANTS-IN-AID
1.1 Grants-in-aid received from the Central Government or other authorities towards capital expenditure as well
as consumers’ contribution to capital works are treated initially as capital reserve and subsequently adjusted
as income in the same proportion as the depreciation written off on the assets acquired out of the grants.
1.2 Where the ownership of the assets acquired out of the grants vests with the government, the grants are adjusted
in the carrying cost of such assets.
1.3 Grants from Government and other agencies towards revenue expenditure are recognized over the period in
which the related costs are incurred and are deducted from the related expenses.
2.
FIXED ASSETS
2.1 Fixed Assets are shown at historical cost.
2.2 Intangible assets are recorded at their cost of acquisition.
2.3 Capital expenditure on assets not owned by the Company is reflected as a distinct item in Capital Work-inProgress till the period of completion and thereafter in the Fixed Assets.
2.4 Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses
relatable to land in possession are treated as cost of land.
2.5 In the case of commissioned assets, where final settlement of bills with contractors is yet to be effected,
capitalisation is done on provisional basis subject to necessary adjustment in the year of final settlement.
2.6 Assets and systems common to more than one generating unit are capitalised on the basis of engineering
estimates/assessments.
3. CAPITAL WORK-IN-PROGRESS
3.1 In respect of supply-cum-erection contracts, the value of supplies received at site and accepted is treated as
Capital Work-in-Progress.
3.2 Incidental Expenditure during Construction (net) including corporate office expenses (allocated to the projects
pro-rata to the annual capital expenditure) for the year, is apportioned to Capital Work-in-Progress on the basis
of accretions thereto.
3.3 Deposit work/cost plus contracts are accounted for on the basis of statements of account received from the
contractors.
3.4 Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.
4.
OIL AND GAS EXPLORATION COSTS
4.1 The Company follows ‘Successful Efforts Method’ for accounting of oil & gas exploration activities.
4.2 Cost of surveys and prospecting activities conducted in the search of oil and gas are expensed in the year in
which these are incurred.
4.3 All acquisition costs are initially capitalized as “Exploratory Wells-in-Progress” under Capital Work-in-Progress.
5.
DEVELOPMENT OF COAL MINES
Expenditure on exploration of new coal deposits is capitalized as “Development of coal mines” under Capital
Work-in-Progress till the mines project is brought to revenue account.
70
30th Annual Report
6. FOREIGN CURRENCY TRANSACTIONS
6.1 Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction.
6.2 At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary
items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.
6.3 Exchange differences in respect of loans/deposits/liabilities relating to fixed assets/capital work-in-progress
acquired from a country outside India are adjusted in the carrying cost of related assets.
6.4 Exchange differences in respect of loans relating to fixed assets/capital work-in-progress acquired within
India to the extent regarded as an adjustment to interest cost are treated as borrowing cost.
6.5 Exchange differences, in respect of loans (other than regarded as borrowing cost)/deposits/liabilities relating
to fixed assets/capital work-in-progress acquired within India, arising out of transactions entered prior to
01.04.2004, are adjusted in the carrying cost of related assets. Such exchange differences in respect of
transactions entered after 01.04.2004 are treated as Incidental Expenditure During Construction till the assets
are ready for their intended use.
6.6 Other exchange differences are recognized as income or expense in the period in which they arise.
7.
BORROWING COSTS
Borrowing costs attributable to the fixed assets during their construction/renovation and modernisation are capitalised.
Such borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other
borrowing costs are recognised as an expense in the period in which they are incurred.
8.
INVESTMENTS
8.1 Current Investments are valued at lower of cost and fair value determined on an individual investment basis.
8.2 Long term investments are carried at cost. Provision is made for diminution, other than temporary, in the value
of such investments.
8.3 Premium paid on long term investments is amortised over the period remaining to maturity.
9.
INVENTORIES
9.1 Inventories are valued at the lower of cost, determined on weighted average basis, and net realizable value.
9.2 Dimunition in value of obsolete and unserviceable stores and spares is ascertained on review and provided
for.
10. PROFIT AND LOSS ACCOUNT
10.1 INCOME RECOGNITION
10.1.1
Sale of energy is accounted for based on tariff rates approved by the Central Electricity Regulatory
Commission. In case of power stations where the tariff rates are yet to be approved /agreed with
beneficiaries, provisional rates are adopted.
10.1.2
The incentives/disincentives are accounted for based on the norms notified/approved by the Central
Electricity Regulatory Commission or agreements with the beneficiaries. In cases of power stations where
the same have not been notified/approved/agreed with beneficiaries, incentives/disincentives are
accounted for on provisional basis.
10.1.3
Advance against depreciation, forming part of tariff to facilitate repayment of loans, is reduced from sales
and considered as deferred revenue to be included in sales in subsequent years.
10.1.4
The surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significant
uncertainty as to measurability or collectability exists.
10.1.5
Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damages
are not treated as accrued due to uncertainty of realisation/acceptance and are therefore accounted for
on receipt/acceptances.
10.1.6.1 Income from Consultancy service is accounted for on the basis of actual progress/technical assessment
of work executed, in line with the terms of respective consultancy contracts.
10.1.6.2 Claims for reimbursement of expenditure are recognized as other income, as per the terms of Consultancy
service contracts.
10.1.7
Scrap other than steel scrap is accounted for in the accounts as and when sold.
10.1.8
Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims are
accounted for based on certainty of realisation.
10.2 EXPENDITURE
10.2.1
Depreciation is charged on straight line method at the rates specified in Schedule XIV of the Companies
Act, 1956 except for the following assets in respect of which depreciation is charged at the rates mentioned
below:
a) Kutcha Roads
47.50 %
b) Enabling works
72
-
residential buildings including their internal electrification.
-
non-residential buildings including their internal electrification,
water supply, sewerage & drainage works, railway sidings,
aerodromes, helipads and airstrips.
6.33 %
19.00 %
10.2.2
Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis
from/up to the month in which the asset is available for use/disposal.
10.2.3
Assets costing up to Rs.5000/- are fully depreciated in the year of capitalization.
10.2.4
Cost of Computer software recognized as intangible assets is amortised on straight line method over a
period of legal right to use or 3 years, whichever is earlier.
10.2.5
Where the cost of depreciable assets has undergone a change during the year due to increase/decrease
in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar
factors, the unamortised balance of such asset is depreciated prospectively over the residual life
determined on the basis of the rate of depreciation.
10.2.6
Machinery spares which can be used only in connection with an item of fixed asset and whose use is
expected to be irregular are capitalised and depreciated over the residual useful life of the related plant
and machinery.
30th Annual Report
10.2.7
Capital expenditure on assets not owned by the Company is amortised over a period of 4 years from the
year in which the first unit of project concerned comes into commercial operation and thereafter from
the year in which the relevant asset becomes available for use. However, such expenditure for community
development in case of stations fully under operation is charged off to revenue.
10.2.8
Leasehold buildings are amortised over the lease period or 30 years, whichever is lower. Leasehold land
and buildings, whose lease period is yet to be finalised, are amortised over a period of 30 years.
10.2.9.1 Expenses on training, recruitment and ex-gratia payments under Voluntary Retirement Scheme are charged
to revenue in the year of incurrence.
10.2.9.2 Research and development expenses, other than fixed assets, are charged to revenue in the year of
incurrence.
10.2.9.3 Preliminary expenses on account of new projects incurred prior to approval of feasibility report are
charged to revenue in the year of incurrence.
10.2.10
Expenditure on leave travel concession to employees is recognized in the year of availment due to
uncertainties in accrual.
10.2.11
Expenses common to operation and construction activities are allocated to Profit and Loss Account and
Incidental Expenditure during Construction in proportion of sales to annual capital outlay in the case of
Corporate Office and sales to accretion to Capital Work-in-Progress in the case of projects.
10.2.12
Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.
10.2.13
Prepaid expenses and prior period expenses/income of items of Rs.100,000/- and below are charged to
natural heads of accounts.
10.2.14
Carpet coal is charged off to coal consumption. However, during pre-commissioning period, carpet
coal is retained in inventories and charged off to consumption in the first year of commercial operation.
Windage and handling losses of coal as per norms are included in cost of coal.
11. RETIREMENT BENEFITS
11.1 The liability for retirement benefits of employees in respect of Provident Fund and Gratuity, which is ascertained
annually on actuarial valuation at the year end, are accrued and funded separately.
11.2 The liabilities for leave encashment and post retirement medical benefits to employees are accounted for on
accrual basis based on actuarial valuation at the year end.
12. FINANCE LEASES
12.1 Assets taken on lease are capitalized at fair value or net present value of the minimum lease payments, whichever
is lower.
12.2 Depreciation on the assets taken on lease is charged at the rate applicable to similar type of fixed assets as per
Accounting Policy 10.2.1. If the leased assets are returnable to the lessor on the expiry of the lease period,
depreciation is charged over its useful life or lease period, whichever is shorter.
12.3 Lease payments made are apportioned between the finance charges and reduction of the outstanding liability
in respect of assets taken on lease.
BALANCE SHEET AS A
T 31st MARCH 2006
AT
Rs. million
SCHEDULE
NO.
SOURCES OF FUNDS
SHAREHOLDERS’ FUNDS
Capital
Reserves and surplus
Deferred Revenue on account of Advance
Against Depreciation
LOAN FUNDS
Secured loans
Unsecured loans
31.03.2006
31.03.2005
1
2
82,455
367,132
449,587
82,455
335,308
417,763
3
4,408
3,374
4
5
57,327
144,646
201,973
53,224
53,223
1
655,969
44,407
126,471
170,878
50,570
50,569
1
592,016
460,396
229,501
230,895
103,999
32,341
367,235
192,891
431,062
207,914
223,148
67,063
32,189
322,400
207,977
Deferred Tax Liability (Net)
Less: Recoverable
TOTAL
APPLICATION OF FUNDS
FIXED ASSETS
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Construction stores and advances
6
7
8
9
INVESTMENTS
CURRENT ASSETS, LOANS AND ADVANCES
Inventories
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
10
11
12
13
14
23,405
8,678
84,714
10,161
30,287
157,245
17,819
13,747
60,783
9,764
26,993
129,106
LESS: CURRENT LIABILITIES AND PROVISIONS
Liabilities
Provisions
15
16
Net current assets
TOTAL
Contingent liabilities
49,102
12,300
61,402
95,843
655,969
52,306
15,161
67,467
61,639
592,016
17
Notes on accounts
Schedules 1 to 27 and accounting policies form integral part of accounts.
27
( A.K.RASTOGI )
Company Secretary
(A.K.SINGHAL)
( T.SANKARALINGAM)
Director (Finance)
As per our report of even date
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
(V.Umamaheswara Rao)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 2275
(Gaurav Nanda )
(Sanjay Gupta)
Partner
Partner
M No 500417
M No 87563
Place : New Delhi
Dated : 31st May 2006
74
30th Annual Report
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH 2006
Rs. million
SCHEDULE
NO.
INCOME
Sales (Gross)
Less: Electricity duty
Sales (Net)
Energy internally consumed
Provisions written back
Other income
Total
EXPENDITURE
Fuel
Employees’ remuneration and benefits
Depreciation
Provisions
Total
Profit before Tax and Prior Period Adjustments
Prior Period income/ expenditure (net)
Profit before tax
Provision for :
Current tax
Deferred tax
Fringe Benefit tax
Less:
Recoverable
Current tax
Deferred tax
Fringe Benefit tax
Transferred to Incidental Expenditure during construction
18
19
20
21
22
23
24
25
Current Year
Previous Year
262,910
1,757
261,153
276
23
26,078
287,530
227,076
1,674
225,402
248
6,235
23,529
255,414
163,947
9,684
12,721
20,477
357
17,632
224,818
62,712
2,488
60,224
137,235
8,823
12,062
19,584
75
16,955
194,734
60,680
(102)
60,782
7,961
2,654
209
10,058
(1,710)
-
5,666
2,654
197
285
2,022
58,202
812
16
2
59,032
2,926
29
29,000
7,346
(1,710)
2,712
58,070
566
17
2
58,655
2,351
22
33,000
Profit after tax
Balance brought forward
Write back from Bond Redemption Reserve
Write back from Foreign Project Reserve
Balance available for appropriation
Transfer to Bonds Redemption Reserve
Dividend
Interim
16,491
Proposed
6,596
Tax on Dividend
Interim
2,313
Proposed
925
Balance carried to Balance Sheet
752
Incidental expenditure during construction
26
Earning Per Share (Equity shares, face value Rs.10/- each) - Basic and Diluted
7.06
(A.K.RASTOGI)
(A.K.SINGHAL)
( T.SANKARALINGAM)
Company Secretary
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 2275
(Gaurav Nanda )
(Sanjay Gupta)
Partner
Partner
M No 500417
M No 87563
Place : New Delhi
9,895
9,895
1,292
1,388
812
7.26
Schedule 1
CAPITAL
AUTHORISED
10,000,000,000 equity shares of Rs.10/- each (Previous
year 10,000,000,000 equity shares of Rs.10/- each)
ISSUED, SUBSCRIBED AND PAID-UP
8,245,464,400 equity shares of Rs.10/- each fully paid-up (Previous
year 8,245,464,400 equity shares of Rs.10/- each fully paid-up)
31.03.2006
Rs. million
31.03.2005
100,000
100,000
82,455
82,455
1,279
29
1,308
1,259
22
2
1,279
22,334
53
22,281
22,511
177
22,334
6,405
2,926
16
9,315
4,071
2,351
17
6,405
2
2
*
4
2
2
304,476
29,000
333,476
752
367,132
271,476
33,000
304,476
812
335,308
3,374
1,505
471
4,408
1,591
1,791
8
3,374
Schedule 2
RESERVES AND SURPLUS
Capital Reserve
As per last Balance Sheet
Add : Additions during the year
Less : Adjustments during the year
Share Premium Account
Add : Additions during the year
Less : Adjustment of share issue expenses during the year
Bonds Redemption Reserve
Add : Transfer from Profit & Loss Account
Less : Write back during the year
Foreign Project Reserve
*Rs. 81229/General Reserve
Add : Transfer from Profit & Loss Account
Surplus, balance in Profit & Loss Account
Total
Schedule 3
DEFERRED REVENUE -
on account of Advance Against Depreciation
Add : Revenue deferred during the year
Less: Revenue recognised during the year
Total
76
30th Annual Report
Schedule 4
SECURED LOANS
Rs. million
31.03.2006
31.03.2005
10.00% Secured Non-Convertible Taxable Bonds of Rs. 10,00,000/- each with five equal
Separately Transferable Redeemable Principal Parts (STRPP) redeemable at par at the end of
the 6th year and in annual instalments thereafter upto the end of 10th year respectively from 5th
September 2001 (Twelfth Issue - Private Placement) 1
5,000
5,000
9.55% Secured Non-Cumulative Non-Convertible Taxable Redeemable Bonds of
Rs. 10,00,000/- each redeemable at par in ten equal annual instalments commencing from the
end of 6th year and upto the end of 15th year respectively from 18th April 2002 (Thirteenth
Issue -Part A - Private Placement) 2
7,500
7,500
9.55% Secured Non-Cumulative Non-Convertible Taxable Redeemable Bonds of
Rs. 10,00,000/- each with ten equal Separately Transferable Redeemable Principal Parts (STRPP)
redeemable at par at the end of the 6th year and in annual instalments thereafter upto the end
of 15th year respectively from 30th April 2002 (Thirteenth Issue - Part B - Private Placement) 2
7,500
7,500
8.05% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of
Rs. 10,00,000/- each with two equal Separately Transferable Redeemable Principal Parts (STRPP)
redeemable at par at the end of 4th and 5th year respectively from 1st August 2002 (Fourteenth
Issue - Private Placement) 2
5,000
5,000
Rs. 1,00,000/- each redeemable at par in three annual instalments of 30%, 30% and 40%
commencing from 28th September 2004 (Fifteenth Issue - Part C - Private Placement) 2
44
77
Rs. 10,00,000/- each redeemable at par on 10th April 2018 (Sixteenth Issue -Private Placement) 3
1,000
1,000
Rs. 10,00,000/- each redeemable at par on 1st May 2023 (Seventeenth Issue - Private Placement) 3
500
500
Rs. 10,00,000/- each with five equal Separately Transferable Redeemable Principal Parts (STRPP)
redeemable at par at the end of 6th year and in annual instalments thereafter upto the end of 10th year
respectively from 15th September 2003 (Eighteenth Issue - Private Placement)4
5,000
5,000
7.50% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs. 10,00,000/each redeemable at par on 12th January 2019 (Nineteenth Issue - Private Placement) 5
500
500
Rs. 20,00,000/- each with twenty equal Separately Transferable Redeemable Principal Parts
(STRPP) redeemable at par semi-annually commencing from 23rd September 2009 and ending
on 23rd March 2019 (Twentieth Issue - Private Placement) 6
5,000
-
7.7125% Secured Non-cumulative Non-Convertible Redeemable Taxable Bonds of
(STRPP) redeemable at par semi-annually commencing from 2nd August 2010 and ending on
2nd February 2020 (Twenty first issue - Private Placement) 7
10,000
-
10,274
12,319
9
11
57,327
44,407
Bonds
Loans and Advances from Banks
Foreign Currency Term Loans (Guaranteed by Government of India) (Due for repayment
within one year Rs.1,702 million, Previous year Rs.1,633 million) 8
Other Loans and Advances
Obligations under finance lease (Due for repayment within one year Rs. 4 million, Previous
Year Rs. 3 million) 9
TOTAL
Schedule 4
SECURED LOANS
Note:
78
1
Secured by (I) English mortgage of the office premises of the Company at Mumbai, (II) Hypothecation of all the present and future movable
assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal
Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project, Simhadri Super
Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal Power Project, Tanda Thermal
Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power
Station, Loharinag Pala Hydro Power Project and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge already
created in favour of the Company’s Bankers on such movable assets hypothecated to them for working capital requirement and (III) Equitable
Mortgage by deposit of title deeds of the immovable properties pertaining to Singrauli Super Thermal Power Station.
2
assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super
Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project,
Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal Power
Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power Station,
Feroze Gandhi Unchahar Power Station, Loharinag Pala Hydro Power Project and Tapovan-Vishnugad Hydro Power Project as first charge,
ranking pari-passu with charge already created in favour of the Company’s Bankers on such movable assets hypothecated to them for
working capital requirement and (III) Equitable mortgage of the immovable properties pertaining to Singrauli Super Thermal Power Station
by extension of charge already created.
3
Secured by (I) English mortgage of the office premises of the Company at Mumbai and (II) Equitable mortgage by deposit of title deeds
of the immovable properties pertaining to National Capital Power Station.
4
assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super
Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project,
working capital requirement and (III) Equitable mortgage of the immovable properties pertaining to National Capital Power Station by
extension of charge already created.
5
Secured by (I) English mortgage of the office premises of the Company at Mumbai and (II) Hypothecation of all the present and future
movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh
Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project,
working capital requirement.
6
Secured by (I) English mortgage of the office premises of the Company at Mumbai and (II) Equitable mortgage by deposit of title deeds
of the immovable properties pertaining to Ramagundam Super Thermal Power Station.
7
Secured by (I) English mortgage of the office premises of the Company at Mumbai, (II) Hypothecation of all the present and future
movable assets (excluding receivables) of Barh Super Thermal Power Project as first charge, ranking pari passu with charge already created
in favour of Trustee for other Series of Bonds and (III) Equitable mortgage of the immovable properties pertaining to Ramagundam Super
Thermal Power Station by extension of charge already created.
8
Secured by English mortage/hypothecation of all the present and future fixed and movable assets of Rihand Super Thermal Power Station
as first charge, ranking pari-passu with charge already created, subject to however, Company’s Banker’s first charge on certain movable assets
hyphothecated to them for working capital requirement.
9
Secured against fixed assets obtained under finance lease.
30th Annual Report
Schedule 5
UNSECURED LOANS
Rs. million
31.03.2006
31.03.2005
778
4,159
-
5,000
8,990
8,814
13,485
-
Foreign Currency Term Loans (Guaranteed by Government of India)
(Due for repayment within one year Rs.181 million , Previous year Rs. Nil)
23,064
24,723
Other Foreign Currency Term Loans (Due for repayment within one year Rs.1,584 million,
Previous year Rs.1,667 million)
10,272
7,885
Rupee Term Loans (Due for repayment within one year Rs.8,963 million, Previous year
Rs.7,618 million)
87,821
75,339
236
551
144,646
126,471
Fixed Deposits
(Due for repayment within one year Rs. 449 million, Previous year Rs. 3,337 million)
Bonds
7.552% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs.
20,00,000/- each with twenty equal Separately Transferable Redeemable Principal Parts
(STRPP) redeemable at par semi-annually commencing from 23rd September 2009 and
ending on 23rd March 2019 (Twentieth Issue - Private Placement - shown under Secured
Loans in current year on creation of security).
Foreign Currency Bonds / Notes
5.50 % Eurobonds due for repayment on 10th March 2011
nd
5.875 % Fixed Rate Notes due for repayment on 2 March 2016
From Banks and Financial Institutions
From Others
Loans from Government of India (Due for repayment within one year Rs.156 million,
Previous year Rs.315 million)
TOTAL
Schedule 6
FIXED ASSETS
Rs. million
Gross Block
Depreciation
As at
Deductions/
As at
1.04.2005 Additions Adjustments 31.03.2006
TANGIBLE ASSETS
Land :
(including development)
Freehold
9,977
Leasehold
1,855
Roads,bridges, culverts & helipads
3,626
Building :
Freehold
Main plant
16,301
Others
14,466
Leasehold
469
Temporary erection
188
Water Supply, drainage &
sewerage system
4,963
MGR track and signalling system
6,344
Railway Siding
2,365
Earth Dam Reservoir
1,481
Plant and machinery
358,736
Furniture, fixtures & other
office equipment
3,117
EDP, WP machines and
SATCOM equipment
2,185
Vehicles including speedboats
98
Construction equipment
944
Electrical Installations
1,796
Communication Equipments
590
Hospital Equipments
195
Laboratory and workshop equipments 119
Leased assets - Vehicles
14
Capital expenditure on assets
not owned by the Company
1,101
Assets of Government
28
Less:Grants from Government
28
Assets held for disposal valued at
net book value or net realisable value
whichever is less
31
INTANGIBLE ASSETS
Land - Right of Use
Software
Total
Previous year
(364)
(117)
2
10,440
2,572
3,773
279
608
44
63
(9)
1
332
670
10,440
2,240
3,103
9,977
1,576
3,018
416
653
15
(41)
(19)
-
16,758
15,138
469
203
7,973
3,686
108
185
535
389
16
12
(7)
5
-
8,515
4,070
124
197
8,243
11,068
345
6
8,328
10,780
361
3
33
16
10
26,694
11
(25)
(3)
11
616
4,985
6,385
2,378
1,470
384,814
1,231
4,232
556
269
182,222
251
268
113
69
19,268
4
(4)
1
42
1,478
4,504
668
338
201,448
3,507
1,881
1,710
1,132
183,366
3,732
2,112
1,809
1,212
176,514
199
9
3,307
2,072
120
11
2,181
1,126
1,045
185
4
90
90
34
8
7
1
44
7
21
(40)
1
1
-
2,326
95
1,013
1,926
623
202
126
15
1,589
81
582
900
321
118
93
3
141
3
51
79
20
8
2
4
33
7
21
3
1
1
-
1,697
77
612
976
340
125
95
7
629
18
401
950
283
77
31
8
596
17
362
896
269
77
26
11
73
-
(46)
-
1,220
28
28
757
-
197
-
-
954
-
266
28
28
344
28
28
-
17
14
-
-
-
-
14
31
7
94
36
(6)
(1)
13
131
49
44
-
93
13
38
7
45
431,062
29,412
78
460,396
207,914
21,697
110
229,501
230,895
223,148
400,281
29,588
(1,193)
431,062
187,736
20,258
80
207,914
223,148
212,545
Disposal/Retirement of assets
Cost adjustments
Assets capitalised with retrospective effect / Write back of excess capitalisation
Depreciation on construction equipment capitalised as IEDC
Others
30th Annual Report
As at
For
Deductions/
Upto
As at
As at
1.04.2005 the Year Adjustments 31.03.2006 31.03.2006 31.3.2005
99
600
149
Deduction/Adjustments from Gross Block includes
80
Net Block
Current Year
Previous Year
344
(41)
(816)
6
585
598
483
(1,172)
1
(1,103)
Deduction/Adjustments from Depreciation includes
Disposal/Retirement of assets
Assets capitalised with retrospective effect / Write back of excess capitalisation
Depreciation on construction equipment capitalised as IEDC
Others
Rs. million
Previous Year
395
(305)
1
(11)
Current Year
235
(171)
6
40
Depreciation for the the year is allocated as given below:Charged to Profit & Loss account
Adjustment in Cost of Coal / Fuel oil
Transferred to Incidental Expenditure during Construction (Schedule 26)
20,477
1,104
116
19,584
567
107
21,697
20,258
Schedule 7
CAPITAL WORK-IN-PROGRESS
Development of land
Roads, bridges, culverts & helipads
Piling and foundation
Buildings :
Main plant
Others
Temporary erection
Water supply, drainage and sewerage system
Hydraulic works, Barrages, Dams, Tunnels, and Power Channel
Railway siding
Earth dam reservoir
Plant and machinery :
On own account
On supply-cum-erection contract
Furniture, fixtures and other office equipment
EDP/WP Machines & SATCOM equipment
Construction Equipments
Electrical installations
Communication equipment
Intangible assets - software
Capital expenditure on assets not owned by the company
Exploratory Wells-in-Progress (* Rs.55,900/-)
Development of Coal Mines
Expenditure pending allocation
Survey, investigation, consultancy and supervision charges
Difference in exchange on foreign currency loans
Expenditure towards diversion of forest land
Pre-commisioning expenses (net)
Less: Allocated to Capital Work-in-Progress
Less: Provision for unserviceable works
Total
Previous Year
As at
1.04.2005
Additions
Deductions &
Adjustments
Capitalised
As at
31.03.2006
1,254
153
1,028
635
255
890
13
(91)
-
149
-
1,876
350
1,918
2,968
1,018
3
51
4,005
48
15
136
1,306
1,303
20
146
2,471
1,348
102
416
1,123
43
4
17
-
416
651
6
31
16
10
-
2,735
1,627
17
162
6,476
1,363
107
552
305
54,316
11
13
123
19
4
170
65,640
332
54,050
83
24
5
236
9
4
168
*
31
63,834
394
(1,238)
(8)
3
47
1
7
315
2
26,326
43
25
85
20
5
73
27,858
241
83,278
59
9
5
227
7
3
258
*
31
101,301
411
2
882
198
53
67,186
123
67,063
72
175
145
585
6,574
5,583
65,802
6
65,796
44
93
548
2
1,002
1,002
27,858
27,858
439
84
1,027
235
6,625
5,583
104,128
129
103,999
56,413
39,669
774
28,245
67,063
Schedule 8
CONSTRUCTION STORES AND ADVANCES
Rs. million
31.03.2006
31.03.2005
3,066
85
9,113
12,264
5
12,259
3,452
96
6,978
10,526
5
10,521
228
49
15,777
4,077
74
20,156
74
20,082
32,341
17,333
4,286
66
21,734
66
21,668
32,189
9,473
7,453
CONSTRUCTION STORES *
(At cost)
Steel
Cement
Others
Less: Provision for shortage
ADVANCES FOR CAPITAL EXPENDITURE
Secured
Unsecured, considered good
Covered by bank guarantees
Others
Considered doubtful
Less:Provision for bad & doubtful advances
Total
*includes material in transit, under inspection and with contractors
82
30th Annual Report
Schedule 9
INVESTMENTS
Rs. million
Number of Face value per
shares/bonds/
share/bond/
securities
security
31.03.2006 31.03.2005
Current Year/
Current Year/
(Previous Year) (Previous Year)
(Rs.)
I.
LONG TERM (Trade - unless otherwise specified)
A) Quoted
a) Government of India Dated Securities (Non-Trade)
45500000
(45500000)
100
(100)
5,084
5,102
(Includes Rs. NIL as balance of unutilised monies raised by issue of
shares, previous year Rs.5,102 million)
Less:- Amortisation of Premium
413
-
4,671
5,102
b) Trust Securities ( # )
6.60% UTI - ARS NCB Tax Free Bonds, 2009
321746
(2171332)
100
(100)
34
230
-
-
-
11
(110481)
(100)
7.75% IRFC Non Taxable Bonds (Series XXVII), 2011
14
(135)
1000000
(1000000)
16
160
8.50% Housing and Urban Development Corporation Limited
(HUDCO) Gujarat Punar Nirman Tax-Free Bonds Series 1A, 2007
18
(177)
500000
(500000)
10
98
10.40% Power Finance Corporation Ltd. Unsecured Tax-Free Bonds
1998 (Series I), 2008
117
(872)
100000
(100000)
14
105
(7)
(1000000)
-
7
10.40% Nuclear Power Corporation of India Ltd. Tax-Free Secured
Non Convertible Bonds, Series XI A2, 2007
(1771)
(100000)
-
198
Redeemable Non-Convertible Bonds, Series XII (LOA), 2013
(138)
(100000)
-
15
9.50% National Textile Corporation Limited Tax-Free Non Convertible
Bonds, 2006
445
(3436)
100000
(100000)
49
377
5.00% NABARD Unsecured, Non-Convertible Tax-Free Bonds, Series
IV G, 2008
2639
(15597)
10000
(10000)
27
158
Redeemable NCB SR-15 (LOA), 2016
24
(1561)
100000
(100000)
3
172
8.20% Nuclear Power Corporation of India Ltd. Tax- Free Secured
Redeemable NCB SR-18 (LOA), 2012 (*Rs.1,07,296/-)
1
(1113)
100000
(100000)
*
119
14
(286)
1000000
(1000000)
14
286
12000000
(12000000)
10
(10)
120
120
4,958
7,158
6.75% UTI - NCB Tax Free Bonds, 2008
c) Bonds
(#)
4.75% Nuclear Power Corporation of India Ltd. Secured NonConvertible Bonds (LOA), Series XXIV, 2019
5.15 % Non Priority Sector Tax-Free Housing and Urban Development
Corporation Limited (HUDCO) Bonds Series XXXIV, 2014
d) Equity Shares in Joint Venture Company
PTC India Ltd.
Sub Total (A)
Schedule 9
INVESTMENTS
Rs. million
Number of
shares/bonds/
securities
Face value per
share/bond/
security
Current Year/
(Previous Year)
Current Year/
(Previous Year)
(Rs.)
31.03.2006
31.03.2005
B) Unquoted
a) Bonds
i) 8.50 % Tax-Free State Government Special Bonds of the Government of ( ## )
Andhra Pradesh
12606500
(12606500)
1000
(1000)
12,607
12,607
514640
(514640)
1000
(1000)
515
515
18944000
(14666600)
1000
(1000)
18,944
14,667
Chattisgarh
4832200
(4832200)
1000
(1000)
4,832
4,832
Gujarat
8372400
(8372400)
1000
(1000)
8,372
8,372
Haryana
10750000
(10750000)
1000
(1000)
10,750
10,750
333880
(333880)
1000
(1000)
334
334
Jammu and Kashmir
3673600
(3673600)
1000
(1000)
3,674
3,674
Jharkhand
9601216
(6222716)
1000
(1000)
9,601
6,223
Karnataka
1966100
(1966100)
1000
(1000)
1,966
1,966
10024000
(10024000)
1000
(1000)
10,024
10,024
Madhya Pradesh
8308400
(8308400)
1000
(1000)
8,308
8,308
Maharashtra
3814000
(3814000)
1000
(1000)
3,814
3,814
Orissa
11028740
(11028740)
1000
(1000)
11,029
11,029
Punjab
3462300
(3462300)
1000
(1000)
3,462
3,462
Rajasthan
2900000
(2900000)
1000
(1000)
2,900
2,900
341960
(341960)
1000
(1000)
342
342
4650660
(4650660)
1000
(1000)
4,651
4,651
39899000
(39899000)
1000
(1000)
39,899
39,899
Uttaranchal
3996500
(3996500)
1000
(1000)
3,996
3,996
West Bengal
11742480
(11742480)
1000
(1000)
11,742
11,742
Assam
Bihar
Himachal Pradesh
Kerala
Sikkim
Tamil Nadu
Uttar Pradesh
84
30th Annual Report
Schedule 9
INVESTMENTS
ii)
Rs. million
Number of
shares/bonds/
securities
Face value per
share/bond/
security
Current Year/
(Previous Year)
Current Year/
(Previous Year)
(Rs.)
Other Bonds
12.50% Secured Non-Convertible Redeemable Western Electricity
Supply Company (WESCO) Bonds, Series - I/2000, 2007
12.50% Secured Non-Convertible Redeemable North Eastern
Electricity Supply Company (NESCO) Bonds, Series - I/2000, 2007
12.50% Secured Non-convertible Redeemable Southern Electricity
Supply Company (SOUTHCO) Bonds, Series - I/2000, 2007
10.00% Secured Non-Cumulative Non-Convertible Redeemable Grid
Corporation of Orissa (GRIDCO) Power Bonds, Series-1/2003 , 03/02,2009
Corporation of Orissa (GRIDCO) Power Bonds, Series-1/2003,
04-09/02,2009
Corporation of Orissa (GRIDCO) Power Bonds,
Series-1/2003 - 10/02,2009
Corporation of Orissa (GRIDCO) Power Bonds,
Series-1/2003, 02/02 &11/02,2009
7.90% Secured Non-Convertible Redeemable Tax free PSU Bonds
(VIII issue) - North Eastern Electric Power Corporation Ltd. (NEEPCO)
Bonds, 2010 #
8.75%IREDA (Tax-Free) Bonds (Series IX), 2008#
6.00%IREDA (Tax-Free) Bonds (Series X), 2013#
5.50%IREDA (Tax- Free) Bonds (Series XI), 2013#
b) Equity Shares in Joint Venture Companies
Utility Powertech Ltd.
NTPC-Alstom Power Services Private Ltd.
NTPC-SAIL Power Company Private Ltd.
Bhilai Electric Supply Company Private Ltd.
NTPC-Tamil Nadu Energy Company Ltd.
c) Equity Shares in Subsidiary Companies
*(current year Rs. 8,09,100/-, previous year Rs.8,09,100/-)
NTPC Hydro Ltd.
d) Share application money pending allotment in :
NTPC Hydro Ltd.
Ratnagiri Gas & Power Private Ltd.
e) Shares in Cooperative Societies
Sub Total (B)
Sub Total ( I )
31.03.2006
31.03.2005
721
1,030
1,169
1,670
910
1,300
200
266
1,709
1,953
10300
(10300)
16700
(16700)
13000
(13000)
2660
(2660)
19536
(19536)
70000
(100000)
70000
(100000)
70000
(100000)
75000
(100000)
87500
(100000)
5970
(5970)
100000
(100000)
597
597
(6119)
(100000)
-
612
5
(281)
1000000
(1000000)
5
295
5510
(42175)
6612
(48235)
7348
(38445)
1000
(1000)
1000
(1000)
1000
(1000)
6
46
7
51
8
40
1000000
(1000000)
3000000
(3000000)
58650050
(58650050)
106600000
(56600000)
500000
(500000)
10
(10)
10
(10)
10
(10)
10
(10)
10
(10)
10
10
30
30
587
587
1,066
566
5
5
370000
(365000)
80910
(80910)
10
(10)
10
(10)
4
4
*
*
20000000
(20000000)
10000000
(4562110)
10
(10)
10
(10)
200
200
100
46
5,000
ß
184,096
2
ß
173,417
189,054
180,575
Schedule 9
INVESTMENTS
II. CURRENT (Non - Trade - Quoted)
Government of India Treasury Bills
Government of India Dated Securities
Rs. million
Number of
shares/bonds/
securities
Face value per
share/bond/
security
31.03.2006
31.03.2005
Current Year/
(Previous Year)
Current Year/
(Previous Year)
(Rs.)
40000000
(277902500)
100
(100)
3,837
27,079
(3177320)
(100)
-
323
Sub Total ( II )
Total ( I + II )
3,837
27,402
192,891
207,977
Quoted Investments
Book Value
8,795
34,560
Market Value
9,516
35,249
184,096
173,417
42,051
3,432
70
-
Rs.
Rs.
Unquoted Investments
Book Value
During the year the following current investments were purchased and realised on maturity (at cost)
Government of India
Treasury bills
Dated Securities
(#)
Development Surcharge Fund Investments
(# #)
Includes bonds of Rs.34,353 million (previous year Rs. 32,821 million) permitted for transfer/trading
by Reserve Bank of India. Balance can be transferred/ traded subject to prior approval of
Reserve Bank of India.
ß
86
Shares in Co-operative societies (unquoted)
NTPC Employees Consumers and Thrift Co-operative
Society Ltd. Korba
500
(500)
10
(10)
5,000
5,000
NTPC Employees Consumers and Thrift Cooperative
Society Ltd. Ramagundam
250
(250)
10
(10)
2,500
2,500
NTPC Employees Consumers Cooperative Society Ltd. Farakka
500
(500)
10
(10)
5,000
5,000
NTPC Employees Consumers Cooperative Society Ltd. Vindhyachal
108
(108)
25
(25)
2,700
2,700
NTPC Employees Consumers Cooperative Society Ltd. Anta
500
(500)
10
(10)
5,000
5,000
NTPC Employees Consumers Cooperative Society Ltd. Kawas
500
(500)
10
(10)
5,000
5,000
NTPC Employees Consumers Cooperative Society Ltd. Kaniha
250
(250)
20
(20)
5,000
5,000
30,200
30,200
30th Annual Report
Schedule 10
INVENTORIES
31.03.2006
Rs. million
31.03.2005
12,894
42
7,476
887
690
759
805
76
23,629
24
200
23,405
666
11,904
41
3,115
823
645
670
758
59
18,015
24
172
17,819
684
656
8,363
9,019
7,866
8,360
16,226
8,022
17,041
8,363
8,678
5,881
22,107
8,360
13,747
153
1,569
13
308
50
308
1,294
82,887
1,746
57,050
59
60
84,714
60,783
(Valuation as per Accounting Policy No. 9)
Components and spares
Loose tools
Coal
Fuel Oil
Naphtha
Chemicals & consumables
Others
Steel Scrap
Less: Provision for shortage
Provision for obsolete/ unserviceable items
Total
Inventories include stores in transit
Schedule 11
SUNDRY DEBTORS
Debts outstanding over six months
Considered doubtful
Other debts
Less: Provision for bad & doubtful debts
Total
Schedule 12
CASH & BANK BALANCES
Cash on hand (includes cheques, drafts, stamps on hand Rs.150 million,
previous year Rs.1,566 million)
Remittances in transit
Balance with Reserve Bank of India earmarked for fixed deposits from public
Balances with scheduled banks (a)
Current Account (b)
Term Deposit Account (c)(d)
Balance with other banks
Call Deposit Account
West Merchant Bank Limited,London
(maximum amount outstanding at any time during
the year Rs.60 million, previous year Rs.60 million)
Total
(a) Includes Rs.1,00,007/-(previous Year Rs.4,32,570/- ) in respect of Development Surcharge.
(b) Includes Rs.44 million of Unclaimed Dividend (previous year Rs.37 million)
(c) Rs. 14 million (previous year Rs.11 million) deposited as security with Government authorities/as per court orders.
(d) Includes Rs.Nil as balance of unutilised monies raised by issue of shares (previous year Rs.11,316 million).
Schedule 13
OTHER CURRENT ASSETS
Interest accrued :
Bonds
Development surcharge investments
Term Deposits
Others
Others Recoverables
Total
31.03.2006
Rs. million
31.03.2005
8,615
6
153
1241
103
43
10,161
8,640
59
137
834
65
29
9,764
4,575
1,053
1
4,696
1,082
1
403
722
9,573
9,573
500
4
500
206
238
146
6
901
1
2
546
3
77
1
68
1
494
289
18,116
765
21
18,332
965
40
332
1,012
40
66
18,789
19,318
870
35,731
25,103
10,628
30,287
196
691
18,590
11,606
6,984
26,993
122
1
438
1
353
2
522
2
438
Schedule 14
LOANS AND ADVANCES
LOANS
Employees (including accrued interest)
Secured
Considered doubtful
Government of India (for transfer of transmission systems)
Loan to State Government in settlement of dues from customers
Others
Secured
ADVANCES
(recoverable in cash or kind for value to be received)
Subsidiary Companies
Contractors & suppliers, including material issued on loan
Secured
Considered doubtful
Employees (including imprest)
Considered doubtful
Others
Considered doubtful
Claims recoverable
Considered doubtful
Less: Provision for bad and doubtful loans, advances
and claims
DEPOSITS
Deposits with customs, port trust and others (#)
Advance tax deposit & tax deducted at source
Less: Provision
Total
(#) Sales Tax deposited under protest with sales tax authorities
Due from Directors & Officers of the Company
Directors
Officers
Maximum Amount
Directors
Officers
88
30th Annual Report
Schedule 15
CURRENT LIABILITIES
Sundry Creditors
For capital expenditure
Other than Small Scale Industrial Undertakings
For goods and services
Small Scale Industrial Undertakings
Others
Book overdraft
Deposits, retention money from contractors and others
Less: Investments held as security
Advances from customers and others
Investor Education and Protection Fund shall be credited by
Unpaid matured Bonds (*Rs.2,000/-)
Interest accrued on unpaid matured deposits/bonds (*Rs.3,10,366/-)
Other liabilities
Unclaimed dividend (#)
Interest Accrued but not due :
Loans from Government of India
Foreign currency loans/bonds
Term loans in Indian currency
Bonds
Fixed deposits from public
Total
31.03.2006
Rs. million
31.03.2005
11,692
12,216
8
13,049
128
11,289
109
36,057
9,886
14
11,578
9,473
113
33,168
14,431
*
*
977
44
1
1
2,999
37
9
362
517
1,173
77
21
300
299
967
82
49,102
52,306
209
209
-
-
9,895
6,596
9,895
6,596
10,823
9,895
10,823
9,895
1,388
925
1,388
925
1,387
1,388
1,387
1,388
3,867
1,279
376
4,770
3,193
1,095
421
3,867
-
286
286
-
11
1
3
9
12,300
8
4
1
11
15,161
(#) No amount is due for payment to Investor Education and Protection Fund
Schedule 16
PROVISIONS
Fringe Benefit Tax
Additions during the year
Less:Advance tax deposited
Proposed dividend
As per last balance sheet
Amounts used during the year
Tax on proposed dividend
Retirement benefits
Tariff adjustment
Amounts reversed during the year
Others
Amounts written off during the year
Total
Schedule 17
CONTIGENT LIABILITIES
Claims against the Company not acknowledged as debt in respect of:
Capital works
Land compensation cases
Others
Disputed Income Tax demand *
Disputed Sales Tax demand
Letters of Credit other than for capital expenditure
Others
Total
31.03.2006
Rs. million
31.03.2005
7,153
3,166
6,902
11,269
189
2,951
32
31,662
7,084
5,508
5,802
11
197
1,008
58
19,668
Current Year
Previous Year
263,492
1,505
471
262,458
452
262,910
228,526
1,791
8
226,743
333
227,076
5
1
2
9
6
23
5,927
5
3
286
1
9
2
2
6,235
* Possible reimbursement Rs.6,662 million (Previous year Nil)
Schedule 18
SALES
Energy Sales (including Electricity Duty)
Less : Advance against Depreciation deferred
Add: Revenue recognised out of Advance against Depreciation
Consultancy, project management and supervision fees (including turnkey construction projects)
Total
Schedule 19
PROVISIONS WRITTEN BACK
Doubtful debts
Doubtful advances and claims
Doubtful construction advances
Adjustment in tariff
Shortage in construction stores
Shortage in stores
Obsolescence in stores
Others
Total
90
30th Annual Report
Schedule 20
OTHER INCOME
Current Year
Rs. million
Previous Year
Income from Long Term Investments
Trade
Dividend from Subsidiaries
Dividend from Joint Ventures
30
6
118
111
16,877
13,949
700
843
Interest
Government Securities (8.5% tax free bonds issued by the State Governments)
Other Bonds (Gross) (Tax deducted at source Rs.161 million, Previous year Rs.195 million )
Non-Trade
Interest from Government of India Securities (Gross)
618
Less: Amortisation of premium
413
156
205
156
Income from Current Investments (Non-Trade)
Interest from Government of India Securities (Gross) (Tax deducted at source Nil)
Income on redemption of Government of India Treasury Bills
14
6
1,399
37
Income from Others
Interest (Gross) (Tax deducted at source Rs.1,159 million, Previous year Rs.76 million )
Public Deposit Account with Government of India
Indian banks
Foreign banks
Employees’ loans
Others
Interest on Income Tax refunds
1,151
Less: Refundable to customers
1,151
Surcharge on late payment from customers
814
595
-
3,573
4,780
1,065
3
2
237
259
107
152
-
-
-
384
2,460
Hire charges for equipment
14
24
Profit on disposal of fixed assets
41
37
1,012
1,313
26,735
24,588
657
1,059
26,078
23,529
8,582
7,584
Miscellaneous income
Less:Income transferred to Incidental expenditure during construction-Schedule 26
Total
Schedule 21
EMPLOYEES’ REMUNERATION AND BENEFITS
Salaries, wages, bonus, allowances & benefits
Contribution to provident and other funds
Welfare expenses
Less: Adjusted in fuel cost
Transferred to Development of Coal Mines
986
854
1,807
1,726
11,375
10,164
522
205
12
-
Transferred to incidental expenditure during construction - Schedule 26
1,157
1,136
Total
9,684
8,823
Schedule 22
GENERATION, ADMINISTRATION & OTHER EXPENSES
Current Year
Power charges
Less: Recovered from contractors & employees
Water charges
Stores consumed
Rent
Less:Recoveries
Repairs & Maintenance
Buildings
Plant & Machinery
Power stations
Others
Insurance
Rates and taxes
Water Cess & Environment Protection Cess
Training & Recruitment expenses
Less: Fees for training and application
Communication expenses
Travelling Expenses
Tender expenses
Less: Receipt from sale of tenders
Payment to Auditors
Advertisement and publicity
Security expenses
Entertainment expenses
Expenses for guest house
Less:Recoveries
Education expenses
Brokerage & commission
Donations
Community development and welfare expenses
Less: Grants-in-aid
48
436
72
364
442
179
78
48
30
559
568
542
71
471
553
204
108
60
66
30
239
34
68
74
556
2
13
88
6
14,251
782
19
729
6,229
20
6,249
273
765
164
252
260
25
235
171
818
72
10
62
10
57
893
59
51
9
42
120
9
97
72
72
79
9
70
31
177
79
67
74
505
3
2
4
199
13,142
409
671
12,721
12,062
4,453
3,870
7043
8
7,051
264
559
131
257
307
23
284
197
930
81
9
72
20
68
1002
74
57
10
47
113
7
4
167
7
160
Ash utilisation & marketing expenses
Less: Sale of ash products
Books and periodicals
Professional charges and consultancy fees
Legal Expenses
EDP hire and other charges
Printing and stationery
Miscellaneous expenses
Stores written off
Claims/Advances written off
Survey & Investigation expenses written off
Loss on disposal/write-off of fixed assets
Loss on maturity of current Investments
Less: Adjusted in cost of fuel
Total
Stores consumption included in repairs and maintenance
92
30th Annual Report
Rs. million
Previous Year
67
1
Schedule 23
PROVISIONS
Rs. million
Current Year
Doubtful debts
Previous Year
3
-
292
30
Doubtful advances for construction
9
-
Shortage in stores
9
7
34
27
3
2
Unserviceable capital work-in-progress
6
4
Others
Total
1
5
357
75
3,301
2,814
Schedule 24
INTEREST AND FINANCE CHARGES
Interest on :
Bonds
54
99
Foreign Currency Term Loans
1,155
1,282
Rupee Term loans
6,388
4,959
Public deposits
131
378
Foreign currency Bonds/Notes
694
624
Others
Exchange differences regarded as adjustment to interest costs
129
152
(2,469)
(568)
9,383
9,740
Finance Charges :
Bonds servicing & public deposit expenses
Guarantee Fee
Management Fee
18
13
405
443
-
85
99
1,069
Rebate under Scheme for Settlement of SEB dues
8,047
6,813
Rebate to customers
4,244
3,828
57
13
8
8
Bond Issue Expenses
2
5
Exchange differences
123
6
Commitment charges/ Exposure premium
Reimbursement of L.C.charges on Sales Realisation
Bank Charges
Foreign currency Bonds/ Notes issue expenses
98
-
Others
58
32
13,159
12,315
22,542
22,055
4,910
5,100
17,632
16,955
Less: Interest and Finance charges capitalised by transfer to
incidental expenditure during construction - Schedule 26
Total
Schedule 25
PRIOR PERIOD INCOME/EXPENDITURE (NET)
Rs. million
INCOME
Sales
Others
EXPENDITURE
Salary, wages, bonus, allowances & benefits
Repairs and Maintenance
Depreciation
Interest
Professional consultancy charges
Rates & Taxes
Power charges
Insurance
Rent
Fuel
Others
Less: Incidental expenditure during construction - Schedule 26
Total
94
30th Annual Report
Current Year
Previous Year
35
4
39
1,080
22
1,102
3
86
171
2,197
64
(6)
12
34
2,561
2,522
34
2,488
(8)
20
305
888
1
12
(1)
(27)
(201)
14
1,003
(99)
3
(102)
Schedule 26
INCIDENTAL EXPENDITURE DURING CONSTRUCTION
Rs. million
Current Year
Previous Year
Salaries, wages, allowances and benefits
876
887
110
86
Welfare expenses
171
163
1,157
1,136
A. Employees remuneration and other benefits
Total (A)
B. Other Expenses
Power charges
Less: Recovered from contractors & employees
103
149
10
13
136
Water charges
Rent
93
3
-
25
17
Repairs & maintenance
Buildings
Others
24
49
1
11
31
36
61
Insurance
Rates and taxes
Travelling expenses
Tender expenses
Less: Income from sale of tenders
91
5
4
16
30
32
28
138
125
27
24
2
1
23
25
2
2
14
12
Security expenses
84
63
13
1
Guest house expenses
4
3
Payment to Auditors
Education expenses
-
1
3
4
Community development expenses
7
4
Professional charges and consultancy fee
33
37
Legal expenses
3
3
EDP Hire and other charges
9
9
11
10
107
109
Total (B)
729
671
Depreciation (C)
116
107
2,002
1,914
Total (A+B+C)
Rs. million
D. Interest and Finance Charges
Current Year
Previous Year
865
650
Interest on
Bonds
Rupee Term loans
Foreign currency Bonds/Notes
67
2
3,210
2,738
396
520
-
1,069
Finance Charges
Guarantee Fee
Commitment charges
11
-
Management fee / arrangers fees
88
85
118
-
Foreign currency Bonds/Notes issue expenses
98
-
Others
57
36
4,910
5,100
Indian Banks
285
287
Employees
21
21
Total (D)
E. Less Other Income
Interest from
Government of India Securities out of unutilised
monies raised by issue of shares
532
368
Others
Hire Charges
Sale of scrap
164
56
8
1
122
156
330
6
259
Total (E)
657
1,059
34
3
F. Prior Period Adjustments
G. Income / Fringe Benefit Tax
GRAND TOTAL (A+B+C+D-E+F+G)
96
156
30th Annual Report
285
-
6,574
5,958
Schedule 27
NOTES ON ACCOUNTS
1.
The name of the Company has changed from “National Thermal Power Corporation Limited” to “NTPC Limited” with effect from 28th October, 2005.
2.
a) The conveyancing of the title to 5,665 acres of freehold land of value Rs. 2,571 million (previous year 7,157 acres, value Rs. 3,126 million)
and execution of lease agreements for 6,873 acres of value Rs. 849 million (previous year 6,940 acres, value Rs.733 million) in favour of the
Company are awaiting completion of legal formalities.
b) Land shown in the books does not include cost of 1,148 acres (previous year 1,148 acres) of land in possession of the Company. This will
be accounted for on settlement of the price thereof by the State Government Authorities. Land includes 345 acres of value Rs.28 million
(previous year 345 acres value Rs.28 million) not in possession of the Company.
c) Land includes amount of Rs. 1,206 million (previous year Rs.1,128 million) deposited with various authorities in respect of land in possession
which is subject to adjustment on final determination of price.
d) The cost of Right of Use of land for laying pipelines amounting to Rs.13 million (previous year Rs.7 million) is included under intangible
assets.
3.
a) The Central Electricity Regulatory Commission (CERC) has notified by regulations in March 2004, the terms and conditions for determination of
tariff applicable with effect from 1st April 2004 for a period of five years. Pending final determination of tariff for the period 1st April 2004
onwards, CERC has directed by notification that on provisional basis, the annual fixed charges as applicable on 31st March 2004 shall be
billed at target availability and variable charges based on norms of operation notified in Regulations, 2004. The amount billed for the year on
this basis is Rs. 268,301 million (previous year Rs.230,663 million). Since the amount billed is subject to adjustment with effect from 1 stApril
2004, pending final determination of the tariff by CERC, sales amounting to Rs. 257,179 million (previous year Rs.221,380 million) for the year
have been provisionally recognised on the basis of principles enunciated by the CERC in Regulations, 2004.
Further, Rs. 603 million pertaining to previous year has been recognised in sales due to revision in the amounts provisionally billed based on
orders of the CERC/Appellate Tribunal for Electricity.
b) CERC has issued orders in December 2000 with respect to the tariff norms, principles and Availability Based Tariff (ABT). The company filed
an appeal against the orders of CERC before the Delhi High Court which has since been transferred to the Appellate Tribunal for Electricity.
Pending disposal of the appeal, CERC has notified by regulations, the terms and conditions for determination of tariff, effective from 1st April
2001 to 31st March 2004. CERC issued final tariff orders based on above regulations in respect of all the stations up to 31st March, 2004 except
for Rihand STPS Stage-I. During the year in respect of Rihand STPS Stage-I, an amount of Rs. 101 million has been accounted for in sales
(reduction of Rs.39 million in the previous year) in line with above regulations and principles followed in the final tariff orders issued for other
stations of the company.
In case of stations for which final tariff orders have been issued by the CERC for the period up to 31st March, 2004, sales for the said period
amounting to Rs. 2,282 million (previous year Rs.2,768 million) has been accounted for during the year. Based on the orders of
CERC admitting the additional capital expenditure for some of the stations for the period 2001-04 and the principles enunciated therein,
Rs. 536 million (previous year Rs.474 million) has been provisionally accounted as sales during the year which is to be billed on issuance of
station specific tariff orders by CERC.
4.
Depreciation has been charged at the rates specified in Schedule XIV of the Companies Act,1956 except as stated in accounting policy
No.10.2.1. The Government of India in January 2006 notified the Tariff Policy under the provisions of the Electricity Act, 2003 which provides that
the rates of depreciation notified by the CERC would be applicable for the purpose of tariffs as well as accounting. Subsequent to the notification
of the Tariff Policy, CERC has not notified the rates of depreciation. The Company has been advised that the Tariff Policy cannot override the
provisions of the Companies Act,1956 and it is required to follow Schedule XIV of the Companies Act,1956 in the absence of any specific
deviation contained in the Electricity Act, 2003 which could be said to have been saved by Sec.616 of the Companies Act,1956. The Company
has also been advised that there is no such provision in the Electricity Act,2003 either prescribing the rates of depreciation for the generating
company or otherwise empowering any authority for providing depreciation rates for accounting purposes in supercession of the provisions of
the Companies Act, 1956.
5.
Due to uncertainty of realisation in the absence of sanction by the Government of India (GOI), the company’s share of net annual profits of
Badarpur Thermal Power Station for the years 1986-87 to 2004-05 amounting to Rs. 1,155 million (previous year Rs. 1,174 million) being balance
receivable in terms of the management contract with the GOI has not been recognised.
6.
CERC notification dated 26th March,2001 in respect of tariff norms for the period 2001-04 directed to collect Development Surcharge from
beneficiaries. Subsequently, CERC vide its order dated 9th November 2004 directed that the amount collected and invested in instruments
corresponding to the amount contributed by each of the state utilities with interest shall be transferred in the name of concerned utility at the
latter’s expense. The company paid/adjusted the same as per CERC directions and the outstanding balance yet to be transferred as on
31st March, 2006 is as under:
(Rs. Million)
Sl. No.
Description of the Account
Schedule No.
31.03.2006
31.03.2005
1
Investment in different tax-free bonds
9
193
2367
2
Bank balance in Current Account
12
*
**
3
Interest accrued on Sl. No. 1
13
6
59
199
2426
Total
*Rs.1,00,007/- **Rs.4,32,570/-
7.
Pursuant to the Government of India Scheme for Settlement of Dues of State Electricity Boards (Scheme), Governments of Jharkhand and Bihar
issued notifications during December 2005 for issue of 8.5% Tax-Free special bonds with effect from 1st October 2001 for Rs.3,378 million and Rs.
4,277 million respectively towards outstanding dues. Accordingly, Investment of Rs. 7,655 million, interest income on the bonds amounting to
Rs.2,928 million, rebate of Rs.1,198 million payable to State Electricity Boards/Successor Entities under the Scheme have been recognised,
including Rs.2,278 million towards interest and Rs.892 million towards rebate pertaining to the period upto 31st March, 2005.
8.
In accordance with the Uttar Pradesh Electricity Reforms (Transfer of Tanda Generation Undertaking) Scheme 2000, the assets for Rs.6,070 million
(previous Year Rs.6,070 million) of Tanda Power Station of UP State Electricity Board (UPSEB) were handed over to the Company free from all
encumbrances. However, the charge created by UPSEB in favour of Life Insurance Corporation of India (LIC) before the assets were taken over is
still to be vacated by LIC.
9.
The company has provided Rs.3,401 million in previous years in respect of amounts reimbursable to Government of India (GOI) in terms of Public
Notice No.38 dated 5th November, 1999 and Public Notice No.42 dated 10th October, 2002 towards cash equivalent of the relevant deemed
export benefits paid by GOI to the contractors for Talcher Super Thermal Power Project Stage-II based upon the details provided by the contractors.
During the year, Rs.2678 million was paid on receipt of procedural details from the GOI for depositing the amount. The balance provision has
been revised to Rs.91 million on the basis of additional information received from the contractors, and the difference of Rs.632 million was
adjusted against the related assets. No interest has been provided on the reimbursable amounts as there is no stipulation for payment of interest
in the public notices cited above.
10. The Company has raised Rs.26,840 million through public issue of shares in 2004-05. The entire proceeds of the issue, net of issue expenses, were
utilised for part financing the capital expenditure on the specified projects.
11. Out of Rs.109 million accounted as recoverable from the Government of India (GOI) towards its share of expenses for the initial public issue of
shares made in the previous year, the GOI has approved payment of Rs.56 million. Consequently, an amount of Rs.53 million has been adjusted
against the Share Premium Account.
12. a) Balances shown under advances, creditors and material lying with contractors/ fabricators and material issued on loan in so far as these have
since not been realised/ discharged or adjusted are subject to confirmation/reconciliation and consequential adjustment, if any.
b) In the opinion of the management, the value of current assets, loans and advances on realisation in the ordinary course of business, will not
be less than the value at which these are stated in the Balance Sheet.
13. Effects of change in Accounting Policies
a) Exchange differences on foreign currency loans contracted before 1st April, 2000 for acquisition of fixed assets within India were hitherto
adjusted in the carrying cost of related fixed assets. In line with the opinion received from the Institute of Chartered Accountants of India
during the year, the Company has treated such exchange differences to the extent regarded as adjustment to interest cost as ‘borrowing
costs’ w.e.f. 1stApril 2000. Consequently, during the current year there has been decrease in Interest and Finance charges by Rs.1,364 million,
increase in Depreciation by Rs.166 million, Prior period adjustment of Rs.1,986 million and decrease in the Profit by Rs.788 million.
b) In pursuance of Accounting Policy No.8.3, Rs.413 million has been amortised during the year out of the premium paid on long term
investments which was hitherto not being done. As a result profit for the year is lower by Rs.45 million and Capital Work-In-Progress is
higher by Rs.368 million.
c) Expenses by way of repairs and maintenance, depreciation, employee cost and insurance charges relating to the coal handling system used
for bringing coal to its present location and condition at the power stations have been considered for valuation of the coal during the year
which was hitherto not being done. The total expenses incurred under these items during the year are Rs.1,090 million. Due to inclusion of
the above expenses, the closing stock of coal and profit for the year is more by Rs.82 million.
14. The effect of foreign exchange fluctuation during the year is as under :
i)
The amount of exchange differences (net) credited to the Profit & Loss Account is Rs. 2 million (previous year credit, Rs.9 million).
ii) The amount of exchange differences debited to the carrying amount of fixed assets and Capital Work-in-Progress is Rs.317 million (previous
year credit, Rs.145 million).
15. Revenue Grants recognised during the year in respect of expenditure incurred in the previous years amount to Rs.1 million (previous year Nil) .
16. Borrowing costs capitalised during the year are Rs. 4,785 million (previous year Rs.5,100 million).
17. Segment information
a) Business Segments: The Company’s principal business is generation and sale of bulk power to SEBs/State utilities. Other business includes
providing consultancy, project management and supervision, oil and gas exploration and coal mining.
b) Segment Revenue and Expense: Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable
to the segments and common expenses allocated on a reasonable basis are considered as Segment Expenses.
c) Segment Assets and Liabilities: Segment assets include all operating assets in respective segments comprising of net fixed assets and current
assets, loans and advances. Construction work-in-progress, construction stores and advances are included in unallocated corporate and
other assets. Segment liabilities include operating liabilities and provisions.
98
30th Annual Report
Rs. Million
Business Segments
Generation
Current Year
Others
Total
Previous Year Current Year Previous Year Current Year Previous Year
Revenue :
Sale of Energy/Consultancy,
Project Management and Supervision fees
260,701*
225,069*
452
333
261,153
225,402
276
248
-
-
276
248
Total
260,977
225,317
452
333
261,429
225,650
Segment Result
45,837#
49,467#
224
188
46,061
49,655
Unallocated Corporate Interest
and Other Income
24,659
19,843
Unallocated Corporate Expenses,
Interest and Finance Charges
10,496
8,716
2,022
2,712
58,202
58,070
267,406
259,867
Internal Consumption of Electricity
Income Taxes (Net)
Profit after Tax
Other information
Segment Assets
266,989
259,465
417
402
449,965
399,616
266,989
259,465
417
402
717,371
659,483
37,620
38,074
214
176
37,834
38,250
225,541
200,095
Unallocated Corporate and Other Assets
Total Assets
Segment liabilities
Unallocated Corporate and other liabilities
Total liabilities
37,620
38,074
214
176
263,375
238,345
Depreciation
20,320
19,438
1
1
20,321
19,439
355
67
-
-
355
67
65,854
54,702
32
2
65,886
54,704
Non-cash expenses other than Depreciation
Capital Expenditure
* Includes Rs.3,522 million ( previous year Rs.3,689 million) for sales related to earlier years.
# Segment result would have been Rs. 42,315 million (previous year Rs.45,778 million) without including the sales related to earlier years.
d) The operations of the Company are mainly carried out within the country and therefore, geographical segments are inapplicable.
18. Related party disclosures
a) Related parties:
i)
List of joint ventures:
Utility Powertech Limited, NTPC-Alstom Power Services Private Ltd., PTC India Ltd.
ii)
Key Management Personnel:
Chairman and Managing Director1
Shri C.P. Jain
Director (Projects)
Shri K.K.Sinha
Director (Human Resources)2
Shri P. Narasimharamulu
Director (Finance)3
Shri Chandan Roy
Shri R.S.Sharma
Shri R.K. Jain
Director (Technical)4
Director (Finance)5
Shri A.K.Singhal
st
1. Superannuated on 31 March 2006 2. Resigned w.e.f 27th June 2005 3. Superannuated on 31st July 2005 4. W.e.f. 5th May 2005
5. W.e.f. 1st August 2005
b) Transactions with the related parties at a
(i) above are as follows :
(Rs. Million)
Particulars
Current Year
Previous Year
• Transactions during the year
945
854
• Amount recoverable from related parties
42
6
• Amount payable to related parties
185
142
15
10
3
2
Dividend Received
28
21
11
7
• Amount recoverable from the related parties
2
1
Contracts for Works/ Services for services received by the company
Contracts for Works/ Services for services provided by the company
Deputation of Employees
c) Remuneration to key management personnel is Rs. 10 million (previous year Rs. 8 million) and amount of dues outstanding to the
company as on 31st March 2006 are Rs.1 million (previous year Rs.1 million).
19. Disclosure regarding leases
a) Finance leases
The Company has taken on lease certain vehicles and has the option to purchase the vehicles as per terms of the lease agreements,
details of which are as under:
Rs. million
31.03.2006
31.03.2005
a) Outstanding balance of minimum lease payments
• Not later than one year
4
4
• Later than one year and not later than five years
6
9
Total
10
13
4
3
5
8
Total
9
11
1
2
b) Present value of (a) above
c) Finance Charges
b) Operating leases:
The company’s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices and
guest houses/transit camps. These leasing arrangements are usually renewable on mutually agreed terms but are not non-cancellable.
Employees’ remuneration and benefits include Rs. 184 million (previous year Rs. 163 million) towards lease payments, net of recoveries, in
respect of premises for residential use of employees. Lease payments in respect of premises for offices and guest house/transit camps are
shown as Rent in Schedule 22 – Generation, Administration and other expenses. Miscellaneous income in Schedule 20 – Other Income,
includes Rs.1 million (previous year Rs.1 million) towards sub-lease payments received/recoverable.
100 30th Annual Report
20. Earnings per share
The elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:
Current Year
Net Profit after Tax used as numerator (Rs. Million)
Previous year
58,202
58,070
8,245,464,400
7,997,576,085
Earning Per Share Basic and Diluted (Rupees)
7.06
7.26
Face value per share (Rupees)
10/-
10/-
Weighted average number of equity shares used as denominator
21. Advances- due from subsidiaries
Name of Subsidiary
NTPC Electric Supply Company Ltd
(Rs. Million)
Outstanding balance
Maximum amount
31.03.2006
31.03.2005
31.03.2006
31.03.2005
148
78
148
78
NTPC Vidyut Vyapar Nigam Ltd
10
5
16
24
Pipavav Power Development Company Ltd
61
61
61
61
NTPC Hydro Ltd
19
2
21
12
238
146
246
175
Total
22. The item-wise details of deferred tax liability (net) are as under:
(Rs. Million)
31.03.2006
31.03.2005
62,656
57,109
9,336
5,199
96
1,340
9,432
6,539
53,224
50,570
Deferred tax liability
i) Difference of Book depreciation and tax depreciation
Less: Deferred tax assets
i) Provisions disallowed for tax purposes
ii) Disallowed u/s 43B of the Income Tax Act,1961
The net increase in the deferred tax liability of Rs.2,654 million (previous year decrease Rs.1,710 million) has been debited to Profit and
Loss Account. However, the same is recoverable from customers.
23. Provision for current tax is after adjustment of refund amounting to Rs.5,536 million (previous year Rs.332 million) pertaining to previous
years and consequent adjustment made in Income Tax recoverable is Rs.5,090 million (previous year Nil).
24. Research and Development expenditure charged to revenue during the year is Rs. 58 million (previous year Rs. 42 million).
25. Interest in joint ventures:
a) Joint venture entities:
Company
Proportion of ownership interest
as on
31.03.2006
31.03.2005
Utility Powertech Limited
50%
50%
NTPC-Alstom Power Services Private Limited
50%
50%
PTC India Limited
8%
8%
NTPC-SAIL Power Company Private Limited
50%
50%
Bhilai Electric Supply Company Private Limited
50%
50%
NTPC-Tamilnadu Energy Company Limited
50%
50%
28.33%
NIL
Ratnagiri Gas and Power Private Ltd.*
*Shareholders’ agreement is under execution
The above joint venture entities are incorporated in India. The Company’s share of the assets and liabilities as on 31st March, 2006 and
income and expenses for the year in respect of joint venture entities based on audited accounts are given below:
(Rs. Million)
31.03.2006
31.03.2005
28,562
2,665
A Assets
• Long Term Assets
• Current Assets
Total
2,376
1,846
30,938
4,511
22,824
2,148
1,725
881
B Liabilities
• Long Term Liabilities
• Current Liabilities and Provisions
24,549
3,029
C Contingent Liabilities
Total
6
1
D Capital Commitments
7,762
6,708
Current Year
Previous Year
E Income
4,547
3,667
F Expenses
4,259
3,423
b) Joint venture operations: During the year the Company alongwith M/s Geopetrol International Inc. and M/s Canoro Resources Ltd., has participated
in bidding under the Government of India New Exploration Licensing Policy-V for exploration and production of oil and gas and has been
allotted Block AA-ONN-2003/2 in the State of Arunachal Pradesh. The Company together with other consortium members entered into a
Production Sharing Contract with the Government of India. The Company is a non-operator and has 40% share in expenses, income, assets
and liabilities with a minimum work programme commitment of Rs.621 million (previous year Nil) as per the Production Sharing Contract.
The Company’s share of assets and liabilities as at 31st March,2006 and expenditure for the period ended on that day in respect of the above
joint venture operations has been accounted for based on unaudited statement of accounts submitted by the operator.
Rs.Million
Expenses
2
Fixed Assets (# Rs.32,117/-)
#
Other Assets (* Rs.61,180/-)
*
Current Liabilities
2
26. As required by Accounting Standard (AS-28) “ Impairment of Assets” issued by the Institute of Chartered Accountants of India, the company has
carried out the assessment of impairment of assets. There has been no impairment loss during the year.
27. i)
During the year the Company reviewed the disclosure of contingent liabilities keeping in view the provisions of AS-29 ‘Provisions, Contingent
Liabilities and Contingent Assets’ issued by the Institute of Chartered Accountants of India as under:
a) As on 31st March, 2006 the estimated financial effect of claims for enhanced compensation for land pending before courts disclosed as
contingent liability is based on judgment of the management, opinion of independent experts or experience of similar transactions.
Such claims hitherto were disclosed based on the amounts claimed by the land losers, except to the extent the possibility of a liability
was considered remote.
b) As on 31st March 2006 the estimated financial effect of claims for interest on amounts disputed, delayed payments etc. is based on the
rate of interest claimed or 18%, whichever is lower, unless otherwise provided in any statute, agreement, order etc. Such claims were
hitherto disclosed based on the rates demanded by the claimants.
Consequently, contingent liabilities as at 31st March, 2006 are lower by Rs.3,595 million.
ii) The outflow on account of the claims against the company not acknowledged as debts, and tax disputes is contingent upon the decision of
the courts/other authorities and may differ from the amounts disclosed as contingent liability on the basis of estimates.
28. Foreign currency exposure not hedged by a derivative instrument or otherwise:
Sl.No Particulars
Currencies
Amount Rs. Million
31.03.2006
31.03.2005
a.
Borrowings, including interest accrued but not due thereon.
USD
JPY
Others
36,977
28,574
896
20,348
32,303
1,390
b.
Sundry creditors/deposits and retention monies
USD
EURO
Others
4,729
787
536
3,450
131
597
c.
Sundry debtor and Bank balances
GBP
USD
59
6
60
-
d.
Unexecuted amount of contracts remaining to be executed
USD
EURO
Others
44,044
5,531
1,187
51,185
5,477
1,175
29. The pre-commissioning expenses during the year amounting to Rs 1,312 million (previous year Rs 1,191 million) have been included in
Fixed Assets/Capital work-in-progress after adjustment of pre-commissioning sales of Rs. 727 million (previous year Rs. 583 million)
resulting in a net pre-commissioning expenditure of Rs. 585 million (previous year Rs.608 million).
30. Payment to the Statutory Auditors (Schedule 22)
Rs. Million
Previous Year
Current Year
Audit Fees
4
4
Tax audit Fees
2
1
Certification Fees
8
6
- Travelling Expenses
5
4
- Service Tax
1
1
20
16
Reimbursements
Less: Towards IPO certification included in Issue expenses
-
6
20
10
31. List of Small Scale Industrial undertaking to whom payment is outstanding for more than 30 days as on 31st March, 2006, to the extent
available to the Company, is as under:
Adarsh Engineering Works, Atlas Fasteners, Accurate Metal Industries, Aditya Air Products Pvt.Ltd, Avlani Engineering, Balaji Alum Industries,
Bajrang Pharmaceuticals, Bhavesh Corporation, Balaji Industrial Products, Clean Filter Industries Pvt. Ltd., Central India Engineers, DASS & Sons, EDP
Forms Pvt. Ltd., Flexer Rubber Pvt. Ltd., GEECO Enercon Pvt. Ltd., Gopal Steam Printing Works, Hivelm Industries, Insha Plastic Industries, IMECO
Limited, Iyappan Engineering Ind. Pvt. Ltd., Jalan Engineering, Khera Instruments Pvt. Ltd., KPC Flexi Tubes, Kwality Tubes, Modi Gas Products,
Poweraid (India) Pvt. Ltd., Prabhu Industries, Panja Valves, Precission Transmatic Dev., Rameswar Iron Foundry, Ray Enterprises, Rasvin Rubber Pvt.
Ltd., Shree Vishnu Enterprises, Sudeep Industries Pvt. Ltd., SAP Industries, SPA Instruments (I) Pvt. Ltd., S.D. Instruments & Equipments, Steam &
Mining Industries, Teletex Industrial Corpn., Technofab (India), Turbo Engineers (CBE), Upadhyay Valves Mfg., Udyogi Industries, Vishal Structure
Fabricators.
32. Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 135,587 million (previous year Rs.148,140
million).
33. Managerial remuneration paid/ payable to Directors
(Rs. Million)
Current year
Previous year
Salaries & Allowances
8
6
Contribution to provident fund & other funds including gratuity & group insurance
1
1
Other benefits
1
1
Directors’ fees
*
*
* Rs.1,30,000/- (previous year Rs.3,00,000/-)
In addition to the above remuneration the whole time Directors have been allowed the use of staff car including for private journeys on
payment of Rs.780/- per month, as contained in the Ministry of Finance (BPE) Circular No.2 (18)/pc/64 dt.29.11.64, as amended.
34. Licensed and Installed Capacities as at 31st March:
(As certified by Management)
Current year
Previous year
23,497
22,497
Licensed Capacity - Not applicable
Installed Capacity (MW Commercial units)
Quantitative information in respect of Generation and Sale of Electricity (in MUs):
a) Pre-commissioning period :
Generation
1,091
839
991
713
Generation
169,789
158,271
Sales
159,019
147,792
Sales
b) Commercial period :
c) Value of imports calculated on CIF basis (Rs. Million):
Capital goods
Spare parts
6,380
822
518
630
d) Expenditure in foreign currency (Rs. Million):
Professional and Consultancy fee
e)
10
78
Interest
1,849
1,906
Others
2,618
12,083
%age
Amount
%age Amount
1.07
1,809
98.93
166,795
Value of Components, Stores and Spare parts consumed (Rs. Million):
Imported
Indigenous (including fuel)
f)
0.37
527
99.63 140,695
Earnings in foreign exchange (Rs. Million):
Professional & Consultancy fee
3
-
Interest
3
3
Others
1
2
35. Previous year figures have been regrouped/rearranged wherever necessary.
36. Information pursuant to Part IV of Schedule VI of the Companies Act, 1956.
BALANCE SHEET ABSTRACT AND A COMPANY’S GENERAL BUSINESS PROFILE
I.
Registration Details
Registration No.
7
Balance-sheet date
II.
9
6
6
3
1
0
1
9
0
6
3
7
5
-
7
6
State Code:
5
5
Capital Raised during the year (Amount in Rs. Thousands)
Public Issue
N
I
L
Rights Issue
N
I
L
Bonus Issue
N
I
L
Private Placement
N
I
L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities
7
7
0
5
9
4
Total Assets
2
4
7
7
7
0
6
4
4
3
6
7
5
9
4
2
4
7
5
5
0
6
0
6
5
1
3
7
0
N
I
L
3
9
9
8
7
Sources of Funds
Paid-up Capital
8
2
4
5
4
Reserves & Surplus
Secured Loans
5
7
5
3
3
2
7
1
3
1
Unsecured Loans
2
8
4
0
0
0
9
0
0
1
4
4
1
9
2
6
4
Deferred Tax Liability
2
2
4
Application of Funds
Net Fixed Assets
2
3
0
8
9
4
Investments
Net Current Assets
9
5
8
4
2
8
9
Misc. Expenditure
8
1
2
I
L
Accumulated Losses
N
IV. Performance of Company (Amount in Rs. Thousands)
Turnover
2
6
1
1
Total Expenditure
5
2
7
1
7
2
2
4
Profit/Loss before tax
+
6
0
2
2
3
.
1
8
Profit/Loss after tax
9
8
0
6
4
+
5
8
Earning per share in Rs
7
8
2
0
1
9
Dividend Rate %
2
8
.
0
0
V. Generic Names of Three Principal Products/Services of Company (as per monetary terms)
Product Description:
Item Code No.
G
E
N
E
R
A T
I
O
N
O
C
O N
S
U
L
T
A
N
C
Y
M
A N
A
G
E M
E
N
T
O F
F
S
E
L
E C
T
R
E
R
V
I
C
E
S
P
O W
E
R
S
I
T
C
A
I
T
T
I
Y
O N
S
N
A
N
A
N
A
( A.K.RASTOGI )
Company Secretary
(A.K.SINGHAL)
( T.SANKARALINGAM)
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 2275
(Gaurav Nanda )
(Sanjay Gupta)
Partner
Partner
M No 500417
M No 87563
Place : New Delhi
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2006
A.
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax and Prior Period Adjustments
Adjustment for:
Depreciation
Provisions
Deferred revenue on account of Advance Against Depreciation
Interest charges
Guarantee Fee & Other Finance charges
Interest/Income on Bonds/Investments
Dividend Income
Provisions Written Back
Bonds issue and Servicing Expenses
Loss on maturity of Current Investments
Operating Profit before Working Capital Changes
Adjustment for:
Trade and Other Receivables
Inventories
Trade Payables and Other Liabilities
Loans and Advances
Other Current Assets
B.
C.
Cash generated from operations
Direct Taxes Paid
Income Tax Recoverable
Net Cash from Operating Activities - A
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Purchase of Investments
Sale of Investment
Invesment in Subsidiaries/Joint Ventures
Loans & Advances to Subsidiary
Development Surcharge Account
Interest/Income on Bonds/Investment Received
Dividend Received
Net cash used in Investing Activities - B
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of Share capital (Including Premium)
Proceeds from Long Term Borrowings
Repayment of Long Term Borrowings
Interest Paid
Guarantee Fee & other Finance charges Paid
Dividend Paid
Tax on Dividend
Bonds issue and Servicing Expenses
Net Cash flow from Financing Activities - C
Current Year
Rs. Million
Previous Year
62712
60680
12494
75206
19584
75
1783
10308
1597
(14991)
102
(117)
(6235)
18
12124
72804
(9068)
66138
(9319)
5245
62064
(2835)
105
(16319)
3323
(467)
(16193)
56611
(12959)
7346
50998
(66956)
(45959)
71638
(5552)
(92)
19637
148
(27136)
(53699)
(34167)
(430)
(52)
(1358)
25453
117
(64136)
48226
(17131)
(11383)
(504)
(26386)
(3701)
(118)
(10997)
26841
29592
(13242)
(10323)
(1597)
(20718)
(2679)
(304)
7570
20477
357
1034
11852
504
(19195)
(2488)
(148)
(23)
118
6
(2589)
(4510)
(73)
(1490)
(406)
Net Increase/Decrease in Cash and Cash equivalents (A+B+C)
23931
(5568)
Cash and cash equivalents (Opening balance) *
60783
66351
Cash and cash equivalents (Closing balance) *
84714
60783
NOTES : Cash and Cash Equivalents consists of Cash in Hand, Balance with Banks, Public Deposit Account and interest accrued thereon.
Previous year’s figures have been regrouped/rearranged wherever necessary.
* Includes Rs. 14 Million deposited as security with Government Authorities as per court orders.
( A.K.RASTOGI )
(A.K.SINGHAL)
( T.SANKARALINGAM)
Company Secretary
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 2275
(Gaurav Nanda )
(Sanjay Gupta)
Partner
Partner
M No 500417
M No 87563
Place : New Delhi
AUDITORS’ REPORT
To the Members of
NTPC LIMITED
1.
We have audited the attached Balance Sheet of NTPC LIMITED (formerly NATIONAL THERMAL POWER CORPORATION LIMITED) as at 31st March,
2006, 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 company’s 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 misstatements. 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) 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.
We draw attention to:
(i) Note No. 3 of Schedule 27 to the financial statements in respect of accounting of sales on provisional basis pending final determination of
tariff by Central Electricity Regulatory Commission.
(ii) Note No. 5 of Schedule 27 to the financial statements in respect of share of net annual profit of Badarpur Thermal Power Station amounting to
Rs.1,155 million relating to earlier years not recognized as revenue.
5.
Further to our comments in annexure referred to in para 3, and also para 4 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 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 17.7.2003 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 27, 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, 2006,
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.
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
Partner
M.No.77076
(Pradeep Mukherjee)
Partner
M.No. 70693
(V. Umamaheswara Rao)
Partner
M.No. 2275
For S.N.Nanda & Co.
For T.R.Chadha & Co.
(Gaurav Nanda)
Partner
M.No.500417
(Sanjay Gupta)
Partner
M.No. 87563
Place : New Delhi
Dated : 31st May, 2006
ANNEXURE TO THE AUDITORS’ REPORT
Statement referred to in paragraph (3) of our report of even date to the members of NTPC LIMITED (Formerly National Thermal Power
Corporation Ltd.) on the accounts for the year ended 31st March, 2006
(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 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.
(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.
(ii)
In view of clause (iii) (a) above, the clauses (iii) (b), (iii) (c) and (iii) (d) are not applicable.
(e)
The company has not taken any loans secured or unsecured from any company, firm, or other party covered in register maintained under
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.
(b)
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. However, it needs to be
further strengthened.
(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
except outstanding dues in respect of electricity duty amounting to Rs.0.49 million as at 31st March, 2006 due for a period of more than six
months from the date they became payable. However, the same has since been deposited by the company.
(b)
The disputed statutory dues aggregating to Rs.191 million that have not been deposited on account of matters pending before appropriate
authorities are detailed below :
Sl.No. Name of Statute
Nature of dues
Forum where the dispute is pending
Rs. Million
1
Sales Tax
Additional Commissioner of Sales Taxes
81
Commissioner of Sales Taxes
25
Dy. Commissioner of Sales/ Commercial Taxes
12
High Court
28
Central Sales Tax and Sales Tax Acts
of Various States
Sl.No. Name of Statute
2
Water (Prevention &
Control of Pollution)
Cess Act 1977
Nature of dues
Water/Pollution
Cess
Forum where the dispute is pending
Rs. million
Sales Tax Tribunal
5
Joint Commissioner (Appeal) Trade tax
9
Revenue Board *(Rs.25645)
*
Appellate Authority,
Pollution Control Board
31
Total
191
(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 (Auditor’s
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 (Auditor’s 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.
(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 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, during the year covered by our audit report, the company has created security in
respect of the Bonds issued by the Company.
(xx)
We have verified the end use of the money raised by public issue as disclosed in Schedule 27 ‘Notes on Accounts’ forming part of the
financial statements.
(xxi)
According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of
our audit.
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
Partner
M.No.77076
(Pradeep Mukherjee)
Partner
M.No. 70693
(V. Umamaheswara Rao)
Partner
M.No. 2275
For S.N.Nanda & Co.
For T.R.Chadha & Co.
(Gaurav Nanda)
Partner
M.No.500417
(Sanjay Gupta)
Partner
M.No. 87563
Place : New Delhi
Dated : 31st May, 2006
EMPLOYEE COST SUMMARY
(Rs. million)
Description
1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
A. Salaries, wages & benefits*
(incl.Provident Fund and
other contributions)
2,618
3,411
4,363
5,789
7,082
7,494
7,590
8,180
8,248
9,568
B. Other Benefits
1. Welfare expenses
531
783
733
772
1,044
1,359
1,352
1,430
1,723
1,807
2. Township
361
367
461
565
520
469
460
575
629
567
90
111
116
125
140
121
119
158
160
160
153
364
262
284
298
359
383
427
424
444
19
21
28
39
28
39
35
45
47
46
100
3. Educational & school facilities
4. Medical facilities
5. Subsidised transport
6. Social & cultural activities
54
60
87
67
133
79
79
109
108
7. Subsidised canteen
93
104
112
130
142
114
139
159
160
174
Total ( B )
1,301
1,810
1,799
1,982
2,305
2,540
2,567
2,903
3,251
3,298
Total ( A+B )
3,919
5,221
6,162
7,771
9,387
10,034
10,157 11,083
11,499 12,866
8. Year end number of employees ** 21,407
20,710
20,798
21,265
21,289
21,383
21,408 20,971
21,420 21,870
9. Average number of employees
21,059
20,754
21,032
21,277
21,336
21,396 21,190
21,196 21,645
21,320
10.Average Salary, wages & benefits
per employee per annum (Rs.) 122,795 161,974 210,225 275,247 332,848
351,237 354,747 386,040 389,139 442,042
11.Average cost of other benefits
per employee per annum (Rs.)
12.Average cost of employees
remuneration & benefits
per annum (Rs.)
61,023
85,949
86,682
183,818
247,923 296,907
94,237 108,333
369,484
441,181
119,048 119,979 137,002 153,382 152,368
470,285
474,726 523,042
542,521 594,410
* Excluding payment to personnel employed for social amenities
** Excluding BTPS, BCPP and Joint Venture Companies.
REVENUE EXPENDITURE ON SOCIAL OVERHEADS FOR THE YEAR ENDED 31st MARCH 2006
(Rs. million)
Particulars
1
Payment to employees
2
Township Educational
and School
Facilities
Medical Subsidised
facilities Transport
Social and
Cultural
Activities
Subsidised
Canteen
Total
Land Scaping Previous
and Wasteland
Year
development
146
24
351
16
23
21
581
-
484
Material consumed
64
-
53
1
-
-
118
-
138
3
Rates and taxes
28
-
-
1
-
-
29
-
56
4
Welfare expenses
26
107
394
44
72
173
816
3
799
5
Others including repairs
& maintenance
349
45
16
3
23
-
436
14
429
6
Depreciation
208
8
10
-
5
1
232
-
211
7
Sub-total (1 to 6)
821
184
824
65
123
195
2212
17
2117
8
Less : Recoveries
108
-
29
3
-
-
140
-
140
9
Net expenditure (7-8)
713
184
795
62
123
195
2072
17
1977
10
Previous Year
730
173
702
62
130
180
1977
5
-
FUND FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2006
A. STATEMENT OF SOURCES AND APPLICATION OF FUNDS
SOURCES
Fund Generated from Operating Activities
Proceeds from issue of Share Capital (including premium)
Interest/ Income on Bonds/Investments received
Sale of Investment
Dividend received on Investments
APPLICATION
Expenditure on Fixed Assets
Purchase of Investment
Investment in Subsidiaries/Joint Ventures
Bonds under One Time Settlement Scheme
Interest
Guarantee Commission and other finance charges
Development Surcharge Fund
Dividend
Dividend Tax
Net Increase / Decrease in Working Capital
B. STATEMENT OF CHANGES IN WORKING CAPITAL
Cash and Bank Balances
Inventories
Trade Payables & Other Liabilities
Loans and Advances
Net Increase / Decrease in Working Capital
C. FUND FROM OPERATIONS
Net Profit before tax, Prior Period Adjustments andExtra Ordinary Items
Adjustment for:
Depreciation
Interest
Guarantee Commission and other finance charges
Interest / Income on Bonds / Investment received
Prior Period Adjustment (Net)
Dividend Income
Operating Profit
Direct Taxes (Net of income tax recoverable)
Fund Generated from Operating Activities
Current Year
Rs. million
Previous Year
70445
(53)
1034
19195
73839
148
48226
212834
74468
26664
1783
14991
117
29592
147615
66416
45546
5552
7655
17131
9383
622
23087
3238
178630
34204
55089
34167
430
13242
9740
1615
3784
19790
2679
140536
7079
23931
5586
(5069)
6065
3294
397
34204
54692
397
9048
13474
(227)
(70305)
7079
62712
60680
21581
9383
622
(19195)
(2488)
(148)
9755
72467
(2022)
70445
20151
9740
1615
(14991)
102
(117)
16500
77180
(2712)
74468
SUBSIDIARY COMP
ANIES
COMPANIES
NTPC ELECTRIC SUPPLY COMPANY LIMITED
(A wholly owned subsidiary of NTPC Limited)
DIRECTORS’ REPORT
To The Members,
Your Directors have pleasure in presenting their Fourth Annual Report on the working
of the Company for the financial year ended on 31st March 2006 together with
Audited Accounts and Auditors’ Report.
OPERATIONAL REVIEW
The activities as Advisor-cum-Consultant under the “Accelerated Power Development
Reforms Programme” (APDRP), an initiative taken by the Ministry of Power (MoP) for
power development reforms, have been undertaken by your company.
A Memorandum of Understanding was signed between NTPC and Rural
Electrification Corporation Ltd. (REC) to carry out rural electrification of villages and
households in West Bengal under the Government of India’s “Accelerated Rural
Electrification Program”. A quadripartite agreement was signed between West Bengal
State Electricity Board, Government of West Bengal, NTPC and REC for the same.
Upon merging of the AREP with MoP’s programme of rural electrification under the
name of “Rajiv Gandhi Grameen Vidyutikaran Yojana” (RGGVY), the earlier agreement
was revised in line with the new scheme. NTPC has also been asked, under this
new scheme, to carry out rural electrification works in the states of Chattisgarh,
Jharkhand, Orissa and Madhya Pradesh for which quadripartite Agreements have
been signed between REC, NTPC, respective State Governments and State Utilities.
Under a Supplementary Agreement, your Company has been assigned to take up
these works on behalf of NTPC.
As per these Agreements, your Company will be executing turnkey works in
Kharagpur area (Blocks I and II) of West Midnapur district of West Bengal, five
districts of Chattisgarh, eight districts of Jharkhand, twelve districts of Orissa and
four districts of Madhya Pradesh. In Kharagpur, where the work is in progress,
Distribution Transformers have already been charged in 11 villages.
Quadripartite Agreements, along with Supplementary Agreements, have also been
signed for consultancy work of post award Project Monitoring and Quality Assurance
services during execution of RGGVY works in the states of Madhya Pradesh and
Uttaranchal. As per these Agreements, your Company will be providing services
for all the three Discoms of Madhya Pradesh and all thirteen districts of Uttaranchal.
Your Company has also been providing consultancy works in the areas of Project
Monitoring, Quality Assurance and Inspection of APDRP work of Bhopal and Gwalior
regions by Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Ltd. Similar
assignments of consultancy work in Indore and Ujjain circles, along with eight
districts of Western Zone of Madhya Pradesh Paschim Kshetra Vidyut Vitran Company
Ltd., was successfully carried out during the financial year.
Chandigarh Administration has entrusted the turnkey contract for design, supply,
erection, testing and commissioning of 2 x 20 MVA sub-station along with associated
HT lines at Manimajra to your company, which is in progress.
Your Company has also been entrusted, by the Uttaranchal Power Corporation Ltd.,
an assignment of carrying out third party inspection of their stock materials.
The Company is yet to undertake commercial activities in the are of distribution of
power. It is exploring various options in this field.
FINANCIAL RESULTS
During the current year, the Company has recorded gross revenue of Rs. 92.14 million
(previous year Rs. 74.80 million) and a profit before tax of Rs. 10.33 million as
compared to the profit before tax of Rs. 2.60 million in the previous year. The profit
after tax is Rs. 4.52 million (previous year Rs. 0.40 million) and a sum of Rs. 0.45
million was transferred to General Reserve during the current financial year.
DIVIDEND
Your Directors have recommended a maiden dividend of Rs.1.36 million, i.e. @
167.59% of the paid up equity share capital of the Company for the financial year
2005-06. The dividend shall be paid after your approval at this Annual General Meeting.
PARTICULARS OF EMPLOYEES
During the period under review the Company had no employees of the category,
which falls, under section 217 (2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975.
FIXED DEPOSITS
The company has not accepted any fixed deposit during the period ending
31st March 2006.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNING & OUTGO
There are no significant particulars, relating to conservation of energy, technology
absorption under the Companies (Disclosure of particulars in the Report of Board
of Directors) Rules, 1988, as your Company does not own any manufacturing facility.
During the period under review there are no foreign exchange earnings and outgo.
DIRECTORS
Shri C.P.Jain ceased to be Chairman of the Company w.e.f. 31.03.2006 A.N.
consequent upon his superannuation from the services of NTPC Limited. The Board
places on record its deep appreciation for the valuable contributions made by
Shri C.P.Jain. Pursuant to the Articles of Association of the Company, the Chairman
& Managing Director of NTPC Limited shall be the ex-officio part-time Chairman on
the Board of the Company. On taking over as the Chairman & Managing Director of
NTPC Limited, Shri T. Sankaralingam was appointed as Chairman of the Company
w.e.f 01.04.2006.
AUDITORS’ REPORT AND C&AG REVIEW
The Comptroller & Auditor General of India (C&AG) has appointed M/s Kanwalia &
Company, Chartered Accountants as the Statutory Auditor of the Company for the
financial year ending 2005-06. There are no adverse comments, observations or
reservations in the auditors report on the accounts of the comapany.
C&AG vide letter dated 02.06.2006 has decided not to review the report of the
Auditors on the accounts of the Company for the year ended 31st March 2006 and as
such has no comments to make under Section 619(4) of the Companies Act, 1956.
A copy of the certificate issued by C&AG in this regard is enclosed as Annex-1.
DIRCTORS’ RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956 your Directors
confirm that:
i) in the preparation of annual accounts, the applicable accounting standards had
been followed along with proper explanation relating to material departures;
ii) 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 2005-06 and of the profit of the company for
that period;
iii) 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
iv) the directors had prepared the annual accounts on a going concern basis.
ACKNOWLEDGEMENT
The Board of Directors wish to place on record their appreciation for the support
and co-operation extended by the Ministry of Power, various state governments,
various state utilities, various customers, NTPC Ltd., the Auditors, the Bankers and
the employees of the Company.
(T. SANKARALINGAM)
CHAIRMAN
Place: New Delhi
Date: 03.08.2006
ANNEXURE-I
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER
SECTION 619 (4) OF THE COMPANIES ACT, 1956, ON THE ACCOUNTS OF NTPC
ELECTRIC SUPPLY COMPANY LIMITED, NEW DELHI FOR THE YEAR ENDED,31ST
MARCH, 2006
The Comptroller and Auditor General of India has decided not to review the report
of the Auditors on the accounts of NTPC Electric Supply Company Limited., New
Delhi for the year ended 31st March 2006 and as such he has no comments to make
under Section 619(4) of the Companies Act, 1956
(Meera Swraup)
Place: New Delhi
Dated: 2 June, 2006
Ex-officio Member Audit Board-III
New Delhi
SIGNIFICANT ACCOUNTING POLICIES
A. Fixed Assets
1. Fixed Assets are shown at historical cost.
2. Intangible assets are recorded at their cost of acquisition.
B. Income Recognition
1. Income from consultancy service is accounted for on the basis of actual progress/
technical assessment of work executed, in line with the terms of respective
consultancy contracts.
2. Claims for reimbursement of expenditure are recognised as other income, as per
the terms of consultancy service contracts.
C. Expenditure
1. Depreciation is charged on straight-line method at the rates specified in
Schedule XIV of the Companies Act, 1956.
2. Depreciation on additions to/deductions from fixed assets during the year is charged
on pro-rata basis from/up to the month in which the asset is available for use/
disposal.
3. Assets costing up to Rs. 5,000/- are fully depreciated in the year of capitalisation.
4. Cost of computer software recognized as intangible assets is amortised on straightline method over a period of legal right to use or 3 years, whichever is earlier.
5. Where the cost of depreciable assets has undergone a change during the year due
to increase/decrease in long term liabilities on account of exchange fluctuation,
price adjustment, change in duties or similar factors, the unamortised balance of
such asset is depreciated prospectively over the residual life determined on the
basis of the rate of depreciation.
6. Expenditure on training, recruitment and ex-gratia payments under voluntary
retirement scheme are charged to revenue in the year of incurrence.
7. Expenditure on leave travel concession to employees is recognised in the year
of availment due to uncertainties in accrual.
8. Pre-paid expenses and prior period expenses/income of items of
Rs. 1,00,000/- and below are charged to natural heads of accounts.
9. The liabilities for retirement benefits in respect of gratuity, leave encashment and
post-retirement medical benefits are ascertained annually by the Holding Company
on actuarial valuation at the year-end. The company provides for retirement benefits
in respect of provident fund, gratuity, leave encashment and post-retirement medical
benefits as apportioned by the Holding Company.
BALANCE SHEET AS AT 31ST MARCH 2006
Sch. No.
SOURCES OF FUNDS
Capital
1
Reserves & Surplus
2
TOTAL
Fixed Assets
3
Gross Block
Less: Depreciation
Net Block
Sundry Debtors
4
Cash and Bank Balances
5
6
Loans & Advances
7
LESS : CURRENT LIABILITIES AND PROVISIONS
Liabilities
8
Provisions
9
Net Current Assets
Deferred Tax Assets
Miscellaneous Expenditure (to the extent
not written off or adjusted)
10
31.03.2006
Rs.
31.03.2005
809100
3311836
4120936
809100
338100
1147200
733842
196089
537753
-
149950092
171524856
1870276
873051
324218275
91111986
72170307
21451
746653
164050397
319095166
1546179
320641345
3576930
6253
162903197
162903197
1147200
-
-
-
4120936
1147200
TOTAL
Rs.
Sch. No.
INCOME
Sales
Other Income
TOTAL
EXPENDITURE
Employees’ Remuneration
and Benefits
Administration and Other Expenses
Depreciation
Finance Charges
TOTAL
Profit before tax
Provision for
- Current Tax
- Fringe Benefit Tax
- Deferred Tax
As per our attached report of even date
For Kanwalia & Co.
For & on behalf of the Board of Directors
(A. K. Singhal)
Director
Previous Year
11
12
74612419
17527042
92139461
61150963
13649250
74800213
13
14
65454022
16144314
196089
17248
81811673
10327788
54663655
17519892
12876
72196423
2603790
4621924
1192202
(6253)
5807873
4519915
338100
4858015
452000
1356000
190179
2859836
2167596
35191
2202787
401003
(62903)
338100
338100
55.86
4.96
15
Profit after tax
Proposed Dividend
Tax on Proposed Dividend
Balance carried to Balance sheet
Earning per Share (Equity shares, face value
Rs.10/- each) - Basic and Diluted
Notes on Accounts
16
Schedules 1 to 16, accounting policies and cashflow statement form integral part
of Accounts.
(B. K. Kanwalia)
Partner
Current Year
For Kanwalia & Co.
(B K Kanwalia)
Partner
Place: New Delhi
Dated: 24th May, 2006
(T. Sankaralingam)
Chairman
Place: New Delhi
(A. K. Singhal)
(T. Sankaralingam)
Director
Chairman
SCHEDULES FORMING PART OF BALANCE SHEET
SCHEDULE 2
SCHEDULE 1
CAPITAL
Rs.
31.03.2005
31.03.2006
Authorised
10,000,000 equity shares of Rs. 10/- each
(Previous year 10,000,000 equity shares
of Rs. 10/- each)
Issued, Subscribed and Paid-Up
80,910 equity shares of Rs. 10/- each
(Previous year 80,910 equity shares of
Rs. 10/- each) are held by the holding company,
NTPC Ltd. and its nominees.
100000000
100000000
809100
809100
809100
809100
General Reserve
Add: Transfer from Profit & Loss Account
31.03.2006
Rs.
31.03.2005
452000
2859836
3311836
338100
338100
SCHEDULE 3
FIXED ASSETS
Rs.
GROSS BLOCK
DEPRECIATION
NET BLOCK
As at
01.04.2005
Additions
Deductions /
Adjustments
As at
31.03.2006
As at
01.04.2005
For the Deductions /
year Adjustments
Up to
As at
As at
31.03.2006 31.03.2006 31.03.2005
Furniture, Fixtures &
Other Office Equipments
EDP & WP Machines
Intangible Assets - Software
-
164480
66308
503054
-
164480
66308
503054
-
19179
8092
168818
-
19179
8092
168818
145301
58216
334236
Total
-
733842
-
733842
-
196089
-
196089
537753
-
Previous year
-
-
-
-
-
-
-
-
-
-
-
31.03.2006
SCHEDULE 4
SUNDRY DEBTORS
- Unsecured, considered good
Other debts
SCHEDULE 5
CASH AND BANK BALANCES
Cash on hand (includes cheques & drafts
on hand )
Balances with scheduled banks
- Current Account
- Term Deposit Account
Cheques & Drafts on hand
SCHEDULE 6
Interest accrued on Short Term Deposits
with Indian banks
SCHEDULE 7
LOANS & ADVANCES
ADVANCES
Employees
Others
DEPOSITS
Less: Provision
SCHEDULE 8
CURRENT LIABILITIES
Sundry Creditors
Deposits, retention money from
contractors and others
Other liabilities
Amount received against deposit works
Amount payable to NTPC Ltd.
SCHEDULE 9
PROVISIONS
Proposed Dividend
Tax on Proposed Dividend
SCHEDULE 10
MISCELLANEOUS EXPENDITURE
(To the extent not written off
or adjusted)
Preliminary (Incorporation) Expenses
Balances as per last Balance Sheet
Less: Deductions/Adjustments
SCHEDULE 11
SALES
Consultancy, Project Management and
Supervision Fees
Rs.
31.03.2005
115944852
53161773
34005240
149950092
37950213
91111986
-
13878000
9024856
162500000
171524856
-
3292307
55000000
72170307
13878000
1870276
1870276
21451
21451
7500
-
12230
-
8819184
7965863
853321
873051
2898390
2151737
746653
746653
20956251
1130200
54875
21011126
4700000
12435200
132508081
148440759
319095166
32510
1162710
8485000
6528443
68980000
77747044
162903197
1356000
1356000
-
190179
190179
1546179
-
-
617824
617824
-
74612419
74612419
61150963
61150963
SCHEDULE 12
OTHER INCOME
Reimbursibles billed to clients
Interest from Indian Banks (Gross)
(Tax deducted at source Rs. 1437935,
previous year Rs. 5672)
SCHEDULE 13
Welfare expenses
SCHEDULE 14
ADMINISTRATION AND OTHER EXPENSES
Power Charges
Rent
Building
Others
Insurance
Training and Recruitment Expenses
Communication Expenses
Traveling Expenses
Tender Expenses
Payment to Auditors
Audit Fees
Tax Audit Fees
In other capacity
Entertainment Expenses
Expenses for Transit Camp
Prefeasibility Study Expenses
Preliminary Expenses Written Off
Professional charges & consultancy fees
Printing and stationary
SCHEDULE 15
FINANCE CHARGES
Bank Charges
Current Year
Rs.
Previous
11119422
13622127
6407620
17527042
27123
13649250
51225704
5158483
9069835
65454022
45146739
4699818
4817098
54663655
210772
1186756
202220
1072377
41862
51971
93833
3610
1418284
9277057
801106
661500
139606
81993
42437
124430
8381
228482
1130494
7742421
227666
38250
189416
22448
5612
16530
44590
561132
215737
3159
68999
164113
325692
245166
2185808
16144314
16530
7670
18580
42780
452221
506336
279578
617824
77035
7648
312274
276219
4249756
17519892
17248
17248
12876
12876
SCHEDULE 16
Notes on Accounts
1) Related Party Disclosures
a. The Company is a wholly owned subsidiary of NTPC Ltd. (formerly National
Thermal Power Corporation Limited).
b. Key Management Personnel (appointed by the Holding Company, i.e. NTPC Ltd.)
Shri C. P. Jain
Chairman
Shri K. K. Sinha
Director Ceased to be Director w.e.f. 1st April 2005
Shri P. Narasimharamulu Director Ceased to be Director w.e.f. 1st April 2005
Shri R. S. Sharma
Director
Shri R. K. Jain
Director
Shri A. K. Singhal
Director Appointed w.e.f. 1st April 2005
Shri G. K. Agarwal
Director Appointed w.e.f. 1st April 2005
c. The Key Management Personnel are on appointment to the Company on parttime basis from the Holding Company, NTPC Ltd. The Company pays no
remuneration to the key management personnel as their remuneration (being
full-time employees of the Holding Company) is paid by NTPC Ltd.
2) The Company is operating in a single segment, that is providing consultancy,
project management and supervision services.
3) All the employees of the Company are on secondment from the Holding
Company, i.e. NTPC Ltd.
4) Earning per share:
The elements considered for calculation of Earnings per share (Basic & Diluted)
are as under:
Current Year Previous Year
Net Profit after Tax used as numerator (Rupees)
Weighted average number of equity
shares used as denominator
Earning per share (Rupees) – Basic & Diluted
4519915
401003
80910
55.86
10.00
80910
4.96
10.00
5) Disclosure regarding Operating Leases:
The company’s significant leasing arrangements are in respect of operating leases
of premises for residential use of employees, offices and transit camps. These
leasing arrangements are usually renewable on mutually agreed terms but are
not non-cancellable. Employees’ remuneration and benefits include
Rs.52,10,555/- (Previous year Rs. 38,80,146/-) towards lease payments, net of
recoveries, in respect of premises for residential use of employees. Lease
payments in respect of premises for offices and transit camps are shown as
Rent in Schedule 13 - Administration and other expenses.
6) The item-wise details of Deferred Tax Asset are as under:
Rs.
31.03.2006 31.03.2005
i) Difference of Book depreciation and Tax
depreciation
ii) Provisions disallowed for tax purposes
Deferred Tax Asset
5. Generic name of three principal products/services of Company
(As per monetary terms)
Item Code No.
N.A.
(ITC Code)
Product Description
Consultancy Services
For Kanwalia & Co.
(B.K. Kanwalia)
Partner
(A. K. Singhal)
Director
(T. Sankaralingam)
Chairman
Place: New Delhi
Date : 24th May, 2006
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2006
Current Year
Rs.
Previous Year
10327788
2603790
-
3,530
2,723
-
6,253
-
A. CASH FLOW FROM OPERATING
ACTIVITIES
Net Profit/(Loss) before tax
and Prior Period Adjustments
The net increase in the deferred tax asset of Rs. 6,253/- (Previous year decrease
Rs. 35,191/-) has been credited to Profit and Loss Account.
7) Previous year’s figures have been regrouped/rearranged wherever necessary.
For Kanwalia & Co.
(B. K. Kanwalia)
(A. K. Singhal)
(T. Sankaralingam)
Partner
Director
Chairman
Place: New Delhi
Preliminary Expenses written off
INFORMATION PURSUANT TO PART IV OF SCHEDULE VI OF THE COMPANIES ACT, 1956
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE:
Trade & Other Receivables
(58838106)
(72258899)
Trade Payables & Other Liabilities
156191969
140338299
-
-
State Code: 0 5 5
1. Registration Detail
Registration No. U 4 0 1 0 8 D L 2 0 0 2 G O I 1 1 6 6 3 5
Balance Sheet Date
Date
Month
Year
3 1
0 3
2 0 0 6
2. Capital Raised during the year
(Rs. in Thousands)
Public Issue
Right issue
N I L
N I L
Bonus Issue
Private Placement
N I L
N I L
3. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liabilities
Total Assets
3 2 4 7 6 2
3 2 4 7 6 2
Source of Funds
Paid up Capital
Reserve & Surplus
8 0 9
3 3 1 2
Secured Loans
Unsecured Loans
N I L
N I L
N I L
Net Fixed Assets
Investments
5 3 8
N I L
Net Current assets
Deferred Tax Asset
3 5 7 7
6
Misc. Expenditure
Accumulated Losses
N I L
N I L
4. Performance of Company (Amount in Rs. Thousands)
Turnover
Total Expenditure
7 4 6 1 2
8 1 8 1 2
Profit Before Tax
Profit After Tax
1 0 3 2 8
4 5 2 0
Earning Per Share in Rs.
Dividend Rate (%)
5 5. 8 6
1 6 7. 5 9
Adjustment for:
Depreciation
Interest Received
Operating Profit before
Working Capital Changes
196089
-
-
617824
(6407620)
(27123)
4116257
3194491
Adjustment for:
Loans & Advances
(19730) 97334133
-
101450390
71273891
5920794
2914249
95529596
68359642
Direct Taxes Paid
Net Cash from
Operating Activities - A
B. CASH FLOW FROM
INVESTING ACTIVITIES
(733842)
-
Interest Received
4558795
5672
Net cash flow from
Investing Activities - B
3824953
5672
-
-
-
-
Net Increase/Decrease in Cash &
Cash equivalents (A + B + C + D)
99354549
68365314
Cash & cash equivalents
(Opening balance)
72170307
3804993
Cash & cash equivalents
(Closing balance)
171524856
72170307
C. CASH FLOW FROM
FINANCING ACTIVITIES
Net Cash flow from
Financing Activities - C
D. OTHERS
Notes:Cash & Cash equivalents consist of Cash in Hand and Balance with Banks.
Previous year’s figures have been regrouped/rearranged wherever necessary
As per our Report of even date
For Kanwalia & Co.
(B.K. Kanwalia)
Partner
(A.K. Singhal)
Director
(T. Sankaralingam)
Chairman
Place: New Delhi
AUDITORS’ REPORT
To the Members of
NTPC ELECTRIC SUPPLY COMPANY LTD.
1. We have audited the attached Balance Sheet of NTPC Electric Supply Company Ltd.
(a wholly owned subsidiary of NTPC Ltd.) as at 31st March 2006, 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 company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
2. We conducted our audit in accordance with the 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 misstatements. 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 (Auditor’s Report) Order, 2003 (as amended) 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 purpose of our audit;
(b) In our opinion, proper books of account as required by law have been kept
by the company so far as 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 17.07.2003 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 according 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 16, give the information required by
the Companies Act, 1956 in the manner so required and gives 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 2006,
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.
For Kanwalia & Co.
(B.K.Kanwalia)
Partner
Membership No.: 7719
Place: New Delhi
ANNEXURE TO THE AUDITORS’ REPORT
Referred to in paragraph 3 of our report of even date.
(i) (a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All the assets have been physically verified by the management during the
year and 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 discrepancies were noticed on such verification.
(c) No fixed assets have been disposed off during the year.
(ii) (a) The company does not have inventory.
Accordingly, the provisions of clause 4(ii) (b) & (c) of the Companies
(Auditors’ Report) Order, 2003 are not applicable to the company.
(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 (iii) (a) above, the clauses (iii) (b), (iii) (c) and (iii) (d) are not
applicable.
(e) The Company has not taken any loans secured or unsecured from any
company, firm or other party covered in the 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 nature of its business for purchase of fixed assets and for sale of
services. During the course of our audit, we have not observed any continuing
failure to correct major weaknesses in internal control systems.
(v) (a) The company has not carried out any transactions required to be entered
in the register maintained under section 301 of the Companies Act 1956.
(b) In view of clause (v) (a) above, the clause (v) (b) is not applicable.
(vi) The Company has not accepted deposits from the public.
(vii) The provisions of the Order related to internal audit are not applicable to the
company as the paid up capital plus reserves of the company are less than Rs.
50 lac at the commencement of the year under audit and the average annual
turnover for the three consecutive financial years immediately preceding the
year under audit being less than Rs. 5 crore. However, in our opinion, the Company
has an internal audit system commensurate with the size and nature of its business.
(viii) The maintenance of cost records under section 209(1) (d) of the Companies
Act 1956 is not applicable to the company, as the company has not commenced
any activities related to distribution of electricity.
(ix) (a) The Company is regular in depositing the statutory dues like Income Tax,
Fringe Benefit Tax, Service Tax with the appropriate authorities. According
to the information and explanations given to us, no undisputed amounts
payable in respect of income tax, wealth tax, sales tax, service tax, customs
duty, excise duty and cess were in arrears, as at 31st of March 2006 for a
period of more than six months from the date they became payable. The
provisions related to provident fund, investor education and protection
fund and employees’ state insurance etc. along with the related provisions
of clause (ix) (b) are not applicable to the company.
(b) According to the information and explanation given to us, there are no
dues of sales tax, income tax, customs duty, wealth tax, excise duty and
cess, which have not been deposited on account of any dispute.
(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) Not applicable as the company has not taken any loans from any financial
institution, bank or by way of issue of debentures.
(xii) The company has not granted any loans or advances.
(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 (Auditor’s 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
(Auditor’s Report) Order, 2003 are not applicable to the company.
(xv) The company has not given any guarantees for loans taken by others from banks
or financial institutions.
(xvi) The company has not raised any term loams.
(xvii)The company has not raised any short term or long-term funds.
(xviii)The company has not made preferential allotment of shares to companies, firms
or other parties listed in the registers maintained under Section 301 of the
Companies Act, 1956.
(xix) The company has not issued any debentures.
(xx) The company has not raised money through a public issue.
(xxi) According to the information and explanations given to us, no fraud on or by
the company has been noticed or reported during the course of our audit.
For Kanwalia & Co.
Place : New Delhi
(B.K.Kanwalia)
Partner
Membership No.: 7719
NTPC HYDRO LIMITED
(A wholly owned subsidiary of NTPC Limited)
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting their fourth Annual Report on the
performance of the Company for the financial year ended 31st March 2006 together
with the Audited Accounts and Auditors‘ Report thereon.
OPERATIONAL REVIEW
Your Company’s maiden venture is Lata-Tapovan Hydro Electric Power Project (3x57
MW) in the State of Uttaranchal. Detailed Project Report (DPR) of this project has
been completed. Techno-Economic Clearance (TEC) from Central Electricity
Authority (CEA) and Stage I & II clearance form Ministry of Environment & Forest
has also been received. The project is scheduled for commissioning by March,
2012. Annual Generation from this project is estimated as approx. 869 MU of this
12% is earmarked as free power to the State of Uttranchal.
The DPR of Rammam Stage-III Hydro Electric Power Project (3x40MW), in the State
of West Bengal, has been completed and submitted to CEA for obtaining TEC.
Ministry of Environment & Forest has also accorded stage-I & II approval. The
implementation activities of this project are being initiated. The project is scheduled
for commissioning by March 2012. Annual Generation from this project is estimated
as approx. 467.50 MU out of which 85% of the power generated from this project
shall be given to WBSEB and balance 15% shall rest with the Company.
FINANCIAL REVIEW
During the financial year ending 31 st March 2006 the company has incurred
expenditure of Rs 69 million, out of which Rs. 36 million has been capitalized. The
Company has incurred loss of Rs. 33 million during the financial year as against loss
of Rs. 30 million during the last year. In addition, Rs. 2 million were incurred on
fixed assets during the financial year.
There being no employee in the Company with earning over the specified amount,
the particulars of employees as prescribed under Sec. 217(2A) of Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975 are not
required to be given.
FIXED DEPOSITS
The Company has not accepted any fixed deposit during the period ending 31st
March, 2006.
EARNING & OUTGO
Since the projects undertaken by the Company are in implementation stage, there
are no significant particulars, relating to conservation of energy, technology
absorption, under the Companies (Disclosure of Particulars in the Report of Board
of Directors) Rule,1988. During the period under review the Company had no earning
in foreign exchange. However, an amount of Rs. 1,57,283 was spent in equivalent
foreign currency on foreign training.
AUDIT COMMITTEE
As per the provisions of Section 292A of the Companies Act, 1956, the Board of
Directors has constituted an Audit committee comprising of S/Shri T.Sankaralingam,
A.K.Singhal and G.K.Agarwal, Directors.
DIRECTORS
Shri C.P.Jain ceased to be Director of the Company w.e.f. 31 st March 2006
consequent upon his superannuation from the services of NTPC Limited. Your Board
places on record their deep appreciation for the valuable services rendered by
Shri C.P. Jain during his tenure. Further, consequent upon appointment of Shri
T.Sankaralingam as the Chairman & Managing Director of NTPC Limited, he was
appointed as the Chairman of the Company.
AUDITORS’ REPORT
The Comptroller and Auditor General of India (C&AG) vide letter dated 30th August,
2005 has appointed M/s S. R. Kapoor & Company, Chartered Accountants as Statutory
Auditor of the Company for the financial year 2005-06. There is no adverse comment,
observation or reservation in the auditors’ report on the accounts of the Company.
COMPTROLLER & AUDITOR GENERAL REVIEW
C&AG vide letter dated 7th June, 2006 has decided not to review the report of the
Auditors on the accounts of the company for the year ended 31st March 2006 and
as such has no comments to make under Section 619(4) of the Companies Act,
1956. A copy of the letter issued by C&AG in this regard is at Annex-I.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956 your Directors confirm that:
i) in the preparation of the Annual Accounts for the financial year ended 31st
March 2006, the applicable accounting standards have been followed alongwith
proper explanation relating to material departures;
ii) the directors have 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
as at 31st March 2006 and of the loss of the company for the said period;
iii) the directors had taken proper and sufficient care for the maintenance of
Companies Act, 1956, for safeguarding the assets of the company and for
iv) the directors had prepared the annual accounts for the financial year ended
31st March 2006, on going concern basis.
ACKNOWLEDGEMENT
and co-operation extended by the NTPC Limited, the holding Company, Cental
Electricity Authority and other agencies of Govt. of India/Govt. of Uttranchal/ Govt.
of West Bengal, Auditors and the Bankers of the Company.
Place: New Delhi
Dated: 29.07.2006
(T. Sankaralingam)
Chairman
ANNEXURE-I
SECTION 619 (4) OF THE COMPANIES ACT, 1956, ON THE ACCOUNTS OF NTPC
HYDRO LIMITED, NEW DELHI FOR THE YEAR ENDED,31ST MARCH, 2006
of the Auditors on the accounts of NTPC Hydro Limited, New Delhi for the year ended
31st March 2006 and as such he has no comments to make under Section 619(4) of
the Companies Act, 1956
Place: New Delhi
Dated: 7th June, 2006
(Meera Swraup)
New Delhi
SIGNIFICANT ACCOUNTING POLICIES
1. FIXED ASSETS
1.3 Capital expenditure on assets not owned by the Company is reflected as a
distinct item in Capital Work-in-Progress till the period of completion and
thereafter in the Fixed Assets.
1.4 Deposits, payments/liabilities made provisionally towards compensation,
rehabilitation and other expenses relatable to land in possession are treated
as cost of land.
2. CAPITAL WORK-IN-PROGRESS
2.1 Incidental Expenditure during Construction (net) including corporate office
expenses (allocated to the projects pro-rata to the annual capital
expenditure) for the year is apportioned to Capital Work-in-Progress on the
basis of accretions thereto.
2.2 Deposit work/ cost plus contracts are accounted for on the basis of
statements of account received from the contractors.
EXPENDITURE
3.1 Depreciation is charged on straight line method at the rates specified in
3.2 Depreciation on additions to/deductions from fixed assets during the year
is charged on pro-rata basis from/up to the month in which the asset is
available for use/disposal.
3.3 Assets costing up to Rs. 5000/- are fully depreciated in the year of
capitalization.
3.4 Capital expenditure referred to in Para 1.3 is amortised over a period of 4
years, from the year in which the first unit of project concerned comes into
commercial operation and thereafter from the year in which the relevant
asset becomes available for use.
3.5 Expenses on training are charged to revenue in the year of incurrence.
3.6 Expenditure on Leave Travel Concession to employees is recognized in the
year of availment due to uncertainties in accrual.
3.7 Prepaid expenses and prior period expenses / income of items of
Rs. 100,000/-and below are charged to natural heads of accounts.
The liabilities for retirement benefits in respect of gratuity, leave encashment and
Post Retirement Medical Scheme are ascertained annually by the holding company
on actuarial valuation at the year end. The company provides for retirement
benefits in respect of provident fund, gratuity, leave encashment and Post
Retirement Medical Scheme as apportioned by the holding company.
NTPC HYDRO LIMITED
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
NTPC HYDRO LIMITED
SCHEDULE
NO.
As at
31.03.2006
Rs.
As at
31.03.2005
1
100,000,000
48,121,100
100,000,000
48,121,100
SOURCES OF FUNDS
Capital
Fixed Assets
Gross Block
2
Less: Depreciation
Net Block
Capital Work In Progress
3
Construction Stores and Advances 4
1,328,901
149,928
1,478,829
2,879,877
330,211
3,210,088
7(a)
7(b)
25,708,351
49,305
4,651,248
-
Net Current Assets
Profit & Loss Account
25,757,656
(22,547,568)
81,140,036
4,651,248
(3,172,419)
47,712,642
TOTAL
100,000,000
48,121,100
Notes on Accounts
12
Schedules 1 to 12, significant accounting policies form integral part of accounts.
For S.R. Kapur & Co.
(D.K.Gupta)
(Manish Kumar)
(A.K.Singhal) (T.Sankaralingam)
Partner
Company Secretary
Director
Chairman
Place : New Delhi
Dated: 25th May 2006
NTPC HYDRO LIMITED
SCHEDULES - FORMING PART OF ACCOUNTS
SCHEDULE 1
CAPITAL
AUTHORISED
25,000,000 Equity shares of Rs. 10/- each
(Previous year 10,000,000 Equity shares
of Rs.10/- each)
Rs.
NO.
EXPENDITURE
Employees’ remuneration and benefits 8
10,684,979
10,870,779
Administration & other expenses
22,474,566
19,187,622
91,066
407,006
9
Depreciation
Finance charges
10
4,369
1,821
Total Expenditure
33,254,980
30,467,227
Loss before tax
33,254,980
30,467,227
577,494
-
(405,080)
-
Provision for Fringe Benefit Tax
Less : FBT Allocated to IEDC
Current Assets,Loans and Advances
Cash and Bank balances
5
Loans and Advances
6
Less:
Current Liabilities and Provisions
Liabilities
Provisions
3,501,732
582,918
2,918,814
662,063
3,580,877
5,309,935
802,920
4,507,015
35,705,819
1,194,698
41,407,532
SCHEDULE
Provision for Fringe benefit tax (Net)
172,414
-
Loss after tax
33,427,394
30,467,227
47,712,642
17,245,415
81,140,036
47,712,642
(5.71)
(13.85)
Incidental Expenditure During
Construction
11
Earning per share(Basic/Diluted)
(D.K.Gupta)
(Manish Kumar)
Partner
Company Secretary
Director
Chairman
Place : New Delhi
As at
31.03.2006
Rs.
As at
31.03.2005
100,000,000
45,621,100
100,000,000
2,500,000
48,121,100
SCHEDULE 1 (Contd.)
As at
31.03.2006
Rs.
As at
31.03.2005
250,000,000
100,000,000
10,000,000 Equity shares of Rs. 10/- each
fully paid up (Previous year 4,562,110
Equity shares of Rs.10/- each fully paid up)
held by the holding company, NTPC Limited
and its nominees
Share Capital Deposit
SCHEDULE 2
FIXED ASSETS
Rs.
GROSS BLOCK (AT COST)
DEPRECIATION
NET BLOCK
Fixed Assets
As at
01.04.2005
Additions
Deductions/
Adjustments
As on
31.03.2006
As at
01.04.2005
For the
Year
Deductions/
Adjustments
Upto
31.03.2006
As at
31.03.2006
As at
31.03.2005
Furniture,fixtures & other office
equipments
EDP-Equipments
Plant & Machinery
Capital expenditure on Assets
1,770,916
250,715
304,961
1,716,670
391,483
104,724
97,606
398,601
1,318,069
1,379,433
1,116,444
55,500
558,872
1,223,475
18,784
11,640
735,032
92,198
34,284
-
2,247,721
40,000
11,640
1,293,904
149,131
42,304
-
218,601
3,739
323
-
3,736
6,043
-
363,996
40,000
323
-
1,883,725
11,317
1,293,904
967,313
13,196
558,872
3,501,732
1,216,459
2,239,646
2,312,192
431,443
26,919
5,309,935
3,501,732
582,918
177,616
327,387
407,006
107,385
1,704
802,920
582,918
4,507,015
2,918,814
2,918,814
1,038,843
Previous Year
Depreciation for the yare is allocated as given below:
Charged to Profit & Loss Account
Transferred to IEDC
Current Year
91,066
236,321
327,387
Previous Year
-
SCHEDULE 3
Fixed Assets
Capital expenditure on Assets
not owned by the company
Survey, investigation, consultancy
and supervision charges
incidental Expenditure during
construction
Previous Year
Rs.
As at
Capitalise
As at
01.04.2005 Additions
during 31.03.2006
the Year
662,063
72,969
735,032
-
- 6,675,222
-
6,675,222
- 29,030,597
- 29,030,597
662,063 35,778,788
662,063
735,032 35,705,819
662,063
SCHEDULE 4
Advance for Captial Expenditure
SCHEDULE 5
Balances with scheduled banks
Current Account
SCHEDULE 6
LOANS AND ADVANCES
Advances recoverable in cash or in kind or
for value to be received
Employees
Others
SCHEDULE 7 (a)
CURRENT LIABILITIES
Sundry Creditors for capital expenditure
other than small scale undertakings
Sundry Creditors for goods and services
other than small scale undertakings
Amount payable to NTPC Ltd.
Deposits, retention money from contractors
and others
Other Liabilities
SCHEDULE 7 (b)
PROVISIONS
Provisions for Fringe Benefit tax
Less: Advance tax F.B.T.
As at
31.03.2006
1,194,698
Rs.
As at
31.03.2005
-
1,194,698
-
2,879,877
2,879,877
1,328,901
1,328,901
Less: Transferred to incidental expenditure
during construction - Schedule 11
Power Charges
Water Charges
Rent
Building
Others
Others Insurance
Environment Protection Cess
Training & Recruitment Expenses
Inland Travel
Remuneration to Auditors
Audit Fee
In Other Capacity
Publicity Expenses
Transit Hostel Expenses
Books and Periodicals
Legal Expenses
Printing and Stationery
Survey, Investigaion, Cosultancy and
Supervision Charges
Miscellaneous Expenses
SCHEDULE 10
FINANCE CHARGES
Bank Charges
43,051
287,160
330,211
97,800
52,128
149,928
SCHEDULE 11
INCIDENTAL EXPENDITURE DURING
CONSTRUCTION
A. Employees’ remuneration and othre benefits
Salaries,wages, allowances & benefits
Welfare Expenses
Total (A)
3,250,880
-
1,405,781
18,738,911
2,240,025
1,774,648
1,906,255
(76,810)
25,225,017
483,334
25,708,351
259,307
(24,450)
4,249,530
401,718
4,651,248
577,494
528,189
49,305
-
Current Year
Rs.
Previous Year
22,787,328
2,422,927
3,488,405
28,698,660
8,126,256
876,815
1,867,708
10,870,779
C. Depreciation
D. Interest & Finance Charges Capitalised
Bank Charges
Total (D)
18,013,681
10,684,979
10,870,779
E. Tax provision on IEDC Income
Total (E)
Total (A+B+C+D+E)
SCHEDULE 8
Salaries,wages,bonus,allowances & benefits
Welfare Expenses
SCHEDULE 9
ADMINISTRATION & OTHER EXPENSES
B. Othre Expenses
Power Charges
Water Charges
Rent
Hiring of Vehicles
Travelling Expenses
Advertainment and Publicity
Guest House Expenses
Books and Periodicals
Legal Expenses
Printing and Stationery
Auditor’s Remuneration in other capacity
Transport Vehicle Running Expenses
Subscription to trade & other association
Total (B)
Current Year
Rs.
Previous Year
188,063
6,859
3,584,668
58,332
5,622
1,785,932
437,856
1,649,956
4,791
400,000
458,236
693,919
4,336,464
557,317
180,356
491,718
946,063
22,040
21,530
37,000
397,253
269,930
21,381
354,995
979,500
319,888
181,285
16,530
21,820
140,162
223,647
20,748
15,057
15,114
327,478
55,864
17,012,328
1,466,688
32,844,630
13,177,615
1,148,247
19,187,622
10,370,064
22,474,566
19,187,622
9,820
Rs.
1,821
(5,451)
4,369
1,821
Current Year
Rs.
Previous Year
14,869,569
1,582,605
1,561,507
18,013,681
-
132,505
5,087
2,442,400
1,326,264
709,915
462,330
2,665,249
32,000
260,707
165,614
14,215
251,759
979,000
218,527
102,911
160,906
38,060
2,315
300
400,000
10,370,064
-
236,321
-
5,451
5,451
-
405,080
405,080
29,030,597
-
-
Paid up Capital
NTPC HYDRO LIMITED
1 0 0 0
SCHEDULE 12
NOTES ON ACCOUNT
1.
2.
Related Party Disclosures
The Company is a wholly owned subsidiary of NTPC Ltd.
ii)
Key Management Perosnnel (appointed by the Holding Company
i.e. NTPC Ltd.)
Shri C.P. Jain
Chairman *
Director
Shri A.K. Singhal
Director
Weighted Average number of equity
Earning Per Share (Rupees) - Basic and
Diluted
- 2 2
Previous Year
as on 31.03.05
33,427,394
30,467,227
5,855,556
2,200,196.6
(5.71)
(13.85)
10.00
Cost of building and trees has not been considered for working out the
estimated amount of the contract remaining to be executed on capital account
as the amount thereof shall be ascertained only after physical possession of
the land.
Previous year’s figures have been regrouped/rearranged wherever necessany.
INFORMATION PURSUANT TO PART IV OF SCHEDULE VI OF THE COMPANIES
ACT, 1956
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
State Code :
Registration Details
0 5 5
Registration No. U 4 0 1 0 1 D L 2 0 0 2 G O I 1 1 8 0 1 3
0 3
0 6
II Capital Raised during the year (Rs. In Thousands).
Public Issue
N I
L
Rights Issue
N I
L
Bonus Issue
N I
L
Private Placement
0
5
4
3
7
8
III Position of Mobilization and Deployment of Funds (Amount in Rs. Thousands)
Total liabilities
Total Assets
1 0 0 0
0 0
N
I L
Misc. Expenditure
5 4 8
N I
L
1
0 0
0 0 0
8 1 1
4 0
IV. Performance of Company (Rs. in Thousands)
Turnover (Including Other Income)
Total Expenditure
-
3
- - -
-
-
- - - -
-
Loss before tax
3 3 2 5
Earning per share in Rs.
-
5 . 7
3
2
5
5
Loss after tax
5
3
3 4
2
7
Dividend Rate %
1
N I
L
V. Generic Names of Three principal Products/Services of Company
Product Description:
G E N E R A T I O N
O F
10.00
The company has capitalized incidental expenses during construction period
w.e.f. 2nd August, 2005 relating to Lata Tapovan Project and Corporate Office
as the Detailed Project Report (DPR) has been approved by the Board of Diretors
in their meeting held on 2nd August, 2005. Further Rammam Project was also
approved by the Board of Directors on 21st March, 2006 and accordingly
incidental expenses during construction has been capitalized and Corporate
Office expenses has been allocated to Lata Tapovan Project and Rammam
Project in the ratio of capital expenditure of the projects.
3 1
Investments
0 8
Net Current Assets
Earning Per Share
The elements considered for calculation of Earning Per Share (Basic and
Diluted) are as under :
Balance-sheet date
L
Accumulated Losses
Net Loss used as numerator
I
N I
Net Fixed Assets
Director
Current Period
as on 31.03.06
6.
L
4 1 4
*superannuated on 31.3.2006
5.
N I
Unsecured Loans
N I L
i)
L
Reserve & Surplus
N I L
iii) The Key Management Personnel are on appointment to the Company on
part-time basis from the Holding Company NTPC Ltd. Company pays no
remuneration to the key management personnel as their remuneration
(being full-time employees of the Holding Company) is paid by NTPC Ltd.
4.
N I
Secured Loans
Estimated amount of contracts remaining to be executed on capital account
and not provided for Rs. 299.29 lakhs.
Shri G.K. Agarwal
3.
Capital Deposit Account
0 0
Item Code
E L E C T R I C I T Y
N A
In terms of our report of even date
(D.K.Gupta)
(Manish Kumar)
Partner
Company Secretary
(A.K.Singhal)
Director
(T.Sankaralingam)
Chairman
Place : New Delhi
Dated: 25th MAY 2006
NTPC HYDRO LIMITED
A.CASH FLOW FROM
OPERATING ACTIVITIES
Net Loss
Adjustment for:
Depreciation
Operating Loss before Working
Capital Changes
Adjustment for:
Loans and Advances
Direct Taxes Paid
Net Cash from Operating
Activities-A
B. CASH FLOW FROM
INVESTING ACTIVITIES
Purchase of Fixed Assets &
CWIP & Const. Advance
Current Year
31.03.2006
Rs.
Previous Year
31.03.2005
(33,254,980)
(30,467,227)
407,006
91,066
91,066
(33,163,914)
(30,060,221)
21,106,408
(180,283)
20,926,125
(12,237,789)
(172,414)
(12,410,203)
2,656,211
(117,083)
2,539,128
(27,521,093)
(27,521,093)
(37,917,721)
(2,949,040)
(50,327,924)
(30,470,133)
C. CASH FLOW FROM
FINANCING ACTIVITIES
Proceeds from issuance of
share capital
Net Increase in Cash and
Cash equivalents(A+B+C)
Cash and cash equivalents
(Opening Balance)
Cash and cash equivalents
(Closing Balance)
Current Year
Rs.
Previous Year
51,878,900
30,573,000
51,878,900
30,573,000
1,550,976
102,867
1,328,901
1,226,034
2,879,877
1,328,901
(D.K.Gupta)
(Manish Kumar)
Partner
Company Secretary
Director
Chairman
Place : New Delhi
th
Dated: 25 May 2006
AUDITORS’ REPORT
To the Members of
NTPC Hydro Limited
New Delhi
1. We have audited the attached Balance Sheet of NTPC HYDRO LIMITED, as at
31st March, 2006, 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 company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2
We conducted our audit in accordance with the 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 of material misstatement. An audit includes examining, on a 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 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 (Auditor’s Report) Order, 2003 issued by the
Central 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 the Annexure referred to above, we report that:i.
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.
ii. In our opinion, proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books.
iii. The Balance Sheet, Profit & Loss Account and Cash Flow statement dealt
with by this report are in agreement with the books of account.
iv. In our opinion, the Balance Sheet, Profit & 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;
v. We have been informed that the provisions of section 274(1)(g) of the
Companies Act, 1956 are not applicable to the directors of the Company,
pursuant to Circular No. 8/2002 dated 22 nd March, 2002 issued by
Department of Company Affairs, Government of India as the company is
wholly owned subsidiary of the Government Company.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with 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 the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2006;
b) in the case of the Profit and Loss Account, of the loss for the year
ended on that date; and
c) in the case of the Cash Flow statement, of the cash flow for the year
ended on that date.
for S.R. Kapur & Co.
Place : New Delhi
(D.K. Gupta)
Partner
Membership No. 089480
Annexure referred in paragraph 3 of Auditors’ Report to the Members of NTPC
HYDRO LIMITED on the accounts for the year ended on 31st March, 2006
i) a) The company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
b) All fixed assets have been physically verified by the management during the
year 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) In our opinion and according the information and explanations given to us
no substantial part of fixed assets of the company have been disposed off
during the year.
ii) As the company has not purchased / sold goods during the year nor is there any
opening stock, requirement of reporting on physical verification of stocks or
maintenance of inventory records is not applicable.
iii) The company has neither taken nor granted loans, secured or unsecured from/ to
companies, firms and other parties covered in the register maintained under section
301 of the Companies Act 1956. Accordingly paragraphs of clauses 4(iii)(b), (c)
& (d) of the Companies Auditor’s Report Order 2003 are not applicable.
iv) In our opinion and according to the information and explanations given to us,
there are adequate internal control procedures commensurate with the size of
the company and the nature of its business with regard to purchase of fixed
assets. The company has not made any purchase / sale. 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, we are of the
opinion that the transactions that needed to be entered into the register
maintained under section 301 of the Companies Act, 1956 have been so
entered.
b) In our opinion and according to the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements during
the year have been made at prices which are reasonable though company
has made reimbursements only.
vi) According to the information and explanations given to us, the company has not
accepted deposits under the provisions of section 58A & 58AA or any other
relevant provisions of the Companies Act, 1956 and the Companies (Acceptance
of Deposits) Rules 1975.
vii) In our opinion, the company has an internal audit system commensurate with the
size and nature of its business.
viii). The Central Government has prescribed the maintenance of cost records for
Electricity Industry under section 209 (l)(d) of the Companies Act, 1956. As the
company has not yet started its commercial production, clause 4(viii) of the
Companies Auditor’s Report Order, 2003 is not applicable.
ix) (a) The company is regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, investor education protection fund,
employees’ state insurance, income tax, sales tax, wealth tax, service tax, custom
duty, excise duty, cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed
amounts payable in respect of income tax, sales tax, wealth-tax, service tax,
customs duty, excise duty and cess were in arrears.
(c) According to the information and explanation given to us, there are no dues
of sales tax, income tax, customs duty, wealth tax, excise duty and cess
which have not been deposited on account of any dispute.
x) As the company has been registered for a period of less than five years, the
provisions of clause 4(x) of the Company (Auditor’s Report) Order 2003 is not
applicable.
xi) According to the information and explanations given to us, the company has not
taken loans from financial institution, banks or debenture holders.
xii) The 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 (Auditor’s Report) Order, 2003 is
not applicable to the company.
xiv) The company is not dealing in or trading in shares, securities, debentures and
other investments. Accordingly, the provision of clause 4(xiv) of the Companies
(Auditor’s Report) Order, 2003 is not applicable to the company.
xv) The company has not given any guarantee for loans taken by others from banks or
financial institutions.
xvi) The company has not taken term loans during the year.
xvii) The company has not raised short term or long term funds during the year.
xviii) According to the information and explanations given to us, the company has
made preferential allotment of shares to NTPC Limited holding company, covered
in the register maintained under section 301 of the Companies Act, 1956. In our
opinion, the price at which shares have been issued is not prejudicial to the
interest of the company.
xix) The Company has not issued debentures during the period covered by our audit.
xx) The company has not raised money by public issue.
xxi) According to the information and explanations given to us, no fraud on or by the
company has been noticed or reported during the course of our audit.
for S.R. Kapur & Co.
Place : New Delhi
(D.K. Gupta)
Partner
Membership No. 089480
EARNING & OUTGO
NTPC VIDYUT VYAPAR NIGAM LIMITED
(A wholly owned subsidiary of NTPC Limted)
DIRECTORS’ REPORT
There are no significant particulars, relating to conservation of energy, technology
absorption under the Companies (Disclosure of particulars in the Report of Board
of Directors) Rules, 1988, as your Company does not own any manufacturing facility.
During the period under review the Company had no earning in foreign exchange.
However, an amount of Rs.92, 367/- only was spent in equivalent foreign currency.
To the Members,
AUDIT COMMITTEE
Your Directors have pleasure in presenting the fourth Annual Report on the working
of the Company for the financial year ended on 31st March 2006 together with
Audited Statement of Accounts, Auditors’ Report and Review by the Comptroller
& Auditor General of India for the reporting period.
FINANCIAL RESULTS
(Amount in Rs.)
Income/Revenue
Profit before Tax
Less: Current Tax
Profit after current Tax
Provision for deferred Tax
Profit after tax
Profit available for appropriation
Transfer to general reserve
Interim Dividend
Proposed Dividend
Tax on Interim Dividend
Tax on proposed Dividend
Surplus carried forward
Year ended
31st March, 2006
Year ended
31st March, 2005
444,13,91,654
5,06,74,996
1,69,37,865
3,37,37,131
4,67,212
3,32,69,919
4,50,20,176
7,82,90,095
8,31,748
1,00,00,000
1,00,00,000
14,02,500
14,02,500
5,46,53,347
5,99,23,60,451
9,10,28,368
3,37,54,101
5,72,74,267
(90,098)
5,73,64,365
1,18,94,920
6,92,59,285
14,34,109
2,00,00,000
28,05,000
4,50,20,176
DIVIDEND
Your Directors have recommended a final dividend of Rs.10.00 million, i.e. @ 5%
on the paid up capital for the financial year 2005-06, thus making the total dividend
at Rs. 20 million, including the interim dividend of Rs. 10.00 million.
POWER TRADING-BUSINESS
During the year under review your company had traded 1643.29 MU amounting to
Rs. 4343.83 million as compared to 2616.253 MU of electricity amounting to
Rs.5870.50 million in the year 2004-05. The trading activity also included NTPC’s
unrequisitioned surplus (URS) power of Liquid Fuel stations. The power trading
activity has been affected due to licenses issued to many other new trading
companies and the state power utilities resorting to the tender route for sale of
power.
NEW BUSINESS INITIATIVES
During the year new business initiatives for export of Fly Ash and domestic sale of
Cenosphere and certified Fly Ash as per IS 3812 part-I were started. The first
consignment of 7508MT has been shipped on April 10, 2006 from Vizag port.
The domestic sale of Cenosphere is being conducted through e-auction portal of
MSTC Limited. An agreement to this effect was signed with them and one lot of
50MT has been auctioned and sold successfully during the year.
INITIATIVE FOR SETTING UP OF POWER EXCHANGE AT NATIONAL LEVEL
Your company had appointed a Consortium of Consultants viz. M/S CRISIL Ltd. and
M/s Nordpool Consulting, Norway to prepare a detailed Project Report for
establishment of a wholesale Power Exchange at National Level in India. The
consultants have submitted the DPR. Appropriate further action is being considered
by CERC in this matter.
SYSTEMS DEVELOPMENT
The Consortium of Consultants viz. M/s CRISIL Ltd. and M/s Millhouse Associates
UK is also working for development of IT-enabled trading system for NVVN.
During the period under review the Company had no employees of the category,
which falls, under section 217 (2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975.
The Board of Directors during the year had constituted an Audit Committee
comprising S/Shri Shyam Wadhera, R.S.Sharma & A.K.Singhal Directors pursuant to
the requirement of section 292A of the Companies Act, 1956. Three meetings of
the Audit Committee were held during the financial year 2005-06.
BOARD OF DIRECTORS
Shri C.P.Jain ceased to be Chairman of the Company w.e.f. 31.03.2006 A.N.
consequent upon his superannuation from the services of NTPC Limited. The Board
places on record its deep appreciation for the valuable contributions made by
Shri C.P.Jain, under whose dynamic leadership the Company was formed. Pursuant
to the Articles of Association of the Company, the Chairman & Managing Director
of NTPC Limited shall be the ex-officio part-time Chairman on the Board of the
Company. On taking over as the Chairman & Managing Director of NTPC Limited,
Shri T. Sankaralingam was appointed as Chairman of the Company w.e.f 01.04.2006.
AUDIT REPORT & C & A G REVIEW
The Comptroller and Auditor General of India (C & AG) has appointed M/s Rohtas
& Hans, Chartered Accountants as Auditor of the Company for the financial year
2005-06. There are no adverse comments, observation or reservation in the auditors
report on the accounts of the Company.
The C&AG has reviewed the annual accounts for the year ended 31.3.2006 and has
made no comment upon or supplement to the Auditors’ Report under Section 619
(4) of the Companies Act, 1956. Letter of C & AG on the accounts of the Company
for the financial year 2005-06 are at Annexure-I.
As required under Section 217 (2AA) of the companies Act, 1956 your Directors
confirm that:
(i) in the preparation of annual accounts, the applicable accounting standards
had been followed along with proper explanation relating to material
departures;
(ii) 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 2005-06 and of the profit of the company for that
period;
(iii) the Directors had taken proper and sufficient care for the maintenance of
preventing and detecting the fraud and other irregularities;
(iv) the Directors had prepared the annual accounts on going concern basis.
ACKNOWLEDGMENT
and co-operation extended by NTPC Limited, the Central Electricity Regulatory
Commission, the valued customers of the Company, various State Electricity Boards,
the Auditors and the Bankers of the Company.
Place: New Delhi
Date: 03.08.2006
ANNEXURE-I
SECTION 619 (4) OF THE COMPANIES ACT, 1956, ON THE ACCOUNTS OF
NTPC VIDYUT VYAPAR NIGAM LIMITED, NEW DELHI FOR THE YEAR ENDED,31ST
MARCH, 2006
I, have to state that the Comptroller and Auditor General of India has no comments
upon or supplement to the Auditors’ Report under section 619(4) of the Companies
Act, 1956, on the accounts of NTPC Vidyut Vyapar Nigam Limited, New Delhi for the
year ended 31st March 2006.
FIXED DEPOSITS
The company has not accepted any fixed deposit during the period ending 31st
March 2006.
(T.SANKARALINGAM)
CHAIRMAN
Place: New Delhi
Dated: 22 June, 2006
(Meera Swraup)
New Delhi
NTPC VIDYUT VYAPAR NIGAM LTD.
ACCOUNTING POLICIES
1 FIXED ASSETS
2 INVENTORIES
2.1 Inventories are valued at the lower of cost, determined on weighted
average basis, and net realizable value.
3 FOREIGN CURRENCY TRANSACTIONS
3.1 Foreign currency transactions are initially recorded at the rates of exchange
ruling at the date of transaction.
3.2 At the balance sheet date, foreign currency monetary items are reported
using the closing rate.
4 PROFIT AND LOSS ACCOUNT
4.1 INCOME RECOGNITION
4.1.1 Sale of energy is accounted for based on rates agreed with the customers.
4.1.2 The surcharge on late payment/overdue sundry debtors for sale of energy
is recognized when no significant uncertainty as to measurability or
collectability exists.
4.2 EXPENDITURE
4.2.1 Depreciation is charged on straight-line method at the rates specified in
4.2.2 Depreciation on additions to/ deductions from fixed assets during the
year is charged on pro-rata basis from/up to the month in which the asset is
available for use/disposal.
4.2.3 Assets costing up to Rs.5000/- are fully depreciated in the year of
capitalization.
4.2.4 Cost of Computer software recognized as intangible assets is amortized
on straight-line method over a period of legal right to use or 3 years,
whichever is earlier.
4.2.5 Expenses on training, recruitment and ex-gratia payments under Voluntary
Retirement scheme are charged to revenue in the year of incurrence.
4.2.6 Expenditure on Leave Travel Concession to employees is recognized in
the year of availment due to uncertainties in accrual.
4.2.7 Prepaid expenses and prior period expenses/income of items of
Rs.1,00,000/- and below are charged to natural heads of accounts.
5 RETIREMENT BENEFITS
5.1 The liabilities for retirement benefits in respect of Gratuity, leave
encashment and post retirement medical scheme are ascertained annually
by the Holding Company i.e. NTPC Ltd. on actuarial valuation at the year
end. The company provides for retirement benefits in respect of provident
fund, gratuity, leave encashment and post retirement medical scheme as
apportioned by the Holding Company.
BALANCE SHEET AS AT 31st MARCH 2006
Schedule No. 31.03.2006
SOURCES OF FUNDS
Capital
Reserves & Surplus
1
2
Deffered Tax Liability (Net)
TOTAL
FIXED ASSETS
3
Gross Block
Less: Depreciation
Net Block
Inventories
4
Sundry Debtors
5
6
7
Loans and Advances
8
Liabilities
9
Provisions
10
(Rs.)
31.03.2005
200000000
59037387
259037387
443564
259480951
200000000
48572468
248572468
248572468
3270886
751402
2519484
2607734
308889
2298845
7437068
242649199
322306545
157864
6822516
579373192
245757584
234448175
12677
6229780
486448216
310961621
11450104
322411725
256961467
259480951
217393241
22805000
240198241
246249975
23648
248572468
Net Current Assets
Deferred Tax Asset (Net)
TOTAL
Notes on accounts
14
Cash Flow Statement, Schedules 1 to 14 and accounting policies form integral part
of accounts.
For Rohtas & Hans
(Hans Kumar Jain)
(Nitin Mehra)
(A.K.Singhal)
(T.Sankaralingam)
Partner
Company Secretary
Director
Chairman
M.No. 82912
Place : New Delhi
NTPC VIDYUT VYPAR NIGAM LTD.
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
Schedule
No.
INCOME
Sales
Power
4343829121
Ash/Ash products
750000
Rebate on power purchase
Interest (Gross)(Tax deducted at source
Rs.2764971/- Previous year Rs.58280/-)
TOTAL
EXPENDITURE
Power purchase
Open Access Charges
Ash/Ash products collection, trading
& selling Expenses
11
Employees’ remuneration and benefits 12
Administration & Other Expenses
13
Rebate on power sale
Depreciation
Interest u/s 234C of Income Tax Act
TOTAL
Profit beforeTax
Provision for Tax:
a) Current Tax
b) Deferred Tax
c) Fringe Benefit Tax
Total (a+b+c)
Profit after Tax
Dividend
- Interim
- Proposed
Tax on Dividend
- Interim
- Proposed
Earning per share (Equity share, face value
Rs.10/- each)-Basic and diluted
Current
Year
(Rs.)
Previous
Year
4344579121
83764179
5870493765
121587973
13048354
4441391654
278713
5992360451
4267171550
4298233
5746745992
6605904
128748
26284202
9283178
83067740
454083
28924
4390716658
50674996
19027197
7681137
120838239
271821
161793
5901332083
91028368
16599728
467212
338137
17405077
33269919
45020176
78290095
831748
33754101
(90098)
33664003
57364365
11894920
69259285
1434109
10000000
10000000
20000000
1402500
1402500
54653347
2805000
45020176
1.66
2.87
For Rohtas & Hans
(Hans Kumar Jain)
(Nitin Mehra)
(A.K.Singhal)
(T.Sankaralingam)
Partner
Company Secretary
Director
Chairman
M.No. 82912
Place : New Delhi
NTPC VIDYUT VYPAR NIGAM LTD.
SCHEDULE 1
CAPITAL
AUTHORISED
2,00,00,000 equity shares of Rs. 10/-each
(Previous Year 2,00,00,000 equity shares
of Rs. 10/-each)
ISSUED, SUBSCRIBED & PAID UP
2,00,00,000 equity shares of Rs. 10/-each
fully paid-up (Previous Year 2,00,00,000
equity shares of Rs. 10/- each fully paid up)
All shares are held by the holding company,
NTPC Limited and its’ nominees.
SCHEDULE 2
RESERVES & SURPLUS
General Reserve
Add: Transfer from Profit and Loss Account
Surplus, balance in Profit and Loss Account
TOTAL
31.03.2006
(Rs.)
31.03.2005
200000000
200000000
200000000
200000000
3552292
831748
4384040
54653347
59037387
2118183
1434109
3552292
45020176
48572468
SCHEDULE 3
FIXED ASSETS
As at
1.04.2005
Furniture,fixtures &
other office equipment
EDP & WP machines
Intangible assets-software
Total
Previous Year
(Rs.)
GROSS BLOCK
DEPRECIATION
NET BLOCK
Additions Deductions/
As at
As at For the Deductions/
upto
As at
As at
Adjustments 31.03.2006 1.04.2005
Year Adjustments 31.03.2006 31.03.2006 31.03.2005
426491
2167723
13520
2607734
178775
578879
21985
779639
116487
116487
488779
2746602
35505
3270886
46501
253374
9014
308889
66667
374919
12497
454083
11570
11570
101598
628293
21511
751402
387181
2118309
13994
2519484
379990
1914349
4506
2298845
845690
1793744
31700
2607734
37295
271821
227
308889
2298845
808395
SCHEDULE 4
INVENTORIES
(Valuation as per Accounting Policy No.2)
Fly Ash (packed bags)
Packing material
Cenosphere
TOTAL
SCHEDULE 5
SUNDRY DEBTORS
Other debts
TOTAL
SCHEDULE 6
Cash on hand
Balances with Scheduled Banks
-Current Account
-Current account linked-Term Deposit Account
TOTAL
SCHEDULE 7
Interest accrued
31.03.2006
4680652
2594973
161443
7437068
Other liabilities
TOTAL
SCHEDULE 10
PROVISIONS
Proposed dividend
Closing Balance (Proposed Dividend)
-
Provision for Interest u/s 234C of Income Tax Act
Less: Interest paid
Provision for Fringe Benefit Tax
Less: Fringe Benefit Tax paid
2918337
334796
239730862
242649199
245422788
245757584
930
1930
13373
322292242
322306545
192392300
42053945
234448175
157864
12677
SCHEDULE 8
LOANS AND ADVANCES
ADVANCES
Advance deposit with RLDCs
-Unsecured, considered good
3408865
Earnest money deposit with suppliers
-Unsecured, considered good
1000000
4408865
Advance Income Tax Deposit & Tax deducted
at source
19013379
Less: Provision for Income Tax
16599728
2413651
TOTAL
6822516
SCHEDULE 9
CURRENT LIABILITIES
Sundry Creditors
- Suppliers & Contractors
- NTPC Ltd. (Holding Company)
- Others
Book Overdraft
Deposits, retention money from buyers
(Rs.)
31.03.2005
275149476
10775851
949397
3582897
1089327
291546948
19367068
47605
310961621
20000000
10000000
20000000
10000000
3093312
1300000
4393312
35590569
33754101
1836468
6229780
209161366
5735928
70528
214967822
2425419
217393241
6354548
20000000
6354548
20000000
TOTAL
SCHEDULE 11
ASH/ASH PRODUCTS COLLECTION, TRADING
& SELLING EXPENSES
Ash testing charges
Cenospere collection charges
E-auction charges
TOTAL
SCHEDULE 12
Salaries,wages,bonus,allowances & benefits
Welfare expenses
TOTAL
SCHEDULE 13
ADMINISTRATION & OTHER EXPENSES
Power Charges
Leased building-residential
Office
Rates & Taxes
Training & recruitment expenses
Travelling expenses
Tender expenses
1342467
215000
Remuneration to auditors
Audit fee
Tax audit fee
In other capacity
Out of pocket expenses
Business promotion and advertisement
Legal Expenses
Printing & stationery
Loss on disposal of fixed assets
Bank and other Charges
TOTAL
31.03.2006
(Rs.)
31.03.2005
2805000
1402500
2805000
1402500
28924
28924
338137
319457
18680
11450104
814176
2805000
814176
2805000
161793
161793
22805000
Current
Year
Previous
Year
30636
73317
24795
128748
-
21071079
2212497
3000626
26284202
14956229
1529986
2540982
19027197
39000
29400
399226
42180
1511600
750
610253
3171333
1127467
241174
61675
1058600
840613
449857
2424197
21000
-
33060
9918
16530
11305
31000
266438
3350
24332
81983
1380
203601
166153
9762
1036890
485667
9283178
33060
9918
20872
289482
75012
25992
140089
180
212231
166102
7471
1414137
160075
7681137
SCHEDULE 14
NOTES ON ACCOUNTS
1. Balances shown under debtors, advances and creditors in so far as these
have not been since realized/discharged or adjusted are subject to
confirmation/reconciliation and consequential adjustment, if any.
2. The Sales and Purchase are recognized on the basis of monthly Regional Energy
Accounts (REA) issued by the concerned Regional Electricity Boards (REBs).
3.
4.
5.
6.
Contingent liability: Claims against the company not acknowledged as Debts
is Rs.NIL (Previous year-Rs. NIL).
The effect of foreign exchange fluctuation during the year is as under:
a) The amount of exchange difference debited to the Profit and Loss Account
is Rs.3904/- (Previous year Rs. NIL)
Segment information
Accounting standard (AS-17) ‘Segment Reporting’ is applicable to the
company but there are no reportable segments.
Related Party Disclosures
a) The Company is a wholly owned subsidiary of NTPC Limited.
b) Key Management Personnel (appointed by the Holding Company i.e. NTPC
Limited.)
Shri C.P.Jain
Shri R.S.Sharma
Shri Shyam Wadhera
Shri Chandan Roy
Shri A.K.Singhal
Shri G.K.Agarwal
c)
7.
Current Year
33269919
Previous Year
57364365
20000000
20000000
1.66
10
2.87
10
In compliance of Accounting Standard –22 on “Accounting for taxes on
Income” issued by the Institute of Chartered Accountants of India, the item
wise details of Deferred tax liability (net) are as under:
(Rs.)
Deferred Tax Liability/(Asset) (net)
31.03.2006
31.03.2005
446335
293344
446335
293344
2771
-
5541
311451
2771
443564
316992
(23648)
The net increase in the deferred tax liability of Rs. 467212/- (Previous year
(-) Rs.90098/-) has been debited to Profit & Loss Account.
9.
Licensed and Installed Capacities:
a) Licensed Capacity - Not Applicable
b) Installed Capacity - Not Applicable
10. Quantitative information:
a) Purchase and sale of power (in KWH)
Purchase
Sale
b) Trading of Fly Ash and ash based
products (MT)
11. Expenditure in foreign currency (Rs.)
a) Training & recruitment expenses
b) Foreign travel
(A.K.Singhal)
Director
(T.Sankaralingam)
Chairman
Place : New Delhi
Dated: 26 th May 2006
State Code: 0 5 5
Registration No. U 4 0 1 0 8 D L 2 0
Earnings per share
Less: Deferred Tax Assets
i) Provision disallowed for tax purpose
ii) Disallowed u/s 43B of the
Income Tax Act, 1961
(Nitin Mehra)
Company Secretary
I. Registration Detail
The Key Management Personnel are on appointment to the Company on
part-time basis from the Holding Company NTPC Limited. The Company
pays no remuneration to the key management personnel as their
remuneration (being full-time employees of the Holding Company) is
paid by NTPC Limited. In case of Shri Shyam Wadhera, as he is full time
employee of Power Finance Corporation Ltd. (PFC Ltd.), his remuneration
is paid by PFC Ltd.
Deferred Tax liability
i) Difference of Book depreciation
and Tax depreciation
(Hans Kumar Jain)
Partner
M.No. 82912
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE
The elements considered for calculation of Earning per share (Basic) are as
under:
8.
For Rohtas & Hans
INFORMATION PURSUANT TO PART IV OF SCHEDULE VI OF THE COMPANIES
ACT, 1956
Chairman
Director
Director
Director
Director
Director
Net Profit/(Loss) after Tax used as
numerator (Rupees)
Weighted average number of equity
Earning/(Loss) per share (Rupees)
Current Year
Previous Year
1643299451
1643299451
2616252909
2616252909
50
NIL
NIL
92367
153893
NIL
12. All the employees of the company are on secondment from the Holding
Company.
Balance Sheet Date
0 2
G O I 1 1 7 5 8 4
Date
Month
Year
3 1
0 3
2 0 0 6
II. Capital Raised during the year
(Rs. in Thousand)
Public Issue
Right issue
N I L
N I L
Bonus Issue
Private Placement
N I L
N I L
III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)
Total Liability
Total Assets
5 8 1 8 9 3
5 8 1 8 9 3
Source of Funds
Paid up Capital
Reserves & Surplus
2 0 0 0 0 0
5 9 0 3 7
Secured Loans
Unsecured Loans
N I L
N I L
Deferred Tax Liabilites
4 4 4
Net Fixed Assets
Investment
2 5 2 0
N I L
Net Current assets
Misc. Expenditure
2 5 6 9 6 1
N I L
Accumulated Losses
N I L
IV. Performance of Company (Amount in Rs. Thousands)
Turnover
Total Expenditure
4 3 4 4 5 7 9
4 3 9 0 7 1 7
Profit/Loss before Tax
Profit After Tax
5 0 6 7 5
3 3 2 7 0
Dividend Rate (%)
1. 6 6
1 0
V. Generic name of three Principal Products/Services of Company
Product Description
Item Code No.
1. Trading of Electric Power
N A
2. Trading of Fly Ash and Ash based products
N A
For Rohtas & Hans
(Hans Kumar Jain)
(Nitin Mehra)
Partner
Company Secretary
M.No. 82912
(A.K.Singhal)
Director
(T.Sankaralingam)
Chairman
Place : New Delhi
13. Previous year’s figures have been regrouped/rearranged wherever necessary.
(Rs.)
A.
B.
C.
Net profit before tax
Adjustment for:
Depreciation
Interest income
Interest paid u/s 234C of Income tax Act
Operating profit
before Working Capital Changes
Adjustment for:
Inventories
Trade Payable and Other Liabilities
Loans and Advances
Direct Taxes Paid
Net cash from Operating Activities-A
CASH FLOW FROM INVESTING ACTIVITIES
Expenditure on Fixed Assets
Interest received
Net Cash in Investing Activities -B
Dividend
Tax on Dividend
Net Cash flow from Financing Activities-C
Net Increase/(Decrease) in Cash and
Cash equivalents (A+B+C)
Cash and Cash equivalents
(Opening balance) *
Cash and Cash equivalents
(Closing balance)*
50674996
91028368
454083
(13048354)
28924
271821
(278713)
161793
38109649
91183269
(7437068)
3108385
93568380
(15553)
127333793
(17496368)
109837425
(17660556)
14589262
(4393312)
83718663
(36401528)
47317135
(674722)
12903167
12228445
(1762271)
266036
(1496235)
(30000000)
(4207500)
(34207500)
(6354548)
(814176)
(7168724)
87858370
38652176
234448175
195795999
322306545
234448175
*NOTE: Cash and Cash Equivalents consist of Cash in Hand & Balance with Banks.
For Rohtas & Hans
(Hans Kumar Jain)
(Nitin Mehra)
Partner
Company Secretary
Director
Chairman
M.No. 82912
Place : New Delhi
AUDITORS’ REPORT
To the Members of
NTPC Vidyut Vyapar Nigam Limited
1. We have audited the attached Balance Sheet of NTPC VIDYUT VYAPAR NIGAM
LIMITED, as at 31st March 2006, 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 Company’s 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 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 (Auditor’s Report) Order, 2003 (as amended)
issued by the Government of India in terms of Section 227 (4A) of the Companies
Act, 1956, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 & 5 of the said order.
4. Further to our comments in the Annexure referred to 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 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 Section 274
(1) (g) 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 14, give the information required by the
Companies Act, 1956, in the manner so required and gives a true and fair
view in conformity with the accounting principles generally accepted in India;
i.
in the case of Balance Sheet, of the state of affairs of the Company as at
31st March, 2006,
ii. in the case of Profit and Loss Account, of the profit for the year ended on
that date, and
iii. in the case of Cash Flow Statement, of the cash flows for the year ended
on that date.
For Rohtas & Hans
(Hans Kumar Jain)
Partner
M.N.82912
Place : New Delhi
Dated : 26th May 2006
Annexure to the Auditor’s Report
Statement referred to in paragraph (3) of our report of even date to the members of NTPC
VIDYUT VYAPAR NIGAM LIMITED on the accounts for the year ended 31st March 2006.
(i) (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) Physical verification of fixed assets has been carried out by an independent
Chartered Accountant firm appointed for the purpose, which in our opinion is
considered reasonable having regard to the size and nature of its assets & no
material discrepancies were noticed on such verification.
(c) No substantial part of fixed assets has been disposed off during the year.
(ii) (a) The physical verification of inventory has been conducted by the management.
(b) The procedure of the physical verification of Inventory followed by the
management is reasonable and adequate in relation to the size of the company
and the nature of its business.
(c) The company has maintained proper records of inventory and no material
discrepancies were noticed on such verification.
(iii) (a) The Company has not granted or taken any loans, secured or unsecured to/
from companies, firms or other parties listed in the register maintained under
(b) In view of clause (iii) (a) above, the clause (iii) (b), (iii) (c) and (iii) (d), are not
applicable.
(iv) In our opinion and according to the information and explanations given to us,
there are adequate internal control procedures commensurate with the size of the
company and nature of its business with regard to purchase of Inventory, fixed
assets and sale of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control systems.
(v) (a) According to the information and explanation given to us, during the year
under audit there have been no transaction which need to be entered into the
register maintained under section 301 of the companies Act, 1956.
(b) In view of clause (v) (a) above, the clause (v) (b) is not applicable.
(vi) The Company has not accepted deposits from the public.
(vii) The Company has appointed a Chartered Accountant firm separately to conduct
Internal audit during the year and in our opinion, this is commensurate with the
size of the company and nature of its business.
(viii) The Central Government has not prescribed maintenance of cost records under
section 209(l)(d) of the Companies Act, 1956.
(ix) (a) The employees of NVVN are on secondment basis from its holding company
i.e. NTPC Ltd. Both companies are regular in depositing undisputed statutory
dues including dues like Provident Fund, Income Tax, Sales Tax and Service Tax
etc. with appropriate authorities. According to the information and explanations
given to us, there are no undisputed Provident Fund, Income Tax, Sales Tax and
Service Tax etc. in arrear as at 31.03.2006 for a period of more than six months
from the date they became payable.
(b) In view of clause (ix) (a) above, the clause (ix) (b) is not applicable.
(x) The clause is not applicable.
(xi) The clause is not applicable.
(xii) The clause is not applicable.
(xiii) The clause (xiii) (a), (b), (c) and (d) are not applicable.
(xiv) The clause is not applicable.
(xv) The clause is not applicable.
(xvi) The clause is not applicable.
(xvii) The clause is not applicable.
(xviii)The clause is not applicable.
(xix) The clause is not applicable.
(xx) The clause is not applicable
(xxi) According to the information and explanations given to us, no fraud on or by
the company has been noticed or reported during the course of our audit.
For Rohtas & Hans
(Hans Kumar Jain)
Partner
M.N.82912
Place : New Delhi
PIPAVAV POWER DEVELOPMENT COMPANY LIMITED
(A wholly owned subsidiary of NTPC Limted)
DIRECTORS’ REPORT
To,
The Members,
Your Directors have pleasure in presenting their 5th Annual Report and Audited
statement of Accounts for the financial year ended 31 st March 2006 together with
the Auditors‘ Report thereon.
OPERATIONAL REVIEW
During the period under review, studies pertaining to fuel transportation and seismic
study have been completed. Environmental Impact Assessment study, Area drainage
study and feasibility study are in progress.
Various agencies like NTPC Vidyut Vyapar Nigam Ltd. and Madhya Pradesh State
Electricity Board have expressed their willingness for purchasing power from the
proposed power project carried out by the Company. Efforts are on for obtaining
“Mega Power Project” status.
The Company has applied for allotment of “ Nuagaon, Telishahi” coal mine block
and is pursuing the matter with concerned authorities.
FINANCIAL REVIEW
During the year Company has incurred loss of Rs. 40,083/- as against loss of
Rs. 24,252/- incurred last year.
Since, the company has no employee on the rolls, the particulars prescribed under
Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars
of Employees) Rules, 1975 are not applicable.
AUDITORS’ REPORT
The Comptroller and Auditor General of India (C&AG) has appointed M/s Sanjeev
Chopra & Company, Chartered Accountants as Auditor of the Company for the
financial year 2005-06. There are no adverse comments, observation or reservation
in the auditors’ report on the accounts of the Company.
COMPTROLLERS & AUDITOR GENERAL REVIEW
C&AG vide letter dated 7th June, 2006 has decided not to review the report of the
Auditors on the accounts of the company for the year ended 31st March 2006 and
as such has no comments to make under Section 619(4) of the Companies Act,
1956. A copy of the letter issued by C&AG in this regard is at Annex-I.
SECRETARIAL COMPLIANCE REPORT
The Company appointed M/s. K.K. Malhotra & Company, Company Secretaries for
the Certificate of compliance under Section 383A(1) of the Companies Act, 1956
for the financial year 2005-06. The Certificate is attached with the Directors’ Report
as Annex-II.
FIXED DEPOSITS
The Company has not accepted any fixed deposit during the period ending 31 st
March 2006.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNING & OUTGO
Since the Company’s activities are in project formulation stage and no commercial
activity was carried out by the Company, particulars in respect of conservation of
energy, technology absorption and foreign exchange earnings and outgo are not
applicable to the Company.
As required under Section 217(2AA) of the Companies Act, 1956 your Directors
confirm that:
i)
In the preparation of the Annual Accounts, the applicable accounting standards
had been followed alongwith proper explanation relating to material
departures;
ii) The Directors had selected such accounting policies and made judgements
and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the company as on 31st March 2006 and of the loss of
the company for that period;
iii) The Directors had taken proper and sufficient care for the maintenance of
iv) The Directors had prepared the annual accounts on going concern basis.
DIRECTORS
Smt. Vijaylaxmi Joshi, Chairman and Managing Director, Gujarat State Electricity
Corporation Limited was nominated by Gujarat State Electricity Corporation to the
Board of the Company w.e.f.24th July, 2005.
Dr. Joy I. Cheenath, ceased to be Director of the Company w.e.f. 14th March 2006.
Directors place on record deep appreciation for valuable contributions made by
him.
ACKNOWLEDGEMENT
and co-operation extended by the Union Ministry of Power, Government of Gujarat,
NTPC Ltd., Gujarat Power Corporation Ltd., Gujarat State Electricity Corporation
and other agencies of Govt. of India/Govt. of Gujarat, Auditors and the Bankers of
the company.
(T. Sankaralingam)
Chairman
Place: New Delhi
Dated:14 th June, 2006
SECTION 619 (4) OF THE COMPANIES ACT, 1956, ON THE ACCOUNTS OF
PIPAVAV POWER DEVELOPMENT COMPANY LIMITED, NEW DELHI FOR THE YEAR
ENDED,31ST MARCH, 2006
of the Auditors on the accounts of Pipavav Power Development Company Limited.
New Delhi for the year ended 31st March 2006 and as such he has no comments to
make under Section 619(4) of the Companies Act, 1956
Place: New Delhi
Dated: 7th June, 2006
(Meera Swraup)
New Delhi
Annex-II
The Members
Pipavav Power Development Company Limited
We have examined the registers, records, books and papers of PIPAVAV POWER
DEVELOPMENT COMPANY LIMITED (the Company) as required to be maintained
under the Companies Act, 1956 (the Act) and the rules made thereunder and also the
provisions contained in the Memorandum and Articles of Association of the company
for the financial year ended 31 March, 2006 (Financial Year). In our opinion and to the
best of our information and according to the examination carried out by us and
explanations furnished to us by the company, its officers and agents and on the basis
of the Auditors’ Report, we certify that in respect of the aforesaid financial year:
1. The company has kept and maintained all registers as stated in the Annexure ‘A’
to this certificate, as per the provisions of the Act and the rules made thereunder
and all entries therein have been duly recorded.
2. The company has duly filed the forms and returns as stated in the Annexure ‘B’
to this certificate, with the Registrar of Companies, Regional Director, Central
Government, Company Law Board or other authorities within the time prescribed
under the Act and the rules made there under.
3. The Company being a public limited company, comments are not required.
4. The Board of Directors duly met 4(Four) times respectively on 30/5/2005,
28/9/2005, 23/12/2005 and 25/03/2006 in respect of which meeting proper notices
were given and the proceedings were properly recorded and signed including
the circular resolutions passed in the Minutes Book maintained for the purpose.
5. The company has not closed its Register of members or Debenture holders during
the financial year.
6. Tte Annual General Meeting for the financial year ended on 31st March, 2005 was
held on 15th July 2005 after giving due notice to the members of the company
and other concerned and the resolutions passed thereat were duly recorded in
Minutes Book maintained for the purpose.
7. No Extra Ordinary General Meeting was held during the financial year.
8. The Company has not advanced any loans to its directors or persons or firms or
companies referred to under section 295 of the Act during the financial year.
9. The Company has not entered into any contracts falling within the purview of
section 297 ot the Act.
10. The Company was not required to make any entries in the register maintained
under section 301(1) of the Act. However, it made all the necessary entries in the
register maintained under section 301(3) of the Act.
11. As there were no instances falling within the purview of section 314 of the Act,
the company has not obtained any approvals from the Board of Directors, Members
or Central Government.
12. The Company has not issued any duplicate share certificates during the financial year.
13. The company has:
(i) delivered all the certificates on Allotment of shares & lodgement thereof
and on transfer/transmission of securities in accordance with the provisions
of the Act.
(ii) not deposited any amount in a separate Bank Account as no dividend was
declared during the financial year.
(iii) not posted warrants to any member of the company as no dividend was
declared during the financial year.
(iv) not transferred any amounts to the Investor Education and Protection Fund
during the year.
(v) duly complied with the requirements of section 217 of the Act.
14. The Board of Directors of the company is duly constituted and the appointment
of directors, additional directors, alternate directors and directors to fill the casual
vacancies have been duly made.
15. The company has not appointed any Managing Director/Whole time Director/
Manager during the financial year.
16. The company has not appointed any sole -selling agent during the financial year.
17. The company has not obtained any approvals of the Central Government, Company
Law Board, Regional Director, Registrar and/or such other authorities prescribed
under the various provisions of the Act during the financial year.
18. The Directors have disclosed their interest in other firms/companies to the Board
of Directors pursuant to the provisions of the Act and the rules made there under.
19. The company has issued 5000 Equity Shares during the financial year and duly
complied with the provisions of the Act.
20. The company has not bought back any shares during the financial year.
21. There was no redemption of preference shares or debentures during the financial year.
22. There were no transactions necessitating the Company to keep in abeyance rights to
dividend, rights shares and bonus shares pending registration of transfer of shares.
23. The company has not invited/accepted any deposits including any unsecured
loan falling within the purview of section 58 A during the financial year.
24. The company has not made any borrowing during the financial year ended 31st
March,2006.
25. The company has not made any loans or advances or given guarantees or provided
securities to other bodies corporate and consequently no entries have been made
in the register kept for the purpose.
26. The company has not altered the provisions of the Memorandum with respect to
situation of the company’s registered office from one state to another during the
year under scrutiny.
the objects of the company during the financial year under scrutiny.
28 The company has not altered the provisions of the Memorandum with respect to
the name of the company during the financial year under scrutiny.
the share capital of the company during the financial year under scrutiny.
30. The company has not altered its Articles of Association during the financial year.
31. There was no prosecution initiated against or show cause notices received by the
company and no fines or penalties or any other punishments were imposed on
the company during the financial year, for offences under the Act.
32. The company has not received any money as security from its employees during
the financial year.
33. The company has not constituted a separate provident Fund trust for its employees
or any class of its employees as contemplated under section 418 of the Act.
For K.K. Malhotra & Co.
Company Secretaries
Place : New Delhi
K.K. Malhotra
C.P. No. 446
Date : 25th May 2005
Annexure A
Registers as maintained by the company:
1. Register of members u/s 150.
2. Index of members u/s 151.
3. Registers of transfers.
4. Books of accounts u/s 209.
5. Register of contracts under which directors are interested u/s 301.
6. Register of Directors, Managing Director, Secretary, Manager u/s 303.
7. Register of Director’s Shareholding u/s 307.
8. Register of Directors attendance.
9. Minutes books of General/Board Meetings.
10. Register of Share application & allotment.
Annexure B
Forms and Returns as filed by the Company with Registrar of Companies, Regional
Director, Central Government or other authorities during the financial year ending 31st
March, 2006.
1. Annual Return u/s 159 on 29/07//2005
2. Balance Sheet u/s 220 on 27/07/2005.
3. Compliance certificate u/s 383A on 27/07/2005.
4. Form no. 32 u/s 303(2) on 17/08/2005 .
SOURCES OF FUNDS
Capital
CURRENT ASSETS, LOANS
AND ADVANCES
Loans & Advances
LESS : CURRENT LIABILITIES
AND PROVISIONS
Liabilities
Net Current Assets
Profit & Loss Account
TOTAL
Schedule
No.
31.03.2006
(Rs.)
31.03.2005
1
37,00,000
36,50,000
2
3
30,379
6,05,00,000
6,05,30,379
17,632
6,05,00,000
6,05,17,632
4
6,05,20,462
9,917
36,90,083
6,05,17,632
36,50,000
37,00,000
36,50,000
Notes on Accounts
5
Schedules 1 to 5 form integral part of Annual Accounts.
(K. Prakasa Rao)
(T. Sankaralingam)
Director
Chairman
For Sanjeev Chopra & Co.
(Praveen Kumar)
Partner
Place : New Delhi
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2006
3.
Rs.
EXPENDITURE
Filing fees
Bank charges
Secretarial audit fees
Audit fees
Travelling Expenses
Total
Profit/ (Loss) before Tax
Balance carried to Balance sheet
Earnings per share (Equity share,
face value Rs.10/- each) - Basic and Diluted
3,000
4,490
13,428
18,075
1,090
40,083
(40,083)
(36,50,000)
(36,90,083)
2,000
300
4,408
17,544
24,252
(24,252)
(36,25,748)
(36,50,000)
(0.11)
(0.07)
(K. Prakasa Rao) (T. Sankaralingam)
Director
Chairman
31.03.2006
Rs.
31.03.2005
10,00,00,000
10,00,00,000
37,00,000
36,50,000
199
30,180
30,379
749
16,883
17,632
SCHEDULE 3
LOANS & ADVANCES
(Advances recoverable in cash or in kind or
for value to be received)
Advance to Gujarat Power Corporation Limited
6,05,00,000
6,05,00,000
SCHEDULE 4
CURRENT LIABILITIES & PROVISIONS
Sundry Creditors - For Goods & Services
Other Liabilities - Advance from NTPC Limited
Total
20,462
6,05,00,000
6,05,20,462
17,632
6,05,00,000
6,05,17,632
SCHEDULE 2
CASH AND BANK BALANCES
Cash in hand
Balance with scheduled Bank in Current Account
Total
Face value per share
10
10
1. Registration Detail
State
Code : 0 5 5
Registration No. U 4 0 1 0 5 D L 2 0 0 1 U G C 1 1 3 5 0 8
Date
Month
Year
Balance Sheet Date
3 1
0 3
2 0 0 6
Issued , Subscribed and Paid-up
3,70,000 equity shares (Previous year
3,65,000 equity shares) of Rs. 10/- each
held by the holding company, NTPC Limited
and its nominees
4.
BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE:
(Praveen Kumar)
Partner
Place : New Delhi
SCHEDULE 1
CAPITAL
Authorised
1,00,00,000 equity shares of Rs. 10/- each
c.
Related Party Disclosures :
a. The company is a wholly owned subsidiary of NTPC Limited.
b. Key Management Personnel [appointed by NTPC Limited, GPCL and Gujarat
State Electricity Corporation Limited (GSECL)]:
Chairman
Sh. S. Trivedi
Director
Sh. K. Prakasa Rao
Director
Dr. Joy I. Cheenath
Director w.e.f. 01.05.2005
Smt. Vijaylaxmi Joshi
Director w.e.f. 24.07.2005
The Key Management Personnel are on appointment to the company on parttime basis. The Company pays no remuneration to the key management
personnel as their remuneration is paid by NTPC Limited or GPCL or GSECL.
Earning per Share :
The elements considered for calculation of Earning per Share (Basic and
Diluted) are as under :
Net Profit before Tax used as numerator
(40,083)
(24,252)
Weighted Average number of Equity
Shares used as denominator
3,65,096
3,65,000
Earning per Share – Basic and Diluted
(0.11)
(0.07)
SCHEDULE-5
Notes on Accounts :
1. Pursuant to Presidential Directive received under Articles of Association of
NTPC Limited, NTPC had paid a sum of Rs.6,05,00,000 for acquisition of 212
hectares of land in Amreli District of Gujarat to M/s Gujarat Power Corporation
Ltd. (GPCL). The payment was made by NTPC on behalf of Pipavav Power
Development Company Limited and accordingly it has been shown as advance
to GPCL. The land is yet to be transferred in the name of the Company.
2. GPCL has given No Objection Certificate to Revenue Deptt. of Govt. of Gujarat
for transfer of 3.68 hectare of land (out of 212 hectare) to Railways for laying
new railway line between Rajula and Pipavav port. An amount of Rs. 10.85 lac
has since been received by GPCL from Western Railways. Cost of 3.68 hectares
of land transferred to Railways and received by GPCL shall be recovered from
GPCL once the net cost of the land is determined as per the Joint Venture
Agreement to be executed between NTPC, GPCL and Gujarat Urja Vikas Nigam
Ltd. or its associates.
2. Capital Raised during the year (Amounts in Rs. Thousand)
Public Issue
Right issue
N I L
N I L
Bonus Issue
Private Placement
N I L
5 0
3.
Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousand)
Total Liabilities
Total Assets
6 4 2 2 0
6 4 2 2 0
Source of Funds
Paid up Capital
Reserve & Surplus
3 7 0 0
N I L
Secured Loans
Unsecured Loans
N I L
N I L
Net Fixed Assets
Investments
N I L
N I L
Net Current assets
Misc. Expenditure
1 0
N I L
AccumulatedLosses
3 6 9 0
4. Performance of Company (Amount in Rs. Thousand)
Turnover
Total Expenditure
N I L
4 0
Loss Before Tax
Loss After Tax
4 0
4 0
Dividend
(-) 0 . 1 1
N I L
5. Generic name of three principal products/services of Company
Item Code No.
(ITC Code)
Product Description
Director
Chairman
(Praveen Kumar)
Partner
Place : New Delhi
Rs
A.
B.
Net Operating Profit (Loss) before
working capital changes
Adjustment for sundry creditors
Net Cash flow outgo from
operating activities - A
Issue of share capital
Net Cash flow (outgo) from
Financing activities - B
Net Increase (Decrease) in cash and
cash equivalents (A+B)
Cash & Cash equivalents (Opening Balance)
Cash & Cash equivalents (Closing Balance)
(40,083)
2,830
(24,252)
2,512
(37,253)
(21,740)
50,000
-
50,000
-
12,747
(21,740)
17,632
30,379
39,372
17,632
Note: Cash & Cash equivalents includes cash in hand and balance with banks.
Director
Chairman
(Praveen Kumar)
Partner
Place : New Delhi
Auditor’s Report
To the Members of
Pipavav Power Development Company Limited
We have audited the attached balance sheet of Pipavav Power Development
Company Limited, New Delhi as at 31st March 2006, the profit & 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 company’s management. Our
responsibility is to express an opinion on these financial statements based on our
audit.
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 assurances about whether the financial statements are free of material
misstatement(s). An audit includes examining, on a 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
management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
We report that:
(i)
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;
(ii) In our opinion, proper books of account as required by law have been kept by
the company so far as appears from our examination of those books;
(iii) The balance sheet, profit & loss account and cash flow statement dealt with by
this report are in agreement with books of account;
(iv) In our opinion, the balance sheet, profit & 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;
(v) Being a Government Company, clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956 is not applicable to the company (Notification No.
GSR 829 (E) dated 21.10.2003 issued by the Department of Company Affairs);
(vi) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts 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:
(c) in the case of cash flow statement, of the cash flows for the year ended on
that date.
As required by the Companies (Auditor’s Report) Order, 2003 (the Order) issued by
the Central government of India under sub-section (4 A) of section 227 of the
Companies Act, 1956, we further report in terms of matters specified in paragraphs 4
and 5 of the said Order that:
(i)
Since the company has not commenced any business operations and is not
having any fixed assets/stocks, clauses (i) & (ii) of the paragraph 4 of the Order
are not applicable to the company;
(ii)
Since the company has neither granted nor taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the register
maintained under section 301 of Act, clause (iii) of the paragraph 4 of the
Order is not applicable to the company;
(iii) Since there is no inventory, fixed assets and sale of goods, clause (iv) of the
paragraph 4 of the Order is not applicable to the company;
(iv) According to the information given to us, there are no transactions that need
to be entered in the register maintained u/s 301 of the Act, therefore clause (v)
of the paragraph 4 of the Order is not applicable to the company;
(v)
According to the information and explanations given to us, the company has
not accepted any deposits from public during the year, therefore, clause (vi)
(vi) Since the company is neither a listed company and/nor having a paid up capital
exceeding Rs. 50 Lakhs as at the commencement of the financial year concerned
nor having an average annual turnover exceeding five crore rupees for a period
of three consecutive financial years immediately preceding the financial year
concerned, clause (vii) of the paragraph 4 of the Order is not applicable to the
company;
(vii) The Central Government has not prescribed the maintenance of cost records
under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956
for the company, therefore, clause (viii) of the paragraph 4 of the Order is not
applicable to the company;
(viii) According to the information and explanations given to us, since the company
has not commenced any business operations, various provisions with regard
to payments of Provident Fund, Investor Education and Protection Fund,
Employees’ State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty,
Excise Duty, cess and any other statutory dues are not applicable to company
for the time being, therefore, clause (ix) of the paragraph 4 of the Order is not
(ix) Since the company is in existence for a period less than five years, clause (x) of
the paragraph 4 of the Order is not applicable to the company;
(x)
As per the information and explanations given to us, clause (xi) of the paragraph
4 of the Order is not applicable to the company, since there is no dues payable
by the company to a financial institutions or bank or debenture holders;
(xi) The company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities, therefore, clause
(xii) of the paragraph 4 of the Order is not applicable to the company;
(xii) Since the company is not a chit fund/nidhi/mutual benefit fund/society, clause
(xiii) of the paragraph 4 of the Order is not applicable to the company;
(xiii) Since the company is not dealing or trading in shares, securities, debentures
and other investments, clause (xiv) of the paragraph 4 of the Order is not
(xiv) As per the information and explanations given to us, the company has not
given any guarantee for loans taken by others from bank or financial institutions,
therefore, clause (xv) of the paragraph 4 of the Order is not applicable to the
company;
(xv) Since the company has not taken/raised any loans, clauses (xvi) & (xvii) of the
paragraph 4 of the Order are not applicable to the company;
(xvi) As per the information and explanations given to us, the company has not
given any preferential allotment of shares to parties and companies covered in
the Register maintained under section 301 of the Act, therefore, clause (xviii)
(xvii) Since the company has not issued any debentures, clause (xix) of the paragraph
4 of the order is not applicable to the company;
(xviii) Since the company has not raised money by public issue, clause (xx) of the
paragraph 4 of the Order is not applicable to the company;
(xix) As per information and explanations given to us, there are not frauds on or by
the company has been noticed or reported during the year, therefore, clause
(xxi) of the paragraph 4 of the Order is not applicable to the company.
For Sanjeev Chopra & Company
(a) in the case of balance sheet, of the state of affairs of the company as at 31st
March, 2006;
(b) in the case of profit & loss account, of the loss for the year ended on that
date; and
Place : New Delhi
(Praveen Kumar)
(M.S.No. 88192)
Partner
NTPC Limited Consolidated Financial Statements (Formerly National Thermal Power Corporation Ltd.)
ACCOUNTING POLICIES
1.
GRANTS-IN-AID
1.1 Grants-in-aid received from the Central Government or other authorities towards capital expenditure as well as consumers’
contribution to capital works are treated initially as capital reserve and subsequently adjusted as income in the same
proportion as the depreciation written off on the assets acquired out of the grants.
1.2 Where the ownership of the assets acquired out of the grants vests with the government, the grants are adjusted in the
carrying cost of such assets.
1.3 Grants from Government and other agencies towards revenue expenditure are recognized over the period in which the
related costs are incurred and are deducted from the related expenses.
2.
FIXED ASSETS
2.3 Capital expenditure on assets not owned by the company is reflected as a distinct item in Capital Work-in-Progress till the
period of completion and thereafter in the Fixed Assets.
2.4 Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses relatable to
land in possession are treated as cost of land.
2.5 In the case of commissioned assets, where final settlement of bills with contractors is yet to be effected, capitalisation is
done on provisional basis subject to necessary adjustment in the year of final settlement.
2.6 Assets and systems common to more than one generating unit are capitalised on the basis of engineering estimates/
assessments.
3.
3.1 In respect of supply-cum-erection contracts, the value of supplies received at site and accepted is treated as Capital Workin-Progress.
3.2 Incidental Expenditure during Construction (net) including corporate office expenses (allocated to the projects pro-rata to
the annual capital expenditure) for the year, is apportioned to Capital Work-in-Progress on the basis of accretions thereto.
3.3 Deposit work/cost plus contracts are accounted for on the basis of statements of account received from the contractors.
3.4 Claims for price variation/exchange rate variation in case of contracts are accounted for on acceptance.
4.
OIL AND GAS EXPLORATION COSTS
4.1 The Company follows ‘Successful Efforts Method’ for accounting of oil and gas exploration activities.
4.2 Cost of surveys and prospecting activities conducted in the search of oil and gas are expensed in the year in which these
are incurred.
4.3 All acquisition costs are initially capitalized as “Exploratory Wells-in-Progress” under Capital Work-in-Progress.
5.
DEVELOPMENT OF COAL MINES
Expenditure on exploration of new coal deposits is capitalized as “Development of coal mines” under Capital Work-in-Progress
till the mines project is brought to revenue account.
6. FOREIGN CURRENCY TRANSACTIONS
6.1 Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction.
6.2 At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items
denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.
6.3 Exchange differences in respect of loans/deposits/liabilities relating to fixed assets/capital work-in-progress acquired from
a country outside India are adjusted in the carrying cost of related assets.
6.4 Exchange differences in respect of loans relating to fixed assets/capital work-in-progress acquired within India to the
extent regarded as an adjustment to interest cost are treated as borrowing cost.
6.5 Exchange differences, in respect of loans (other than regarded as borrowing cost)/deposits/liabilities relating to fixed
assets/capital work-in-progress acquired within India, arising out of transactions entered prior to 01.04.2004, are adjusted
in the carrying cost of related assets. Such exchange differences in respect of transactions entered after 01.04.2004 are
treated as Incidental Expenditure During Construction till the assets are ready for their intended use.
6.6 Other exchange differences are recognized as income or expense in the period in which they arise.
7.
BORROWING COSTS
Borrowing costs attributable to the fixed assets during their construction/renovation and modernisation are capitalised. Such
borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are
recognised as an expense in the period in which they are incurred.
8.
INVESTMENTS
8.1 Current investments are valued at lower of cost and fair value determined on an individual investment basis.
8.2 Long term investments are carried at cost. Provision is made for diminution, other than temporary, in the value of such
investments.
8.3 Premium paid on long term investments is amortised over the period remaining to maturity.
9.
INVENTORIES
9.1 Inventories are valued at the lower of cost, determined on weighted average basis, and net realizable value.
9.2 Dimunition in value of obsolete and unserviceable stores and spares is ascertained on review and provided for.
10.1
INCOME RECOGNITION
10.1.1
Sale of energy is accounted for based on tariff rates approved by the Central Electricity Regulatory Commission. In
case of power stations where the tariff rates are yet to be approved /agreed with beneficiaries, provisional rates are
adopted.
10.1.2
The incentives/disincentives are accounted for based on the norms notified/approved by the Central Electricity
Regulatory Commission or agreements with the beneficiaries. In cases of power stations where the same have not
been notified/approved/agreed with beneficiaries, incentives/disincentives are accounted for on provisional basis.
10.1.3
Advance against depreciation, forming part of tariff to facilitate repayment of loans, is reduced from sales and
considered as deferred revenue to be included in sales in subsequent years.
10.1.4
The surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significant uncertainty
as to measurability or collectability exists.
10.1.5
Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damages are not treated
as accrued due to uncertainty of realisation/acceptance and are therefore accounted for on receipt/acceptances.
10.1.6.1 Income from Consultancy service is accounted for on the basis of actual progress/technical assessment of work
executed, in line with the terms of respective consultancy contracts.
10.1.6.2 Claims for reimbursement of expenditure are recognized as other income, as per the terms of Consultancy service
contracts.
10.1.7
Scrap other than steel scrap is accounted for in the accounts as and when sold.
10.1.8
Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims are accounted
for based on certainty of realisation.
10.2
EXPENDITURE
10.2.1
Depreciation is charged on straight line method at the rates specified in Schedule XIV of the Companies Act, 1956
except for the following assets in respect of which depreciation is charged at the rates mentioned below:
a)
Kutcha Roads
47.50 %
b) Enabling works
-
residential buildings including their internal electrification
-
non-residential buildings including their internal electrification,
water supply, sewerage & drainage works, railway sidings,
aerodromes, helipads and airstrips
6.33 %
19.00 %
10.2.2
Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the
month in which the asset is available for use/disposal.
10.2.3
Assets costing up to Rs.5000/- are fully depreciated in the year of capitalization.
10.2.4
Cost of computer software recognized as intangible assets is amortised on straight line method over a period of legal
right to use or 3 years, whichever is earlier.
10.2.5
Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term
liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortised
balance of such asset is depreciated prospectively over the residual life determined on the basis of the rate of
depreciation.
10.2.6
Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be
irregular are capitalised and depreciated over the residual useful life of the related plant and machinery.
10.2.7
Capital expenditure on assets not owned by the company is amortised over a period of 4 years from the year in which
the first unit of project concerned comes into commercial operation and thereafter from the year in which the relevant
asset becomes available for use. However, such expenditure for community development in case of stations fully
under operation is charged off to revenue.
10.2.8
Leasehold buildings are amortised over the lease period or 30 years, whichever is lower. Leasehold land and buildings,
whose lease period is yet to be finalised, are amortised over a period of 30 years.
10.2.9.1
Expenses on training, recruitment and ex-gratia payments under Voluntary Retirement Scheme are charged to revenue
in the year of incurrence.
10.2.9.2
Research and development expenses, other than fixed assets, are charged to revenue in the year of incurrence.
10.2.9.3
Preliminary expenses on account of new projects incurred prior to approval of feasibility report are charged to revenue
in the year of incurrence.
10.2.10
Expenditure on leave travel concession to employees is recognized in the year of availment due to uncertainties in
accrual.
10.2.11
Expenses common to operation and construction activities are allocated to Profit and Loss Account and Incidental
Expenditure During Construction in proportion of sales to annual capital outlay in the case of Corporate Office and
sales to accretion to Capital Work-in-Progress in the case of projects.
10.2.12
Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.
10.2.13
Prepaid expenses and prior period expenses/income of items of Rs.100,000/- and below are charged to natural
heads of accounts.
10.2.14
Carpet coal is charged off to coal consumption. However, during pre-commissioning period, carpet coal is retained
in inventories and charged off to consumption in the first year of commercial operation. Windage and handling losses
of coal as per norms are included in cost of coal.
11.1 The liability for retirement benefits of employees in respect of Provident Fund and Gratuity, which is ascertained annually on
actuarial valuation at the year end, are accrued and funded separately.
11.2 The liabilities for leave encashment and post retirement medical benefits to employees are accounted for on accrual basis
based on actuarial valuation at the year end.
12. FINANCE LEASES
12.1 Assets taken on lease are capitalized at fair value or net present value of the minimum lease payments, whichever is lower.
12.2 Depreciation on the assets taken on lease is charged at the rate applicable to similar type of fixed assets as per Accounting
Policy 10.2.1. If the leased assets are returnable to the lessor on the expiry of the lease period, depreciation is charged over
its useful life or lease period, whichever is shorter.
12.3 Lease payments made are apportioned between the finance charges and reduction of the outstanding liability in respect of
assets taken on lease.
BALANCE SHEET AS AT 31st MARCH 2006
Rs. Million
SCHEDULE
NO.
SOURCES OF FUNDS
Capital
Reserves and surplus
1
2
Deferred Revenue on account of Advance Against Depreciation
LOAN FUNDS
Secured loans
Unsecured loans
3
4
5
Less: Recoverable
TOTAL
GOODWILL ON CONSOLIDATION
FIXED ASSETS
Gross Block
Less: Depreciation
Net Block
Capital Work-in-Progress
Construction stores and advances
31.03.2006
31.03.2005
82,455
367,551
450,006
4,408
82,455
335,621
418,076
3,374
59,664
165,133
224,797
46,408
126,619
173,027
53,479
53,439
40
679,251
50,791
50,759
32
594,509
756
6
463,648
230,607
233,041
129,297
33,504
395,842
185,922
433,767
208,779
224,988
67,157
32,927
325,072
206,565
6
7
8
9
INVESTMENTS
Inventories
Sundry debtors
Cash and bank balances
Other current assets
Loans and advances
10
11
12
13
14
23,679
9,725
86,075
10,229
30,597
160,305
18,002
14,673
61,983
9,802
27,028
131,488
Liabilities
Provisions
15
16
51,152
12,422
63,574
96,731
679,251
53,304
15,318
68,622
62,866
594,509
Net current assets
TOTAL
Contingent liabilities
Notes on accounts
Schedules 1 to 27 and accounting policies form integral part of accounts.
17
27
( A.K.RASTOGI )
Company Secretary
(A.K.SINGHAL)
(T.SANKARALINGAM)
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 24860
(Bhavna Nanda )
(Sanjay Gupta)
Partner
Partner
M No 95275
M No 87563
Place : New Delhi
SCHEDULE NO.
INCOME
Sales (Gross)
Less:Electricity duty
Sales (Net)
Energy internally consumed
Provisions written back
Other income
Total
EXPENDITURE
Fuel
Electricty purchased
Cost of material and services
Depreciation
Provisions
Total
Profit before Tax and Prior Period Adjustments
Prior Period income/ expenditure (net)
Profit before tax
Provision for:
Current tax
Fringe Benefit tax
Less :Tansferred to Incidental expenditure during construction
Profit after current tax
Provision for Deferred tax
Profit of the Group after tax
Write back from Bond Redemption Reserve
Write back from Foreign Project Reserve
Transfer to Bonds Redemption Reserve
Dividend
Interim
Proposed
Tax on Dividend
Interim Dividend
Proposed Dividend
18
19
20
21
22
23
24
25
26
Earning Per Share (Equity shares, face value Rs.10/- each) - Basic and Diluted
Total Income includes Rs.4,547 million share of jointly controlled entities.
Total Expenditure includes Rs. 4,259 million share of jointly controlled entities
Rs. Million
Current Year
Previous Year
271,519
1,938
269,581
276
23
26,244
296,124
236,738
1,825
234,913
248
6,236
23,728
265,125
163,963
6,189
952
9,964
13,148
20,710
358
17,842
233,126
62,998
2,488
60,510
137,248
7,303
904
9,082
12,497
19,824
75
17,219
204,152
60,973
(102)
61,075
2,366
16
288
58,416
8
58,408
1,028
16
2
59,454
2,926
29
29,039
2,782
58,293
7
58,286
726
17
2
59,031
2,351
22
33,022
16,501
6,683
9,895
10,013
2,314
937
1,025
1,292
1,408
1,028
7.08
7.29
( A.K.RASTOGI )
Company Secretary
(A.K.SINGHAL)
(T.SANKARALINGAM)
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 24860
(Bhavna Nanda )
(Sanjay Gupta)
Partner
Partner
M No 95275
M No 87563
Place : New Delhi
Rs. million
Schedule 1
CAPITAL
31.03.2006
31.03.2005
100,000
100,000
82,455
82,455
1,279
1,259
29
22
AUTHORISED
10,000,000,000 equity shares of Rs. 10/- each (Previous
year 10,000,000,000 equity shares of Rs. 10/- each)
8,245,464,400 equity shares of Rs. 10/- each fully paid up (Previous
year 8,245,464,400 equity shares of Rs. 10/- each fully paid up)
Schedule 2
Capital Reserve
Add: Additions during the year
Less: Adjustments during the year
-
2
1,308
1,279
Share Premium Account
Add: Additions during the year
Less : Adjustment of share issue expenses during the year
22,360
26
-
22,511
53
177
22,307
22,360
6,405
4,071
2,926
2,351
Bonds Redemption Reserve
16
17
9,315
6,405
2
4
2
2
*Rs. 81,229
*
2
304,547
271,525
29,039
33,022
10
-
333,596
304,547
Foreign Project Reserve
General Reserve
Add: Adjustment towards dividend
1,025
1,028
367,551
335,621
3,374
1,591
Add: Revenue deferred during the year
1,505
1791
Total
Includes Rs.447 million share of jointly controlled entities.
Schedule 3
DEFERRED REVENUE - on account of
Advance Against Depreciation
Less: Revenue recognised during the year
Total
471
8
4,408
3,374
Rs. million
Schedule 4
SECURED LOANS
31.03.2006
31.03.2005
-
48
10.00% Secured Non-Convertible Taxable Bonds of Rs.10,00,000/- each with five equal Separately Transferable
Redeemable Principal Parts (STRPP) redeemable at par at the end of the 6th year in annual instalments thereafter
upto the end of 10th year respectively from 5th September, 2001 (Twelfth Issue - Private Placement)1
5,000
5,000
9.55% Secured Non-Cumulative Non-Convertible Taxable Redeemable Bonds of Rs. 10,00,000/- each
redeemable at par in ten equal annual instalments commencing from the end of 6th year and upto the end of
15th year respectively from 18th April 2002 (Thirteenth Issue -Part A - Private Placement)2
7,500
7,500
9.55% Secured Non-Cumulative Non-Convertible Taxable Redeemable Bonds of Rs. 10,00,000/- each with ten
equal Separately Transferable Redeemable Principal Parts (STRPP) redeemable at par at the end of the 6th year
and in annual instalments thereafter upto the end of 15th year resepectively from 30th April, 2002 - (Thirteenth
Issue - Part B - Private Placement)2
7,500
7,500
8.05% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs. 10,00,000/- each with
two equal Separately Transferable Redeemable Principal Parts (STRPP) redeemable at par at the end of 4th and
5th year respectively from 1st August, 2002 (Fourteenth issue - Private Placement) 2
5,000
5,000
13.60% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs. 1,00,000/- each
redeemable at par in three annual instalments of 30%, 30% and 40% commencing from 28th September 2004
(Fifteenth Issue - Part C - Private Placement)2
44
77
8.00% Secured Non-cumulative Non-Convertible Redeemable Taxable Bonds of Rs. 10,00,000/- each
redeemable at par on 10th April 2018 (Sixteenth Issue -Private Placement)3
1,000
1,000
8.48% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs10,00,000/- each redeemable
at par on 1st May 2023 (Seventeenth Issue - Private Placement)3
500
500
5.95% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs 10,00,000/- each with five
equal Separately Transferable Redeemable Principal Parts (STRPP) redeemable at par at the end of 6th year and
in annual instalments thereafter upto the end of 10th year respectively from 15th September 2003 (Eighteenth
Issue - Private Placement)4
5,000
5,000
7.50% Secured Non-Cumulative Non-Convertible Redeemable Taxable Bonds of Rs.10,00,000/- each
redeemable at par on 12th January, 2019 (Nineteenth Issue - Private Placement)5
500
500
7.552% Secured Non Cumulative Non-Convertible Redeemable Taxable Bonds of Rs.20,00,000/- each with
twenty equal Separately Transferable Redeemable Principal Parts (STRPP) redeemable at par semi-annually
commencing from 23rd September 2009 and ending on 23 rd March 2019 (Twentieth Issue - Private Placement)6
5,000
-
7.7125% Secured Non-cumulative Non-convertible Reedemable Taxable Bonds of Rs.20,00,000/- each with
twenty equal Separately Transferable Redeemable Principal Parts (STRPP) redeembale at par semi-annually
commencing from 2nd August 2010 and ending on 2nd February 2020 (Twenty first issue - Private Placement)7
10,000
-
10,274
12,319
1,682
1,453
655
500
9
11
59,664
46,408
Cash credit from scheduled banks (secured by the hypothecation of Stock & Book Debts of Bhilai Electric
Supply Company Pvt. Ltd.)
Bonds
Loans and Advances from Banks
Foreign Currency Term Loans (Guaranteed by Government of India) (Due for repayment within one year
Rs.1,702 million, Previous year 1,633 million) 8
Rupee Term Loans (Due for repayment within one year Rs.300 million, Previous year Rs. 247 milion)9
Rupee Term loans (Due for repayment within one year Rs.nil, Previous year Rs.Nil)10
Obligation under finance lease (Due for repayment within one year Rs.4 million, Previous year
Rs.3 million)11
TOTAL
Includes Rs. 2,337 million share of jointly controlled entities
Schedule 4
SECURED LOANS
Note:
1
Secured by (I) English mortgage of the office premises of National Thermal Power Corporation Ltd.at Mumbai, (II) Hypothecation of all the
present and future movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas
Power Station, Barh Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam
Hydel Power Project, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher
Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri
Gas Power Station, Feroze Gandhi Unchahar Power Station, Loharinag Pala Hydro Power Project and Tapovan-Vishnugad Hydro Power Project
as first charge, ranking pari-passu with charge already created in favour of the Company’s Bankers on such moveable assets hypothecated
to them for working capital requirement and (III) Equitable Mortgage by deposit of title deeds of the immovable properties pertaining to
Singrauli Super Thermal Power Station.
2
Secured by (I) English mortgage of the office premises of National Thermal Power Corporation Ltd., the company at Mumbai, (II)
Hypothecation of all the present and future movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas
Power Station, Auraiya Gas Power Station, Barh Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super
Thermal Power Station, Koldam Hydel Power Project, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher
Thermal Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station,
National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power Station, Loharinag Pala Hydro Power Project and
Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge already created in favour of the Comany’s Bankers
on such moveable assets hypothecated to them for working capital requirement and (III) Equitable mortagage of the immovable
properties pertaining to Singrauli Super Thermal Power Station by extension of charge already created.
3
Secured by (I) English mortgage of the office premises of NTPC Ltd. at Mumbai and (II) Equitable mortgage by deposit of title deeds of
the immovable properties pertaining to National Capital Power Station.
4
Secured by (I) English mortgage of the office premises of NTPC Ltd. at Mumbai, (II) Hypothecation of all the present and future movable assets
(excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh Super Thermal Power
Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power Project, Simhadri Super Thermal
Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal Power Project, Tanda Thermal Power
Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power Station, Feroze Gandhi Unchahar Power
Station, Loharinag Pala Hydro Power Project and Tapovan-Vishnugad Hydro Power Project as first charge, ranking pari-passu with charge already
created in favour of the Company’s Bankers on such moveable assets hypothecated to them for working capital requirement and (III) Equitable
mortgage of the immovable properties pertaining to National Capital Power Station by extension of charge already created.
5
Secured by (I) English mortgage of the office premises of NTPC Ltd. at Mumbai and (II) Hypothecation of all the present and future
movable assets (excluding receivables) of Singrauli Super Thermal Power Station, Anta Gas Power Station, Auraiya Gas Power Station, Barh
Super Thermal Power Project, Farakka Super Thermal Power Station, Kahalgaon Super Thermal Power Station, Koldam Hydel Power
Project, Simhadri Super Thermal Power Project, Sipat Super Thermal Power Project, Talcher Thermal Power Station, Talcher Super Thermal
Power Project, Tanda Thermal Power Station, Vindhyachal Super Thermal Power Station, National Capital Power Station, Dadri Gas Power
Station, Feroze Gandhi Unchahar Power Station, Loharinag Pala Hydro Power Project and Tapovan-Vishnugad Hydro Power Project as first
charge, ranking pari-passu with charge already created in favour of the Company’s Bankers on such moveable assets hypothecated to
them for working capital requirement.
6
Secured by (I) English mortgage of the office premises of NTPC Ltd. at Mumbai and (II) Equitable mortgage by deposit of title deeds of
the immovable properties pertaining to Ramagundam Super Thermal Power Station.
7
Secured by (I) English mortgage of the office premises of NTPC Ltd. at Mumbai, (II) Hypothecation of all the present and future moveable
assets (excluding receivables) of Barh Super Thermal Power Project as first charge, ranking pari passu with charge already created in
favour of Trustee for other Series of Bonds and (III) Equitable mortgage of the immovable properties pertaining to Ramagundam Super
Thermal Power Station by extension of charge already created.
8
Secured by English mortgage/hypothecation of all the present and future fixed and movable assets of Rihand Super Thermal Power
Station as first charge, ranking pari-passu with charge already created, subject to however, Company’s Banker’s first charge on certain
moveable assets hypothecated to them for working capital requirement.
9
Secured by (I) Equitable mortagage/hypothecation of all the present and future fixed assets and movable assets of Bhilai Captive Power
Plant II and Registered Office at New Delhi and (II) Secured by equitable mortgage/hypothecation of all the present and future fixed
assets and movable assets of Bhilai Expansion Project and Secured by equitable mortgage/hypothecation/ranking paripassu of all present
and future fixed and movable assets of Durgapur and Rourkela Captive Power Plants and Corporate Office, Delhi.
1 0 Secured by equitable mortgage/hypothecation of all the present and future assets and movable assets of Bhilai Expansion Project.
1 1 Secured against fixed assets obtained under finance lease.
Schedule 5
UNSECURED LOANS
Rs. million
31.03.2006
31.03.2005
778
4,159
-
5,000
8,990
8,814
13,485
-
23,064
24,723
10,272
7,885
99,342
75,339
236
551
8,966
148
165,133
126,619
Fixed Deposits
(Due for repayment within one year Rs.449 million, Previous year Rs.3,337 million)
Bonds
7.552% Secured Non-Cummulative Non-Convertible Redeemable Taxable Bonds of
(STRPP) redeemable at par semi-anually commencing from 23rd September, 2009 and ending
on 23 rd March 2019 (Twentieth Issue - Private Placement - shown under Secured Loans in
current year on creation of security)
Foreign Currency Bonds/ Notes
5.5% Eurobonds due for repayment on 10th March 2011
nd
5.875% Fixed Rate Notes due for repayment on 2 March 2016
From Banks and Financial Institutions
Foreign Currency Term Loans (Guaranteed by Government of India) (Due for repayment
within one year Rs.181 million, Previous year Nil)
Other Foreign Currency Term Loans (Due for repayment within one year
Rs.1,584 million, Previous year Rs.1,667 million )
Rupee Term Loans (Due for repayment within one year Rs.8,963 million,
Previous year Rs. 7,618 million )
From Others
Loan from Government of India (Due for repayment within one year
Rs. 156 million, Previous year Rs. 315 million )
Others (Due for repayment within one year Rs.425 million, Previous year Rs. Nil)
TOTAL
Includes Rs. 20,487 million share of jointly controlled entities
Schedule 6
FIXED ASSETS
Rs. million
Gross Block
As at
1.04.2005 Additions
TANGIBLE ASSETS
Land :
(including development)
Freehold
9,977
Leasehold
1,859
Roads,bridges, culverts & helipads
3,632
Building :
Freehold
Main plant
16,503
Others
14,703
Leasehold
469
Temporary erection
189
Water Supply, drainage & sewerage 4,966
6,344
Railway Siding
2,371
Earth Dam Reservoir
1,481
Plant and machinery
360,915
Furniture, fixtures & other office
equipment
3,145
EDP, WP machines and SATCOM
equipment
2,196
Vehicles including speedboats
98
951
Electrical Installations
1,804
591
Hospital Equipments
195
Laboratory and workshop
equipments
124
Leased assets - Vehicles
14
Capital expenditure on assets
1,105
Assets held for disposal valued
at net book value or net realisable
value whichever is less
31
Assets of Government
28
Less:Grants from Government
28
INTANGIBLE ASSETS
Land- Right of Use
7
Software
97
Total
Previous year
Depreciation
Deductions/
As at
Adjustments 31.03.2006
For
the Year
Deductions/
Upto
As at
Adjustments 31.03.2006 31.03.2006
As at
31.03.2005
201
940
152
(364)
(117)
2
10,542
2,916
3,782
279
610
45
63
(9)
1
333
672
10,542
2,583
3,110
9,977
1,580
3,022
416
668
15
33
16
10
26,726
(41)
(20)
11
(25)
(3)
11
609
16,960
15,391
469
204
4,988
6,385
2,384
1,470
387,032
8,020
3,716
108
185
1,231
4,232
559
269
182,988
545
399
16
13
251
268
114
70
19,474
(7)
5
4
(4)
1
42
8,572
4,110
124
198
1,478
4,504
672
339
202,420
8,388
11,281
345
6
3,510
1,881
1,712
1,131
184,612
8,483
10,987
361
4
3,735
2,112
1,812
1,212
177,927
213
9
3,349
2,081
124
11
2,194
1,155
1,064
194
4
97
99
36
8
44
7
21
(40)
1
1
2,346
95
1,027
1,943
626
202
1,592
81
584
900
321
118
144
3
52
80
20
7
33
7
21
3
1
1
1,703
77
615
977
340
124
643
18
412
966
286
78
604
17
367
904
270
77
7
1
-
131
15
95
3
3
4
-
98
7
33
8
29
11
77
(47)
1,229
757
198
-
955
274
348
-
17
-
14
28
28
-
-
-
-
14
28
28
31
28
28
38
(6)
-
13
135
50
45
-
95
13
40
7
47
433,767
29,951
70
463,648
208,779
21,938
110
230,607
233,041
224,988
402,917
29,644
(1,206)
433,767
188,362
20,497
80
208,779
224,988
214,555
Net Fixed Assets includes Rs.2,137 million share of jointly controlled entities
As at
1.04.2005
Net Block
Schedule 7
Rs. million
As at
Development of land
Roads, bridges, culverts & helipads
Piling and foundation
Buildings :
Main plant
Others
Temporary erection
Water supply, drainage and sewerage system
Hydraulic works, Barrages, Dams, Tunnels, and Power Channel
Railway siding
Earth dam reservoir
Plant and machinery :
On own account
On supply-cum-erection contract
Furniture, fixtures and other office equipment
EDP/WP Machines & SATCOM equipment
Construction Equipments
Electrical installations
Communication equipment
Intangible assets - software
Capital expenditure on assets not owned by the company
Exploratory Wells-In-Progress (*Rs.55,900/-)
Development of Coal Mines
Expenditure pending allocation
Survey, investigation, consultancy and supervision charges
Difference in exchange on foreign loans
Expenditure towards diversion of forest land
Pre-commissioning expenses (net)
Less: Allocated to Capital Work-in-Progress
Less: Provision for unserviceable works
Total
Previous Year
Includes Rs.25,263 million share of jointly controlled entities
Deductions &
As at
1.04.2005
Additions
Adjustments
Capitalised
31.03.2006
1,254
153
1,028
702
258
890
13
(91)
-
152
-
1,943
350
1,918
2,968
1,022
3
51
4,005
48
15
136
1,618
1,313
20
146
2,471
1,348
102
416
1,123
43
4
17
-
417
658
6
31
16
10
-
3,046
1,634
17
162
6,476
1,363
107
552
306
54,319
11
14
125
19
4
178
65,659
901
77,970
84
27
5
245
10
4
171
*
31
88,732
394
(1,238)
(8)
3
47
1
13
321
4
26,343
44
29
94
22
5
77
27,908
809
107,184
59
9
5
229
6
3
259
*
31
126,162
484
2
882
198
55
67,280
123
67,157
106
175
145
585
7,020
5,701
91,062
6
91,056
44
93
548
2
1,008
1,008
27,908
27,908
546
84
1,027
235
7,073
5,701
129,426
129
129,297
56,454
39,782
800
28,279
67,157
Schedule 8
Rs. million
31.3.2006
31.03.2005
3,066
3,452
CONSTRUCTION STORES *
(At cost)
Steel
Cement
Others
Less: Provision for shortages
85
96
9,199
6,982
12,350
10,530
5
5
12,345
10,525
229
49
16,760
18,067
4,170
4,286
74
66
21,233
22,468
ADVANCES FOR CAPITAL EXPENDITURE
Secured
Covered by bank guarantees
Others
Considered doubtful
Less:Provision for bad & doubtful advances
Total
* includes material in transit, under inspection and with contractors
74
66
21,159
22,402
33,504
32,927
9,474
7,455
Schedule 9
INVESTMENTS
I.
Rs. million
Number of
shares/bonds/
securities
Current Year/
(Previous Year)
Face
value per
share/bond/
security
Current Year/
(Previous Year)
(Rs.)
45500000
(45500000)
100
(100)
31.03.2006 31.03.2005
LONG TERM (Trade - unless otherwise specified)
A) Quoted
a) Government of India Dated Securities (Non-Trade)
(Includes Rs. Nil as balance of unutilised monies raised by issue of
shares, previous year Rs.5,102 million)
Less:- Amortisation of Premium
b) Trust Securities (#)
6.60% UTI - ARS NCB Tax Free Bonds, 2009
5084
5102
413
-
4671
5102
321746
(2171332)
(110481)
100
(100)
(100)
34
230
-
11
14
(135)
1000000
(1000000)
16
160
8.50% Housing and Urban Development Corporation Limited (HUDCO)
Gujarat Punar Nirman Tax-Free Bonds Series 1A, 2007
18
(177)
500000
(500000)
10
98
10.40% Power Finance Corporation Ltd. Unsecured Tax-Free Bonds
1998 (Series I), 2008
117
(872)
100000
(100000)
14
105
4.75% Nuclear Power Corporation of India Ltd. Secured NonConvertible Bonds (LOA), Series XXIV, 2019
(7)
(1000000)
-
7
10.40% Nuclear Power Corporation of India Ltd. Tax Free Secured
Non-Convertible Bonds, Series XI A2, 2007
(1771)
(100000)
-
198
Redeemable Non-Convertible Bonds, Series XII (LOA), 2013
(138)
(100000)
-
15
9.50% National Textile Corporation Limited Tax-Free Non-Convertible
Bonds, 2006
445
(3436)
100000
(100000)
49
377
5.00% NABARD Unsecured, Non-Convertible Tax-Free Bonds,
Series IV G, 2008
2639
(15597)
10000
(10000)
27
158
Redeemable NCB SR-15 (LOA), 2016
24
(1561)
100000
(100000)
3
172
8.20% Nuclear Power Corporation of India Ltd. Tax- Free Secured
Redeemable NCB SR-18 (LOA), 2012 (*Rs.1,07,296/-)
1
(1113)
100000
(100000)
*
119
5.15 % Non Priority Sector Tax-Free Housing and Urban Development
Corporation Limited (HUDCO) Bonds Series XXXIV, 2014
14
(286)
1000000
(1000000)
14
286
4838
7038
12,607
12,607
515
515
18,944
14,667
4,832
4,832
8,372
8,372
6.75% UTI - NCB Tax Free Bonds, 2008
c) Bonds (#)
7.75% IRFC Non-Taxable Bonds (Series XXVII), 2011
Sub Total (A)
B) Unquoted
a) Bonds
i) 8.50 % Tax-Free State Government Special Bonds of the Government of (##)
Andhra Pradesh
Assam
Bihar
Chattisgarh
Gujarat
12606500
(12606500)
514640
(514640)
18944000
(14666600)
4832200
(4832200)
8372400
(8372400)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
Rs. million
Number of
shares/bonds/
securities
Current Year/
(Previous Year)
Face
value per
share/bond/
security
Current Year/
(Previous Year)
(Rs.)
31.03.2006
31.03.2005
10750000
(10750000)
333880
(333880)
3673600
(3673600)
9601216
(6222716)
1966100
(1966100)
10024000
(10024000)
8308400
(8308400)
3814000
(3814000)
11028740
(11028740)
3462300
(3462300)
2900000
(2900000)
341960
(341960)
4650660
(4650660)
39899000
(39899000)
3996500
(3996500)
11742480
(11742480)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
1000
(1000)
10,750
10,750
334
334
3,674
3,674
9,601
6,223
1,966
1,966
10,024
10,024
8,308
8,308
3,814
3,814
11,029
11,029
3,462
3,462
2,900
2,900
342
342
4,651
4,651
39,899
39,899
3,996
3,996
11,742
11,742
10300
(10300)
70000
(100000)
721
1,030
12.50 % Secured Non-convertible Redeemable North Eastern Electricity
Supply Company (NESCO) Bonds, Series - I/2000, 2007
16700
(16700)
70000
(100000)
1169
1,670
12.50 % Secured Non-convertible Redeemable Southern Electricity Supply
Company (SOUTHCO) Bonds, Series - I/2000, 2007
13000
(13000)
70000
(100000)
910
1,300
10.00 % Secured Non-Cumulative Non-Convertible Redeemable Grid
Corporation of Orissa (GRIDCO) Power Bonds, Series-1/2003 , 03/02,2009
2660
(2660)
75000
(100000)
200
266
Corporation of Orissa (GRIDCO) Power Bonds, Series-1/2003, 04-09/02,2009
19536
(19536)
87500
(100000)
1709
1,953
100000
(100000)
597
597
(6119)
(100000)
-
612
5
(281)
1000000
(1000000)
5
295
5510
(42175)
1000
(1000)
6
46
Haryana
Himachal Pradesh
Jammu and Kashmir
Jharkhand
Karnataka
Kerala
Madhya Pradesh
Maharashtra
Orissa
Punjab
Rajasthan
Sikkim
Tamil Nadu
Uttar Pradesh
Uttaranchal
West Bengal
ii) Other Bonds
12.50 % Secured Non-convertible Redeemable Western Electricity Supply
Company (WESCO) Bonds, Series - I/2000, 2007
Corporation of Orissa (GRIDCO) Power Bonds, Series-1/2003 - 10/02,2009
Corporation of Orissa (GRIDCO) Power Bonds Series-1/2003, 02/02 &
11/02,2009
7.90 % Secured Non-Convertible Redeemable Tax free PSU Bonds
(VIII issue) - North Eastern Electric Power Corporation Ltd. (NEEPCO)
Bonds, 2010 (#)
8.75 % IREDA (Tax-Free) Bonds (Series IX), 2008
(#)
5970
(5970)
Rs. million
Number of
shares/bonds/
securities
Current Year/
(Previous Year)
Face
value per
share/bond/
security
Current Year/
(Previous Year)
(Rs.)
31.03.2006
31.03.2005
6612
(48235)
1000
(1000)
7
51
7348
(38445)
1000
(1000)
8
40
b) Others
Sub Total (B)
102
177,196
136
172,103
Sub Total ( I )
182,034
179,141
3,837
27,079
-
323
6.00 % IREDA (Tax-Free) Bonds (Series X), 2013
(#)
5.50 % IREDA (Tax- Free) Bonds (Series XI), 2013 (#)
II. CURRENT (Non - Trade - Quoted)
Government of India Treasury Bills
40000000
(277902500)
(3177320)
Others (Non-Trade- Unquoted)
Sub Total ( II )
Total ( I + II )
Includes Rs.153 million share of jointly controlled entities
(#)
Development Surcharge Fund Investments
(##)
Includes bonds of Rs.34,352 million (previous year Rs. 32,821 million) permitted
for transfer/trading by Reserve Bank of India. Balance can be transferred/ traded subject
to prior approval of Reserve Bank of India.
100
(100)
(100)
51
22
3,888
27,424
185,922
206,565
Rs. million
31.03.2006
31.03.2005
12,966
11,956
42
41
Schedule 10
INVENTORIES
(Valuation as per Accounting Policy No. 9)
Components and spares
Loose tools
Coal
7,476
3,115
Fuel Oil
905
831
Naphtha
690
645
Chemicals & consumables
769
677
Others
980
874
Steel Scrap
Less: Provision for shortages
Provision for obsolete/ unserviceable items
Total
Inventories include stores in transit
76
59
23,904
18,198
25
24
200
172
23,679
18,002
676
694
Schedule 11
SUNDRY DEBTORS
Considered doubtful
927
8,120
8,363
8,360
9,290
16,480
8,798
6,553
Other debts
Considered doubtful
-
-
8,798
6,553
18,088
23,033
Less: Provision for bad & doubtful debts
8,363
8,360
Total
9,725
14,673
Rs. million
Schedule 12
31.03.2006
31.03.2005
162
1,597
Cash on hand (includes cheques, drafts, stamps on hand of Rs.158 million,
previous year Rs.1,594 million)
Remittances in transit
Balance with Reserve Bank of India earmarked for fixed deposits from public
13
50
308
308
Balances with scheduled banks (a)
Current Account (b)
Term Deposit Account (c) (d)
1,387
2,363
84,146
57,605
59
60
86,075
61,983
Balance with other banks
Call Deposit Account
West Merchant Bank Limited,London
(maximum amount outstanding at any time during
the year Rs.60 million, previous year Rs.60 million)
Total
(a) Includes Rs. 1,00,007/- (previous year Rs. 4,32,570) in respect of Development Surcharge.
(b) Includes Rs.44 million of Unclaimed Dividend (previous year Rs. 37 million).
(c) Rs.14 million (previous year Rs. 11 million) deposited as security with Government authorities/as per court orders.
(d) Includes Rs.Nil as balance of unutilised monies raised by issue of shares (previous year Rs.11,316 million).
Schedule 13
Interest accured :
Bonds
Development surcharge investment
Term Deposits
Others
Other Recoverables
Total
8,615
8,640
6
58
153
137
1,306
834
106
65
43
68
10,229
9,802
Rs. million
Schedule 14
LOANS AND ADVANCES
31.03.2006
31.03.2005
Secured
4,591
4,711
1,065
1,088
1
1
403
722
9,573
9,573
500
500
4
206
LOANS
Employees (including accrued interest)
Considered doubtful
Government of India (for transfer of transmission systems)
Others
Secured
ADVANCES
Contractors & suppliers, including material issued on loan
Secured
6
2
922
556
1
3
79
69
1
1
705
881
Considered doubtful
289
21
18,140
18,334
965
1,012
40
40
Considered doubtful
Employees (including imprest)
Considered doubtful
Others
Claims recoverable
Considered doubtful
Less: Provision for bad and doubtful loans, advances and claims
332
66
18,813
19,320
DEPOSITS
Deposits with customs, port trust and others (#)
897
709
36,158
18,772
Less: Provision
25,271
11,773
Total
(#)
Sales Tax deposited under protest with sales tax authorities
10,887
6,999
30,597
27,028
196
122
Rs. million
Schedule 15
CURRENT LIABILITIES
31.03.2006
31.03.2005
12,010
12,222
Sundry Creditors
For capital expenditure
Other than Small Scale Industrial Undertakings
Small Scale Industrial Undertakings
Others
Book Overdraft
Deposits, retention money from contractors and others
19
15
13,939
12,272
140
-
11,534
9,490
109
113
37,533
33,886
9,968
14,609
Unpaid matured Bonds (* Rs.2,000/-)
*
1
Interest accrued on unpaid matured deposits/bonds (*Rs.3,10,366/-)
*
1
1,421
3,099
44
37
Investor Education and Protection Fund shall be credited by
Other liabilities
Unclaimed dividend
(#)
Interest accrued but not due :
Foreign currency loans/bonds
Term loans in Indian currency
Bonds
Fixed deposits from public
Total
(#)
9
21
362
300
565
301
1,173
967
77
82
51,152
53,304
No amount is due for payment to Investor Education and Protection Fund
Rs. million
Schedule 16
PROVISIONS
31.03.2006
31.03.2005
217
-
Less: Advance tax deposited
216
-
1
-
10,013
10,940
6,683
10,013
10,013
10,940
6,683
10,013
1,408
1,402
Fringe Benefit Tax
Proposed dividend
937
1,408
1,408
1,402
937
1,408
3,871
3,196
1,097
1,096
191
421
4,777
3,871
-
286
-
-
-
286
-
-
26
24
Retirement benefits
Tariff adjustment
Others
1
6
3
3
-
1
Total
24
26
12,422
15,318
Rs. million
Schedule 17
CONTINGENT LIABILITIES
31.03.2006
31.03.2005
Capital Works
7,157
7,084
Land compensation cases
3,166
5,508
Others
6,904
5,803
11,269
11
Claims against the Company not acknowledged as debts in respect of:
Disputed Income Tax demand
*
Disputed Sales Tax demand
Letters of Credit other than for capital expenditure
Others
189
197
2,951
1,008
32
58
31,668
19,669
Current Year
Previous Year
270,932
237,082
1,505
1,791
471
8
269,898
235,299
1,621
1,439
271,519
236,738
Doubtful debts
-
5,927
Doubtful claims and advances
5
5
Doubtful construction advances
1
3
Adjustment in Tariff
-
286
Shortages in construction stores
2
1
Shortages in stores
9
9
6
2
Others
-
3
23
6,236
Total
*
Possible reimbursement Rs.6,662 million (Previous year Nil).
Schedule 18
SALES
Energy Sales (including Electricity Duty)
Less : Advance Against Depreciation deferred
Add: Revenue recognised out of Advance Against Depreciation
Consultancy, project management and supervision fees
(including turnkey construction projects)
Total
Schedule 19
PROVISIONS WRITTEN BACK
Total
Includes Rs.Nil share of jointly controlled entities
Schedule 20
OTHER INCOME
Rs. million
Current Year
Income from Long Term Investments
Trade
Dividend from Joint Ventures
Interest (Gross)
Government Securities (8.5% tax free bonds issued by the State Government)
Other Bonds (Tax deducted at source Rs.161 million, previous year Rs.195 million)
Non -Trade
Interest from Government of India Securities, Gross
Income from Current Investments (Non-Trade)
Interest from Government of India Securities (Gross) (Tax deducted at source Nil)
Income on redemption of Government of India Securities
Income from Others
Interest (Gross) (Tax deducted at source Rs. 1,165 million, previous Rs. 83 million )
Public Deposit Account with Government of India
Indian banks
Foreign banks
Employees’ loans
Others
Interest on Income Tax refunds
Less: Refundable to customers
Surcharge on late payment from customers
Hire charges for equipment
Profit on sale of fixed assets
Less:Income transferred to Incidental expenditure during construction-Schedule 26
Total
Previous Year
118
113
16,877
700
13,949
843
205
156
156
14
1,399
6
37
814
4,839
3
239
107
595
3,573
1,097
2
260
153
2,460
24
37
1,485
24,790
618
413
1,151
1,151
384
14
41
1,158
26,912
668
1,062
26,244
23,728
8,842
1,012
1,849
11,703
522
12
1,205
9,964
7,795
879
1,758
10,432
205
1,145
9,082
Schedule 21
Welfare expenses
Less: Adjusted in fuel cost
Total
Rs. million
Schedule 22
GENERATION, ADMINISTRATION & OTHER EXPENSES
Power charges
Less: Recovered from contractors/employees
Water charges
Stores consumed
Rent
Less: Recoveries
Buildings
Plant & Machinery
Power station
Current Year
Previous Year
489
590
213
128
68
438
72
366
477
187
94
48
46
571
573
560
71
60
Less: Adjusted in cost of fuel
Expenses transferred to incidental expenditure during construction - Schedule 26
66
31
250
35
70
78
595
2
6
31
96
6
14,767
782
19
818
6,431
20
6,451
285
774
170
252
264
25
239
178
847
72
10
62
10
58
907
59
51
9
42
120
9
97
72
72
79
9
70
31
189
89
69
78
539
3
2
16
18
199
13,584
409
678
Total
13,148
12,497
4,453
3,870
Others
Insurance
Rates and taxes
Training & Recruitment expenses
Less: Fees for training and application
Travelling Expenses
Tender expenses
Payment to Auditors
Security expenses
Expenses for guest house
Less:Recoveries
Education expenses
Donations
Community development and welfare expenses
Less: Grants-in-aid
7,236
8
7,244
280
593
136
257
311
23
288
205
970
85
10
75
20
70
1,023
77
58
10
48
113
7
4
167
7
160
Ash utilisation & marketing expenses
Less: Sale of ash products
Legal Expenses
Stores written off
Claims/Advances written off
Deferred revenue expenditure written off
Survey & Investigation expenses written off
Loss on disposal/write-off of fixed assets
Loss on maturity of current Investments
Stores consumption included in repairs and maintenance
67
1
Schedule 23
PROVISIONS
Rs. million
Current Year
Doubtful debts
Doubtful advances for construction
Previous Year
3
-
292
30
9
-
Shortage in stores
10
7
34
27
3
2
Unserviceable CWIP
6
4
Others
1
5
358
75
3,301
2,814
54
99
1,155
1,282
Rupee Term loans
6,778
5,069
Public deposits
131
378
Foreign currency Bonds/ Notes
694
624
Total
Schedule 24
INTEREST AND FINANCE CHARGES
Interest on :
Bonds
Others
Exchange difference regarded as adjustment to interest cost
130
159
(2,469)
(568)
9,774
9,857
Finance Charges :
Bonds servicing & public deposit expenses
Guarantee Fee
Management/Arrangers’ fee
18
13
405
443
-
85
99
1,069
Rebate under Scheme for Settlement of SEB dues
8,047
6,813
Rebate to customers
4,368
3,981
Commitment charges/ Exposure premium
Reimbursement of L.C. Charges on Sales Realisation
57
13
Bank Charges
13
12
2
5
123
9
Bond Issue Expenses
Eurobonds/ Foreign currency notes issue expenses
98
-
Others
59
32
13,289
12,475
23,063
22,332
5,221
5,113
17,842
17,219
Less: Interest and Finance charges capitalised by transfer to incidental
expenditure during construction - Schedule 26
Total
Includes Rs 125 million share of jointly controlled entities
Schedule 25
PRIOR PERIOD INCOME/EXPENDITURE (NET)
Rs. million
Current Year
Previous Year
35
1,080
INCOME
Sales
Others
4
22
39
1,102
3
(8)
EXPENDITURE
Salary, wages, bonus, allowances & benefits
Depreciation
Interest
Professional consultancy charges
86
20
171
305
2,197
888
-
1
-
12
Rates & Taxes
64
(1)
Insurance
(6)
-
-
(27)
Power Charges
Rent
12
-
Fuel
-
(201)
34
14
2,561
1,003
2,522
(99)
34
3
2,488
(102)
Others
Less: Incidental expenditure during construction - Schedule 26
Total
Includes Rs.Nil share of jointly controlled entities
Schedule 26
Rs. million
Current Year
Previous Year
Salaries, wages, allowances and benefits
914
894
115
87
Welfare expenses
176
164
1,205
1,145
A. Employees remuneration and other benefits
Total (A)
B. Other Expenses
Power
Less: Recovered from contractors
166
104
13
10
Water Charges
Rent
153
94
3
-
30
20
Repairs & maintenance
Buildings
Others
27
49
1
11
39
31
67
91
Insurance
29
4
Rates and taxes
17
30
Travelling expenses
Tender expenses
Less: Income from sale of tenders
33
28
146
126
24
27
-
2
24
Remuneration to Auditors
25
2
2
14
12
Security expenses
90
63
13
1
Guest house expenses
5
3
Education expenses
-
1
3
4
Community development expenses
7
4
33
37
Legal expenses
4
3
9
9
11
10
125
111
Total (B)
818
678
Depreciation (C)
122
108
2,145
1,931
Total (A+B+C)
Schedule 26
Rs. million
Current Year
Previous Year
865
650
D. Interest and Finance Charges Capitalised
Interest on
Bonds
Rupee Term loans
Foreign Currency Bonds/Notes issue expenses
67
2
3,520
2,738
396
520
-
1,069
Finance Charges
Guarantee Fee
Commitment Charges
11
-
Management fee / arrangers fees
88
85
118
-
Foreign Currency Bonds/Notes issue expenses
98
-
Others
58
49
5,221
5,113
Indian Banks
296
290
Employees
21
21
Exchange Differences
Total (D)
E. Less Other Income
Interest from
Government of India Securities out of unutilised monies
raised by issue of shares
532
156
Less:- Amortisation of premium
368
-
Others
F.
164
156
56
330
Hire Charges
8
6
Sale of scrap
1
-
122
259
TOTAL (E)
668
1,062
Prior Period Adjustments
G. Income/Fringe Benefit Tax
GRAND TOTAL (A+B+C+D-E+F+G)
34
3
288
-
7,020
5,985
SCHEDULE 27
NOTES ON ACCOUNTS
1.
The name of the Company has changed from “National Thermal Power Corporation Limited” to “NTPC Limited” with effect from 28th October,
2005.
2.
BASIS OF CONSOLIDATION
2.1
The consolidated financial statements relate to NTPC Ltd. (The Company), its Subsidiaries and interest in Joint Ventures.
a)
Basis of Accounting:
b)
i)
The financial statements of the subsidiary companies in the consolidation are drawn up to the same reporting date as of the
company.
ii)
The consolidated financial statements have been prepared in accordance with Accounting Standards (AS) 21 - ‘Consolidated
Financial Statements’ and (AS) 27 – ‘Financial Reporting of Interest in Joint Ventures’ issued by the Institute of Chartered
Accountants of India and generally accepted accounting principles.
Principles of consolidation:
The consolidated financial statements have been prepared as per the following principles:
2.2
i)
The financial statements of the company and its subsidiaries are combined on a line by line basis by adding together the book
value of like items of assets, liabilities, income and expenses, after eliminating intra-group balances, intra-group transactions and
unrealised profits or losses.
ii)
The consolidated financial statements include the interest of the company in joint ventures, which has been accounted for using
the proportionate consolidation method of accounting and reporting whereby the company’s share of each of assets, liabilities,
income and expenses of a jointly controlled entity is considered as separate line item.
iii)
The consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in
similar circumstances and are presented to the extent possible, in the same manner as the company’s separate financial statements
except as otherwise stated in the notes to the accounts.
iv)
The difference between the cost of investment in the joint venture and the share of net assets at the time of acquisition of shares
in the joint venture is identified in the financial statements as goodwill or capital reserve as the case may be.
The Subsidiary and Joint Venture companies considered in the financial statements are as follows:
Name of the Company
Proportion (%) of Shareholding as on
31.3.2006
31.3.2005
100
100
NTPC Hydro Ltd.
100
100
100
100
100
100
50
50
NTPC -Alstom Power Services Private Ltd.
50
50
PTC India Ltd.
08
08
NTPC-SAIL Power Company Private Ltd.
50
50
Bhilai Electric Supply Company Private Ltd.
50
50
NTPC-Tamilnadu Energy Company Ltd.
50
50
Ratanagari Gas & Power Private Limited*
28.33
Nil
Subsidiary Companies:
Joint Venture Companies:
* Shareholders’ agreement is under execution
All the above Companies are incorporated in India
2.3 Joint venture operations: During the year the Company alongwith M/s Geopetrol International Inc. and M/s Canoro Resources Ltd., has participated
in bidding under the Government of India New Exploration Licensing Policy-V for exploration and production of oil and gas and has been
allotted Block AA-ONN-2003/2 in the State of Arunachal Pradesh. The Company together with other consortium members entered into a Production
Sharing Contract with the Government of India. The Company is a non-operator and has 40% share in expenses, income, assets and liabilities
with a minimum work programme commitment of Rs.621 million (previous year Nil) as per the Production Sharing Contract.
The Company’s share of assets and liabilities as at 31st March 2006 and expenditure for the period ended on that date in respect of the above
joint venture operations has been accounted for based on unaudited statement of accounts submitted by the operator.
Rs.Million
3.
Expenses
2
Fixed Assets (# Rs.32,117)
#
Other Assets (* Rs.61,180)
*
Current Liabilities
2
a) The conveyancing of the title to 5,665 acres of freehold land of value Rs. 2,571 million (previous year 7,157 acres, value Rs. 3,126 million)
and execution of lease agreements for 6,873 acres of value Rs.849 million (previous year 6,940 acres, value Rs.733 million) in favour of the
Company are awaiting completion of legal formalities.
b) Land shown in the books does not include cost of 1,148 acres (previous year 1,148 acres) of land in possession of the Company. This will be
accounted for on settlement of the price thereof by the State Government Authorities. Land includes 345 acres of value Rs. 28 million
(previous year 345 acres value Rs.28 million) not in possession of the Company.
c) Land includes amount of Rs. 1,206 million (previous year Rs.1,128 million) deposited with various authorities in respect of land in possession
which is subject to adjustment on final determination of price.
d) The cost of Right of Use of land for laying pipelines amounting to Rs.13 million (previous year Rs.7 million) is included under intangible assets
e) At Pipavav Power Development Company Ltd.:
(i) Pursuant to Presidential directive received under Articles of Association of the Company, the Company had paid a sum of Rs. 60.50
million for acquisition of 212 hectares of land in Amreli District of Gujarat to M/s Gujarat Power Corporation Ltd. (GPCL). The payment was
made by the Company on behalf of Pipavav Power Development Company Limited and accordingly it has been shown as advance to
GPCL. The land is yet to be transferred in the name of the Company.
(ii) GPCL has given No Objection Certificate to Revenue Deptt. of Govt. of Gujarat for transfer of 3.68 hectare of land (out of 212 hectare) to
Railways for laying new railway line between Rajula and Pipavav port. An amount of Rs.1.08 million has since been received by GPCL from
Western Railways. Cost of 3.68 hectares of land transferred to Railways and received by GPCL shall be recovered from GPCL once the net
cost of the land is determined as per the joint venture agreement to be executed between NTPC Ltd, GPCL and Gujrat Urja Vikas Nigam
Ltd. or its associates.
4.
a) The Central Electricity Regulatory Commission (CERC) has notified by regulations in March 2004, the terms and conditions for determination of
tariff applicable with effect from 1st April 2004 for a period of five years. Pending final determination of tariff for the period 1st April 2004
onwards, CERC has directed by notification that on provisional basis, the annual fixed charges as applicable on 31st March 2004 shall be
billed at target availability and variable charges based on norms of operation notified in Regulation, 2004. The amount billed for the year on
this basis is Rs. 268,301 million (previous year Rs.230,663 million). Since the amount billed is subject to adjustment with effect from 1st April
2004, pending final determination of the tariff by CERC, sales amounting to Rs. 257,179 million (previous year Rs.221,380 million) for the year
have been provisionally recognised on the basis of principles enunciated by the CERC in Regulations, 2004.
Further, Rs. 603 million pertaining to previous year has been recognised in Sales due to revision in the amounts provisionally billed based on
orders of the CERC/Appellate Tribunal for Electricity.
b) CERC has issued orders in December 2000 with respect to the tariff norms, principles and Availability Based Tariff (ABT). The company filed
an appeal against the orders of CERC before the Delhi High Court which has since been transferred to the Appellate Tribunal for Electricity.
Pending disposal of the appeal, CERC has notified by regulations, the terms and conditions for determination of tariff, effective from 1st April,
2001 to 31st March 2004. CERC issued final tariff orders based on above regulations in respect of all the stations up to 31st March 2004 except
for Rihand STPS Stage-I. During the year in respect of Rihand STPS Stage-I, an amount of Rs. 101 million has been accounted for in sales
(reduction of Rs.39 million in the previous year) in line with above regulations and principles followed in the final tariff orders issued for other
stations of the company.
In case of stations for which final tariff orders have been issued by the CERC for the period up to 31st March, 2004, sales for the said period
amounting to Rs. 2,282 million (previous year Rs.2768 million) has been accounted for during the year.
Based on the orders of CERC admitting the additional capital expenditure for some of the stations for the period 2001-04 and the principles
enunciated therein, Rs. 536 million (previous year Rs.474 million) has been provisionally accounted as sales during the year which is to be
billed on issuance of station specific Tariff orders by CERC.
5.
Depreciation has been charged at the rates specified in Schedule XIV of the Companies Act,1956 except as stated in accounting policy no.10.2.1.
The Government of India in January 2006 notified the Tariff Policy under the provisions of the Electricity Act, 2003 which provides that the rates of
depreciation notified by the CERC would be applicable for the purpose of tariffs as well as accounting. Subsequent to the notification of the
Tariff Policy, CERC has not notified the rates of depreciation. The Company has been advised that the Tariff Policy cannot override the provisions
of the Companies Act, 1956 and it is required to follow Schedule XIV of the Companies Act, 1956 in the absence of any specific deviation
contained in the Electricity Act, 2003 which could be said to have been saved by Sec.616 of the Companies Act, 1956. The Company has also
been advised that there is no such provision in the Electricity Act, 2003 either prescribing the rates of depreciation for the generating company or
otherwise empowering any authority for providing depreciation rates for accounting purposes in supercession of the provisions of Companies
Act, 1956.
6.
Due to uncertainty of realisation in the absence of sanction by the GOI, the company’s share of net annual profits of Badarpur Thermal Power
Station for the years 1986-87 to 2004-05 amounting to Rs.1,155 million (previous year Rs.1,174 million) being balance receivable in terms of the
management contract with the GOI has not been recognised.
7.
CERC notification dated 26th March 2001 in respect of tariff norms for the period 2001-04 directed to collect Development Surcharge from
beneficiaries. Subsequently, CERC vide its order dated 9th November 2004 directed that the amount collected and invested in instruments
corresponding to the amount contributed by each of the state utilities with interest shall be transferred in the name of concerned utility at the
latter’s expense. The company paid/adjusted the same as per CERC directions and the outstanding balance to be transferred as on 31st March is
as under:
(Rs. Million)
Sl. No.
Description of the Account
1
Investment in different tax-free bonds
9
2
Bank balance in Current Account
12
*
**
3
Interest accrued on Sl. No. 1
13
6
59
199
2,426
Total
Schedule No.
31.03.06
31.03.05
193
2,367
* Rs.1,00,007/- **Rs.4,32,570/8.
Pursuant to the Government of India Scheme for Settlement of Dues of State Electricity Boards (Scheme), Governments of Jharkhand and Bihar
issued notifications during December 2005 for issue of 8.5% Tax-Free special bonds with effect from 1st October 2001 for Rs.3,378 million and Rs.
4,277 million respectively towards outstanding dues. Accordingly, Investment of Rs. 7,655 million, interest income on the bonds amounting to
Rs.2,928 million, rebate of Rs.1,198 million payable to State Electricity Boards/Successor Entities under the Scheme have been recognised,
including Rs.2,278 million towards interest and Rs.892 million towards Rebate pertaining to the period upto 31st March 2005.
9.
In accordance with the Uttar Pradesh Electricity Reforms (Transfer of Tanda Generation Undertaking) Scheme 2000, the assets for Rs.6,070 million
(previous Year Rs.6,070 million) of Tanda Power Station of UP State Electricity Board (UPSEB) were handed over to the Company free from all
encumbrances. However, the charge created by UPSEB in favour of Life Insurance Corporation of India (LIC) before the assets were taken over is
still to be vacated by LIC.
10. The Company has provided Rs.3,401 million in the previous years in respect of amounts reimbursable to Government of India (GOI) in terms of
Public notice No.38 dated 5th November 1999 and Public Notice No.42 dated 10th October 2002 towards cash equivalent of the relevant
deemed export benefits paid by GOI to the contractors for Talcher Super Thermal Power Project Stage-II based upon the details provided by the
contractors. During the year Rs.2,678 million was paid on receipt of procedural details from the GOI for depositing the amount. The balance
provision has been revised to Rs.91million on the basis of additional information received from the contractors, and the difference of Rs.632
million was adjusted against the related assets. No interest has been provided on the reimbursable amounts as there is no stipulation for payment
of interest in the public notices cited above.
11. The Company has raised Rs.26,840 million through public issue of shares in 2004-05. The entire proceeds of the issue, net of issue expenses, were
utilised for part financing the capital expenditure on the specified projects.
12. Out of Rs.109 million accounted as recoverable from the Government of India (GOI) towards its share of expenses for the initial public issue of
shares made in the previous year, the GOI has approved payment of Rs.56 million. Consequently, an amount of Rs.53 million has been adjusted
against the Share Premium Account.
13. a) Balances shown under advances, creditors and material lying with contractors/ fabricators and material issued on loan in so far as these have
since not been realised/ discharged or adjusted are subject to confirmation/reconciliation and consequential adjustment, if any.
b) In the opinion of the management, the value of current assets, loans and advances on realisation in the ordinary course of business, will not
be less than the value at which these are stated in the Balance Sheet.
14.
Effects of change in Accounting Policies:
a) Exchange differences on foreign currency loans contracted before 1st April, 2000 for acquisition of fixed assets within India were hitherto
adjusted in the carrying cost of related fixed assets. In line with the opinion received from the Institute of Chartered Accountants of India
during the year, the Company has treated such exchange differences to the extent regarded as adjustment to interest cost as ‘borrowing
costs’ w.e.f. 1st April, 2000. Consequently, during the current year there has been decrease in Interest and Finance charges by Rs.1,364
million, increase in Depreciation by Rs.166 million, Prior period adjustment of Rs.1,986 million and decrease in the Profit by Rs.788
million.
b) In pursuance of Accounting policy no.8.3, Rs.413 million has been amortised during the year out of the premium paid on long term
investments which was hitherto not being done. As a result profit for the year is lower by Rs.45 million and Capital Work-In-Progress is
higher by Rs.368 million.
c) Expenses by way of repairs and maintenance, depreciation, employee cost and insurance charges relating to the coal handling system used
for bringing coal to its present location and condition at the power stations have been considered for valuation of the coal during the year
which was hitherto not being done. The total expenses incurred under these items during the year are Rs.1,090 million. Due to inclusion of
the above expenses, the closing stock of coal and profit for the year is more by Rs.82 million.
15. The effect of foreign exchange fluctuation during the year is as under :
i)
The amount of exchange differences (net) credited to the Profit & Loss Account is Rs. 2 million (previous year credit, Rs.6 million).
ii) The amount of exchange differences debited to the carrying amount of fixed assets and Capital Work-in-Progress is Rs.317 million (previous
year credit, Rs.145 million).
16. Revenue Grants recognised during the year in respect of expenditure incurred in the previous years amount to Rs.1 million (previous year ‘Nil’)
17. Borrowing costs capitalised during the year are Rs. 5,095 million (previous year Rs.5,113 million).
18. Segment information:
a)
Business Segments:
Principal business of the Company, its subsidiaries & Joint Ventures is generation and sale of bulk power to SEBs/State utilities. Other
business includes providing consultancy, project management and supervision, maintenance services, Power trading and distribution of bulk
power, oil and gas exploration and coal mining.
b)
Segment Revenue and Expense:
Revenue directly attributable to the segments is considered as Segment Revenue. Expenses directly attributable to the segments and common
expenses allocated on a reasonable basis are considered as Segment Expenses.
c)
Segment Assets and Liabilities:
Segment assets include all operating assets in respective segments comprising of net fixed assets and current assets, loans and advances.
Construction work-in-progress, construction stores and advances are included in unallocated corporate and other assets. Segment liabilities
include operating liabilities and provisions.
Rs. Million
Business Segments
Generation
Total
Others
Current Year
Previous Year
Current Year
Previous Year Current Year Previous Year
Sale of Energy/Consultancy, Project
Management and Supervision fees
261,626
226,009*
7,955
8,904
269,581
Internal Consumption of Electricity
276
248
-
-
276
248
261,902
226,257
7,955
8,904
269,857
235,161
46,029
49,589#
378
358
Revenue :
Total
Segment Result
234,913
46,407
49,947
Unallocated Corporate Interest and Other
Income
24,679
19,958
Unallocated Corporate expenses, interest
and finance charges
10,576
8,830
Income Taxes (Net)
Profit after Tax
2,102
2,789
58,408
58,286
Other information
271,654
263,720
Unallocated Corporate and other assets
Segment assets
471,171
399,411
Total assets
742,825
663,131
Segment liabilities
269,684
38,516
262,083
38,327
1,970
1,490
1,637
1,110
Unallocated Corporate and other liabilities
Total liabilities
Depreciation
Non-cash expenses other than Depreciation
Capital Expenditure
40,006
39,437
248,365
202,244
288,371
241,681
20,549
19,675
5
4
20,554
19,679
358
67
-
-
358
67
92,027
55,548
36
7
92,063
55,555
* includes Rs.3,522 Million (previous year Rs.3,689 million) for Sales related to earlier years.
# Segment result would have been Rs. 42,507 million (previous year Rs. 45,898 million) without including the Sales related to earlier
years.
d) The operation of the Company, its subsidiaries and its Joint Ventures are mainly carried out within the country and therefore, geographical
segments are inapplicable.
19. Related party disclosures
a) Related parties:
i)
List of joint ventures:
Utility Powertech Limited, NTPC-Alstom Power Services Private Ltd., PTC India Ltd.
ii) Key Management Personnel:
Shri C.P. Jain
Shri K.K.Sinha
Shri P. Narasimharamulu
Shri Chandan Roy
Shri R.S.Sharma
Shri R.K. Jain
Shri A.K.Singhal
Shri G.K.Agarwal
Shri S.Trivedi
Shri K.Prakasa Rao
Dr. Joy I.Cheenath
Smt Vijayalaxmi Joshi
Shri Shyam Wadhera
Superannuated on 31st March 2006
Resigned w.e.f 27 th June 2005
Superannuated on 31st July 2005
W.e.f 5 th May 2005
W.e.f 1 st Aug 2005
W.e.f. 1st May 2005
W.e.f 24 th July 2005
b) Transactions with the related parties at a (i) above are as follows :
(Rs. Million)
Particulars
Current Year
Previous Year
854
Contracts for Works/ Services for services received by the company
•Transactions during the year
945
42
6
• Amount payable to related parties
185
142
15
10
3
2
Dividend Received
28
21
11
7
• Amount recoverable from the related parties
2
1
Contracts for Works/ Services for services provided by the company
Deputation of Employees
c) Remuneration to key management personnel is Rs. 13 million (previous year Rs. 8 million) and amount of dues outstanding to the company
as on 31st March 2006 are Rs.1 million (previous year Rs.1 million).
20. Disclosure regarding Leases:
a) Finance Leases:
The Company has taken on lease certain vehicles and has the option to purchase the vehicles as per terms of the lease agreements, details
of which are as under:
Rs. million
31.03.2006
31.03.2005
4
4
6
9
Total
10
13
4
5
9
1
3
8
11
2
a) Outstanding balance of minimum lease payments
b) Present value of (a) above
Total
c) Finance Charges
b) Operating leases :
The company’s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices and
guest houses/transit camps. These leasing arrangements are usually renewable on mutually agreed terms but are not non-cancellable.
Employees’ remuneration and benefits include Rs. 189 million (previous year Rs. 163 million) towards lease payments, net of recoveries, in
respect of premises for residential use of employees. Lease payments in respect of premises for offices and guest house/transit camps are
shown as Rent in Schedule 22 – Generation, Administration and other expenses. Miscellaneous income in Schedule 20 – Other Income,
includes Rs.1 million (previous year Rs.1 million) towards sub-lease payments received/recoverable.
21.
Earnings Per Share:
The elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:
Current Year
Net Profit after Tax used as numerator (Rs. Million)
58,286
8,245,464,400
7,997,576,085
Earning Per Share (Basic and Diluted) Rupees
7.08
7.29
10/-
10/-
Weighted Average number of equity shares used as denominator
22.
Previous Year
58,408
i)
Current Tax:
Current Tax for the year
Less: Written back from earlier years
Less: Recoverable
Net current tax debited to Profit & Loss Account
ii)
(Rs.Million)
31.03.2006
31.03.2005
13,599
10,472
446
332
10,787
7,358
2,366
2,782
31.03.06
31.03.2005
62,914
57,410
Deferred Tax:
i)
Difference of Book depreciation and Tax depreciation
ii)
Others
-
1
62,914
57,411
9,338
5,279
97
1,341
Less: Deferred Tax Assets
i)
Provisions disallowed for tax purposes
ii)
Disallowed u/s 43B of the Income Tax Act,1961
9,435
6,620
53,479
50,791
The net increase in the deferred tax liability of Rs. 2,688 million (Previous year decrease Rs. 1,658) has been debited to Profit and Loss Account.
Out of the same amount Rs. 2,680 million (Previous year decrease Rs. 1665 million) is recoverable from customers.
23. Research and Development expenditure charged to revenue during the year is Rs. 58 million (Previous year Rs. 42 million).
24. As required by Accounting Standard (AS 28) “Impairment of Assets” issued by the Institute of Chartered Accountants of India, the company has
carried out the assessment of impairment of assets. There has been no impairment loss during the year.
25. i)
During the year the Company reviewed the disclosure of contingent liabilities keeping in view the provisions of AS-29 ‘Provisions, Contingent
Liabilities and Contingent Assets’ issued by the Institute of Chartered Accountants of India as under:
a) As on 31st March, 2006 the estimated financial effect of claims for enhanced compensation for land pending before courts disclosed as
contingent liability is based on judgment of the management, opinion of independent experts or experience of similar transactions.
Such claims hitherto were disclosed based on the amounts claimed by the land losers, except to the extent the possibility of a liability
was considered remote.
b) As on 31st March, 2006 the estimated financial effect of claims for interest on amounts disputed, delayed payments etc. is based on the
rate of interest claimed or 18%, whichever is lower, unless otherwise provided in any statute, agreement, order etc. Such claims were
hitherto disclosed based on the rates demanded by the claimants.
Consequently, contingent liabilities as at 31st March, 2006 are lower by Rs.3,595 million.
ii)
The outflow on account of the claims against the company not acknowledged as debts, and tax disputes is contingent upon the decision of
the courts/other authorities and may differ from the amounts disclosed as contingent liability on the basis of estimates.
26. Foreign currency exposure not hedged by a derivative instrument or otherwise:
Sl.No Particulars
Currencies
a)
Borrowings, including interest accrued but not due thereon.
USD
JPY
Others
b)
Sundry creditors/deposits and retention monies
USD
EURO
Others
c)
Sundry debtor and Bank balances
GBP
USD
d)
Unexecuted amount of contracts remaining to be executed
USD
EURO
Others
Amount Rs. Million
31.03.2006
31.03.2005
36,977
28,574
896
20,348
32,303
1,390
4,729
3,450
826
537
131
597
59
6
60
-
44,044
5,531
1,187
51,185
5,477
1,175
27.
The pre-commissioning expenses during the year amounting to Rs. 1,312 million (previous year Rs 1,191 million) have been included in Fixed
Assets/Capital work-in-progress after adjustment of pre-commissioning sales of Rs.727 million (previous year Rs. 583 million) resulting in a net
pre-commissioning expenditure of Rs. 585 million (previous year Rs.608 million)
28.
Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 143,379 million, (previous year
Rs. 154,848 million) which includes an amount of Rs. 7,762 million (previous year Rs.6,708 million) in respect of Jointly Controlled Entities.
29.
For certain items, the Company and its Joint Ventures have followed different accounting policies. However, impact of the same is not material.
30.
Previous year figures have been regrouped/rearranged wherever necessary
( A.K.RASTOGI )
Company Secretary
(A.K.SINGHAL)
(T.SANKARALINGAM)
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 24860
(Bhavna Nanda )
(Sanjay Gupta)
Partner
Partner
M No 95275
M No 87563
Place : New Delhi
Dated : 31 st May 2006
A. CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax and Prior Period Adjustments
Adjustment for:
Depreciation
Provisions
Interest charges
Guarantee Fee & other Finance charges
Interest/Income on Bonds/Investment
Dividend Income
Provisions Written Back
Deffered Revenue Expenditure Written off
Others (Bonds issue and Servicing Expenses)
Loss on maturity of current Investment
Operating Profit before Working Capital Changes
Adjustment for:
Inventories
Loans and Advances
Rs. Million
Current Year
Previous Year
62998
60973
13155
76153
19824
75
1783
10425
1597
(14991)
102
(113)
(6236)
16
18
12500
73473
20710
358
1034
12243
504
(19195)
(2488)
(118)
(23)
6
118
6
(2710)
(4602)
635
(1614)
(436)
(2969)
99
(16169)
3154
(392)
(16277)
57196
(13009)
7358
51545
(8727)
67426
Direct Taxes Paid
(9671)
Income Tax Recoverable
5282
Net Cash from Operating Activities - A
63037
B. CASH FLOW FROM INVESTING ACTIVITIES
(92818)
(54565)
Investment in Goodwill
(750)
Purchase of Investments
(45959)
(34219)
Sale of Investment
71643
Development Surcharge Account
(1358)
Interest/Income on Bonds/Investment Received
19637
25453
Dividend Received
118
119
Net cash used in Investing Activities - B
(48129)
(64570)
C. CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issue of Share capital (Including Premium)
26841
69402
30328
(17632)
(13579)
Interest Paid
(11728)
(10438)
Guarantee Fee & other Finance charges Paid
(504)
(1597)
Dividend Paid
(26514)
(20835)
Tax on Dividend
(3722)
(2694)
Others ( Equity /Bonds issue & Servicing Expenses)
(118)
(304)
Net Cash flow from Financing Activities - C
9184
7722
Net Increase/Decrease in Cash and Cash equivalents (A+B+C+D)
24092
(5303)
Cash and cash equivalents (Opening balance) *
61983
67286
Cash and cash equivalents (Closing balance) *
86075
61983
NOTES : Cash and Cash Equivalents consists of Cash in Hand, Balance with Banks, Public Deposit Account and interest accrued thereon
Previous year figures have been regrouped/rearranged wherever necessary.
* Includes Rs.14 million deposited as security with Government Authorities as per court orders.
( A.K.RASTOGI )
(A.K.SINGHAL)
(T.SANKARALINGAM)
Company Secretary
Director (Finance)
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 24860
(Bhavna Nanda )
(Sanjay Gupta)
Partner
Partner
M No 95275
M No 87563
Place : New Delhi
AUDITORS’ REPORT TO THE BOARD OF DIRECTORS ON THE CONSOLIDATED FINANCIAL STATEMENTS OF NTPC LIMITED (formerly National
Thermal Power Corporation Ltd.), ITS SUBSIDIARIES AND JOINT VENTURES.
1.
We have audited the attached Consolidated Balance Sheet of NTPC LIMITED (formerly National Thermal Power Corporation Limited) (the Company),
its Subsidiaries and Joint Ventures (NTPC Group) as at 31st March 2006 and also the Consolidated Profit & Loss Account and the Consolidated
Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s Management
and have been prepared by the management on the basis of separate financial statements and other financial information regarding components.
Our responsibility is to express an opinion on these financial statements based on our audit.
2.
We conducted our audit in accordance with the 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 of material misstatement. An audit includes
examining on a 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.
We did not audit the financial statements of the Company’s following Subsidiaries and Joint Ventures which have been audited by other auditors
whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included in respect of the Subsidiaries and Joint
Ventures, is based solely on the reports of the other auditors. The details of the assets, revenues and net cash flows in respect of these Subsidiaries
and Joint Ventures to the extent to which they are reflected in the consolidated financial statements are given below:
(Rs.Million)
Name
Subsidiaries:
NTPC Hydro Ltd.
Joint Ventures:
NTPC-Alstom Power Services Pvt. Ltd.
PTC India Ltd.
NTPC-SAIL Power Company Pvt. Ltd.
Bhilai Electric Supply Company Pvt. Ltd.
NTPC-Tamilnadu Energy Company Ltd.
Ratnagiri Gas & Power Pvt. Ltd.*
Total Assets
Total Revenues
Net Cash Flows
325
43
61
581
92
4,442
100
2
88
383
409
313
2,066
2,881
2
24,991
739
364
2,496
658
288
2
19
(7)
39
(67)
(349)
336
*Shareholders Agreement is under execution.
4.
We report that the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of
Accounting Standard (AS) 21, ‘Consolidated Financial Statements’ and Accounting Standard (AS) 27, ‘Financial Reporting of Interests in Joint
Ventures’ issued by the Institute of Chartered Accountants of India.
5.
We draw attention to:
(i) Note no. 4 of Schedule 27 to the financial statements in respect of accounting of sales on provisional basis pending final determination of
tariff by Central Electricity Regulatory Commission.
(ii) Note no. 6 of Schedule 27 to the financial statements in respect of share of net annual profit of Badarpur Thermal Power Station amounting to
Rs.1,155 million relating to earlier years not recognized as revenue.
6.
Further to our comments in para 5 above, we report that on the basis of our audit, the information and explanations given to us and on the
consideration of the separate audit reports on individual audited financial statements of the NTPC group, we are of the opinion that the said
consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India,
i) in case of Consolidated Balance Sheet, of the state of affairs of the NTPC Group as at 31st March, 2006;
ii) in case of Consolidated Profit & Loss Account, of the profit for the year ended on that date; and
iii) in case of Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
For Kalani & Co.
For Amit Ray & Co.
(Vikas Gupta)
(Pradeep Mukherjee)
Partner
Partner
Partner
M No. 77076
M No 70693
M No. 24860
(Bhavna Nanda )
(Sanjay Gupta)
Partner
Partner
M No 95275
M No 87563
Place : New Delhi
NTPC Limited
(Formerly National Thermal Power Corporation Limited)
Regd. Office : NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003
ATTENDANCE SLIP
th
30 Annual General Meeting to be held on Tuesday, September 19, 2006 at 11.30 a.m.
NAME OF THE ATTENDING MEMEBR
(IN BLOCK LETTERS)
*Folio. No.
DP ID No.
Client ID No.
No. of shares Held
NAME OF PROXY
(IN BLOCK LETTERS, TO BE FILLED
IN IF THE PROXY ATTENDS INSTEAD OF THE MEMBER)
I, hereby record my presence at the 30th Annual General Meeting of the Company at NDMC Indoor Stadium, Talkatora Garden, New Delhi – 110 001,
on Tuesday, September 19, 2006.
Signature of Member/Proxy
*Applicable in case of shares held in Physical Form.
NTPC Limited
(Formerly National Thermal Power Corporation Limited)
Regd. Office : NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003
FORM OF PROXY
DP ID :
Client ID :
No. of Shares
Regd. Folio No.:
(in case of shares held in Physical Form)
I / We...................…………………………………………………………………………......................................................……………...of
……………………….................................…………………………………………………………………...................................................in the District of
........................................................................................................................................ being a member/ members of the above
named Company, hereby appoint …………………..............................……………… of ….....................………… in the District of ......................................
...........................................................or failing him/her..................................................................................................................of
……….................................................................……………………………………….......……………………................................................................of
……....................................................................………………………………………………………………...........................in the District of
...................... ................................. as my/our proxy to vote for me/us on my/our behalf at the 30 th Annual General Meeting of the
Company to be held on Tuesday, September 19, 2006 and at any adjournments thereof.
Affix One
Rupee
Signed this ..........................................................day of ................................ 2006.
Revenue
Stamp
Signature
This form is to be used in favour of resolution(s) no………….and against resolution(s) no………... Unless otherwise instructed, the Proxy will
act as he thinks fit.
Notes:
a) The form should be signed across the stamp as per specimen signature registered with the Company.
b) The form should be deposited at the Registered Office of the Company not less than forty-eight hours before the time for holding the Meeting.