Directors Report of NHPC Ltd.

Mar 31, 2025

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Mar 31, 2024

The Board of Directors of your Company is pleased to present before you the 48^th Annual Report of your Company, highlighting the development and progress for the financial year 2023-24 along with audited financial statements, Auditors' Report thereon, Secretarial Auditor's Report and review of financial statements by the Comptroller and Auditor General of India (C&AG).

Major highlights of performance of your Company during the year under review are as under:

•    NHPC has earned Profit After Tax (PAT) of '3,743.94 crore on standalone basis in the financial year 202324 compared to '3,833.79 crore in the previous financial year. The consolidated net profit was '4,028.01 crore in financial year 2023-24 as compared to '4,260.83 crore in previous financial year.

•    Total income and revenue from operations were '10,024.99 crore and '8,404.92 crore respectively during the financial year 2023-24. Total comprehensive income for financial year 2023-24 was '3,718.98 crore.

•    NHPC's power stations recorded overall Plant Availability Factor (PAF) of 77.6% and generated 21,779 Million Units (MUs) during the year.

•    Cash contribution of '1268.52 crore was made to Government of India's exchequer through dividend (final dividend for financial year 2022-23 of '320.70 crore and interim dividend for financial year 2023-24 of '947.82 crore) during the financial year 2023-24.

•    Foundation stone of India's largest hydro power project 2880 MW Dibang Multipurpose Project was laid in the distinguished presence of the Hon'ble Prime Minister of India, Shri Narendra Modi.

•    The inauguration of the 380 MW Solar Project in Jaisalmer District, Rajasthan under REIA scheme, by the Hon'ble Prime Minister, Shri Narendra Modi, further underscored NHPC's pivotal role in the renewable energy sector. Furthermore, the laying of the foundation stone for the 1200 MW Jalaun Ultra Mega Renewable Energy Power Park of Bundelkhand Saur Urja Limited (BSUL), NHPC's JV with Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA), added another feather to NHPC's cap.

•    NHPC has achieved a significant milestone with the foundation stone laying ceremony of the

300 MW Solar Power Plant by Hon'ble Prime Minister, Shri Narendra Modi, located in Bikaner, Rajasthan under the Government of India's CPSU Scheme, Phase-II, Tranche-III, with total investment of over '1732 crore.

•    NHPC has signed an MOU with Department of Energy, Govt. of Maharashtra for the development of Pumped Storage Schemes and other Renewable Energy Source Projects in Maharashtra. The MOU envisages development of four Pumped Storage Projects aggregating to 7350 MW namely Kalu-1150 MW, Savitri-2250 MW, Jalond-2400 MW & Kengadi-1550 MW and other Renewable Energy Source Projects in the state.

•    NHPC has signed an MOU with Govt. of Odisha through GRIDCO Limited for "Development of Pumped Storage Projects (PSPs) and Renewable Energy in the State of Odisha."

•    NHPC signed an MOU with Kerala State Electricity Board (KSEB) to set up a "Design Clinic" for vetting of design of KSEB Projects as part of its Consultancy Services initiatives.

•    A Memorandum of Agreement (MOA) was signed with Government of Arunachal Pradesh for development of two mega projects i.e. 1605 MW Subansiri Upper Hydroelectric Project and 1720 MW Kamala Hydroelectric Project.

•    NHPC has signed an MOU with Andhra Pradesh Power Generation Corporation Limited (APGENCO) for Implementation of Pumped Hydro Storage Projects and Renewable Energy Projects under joint venture mode in Andhra Pradesh.

•    NHPC has signed an MOU with School of Planning and Architecture for developing 3 Model villages in Siang and Upper Siang Districts, Arunachal Pradesh. The model villages will provide appropriate and robust livelihood to local people and will also improve social & economic infrastructure.

•    NHPC has signed an MOU with ONGC for "Cooperation in exploration & development of Pumped Hydro Storage & other Renewable Projects".

•    NHPC has signed an MOU with Gujarat Power Corporation Limited for proposed investment of '4,000 crore in Kuppa Pumped Storage Project (750 MW), Chhota Udaipur, Gujarat. NHPC secured a significant achievement by securing a 200 MW capacity solar project in the 1,125 MW Gujarat State Electricity Corporation Limited (GSECL) Solar Park at Khavda, Gujarat.

• NHPC has signed an agreement with Japan Bank for International Cooperation (JBIC), Japan for a loan of JPY 20 billion for implementation of renewable project including 300 MW Solar Power Project, Bikaner being developed under CPSE 1000 MW Scheme.

1. FINANCIAL PERFORMANCE

The important financial highlights are given in table below:

(' in crore)

PARTICULARS	Financial Year
	2023-24	2022-23
Revenue from operations	8,404.92	9,316.34
Profit before depreciation, interest, rate regulated income and tax	5,598.33	6,205.20
Depreciation	1,111.00	1,145.44
Profit after depreciation but before rate regulated income, interest and tax	4,487.33	5,059.76
Interest and finance charges	425.13	476.16
Profit after depreciation and interest but before rate regulated income and tax	4,062.20	4,583.60
Rate regulated income	233.28	(144.41)
Tax	551.54	605.40
Profit after depreciation, interest, rate regulated income and tax	3,743.94	3,833.79
Other Comprehensive Income (OCI)	(24.96)	(3.37)
Total Comprehensive Income (TCI)	3,718.98	3,830.42
Surplus from statement of profit and loss of earlier years (including Other Comprehensive Income)	12,253.20	10,094.39

Transfer from bond redemption reserve	178.69	236.95
Sub-total	16,150.87	14,161.76
Less : Appropriations
Dividend	1,858.33	1,908.56
Closing Balance of Retained Earnings including Other Comprehensive Income	14,292.54	12,253.20

1.1    REVENUE

Your Company has generated total income of '10,024.99 crore during the financial year 2023-24. The total income during the financial year 2022-23 was '10,150.90 crore.

1.2    EXPENSES

The total expenditure during financial year 2023-24 increased to '5,962.79 crore as compared to '5,567.30 crore in the previous financial year.

1.3    TOTAL COMPREHENSIVE INCOME

Total Comprehensive Income of your Company decreased to '3,718.98 crore during the financial year 2023-24 as compared to '3830.42 crore in the previous financial year.

1.4    NET WORTH

Your Company's net worth as on March 31, 2024 was '37,268.61 crore as compared to '35,407.96 crore at the end of previous financial year.

1.5    SHARE CAPITAL

Your Company's paid-up share capital as on March 31, 2024 was '10,045.03 crore which remained unchanged during the financial year 2023-24.

1.6    TRANSFER TO RESERVES

During the year 2023-24, Company did not transfer any amount to any reserve.

2. DIVIDEND

Your Company has a consistent track record of dividend payment. The Board of Directors has recommended a final dividend of '0.50 per equity share for the financial year 2023-24 amounting to '502.25 crore. The above dividend is in addition to the interim dividend of '1.40 per equity share amounting to '1,406.30 crore paid in March, 2024. Accordingly, total dividend for the financial year 2023-24 comes to '1.90 per equity share amounting to '1,908.55 crore. Your Company has a Dividend Distribution Policy in place since May, 2017. The Policy sets out the parameters and circumstances that

will be taken into account by the Board in determining the distribution of dividend to its shareholders and/ or retained profits earned by the Company. As per Dividend Distribution Policy of the Company, broadly the dividend payment shall be 30% of PAT or 5% of the Net worth, whichever is higher. Accordingly, total dividend payout for financial year 2023-24 (subject to approval of final dividend by the members of the Company) @ '1.90 per share will be '1,908.55 crore i.e. 51% of PAT for financial year 2023-24 and 5.12% of Net worth as on March 31, 2024 as against total dividend pay-out of '1858.33 crore i.e. 48% of the PAT for financial year 2022-23 and 5.25% of Net worth as on March 31, 2023 in the previous year. The Dividend Distribution Policy of the Company is available on website of the Company at https://www.nhpcindia. com/assests/pzi public/gallery/1672828855.pdf

3. OFFER FOR SALE

Govt. of India has divested 3.55% stake in NHPC through Offer For Sale (OFS) during financial year 2023-24. Out

of this, 3.50% stake was divested through OFS to Retail and Non Retail Investors in the month of January, 2024. Further, 0.05% stake was divested through Employee OFS (EOFS) in the month of February, 2024. Post OFS, the shareholding of Govt. of India in NHPC has been reduced from 70.95% to 67.40%.

4. OPERATIONAL PERFORMANCE

Your Company's power stations have achieved total generation of 21,779 MUs during the year 2023-24 against generation of 24,907 MUs during the previous year. Your Company has achieved overall Plant Availability Factor (PAF) of 77.60% during financial year 2023-24 against overall PAF of 88.75% during the previous year. Major reasons for less generation were flash floods in Himachal region during July 2023, unprecedented flash flood originating from Lhonak lake during October 2023 in Sikkim Region and overall less inflow of water.

The power station wise generation and PAF during the year 2023-24 are given in table below:

NAME OF POWER STATIONS	GENERATION TARGET * (MU)	ACTUAL GENERATION (MU)	ACTUAL PAF (%)
BAIRA SIUL	709	542	80.41
LOKTAK	500	298	80.45
SALAL	3832	3367	93.26
TANAKPUR	525	453	83.99
CHAMERA-I	2500	2172	93.99
URI	3050	2430	86.58
RANGIT	355	298	82.27
CHAMERA-II	1567	1211	89.75
DHAULIGANGA	1285	976	91.28
DULHASTI	2300	2092	92.91
TEESTA-V	2835	1966	52.61
SEWA-II	620	552	95.59
CHAMERA-III	1160	846	83.37
CHUTAK	213	159	56.82
TLDP-III	622	419	48.41
NIMOO-BAZGO	250	230	87.95
URI-II	1794	1392	88.75
PARBATI-III	742	294	31.26
TLDP-IV	763	640	64.89

KISHANGANGA	1713	1272	71.17
PARBATI II	815	6**	-
SUBANSIRI	1573	-	-
Total (Hydro)	29723	21615	77.60
WIND POWER PROJECT	94	72	-
SOLAR POWER PROJECT	100	92	-
Total	194	164	-
Total (NHPC)	29917	21779	77.60

Note:

*As per MOU FY 2023-24, Consolidated Generation Target is 35,746 MUs i.e. including Generation Target of NHPC, NHDC & BSUL. Actual generation for FY 2023-24 including NHPC, NHDC ( ISPS, OSPS & Sanchi Solar) & BSUL is 26,291 MUs.

** Actual Generation shown is infirm power.

S.No	Power Station	Beneficiary DISCOMs	Date of Signing of PPA	Validity of PPA
1	Chamera-III	Jammu & Kashmir Power Corporation Limited, J&K	11.05.2023
2	Parbati-III			40 years from COD
3	Kishanganga		14.10.2023

With sanction of number of new Hydro projects/Solar projects under CPSU scheme, NHPC has been pursuing states/ DISCOMs to tie up the capacity of these new projects. PPA for following projects has been signed:

S.No	PROJECT /STATE	PPA SIGNED	DATE OF SIGNING OF PPA	VALIDITY OF PPA
Hydro Projects (NHPC-Standalone)
1	2880 MW Dibang MPP, Arunachal Pradesh	Gujarat Urja Vikas Nigam Limited	02.05.2023
2	500 MW Dugar HEP, Himachal Pradesh	Chhattisgarh State Power Development Corporation Limited	02.05.2023	40 years from COD
		Gujarat Urja Vikas Nigam Limited	20.06.2023
Hydro Projects (Subsidiary/ Joint Ventures)
1	500 MW Teesta-VI HEP, Sikkim	Gujarat Urja Vikas Nigam Limited	02.05.2023
2	120 MW Rangit-IV, Sikkim	Gujarat Urja Vikas Nigam Limited	02.05.2023
		Chhattisgarh State Power Development Corporation Limited	20.06.2023
3	1000 MW Pakaldul HEP, UT of J&K	Gujarat Urja Vikas Nigam Limited	08.08.2023
		Jammu & Kashmir Power Development Department	14.10.2023
4	624 MW Kiru HEP, UT of J&K	Gujarat Urja Vikas Nigam Limited	06.12.2023	40 years from COD
		Chhattisgarh State Power Development Corporation Limited	20.06.2023
5	540 MW Kwar HEP, UT of J&K	Gujarat Urja Vikas Nigam Limited	08.08.2023
		Jammu & Kashmir Power Development Department	14.10.2023
		Chhattisgarh State Power Development Corporation Limited	20.06.2023
6	850 MW Ratle HEP, UT of J&K	Gujarat Urja Vikas Nigam Limited	08.08.2023
		Jammu & Kashmir Power Development Department	14.10.2023

Solar Projects (NHPC-Standalone)
1	600 MW, Kutch, Gujarat	Punjab State Power Corporation Limited	16.05.2023	25 years from COD
2	300 MW, Bikaner Rajasthan	Punjab State Power Corporation Limited	16.05.2023
3	200 MW, Khavda, Gujarat	Gujarat Urja Vikas Nigam Limited	09.08.2023

6 STATUS OF HYDROELECTRIC PROJECTS UNDER CONSTRUCTION

At present, your Company is actively engaged in the construction of 09 Hydro Power Projects of 9,314 MW Capacity (including JV & Subsidiaries). The detail is given in table below:

S. No.	PROJECT		STATE/UNION TERRITORY (UT)	INSTALLED CAPACITY (MW)
A.	STANDALONE BASIS
	i	Parbati-II	Himachal Pradesh	800
	ii	Subansiri Lower	Assam/Arunachal Pradesh	2,000
	iii	Dibang	Arunachal Pradesh	2,880
			Sub-total (A)	5,680
B.	THROUGH SUBSIDIARIES/JOINT VENTURES
	i.	Teesta Stage-VI HE Project implementing through Lanco Teesta Hydro Power Limited (LTHPL) (A wholly owned subsidiary)	Sikkim	500
	ii.	Rangit-IV HE Project implementing through Jalpower Corporation Limited (JPCL) (A wholly owned subsidiary)	Sikkim	120
	iii.	Pakal Dul HE Project implementing through Chenab Valley Power Projects Limited (CVPPL) [A Joint Venture with Jammu & Kashmir State Power Development Corporation Limited (JKSPDCL)]		1,000
	iv.	Kiru HE Project implementing through CVPPL	Jammu & Kashmir	624
	v.	Kwar HE Project implementing through CVPPL		540
	vi.	Ratle HE Project implementing through Ratle Hydroelectric Power Corporation Limited (RHPCL) (A Joint Venture with JKSPDCL)		850
			Sub-total (B)	3,634
			Total (A+B)	9,314

During the financial year 2023-24:

•    Six (06) power stations viz. Chamera-I, Uri-II, Dulhasti, Salal, Sewa-II and Tanakpur have achieved their respective annual design energy.

•    Ten (10) power stations viz. Chamera-I, Dhauliganga, Dulhasti, Sewa-II, Salal, Tanakpur, Uri, Uri-II, Nimoo Bazgo and Chutak have achieved their respective NAPAF (Normative PAF).

Renovation & Modernization of Loktak Power Station

Loktak Power Station situated in Churachandpur district of Manipur state is an integral part of Loktak Lake Multipurpose project of Government of Manipur to harness the hydro power potential of Loktak Lake fed by Khuga and Imphal rivers. It was commissioned in April-May 1983. The installed capacity of the Power Station is 105 MW with three units of 35 MW each. The annual design energy is 448 MU and the beneficiaries' states of the Power Station are Manipur, Nagaland, Assam, Mizoram, Arunachal Pradesh, Meghalaya and Tripura. Since, Loktak Power Station has completed its schedule life of 35 years in May 2018, it was desired to have complete R&M works of entire Power Station to continue its services in future as per norms, defined in CERC Tariff Regulations 2014-19 (35 years from the COD). The DPR for R&M works of Loktak Power station has been approved for '273.59 crore (Sept. 2017 PL) including IDC & FC. Post R&M, the Design Energy shall increase to 562.73 MU from existing 448 MU. Progress of work has suffered due to the civil commotion in the state of Manipur.

5. COMMERCIAL PERFORMANCE

5.1    SALES AND REALIZATION

During the year under Report, your Company's sales from operations stood at '8,404.92 crore. Total billing was '8,992.53 crore and collection was '9,653.04 crore including collection on account of late payment surcharge of '38.50 crore. Total collection in financial year 2023-24 including collection from Power Trading Business was '9,664.56 crore

As on March 31,2024, the total outstanding dues of '98.41 crore (including late payment surcharge of '4.26 crore) were pending for more than 45 days. The outstanding amount mainly pertains to Jammu & Kashmir Power Corporation Limited, Jammu & Kashmir ('69.79 crore). Your Company is making all out efforts to liquidate the outstanding dues by continuous follow-up.

5.2    SIGNING OF POWER PURCHASE AGREEMENTS (PPA)

Availability of long term PPAs for Power Stations is key to survival of organization as this gives revenue visibility for the organization and assured rate of return which can be utilized for business expansion.

Therefore, a conscious decision has been taken to focus on this area and execute PPAs for existing, under construction and upcoming projects for complete useful life of the projects. During the financial year, NHPC has signed PPA in respect of following power stations/upcoming Projects:

6.1    NHPC STANDALONE PROJECTS

6.1.1    PARBATI-II HE PROJECT - 800 MW (4 X 200 MW), HIMACHAL PRADESH:

Parbati-II HE project is being constructed by NHPC as a run-of-the-river scheme to harness the hydro-potential of the lower reaches of Parbati River. A Concrete Gravity Dam of 83.7 m height has been constructed at Village Pulga in Parbati valley to divert the river water through a 31,557 m long Head Race Tunnel (HRT). An underground Power House of 800 MW (4 x 200 MW) capacity has been constructed at Village Suind in Sainj valley utilizing gross head of 863 m. The diverted discharge of the Parbati River is to be further augmented by diverting the discharge of various nallahs viz. Jiwa, Hurla, Pancha and Manihar falling along the HRT alignment.

Major civil works of Dam, intake structure, desilting chamber, pressure shafts, surge shaft, power house, all nallahs viz. Jiwa, Hurla, Pancha and Manihar have been completed. HRT excavation has been completed (except 41m rock plug) using Drill and Blast Method (DBM) and Tunnel Boring Machine (TBM). At present, HRT lining is in progress from Face-3 and Face-4. Total 99.87% HRT excavation and 92.56% overt lining have been completed till March, 2024.

LINING WORKS IN FACE-3 & FACE-4 OF HEAD RACE TUNNEL - 800 MW PARBATI-II (HIMACHAL PRADESH)

Major Hydro Mechanical Works and Electro-Mechanical works of the project have been completed. All the generating units have been synchronized with grid at part load. At present generation of electricity (infirm power) is being made as per availability of water from Jiwa, Manihar, Pancha and Hurla Nallah. 1,123 MUs Energy have been generated till March, 2024 from Parbati-II in the form of infirm power.

SALIENT FEATURES

Location	Kullu District of Himachal Pradesh
River	Parbati
Capacity	800 MW (4 X 200 MW)
Dam	Concrete Gravity Dam, 83.7 m high and 110 m long
Spillway Radial Gate	3 nos., 6.0 m x 9.0 m
De-silting Chamber	3 nos., Dufour type, 15 m x 16 m x 170 m
Head Race Tunnel (HRT)	31.557 Km long (24.008 Km Horse Shoe Shape by DBM and 7.549 Km Circular shape by TBM)
Surge Shaft	17 m dia., 130 m high underground orifice type.
Pressure Shaft	2nos., 3.50m dia., Underground Inclined pressure shafts of length 2,121.5 m (Right) & 2,149.5 m (Left)
Power House	Surface Powerhouse with 4 units (Pelton) of 200 MW each
Design Energy	3,124.60 MUs
Reservoir Capacity	Gross Storage : 6.83 Mcum Diurnal Storage : 3.09 Mcum
CCEA approval	11.09.2002
Project cost	'3,919.59 crore at Dec' 01 PL (CCEA approved) '12,160 crore (approx.) at completion
Annual Generation	3,124 MUs in a 90% dependable year
Anticipated commissioning	December 2024

6.1.2 SUBANSIRI LOWER HE PROJECT - 2,000 MW (8 X 250 MW), ARUNACHAL PRADESH/ ASSAM:

Subansiri Lower HE Project is one the biggest hydroelectric project under construction in India so far and is a run of-the-river scheme on Subansiri River, a tributary of Brahmaputra. The project is located at Gerukamukh (Dhemaji District) / Kolaptukar (Kamle District) on the border of Assam and Arunachal Pradesh. The right bank of river Subansiri is situated in Arunachal Pradesh and left bank is in Assam. At the right bank of river Subansiri all the major project component viz. Intake, HRT, Power House & TRC etc. are situated and on the left bank Diversion Tunnels are located.

The CCEA sanction to the project was accorded in September 2003 and NHPC started construction works in January 2005. The construction work was halted from December 2011 to July 2019 due to various reasons and ban of Hon'ble NGT on construction activities of the Project. Hon'ble NGT dismissed all the petitions and cleared the project vide order dated July 31,2019. Now, the Project is in advance stage of construction. Three units of the Project are scheduled to be commissioned in March 2025 and all units by May 2026.

SALIENT FEATURES

Location	North Lakhimpur on Assam and Arunachal Pradesh border
River	Subansiri
Capacity	2000 MW (8 x 250 MW)
Dam	Concrete Gravity Dam (116 m high, 271 m wide, 284 m long)
Head Race Tunnel	8 nos., 9.5 m dia., horse shoe shaped, 7,102 m total length

Power House	Surface, 285 m x 61 m x 64 m housing 8 units
Spillway Radial Gates	9 nos., 11.5 m x 14.0 m
Surge Shaft	17 m dia., 130 m high underground orifice type.
Pressure Shaft	8 nos., Vertical 48 m deep (Circular, Dia varying from 9.5 m to 7 m and length 209 m to 231 m)
Gross Head	91 m
CCEA approval	09.09.2003
Project cost	'6,285.33 crore (Dec'2002 PL) CCEA approved '21,247.54 crore (Jan 2023 PL) now anticipated
Annual Generation	7422 MU in a 90% dependable year
Anticipated commissioning	3 units by March 2025 and all units by May 2026

UNIQUE FEATURES:

•    The project involves 1200 TPH aggregate processing plant which is the largest such plant commissioned in India so far in a hydroelectric project. Also, it has a 300 m span conveyor bridge over river Subansiri which is longest span conveyor bridge in India.

•    The concrete batching and mixing plant consists of 880 cum capacity plants, a twin shaft mixing plant, and a chilling and ice plant from KTI Germany. This is the single largest batching and mixing plant for Dam construction in India.

•    Rotec's Tower belt System used first time in India for concreting of Dam of Subansiri Lower HE Project.

•    Biggest Radial gates in terms of size and head combination (11.5 m x 14.0 m) and effective head of 64 m.

•    Unique feature of 8 lanes of pressure shafts each having 8 m dia., 10 Diversion Tunnel gates and 24 draft tube gates.

•    The Generator of Subansiri Project is the largest capacity hydro generator of the Country with its MVA rating of 306 MVA.

•    The Rotor is the biggest equipment ever handled in a hydro power plant in India with its weight of 620 ton and diameter of approx. 11.45 m.

•    The Stator of the Project is the largest in the Country in term of its weight of 395 ton and bore dia. of 11.5 m.

•    The runner of the project is the heaviest Francis Turbine runner of the Country in its category with its weight of approx. 105 ton.

•    The Main Inlet Valve with its weight of about 355 ton and dia. of 7 m is the biggest Main Inlet Valve (MIV) in the Country.

•    The 420 KV GIS with total 22 bays shall be the biggest Gas Insulated Switchyard of the Country.

STATUS OF MAJOR WORKS:

Dam Works: Dam works completed.

Power House Civil Package works: Total 13,19,639 cum concreting completed out of 14,67,867 cum in power house. HRT Overt Lining and Invert lining of (7,102 m) has been completed. Surge Tunnel Overt lining of 3,221 m completed out of 3,545 m (90.86%).

E&M Works: Unit-1 & 2: Boxing up completed and pre-commissioning activities are under progress. Unit-3: Assembly of Rotor completed and erection of Stator is in progress. Erection of spiral casing is completed. Unit-4, Unit-5, Unit-6 &7: Erection of Draft Tube completed. Unit-8: Erection of Draft Tube in progress.

HM Works: Testing and commissioning of all Intake Service Gates (08) have been completed. Fabrication of ferrule and erection work of Penstock Liner is in progress (98.24 % completed).

Erection of Spillway Bulkhead units is completed. Erection of Draft Tube Gates of Unit -1, 2, 3 & 4 have been completed & remaining is in progress.

In addition to implementation of major works of project, downstream protection works upto 30 km downstream of dam has been completed. Protection works beyond 30 Km downstream of Dam area in identified stretches as per directions of Assam Govt. is also being implemented. NHPC is also undertaking downstream developmental works for safety and uplifting the living status of local people in downstream of dam through various livelihood intervention engaging Institute of Rural Management, Anand, Gujarat. Further, various Corporate Social Responsibility and Sustainable Development programs have been implemented for welfare of the local populace of Assam / Arunachal Pradesh. The Project would provide a great relief from the flood devastation being faced by the region every year since time immemorial by controlling the flood through regulated discharge of water in river.

This project has brought prosperity for local people as well as the region boosting local economy and general improvement in living standard of masses, providing employment to the local youths, indirect employment generated in various forms like deployment of inspection vehicles, contractor, sub-contractors, petty contractors, R&M works and other works.

Total 17 states including all seven north-eastern states (Assam, Manipur, Meghalaya, Nagaland, Tripura, Arunachal Pradesh and Mizoram), five northern states / UTs (Haryana, Punjab, Rajasthan, Uttar Pradesh and Chandigarh) and five western states (Gujarat, Madhya Pradesh, Chhattisgarh, Maharashtra and Goa) will be benefitted from the power generated from Subansiri Lower HE Project.

6.1.3 DIBANG MULTIPURPOSE PROJECT - 2,880 MW (12 X 240 MW), ARUNACHAL PRADESH

Dibang Multipurpose Project, one of the largest project in the Country, is a hydropower cum flood moderation scheme. The Project envisages utilization of gross head of 230 m by construction of a 278 m high concrete dam across river Dibang. The estimated energy generation with an installed capacity of 2,880 MW works out to be 11,223 MUs for the 90% dependable year. In addition, the reservoir created behind the dam will provide flood moderation benefit in the downstream, for which reservoir will be kept 40.10 m below Full Reservoir Level (FRL) in monsoon period. The back water in the reservoir will travel up to a length of 41 km in Dibang River and its tributaries. The flood moderation will save erosion of agricultural land, damage to crops and further save crores of rupees being spent on flood control measures by the Government.

SALIENT FEATURES:

Location	Village Munli (Distt. Lower Dibang Valley), Arunachal Pradesh
River	Dibang
Capacity	2880 MW
Dam	278 m high, 798 m long concrete gravity
Power House	Underground of size 24.5 m (W) x 56.3 m (H) x 419.0 m (L) housing 12 units of 240 MW each, Francis Turbine
Diversion Tunnel	5 nos. 12 m dia, Horse Shoe Shape (Length: 1,175 m to 1,325 m)
Head Race Tunnel	6 nos., 9 m dia, Horse Shoe Shaped, Concrete Lined (Length: 300 m to 600 m, Total 2,700m)
Pressure Shaft	6 nos. Steel lined, 7.5 m dia, Circular shaped, Inclined (Length: 231 m each)
Penstock	12 nos. Steel lined, 5.2 to 4.0 m dia, Circular shape
Reservoir Capacity	Gross Storage : 3,510.0 Mcum at MWL / 3,247.9 Mcum at FRL Live Storage : 1,282.6 Mcum at FRL
CCEA approval	27.02.2023
Project cost	'31,876.39 crore (May 2021 PL) CCEA approved
Annual Generation	11,223 MUs in 90% dependable year
Anticipated commissioning	February 2032

STATUS OF MAJOR WORKS:

•    CCEA approval of the project amounting to '31,876.39 crore at May 2021 Price Level has been accorded on February 27, 2023, with a completion period of 108 Months. Government of India has extended grant of '6,159.40 crore (including IDC of '57.21 crore) for Flood Moderation and '556.15 crore for Enabling Infrastructure (i.e. roads and bridges). The total Govt. of India grant for the Dibang MPP is '6,715.55 crore.

•    As on date Possession Certificate of land received is 1,519.59 ha (99.91%) in Lower Dibang Valley and 1,701.23 ha (98%) in Dibang Valley District by the Project for Project Construction Components.

•    Construction of Haulage Road has been completed. Formation cutting of various approach road on left and right bank has been completed and widening of the roads is in progress.

•    Major works of the Project have been divided into 08 packages out of which 04 packages have been awarded. The other packages are in various stages of Tendering & Evaluation Process.

•    As on March 31, 2024, the overall physical progress of the project is 10.55% and financial progress is 7.23%.

S. No.	Activity	Unit	Total qty.	Cum. Progress	% Completion
1	Open Excavation of DT Outlet-Portal	Cum	2,41,000	1,22,296	51
2	CCVT Excavation -(Heading)	M	510	5.25	1
3	MAT-1 Excavation-(Heading)	M	302	17.50	6
4	MAT-2 Excavation-(Heading)	M	575	13.60	2
5	Access Adit to Diversion Tunnel	M	468	Portal Development in progress.

6.2.1 Teesta Stage-VI HE Project: 500 MW (4x125MW) Sikkim-Implementing through Lanco Teesta Hydro Power Limited (LTHPL):

LTHPL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in October, 2019 and is a wholly owned subsidiary of NHPC developing 500 MW Teesta VI HE Project in Sikkim. The project is a Run of River (RoR) Scheme in Sirwani Village of Sikkim to utilize the power potential of Teesta River Basin in a cascade manner. Major components of the project include 26.5m high barrage and underground power house having 4 units of 125 MW each. The project is having an estimated annual energy generation of 2,400 MUs in a 90% dependable year.

SALIENT FEATURES:

Location	Sirwani / Tarkhola, South Sikkim, Sikkim
River	Teesta
Capacity	500 MW (4X125 MW)
Barrage	26.5 m high, 105 m long, 5 Nos. Radial Gates 15 m(W) x 17.5 m (H)
HRT	2 Nos. HRT, D-Shape 8 m dia., Length 71 m & 92.6 m, Modified Horse Shoe-Shape 9.8 m dia. Length 13,712 m & 13,815 m.
Pressure Shafts	4 Nos. Pressure Shafts, 5.4 m dia. (steel lined), length varying from 151m to 198 m
Surge Shaft	2 Nos., 16 m dia., 89.30 m depth
Power House	Underground, 142.75 m (L) x 18.5 m (W) x 52.44 m (H), 4 units of 125 MW each
TRT	04 Nos., (8.5 m X 7.5 m), D Shaped, each 247m length.
Gross Head	116 m
CCEA approval	08.03.2019
Project cost	'5,748.04 crore (July '2018 PL) CCEA approved
Annual Generation	2,400 MUs in a 90% dependable year
Anticipated	December 2027
commissioning

STATUS OF MAJOR WORKS:

The Construction works of Barrage, Excavation of HRT and Power House works are in full swing, despite various hindrances faced from time to time. As on March 31,2024, the overall progress of the project is 61.63%.

S. No.	Activity	Unit	Total	Cumm Progress	Progress %
1	Barrage & Head Regulator Concreting	Cum	3,44,713	2,66,163	77.21
2	De-silting Basin Concreting	Cum	1,71,080	95,824	56.01
3	HRT Heading Excavation	RM	27,527	17,883	64.96
4	HRT Benching Excavation	RM	27,527	6,135	22.28
5	HRT Overt Concrete Lining	RM	27,527	4,857	17.64
6	HRT Invert Concrete Lining	RM	27,527	1,650	6.0
7	Power House Excavation	Cum	3,78,090	3,66,090	96.83
8	HM Works	%	100	57.57	57.57
9	E&M Works	%	100	54.33	54.33

6.2.2 Rangit-IV HE Project: 120 MW (3x40MW) - Implementing through Jalpower Corporation Limited (JPCL):

JPCL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in March, 2021 and is a wholly owned subsidiary of NHPC developing Rangit-IV HE Project in Sikkim. The project is located on Rangit River near Rishi village, West Sikkim and is a run-of-the-river scheme envisaging construction of a 44m high concrete gravity dam to generate 120 MW (3x40MW) of power. The estimated design energy of the project is 507.88 MUs in a 90% dependable year.

SALIENT FEATURES:

Location	Rishi village, West Sikkim, Sikkim
River	Rangit
Capacity	120 MW (3 x 40 MW)
Dam	44 m high concrete gravity dam
Head Race Tunnel	1 No., 6.4 m dia., 6,488 m length modified horse shoe shaped
Surge Shaft	1 No., restricted orifice type, semi underground, 18 m dia.
Pressure Shaft	01 No., 5.5 m dia., Circular, Steel lined, Underground
Power house / No. of unit & size/Turbine	Surface, 3 Units 40 MW each, Francis Turbine
Net Head	103.67m
Investment approval	30.03.2021
Project cost	'938.29 crore (Oct 2019 PL) Investment Approval
Annual Generation	507.88 MU (90% dependable year)
Anticipated commissioning	May 2025

STATUS OF MAJOR WORKS:

S. No.	Activity	Unit	Total	Cumm Progress	Progress %
1	Dam & Intake Excavation	Cum	4,92,775	4,76,149	96.62
2	Dam & Intake Concreting	Cum	2,07,015	1,79,685.20	86.80
3	Desilting Chamber Excavation	RM	3,360	3,227.87	96.06
4	Desilting Chamber Concreting	RM	3,360	2,973.6	88.5
5	HRT Heading Excavation	RM	6,488	6,088.8	93.84
6	HRT Benching Excavation	RM	6,488	5,410.8	83.40
7	HRT Overt Concrete Lining	RM	6,488	1,151.5	17.74
8	HRT Invert Concrete Lining	RM	6,488	0	-
9	Surge Shaft Concreting	RM	59	48.50	82.20
10	HM Works	%	100	46	46.00
11	E&M Works	%	100	66	66.00

The project is being developed on Marusudar River, a tributary of Chenab in Kishtwar District, UT of Jammu & Kashmir. The project has been planned as a storage scheme and shall utilize the permissible storage under Indus Water Treaty with storage of 0.1 Million Acre Feet (MAF). The scheme envisages construction of a 167m high Concrete-Face Rockfill Dam (CFRD) (highest in India) to store and carry water through two HRTs of length 9.6 Km each to an underground power house, thereby utilizing rated head of 397.30 m to generate 3,230.18 MUs energy annually through 4 units of 250 MW each.

SALIENT FEATURES:

Location	Kishtwar District, UT of Jammu & Kashmir
River	Marusudar
Capacity	1,000 MW (4x 250 MW)
Dam	Concrete Face Rock Fill Dam (167 m high, 305 m long)
HRT	2 Nos., 7.2 m dia., Horse shoe shaped/ Circular, HRT-1 - 9612 m, HRT-2- 9,619 m length
Surge Shaft	2 Nos. 13 m dia. and 200 m height
Power House	Underground, 166 m x 20.20 m x 50.5 m housing 4 units
Rated Head	397.30 m
CCEA Approval	28.10.2014
Project cost	'8,112.12 crore (March '2013 PL) CCEA approved
Annual generation	3,230.18 MUs in a 90% dependable year
Anticipated commissioning	September 2026

STATUS OF MAJOR WORKS:

Dam Package Works: River Diversion, construction of upstream & downstream Coffer dam, Dam stripping, excavation in cut off wall area, and heading excavation of Tunnel Spillway-1 completed.

Major Activities	Progress %
CFRD Rock filling	33
HRT excavation by DBM	92
HRT Lining (DBM) portion	39
Surface excavation of Power Intake incl. Gate shaft platform	72
Surface excavation of Tunnel Spillways Outlet, Inlet and Gate Shaft Platform	72
Surface excavation of Surface Spillway	77

Powerhouse Package Works: Excavation of Power House cavern, MIV cavern, Transformer cavern, Butterfly valve House cavern, Tail Race Tunnel, Pothead yard completed.

Major Activities	Progress %
Powerhouse concreting	50.5
Vertical Pressure Shaft excavation	52
Surge Shaft-2 Slashing	2

E&M Package Works: Detailed Engineering, manufacturing, inspection, supply & erection of E&M components are in progress.

Unit: 1- Erection of Spiral case & Stay ring completed, Stator build up work in progress.

Unit: 2 - Spiral casing erection completed. Upper pit liner lowered and alignment completed. Stator build up work is in progress.

Unit: 3- Spiral case erection is in progress.

Unit: 4- Stay ring alignment completed in service bay.

HM Package Works: Detailed Engineering, manufacturing, inspection, supply & erection of HM components are in progress. Erection of Pressure shaft liner of 2.9 m dia. PS1A, PS1B, PS2A & PS2B completed. Erection of steel liner for both Pressure shafts (Horizontal portion) having 6 m dia. is in progress.

HRT-TBM Package Works: Excavation of HRT-1 by TBM is in progress & 348.5 m (4%) achieved out of 7350 m. Assembly of TBM-2 and Lining Segment casting is in progress.

The project has been planned as run-of-river scheme on river Chenab and located near Village Kiru / Patharnakki in Kishtwar District of UT of Jammu & Kashmir. The major components of project includes 135 m high concrete gravity dam, 4 nos. (5.5 m dia.) pressure shafts/ penstocks and underground Power House having 4 units each of 156 MW. The project of 117.98 m Rated Head will generate 2,272 MUs energy annually.

SALIENT FEATURES:

Location	Village Kiru / Patharnakki, Kishtwar District, UT of Jammu & Kashmir
River	Marusudar
River	Chenab
Capacity	624 MW
Dam	Concrete gravity dam (135 m high, 193 m long)
Pressure Shaft/Penstock	4 Nos., 5.5 m dia., Underground Circular steel lined, 316 m to 322 m length
Tail Race Tunnel	4 Nos., 7 m dia., Horse Shoe shaped, varies length from 164 m to 190 m
Power House	Underground, 4 Units, size 182 m x 23.6 m x 51.2 m
Rated Head	117.98 m
CCEA Approval	08.03.2019
Project cost	'4,287.59 crore (July '2018 PL) CCEA approved
Annual generation	2,272.02 MU in a 90% dependable year
Anticipated commissioning	September 2026

STATUS OF MAJOR WORKS:

Civil Package Work: Construction of coffer dams, River bed excavation and Dam foundation concreting completed after River diversion in December' 2021. The excavation of Power House Cavern, Transformer Cavern and Pressure Shaft completed.

Major Activities	Progress %
Dam concreting	23
Power Intake Excavation	98
Powerhouse concreting	4
Excavation of TRT	75

Electro-Mechanical Works: Detailed Engineering, manufacturing, inspection, supply & erection of E&M components is in progress.

Hydro-Mechanical Works: Detailed Engineering, manufacturing, inspection, supply & erection of HM components is in progress.

The project has been planned as run-of-river scheme on river Chenab near Padyarna village in Kishtwar District of Jammu. The major components of project includes 109 m high concrete gravity dam, 4 nos., 5.65 m diameter pressure shafts and underground power house having 4 units each of 135 MW. The project of 102.5 m Rated Head will generate 1,975.54 MUs energy annually.

SALIENT FEATURES:

Location	Padyarna village, Kishtwar, UT of Jammu & Kashmir
River	Chenab
Capacity	540 MW (4 x 135 MW)
Dam	Concrete gravity dam (109 m high, 195 m long)
Pressure Shaft / Penstock	4 Nos., 5.65 m dia., Underground Circular steel lined.
Tail Race Tunnel	2 Nos., 9.5m dia. horse shoe shaped, concrete line TRT's of lengths 2,786 m and 2,963 m.
Power House	Underground, 4 Units, size 140 m x 23.3 m x 50 m
Rated Head	102.5 m
CCEA Approval	10.05.2022
Project cost	'4,526.12 crore (Sept '2020 PL) CCEA approved
Annual generation	1,975.54 MU in a 90 % dependable year
Anticipated commissioning	December 2027

STATUS OF MAJOR WORKS:

Civil Package Works: River Diversion achieved on January 15, 2024. Cable cum Ventilation Tunnel excavation, Pilot excavation of Powerhouse and Transformer Cavern completed.

Major Activities	Progress %
Dam Abutment striping	62
Dam Pit Excavation	59
MAT Excavation	91
Excavation Adit cum Surge Gallery for TRT-1	61
Powerhouse excavation	6
Transformer Cavern excavation	14
GIS Cavern Excavation	17

E&M and HM Works: The tendering for E&M and HM packages are in progress.

6.3.4 Ratle HE Project (850 MW) (4 x 205 MW + 1 x 30 MW) - Implementing through Ratle Hydroelectric Power Corporation Limited (RHPCL):

The project has been planned as run-of-river scheme on river Chenab located at Kishtwar District of UT of Jammu & Kashmir near Drabshalla. The major components of the project include 133 m high concrete gravity dam and an underground power house having 4 units each of 205 MW and 30 MW Auxiliary Unit to utilize continuous release of environmental flows. The project of 97.39 m Rated Head will generate 3,137 MUs energy annually.

SALIENT FEATURES:

Location	Drabshalla, Kishtwar, UT of Jammu & Kashmir
River	Chenab
Capacity	850 MW (4 X 205 MW + 1 X 30 MW)
Dam	133 m high RCC Gravity Dam
Pressure Shaft / Penstock	Main Pressure shaft (4 Nos. with dia. 7 m) & Auxiliary pressure shaft (1No. with dia 3.2 m)
Tail Race Tunnel	4 Nos. Main TRTs with dia 8.7 m & 1No. Auxiliary TRT with dia 4.7 m, Circular Shape
Power House	Underground, 221.85 m x 23.9 m x 59.1m; Francis Turbine
Net Head	Main: 97.39 m, Auxiliary: 98.9 m
CCEA Approval	11.02.2021
Project cost	'5,281.94 crore (Nov '2018 PL) CCEA approved
Annual generation	3,137 MUs in a 90% dependable year
Anticipated commissioning	December 2026

STATUS OF MAJOR WORKS:

EPC contract for the project was awarded in January' 2022. River Diversion achieved on January 27, 2024. Excavation of Power House & Transformer Cavern access tunnels & adits completed.

Major Activities	Progress %
Dam Abutment Stripping	80.5
Power House Cavern Excavation	58
Pressure Shaft Excavation	63
Surge Chamber Excavation	46
TRT Excavation	36
Excavation Road Tunnel to dam top	55

7. HYDROPOWER PROJECTS UNDER CLEARANCE/APPROVAL

The status of hydro projects including of subsidiaries/joint ventures under various stages of clearance/approval are given in below table:

S. No.	PROJECT		STATE/UNION TERRITORY (UT)	INSTALLED CAPACITY (MW)
A.	STANDALONE BASIS
	i	Teesta-IV	Sikkim	520
	ii	Sawalkot	UT of Jammu & Kashmir	1,856
	iii	Dugar	Himachal Pradesh	500
	iv	Uri-I, Stage-II	UT of Jammu & Kashmir	240
			Sub-total (A)	3,116
B.	THROUGH JOINT VENTURES /SUBSIDIARIES
	i.	Kirthai-II through Chenab Valley Power Projects Limited (A Joint Venture with JKSPDCL)	UT of Jammu & Kashmir	930
	ii.	Loktak Downstream HE Project through Loktak Downstream Hydroelectric Corporation Limited (A Joint Venture with Govt. of Manipur)	Manipur	66
			Sub-total (B)	996
			Total (A+B)	4,112

7.1    NHPC STANDALONE

7.1.1    TEESTA-IV H.E. PROJECT (520 MW), SIKKIM

All the clearances for the project have been accorded except Forest Clearance (FC-II) which is pending on account of compliance under the Forest Rights Act, 2006. The same is being pursued by NHPC.

7.1.2    SAWALKOT H.E. PROJECT (1,856 MW), UT OF JAMMU & KASHMIR

MOU has been signed between NHPC and JKSPDCL on January 03, 2021. Agreement for handing over / taking over of Sawalkot HE Project signed between NHPC and JKSPDCL on December 11, 2021 & NHPC has taken over the Project. MoP accorded approval on July 12, 2022 for incurring expenditure on pre-investment activities for Sawalkot HE Project for an amount of '973 crore at Nov. 2021 PL.

CEA vide letter dated December 27, 2022 vetted the cost estimates of hard cost, IDC/FC and tariff of Sawalkot HE project at completion level for an amount of '22,704.80 crores including '4,593.41 crores for IDC and '1,124.20 crores for enabling infrastructure. FC-I&II, EC, PIB & CCEA are pending.

7.1.3    DUGAR HE PROJECT (500 MW), HIMACHAL PRADESH

MOU was signed on September 25, 2019 between NHPC and Govt. of Himachal Pradesh for implementation of Dugar HE Project. CEA vide letter dated April 26, 2022 vetted the cost estimates of the project for an amount of '4,250.20 crore at completion i.e. April, 2021 PL. FC-I & II, EC, PIB & CCEA are pending.

Govt. of Himachal Pradesh vide corrigendum dated December 12, 2023 has altered the terms & conditions agreed in Implementation Agreement for implementation of Dugar HEP by NHPC making the project commercially unviable with revised terms & conditions.

Description	As per Implementation Agreement dated 26.08.2022	As per Corrigendum dated 12.12.2023
	a) 4% from 1st to 10th year	(a) 20% from 1st to 12th year
Free Power	b) 8% from 11th to 25th year	(b) 30% from 13th to 30th year
	c)    12% from 26 th to 40th year d)    25% beyond 40 years	(c) 40% from 31st to 40th year
SGST waiver	50%	-
Concession Period	70 years	41 years

NHPC has filed a writ petition in the Hon'ble High Court of Shimla on February 05, 2024 to quash above Cabinet decisions/notifications/corrigendum. The case was heard on February 26, 2024, March 18, 2024, May 06, 2024 and July 02, 2024. The next date of hearing is scheduled on July 17, 2024.

The matter is sub-judice.

7.1.4 URI-I, STAGE-II (240 MW), UT OF JAMMU & KASHMIR

MOU has been signed between NHPC and JKSPDCL on January 03, 2021. DPR of Uri-I, Stage-II was concurred by CEA vide O.M. dated March 07, 2023 amounting to '2,526.79 crore at completion level including '249.45 crore for IDC and '26.20 crore for enabling infrastructure. FC-I & II, EC, PIB & CCEA are pending.

7.2 UNDER JOINT VENTURE / SUBSIDIARY COMPANIES

7.2.1    KIRTHAI-II HE PROJECT (930 MW)

MOU has been signed between NHPC and JKSPDCL on January 03, 2021 for execution of Kirthai-II (930 MW) and other Hydroelectric Projects in UT of Jammu and Kashmir. Extension of validity of appraisal up to June 13, 2024 has been accorded by CEA on August 29, 2022. Balance investigation works are in progress in compliance to DPR concurrence. IWT, FC-I&II, EC, PIB & CCEA are pending.

7.2.2    LOKTAK DOWNSTREAM HE PROJECT

The details are provided elsewhere in the Directors' Report.

8. PROJECTS UNDER SURVEY AND INVESTIGATION (S&I)

S.No.	Project	State	Installed capacity (MW)
Hydro-Standalone
1.	Dulhasti Stage-II	UT of J&K	260
2.	Garba Tawaghat	Uttarakhand	630
3.	Kamala HEP	Arunachal Pradesh	1,720
4.	Subansiri Upper	Arunachal Pradesh	1,605
Pump Storage Project - Standalone
5.	Kengadi	Maharashtra	600
6.	Kalu		1,150
7.	Savitri		1,800
Sub-total (Standalone)			7,765

S.No.	Project	State	Installed capacity (MW)
Pump Storage Project - Joint Venture/ Subsidiary
8.	Indirasagar-Omkareshwar PSP (On Stream)	Madhya Pradesh	640
9.	Kamalapadu	APGENCO, Andhra Pradesh	950
10.	Yaganti		1,000
Sub-total (Joint Venture/ Subsidiary)			2,590
Total			10,355

project is 13,236.47 MUs in a 90% dependable year. The scheme features 111 m high concrete gravity dam and a surface power house of 2,700 MW capacity. Professional Consultant M/s Ernst & Young LLP (EY) engaged by NHPC has submitted the preliminary due diligence Report of Siang Lower HE Project.

As parameters of Siang Upper Multipurpose Project are under finalization and may impact project parameters of Siang Lower HE Project, as such techno-commercial aspects of Siang Lower are uncertain at this stage and shall only be firmed up after fixing the parameters of Upper Siang Multipurpose Storage Project.

9.3 UPPER SIANG MULTIPURPOSE STORAGE PROJECT - 10,000 MW:

Ministry of Jal Shakti in April, 2022 has entrusted the task for preparation of Pre-Feasibility Report (PFR) of Upper Siang Multipurpose Storage Project (USMSP) to NHPC. The PFR of the project considering following 3 alternatives at Uggeng (11,600 MW), Dite Dime (11,200 MW) & Parong (11,200 MW) Sites have been prepared by NHPC and submitted to Ministry of Jal Shakti, Govt. of India in December, 2022. Technical Committee constituted by Govt. of India has suggested that further geological investigations are required to concur the project site amongst

the alternative project locations submitted in PFR for DPR preparation. It recommended that drilling works need to be undertaken at all the three sites as suggested by Geological Survey of India (GSI). NHPC proposal of Drilling Cost Estimate for 3 alternative sites of USMSP, has been approved by Ministry of Jal Shakti vide Office Order dated May 09, 2023 for an amount of ' 401.08 Lakh. Letter of Award for Drilling work at Parong and Dite Dime site was issued on May 05, 2023 and for Uggeng site was issued on May 04, 2023. However, the work could not be started due to law and order issue in the project site area.

10. RENEWABLE ENERGY PROJECTS

Your Company intends to be part of the renewable energy growth story of India by contributing to the Govt. of India's ambitious target of development of 50% power from non-fossil fuel sources by 2030. World over, various new and advanced technologies are being explored in the transition to a net-zero carbon future and your Company is aggressively looking forward in this direction. NHPC, in line with the latest technological developments and advancements, is now exploring road maps and strategies to scale up its renewable energy projects. NHPC has also incorporated a wholly owned subsidiary i.e. NHPC Renewable Energy Limited (NHPC REL) in February, 2022 as a separate vertical for developing renewable energy projects.

10.1    SOLAR POWER PROJECTS

10.1.1    Ongoing Solar Projects are given in table below:

S. No.	Project	State	Capacity (MW)
A.	In EPC Mode:
I.	Standalone basis:
(i)	600 MW Solar Power Project, Kutch, Gujarat under CPSU Scheme	Gujarat	600
(ii)	300 MW Solar Power Project, Bikaner, Rajasthan under CPSU Scheme	Rajasthan	300
(iii)	100 MW Solar Power Project, N.P. Kunta, Andhra Pradesh under CPSU Scheme	Andhra Pradesh	100
Sub-total (I)			1,000
II.	Through Joint Ventures:
(i)	88 MW Floating Solar Power Project, Omkareshwar Reservoir through NHDC	Madhya Pradesh	88
(ii)	NHPC REL-700 kW at Ajmer	Rajasthan	0.7
Sub-total (II)			88.7
Sub-total (A) [I+II]			1,088.7

S. No.	Project	State	Capacity (MW)
B.	As an Intermediary Procurer: (REIA -Tranche-I)
(i)	300 MW Solar Power project at Jaisalmer, by M/s Eden Renewable Passy Private Limited		300
(ii)	600 MW at Barmer by M/s Adani Solar Energy Barmer One Private Limited	Rajasthan	600
(iii)	400 MW at Barmer by M/s ABC Renewable Energy Private Limited		400
Sub-total (B)			1,300
Total (A+B)			2,388.7

(i)    Projects awarded under CPSU Scheme, Phase-II, Tranche-III of MNRE/ IREDA:

Your Company is implementing total 1000 MW Solar Power Projects underTranche-III of CPSU Scheme (Phase-II) which includes 300 MW Project at Bikaner, Rajasthan, 600 MW Project at Kutch, Gujarat and 100 MW Project at N.P. Kunta, Andhra Pradesh. The projects are under implementation at various stages. 300 MW Project at Bikaner & 100 MW Project at N.P. Kunta, Andhra Pradesh are likely to be commissioned during financial year 2024-25. 600 MW Project at Kutch, Gujarat is likely to be commissioned during financial year 2025-26 aligned with the commissioning of respective ISTS sub-station for power evacuation.

(ii)    88 MW Floating Solar at Omkareshwar reservoir, Madhya Pradesh:

This project is being developed by NHDC Limited (a Joint Venture of NHPC and Govt. of Madhya Pradesh).

48.4 MW capacity of the project was commissioned in June 2024, balance capacity is likely to be commissioned during 2^nd quarter of financial year 2024-25.

(iii)    700 kW Solar Power Project at Central University, Ajmer:

700 kW Solar Power Project at Central University, Ajmer is awarded by NHPC REL. The project is near completion and is likely to commissioned during 2^nd quarter of financial year 2024-25.

(iv)    Projects under development through selected developers - NHPC as Renewable Energy Implementing Agency (Intermediary Procurer) - 2000 MW (Tranche-I):

Out of total 2000 MW awarded Solar Projects, 320 MW capacity commissioned on December 10, 2022 and 380 MW capacity commissioned on February 07, 2024. Commissioning of balance 1300 MW Projects got delayed due to Great Indian Bustard (GIB) Issue, delay in commissioning of respective ISTS sub-stations and land arrangements. Efforts are being made to expedite resolution of issues through various stakeholders and to commission these projects by financial year 2024-25.

10.1.2 Renewable Energy projects under clearance/ new projects The solar power projects under clearance are:

S. No.	Project	State	Installed Capacity
NHPC Standalone
1.	Floating Solar Power Project, West Kallada	Kerala	50
2.	200 MW Grid connected Solar PV Projects (600 MW Solar Park at Khavda), Stage-I	Gujarat	200
3.	200 MW Grid connected Solar PV Projects (600 MW Solar Park at Khavda), Stage-III	Gujarat	200
4.	Ground Mounted Solar Power Project, Ganjam	Odisha	40
Sub-total (A)			490

S. No.	Project	State	Installed Capacity
Projects in Joint Venture (JV)
5.	Floating Solar Odisha (300 MW out of 500 MW) JV with GEDCOL	Odisha	300
6.	Mirzapur Solar Project (BSUL, JV with UPNEDA)	Uttar Pradesh	100
7.	Madhogarh Solar Project (BSUL, JV with UPNEDA)		45
8.	Jalaun Ultra Mega Solar Park, 1200 MW (BSUL, JV with UPNEDA)		-
Sub-total (B)			445
Total (A+B)			935

Brief status of projects is as under:

i.    Dulhasti Stage-II - MOU has been signed between NHPC and JKSPDCL on January 03, 2021. Defence Clearance has been accorded by MoD on January 03, 2022. DPR is under progress.

ii.    Garba Tawaghat - The project is under "Mahakali Treaty" and consent of Govt. of Nepal is required, for which matter is under pursuance of MOP / MEA.

iii.    Kamala HEP - MOA signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023.

iv.    Subansiri Upper - MOA signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023.

v.    600 MW Kengadi PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR submitted to Govt. of Maharashtra on November 22, 2023.

vi.    1150 MW Kalu PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR is under progress.

vii.    1800 MW Savitri PSP, Maharashtra - MOU signed with Department of Energy, Govt. of Maharashtra on June 06, 2023. PFR submitted to Govt. of Maharashtra and CEA on September 11, 2023 & September 20, 2023 respectively.

viii.    Indirasagar-Omkareshwar PSP (On Stream) - DPR

is under progress

ix.    950 MW Kamalapadu PSP, Andhra Pradesh -

MOU signed with APGENCO, Andhra Pradesh for development of Projects in JV mode (50:50) on August 23, 2023. MOP has conveyed the concurrence of DIPAM and NITI Aayog and directed NHPC for further necessary action as per extant rules of Govt. of India in this regard. DPR is under progress.

x.    1000 MW Yaganti PSP, Andhra Pradesh - MOU signed with APGENCO, Andhra Pradesh for development of Projects in JV mode (50:50) on August 23, 2023. MOP has conveyed the concurrence

of DIPAM and NITI Aayog and directed NHPC for further necessary action as per extant rules of Govt. of India in this regard. DPR is under progress.

9. NEW HYDRO PROJECTS INDICATED BY MINISTRY OF POWER FOR ALLOTMENT BY STATE GOVERNMENT TO NHPC

Ministry of Power (MoP) in December, 2021 has identified and indicated the four stalled Hydro Projects viz. Subansiri Upper (1605 MW) - Standalone by NHPC; Subansiri Middle (Kamala) (1720 MW)

-    Standalone by NHPC; Siang Lower (2700 MW) -NHPC, JV with NEEPCO; Upper Siang (10000 MW)

-    NHPC, JV with NEEPCO in the State of Arunachal Pradesh, for possible allocation to NHPC.

9.1    KAMALA HE PROJECT AND SUBANSIRI UPPER HEP (SUP):

Subsequent to indication of projects from MoP, NOC was obtained from MoP and accordingly Board of Directors of NHPC accorded approval for the acquisition of these projects. Govt. of Arunachal Pradesh approved allotment of Kamala HE Project (1720 MW) and Subansiri Upper HE Project (1605 MW) to NHPC. Memorandum of Agreement has been signed between Govt. of Arunachal Pradesh and NHPC on August 12, 2023 in the august presence of Hon'ble Minister of Power & New and Renewable Energy and Chief Minister of Arunachal Pradesh for further development by NHPC.

After signing of MoA, activities for DPR preparation for both projects are under progress. The Capacity & Design Energy works out as under:

Kamala HE Project    : 1720 MW / 6869.92 MU

Subansiri Upper HE Project : 1605 MW / 6131.55 MU

9.2    SIANG LOWER PROJECT - 2700 MW:

The project is located in East Siang District of Arunachal Pradesh. As per the updated DPR, the estimated annual energy generation from the

Your Company, in line with the latest technological developments and advancements, is now exploring road maps and strategies to scale up projects in the field of Renewable Energy.

Your Company is actively exploring development of various sources of renewable energy on pan India basis and has identified projects in the potential rich states such as Rajasthan, Gujarat, Odisha, Uttar Pradesh, Kerala, Maharashtra etc. Efforts are underway to take up implementation of these projects under different schemes of MNRE so as to avail benefits/ incentives available to CPSUs under different schemes.

Your Company is also participating in Tariff Based Competitive Biddings (TBCB) conducted by various implementing agencies to win projects across India and has won total 400 MW Solar Power Projects viz. 200 MW Solar Project in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-1) & 200 MW Solar Project in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-3).

10.1.2.1 Projects won through Tariff Based Competitive Bidding (TBCB) Process:

(i)    200 MW Grid Connected Solar Photovoltaic Power Projects located in 600 MW GSECL Solar Park at Khavda, Gujarat (Stage-1):

NHPC bagged 200 MW Grid Connected Solar Photovoltaic Power Projects located in 600 MW GSECL Solar Park at Khavda, Gujarat through tariff based competitive bidding from GUVNL. PPA for the project signed with GUVNL, tendering for EPC Contract concluded and award of EPC Contract for the said project is in process.

(ii)    200 MW Grid Connected Solar Photovoltaic Power Projects located in GSECL's RE Park (Stage-3) at Khavda, Gujarat:

NHPC bagged 200 MW Grid Connected Solar Photovoltaic Power Project through Tariff based

i    *

competitive bidding from GUVNL. Tendering for EPC Contract is in process.

10.1.2.2 Projects envisaged under Solar Park Scheme:

Your Company is exploring possibilities for development of projects under Solar Park Scheme of MNRE in various solar power potential rich States across the Country. The status of development of such projects are as under:

(i) 50 MW Floating Solar Project in Kerala Ultra Mega Renewable Energy Power Parks (UMREPPs-Mode 8 of Solar Park Scheme):

EPC tender finalized and discussions for signing of PPA with Kerala State Electricity Board is in process.

(ii)    40 MW Solar Power Project, Ganjam, Odisha (Mode 5 of Solar Park Scheme):

EPC tender finalized. Modifications in earlier signed PPA with GRIDCO is in process before award of EPC contract.

(iii)    500 MW Floating Solar Project in Odisha:

Your Company had signed the Promoter's Agreement, with Green Energy Development Corporation of Odisha Limited (GEDCOL) for formation of JV Company for development of 500 MW Floating Solar Power Projects in various water reservoirs & other solar projects in Odisha. 300 MW Floating Solar at Rengali Reservoir, Odisha has been identified for implementation in 1^st Phase for which EPC tender has been concluded. PPA for the project is under discussion with GRIDCO.

(iv)    10,000 MW Renewable Energy Parks/Projects in Rajasthan:

MOU for development of 10,000 MW Renewable Energy Projects in Rajasthan has been signed between NHPC Renewable Energy Limited (A wholly owned subsidiary of NHPC Limited) and

Govt. of Rajasthan. Under the purview of said MOU, development of 10,000 MW renewable energy parks/ projects under UMREPP are to be taken up by NHPC REL in the state of Rajasthan with facilitation from Govt. of Rajasthan regarding land, connectivity and other necessary clearances. Identification of land for 1^st phase 1000 MW is under process.

10.1.2.3 NHPC as Renewable Energy Implementing Agency (REIA mode)

Your Company was designated as a Renewable Energy Implementing Agency (REIA) by MNRE on June 11, 2020. The primary role is to aggregate the power purchased from different RE Power plants of selected developers through long term Power Purchase Agreement (PPA) and sell it to the distribution licensee(s)/consuming entities/open access consumers through Long Term Power Sale Agreement (PSA). PPA and PSA are signed on back to back basis. Trading margin of '0.07/kWh shall be payable by the end procurer to your Company being the Intermediary Procurer.

10.2 GREEN HYDROGEN TECHNOLOGY

The National Green Hydrogen Mission launched by Ministry of New and Renewable Energy in January, 2023 aims to make India a 'global hub' for using, producing and exporting green hydrogen. Green Hydrogen Technology is at nascent stage and emerging as the future source of energy in zero carbon emission scenario. NHPC is willing to leverage the emerging opportunities of green hydrogen in power sector to fulfil the grid balancing services and also to explore the end demand of hydrogen in other sectors. In order to avail the opportunities and gain business in Green Hydrogen sector, your Company has planned to enter and explore the production of Green Hydrogen with the use of various Renewable Energy Sources which are planned to be developed in potential rich States across the Country.

To start with, your Company has initiated actions for development of Green Hydrogen Technology on pilot basis as below:

a)    Pilot Green Hydrogen Based Fuel-Cell Micro grid (25 kWe) at NBPS Guest House, Leh:

The construction work is in progress and project is likely to be commissioned during the financial year 2024-25.

b)    Pilot Green Hydrogen Mobility Station at Kargil, UT of Ladakh:

EPC contract has been awarded and work likely to be completed during the financial year 2024-25.

c)    Pilot Green Hydrogen Mobility Station at Chamba, Himachal Pradesh:

Project is under tendering process.

d) Procurement of 3 Nos. Hydrogen Fuel Cell Electric Buses (2 Nos. for Kargil and 1 No. for Chamba):

Procurement is in tendering process.

Based on the experiences obtained from above Pilot Projects, NHPC proposes to venture suitably in the Green Hydrogen business on larger scale in emerging hydrogen economy in future.

10.3 PUMPED STORAGE PROJECTS (PSP)

Your Company is also diversifying in the field of PSP currently in states of Maharashtra, Gujarat, Andhra Pradesh and Tripura. Memorandum of Understanding was signed between NHPC and Department of Energy, Govt. of Maharashtra on June 06, 2023 for establishment of Kalu (1,150 MW), Savitri (After PFR-1,800 MW), Kengadi (After PFR-600 MW), Jalond (2,400 MW). Further, an Investment MOU was signed between NHPC & Govt. of Gujarat for development of 750 MW PSP in Kuppa Village, Gujarat on January 03, 2024 and discussions with Govt. of Gujarat are underway for allotment of the project to NHPC on BOOM basis. PFR/ DPR for the projects are under preparation. Under the MOU signed with Govt. ofAndhra Pradesh for development of two PSPs in Joint venture with Andhra Pradesh Power Generation Corporation (APGENCO) namely Yaganti (1000 MW) and Kamalapadu (950 MW), the DPR/ FR works are in progress. Govt. of Tripura has also allotted 4 project sites to develop Pumped Storage Projects at Longtharai, Sunitipur, Shantipur and Sakhan in the State of Tripura. MOU for the development of these PSPs shall be finalized after identification of techno-commercial viability of the proposed PSP sites.

11. DIVERSIFICATION

Your Company has diversified in the field of renewable energy and green hydrogen energy development with an objective to strengthen its core vision of sustainable development of clean power. Further, in line with the paradigm shift towards clean energy transition and trajectory of energy markets in the Country, NHPC as a business growth plan is diversifying its business portfolio towards development of Pumped Storage Projects in the Country.

NHPC is perusing for development of 11,375 MW PSPs capacities across different states viz. Maharashtra, Madhya Pradesh, Odisha, Andhra Pradesh, Gujarat, Tripura, Punjab, etc.

The efforts made by NHPC are as under:

• NHPC has signed MOU for development of PSPs along with Renewable Energy Sources (like Solar/ Wind/ Hybrid etc.) in the state of Maharashtra with

Department of Energy, Govt. of Maharashtra for development of 4 PSPs.

•    NHPC entered into a MOU with Govt. of Odisha through GRIDCO Limited to establish PSPs and Renewable Energy Projects in the State of Odisha. The MOU envisages setting up of self identified PSPs of at least 2000 MW and Renewable Energy Projects (Ground Mounted Solar Projects/ Floating Solar Projects) of at least 1000 MW in the state of Odisha which will help in de-carbonizing and energy transition of the State.

•    NHPC has prepared the Pre-Feasibility Report in respect of 03 Pumped Storage Projects viz. Indirasagar-Omkareshwar, Tekwa-2 & Satpura-2 in the State of Madhya Pradesh.

•    NHPC has signed MOU with APGENCO on August 23, 2023 for implementation of PSPs and other Renewable Energy (Solar/ Floating Solar/ Wind) Projects in the state of Andhra Pradesh in phases on joint venture Mode with 50:50 shareholding ratios.

•    NHPC has signed MOU with Punjab State Power Corporation Limited (PSPCL) on March 14, 2024 for development of Hydro Projects, PSPs and other Renewable Energy Sources (Solar/ Floating Solar) in the State of Punjab.

12. POWER TRADING BUSINESS AND POWER TRADING LICENSE

As part of Business expansion and Diversification program, your Company has ventured into Power Trading Business. Endeavour of Power Trading Business of the Company is to provide efficient and smart business solution to its clients, viz. Buyers/ DISCOMs, Generators/ Sellers, Utilities, etc. In the year 2018-19, NHPC obtained Category-I license from CERC for interstate trading of electricity in whole of India. NHPC is registered at DEEP (Discovery of Efficient Electricity Price) e-bidding portal and has obtained trader membership in Indian Energy Exchange (IEX) & Power Exchange of India Limited (PXIL).

2000 MW Solar Projects Intermediary Scheme:

NHPC as an "Intermediary Procurer" had invited bids in 2019-20 for selection of Solar Power Developer (SPDs) for procurement of 2000 MW Solar Power from Solar projects. PPA has been signed with 05 SPDs viz. Avada Sunrays Energy Pvt. Ltd. (320 MW), O2 Power limited (380 MW), Adani Solar Energy Barmer One Private Limited (600 MW), EDEN Renewable Passy Pvt. Ltd. (300 MW) and ABC Renewable Energy Pvt. Ltd. (400 MW). Back to back Power Sale Agreements

(PSAs) were signed with Madhya Pradesh Power Management Corporation Limited for 1000 MW, Chhattisgarh State Power Development Corporation Limited for 400 MW, Punjab State Power Corporation Limited for 300 MW and Jammu & Kashmir Power Corporation Limited for 300 MW for sale of solar power. Out of 2000 MW, total 700 MW project has been commissioned and power is being supplied to Punjab, J&K and Madhya Pradesh. Balance capacity is likely to be commissioned in financial year 2024-25 & 2025-26. After full commissioning of 2000 MW projects, NHPC shall earn trading margin of '35.00 crore annually for 25 years in this scheme. During financial year 2023-24, NHPC has traded 960.59 MUs with turnover of '252.48 crore.

Further, 10 GW capacity has been allotted to NHPC as Renewable Energy Implementing Agency (REIA) for inviting bids for development of RE projects. MNRE has allocated 10 GW to NHPC as "REIA" for inviting bids for selection of SPDs for development of Solar, Wind, Hybrid and FDRE projects during 2023-24. NHPC as REIA invited bid for development of 3000 MW Solar projects. LOAs have been issued to 08 developers. NHPC has signed PSA with Uttar Pradesh and Maharashtra. Back to Back PPAs are being signed with successful bidders. Projects are likely to be commissioned in financial year 2026-27. After commissioning, NHPC shall earn Trading Margin of '52.35 crore annually.

13. DETAILS OF SUBSIDIARIES AND ASSOCIATE COMPANIES

No subsidiary/ joint venture/ associate Company was incorporated or ceased during financial year 2023-24.

A statement containing the salient features of the financial statements of subsidiaries and associate/ joint venture companies in AOC-I as per Section 129(3) of the Companies Act, 2013 and details of individual contribution of these companies in the overall performance of the Company during the financial year 2023-24 is given under Consolidated Financial Statements.

The audited financial statements of subsidiary companies are not being attached to the audited annual financial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder who desires to have information on aforesaid financial statements may visit website of the Company i.e. www.nhpcindia.com.

Your Company has following subsidiaries and associate/joint venture companies as on March 31, 2024:

13.1 Subsidiary Companies:

i)    NHDC Limited (NHDC):

NHDC was incorporated as a joint venture of NHPC and Government of Madhya Pradesh in August, 2000. The shareholding pattern of NHDC as on March 31, 2024 was NHPC (51.08%), GoMP (26%) and Narmada Basin Projects Company Limited (Wholly owned by GoMP) (22.92%) respectively. NHDC has two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 MW) in Madhya Pradesh.

NHDC has also commissioned 8 MW ground mounted solar project at Sanchi, MP on March 29, 2024. NHDC is also engaged in the development of 88 MW Floating Solar Project at Omkareshwar reservoir.

During the financial year 2023-24, NHDC generated 4,473.18 MUs from its power stations i.e. 2,999.70 MU from Indira Sagar Power Station, 1,470.79 MU from Omkareshwar Power Station and 2.69 MU from Sanchi Solar Power Station.

ii)    Chenab Valley Power Projects Limited (CVPPL):

CVPPL is a joint venture of NHPC and Jammu & Kashmir State Power Development Corporation Limited with shareholding of 54.02% and 45.98% respectively as on March 31, 2024. CVPPL was incorporated in June, 2011. CVPPL is developing four hydro-electric projects in UT of Jammu & Kashmir i.e. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW), Kwar HE Project (540 MW) and Kirthai-II HE Project (930 MW). The status of the Projects are provided elsewhere in the Report.

iii)    Ratle Hydroelectric Power Corporation Limited (RHPCL):

RHPCL was incorporated in June, 2021 as joint venture of NHPC and Jammu & Kashmir State Power Development Corporation Limited (JKSPDCL). As on March 31, 2024, shareholding of NHPC and JKSPDCL was 54.88% and 45.12% respectively.

RHPCL is developing Ratle Hydroelectric Project (850 MW) in UT of Jammu & Kashmir. The status of the Project has been provided elsewhere in the Report.

iv)    Bundelkhand Saur Urja Limited (BSUL):

BSUL is a joint venture between NHPC and Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA). As on March 31, 2024, shareholding of NHPC and UPNEDA was 87.64%

and 12.36% respectively. BSUL was incorporated in February, 2015 for development of Solar Power Project in Tehsil Kalpi, District Jalaun, Uttar Pradesh and other conventional & non-conventional power projects entrusted by the Govt. of Uttar Pradesh. BSUL has achieved the commisioning of Kalpi Solar Power Project (65 MW) on March, 2024.

BSUL is in the process of development of 1400MW (approx.) Solar Power Projects in Uttar Pradesh through various modes of implementation i.e. in EPC mode and development of Solar Park followed by plant installation in developer mode. Hon'ble Prime Minister laid foundation stone of Jalaun Ultra Mega Renewable Energy Power Park 1200 MW.

Preparation of Public Investment Board (PIB) proposals for investment in the projects viz. Mirzapur SPP (100 MW) , Madhogarh SPP (45 MW) and Jalaun Solar Park (1200 MW) are in progress.

v)    Lanco Teesta Hydro Power Limited (LTHPL):

LTHPL was acquired by NHPC through Corporate Insolvency Resolution Process (CIRP) in October, 2019 and equity of '897.50 crore was infused as consideration amount pursuant to approved resolution plan. LTHPL is a wholly owned subsidiary of NHPC. LTHPL is executing 500 MW Teesta VI HE Project in Sikkim and construction works are at full swing. The status of Teesta VI HE Project has been provided elsewhere in the Report. Approval of Ministry of Power was obtained for merger of LTHPL with NHPC Limited. The merger of LTHPL with NHPC is underway.

vi)    Jalpower Corporation Limited (JPCL):

JPCL was acquired by NHPC through CIRP in March, 2021 and equity of '165 crore was infused as consideration amount pursuant to approved resolution plan. JPCL is a wholly owned subsidiary of NHPC. JPCL is developing Rangit-IV HE Project in Sikkim and construction works are at full swing. The status of Rangit-IV HE Project has been provided elsewhere in the Report.

Ministry of Power (MoP), Govt. of I ndia has conveyed its approval for merger/ amalgamation of JPCL with NHPC Limited. Accordingly, NHPC (Transferee Company) and JPCL (Transferor Company) filed Merger application with MCA. The merger of JPCL with NHPC is under process.

vii)    NHPC Renewable Energy Limited (NHPC REL):

NHPC REL was incorporated in February, 2022 as wholly owned subsidiary of NHPC for taking up

Solar, Wind, Small Hydro and Green Hydrogen ventures. NHPC REL is exploring various renewable energy projects for expansion of its activities. The status of its Projects has been provided elsewhere in the Report.

viii) Loktak Downstream Hydroelectric Corporation Limited (LDHCL):

LDHCL is subsidiary of NHPC with 74.82% shareholding of NHPC and 25.18% shareholding of Government of Manipur as on March 31, 2024. LDHCL was incorporated in October, 2009 to execute Loktak Downstream Hydro-electric Project (66 MW) in Noney District of Manipur. The PIB approval is pending for want of consent from Govt. of Manipur. The process of initiation of closure of Loktak Downstream Hydroelectric Corporation Limited (LDHCL) is under progress subject to the approval of DIPAM, Ministry of Power & Govt. of Manipur.

13.2 Associate Company:

i) National High Power Test Laboratory Private Limited (NHPTL):

NHPTL, incorporated in May, 2009, is a joint venture between five (5) entities viz. NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute, previously each having shareholding of 20%.

NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the Country. The laboratory for High Voltage Transformer (HVTR) at 400 kV level and 765 kV level is already operational at Bina, Madhya Pradesh. In view of the financial crisis of NHPTL and for long term sustenance of this important testing facility for high voltage transformers in the Country, revival plan has been agreed in the meeting held on September 15, 2022 with Ministry of Power, GoI wherein it was agreed that Powergrid Corporation of India Limited (PGCIL) shall infuse funds subject to approval of respective managements of JV parties. As a result of revival plan of NHPTL, the revised equity holding of PGCIL in NHPTL shall be 50%, remaining fifty (50%) percent of equity shall be held equally by the other four Parties (i.e., 12.5% each of NHPC, NTPC, DVC & CPRI). NHPC signed a Supplementary JV Agreement with JV Partners of NHPTL for sale of partial stake in NHPTL. The Board of Directors of NHPTL has approved the transfer of 1,31,63,750 shares from NHPC to PGCIL during the financial year 2024-25, in line with the Supplementary JV Agreement signed.

14. GLOBAL INITIATIVES

NHPC has ventured into Nepal seeking to expand its footprint in the hydropower business in line with GoI direction that CPSEs act in a way to increase their geographic footprint in the neighbouring countries of India and that CPSEs should transform to globally respected multinational companies in the long run and be able to generate substantial revenues from their foreign operations.

Accordingly, during the year, NHPC has taken major strides in establishing its business footprint in Nepal. NHPC is currently engaged in three hydro-electric projects namely West Seti (750 MW), Seti River (SR6) (450 MW) & Phukot Karnali (480 MW) HE Projects in Nepal.

In this regard 02 MOUs (Memorandum of Understanding) have been signed by NHPC, one with IBN (Investment Board Nepal) on August 18, 2022 to develop West Seti (750 MW) & Seti River (SR6) (450 MW) HE Projects and another with VUCL (Vidhyut Utpadan Company Limited) on May 31, 2023 to develop Phukot Karnali HE Project (480 MW).

As per terms of the MOU, NHPC will review the prior studies/ details undertaken i.r.o. the schemes and prepare the DPR for the schemes to confirm the techno economic feasibility. Thereafter, Project Development Agreement is proposed to be signed for implementation of the schemes.

In this regard, subsequent to grant of Survey License, Inception Reports in respect of all the above three Projects stands prepared and submitted by NHPC to the concerned Authority of Nepal. Currently, investigation works & preparation of DPR (Detailed Project Report) is in progress and likely to be submitted within the timelines of MOU.

These projects are expected to significantly contribute to Nepal's energy sector and help to meet its growing electricity demand. As far as NHPC's future plans for expanding its international footprint is concerned, the Company aims to leverage its expertise in hydropower to expand its presence in the global energy market and shall continue exploring opportunities in Nepal and other countries to further its growth and contribute to the renewable energy sector.

Your Company has commissioned 14.1 MW Devighat Hydropower project in Nepal and 60 MW Kurichu Hydropower project in Bhutan on deposit basis. Company has already marked its footprints in countries like Nepal, Bhutan, Myanmar, Tajikistan, Nigeria and Ethiopia and is looking further to expand its business in various other countries.

15. HEALTH, SAFETY & ENVIRONMENT (HSE)

NHPC is committed to conduct its business with a strong environment conscience. NHPC is committed to protect the environment during the construction and operation phases of its hydroelectric projects. NHPC conducts its business with a strong environmental conscience and socially responsible manner, ensuring sustainable development, safe workplaces, and enrichment of the quality of life of its employees, customers, and the community. It is well aware of its obligation to conserve and protect the environment. During the investigation stage, probable impacts on the environment while executing the projects, are assessed and identified. Environmental Management Plans (EMPs) are proposed and implemented to compensate for the adverse impacts of the project by taking necessary measures. Compliance with safety systems & procedures and environmental laws is regularly monitored.

In NHPC Limited, Safety Manual & Safety Policy has been prepared which provides the detail of Scope, Applicability of Laws, Standard Operating Procedures (SOPs), Operations Control Procedures, Roles & Responsibilities etc. for effective Safety Management. All Power Stations/Projects have prepared their Crisis & Disaster Management Plan. Safety Policy & Safety Manual has been implemented at all Power Stations/ Projects of NHPC Limited with a target of Zero hazard potential at workplace. In addition of the above, Occupational Safety, Health and Working Conditions Code, 2020/ Factories Act, 1948, Building and Other Construction Workers Act 1996, Disaster Management Act, 2005, the Environment Protection Act, 1986, Hazardous Waste Rules, 2016, National Building Code and other applicable, Acts, Rules & Standards are being followed at all Power Stations/ Projects.

Annual Internal & External Safety Audits are being conducted at Power Stations/ Projects to identify, assess and control of hazards. Various type of Mock drills/ trainings/ awareness camps are being organised for awareness & also preparing the employees/ stakeholders for any probable threat, disaster and risk.

Early warning system is installed/ under progress at all Power Stations/ Projects to receive the early warnings from upstream of the river. Hooters are installed in Dam & Power House to sensitize public in the vicinity areas/ downstream before release of water from Dam.

Most of the power stations of your Company are ISO 9001:2015 (Quality Management System), ISO

14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System) certified, thus ensuring sustainable development and enrichment of quality of life of its stakeholders. Compliance to safety systems & procedures and environmental laws is regularly monitored.

16.    CONSULTANCY SERVICES

Your Company takes up consultancy assignments within India and in its neighboring countries. The main aim is to share its best practices with fellow organizations and other stakeholders in the hydropower sector in construction of hydro-electric projects in the geologically fragile Himalayan Region. The best O&M practices, which have allowed NHPC to achieve best plant availability, increased efficiency and increased plant/ equipment life across its various power stations are also shared through consultancy.

During the financial year 2023-24, a payment of '74.04 crore has been received by NHPC Limited for consultancy services rendered to its different clients.

17.    FINANCING OF NEW PROJECTS

The financing of any new hydro power project is carried out in line with CERC regulations and debt equity ratio is generally kept at 70:30. For solar/ wind projects, debt equity ratio varies from project to project, however largely it is kept at 80:20. For equity component, the Company has sufficient internal resources to meet out future CAPEX targets. Further, the Company possesses highest domestic credit rating and international credit rating at par with sovereign rating. Due to low geared capital structure and strong credit credentials, the Company is better positioned to raise debt for its CAPEX requirement. During the financial year 2023-24, Company has raised '2,000 crore through term loan from Banks and '2,046.94 crore through monetization of free cash (Return on Equity) of Kishanganga Power Station for 8 years under the ambit of Asset Monetization Pipeline.

18.    CREDIT RATINGS

•    Domestic Rating

NHPC has highest domestic credit rating of 'AAA' with stable outlook assigned by domestic credit rating agencies i.e. ICRA, CARE and India Ratings & Research for its listed bonds which indicates lower credit risk for the investors.

•    International Rating

NHPC has International Credit Rating of 'Baa3' with stable outlook rated by the Moody's Investors Service Singapore Pte. Ltd.

19. INFORMATION    TECHNOLOGY    AND

COMMUNICATION

NHPC considers Information Technology as a strategic tool for the attainment of sustainable growth in business and to improve overall productivity and efficiency. All locations of the Company including remotely located Power Stations/ Projects are connected to Corporate Office/ Regional Offices through multimode communication links using MPLS-VPN/ ILL/ VSAT-Ku band/ VSAT Phones. These multimode links have been integrated through SDWAN (Software Defined Wide Area Network) technology to function in a fail-safe mode. IP Telephony has been deployed between Corporate Office/ Regional Offices and Power Stations / Projects. VMS (Video Management System) is also operational for better monitoring/ management and surveillance of Projects/ Power Stations. Two-Factor Authentication (2FA) has also been implemented for the users connecting NHPC network through SSL-VPN in a secured manner. NHPC had implemented Enterprise Resource Planning application across all its locations integrating its various business processes in 2009. Recently work has been started for implementation of state-of-the-art technology; AI/BI enabled New Age ERP solution at NHPC. This software solution will bring in latest available technologies to improve the efficiencies in core business areas such as Operations & Maintenance, Project Construction, Energy Sales and Accounting apart from support functions like HR, Finance, etc.

Apart from ERP, NHPC has implemented a host of other software applications/ Mobile apps to take care of day-to-day business requirements. Latest technology based NHPC's bilingual website and integrated intranet are functioning as powerful information dissemination systems to take care of external/ internal information requirements. As per Government of India directives, e-procurement, Government e-Marketplace (GeM), e-Office, e-Sushrut HMIS, Vendor payment portal and e-Reverse auction system are operational in the Company.

NHPC has implemented "Early Warning System (EWS) - e-Aabhas" an Internet Cloud based Software Application for monitoring of water level/discharge of rivers so as to raise alarms with sufficient lead time to handle disastrous situation at Project/ Power Station sites. Accordingly, Master Control Room facility has also been set up in NHPC Corporate Office for monitoring of vulnerable hydro-electric projects in the Country.

IT & Cyber Security Policy and Cyber-Crisis Management Plan are in place to strengthen Cyber Security Posture of the Organization. Critical IT Infrastructure including servers, data storage, communication equipment etc. have been installed at safe locations and are being managed through internal resources. NHPC Corporate Office and all Power Stations of NHPC are ISMS ISO 27001:2013 certified which assures confidentiality, integrity and availability of information assets. VAPT Audit is being regularly carried out at all generating power stations to secure valuable information and vital infrastructure. A centralised End Point Security Software solution has also been implemented to protect Servers/ Desktops against Cyber threats. NHPC has been nominated as nodal agency for Sectorial CERT i.e. CERT-Hydro to guide and monitor the Cyber security related activities in the constituent member organizations.

20. HUMAN RESOURCES

Your Company has a strong and dedicated workforce of 4,929 employees, consisting of 3,193 executives and 1,736 non-executives as on March 31, 2024. The above workforce includes 511 women employees. Your Company is strongly focused towards lifelong learning and competency development of its employees for their overall capacity building by improving their performance and enhancing organizational capabilities. Training programmes to employees are facilitated through internal faculty as well as through external agencies. NHPC has organized various training and development programmes for its employees through premier management and engineering institutions like IIMs, IITs etc. to enhance their skills and competencies and to encourage them to utilize their full potential in their respective field of operations. Your Company also deputes senior and high potential employees to foreign training programmes to keep them abreast with the latest know how and to understand the global scenario in the field of hydro power. NHPC also sponsors its executives to acquire higher qualification and specialization to improve their productivity and effectiveness.

NHPC is strongly focused towards lifelong learning and competency development of its employees for their overall capacity building by improving their performance and enhancing organizational capabilities. Training programmes to employees are facilitated through internal faculty as well as through external agencies. NHPC's vision towards human resource development is to develop & nurture its employees to leverage their fullest potential to make NHPC an employer of choice in the talent market.

Workshops and knowledge sharing sessions are organized both in physical and virtual mode for awareness and for updation of knowledge base of employees. Specially designed programs, like in the areas of Corporate Governance, are conducted for senior officials.

Considering the future training needs due to advancing technologies, NHPC recognizes the need to adopt modern and scientific training methodologies and to create an infrastructure accordingly. Further, specialized training in the field of project planning, execution & management, O&M, R&D, etc. will be met either by establishing JVs or in collaboration with the expert institutions in the concerned field in India & abroad.

Industrial relations in the Company remained cordial and harmonious during the year. Employees actively contributed in the growth of the Company. NHPC Limited continuously endeavours to establish good Industrial Relation among its stakeholders. NHPC stress upon acquiring the best talent in the Country on the basis of score of GATE, NET, CLAT, CA/ CMA/ CS etc. It has been working towards nurturing and retaining talent by providing opportunities to improve their knowledge and skills. The Company formulates employee oriented HR Policies and implement it in true spirit to ensure that its benefit reaches to the bottom level. Due to declining workforce, challenges in collective bargaining, etc the face of Industrial Relations in PSEs in India have changed to a great extent.

Further, to effectively address the changes and keeping the welfare of the Contract Workers engaged by Contractors in R&M/ Service Contracts in view, NHPC Limited has extended Uniform Higher Wages and Financial Benefits which is approximately 37%- 47% over and above the Minimum Wages notified by the Central Government or as the case may be, the state Government, whichever is higher. A Grievance Redressal Mechanism is also in place for resolution of their grievances. To ensure a robust & transparent payment system, NHPC Limited has developed a comprehensive Contract Labour Payment Management Portal wherein details of Wages and Benefits are uploaded for Public view. Considering the empowerment of women workforce, creches and day-care facility has been established across NHPC. Dedicated toilets for women at all NHPC locations especially at construction sites are mandatory.

Your Company follows the Government of India's guidelines regarding reservation in services for SC/ ST/ OBC/ PWD (Persons with Disabilities)/ Ex-servicemen/EWS to promote inclusive growth. Necessary concessions/ relaxations in accordance with the rules are extended to SC/ ST and physically challenged persons in recruitment. Details of representation of SC/ ST/ OBC/ PWD are given in "Management Discussion & Analysis".

21. AWARDS & RECOGNITIONS

NHPC has been proud recipient of following awards for excellence in different areas during 2023-24:-

• Hon'ble Vice President of India Shri Jagdeep Dhankhar presented SCOPE's 'Commendation Certificate' to NHPC in the category of 'Effective Implementation of RTI Act' at Vigyan Bhawan, New Delhi.

• NHPC was conferred with Second prize under NTPC Rajbhasha Shield Award Scheme for the year 2021-22 as well as Second prize for 2022-23 for excellent implementation of Rajbasha by Hon'ble Union Minister of Power.

• NHPC won the 2^nd prize under the 'Annual Report' category of 'PRSI National Awards 2023' instituted by Public Relations Society of India. The award recognized the overall high quality, layout and design of NHPC Annual Report 2022-23.

• NHPC's efforts and commitment towards making India truly a digital economy was recognized by being conferred with 'Governance Now India PSU IT Award 2023'.

• NHPC was awarded as 'Winner' in Power Generation-Renewables (CPSU) category of Dun & Bradstreet PSU Awards'23 during the 15^th edition of "PSU & government summit"in New Delhi

• NHPC was presented with "India's Best Hydro & Renewable Energy Public Sector Enterprise" award at PRAKASHmay "16th ENERTIA Award'23 - India & South Asia's Awards for excellence in Sustainable Energy, Power & Renewables" held at Mumbai.

• NHPC won the coveted 'Economic Times HR World Exceptional Employee Experience Award 2023 in 'Large Scale Enterprise' category during ET HR WORLD EX Awards at Bengaluru. The Award was conferred to NHPC in recognition to its wide range of Employees Centric HR initiatives.

22.    REHABILITATION AND RESETTLEMENT (R&R)

Your Company appreciates the difficulties of populace displaced during the execution of its projects. Rehabilitation & Resettlement Plans are formulated for Project Affected Families (PAFs) to provide economic sustenance under the provisions of 'The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013'. NHPC has formulated a Policy for reservation of certain type of works through competitive bidding for PAFs and locals residing near its projects/ power stations.

23.    VIGILANCE

The objective of the vigilance function is to increase the productivity and efficiency of the Company by bringing about an improvement in system and encouraging transparency.

Your Company has a Vigilance Department headed by Chief Vigilance Officer who is an independent entity appointed by Govt. of India to ensure transparency, objectivity and quality of decision making in its operations. All the procedures are documented to monitor and handle vigilance complaints and disciplinary cases. Vigilance Department also co-ordinates with Ministry of Power, Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC), Department of Personnel and Training (DoPT) and other concerned departments of the Government. In order to exercise effective supervision and for a better appreciation of the work being done by the Vigilance Units, the Central Vigilance Commission conducted 'Management Audit of Vigilance Unit (MAVU), of NHPC vigilance unit which concluded with satisfaction. Further, there are no vigilance cases due for dispose-off in financial year 2023- 24 except one vigilance case related to disproportionate assets and is sub-judice.

Further, as a part of preventive vigilance, circulars and guidelines are being issued regularly based on outcome of various inspections/ intensive examinations carried out from time to time. Vigilance awareness week, trainings and other vigilance awareness programmes are also being organized by the Company to promote transparency, capacity building, to address sector specific challenges and ethics in working system.

24.    INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial control system in place with reference to the Financial Statements and such internal financial controls were operating effectively as at March 31, 2024. The Statutory Auditors of the Company have certified that the Company has an adequate internal financial control system with reference to the Standalone and Consolidated Financial Statements and such controls were operating effectively as at March 31, 2024 based on the internal control criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by ICAI.

25.    RISK MANAGEMENT

NHPC recognizes that it is exposed to a number of uncertainties, which is inherent to the power sector. The volatility of the power sector affects the financial and non-financial results of the business. To increase confidence in the achievement of organization's objectives, NHPC has developed Risk Management Policy to remain a competitive and sustainable organization and enhance its operational effectiveness.

The Policy statement is as under:-

a.    To ensure protection of shareholder value through the establishment of an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting of all risks.

b.    To provide clear and strong basis for informed decision making at all levels of the organization.

c.    To continually strive towards strengthening the Risk Management System through continuous learning and improvement and to achieve the objectives of this Policy through proper implementation and monitoring.

d.    To ensure that new emerging risks are identified and managed effectively.

e.    To put in place systems for effective implementation for achievement of Policy objectives through systematic monitoring and effective course corrections from time to time.

26.    PROCUREMENT FROM MICRO & SMALL ENTERPRISES

Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and services rendered by them. In compliance to the Policy, annual procurement plan including items to be procured from MSEs are uploaded on NHPC's website (www.nhpcindia.com) for the benefit of MSEs. The benefits to MSEs like exemption from tender fees and earnest money deposit, purchase preference, interest on delayed payments and exemption from prior experience - prior turnover criteria subject to meeting of quality and technical specifications are also extended to encourage these enterprises.

During financial year 2023-24, NHPC has procured 55.74% of the total annual procurement of products produced and services rendered by MSEs against the mandate of 25% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India. Procurement also includes 3.46% from SC/ ST MSEs and 5.15% from women MSEs against the sub-target of 4% and 3% respectively.

During this period, 2420 MSEs were benefited out of which 120 MSEs and 385 MSEs were owned by SC/ ST and Women entrepreneurs respectively.

27.    IMPLEMENTATION OF OFFICIAL LANGUAGE Your Company is committed to implement Official Language Hindi in day-to-day working in various offices/ locations/ units in accordance with the provisions of Official Languages Act, 1963 and Official Languages Rules, 1976. During the year

2023-24, quarterly meetings of Official Language Implementation Committee of the Company and half yearly meetings of Town Official Language Implementation Committee (Office), Faridabad were organized regularly to review the status of Official Language Implementation. Official language inspection of PID Office-Pathankot, Tanakpur Power Station, Regional Office-Banikhet, Chamera-I Power Station, Parbati-II HE Project, Liaison Offices-Lucknow and Kolkata was completed successfully by second sub-committee of Parliamentary Committee on Official Language and Official language implementation was speeded up in view of inspecting the official language in various offices/ locations/ units from time to time by senior officials of Company. During the year, NHPC organized various events like Three days NHPC Official Language Sangosthi/ Conference in non-hindi region Odisha and Hindi Kavi Sammelan, Hindi Pakhwada, Hindi Poetry Seminar, various Hindi Competitions for children and ladies of NHPC employees, Monthly Hindi Literary Series etc. in Corporate Office for its employees to encourage the use of Hindi. In addition to the above, Hindi Typing Training Programme, Hindi Workshops and Departmental Computer Workshops were also conducted regularly. Apart from this, to increase the interest of employees to work in Hindi, an 'Online Hindi Quiz Competition' was also conducted at corporate office, Faridabad. To promote the use of Hindi, Official Language magazines named 'Rajbhasha Jyoti' and 'Nagar Saurabh' were also published regularly.

In order to encourage and participate actively to promote Hindi, attractive incentive schemes have been implemented for employees to write articles/ papers for in-house journals, to read Hindi books and to do official work by writing noting and drafting, to do specific official language work etc. in Hindi. As a result of the commitment and seriousness of the Company towards implementation of official language Hindi, recruitment has also been done on 14 vacant posts of Hindi translators in various offices of the Company.

The efforts made by the Company for progressive use of Hindi have been appreciated at various forum, out of which your Company has been awarded 'Second Prize' recognized under Rajbhasha Shield Scheme for the year 2021-22 and 2022-23 for excellent Official Language Implementation under the aegis of Ministry of Power, Government of India. Your Company's website i.e. www.nhpcindia.com has been developed and updated continuously in bilingual operation mode i.e. Hindi & English for excellent implementation of Official Language in entire Power Sector.

28.    RIGHT TO INFORMATION ACT

The Right to Information Act, 2005 has been implemented in our Company to provide information to citizens and to maintain accountability and transparency. The Company has placed various documents/ records on its website i.e. www.nhpcindia.com for access to all citizens of India, NHPC has designated Appellate Authority, Transparency Officer and Central Public Information Officer (CPIO) at Corporate Office and Assistant Public information Officer (APIOs) at all Power Stations/ Projects/ Regional Offices/ Units.

During financial year 2023-24, 785 applications and 73 first stage appeals were received under RTI Act. Out of above, 782 (99.61%) applications and 73 (100%) first stage appeals were replied/ disposed. Further, 7 second stage appeals were filed by the applicants before the Central Information Commissioner (CIC), which were also disposed-off in favour of NHPC.

29.    CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR has been an integral part of your Company's business philosophy. Your Company is conducting its business in a socially responsible way by maintaining high level of organizational integrity and ethical behaviour, in conformity with expected standards of transparency in reporting and disclosing the performance in all spheres of its activities, demonstration of concern for social welfare, adoption of best management practices and effective operational methods to win the trust and confidence of all stakeholders. For years, your Company has played a vital role in the greater welfare of society through its various CSR initiatives. The positive impacts of these initiatives have deeply penetrated the needy sections of society, addressing the social, economic, environmental, and welfare concerns of stakeholders. The CSR initiatives of your Company encompass programs on promoting Education & Skill Development, Healthcare & Sanitation, Rural Development, Women Empowerment, Environmental Sustainability etc., in accordance with areas or subject specified in Schedule VII of the Companies Act, 2013.

Your Company's focused approach to aligning its CSR initiatives with national priorities and optimizing resource utilization has significantly maximized its socio-economic impact. Your Company is committed to making significant contributions to the community, environment and society through well-planned CSR interventions. Over time, the reach of your Company's CSR initiatives has expanded manifold, covering the intended areas effectively.

Your Company has adopted a CSR & Sustainability Policy in compliance with Section 135 of Companies Act, 2013, and the Companies (Corporate Social Responsibility Policy) Rules, 2014, along with their amendments. The major highlights of the CSR & Sustainability Policy of your Company are as under:

•    Preference to the Local area around NHPC's Projects is being given by allocating atleast 80% of the CSR Budget amount. However, other locations are also being selected based on the needs and as per the direction of Government of India on National schemes and campaign, wherein about 20% amount of the CSR Budget may be spent, for the larger benefit of society/ environment.

•    The CSR initiatives include programs in areas or subject specified in Schedule VII of the Companies Act, 2013. Expenditure on any other activity not in conformity with Schedule VII is not accounted towards CSR expenditure.

•    Selection of CSR and sustainability schemes is carried out effectively to ensure that maximum benefits reach the poor, backward, and needy sections of society, while also contributing to the improvement of environmental quality.

•    NHPC is open to join hands with the other CPSEs in planning, implementing and monitoring of Mega Projects for optimal use of resources, synergy of expertise and capabilities for maximizing socioeconomic or environmental impact.

•    The CSR & Sustainability Policy of your Company has defined roles & responsibilities at various levels for proper selection, planning, execution & monitoring of CSR activities.

The CSR & Sustainability Policy is available on website of the Company at https://www.nhpcindia. com/assests/pzi public/gallery/1681895733.pdf. The Annual Report on CSR & Sustainability of your Company for financial year 2023-24 is provided as Annexure-I to this Report.

30. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your Company has not entered into any material transaction with any of its related parties during the financial year 2023-24. Company's major related party transactions are generally with its subsidiaries and associate companies for providing consultancy services, leasing out of properties, manpower services, inter-corporate loan, corporate guarantee, etc. All the contracts/ arrangements/ transactions entered into with related parties were on arm's length basis, intended to further the Company's interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h)

of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is also drawn to Notes of the standalone financial statements, which sets out related party disclosures as per Ind AS-24.

31.    VIGIL MECHANISM-POLICY ON WHISTLE BLOWER AND FRAUD PREVENTION

Your Company has framed a 'Whistle Blower Policy' wherein Directors, employees, contractors and vendors of the Company are free to report any unethical practice, violation of applicable laws, rules, regulations or Company's Code of Conduct, that could adversely impact Company's operations, business performance and/or reputation. The Policy also allows direct access to the Chairperson of the Audit Committee. During the year, no person was denied access to the Audit Committee on issues relating to Whistle Blower Policy. The identity of the whistle blower is kept confidential so that the Whistle Blower is not subjected to any discriminatory practice. A senior level officer has been nominated as Coordinator for effective implementation of the Policy and to deal with complaints reported under the Policy. During the year 2023-24, no complaint was received under Whistle Blower Policy. Your Company has also framed a Fraud Prevention & Detection Policy to prevent, detect and allow speedy disposal of fraud or suspected fraud. Mechanism under the Policy is appropriately communicated within the organization across all levels and has been displayed on Company's intranet.

The Whistle Blower Policy is available at website of the Company at https://www.nhpcindia.com/ assests/pzi public/gallery/1683188102.pdf

32.    PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your Company believes that diversity at workplace creates an environment conducive to engagement, alignment, innovation and high performance. Every employee in the Company is treated with dignity, respect and afforded equal treatment. A Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 is in place. 'Internal Complaints Committees' have been constituted at all locations of the Company for the redressal of complaints against sexual harassment of women at workplace. The Committee at Corporate Office, Faridabad is headed by a senior woman officer and includes representative from an NGO, as one of its members. Your Company has also prohibited

sexual harassment of women by incorporating it as misconduct under "NHPC Conduct, Discipline and Appeal Rules". Disclosure in respect of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for the financial year 2023-24 is as under:

A	Number of complaints pending at the beginning of the financial year	1
B	Number of complaints filed during the financial year	0
C	Number of complaints disposed-off during the financial year	1
D	Number of complaints pending at the end of the financial year	0

33. SPORTS AND OTHER ACTIVITIES

NHPC has always encouraged sports culture in the organization. NHPC employees have participated in various sports tournaments in individual and team events. As per NHPC's Sports Policy, your Company has given scholarship to thirty eight young sports persons during the financial year 2023-24. NHPC Sports Scholarship holders have participated in many national and international tournaments giving stellar performances.

The chairmanship of Power Sports Control Board (PSCB) under the aegis of Ministry of Power, Govt. of India which aims to promote sportsmanship and camaraderie amongst Power PSUs employees been taken over by NHPC for financial year 2023-24 and 2024-25.

NHPC hosted the 23^rd Inter CPSU T-20 Cricket Tournament under the aegis of PSCB from 19^th to 24^th February 2024 at Gurugram.

Team and Individual achieved podium positions in Chess, Athletics, Carrom, Badminton and Bridge tournaments taking the medal tally to a total of 24.

Under the aegis of Bureau of Energy Efficiency (BEE), Ministry of Power, Govt. of India, NHPC organized State Level Painting Competition on the theme of energy conservation in four States/ UTs (J&K, Ladakh, Arunachal Pradesh, & Madhya Pradesh) in the month of November 2023. The winners of the State Level Painting Competition participated in the National Level Painting Competition held in Noida & Gurugram. Master Awaiz Alam, a participant from Madhya Pradesh was awarded 'Appreciation Prize' under Group 'A' category of National Painting Competition on Energy Conservation 2023 by Hon'ble Union Minister of Power, New & Renewable Energy during National Energy Conservation Day function on December 14, 2023 at New Delhi. The award recognized his talent and awareness displayed during the National Level Painting Competition 2023 on Energy Conservation.

NHPC observed its 49^th Raising Day on November 07, 2023 at NHPC Corporate Office, Faridabad and across all its Regional Offices, Power Stations and Projects.

The tournament witnessed highest ever participation of 14 power sector CPSUs/organizations including Ministry of Power, NHPC, DVC, PGCIL, CEA, BBMB, REC, THDC, BEE, NEEPCO, CEA, PFC, SJVNL and Grid Controller of India. NHPC's Teams participated in all the Inter CPSU Tournaments organized under the aegis of PSCB. NHPC's

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Your Company has organized Vasant Utsav 2024 with great festive spirit at the NHPC Residential Complex on March 2, 2024 to welcome the arrival of spring and to showcase the rich and diverse Indian culture. A number of stalls promoting local handicrafts, dress materials, food delicacies, puppet show etc. from various States/ Union Territories were set up by NHPC Power Stations, Projects and Regional Offices.

During the year, your Company also participated in various National and International exhibitions to showcase its strengths, capabilities, achievements and the roadmap ahead. NHPC participated in ICOLD 2023 Annual Meeting & Symposium at Gothenberg, Sweden in the month of June 2023, CSR Exhibition showcasing CSR activities of CPSEs organised by Department of Public Enterprises, Govt. of India in the month of September 2023, India International Trade Fair in the month of November 2023, Vibrant Gujarat Global Trade Show 2024 and Distribuelec 2024 in the month of January 2024.

34.    DEBENTURE TRUSTEES

In compliance to the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI LODR), the details of Debenture Trustees appointed by the Company for different series of Bonds is provided at reference information of this Annual Report.

35.    MANAGEMENT DISCUSSION & ANALYSIS

35.1 INDUSTRY STRUCTURE AND DEVELOPMENT

Global warming is an aspect of climate change, referring to the long-term rise of the planet's temperatures. It is caused by increased concentrations of greenhouse gases in the atmosphere, mainly from human activities such as burning fossil fuels, and farming etc. Energy transition refers to the shift from fossil-fuels based generation to renewable energy sources like wind, solar & hydro and by improving the energy efficiency in various sectors of economy for reducing energy-related CO₂ emissions with the objective to contain

global warming. Energy transition is happening across the world and India is also committed to energy transition from fossil fuels to non-fossil fuels. India is currently one of the fastest growing economies in the world, home to almost one-sixth of humanity. Its growth momentum is an integral part of global development and is essential to meet the world's sustainable development goals. India's contribution to global warming is minimal. Nevertheless, India is committed to combating climate change, by keeping in view, energy security, affordability and accessibility as critical inalienable priorities to ensure growth and development alongside Energy transition of the economy towards net-zero by 2070. India is a resource-rich and diverse Country. Having abundance of Renewable Energy Source, Indian renewable energy sector is one of the most attractive renewable energy markets in the world.

India has set a target to reduce the carbon intensity of the nation's economy by less than 45% by the end of the decade, achieve 50% cumulative electric power installed by 2030 from renewables, and achieve net-zero carbon emissions by 2070. India aims for 500 GW of renewable energy installed capacity by 2030. Besides this, India also aims to produce 5 MMT (Million Metric Tonne) of green hydrogen by 2030. This will be supported by 125 GW of renewable energy capacity.

With the increased support of Government and improved economics, Renewable Energy Sector has become attractive from investors perspective.

The Indian power sector has come a long way in the past decade, transforming from a power-deficit to a power-surplus nation. A series of concerted measures led to a 57.89% increase in generation capacity - from 275 GW in March, 2015 to ~441.96 GW in March, 2024.The Installed Generation Capacity as on March, 2024 was 441.97 GW comprising of 243.22 GW Thermal, 8.18 GW Nuclear, 190.57 GW Renewables including large hydro of 46.93 GW¹.

All India Installed Capacity (441.97 GW) As On 31.03.2024 (RE 190.57 GW) Diesel, 0.59,0.13% Gas, 25.04,5.67% j Nuclear, 8.18,1.85% Small Hydra 5.00,1%
Coal, 217.59,49.23% Renewable, 190.57, 43.12%	Wind, 45.89,10.38%
	Solar, 81.81,18.51%
	Large Hydro, 46.93, 10.62%
Coal Gas Diesel Nuclear ¦ Small Hydro Wind Biomass+WH Solar Large Hydro

A generation capacity addition totaling to 2,11,037.92 MW from various sources has been achieved from the year 2014-15 till March 31, 2024 comprising of 96,134.41 MW from conventional sources (Coal, Gas and Nuclear) and 1,14,903.51 MW from RE sources. The conventional capacity addition of 96,134.41 MW comprises of 92,734.41 MW of Coal and Gas, and 3,400 MW of Nuclear. RE capacity addition of 1,14,903.51 MW includes 6,246.99 MW of Large Hydro (Above 25 MW) and 1,08,656.52 MW of Renewable Energy (Solar, Wind, Biomass and Small Hydro) has been achieved since the year 2014-15¹.

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35.2    STRATEGIC DIVERSIFICATION

NHPC is one of the India's leading hydro power generation Company and considering upcoming huge opportunities in Renewable Energy and Green Hydrogen sector, NHPC plans to strategically tap opportunities in these sectors. Various Solar Power Projects and pilot Green Hydrogen Projects are being taken up, which are under different stages of development. While NHPC will continue development of Hydro Power Projects as its core business, it would make all endeavors to expand its business in Renewable Energy development coupled with storage solutions such as Green Hydrogen and Pumped Storage Projects.

35.3    HYDROPOWER POTENTIAL IN INDIA

As per reassessment study carried out for the period 2017-2023, exploitable identified hydro power potential in terms of installed capacity is estimated at 1,33,410 MW consisting of hydro-electric schemes having installed capacity above 25 MW¹.

35.4    MEASURES TAKEN BY GOVERNMENT OF INDIA TO PROMOTE HYDRO POWER SECTOR

The Government of India in past had taken several Policy initiatives for hydro power development in the Country viz., National Electricity Policy, 2005, Hydro Power Policy, 2008, Revised Tariff Policy, 2016 and Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. Over the period of past few years, the

Government had also issued measures to promote Hydro Power Sector, which included:-

•    Large Hydro-power Projects (LHPs, i.e. > 25 MW Projects) have been declared as renewable energy source. However, LHPs would not be automatically eligible for any differential treatment for statutory clearances such as forest clearance, environmental clearances, National Board for Wildlife (NBWL) clearance, etc. as available to Small Hydro-power Projects (i.e. < 25 MW Projects). Ministry of Power shall continue to be administrative ministry for LHPs.

•    Hydropower Purchase Obligation (HPO) is notified as a separate entity within Non-solar Renewable Purchase Obligation (RPO). The HPO shall cover all LHPs commissioned after March 08, 2019 (i.e. date of issuance of Office Memorandum by Ministry of Power) as well as untied capacity (i.e. without long term PPA) of the commissioned Power Station.

•    Flexibility to the developers to determine tariff by back loading of tariff after increasing project life to 40 years, increasing debt-repayment period to 18 years and introducing escalating tariff to rationalize hydro power tariff.

•    Budgetary Support shall be extended for Flood Moderation/Storage Hydro-Electric Projects (HEPs). Budgetary Support shall also be extended to Cost of Enabling Infrastructure i.e. roads/ bridges @ '1.5 crore/ MW for project upto 200 MW and '1 crore/ MW for project above 200 MW.

•    New Projects commissioned after March 08, 2019 are covered under HPO provided tariff (LT) is not above '5.50/kWh for Projects commissioned till March 31, 2021. 5% increment in tariff shall be permitted for subsequent financial years. Further, MoP vide order dated July 22, 2022 & October 20, 2023 has revised the trajectory of HPO along with notification of trajectory of Energy Storage Obligation (ESO).

•    MoP vide order dated December 01, 2022 has extended the waiver of ISTS Charges on the transmission of power from new hydro power projects, for which construction work is awarded on or before June 30, 2025 and PPA is signed on or after December 01, 2023 and on or before June 30, 2025. Further, the trajectory of waiver of ISTS charges from June 30, 2025 to June 30, 2028 has also been laid off by MoP.

35.5 GOVERNMENT INITIATIVES FOR RENEWABLE ENERGY SECTOR

The Government of India has taken various initiatives to achieve inclusive growth in Power Sector for providing cleaner and affordable power for all. The planned large scale integration of renewable energy in the national grid has made Energy Storage

Capacity a critical aspect to meet the challenges of flexibility (grid support/ ancillary service), reliability (fast response/ ramping up/ peaking support) and security. In the interest of optimal use of Renewable Energy generation and smooth transition of lndian Power Sector to Net Zero by the year 2070, it is critically important to take up the large scale development of Hydro Pumped Storage Projects (PSPs) in the Country, which will play a vital role in Grid balancing and shall be utilized to meet the peak power requirements, energy arbitrage, ancillary services and RE smoothing. Accordingly, Ministry of Power, Govt. of India on April 10, 2023 issued "Guidelines to promote development of Pump Storage Projects (PSP)". Guideline offers that PSPs are energy storage schemes; hence the PSPs would be kept out of the liability of free power, LADF, Upfront Premium for Project allocations.

Amid various challenges, meeting the target of 500 GW of renewables by 2030 will require a dramatic acceleration in installed capacity. Govt. of India has taken major steps to reform the energy sector and usher in a climate-friendly energy transition that will deliver energy security, affordability, and sustainability. The steps include proposing the Electricity (Amendment) Bill, 2020, PM-KUSUM and Roof Top Solar scheme, various schemes to promote large scale Solar Power Development such as CPSU Scheme, Solar Park Scheme, Production linked incentive schemes, etc., proposing amendments to Energy Conservation Act (2001), Pradhan Mantri Ujjwala Yojana, National Green Hydrogen Mission, Guidelines to promote Pump Storage Hydro Power Plants and so on. MOP during the financial year 2023-24 also issued revised bidding guidelines for procurement and utilization of renewable energy such as Solar, Wind, Solar Wind Hybrid & Firm & Dispatchable RE power.

PM Surya Ghar: Muft Bijli Yojana was Launched by MNRE on February 13, 2024 with total financial outlay of '75,021 crore. Your Company has also been allotted five States/ UT viz. Haryana, UT of J&K, Sikkim, Manipur and Nagaland for taking up Roof Top Solar Projects. Additionally, 8 Central Ministries/ Departments have been allocated to NHPC for installation of Roof Top Solar at the premises of these Ministries. The projects under PM Surya Ghar: Muft Bijli Yojana Scheme has been planned to be taken up through NHPC Renewable Energy Limited, a wholly owned subsidiary of NHPC.

Above initiatives in the Renewable Energy Sector in conjunction with technological advancements have made the investment in solar power business highly attractive. NHPC is making its efforts to explore

opportunities for development of renewable energy and green hydrogen projects through different modes.

35.6 ELECTRICITY (LATE PAYMENT SURCHARGE AND RELATED MATTERS) RULES, 2022

Ministry of Power vide notification dated February 22, 2021 had first notified the Electricity (Late Payment Surcharge) Rules, 2021 (LPSC). In the LPSC Rules, 2021, MoP had kept the base LPSC rate with MCLR rate plus 5%, which shall be increased by 0.5% every successive month till 6 months. It was also notified to adjust the payment received first towards the late payment surcharge and then towards the monthly charges starting from the longest overdue bill.

MoP has notified Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 on June 03, 2022 and its amendment on February 28, 2024. With other rules kept as same regarding rate of LPSC and adjustment of payment received, MoP has incorporated the following clauses, under these rules:

a.    Liquidation of arrears:

MoP has allowed the DISCOMs to liquidate their old outstanding dues accumulated till date of notification of these rules in equal monthly installments (ranging from 12 to 48 EMIs depending on amount of outstanding). This rule played a vital role in settlement of long outstanding dues of NHPC. Jammu and Kashmir Power Corporation Limited (JKPCL) and Tamilnadu Generation and Distribution Corporation Limited (TANGEDCO) opted for liquidation of their old outstanding dues under these rules and are timely paying their monthly installments.

b.    Operationalization of Payment Security Mechanism (PSM) and its consequences:

A DISCOM has to maintain unconditional, irrevocable and adequate payment security mechanism (LC) and in case of non-maintenance of PSM, generating companies, electricity trading licensee and transmission licensee shall regulate power supply to the DISCOMs. Supply of power shall be made only if adequate PSM is maintained or an advance payment is made. This rule ensures payment security, as LC can be encashed, if the payment is not made by DISCOMs on time.

Regulation of Power:

In case of non-payment of outstanding dues by default trigger date (45 days plus 30 days from bill date) and does not establish PSM, the generator can regulate 25% of contracted power and can sell in

exchange. Further, if the DISCOMs do not establish PSM or continue the default for 30 days, generator can regulate 100% of contracted power and can sell in exchange. This rule has brought discipline among DISCOMs and has resulted in timely realisation of dues from beneficiary DISCOMs.

c. Regulation of access to defaulting entity:

In case of non-payment of dues for two and half month from date of presentation of bill, the short term access shall be regulated and if the default continues for another month, other contracts shall be regulated by 10% and the regulation shall be increased by 10% every successive month.

This rule has brought discipline among DISCOMs and has resulted in timely realisation of dues from beneficiary DISCOMs.

35.7 CERC REGULATIONS:

a. CERC Tariff Regulations, 2024:

CERC has issued CERC (Terms and Conditions of Tariff) Regulations, 2024 in March, 2024 which will be applicable for the period April 1, 2024 to March 31, 2029. Some of the major highlights of CERC Tariff Regulations 2024 which shall play a vital role in the development of hydro power sector in India are as under:

•    For uninterrupted and timely development of Hydro projects, expenditure incurred towards developing local infrastructure in the vicinity of the power plant not exceeding '10 lakh/MW shall be considered as part of the Capital cost, and in case the same work is covered under budgetary support provided by the Government of India, the funding of such works shall be adjusted on receipt of such funds.

•    Return on equity for the new Run-of-River (ROR) with pondage projects which will be commissioned on or after April 01, 2024 shall be 17% instead of 16.5%

•    O&M expenses for older plants - the normative O&M expenses allowed for older power stations does not include Security Expenses and Insurance Expenses and shall be reimbursed separately as per actual. This is beneficial especially considering risk perception of Insurance companies for hydro power plant.

•    In addition to AFC entitlement, the hydro generating station shall be allowed an incentive of up to 3% of the Capacity Charge approved for a given year which shall be billed monthly as per the following. Incentive = (3% x G x CCy)/12

•    Rate of energy beyond Saleable Design Energy has been increase from 120 paise/kWh or ECR to 130 paise/kWh or ECR whichever is lower.

i    *

•    An incentive shall be payable to a ROR Hydro generating station @ 50 paise/ kWh corresponding to the saleable scheduled energy during peak hours of the day in excess of average saleable scheduled energy during the day (24 hours).

b.    CERC Ancillary Services Regulations, 2022:

CERC has issued Central Electricity Regulatory Commission (Ancillary Services) Regulations, 2022 which has come into force from January 31, 2022.

c.    CERC Deviation Settlement Mechanism Regulations, 2022:

CERC has notified the Deviation Settlement Mechanism and Related Matters Regulations, 2022. The regulations seek to ensure, through a commercial mechanism that users of the grid do not deviate from and adhere to their schedule of drawal and injection of electricity in the interest of security and stability of the grid. As per the regulations, for a secure and stable operation of the grid, every grid connected regional entity shall adhere to its schedule as per the Grid Code and shall not deviate from its schedule. The regulations have been effective from December 02, 2022, however, due to difficulty in operationalization of notified regulation, various provisions have been relaxed by the Hon'ble Commission vide various Suo-moto order and presently CERC order dated February 06, 2023 in 1/SM/2023 effective from February 08, 2023 read with CERC order dated April 09, 2023 in 5/ SM/2023 is in force.

35.8 SWOT ANALYSIS:

(i)    STRENGTHS

•    Established track record in developing hydroelectric projects & experienced manpower

NHPC possesses rich experience and expertise in developing hydroelectric projects across the Country. NHPC has a competent and committed workforce, which has extensive experience in the industry with capabilities and expertise in conceptualization, construction, commissioning and operation of hydroelectric projects. Their skills, industry knowledge and experience provide significant competitive advantage to the Company.

•    Capabilities from concept to commissioning including in-house Design & Engineering NHPC has a full-fledged Design division dedicated to cater the design and engineering requirements of its projects. The in-house design team along with extensive experience in hydro power sector gives NHPC an edge over other hydro power companies. NHPC has in-house capability to carry out various types of survey works i.e. Control

survey, Topographical survey, River X-section, Tunnel Alignment Checking, etc. for River valley projects including Pump Storage Projects & other Renewable Energy Projects. NHPC has an efficient team of professionals to investigate and monitor the Geological and Geotechnical, aspects of hydropower/ pump storage projects in an efficient and scientific manner including preparation of feasibility and Detailed Project Reports (DPRs). Geological investigations assist in avoiding or minimizing the threat of geological uncertainties during construction of various civil structures, powerhouse etc. The engineering capabilities of NHPC ranges right from the stage of conceptualization till the commissioning of the projects.

•    Extensive experience in construction and operation

NHPC has extensive experience & expertise in developing hydroelectric projects in complex geological regions by overcoming number of geo-technical challenges using in-house state of-art technology. It has successfully completed construction of some of the challenging hydroelectric projects in India situated in remote hilly areas with various challenges like inaccessibility, poor logistic, adverse climate and technological hindrances. With its strong team of competent, efficient and experienced professionals, it is capable of executing all types and sizes of hydroelectric projects by overcoming such obstacles.

•    Strong financial position

NHPC has paid-up share capital of '10,045.03 crore and an investment base of over '78,802.59 crore as on March 31, 2024. NHPC has credit rating of 'AAA' with stable outlook assigned by domestic credit rating agencies for its listed bonds. Moody's Ratings vide rating rationale dated April 24, 2024 has assigned 'Baa3' rating to NHPC with stable outlook. The strong financial position of the Company makes it competent enough to execute capital-intensive large hydroelectric projects.

•    Strong operating performance

NHPC has successfully managed to develop and implement twenty-two hydroelectric projects (including two through its subsidiary Company i.e. NHDC Limited), one solar power project and one wind power project on its own and two solar power projects through its subsidiary companies with an aggregate installed capacity of 7,144.20 MW. NHPC with its fleet of power stations is a flagship Company in hydropower sector in India.

•    Seismic safety assessment

NHPC is totally committed to seismic safety of its power stations. It has developed one of its kind state-of-art centralized Real Time Seismic Data Centre (RTSDC) for online seismic monitoring of all its power stations covering entire Himalayas. The RTSDC is connected with 54 Strong Motion Accelerographs stations across various power stations. NHPC is the only power utility in the Country to have such data centre. NHPC has also a team of experience geophysicists to carry out geophysical studies during investigation, construction and post construction stages with geophysical techniques like Seismic Refraction/ Reflection, Resistivity Imaging, High Resolution Seismic Tomography, Tunnel Seismic prediction, liquefaction potential assessment of various geological conditions.

(ii) OPPORTUNITIES

•    Untapped hydro potential

The deteriorating hydro-thermal mix, peaking shortages and frequency variations have forced Policy makers to turn their attention towards development of hydropower. India's huge untapped hydro potential, especially in the north-eastern region, provides opportunity for hydropower development. NHPC has an opportunity for adding to its capacity the untapped hydro potential in coming years in India and neighbouring countries.

•    NHPC's continued ability to complete the hydro projects

The strength shown by NHPC over the years in its ability to complete the projects where most of other Companies have been generally failing, is a beacon of hope in the hydro sector. As a result, NHPC's forte in hydro projects construction is creating new space for its growth in the future.

•    Renewable Energy

Accelerating the energy transition can bring numerous opportunities for India. It can create millions of jobs, enhance energy security, and tangibly reduce nationwide greenhouse gas emissions. India can serve as an example for the world by fostering what is potentially the largest green workforce in the world and building a domestic supply of critical battery materials via recycling, contributing significantly to the fight against climate change on both national and international scales.

India has already made strides in green energy production. It aims to become a net-zero emitter of CO₂ by 2070 and generate at least half of its power from non-fossil sources by 2030. The Country's resources, including its long coastline, abundant

sunshine, and various vacant lands, can facilitate renewable power generation via hydro, solar, and wind. The Nation thus has the potential to rank among the top global producers of both wind and solar energy.

To achieve its target of 500 GW in renewable power capacity by 2030, India has implemented various measures, including the waiver of transmission system charges for inter-state solar and wind power sales, establishing renewable power purchase obligations, and creating Ultra Mega Renewable Energy Parks. The government also supports domestic manufacturing through Production-Linked Incentive (PLI) schemes. India has also set up innovative green energy trading platforms such as the GTAM (Green Term Ahead Market) and GDAM (Green Day Ahead Market). These platforms enable renewable energy developers to sell power on the open market without signing long-term Power Purchase Agreements. New measures introduced at the Indian Energy Exchange have also resulted in the trade of billions of units of clean energy in recent months. Government of India is also focussing on Green energy corridors to strengthen transmission networks in eight RE rich states by laying of new transmission lines and creating new sub-station capacity for integration of over 500 GW RE Capacity by 2030.

Thus, there exists immense opportunities for development of renewable energy and green hydrogen projects in coming years.

NHPC is exploring all possible opportunities to develop Renewable Energy and Green Hydrogen projects ensuring various incentives being provided by Govt. of India to give impetus to these sectors.

•    Grid Balancing Requirement

In view of Government of India's present initiative for extensive renewable energy development particularly large scale development of solar power, hydro power would be required for grid balancing/ stability. The present scenario would create opportunities for NHPC to develop hydro power due to its inherent qualities of fast ramping up and down and flexibility imparted to the system

(iii) THREATS/ WEAKNESSES/ CHALLENGES/ CONCERN

•    Geological uncertainties:

Inaccessible terrain and constraints of logistic and limits of investigation, poses serious consequences for execution of projects. Excavation of tunnels under high superincumbent cover also poses serious problems in timely completion of projects due to severe stress related problems and heavy ingress of water.

•    Time and cost overruns

Most hydro-electric projects are generally located in hilly terrain, which are at the receiving end of devastating natural calamities like landslides, hill slope collapses & roadblocks, flood, cloud burst etc. These calamities cause severe setbacks in construction schedule. Further, in-spite of extensive survey and investigation, geological uncertainties may have to be tackled especially in long tunnels such as Head Race Tunnel. NHPC with its rich experience and expertise coupled with state-of-the -art technology has overcome such surprises many a times in the past. However, these uncommon and unpredictable geological uncertainties may result in time and cost overrun. Sometimes law and order problems also result time and thus cost overrun.

•    Time consuming clearance process:

Before any hydroelectric project is implemented, it needs to be cleared by various agencies by obtaining various statutory as well as non-statutory clearances. Often projects get bogged down with the lengthy clearance procedures involving multiple agencies/ organizations, states, etc. Obtaining the requisite clearances is a complex, tedious and time-consuming process which sometimes leads to abnormal delay, ultimately affecting the project implementation.

•    Difficulties in entering into Power Purchase Agreements (PPAs)

Sale of energy from projects having higher tariff is getting difficult in present day's power trading scenario. Beneficiaries prefer to purchase their additional power requirement on short-term basis through power exchange or e-procurement rather than opting for long term/ medium term PPAs. As hydroelectric projects are site specific and its tariff depends on location/ design parameters and high initial investment, the tariff for new hydroelectric projects is relatively higher. Due to above reasons, NHPC is facing difficulties in dispatch of power from new projects through long term PPAs.

•    High initial cost/ tariff

The development of hydroelectric projects involves long gestation period and require large initial investment, which results into high initial tariff. Cash flow and revenue from operations of hydroelectric projects are also subject to variations as per tariff regulations notified by CERC from time to time. High initial costs and tariffs sometimes prove detrimental in obtaining investment sanction and require extensive financial re-engineering and different waivers from various stakeholders to bring the project on the anvil.

•    Law & order

NHPC is witnessing law & order problem at some of its projects/ power stations, as they are located near sensitive border areas and at remote locations. Officials posted at those projects/ power stations are prone to security threats.

•    Opposition to hydroelectric projects: Hydroelectric projects in India are also facing opposition by certain pressure groups. This has created an apprehension amongst the hydroelectric project developers as some of their projects are getting stalled.

•    State hydro policies restricting entry of PSUs

Several state hydro policies favors for payment of upfront premium, free power over & above the required free power etc. for allocation of hydroelectric projects to the developers. CPSEs are facing difficulties in getting these hydroelectric projects, as they have to follow the norms of Government of India.

•    Dependence on few contractors Construction of hydroelectric projects requires manpower, machinery and substantial investment of money. There are very few contractors in India who can deliver especially in remote and difficult locations where accessibility is a major issue. The limited range of contractors who are able to perform in the sector increases our dependence on few available contractors in the Country.

35.9 RISK AND CONCERNS:

NHPC has a well-defined and dynamic Risk Management Policy since 2009 to provide overall framework for the risk management in the Company. The Policy is modified and updated from time to time. The revision-01 of the Policy was done in the year 2015, Revision-02 of the Policy was done in the year 2022 and Revision-03 of the Risk Management Policy has been done in the year 2024. At present, 70 key risks have been identified from initial 54 risks. To ensure effective implementation of the Risk Management Policy, two Committees have been constituted:

i.    A Board level Risk Management Committee comprising of Directors, to assist the Board in management of key risks. The Committee inter-alia ensure that appropriate methodology, processes and systems are in place to monitor and evaluate risks associated with the business of the Company.

ii.    Risk Assessment Committee comprising of Chief Risk Officer and Risk Coordinators-HOD(s) of various divisions responsible for risk mitigation pertaining to their division as well as for Power Stations/

Projects/ Divisions of Corporate office. The Heads of Departments/ Regions / Projects/ Power Stations implement and review the directions issued by Risk Assessment Committee on the identified risks and their mitigation measures.

35.10    OUTLOOK:

Your Company has taken some very effective initiatives and successfully streamlined the processes for sustainable growth and consistent performance in the electricity business. It has adopted new and relevant technologies in the areas of electromechanical, civil and hydro-mechanical engineering. NHPC has applied contemporary practices to reduce construction time delays as well as cost overrun. Its power stations are run in an optimized way to reduce silting problem of its reservoir. Construction supervision, post-commissioning monitoring and hurdle free operation are ensured and augmented by use of information technology. Operations of all power stations of the Company are either semi or fully automated. Many power stations are equipped with advanced distributed control systems along with SCADA systems. NHPC is also looking forward for remote operation of some of its power stations. NHPC Limited at present has an installed capacity of 7,144.20 MW from 26 power stations including four power stations in JV mode and is looking for expansion through diversification.

Considering the opportunities available in the Renewable Energy and Green Hydrogen Sector and various initiatives taken up by Govt. of India to impart thrust towards development of clean Energy, NHPC is diversifying its portfolio by taking different renewable energy projects. NHPC has already commissioned 876.70 MW renewable energy projects in different modes and is in the process of development of many other renewable energy and green hydrogen projects, details of which are mentioned in the Directors' Report.

35.11    SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE: Generation of electricity is the principal business activity of the Company. Other operations viz. power trading, contracts, project management and consultancy works do not form a reportable segment as per the Ind AS - 108 on "operating segments". The Company has a single geographical segment, as all its power stations are located within the Country.

35.12    INTERNAL CONTROL SYSTEMS AND ADEQUACY:

The Company has sound internal control systems and processes in place for smooth and efficient conduct of business and ensure compliance to relevant

laws and regulations. NHPC has clearly defined organizational structure, manual and standard operating procedures to ensure orderly, ethical and efficient conduct of its business. A comprehensive delegation of power from Chairman and Managing Director to down below is in place to assist in smooth decision making, which is periodically reviewed to align it with changing business environment and for speedier decision making.

The Company has an in-house internal audit department headed by a senior officer. In compliance to Section 138 of the Companies Act, 2013, the Board has appointed a General Manager (Finance) as Internal Auditor of the Company. The department has qualified and experienced workforce to carry out periodical as well as special audits.

The Internal Audit department submits their audit observations and action taken reports to Audit Committee. The recommendations of the Committee are duly complied with. In compliance to Section 134 of the Companies Act, 2013, M/s A.M.A.A & Associates, Chartered Accountants, New Delhi was appointed to provide independent assurance on implementation of Internal Financial Controls in the Company during the financial year 2023-24. The Firm, in its Report, acknowledged the effectiveness of prevailing internal financial control systems in the Company.

35.13 FINANCIAL DISCUSSION AND ANALYSIS PROFIT & LOSS ITEMS

A detailed analysis of the Audited Financial Results of the Company for the Fiscal 2024 vis-a-vis Fiscal 2023 is as under: -Income

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Units of electricity generated (in million units)	21,773	24,619
Income
(i) Sales of Energy	7,327.90	8,404.65
(ii) Income from Finance Lease	297.31	327.80
(iii) Income from Operating Lease	332.22	392.40
(iv) Revenue from Contracts, Project Management and Consultancy Works	56.29	60.94

(v) Revenue from Power -Trading	11.52	4.60
(vi) Other Operating Income	379.68	125.95
Revenue from operations [sum of (i) to (vi)]	8,404.92	9,316.34
Add: Other Income	1,620.07	834.56
Total Income	10,024.99	10,150.90

Total income in Fiscal 2024 decreased by 1.24% to '10,024.99 crore from '10,150.90 crore in Fiscal 2023, primarily due to decrease in generation, decrease in Revenue from Project Management and Consultancy works partially offset by increase in Other Operating Income and increase in Other Income in Fiscal 2024.

Sale of Energy

The principal source of income of the Company is from sale of power to bulk customers comprising, mainly of electricity utilities owned by State Governments/Private Distribution Companies pursuant to long-term Power Purchase Agreements. The rate of electricity is determined Power Station wise by the Central Electricity Regulatory Commission (CERC). The CERC vide its notification no. L-1/ 236/ 2018/CERC dated March 07, 2019 has issued Tariff Regulations for the tariff period 2019-24 and subsequent amendments from time to time. Sales in respect of one of the Power Stations has been recognized provisionally as per ibid tariff notification pending approval of tariff for the period 2019-24 by CERC.

The said regulations inter-alia provides that, for the purpose of filing of tariff petitions, the Return on Equity (ROE), a component of tariff, is to be grossed-up using effective tax rate of the respective Financial Year. For the purpose of recognizing Sales, ROE has been grossed up using effective tax rate for financial year 2023-24.

The Tariff Regulations also provide for incentives which comprise of incentives on achieving plant availability factor greater than Normative Annual Plant Availability Factor (NAPAF), incentive for generation of energy in excess of the design energy of the plant (Secondary Energy) as well as incentive by way of Unscheduled Interchange charges where the Power Stations of the Company contribute towards maintaining grid stability.

Sale includes reimbursement on account of Water Cess in respect of power stations situated in state of Jammu & Kashmir and Uttarakhand.

In Fiscal 2024, 21,773 MUs of electricity (excluding infirm power of 6 MUs generated by Parbati-II HE Project during FY 2023-24) was generated from installed capacity of 5,551 MW as against 24,619 MUs (excluding infirm

power of 288 MUs generated by Parbati-II HE Project during financial year 2022-23) from installed capacity of 5,551MW in Fiscal 2023. Accordingly, there was decrease of 11.56% in the number of units generated. The average selling price (after adjustment of components of earlier year sales and free power to home state) was '4.21 per unit for 19,138 million units sold in Fiscal 2024 as against '3.97 per unit for 21,622 million units in Fiscal 2023. During Fiscal 2024, the Company has earned '457.81 crore towards incentives against '675.68 crore in Fiscal 2023. Sale of energy decreased by 12.79% to '7,327.90 crore in Fiscal 2024 from '8,404.65 crore in Fiscal 2023 primarily due to lower generation in Power Stations and decrease in sales pertaining to earlier years. Company's Plant Availability Factor (PAF) in Fiscal 2024 was 77.60% as compared to 88.75% in Fiscal 2023. Plant Availability Factor for Fiscal 2024 was higher by 0.32% as compared to Normative Annual PAF of 77.35%.

Adjusted Sale of Energy

The revenue from sale of energy includes sales pertaining to earlier years but recognised in current year and excludes the sale of energy of five Power Stations, whose sale of energy is accounted for as Operating/ Finance Lease in terms of Ind AS 116 - Leases.

As per CERC Tariff Regulations, Exchange Rate Variation on interest payments and loan repayments corresponding to the normative loans considered for tariff of stations/ units is payable/ recoverable to/ from the beneficiaries on repayment of the loans and interest thereon. Pursuant to the opinion of Expert Advisory Committee of the Institute of Chartered Accountants of India (EAC of the ICAI), Foreign Exchange Rate Variation on restatement of foreign currency loans as at the Balance Sheet date, payable/ recoverable to/ from customers later on actual settlement, is accounted for by creating a deferred liability/ asset in the accounts instead of adjusting the same in the Statement of Profit & Loss.

For the purpose of year to year comparison, the impact of earlier year sales has been excluded from sales of energy in order to arrive at the adjusted sales of energy.

The revenue from sales of energy after such adjustments is as under:

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Net Sales (including income in respect of 5	7,957.43	9,124.85
Power Stations accounted for as Leases)

Less: Earlier year sales	(107.78)	532.55
Adjusted Sales of Energy	8,065.21	8,592.30

Revenue from Contracts, Project Management and Consultancy Works

The revenue under this head includes revenue from assignments pertaining to Construction Contracts, Project Management & Consultancy Contracts. These assignments primarily include consultancy assignments in respect of Chenab Valley Power Projects Limited, Lanco Teesta Hydro Power Limited, Jalpower Corporation Limited and Ratle Hydroelectric Power Corporation Limited. The income from contracts, project management and consultancy works decreased by 7.63% from '60.94 crore in Fiscal 2023 to '56.29 crore in Fiscal 2024 due to decrease in consultancy assignments in Fiscal 2024. Revenue from Power - Trading

The revenue under this head includes revenue from Power Trading activity which the Company ventured into during Fiscal 2019. The revenue from Power-Trading increased from '4.60 crore in Fiscal 2023 to '11.52 crore in Fiscal 2024 due to increased Power Trading activities in Fiscal 2024. The income under this activity was booked on net Trading Margin Basis in line with Ind AS 115 - Revenue from Contracts with Customers.

Other Operating Income

Other operating income in Fiscal 2024 was '379.68 crore i.e. an increase of 201.45% as against '125.95 crore in Fiscal 2023. Income on account of Interest from beneficiary states has been booked in respect of twelve power stations whose tariff orders for truing up of 2014-19 tariff period and provisional tariff orders for 2019-24 tariff period were received during Fiscal 2024. Components of other operating income are as under:

(' in crore)

Other Operating Income	Fiscal 2024	Fiscal 2023
Income on account of sale of scrap	1.20	-
Income on account of generation based incentive (GBI)	3.41	3.68
Interest from beneficiary states	375.07	122.27
Total	379.68	125.95

During Fiscal 2024, '25.96 crore was earned as Late Payment Surcharge (LPS) from beneficiaries, as against '53.41 crore during Fiscal 2023. Lower income on account of LPS is due to better realisation of Trade Receivables during the current fiscal.

During Fiscal 2024, '497.54 crore was earned as Dividend from investments, mainly from one subsidiary Company (NHDC Ltd.), as against '376.85 crore during Fiscal 2023. During Fiscal 2024, '149.86 crore was booked as realisation of Business Interruption (BI) loss, as against '42.14 crore during Fiscal 2023. Higher income on account of BI Loss includes confirmation for "On Account Payment" of '112.50 crore received from Insurance Company in respect of generation loss in one of the Power Stations of the Company.

During Fiscal 2024, '381.92 crore was booked as Income from Insurance Claim, as against '19.33 crore during Fiscal 2023. Higher income on account of Insurance Claim in the current fiscal is on account of amount recoverable from Insurance Company for certain losses to assets due to flash flood in the Power Stations located in Teesta River Basin.

Expenditure

(' in crore)

Expenditure	Fiscal 2024	Fiscal 2023
Generation Expenses	814.27	936.46
Employee Benefits Expense	1,296.58	1,301.35
Finance Costs	425.13	476.16
Depreciation & Amortization Expense	1,111.00	1,145.44
Other Expenses	2,315.81	1,707.89
Total Expenditure	5,962.79	5,567.30

Other Income

Other income in Fiscal 2024 was '1,620.07 crore i.e. an increase of 94.12% as against '834.56 crore in Fiscal 2023. Major components of Other Income are placed and discussed hereunder:

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Interest on Loan to Govt. of Arunachal Pradesh	78.77	72.26
Interest on Term Deposits/ Investments	79.27	73.92
Dividend (mainly from NHDC-a Subsidiary Co.)	497.54	376.85
Late Payment Surcharge	25.96	53.41
Realisation of loss from Insurance Company due to Business Interruption	149.86	42.14
Liability/ Provision not required written back	138.11	31.06
Income from Insurance Claim	381.92	19.33
Interest on Unwinding of Fair Value Loss on Financial Assets	50.19	63.87
Exchange Rate Variation	74.14	0.50
Other miscellaneous income	144.31	101.22
Total	1,620.07	834.56

Total expenditure increased by 7.10% to '5,962.79 crore in Fiscal 2024 from '5,567.30 crore in Fiscal 2023 mainly due to increase in Other Expenses by '607.92 crore partially offset by decrease in Generation Expenses by '122.19 crore, decrease in Depreciation & Amortization Expense by '34.44 crore, decrease in Finance Cost by '51.03 crore and decrease in Employee Benefits Expense by '4.77 crore. Our total expenditure as a percentage of total income was 59.48% in Fiscal 2024 as compared to 54.85% in Fiscal 2023.

Generation Expenses

Generation expenses consist of Water Cess and consumption of stores and spare parts. These expenses represent approximately 13.66% of the total expenditure in Fiscal 2024 compared to 16.82% of the total expenditure in Fiscal 2023. In absolute terms, these expenses were '814.27 crore in Fiscal 2024 as against '936.46 crore in Fiscal 2023. The decrease of '122.19 crore in generation expenses is primarily on account of reversal of liability towards water cess in respect of power stations located in the state of Himachal Pradesh where the relevant act has been deemed unconstitutional by the Hon'ble High Court of Himachal Pradesh and in the state of Sikkim, where management is of the opinion that obligation to pay water cess beyond what has already been paid is at best contingent in nature.

Employee Benefits Expense

Employee benefits expense include Salaries and Wages, Allowances, Incentives, Contribution to Provident Fund, Contribution to Employees Defined Contribution

Superannuation Scheme and expenses related to other employee welfare funds. These expenses represent 21.74% of our total expenditure in Fiscal 2024 as against 23.37% in Fiscal 2023. Employee costs has decreased from '1,301.35 crore in Fiscal 2023 to '1,296.58 crore in Fiscal 2024 i.e. a decrease of '4.77 crore in Fiscal 2024.

There were 4,929 employees on the payroll as of March 31, 2024 compared to 4,776 employees as of March 31, 2023. Out of this 2,374 and 2,428 employees were engaged in Operation & Maintenance of Power Stations during Fiscal 2024 & 2023 respectively.

Finance Costs

'Finance costs' consist of interest expense on bonds and term loans. In books of accounts, borrowings are denominated in Indian Rupees, including amounts raised in foreign currencies (Japanese Yen). Finance Cost also includes expenses on account of Guarantee Fees to the Government of India in connection with loans raised from Foreign Market.

Finance Cost represents 7.13% of the total expenditure in Fiscal 2024 compared to 8.55% of the total expenditure in Fiscal 2023. Finance Cost decreased by 10.72% to '425.13 crore in Fiscal 2024 from '476.16 crore in Fiscal 2023. The decrease in Finance Cost is mainly due to repayment of loans and change in weighted average rate of interest in Fiscal 2024.

Depreciation & Amortization Expense

As per the material accounting policies of the Company, Depreciation is charged to the extent of 90% of the cost of assets following the rates and methodology notified by CERC on straight line method, except for some items on which depreciation is charged to the extent of 95% of the costs of the assets at the rates prescribed in the Companies Act, 2013 or as per rates assessed by Management. Depreciation cost decreased by 3.01% to '1,111.00 crore in Fiscal 2024 from '1,145.44 crore in Fiscal 2023. The decrease in depreciation expenses is primarily due to completion of 12 years of life of Sewa-II Power Station in Fiscal 2023.

As a percentage of total expenditure, depreciation & amortization expense decreased to 18.63% in Fiscal 2024 from 20.57% in Fiscal 2023.

Other Expenses

Other expenses consist primarily of Repair & Maintenance of Buildings and Plant & Machinery, Security Expenses, Insurance Expenses, CSR Expenses, Other Administrative Overheads, Provisions, etc. These expenses represent approximately 38.84% of the total expenditure in Fiscal 2024 as against 30.68% in Fiscal 2023. In absolute terms, these expenses increased by 35.59% to '2,315.81 crore in Fiscal 2024 from '1,707.89 crore in Fiscal 2023. The increase of '607.92 crore in other expenses is primarily

due to increase in losses on insured assets ('407.68 crore), Insurance Expenses ('125.35 crore), Interest to Beneficiary states ('69.27 crore), Security Expenses ('15.17 crore), R&M Expenses ('14.27 crore), Interest on arbitration/court cases (under Vivad se Viswas scheme) charged to the Statement of Profit & Loss ('183.11 crore) partially offset by decrease in provision against impairment of investment in Subsidiary & Joint Venture Companies ('115.81 crore), Fair Value Loss on Financial Assets ('124.19 crore), CSR Expenses ('41.58 crore), etc. Movements in Regulatory Deferral Account Balances (Regulatory Income)

In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India (ICAI) as well as keeping in view the provision of Ind AS 114 - Regulatory Deferral Accounts, 'Regulatory Assets' has been created and corresponding 'Regulatory Income' has been recognized for '233.28 crore. This includes Depreciation due to moderation of Tariff in respect of Kishanganga Power Station '197.93 crore, Exchange Differences against monetary Items '0.04 crore, Adjustment against Deferred Tax Recoverable for tariff period up to 2009 '(-)61.68 crore, Adjustment against Deferred Tax Liabilities for tariff period 2014-19 '(-)38.52 crore and Interest Payment on Court/ Arbitration Cases '135.51 crore. Rate regulated income is recognised in the books of accounts for Fiscal 2024 on account of below mentioned five factors:

(i)    Regulatory Deferral Account balances due to moderation of tariff of Kishanganga Power Station

The Company has carried out moderation of depreciation as a component of tariff of Kishanganga Power Station to make the tariff saleable, which has been allowed by the CERC. This entitles the Company to recover the lower depreciation considered in tariff during the first ten years of operation over the balance useful life of the Power Station. Accordingly, the right to recover the difference between the depreciation charged in the books as per CERC Tariff Regulations, 2019-24 and that recoverable through tariff amounting to '197.93 crore during Fiscal 2024 (Fiscal 2023 '199.36 crore) has been recognised as a Regulatory Income.

(ii)    Regulatory Deferral Account balances in respect of exchange differences on Foreign Currency Monetary items

Exchange differences arising on translation/ settlement of foreign currency monetary items to the extent charged to the Statement of Profit & Loss and further recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are being recognized as 'Regulatory Deferral Account balances' w.e.f.

V    )

April 01, 2016. These balances are adjusted from the year in which the same become recoverable from or payable to the beneficiaries after Date of Commercial Operation (COD) of the Project. Accordingly the Company has created Regulatory Assets and recognised corresponding Regulatory Income of '0.04 crore during Fiscal 2024 (Fiscal 2023 '1.10 crore), which is recoverable from beneficiaries in future periods.

(iii)    Regulatory Deferral Account balances due to reclassification of deferred tax recoverable/ deferred tax adjustment against deferred tax liabilities

As per CERC Tariff Regulations, deferred tax arising out of generating income for the tariff period 2004-09 is recoverable from beneficiaries in the year the same materializes as current tax. For the tariff periods 2014-19 and 2019-24, deferred tax is recoverable by way of grossing up the Return on Equity by the effective tax rate based on actual tax paid. Till 31^st March, 2018 the deferred tax recoverable from beneficiaries in future years was presented as an adjustment to deferred tax liability.

The practice was reviewed in FY 2018-19 based on an opinion of the EAC of the ICAI obtained during that year. As per this opinion, adjustment against Deferred Tax Liability is not a deductible temporary difference resulting into deferred tax asset under Ind AS 12- Income Taxes, but rather fulfills the definition of regulatory deferral account balance in terms of Ind AS 114 - Regulatory Deferral Accounts.

The regulated assets (+)/liability (-) recognized in the books during Fiscal 2024 are as follows:

In respect of deferred tax recoverable for tariff period upto 2009, '61.68 crore has been utilized during Fiscal 2024 (Fiscal 2023 '56.09 crore) and in respect of deferred tax adjustment against deferred tax liabilities (pertaining to tariff period 2014-19) '38.52 crore has been utilized during Fiscal 2024 (in Fiscal 2023 addition of '1.18 crore and reversal of '217.16 crore).

(iv)    Creation of Regulatory Deferral Account balances on account of Interest payment on settlement of Court/ Arbitration cases (Under Vivad Se Viswas Scheme)

Vide Office Memorandum dated 29.05.2023, the Ministry of Finance, Government of India has notified the "Vivad Se Viswas II (Contractual Disputes) Scheme" (the Scheme) for settlement of contractual disputes between, inter alia CPSEs (the 'Procurer') and the counter-party to the dispute (the 'Contractor'). Disputes where the award by Court/

Arbitral Tribunal (AT) is only for monetary value are eligible for settlement under this scheme. Cases where the award stipulates specific performance of contract (either fully or partially) shall not be eligible for settlement through this scheme.

As per Regulation 91 of CERC Tariff Regulations, 2024-29, in cases where there is a liability with respect to capital works on account of award of arbitration having principal amount along with interest payment, the principal amount actually paid shall be capitalised. Provided that any interest amount associated with the arbitration award and actually paid shall be recovered in installments. Since, expenditure towards interest in case of award of arbitration or for compliance of order or directions of any Statutory Authority, or Order or decree of any Court of Law was allowed as reimbursement by CERC during tariff period 2019-24 and tariff regulation 2024-29 also allows for recovery of interest expenditure on arbitration award, the interest paid/ to be paid in respect of cases being settled under the Scheme has been charged to the Statement of Profit and Loss. Further, keeping in view the provisions of Ind AS 114- "Regulatory Deferral Accounts Debit Balance', such interest amount to the extent charged to the Statement of Profit and Loss till 31^st March 2024, amounting to '135.51 crore have been recognized as 'Regulatory Deferral Account balances'.

(v) Recognition of Minimum Alternative Tax (MAT) Credit and Regulatory Deferral Account (Credit) balances thereon

NHPC is currently paying its income tax liability under MAT mainly due to availment of deduction u/s 80-IA of the Income Tax Act,1961 in respect of its Power Stations commissioned before 31.03.2017.

During Fiscal 2024, MAT Credit of '528.65 crore has been recognised and '354.52 crore has been utilised.

During Fiscal 2023, MAT Credit of '417.31 crore was recognised and '328.94 crore was utilised. Simultaneously, Regulatory Deferral Account (Credit) balances of '125.59 crore was recognised and the same was utilised during the year. Further, '390.07 crore was adjusted being regulatory liability recognized in respect of Power Stations where tariff has been fixed on negotiated basis with the beneficiaries.

Profit before Tax and Rate Regulated Income

Due to the reasons outlined above, our profit before tax

decreased by 11.38% to '4,062.20 crore in Fiscal 2024

from '4,583.60 crore in Fiscal 2023.

Tax Expenses

In Fiscal 2024, we provided '551.54 crore towards tax expenses as compared to '605.40 crore in Fiscal 2023. The decrease in tax expenses in Fiscal 2024 is on account of decrease in deferred tax expenses by '76.33 crore and increase in current year taxes by '22.47 crore.

Profit after Tax including Rate Regulated Income Our profit after tax decreased by 2.34% to '3,743.94 crore in Fiscal 2024 from '3,833.79 crore in Fiscal 2023.

Other Comprehensive Income (OCI)

OCI comprising of actuarial gain/ loss of re-measurements of post retirement Defined Benefit Plans and fair value gain/ loss on investments in Equity & Debt Instruments in Fiscal 2024 was '(-)24.96 crore against '(-)3.37 crore in Fiscal 2023.

Total Comprehensive Income (TCI)

TCI i.e. total profit inclusive of OCI in Fiscal 2024 was '3,718.98 crore i.e. decrease of 2.91% as against '3,830.42 crore in Fiscal 2023.

LIQUIDITY AND CAPITAL RESOURCES Both internal and external sources of liquidity are utilized for working capital requirement and funding of capital expenditure requirements. Generally long term borrowings are raised through term loans from banks/ financial institutions or issue of bonds either in Indian Rupees or foreign currencies. Cash and cash equivalents were '775.27 crore and '397.05 crore as of March 31, 2024 and 2023 respectively.

Cash Flows

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Net cash inflow/(outflow) from operating activities	5707.72	3,907.35
Net cash inflow/(outflow) from investing activities	(2824.17)	(2,929.30)
Net cash inflow/(outflow) from financing activities	(2505.33)	(1,519.66)

Net Cash from Operating Activities

In Fiscal 2024, the net cash from operating activities was '5,707.72 crore and Profit before Tax and Regulated Income was '4,062.20 crore. Net cash from operating activities has been arrived at after adjusting non-cash items comprising '1,111.00 crore towards depreciation, '425.13 crore towards interest expenses, '16.80 crore towards provisions, '29.42 crore towards sales adjustment on a/c of FERV, '13.17 crore loss on sale of assets/claims written off, '34.15 crore towards fair value adjustments, '50.42 crore towards deferred revenue on

account of advance against depreciation, '138.11 crore on account of provisions/ liabilities not required written back, '497.54 crore on account of dividend income, '251.07 crore towards interest income & guarantee fees including late payment surcharge, '74.14 crore towards exchange rate variation (gain) and '33.15 crore towards amortization of government grants. Changes in Operating Assets & Liabilities had impact on cash outflow by '1,810.50 crore, which was the net effect of change in Inventories, Trade Receivables, Other Financial Assets, Loans & Advances, Other Financial Liabilities & Provisions and Regulatory Deferral Account Balances.

In Fiscal 2023, the net cash from operating activities was '3,907.35 crore and Profit before Tax and Regulated Income was '4,583.60 crore. Net cash from operating activities was arrived at after adjusting non-cash items comprising '1,145.44 crore towards depreciation, '476.16 crore towards interest expenses, '148.52 crore towards provisions, '32.47 crore towards sales adjustment on a/c of FERV, '1.36 crore loss on sale of assets/claims written off, '50.42 crore towards deferred revenue on account of advance against depreciation, '31.06 crore on account of provisions/liabilities not required written back, '376.85 crore on account of dividend income, '233.65 crore towards interest income & Guarantee Fees including Late Payment Surcharge, '0.50 crore towards exchange rate variation (gain), '93.45 crore towards fair value adjustments and '33.20 crore towards amortization of government grants. Changes in Operating Assets & Liabilities had impact on cash outflow by '1,056.83 crore, which was the net effect of change in Inventories, Trade Receivables, Other Financial Assets, Loans & Advances, Other Financial Liabilities & Provisions and Regulatory Deferral Account Balances.

Net Cash from Investing Activities Net cash used in investing activities was '2,824.17 crore in Fiscal 2024. This was mainly on account of expenditure on Fixed Assets i.e. Property, Plant & Equipment, Other Intangible Assets, CWIP and Movement in Regulatory Deferral Account Balances forming part of project cost of '3,316.05 crore, '763.98 crore towards Investment in Joint Venture & Subsidiaries and '600.05 crore towards loan to subsidiaries partly offset by interest income & Guarantee Fees by '163.87 crore, '497.54 crore towards dividend income, '12.96 crore towards proceeds from term deposits, '13.88 crore towards interest on loan to Subsidiaries/ Joint Ventures, '2.18 crore towards sale of assets, '625.00 crore towards repayment of loan by subsidiaries, '150.00 crore towards proceeds from sale of investment and '390.48 crore towards receipt of Grant. Net cash used in investing activities was '2,929.30 crore in Fiscal 2023. This was mainly on account of expenditure on Fixed Assets i.e. Property, Plant & Equipment, Other Intangible Assets, CWIP and Movement in Regulatory

Deferral Account Balances forming part of project cost of '2,767.79 crore, '638.54 crore towards Investment in Joint Venture & Subsidiaries, '14.28 crore towards investment in term deposits and '315.00 crore towards loan to subsidiaries partly offset by interest income & guarantee fees by '166.27 crore, '376.85 crore towards dividend income, '255.00 crore towards repayment of loan by subsidiaries, '2.82 crore towards interest on loan to Subsidiaries/ Joint Ventures, '1.39 crore towards sale of assets and '3.98 crore towards receipt of Grant.

Net Cash from Financing Activities

In Fiscal 2024, our net cash outflow from financing activities was '2,505.33 crore. Fund of '4,046.94 crore has been raised through issue of bonds and loan from banks. Borrowings to the tune of '2,713.51 crore were repaid. Our cash outflow on account of repayment of lease liability including interest thereon was to the tune of '5.72 crore. The amount related to interest servicing was '1,974.71 crore. In Fiscal 2024, Total dividend amounting to '1,858.33 crore was paid.

In Fiscal 2023, our net cash outflow from financing activities was '1,519.66 crore. Fund of '3,972.37 crore was raised through issue of bonds and loan from banks. Borrowings to the tune of '1,898.66 crore were repaid. Our cash outflow on account of repayment of lease liability including interest thereon was to the tune of '3.29 crore. The amount related to interest servicing was '1,681.52 crore. In Fiscal 2024, total dividend amounting to '1,908.56 crore was paid.

BALANCE SHEET ITEMS Balance Sheet Highlights Assets

(' in crore)

Particulars	As of March 31,
	2024	2023
Non-Current Assets
Property, Plant and Equipment, Capital Work in Progress, Right of Use Assets, Investment Property, Intangible Assets and Intangible Assets under development	49,193.10	45,383.31

Particulars	As of March 31,
	2024	2023
Non-Current Tax Assets (Net)	-	30.27
Other Non-Current Assets	3,528.73	3,602.77
Financial Assets (Non-Current)
Non-Current Investments	6,355.86	5,546.96
Trade Receivables	2.63	399.45
Long Term Loans and Advances	1,196.15	1,089.80
Other Financial Assets	4,579.14	4,547.09
Total Non-Current Assets	64,855.61	60,599.65
Current Assets
Inventories	177.00	150.48
Current Tax Assets (Net)	117.93	132.83
Other Current Assets	732.23	398.23
Financial Assets (Current)
Current Investments	12.43	151.35
Trade Receivables	3,981.32	5,487.59
Cash & Bank Balances	992.51	638.22
Short Term Loans	97.25	114.59
Other Financial Assets	1,181.69	614.32
Total Current Assets	7,292.36	7,687.61
Asset classified as held for sale	1.22	7.74
Regulatory Deferral Account Debit Balances	6,653.40	6,420.12
Total Assets and Regulatory Deferral Account Debit Balances	78,802.59	74,715.12

Equity and Liabilities

(' in crore;

Particulars	As of March 31,
	2024	2023
Equity
Equity Share Capital	10,045.03	10,045.03
Other Equity	27,223.58	25,362.93
Net Worth	37,268.61	35,407.96
Non-Current Liabilities
Long Term Provisions	59.71	50.92
Deferred Tax Liabilities (Net)	1,668.45	1,937.34
Other Non-Current Liabilities	2,250.06	1,944.56
Financial Liabilities (Non-Current)
Long Term Borrowings	26,338.22	25,254.69
Lease Liabilities	18.23	11.70
Other Financial Liabilities	2,160.22	2,143.07
Total Non-Current Liabilities	32,494.89	31,342.28
Current Liabilities
Short Term Provisions	2,169.55	1,662.23
Current Tax Liabilities	56.70	-
Other Current Liabilities	653.30	734.91
Financial Liabilities (Current)
Short Term Borrowings	3,052.77	2,885.65
Lease Liabilities	4.91	2.39
Trade Payables	258.85	215.45
Other Financial Liabilities	1,919.81	1,541.05
Total Current Liabilities	8,115.89	7,041.68
Regulatory Deferral Account Credit Balances	923.20	923.20
Total Equity, Liabilities and Regulatory Deferral Account Credit Balances	78,802.59	74,715.12

Movement in Balance Sheet items are discussed here under:-

Property, Plant and Equipment (PPE), Capital Work in Progress (CWIP), Right of Use Assets (ROU), Investment Property, Intangible Assets

Our PPE consisting of Land, Dams, Tunnels, Buildings including Power House Buildings, Construction Equipment, Plant & Machinery, Office Equipment, Computers, etc. after provision for depreciation & amortisation were '16,598.88 crore and '17,435.03 crore as of March 31,2024 and March 31,2023 respectively.

CWIP which includes Hydraulic Works, Buildings including Power House Buildings, Construction Equipment, Plant & Machinery and S&I works at our power projects under Construction, Survey & Investigation were '29,794.72 crore and '25,315.01 crore as of March 31, 2024 and March 31, 2023 respectively.

ROU including forest land under right of use and other leased assets were '2,613.18 crore and '2,625.70 crore as of March 31, 2024 and March 31, 2023 respectively.

Investment Property consists of one piece of land at Bangalore amounting to '4.49 crore.

Intangible Assets comprising of computer software were '1.83 crore and '3.08 crore as of March 31, 2024 and March 31, 2023 respectively.

Intangible Assets under development consisting of Upfront Fee/ Premium for allotment of two hydroelectric projects in the State of Arunachal Pradesh were '180.00 crore as of March 31, 2024.

Investments (Current & Non-Current)

Investments are intended for long term and carried at cost which consists of Equity investments in Subsidiaries/ Joint Venture Companies, Govt. Securities and Bonds. Our total investment was '6,368.29 crore and '5,698.31 crore as of March 31, 2024 and March 31, 2023 respectively. The increase in investment is the net effect of increase in investment in subsidiary companies and increase in fair value of investment in equity instruments. During FY 2023-24, the Company has made fresh investment in subsidiary Companies amounting to '689.51 crore.

Loans (Current & Non-Current)

Loans include loans to our employees, loan and interest accrued thereon to Govt. of Arunachal Pradesh and loans to subsidiary and joint venture companies' viz. Lanco Teesta Hydro Power Limited (LTHPL), Bundelkhand Saur Urja Limited (BSUL) and National High Power Test Laboratory Limited (NHPTL). Loans as of March 31, 2024 and March 31, 2023 were '1,293.40 crore and '1,204.39

crore respectively i.e. there is an increase of 7.39% over figures of previous fiscal mainly due to accrued interest on loan to Govt. of Arunachal Pradesh, loan to BSUL and increase in employee loans partially offset by repayment of loan by LTHPL during fiscal 2024.

Other Financial Assets (Current & Non-Current)

The other financial assets as at March 31, 2024 stood at '5,760.83 crore against '5,161.41 crore for the previous fiscal i.e. there is an increase of 11.61% over figures of previous fiscal. Other Financial Assets include amount recoverable on account of Bonds fully serviced by Govt. of India, Lease rent receivable, Receivable on account of Late Payment Surcharge, Interest income accrued on Bank Deposits/ Investment, claim recoverable from different agencies, Share Application Money pending allotment and Receivable from Subsidiaries, etc. The increase in other financial assets is mainly due to increase in claim recoverable from insurance Company and increase in Share Application Money pending allotment from Subsidiary Companies.

Tax Assets (Current & Non-Current)

Tax assets as of March 31, 2024 and 2023 were '117.93 crore and '163.10 crore respectively i.e. there is decrease of 27.69% over figures of previous fiscal. Tax Assets include Advance Income Tax & Tax Deducted at Source over and above provision for income tax up to financial year 2023-24. Tax assessment up to financial year 2021-22 has been completed except financial year 2020-21 and Tax assessment for financial year 2022-23 is under progress. Other Non-Current Assets

Other non-current assets mainly comprise deferred foreign currency fluctuation assets, advances (Capital as well as other than Capital) and advance to contractors against arbitration awards. Our other non-current assets as of March 31, 2024 and 2023 were '3,528.73 crore and '3,602.77 crore respectively. The decrease of 2.06% in fiscal 2024 as compared to the figures in fiscal 2023 is mainly due to recovery of capital advances and decrease in deferred foreign currency fluctuation assets. Inventories

Inventories are valued at cost or Net Realisable Value whichever is lower. Our inventories were valued at '177.00 crore and '150.48 crore as of March 31, 2024 and 2023 respectively.

Trade Receivables (Current & Non-Current)

These consist primarily of receivables against the sale of electricity including unbilled revenue. The Trade receivables (net of provision for doubtful debts) as of March 31, 2024 and 2023 were '3,983.95 crore and

'5,887.04 crore respectively. Decrease of 32.33% in trade receivables in fiscal 2024 as compared to fiscal 2023 is due to decrease in receivable on account of unbilled revenue and receivables not yet due.

Cash and Bank Balances

Cash and Bank balances as of the Balance Sheet date consist of cash surplus in our current account, short term deposits, unspent advances received from Government entities in respect of the Pradhan Mantri Grameen Sadak Yojna Scheme for development of rural roads and the Deen Dayal Upadhyaya Grameen Jyoti Yojana Scheme for development of rural electrification infrastructure.

Cash and Cash equivalents as of March 31,2024 and 2023, respectively, were '775.27 crore and '397.05 crore. The increase of '378.22 crore during fiscal 2024 is the net result of cash inflow from operating activities of '5,707.72 crore offset by cash outflow on investing activities by '2,824.17 crore & '2,505.33 crore on account of financing activities respectively.

Bank balances other than Cash and Cash Equivalents as of March 31, 2024 and 2023 were '217.24 crore and '241.17 crore respectively.

Our Bank balances other than Cash and Cash Equivalents include '88.08 crore (Previous Year '84.74 crore) held for Rural Road and Rural Electrification works being executed by Company on behalf of other agencies, unpaid dividend, unpaid interest & other earmarked balances of '129.16 crore (Previous Year ' 140.13 crore) which are not freely available for the business of the Company.

Other Current Assets

Other Current Assets mainly comprise of advances to contractors and suppliers, Prepaid Expenditure and Deferred Foreign Currency Fluctuation Assets. Our other Current Assets, as of March 31, 2024 and 2023 respectively were '732.23 crore and '398.23 crore, an increase of 83.87% in fiscal 2024 as compared to the figures in fiscal 2023. This increase is mainly due to increase in Prepaid Insurance ('373.00 crore) partly offset by decrease in Receivable on account of material issue to contractors ('48.20 crore).

Regulatory Deferral Account Debit Balances In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India as well as keeping in view the provisions of Ind-AS 114 - Regulatory Deferral Accounts, 'Regulatory Assets' have been created and corresponding 'Regulatory Income' has been recognized in respect of certain items which are recoverable from beneficiaries in future.

Regulatory Deferral Account Debit balances as on March

31,2024 and March 31, 2023 were as under:

(' in crore)

Particulars	As of March 31,
	2024	2023
Regulatory Deferral Account balances in respect of Subansiri Lower Project	3,470.59	3,470.59
Differential depreciation due to Moderation of Tariff in respect of Kishanganga Power Station	1,158.75	960.82
Exchange differences on Foreign Currency Monetary items	2.69	2.65
Interest Payment on Court/ Arbitration Cases	135.51	-
Adjustment against Deferred Tax Recoverable for tariff period upto 2009	1,286.27	1,347.95
Adjustment against Deferred Tax Liabilities for tariff period 2014-2019	599.59	638.11
Total	6,653.40	6,420.12

Net Worth

Net Worth of the Company at the end of Fiscal 2024 increased to '37,268.61 crore from '35,407.96 crore in the previous Fiscal registering an increase of 5.25% mainly due to increase in Profit after tax and consequential increase in retained earnings.

Long Term Borrowings

Long Term Borrowings of the Company mainly comprise of Bonds, Secured Term Loans & Unsecured Loans (Bonds, Term Loans and Foreign Currency Loans) amounting to '11,792.15 crore, '8,580.60 crore and '5,965.47 crore in Fiscal 2024 as against '13,099.23 crore, '5,313.60 crore and '6841.86 crore respectively in Fiscal 2023. The Secured loans include borrowings from domestic banks and financial institutions along with corporate bonds raised in the capital markets that are secured against assets of the Company.

The increase in Long Term Borrowings to the extent of 4.29% over previous fiscal is mainly on account of borrowings from domestic banks including securitization

of return on equity of one of the power station partly offset by redemption of secured bonds and repayment of borrowings.

Lease Liabilities (Current & Non-Current)

Lease Liabilities accounted for as per Ind AS 116 - Leases as at March 31, 2024 stood at '23.14 crore against '14.09 crore for the previous fiscal.

Other Financial Liabilities (Current & Non-Current)

Other Financial Liabilities include amount payable towards Bonds fully serviced by Govt. of India, interest accrued but not due on borrowings, liability against capital works/supplies, EMD/ Retention Money, etc. The other financial liabilities as at March 31, 2024 stood at '4,080.03 crore against '3,684.12 crore for the previous fiscal i.e. there is an increase of 10.75% over figures of previous fiscal mainly due to increase in Liability against capital works/ supplies C277.42 crore), amount payable to beneficiaries ('99.69 crore) and EMD/ Retention Money ('59.34 crore) partially offset by decrease in Interest accrued but not due on borrowings ('60.17 crore). Provisions (Current & Non-Current)

Provisions include provision for employee benefit expenses viz. Performance Related Pay, Superannuation/ Pension fund and Provision towards long term employee benefits arrived at on the basis of actuarial valuation. Other Provisions include Provision for Restoration expenses of Insured Assets, Provision for Tariff Adjustment, Provision for Committed Capital Expenditure, Provision in respect of arbitration award/court cases and other Provisions. Total provisions stood at '2,229.26 crore as at March 31, 2024 as against '1,713.15 crore for previous fiscal i.e. there is an increase of 30.13% over figures of previous fiscal mainly due to increase in Provision for Restoration expenses of Insured Assets ('376.12 crore), Provision in respect of arbitration award/ court cases ('80.71 crore), Provision for Committed Capital Expenditure C52.42 crore) partly offset by decrease in Provision for Tariff Adjustment ('12.98 crore) and other provisions.

Deferred Tax Liabilities

The Deferred Tax Liabilities as at March 31, 2024 stood at '1,668.45 crore against '1,937.34 crore for the previous fiscal i.e. there is decrease of 13.88% over figures of previous fiscal mainly due to recognition of MAT Credit ('528.65 crore) and increase in deferred assets due to PPE ('56.13 crore) partly offset by utilisation of MAT Credit ('354.52 crore).

Other Non-Current Liabilities

Other Non-Current Liabilities include Income received in

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advance (Advance against Depreciation) and Grants in aid-from Government. The Other Non-Current Liabilities as at March 31, 2024 stood at '2,250.06 crore against '1,944.56 crore for the previous fiscal i.e. there is an increase of 15.71% over figures of previous fiscal mainly due to increase in Grants in aid received from Government of India for Downstream Protection Measures at Subansiri Lower Project C56.98 crore), for setting up Solar Power Projects and rooftop Solar Power Plant ('223.50 crore) and for Flood Moderation & Enabling Infrastructure in respect of Dibang Project ('109.00 crore).

Short Term Borrowings

The Short term borrowings as at March 31, 2024 stood at '3,052.77 crore against '2,885.65 crore for the previous fiscal. Increase in short term borrowings mainly due to increase in current maturities of long term borrowings ('924.06 crore) partly offset by decrease in amount payable to the banks by the beneficiaries on account of bills discounted against trade receivables ('756.94 crore). Trade Payables

The Trade payables as at March 31, 2024 stood at '258.85 crore against '215.45 crore for the previous fiscal i.e. there is an increase of 20.14% over figures of previous fiscal due to increase in unbilled amount of Trade payables ('32.70 crore).

Other Current Liabilities

The other current liabilities as at March 31, 2024 stood at '653.30 crore against '734.91 crore for the previous fiscal i.e. there is decrease of 11.10% over figures of previous fiscal mainly due to decrease in water usage charges payable, liabilities against deposit works partially offset by increase in statutory dues payable.

Regulatory Deferral Account Credit Balances In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India as well as keeping in view the provisions of Ind-AS 114-Regulatory Deferral Accounts, 'Regulatory Deferral Account Credit Balances' has been created and corresponding 'Movement in Regulatory Deferral Account Balances' has been recognized in respect of MAT Credit to be passed on the beneficiaries. Regulatory Deferral Account Credit Balances as at March

31,2024 stood at '923.20 crore.

Current Tax Liabilities

The current tax liabilities as at March 31, 2024 stood at '56.70 crore against Nil for the previous fiscal. This represents excess provision of current tax over and above Advance Tax & TDS for FY 2023-24.

Off-Balance Sheet Items Contingent Liabilities

The following table sets forth the components of our contingent liabilities as of Fiscal 2024 and 2023.

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Claims against the Company not acknowledged as debts in respect of:
Capital Works	7,643.84	8,556.95
Land Compensation Cases	153.86	224.97
Disputed Tax matters and Other Items	1,467.76	1,470.30
Total	9,265.46	10,252.22

Contingent liabilities decreased by 9.62% from '10,252.22 crore as of March 31, 2023 to '9,265.46 crore as of March

31,2024 mainly due to contractors claim settled under the Vivad se Viswas II Scheme (Contractual Disputes) notified by the Government of India ('676.32 crore) and reduction in contractors claims due to arbitration awards settled in favour of the Company ('755.85 crore) partially offset by addition of interest on claims of existing contractors.

Key Financial Ratios (Standalone basis)

S. No.	Ratios	Fiscal 2024	Fiscal 2023	% Change
1.	Debtors Turnover Ratio (Revenue from Operations/ Average Debtors)	1.69	1.76	(-) 3.98%
2.	Inventory Turnover Ratio (Revenue from Operations/ Average Inventory)	50.09	64.78	(-) 22.68%
3.	Interest Service Coverage Ratio (ISCR)# (Profit after Tax but before Interest and Depreciation/ Interest)	8.63	8.21	5.12%

4.	Debt Service Coverage Ratio (DSCR)# (Profit after Tax but before Interest and Depreciation / Principal repayment excluding payment under put option and Interest)	3.16	4.05	(-) 21.98%
5.	Current Ratio (Current Assets/ Current Liabilities)	0.90	1.09	(-) 17.43%
6.	Debt Equity Ratio (Paid up Debt Capital/ Shareholder's Equity)	0.84	0.85	(-) 1.18%
7.	Operating Profit Margin (Operating Profit/ Revenue from Operations)	38.08%	42.52%	(-) 10.44%
8.	Net Profit Margin (Net Profit/ Revenue from Operations)	44.54%	41.15%	8.24%
9.	PE Ratio (Market Price Per Share*/ Earning Per Share)	24.03	10.52	128.42%
10.	EBITDA ('in crore)	5,733.88	5,743.43	(-) 0.17%
11.	EBITDA Margin (EBITDA/ Revenue from Operations)	68.22%	61.65%	10.66%

#    For the calculation of ISCR and DSCR, amount of interest and Principal repayments against the borrowings of the operational projects have been considered.

*    Closing Price as on 31^st March of respective fiscal has been considered for Market Price per Share

PE Ratio (Market Price per Share/ Earning Per Share)

PE Ratio of the Company at the end of Fiscal 2024 increased to 24.03 from 10.52 in the previous Fiscal 2023 registering an increase of 128.42% mainly due to increase

in Market Price per Share of the Company. Market Price per Share as on 31^st March 2024 was '89.65 as against '40.20 as on 31^st March 2023.

Return on Net worth (PAT/ Average Shareholder's Equity)

Return on Net worth of the Company at the end of Fiscal 2024 decreased to 10.30% from 11.13% in the previous Fiscal 2023 registering a decrease of 7.46% mainly due to decrease in Profit after tax partially offset by increase in retained earnings.

BUSINESS AND FINANCIAL REVIEW OF SUBSIDIARIES/ JOINT VENTURE COMPANIES

Highlights of the subsidiaries and joint venture companies of NHPC are as under:-NHDC Limited

NHDC Ltd. was incorporated on 01.08.2000 as a Joint Venture of NHPC Ltd. (51.08%) and Government of Madhya Pradesh (48.92%) having authorised share capital of '3,000 crore. NHDC has commissioned Indira Sagar Power Project (1,000 MW) and Omkareshwar Power Project (520 MW). The Total Income of NHDC Ltd. for the financial year ended March 31, 2024 and 2023 was '1,500.27 crore and '1,509.35 crore respectively. The Profit After Tax of NHDC Ltd. for the financial year ended March 31, 2024 and 2023 was '812.24 crore and '800.53 crore respectively. Paid up share capital of the Company is '1,962.58 crore of which NHPC's contribution is '1,002.42 crore. During the FY 2023-24, the Company has commissioned the 8 MW Sanchi Solar Project in the State of Madhya Pradesh. Loktak Downstream Hydroelectric Corporation Limited (LDHCL)

LDHCL was incorporated on 23.10.2009 as a Joint Venture of NHPC Ltd. (74%) and Government of Manipur (26%) having authorized share capital of '230 crore. Paid up share capital of the Company is '141.09 crore of which NHPC's contribution is '105.56 crore (74.82%). Considering the delay in investment sanction (PIB & CCEA) and high projected tariff, impairment provision for the entire investment of NHPC in LDHCL was created in the books of the NHPC Limited during the FY 2022-23. The Company is yet to start operations.

Bundelkhand Saur Urja Limited (BSUL)

BSUL was incorporated on 02.02.2015, as a Joint Venture of NHPC Ltd. and Government of Uttar Pradesh (UPNEDA), with NHPC's share not less than 74%. The authorized share capital of the Company is '450.00 crore. Paid up share capital of the Company is '104.78 crore of which NHPC's contribution is '91.83 crore (87.64%). During the FY 2023-24, the Company has commissioned the 65 MW Kalpi Solar Power Project in the State of Uttar Pradesh.

Lanco Teesta Hydro Power Limited (LTHPL)

During the FY 2019-20, NHPC had acquired LTHPL as its wholly owned subsidiary under insolvency resolution process. The acquisition was made as per the resolution plan submitted by NHPC and approved by the National Company Law Tribunal (NCLT). The authorized share capital of the Company is '2,500.00 crore. Paid up share capital of the Company is '1,724.41 crore. The Company is involved in construction of 500 MW Teesta-VI Hydro Power Project.

Jalpower Corporation Limited (JPCL)

On 31.03.2021, NHPC had acquired JPCL under insolvency resolution process and the Company had become a wholly owned subsidiary of NHPC from that date. The acquisition was made as per the resolution plan submitted by NHPC and approved by the NCLT. The authorized share capital of the Company is '600.00 crore. Paid up share capital of the Company is '281.49 crore. The Company is involved in construction of 120 MW Rangit-IV Hydroelectric Project.

Ratle Hydroelectric Power Corporation Limited (RHPCL)

RHPCL was incorporated on 01.06.2021, as a Joint Venture of NHPC Ltd. and Jammu and Kashmir State Power Development Corporation Limited (JKSPDCL), with equity participation of 51:49 respectively. The authorized share capital of the Company is '1,600 crore. Paid up share capital of the Company is '664.88 crore of which NHPC's contribution is '364.88 crore (54.88%). The Company is involved in construction of 850 MW Ratle Hydroelectric Power Project.

Chenab Valley Power Projects Limited (CVPPL)

CVPPL was incorporated on 13.06.2011 as a Joint Venture of NHPC Ltd. (49%), Jammu & Kashmir State Power Development Corporation (JKSPDC) (49%) & PTC India Ltd. (2%) for execution of Pakal Dul, Kiru & Kwar H.E. Projects in Chenab River Basin. During the FY 2021-22, NHPC Limited had acquired 2% equity of PTC India Limited in CVPPL for an amount of '4.19 crore. Further, during FY 2022-23, pursuant to signing of Supplementary Promoters' Agreement of CVPPL between NHPC Limited and J&K State Power Development Corporation Limited on November 21, 2022, NHPC Limited had obtained majority representation on the Board of CVPPL and had gained control over CVPPL from that date. Accordingly, CVPPL has been accounted for as a Subsidiary Company from ibid date. The authorized share capital of the Company is '5,200 crore. Paid up share capital of the Company is '4,450.34 crore out of which NHPC's contribution is '2,404.11 crore. The Company's shareholding in CVPPL

due to additional equity infusion is 54.02% as on 31^st March, 2024. The Company is involved in construction of 3 Hydroelectric Power Projects totalling 2164 MW in the UT of J&K.

NHPC Renewable Energy Limited (NHPC REL)

NHPC REL was incorporated on 16.02.2022 as a wholly owned subsidiary of NHPC Ltd. The authorised share capital and paid up share capital of the Company is '499 crore and '20 crore respectively. The Company is exploring options for setting up non-conventional/ renewable energy projects and is currently setting up a 700 KW Solar Plant in Rajasthan.

National High Power Test Laboratory Private Limited (NHPTL)

NHPTL was incorporated on 22.05.2009 as a Joint Venture Company of NHPC Ltd., NTPC Ltd., PGCIL and Damodar Valley Corporation (DVC) each having 25% of equity participation. During the Fiscal 2013, Central Power Research Institute also entered into the Joint Venture thereby revising the equity participation to 20% of each Joint Venture partner. The Company has been incorporated to set up an Online High Power Test Laboratory for short-circuit test facility in the Country having Authorised Share Capital of '300 crore. As on March 31, 2024 paid up share capital of the Company is '225.60 crore out of which NHPC's contribution is '48.80 crore against which provision for impairment amounting to '36.48 crore has been created in the books of NHPC Limited. During FY 2020-21, NHPC had granted loan of '18.40 crore to NHPTL. Subsequently, promoters of NHPTL agreed to the revival plan of the Company, as per which the outstanding loan of the promoters has been converted into Equity. Accordingly, shares have been allotted to NHPC against loan of '18.40 crore during FY 2023-24 and the shareholding of the Company in NHPTL has increased from 20% to 21.63%.

The Company has started commercial operation during Fiscal 2018. For the financial year ended March 31, 2024, the Company earned profit of '20.90 crore while loss for the financial year ended March 31, 2023 was '108.32 crore.

Consolidated Financial Statements of NHPC Ltd, its Subsidiaries and Joint Venture Companies

The Consolidated Financial Statements have been prepared in accordance with Ind-AS 110-'Consolidated Financial Statements' and Ind-AS 28-'Investment in Associates & Joint Ventures' which are included in this Annual Report.

A brief summary of the results on a consolidated basis is given below:

(' in crore)

Particulars	Fiscal 2024	Fiscal 2023
Total Income	10,993.91	11,284.90
Total Expenses	6,350.39	6,028.22
Profit after Tax (PAT)	4,028.01	4,260.83
PAT attributable to NHPC	3,624.42	3,903.31
Ltd.

SUMMARY OF CONSOLIDATED BALANCE SHEET

(' in crore)

PARTICULARS	Fiscal 2024	Fiscal 2023
Non-Current Assets (NonFinancial Assets)	65,716.71	58,089.31
Non-Current Assets (Financial Assets)	9,613.98	10,553.03
Current Assets (NonFinancial Assets)	1,083.25	748.57
Current Assets (Financial Assets)	9,818.36	10,008.46
Assets classified as held for sale	1.29	8.11
Regulatory Deferral Account Debit Balances	7,061.90	6,802.36
Total	93,295.49	86,209.84
Total Equity (including noncontrolling interest)	43,892.41	41,834.54
Non-Current Liabilities (NonFinancial Liabilities)	6,772.72	6,100.83
Non-Current Liabilities (Financial Liabilities)	31,670.06	28,848.20
Current Liabilities (NonFinancial Liabilities)	3,607.91	2,919.17
Current Liabilities (Financial Liabilities)	6,004.41	5,023.15

Regulatory Deferral Account Credit Balances	1,347.98	1,483.95
Total	93,295.49	86,209.84

35.14 MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT

Your Company has a highly talented team of committed professionals and has been able to induct, develop and retain the best talent. NHPC endeavors to acquire the best talent in the Country from leading educational institutions and universities. It has been working towards nurturing and retaining talent by providing opportunities to improve their knowledge and skills. Job rotation and inter-location transfer through-out the organization facilitate planned development of careers and broaden the outlook of employees. Employees' participation has been ensured through information sharing with employees, seeking their support, suggestions and co-operation.

(i) TRAINING OF EMPLOYEES

NHPC organizes various developmental programmes for its employees in the areas of behavioral, managerial skills and core competencies.

These programmes organized by the Company are either-in-house or through premier management & engineering institutions which helps employees to keep them abreast with the latest developments and changes taking place in the area of their operation. Special out- bound training programmes for women were organised through which they were acquainted with various aspects of management, leadership and teamwork. Women executives were nominated for International training programmes in the field of HRM and Power Sector to enhance their functional and professional prowess. In addition to above, NHPC also sponsors its executives on regular basis to acquire higher qualification and specialization to enhance their productivity and effectiveness. Workshops and knowledge sharing sessions are organized both in physical and virtual mode for awareness and for updation of knowledge base of employees. Specially designed programs, like in the areas of Corporate Governance, are conducted for senior officials.

Your Company also deputes senior and high potential employees to foreign training programmes to keep them abreast with the latest know how and to understand the global scenario in the field of hydro power. NHPC also sponsors its executives to acquire higher qualification and specialization to improve their productivity and effectiveness.

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Considering the future training needs due to advancing technologies, NHPC recognizes the need to adopt modern and scientific training methodologies and to create an infrastructure accordingly. Further, specialized training in the field of project planning, execution & management, O&M, R&D, etc. will be met either by establishing JVs or in collaboration with the expert institutions in the concerned field in India & abroad.

(ii)    EMPLOYEE STRENGTH

The employee strength of the Company as on March 31, 2024 was 4,929 (3,193 executives, 631 supervisors & 1,105 workmen).

(iii)    WELFARE MEASURES FOR WOMEN EMPLOYEES The number and percentage of women employees as on March 31, 2024 is given in the table below:

% of overall

Total no. of No. of women

employee

employees    employees    _st_re_ngth

4929    511    10.37

Steps taken for the welfare of women employees

•    Women employees are regularly nominated to various programmes/seminars on women empowerment and other issues related to women.

•    Women employees are eligible for child care leave with pay up to 730 days for taking care of two children up to the age of 18 years (no age limit in respect of child with minimum disability of 40%).

•    Women employees have option to declare parents/ parents-in-law as their dependents under medical rules.

•    Internal Complaints Committees (ICCs) have been constituted at all locations of the Company to examine the grievances/complaints relating to sexual harassment of women employees.

•    Women representatives are nominated on selection Board/Committee constituted for promotion/ recruitment of employees.

•    Women employees may avail maternity leave upto 180 days.

•    12 Weeks Maternity Leave to Commissioning mothers on delivering child through surrogacy is allowed.

•    NHPC Corporate Office, Faridabad has Creche facility for employees with infants in the age group of 6 months to 6 years.

•    Relaxations in attendance timings are given to women employees posted at Corporate Office.

•    WIPS (Women in Public Sector Forum) Cell has been constituted in Corporate Office.

•    International Women's Day 2024 was celebrated on March 20, 2024 in order to commemorate the occasion and celebrate the progress made towards achieving gender equity and women's empowerment and also to critically reflect on accomplishments & significant contributions of our outstanding women employees. During the program women employees excelling in sports, leadership and social activities were felicitated.

•    "Matritva"- A special welfare scheme for Female employees is introduced which aims at providing unwavering support and care to the female employees who is on the way to embrace motherhood and continuing their office duties. Under this Scheme, the expecting mothers are served with a bowl of cut fruit/handful of dry fruits/ milk, juice etc. once in a day to ensure proper nutrition during working hours. They are also provided with paddle stool to help them in elevating their feet to ensure comfortable sitting posture. A planter and a picture is also provided at their workspace to uplift their mood and bring positivity around.

(iv) WELFARE MEASURES AND RESERVATION FOR SCHEDULED CASTE (SC), SCHEDULED TRIBE (ST) AND OTHER BACKWARD CLASSES (OBC)

Your Company is providing reservation and relaxation to SC/ST and OBC candidates in direct recruitment as per guidelines issued by DoPT from time to time. The relaxed standard and reservation is also applicable to SC/ST employees, while considering them for promotion. The management holds periodical meetings with SC/ST/OBC employees for discussing various issues related to them. SC/ST & OBC Cells headed by separate Liaison Officers have been set up for the welfare of SC/ST and OBC employees. Representation of SC/ST/OBC employees is given in table below:

Total no. of	REPRESENTATION
employees	SC	%	ST	%	OBC	%
4929	760	15.42	373	7.57	1089	22.09

(v) WELFARE MEASURES FOR DIFFERENTLY ABLED EMPLOYEES:

Representation of differently abled employees as on March 31, 2024 is given in table below:

Total No of employees	Differently abled employees			% of differently abled employees
	VH	HH	OH	TOTAL	%
4929	15	7	106	128	2.60

VH=Visual Handicap, HH=Hearing Handicap, OH=Orthopaedic Handicap

Steps taken for the welfare of differently abled employees:

Reservation and relaxation are provided to differently abled candidates/employees in direct recruitment and promotion as per guidelines issued by DoPT/ Ministry of Social Justice & Empowerment from time to time. In addition to above, following welfare schemes have also been extended to differently abled employees:-

•    Differently abled employees as well as employees who are care giver to dependent physically/ mentally disabled child are exempted from rotational transfer. These employees are given option about their preference in place of posting at the time of transfer/promotion.

•    Financial assistance is provided to employees (who get physically handicapped while in service) for vocational training.

•    Reimbursement of expenses for purchase of hearing aid is given to hearing impaired employees/their dependents.

•    Reimbursement of the cost of artificial limbs and for the same an interest free loan is being given to employees/their dependents.

•    Restriction of age is not applicable in respect of physically/mentally retarded children for considering them as dependents for medical and other benefits.

35.15 ENVIRONMENT PROTECTION AND CONSERVATION, TECHNOLOGICAL ABSORPTION, RENEWABLE ENERGY DEVELOPMENTS & FOREIGN EXCHANGE CONSERVATION

(i) Environment Protection and Conservation:

Environmental Impact Assessment (EIA) for NHPC projects is undertaken during investigation stage to identify probable impacts on environment. Based on the findings of EIA studies, mitigatory Environmental Management Plans (EMPs) are proposed and implemented to ameliorate the adverse impacts of the project by taking necessary measures like; compensatory afforestation, catchment area treatment, biodiversity conservation, green belt development, fishery management, rejuvenation of dumping and quarry sites including rehabilitation & resettlement amongst others. Environment and Diversity Management Division has been established at the Corporate Office to monitor and facilitate implementation of environmental safeguard measures at all the Projects/Power Stations and Regional Offices.

Compliance under Corporate Environment Policy:

Your Company has also formulated Corporate

Environment Policy, 2022 Biodiversity Policy, 2023, Waste Management Policy, 2023 and Water Conservation Policy, 2023 to institutionalize environmental protection measures in its quest for sustainable development of clean power. Six monthly compliance reports on environmental aspects of Projects/ Power Stations for the periods ending March, 2023 and September, 2023 were submitted to Ministry of Environment, Forest and Climate Change (MoEF&CC), Government of India and its concerned Integrated Regional Offices. These reports were also uploaded on the website of the Company i.e. www.nhpcindia.com. The Company has evaluated the effectiveness of the management plans implemented during the course of construction of a project through post construction EIA studies of Uri (UT of J&K), Rangit (Sikkim), Dhauliganga (Uttarakhand) and Teesta-V (Sikkim) Power Stations. Post construction EIA Studies of Loktak Power Station (Manipur) and Uri-II Power Station (UT of J&K) are currently in progress. NHPC has also conducted sustainability assessment of Teesta-V Power Station (Sikkim) through Sustainability Assessment Protocol of International Hydropower Association (IHA) for operational projects. As per the findings of the assessment, out of 20 parameters on which the Teesta-V Power Station was assessed, it meets basic good practices on all parameters, meets proven best practice on 6 parameters and exceeds basic Good Practice on 9 parameters.

(ii)    Sustainability Initiatives:

NHPC has embarked on the preparation of its Sustainability Report w.e.f. financial year 2021-22 on GRI Standards. The Sustainability Report for financial year 2022-23 is available on website of the Company at https://www.nhpcindia.com/assests/ pzi public/gallery/17183553740.pdf. Also, NHPC had actively participated in S&P Global Corporate Sustainability Assessment Survey (CSA)-2023. Based on CSA analysis on Dow Jones Sustainability World Index, NHPC has achieved S&P Global ESG Score of 48 in March, 2024. Earlier, S&P Global had provided ESG Score of 17 to NHPC (November, 2022) based on publicly available information. Enhanced ESG scores of NHPC signify a more robust commitment to environmental stewardship, social responsibility and effective governance practices.

(iii)    Renewable Energy Developments:

Your Company is diversifying its activities to explore renewable energy projects. The details of renewable energy projects are given elsewhere in the Report.

(iv)    Foreign Exchange Conservation:

In accordance with "Make in India" Policy of Government of India, your Company is making efforts to encourage the participation of local firms in the bidding process. The participation of local firms as well as Micro & Small Enterprises helps in conservation of foreign exchange and growth of Indian industry at large.

(v)    Technological Absorption:

Information regarding technology absorption has been included elsewhere in this Report.

35.16    CORPORATE SOCIAL RESPONSIBILITY Information regarding Corporate Social Responsibility has been included elsewhere in this Report.

35.17    CAUTIONARY STATEMENT

The views and forward-looking statements contained in this Report are based on reasonable assumptions and subject to certain risks and uncertainties that could cause actual results to differ from those reflected in such statements.

Readers are requested to review and confirm with other information in this Report and in the Company's periodic Reports. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events or otherwise. The financial figures shown are based on the audited results of the Company.

36. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The particulars as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, in respect of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo are as under:

A. CONSERVATION OF ENERGY

(i) Steps taken or impact on conservation of energy

•    Energy ConservationTask Force has been constituted at Corporate office for creating awareness amongst users, monitor effectiveness of measures adopted for energy conservation and provide vertical and horizontal feedback to the management/ users. Energy Conservation Task force suggests time to time measures for the Energy Saving at Corporate Office.

•    To assess the efficiency of electrical equipments like generators, transformers etc. and to recommend the energy saving measures, energy audits are carried out for our power stations and recommendations are implemented on a regular basis.

•    Neer Shakti Sadan has been rated Four star building with GRIHA certification. Jyoti Sadan Building of NHPC Corporate Office is accredited with a prestigious Three star rating by the Bureau of Energy Efficiency (BEE), Ministry of Power for its remarkable sustainable building practices.

•    In Neer Shakti Sadan, Corporate Office lighting/ temperature is controlled through Building Management System, occupancy sensor, timers. The Senior Office Room, Corridor, general common toilets, restrooms are equipped with state-of-the-art motion detectors/sensors, a testament to the commitment to embracing cutting-edge technology in its facilities.

•    The Energy Audit of the NHPC Office Complex has also been conducted through External Agency certified from BEE. The recommendations of the Energy Audit are being implemented.

•    Electric Vehicle (EV) charging points has been established in the Neer Shakti Sadan Office Complex, promoting use of EV.

•    Power efficient Equipments/ systems that have star ratings are procured, to reduce energy consumption. Five star rated air-conditioner/ refrigerators are procured and installed. Water pump with star rating are procured and installed. The old and non-star rated, uneconomical repairable Air Conditioners have been replaced by high Star rated Energy Efficient Air Conditioners in phased manner.

•    The maximum available star rating Energy Efficient appliances are purchased for replacing old appliances. 400 five star rated BLDC Ceiling Fans has been procured and installed replacing Non star rated fans.

•    Monthly maintenance of 900TR and 1200TR HVAC (Heating Ventilating Air Conditioning) system/ equipment is being taken up to guarantee efficient operation throughout the year. HVAC filters are replaced or cleaned every month during peak cooling or heating season for maintaining efficiency and air quality. The operation of the HVAC system for building space cooling is being regulated by BEE recommended optimum temperature setting i.e. 24-25 degree Celsius.

•    Energy Conservation measure, Movement detectors have been installed in the toilets of Jyoti Sadan.

•    A state-of-the-art Grid Solar Power Station, boasting an impressive capacity of 230 kWp, has been successfully installed on the rooftop of the Neer Shakti Sadan, Jyoti Sadan and Canteen Building of Corporate Office.

•    1000 kWp Grid connected Solar PV Power Plant is also installed at residential colony of NHPC Limited, Faridabad. This rooftop solar panels plant also partially supplements the Colony's electricity requirement.

•    NHPC ensures maintenance of components for optimal productivity and availability of these Solar PV Plants.

•    NHPC effectively promotes energy-saving best practices by designing posters aligned with the Mission LiFE (Lifestyle for Environment) initiative.

•    Energy saving slogans are also displayed on NHPC Intranet and on personnel Computers.

•    For illumination LED streetlight / solar PV standalone street light are installed at NHPC office Complex / Residential Complex. Energy Efficiency in Street Lighting is being achieved by replacing old inefficient street lights with energy efficient LED street lights. Astronomical timer switch for Street light are being used. Solar Street light are also installed. As an Energy Conservation measures, different types of conventional light fittings CFL, FTL, conventional Outdoor as well as indoor lights are being replaced with high efficacy / lumen level and less wattage consumption LED Light fittings.

•    The roof top of the office buildings have been treated for reducing the heat /temperature impact on the floor.

•    Energy efficient lights like LED bulbs and tubes are installed in the building.

•    Painting Competitions were also organised in surrounding area schools for creating awareness of Energy Conservation and energy efficiency.

(ii) Steps taken by the Company for utilizing alternate sources of energy

Grid Solar Power Plant of 80 kWp and 150 kWp capacity has been installed at the roof top of the buildings of Corporate Office, Sector-33, Faridabad. 1000 kWp grid connected roof top Solar PV Plant has been installed at Residential Complex, Sector-41, Faridabad. The maintenance of the plant is being taken up on regular basis for obtaining maximum output. Further, Break even point for the 80 kWp and 150 kWp Solar PV Power Plant has been achieved.

Further, roof-top solar power projects of cumulative 3699 kWp capacity have been installed at various locations of the Company and additional installations being taken up on the premises of the Company as per the available roof area.

Your Company is also exploring use of green hydrogen as alternate source of energy and is implementing pilot projects in this regard. A 25 KWe

green hydrogen pilot project is being taken up for use as storage energy for Nimmo Bazgo Project at Leh. Setting up of Pilot Green Hydrogen Mobility Projects at Leh and Chamba along with procurement of Hydrogen Fuel Cell Electric Buses are also being taken up.

(iii) Capital investment on energy conservation equipments

Capital investment on energy conservation equipments has been around '40.07 lakh.

B. TECHNOLOGY ABSORPTION

(i) Efforts made towards technology absorption

a) R&D projects completed in financial year 2023-24:

•    Study the necessity & effectiveness of concrete cut off wall for Subansiri Dam as a seepage mitigation measure in soft rock foundation beneath concrete gravity Dam as a credible alternative to grout curtain: This is an in-house R&D Project. The concrete cut-off wall will help in limiting/ minimizing seepage and prevention of migration of particles. This will help in reducing the uplift force acting on the dam as the foundation galleries are provided just downstream of cutoff wall for release of uplift pressure by drilling pressure relief holes.

•    Monitoring hydro abrasive erosion, and suspended sediment for optimal operation of Hydro Power Plant: This project has been taken up at Bairasiul Power Station with IIT Roorkee. From this project limiting value of suspended sediment concentration has been determined for optimum operation of power station as excessive silt load will lead to reduction in life of underwater parts. It will help in planning and management of Hydro Power Plants severely affected by HydroAbrasive Erosion.

•    Updation of guidelines for Repair & Rehabilitation of civil structures of Hydroelectric Projects and inclusion of new material/ methodology based on performance evaluation: This is an in-house R&D Project. From this project, new repair guidelines has been prepared to reduce the frequency of repair cycles based on the experiences gained on repair/ remedial measures in various power stations, study of literatures available on the subject, internationally adopted repair methodology/

systems and relevant BIS codes, ASTM, ACI & European Codes, etc.

•    Targeted Solutions through emerging Geophysical Technology in Seismic Tomography for optimization of Geological uncertainties in Hydro Power Projects: In

Hydroelectric Projects, investigation plays a very vital role and is of great importance for construction of project in optimum time and cost effective manner. The project concluded that Seismic Tomography can be very effectively utilized for providing targeted Solutions for Optimization of Geological Uncertainties in Hydropower Projects. Its application is providing continuous coverage of subsurface, thereby reducing the risk of overlooking the critical reaches. Hence, this may be utilized in association with direct investigations such as drilling/drifting.

•    Analysis of strong motion accelerograph data recorded at NHPC Power Station for development of site specific peak ground acceleration attenuation relationship for Himalayan region: This project has been taken up in consultation with Department of Earthquake Engineering, IIT Roorkee for development ofHimalayan specific attenuation relationships. On the basis of comparative analysis of the recorded data and empirically obtained Peak Ground Acceleration values it can be concluded that the recorded data was much lesser than the calculated values.

A comprehensive Earthquake Catalog has been compiled from 1988 earthquake events from 27 global networks along with the NHPC network and by utilizing this Database a General Ground Motion Prediction Equation (GMPE) was developed for site specific Himalayan Region. The resulting GMPE was utilized for validating the Design spectrum for Kwar HEP, J&K. The results showed good conformity with the spectrum generated by Standard Practice.

b)    On Going R&D Projects:

i)    Modelling to benchmark the operational availability of Hydro Generating Units of Power Stations. The benefits of the R&D project include developing process standardization, analyzing the availability of critical spares, tripping analysis, and optimizing maintenance periods.

ii)    Optimization of Earthmat Design by Resistivity Imaging Technique. Its benefit is

to minimize costs by optimizing the design of earthmat fixing during construction using 3-D RI software Res3DinV for 3-D data processing and interpretation, utilizing FEM and FDM techniques.

iii) Development of a suitable risk-free cleaning arrangement of trash at Dam Intake The

main benefits of this project are to identify the factors causing trash at the dam intake and establish potential solutions.

iv)    3 Green Hydrogen Pilot Projects Located at Chamba, (H.P), Kargil, UT of Ladakh & NBPS Guest House, Leh

•    The benefits of the project include the absorption of new technology, which appears as a future source of energy in the power sector.

•    Technology has the potential to help in integration with renewable energy and the grid.

•    It helps in achieving Net Zero carbon emission goal set by GOI.

•    Based on the performance of these pilot projects and their commercial viability, large-scale green hydrogen energy projects will be undertaken in the future in the fields of transportation, the power industry, and micro grids.

•    Exploring options for Green energy and environmental protection.

v)    Glacial lake Outburst Flood (GLOF) of Hydroelectric Projects of NHPC

•    Technical collaboration and capacity building on monitoring of glacial lakes using satellite data and development of framework and establishment of Early Warning System Methodology.

•    Monitoring of glacial lakes in 26 (in 9 basins) hydropower stations by NHPC with hand holding of National Remote Sensing Centre (NRSC).

•    Ranking and prioritization of glacial lakes in 26 (in 9 basins) NHPC hydropower stations jointly by NHPC and NRSC.

•    Formulation of methodology & develop an early warning systems for threshold risk for an individual lake.

•    NHPC has more than 26 Hydropower Projects in Himalayan Region which may be subjected to GLOF so it has become important to continuous monitor and manage GLOF eventually to minimize any risk or disasters.

vi)    Modification of Trench Wear at Bhaledh including Design, Manufacturing, Supply and Erection of modified trash rack along with necessary civil works

The main benefits of this project is to increase the Water carrying capacity of Bhaledh Feeder Tunnel and decrease the damages of trench weir from rolling Boulders. Also modify the trench weir and trash rack so as to allow more water to pass through and avoid chocking with stones, boulders, silt and other debris and increase the discharge during lean season. Success of the R&D Project shall provide the solution for similar nature of problems at others geographical locations of NHPC.

vii)    Conduct a study for generation capacity enhancement to Tanakpur Power Station The main benefits of this study is to search the option by Redesigning of Runner blade profile to increase the highest turbine output and increase overall Generation & PAF at the existing Net Head on other existing parameters.

viii)    Arc Sensing technology for Root Cause Analysis in Reactors y-phase in transformer (increase Acetelene C₂H₂)

The Benefits of this arc sensing technology analysis are as follows:

•    Arc Sensing Technology is an emerging technology which need to be tested in Hydro Power Sector for early detection of any failure in equipment like Transformers or Reactors.

•    Early detection of fault and its preventative maintenance thereby saving the life of equipment.

•    Identification of the location of faults where electrical arcing is taking place (along with its frequency of occurrence), resulting in the production of acetylene gas in reactors and implementation of corrective measures to stop the production of acetylene.

•    Reducing downtime, Minimising maintenance costs, reducing/eliminating unplanned failures, and minimizing asset damage.

ix)    Development of inflow forecasting system for Chamera-III Power Station

Inflow forecasting is important for Dam safety, better planning for operation of machine, generation of schedule on day to day basis. The information shall be useful for downstream projects. The hydro-metrological data in catchment and the climate changes in the catchment will be better known. Purchase of equipments for this work is under process.

x)    Projects taken up in collaboration with IIT Kanpur:

Development of Design Guidelines/Charts for quick estimation of Caverns behaviour & support layout including openings based on 3D FEM Analysis (IIT Kanpur): The objectives of this Project is safe and economic design of underground caverns of various upcoming projects having underground caverns. The aim is to develop easy-to-use design charts/ guidelines based on advanced 3D numerical analysis for direct estimation of optimal cavern dimensional parameters and external support requirements, without undergoing detailed computational analysis.

xi)    Project taken up in collaboration with NIT Durgapur:

Development of Partial Discharge Monitoring Solutions for High Voltage Electrical Apparatus can help NHPC to move towards a "Predictive Maintenance Practice" from its current Preventive Maintenance Practice. This will improve the system reliability and minimize the breakdown period.

c)    Collaborative research related to growth of power sector

As per Ministry of Power recommendations for support and growth of power sector, Studies/ research related to Policy initiative, reforms, restructuring will provide crucial inputs for Policy formulation. For this a corpus for funding these studies has been setup jointly with MoP and CPSUs like NHPC, NTPC, PGCIL, PFC & REC. NHPC has been undertaking collaborative research for overall growth of power sector.

d)    MoA signed with IIT Indore

NHPC has signed MOA with IIT Indore on September 05, 2023 under which IIT Indore shall provide education, training, research and development and advisory session services to NHPC in the broad areas of its various expertise, hydro, hydrology, water resources, geology, earthquake, renewable energy and environmental management.

e)    MoA signed with IIT Patna

NHPC has signed MOA with IIT Patna on December 15, 2023 under which IIT Patna shall provide training, research and development and advisory session services to NHPC in the broad area of its various expertise, hydro, hydrology, water resources, geology, earthquake, renewable energy and environmental management.

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(ii)    Benefits derived like product improvement, cost reduction, product development or import substitution:

a)    Monitoring hydro abrasive erosion, and suspended sediment for optimal operation of Hydro Power Plant will help in planning and management of Hydro Power Plants affected by Hydro-Abrasive Erosion.

b)    Updation of guidelines for Repair & Rehabilitation of civil structures of Hydroelectric Projects and inclusion of new material/ methodology based on performance evaluation indicated that it will help in reducing the frequency of repair cycles of civil structures.

c)    Targeted Solutions through emerging Geophysical Technology in Seismic Tomography for optimization of Geological uncertainties in Hydro Power Projects indicated that Seismic Tomography can be utilized effectively for finding the precise details of subsurface rock mass which can minimize uncertainties during construction stage for its timely completion.

d)    Assessment on socio-economics of Sewa-II HE Project, J&K using Remote Sensing and GIS Technology indicated that CAT plan undertaken in the project has been beneficial.

e)    Analysis of strong motion accelerograph data recorded at NHPC Power Station for development of site specific peak ground acceleration attenuation relationship for Himalayan region indicated that it can be utilized for optimizing the seismic design of civil structures.

Further, other efforts made towards technology absorption are in initial stages, benefits are expected to be derived after completion of studies and actual implementation.

(iii)    Particulars of technology imported during the current year and last three years

NIL

(iv)    Expenditure incurred on Research and Development:-

Expenditure incurred on Research and Development during the financial year 2023-24 was '11.55 crore including '7.80 crore towards establishment expenses.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

C in crore)

S. No.	Particulars	For the year ended 31.03.2024	For the year ended 31.03.2023
Expenditure in Foreign Currency:
i)	Interest	16.29	18.78
ii)	Other Misc. Matters	16.35	24.85

There were no foreign exchange earnings during the financial year 2023-24.

37. AUDIT AND AUDITORS' REPORT

37.1 SECRETARIAL AUDIT

M/s Kumar Naresh Sinha & Associates, Company Secretaries, Noida has been appointed by the Board to conduct Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Auditor, in its Report, has given certain observation. The Secretarial Auditor's Report is given as Annexure-II. The management reply against observation raised by Secretarial Auditor is as under:

Qualification / Observation

Management Reply

Regulation 17(1) (b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and para 3.1.4 of DPE Guidelines on Corporate Governance, the number of Independent Directors on the Board of Directors was less than fifty percent during the period from 18.09.2023 to 31.12.2023.

As per Article 34 of the Articles of Association of the Company read with Ministry of Corporate Affairs notification dated 05th June 2015, the Directors including Independent Directors (IDs) on the Board of the Company are appointed by the President of India through Administrative Ministry i.e. Ministry of Power (MoP). The matter regarding appointment of requisite number of Independent Directors was being regularly pursued with the Administrative Ministry i.e. Ministry of Power (MoP), Govt. of India. As on March 31, 2024, the Composition of Board was in Compliance with the provisions of the SEBI LODR, 2015 and DPE Guidelines.

In compliance to Regulation 24A of SEBI LODR, Secretarial Audit Report of NHDC Limited and Chenab Valley Power Projects Limited, which are material unlisted subsidiaries of NHPC, is also given elsewhere in the Annual Report.

37.2    STATUTORY AUDIT

In line with provisions of the Companies Act, 2013, the Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). C&AG had appointed following Joint Statutory Auditors for the financial year 2023-24:

1.    M/s Chaturvedi & Co., Kolkata

2.    M/s P. C. Bindal & Co, Srinagar

3.    M/s S N Dhawan & Co., LLP, New Delhi

The Joint Statutory Auditors have given un-modified opinion in their Report on the standalone and consolidated financial statements of the Company for the financial year 2023-24. Further, no instance of fraud by any officer or employee of the Company has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

37.3    REVIEW OF ACCOUNTS BY C&AG

The C&AG has given its comments on the standalone and consolidated financial statements of your Company for the year ended March 31, 2024 after conducting supplementary audit under Section 143(6)(a) of the Companies Act, 2013. There are no Comments of C&AG for both the standalone and consolidated financial statements of your Company for the year ended March 31, 2024. The comments of C&AG are appearing elsewhere in the Annual Report.

37.4    COST AUDIT

The Company maintains necessary cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. As recommended by the Audit Committee, your Board has appointed the following firms of Cost Accountants to conduct audit of cost accounting records of power stations for the financial year 202324 under Section 148 of the Companies Act, 2013:

Name of the Firm	Power Stations
M/s. Chandra Wadhwa & Co. (Lead Cost Auditor)	Dulhasti and Salal
M/s. Balwinder &	Sewa-II, Parbati-III and
Associates, Mohali	Chamera-I
M/s. S. C. Mohanty &	Uri-I, Uri-II and
Associates, Delhi	Kishanganga

M/s. Sanjay Gupta & Associates, Delhi	Bairasiul, Chamera-II and Chamera-III
M/s. K B Saxena and Associates, Lucknow	Tanakpur, Dhauliganga and 50 MW Solar Power Project, Tamil Nadu
M/s. K G Goyal & Associates, Jaipur	Chutak, Nimmo Bazgo and Wind Power Project, Jaisalmer
M/s. Niran & Co. Kolkata (WB)	Rangit, Teesta-V and Loktak
M/s. DGM & Associates, Kolkata (WB)	TLDP-IV, TLDP-III

The consolidated Cost Audit Report in XBRL format for the year ended March 31, 2023 was filed with the Ministry of Corporate Affairs on September 5,

2023    which was within the prescribed time period. The Cost Audit Report for the year ended March 31,

2024    shall be endeavoured to be filed within the prescribed time period.

38.    ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013, the Annual Return of the Company as on March 31, 2024 is available on the Company's website at https://www.nhpcindia.com/ assests/pzi public/gallery/17223220130.pdf

39.    PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES

Section 186 of the Companies Act, 2013 (except sub-section 1) regarding loans made, guarantees given or securities provided is not applicable to NHPC being engaged in the business of providing infrastructure facilities.

40.    PARTICULARS OF EMPLOYEES

In accordance to notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors' Report. The Policy on remuneration, pay structure, allowances and other benefits of employees of the Company are governed by relevant DPE Guidelines. Pay structure and allowances of the Company are also available on the website at https://www.nhpcindia. com/assests/pzi_public/gallery/1676010521.pdf

41.    BOARD AND COMMITTEES OF THE BOARD

The Board of Directors met thirteen (13) times during the financial year 2023-24. The details of meetings of Board of Directors and attendance of Directors

therein are given in the Report on Corporate Governance, which forms part of the Annual Report. The details of various Committees of the Board along with their meetings and composition are given in Corporate Governance Report.

42.    PERFORMANCE EVALUATION OF BOARD, BOARD LEVEL COMMITTEES AND DIRECTORS

NHPC has in place a "Policy on performance evaluation of Board, Board level Committees and Directors". As per the Policy, following evaluation process has been followed by the Company:

1.    Every Director of the Company rate performance of the Board, Board level Committees and the individual Directors on pre-determined criteria.

2.    The Nomination & Remuneration Committee reviews the performance of Independent Directors & the Board of Directors and determines whether to extend the term of the Independent Director.

3.    Independent Directors review the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

4.    Board evaluates the performance of Independent Directors, excluding the Director being evaluated. The performance evaluation of all the Board Members, Board as a whole and mandatory Committees of the Board for financial year 2023-24 was carried out during financial year 2024-25.

43.    DIRECTORS' RESPONSIBILITY STATEMENT

In line with requirement of Section 134(3)(c) read with Section 134(5) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, it is confirmed that:

(a)    in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b)    the Directors had selected such accounting policies and applied them consistently 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 at the end of the financial year and of the profit and loss of the Company for that period;

(c)    the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d)    the Directors had prepared the annual accounts on a going concern basis;

(e)    the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f)    the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

44.    SECRETARIAL STANDARDS

Your Company has followed in true spirit the applicable Secretarial Standards relating to 'Meetings of the Board of Directors' and 'General Meetings' issued by the Institute of Company Secretaries of India (ICSI).

45.    GENERAL

No disclosure or reporting in respect of the following items is required, as there was no transaction on these items during the year under Report:

1.    Issue of equity shares with differential rights as to dividend, voting or otherwise.

2.    Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3.    Significant and material orders passed by regulators or courts or tribunals, which impact the going concern status or Company's operations in future.

4.    Occurrence of any material changes and commitments after the close of the financial year till the date of this Report, which affect the financial position of the Company.

5.    Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof.

6.    Details related to public deposits as required under Chapter V of the Companies Act, 2013.

7.    Application made or proceeding pending under Insolvency & Bankruptcy Code, 2016.

46.    BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The following changes in composition of Board of Directors and Key Managerial Personnel took place during the financial year 2023-24 and afterwards till signing of this Report:

1.    Shri Yamuna Kumar Chaubey (DIN: 08492346) ceased to be Director (Technical) of the Company w.e.f. May 31, 2023 end of day on attaining the age of superannuation.

2.    Shri Uttam Lal (DIN: 10194925) was appointed as Director (Personnel) of the Company w.e.f. June 13, 2023 pursuant to orders of Ministry of Power, Govt. of India.

3.    Shri Raj Kumar Chaudhary (DIN: 10198931) was appointed as Director (Technical) of the Company w.e.f. September 18, 2023 pursuant to orders of Ministry of Power, Govt. of India. He also holds additional charge of Director (Projects) since January 01, 2024.

4.    Shri Biswajit Basu (DIN: 09003080) ceased to be Director (Projects) of the Company w.e.f. January 01, 2024 on attaining the age of superannuation. He also held the additional charge of Director (Technical), NHPC from June 01, 2023 to September 17, 2023.

5.    Shri Rajeev Kumar Vishnoi (DIN: 08534217) ceased to be Chairman & Managing Director of the Company w.e.f. March 01, 2024 pursuant to orders of Ministry of Power, Govt. of India.

6.    Shri Rajendra Prasad Goyal (DIN: 08645380), Director (Finance) was also given additional charge of Chairman & Managing Director w.e.f. March 01,2024 pursuant to orders of Ministry of Power, Govt. of India. He also held the additional charge of Director (Personnel) from March 03, 2023 to June 12, 2023.

Details of remuneration and sitting fee paid to Directors during the financial year 2023-24 are given in the Report on Corporate Governance.

All Independent Directors of the Company as on March 31, 2024 have declared that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI LODR.They have further declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Independent Directors have also declared that they have complied with Rule 6(1) & 6(2) of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 regarding inclusion of their name in the data bank of Independent Directors maintained by Indian Institute of Corporate Affairs (IICA).

As Shri Raj Kumar Chaudhary, Director (Technical) was appointed by Board of Directors as Additional Director, his appointment is proposed in the ensuing Annual General Meeting (AGM). Brief profile of Shri Raj Kumar Chaudhary is given in the Notice of AGM. Shri Rajendra Prasad Goyal, Director (Finance) is liable to retire by rotation and being eligible, has proposed himself to be re-appointed at the forthcoming AGM. Brief profile of Shri Rajendra Prasad Goyal is given in the Notice of AGM.

47. RAISING OF INCREMENTAL BORROWINGS BY WAY OF ISSUANCE OF DEBT SECURITIES

Regulation 50B of SEBI (Issue and Listing of NonConvertible Securities) Regulations, 2021 (NCS Regulations) read with Chapter XII of the NCS Master Circular on 'Fund raising by issuance of debt securities by large corporates' (LC Chapter), inter-alia, mandates Large Corporates (LCs) to raise a minimum 25% of their incremental borrowings in the financial year through issuance of debt securities which were to be met over a contiguous block of three years from the financial year 2022 onwards.

Further, SEBI vide circular dated October 19, 2023 has, inter-alia, provided that LCs shall endeavor to comply with the requirement of raising 25% of their incremental borrowings done during financial year 2022, financial year 2023 and financial year 2024 respectively by way of issuance of debt securities till March 31, 2024. Failing which, such LCs shall provide a one-time explanation in their Annual Report for financial year 2024. The total incremental borrowings of NHPC during financial year 2021-22, 2022-23 & 2023-24 are of '10,656.60 crore. Being a Large Corporate, NHPC had to borrow through issuance of debt securities at least '2664.16 crore (25% of '10656.60 crore) by March 31, 2024. However, the actual borrowings done through debt securities by the Company during the period are '996 crore. Accordingly, the shortfall in mandatory borrowings through debt securities works out to '1668.16 crore.

The shortfall happened as NHPC is mainly in the business of developing Hydroelectric Power Projects and Power tariff is regulated by Central Electricity Regulatory Commission (CERC). In Hydro Power Sector, the debt equity ratio allowed by CERC is 70:30.

Therefore, the cost of debt has a major bearing on tariff rates of a Hydroelectric Power Project. Any increase in the interest cost will result into higher tariff and the same shall be passed through to the consumer at large as we are operating under cost plus tariff regime. Since, interest cost constitutes important element of the total project cost, it is our continuous endeavor to ensure low cost debt to establish commercial viability of the Hydro Power Project. In addition, we also take up refinancing of high cost debt with lower cost debt wherever opportunity arises. Further, it is pertinent to mention here that due to long gestation period of hydro projects, NHPC raises loan with a horizon of 10-15 years and in the present market scenario, debt instruments with floating rate of interest are

more cost effective in comparison to fixed rate debt instruments. Since, corporate bonds are fixed interest rate debt instruments, we had preferred term loans from banks with variable interest rate. However, NHPC is committed for the compliance with the ibid provision of SEBI regulations for mandatory borrowings through issuance of debt securities from financial year 2024-25 onwards.

48. ACKNOWLEDGEMENT

The Board of Directors wish to place on record their sincere appreciation to all the employees for their dedication and commitment. Their hard work and unstinted efforts enabled the Company to sustain its excellent performance and consolidate its sectoral leadership. The commitment displayed by the employees at all levels is exemplary and praise worthy. NHPC is proud of continuous untiring efforts of its employees especially posted at power stations & projects of the Company.

The Board of Directors would like to express their gratitude for the guidance and co-operation received from Govt. of India, particularly the Ministry of Power, Ministry of New & Renewable Energy, Department of Public Enterprises, Office of the Comptroller and Auditor General of India, Central

Electricity Authority, Central Electricity Regulatory Commission, Central Water Commission and other concerned Govt. departments/agencies at the Central and State level.

The Board is also thankful to all its stakeholders, valued customers, contractors, vendors and consultants for their continued support and confidence reposed in the Company.

The Board also acknowledges invaluable guidance and inputs received from Statutory Auditors, Secretarial Auditor and Cost Auditor of the Company. The Board also conveys its sincere thanks to the national and international financial institutions, multilateral financial institutions, domestic and international credit rating agencies for their valuable support and continued trust in the Company.

For and on behalf of the Board of Directors

Sd/-

(Rajendra Prasad Goyal) Place: New Delhi Chairman & Managing Director Date: July 11, 2024    DIN: 08645380

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Mar 31, 2019

DIRECTORS'' REPORT

Dear Members,

On behalf of the Board of Directors, it gives me immense pleasure to present the 43rd Annual Report on the business and operations of the Company along with Audited Financial Statements, Auditors'' Report and review of financial statements by the Comptroller and Auditor General of India (CAG). During the financial year 2018-19, your Company continued to achieve new heights.

Major highlights of your Company since last report are:

• Power Stations have achieved highest ever annual generation of 24,193 Million Units (MUs) surpassing the previous highest generation of 23,404 MUs during financial year 201 5-1 6.

• Total revenue and revenue from operations (net) were Rs 9,086 crore and Rs 8,161 crore respectively. Total comprehensive income, Net Profit After Tax (PAT) and other comprehensive income were Rs 2,618 crore, Rs 2,630 crore and Rs (12) crore respectively.

• Cash contribution of Rs 1,894 crore was made to Government of India''s exchequer through dividend, dividend tax and income tax in the financial year 2018-19.

• Company had bought back 21,42,85,714 equity shares at a price of Rs 28 per share for an aggregate amount of Rs 599.99 crore.

• Market capitalization of the Company as on March 31, 2019 stood at Rs 24,861.46 crore.

• Resolution Plan submitted by NHPC Limited for Lanco Teesta Hydro Power Limited (LTHPL) has been approved by Hon''ble National Company Law Tribunal (NCLT), Hyderabad Bench on July 26, 2019 subject to certain reliefs as per The Insolvency and Bankruptcy Code, 201 6 (IBC). LTHPL is the developer of Teesta VI HE Project (500 MW) in Sikkim. Cabinet Committee on Economics Affairs (CCEA) has already accorded its investment sanction for the acquisition of LTHPL and execution of balance works of Teesta Stage-VI HE Project.

• The Principal Bench of Hon''ble National Green Tribunal (NGT) vide order dated July 31, 2019 has upheld the constitution of Expert Committee by Ministry of Environment, Forest & Climate Change (MoEF&CC) for Subansiri Lower H.E. Project (2,000 MW) and observed that the project be advanced in public interest.

• CCEA has accorded approval for incurring expenditure on pre-investment activities and various clearances for Dibang Multipurpose Project (2,880 MW) in Arunachal Pradesh for an amount of Rs 1,600 crore.

• NHPC has signed a Memorandum of Understanding (MoU) on February 3, 2019 with Jammu and Kashmir State Power Development Corporation Limited (JKSPDC) and Government of Jammu & Kashmir (GoJK) for the implementation of Ratle HE Project (850 MW) in the State of Jammu & Kashmir through a Joint Venture Company (JVC). The equity participation of NHPC and JKSPDC shall initially be in the ratio of 51:49.

NHPC has signed a MoU with NLC India Limited (NLCIL) on February 18, 2019 for the trading of power. As per MoU, NHPC and NLCIL will offer surplus power available in northern and north-eastern region to the bulk consumers in the southern region of the Country at an affordable price.

• NHPC has been appointed as ''Aggregator'' under Pilot Scheme-ll by Ministry of Power for procurement of aggregated power of 2500 MW for three years through the nodal agency ''PFC Consultancy Limited''. NHPC has signed a MoU with NT Roorkee for establishing NHPC Chair Professorship and Memorandum of Agreement (MoA) for R&D collaboration. This shall facilitate co-operation in research & education in the field of hydropower.

• NHPC has signed a MoU on September 3, 2018 with BHEL for consultancy and co-operation in hydro-electric projects. As per the MoU, both NHPC and BHEL will co-operate in joint bidding for consultancy works and hydro-electric projects, wherein, NHPC shall be responsible for civil works and hydro-mechanical works and BHEL shall be responsible for electromechanical works.

• NHPC has signed a MoU with Indian Army in April, 2019 for undertaking construction of semi underground bunkers and fully underground caverns at different locations in India.

• CCEA has accorded investment sanction for construction of Kiru HE Project (624 MW) in Jammu & Kashmir by Chenab Valley Power Projects Private Limited (A Joint Venture Company).

1. FINANCIAL PERFORMANCE

The financial results for the year ended March 31, 2019 are summarized in Table 1. Table 1: Financial Highlights

PARTICULARS	Financial Year
	2017-18	2018-19
Revenue from operations	6,938.22	8,161.18
Profit before depreciation, interest, rate regulated income and tax	5,134.13	5,406.25
Depreciation	1,395.51	1,589.99
Profit after depreciation but before rate regulated income, interest and tax	3,738.62	3,816.26

(Rs in crore)

PARTICULARS	Financial Year
	2017-18	2018-19
Interest and finance charges	922.32	894.88
Profit after depreciation and interest but before rate regulated income and tax	2,816.30	2,921.38
Rate regulated income	62.33	823.40
Tax	109.60	1,114.23
Profit after depreciation, interest, rate regulated income and tax	2,769.03	2,630.55
Other Comprehensive Income (OCI)	5.88	(12.41)
Total Comprehensive Income (TCI)	2,774.91	2,618.14
Surplus from statement of profit and loss of earlier years (including Other Comprehensive Income)	2,670.59	3,590.61
Transfer from bond redemption reserve	148.17	244.98
Transfer from R&D Fund	43.90	-
Sub-total	5,637.57	6,453.73
Less: Appropriations
Transfer to bond redemption reserve	668.45	308.78
Dividend and Corporate Dividend Tax (CDT)	1,378.51	1,149.03
Closing Balance of Retained Earnings including Other Comprehensive Income	3,590.61	4,995.92

1.1 REVENUE

Your Company has generated revenue of Rs 9,085.96 crore during the financial year 2018-19. The revenue during the financial year 2017-18 was Rs 8,358.77 crore.

1.2 EXPENSES

The total expenditure during financial year 2018-19 was Rs 6,164.58 crore as against total expenditure of Rs 5,542.47 crore in the financial year 2017-18.

1.3 PROFIT

Your Company has earned a Profit After Tax (Total Comprehensive Income) of Rs 2,618.14 crore during the financial year 2018-19 as compared to Rs 2,774.91 crore in the financial year 2017-18.

1.4 NET WORTH

Your Company''s net worth as on March 31, 2019 was Rs 29,214.73 crore as against Rs 28,351.82 crore in the previous year.

2. SHARE CAPITAL

During the year, your Company has bought back its 21,42,85,714 fully paid up equity shares of Rs 10/- each from the shareholders at a price of Rs 28 per equity share pursuant to the decision taken by the Board of Directors. The total consideration for the buy-back of shares was Rs 599.99 crore. The paid-up capital of the Company as on March 31, 2019 was Rs 10,045.03 crore comprising 10,04,50,34,805 equity shares of Rs 10/- each.

In addition to above, the Government of India divested its holding in NHPC by transferring 2,93,54,564 and 4,98,89,622 shares to Bharat 22 Exchange Traded Fund (ETF) in June, 2018 and February, 2019 respectively. After transfer of shares to Bharat 22 ETF and Buy-back, the holding of Government of India in NHPC reduced to 73.33%.

3. DIVIDEND

Your Company has a consistent track record of dividend payment. The Board of Directors has recommended a final dividend of Re. 0.75 per equity share for the financial year 2018-19 amounting to Rs 753.38 crore. The above dividend is in addition to the interim dividend of Re. 0.71 per equity share amounting to Rs 713.20 crore (excluding dividend distribution tax) paid in March, 2019. Accordingly, total dividend for the financial year 2018-19 comes to Rs 1.46 per equity share. The total dividend pay-out (subject to approval of final dividend by the members of the Company) for the financial year 2018-19 will be Rs 1466.58 crore (excluding dividend distribution tax) representing 56% of the profits after tax, as against dividend pay-out of Rs 1,436.31 crore representing 52% of the profits after tax in the previous year.

In pursuant to requirement of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI LODR], your Company has formulated a Dividend Distribution Policy. The Dividend Distribution Policy is given as a separate annexure and is available on Company''s website i.e. www.nhpcindia.com.

4. OPERATIONAL PERFORMANCE

During the financial year 2018-19, your Company has achieved highest ever generation of 24,193 MUs (excluding deemed generation of 279 MUs from ChutakS Nimoo Bazgo Power Stations). Your Directors are pleased to inform that five power stations viz. Uri-ll, TLDP-III, TLDP-IV, Nimoo Bazgo and Chutak have achieved highest ever generation since their commissioning. The pondage power stations (except Run of the River & Restricted Plants) have achieved highest ever Plant Availability Factor (PAF) of 95%. Five pondage power stations viz. Chamera-l, Sewa-ll, Teesta-V, TLDP-III and TLDP-IV have achieved their highest ever PAF. The power station wise generation and PAF is given at Table 2.

Table 2: Power Station wise generation and PAF during financial year 2018-19

NAME OF POWER STATION	GENERATION TARGET* (MU)	ACTUAL GENERATION (MU)	PAF TARGET* (%)	ACTUAL PAF (%)
PONDAGE POWER STATIONS**
Loktak (105 MW)	650	603	94.00	97.87
Chamera - I (540 MW)	2365	2485	96.50	99.49
Rangit (60 MW)	340	349	96.40	95.67
Chamera -II (300 MW)	1470	1508	96.50	94.15
Dhauliganga (280 MW)	1120	1106	94.50	91.39
Dulhasti (390 MW)	2210	2273	93.50	89.58
Teesta-V (510 MW)	2710	2701	94.50	98.23
Sewa-ll (120 MW)	535	498	96.50	103.34
Chamera -III (231 MW)	1065	1043	94.00	90.96
TLDP-III (132 MW)	550	572	91.80	95.71
TLDP - IV (160 MW)	700	709	91.85	93.64
Sub Total (A)	13715	13847	94.75	95.00
RUN OF THE RIVER POWER STATIONS & RESTRICTED PLANTS
Bairasiul (180 MW)	500	367	90.00	75.09
Salal (690 MW)	3290	3412	77.00	84.05
Tanakpur ( 94.2 MW)	450	453	70.00	74.07
Uri (480 MW)	2630	3048	80.00	89.22
Chutak1 (44 MW)	40	49	49.00	51.45
Nimoo Bazgo1 (45 MW)	95	106	64.00	71.44
Uri - II (240 MW)	1400	1581	83.00	90.29
Parbati-lll (520 MW)	680	608	65.00	51.76
Kishanganga (330 MW)	1450	529	85.00	44.85
Parbati-ll2 (800 MW)	300	42	30.00	0.00
Sub Total (B)	10835	10195	73.35	73.12
TOTAL (A B) (HYDRO)	24550	24042	84.30	84.97
Wind Power Project, Jaisalmer (50 MW)	70	68	-	-
Solar Power Project, Tamil Nadu (50 MW)	80	83	-	-
TOTAL	24700	24193	84.30	84.97

*Targets shown are for "Very Good" rating as per MOU with Government of India.

** PAF MOU targets for financial year 2018-19 were fixed for Pondage Power Stations only (i.e. Run of River Power Stations and Restricted Plants were excluded).

Actual Achievement and MoU target of PAF for the financial year 2018-19 is as under:

Very Good MoU Target:	FY 2017-18 Actual	FY 2018-19 Actual	Improvement in PAF over previous year
0.20% improvement in PAF (excluding Run of River and Restricted Plants) over previous year	94.56%	95.00%	0.47%

Note:

1. Generation excludes deemed generation from Chutak Power Station (148.2 MUs) & Nimoo Bazgo Power Station (131 MUs).

2. Unit 1 & 2 started generation from September 14, 2018 & September 22, 2018 respectively. Generation includes infirm power.

During the financial year under report, your Company has earned net deviation charges of Rs 185.05 crore due to efficient operation and timely response to changes in the grid frequency.

In the present scenario, Renovation & Modernization (R&M) of power plants is considered to be a cost-effective option to complement new capacity addition, as these have a shorter gestation period with available statutory clearances and beneficiaries. NHPC is undertaking R&M for life extension of two power stations i.e. Bairasiul (180 MW) and Loktak (105 MW). Bairasiul Power Station (3 X 60 MW), completed its 35 years of commercial operation in financial year 2016-17. The work of R&M of the power stations started in October, 2018 with scheduled completion in financial year 2021-22. During the period, two units will be available for generation and one unit will be kept under R&M, so that beneficiaries continue to get power.

Loktak Power Station has completed its 35 years of commercial operation in financial year 2018-19. Final hearing of petition to approve R&M proposal has already been completed in February, 2019 before Central Electricity Regulatory Commission (CERC) and order is awaited.

5. COMMERCIAL PERFORMANCE

5.1 SALES AND REALIZATION

During the year under report, your Company''s sales from operations stood at Rs 8,161.18 crore. We are pleased to inform that your Company has been able to realize an amount of Rs 6,498.70 crore including liquidation of outstanding amount of previous years and surcharge of Rs 190.74 crore during the financial year 2018-19.

As on March 31, 2019, the total outstanding dues of Rs 1,719.02 crore (including surcharge of Rs 362.93 crore) were pending for more than 60 days. The outstanding amount mainly pertains to Power Development Department, Jammu & Kashmir (Rs 707.19 crore), Uttar Pradesh Power Corporation Limited (Rs 640.74 crore) and BSES Yamuna Power Limited (Rs 219.10 crore).

Your Company is making efforts to liquidate the outstanding dues by continuous follow-up.

5.2 SIGNING OF POWER PURCHASE AGREEMENTS (PPAs)

The PPAs in respect of following power stations had been renewed for 35 years from the date of their commercial operation with following states/distribution companies in financial year 2018-19:

S. No.	Name of State/ Distribution Companies	Name of Power Station
1	Himachal Pradesh	Dhauliganga, Chamera-ll, Salal, Tanakpur, Chamera-l, Uri-l, Chamera-lll, Bairasiul & Parbati-lll
2	Uttar Pradesh	Kishanganga
3	Rajasthan	Chamera-lll, Parbati-lll
4	Tata Power Delhi Distribution Limited (TPDDL) - Delhi	Bairasiul

Efforts are being made for the renewal of PPAs for balance useful life of power stations (i.e. 35 years) with DISCOMs in respect of expired PPAs. It is expected that most of the PPAs shall be renewed for 35 years in financial year 2019-20.

6. STATUS OF ONGOING PROJECTS

Your Company is presently engaged in the construction of two hydro-electric projects with aggregate installed capacity of 2,800 MW. The status of these on-going projects is as under:

6.1 PARBATI- II HYDRO-ELECTRIC PROJECT - 800 MW (4 X 200 MW), HIMACHAL PRADESH:

Parbati-ll Hydro-electric Project is a run of the river scheme on the River Parbati in Kullu District of Himachal Pradesh. Major civil works of dam, intake structure, de-silting chamber, pressure shafts, surge shaft, powerhouse and works at Jiwa Nallah have been completed. Water conductor system consists of 31.52 Km long Head Race Tunnel (HRT). Excavation of 28.47 Km and concrete lining of 26.58 Km length has been completed till March, 2019. Since the resumption of excavation of HRT by Tunnel Boring Machine (TBM) from October, 201 5, 1 671 m of tunnel has been excavated till March 31, 2019. E&M works of powerhouse has also been completed.

First and second units has been successfully synchronized with grid at part-load on September 14, 2018 and September 22, 2018 respectively by using discharge from Jiwa Nallah. Project is anticipated to be commissioned by December, 2021.

6.2 SUBANSIRI LOWER HYDRO-ELECTRIC PROJECT - 2,000 MW (8 X 250 MW), ASSAM/ARUNACHAL PRADESH:

Construction of the project was started in January, 2005 and 55% of the works have been completed. Main construction activities of the project at present have been stalled due to directions from Hon''ble National Green Tribunal (NGT), Kolkata. In accordance to judgement of Hon''ble NGT in October, 2017, a three member expert committee has been constituted by Ministry of Environment, Forest & Climate Change (MoEF&CC) to review all issues pertaining to the project. However, meetings of the committee were deferred by Principal Bench of Hon''ble NGT, New Delhi due to objection raised on its constitution. After final hearing in the matter, Principal Bench of Hon''ble NGT dismissed the applications of petitioners. Thereafter, Expert Committee held various meetings and conducted site visits and submitted their report to MoEF&CC in March, 2019. However, the petitioners have approached Hon''ble Supreme Court challenging the orders of Principal Bench of Hon''ble NGT. Hon''ble Supreme Court has set aside the orders of Hon''ble NGT and ordered that the applications be restored for filing before the Tribunal for determination afresh. The Principal Bench of Hon''ble NGT vide order dated July 31, 2019 has upheld the constitution of Expert Committee by MoEF&CC and observed that the project be advanced in public interest.

7. NEW PROJECTS

The status of projects including of subsidiaries/joint ventures under various stages of clearances/approval are given in Table 3 Table 3: Projects under clearance/approval stage:

S.No.	PROJECT	STATE	INSTALLED CAPACITY (MW)
A.	STANDALONE BASIS
(a)	HYDRO PROJECTS
i	Kotlibhel - IA*	Uttarakhand	195
ii	Teesta-IV	Sikkim	520
iii	Dibang**	Arunachal Pradesh	2,880
iv	Tawang-l		600
V	Tawang-ll		800
vi	Bursar	Jammu & Kashmir	800
vii	Goriganga-IIIA	Uttarakhand	150
	Sub-total (a)		5,945
(b)	WIND PROJECTS
i	Wind Project, Palakkad	Kerala	8
	Sub-total (b)		8
	Total A (a b)		5,953
B.	THROUGH SUBSIDIARIES/JOINT VENTURES
(a)	HYDRO PROJECTS
i	Loktak Downstream H.E. Project through Loktak Downstream Hydroelectric Corporation Limited (A Joint Venture with Govt. of Manipur)	Manipur	66
ii	Kwar (A Joint Venture with JKSPDC & PTC India Limited)	Jammu & Kashmir	540
iii	Chamkharchhu - I (A Joint Venture with Druk Green Power Corporation Limited, Bhutan - yet to be incorporated) in Bhutan	-	770
	Sub-total (a)		1,376
(b)	SOLAR PROJECTS
i	Project in Jalaun District of U.P. through Bundelkhand Saur Urja Limited (A Joint Venture with UPNEDA) ***	Uttar Pradesh	32
	Sub-total (b)		32
	Total B (a b)		1,408
	Grand Total (A B)		7,361

*Approval of the Project Investment Board (PIB) for the project is subject to clearance by the Hon''ble Supreme Court. Other construction

activities of the project are also dependent upon the decision of Hon''ble Court.

**CCEA has accorded approved for incurring expenditure on pre-investment activities and various clearances for Dibang Multipurpose

Project in Arunachal Pradesh for an amount of Rs 1,600 crore.

***MOU has been signed between NHPC and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) for setting up of

50 MW solar power project in UP. The land for the project is presently available for 32 MW only.

Your Directors are please to inform that Resolution Plan submitted by NHPC Limited for Lanco Teesta Hydro Power Limited (LTHPL) has been approved by Hon''ble NCLT, Hyderabad Bench on July 26, 2019 subject to certain reliefs as per IBC. LTHPL is the developer of Teesta-VI HE Project (500 MW) in Sikkim. CCEA has already accorded its investment sanction for the acquisition of LTHPL and execution of balance works of Teesta-VI HE Project.

In addition to above, a Memorandum of Understanding (MoU) has been signed for implementation of Ratle H.E. Project (850 MW) through a Joint Venture Company to be incorporated initially with equity shareholding of 51% by NHPC and 49% by Jammu & Kashmir State Power Development Corporation Limited (JKSPDC). The equity of NHPC shall be purchased by JKSPDC from the end of 5th year after the date of commissioning over 1 5 years through equal installments.

8. DIVERSIFICATION

Your Company is making efforts to diversify its activities by taking projects of different sources of renewable energy viz. wind, solar etc. The activities of the Company for establishment of such projects are as under:

8.1 SOLAR POWER PROJECTS

Your Company has initiated the process for the development of 10 MW floating solar power project in Kallada, Kerala. The bids for the project are under evaluation. Signing of PPA is being expedited before issue of letter of award. Various activities before the implementation of the project are under process.

NHPC has also received in-principle approval for setting-up of one solar park of 100 MW capacity in Odisha from Ministry of New and Renewable Energy, Government of India. In the first phase, 40 MW solar project shall be developed in Ganjam District. Transfer of land, signing of PPA and grid connectivity approval is in process. Bids for EPC contract have already been invited. Development of balance capacity is also being explored.

8.2 WIND POWER PROJECTS

NHPC has initiated the process for the development of 72 MW (±10%) capacity Wind Power Projects in the Palakkad District of Kerala to tap the high wind potential available in the State. The DPR of the project has already been prepared. In the first instance, 8 MW capacity Wind Power Project shall be implemented as per available power evacuation infrastructure. Land allotment, signing of PPA and grid connectivity approval is in process.

8.3 POWER TRADING LICENSE

NHPC has entered into new avenues in the Power Sector. During the year, NHPC has obtained Category-l license from CERC for interstate trading of electricity in whole of India. NHPC is registered at DEEP (Discovery of Efficient Electricity Price) e-bidding portal and has obtained trader membership in Indian Energy Exchange (IEX) & Power Exchange of India Limited (PXIL). In addition to above, your Company has been appointed as ''Aggregator'' under Pilot Scheme-ll by Ministry of Power for procurement of aggregated power of 2500 MW for three years through the nodal agency PFC Consultancy Limited in March, 2019.

9. DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has the following subsidiaries/associates/ioint venture companies as on March 31, 2019:

Name of the Company	Details of joint venture partners (equity participation)	Performance of the Company during FY 2018-19
SUBSIDIARY COMPANIES
NHDC Limited (NHDC)	NHPC (51.08%) and Government of Madhya Pradesh (48.92%)	NHDC has two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 MW) in Madhya Pradesh. During the year, NHDC generated 1921.23 MUs from its power stations i.e. 1309.22 MUs from Indira Sagar Power Station and 612.01 MUs from Omkareshwar Power Station. NHDC is also exploring possibilities for its capacity addition through diversification in renewable sources of energy i.e. solar power projects in the State of Madhya Pradesh.
Loktak Downstream Hydroelectric Corporation Limited (LDHCL)	NHPC (74%) and Government of Manipur (26%)	LDHCL is currently implementing Loktak Downstream Hydro-electric Project (66 MW) in Tamenglong, Manipur. All statutory clearances for the project have been received. Tendering for the EPC packages are under process. The Government of Manipur has also allocated hydro-electric component of Thoubal Multipurpose Scheme (7.5 MW) to the Company. The Board of NHPC Limited has also accorded its in-principle approval for equity contribution for this project. The project, at present, is under nvestigation stage.
Bundelkhand Saur Urja Limited (BSUL)	NHPC (99.99%) and Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA)	BSUL was incorporated to implement a 50 MW solar power project at Village Parason, District-Jalaun, Uttar Pradesh and any other conventional & non-conventional power projects entrusted to it by the Govt. of Uttar Pradesh. The land earmarked by UPNEDA earlier for the project was withdrawn. Subsequently, UPNEDA transferred 63.491 Ha Land at Village Parason to BSUL. Now, a 32 MW Solar Power Plant is proposed to be implemented at the site. Bids for the project works are under evaluation.
Chenab Valley Power Projects Private Limited* (CVPPPL)	NHPC Limited (51.94%), Jammu & Kashmir State Power Development Corporation Limited (47.77%) and PTC India Limited (0.29%)	Three projects viz. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW) and Kwar HE Project (540 MW) in Jammu & Kashmir are being developed by CVPPPL. The Company has taken up infrastructure development works i.e. roads, bridge, building etc. for the projects. Pakal Dul HE project is being executed through packages of major components viz. Head Race Tunnel-TBM, Dam, Power house, Hydro-Mechanical and Electro-Mechanical. The works for Dam & Power house packages have been awarded. Bids for remaining packages are under process. Bids for all packages of Kiru HE Project have been evaluated and award of work is under process. CCEA has accorded investment sanction for construction of Kiru HE Project by CVPPPL. Bids for Civil & Hydro-Mechanical packages for Kwar HE Project are under evaluation. Bids for Electro-Mechanical packages have been invited.
ASSOCIATE/JOINT VENTURE COMPANY
National High Power Test Laboratory Private Limited (NHPTL)	NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute (each having shareholding of 20%)	NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the Country. The laboratory for High Voltage Transformer (HVTR) at 400 kV level and 765 kV level is already in operation at Bina, Madhya Pradesh. Laboratory for Medium Voltage Transformer (MVTR) is expected to be commissioned by October/November, 2019.

*As the required matching contribution was not made by the other Joint Ventures Partners, the shareholding of NHPC was 51.94% as on March 31, 2019 and therefore pursuant to provisions of the Companies Act, 2013, CVPPPL continued to be subsidiary of NHPC Limited.

A report on the financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 has been provided as an annexure to the consolidated financial statements and hence not repeated here for the sake of brevity.

The audited financial statements of subsidiary companies are not being attached to the audited annual financial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder who desires to have a copy of aforesaid financial statements, may write to the Company Secretary, NHPC Limited. The financial statements of subsidiary companies are also available on the website of the Company i.e. www.nhpcindia.com.

10. RURAL ROAD PROJECTS

Your Company is executing works relating to construction of rural roads in six districts of Bihar in pursuance to a MoU signed with Ministry of Rural Development, Government of India and Government of Bihar under Pradhan Mantri Gram Sadak Yojna(PMGSY).

Under the scheme, your Company has to construct 758 roads having cost of Rs 1,725.65 crore and its maintenance for five years after construction. As on March 31, 2019, 753 roads covering 3,084 Km have been completed. Construction of balance 5 roads in Vaishali District is in progress. Maintenance period of 734 roads covering 2,982 Km has also been completed.

11. CONSULTANCY SERVICES

The technical "know-why and know-how", proficiency and experience of your Company places it in a leading position to offer a wide range of world class consultancy services from "Concept to Commissioning along with operation and maintenance" in the field of hydro power and related works. At present, your Company is providing consultancy services related to river basin studies, survey works, design and engineering, hydrological studies, contract & construction management etc. The major consultancy assignments of your Company include providing of engineering & design consultancy services for the implementation of Mangdechhu HE Project in Bhutan, consultancy services for the implementation of Pakaldul, Kiru & Kwar HE Project in Jammu & Kashmir and overhauling of Kalpong Power Station in Andaman & Nicobar islands.

To make other organizations take benefit of the knowledge of NHPC, programmes were offered to participants from Public and Private Sector in the area of electrical, mechanical, design & engineering aspects of hydropower projects. A large number of Indian and foreign delegates participated in these programmes.

12. FINANCING OF NEW PROJECTS

Your Directors believe that internal accruals of the Company would be sufficient to finance the equity component for the new/upcoming projects. Your Company is well positioned to raise the borrowings as per CERC norms given its low geared capital structure and strong credit ratings.

Your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by multilateral/bilateral agencies to mobilize the debt required for the planned capacity addition programmes.

13. INFORMATION TECHNOLOGY AND COMMUNICATION

Your Company considers information technology as an important constituent for the attainment of sustainable growth in business. Various units of the Company across India are connected to Corporate Office through multimode & fail-safe communication links. Information Technology (IT) and Cyber Security Policy are in place to ensure optimum and secure utilization of the IT&C assets owned by your Company. Enterprise Resource Planning (ERP) application has been implemented in NHPC to integrate all its business functions to improve information availability, transparency and decision making.

As per Government of India directives, e-procurement, Government e-Market (GeM) and e-Reverse auction system is operational in the Company. Your Company is also acting as a nodal agency for CERT-HYDRO to guide and monitor the cyber security related activities in the constituent member organizations. Efforts are also being made for enhanced deployment of e-office applications with the aim to have paperless office.

14. HUMAN RESOURCE MANAGEMENT

During the year, T&HRD has organized competency and capacity building programmes in the areas of Civil & Electrical Engineering, Design, HR, Finance and other core areas to ensure that employees of the Company keep abreast with the latest technological advancement. The reimagined approach to learning and development has helped the Company to provide 20,744 man-days training to its employees during the period.

In addition to these programmes, executives were nominated in customized training programmes, organized at India''s leading institutes like IIMs, IITs, CBIP etc. to enhance their skills for achieving higher productivity and efficiency in the organization. A total 583 executives were sponsored in different programmes organized by the above institutes. Besides, executives were also sponsored for higher education courses viz. MBA etc. and deputed for foreign training programmes to become aware of the global practices in the field of hydropower development.

NHPC has four training centers viz. Salal (Jammu & Kashmir), Uri (Jammu & Kashmir), Tanakpur (Uttarakhand) and Chamera-l (Himachal Pradesh). These training centers also organized skill development programmes in different trades for the employees.

NHPC in its process to benchmark with leading CPSEs in the country, organized various cross sectoral programmes to understand practices followed in the respective organizations. The programmes organized were on ''Contracts and Arbitration'', ''Solar Development'', ''Hydropower Development'' etc.

During the year under report, revised pay scales w.e.f. 01.01.2017 for Board Level, Below Board Level executives, supervisors and workmen were implemented in the Company. In addition to above, pay scales of executives including Board Level executives were also regularized w.e.f. January 1, 2007 in March, 2019.

15. INDUSTRIAL RELATIONS

The Industrial Relations in the Company remained cordial and harmonious during the year. Employees actively contributed in the decision making process for the growth of the Company.

16. RESETTLEMENT AND REHABILITATION (R&R)

Your Company appreciates the difficulties of populace displaced during the execution of its projects. Resettlement and Rehabilitation Plans are formulated for Project Affected Families (PAFs) to provide economic sustenance under the provisions of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013''. Recently, NHPC has formulated a policy for reservation of certain type of works through competitive bidding for PAFs and locals residing near the Projects/Power Stations.

17. VIGILANCE ACTIVITIES

The systems, procedures and processes in your Company are aimed to make the organization a transparent entity. All the procedures are documented to monitor and handle vigilance complaints and disciplinary cases. Your Company has a Vigilance Department headed by Chief Vigilance Officer to ensure transparency, objectivity and quality of decision making in its operations.

Vigilance Department co-ordinates with CBI, CVC and other concerned departments of the government. Six vigilance cases were concluded during the financial year 2018-19. As on March 31, 2019, three vigilance cases relating to misconduct, misappropriation and disproportionate assets against employees were under investigation.

As a part of preventive vigilance, circulars and guidelines are being issued regularly based on various inspections / intensive examinations carried out from time to time. Vigilance awareness week and other vigilance awareness programmes are also being organised by the Company to promote transparency and ethics in working system.

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Adequate internal financial controls with reference to financial reporting are in place in the Company. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

19. RISK MANAGEMENT

Your Company has an elaborate Risk Management Policy to have structured and disciplined approach towards risks. The development and implementation of Risk Management Policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

20. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and services rendered by them. In compliance to the policy, annual procurement plan including items to be procured from Micro & Small Enterprises (MSEs) are uploaded on NHPC''s website for the benefit of MSEs.

The benefits to MSEs like exemption from tender fees and earnest money deposit, purchase preference, interest on delayed payments and exemption from prior experience - prior turnover criteria subject to meeting of quality and technical specifications are also extended to encourage these enterprises.

During the financial year 2018-19, your Company has procured products and services from MSEs, which constituted 67.49% of the total annual procurement value, against the mandate of 25% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India. During the year, 918 MSEs were benefited out of which 45 MSEs belonged to SC/ST category and 23 MSEs were owned by women.

NHPC is also registered on the Trade Receivables Discounting System (TReDS) platform for financing of trade receivables of Micro, Small & Medium Enterprises (MSMEs). TReDS platform facilitates the discounting of invoices of MSMEs leading to prompt generation of working capital for their regular business operations.

Your Company had also organized/participated in five vendor development programmes in co-ordination with Ministry of Micro, Small and Medium Enterprises, Govt. of India to encourage participation of Micro and Small Enterprises.

21. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has complied the provisions of the Official Languages Act, 1963 and relevant rules during the financial year 2018-19. Attractive incentive schemes for employees have been implemented to encourage employees for active participation in promotion of Hindi, by contributing to articles/write-ups for in-house magazines, reading hindi books, and by noting and drafting in Hindi etc.

During the year, NHPC had organized various programmes for its employees to encourage the use of official language Hindi. In addition to above, Hindi typing training programmes, Hindi workshops and departmental computer workshops were regularly organized in the Company. Rajbhasha magazines titled ''Rajbhasha Jyoti'' and ''Nagar Saurabh'' were also published to encourage the use of Hindi.

The efforts made by the Company for the progressive use of Hindi were appreciated at various forums. Your Company''s website also has bilingual mode of operating i.e. in Hindi as well as in English. During the year, Town Official Language Implementation Committee (TOLIC), Faridabad, being operated by NHPC, received "Second Prize" in Region "A" for outstanding work in the field of Rajbhasha implementation for the year 2017-18 from Ministry of Home Affairs, Govt. of India.

22. SPORTS AND OTHER ACTIVITIES

During the year 2018-19, NHPC had participated in various Inter CPSU tournaments organized under the aegis of Power Sports Control Board, Ministry of Power. NHPC has organized inter CPSU Kabaddi Tournament at Guwahati from February 26 to 28, 2019. As per NHPC''s Sports Policy, your Company has given scholarship to four young sportspersons during the financial year 2018-19.

Your Company had coordinated painting competitions under the National Awareness Campaign on Energy Conservation organized by the Ministry of Power, Government of India amongst school students in the states of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh. Shri Rajesh Kumar, SM (HR), Loktak Power Station was adjudged "Best Nodal Officer" for showing highest percentage increase in student participation over previous year by the Ministry of Power, Government of India.

During the year, your Company has also participated in various National & International exhibitions to showcase its activities.

23. SOCIAL INITIATIVES

Your Company and its employees are continuing with the noble tradition of extending help to the Country in the times of distress. NHPC employees had contributed Rs 1.61 crore to Prime Minister''s National Relief Fund for flood affected people of Kerala and Rs 1.85 crore in ''Bharat ke Veer'' fund in honour of soldiers martyred in Pulwama attack. In addition to it, NHPC has also provided two transformers to Kerala State Electricity Board for restoring their hydropower plants damaged due to flood. NHPC has also contributed Rs 1 crore to the Chief Minister''s Relief Fund for natural calamities in Himachal Pradesh.

Under the ''Pradhan Mantri Bhartiya Janaushadhi Pariyojana'', Director (Personnel) inaugurated a ''PMBJP centre'' at Tanakpur Power Station in August, 2018, to make generic medicines available at cheaper rates.

24. INITIATIVES TOWARDS ENVIRONMENT PROTECTION AND CONSERVATION

Your Company is aware of its obligation to conserve and protect environment. During the investigation stage, probable impact on environment, while executing the projects, are assessed and identified. Environmental Management Plans are proposed and implemented to compensate the adverse impacts of the project by taking necessary measures. In addition to above, construction of buildings is designed to make them environment friendly. We are pleased to share that ''Neer Shakti Sadan'', NHPC Office Complex, Faridabad has been awarded the Four Star GRIHA Rating by the GRIHA Council in June, 2019. GRIHA (Green Rating for Integrated Habitat Assessment) is a joint initiative of Ministry of New and Renewable Energy (MNRE), Govt. of India and The Energy and Resources Institute (TERI).

Large scale plantation programmes were undertaken across various locations of NHPC to celebrate World Environment Day on June 5, 2019. Talks on environmental aspects were also delivered by heads of projects/power stations to spread awareness and sensitivity about environment issues. In addition to above, cultural programmes, slogan competitions, awareness rally and distribution of sapling to locals were also undertaken at some power stations.

25. RIGHT TO INFORMATION

Your Company has placed an elaborate mechanism to deal with the matters related to Right to Information Act, 2005. All the applications/appeals received through the online RTI portal launched by Department of Personnel & Training (DoPT) are attended through the portal only. In compliance to the provisions of the RTI Act, 2005, NHPC has placed various documents/records on its website (www.nhpcindia.com) for wider information of the general public.

During the financial year 2018-19, 519 (266 online) applications and 65 (38 online) first stage appeals were received under RTI Act, out of which 517 (99.61%) applications and 64 (98.46%) first stage appeals were dealt/replied accordingly. Further, 5 appeals were filed by the applicants before the Central Information Commission (CIC), which were also disposed-off.

26. CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) is an integral part of your Company''s business philosophy. The aim of CSR activities of your Company is to create a deeper positive impact on society at large with focus on key areas of development, especially by addressing the social, economic, environmental and welfare concerns of stakeholders and equitable development through empowerment of marginalized and underprivileged sections/ communities. Your Company has undertaken number of programmes under CSR in the areas of Education, Health, Sanitation, Drinking Water, Rural Development, Skill Development, Environment, Women Empowerment etc. A separate report on CSR activities undertaken by your Company during the financial year 2018-19 including the reasons for shortfall in mandatory expenditure on CSR activities is given as annexure to this report. The Corporate Social Responsibility & Sustainability Policy of your Company is available at http://www.nhpcindia.com/writereaddata/lmages/pdf/ CSR_Policy_E_CMA_201811_1 .pdf

27. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2018-19, the Company has not entered into any material transaction with any of its related parties. The Company''s major related party transactions are generally with its subsidiaries and associates for providing consultancy services, leasing out of properties and manpower services. All the contracts/ arrangements/transactions entered into with related parties were on arm''s length basis, intended to further the Company''s interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable. During the financial year 2018-19, NHPC has raised "GOI Fully Serviced Bonds" in the nature of unsecured, redeemable, non-convertible, non-cumulative and taxable long term bonds to fund Extra Budgetary Resources of Rs 2017.20 crore for meeting accrued liabilities of "Power System Development Fund" scheme of Government of India.

Attention of the members is also drawn to para no. 8 of note no. 34 of the financial statements, which sets out related party disclosures as per Ind AS-24.

28. WHISTLE BLOWER MECHANISM

Your Company had framed a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the employees, directors, vendors and contractors to bring instances of unethical/improper conduct to the knowledge of competent authority under the policy. The policy provides that confidentiality of whistle blower shall be maintained and he/she shall not be subjected to any discriminatory practice. The policy also allows direct access to the Chairperson of Audit Committee in exceptional cases.

A senior officer has been designated as Coordinator for effective implementation of the policy and dealing with complaints received under the policy. During the financial year 2018-19, one complaint was received under the Whistle Blower Policy, which was investigated and closed in accordance with procedure under the policy. Further, no person was denied access to the Audit Committee on issues pertaining to Whistle Blower Policy.

29. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 have been implemented in the Company with the objective to provide protection to women employees against sexual harassment at workplace and redressal of their complaints. Internal Complaints Committees (ICC) has been constituted at various locations to redress complaint(s) against sexual harassment of women employees.

Regular workshops are being organised for women employees to create awareness about their rights and facilities at workplace. Programmes for sensitizing the male employees are also being conducted regularly.

During the financial year 2018-19, no complaint of sexual harassment was received. However, a compliant of the previous year was disposed-off during the year.

30. DEBENTURE TRUSTEES

In compliance to the requirements of SEBI LODR, the details of Debenture Trustees appointed by the Company for different series of Bonds is provided at reference information of this Annual Report.

31. STATUTORY AND OTHER INFORMATION

Information required to be furnished as per the Companies Act, 2013, SEBI LODR, Guidelines issued by Department of Public Enterprises (DPE) on Corporate Governance for CPSEs etc. is annexed to this report as follows:

Particulars	Annexure
Report on Corporate Governance	I
Certificate from Practicing Company Secretary regarding compliance to conditions of Corporate Governance	II
Management Discussion and Analysis Report	III
Conservation of energy, technology absorption and foreign exchange earnings and outgo	IV
Business Responsibility Report	V
Annual Report on CSR Activities	VI
Extract of Annual Return	VII
Dividend Distribution Policy	VIM

32. AUDIT AND AUDITORS'' REPORT

32.1 SECRETARIAL AUDIT

The Board has appointed M/s Agarwal S. & Associates, Company Secretaries, Delhi to conduct Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Auditor in its report has given some observations/qualifications. The report of Secretarial Auditor along with management reply is given at Annexure-IX.

In compliance to Regulation 24A of SEBI LODR, Secretarial Audit report of NHDC Limited, which is a material unlisted subsidiary company of NHPC Limited, is also given at Annexure-X.

32.2 STATUTORY AUDIT

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (CAG). CAG has appointed following Joint Statutory Auditors for the financial year 2018-19:

1. M/s DSP & Associates, New Delhi;

2. M/s Lodha & Co, Kolkata; and

3. M/s Arora Vohra & Co, Jammu

The Joint Statutory Auditors have given un-modified report on the financial statements of the Company for financial year 2018-19. Further, no instance of fraud by any officer or employee of the Company has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

The standalone financial statements of the Company along-with Statutory Auditors'' Report thereon are given at Annexure-XI. The consolidated financial statements of the Company along-with the Statutory Auditors'' Report thereon are given at Annexure-XII.

32.3 REVIEW OF ACCOUNTS BY CAG

The comments of CAG on the standalone and consolidated financial statements of your Company for the financial year 2018-19 after conducting supplementary audit under Section 143(6)(a) of the Companies Act, 2013 are given at Annexure-XIII.

32.4 COST AUDIT

As per the requirement of Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records are being maintained by all power stations of your Company. The consolidated Cost Audit Report in XBRL format for the financial year ended March 31, 2018 was filed with the Central Government on October 15, 2018. The following firms of Cost Accountants were appointed to conduct audit of cost accounting records of power stations for the financial year 2018-19 under Section 148 of the Companies Act, 2013:

Name of the Firm	Name of Power Station/Project
M/s Chandra Wadhwa & Co., Delhi (Lead Cost Auditor)	Chutakand Nimmo Bazgo
M/s Balwinder & Associates, Mohali-Punjab	Chamera-l, Bairasiul and Parbati-lll
M/s Sanjay Gupta & Associates, Delhi	Chamera-ll, Chamera-lll and Wind Power Project-Jaisalmer
M/s K. L. Jaisingh & Co., Noida	Dulhasti, Salal and Sewa-ll
M/s K. G. Goyal & Associates, Jaipur	Uri-l, Uri-ll and Kishanganga
M/s R. J. Goel & Co., Delhi	Dhauliganga and Tanakpur
M/s DGM & Associates, Kolkata	Loktak, TLDP-IV and 50 MW Solar Power Project -Tamil Nadu
M/s Niran & Co., Kolkata	Rangit, Teesta-V and TLDP-III

The Cost Audit Report for the financial year ended March 31, 2019 shall be filed within the prescribed time period.

33. LOANS AND INVESTMENTS

Section 186 of the Companies Act, 2013 (except subsection 1) regarding loans made, guarantees given or securities provided is not applicable to NHPC being engaged in the business of providing infrastructure facilities.

34. PARTICULARS OF EMPLOYEES

In accordance to notification dated June 5, 201 5 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors'' Report.

As regards policy on remuneration of Key Managerial Personnel and other employees of the Company, their pay structure, allowances and other benefits are governed by relevant DPE Guidelines. Pay structure and allowances of the Company are also available on the website at http:// www.nhpcindia.com/writereaddata/images/pdf/RTI%20 Corner%20Wages%20UpdationENG_CAA_201 905 J . pdf.

35. BOARD AND COMMITTEES OF THE BOARD

The Board of Directors of your Company met ten times during the financial year 2018-19. Details regarding dates and attendance of the Board Meetings are given in the Corporate Governance Report, which forms part of this report.

Your Company has Audit Committee, Stakeholders'' Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee, Committee on Corporate Social Responsibility & Sustainable Development and other Board Level Committees. Details regarding composition and meetings of these Committees are given in the Corporate Governance Report, which forms part of this report.

There was no instance during the year, where the Board had not accepted recommendation(s) of committee(s) of the board which is mandatorily required to be recommended by the committee(s) for the approval of the Board of Directors.

36. PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD

Your Company has framed a policy on performance evaluation of Board, Board level Committees and Independent Directors in line with SEBI LODR read with Companies Act, 2013. The annual performance evaluation of Board, Board level Committees and Independent Directors of the Company was discussed in the meetings of the Board of Directors and Nomination & Remuneration Committee. The Independent Directors in their separate meeting held on June 11, 2019 decided not to carry out the performance evaluation of Functional Directors as their performance is being evaluated by the Ministry of Power (Administrative Ministry). The process of annual performance evaluation of Board, Board level Committees and Independent

Directors is given in the Corporate Governance Report. Annual performance evaluation of senior management personnel of the Company is being carried out as per rules of the Company read with relevant DPE Guidelines.

37. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under clause (c) of subsection (3) of Section 134 of the Companies Act, 2013 with respect to the Directors'' Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

38. SECRETARIAL STANDARDS

Your Company has followed applicable Secretarial Standards relating to ''Meetings of the Board of Directors'' and ''General Meetings'' issued by Institute of Company Secretaries of India (ICSI).

39. GENERAL

No disclosure or reporting in respect of the following items is required, as there was no transaction on these items during the year under report:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Significant and material orders passed by regulators or courts or tribunals, which impact the going concern status or Company''s operations in future.

4. Occurrence of any material changes and commitments after the close of the financial year till the date of this report, which affect the financial position of the Company.

5. Details related to public deposits as required under Chapter V of the Act.

40. WEBSITE LINK FOR VARIOUS POLICIES OF THE COMPANY

Website links for the information required to be hosted on the website of the Company i.e. www.nhpcindia.com as per the Companies Act, 2013, SEBI LODR etc. are as follows:

Particulars	Website Link
Policy on Related Party Transactions	http://www.nhpcindia. com/writereaddata/l mages/ pdf/Policy-Related-Party-Transaction.pdf
Corporate Social Responsibility & Sustainability Policy	http://www.nhpcindia. com/writereaddata/ Images/pdf/CSR Policy E CMA_201811_1.pdf
Policy on Material Subsidiaries	http://www.nhpcindia.com/ writereaddata/l mages/pdf/ Policy-Material-Subsidiary.pdf
Whistle Blower Policy	http://www.nhpcindia.com/ writereaddata/i mages/pdf/ wbp.pdf
Familiarization programme for Directors	http://www.nhpcindia.com/ writereaddata/l mages/pdf/ Familarisation programmes-E. pdf
Dividend Distribution Policy	http://www.nhpcindia.com/ writereaddata/l mages/pdf/ Dividend-Policy-21062017.pdf
Extract of Annual Return	http://www.nhpcindia.com/ NHPC-annual-reports.htm

41. BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

The following changes in composition of Board of Directors took place since the last annual report:

1. Shri Nalini Kant Jha, Independent Director ceased to be Director on the Board of the Company due to his sudden demise on November 5, 2018. The Board places on record its deep appreciation for the valuable contribution and guidance given by Late (Shri) N. K. Jha during his tenure as Director.

2. Ministry of Power vide its order dated November 22, 2018 re-appointed Shri Satya Prakash Mangal, Prof. Kanika T. Bhal and Prof. Arun Kumar as Non-official Independent Directors for a period of one year with effect from the date of completion of their tenure i.e. November 17, 2018 or until

further orders, whichever is earlier. Accordingly, Board has appointed them as Additional Directors w.e.f. November 18, 2018 till the conclusion of next AGM unless re-appointed.

Details of remuneration/sitting fee paid to Directors during the year 2018-19 are given in the Corporate Governance Report.

All Independent Directors of the Company as on March 31, 2019, have declared that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI LODR. They have further declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

42. ACKNOWLEDGEMENT

The Board would like to acknowledge with thanks the guidance and co-operation received from Government of India, particularly the Ministry of Power, Ministry of New & Renewable Energy, Ministry of Finance, Ministry of Environment, Forest & Climate Change, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, Appellate Tribunal for Electricity, State Governments, State Utilities, Power Distribution Companies and valuable clients of consultancy assignments.

The Board also expresses its gratitude to the Shareholders, Bankers and Financial Institutions for their continued support and confidence reposed by them in the Company.

We place on record our special appreciation to the contribution of contractors, vendors and consultants in implementation of various projects of the Company.

We also acknowledge the constructive suggestions received from the Office of Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditor and Cost Auditors.

Your Directors wish to place on record their sincere appreciation for the unstinting efforts and dedicated contributions put in by the NHPCians at all levels, to ensure that the Company continues to grow and excel.

For and on behalf of the Board of Directors

(Balraj Joshi)

Chairman and Managing Director

DIN: 07449990

Date: August 2, 2019

Place: Faridabad

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Mar 31, 2018

Dear Members,

The Directors are pleased to present the 42^nd Annual Report on the business and operations of NHPC Limited along with its Audited Financial Statements, Auditors’ Report and review of financial statements by the Comptroller and Auditor General of India (CAG). Financial year 2017-18 was yet another year of achievements for your Company. Your Company added 380 MW to its capacity by commissioning Kishanganga H.E. Project (3 X 110 MW), Jammu & Kashmir and 50 MW Solar Power Project, Tamil Nadu during the financial year 2017-18. The total installed capacity of your Company (including of subsidiaries & JVs) as on March 31, 2018 was increased to 7,071 MW.

Major highlights for the financial year 2017-18 are:

- Total revenue and revenue from operations (net) were Rs.8,425.03 crore and Rs.6,934.03 crore respectively. Total comprehensive income, Net Profit After Tax (PAT) and other comprehensive income were Rs.2,764.53 crore, Rs.2,758.65 crore and Rs.5.88 crore respectively.

- Interim dividend of Rs.1,149.05 crore (@ Rs.1.12 per equity share) was paid in March, 2018. Further, a final dividend of Rs.0.28 per equity share has been recommended for the financial year 2017-18 subject to approval of the shareholders.

- Power stations have achieved generation of 22,975 MUs which include deemed generation of 350.2 MUs from Chutak and Nimmo Bazgo Power Stations.

- Highest ever Plant Availability Factor (PAF) of 85.32% was achieved against the PAF of 83.41% during the previous financial year.

- Successfully commissioned all three units of Kishanganga H.E. Project (3 x 110 MW) at Bandipora, Jammu & Kashmir in March, 2018. The Project was dedicated to the Nation by Hon’ble Prime Minister of India Shri Narendra Modi on May 19, 2018.

- Commissioned its first 50 MW Solar PV Project in Theni/ Dindigul District of Tamil Nadu. Domestically manufactured Solar PV Modules were used for the Project.

- Central Electricity Regulatory Commission (CERC) granted Inter-state Power Trading License to NHPC vide its order dated April 23, 2018.

- Moody’s has upgraded international rating of NHPC from Baa3 positive to Baa2 stable, which is equivalent to sovereign rating of India.

- National Green Tribunal (NGT), Eastern Bench, Kolkata upheld Environment Clearance of Teesta-IV H. E. Project.

- Expert Appraisal Committee, Ministry of Environment, Forest & Climate Change, Govt. of India, has recommended for grant of Environment Clearance to the Bursar Hydro-electric Project, Jammu & Kashmir.

- To meet the requirement of distinct set of special skills for the development of Hydro Power, NHPC in partnership with NTPC is contributing towards establishment of Hydro Engineering College at Bilaspur, Himachal Pradesh. Foundation stone of the college was laid by the Hon’ble Prime Minister of India Shri Narendra Modi on April 27, 2017.

- Overall development of society has been one of the aims of NHPC as an organization. CSR & SD activities of NHPC are focused in areas like Education, Health Care, Skill Development, Rural Development, Sanitation, Environment & Sustainability, Women Empowerment etc. NHPC has taken up several CSR & SD activities with a total expenditure of Rs.38.55 crore during financial year 2017-18.

- The Detailed Project Report (DPR) of Goriganga IIIA Hydro-electric Project (150 MW), Uttarakhand was submitted to Central Electricity Authority (cEa) on March 30, 2018.

- Cash contribution of Rs.1,688.17 crore was made to Government of India’s exchequer through dividend, dividend tax, income tax and wealth tax in the financial year 2017-18.

- Market capitalization of the Company as on March 31, 2018 stood at Rs.28,418.32 crore.

Awards and Recognition

- ”First Prize” under ‘Rajbhasha Kirti Puraskar’ by Ministry of Home Affairs, Govt. of India for commendable work in implementation of Rajbhasha amongst the Public Sector Undertakings located in Region ‘A’ for the year 2016-17. This is the highest award given by the Government of India in the field of implementation of official language.

- ”Excellence in CSR/ Environment Protection and Conservation” at India Pride Awards 2017-18 instituted by Dainik Bhaskar newspaper.

- ”Best Project Developer in Hydro Sector for a project under construction” for Kishanganga H.E. Project presented by Central Board of Irrigation and Power, New Delhi at CBIP Awards.

- ”CIDC Partner in Progress Trophy 2018” at 10^th Construction Industry Development Council (CIDC) Vishwakarma Awards organized by Construction Industry Development Council, New Delhi.

- ”Industry Doyen” award to Shri Balraj Joshi, Chairman & Managing Director at 10^th CIDC Vishwakarma Awards organized by Construction Industry Development Council, New Delhi.

- ”HR Leadership Award” to Shri Nikhil Kumar Jain, Director (Personnel) at 16^th edition of Asia Pacific HRM Congress and Awards presented by Times Ascent (The Time of India Group).

1. FINANCIAL PERFORMANCE

The financial results for the year ended March 31, 2018 are summarized in Table 1.

Table 1: Financial Highlights

(Rs. in crore)

PARTICULARS	Financial Year
	2017-18	2016-17
Revenue from operations	6,934.03	7,271.17
Profit before depreciation, interest, rate regulated income and tax	5,134.13	5,222.23
Depreciation	1,405.89	1,388.40
Profit after depreciation but before rate regulated income, interest and tax	3,728.24	3,833.83
Interest and finance charges	922.32	1,073.22
Profit after depreciation and interest but before rate regulated income and tax	2,805.92	2,760.61
Rate regulated income	719.82	713.99
Tax	767.09	679.01
Profit after depreciation, interest, rate regulated income and tax	2,758.65	2,795.59
Other Comprehensive Income (OCI)	5.88	7.67
Total Comprehensive Income (TCI)	2,764.53	2,803.26
Surplus from statement of profit and loss of earlier years (including Other Comprehensive Income)	2,657.30	3,147.66
Amount written back from bond redemption reserve	148.17	109.42
Transfer from R&D Fund	43.90	-
Sub-total	5,613.90	6,060.34
Less: APPROPRIATIONS
Transfer to bond redemption reserve	668.45	394.49
Dividend and Corporate Dividend Tax (CDT)	1,378.51	2,996.35
Transfer to R & D fund	-	12.20
Closing Balance of Retained Earnings including Other Comprehensive Income	3,566.94	2,657.30

1.1 REVENUE

Your Company generated revenue of Rs.8,425.03 crore during the financial year 2017-18. The revenue during the financial year 2016-17 was Rs.8,728.84 crore.

1.2 EXPENSES

The total expenditure during financial year 2017-18 was Rs.5,619.11 crore as against total expenditure of Rs.5,968.23 crore in the financial year 2016-17.

1.3 PROFIT

Your Company had earned a Profit After Tax (Total Comprehensive Income) of Rs.2,764.53 crore during the financial year 2017-18 as compared to Rs.2,803.26 crore in the financial year 2016-17.

1.4 SHARE CAPITAL

The paid-up equity share capital of the Company as on March 31, 2018 was Rs.10,259.32 crore.

1.5 NET WORTH

Your Company’s net worth as on March 31, 2018 was Rs.28,328.15 crore as against Rs.26,942.13 crore in the previous year.

2. DIVIDEND

Your Directors are pleased to recommend a final dividend of Rs.0.28 per equity share for the financial year ended on March 31, 2018. The above dividend is in addition to the interim dividend of Rs.1.12 per equity share paid in March, 2018. Accordingly, the total dividend for the financial year 2017-18 comes to Rs.1.40 per equity share. The total dividend pay-out, subject to approval of final dividend by the members of the Company, for the financial year 2017-18 will be Rs.1436.31 crore (excluding dividend distribution tax) representing 52% of the profits after tax, as against a dividend pay-out of Rs.1984.61 crore representing 71% of the profits after tax in the previous year.

3. OPERATIONAL PERFORMANCE

During the financial year 2017-18, the standalone installed capacity of your Company had increased to 5,551 MW with the commissioning of Kishanganga H.E. Project (3 X 110 MW), Jammu & Kashmir and 50 MW Solar Power Project, Tamil Nadu. Presently, the aggregate installed capacity of your Company is 7,071 MW (including 2 power stations of 1,520 MW of NHDC Limited - Subsidiary Company of NHPC).

Your Company had generated 22,975 Million Units (MUs) during the financial year 2017-18 and achieved highest ever Plant Availability Factor (PAF) of 85.32% as compared to 83.41% in the previous year. The power station wise generation and PAF is given at Table 2.

Table 2: Power Station wise generation and PAF during financial year 2017-18

NAME OF POWER STATION	GENERATION TARGET1 (MU)	ACTUAL GENERATION (MU)	PAF TARGET* (%)	ACTUAL PAF (%)
PONDAGE POWER STATIONS2
BAIRA SIUL (180 MW)	693	642	92.50	82.54
LOKTAK (105 MW)	539	838	93.50	97.95
CHAMERA - I (540 MW)	2,350	2,344	96.00	98.09
RANGIT (60 MW)	338	346	95.50	99.45
CHAMERA - II (300 MW)	1,469	1,487	95.50	97.52
DHAULIGANGA (280 MW)	1,112	1,153	90.00	94.87
DULHASTI (390 MW)	2,194	2,344	95.50	96.54
TEESTA - V (510 MW)	2,644	2,819	92.50	97.49
SEWA - II (120 MW)	523	506	96.50	97.85
CHAMERA - III (231 MW)	1,085	1,068	91.50	95.48
TLDP - III (132 MW)	581	387	89.50	79.64
TLDP - IV (160 MW)	704	495	90.10	80.39
Sub Total (A)	14,232	14,429	93.50	94.56
RUN OF THE RIVER POWER STATIONS & RESTRICTED PLANTS
SALAL (690 MW)	3,379	3,247	65.00	76.18
TANAKPUR ( 94.2 MW)	443	460	64.00	68.70
URI (480 MW)	2,844	2,350	75.00	74.82
CHUTAK1 (44 MW)	51	227	49.90	59.57
NIMOO BAZGO1 (45 MW)	94	267	64.90	72.40
URI - II (240 MW)	1,420	1,207	75.00	79.30
PARBATI - III (520 MW)	686	710	52.00	62.70
KISHANGANGA2 (330 MW)	236	2	75.00	-
PARBATI - II (800 MW)	45	-	-	-
Sub Total (B)	9,198	8,472	65.14	72.15
TOTAL (A B) (HYDRO)	23,430	22,901	81.60	85.32
WIND POWER PROJECT, JAISALMER (50 MW)	70	70	-	-
SOLAR POWER PROJECT, TAMIL NADU3 (50 MW)	-	4	-	-
TOTAL	23,500	22,975	81.60	85.32

*Targets shown are for “Very Good” rating as per MOU with Government of India.

***PAF MOU targets for financial year 2017-18 are for “Very Good” rating and related to Pondage Power Stations only (i.e. Run of River Power Stations and Restricted Plants are excluded).

Note:

1. Generation includes deemed generation of Chutak Power Station (181.6 MUs) & Nimoo Bazgo Power Station (168.6 MUs).

2. All three units of Kishanganga HE Project (3 X 110 MW) were commissioned in the month of March, 2018. Generation shown is infirm power.

3. Solar Power Project was declared under commercial operation from March 23, 2018.

Your Directors are pleased to inform that your Company had also earned net deviation charges of Rs.181 crore (approx.) due to efficient operation and timely response to changes in the grid frequency.

In the present scenario of severe resource constraints, Renovation & Modernization (R&M) of power plants is considered to be a cost-effective option, which can complement new capacity addition as R&M schemes have a shorter gestation period with all clearances and beneficiaries available. Accordingly, R&M is being carried out for the purpose of life extension of power stations, performance improvement and availability & reliability improvement. It further ensures safe, reliable and economic electricity production by replacement of worn-out, deteriorated or obsolete electrical, mechanical, instrumentation, controls and protection system by state-of-the-art equipment.

At present, R&M for life extension of two power stations i.e. Bairasiul (180 MW) and Loktak (105 Mw) are under process. The R&M works of Bairasiul Power Station shall be carried out during 2018-2021. The cost estimate of R&M proposal of Loktak Power Station has been approved by Central Electricity Authority (CEA) and shall be carried out during 2021-2024.

4. COMMERCIAL PERFORMANCE

4.1 SALES AND REALIZATION

During the year under report, your Company’s sales from operations stood at Rs.6934.03 crore. We are pleased to inform that during the financial year 2017-18, your Company has been able to realize an amount of Rs.8,024 crore including collection of surcharge of Rs.254.19 crore and liquidation of outstanding amount of previous years.

As on March 31, 2018, the total outstanding dues of Rs.1,050.49 crore (including surcharge) were pending for more than 60 days. Out of the above, Rs.564.11 crore pertains to Power Development Department, Jammu & Kashmir (JKPDD) and Rs.337.38 crore pertains to BSES Yamuna Power Limited (BYPL). During the year, your Company held various meetings and discussions with BYPL to liquidate outstanding dues. As a result, BYPL has agreed to pay the outstanding dues in installments along with their current dues. As per agreed liquidation plan, BYPL released a sum of Rs.65 crore in the month of March, 2018 and handed over post-dated cheques as refundable security for the release of balance dues and current dues on committed dates.

Your Company is making efforts to recover the outstanding dues by continuous follow-up and regulation of power supply of defaulting beneficiaries, if required.

4.2 TARIFF PETITIONS BEFORE CENTRAL ELECTRICITY REGULATORY COMMISSION

The tariff petitions in respect of all the 20 hydro power stations of your Company had been filed for the period 2014-19 for fixation of tariff under Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulation, 2014. Tariff orders for 13 power stations have been issued by CERC. Interim/provisional tariff have been allowed for 6 new power stations. The final tariff for these new power stations will be issued by CERC, after the submission of revised cost estimate duly approved by Govt. of India. Tariff petition for Kishanganga H.E. Project has also been submitted to CERC for which order is awaited.

4.3 SIGNING OF POWER PURCHASE AGREEMENTS (PPAs)

The PPAs in respect of following power stations had been renewed for 35 years from the date of their commercial operation with following states/distribution companies in financial year 2017-18:

S. No.	Name of State/ Distribution Companies	Name of Power Station
1	Uttar Pradesh	Chamera-III
2	BSES Rajdhani Power Limited -Delhi	Salal, Tanakpur, Chamera-I, Uri-I, Sewa-II and Chamera-III
3	BSES Yamuna Power Limited -Delhi	Salal, Tanakpur, Chamera-I, Uri-I, Sewa-II and Chamera-III
4	Tata Power Delhi Distribution Limited - Delhi	Bairasiul for 25 years after Renovation & Modernization

5. STATUS OF ONGOING PROJECTS

Your Company is presently engaged in the construction of two hydro-electric projects. The status of these on-going projects is as under:

5.1 PARBATI- II HYDRO-ELECTRIC PROJECT - 800 MW (4 X 200 MW), HIMACHAL PRADESH:

Parbati-II Hydro-electric Project is a run of the river scheme on the River Parbati in Kullu District of Himachal Pradesh. Major civil works of dam, intake structure, de-silting chamber, pressure shafts, surge shaft, powerhouse and Jiwa Nallah have been completed. Water conductor system consists of 31.52 Km long Head Race Tunnel (HRT), out of which excavation of 27.9 Km and concrete lining of 26.1 Km length has been completed till March, 2018. Since the resumption of excavation of HRT by Tunnel Boring Machine (TBM) from October, 201 5, 1071 m of tunnel has been excavated till March 31, 2018. E&M works of powerhouse are also completed. All the four generating units have been boxed up.

First and second units of Parbati-II H.E. Project had been successfully spun using the water of Jiwa Nallah. First unit of Parbati-II H.E. Project has also been successfully synchronized on part-load. Erection of all radial gates of dam has been completed. Diversion works of Jigrai, Manihaar, Pancha and Hurla Nallahs are also progressing satisfactorily. Excavation of balance HRT by TBM is most critical. Project is now anticipated to be commissioned by December, 2020.

5.2 SUBANSIRI LOWER HYDRO-ELECTRIC PROJECT - 2,000 MW (8 X 250 MW), ASSAM/ARUNACHAL PRADESH:

Construction of the project was started in January, 2005 and 55% (approx.) of the works have been completed. Works on the project have been stalled due to directions from National Green Tribunal (NGT), Kolkata. Subsequently as per NGT’s judgement dated October 16, 2017, a three member expert committee was constituted by Ministry of Environment, Forests & Climate Change (MoEF&CC) to review all issues pertaining to the Project. However, due to objection raised on constitution of the above committee, the meetings of the committee were deferred by NGT Principal Bench, New Delhi. The final hearing in this regard was held on May 8, 2018 and the judgement was reserved by NGT Principal Bench, New Delhi. Company is in constant touch with the Central Govt. and State Govt. of Assam for early resumption of the works of the project. The project is expected to be completed in 4 years time from the date of resumption of work.

6. NEW PROJECTS

Table 3: Projects under clearance/approval stage:

S. No.	PROJECT	STATE	INSTALLED CAPACITY (MW)
A.	STANDALONE BASIS
(a)	HYDRO PROJECTS
	Kotlibhel - IA1	Uttarakhand	195
i	Teesta-IV	Sikkim	520
ii	Dibang	Arunachal Pradesh	2,880
v	Tawang-I		600
v	Tawang-II		800
vi	Bursar	Jammu & Kashmir	800
	Sub-total (a)		5,795
(b)	WIND PROJECTS
i	Wind Project, Palakkad	Kerala	8
	Sub-total (b)		8
	Total A (a b)		5,803
B.	THROUGH SUBSIDIARIES
(a)	HYDRO PROJECTS
i	Loktak Downstream H.E. Project through Loktak Downstream Hydroelectric Corporation Limited (Joint Venture with Govt. of Manipur)	Manipur	66
	Sub-total (a)		66
(b)	SOLAR PROJECTS
i	Project in Jalaun District of U.P. through Bundelkhand Saur Urja Limited (Joint Venture with UPNEDA) 2	Uttar Pradesh	32
	Sub-total (b)		32
	Total B (a b)		98
C.	THROUGH JOINT VENTURE
	HYDRO PROJECTS
	Kiru (Joint Venture with JKSPDC & PTC)	Jammu & Kashmir	624
	Kwar (Joint Venture with JKSPDC & PTC)		540
ii	Chamkharchhu - I (Joint Venture with Druk Green Power Corporation Limited, Bhutan - yet to be incorporated) in Bhutan	-	770
	Total C		1,934
	Grand Total (A B C)		7,835

Note:

1. Project Investment Board (PIB) approval for the project is subject to clearance by the Hon’ble Supreme Court, which is under consideration. Further, other construction activities are also dependent on Hon’ble Court’s decision.

2. MOU has been signed between NHPC and Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA) for setting up of 50 MW solar power project in UP but land presently available for 32 MW only.

7. DIVERSIFICATION

Your Company is making efforts for capacity addition through diversification of its activities by taking projects of different sources of energy viz. wind, solar etc. The activities of the Company for establishment of such projects are as under:

7.1 SOLAR POWER PROJECTS

Your Directors are pleased to inform that during the financial year 2017-18 Company has successfully commissioned a 50 MW Solar Power Project at Theni/ Dindigul District of Tamilnadu on March 23, 2018.

Your Company has also installed roof top solar power plants at its various projects/power stations including corporate office with aggregate capacity of 860 KWp. In addition to above, roof top solar projects with aggregate capacity of 534.7 KWp are under execution at various locations of the Company.

7.2 WIND POWER PROJECTS

Your Company has already commissioned a 50 MW Wind Power Project in Jaisalmer, Rajasthan.

The Detailed Project Report (DPR) to execute a 72 MW ( 10%) capacity wind power project at Agali site, Palakkad - Kerala has been prepared. Initially 8 MW capacity wind power project is being executed as per existing evacuation facility. EPC bid process has been initiated. Signing of Power Purchase Agreement (PPA) and allotment of land is under process.

7.3 POWER TRADING LICENSE

In order to venture into new avenues in the Power Sector, your Company had filed a petition with CERC on January 10, 2018 for the grant of Category-I license for interstate trading in electricity in whole of India. CERC vide its order dated April 23, 2018 has decided to grant Category-I license to NHPC for the above activity. As per aforesaid order, NHPC would be able to undertake interstate trading in electricity across the Country. Accordingly, your Company is exploring various trading options. NHPC has already been registered in the DEEP e-bidding portal of M/s mStC as a trader. NHPC has also taken ‘trader membership’ of Indian Energy Exchange.

7.4 PUMPED STORAGE SCHEME

Government of India has envisaged large capacity additions of variable and intermittent power from solar and wind in coming years. Accordingly, expeditious development of pumped storage potential as balancing plants has become very vital for ensuring greater grid discipline, load balancing and facilitating large renewable penetration. In the recent times, Government is giving more emphasis on the development of pumped storage plants due to their inherent advantages of absorbing the off-peak energy in the system and providing peaking power which will help in the system stability. In this regard, your Company is actively exploring opportunities for the development of pumped storage schemes in potential rich states.

7.5 ENVIRONMENT AND SOCIAL

Your Company is making significant contribution in reduction of carbon footprint of the electricity by improving environment and social conditions in the respective states in general and project areas in specific. The efforts are being placed by the Company for improving environmental sustainability of the hydropower projects and working for social acceptance.

8. DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has the following subsidiaries/associates/joint venture companies as on March 31, 2018:

Name of the Company	Details of joint venture partners (equity participation)	Performance of the Company during FY 2017-18
SUBSIDIARY COMPANIES
NHDC Limited (NHDC)	NHPC (51.08%) and Government of Madhya Pradesh (48.92%)		NHDC has two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 mW) in Madhya Pradesh. During the year, NHDC generated 1325.25 MUs from its power stations i.e. 881.68 MUs from Indira Sagar Power Station and 443.57 MUs from Omkareshwar Power Station. NHDC is also exploring possibilities for its capacity addition through diversification in renewable sources of energy i.e. solar power projects in the state of Madhya Pradesh.
Loktak Downstream Hydroelectric Corporation Limited (LDHCL)	NHPC (74%) and Government of Manipur (26%)		LDHCL is currently implementing Loktak Downstream Hydro-electric Project (66 MW) in Tamenglong, Manipur. All statutory clearances for the project have been received. Tendering for the EPC packages are under process. The Government of Manipur has also allocated hydro-electric component of Thoubal Multipurpose Scheme (7.5 MW) to the Company. The Board of NHPC Limited has accorded in-principle approval for equity contribution for this project. The project, at present, is under investigation stage.

Bundelkhand Saur Urja Limited (BSUL)	NHPC (99.99%) and Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA)	BSUL was incorporated to implement a 50 MW solar power project at Village Parason, District-Jalaun, Uttar Pradesh and any other conventional & non-conventional power projects entrusted to it by the Govt. of Uttar Pradesh. The land earmarked by UPNEDA earlier for the project was withdrawn, resulting in cancellation of bids for EPC contract. Subsequently, UPNEDA transferred 63.491 Ha Land at Village Parason to BSUL. Now, a 32 MW Solar Power Plant is proposed to be implemented at the site. Award of EPC contract to develop 32 MW Solar Power Project along with associated 132 kV power evacuation equipment and its 10 years comprehensive operation & maintenance is under process.
Chenab Valley Power Projects Private Limited* (CVPPPL)	NHPC Limited (55.39%), Jammu & Kashmir State Power Development Corporation Limited (44.22%) and PTC India Limited (0.39%)	Three projects viz. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW) and Kwar HE Project (540 Mw) in Jammu & Kashmir are being developed by CVPPPL. Pakal Dul HE project is being executed through package-wise tendering of major components viz. Head Race Tunnel-TBM, Dam, Power house, Hydro-Mechanical and Electro-Mechanical. Power house package has already been awarded. Bids for remaining packages are under evaluation. The foundation stone for the project was laid down by Hon’ble Prime Minister of India Shri Narendra Modi on May 19, 2018. Tendering of Civil & HM Package of Kiru HE Project is under process although the Company has taken up infrastructure development works i.e. roads, bridge, building etc. for the project. However, major construction activities are yet to be started. Tenders for three packages - Civil, Hydro-Mechanical and Electro-Mechanical for Kwar HE Project have been invited by CVPPPL.
ASSOCIATE/JOINT VENTURE COMPANY
National High Power Test Laboratory Private Limited (NHPTL)	NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute (each having shareholding of 20%)	NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the Country. NHPTL is constructing laboratories for testing of High Voltage Transformer (HVTR) and Medium Voltage Transformer (MVTR) at Bina, Madhya Pradesh. The HVTR lab has been commissioned at 400 kV level and 765kV level on July 1, 2017 and September 11, 2017 respectively. MVTR lab is expected to be commissioned by March, 2019.

* As per the promoters’ agreement, the equity participation of NHPC, JKSPDC shall be 49% each and PTC India Limited shall be 2%. During the year, NHPC has further invested Rs.122.36 crore in CVPPPL. As the required matching contribution was not made by the other Joint Venture Partners, the shareholding of NHPC was increased to 55.39% as on March 31, 2018 and therefore, CVPPPL has become subsidiary of NHPC Limited pursuant to provisions of the Companies Act, 2013.

A report on the financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 has been provided as an annexure to the consolidated financial statements and hence not repeated here for the sake of brevity.

The audited financial statements of subsidiary companies are not being attached to the audited annual financial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder who desires to have a copy of aforesaid financial statements, may write to the Company Secretary, NHPC Limited. The financial statements of subsidiary companies are also available on the website of the Company i.e. www.nhpcindia.com.

9. PROJECTS UNDER DPR PREPARATION

Survey and Investigation for the preparation of DPRs of the following hydro-electric projects are under process:

S. NO.	PROJECT	INSTALLED CAPACITY (MW)
1	Dhauliganga Intermediate HE Project, Uttarakhand	210
2	Goriganga-IIIA HE Project, Uttarakhand	150
	Total	360

9.1 DHAULIGANGA INTERMEDIATE HE PROJECT, UTTARAKHAND:

The Dhauliganga Intermediate HE Project is situated in the Pithoragarh District of Uttarakhand on the River Dhauliganga. The survey & investigation activities for preparation of DPR of the project shall be taken up after receipt of approval of pre-investment activities from Administrative Ministry.

9.2 GORIGANGA IIIA HE PROJECT, UTTARAKHAND:

The Goriganga IIIA HE Project is situated in the Pithoragarh District of Uttarakhand on the River Goriganga. The DPR of the project has been submitted to the CEA on March 30, 2018 for obtaining techno-economical clearance and is under examination at their end.

10. RURAL ROAD PROJECTS

Your Company had signed an MoU with the Ministry of Rural Development, Government of India and the Government of Bihar for the construction of rural roads in six districts of Bihar namely Vaishali, Muzaffarpur, Sitamarhi, East Champaran, Sheohar and West Champaran under the Pradhan Mantri Gram Sadak Yojna (PMGSY).

Under the scheme, your Company was awarded the works of 758 roads having cost of Rs.1,725.65 crore for execution. As on March 31, 2018, 753 roads of the length of 3,084 Km have been completed. Construction of balance 5 roads in Vaishali District is under progress.

As per the Tripartite Agreement, maintenance of all 758 roads was also to be carried out for five years after completion of their construction. Out of 753 roads already completed, maintenance period of five years for 694 roads covering 2835 km length has been completed. 59 roads of the length of 249 km are under maintenance period.

11. CONSULTANCY SERVICES

Your Company is also providing consultancy services related to hydro power within and outside the country viz. river basin studies, survey works, design and engineering, hydrological studies, contract & construction management etc. Major consultancy clients of your Company are government agencies (Central and State), CPSUs and Governments of neighbouring countries.

12. FINANCING OF NEW PROJECTS

As per CERC norms, the capacity addition programmes shall be financed with a debt to equity ratio of 70:30. Your Directors believe that internal accruals of the Company would be sufficient to finance the equity component for the new/upcoming projects. Given its low geared capital structure and strong credit ratings, your Company is well positioned to raise the required borrowings.

Your Company is exploring domestic as well as international borrowing options including overseas development assistance provided by multilateral/ bilateral agencies to mobilize the debt required for the planned capacity addition programmes.

13. INFORMATION TECHNOLOGY AND COMMUNICATION

Your Company is leveraging Information Technology in its goal of sustainable growth in business. Your Company has implemented Enterprise Resource Planning (ERP) application to integrate all its business functions to improve information availability, transparency and decision making. Various units of the Company across India are connected to Corporate Office through multimode & fail-safe communication links. Information Technology (IT) and Cyber Security Policy are in place to ensure optimum and secure utilization of the IT&C assets owned by your Company. The key servers have been co-located at TIER-III data centre of M/s BSNL at Faridabad. Disaster Recovery (DR) site for ERP data is operational at NHPC office, Kolkata and a near DR site is operational at a data centre of M/s National Informatics Centre Services Inc. (NICSI) at New Delhi.

As per Government of India directives, the procurement process through e-procurement, Government e-Market (GeM) and e-Reverse auction system is operational in the Company. E-waste is being disposed-off in an environment friendly manner. Your Company is also acting as a nodal agency for CERT-HYDRO to guide and monitor the cyber security related activities in the constituent member organizations. Efforts are also being made to use technology to achieve e-office.

14. HUMAN RESOURCE MANAGEMENT

Your Company takes pride in its highly motivated and competent Human Resource that has contributed its best to bring the Company to its present heights. Both, employees and management are contributing to further the interest of Company as well as its stakeholders, signifying and highlighting overall harmony and cordial employee relations prevalent in your Company.

Your Company has consistently endeavored for attracting, on-boarding, grooming and motivating its talent recognizing that nurturing the talent leads to competitive advantage.

During the financial year 2017-18, your Company had organized various training and development programmes for its employees to enhance their skills and competencies through premier institutions like IIMs, IITs, ICAI etc. It is regularly sponsoring its executives for higher education and specialization to improve their productivity and effectiveness. NHPC is also sponsoring its employees for various foreign training programmes to understand global developments in the field of hydro-power. In the previous year, “Special Lecture Series” were organized by your Company by inviting eminent personalities viz. Shri K. V. Chowdary, Chief Vigilance Commissioner, Sister B. K. Shivani from Brahma Kumari’s, speakers from Mumbai Dabbawala and Smt. Shobhana Radhakrishna, eminent Gandhian to share and enlighten their knowledge and experience with the employees.

In the emerging business scenario, it is also significant to identify and generate new ideas as well as creating a working environment for employees to express their creativity and allow them to think out of box. In line with this objective, a scheme for ”Un-locking Creativity & Innovation at Work Place” was introduced in NHPC with the objective to encourage innovations, creative thinking and idea generation. NHPC has also introduced quarterly e-Magazine ”Abhigjna”that provides a learning platform for employees to share their article, workplace experiences, troubleshooting methodology, unique innovative solutions etc. To overcome various challenges faced at difficult locations, Company is organizing “Learning from Experience” lectures by senior officers to share their learning and practical problems faced at different locations so that employees can have the knowledge to resolve the same in future.

15. INDUSTRIAL RELATIONS

During the year, industrial relations remained cordial and harmonious at all the projects / power stations / units.

16. RESETTLEMENT AND REHABILITATION (R&R)

Your Company is committed to help the populace displaced during the execution of its projects and has been making efforts to improve socio-economic status of Project Affected Families (PAFs). In line with its social objectives, the Company has focused on effective Resettlement and Rehabilitation of PAFs and initiated community development works in and around its projects. R&R Plan for the PAFs are in place as per ‘the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’ for upcoming NHPC’s projects.

17. VIGILANCE ACTIVITIES

Your Company ensures transparency, objectivity and quality of decision making in its operations, and to monitor it, the Company has a Vigilance Department headed by Chief Vigilance Officer. The systems, procedures and processes in your Company are aimed to make the organization a transparent entity. All the procedures are documented and systems are in place to monitor and handle vigilance complaints and disciplinary cases.

Regular and surprise inspections are being conducted by Vigilance Department of your Company. Actionable points identified by Project Vigilance Officers are intimated to Heads of Projects from time to time. Intensive examination of works, wherever required, is also carried out by Chief Technical Examiner of the Central Vigilance Commission (CVC).

Vigilance Department also co-ordinates with CBI, CVC and other concerned departments of the government. One vigilance case relating to shortcomings in the award of work has been concluded during the financial year 2017-18. As on March 31, 2018, three vigilance cases relating to irregularities in supply, splitting of contract and compliance of norms were under investigation.

As a part of preventive vigilance, circulars and guidelines are being issued regularly based on various inspections/ intensive examinations carried out from time to time. To promote transparency and ethics in working system, vigilance awareness week and other vigilance awareness programmes are also being organised by the Company.

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Adequate internal financial controls with reference to financial reporting are in place in the Company. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

19. RISK MANAGEMENT

Your Company has an elaborate Risk Management framework in place. Risk Management Policy of NHPC establishes a structured and disciplined approach to Risk Management including the development of a risk register to guide decisions on risk related issues. A total of 54 key risks have been identified along-with their mitigation measures and recorded in the risk register. The Company has set up a Board Level Risk Management Committee comprising Independent and Functional Directors to monitor the risks and their mitigating actions. Risk coordinators for each of the risks are identified, who are responsible for timely action to manage the risks, which may have detrimental effect on the business of the Company. The development and implementation of Risk Management Policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

20. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

In compliance to Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, annual procurement plan including items to be procured from Micro & Small Enterprises (MSEs) are uploaded on NHPC’s website for the benefits of MSEs. Your Company has designated a Nodal Officer for co-ordination and implementation of the policy.

NHPC is also extending the benefits to MSEs like exemption from tender fees and earnest money deposit, purchase preference, interest on delayed payments and exemption from prior experience - prior turnover criteria subject to meeting of quality and technical specifications.

During the financial year 2017-18, your Company has procured products and services from MSEs, which constituted 25.56% of the total annual procurement value, against the mandate of 20% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India. During the year, 582 MSEs were benefited out of which 15 MSEs belonged to SC/ST category.

Your Company had also organized/participated in ten vendor development programmes in co-ordination with Ministry of Micro, Small and Medium Enterprises, Govt. of India to encourage participation of Micro and Small Enterprises.

21. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has complied the provisions of the Official Languages Act, 1963 and relevant rules during the financial year 2017-18.

During the financial year 2017-18, NHPC had organized various programmes for its employees to encourage the use of official language Hindi which includes Hindi fortnight, Hindi competitions, Hindi Pustak Pathan Saptah, Akhil Bhartiya Rajbhasha Sammelan, Hindi Kavi Sammelan etc. In addition to above, Hindi workshops and departmental computer workshops were regularly organized in the Company. Rajbhasha magazines titled ‘Rajbhasha Jyoti’ and ‘Nagar Saurabh’ were also published to encourage the use of Hindi. Attractive incentive schemes for employees have been implemented as per the government guidelines to encourage employees for active participation in promotion of Hindi, by contributing to articles/writeups for in-house magazines, reading hindi books, and by noting and drafting in Hindi etc.

Rajbhasha inspections were carried out in various departments of the Corporate Office and at power stations/projects/regional offices by senior executives of the Company. The Parliamentary Committee on Official Language carried out the inspection of Corporate Office, Faridabad on February 19, 2018 at New Delhi. The efforts made by the Company in the progressive use of Hindi were appreciated.

Your Directors are pleased to inform that NHPC has been awarded “First Prize” under ‘Rajbhasha Kirti Puraskar’ scheme for the year 2016-17. NHPC has won this prestigious award for the eighth time for outstanding implementation of Rajbhasha amongst the Public Sector Undertakings (PSUs) located in Region ‘A’. NHPC has also been awarded ‘NTPC Rajbhasha Shield and Citation award’ as First Prize for 2016-17 for outstanding work in implementation of Rajbhasha amongst Power Sector Utilities. Company’s in-house Hindi language magazine “Rajbhasha Jyoti” was awarded Second Prize for the year 2016-17 amongst PSUs located in Region ‘A’ under Government of India’s highest official language award ‘Rajbhasha Kirti Puraskar’ for House magazine.

22. SPORTS AND OTHER ACTIVITIES

Your Company has formulated a Sports Policy to regulate sports related activities/issues, such as general administration, recruitment of sports persons, scholarship to sports persons, provision of sports accessories etc. Your Company has provided scholarships to four young sportspersons under the policy during the financial year 2017-18.

During the year 2017-18, NHPC had participated in various other Inter CPSU sports tournaments organized under the aegis of Power Sports Control Board, Ministry of Power. NHPC had also successfully hosted 22^nd Inter CPSU Badminton Tournament at its Chamera-I and Chamera-II Power Stations, Himachal Pradesh from February 20 to 23, 2018.

Your Company had coordinated painting competitions under the National Awareness Campaign on Energy Conservation organized by the Ministry of Power, Government of India for school students in the states of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh. In this competition employees of your Company have won Best Nodal Officer award in North Eastern States category and Best Nodal Officer for showing highest percentage increase in student participation over previous year.

During the year, your Company has participated in various National & International exhibitions to showcase its activities.

23. RIGHT TO INFORMATION

The Right to Information Act, 2005 has been implemented in your Company to provide information to citizens and to maintain accountability and transparency. The Company has placed various documents/records on its website i.e. www.nhpcindia.com. NHPC has designated Appellate Authority, Transparency Officer and Central Public Information Officer (CPIO) at Corporate Office and Assistant Public Information Officers (APIOs) at all power stations/projects/regional offices/units of the Company.

During the financial year 2017-18, 538 (210 online) applications and 65 (36 online) first stage appeals were received under RTI Act, out of which 536 (99.63%) applications and 64 first stage appeals (98.46%) were replied/disposed-off. Further, 13 appeals were filed by the applicants before the Central Information Commission (CIC), which were also disposed-off.

24. CORPORATE SOCIAL RESPONSIBILITY

Your Company commits itself to contribute to the society, discharging its corporate social responsibilities through initiatives that have positive impact on society at large, especially the community in the neighborhood of its operations by improving the quality of life of the people, promoting inclusive growth and sustainable development.

Focus areas of your Company’s CSR & Sustainability activities are Health, Sanitation, Drinking Water, Education & Skill Development, Capacity Building, Women Empowerment, Social Infrastructure Development and activities contributing towards Environment Sustainability.

As per Section 135 of the Companies Act, 2013, the 2% of average net profit for the preceding 3 financial years is to be spent on CSR activities. As against the required amount of Rs.59.52 crore for the financial year 2017-18, the Company has spent Rs.38.55 crore. The major reasons for less expenditure during the year then the mandatory requirement are as under:

(i) Spillover of works and payments, which were at different stages. Further details are given in the Annual Report on CSR Activities annexed with this report.

(ii) Activities at Kishanganga H.E. Project, Jammu & Kashmir suffered badly due to law and order problems in and around Bandipora District of Jammu & Kashmir.

(iii) Progress of CSR works suffered in Projects/ Power Stations under Siliguri Region due to Gorkhaland issue and strike called by Gorkha Janmukti Morcha.

The unspent amount of financial year 2017-18 shall be utilized on forthcoming CSR activities during financial year 2018-19 in accordance with Schedule VII of the Companies Act, 2013.

A separate report on CSR & sustainable development activities undertaken by your Company during the financial year 2017-18 is given as annexure to this report. The Corporate Social Responsibility & Sustainability Policy of your Company is available at http://www.nhpcindia.com/writereaddata/Images/pdf/ CSR-sustainability-23062017.pdf

25. INVESTOR EDUCATION AND PROTECTION FUND

The Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 provides that all unpaid or unclaimed dividend and the shares in respect of which dividend has not been paid or claimed for seven consecutive years are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by Central Government. Accordingly, the Company has transferred the unclaimed/unpaid amounts and the corresponding shares to the IEPF during the financial year 2017-18. The brief information regarding shares and unclaimed/unpaid amounts transferred to IEPF has been provided in the Corporate Governance Report. The details of unpaid/unclaimed amounts lying with the Company and details of shares transferred to IEPF are available on website of the Company at the link: http:// www.nhpcindia.com/Default.aspx?id = 278&lg = eng& and also on the website of Ministry of Corporate Affairs. Any person whose shares, unclaimed dividend, application money due for refund, etc. has been transferred to the IEPF, can claim it by making an online application to the IEPF Authority in accordance to the provisions of the Companies Act, 2013 and rules made thereunder.

26. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the financial year 2017-18, the Company has not entered into any material transaction with any of its related parties. The Company’s major related party transactions are generally with its subsidiaries and associates for providing consultancy services, leasing out of properties and manpower services. All the contracts/ arrangements/ transactions entered into with related parties were on arm’s length basis, intended to further the Company’s interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is also drawn to para no. 8 of note no. 34 of the financial statements, which sets out related party disclosures as per Ind AS-24.

27. VIGIL MECHANISM

Your Company had adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the directors, employees, vendors and contractors to bring instances of unethical/improper conduct to the knowledge of management. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A senior officer has been designated for effective implementation of the policy and dealing with the complaints registered under the policy. During the financial year 2017-18, no complaint was reported under the policy. No person was denied access to the Audit Committee on the issues pertaining to the Whistle Blower Policy.

28. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, ‘Internal Complaints Committees’ have been constituted at various locations of the Company for the redressal of complaint(s) against sexual harassment of women employees. The committee at Corporate Office of the Company is being headed by a senior woman officer and includes a representative from an NGO, as one of its members. Your company has also prohibited sexual harassment of women by incorporating it as misconduct under “NHPC (Conduct, Discipline and Appeal) Rules”.

During the financial year 2017-18, two complaints of sexual harassment were received by the Company, out of which one was resolved as per provisions of the Act and the other is under investigation.

29. DEBENTURE TRUSTEES

In compliance to the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of Debenture Trustees appointed by the Company, for different series of Bonds issued by it from time to time, is provided elsewhere in this report.

30. STATUTORY AND OTHER INFORMATION

Information required to be furnished as per the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Guidelines issued by Department of Public Enterprises (DPE) on Corporate Governance for CPSEs etc. is annexed to this report as follows:

Particulars	Annexure
Report on Corporate Governance	I
Certificate from Practicing Company Secretary regarding compliance to conditions of Corporate Governance	II
Management Discussion and Analysis Report	III
Conservation of energy, technology absorption and foreign exchange earnings and outgo	IV
Business Responsibility Report	V
Annual Report on CSR Activities	VI
Extract of Annual Return	VII
Dividend Distribution Policy	VIII

31. AUDIT AND AUDITORS’ REPORT

31.1 SECRETARIAL AUDIT

The Board has appointed M/s P. C. Jain & Company, Company Secretaries, Faridabad to conduct Secretarial Audit of the Company for the financial year 2017-18. The report of Secretarial Auditor is given at Annexure-IX. The qualification/observation in Secretarial Auditor’s Report and reply thereto is as under:

S. No.	Qualification/ Observation	Management reply
1.	The composition of the Board of Directors was not in compliance with the Para 3.1.4 of the DPE Guidelines on Corporate Governance upto 6th October, 2017 as the Board of Directors of the Company did not have requisite number of Independent directors on its Board.	As per Article 34 of the Articles of Association of the Company read with Ministry of Corporate Affairs notification dated 5th June 2015, the Independent Directors on the Board of the Company are to be appointed by the President of India. The matter regarding appointment of Independent Directors was regularly pursued with the Administrative Ministry i.e. Ministry of Power. During the financial year 2017-18, three Independent Directors viz. Shri Jugal Kishore Mohapatra, Prof. Nalini Kant Jha and Shri Bhagwat Prasad had joined the Board as additional directors of the Company w.e.f. October 7, 2017 pursuant to the orders received from Ministry of Power

2.	During the year 2017-18 the Company has spent only Rs.38.55 crores towards Corporate Social Responsibility as against Rs.59.52 crores to be spent pursuant to the provisions of Section 135 of the Companies Act, 2013.	The expenditure on CSR & SD activities during the financial year 2017-18 was Rs.38.55 crore as against the required amount of Rs.59.52 crore, under the Companies Act, 2013. The expenditure of requisite amount could not be made due to various reasons such as law and order problems in Jammu & Kashmir region, spillover of works and payments, which were under different stages of tendering, work award and release of final balance payments, etc.
3.	The Company	Rs.40,000 was inadvertently
	has made the	paid during the financial
	payment of sum of	year 2017-18. On coming to
	Rs.40,000/- to one	notice, the amount has been
	of the Independent	refunded by the Director
	director as	during the current financial year.
	honorarium for attending the Departmental Promotion Committee meeting (one level below the Board).The necessary approval towards this payment has not been obtained pursuant to the Article 34(b) of the Articles of Association of the Company from the Competent Authority during the period under review.

31.2 STATUTORY AUDIT

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (CAG). Accordingly, CAG has appointed following Joint Statutory Auditors for the financial year 2017-18:

1. M/s S.N. Dhawan & Co. LLP, New Delhi;

2. M/s Ray and Ray, Kolkata; and

3. M/s Arora Vohra & Co, Jammu

The Joint Statutory Auditors have given un-qualified report on the financial statements of the Company for financial year 2017-18. Further, no instance of fraud by any officer or employee of the Company has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

The standalone financial statements of the Company along-with report of the Statutory Auditors are given at Annexure-X. The consolidated financial statements of the Company along-with the Statutory Auditors’ Report are given at Annexure-XI.

31.3 REVIEW OF ACCOUNTS BY CAG

The CAG has given “NIL” comments on the standalone and consolidated financial statements of your Company for the financial year 2017-18 after conducting supplementary audit under Section 143(6)(a) of the Companies Act, 2013. The comments of CAG on the financial statements of your Company are given at Annexure-XII.

31.4 COST AUDIT

As per the requirement of Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records are being maintained by all power stations of your Company. The following firms of Cost Accountants were appointed to conduct audit of cost accounting records of power stations for the financial year 2017-18 under Section 148 of the Companies Act, 2013:

Name of the Firm	Name of Power Station/Project
M/s Chandra Wadhwa & Co., Delhi (Lead Cost Auditor)	Chamera-II and Chamera-III
M/s Balwinder & Associates, Mohali-Punjab	Dulhasti, Salal and Sewa-II
M/s Sanjay Gupta & Associates, Delhi	Tanakpur, Chutak and Nimmo Bazgo
M/s K. L. Jaisingh & Co., Noida	Chamera-I, Bairasiul and Parbati-III
M/s K. G. Goyal & Associates, Jaipur	Dhauliganga and Wind Power Project-Jaisalmer
M/s R. J. Goel & Co., Delhi	Uri-I and Uri-II
M/s DGM & Associates, Kolkata	Rangit, Teesta-V and TLDP-III
M/s Niran & Co., Kolkata	Loktak, TLDP-IV and Solar Power Project - Tamil Nadu

The consolidated Cost Audit Report in XBRL format for the financial year ended March 31, 2017 was filed with the Central Government on October 12, 2017 within the due date. The Cost Audit Report for the financial year ended March 31, 2018 shall be filed within the prescribed time period.

32. LOANS AND INVESTMENTS

Section 186 of the Companies Act, 2013 (except subsection 1) regarding loans made, guarantees given or securities provided is not applicable to the Companies engaged in the business of providing infrastructure facilities.

33. PARTICULARS OF EMPLOYEES

In accordance to notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors’ Report.

34. BOARD AND COMMITTEES OF THE BOARD

The Board of Directors of your Company met eleven times during the financial year 2017-18. Details regarding dates and attendance of the Board Meetings are given in the Corporate Governance Report, which forms part of this report.

Your Company has Audit Committee, Stakeholders’ Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee, Committee on Corporate Social Responsibility & Sustainable Development and other board level committees. Details regarding composition and meetings of these Committees are given in the Corporate Governance Report, which forms part of this report.

35. PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD

Ministry of Corporate Affairs (MCA) vide its notification dated June 5, 2015 has exempted/amended certain provisions of the Companies Act, 2013 for the Government Companies. As per the said notification, the Nomination & Remuneration Committee is not required to formulate remuneration policy, criteria for the appointment of Directors and their performance evaluation in certain cases i.e. in cases where the performance of directors is evaluated by the Administrative Ministry. Further, MCA vide its notification dated July 5, 2017 has amended Schedule IV to the Companies Act, 2013 with respect to performance evaluation of directors of the Government Companies, and exempted certain class of directors.

In compliance to SEBI (LODR) Regulations, 2015 read with Companies Act, 2013, your Company has framed a policy on performance evaluation of Board, Board level Committees and Independent Directors. As per the said policy, an annual performance evaluation of Board, Board level Committees and Independent Directors of the Company is carried out every year. The process of annual performance evaluation of Board, Board level Committees and Independent Directors is given in the Corporate Governance Report.

As regards policy on remuneration of Key Managerial Personnel and other employees of the Company, their pay structure, allowances and other benefits are governed by relevant DPE Guidelines. Annual performance evaluation of senior management personnel of the Company is being done as per HR rules of the Company read with relevant DPE Guidelines.

36. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

37. SECRETARIAL STANDARDS

Applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

38. DIVIDEND DISTRIBUTION POLICY

As per Regulation 43A of the SEBI (LODR) Regulations, 2015, your Company has formulated a Dividend Distribution Policy. The policy sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retained profits earned by the Company. The Dividend Distribution Policy of the Company is given as annexure to this report. The dividend pay-out of the Company during the financial year 2017-18 was in accordance with the Dividend Distribution Policy.

39. GENERAL

No disclosure or reporting in respect of the following items is required, as there was no transaction on these items during the year under report:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Significant and material orders passed by regulators or courts or tribunals, which impact the going concern status or Company’s operations in future.

4. Occurrence of any material changes and commitments after the close of the financial year till the date of this report, which affect the financial position of the Company.

5. Details related to public deposits as required under Chapter V of the Act, except to the extent explanation given in the annexure to the Auditors’ Report.

40. WEBSITE LINK FOR VARIOUS POLICIES OF THE COMPANY

Website links for the information required to be hosted on the website of the Company i.e. www.nhpcindia.com as per the Companies Act, 2013, SEBI (LODR) Regulations, 2015 etc. are as follows:

Particulars	Website Link
Policy on Related Party Transactions	http://www.nhpcindia.com/writereaddata/Images/pdf/Policy-Related-Party-Transaction.pdf
Corporate Social Responsibility & Sustainability Policy	http://www.nhpcindia.com/ writereaddata/Images/pdf/ CSR Policy Final.pdf
Policy on Material Subsidiaries	http://www.nhpcindia.com/writereaddata/Images/pdf/Policy-Material-Subsidiary.pdf
Whistle Blower Policy	http://www.nhpcindia.com/writereaddata/images/pdf/wbp.pdf
Familiarization programme for Directors	http://www.nhpcindia.com/writereaddata/Images/pdf/FProg-IndependentDirectorsIFA_201804_1.pdf
Dividend Distribution Policy	http://www.nhpcindia.com/writereaddata/Images/pdf/Dividend-Policy-21062017.pdf

41. BOARD OF DIRECTORS

The details of changes in composition of Board of Directors of your Company since the last report are as under:

41.1 FUNCTIONAL DIRECTORS

Ministry of Power, Govt. of India vide its letter dated September 22, 2017 had appointed Shri Balraj Joshi as Chairman & Managing Director (CMD) of the Company.

Ministry of Power, Govt. of India vide its letter dated July 5, 2018 had appointed Shri Janardan Choudhary as Director (Technical) of the Company. Prior to his appointment, Shri Balraj Joshi, CMD was holding the additional charge of the post of Director (Technical) w.e.f. October 27, 2017 in addition to his duties as CMD of the Company.

Shri Ratish Kumar, Director (Projects) held the additional charge of the post of CMD from August 1, 2017 to September 22, 2017.

The details of remuneration paid to Functional Directors during the financial year 2017-18 have been provided in the corporate governance report.

41.2 INDEPENDENT DIRECTORS

During the financial year 2017-18, three Independent Directors viz. Shri Jugal Kishore Mohapatra, Prof. Nalini Kant Jha and Shri Bhagwat Prasad joined the Board as additional directors of the Company w.e.f. October 7, 2017. They will hold the office till conclusion of next AGM of the Company unless re-appointed.

All the Independent Directors of the Company as on March 31, 2018, have declared that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015.

41.3 NOMINEE DIRECTORS

Shri Aniruddha Kumar, Joint Secretary (Thermal) was Nominee Director on the Board of the Company during the period from May 28, 2018 to July 18, 2018 pursuant to orders received from Ministry of Power. Further, Ministry of Power vide its letter dated July 30, 2018 has appointed Shri Aniruddha Kumar as Director in place of Ms. Archana Agrawal. Smt. Krishna Tyagi, Nominee Director of the Govt. of India, ceased to be a Director of the Company w.e.f. January 1, 2018 consequent upon her relieving from the post of Chief Controller of Accounts, Ministry of Power.

The Board place on record its deep appreciation for the valuable contribution and guidance given by Ms. Archana Agrawal and Smt. Krishna Tyagi during their respective tenure as Directors.

42. ACKNOWLEDGEMENT

The Board would like to express its deep sense of appreciation for the guidance and co-operation received from Government of India, particularly the Ministry of Power, Ministry of New & Renewable Energy, Ministry of Finance, Ministry of Environment, Forests & Climate Change, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, State Governments and their Ministries/ Departments.

The Board also conveys its gratitude to the Shareholders, Bankers, Financial Institutions and Lenders for the confidence reposed by them in the Company.

We place on record our special appreciation to valued customers, State Electricity Boards & Distribution Companies and other valuable clients of consultancy assignments. We also appreciate the contribution of contractors, vendors and consultants in implementation of various projects of the Company.

We also acknowledge the constructive suggestions received from the Office of Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditor and Cost Auditors.

We wish to place on record our appreciation for the untiring efforts, contributions and devotion made by the employees at all levels to ensure the continuous growth of the Company.

For and on behalf of the Board of Directors

(Balraj Joshi)

Chairman and Managing Director

DIN: 07449990

Date: August 6, 2018

Place: Faridabad

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Mar 31, 2017

Dear Members,

The Directors are pleased to present the 41^st Annual Report on the business and operations of the Company along with audited financial statements, Auditors'' Report, Report of Secretarial Auditor and review of financial statements by the Comptroller and Auditor General of India for the Financial Year ended 31^st March, 2017. Financial Year 2016-17 was yet another year of achievements for your Company. During the year under report, your Company added 130 MW to its capacity by commissioning its first wind power plant of 50 MW at Jaisalmer, Rajasthan and two units of 40 MW each of TLDP-IV Power Station (4 X 40MW). The total installed capacity of your Company (including of subsidiaries & JVs) as on 31^st March, 2017 was increased to 6,691 MW.

Major highlights for the year 2016-17 are:

- Total revenue and revenue from operations (net) were Rs, 8,729.84 crore and Rs, 7,271.17 crore respectively. Total comprehensive income, Net Profit After Tax (PAT) and other comprehensive income were Rs, 2,803.26 crore, Rs, 2,795.59 crore and Rs, 7.67 crore respectively.

- Power stations have achieved generation of 23,275 MUs, which includes generation of 18.2 MUs from Wind Power Project, Jaisalmer and deemed generation of 326.8 MUs from Chutak & Nimmo Bazgo Power Stations.

- Company had bought back 81.13 crore equity shares at a price of Rs, 32.25 per share for an aggregate amount of Rs, 2,616.60 crore.

- Overall Plant Availability Factor (PAF) of 83.41% was achieved during the Financial Year, which is higher than previous year''s PAF of 81.6%.

- Overall performance of the Company for the Financial Year 2015-16 was rated as "Very Good” in terms of Memorandum of Understanding (MOU) signed with Government of India.

- Cash contribution of Rs, 3,116.08 crore was made to Government of India''s exchequer through dividend, dividend tax, income tax and wealth tax in the Financial Year 2016-17.

- Market capitalization of the Company as on 31^st March, 2017 stood at Rs, 32,881.12 crore.

- Power Purchase Agreements (PPAs) were signed with Government of Bihar, Uttarakhand, Assam and Mizoram for upcoming Tawang HE Projects, Stage-I (600 MW) and Stage-II (800 MW) in Arunachal Pradesh.

- Power Purchase Agreement (PPA) was signed with Government of Bihar and Odisha for upcoming Teesta IV HE Project (520 MW) in Sikkim.

- Highest ever interim dividend of Rs, 1,882.02 crore (@ Rs, 1.70 per equity share) was paid in January, 2017. Further, a final dividend of Rs, 0.10 per equity share has been recommended for the Financial Year 2016-17 subject to approval of the shareholders.

Awards and Recognition

- "Best Miniratna” at Dun & Bradstreet PSU Awards, 2016.

- "PSE Excellence Award” for securing third place in the ''Mini Ratnas and other category'' for Corporate Governance for the year 2015 at the 6^th PSE Excellence Awards organized by Indian Chamber of Commerce in association with the Department of Public Enterprises, Govt. of India.

- "Best Hydropower Enterprise Award” by Hydropower Forum of India under the aegis of Enertia Foundation and Renewable Energy Promotion Association at the 2^nd India Hydro Awards, 2016.

- Awarded for displaying utmost commitment and drive to create a vibrant work environment for the construction fraternity especially by achieving the targets of "Mission Skilling India” by Construction Industry Development Council (CIDC).

- Excellence in CSR/Environment Protection and Conservation at the 8^th India Pride Awards 2016-17.

- Runner-up in the listed Public Sector Company category at the 2^nd Corporate Governance Excellence Awards 2015-16 organized by ASSOCHAM.

- "Best Water Management in Power Generation” at the 11^th Water Digest Water Awards, Water Titans 2016-17.

- Awarded for "Best Risk Management Practices” at the 3^rd India Risk Management Awards.

- Winner of Dun & Bradstreet Infra Awards 2016 under "Power Generation-Renewable” category.

- Second prize under "Rajbhasha Kirti Puraskar” by Ministry of Home Affairs, Govt. of India for commendable work in implementation of Rajbhasha amongst Public Sector Undertakings located in Region "A” for the year 2015-16.

1. FINANCIAL PERFORMANCE

The financial results for the year ended 31^st March, 2017 are summarized in Table 1.

Table 1: Financial Highlights

_(Rs, in crore)

PARTICULARS	2016-17		2015-161
Revenue from operations	7,271.17		7,353.00
Profit before depreciation, interest, rate regulated income and tax	5,222.23		5,060.77
Depreciation	1,388.40		1,359.07
Profit after depreciation but before rate regulated income, interest and tax	3,833.83		3,701.70
Interest and finance charges	1,073.22		1,072.10
Profit after depreciation and interest but before rate regulated income and tax	2,760.61		2,629.60
Rate regulated income	713.99		550.90
Tax	679.01		750.61
Profit after depreciation, interest, rate regulated income and tax	2,795.59		2,429.89
Other Comprehensive Income (OCI)	7.67		3.24
Total Comprehensive Income (TCI)	2,803.26		2,433.13
Surplus from statement of profit and loss of earlier years (including Other Comprehensive Income)	3,147.66		2,531.56
Amount written back from bond redemption reserve	109.42		109.43
Amount written back from CSR fund	-		13.33
Tax on dividend—written back	-		24.08
Movement in Other Comprehensive Income	-		(9.40)
Sub-total	6,060.34		5,102.13
Less: APPROPRIATIONS
Transfer to bond redemption reserve		394.49		185.74
Dividend and Corporate Dividend Tax (CDT)		2,996.35		1,758.82
Transfer to R & D fund		12.20		9.91
Closing Balance of Retained Earnings including Other Comprehensive Income		2,657.30		3,147.66

* Figures of Financial Year 2015-16 have been re-casted to make them Ind-AS compliant.

1.1 Revenue

Your Company has registered a growth of 4.61% in the total income during the Financial Year 2016-17 by generating revenue of Rs, 8,729.84 crore as against Rs, 8,345.07 crore during the Financial Year 2015-16.

1.2 Expenses

The total expenditure during Financial Year 2016-17 was of Rs, 5,969.23 crore as against total expenditure of Rs, 5,715.47 crore in the Financial Year 2015-16. Employee benefit expenses, generation & other expenses, finance cost and depreciation were 26%, 33%, 18% and 23% respectively of total expenses as against 20%, 37%, 19% and 24% respectively in the previous year. Total expenditure in terms of percentage remained the same as of previous year at 68% of total income during the Financial Year 2016-17.

1.3 Profit

Your Company had earned a Profit After Tax (Total Comprehensive Income) of Rs, 2,803.26 crore during the Financial Year 2016-17, as compared to Rs, 2,433.13 crore (re-stated as per Ind AS) in the Financial Year 2015-16.

1.4 Share Capital

The paid-up equity share capital of the Company as on 31^st March, 2017 was Rs, 10,259.32 crore as against Rs, 11,070.67 crore in the previous year. Decrease in paid up capital was due to buy-back of equity shares.

1.5 Net Worth

Your Company''s net worth as on 31^st March, 2017 was Rs, 26,942.13 crore, as against Rs, 29,761.15 crore in the previous year. Decrease in net worth as on 31^st March,

2017 was due to buy-back of shares and payment of interim dividend.

1.6 Offer for Sale by the Govt. of India to the Employees

The President of India acting through Ministry of Power, Govt. of India had divested its holding in NHPC, equivalent to 11.36% of the paid up capital during April, 2016 and raised Rs, 2,719.55 crore through Offer for Sale (OFS) route. Further, total of 6,28,81,397 shares representing

0.568% of the paid up equity capital of the Company were offered to eligible employees in November, 2016. These shares were offered at a rate of Rs, 20.66 per equity share (at a discount of 5% on OFS price of Rs, 21.75). After the above Offer for Sale to employees, the holding of Government of India in the Company was reduced to 74.51%.

1.7 Buy-back of Shares

Your Company had also bought back its 81,13,47,977 fully paid up equity shares of Rs, 10/- each, from the shareholders of Company at a price of Rs, 32.25 per equity share, pursuant to the decision taken by the Board of Directors in its meeting held on 7^th February, 2017. The buy-back consideration paid to the shareholders was Rs, 2,616.60 crore. The activity of the buy-back was completed on 27^th March, 2017. After the Buy-back, paid up capital was reduced to Rs, 10,259.32 crore comprising 10,25,93,20,519 equity shares of Rs, 10/- each.

2. DIVIDEND

Your Company had paid an interim dividend of Rs, 1.70 per equity share in January, 2017. In addition to above, the Board of Directors of your Company has recommended a final dividend of Rs, 0.10 per equity share for the Financial Year 2016-17. Accordingly, the total dividend for the year comes to Rs, 1.80 per equity share. The total dividend pay-out on approval of final dividend of Rs, 0.10 for the Financial Year 2016-17 will be Rs, 1,984.61 crore (Rs, 2,388.64 crore including dividend distribution tax of Rs, 404.03 crore) representing 71% of the profits after tax, as against a dividend pay-out of Rs, 1,660.60 crore representing 68% of the profits after tax in the previous year.

3. OPERATIONAL PERFORMANCE

During the Financial Year 2016-17, the standalone installed capacity of your Company had increased to

5,171 MW with the commissioning of remaining two units of 40 MW each of TLDP-IV HE Project (4X40 MW) (under commercial operation w.e.f. 19^th August, 2016) and 50 MW Wind Power Project, Jaisalmer, Rajasthan (under commercial operation w.e.f. 30^thSeptember, 2016). Presently, the aggregate installed capacity of your Company is 6,691 MW (including 2 power stations of

1,520 MW of NHDC Limited - Subsidiary Company of NHPC).

Your Company had generated 23,275 Million Units (MUs) during the Financial Year 2016-17. The Plant Availability Factor during the Financial Year 2016-17 was at 83.41%. The power station wise generation and Plant Availability Factor is given at Table 2.

Table 2: Power Station wise generation and Plant Availability Factor (PAF) during Financial Year 2016-17

NAME OF POWER STATIONS	GENERATION TARGET* (MU)	ACTUAL GENERATION (MU)	PAF TARGET* (%)	ACTUAL PAF (%)
PONDAGE POWER STATIONS2
BAIRA SIUL (180 MW)	650	669	92.54	93.30
LOKTAK (105 MW)	530	741	93.54	96.91
CHAMERA - I (540 MW)	2,270	2,224	96.54	98.02
RANGIT (60 MW)	340	347	95.54	97.84
CHAMERA - II (300 MW)	1,460	1,444	95.54	98.67
DHAULIGANGA (280 MW)	1,110	956	89.54	82.58
DHULASTI (390 MW)	2,147	2,280	95.24	95.26
TEESTA - V (510 MW)	2,593	2,773	92.54	95.09
SEWA - II (120 MW)	470	471	96.54	98.13
CHAMERA - III (231 MW)	1,015	917	91.54	80.14
TLDP - III (132 MW)	565	554	89.54	89.51
TLDP - IV1 (160 MW)	500	603	89.54	92.15
Sub Total A	13,650	13,979	93.55	93.43
RUN OF THE RIVER POWER STATIONS & RESTRICTED PLANTS
SALAL (690 MW)	3,280	3,423	65.00	70.45
TANAKPUR (94.2 MW)	450	430	55.00	66.20
URI (480 MW)	2,940	2,803	74.00	79.10
CHUTAK2 (44 MW)	195	220	50.00	57.35
NIMOO BAZGO2 (45 MW)	220	246	65.00	81.41
URI - II (240 MW)	1,362	1,473	74.00	81.75
PARBATI - III (520 MW)	665	682	50.00	53.49
KISHANGANGA (330 MW)	238	-	80.00	-
Sub Total B	9,350	9,277	64.00	69.29
TOTAL A B (HYDRO)	23,000	23,256	81.12	83.41
WIND POWER PROJECT3	0	18	-	-
TOTAL	23,000	23,275	81.12	83.41

*Targets shown are for "Very Good” rating as per MOU.

Actual achievement for the Financial Year 2016-17 is as under:

Increase in Plant Availability Factor over Previous Year excluding Run of River and Restricted Plants	Financial Year 2015-16 - Actual	Financial Year 2016-17 - Actual	Actual increase over previous year
	92.85%	93.43%	0.62%

Note:

¹. Unit 3 & 4 of TLDP IV HE Project (4X40 MW) were commissioned on 3^rd July, 2016 & 11^th August, 2016 and declared under commercial operation on 17^th July, 2016 & 19^th August, 2016 respectively.

² Generation includes deemed generation of Chutak Power Station (176.2 MUs) & Nimoo Bazgo Power Station (150.6 MUs).

³. Wind Power Project was declared under commercial operation on 30^th September, 2016.

Accordingly, your Company had achieved target for "Very Good” rating as per the MOU signed with Ministry of Power, Govt. of India. Your Directors are pleased to inform that Company had also earned net deviation charges of Rs, 150 crore (approx) due to efficient operation and timely response to changes in the grid frequency.

The Bairasiul Power Station (180 MW), which was commissioned in the year 1981, had completed 35 years of its commercial operation in the Financial Year 2016-17. Proposal for its renovation & modernization for the extension of its life has been approved by Central Electricity Regulatory Commission (CERC) and shall be carried out from the year

2018 to 2021. Electro-Mechanical (E&M) package for the power station has been awarded to M/s BHEL. Likewise, Loktak Power Station (105 MW) shall be completing 35 years of its commercial operation in the Financial Year 2018-19. Proposal for its renovation & modernization for the extension of its life has been approved by the Board of Directors and is presently under examination/vetting by the Central Electricity Authority (CEA).

4. COMMERCIAL PERFORMANCE

4.1 Sales and Realization

During the year under report, your Company''s sales from operations stood at Rs, 7,191.53 crore. We are pleased to inform that your Company has been able to realize an amount of Rs, 7,676.27 crore including collection of surcharge and liquidation of outstanding amount of previous years during the Financial Year 2016-17.

As on 31^st March, 2017, the total outstanding dues of Rs, 959.95 crore were pending for more than 60 days. Out of the above, Rs, 566.64 crore pertains to Power Development Department, J&K (JKPDD) and Rs, 256.74 crore pertains to BSES Yamuna Power Limited. Your Company is making efforts to recover the outstanding dues by continuous follow-up and regulation of power supply of defaulting beneficiaries. The implementation of Ujwal DISCOM Assurance Yojna (UDAY) of Government of India has also facilitated in liquidation of outstanding dues by beneficiaries.

4.2 Tariff petition before Central Electricity Regulatory Commission

The tariff petitions in respect of all the 19 hydro power stations had been filed for the period 2014-19 for fixation of tariff under Central Electricity Regulatory

Commission (Terms & Conditions of Tariff) Regulation, 2014. Tariff orders for 14 power stations have been issued by Central Electricity Regulatory Commission (CERC). Interim tariff have been allowed for remaining 5 new power stations. The final tariff for these new power stations will be issued by CERC, after the submission of revised cost estimate duly approved by Govt. of India.

4.3 Signing of Power Purchase Agreements (PPAs)

The PPAs in respect of following power stations had been renewed for 35 years from the date of their commercial operation with following states/union territory/distribution companies:

SR. No.	Name of State/ Union Territory/ Distribution Companies	Name of Power Station
1	Jammu & Kashmir	Dulhasti, Chamera-I, Chamera - II, Tanakpur, Salal ,Uri and Sewa - II
2	Uttar Pradesh	Chamera - II, Tanakpur, Salal, Uri, Chamera - I and Sewa - II
3	Chandigarh	Salal, Uri, Tanakpur, Chamera-I, Sewa-II, Chamera-III, Uri-II and Parbati-III
4	Tata Power Delhi Distribution Limited - Delhi	Bairasiul, Salal, Tanakpur, Chamera - I, Uri - I, Sewa - II and Chamera - III
5.	Assam	Loktak
6	Bihar	Teesta - V and Rangit
7.	Jharkhand	Teesta - V and Rangit
8	Odisha	Teesta - V

5. STATUS OF ONGOING PROJECTS

Your Company is presently engaged in the construction of three hydroelectric projects. The status of these ongoing projects is as under:

5.1 Kishanganga Hydroelectric Project - 330 MW (3 X 110 MW), Jammu & Kashmir:

Kishanganga HE Project is a run of the river project on Kishanganga River in the Bandipore District of Jammu & Kashmir. The project will generate 1,713 MUs of energy in a 90% dependable year on its commissioning. The Dam works and Head Race Tunnel (HRT) of the project are almost completed. The Electro-Mechanical works are in advanced stage of completion. The work of project was disrupted due to law and order problem in the

Kashmir valley during July, 2016 to January, 2017. The work in power house area has been resumed with effect from January, 2017. The progress of the balance work on all fronts is gearing up for commissioning of project. The 1^st Unit of the project is anticipated to be commissioned in November, 2017 and remaining two Units by January, 2018.

5.2 Parbati- II Hydroelectric Project - 800 MW (4 X 200 MW), Himachal Pradesh:

Parbati-II Hydroelectric Project is a run of the river scheme on the River Parbati. Major civil works of Dam, Intake Structure, De-silting Chamber, Pressure shafts, Surge shaft, Powerhouse and Jiwa Nallah works have been completed. Water conductor system consists of 31.52 Km long Head Race Tunnel (hRt), out of which excavation of 27.4 Km and concrete lining of 24.6 Km length has been completed till May, 2017. Since the resumption of excavation of HRT by Tunnel Boring Machine (TBM) from October, 2015, 648 m of tunnel has been excavated till 31^st May, 2017. E&M works of powerhouse are also progressing satisfactorily. Out of four generating units, three units have been boxed up. In Unit-IV, stator and rotor have been lowered and boxing up is in progress.

First and second units of Parbati-II HE Project were successfully spun on 31^st March, 2017 and 9^th April, 2017 respectively by using the water of Jiwa Nallah. First Unit of Parbati-II HE Project has been successfully synchronized on part-load on 29^th July, 2017. Erection of all radial gates of Dam has been completed and shall be commissioned shortly. Diversion works of Jigrai, Manihaar, Pancha and Hurla Nallahs are also progressing satisfactorily.

Excavation of balance HRT by TBM is most critical. Project is now anticipated to be commissioned in December, 2018.

5.3 Subansiri Lower Hydroelectric Project - 2,000 MW (8 X 250 MW), Assam/Arunachal Pradesh:

Works on the project is presently stalled due to directions from National Green Tribunal (NGT), Kolkata. Company is in constant touch with the Central Govt. and State Govt. of Assam for the early resumption of the construction activities at the project. Efforts are being made for early vacation of stay from NGT, Kolkata. The project is expected to be completed in 4 years'' time from the date of resumption of work.

6. NEW PROJECTS

Table 3: Projects under clearance/approval stage:

SR. No.		PROJECT	STATE	INSTALLED CAPACITY (MW)
A.		STANDALONE BASIS
(a)		HYDRO PROJECTS
		Kotlibhel - IA	Uttarakhand	195
	i	Teesta-IV	Sikkim	520
	ii	Dibang	Arunachal Pradesh	2,8801
	iv	Tawang-I		6002
v		Tawang-II		8002
		Sub-total (a)		4,995
(b)		WIND PROJECTS
i		Wind Project, Palakkad	Kerala	72
ii		Wind Project	Andhra Pradesh	12.53
		Sub-total (b)		84.5
(c)		SOLAR PROJECT
i		Solar Project	Tamil Nadu	50
		Sub-total (c)		50
		Total A (a b c)		5,129.5
B. THROUGH SUBSIDIARIES
(a) HYDRO PROJECTS
i		Loktak Downstream HE Project through Loktak Downstream Hydroelectric Corporation Limited (Joint Venture with Govt. of Manipur)	Manipur	66
		Sub-total (a)		66
(b) SOLAR PROJECTS
i		Project in Jalaun District of U.P. through Bundelkhand Saur Urja Limited (Joint Venture with UPNEDA)	Uttar Pradesh	4 3
		Sub-total (b)		32

SR. No.		PROJECT	STATE	INSTALLED CAPACITY (MW)
(c) THERMAL PROJECTS
i		Pirpainti Thermal Power Project (a Joint venture between Bihar State Power Generation Company Limited and Pirpainti Bijlee Company Private Limited - The JV Company is yet to be incorporated)	Bihar (Approval for NHPC participation is awaited)	1,320
		Sub-total (c)		1,320
		Total B (a b c)		1,418
C.		THROUGH JOINT VENTURE
(a)		HYDRO PROJECTS
		Kiru (Joint Venture with JKSPDC & PTC)	Jammu & Kashmir	6245
	i	Kwar (Joint Venture with JKSPDC & PTC)		5405
	iii	Chamkharchhu - I (Joint Venture with Druk Green Power Corporation Limited, Bhutan - yet to be incorporated) in Bhutan	-	770
		Sub-total (a)		1,934
		Total C (a)		1,934
		Grand Total (A B C)		8,481.5

1. The project was initially concurred for 3,000 MW by Central Electricity Authority (CEA). Subsequently, due to reduction in the proposed height of the project at the time of clearance by Ministry of Environment, Forest and Climate Change, the installed capacity of the project has been reduced to 2,880 MW. Forest clearance (Stage-I) and Environment Clearance have been accorded. Compliance of conditions under Forest Clearance (Stage-I) is under process for obtaining Forest Clearance (Stage-II). Meeting for concurrence of the project has been held at Central Electricity Authority (CEA) in May, 2017. Final concurrence for the project is awaited.

2. Environment Clearance and concurrence by CEA have been accorded for Tawang-I & II HE Projects. Forest Clearance (Stage-I) has been accorded to Tawang-II HE Project. Compliance of conditions under Forest Rights Act, 2006 is under process for these projects.

3. New & Renewable Energy Development Corporation of Andhra Pradesh Limited had initially accorded approval for 16 MW project. However, due to connectivity issues approval for 12.5 MW has been granted.

4. As against land for 50 MW solar power project, UPNEDA has transferred 63.491 Ha Land at Village Parason to BSUL. Now, a 32 MW solar power project is proposed to be implemented.

5. DPR of Kiru & Kwar HE Projects have been techno-economically appraised by Central Electricity Authority. Earlier capacity for Kiru and Kwar projects was envisaged as 600 MW and 520 MW respectively.

7. DIVERSIFICATION

Your Company is making efforts for capacity addition through diversification of its activities by taking projects of different sources of energy viz. wind, solar and thermal. The activities of the Company for establishment of such projects are as under:

7.1 Wind Power Projects

Your Company has commissioned a 50 MW wind power project in the Jaisalmer District in the state of Rajasthan on 30^th September, 2016.

The Detailed Project Report (DPR) to execute a 72 MW (±10%) capacity wind power project at Agali site, Palakkad District in the State of Kerala has been prepared. Signing of Power Purchase Agreement (PPA) and allotment of land is under process. Government of Kerala has requested to execute 8 MW capacity initially as per existing evacuation facility. EPC bid process has been initiated.

Your Company has also received an in-principle approval for 12.5 MW wind power plant in Andhra Pradesh from New & Renewable Energy Development Corporation of Andhra Pradesh Limited (nodal agency). Signing of PPA and EPC bidding for the project is under process.

7.2 Solar Power Projects

Your Company is in process for the establishment of a 50 MW Solar Power Project at Dindigul/Theni District of Tamilnadu. The letter of award has been issued to EPC contractor with completion time of 9 months. The project is likely to be completed by March, 2018.

Your Company is also under process to install solar power plants at its various projects/power stations including corporate office. Plants with aggregate capacity of 360 KWp have already been commissioned. In addition to above, plants with aggregate capacity of 605 KWp are under execution and tender process for 974 KWp has been initiated.

7.3 Thermal Power Project

Investment approval for the formation of a Joint Venture Company by acquisition of 74% equity shares of Bihar State Power Generation Company Limited for the development of 1,320 MW (2 X 660 MW) Pirpainti Thermal Power Project in District Bhagalpur, Bihar is under process. The approval of Govt. of Bihar for the extension of MoU and equity funding without availing loan from NHPC is also under process.

Doecha-Pachami-Dewanganj-Harinsingha coal block at Birbhum District, West Bengal was allocated to the project along with other states. However, the applications were invited by Ministry of Coal, Govt. of India for allocation of seven coal blocks to States/CPSUs separately due to operational difficulties and the same is under process.

7.4 Pumped Storage Scheme

Government of India has envisaged large capacity additions of variable and intermittent power from solar and wind in coming years. Accordingly, expeditious development of Pumped Storage potential as balancing plants has become very vital for ensuring greater grid

8. DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has the following subsidiaries/associates/joint venture Companies as on 31^st March, 2017:

Name of the Company	Details of Joint Venture partners	Performance of the Company during Financial Year 2016-17
SUBSIDIARY COMPANIES
NHDC Limited (NHDC)	NHPC (51%) and Government of Madhya Pradesh (49%)	NHDC is having two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 MW) in Madhya Pradesh. During the Financial Year 2016-17, the generation from Indira Sagar Power Station and Omkareshwar Power Station was of 3,320.79 MUs and 1,427.71 MUs respectively. NHDC is also exploring possibilities for its capacity addition through diversification in renewable sources of energy i.e. solar power projects in the state of Madhya Pradesh.
Loktak Downstream Hydroelectric Corporation Limited (LDHCL)	NHPC (74%) and the Government of Manipur (26%)	LDHCL is currently implementing Loktak Downstream Hydro-Electric Project (66 MW) in Tamenglong District of Manipur. All statutory clearances for the project have been received. Bids for turnkey execution of the project were invited by the Company. As the lowest bid was much higher than the estimated cost, therefore the Board of LDHCL decided to go for re-tendering. The project is now planned to be implemented through two EPC packages viz. one for Civil & HydroMechanical and the other for Electro-Mechanical works. Tendering for the two EPC packages are under process. Further, the Government of Manipur has also allocated hydro-electric component of Thoubal Multipurpose Scheme (7.5 MW) to the Company. The Board of NHPC Limited has accorded in-principle approval for equity contribution for this project. The project at present is under investigation stage.
Bundelkhand Saur Urja Limited (BSUL)	NHPC (99.99%) and Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA)	BSUL was incorporated to implement a 50 MW solar power project at Village Parason, Tehsil-Kalpi, District-Jalaun, Uttar Pradesh and any other conventional & non-conventional power projects entrusted to it by the Govt. of Uttar Pradesh. The land earmarked by UPNEDA earlier for the project was withdrawn, resulting in cancellation of bids for EPC contract. Subsequently, UPNEDA transferred 63.491 Ha Land at Village Parason to BSUL on 21st March, 2017. Now, a 32 MW Solar Power Plant is proposed to be implemented at the site. Fresh bids for the award of EPC contract to develop 32 MW solar crystalline photovoltaic grid connected power plant along with associated 132 kV power evacuation equipment and its 10 years comprehensive operation & maintenance have been invited.

discipline, load balancing and facilitating large renewable penetration. In the recent times, Government is giving more emphasis on the development of Pumped Storage Plants due to their inherent advantages of absorbing the off-peak energy in the system and providing peaking power which will help in the system stability.

NHPC is actively exploring opportunities for the development of pumped storage schemes in potential rich states like Maharashtra, Karnataka, Odisha etc. Your Company has identified some projects in Maharashtra and Karnataka and is under discussion with respective state governments for DPR preparation and subsequent development of pumped storage projects.

National Power Exchange Limited (A joint venture of NHPC Limited, NTPC Limited, Power Finance Corporation Limited and Tata Consultancy Services) has been wound up and dissolved w.e.f. 31^st March, 2017 pursuant to the orders of Hon''ble High Court of Delhi.

Name of the Company	Details of Joint Venture partners	Performance of the Company during Financial Year 2016-17
ASSOCIATE/JOINT VENTURE COMPANIES
Chenab Valley Power Projects Private Limited (CVPPPL)	NHPC Limited (49%), Jammu & Kashmir State Power Development Corporation Limited (49%) and PTC India Limited (2%)	Three projects viz. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW) and Kwar HE Project (540 Mw) in Jammu & Kashmir are being developed by CVPPPL. Tenders for the execution of Pakal Dul HE Project through packages of major components viz. Diversion tunnel, Head Race Tunnel-TBM, Dam, Power House, Hydro-Mechanical and Electro-Mechanical are under process. All statutory clearances for Kiru & Kwar HE Projects are also available. Process of tendering for civil works of Kiru HE Project has been initiated. The Company has also taken up infrastructure development works i.e. projects roads, bridge, building etc. for Kiru HE Project. However, major construction activities are yet to be started. Tender documents for three packages - Civil, Hydro-Mechanical and Electro-Mechanical for Kwar HE Project are under preparation.
National High Power Test Laboratory Private Limited (NHPTL)	NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute (each having shareholding of 20%)	NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the Country. The Company is constructing laboratories for High Voltage Transformer (HVTR) and Medium Voltage Transformer (MVTR) at Bina, Madhya Pradesh. The Voltage Transformer section of its laboratory under Stage-I for short circuit testing of transformers is commercially operational at 400 kV, at Bina, Madhya Pradesh w.e.f. 1st July, 2017.

A report on the financial position of each of the subsidiaries, associates and joint venture Companies as per the Companies Act, 2013 has been provided as an annexure to the consolidated financial statements and hence not repeated here for the sake of brevity.

The audited financial statements of subsidiary companies are not being attached to the audited annual financial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder who desires to have a copy of aforesaid financial statements, may write to the Company Secretary, NHPC Limited. The financial statements of subsidiary companies are also available on the website of the Company i.e. www. nhpcindia.com.

9. PROJECTS UNDER DPR PREPARATION

Survey and Investigation for the preparation of DPRs of the following hydroelectric projects are under process:

SR. NO.	PROJECT	INSTALLED CAPACITY (MW)
1	Bursar HE Project, Jammu & Kashmir	800
2	Dhauliganga Intermediate HE Project, Uttarakhand	210
3	Goriganga-IIIA HE Project, Uttarakhand	150
	Total	1,160

9.1 Bursar HE Project, Jammu & Kashmir:

The Bursar HE Project is a storage project located in Kishtwar District of Jammu & Kashmir on Marusudar

River, a major tributary of River Chenab. The project is planned with an installed capacity of 800 MW. The storage provided at the project is intended to be used for additional power generation during lean flow months and releasing regulated flow in the downstream. The DPR of the project has been submitted to Central Electricity Authority (CEA) on 6^th January, 2017 and is under examination.

9.2 Dhauliganga Intermediate HE Project, Uttarakhand:

The Dhauliganga Intermediate HE Project is situated in the Pithoragarh District of Uttarakhand on the River Dhauliganga. The project was earlier planned with an installed capacity of 225 MW. The capacity of the project has now been reduced to 210 MW due to change of Dam site consequent upon flash flood in June, 2013 and deposition of huge riverine material in the Dam area. The survey & investigation activities at the project for the preparation of DPR are under progress.

9.3 Goriganga IIIA HE Project, Uttarakhand:

The Goriganga IIIA HE Project is situated in the Pithoragarh District of Uttarakhand on the River Goriganga. The project was earlier planned with an installed capacity of 120 MW. However, as per approved water series by Central Water Commission (CWC), the installed capacity of the project was increased to 150 MW. Major survey & investigation activities have already been completed and DPR is under preparation.

10. RURAL ROAD PROJECTS

Your Company had signed an MoU with the Ministry of Rural Development, Government of India and the Government of Bihar for the construction of rural roads in six Districts of Bihar namely Vaishali, Muzaffarpur, Sitamarhi, East Champaran, Sheohar and West

Champaran under the Pradhan Mantri Gram Sadak Yojna (PMGSY).

Under the scheme, your Company was awarded the works of 758 roads having cost of '' 1,725.65 crore for execution. As on 31^st March, 2017, 752 roads of the length of 3,076 km have been completed. Construction of balance 6 roads (5 roads in Vaishali District and 1 road in Sheohar District) are under progress.

As per the Tripartite Agreement, maintenance of all 758 roads was also to be carried out for five years after completion of their construction. Out of 752 roads already completed, maintenance period of five years for 570 roads covering 2,395 km of road length has also been completed. 182 roads of the length of 681 km are under maintenance period.

11. CONSULTANCY SERVICES

Your Company is also providing consultancy services in various fields related to hydro power within and outside the country viz. river basin studies, survey works, design and engineering, hydrological studies, contract & construction management etc.

Major consultancy clients of your Company are government agencies (Central and State), CPSUs and Governments of neighboring countries.

12. FINANCING OF NEW PROJECTS

As per CERC guidelines, the financing of projects is to be considered in debt equity ratio of 70:30 for the purpose of tariff fixation.

Your directors are of the opinion that available internal accruals will be sufficient to meet equity component for new/upcoming projects. Further, your Company is well positioned to raise required funds on the basis of its strong domestic and international credit ratings.

13. INFORMATION TECHNOLOGY AND COMMUNICATION

Your Company has a robust information technology and communication infrastructure.

Information Technology (IT) and Cyber Security Policy is in place to manage the IT system to ensure optimum and secure utilization of the assets owned by NHPC. Its various sites are connected with the corporate office through multimode, fail-safe communication links using MPLS-OPGW/VPN/VSAT-Ku band/broadband technologies. Your Company has co-located its key servers at TIER-III data centers of M/s National Informatics Centre Service Incorporated (NICSI) at New Delhi and M/s BSNL at Faridabad. Disaster Recovery (DR) site is also operational for ERP at NHPC office, Kolkata.

All key business functions viz. finance, human resource, procurement & contracts, inventory, project management, power plant operation and maintenance, energy sales and accounting, quality assurance etc. have been implemented in the IFS-ERP System using latest tools & technologies.

E-waste is being disposed-off in an environment friendly manner. Your Company is also acting as a nodal agency for CERT-HYDRO to guide and monitor the cyber security related activities in the constituent member organizations.

14. TRAINING AND HUMAN RESOURCE DEVELOPMENT

Your Company believes that an organization can ensure its growth and expansion on sustainable basis, if its human resources are ready to lead change, provide meaningful solutions, overcome competitive challenges and make the most of every opportunity for growth. It is only through an extensive training and development intervention that we can produce capable human resource, who can put the organization on the growth trajectory in a sustained manner.

During the period, your Company has organized number of training and development programmes to enhance the competencies of the employees towards their valuable contribution for the growth of the organization. Your Company in collaboration with ASCI Hyderabad, IIMs, IIT-Roorkee, ISM-Dhanbad, Alstom, BHEL etc. has organized multidisciplinary programmes to develop behavioral, managerial and functional competency of employees. The above programmes have been organized in various areas including Behavioral Competency & Leadership Development, Functional Competency, Health & Lifestyle Management.

15. INDUSTRIAL RELATIONS

During the year, industrial relations remained cordial and harmonious at all the projects / power stations / units.

16. RESETTLEMENT AND REHABILITATION Resettlement and Rehabilitation (R&R) Plan for the project affected families are in place as per ''the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013'' for upcoming NHPC''s projects.

17. VIGILANCE ACTIVITIES

The systems, procedures and processes in NHPC are aimed to make organization a transparent entity. Vigilance Division of your Company has been granted ISO 9001:2008 certification. All the procedures are documented and systems are in place to monitor, vigilance complaints and disciplinary cases, to avoid delays.

As a part of transparent procurement system and in compliance to guidelines issued by Ministry of Power and Central Vigilance Commission (CVC), your Company has opted for e-procurement solution across the Company. The procurement process for supply/works/contracts cases over the value of Rs, 2 lakh is being done through e-procurement. Your Company has also implemented e-Reverse auction for the works of Electro-Mechanical /Hydro-Mechanical Contracts, Solar, Wind projects & procurement of goods, of estimated value of more than Rs, 5 crore and are not of urgent nature.

Integrity Pact has been successfully implemented for all the procurement of works, goods and services equal to or more than value of Rs, 100 lakh, Rs, 7 lakh and Rs, 15 lakh respectively.

Regular and surprise inspections are being conducted by Vigilance Department. Actionable points identified by Project Vigilance Officers are intimated to Head of Projects from time to time. Intensive examination of works, wherever required, is also carried out by Chief Technical Examiner of the CVC.

Circulars and guidelines based on inspection / intensive examination are being issued regularly, as part of preventive vigilance. Vigilance awareness week and other programmes are being arranged to create awareness, promote transparency and ethics in working system.

18. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal financial controls. During the year, such controls were tested and no reportable material shortcoming in the design or operation of control systems was observed.

19. RISK MANAGEMENT

Risk Management Policy establishes a structured and disciplined approach to Risk Management including the development of a risk register to guide decisions on risk related issues. The Policy was revised in July, 2015 wherein a total of 54 key risks had been identified along-with their mitigation measures and recorded in the risk register. The Risk Management Committee comprising Independent and Functional Directors has oversight on all the risks assumed by the Company. Risk co-ordinators for each of the risks are identified, who are responsible for timely action to manage the risks, which may have detrimental effect on the business of the Company. Implementation of risk management policy has resulted in increased focus on corporate governance and managing the risks during construction and operation of power stations/projects. Company has also improved the compliances relating to legal and regulatory frameworks with periodic compliance audit of its various locations.

20. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

In compliance to Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012, annual procurement plan including items to be procured from Micro & Small Enterprises (MSEs) are uploaded on NHPC''s website for the benefits of MSEs. Your Company has designated a Nodal Officer for co-ordination & implementation of the policy.

NHPC is also extending the benefits to MSEs like exemption from tender fees, earnest money deposit, purchase preference and interest on delayed payments. During the Financial Year 2016-17, your Company has procured products and services from MSEs, which constitute 34.69% of the total annual procurement value, against the mandate of 20% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India. The total annual procurement value doesn''t include items/ equipments/services procured from Original Equipment Manufacturers (OEMs) and/or not manufactured/ provided by MSEs.

NHPC had also organized eight vendor development programmes in co-ordination with Ministry of Micro, Small and Medium Enterprises, Govt. of India at various NHPC''s power stations/projects/units to encourage participation of Micro and Small Enterprises.

21. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company had complied the provisions of the Official Languages Act, 1963 and relevant rules during the year 2016-17.

NHPC had organized various programmes for its employees to encourage the use of official language Hindi like Hindi fortnight, All India Rajbhasha Sammelan, Hindi competitions, Hindi Pustak Pathan Saptah, Hindi Kavi Sammelan etc. during the Financial Year 2016-17. Hindi workshops and departmental computer workshops were regularly organized in the Company. Rajbhasha magazines titled ''Rajbhasha Jyoti'' and ''Nagar Saurabh'' were also published to encourage the use of Hindi.

The Parliamentary Committee on Official Language carried out the inspection of TLDP-IV (Darjeeling, West Bengal) and Rangit (Gangtok, Sikkim) Power Stations on 17^th June, 2016 and 20^th June, 2016 respectively. The efforts made by the Company in the progressive use of Hindi were appreciated. Further, Rajbhasha inspections were carried out in various departments of the Corporate Office and at power stations/projects/regional offices by senior executives of the Company.

Your directors are pleased to inform that Company has received "Rajbhasha Kirti Puraskar” for outstanding work in implementation of Rajbhasha for the seventh time. This is the highest award given by the Govt. of India in the field for implementation of Official Language.

22. SPORTS AND OTHER ACTIVITIES

NHPC Sports Policy was approved by the Board of Directors of your Company during the Financial Year 2016-17. The policy aims to regulate sports related activities/issues, such as general administration, recruitment of sports persons, scholarship to sports persons, provision of sports accessories etc.

Teams from NHPC had participated in various other Inter CPSU sports tournaments organized under the aegis of Power Sports Control Board, Ministry of Power during the Financial Year 2016-17. 19^th Inter CPSU Table Tennis Tournament was also successfully hosted by your Company at its Chamera-I Power Station, Himachal Pradesh from 12^th to 15^th February, 2017.

Your Company had also coordinated the painting competitions at Schools, State and National level in the States of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh.

During the year, your Company has participated in various National & International exhibitions to showcase its activities.

23. RIGHT TO INFORMATION

In compliance to the provisions of the Right to Information Act, 2005 (RTI), NHPC has placed various documents/ records on its website i.e. www.nhpcindia.com during the Financial Year 2016-17. Your Company has designated senior officers as Central Public Information Officer (CPIO), Appellate Authority, Transparency Officer at Corporate Office and Assistant Public Information Officers (APIOs) at power stations/projects/regional offices/units to implement the provisions of RTI Act. During the Financial Year 2016-17, 541 (185 online) applications and 71 (30 online) first appeals were received under RTI Act, out of which 538 (99.45%) applications and 71 first appeals (100%) were replied/disposed-off. Further, 10 appeals were filed by the applicants before the Central Information Commission (CIC), which were also disposed-off.

24. INVESTOR EDUCATION AND PROTECTION FUND (IEPF) DETAILS

Pursuant to the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, details of unpaid and unclaimed amounts lying with the Company are available on the Company''s web site link: http://www. nhpcindia.com/Default.aspx?id = 278&lg = eng& and also on the website of Ministry of Corporate Affairs. The information relating to transfer of unclaimed /unpaid amounts to Investor Education and Protection Fund is given in the Corporate Governance Report.

25. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

During the Financial Year 2016-17, the Company has not entered into any material transaction with any of its related parties. The Company''s major related party transactions are generally with its subsidiaries and associates for providing consultancy services, leasing out of properties and manpower services. All the contracts / arrangements / transactions entered into with related parties were on arm''s length basis, intended to further the Company''s interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is also drawn to para no. 8 of note no. 34 of the financial statements, which sets out related party disclosures as per Ind AS-24

26. VIGIL MECHANISM

Your Company had adopted a Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the directors, employees, vendors and contractors to bring instances of unethical/improper conduct to the knowledge of management. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and Regulation 22 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A senior officer has been designated for effective implementation of the policy and dealing with the complaints registered under the policy. During the Financial Year 2016-17, no complaint was reported under the policy. No person was denied access to the Audit Committee on the issues pertaining to the Whistle Blower Policy.

27. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, ''Internal Complaints Committees'' have been constituted at various locations of the Company for the redressal of complaint(s) against sexual harassment of women employees. The committee at Corporate Office of the Company is being headed by a senior woman officer and includes representative from an NGO, as one of its members. Your Company has also prohibited sexual harassment of women by incorporating it as misconduct under "NHPC (Conduct, Discipline and Appeal) Rules”.

During the Financial Year 2016-17, the Company did not receive any complaint of sexual harassment.

28. DEBENTURE TRUSTEES

In compliance to the requirements of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of Debenture Trustees appointed by the Company, for different series of Bonds issued by the Company, from time to time, is provided elsewhere in this report.

29. STATUTORY AND OTHER INFORMATION

Information required to be furnished as per the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, DPE''s Guidelines on Corporate Governance for CPSEs etc. is annexed to this report as follows:

Particulars	Annexure
Report on Corporate Governance	I
Certificate from Practicing Company Secretary regarding compliance to conditions of Corporate Governance	II
Management Discussion and Analysis Report	III
Conservation of energy, technology absorption and foreign exchange earnings and outgo	IV
Business Responsibility Report	V
Annual Report on CSR Activities	VI
Extract of Annual Return	VII
Dividend Distribution Policy	VIII

30. AUDITORS'' REPORT

30.1 Secretarial Audit

The Board has appointed M/s P. P. Agarwal & Co., Company Secretaries, Delhi, to conduct Secretarial Audit of the Company for the Financial Year 2016-17. The report of Secretarial Auditor is given at Annexure-IX. The qualification/observation in Secretarial Auditor''s Report and reply thereto is as under:

SR. No.	Qualification/ Observation	Management reply
1.	The composition of the	As per Article 34
	Board of Directors is	of the Articles of
	not in compliance with	Association of the
	Section 149(1) of the	Company read with
	Companies Act, 2013,	Ministry of Corporate
	the Regulation 17(1)	Affairs notification
	(b) of Securities and	dated 5th June, 201 5,
	Exchange Board of India	the Independent
	(Listing Obligations	Directors on the Board
	and Disclosure	of the Company are
	Requirements)	to be appointed by
	Regulations, 2015 and	the President of India.
	Para 3.1.4 of the DPE	The matter regarding
	Guidelines on Corporate	appointment of
	Governance, as the	Independent Directors
	Company does not have	is regularly being
	requisite number of	pursued with the
	Independent directors	Administrative Ministry
	on its Board.	i.e. Ministry of Power.

30.2 Statutory Auditors

The following Joint Statutory Auditors of your Company were appointed by the Comptroller and Auditor General of India for the Financial Year 2016-17:

1. M/s S.N. Dhawan & Co. LLP, New Delhi,

2. M/s Ray and Ray, Kolkata and

3. M/s Gupta Gupta & Associates, Jammu

The Joint Statutory Auditors have audited the financial statements of the Company for the Financial Year 2016-17. The report of Joint Statutory Auditors is without any qualification. Further, no instance of fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

The standalone financial statements of the Company along-with report of the Statutory Auditors are given at Annexure-X. The consolidated financial statements of the Company along-with the Statutory Auditors'' Report are given at Annexure-XI.

30.3 Review of accounts by the Comptroller & Auditor General of India (C&AG)

The comments of the Comptroller and Auditor General of India (C&AG) on the financial statements of the Company for the Financial Year 2016-17 in pursuant to Section 143 of the Companies Act, 2013 are self-explanatory and are given at Annexure-XII.

30.4 Cost Audit

As per the requirement of Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records are being maintained by all power stations of your Company. The following firms of Cost Accountants were appointed to conduct audit of cost accounting records of power stations for the Financial Year 2016-17 under Section 148 of the Companies Act, 2013:

Name of the Firm	Name of Power Station
M/s. H. Tara & Co., New Delhi (Lead Auditor)	Dulhasti and Sewa-II
M/s. V. P. Gupta & Co., Noida	Chamera-I, Tanakpur and Dhauliganga
M/s. SKR & Associates, Jaipur	Salal, Chutak and Nimmo Bazgo
M/s Jugal K Puri & Associates, New Delhi	Bairasiul, Chamera-II and Chamera-III
M/s. N K Jain & Associates, New Delhi	Uri-I, Uri-II and Parbati-III
M/s S P Bhattacharyya & Co., Kolkata	Rangit, Teesta-V and TLDP-III
M/s Musib & Co, New Delhi	Loktak, TLDP-IV and Wind Power Project, Jaisalmer

The consolidated Cost Audit Report in XBRL format for the Financial Year ended 31^st March, 2016 was filed with the Central Government on 9^th September, 2016 within the statutory period. The Cost Audit Report for the Financial Year ended 31^st March, 2017 shall be filed within the prescribed time period.

31. PARTICULARS OF LOANS & GUARANTEES GIVEN, INVESTMENTS MADE AND SECURITIES PROVIDED

Particulars of loans & guarantees given, investments made and securities provided are given in the standalone financial statements (please refer to Note No. 6 and 16 of the standalone financial statements).

Further, Section 186 of the Companies Act, 2013 (except sub-section 1) regarding loans made, guarantees given or securities provided is not applicable to the Companies engaged in the business of providing infrastructure facilities.

32. PARTICULARS OF EMPLOYEES

As per notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors'' Report.

33. BOARD AND COMMITTEES OF THE BOARD

Your Company has Audit Committee, Stakeholders'' Relationship Committee, Nomination & Remuneration Committee, Risk Management Committee, Committee on Corporate Social Responsibility & Sustainability and other board level committees. The details of composition of these Committees along with number of meetings of the Board and its Committees are given in the Corporate Governance Report, which forms part of this report.

34. PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD

Ministry of Corporate Affairs vide its notification dated 5^th June, 2015 has exempted/amended certain provisions of the Companies Act, 2013 for the Government Companies. As per the said notification, the Nomination & Remuneration Committee is not required to formulate remuneration policy, criteria for the appointment of directors and their performance evaluation in certain cases i.e. in case performance of directors is evaluated by the Administrative Ministry.

Policy on Performance Evaluation of Board, Board level Committees and Independent Directors of the Company was approved by the Board. Accordingly, an annual performance evaluation process of Board, Board level Committees and Independent Directors of the Company for the year 2015-16 was carried out during year 2016-17. The performance evaluation process for the year 2016-17 is in process.

As regards policy on remuneration of Key Managerial Personnel and other employees of the Company, their pay structure, allowances and other benefits are governed by relevant DPE Guidelines. Annual performance evaluation of senior management personnel of the Company is being done as per the "Performance Appraisal-Recording and Custody” rules of the Company read with relevant guidelines of Department of Public Enterprises, Govt. of India.

35. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 and of the profit and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

36. DIVIDEND DISTRIBUTION POLICY

Your Company has formulated a Dividend Distribution Policy duly approved by the Board of Directors and the same is annexed with this report.

37. GENERAL

No disclosure or reporting in respect of the following items is required, as there was no transaction on these items during the year under report:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

3. Remuneration or commission received by Chairman & Managing Director or the Functional Directors of the Company from any of its subsidiaries.

4. Significant or material orders passed by the regulators or courts or tribunals, which impact the going concern status and Company''s operations in future.

5. Occurrence of any material changes and commitments after the close of the Financial Year till the date of this report, which affect the financial position of the Company.

6. Details related to public deposits as required under Chapter V of the Act, except to the extent explanation given in the annexure to the Auditors'' Report.

38. WEBSITE LINK FOR VARIOUS POLICIES OF THE COMPANY

Website links for the information required to be hosted on the website of the Company i.e. www.nhpcindia.com as per the Companies Act, 2013, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 etc. are as follows:

Particulars	Website Link
Policy on Related Party Transactions	http://www.nhpcindia. com/writereaddata/Images/ pdf/Policy-Related-Party- Transaction.pdf
Corporate Social Responsibility & Sustainability Policy	http://www.nhpcindia.com/ writereaddata/Images/pdf/CSR
	Policy Final.pdf
Policy on Material Subsidiaries	http://www.nhpcindia.com/ writereaddata/Images/pdf/ Policy-Material-Subsidiary.pdf
Whistle Blower Policy	http://www.nhpcindia.com/ writereaddata/images/pdf/wbp.
	pdf
Familiarization programme for Directors	http://www.nhpcindia.com/ writereaddata/Images/pdf/FP-
	InDirectors2016-17.pdf
Dividend Distribution Policy	http://www.nhpcindia.com/ writereaddata/Images/pdf/ Dividend-Policy-21062017.pdf

39. BOARD OF DIRECTORS

39.1 Functional Directors

Shri Ratish Kumar, Director (Projects) has been assigned the additional charge to the post of Chairman &

Managing Director of the Company with effect from 1^st August, 2017, consequent upon the retirement of Shri K. M. Singh from the post of Chairman & Managing Director on attaining the age of superannuation on 31^st July, 2017.

Shri Mahesh Kumar Mittal, Director (Finance) joined the Board as an Additional Director on 1^st March, 2017, consequent upon the retirement of Shri Jayant Kumar, then Director (Finance) and Chief Financial Officer (CFO), on attaining the age of superannuation on 28^th February, 2017. Further, the Board in its meeting held on 17^th April, 2017 appointed Shri Mittal as CFO of the Company.

Shri Nikhil Kumar Jain, Director (Personnel) joined the Board as an Additional Director on 7^th February, 2017, consequent upon the retirement of then Director (Personnel), Shri R. S. Mina on attaining the age of superannuation on 31^st January, 2017.

The details of remuneration paid to Directors during the Financial Year 2016-17 have been provided in the corporate governance report.

39.2 Independent Directors

Shri Farooq Khan, Independent Director resigned from the directorship of the Company on 17^th August, 2016 due to his appointment as Administrator, Union Territory of Lakshadweep. Accordingly, addendum to the notice of last AGM regarding withdrawal of item pertaining to his appointment as an Independent Director was issued on 5^th September, 2016 and published in newspapers.

All the Independent Directors as on 31^st March, 2017 have declared that they meet the criteria of independence as laid down under Section 149 (6) of the Companies Act, 2013 and Regulation 16(1 )(b) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board wishes to place on record its deep appreciations for the valuable contribution and guidance given by Shri K. M. Singh, Shri Jayant Kumar, Shri R. S. Mina and Shri Farooq Khan during their tenure as Directors.

40. ACKNOWLEDGMENT

The Board of Directors of your Company acknowledge with deep sense of appreciation, the co-operation and guidance received from the Govt. of India, particularly the Ministry of Power, Ministry of New & Renewable Energy, Ministry of Finance, Ministry of Environment, Forests & Climate Change, Department of Public Enterprises, Central Electricity Regulatory Commission, Central Electricity Authority, State Governments and their Ministries/Departments.

The Board of Directors also conveys their gratitude to the Shareholders, Bankers, Financial Institutions and Lenders for the confidence reposed by them in the Company.

The Board places its special appreciation to our valued customers, State Electricity Boards & Distribution Companies and other valuable clients of our consultancy assignments.

We also acknowledge the constructive suggestions received from the Office of Comptroller & Auditor General of India, Statutory Auditors, Secretarial Auditor and Cost Auditors.

The Board of Directors express their deep sense of appreciation to all the employees, whose outstanding professionalism, commitment and initiative, has made the organization''s growth and success possible and continues to drive its progress.

For and on behalf of the Board of Directors

(Ratish Kumar)

Chairman and Managing Director

DIN 06852735

Date: 11^th August, 2017

Place: Faridabad

---

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 39th Annual Report on the performance of your Company along with audited fnancial statements, Auditors'' Report, Report of Secretarial Auditor and review of fnancial statements by the Comptroller and Auditor General of India for the fnancial year ended 31st March, 2015.

1. FINANCIAL RESULTS

The fnancial results for the year ended 31st March, 2015 are summarized in Table 1.

Table 1: Financial Highlights

(Rs. in crores)

PARTICULARS 2014-15 2013-14

Sales 6,736.64 5,335.11

Proft before depreciation, interest, rate regulated income and tax 4,909.86 3,816.22

Depreciation 1,425.87 1,210.76

Proft after depreciation but before rate regulated income, interest and tax 3,483.99 2,605.46

Interest and fnance charges 1,179.77 1,022.40

Proft after depreciation and interest but before rate regulated income and tax 2,304.22 1,583.06

Rate regulated income 521.95 -

Tax 701.70 604.27

Proft after depreciation, interest and tax 2,124.47 978.79

Adjustment arising out of transition provisions for recognising rate regulatory assets 876.10 - (net of provision for income tax)

Surplus of statement of proft and loss of earlier years 7,447.16 7,146.38

Amount written back from bond redemption reserve 15.96 14.25

Amount written back from self-insurance reserve 5.65 3.97

Amount written back from CSR fund 4.59 7.88

Tax on dividend-written back 10.05 5.11

Balance available for appropriation 10,483.98 8,156.38

APPROPRIATIONS

Transfer to bond redemption reserve 379.10 249.45

Transfer to self-insurance fund 55.77 51.74

Transfer to general reserve 7,500.00 -

Transfer to CSR Reserve - 2.30

Transfer to R & D Fund 4.63 17.16

Proposed/fnal dividend 664.27 332.13

Tax on proposed dividend 134.42 56.44

Balance carried over to reserves and surplus 1,745.79 7,447.16

2. DIVIDEND

Your Directors have recommended a fnal dividend of Rs. 0.60 per equity share (excluding dividend tax) for the fnancial year 2014-15. The above amount is inclusive of an interim dividend of Rs. 0.20 per equity share paid in February, 2015. The fnal dividend shall be paid after your approval at the forthcoming Annual General Meeting. On approval, the total dividend payout for the year will be 31.27% of proft after tax. Further, the Board of Directors have transferred Rs. 7,500 crore to general reserve of the Company.

3. POWER GENERATION

With the commercial operation of Unit IV (130 MW) of Parbati-III Power Station on 6th June, 2014, the installed capacity of your Company has increased to 4961.20 MW during the fnancial year 2014-15.

It is a matter of pleasure to inform that your Company has achieved highest ever annual generation of 22038 MUs with 77.3% Plant Availability Factor (PAF) against the target for excellent MOU of 21800 MUs with 76.4% PAF through its 18 power stations. Salal, Uri-I and Sewa-II Power Stations have generated their individual highest annual generation of 3492 MU, 3077 MU and 594 MU respectively.

Uri-II Power Station (240 MW) was under complete shutdown since 20th November, 2014 due to major fre. All the four units of the power station have now been restored. In-spite of above setback, the power station had achieved its Annual Design Energy (1124 MUs) and Normative Annual Plant Availability Factor (55%) during 2014-15. Further, consequent upon sudden increase in water level on 28.06.2015, Chutak Power Station, 44 MW (4 X 11 MW) was under complete shutdown. Mechanical run of one of the units was successfully carried out on 24th July, 2015. Efforts are being made to restore the unit at earliest.

Baira Siul Power Station (180 MW) is completing 35 years of its commercial operation in 2016-17. DPR for renovation, modernization for extension of the life of the power station has been approved by the Board of Directors. The proposal has been submitted to Central Electricity Authority and Central Electricity Regulatory Commission respectively for their vetting and approval.

4. COMMERCIAL PERFORMANCE

Your Company''s commercial performance during the year 2014-15 was as under:

4.1 Billing and Realization

The sales realization during the year was Rs. 5883.32 crore against the billing of Rs. 6676 crore.

As on 31st March, 2015, the outstanding dues pending for more than 60 days were of Rs. 1564 crore. Out of the above, Rs. 1290 crore pertains to PDD, J&K and Rs. 203 crore to BSES Rajdhani Power Limited & BSES Yamuna Power Limited. Your Company has made all out efforts to recover the outstanding dues, including regulation of power supply of defaulting benefciaries.

Most of the benefciary states are now liquidating their dues except Power Development Department (J&K), BSES Rajdhani Power Limited and BSES Yamuna Power Limited.

4.2 Tariff Regulation

Central Electricity Regulatory Commission (CERC) has issued new regulation for fxation of tariff viz. CERC (terms & conditions of tariff) Regulation, 2014 on 21.02.2014, applicable for the period 2014-19. NHPC has submitted new tariff petitions for the period 2014-19 (including truing up petitions) for its seventeen power stations within stipulated time period.

Parbati – III Power Station has been commissioned on 06.06.2014. The provisional tariff order for Parbati – III Power Station has been issued by CERC on 25.06.2014.

Tariff orders for the Teesta Low Dam Project – III and Chamera – III Power Stations have also been issued by CERC vide orders dated 22.01.2015 and 24.03.2015 respectively.

5. CAPITAL STRUCTURE AND NET WORTH

Your Company''s paid-up capital and net worth as on 31.03.2015 was Rs.11,070.67 crore and Rs. 28,286.39 crore respectively.

6. STATUS OF ONGOING PROJECTS

Your Company is presently engaged in the active construction of the following Hydroelectric Projects:

Table 2: Details of Projects under construction during 2014-15

S.No. PROJECT STATE INSTALLED CAPACITY (MW)

i. Teesta Low Dam IV West Bengal 160

ii. Parbati II Himachal Pradesh 800

iii. Subansiri Lower* Assam/Arunachal Pradesh 2,000

iv. Kishanganga Jammu & Kashmir 330

Total 3,290

*The project works are presently at standstill since 16.12.2011 due to agitation by various pressure groups of Assam. Efforts are being made by NHPC and Ministry of Power, Government of India to restart the project at the earliest. Ministry of Power has constituted a Project Oversight Committee (POC) to resolve the various issues. Five rounds of POC meeting have been held so far and the report is expected shortly.

7. NEW PROJECTS

Table 3: Projects under the clearance/approval stage are as under: PROJECTS TO BE EXECUTED BY NHPC ON STAND ALONE BASIS

S. No. PROJECT STATE INSTALLED CAPACITY (MW)

i. Kotli Bhel I-A Uttarakhand 195

ii. Teesta-IV Sikkim 520

iii. Dibang1 Arunachal Pradesh 3,000

iv. Tawang-I Arunachal Pradesh 600

v. Tawang-II Arunachal Pradesh 800

Total: 5,115

PROJECT TO BE EXECUTED THROUGH SUBSIDIARY COMPANY

vi Loktak Downstream HE Project by Manipur 66

Loktak Downstream Hydroelectric Corporation Limited (LDHCL)

vii Solar Power Project at Village Parason Uttar Pradesh 50 (Tehsil-Kalpi) by Bundelkhand Saur Urja Limited2

PROJECT TO BE EXECUTED THROUGH JOINT VENTURE COMPANY

Pakal Dul3, Kiru and Kwar4 HE Projects Jammu & Kashmir 2120

viii by Chenab Valley Power Projects Pvt. Limited (CVPPPL)

ix Chamkharchhu - I5 Bhutan 770

Grand Total: 8,121

Notes:

1. Dibang Multipurpose HE Project has been accorded environmental clearance by Ministry of Environment, Forest and Climate Change on 19.05.2015 with reduction in dam height by 10 meter. The installed capacity due to reduction in dam height is likely to be 2880 MW.

2. Bundelkhand Saur Urja Limited was incorporated as a Joint Venture Company between NHPC Limited and UPNEDA (Uttar Pradesh New and Renewable Energy Development Agency) on 2nd February, 2015.

3. Pakal Dul HE Project (1000 MW) has been sanctioned by the Government of India, but major works are yet to be awarded by M/s Chenab Valley Power Projects Pvt. Limited.

4. Earlier capacities of Kiru and Kwar HE Projects were envisaged as 600 MW and 520 MW respectively. Presently, detailed project reports of Kiru and Kwar HE Projects are under appraisal by Central Electricity Authority for 624 MW & 540 MW respectively.

5. Project to be executed through Joint Venture between NHPC and Druk Green Power Corporation (Bhutanese PSU).

Besides the above projects, two projects viz. Kotlibhel Stage-1B (320 MW) and Kotlibhel Stage II (530 MW) in Uttarakhand were under clearance. Environmental clearance of Kotlibhel-1B has been withdrawn by Ministry of Environment, Forest and Climate Change (MoEF&CC). NHPC has fled a civil appeal before Hon''ble Supreme Court. Further, MoEF&CC has also declined permission for diversion of forest land for the construction of KB-1B and KB-II HE Projects. These two projects are also included in the list of 24 projects, which are under review by Hon''ble Supreme Court.

The Board of Directors of your Company has accorded its approval for discussions with North Eastern Electric Power Corporation Limited (NEEPCO) and thereafter jointly by NHPC & NEEPCO with Govt. of Arunachal Pradesh regarding Siang Upper Stage-I (6000 MW) and Siang Upper Stage-II (3750 MW) Hydro Electric Projects in Arunachal Pradesh. NEEPCO has already signed an agreement for execution of Siang Upper Stage-II HE Project with Government of Arunachal Pradesh.

We are pleased to inform that your Company has signed an agreement with Government of West Bengal and West Benga State Electricity Distribution Company Ltd. for development of four hydroelectric projects of total estimated capacity of 293 MW in Teesta basin. These four projects are Teesta Low Dam-V, Teesta Low Dam I & II combined, Teesta Intermediate Stage and Rammam Stage-I located in District Darjeeling of West Bengal. These projects shall be developed on Build, Own, Operate and Maintain (BOOM) basis by NHPC Ltd.

DIVERSIFICATION

Your Company is diversifying its activities from hydropower to other non-conventional sources of energy viz. Wind and Solar. The activities of the Company for establishment of such projects are as under:

WIND POWER PROJECTS

Your Company has signed a Memorandum of Understanding with Government of Kerala for the development of 82 MW grid interactive wind energy project in Palakkad District on BOOT (Build, Own, Operate and Transfer) basis.

In addition to above, the Board has approved the proposal for the award of EPC contract for the development of 50 MW wind power project in the Jaisalmer District, Rajasthan along with its comprehensive operation & maintenance for 10 years to M/s Inox Wind Limited.

SOLAR POWER PROJECTS

In pursuit of diversifcation and in line with the policies of the Government of India, your Company plans to foray into development of solar power. Your Company has signed an agreement with Kerala State Electricity Board for development of solar power projects in the State of Kerala. As per the agreement, Company shall in frst phase take up implementation of 50 MW grid linked solar power project at West Kallada Grama Panchayat in Kollam District. Your Company has also incorporated a subsidiary company i.e. Bundelkhand Saur Urja Limited with UPNEDA (Uttar Pradesh New and Renewable Energy Development Agency) to implement a 50 MW solar power project at Village Parason, (Tehsil-Kalpi), District-Jalaun, Uttar Pradesh.

8. PROJECTS UNDER DPR PREPARATION

Survey & investigation for preparation of Detailed Project Reports (DPR) of the following hydroelectric projects has been initiated:

Table 4: Survey and Investigation

S. No. PROJECT INSTALLED CAPACITY (MW)

1 Bursar*, J&K 812

2 Dhauliganga Intermediate, Uttarakhand 210

3 Goriganga IIIA, Uttarakhand 120

Total: 1,142 MW

*Earlier Bursar capacity was envisaged as 1020 MW. As per terms of reference of MoEF & CC, the capacity of Bursar is likely to be reduced to 812 MW.

9. RURAL ELECTRIFICATION PROJECTS UNDER RAJIV GANDHI GRAMIN VIDYUTIKARAN YOJNA (RGGVY)

NHPC is implementing rural electrifcation projects under Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) in 27 districts spread over 5 States viz. West Bengal, Bihar, Jammu & Kashmir, Chhattisgarh and Odisha at an estimated cost of Rs. 2844 crore. The scope of work includes electrifcation of 9,310 un-electrifed/de-electrifed villages, 19,882 partially electrifed villages and service connections to 20.74 lakh Below Poverty Line (BPL) households. Out of the above, 9074 un-electrifed/de-electrifed villages, 18854 partially electrifed villages and 16.30 lakh BPL connections are found do-able, as the remaining villages and BPL households are under hindrances due to various reasons which are beyond the control of your Company.

Your Company has completed electrifcation of 9073 un-electrifed/de-electrifed villages, 18825 partially electrifed villages and provided service connections to 16.30 lakh BPL households till 31st March, 2015 (as per latest closure report submitted to State Govt.).

10. RURAL ROADS PROJECT

Construction of rural roads in six districts of Bihar under the Pradhan Mantri Gram Sadak Yojna (PMGSY) is being carried out by your Company pursuant to an MOU with the Ministry of Rural Development, Government of India and the Government of Bihar. These roads will also be maintained by NHPC for fve years after their construction.

Construction contracts for 758 roads of 3,228.82 Km length having cost ofRs. 1,725.65 crore were awarded to NHPC for execution. 747 roads of 3,208 Km length have been completed till the end of fnancial year 2014-15.

11. CONSULTANCY SERVICES

NHPC is providing consultancy services in various felds of hydro power viz. river basin studies, survey works, design and engineering, geological studies, geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing, commissioning, operation & maintenance etc. to leading global organizations.

Major consultancy assignments are from Central and State Government agencies in India and other countries viz. Bhutan and Ethiopia.

12. GLOBAL INITIATIVES

Under the action plan on India-Bhutan cooperation for the development of 10,000 MW hydropower by the year 2020, NHPC was entrusted with the work for preparation of DPRs of Chamkharchhu-I H.E. Project (770 MW) and preparation of PFRs of Kuri Gongri Reservoir Projects in Bhutan. The fnal DPR for Chamkharchhu-I HE Project submitted to Royal Government of Bhutan/Government of India in March, 2015.

Design & engineering consultancy services are also being provided to Mangdechhu Hydroelectric Project Authority (MHPA) for implementation of Mangdechhu Hydroelectric Project (720 MW) in Bhutan.

NHPC is also engaged with Ethiopia Electric Power Company (EEPCO) for a management consultancy assignment in Consortium with Power Grid Corporation of India Limited (lead partner) and BSES Rajdhani Power Limited.

13. FINANCING OF NEW PROJECTS

As per guidelines issued by CERC for the purpose of tariff fxation, the fnancing of a project is to be considered in 70:30 debt equity ratio.

Your Directors are of the opinion that available internal accruals will be suffcient to fnance the equity component for new projects. The Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies, to mobilize required debt for the planned capacity expansion programme.

Your Company is well positioned to raise the required borrowings with its strong credit rating which is at par with sovereign rating.

14. INFORMATION TECHNOLOGY AND COMMUNICATION

NHPC has very elaborated information technology and communication infrastructure. All its sites are now connected with the corporate offce through multimode, fail-safe communication links using MPLS-VPN/VSAT-Ku band/broadband technologies. NHPC has presently co-located its key servers at TIER-III data centers of National Informatics Centre Service Incorporated (NICSI) at New Delhi and BSNL at Faridabad. Disaster Recovery (DR) site is also operational at NHPC offce at Kolkata. IT & cyber security policy is in place to manage the Information Technology (IT) system to ensure optimum and secure utilization of the assets owned by NHPC.

All key business functions viz. fnance, human resource, procurement & contracts, inventory, project management, power plant operation and maintenance, energy sales and accounting, quality assurance etc. have been implemented in the IFS ERP System.

As per Government of India directives, the procurement process through e- procurement (electronic tender) system is operational in the Company.

15. TRAINING AND HUMAN RESOURCE DEVELOPMENT

The fast changing economic scenario and technological innovations are creating an increasingly competitive market environment. Your Company consistently evaluates the training needs of its employees to keep them updated with latest changes, to improve their productivity and work effciency.

The training programmes are designed to develop and groom internal talent through multi disciplinary programmes. Besides conducting in-house workshops, the Company also organizes training programmes in collaboration with reputed professional / educational institutes like, IIMs /XLRIs / IITs etc. to facilitate advance management and leadership development programmes for its employees.

16. INDUSTRIAL RELATIONS

During the year, industrial relations remained cordial and harmonious at all NHPC projects/power stations/units.

17. RESETTLEMENT AND REHABILITATION

NHPC has its own Resettlement & Rehabilitation (R&R) Policy, 2007 in line with the National Rehabilitation and Resettlement Policy, 2007 (NRRP) and provides certain additional benefts over and above those proposed in NRRP.

The policy aims to address issues like loss of land, houses, other resources and means of livelihood to Project Affected Families (PAFs), who are likely to be affected due to construction of the project. Major emphasis is laid on economic sustenance of PAFs. As per NHPC''s R & R Policy, 0.75% of the hard cost of the project is to be earmarked towards Community and Social Development Plan (CSDP) for implementation in the resettlement zone and affected areas.

However, in view of the new legislation i.e. Right to Fair Compensation & Transparency in Land Acquisition, Resettlement & Rehabilitation Act, 2013, which came in force from 1st January, 2014, both R&R and land acquisition for NHPC projects shall be dealt in accordance with the provisions of the new Act and its Ordinance.

18. VIGILANCE ACTIVITIES

In compliance to guidelines issued by Ministry of Power and Central Vigilance Commission, NHPC has opted for e-procurement solution across the organization. The procurement process of supply/works/contracts cases above the value of Rs. 10 lakh (Rs. 5 lakh w.e.f. 01.04.2015) is being done through e-procurement.

Circulars and guidelines, based upon inspection/intensive examination are being issued from time to time as part of preventive vigilance.

As per CVC guidelines, integrity pact has been implemented successfully for all the procurement of works of the value of Rs. 15 crore and more, and procurement of goods and services of the value of Rs. 25 lakh and more.

Surprise inspections are being conducted by vigilance department at regular intervals. Actionable points identifed by project vigilance offcers are intimated to Head of Projects from time to time. Intensive examinations of works, wherever required, are also carried out by Chief Technical Examiner (CTE) of the CVC from time to time.

Vigilance awareness week and various vigilance awareness programmes are being organised to promote transparency and ethics in working system.

19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal fnancial controls with reference to fnancial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

20. RISK MANAGEMENT

Risk management policy of the Company was formulated as per the requirement of Clause 49 of the Listing Agreement with stock exchanges. The objective of the policy is to protect stakeholders'' value through an integrated risk management policy. Risks identifed by the Company are broadly classifed into the following categories:

Strategic risk: Risks effected by external factors and trends (like Government policy, competition, court rulings or a change in stakeholder requirements) which can adversely impact the Company''s strategic growth trajectory and destroy shareholder value.

Business risk: Risks associated specifcally to the Company and having an adverse impact on the Company''s capability, to execute activities critical for business growth, thereby affecting its near-term performance e.g. occurrence of a risk event, delaying the timely completion of construction activity of a hydro-electric power project leading to the deferment of revenues expected from the project.

Operational risk: Risks associated with operational uncertainties like unpredictable changes in water levels, force majeure events like foods affecting operations, internal risks like attrition etc.

Due to change in business environment, regulatory provisions and present risks applicable to the Company, the existing Risk Management Policy of the Company is being revised.

21. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

Annual procurement plan including items to be procured from Micro & Small Enterprises (MSEs) have been uploaded on NHPC Website for benefts of MSEs. Nodal offcer on behalf of NHPC for co-ordination & implementation of procurement policy has been nominated and conveyed to Ministry of Micro, Small and Medium Enterprises & Ministry of Power.

NHPC has extended benefts under public procurement policy like exemption of tender fee, earnest money deposit, security deposit, purchase preference, interest on delayed payment to MSEs.

Special vendor development program in coordination with Ministry of Micro, Small and Medium Enterprises has also been organized.

22. OFFICIAL LANGUAGE IMPLEMENTATION

Your Company has complied with the provisions of the Offcial Languages Act and relevant rules during the year 2014-15. Efforts were made to improve the progressive use of offcial language in accordance with the policy of the Government of India.

Quarterly meetings of the Offcial Language Implementation Committee (OLIC) are held to review the progress of the use of Hindi at Corporate Offce and its units. Many initiatives like organizing Hindi fortnight, all India Rajbhasha Sammelan, Hindi competitions, Hindi pustak pathan saptah, Hindi kavi sammelan etc, were taken to promote offcial language during the year 2014-15. Hindi workshops and departmental computer workshops were regularly organized in the Corporate Offce. Rajbhasha magazines titled, ''Rajbhasha Jyoti'' and ''Nagar Saurabh'' were also published to encourage use of Hindi.

The Parliament Committee on Offcial Language carried out Rajbhasha inspection in Andaman & Nicobar Project offce at Port Blair and appreciated the efforts made by this offce in the progressive use of Hindi. Further, Rajbhasha inspections were carried out at power stations/projects/regional offces and in various departments of the corporate offce by our senior executives.

23. PR INITIATIVES/AWARENESS ACTIVITIES

Your Company''s achievements were duly highlighted through print and electronic media from time to time to project the role of NHPC as hydropower developer in the country.

Corporate flms on NHPC were screened at a number of platforms to highlight the developmental activities of NHPC. NHPC has also participated in number of exhibitions.

NHPC successfully hosted 19th inter CPSU bridge tournament at NHPC corporate offce, Faridabad from 10th to 12th February, 2015. Teams of NHPC also participated in various other inter CPSU sports tournaments organized under the aegis of Power Sports Control Board, Ministry of Power in 2014-15.

NHPC has coordinated the painting competitions at schools, state and National level in the states of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh to encourage and spread message about energy conservation. These events were organized on behalf of the Bureau of Energy Effciency (BEE) and Ministry of Power.

24. AWARDS AND RECOGNITION

Today, the ambit of business exceeds the mere goal of proft making and embraces the ethos of corporate citizenship in its practice. Operational excellence is lifeless unless a successful story of holistic development is not put forward by the Company. NHPC endeavors for an all-round growth and the same is refected in the list of awards & achievements.

Awards in Management & Leadership:

- National award for meritorious performance for early completion of Nimoo Bazgo Power Station.

- ''Second prize under Indira Gandhi Rajbhasha award progamme'' for the year 2012-13 for commendable work in implementation of Rajbhasha.

- ''CBIP Award for best performing utility in power sector'' at CBIP Awards.

- ''1st Pt. Madan Mohan Malaviya Bronze Award'' for best CSR Practices in Education.

- ''Most valuable PSU under Mini Ratna category'' at India Today Group PSU Awards.

25. CORPORATE GOVERNANCE REPORT

In compliance to Clause 49(X) of Listing Agreement with stock exchanges and DPE Guidelines on Corporate Governance, a separate section is given at Annexure-I. A certifcate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance in accordance with Clause 49(XI) of the Listing Agreement with stock exchanges and DPE guidelines on Corporate Governance is given at Annexure-II.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Clause 49(VIII)(D) of Listing Agreement with stock exchanges and DPE Guidelines on Corporate Governance, a separate report on Management Discussion and Analysis is given at Annexure–III.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, are given at Annexure-IV.

28. BUSINESS RESPONSIBILITY REPORT

In compliance with Clause 55 of the Listing Agreement with stock exchanges, a Business Responsibility Report regarding the disclosures of initiatives taken by the Company on environmental, social and governance issues is given at Annexure-V.

29. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Company has entered into contracts/arrangements/transactions with its subsidiary and associates companies during the fnancial year 2014-15 for providing consultancy services, leasing out of the properties and manpower services. The contracts/ arrangements/transactions were in the ordinary course of business and on an arm''s length basis. None of the contract/ arrangement/transaction entered into with related parties could be considered material in accordance with the policy on related party transactions.

The policy on related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.nhpcindia.com/writereaddata/Images/pdf/Policy- Related-Party-Transaction.pdf

Your Directors draw attention of the members to note no. 29 to the fnancial statement which sets out related party disclosures as per Accounting Standard – 18.

30. REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) & SUSTAINABLE DEVELOPMENT (SD)

Your Company has contributed towards the economic development of the society at large so that the quality of life of internal as well as external stakeholders be improved. The key philosophy of all CSR initiatives of the Company is guided by three core commitments of scale, impact and sustainability.

Your Company has formulated a CSR & Sustainability Policy, which is in line with the provisions of Section 135 of the Companies Act, 2013 read with schedule VII of the Act and guidelines on corporate social responsibility issued by Department of Public Enterprises (DPE), Government of India.

The Corporate Social Responsibility & Sustainability Policy of your Company is available at following link: http://www.nhpcindia.com/writereaddata/Images/pdf/CSR_Policy_Final.pdf

As per Section 135 of the Companies Act, 2013 which became applicable from 01.04.2014, 2% of average net proft for the last 3 fnancial years is to be spent on CSR activities. As per above provision, the amount comes to Rs. 47.64 crore for the fnancial year 2014-15. The Company has spent Rs. 52.24 crore during the year against the said provision.

As such the spending on CSR activities comes to 2.19% of average net proft of last 3 fnancial years. Hence, Company fully utilized the budget allocation for fnancial year 2014-15.

Accordingly, Rs. 4.60 crore has been set-off from unspent fund of Rs. 17.93 crore of previous years created as per DPE guidelines. The major reasons for not utilizing the carried forwarded amount of Rs. 13.33 crore pertaining to previous years are:

1. Most of the works related to construction of toilets under ''Swachh Vidyalaya Abhiyan'' were under different stages of tendering and execution and only part payments were released during the fnancial year 2014-15.

2. Non-fnalization of detailed project report for bio diversity park of Subansiri Lower H.E. Project (2000 MW).

3. Funds for construction of Bilaspur Engineering College in Himachal Pradesh could not be released due to non-fnalization of construction milestones by the State Government.

A separate report on Corporate Social Responsibility (CSR) & Sustainable Development (SD) activities undertaken by your Company during the fnancial year 2014-15 is given at Annexure-VI.

31. EXTRACT OF ANNUAL RETURN

Extract of annual return of the Company in accordance to Section 92(3) of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administration) Rules, 2014 is given at Annexure- VII.

32. RIGHT TO INFORMATION

In compliance to the provisions of the Right to Information Act, 2005, NHPC placed various documents/records on its website during the fnancial year 2014-15. Further, NHPC has designated appellate authority, transparency offcer, Central Public Information Offcer (CPIO) at Corporate Offce and Assistant Public Information Offcers (APIOs) at power stations/projects/ regional offces/units to implement the provisions of Right to Information Act, 2005 (RTI).

During 2014-15, 509 applications were received under RTI, out of which 505 (99.21%) were replied to.

33. AUDITORS AND AUDITORS'' REPORT

SECRETARIAL AUDITOR

The Board has appointed Shri P.S.R. Murthy, Practicing Company Secretary, to conduct Secretarial Audit of the Company for the fnancial year 2014-15. The Secretarial Audit Report is given at Annexure- VIII. The Secretarial Auditor in his report has made certain qualifcations/observations. The qualifcations/observations and reply thereto are as under:

S. No. Qualification/Observation Management Reply

1. The required number of Independent Directors As per Article 34 of the Articles of Association of the Company, under the Listing Agreement with the stock the power to appoint Directors (including Independent exchanges were not inducted. Directors) on the Board of the Company is vested in the President of India. The matter is regularly pursued with the administrative Ministry i.e. Ministry of Power.

2. The Company could not fully utilise the budget As per Section 135 of the Companies Act, 2013, 2% of allocated towards CSR during the fnancial year average net proft for the last 3 fnancial years amounts to 2014-15. Rs. 47.64 Crore. The Company has spent Rs. 52.24 crore against the said provision.

As such the spending on CSR activities comes to 2.19% of average net proft of last 3 fnancial years. Hence, Company fully utilized the budget allocation of fnancial year 2014-15.

The excess amount of Rs. 4.60 crore has been set-off from unspent fund of Rs. 17.93 crore of previous years created as per DPE guidelines. The major reasons for not utilizing the carried forwarded amount of Rs. 13.33 crore are already provided in this report (refer paragraph no. 30).

3. The evaluation criteria for the Members of the As per Articles of Association of the Company, the Directors Board as prescribed and applicable is yet to be are appointed by the President of India. The performance finalised. evaluation of Functional Directors and Nominee Directors is being done by the appointing authority.

The Ministry of Corporate Affairs vide its notifcation dated 05.06.2015 amended Section 134(3)(p) of the Companies Act, 2013 for Government Companies. As per amended provision, the Board of Government Companies are not required to evaluate performance of Directors in case they are evaluated by the Administrative Ministry.

An evaluation mechanism for performance evaluation of Board, its Committees and Independent Directors is under consideration of the Board.

STATUTORY AUDITORS

The Statutory Auditors of NHPC Limited being a Government Company are appointed by the Comptroller and Auditor General of India.

M/s S.N. Nanda and Co., New Delhi, M/s S.N. Dhawan and Co., New Delhi, M/s Ray and Ray, Kolkata and M/s Gupta Gupta & Associates, Jammu, were appointed as Joint Statutory Auditors for the fnancial year 2014-15.

The notes on fnancial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualifcation, reservation or adverse remark. No instance of fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

The report of the Statutory Auditors is given at Annexure- IX. The comments of the Comptroller and Auditor General of India along with management reply thereon are given at Annexure-X. The consolidated fnancial statement of the Company along with the Statutory Auditors'' Report are given at Annexure-XI.

COST AUDITORS

In accordance with the Companies (Cost Records and Audit) Rules, 2014, notifed by Ministry of Corporate Affairs on 30th June, 2014, the cost accounts are being maintained by all power stations of the Company. The following frms of Cost Accountants were appointed to conduct audit of cost accounting records of power stations as indicated against their respective names for the fnancial year 2014-15 under Section 148 of the Companies Act, 2013:

Name of the Firm Name of Power Station

M/s Ravi Sahni and Co., New Delhi Salal, Uri-I and Uri-II

M/s Bahadur Murao and Co., Delhi Chamera-I and Bairasiul

M/s S. C. Mohanty and Associates, Bhubaneswar Tanakpur, Dhauliganga and Chamera-III

M/s K. L. Jaisingh and Co., Noida Rangit, Teesta-V and TLDP-III

M/s H. Tara and Co., New Delhi Chutak, Nimmo Bazgo and Parbati-III

M/s V. P. Gupta and Co., Noida Dulhasti and Loktak

M/s S. K. R. and Associates, Jaipur Chamera-II and Sewa-II

Consolidated Cost Audit Report for the FY 2013-14 was fled by M/s Krishan Singh Berk, Lead Cost Auditor on 26th September, 2014 before the due date for fling i.e. 27th September, 2014. The details of cost audit frms for which Cost Audit Report for the FY 2013-14 was fled are given below:

S. Power Stations Cost Auditor Member ship Address No. No.

1. Salal, Uri-I & Uri-II M/s Chandra Wadhwa 6797 204, Krishna House, 4805/24, and Co. Bharat Ram Road, Daryaganj, New Delhi-110002

2. Chamera-I & Sewa-II M/s Krishan Singh Berk 2724 365, Sector-15, Faridabad, Haryana-121007

3. Tanakpur, Dhauliganga & TLDP-III M/s R. J. Goel & Co 14256 31, Community Centre, Ashok Vihar, Phase-I, New Delhi-110052

4. Dulhasti, Chutak & Nimmo M/s Ravi Sahni and Co. 16339 C-40, West Gorakh Park Extension, Bazgo New Delhi-110032

5. Chamera-II, Chamera-III & M/s Bahadur Murao and 5574 Shop No. 25, DDA Market, ''B'' Parbati-III Co. Block, Preet Vihar, Delhi-110092

6. Rangit & Teesta-V M/s S.C. Mohanty and 10924 511, Sahid Nagar, Associates Bhubaneswar-751007

7. Loktak & Baira Siul M/s K. L. Jaisingh & Co 1222 J-7, Sector-XI, Jaisingh House, Noida-201301

Company has also got a study conducted for cost reduction at 11 power stations during the year with a view to control avoidable expenditure.

34. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Companies Act, 2013 and Accounting Standard (AS)-21 on consolidated fnancial statements read with AS-27 on fnancial reporting of interest in joint ventures, the audited consolidated fnancial statements are provided in the Annual Report.

35. PARTICULARS OF LOANS & GUARANTEES GIVEN, INVESTMENTS MADE AND SECURITIES PROVIDED

Particulars of loans & guarantees given, investments made and securities provided are given in the standalone fnancial statements (please refer to Note No. 12 & 15 to the standalone fnancial statements).

Further, Section 186 of the Companies Act, 2013 (except sub-section (1)) regarding loans made, guarantees given or securities provided is not applicable to the Companies engaged in the business of providing infrastructure facilities.

36. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has the following subsidiary/associates/joint venture Companies as on 31st March, 2015:

Subsidiary Companies

(i) NHDC Limited

NHDC Limited was promoted as a Joint Venture Company between NHPC Limited and the Government of Madhya Pradesh with equity participation of 51% and 49% respectively. The Company is having two operating power stations i.e. Indira Sagar (1000 MW) and Omkareshwar (520 MW) in Madhya Pradesh. The generation from Indira Sagar Power Station and Omkareshwar Power Station during the fnancial year 2014-15 was 2561.73 MU and 1128.91 MU respectively against the target of 2731 MU and 1469 MU. The above two power stations have generated a total of 3690.64 MU of energy during fnancial year 2014-15.

In its diversifcation of activities, Company is venturing into solar power development in the state of Madhya Pradesh, as state is having abundant solar potential blessed with nearly 300 days sun shine. The Company is participating in the 300 MW solar power tariff based competitive bidding invited by MP Power Management Co. Ltd., Jabalpur for the 70 MW project.

During the fnancial year 2014-15, the Company has registered revenue (net) of Rs. 1366.59 crore and proft after tax of Rs. 766.46 crore from operations.

(ii) Loktak Downstream Hydroelectric Corporation Limited

Loktak Downstream Hydroelectric Corporation Limited was promoted as a Joint Venture Company between NHPC Limited and the Government of Manipur with equity shareholding of 74% and 26% respectively for the execution of hydroelectric projects in the state of Manipur by taking over Loktak Downstream Hydroelectric Project (66 MW). The project is at present under survey and investigation stage. All statutory clearances for execution of the project have been obtained. Bids for turnkey execution of the project were invited by the Company and are in evaluation stage.

Further, the Government of Manipur has allocated Thoubal Hydroelectric Scheme (7.5 MW) to the Company. The Board of NHPC Limited has accorded its approval for the equity contribution of the project. The formalities in respect of this project are under fnalization.

(iii) Bundelkhand Saur Urja Limited

Bundelkhand Saur Urja Limited was promoted as a Joint Venture Company between NHPC Limited and UPNEDA (Uttar Pradesh New and Renewable Energy Development Agency) to implement a 50 MW solar power project at Village Parason, (Tehsil-Kalpi), District-Jalaun, Uttar Pradesh. The Company was incorporated on 2nd February, 2015. As per the promoters'' agreement, the equity participation of NHPC shall not be less than 74% and of UPNEDA will not be more than 26% of the total share capital of the Company.

The award of EPC contract for the development of 50 MW solar crystalline photovoltaic grid connected power plant along with associated 132 kV power evacuation equipments is under consideration of the Board of Directors of the Company.

Associate/Joint Venture Companies

(i) Chenab Valley Power Projects Private Limited

Chenab Valley Power Projects Private Limited is a Joint Venture Company between NHPC (49%), Jammu & Kashmir State Power Development Corporation (49%) and PTC India Limited (2%), to harness the vast hydro potential of river Chenab. The Company was incorporated on 13th June, 2011 for development of Pakal Dul HE Project (1000 MW), Kiru H E Project (600 MW) and Kwar H E Project (520 MW) in the state of Jammu & Kashmir. The tender evaluation process for turnkey execution of Pakal Dul HE Project (invited through International Competitive Bidding (ICB) basis) has been completed and is under consideration of the Board of the Company.

The Company has not yet started any operations, as the projects are in the initial stage of development.

(ii) National High Power Test Laboratory Private Limited (NHPTL)

NHPTL was incorporated on 22nd May, 2009 as a Joint Venture Company of NHPC Limited, NTPC Limited, Power Grid Corporation of India Limited and Damodar Valley Corporation (DVC) each having 25% of equity participation. Subsequently, Central Power Research Institute joined the Company after execution of supplementary joint venture agreement. Accordingly, the equity participation of each of the joint venture partner is now 20%. The Company was incorporated to set up an online high power test laboratory for short-circuit test facility in the Country. The Company is constructing High Voltage Transformer (HVTR) Lab and Medium Voltage Transformer (MVTR) Lab at Bina in the state of Madhya Pradesh for short circuit testing of transformers upto 765 kV. The laboratory is expected to be commissioned in 2015. Around 80% - 90% works has been completed till date.

(iii) National Power Exchange Limited

National Power Exchange Limited was incorporated on 11th December, 2008 as a Joint Venture Company of NHPC Limited, NTPC Limited, Power Finance Corporation Limited and Tata Consultancy Services Limited to operate a power exchange at National level. The Company is presently under liquidation. The equity participation of NHPC in the Company is 16.67%. Accordingly, a provision amounting to Rs. 1.06 crore has been made in the books of NHPC Limited towards anticipated loss in the investment made in the Company.

No Company has become/ceased to be a joint venture or associate during the fnancial year 2014-15.

A report on the fnancial position of each of the subsidiaries, associates and joint venture Companies as per the Companies Act, 2013 is provided as annexure to the consolidated fnancial statement and hence not repeated here for the sake of brevity.

The documents in respect of subsidiary companies are not being attached to the audited annual fnancial statements of the Company. In terms of Section 136 of the Companies Act, 2013, any shareholder interested in obtaining a copy of aforesaid documents may write to the Company Secretary, NHPC Limited. This information is also available on the website of the Company i.e. www.nhpcindia.com.

The policy on material subsidiaries as approved by the Board may be accessed on the Company''s website at the link: http://www.nhpcindia.com/writereaddata/Images/pdf/Policy- Material-Subsidiary.pdf

37. DISCLOSURES:

In terms of the requirements of Section 135 and Section 177 of the Companies Act, 2013, the disclosure regarding composition of Committee on Corporate Social Responsibility (CSR) & Sustainability and Audit Committee is as under:

Committee on Corporate Social Responsibility (CSR) and Sustainability

The Committee on Corporate Social Responsibility (CSR) and Sustainability comprises the following members:

1. Shri Atul Kumar Garg, Independent Director-Chairman,

2. Shri D. P. Bhargava, Director (Technical) and

3. Shri R. S. Mina, Director (Personnel).

Audit Committee

The Audit Committee comprises the following members:

1. Shri Atul Kumar Garg, Independent Director-Chairman,

2. Shri Ashoke Kumar Dutta, Independent Director and

3. Shri D. P. Bhargava, Director (Technical).

All the recommendations made by the Audit Committee during the year were accepted by the Board.

Vigil Mechanism

Your Company has a defned and established Whistle Blower Policy (vigil mechanism) for reporting instances of unethical/ improper conduct and taking suitable steps to investigate and correct the same. The Whistle Blower Policy is available on the Company''s website at the link: http://www.nhpcindia.com/writereaddata/images/pdf/wbp.pdf. The provisions of this policy are in line with the provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with stock exchanges.

During the year 2014-15, no complaint has been reported under Whistle Blower Policy.

Further, no personnel had been denied access to the Audit Committee.

38. DIRECTORS'' RESPONSIBILITY STATEMENT

In compliance to Section 134(3)(c)of the Companies Act, 2013, the Directors hereby confrm the following:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 fnancial year and of the proft of the Company for that period;

(c) the Directors had taken proper and suffcient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis;

(e) the Directors had laid down internal fnancial controls to be followed by the Company and that such internal fnancial controls are adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

39. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs)

The following changes have taken place in the Board of Directors and Key Managerial Personnel of your Company since the last Annual General Meeting:

(i) The Board of Directors has appointed Ms. Krishna Tyagi, Chief Controller of Accounts, Ministry of Power as a Nominee Director w.e.f. 8th July, 2015 consequent upon cessation of Directorship of Shri K. N. Garg, then Member (Hydro), Central Electricity Authority, retired on 30th June, 2015 on attaining the age of superannuation.

(ii) The Board of Directors has appointed Shri Jayant Kumar, Director (Finance) as an Additional Director of the Company w.e.f. 26th May, 2015 pursuant to Ministry of Power''s letter no. 9/1/2014-NHPC of even date. Earlier on cessation of Directorship of Shri A. B. L. Srivastava, then Director (Finance) & Chief Financial Offcer, the additional charge for the post of Director (Finance) was held by Shri R.S. Mina, Director (Personnel) w.e.f. 15th September, 2014. Shri Mina acted as Chief Financial Offcer (CFO) of the Company w.e.f. 26th September, 2014 till the appointment of Shri Jayant Kumar, as CFO of the Company on 29th May, 2015.

(iii) The Board of Directors in its 382nd meeting held on 20th March, 2015 appointed Shri Ashoke Kumar Dutta and Shri Atul Kumar Garg, Independent Directors as Additional Directors of the Company to meet the requirements of the Companies Act, 2013 and Listing Agreement, till the appointment of Independent Directors by the President of India or till the date of next Annual General Meeting, whichever event occurs earlier, as their tenure was completed on 22nd March, 2015, as per respective appointment letters issued by the Ministry of Power.

(iv) Ministry of Power entrusted the additional charge of the post of Director (Projects) to Shri R. S. T. Sai, Chairman & Managing Director w.e.f. 11th March, 2015 on cessation of Directorship of Shri J.K. Sharma, then Director (Projects).

(v) The Board of Directors has appointed Shri Arun Kumar Verma, Joint Secretary (Hydro), Ministry of Power as a Nominee Director on the Board of the Company w.e.f. 17th December, 2014 on cessation of Directorship of Shri Mukesh Jain, then Joint Secretary (Hydro), Ministry of Power w.e.f. 11th November, 2014.

(vi) Shri G.S. Vedi, Shri A.K. Mago and Shri R. Jeyaseelan, Independent Directors ceased to be Directors of the Company w.e.f. 1st November, 2014 on completion of their tenure as per respective appointment orders issued by the Ministry of Power.

(vii) Shri Shantikam Hazarika and Shri A. Gopalakrishnan, Independent Directors ceased to be Directors of the Company w.e.f. 27th September, 2014 due to non-appointment by the shareholders in the last Annual General Meeting of the Company.

All Independent Directors have declared that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Details of board and committee meetings are given in the Corporate Governance Report.

Ministry of Corporate Affairs vide its notifcation dated 5th June, 2015 exempted/amended certain provisions of the Companies Act, 2013 for Government Companies. As per the above notifcation, the Nomination & Remuneration Committee is not required to formulate criteria for appointment of Directors, their remuneration policy and carrying out their performance evaluation in certain cases. Further, the Board of Government Companies are not required to evaluate performance of Directors in case they are evaluated by the administrative Ministry.

Particulars of employees and related disclosure have not been provided in the report pursuant to above notifcation.

As regards policy on remuneration of KMPs (other than Directors) and other employees of the Company, their pay structure, allowances and other benefts are governed by relevant DPE Guidelines. Annual performance evaluation of senior management personnel of the Company is being done as per the "performance appraisal-recording and custody" rules of the Company read with relevant guidelines of Department of Public Enterprises, Govt. of India. An evaluation mechanism for performance evaluation of Board, its Committees and Independent Directors is under consideration of the Board.

The details of familiarisation programme for Directors are put up on the website of the Company at the link: http://www. nhpcindia.com/writereaddata/Images/pdf/FamiliarProg-BOD.pdf

The details of remuneration paid to Directors during the Financial Year 2014-15 have been provided in the Corporate Governance Report.

40. MEETINGS OF THE BOARD

Eleven meetings of the Board of Directors were held during the year 2014-15. For further details, please refer Corporate Governance Report of this Annual Report.

41. GENERAL

No disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. Neither the Chairman & Managing Director nor the Functional Directors of the Company receive any remuneration or commission from any of its subsidiaries.

5. No signifcant or material orders were passed by the regulators or courts or tribunals which impact the going concern status and Company''s operations in future.

6. No material changes and commitments have occurred after the close of the fnancial year till the date of this report, which affect the fnancial position of the Company.

7. There were no cases fled pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review.

42. ACKNOWLEDGEMENT

The Board of Directors acknowledge with deep appreciation, the cooperation and guidance received from the Government of India specially the Ministry of Power, Ministry of Environment, Forest & Climate Change, Department of Public Enterprises, Central Electricity Authority, Central Electricity Regulatory Commission, State Governments and their Ministries and State Electricity Boards. The Board of Directors also conveys their gratitude to the shareholders, banks and fnancial institutions for the confdence 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.

The Board wish to place on record its appreciation for the constructive suggestions received from Statutory Auditors, Cost Auditors and Offce of the Comptroller and Auditor General of India. Further, the Board wishes to record its deep gratitude to all the members of NHPC family for their whole hearted support. The Board is confdent that employees will continue to contribute their best in the years to come.

For and On behalf of the Board of Directors

(R. S. T. Sai)

Chairman and Managing Director

DIN No.:00171920

Date: 6th August, 2015

Place: Faridabad

---

Mar 31, 2014

Dear Members,

NHPC Limited.

The Directors are pleased to present the 38th Annual Report on the performance of your Company along with Audited Statement of Accounts, Auditors'' Report and Review of Accounts by the Comptroller and Auditor General of India for the financial year ended 31st March, 2014.

1. FINANCIAL RESULTS

The financial results for the year ended 31st March, 2014 are summarized in Table 1.

Table 1: Financial Highlights (Rs. in crore)

PARTICULARS 2013-14 2012-13

Sales 5,335.11 5,049.13

Profit Before Depreciation, Interest and Tax 3,816.22 4,556.80

Depreciation 1,210.76 969.29

Profit After Depreciation but Before Interest and Tax 2,605.46 3,587.51

Interest and Finance charges 1,022.40 385.38

Profit After Depreciation and Interest but Before Tax 1,583.06 3,202.13

Tax 604.27 853.91

Profit After Depreciation, Interest and Tax 978.79 2,348.22

Surplus of Statement of Profit and Loss of earlier years 7,146.38 5,963.10

Amount written back from Bond Redemption Reserve 14.25 14.25

Amount written back from Self-Insurance Reserve 3.97 0.92

Amount written back from CSR Fund 7.88 -

Tax on Dividend-written back 5.11 4.88

Balance available for appropriation 8,156.38 8,331.37

APPROPRIATIONS

Transfer to Bond Redemption Reserve 249.45 249.17

Transfer to Self-Insurance Fund 51.74 48.84

Transfer to CSR Reserve 2.30 23.50

Transfer to R&D Fund 17.16 -

Proposed/Final Dividend 332.13 738.05

Tax on Proposed Dividend 56.44 125.43

Balance carried over to Reserves and Surplus 7,447.16 7,146.38

The Decline in profit is mainly due to charging off the borrowing cost and other administrative cost of Subansiri Lower & Teesta Low Dam-IV Projects as the construction activities of these Projects were interrupted for a prolonged period.

2. POWER GENERATION

During the year 2013-14, NHPC generated 18,386 MUs of power through 18 Power Stations located in different parts of the Country against the target of 21,465 MUs. The reason for less generation was mainly because of the complete shutdown of 280 MW Dhauliganga Power Station, Uttarakhand, due to flooding of power house by flash floods. Generation from all four units of Dhauliganga Power Station has been restored. The shortfall in generation was also attributable to poor hydrology during the year in some of the Power Stations.

Since last report, 132 MW Teesta Low Dam-III (West Bengal), 45 MW Nimoo Bazgo (Jammu & Kashmir), 240 MW Uri-II (Jammu & Kashmir) and 520 MW Parbati-III (Himachal Pradesh) Power Stations were declared under commercial operation. As such an additional installed capacity of 937 MW was declared under commercial operation since previous report. At present, your Company''s total installed capacity is 6,507 MW including 1520 MW of NHDC Limited, a Subsidiary Company of NHPC.

CERC has issued tariff order for 510 MW Teesta-V Power Station, 45 MW Nimoo Bazgo Power Station, 44 MW Chutak Power Station and 240 MW Uri-II Power Station during the period.

3. PROPOSED DIVIDEND

Your Directors have recommended a dividend of Rs. 0.30 per share (excluding dividend tax) for the year 2013-14. The dividend will be paid after your approval at the forthcoming Annual General Meeting. On approval, the total dividend payout for the year will amount to Rs. 332.13 crore.

4. COMMERCIAL PERFORMANCE

Your Company''s commercial performance during the year 2013-14 was satisfactory. The sales realization during the year was Rs. 6,397 crore (including Rs. 358.76 crore realized from Delhi Transco Limited (DTL)/Delhi Power Company Limited (DPCL) on account of old dues of Delhi Electric Supply Undertaking (DESU) and Rs. 14.64 crore of old dues realized from Manipur) as against Rs. 5,369 crore in the previous year. The bills raised during the year were to the tune of Rs. 5,928 crore compared to the bills of Rs. 5,184 crore in the previous year.

The outstanding dues pending for more than 60 days as on 31st March, 2014 was Rs. 955 crore. Your Company is continuing all its efforts including regulation of Power supply to the defaulting utilities to recover the outstanding dues. Most of the benefi ciary states except J&K are now paying their dues on regular basis.

Central Electricity Regulatory Commission (CERC) Regulations

The CERC has issued Central Electricity Regulatory Commission (Terms & Conditions of Tariff) Regulations, 2014 for the tariff period from 01.04.2014 to 31.03.2019 on 21.02.2014.

Major highlights of the Regulations are:

a) O&M expenses for new Projects have been increased from 2% of capital cost to 2.5% for Power Stations of more than 200 MW and 4% for Power Stations of less than 200 MW.

b) Return on Equity (ROE) has been retained at present level (15.5% for Run of River (ROR) and 16.5% for ROR with pondage/ storage) along with grossing with effective tax rate.

c) Rate of Secondary Energy increased from 80 paisa per unit to 90 paisa per unit.

5. CAPITAL STRUCTURE AND NET WORTH

Your Company''s paid-up capital at present is Rs. 11,070.66 crore compared to last year of Rs. 12,300.74 crore due to buy back of equity shares during the year. The net-worth of the Company as on 31.03.2014 stands at Rs. 26,067.65 crore.

6. STATUS OF ONGOING PROJECTS

Your Company is engaged in the construction of the following Hydroelectric Projects:

Table 2: Details of Projects under construction during 2013-14

S. No. Project State Installed Capacity (MW)

i. Teesta Low Dam IV West Bengal 160

ii. Parbati II Himachal Pradesh 800

iii. Subansiri Lower* Assam/ Arunachal Pradesh 2,000

iv. Kishanganga Jammu & Kashmir 330

Total : 3,290

* The project work is stand still since 16.12.2011. Efforts are being made to restart the project.

7. NEW PROJECTS

Table 3: Projects in the Clearance/Approval Stage are as under: PROJECTS TO BE EXECUTED BY NHPC ON STAND ALONE BASIS

S. No. Project State Installed Capacity (MW)

i. Kotli Bhel I-A Uttarakhand 195

ii. Teesta-IV Sikkim 520

iii. Dibang Arunachal Pradesh 3,000

iv. Tawang-I Arunachal Pradesh 600

v. Tawang-II Arunachal Pradesh 800

Total: 5,115 PROJECT TO BE EXECUTED THROUGH SUBSIDIARY COMPANY

vi. Loktak Downstream Manipur 66

PROJECT TO BE EXECUTED THROUGH JOINT VENTURE

vii. Pakal Dul and others Jammu & Kashmir 2,120

Grand Total: 7,301

On getting necessary approvals, construction activities at respective sites will be started.

In addition to above, your Company is also exploring the possibility of Wind and Solar Power across the Country.

8. PROJECTS UNDER DPR PREPARATION

Survey & Investigation for preparation of Detailed Project Reports (DPR) of the following Projects has been initiated:

Table 4: Survey and Investigation

S. No. Project State Installed Capacity (MW)

i. Bursar J&K 1,020

ii. Dhauliganga Intermediate Uttarakhand 210

iii. Goriganga Uttarakhand 120

Total: 1,350

9. RGGVY - RURAL ELECTRIFICATION (RE) PROJECTS

NHPC is implementing Rural Electrification Projects under Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) in 27 Districts spread over 5 states viz. West Bengal, Bihar, Jammu & Kashmir, Chhattisgarh and Odisha at an estimated cost of Rs. 2,844 crore. Out of total do-able scope of work i.e. Electrification of 9,168 Un-electrifi ed / De-electrifi ed villages, 19,123 partially electrifi ed villages and 18.54 lakh BPL connections, NHPC has completed Electrification of 9,150 Un-electrifi ed / De-electrifi ed villages, 18,957 partially electrifi ed villages and provided service connections to 18.5 lakh BPL households till 31st March, 2014. Balance works are likely to be completed during the current year.

10. RURAL ROADS PROJECT

NHPC had signed an MOU with the Ministry of Rural Development, Government of India and the Government of Bihar for constructing rural roads in Six Districts of Bihar under the Pradhan Mantri Gram Sadak Yojna (PMGSY).

Under the Scheme, 758 roads of 3,228 Km length having cost of Rs. 1,725.65 crore have been awarded by NHPC for execution. Till the end of the financial year, 734 roads of 3,186 Km length have been completed.

11. CONSULTANCY AND BUSINESS DEVELOPMENT SERVICES

NHPC is providing Consultancy services in various fields of Hydro Power viz. River basin studies, Survey works, Design and Engineering, Geotechnical studies, Hydraulic transient studies, Hydrological studies, Construction Management, Testing, Commissioning, Operation & Maintenance etc. to leading organizations globally.

Major Consultancy assignments include assignments from Central and State Government agencies in India and other countries like Bhutan and Ethiopia. Eighty Eight assignments have already been completed, and there are six ongoing assignments presently.

12. GLOBAL INITIATIVES

NHPC is providing Design & Engineering Consultancy services to Mangdechhu Hydroelectric Project Authority (MHPA) for the implementation of 720 MW Mangdechhu Hydroelectric Project in Bhutan.

NHPC is also engaged to provide Management Consultancy to Ethiopia Electric Power Company (EEPCO) through a Consortium led by Power Grid and BSES Rajdhani. The Management contract is for two years duration effective from 25.08.2013.

13. FINANCING OF NEW PROJECTS

As per the Central Electricity Regulatory Commission''s guidelines for the purpose of tariff fixation, the financing of a Project is to be considered in 70:30 Debt Equity Ratio.

In your Directors'' opinion, available internal accruals will be suffi cient to finance the equity component for new Projects. Your Company is well positioned to raise the required borrowings with its low gearing and strong credit ratings, which are at par with sovereign ratings.

The Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion programme.

14. INFORMATION TECHNOLOGY AND COMMUNICATION

All NHPC''s sites are now connected with Corporate office through multimode, fail-safe communications links using MPLS-VPN/ VSAT-Ku Band / Broadband technologies.

NHPC has presently co-located key servers at TIER-III Data Centre of National Informatics Centre Service Incorporated (NICSI), New Delhi. Disaster Recovery (DR) is in operation at Regional office, Kolkata.

Presently, business functions such as Finance, Human Resources, Procurement & Contracts, Inventory, Project Management and Quality Assurance have been implemented in the IFS ERP System across the organization.

15. TRAINING AND HUMAN RESOURCE DEVELOPMENT

The fast changing economic scenario and technological innovations are creating an increasingly competitive market environment. Your Company consistently evaluates the Training needs of its employees to keep them updated with latest changes and provide relevant knowledge to enhance their productivity and work efficiency.

The training programmes are designed to develop and groom internal talent through multidisciplinary programmes. Besides conducting in-house workshops, the Company also organizes training programmes in collaboration with the reputed educational Institutes like, IIMs/XLRIs/IITs etc. by way of strategic alliance to facilitate advance Management and Leadership development programmes for its employees.

16. INDUSTRIAL RELATIONS

During the year, Industrial Relations remained cordial and harmonious at all NHPC Projects / Power Stations / Units.

17. RESETTLEMENT AND REHABILITATION

NHPC has its own Resettlement & Rehabilitation (R&R) Policy, 2007 in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007. NHPC''s R&R Policy provides certain additional benefits over and above those proposed in NRRP, 2007. The Policy aims to address issues like loss of land, houses, other resources and means of livelihood or social support systems, which Project Affected Families (PAFs) are likely to suffer due to the construction of a Project. Major emphasis is laid on economic sustenance of PAFs. As per NHPC''s R&R policy, up to 0.75% of the hard cost of a Project is earmarked towards Community and Social Development Plan (CSDP) for implementation in the resettlement zone and affected areas.

Further, to implement NHPC''s R&R policy in its true spirit, an Operational Manual for effective implementation of various R&R activities has also been formulated.

However, w.e.f. 1st January, 2014, both land acquisition and R&R are being implemented in line with the Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation & Resettlement Act, 2013.

18. VIGILANCE ACTIVITIES

Regular and surprise inspections are being conducted by Vigilance Department at regular intervals. Actionable points identified by Project Vigilance officers are intimated to Head of Projects from time to time. Intensive examinations of works, wherever required, are also carried out by Chief Technical Examiner (CTE) of the CVC from time to time.

Integrity Pact has been implemented successfully for all the procurement works of the value of Rs. 15 crore and more, and for procurement of goods and services of the value of Rs. 25 lakh and more as per CVC guidelines.

Circulars and guidelines based on inspection / intensive examination are being issued regularly as part of preventive Vigilance. Vigilance Awareness Week and various vigilance awareness programmes are being conducted to promote transparency and ethics in working system. Further during the year, two conferences cum workshops of Vigilance officers were also conducted at Corporate office.

As a part of transparent procurement system and in compliance to guidelines issued by Ministry of Power and Central Vigilance Commission, NHPC has opted for e-procurement solution across the organization. The process of supply/works/contracts cases over value of Rs. 10 lakh is through e-procurement.

19. IMPLEMENTATION OF THE FRAUD PREVENTION POLICY

NHPC has formulated a Fraud Prevention Policy to carry out its operations with honesty and ultimately enabling the Company to grow faster.

20. OFFICIAL LANGUAGE IMPLEMENTATION

Your Company has complied with the provisions and rules of the Offi cial Languages Act during the year 2013-14. Efforts were made to improve the progressive use of Official Language in accordance with the policy of the Government of India.

Regular quarterly meetings of the Official Language Implementation Committee (OLIC) and Town Official Language Implementation Committee (TOLIC), Faridabad were organized in NHPC Corporate office where progress of use of Hindi was reviewed in the presence of Functional Directors. Many initiatives were taken to promote Official Language like organizing Hindi Fortnight, All India

Rajbhasha Sammelan, Hindi Competitions, Hindi Pustak Pathan Saptah, Hindi Kavya Ghosthi, etc. Thirty Nine Hindi workshops were organized in Corporate office. Rajbhasha magazines titled, ''Rajbhasha Jyoti'' and ''Nagar Saurabh'' were also published.

The Parliament Sub Committee on Official Languages carried out inspection in some of the Units of the Company and appreciated its implementation. Various incentive Schemes have been introduced in the Corporation to encourage the use of Hindi at workplace.

21. PR INITIATIVES / AWARENESS ACTIVITIES

Your Company''s achievements were duly highlighted through print and electronic media from time to time to project NHPC as a leading and strong hydropower developer in the Country.

Corporate fi lms on NHPC and fi lm on environment were screened at a number of platforms to highlight the developmental activities of NHPC. NHPC has also participated in India International Trade Fair 2013.

NHPC successfully hosted 16th Inter CPSU Carom Tournament at Parbati-II Hydroelectric Project from 20th to 23rd March, 2014. Nine Central Power Sector PSUs / Organizations participated in the tournament. Teams of NHPC also participated in various other Inter CPSU sports tournaments organized under the aegis of Power Sports Control Board, Ministry of Power in 2013-14.

To encourage and spread message about energy conservation, NHPC coordinated painting competitions at School, State and National level in the States of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh. These events were organized by the Bureau of Energy efficiency (BEE) and Ministry of Power.

22. AWARDS AND RECOGNITION

Today, the gambit of Business exceeds the boundaries of mere profit making and embraces the ethos of Corporate Citizenship in its practice. Operational excellence is lifeless unless a successful story of holistic development is not put forward by the Company. NHPC endeavours for an all-round growth and the same is reflected in its long list of awards & achievements both at Corporate and Individual levels.

Awards in Management & Leadership:

Corporate:

- ''Best Value Creating Miniratna'' at the 5th Dalal Street Investment Journal (DSIJ) PSU Awards.

- Gold Medal for ''Excellence in Display'' under the category ''Ministries and Departments Pavilion'' at the India International Trade Fair (IITF) 2013 (along with other Power PSUs under Ministry of Power).

- Special Jury Award for Team NHPC in the Inter Organization Paper Presentation Competition titled ''Quest for Excellence 2013'' organized by Power HR Forum.

Individual:

- Shri A.B.L. Srivastava, Director (Finance) has been conferred with ''Certifi ed Project Director (CPD)'' IPMA Level A by the Institute of Project Management Certifi cation (IPMC). Shri Srivastava has entered a very prestigious league of only 13 CPDs in the Country with a distinction of being the first person with the background of Finance.

- Shri A.B.L. Srivastava, Director (Finance)-''Outstanding Individual Contribution to the Power Sector'' by EPC World Media Group, New Delhi.

- Shri R.S. Mina, Director (Personnel)-''HR Excellence Award'' by Top Rankers Management Consultants, New Delhi.

- Shri R.S. Mina, Director (Personnel)-''HR Leadership Award'' and ''30 Best HR Leaders in PSUs'' by Institute of Public Enterprises.

Sports Corporate:

- NHPC Badminton Team (First position), NHPC Kabaddi Team (Second position) and NHPC Women Carom Team (Third Position)- Inter CPSU Tournaments 2014, Power Sports Control Board.

Individual:

- Ms. Arunachalam Nalini, Assistant Manager (Finance) won 3 Gold medals (Shot put, Discus throw and Badminton mixed doubles) and 1 Bronze medal (Badminton women''s singles) in 6th World Dwarf Games 2013 in Michigan, USA.

23. CORPORATE GOVERNANCE

In compliance with Clause 49(VI) of Listing Agreement and DPE Guidelines on Corporate Governance, a separate section on Corporate Governance is given at Annexure-I and forms part of the Directors'' Report. Further, in compliance with Clause 49(VII) of the Listing Agreement and DPE Guidelines on Corporate Governance, a certificate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance is given at Annexure-II and forms part of the Directors'' Report.

24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Clause 49(IV) (F) of Listing Agreement and DPE Guidelines on Corporate Governance as amended from time to time, a separate report on Management Discussion and Analysis is given at Annexure–III and forms part of Directors'' Report.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given at Annexure-IV and forms part of the Directors'' Report.

26. PARTICULARS OF EMPLOYEES

In compliance with Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, the prescribed information is set out at Annexure-V and forms part of the Directors'' Report. This information is also available on NHPC''s website i.e. www.nhpcindia.com.

The Company (excluding Joint Ventures and Subsidiaries) had 9,838 employees as on 31st March, 2014. One employee employed throughout the year was in receipt of remuneration of more than Rs. 60 lakh per annum and 169 employees employed for a part of the year were in receipt of remuneration of more than Rs. 5 lakh per month.

27. BUSINESS RESPONSIBILITY REPORT

In compliance with Clause 55 of the Listing Agreement, a separate section on Business Responsibility Report is given at Annexure-VI.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR) & SUSTAINABLE DEVELOPMENT (SD)

NHPC has contributed towards the economic development of the society at large and towards improving the quality of life of internal as well as external stakeholders. NHPC has a well-defined CSR and Sustainable Development Policy in line with Department of Public Enterprises, Government of India Guidelines. A separate chapter on Corporate Social Responsibility (CSR) & Sustainable Development (SD) is given at Annexure-VII.

29. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act, 2005, NHPC published various documents/records on its website during the year under review. Assistant Public Information officers were appointed in all Power Stations/ Projects/ Regional offices/ Units to facilitate nationwide access to the information.

30. STATUTORY AUDITORS

The Statutory Auditors of NHPC are appointed by the Comptroller and Auditor General of India. M/s S.N. Nanda and Co., Delhi, M/s Singhi and Co., Kolkata, M/s Gupta Gupta & Associates, Jammu and M/s Tiwari and Associates, Delhi were appointed as Joint Statutory Auditors for the fi nancial year 2013-14.

31. AUDITORS'' REPORT

The Auditors'' Report refers to various notes incorporated by the Company, which are self-explanatory. The report of the Statutory Auditors and management reply thereon is given at Annexure-VIII. The comments of the Comptroller and Auditor General of India is given at Annexure-IX. The Consolidated Financial Statement of the Company along with the Statutory Auditors'' Report is given at Annexure-X.

32. COST AUDITORS

In accordance with the Cost Accounting Records (Electricity Industry) Rules, 2011 and Cost Audit Report Rules, 2011, cost accounts are being maintained by all Power Stations of the Company since 2002-03. The following firms of Cost Auditors were appointed to conduct an audit of Cost Accounting Records as indicated against the name of respective Power Station for the financial year 2013- 14 under Section 233-B of the Companies Act, 1956:

Name of the Firm Name of Power Station

M/s Chandra Wadhwa and Co., New Delhi Salal, Uri-I and Uri-II

M/s R. J. Goel and Co., New Delhi Tanakpur, Dhauliganga and TLDP-III

M/s S. C. Mohanty and Associates, Bhubaneshwar Rangit and Teesta-V

M/s Ravi Sahni and Co., New Delhi Dulhasti, Chutak and Nimoo Bazgo

M/s Krishan Singh Berk, Faridabad Chamera-I and Sewa-II

M/s Bahadur Murao and Co., Delhi Chamera-II, Chamera-IIIand Parbati-III

M/s K. L. Jaisingh and Co., Noida Loktak and Bairasiul

Consolidated Cost Audit Report for the FY 2012-13 was fi led by M/s Krishan Singh Berk, Lead Cost Auditor on 24th September, 2013 The due date for fi ling the same was 27th September, 2013.The details of Cost Audit Firms for which Cost Audit Report for the FY 2012-13 was fi led are given below:

S. No. Power Cost Auditor Membership Address Station No.

1. Uri-I M/s Ravi Sahni and Co. 16339 C-40, West Gorakh Park Extension, New Delhi-110032

2. Dulhasti M/s R.J. Goel and Co. 14256 31, Community Centre, Ashok Vihar, Phase-I, New Delhi-110052

3. Salal M/s R.J. Goel and Co. 14256 31, Community Centre, Ashok Vihar, Phase-I , New Delhi-110052

4. Chamera-I M/s R.M. Bansal and Co. 22583 A-201, Twin Towers, Lakhanpur, Kanpur,Uttar Pradesh-208024

5. Bairasiul M/s Krishan Singh Berk 2724 365, Sector-15, Faridabad, Haryana -121007

6. Chamera-II M/s Krishan Singh Berk 2724 365,Sector-15, Faridabad, Haryana -121007

7. Loktak M/s Ravi Sahni and Co. 16339 C-40, West Gorakh Park Extension, New Delhi-110032

8. Rangit M/s Bahadur Murao and Co. 5574 Shop No. 25, DDA Market, ''B'' Block, Preet Vihar, Delhi- 110092

9. Teesta-V M/s Bahadur Murao and Co. 5574 Shop No.25, DDA Market, ''B'' Block, Preet Vihar, Delhi-110092

10. Dhauliganga M/s Chandra Wadhwa and Co. 6797 204, Krishna House, 4805/24, Bharat Ram Road, Daryaganj, New Delhi-110002

11. Tanakpur M/s Chandra Wadhwa and Co. 6797 204,Krishna House, 4805/24, Bharat Ram Road, Daryaganj, New Delhi-110002

12. Sewa-II M/s R.M. Bansal and Co. 22583 A-201, Twin Towers, Lakhanpur, Kanpur,Uttar Pradesh-208024

13. Chutak M/s S.C. Mohanty and Associates 10924 511, Sahid Nagar, Bhubaneshwar-751007

14. Chamera-III M/s S.C. Mohanty and Associates 10924 511, Sahid Nagar, Bhubaneshwar-751007

Company with a view to control avoidable expenditure has got cost reduction study done for 3 power stations on sample basis.

33. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financia Statements are provided in the Annual Report. A statement of the Holding Company''s interest in the Subsidiary Companies as per Section 212 of the Companies Act, 1956 is annexed to this Annual Report.

34. SUBSIDIARY COMPANIES

Your Company has two Subsidiary Companies namely, NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited The detailed information about these Companies is included in the Management Discussion and Analysis Report and Corporate Governance Report.

The Annual Accounts along with the Auditors'' Report thereon and the Directors'' Report of NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited are not being attached to the Balance Sheet of the Company. In accordance with the genera circular issued by the Ministry of Corporate Affairs, Government of India, any shareholder interested in obtaining a copy of reports pertaining to Subsidiary Companies may write to the Company Secretary, NHPC Limited. The information can also be obtained from www.nhpcindia.com.

The Annual Accounts of the Subsidiary will also be kept open for inspection at the Registered office of the Company and that of the respective Subsidiary Company

The consolidated financial statements presented by the Company include the financial results of its Subsidiaries.

35. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956, the Directors hereby confi rm the following

i) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

i) 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 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.

iv) The Directors had prepared the annual accounts on a ''going concern'' basis.

36. BOARD OF DIRECTORS

The present composition structure of Directors is given in the Corporate Governance Report.

Since the last report, Shri A.S. Bakshi, then Chairperson, Central Electricity Authority (CEA) ceased to be a director on the Board w.e.f. 1st August, 2013. Shri K.N.Garg, Member (Hydro), Central Electricity Authority and Shri Mukesh Jain, Joint Secretary (Hydro), Ministry of Power were appointed on the board w.e.f. 7th October, 2013 and 11th November, 2013 respectively. Shri G. Sai Prasad, Joint Secretary (Thermal), Ministry of Power, who was holding additional charge of Chairman & Managing Director ceased to be a Director w.e.f. 08.06.2014. Shri R. S. T. Sai, Chairman & Managing Director, THDC India Limited has assumed the Charge of Chairman & Managing Director, NHPC Limited w.e.f. 08.06.2014 in addition to his existing duties.

37. ACKNOWLEDGEMENTS

The Board of Directors acknowledge, with deep appreciation, the cooperation and guidance received from the Government of India specially the Ministry of Power, State Governments and their Ministries, Departments/Boards, Bankers, Financial Institutions, lenders and investors. The Board places its appreciation for contributions of contractors, vendors and consultants for their efforts in timely completion of Projects.

The Board places its special appreciation to the benefi ciaries drawing Power, State Electricity Boards and other valuable clients for consultancy assignments.

The Board places on record its deep appreciation for the cooperation extended by Statutory Auditors, Cost Auditors and office of the Comptroller and Auditor General of India. Further, the Board wishes to record its deep gratitude to all the members of NHPC family for their whole hearted support. The Board is also confi dent that the employees will continue to contribute their best in the years to come.

For and On behalf of the Board of Directors

(R. S. T. Sai)

Chairman and Managing Director DIN No.:00171920 Date : 14th August, 2014 Place: New Delh

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Mar 31, 2013

To the Members of NHPC Limited,

The Directors, we take immense pleasure in presenting the 37th Annual Report of your Company for the financial year ended on 31st March, 2013. The report includes highlights of company''s key performance areas pertaining to 2012-2013, along with the Audited Statement of Accounts, Auditors'' Report, and Review of Accounts by the Comptroller & Auditor General of India.

1. FINANCIAL RESULTS

The financial results for the year ended 31st March, 2013 are summarized in Table 1.

Table 1 Financial Highlights

(Rs. in crore)

Particulars 2012-13 2011-12

Sales 5049.13 5509.65

Profit before Depreciation, Interest and Tax 4556.80 4749.00

Depreciation 969.29 893.86

Profit after Depreciation but before Interest and Tax 3587.51 3855.14

Interest and Finance charges 385.38 338.10

Profit after Depreciation and Interest but before Tax 3202.13 3517.04

Tax 853.91 745.27

Profit after Depreciation, Interest and Tax 2348.22 2771.77

Surplus of Statement of Profit and Loss of earlier years 5963.10 4336.18

Amount written back from Bond Redemption Reserve 14.25 14.25

Amount written back from Self-Insurance Reserve 0.92 -

Tax on Dividend— written back 4.88 3.25

Balance available for appropriation 8331.37 7125.45

APPROPRIATIONS

Transfer to Bond Redemption Reserve 249.17 129.13

Transfer to Self-Insurance Fund 48.84 32.48

Transfer to CSR Reserve 23.50 -

Proposed Final Dividend 738.05 861.06*

Tax on Proposed Dividend 125.43 139.68

Balance carried over to Reserves and Surplus 7146.38 5963.10

* including rounding off difference of Rs. 0.01 crore of last year.

2. POWER GENERATION

During the year 2012-13, NHPC achieved "Excellent" rating for exceeding its annual Memorandum of Understanding (Moll) target by generating 18,162 MUs of power as against the target of 18,107 MUs through 12 existing operating Power Stations located in different parts of the country. Apart from the above, 761 MUs were also generated from new projects commissioned during 2012-13.

Chutak Power Station and Chamera-lll Power Station were declared commercially operational during the year 2012-13. Three units ofTLDP III (West Bengal) each 33 MW have been commissioned in 2012-13. Further, two units of Nimmo Bazgo HE project (Jammu and Kashmir) have been commissioned at partial load.

3. PROPOSED DIVIDEND

Your Directors have recommended a dividend of Re. 0.60 per share (excluding dividend tax) for the year 2012-13. The dividend will be paid after your approval at the forthcoming Annual General Meeting. On approval, the total dividend payout for the year will amount to Rs. 738.04 crore.

4. CAPITAL STRUCTURE AND NET WORTH

Your Company''s paid-up capital remained at Rs.12,300.74 crore during the year. The net-worth of the Company increased to Rs. 27,840.50 crore as on 31st March, 2013 as against Rs. 26,353.53 crore at the end of previous year.

5. STATUS OF ONGOING PROJECTS

During the year 2012-13, your Company had to face many challenges like geological obstacles, natural calamities and local problems. Despite these challenges, the construction activities are progressing satisfactorily and projects are at various stages of completion. During the year 2012-13, your Company was engaged in the construction of 10 hydroelectric projects with an installed capacity of 4,502 MW as per the details given in Table 2.

Table 2: Details of hydroelectric projects under construction during 2012-13.

Name of the Hydroelectric Project State Proposed Installed Capacity (MW)

Chamera-III* Himachal Pradesh 231

Chutak** Jammu and Kashmir 44

Teesta Low Dam III*** West Bengal 132

Uri II Jammu and Kashmir 240

Teesta Low Dam IV West Bengal 160

Nimmo Bazgo**** Jammu and Kashmir 45

Parbati III Himachal Pradesh 520

Parbati II Himachal Pradesh 800

Subansiri Lower Assam/Arunachal Pradesh 2,000

Kishanganga Jammu and Kashmir 330

Total 4,502

* Chamera-lll (231MW) in Himachal Pradesh has been commissioned in July, 2012.

** Chutak (44MW) in Jammu and Kashmir has been commissioned in January, 2013.

*** Out of four units of Teesta Low Dam III HEP (132 MW) in West Bengal, three units (99 MW) have been commissioned in March, 2013 and fourth unit also put on commercial operation in May, 2013

****Out of total three units of Nimmo Bazgo HEP (3X15MW) in Jammu and Kashmir, two units have been commissioned at partial load during the Financial Year 2012-13.

The works at Subansiri Lower H.E Project (2000MW) in Arunachal Pradesh have suffered a temporary setback due to local agitation since 1 6th Dec, 2011 and at present the works of the project are unable to be continued. Since Dec''11 at Parbati II H.E Project, the contract for excavation of headrace tunnel was terminated and fresh tender has already been floated to engage a new contractor.

6. COMMERCIAL PERFORMANCE

Your Company''s commercial performance during the year 2012-13 was satisfactory. The sales realization during the year was Rs. 5,369 crore as against Rs. 4,415 crore in the previous year. The bills amounting to Rs. 5,184 crore (including arrear bills of Rs. 1,055 crore against revision of tariff, water usage charges, tax etc. for the previous years) were raised as against the bills of Rs. 6,101 crore in the previous year. Revised tariff order against review petitions for the period 2009-14 have been issued by Central Electricity Regulatory Commission (CERC) in respect of eight operating power stations.

The outstanding dues pending for more than sixty days as on 31.03.2013 were Rs. 830 crores as against Rs. 1,176 crores on 31.03.2012. Your company has made all out efforts, including regulation of power supply to the defaulting utilities, to recover the outstanding dues. As a result, most of the Beneficiary States are liquidating their dues regularly as per liquidation plan.

During the year 2012-13, the Ministry of Power, Government of India has conveyed its approval to NHPC for payment of outstanding receivable of Rs. 120.81 crore pertaining to M/s Delhi Transco Limited (erstwhile DESU) alongwith an interest of Rs. 240.01 crore, which is likely to be received shortly.

CERC has amended its regulation to enhance the base rate for Return on Equity (ROE) (pre-tax) from 15.5 % to 16.5% in case of storage type generating stations including pumped storage hydro generating stations and run of river generating station with pondage.

These regulations came into effect from the date of their publication in the Official Gazette i.e 31.12.2012.

7. PROJECT MANAGEMENT

Technology is extensively used to monitor the progress of different ongoing projects. Online Project Monitoring Centre has been set up at Corporate Office to facilitate video conferencing and provide live video feeds from cameras installed at strategic locations at sites of projects under construction.

8. NEW SCHEMES

Electricity plays an important role in the growth of an economy. Shortage of coal and other fossil fuel has tilted its focus on the environment friendly Hydro Power. Your Company is currently implementing the growth plan to enhance its power generation capacity. Details of projects awaiting clearance and approval are given in Table 3.

Table 3: Projects in the Clearance/Approval Stage:

UNDER NHPC STAND ALONE

S. No. Name of the project Capacity (MW)

1 KotliBhell-A,Uttarakhand 195

2 Teesta-IV, Sikkim 520

3 Dibang, Arunachal Pradesh 3,000

4 Tawang-I, Arunachal Pradesh 600

5 Tawang-II, Arunachal Pradesh 800

Total 5,115 MW

PROJECT TO BE EXECUTED THROUGH JOINT VENTURES

6 Loktak Downstream, Manipur 66

7 Pakal Dul and others,Jammu and Kashmir 2,120

8 Tipaimukh,Manipur 1,500

Total 3,686 MW

Grand Total 8,801 MW

Detailed Project Reports (DPRs) for all these projects have already been prepared and a majority has been approved by the competent authority. Environmental and Forest Clearances are awaited for some of these projects. Construction activities will start on getting the necessary approvals.

Loktak Downstream Hydroelectric Project in Manipur, Joint Venture Company (JVC) has already been incorporated with State Government for execution of Loktak Downstream Project. In respect of projects for execution in Jammu and Kashmir, the JVC namely M/s Chenab Valley Power Projects (Private) Limited has also been incorporated.

Further, a Memorandum of Understanding (MoU) and Promoter''s Agreement for setting up a Joint Venture Company amongst NHPC Limited, SJVN Limited and Government of Manipur for implementation of Tipaimukh Project was also signed in 2011. However, the Competent Authority has now approved to induct NEEPCO in place of SJVN in the proposed Joint Venture, as JV partner. Accordingly formation ofJVC amongst NHPC, NEEPCO and Government of Manipur is in progress.

Status of various activities in NHDC in Madhya Pradesh, Loktak Downstream Hydroelectric Corporation Limited in Manipur and Chenab Valley Power Projects (Private) Limited in Jammu & Kashmir have been discussed in the Management Discussion and Analysis Report and Corporate Governance Report.

In addition to above, Ministry of Environment and Forests (MOEF) has declined permission for diversion of forest land to two projects namely Kotli Bhel Stage-IB (320 MW) and Kotli Bhel Stage-ll (530 MW) in Uttarakhand (not in table). Further, environment clearance accorded to Kotli Bhel-IB was also withdrawn by MOEF subsequent to which NHPC has filed a civil appeal before the Hon''ble Supreme Court of India.

9. PROJECTS UNDER (DPR / FR) PREPARATION

Preparation of Detailed Project Reports (DPRs), Feasibility Reports (FRs) and Survey & Investigation for the projects are in process, and are mentioned in Table 4.

Table 4: DPRs, FRs and Survey and Investigation

S. No. Projects Capacity (MW)

1 Bursar, J&K 1,020

2 Dhauliganga Intermediate,Uttrakhand* 210

3 Goriganga IIIA, Uttrakhand* 120

Total 1,350 MW

* Implementation Agreement has been signed on 23.01.2013 between NHPC & Govt, of Uttrakhand.

In addition to above, attempts are being made to develop Dulhasti Stage -II (350MW) in Jammu and Kashmir.

10. CONSULTANCY AND BUSINESS DEVELOPMENT SERVICES

Based on Company''s varied expertise and experience acquired over the years, NHPC offers consultancy services in various fields of Hydropower worldwide, such as river basin studies, survey works, design and engineering, geological studies, geo-technical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing, commissioning, operation and maintenance etc. to the leading organizations globally.

Major assignments include, consultancy services to Central and State Government agencies in India and neighbouring countries like Bhutan, Myanmar and Tajikistan.

NHPC has successfully completed eighty four assignments and seventeen are in progress.

11. GLOBAL INITIATIVES

During the Year 2012-13, your Company has made continued efforts towards new global initiatives to achieve its long term strategic objectives. Major foreign assignments completed / in progress during the year 2012-13 are as under:

- Pre-feasibility Report (PFR) for Kuri Gongri Basin Project was submitted to Royal Government of Bhutan/Govt, of India in July, 2012.

- Design and Engineering Consultancy is being offered by NHPC Limited for implementation of Mangdechhu HE Project (720 MW) in Bhutan to Mangdechhu Hydroelectric Project Authority (MHPA)

- The work related to Renovation, Modernisation and Uprating (RMU) of the Varzob-I HE Project in Tajikistan have been completed within scheduled time frame. The project was executed under a Tripartite Agreement signed amongst MEA, BHEL and NHPC.

- Technical Due Diligence Study of Shiroro Hydroelectric Power Station in Nigeria for M/s Dangote Industries Limited was carried out by NHPC Limited.

- In association with PGCIL and BSES Rajdhani an agreement has been signed for providing management consultancy to Ethiopia Electric Power Company (EEPCO).

12. RGGVY - RURAL ELECTRIFICATION (RE) PROJECTS

Your Company is implementing rural electrification projects under the Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) in twenty seven districts of five states, namely West Bengal, Bihar, Jammu and Kashmir, Chhattisgarh and Odisha. The estimated cost of the projects is approximately Rs. 2,837 crore.

Under the scheme, NHPC will undertake electrification of 9,310 Un-electrified and De-electrified (UE/DE) villages, 19,939 Partially Electrified (PE) villages along with providing service connections to 20.74 lac Below Poverty Line (BPL) households.

Your Company has provided electricity to 9,119 Un-electrified/De-electrified villages, 18,076 partially electrified villages and connections to 18.33 Lac BPL households till 31st March, 2013.

13. RURAL ROADS PROJECT

Your Company has signed a Memorandum of Understanding (MoU) with the Ministry of Rural Development, Government of India and Government of Bihar for construction of rural roads in six districts of Bihar under the Pradhan Mantri Gram Sadak Yojana (PMGSY). As per the MoU, NHPC will have responsibility to maintain these roads for five years.

Work on 692 roads covering 2990.14 km have been completed till 31st March, 2013 against the contracts awarded for 758 roads covering 3,228.82 km at a cost of Rs. 1,728.61 crore.

14. INFORMATION TECHNOLOGY AND COMMUNICATION

The Information Technology and Communication infrastructure was upgraded in over fifty four locations. All the sites are now connected with the Corporate Office through multi-mode, fail-safe communication links using MPLS-VPN/VSAT- KuBand/ Broadband technologies.

NHPC has presently co-located key servers at TIER-III Data Centre of NICSI (A Government of India Enterprise) at Delhi. Disaster Recovery (DR) site has also commenced its operations through its Regional Office at Kolkata.

A policy framework has been created to manage the Information Technology (IT) systems to ensure optimum and secure utilization of the assets owned by NHPC.

A host of software applications has been implemented covering key business functions and providing services like Internet, Intranet, Email, Voice, Video Conferencing, Web-casting, Desktop virtualization etc. leveraging the IT and Communication Infrastructure.

Your Company has successfully reduced paper consumption, achieved standardization of data and accuracy of information to a large extent with well planned Information Technology facilities.

SAHAJ SEWA portal has been upgraded and improved to make it employee friendly so that users can have easy access to their personal information etc.

During the year, as per Government directives, the procurement process through Electronic Tender System has been successfully implemented.

15. TRAINING AND HUMAN RESOURCE DEVELOPMENT

The fast changing economic scenario and technological innovations are creating an increasingly competitive market environment. Your Company consistently evaluates and trains its employees to keep them updated with latest changes and relevant knowledge to enhance their productivity and work efficiency.

The training programs are initiated to develop and groom internal talent through multidisciplinary programmes internally and externally.

Besides conducting in-house training workshops, the company also organizes training programs in collaboration with the leading and reputed educational Institutes like, IIMs/XLRIs/IITs etc. by way of strategic alliance to facilitate advance management and leadership development programmes for its employees.

16. EMPLOYEE RELATIONS

During theyear, industrial relations remained cordial and harmoniousatall NHPC projects/stations/units .

17. RESEARCH & DEVELOPMENT

Your Company attaches special attention to Research and Development (R&D) activities to introduce innovations and improvements in its areas of operations. Specific areas in which Research and Development was carried out include:

- Research and Development (R&D) techniques developed in-house to overcome the problem of seepage in reservoirs and structures.

- Development of a Hard Coating Facility for which DPR has been prepared.

- Computational fluid dynamics of water flowing through the penstocks to implement and suggest remedial measures to stop seepage in existing dams and preventive measures in dams under construction.

- A National Perspective Plan (NPP) prepared for Research and Development projects-''Development of Silt Erosion Resistant Material for Turbine of Hydro Generators''.

- Undertaking National Perspective Plan (NPP) projects sponsored by CPRI for carrying out Research and Development (R&D) in ''Tunneling in water charged zones under high hydrostatic pressure''.

18. REHABILITATION AND RESETTLEMENT

NHPC has formulated its own Rehabilitation and Resettlement (R&R) policy in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007 after consultation with various stakeholders.

The policy offers benefits in addition to those proposed in NRRP, 2007. Your Company''s policy aims to address the issues like loss of land, houses, other resources, and means of livelihood or social support systems, that the Project Affected Families (PAFs) may suffer as a result of construction of projects.

Economic sustenance of Project Affected Families (PAFs) is treated with a great level of concern. As provided in the NHPC''s Rehabilitation and Resettlement (R&R) Policy, up to 0.75 percent of the hard cost of a project is kept aside for Community and Social Development Plan (CSDP) towards implementation in the resettlement zone and affected areas.

Further, to implement NHPC''s Rehabilitation and Resettlement (R&R) Policy in its true spirit, an Operational Manual for effective implementation of various Rehabilitation and Resettlement activities has been formulated.

19. FINANCING OF NEW PROJECTS

As per the Central Electricity Regulatory Commission''s guidelines, for the purposes of tariff fixation, the financing of the project is to be considered of in 70:30 Debt Equity Ratio.

In the opinion of your Directors, available internal accruals will be sufficient to finance the equity component for new projects. Your Company is well positioned to raise the required borrowings with its low gearing and strong credit ratings which are at par with sovereign ratings.

The Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion programme.

20. VIGILANCE ACTIVITIES

NHPC''s Vigilance Division at the Corporate Office has been granted ISO 9001:2008 Certification for implementing Quality Management System by M/s BIS (Bureau of Indian Standard). The entire process has been documented and system of monitoring of vigilance complaints and disciplinary cases have been implemented to avoid delays.

Routine and surprise inspections are conducted by the Vigilance department from time to time. Actionable points identified by Project Vigilance Officers are intimated to Project Head to take necessary steps for corrections.

Intensive examinations of works are also carried out by Chief Technical Examiner (CTE) of the Central Vigilance Commission (CVC) from time to time.

Integrity Pact has been implemented in the company successfully for works of the value of Rs. 15 crores and more and for procurement of goods and services of the value of Rs. 25 lacs and more based on the CVC guidelines.

As a part of a transparent procurement system and in compliance with guidelines issued from MOP and CVC, NHPC has opted for E-procurement solutions in the organization for major procurements. Emphasis has been laid for preventive vigilance by issuing circulars and guidelines based upon inspection/intensive examinations.

Various Vigilance Awareness Programmes were organized to promote transparency, work culture and ethics in the prevailing system. Your Company also conducted a workshop for Vigilance Officers.

21. IMPLEMENTATION OF THE FRAUD PREVENTION POLICY

NHPC has formulated a Fraud Prevention Policy in order to carry out its operations with honesty and drive the country towards growth.

22. OFFICIAL LANGUAGE IMPLEMENTATION

Your Company complied with the provisions and rules of the Official Language Act during the year. Efforts were made to improve the progressive use of official language in accordance with the policy of the Government of India.

The Parliament sub-committee on official language carried out inspections in Teesta Low Dam-IV and Parbati - II H.E Project and appreciated its implementation. Rajbhasha inspections were conducted in the departments of the Corporate Office and at power stations/projects/regional offices.

Regular quarterly meetings of the Official Language Implementation Committee were organized in the Corporate Office where progress of use of Hindi was reviewed in the presence of Directors. Many initiatives were taken to promote official language like organizing Official language Conference, Hindi Fortnight, Regional Rajbhasha Sammelan, All India Kavi Sammelan, Hindi Kavya Path and Bhashan Pratiyogita, Hindi ''Pustak Pathan Saptah, Hindi Kavya Goshthi etc. Rajbhasha magazine titled ''Rajbhasha Jyoti'' was also released bythe Directors.

During this period thirty one workshops were organized in the Corporate Office and employees were given training of Hindi Language and computer typing. Various incentive schemes were introduced to encourage the use of Hindi within the Company.

NHPC has also received the Rajbhasha Shield and Citation as First Prize for two consecutive years i.e. 2011-12 and 2012-13 under the NTPC Rajbhasha Shield Yojna for carrying out outstanding work towards implementation of Rajbhasha among Power Sectors. NHPC has been conferred with Second Prize under the "Indira Gandhi Rajbhasha Shield Yojna" by the Government of India for the year 2010-11 and the award was received from the Hon''ble President of India, Shri Pranab Mukherjee. This is the highest award of Government of India for Rajbhasha.

23. PRINITIATIVES/AWARENESS ACTIVITIES

Your Company''s achievements were duly highlighted through print and electronic media from time to time to project NHPC as a leading and strong hydropower developer in the country.

Image building efforts initiated by NHPC include participation in exhibitions organized by different agencies at different levels and screening of films created to showcase developmental activities of the Company to a varied sections of audience. NHPC also conducted and participated in sports activities under the aegis of the Power Sports Control Board, Ministry of Power from time to time.

To encourage and spread message about energy conservation, NHPC co-ordinated painting competitions at School, State, and National level, in the States of Jammu and Kashmir, Manipur, Sikkim, Arunachal Pradesh and Madhya Pradesh. These events were organized by the Bureau of Energy Efficiency (BEE), and Ministry of Power.

24. AWARDS AND RECOGNITION

The excellent initiatives taken by the Company and employees has won laurels and appreciation from several quarters during the year 2012-2013. Someofthese awardsarementioned herewith:

- IPE Corporate Governance Award: NHPC has been conferred with the ''IPE Corporate Governance Award'' for exemplary initiatives in the area of Corporate Social Responsibility (CSR) by Institute of Public Enterprise (IPE) on 28th Nov, 2012.

- First Prize for Promoting Rajbhasha: Amongst all PSUs, NHPC was awarded First Prize for its outstanding work to promote the use of Rajbhasha, in a function at Srinagar on 24th September, 2012.

- Winner of IPPAI Power Awards "Best Power Producer (Hydro)": NHPC was awarded the "Best Power Producer (Hydro)" at the 13th Regulators and Policymakers Retreat 2012'' function held in Goa on 24th August, 2012.

- Performance Excellence Award: Instituted by the Indian Institution of Industrial Engineering (HIE), NHPC was given the award for the financial year 2010-11 in June, 2012.

- NHPC was conferred with Silver Award in Training Excellence instituted by Greentech Foundation in Association with Indian Institute of Corporate Affairs, Ministry of Corporate Affairs, Government of India.

25. CORPORATE GOVERNANCE

In compliance with Clause 49(VI) of Listing Agreement and DPE Guidelines on Corporate Governance, a separate section on Corporate Governance is given in Annexure - I. Further, in compliance with Clause 49(VII) of the Listing Agreement and DPE Guidelines on Corporate Governance, a Certificate from Practicing Company Secretary regarding compliance of conditions of Corporate Governance is given in Annexure - II and forms part of the Directors'' Report.

26. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Clause 49(IV)(F) of Listing Agreement and DPE Guidelines on Corporate Governance as amended from time to time, a separate report on Management Discussion and Analysis is given in Annexure - III and forms part ofthe Directors'' Report.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure - IV and forms part ofthe Directors'' Report.

28. PARTICULARS OF EMPLOYEES

In compliance with Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, the prescribed information is set out in Annexure - V and forms part of the Directors'' Report. This information is also available on NHPC''s website at www.nhpcindia.com. The Company (excluding Joint Ventures and Subsidiaries) had 10,418 employees as on 31st March 2013. 2 employees employed throughout the year were in receipt of remuneration of more than Rs. 60 lakh per annum and 55 employees employed for a part of the year were in receipt of remuneration of more than Rs. 5 lakh per month.

29. BUSINESS RESPONSIBILITY REPORT

In compliance with Clause 55 of Listing Agreement, a separate section on Business Responsibilty Report has been included and is given in Annexure - VI.

30. SUSTAINABLE DEVELOPMENT AT NHPC

As stipulated under DPE Guidelines on Sustainable Development, a separate chapter on Sustainable Development at NHPC has been given in Annexure - VII.

31. CORPORATE SOCIAL RESPONSIBILITY

Ethically and socially motivated NHPC has contributed towards the economic development of the society at large and towards improving the quality of life of internal as well as external stakeholders. NHPC has well defined CSR and Sustainable Development policy in line with Department of Public Enterprises Guidelines. A number of community development initiatives in the following areas have been undertaken:

Education:

NHPC leads in front when it comes to imparting education, especially to the poor and underprivileged women.

Various Skill Development and Vocational Training Programmes have been initiated to improve quality of life of people living in the surrounding areas ofvarious Project/Power Stations.

A total of 11 (Eleven) ITI''s have been adopted (five in Jammu and Kashmir, four in Uttarakhand and two in Arunachal Pradesh) through Public Private Partnership (PPP) /Vocational Training Improvement Program/Centre of Excellence Scheme (COE).

Women empowerment: NHPC has done a commendable job of empowering women in many ways. It grants scholarships to bright, deserving girl students belonging to economically and socially backward strata of society pursuing education in nearby government school. Your Company has started Vocational Training Centers for women to promote self employment.

Schools have been opened in the areas surrounding Project/Power Stations/Townships to ensure that students are able to pursue their academic ambitions and dreams without economic hindrances.

Health:

Health is a major issue that your company takes very seriously. It has organized during the year medical camps in surrounding areas of Project/Power Stations and distributes free medicines to economically weaker families/individuals.

Keeping women folks and children in mind, NHPC has created an infrastructure that takes care of basic amenities and facilities extended to women, from providing schools, sanitation, maternity centers around NHPC Projects, Power Stations and Townships. Your Company has taken all possible steps within its reach. These steps have brought a remarkable change in the quality of life of these people.

Rural Sports: Rural sports are being promoted by providing sponsorship/equipments and other facilities.

32. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act, 2005, NHPC published various documents/records on its website during the year under review.

Assistant Public Information Officers were appointed at each of the power stations/projects/regional offices/units to facilitate nationwide access to this information.

33. STATUTORY AUDITORS

The Statutory Auditors of NHPC are appointed by the Comptroller and Auditor General of India. M/s S. N. Nanda and Co., Delhi, M/s Singhi and Co., Kolkata, M/s Baweja and Kaul, Jammu and M/sTiwari and Associates, Delhi were appointed as Joint Statutory Auditors for the financial year 2012-13.

34. AUDITORS'' REPORT

The Auditors'' Report refers to various notes incorporated by the Company in Note no. 30, which are self-explanatory. The report of the Statutory Auditors along with management reply is given in Annexure - VIII. The comments of the Comptroller and Auditor General of India is given in Annexure - IX. The Consolidated Financial Statement of the Company along with the Statutory Auditors'' Report is given in Annexure - X.

35. COST AUDITORS

In accordance with the Cost Accounting Records (Electricity Industry) Rules, 2001, cost accounts are being maintained by all Power Stations of the Company since 2002-03. The cost audit of records for 2012-13 is under process. The following firms of Cost Auditors were appointed to conduct an audit of Cost Accounting Records as indicated against the name of respective Power Station for the financial year 2012-13 under Section 233-B of the Companies Act, 1956:

Name of the Firm Name of Power Station

M/s Chandra Wadhwa and Co., New Delhi Dhauliganga Power Station and Tanakpur Power Station.

M/s Krishan Singh Berk, Faridabad Bairasiul Power Station and Chamera- II Power Station.

M/s R. J. Goel and Co., New Delhi Salal Power Station and Dulhasti Power Station.

M/s Ravi Sahni and Co., New Delhi Uri-I Power Station and Loktak Power Station.

M/s Bahadur Murao and Co., Delhi Rangit Power Station and Teesta-V Power Station.

M/s R. M. Bansal and Co., Kanpur Sewa-ll Power Station and Chamera-I Power Station.

M/s S. C. Mohanty and Associates, Bhubneshwar Chutak Power Station and Chamera- III Power Station.

The Cost Audit Report for the financial year 2011-12 was filed as consolidated one by M/s Krishan Singh Berk, Lead Cost Auditor on 28th December, 2012. The due date for filing the same was 31st December, 2012. The details of Cost Audit Firms for which Cost Audit Report for the financial year 2011-12 was filed are given below:

S. No. Power Name of Cost Auditor Membership Address Station No.

1. Uri-I M/s Ramanathlyer and Co. 13848 BL-4,Paschmi, Shalimar Bagh- 110 088,New Delhi

2. Dulhasti M/s Ramanathlyer and Co. 13848 BL-4,Paschmi, Shalimar Bagh- 110 088,New Delhi

3. Salal M/s R.J.Goeland Co. 56 31,Community Centre, Ashok Vihar,Phase-1, New Delhi - 110 052

4. Chamera-I M/sR.M.Bansal and Co. 3323 A-201,Twin Towers, Lakhan Pur,Kanpur, Uttar Pradesh - 208024

5. Bairasiul M/sKrishan Singh Berk 2724 365,Sector-15, Faridabad- 121 007 (Haryana)

6. Chamera-II M/sKrishan Singh Berk 2724 365,Sector-15, Faridabad- 121 007 (Haryana)

7. Loktak M/s R.J.Goel and Co. 56 31,Community Centre,Ashok Vihar, Phase-1, New Delhi - 110 052

8. Rangit M/sD.Duttand Associates 11633 58,Creek Row, Kolkata-700014

9. Teesta-V M/sD.Duttand Associates 11633 58,Creek Row, Kolkata-700014

10. Dhauliganga M/sChandra Wadhwa and Co. 6797 204,Krishna House, 4805/24,Bharat Ram Road, Daryaganj - 110 002, New Delhi

11. Tanakpur M/s Chandra Wadhwa and Co. 6797 204, Krishna House, 4805/24, Bharat Ram Road, Daryaganj - 110 002, New Delhi

12. Sewa-II M/sR.M.Bansal and Co. 3323 A-201,Twin Towers, Lakhan Pur,Kanpur, Uttar Pradesh - 208024

36. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard (AS)-21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. A statement of the Holding Company''s interest in the Subsidiary Companies as per Section 212 of the Companies Act, 1956 is annexed to this Annual Report.

37. SUBSIDIARY COMPANIES

Your Company has two Subsidiary Companies namely, NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited the detailed information about these Companies is included in the Management Discussion and Analysis Report.

M/s Chenab Valley Power Projects Private Limited became a subsidiary by virtue of NHPC holding more than 50% of its Paid-up Equity Share Capital ason31.3.2013. The details are also stated in Management Discussion Analysis Report.

The Annual Accounts along with the Auditors'' Report thereon and the Directors'' Report of NHDC Limited, Loktak Downstream Hydroelectric Corporation Limited and Chenab Valley Power Projects Private Limited are not being attached to the Balance Sheet of the Company. In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, any shareholder interested in obtaining a copy of reports pertaining to Subsidiary Companies may write to the Company Secretary, NHPC Limited. The information can also be obtained from www.nhpcindia.com.

The Annual Accounts of the Subsidiary will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiary Company.

The consolidated financial statements presented by the Company include the financial results of its Subsidiaries.

38. DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following:

i) In the preparation of the annual accounts, 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 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.

39. RECENT HAPPENINGS

Due to cloud burst and unprecedented high flood in Uttarakhand, water has entered into the Dhauliganga Power Station (280 MW) and submerged all the system on the early hours of 17th June 2013. The generation from the plant has been stopped and efforts are being made to restore the generation at the earliest. In addition to this the water has caused damage to various ancillary structures ofthe project like roads, residential and non-residential buildings. The Power Station is covered under Mega All Risk Insurance Policy for Hydro power station.

40. BOARD OF DIRECTORS

The present composition structure of Directors is given in the Corporate Governance Report.

Since the last report, Shri A. Gopalakrishnan has been re-appointed as Director on 10th March, 2013 subsequent to completion of his earlier tenure on 3rd December, 2012.

41. ACKNOWLEDGEMENTS

Your Directors would like to express their gratitude for the continued support and guidance received from different wings of the Government of India, particularly from the Ministry of Power, the Ministry of Finance, Planning Commission, Ministry of Environment and Forests, Department of Public Enterprises, Ministry of Corporate Affairs, the Central Electricity Authority and Central Water Commission as well as State Governments, the Regional and State Electricity Boards, the beneficiaries drawing power from our power stations as also our other valuable clients for consultancy assignments. Appreciations are also due to various International Financing Institutions as well as Indian Financial Institutions, Bankers, SEBI, Stock Exchanges, Lenders and Investors at large for the confidence reposed in NHPC. The Board also acknowledges and appreciates the contributions made by contactors, vendors, consultants and others for achievement of the desired goals.

Your Directors acknowledge the suggestions received from Statutory Auditors, Cost Auditors and the office of the Comptroller and Auditor General of India and are grateful for their consistent support and cooperation.

Your Directors would also like to place on record their deep and sincere appreciation for the hard work, dedication and unstinting efforts of your Company''s employees to ensure that your Company reaches the pinnacle of success.

For and On behalf of the Board of Directors

(G. Sai Prasad)

Chairman and Managing Director

DIN No.: 00325308

Date: 23.07.2013

Place: New Delhi

---

Mar 31, 2012

To the Members of NHPC Limited,

The Directors have immense pleasure in presenting the 36th Annual Report on the performance of your Company, along with the Audited Statement of Accounts, Auditors' Report and the Review of Accounts by the Comptroller & Auditor General of India for the financial year ended 31st March 2012.

1. FINANCIAL RESULTS

The financial results for the year ended 31st March 2012 are summarized in Table 1.

Table 1 FINANCIAL HIGHLIGHTS

(Rs. in crore)

Particulars 2011-12 2010-11

Sales 5509.65 4046.59

Profit before Depreciation, Interest and Tax 4752.02 4160.75

Depreciation 892.74 916.74

Profit after Depreciation but before Interest and Tax 3859.28 3244.01

Interest and Finance Charges 342.24 366.60

Profit after Depreciation and Interest but before Tax 3517.04 2877.41

Tax 745.27 710.74

Profit after Depreciation, Interest and Tax 2771.77 2166.67

Surplus of Profit and Loss Account of earlier years 4336.18 3150.50

Amount written back from Bond Redemption Reserve 14.25 14.25

Amount written back from Self- Insurance Reserve - 0.04

Tax on Dividend—written back 3.25 1.80

Balance available for appropriation 7125.45 5333.26

APPROPRIATIONS

Transfer to Bond Redemption Reserve 129.13 100.00

Transfer to Self-Insurance Fund 32.48 39.31 Interim Dividend

Proposed Final Dividend 861.06* 738.04

Tax on Proposed Dividend 139.68 119.73

Balance carried over to Reserves and Surplus 5963.10 4336.18

* including rounding off difference of Rs. 0.01 crore of last year.

2. POWER GENERATION

NHPC's 12 operating power stations, located in different parts of the country generated 18,683 MUs of power during 2011-12 exceeding the annual MoU target of 18,500 MUs for an 'Excellent' rating by 183 MUs. The power generation in 2011-12 was higher by 0.42 per cent as compared to the previous year.

In addition to above, all the three units of Chamera-III, H.E Project 231 MW (77x3) in Himachal Pradesh have started commercial operations w.e.f. 4th July, 2012. With the commissioning of Chamera-III Project, the installed capacity of NHPC has gone up to 5526 MW including 1520 MW through our subsidiary i.e. NHDC Limited.

3. PROPOSED DIVIDEND

Your Directors have recommended a highest ever dividend of Re. 0.70 per share (excluding dividend tax) for the year 2011-12. The dividend will be paid after your approval at the forthcoming Annual General meeting. The total dividend payout for the year amounts to Rs. 861.05 crore representing 31.06 per cent of profits after tax.

4. CAPITAL STRUCTURE

Your Company's paid up capital remained at Rs. 12,300.74 crore during the year. The net-worth of the Company has increased to Rs. 26,353.53 crore as on 31st March 2012 as compared to Rs. 24,583.89 crore at the end of previous year.

5. STATUS OF ONGOING PROJECTS

During the year under report, your Company had to face many challenges like geological obstacles, natural calamities and loca problems. But despite all these challenges construction continued at a brisk pace and the projects are in various stages of completion. During the year 2011-12, your Company was engaged in the construction of 10 hydroelectric projects with an installed capacity of 4,502 MW as per the details given in Table 2. Five projects viz. — Teesta Low Dam-III, Nimoo Bazgo, Chutak, Uri-II and Parbati-III are in advanced stages of completion and are likely to be commissioned in the year 2012-13. The work at Subansiri Lower HE Project (2000MW) in Arunachal Pradesh has suffered due to local agitation w.e.f. December, 2011. However at present the pace of work is gearing up and contractors have started mobilizing resources.

Table 2: Details of hydroelectric projects under construction during 2011-12

Hydroelectric Project State Proposed Installed Capacity (MW)

Teesta Low Dam-III West Bengal 132

Uri-II Jammu and Kashmir 240

Chamera-III Himachal Pradesh 231**

Teesta Low Dam-IV West Bengal 160

Nimmo Bazgo Jammu and Kashmir 45

Parbati-III Himachal Pradesh 520

Parbati–II Himachal Pradesh 800

Chutak Jammu and Kashmir 44*

Subansiri Lower Assam/ Arunachal Pradesh 2,000

Kishanganga Jammu and Kashmir 330

Total 4,502

Note: * Two units (22 MW) of Chutak HEP (44 MW) in J&K were synchronized during financial year 2011-12.

** All the three units of Chamera-III, H.E Project 231 MW (77x3) in Himachal Pradesh have started commercial operations w.e.f. 4th July, 2012.

6. COMMERCIAL PERFORMANCE

Your Company's commercial performance during the year 2011-12 was highly satisfactory. The sales realization during the year was Rs. 4,415 crore as against Rs. 3,619 crore in the previous year. The bills amounting to Rs. 6,101crore (including arrear bills ofRs. 2605.40 crore against revision of tariff, tax etc. for the previous years) were raised as against the bills of Rs. 3,553 crore in the previous year. Tariff orders for the period 2009-14 have been issued by CERC in respect of 12 Power Stations.

The outstanding dues pending for more than 60 days as on 31st March, 2012 were Rs. 1176.02 crores. Your company has made all out efforts to recover the outstanding dues, including regulation of power supply to the defaulting utilities. Most of the beneficiary states are now liquidating their dues in installments.

7. PROJECT MANAGEMENT

An online Project Monitoring Centre has been set up at the Corporate Office to support video conferencing and to provide live video feeds from cameras installed at strategic locations in projects under construction. This will facilitate an analysis of physical progress.

8. NEW SCHEMES

Details of projects which are under clearance/approval stages are given in Table 3.

As a part of its future expansion programme, five projects of your Company with a capacity of 5,115 MW are under various stages of approval. In addition to these five projects, new projects with a capacity of 3,686 MW are to be executed through JVCs with State Governments/PSUs.

Table 3: Projects under Clearance/Approval UNDER NHPC STAND ALONE

S. No. Name of the Project Capacity (MW)

1 Kotli Bhel I-A, Uttarakhand 195

2 Teesta-IV, Sikkim 520

3 Dibang, Arunachal Pradesh 3,000

4 Tawang-I, Arunachal Pradesh 600

5 Tawang-II, Arunachal Pradesh 800

Total 5,115 MW

PROJECTS TO BE EXECUTED THROUGH JOINT VENTURES

6 Loktak Downstream, Manipur 66

7 Pakal Dul and others, Jammu & Kashmir 2,120

8 Tipaimukh, Manipur 1,500

Total 3,686 MW

Grand Total 8,801 MW

Detailed Project Reports (DPRs) for all these projects have been prepared and a majority of them have also been approved by the competent authorities. Environmental and Forest Clearances are awaited for some of these projects. Construction activity will start once NHPC/JVCs get these approvals.

A promoter's agreement for setting up a Joint Venture Company (JVC) involving NHPC Limited, SJVN Limited and the Government of Manipur for implementing the Tipaimukh hydroelectric project in Manipur was signed in October 2011, in the presence of Shri Sushil Kumar Shinde, Hon'ble Union Minister of Power, Government of India (GoI) and Shri Okram Ibobi Singh, Hon'ble Chief Minister of Manipur.

JVCs for Loktak Downstream HE Project in Manipur and Pakul Dul HE Project in J&K have already been incorporated.

Ministry of Environment and Forests (MoEF) has declined permission for diversion of forest land to two projects viz. Kotli Bhel Stage- 1B (320 MW) and Kotli Bhel Stage-II (530 MW) in Uttarakhand (not in table). Further, environment clearance accorded to Kotli

Bhel-IB was also withdrawn by MoEF subsequent to which NHPC has filed a civil appeal before the Hon'ble Supreme Court of India.

9. PROJECTS UNDER DPR/FR PREPARATION

Your Company is in the process of preparing DPRs, Feasibility Reports (FRs) and Survey & Investigation for projects which are presently under various stages of clearance. The details are given in Table 4.

Table 4: DPRs, FRs and Survey & Investigation

S. No. Projects Capacity (MW)

1 Bursar, J&K 1,020

2 Chungar Chal, Uttarakhand 240

3 Garba Tawaghat, Uttarakhand 630

4 Karmoli Lumti Tulli, Uttarakhand 55

5 Lachen, Sikkim 210

Total 2,155 MW

10. CONSULTANCY & BUSINESS DEVELOPMENT SERVICES

NHPC's major consultancy assignments include those from Central and State Government agencies in India and in neighboring countries like Bhutan, Myanmar and Tajikistan. These consultancy services are in various hydropower fields like river basin studies, survey work, design and engineering, geological studies, geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing and commissioning and operation & maintenance. So far your Company has completed 84 consultancy assignments while another 18 assignments are under progress. Your Company is registered with the World Bank, the Asian Development Bank, the African Development Bank, Kuwait Fund for Arab Economic Development and the Central Water Commission as a consultant in the area of hydropower.

Your Company is also making efforts to start unallocated hydro projects with state governments through joint ventures.

11. GLOBAL INITIATIVES

Under the 'Action Plan' on India-Bhutan cooperation for hydropower development of 10,000 MW by 2020, NHPC has been entrusted with the preparation of DPRs for Chamkharchhu-I H.E. Project (770 MW) and for preparing PFRs of Kuri Gongri Reservoir projects in Bhutan. The draft DPR for Chamkharchhu-I H.E. Project (770 MW) was submitted to the Royal Government of Bhutan (RGoB) and Government of India (GoI) in March 2012. The draft PFR for the Kuri Gongri Basin projects was also submitted to RGoB/ GoI in May 2012.

Your Company has also signed an agreement with the Mangdechhu Hydroelectric Project Authority for providing engineering and design consultancy services for the construction of the Mangdechhu H.E. Project (720 MW) in Bhutan. It also undertook the following assignments to provide consultancy services:

- Investigations and preparation of updated DPRs for the 1,200 MW Tamanthi and 642 MW Shwezaye, Hydropower & Multipurpose projects in Myanmar, as a consultancy assignment from the Ministry of External Affairs (MEA), Government of ndia. The final report for the Tamanthi Hydropower & Multipurpose Project was submitted to the Ministry of External Affairs, Government of India and to the Government of Myanmar.

- RMU works of Varzob-I H.E. Project in Tajikistan has been entrusted to NHPC under a tripartite agreement signed amongst MEA, BHEL and NHPC.

- Technical due diligence study of the Shiroro Hydroelectric Power Station in Nigeria for M/s Dangote Industries Limited.

12. RGGVY - RURAL ELECTRIFICATION (RE) PROJECTS

Your Company is implementing Rural Electrification Projects under the Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) in 27 districts spread over five states of West Bengal, Bihar, Jammu & Kashmir, Chhattisgarh and Odisha at an estimated cost of Rs. 2,900 crore. The scope of work includes electrification of Unelectrified/De-electrified (UE/DE) villages, Partially Electrified (PE) villages and service connections to Below Poverty Line (BPL) households.

During 2011-12, NHPC electrified 460 UE/DE villages and provided connections to 1.9 lakh BPL households. In addition to above electrification of 2,020 PE villages were also completed.

As on 31st March 2012, the cumulative achievements for UE/DE villages, PE villages and BPL connections were 9,092, 16,439 and 18.2 lakh respectively.

13. RURAL ROADS PROJECT

Your Company has signed a MoU with the Ministry of Rural Development, Government of India and the Government of Bihar for constructing rural roads in six districts in the state under the Pradhan Mantri Gram Sadak Yojana (PMGSY) in the year 2004. These roads will be maintained by NHPC for five years.

Under the scheme, 762 roads of 3,242.58 km at a cost ofRs. 1,763.49 crore have been cleared by the Ministry of Rural Development, Government of India. As on 31st March 2012, 566 roads of 2,701.24 km had been completed.

14. INFORMATION TECHNOLOGY & COMMUNICATION (IT & C)

After implementation of all modules of ERP, the key functions of the organization have now been totally IT enabled and seamlessly integrated with a major focus on the management of projects under construction and also the operation and maintenance of power stations.

The IT & C infrastructure was upgraded at over 50 locations to support increased dependence on information technology. All the locations are connected with the Corporate Office through multi-mode, fail-safe communication links using MPLS-VPN (OFC) and the VSAT based satellite network. Applications such as Intranet, Internet, e-mail and ERP are being run to leverage this network.

Your Company also launched e-procurement initiatives at all locations to bring about efficiency, transparency and cost reduction in procurement of works, goods and services as per Government of India guidelines. Necessary IT security measures have also been put in place to ensure security of all information assets of the organization.

A policy framework has been created for managing the IT systems and assets so that these are optimally used in a secure manner.

15. TRAINING & HUMAN RESOURCE DEVELOPMENT

As a part of its commitment to training and development, your Company has set up training centres at various power stations. The training programmes are designed and conducted on existing and upcoming technologies in the power sector. It has also developed learning ventures with leading educational institutions in the country for skill and knowledge enrichment of all sections of its employees. Strategic alliances have been made with IIMs/XLRI/IITs etc. for advance management and leadership development programmes for NHPC employees.

16. EMPLOYEE RELATIONS

During the year, industrial relations were cordial and harmonious at all NHPC projects/stations/units. However, at some locations workmen participated in a one day nationwide token strike called by the Central Trade Workers Union to raise their demands though no power generation was affected.

17. RESEARCH & DEVELOPMENT

Your Company attaches special attention to Research and Development (R&D) activities to bring in innovations and improvements in its areas of operation. Specific areas in which R&D was carried out include:

- Techniques to stop seepage in reservoirs/structures.

- Development of a hard coating facility for which the DPR has been prepared.

- Computational fluid dynamics analysis of fluid flowing through the surge and pressure shafts of the Teesta-V Power Station and Dam-Spillway of Subansiri H.E. Project.

- A National Perspective Plan (NPP) for R&D projects—'Development of Silt erosion resistant material for turbine of hydro generators'.

- Undertaking NPP projects sponsored by CPRI for R&D in 'Tunneling in water charged zones under high hydrostatic pressure'.

18. CLEAN DEVELOPMENT MECHANISM (CDM) BENEFITS

Carbon credits are expected from NHPCs registered projects under CDM benefits.

Nimoo Bazgo (3X15 MW) and Chutak (4X11 MW) projects located in Jammu & Kashmir have been registered with the CDM Executive Board of the United Nations Framework Convention on Climate Change (UNFCCC). These projects will annually reduce emissions of 1,87,893 and 1,66,831 Metric Tons of CO2 equivalent respectively on their commissioning.

Carbon credits are also expected under the Verified Emission Reductions (VERs) scheme from projects/power stations like Teesta-V.

19. REHABILITATION & RESETTLEMENT

NHPC formulated its own Rehabilitation & Resettlement (R&R) policy-2007 in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007 in consultation with various stakeholders. The Company's policy provides for certain additional benefits over and above those proposed in NRRP, 2007. Your Company's policy aims to address issues like loss of land, houses, other resources and means of livelihood or social support systems, which Project Affected Families (PAFs) are likely to suffer due to the construction of a project. Major emphasis is laid on economic sustenance of PAFs. As per NHPCs R&R policy, up to 0.75 per cent of the hard cost of a project is earmarked towards Community and Social Development Plan (CSDP) for implementation in the resettlement zone and affected areas.

Further, to implement NHPCs R&R policy in its true spirit, an operational manual for effective implementation of various R&R activities has also been formulated.

20. STRATEGIC DIVERSIFICATION

NHPC Limited, a leading company in the Indian hydropower sector, has 14 per cent of the total hydro installed capacity to its credit. During 2011-12, NHPC generated 18,683 MUs of power, which is the highest ever generation since the Company's inception. Apart from hydro, NHPC also has plans to expand in the areas of thermal and renewable energy.

21. FINANCING OF NEW PROJECTS

As per the Central Electricity Regularity Commission's guidelines, projects need to be financed with a debt to equity ratio of 70:30 for the purposes of tariff fixation. Your Directors believe that internal accruals of your Company will be sufficient to finance the equity component of new projects. Due to its low gearing and strong credit ratings, It is well positioned to raise the required borrowings.

The equity component is being funded through IPO proceeds/internal resource accruals.

Company is exploring domestic as well as international borrowing options including overseas development assistance provided by bilateral agencies to mobilize the debt required for the planned capacity expansion programme.

22. SUSTAINABLE DEVELOPMENT POLICY

From 2010-11, the Department of Public Enterprises (DPE) has included Sustainable Development (SD) as a compulsory element for CPSEs under 'Non-Financial Parameters' in MOU for evaluation of performance of the Company. DPE had issued Guidelines on Sustainable Development in September 2011. The main purpose of this policy is to remove any ambiguities and bring in uniformity in the process of sustainable development by specifying the mandate and scope of activities to be performed by CPSEs. NHPC has formulated its own SD policy in line with DPE's guidelines on Sustainable Development.

During 2011-12, NHPC carried out rehabilitation/rejuvenation of dumping sites at Parbati-III HE project and Parbati–II HE project in Himachal Pradesh by way of slope stabilization and plantation, as an initiative towards Sustainable Development. A DPR for the development of a wind power project in Bidda area near the Salal Power Station in J&K was carried out and a feasibility report also prepared for the installation of wind power monitoring stations at Parbati–II, Parbati-III and Chamera-I projects in Himacha Pradesh and the Nimmo Bazgo Project in J&K.

During 2011-12, more than one lakh saplings were planted at NHPCs various project sites under the afforestation drive.

23. VIGILANCE ACTIVITIES

Regular and surprise inspections were conducted by the vigilance department at regular intervals. Actionable points identified by Project Vigilance Officers were conveyed to the heads of the projects from time to time for implementing necessary corrections. An intensive examination of the works under progress was also carried out by CVC's Chief Technical Examiner (CTE) from time to time. An integrity pact was implemented successfully for all procurement works which have a value of more than Rs. 15 crore and for procurement of goods and services which have a value of more than Rs. 25 lakh as per CVC guidelines.

Emphasis is laid on preventive vigilance by issuing circulars and guidelines based on inspections/intensive examinations. Various vigilance awareness programmes and vigilance awareness week were also organized to promote transparency and ethics in the working system. Two workshops for Vigilance Officers were organized during the year under report in order to review and improve their functioning.

24. IMPLEMENTATION OF THE FRAUD PREVENTION POLICY

The fraud prevention policy has been formulated and implemented in your Company.

25. OFFICIAL LANGUAGE IMPLEMENTATION

Your Company complied with the provisions and rules of the Official Language Act. During the year, sincere efforts were made to increase the progressive use of the official language in accordance with the policy of the Government of India.

The Parliament sub-committee on official language carried out inspections in Andaman & Nicobar Islands and Salal and has appreciated its implementation. Rajbhasha inspections were conducted in the departments of the Corporate Office and at power stations/projects/regional offices.

Regular quarterly meetings of the Official Language Implementation Committee were organized at the Corporate Office. During 2011-12, the All India Official Language Conference was inaugurated by a renowned writer, Dr. Narender Mohan. An All India Kavi Sammelan was also organized in the NCUI auditorium in which renowned Hindi poets including Padambhushan Dr. Gopal Das Neeraj, recited poems.

Various incentive schemes were introduced to encourage the use of Hindi in the Company.

Your Company has been conferred with the highest award "Indira Gandhi Rajbhasha Shield Yojna" by the Government of India for the second consecutive year. The award for the year was received from Hon'ble President of India, Smt. Pratibha Devi Singh Patil. First prize for the award "Rajbhasha shield and Citation" for the year 2010-11 under the NTPC Rajbhasha shield yojna for outstanding work in implementation of Rajbhasha among Power Sector was also received from Hon'ble Union Minister of Power, Shri. Sushilkumar Shinde.

26. PR INITIATIVES/AWARENESS ACTIVITIES

Your Company's achievements were appropriately highlighted through print and electronic media throughout the country, creating awareness among the public about the strengths and capabilities of NHPC in developing hydropower.

Your Company has been participating in various exhibitions both in India and abroad and also in sports related activities under the aegis of the Power Sports Control Board, Ministry of Power. During 2011-12, NHPC successfully hosted the 16th Inter-CPSU Bridge and 17th Inter-CPSU Chess tournaments at Faridabad.

Corporate films on NHPC and a film on environment were screened on a number of platforms.

The bi-monthly 'NHPC NEWS' and the monthly communiqué continued to be effective tools for internal communication.

As a part of its attempts for propagating 'Energy Conservation Day 2011', NHPC coordinated a painting competition for school children organized by the Bureau of Energy Efficiency (BEE), Ministry of Power at the national and state levels.

27. AWARDS AND RECOGNITION

NHPC received various prestigious awards. Some of these are:

- The AMITY Corporate Excellence Award for Innovative Training & HR Practices' by AMITY International Business School, NOIDA.

- The 'India Power Award 2011' for the 'largest Hydropower Developer (Public Sector)' at the India Power Awards held on 24th November, 2011.

- 'Prashansa Patra' at the 'NSCI Safety Awards - 2010' instituted by the National Safety Council on 19th October 2011.

- The 'PSE Excellence Award 2011' in the Miniratna and other category for 'Best Human Resource Management'.

- The "Best Performing Generation Company (Hydro)" in Power Line Awards 2012 from Shri Sushil Kumar Shinde, Hon'ble Union Minister of Power.

28. CORPORATE SOCIAL RESPONSIBILITY

The focus of NHPC's Corporate Social Responsibility (CSR) initiative was on rural India and backward districts of hill states like J&K, Himachal Pradesh, Sikkim, Uttarakhand, Arunachal Pradesh and Assam. With its continued commitment towards CSR and ethical behaviour, NHPC contributed to the economic development and improvements in the quality of life of internal as well as external stakeholders and of society at large. NHPC through its expansive CSR initiatives strives to develop mutual trust with the communities that surround its power stations/projects across the country. NHPC has adopted a structured scheme on CSR in line with DPE guidelines w.e.f. 2010-11. During 2011-12, a budget of 0.5 per cent of PAT was allocated to CSR activities which was subsequently increased to 1% of PAT and the target for the activities will be set accordingly. NHPC undertook a number of community development Initiatives and spent about Rs. 10 crore in the following areas:

Education

Various skill developments/vocational training and other programmes were organized during financial year 2011-12 to improve the skills and employment opportunities of the people in areas surrounding projects/power stations.

More than 800 SC/ST students studying in schools near power stations/projects/townships in the states of J&K, Himachal Pradesh, Uttarakhand and Sikkim and in the north-eastern region of our country were provided scholarships during 2011-12 with the vision that this financial support will light up the lives of these young scholars and play an important part in realizing their dreams. Study material like books, stationery, school bags and school uniforms/sweaters/shoes were distributed among poor and needy students around the Dulhasti Power Station, the Tanakpur Power Station and the Teesta-V Power Station. Bicycles were also given to a number of girl students studying in colleges and schools in the vicinity of the Subansiri Lower Project amounting to Rs. 4.39 lakh.

Health

A large number of immunization programmes and medical check-ups were organized for children studying in schools near NHPC's projects and power stations. Besides these, regular health camps focusing women, children, disabled and old age persons were also organized across the northern and eastern regions.

Others

NHPC has always been in the forefront in times of national emergencies. It has helped the victims of natural calamities and contributed to various relief and rehabilitation measures. Your Company had organized relief and rehabilitation work in the areas devastated by earthquake in Sikkim. It also promoted rural sports and organized annual sports meets in the villages by providing both equipment and other facilities. It also organized a veterinary camp for cattle stock. As part of its environment protection initiatives, special thrust was placed on community plantation and forestry programmes around all its establishments.

29. CORPORATE GOVERNANCE

A separate statement on Corporate Governance is enclosed as a part of the Directors' Report along with the Certificate for Compliance as Annexure–I and the Management Discussion and Analysis Report as Annexure–II to this Report.

30. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act, 2005, NHPC provided various information on its website during the year under review. To enable nationwide access to this information, Assistant Public Information Officers were appointed at each of the power stations/projects/regional offices/units. All the applications received under this Act were attended to and information furnished to the applicants. Mr. S.K. Dubey, Chief Engineer, is designated as the Central Public Information Officer.

31. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure-III and forms part of the Directors' Report.

32. PARTICULARS OF EMPLOYEES

Under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended from time to time, the information is set out in Annexure – IV to the Directors' Report. The Company (excluding JVs and Subsidiaries) had 11,037 employees as on 31st March, 2012. No employee employed throughout the year was in receipt of remuneration of more than Rs. 60 lakh per annum and 167 employees employed for a part of the year were in receipt of remuneration of more than Rs. 5 lakh per month.

33. STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s S. N. Nanda & Co., M/s Singhi & Co., M/s Baweja and Kaul and M/s Tiwari & Associates were appointed as Joint Statutory Auditors for financial year 2011-12.

34. AUDITORS' REPORT

The Auditors' Report refers to various notes incorporated by the Company in note no. 14.1 and 35, which are self-explanatory. The report of the Statutory Auditors with comments of the Comptroller & Auditor General of India is enclosed as Annexure - V and VI respectively. The consolidated Financial Statement of the Company along with the Auditor's Report is given in Annexure - VII.

35. COST AUDITORS

As prescribed under the Cost Accounting Records (Electricity Industry) Rules, 2001, cost accounts are being maintained by all Stations of the Company since 2002-03. The cost audit for 2011-12 is under process. The following firms of Cost Auditors were appointed to conduct an audit of cost accounting records of power stations indicated against each firm for the financial year 2011- 12 under Section 233-B of the Companies Act, 1956:

Name of the Firm Name of Power Station

M/s Ramnath Iyer & Co., New Delhi Uri-I Power Station & Dulhasti Power Station

M/s R.M. Bansal & Co., Kanpur(Uttar Pradesh) Sewa-II Power Station & Chamera-I Power Station

M/s Chandra Wadhwa & Co., New Delhi Dhauliganga Power Station & Tanakpur Power Station

M/s Krishan Singh Berk, Faridabad (Haryana) Bairasiul Power Station & Chamera- II Power Station

M/s D. Dutt & Associates, Kolkata (West Bengal) Rangit Power Station & Teesta-V Power Station

M/s R.J. Goel & Co., New Delhi Salal Power Station & Loktak Power Station

The Cost Audit report for which due date was 27.09.11 were filed for the financial year 2010-11 as per details below.

S. Power Name of Cost Membership No. Station Auditor No.

1. Uri-I K. L. Jaisingh and Co. 1222

2. Dulhasti K. L. Jaisingh and Co. 1222

3. Salal R. M. Bansal and Co. 3323

4. Chamera-I K. G. Goyal and 10884 Associates 5. Bairasiul Jugal K. Puri and 3703 Associates

6. Chamera-II Jugal K. Puri and 3703 Associates

7. Loktak D. Dutta & Associates 11633

8. Rangit D. Dutta & Associates 11633

9. Teesta-V R. M. Bansal and Co. 3323

10. Dhauliganga S. K. Adya & Co. 765

11. Tanakpur S. K. Adya & Co. 765

12. Sewa-II K. G. Goyal and 10884 Associates

S. Power Address Actual Date of filing No. Station of Cost Audit Report

1. Uri-I J-7, Sector-XI, Jaisingh House, Noida-201301 25/08/2011

2. Dulhasti J-7, Sector-XI, Jaisingh House, Noida-201301 25/08/2011

3. Salal A-201, Twin Towers, LakhanPur, Kanpur, 26/08/2011 Uttar Pradesh-208024

4. Chamera-I 4-A, Pocket 2,Mix Housing, New Kondli, 26/08/2011 Mayur Vihar III, New Delhi – 110096

5. Bairasiul K 19 (GF), South Extension Part-II, New Delhi 29/08/2011 – 110049

6. Chamera-II K 19 (GF), South Extension Part-II, New Delhi 29/08/2011 – 110049

7. Loktak 58, Creek Row, Kolkata – 700014 29/08/2011

8. Rangit 58, Creek Row, Kolkata – 700014 29/08/2011

9. Teesta-V A-201, Twin Towers, Lakhan Pur, Kanpur, 26/08/2011 Uttar Pradesh-208024

10. Dhauliganga 1158/Sector-14, Faridabad- 121007, Haryana 26/08/2011

11. Tanakpur 1158/Sector-14, Faridabad- 121007, Haryana 26/08/2011

12. Sewa-II 4-A, Pocket 2,Mix Housing, New Kondli, 26/08/2011 Mayur Vihar III, New Delhi – 110096

36. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interest in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. A statement of the Holding Company's interest in the Subsidiary Company is annexed to the report.

37. SUBSIDIARY COMPANIES

Your Company has two Subsidiary Companies – NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited. Detailed information about these Companies is given in the Management Discussion and Analysis Report. The Annual Accounts along with the Auditors' Report and the Directors' Report of NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited are not being attached with the Balance Sheet of the Company. In accordance to the general circular issued by the Ministry of Corporate Affairs, Government of India, any shareholder interested in obtaining a copy of these reports related to Subsidiary Companies may write to the Company Secretary at the Company's registered office. The information is also available on the NHPC website www.nhpcindia.com.

The annual accounts of the Subsidiary will also be kept open for inspection at the Registered Office of the Company and that of the respective of Subsidiary Companies. The Consolidated Financial Statements presented by the Company include the financial results of its Subsidiaries.

The statement under Section 212 of the Companies Act, 1956 is annexed to this report.

38. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following:

(i) In the preparation of the annual accounts, applicable accounting standards were followed along with proper explanation relating to material departures;

(ii) The Directors selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(iii) The Directors took proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities to the best of their knowledge and ability; and

(iv) The Directors prepared the annual accounts on a going concern basis.

39. BOARD OF DIRECTORS

The present composition of Directors is given in the Corporate Governance Report.

Since the last report the following Directors completed their tenures:

S. No. Name of the Director Category of Director Date of cessation of directorship

1. Shri K. Dharmarajan Independent Director 03.09.2011

2. Shri Sudhir Kumar Government Nominee Director 01.12.2011

3. Shri Rakesh Jain Government Nominee Director 03.01.2012

Since the last report following Directors joined the Board:

S. No. Name of the Director Category of Director Date of joining the Board

1. Shri G. S. Vedi Independent Director 08.11.2011

2. Shri A. K. Mago Independent Director 09.11.2011

3. Shri R. Jeyaseelan Independent Director 12.11.2011

4. Shri G. Sai Prasad Government Nominee Director 20.12.2011

5. Shri A. S. Bakshi Government Nominee Director 17.01.2012

6. Shri Ashoke Kumar Dutta Independent Director 30.03.2012

7. Shri Atul Kumar Garg Independent Director 30.03.2012

8. Shri Shantikam Hazarika Independent Director 24.05.2012

40. ACKNOWLEDGEMENTS

Your Directors would like to express their gratitude for the continued support and guidance received from the different wings of the Government of India, particularly from the Ministry of Power, the Ministry of Finance, the Planning Commission, Ministry of Environment and Forests, Department of Public Enterprises, Ministry of Corporate Affairs, the CEA and CWC as well as State Governments, the Regional and State Electricity Board, the beneficiaries drawing power from our power stations as also our other valuable clients for consultancy assignments. Thanks are also due to various international financing institutions as well as Indian financial institutions, bankers, SEBI, stock exchanges, lenders and investors at large for the confidence reposed by them in NHPC. The Board also acknowledges and appreciates the contributions made by contactors, vendors, consultants and others for achieving the desired goals of the Company.

Your Directors acknowledge the suggestions received from Statutory Auditors, Cost Auditors and the office of the Comptroller & Auditor General of India and are grateful for their consistent support and cooperation.

Your Directors would also like to place on record their deep and sincere appreciation for the hard work, dedication and unstinting efforts of your Company's employees to ensure that your Company reaches the pinnacle of success.

For and On behalf of the Board of Directors

(G. Sai Prasad)

Place: New Delhi Chairman and Managing Director

Date : 30.07.2012 DIN No.: 00325308

---

Mar 31, 2011

To the Members,

NHPC Limited,

The directors' have immense pleasure in presenting the 35th Annual Report on the performance of your Company, along with the Audited Statement of Accounts, Auditors' Report and the Review of Accounts by the Comptroller and Auditor General of India for the financial year ended 31st March 2011.

1. financial RESULTS

The financial results for the year ended 31st March 2011 are summarized in Table 1

Table-1

financial HIGHLIGHTS (Rs. in Crore)

PARTICULARS 2010-11 2009-10

Sales 3999.63 4261.18

Profit before Depreciation, Interest and Tax 4208.73 3878.03

Depreciation 916.74 1018.87

Profit after Depreciation but before Interest and Tax 3291.99 2859.16

Interest & Finance Charges 413.56 457.08

Profit after Depreciation and Interest but before Tax 2878.43 2402.08

Tax 711.76 311.58

Profit after Depreciation, Interest and Tax 2166.67 2090.50

Surplus of Profit and Loss Account of earlier years 3150.50 1963.66

Amount written back from Bond Redemption Reserve 14.25 14.25

Amount written back from Self Insurance Reserve 0.04 -

Tax on Dividend-written back 1.80 3.98

Balance available for appropriation 5333.26 4072.39

Appropriations

Transfer to Bond Redemption Reserve 100 100

Transfer to Self Insurance Fund 39.31 32.99

Interim Dividend

Proposed Final Dividend 738.04 676.54

Tax on Proposed Dividend 119.73 112.36

Balance carried over to Reserves and Surplus 4336.18 3150.50

2. POWER GENERATION

The 12 operating NHPC power stations, located in different parts of the country, generated 18606 MUs of power during 2010-11. This exceeded the Memorandum of Understanding (MoU) target of 18000 MUs for ''Excellent'' rating by 606 MU. The generation in 2010-11 was higher by 9.70 per cent as compared to the generation during the previous year. During the year, the 120 MW SEWA-II Power Station (3x40) 120 MW was dedicated to the nation in September, 2010. The overall power generation by your Company includes 363 MUs from this project.

3. PROPOSED DIVIDEND

Your Directors have recommended a dividend of Re. 0.60 per share (excluding dividend tax) for the year 2010-11. 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. 738.04 crore represents 34.06 per cent profits after tax.

4. CAPITAL STRUCTURE

Your Company's paid up capital remained at Rs. 12300.74 crore during the year.

5. STATUS OF ONGOING PROJECTS

During the year, your Company had to face many challenges including geological obstacles, natural calamities and local problems, but construction activities continued at a good pace and the projects are in various stages of completion. Presently your Company is engaged in the construction of hydroelectric projects with an installed capacity of 4502 MW as per the details given in Table 2. Six projects - Teesta Low Dam III, Uri II, Chamera III, Nimoo Bazgo, Chutak and Parbati-III are in advanced stages of completion.

Table 2: Details of hydroelectric projects under construction

Hydroelectric Projects State Proposed Installed Capacity (MW)

Teesta Low Dam III West Bengal 132

Uri II Jammu and Kashmir 240

Chamera III Himachal Pradesh 231

Teesta Low Dam IV West Bengal 160

Nimmo Bazgo Jammu and Kashmir 45

Parbati III Himachal Pradesh 520

Parbati II Himachal Pradesh 800

Chutak Jammu and Kashmir 44

Subansiri Lower Assam/ Arunachal Pradesh 2,000

Kishanganga Jammu and Kashmir 330

Total 4,502

6. COMMERCIAL PERFORMANCE

Your Company's commercial performance has been highly satisfactory. It achieved 100 percent sales realization of tariff charges as compared to 97 per cent last year.

The Central Electricity Regulatory Commission (CERC) under the Regulations has notified the terms and conditions for determining tariff, which is effective from 1st April, 2009 for a period of five years. The petitions for all 12 power stations have since been filed and tariff for three power stations has already been approved.

7. PROJECT MANAGEMENT

An online Project Monitoring Centre has been set up at the corporate office to support video conferencing and provide live video feeds from cameras installed at strategic locations in projects under construction to facilitate the analysis of data on physica progress.

8. NEW SCHEMES

Projects in the Clearance/Approval Stages:

Details of the projects which are under clearance/approval stages are given in Table-3.

As a part of its future expansion programme seven projects of your Company are under various stages of approval. In addition to these four projects with a capacity of 3620 MW are to be executed through JVCs with State/Government PSUs.

Table 3: Projects under clearance/approval

UNDER NHPC STAND ALONE

Sr. No Name of the project Capacity

1 Kotli Bhel I-A, Uttarakhand 195 MW

2 Kotli Bhel I-B, Uttarakhand 320 MW

3 Kotli Bhel II, Uttarakhand 530 MW

4 Teesta-IV, Sikkim 520 MW

5 Dibang, Arunachal Pradesh 3,000 MW

6 Tawang-I, Arunachal Pradesh 600 MW

7 Tawang-II, Arunachal Pradesh 800 MW

Total 5965 MW

JOINT VENTURE COMPANIES

*8 Pakal Dul and others , Jammu & Kashmir 2120 MW

9 Tipaimukh, Manipur 1500 MW

Total 3620 MW

Grand Total 9585 MW

* NHPC has incorporated a new joint venture (JV) company i.e Chenab Valley Power Projects (P) ltd in June,2011 to execute Paku Dul and other hydroelectric projects, with an aggregate installed capacity of about 2100 MW in the Chenab basin in the state of Jammu & Kashmir. The equity share capital in the Chenab Valley Power Projects shall be contributed by NHPC, Jammu and Kashmir State Power Development Corporation and PTC India in the ratio of 49:49:2 respectively.

9. PROJECTS UNDER DPR/FR PREPARATION

Your Company has undertaken preparation of Detailed Project Reports (DPRs), Feasibility Reports (FRs) and Surveys and Investigations for five projects of the 2155 MW capacity which are under various stages of clearances. The details are given in Table 4.

Table 4: DPRs, FRs and Surveys and Investigations

Sl. No Projects Capacity

1 Bursar, J&K 1,020 MW

2 Chungar Chal, Uttarakhand 240 MW

3 Garba Tawaghat, Uttarakhand 630 MW

4 Karmoli Lumti Tulli, Uttarakhand 55 MW

5 Lachen, Sikkim 210 MW

Total 2155 MW

10. GLOBAL INITIATIVES

Under the 'Action Plan' on India-Bhutan cooperation for developing 10000 MW of hydro power by 2020, the following developments took place during the year:

NHPC was entrusted with the work of preparing DPRs of Chamkharchhu-I H.E. Project (670 MW) and the Kuri Gongri H.E. Project (1800 MW) in Bhutan by the Ministry of Power.

In March 2010 an agreement was signed between NHPC and the Department of Energy, Royal Government of Bhutan for providing engineering consultancy services for pre-construction activities at the Mangdechhu H.E. Project (720MW) in Bhutan.

Further, your Company undertook the following consultancy services:-

- Additional investigations and preparation of updated DPRs for the 1200 MW Tamanthi and the 642 MW Shwezaye hydro power and multipurpose projects in Myanmar, as a consultancy assignment with the Ministry of External Affairs (MEA), Government of India.

- Varzob-I H.E. project in Tajikistan. The work of RMU of the project is assigned to NHPC under a tripartite agreement signed between MEA, BHEL and NHPC.

11. CONSULTANCY & BUSINESS DEVELOPMENT SERVICES

NHPC is providing consultancy services in the following fields of hydro power — river basin studies, survey work, design and engineering, geological and geotechnical studies, hydraulic transient studies, hydrological studies, contract management, construction management, equipment planning, underground construction, testing, commissioning and operation and maintenance.

The major consultancy assignments undertaken by your Company include assignments from Central and State Government agencies like State Electricity Boards and Public Sector Undertakings.

NHPC is registered with international financial agencies and the Central Water Commission, as a Consultant in the area of hydro power.

12. RGGVY-RURAL ELECTRIFICATION (RE) PROJECTS

Your Company is implementing rural electrification projects under the Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) in 27 districts spread over the five States of West Bengal, Bihar, Jammu and Kashmir, Chhatisgarh and Orissa at an estimated cost of approximatelyRs. 2900 crore.

The scope of work includes electrification of 29709 villages (9504 unelectrified/de-electrified (UE/DE) and 20205 PE villages) and providing service connections to 20.49 lakh BPL households.

During 2010-11, NHPC completed 2667 UE/DE villages and provided 7.48 lakh BPL connections. As on 31.03.2011, the cumulative achievements for UE/DE villages, PE villages and BPL connections was 8632, 14419 and 16.28 lakhs respectively.

NHPC is also executing 66 KV transmission lines in the Leh and Kargil districts of Jammu and Kashmir under RGGVY

13. RURAL ROADS PROJECT

NHPC has signed a MoU with the Ministry of Rural Development, Government of India and the Government of Bihar for constructing rural roads under the Pradhan Mantri Gram Sadak Yojna (PMGSY). These roads in six districts of Bihar will also be maintained by your Company.

Under this scheme, 832 roads totaling 3517 km with a cost ofRs. 1921 crore have been cleared by the Ministry of Rural Development, Government of India.

Your Company has so far completed 333 roads with a length of 1627 km (full length) at a cost of Rs. 818.93 crore.

14. INFORMATION TECHNOLOGY & COMMUNICATION

After implementing all modules of ERP in the last three years, the key functions of the organization have now been totally IT enabled with a major focus on the management of projects under construction and also the operations and maintenance of power stations.

The IT and Communication infrastructure has been upgraded in over 50 locations to support the increased dependence on IT. Necessary IT security measures have been put in place to ensure security of all information assets of the organization.

NHPC has created a policy framework for managing the IT systems and assets that it owns so that these are optimally used in a secure manner.

15. TRAINING & HUMAN RESOURCE DEVELOPMENT

As a part of its commitment to training, your Company has set up training centres in various power stations. It has also developed learning ventures with leading educational institutions in the country for skill and knowledge enrichment of all sections of its employees. The training programmes are designed and conducted on both existing and upcoming technologies in the power sector.

Special training programmes were organized for creating awareness about the features of the reservation policy and other essential provisions for employees in the SC/ST/OBC category.

16. EMPLOYEE RELATIONS

During the year, industrial relations were cordial and harmonious at all NHPC projects/stations/units. There was no report of any strike or lockout during the period.

Representatives of workmen were allowed to participate in the decision making process, wherever feasible. Scales and Salaries of NHPC Executives were revised during the year, in accordance with the guidelines issued by the Department of Public Enterprises (DPE) based on the recommendations of the 2nd Pay Revision Committee. A wage settlement with workers were signed for the pay revision of the wages. The revision in wages and pay scales of unionized category (workmen) and non-unionized supervisory category have been implemented from 1.1.2007.

Details about industrial relations, women employees, staff welfare and Persons with Disabilities (PwD) are given in the Management and Discussion Analysis Report.

17. RESEARCH & DEVELOPMENT (R&D)

NHPC's research and development wing is carrying out several activities in various fields . It is making sustained efforts towards improving self reliance, import substitution, trouble free operations, faster construction, efficiency gains, innovations and cost reductions as well as residual life predictions.

Some specific areas in which R&D activities were carried out during the year include:

- Computational Fluid Dynamics (CFD) analysis of penstock at the Salal Power Station.

- National R&D project development of silt resistant material for hydro generator turbines.

- National Perspective Plan (NPP) projects for R&D - tunneling in water charged zones under high hydrostatic pressure.

18. REHABILITATION & RESETTLEMENT (R&R)

Your Company is sensitive towards the problems, concerns and aspirations of Project Affected Families (PAFs). Hence, NHPC formulated its own Resettlement & Rehabilitation (R&R) Policy in 2007 which is in line with the National Rehabilitation and Resettlement Policy (NRRP), 2007.

Your Company, in its policy has modified the definition of vulnerable persons as to include persons who are disabled, destitute orphans, widows, unmarried girls, abandoned women or persons above 50 years of age who are not provided or cannot immediately be provided with alternative livelihood and who are not covered as part of a family. The main aim behind this redefining of vulnerable persons was to extend the policy to the maximum number of those who are affected.

Your Company's policy provides certain extra benefits over and above those proposed in NRRP 2007. The policy assesses issues related to loss of land, houses, other resources and means of livelihood, etc. of PAFs. It provides an insight into resolving the issues of income generation and concerns of both PAFs and the local people. A major emphasis for your Company is on the economic sustenance of PAFs.

Further, to implement NHPC's R&R policy in its true spirit, an operational manual for effective implementation of various R&R activities has been formulated.

19. VIGILANCE ACTIVITIES

The vigilance division issued a number of preventive/proactive circular in the areas of administrative functioning, works and procurement to ensure good governance by promoting values of ethics and integrity.

In addition, circulars and guidelines issued by the CVC from time to time were re-circulated in the corporation for awareness and implementation.

Your company has signed the MoU with the Transparencies International India.

An integrity pact is being implemented for works and procurement for Rs. 15 crore and Rs. 25 lakhs respectively, this has been implemented as per the guidelines of the CVC.

Your Company has signed a MoU with Transparencies International India.

20. IMPLEMENTATION OF FRAUD PREVENTION POLICY

The fraud prevention policy has been formulated and implemented in your company.

21. IMPLEMENTATION OF OFFICIAL LANGUAGE

The provisions of the Official Language Act and rules were followed in the Company. Efforts were made to increase the progressive use of the official language in accordance with the policy of the Government of India.

Inspections were conducted in the corporate office and at power stations/projects/regional offices to monitor progress. Rajbhasha inspection of our regional office Uttarakhand (Dehradun) was conducted by 2nd Sub- Committee of Parliament on official language. During inspection committee appreciated the official language progress of our company.

A Hindi fortnight was observed from 1-15 September, 2010. Rajbhasha magazine 'Rajbhasha Jyoti' was released during the event Hindi competitions were organized. The All India Hindi Kavi sameelan was organized to promote and propogate the official language Rajbhasha. During the year workshops and training classes in Hindi were also conducted.

A Hindi 'Kavya Path' and 'Bhashan Pratiyogita' were organized for the children of employees at the NHPC residential complex at Faridabad.

NHPC was also conferred with the first prize under the "Indira Gandhi Rajbhasha Shield Yojna'' by the Government of India for the year 2008-09, which is the highest award of the Government of India in the field of implementation of Rajbhasha. NHPC also received the Rajbhasha Shield and citation, as first prize for 2008-09 and second prize for 2009-10 under the NTPC Rajbhasha Shield Yojna for outstanding work in implementing Rajbhasha. Apart from this your Company's three regional offices and one power station were also awarded Rajbhasha shields in appreciation of their work by the Ministry of Home Affairs, Government of India.

Your Company also played an important role in the publishing of the 'Power Glossary' by the Ministry of Power.

22. CORPORATE COMMUNICATIONS

The organization's initiatives and achievements were appropriately highlighted through print and electronic media throughout the country, creating awareness among the public about the strengths and capabilities of NHPC in the development of hydro power.

Your Company participated in various exhibitions in India and abroad , in sports related activities under the aegis of the Power Sports Control Board, Ministry of Power and conveyed the message of 'Clean Power Hydro Power'.

Corporate films on NHPC and a film on the environment were screened at a number of platforms.

The bi-monthly NHPC NEWS and the monthly Communiqué continued to be effective tools of internal communication.

As a part of its attempts at propagating Energy Conservation Day 2010, NHPC coordinated a painting competition for school children organized by the Bureau of Energy Efficiency (BEE), Ministry of Power at the national and state levels.

23. AWARDS AND ACHIEVEMENTS

During 2010-11, NHPC received various prestigious awards. Some of these are:

- NHPC was adjudged the top Indian company under the power sector at the Dun & Bradstreet–Rolta Corporate Awards for its contribution to the Indian economy.

- NHPC was conferred with the Best PSU award for creating Alternative Energy Resources.

- The Gentle Giants Award under the Non-Manufacturing-Mini Ratna category by the Dalal Street Investment Journal was given to NHPC.

- India Power award 2010 by the Council of Power Utilities for 'Social and Community Impact' in recognition of NHPCs outstanding work under Corporate Social Responsibility.

- CIDC Vishwakarma Award 2011 under the category Social Responsibility.

24. CORPORATE SOCIAL RESPONSIBILITY

NHPC's commitment to Corporate Social Responsibility (CSR) finds echoes in its Corporate Mission Statement: 'To execute and operate projects in a cost effective, environment friendly and socio-economically responsive manner.'

In line with DPE guidelines on CSR, your Company has formulated a policy on CSR and has undertaken a number of CSR initiatives in the areas of health, education, peripheral development, sports & culture, employment opportunities and the environment for communities living in and around power stations and construction projects.

Various other initiatives like developing herbal parks with medicinal values, afforestation, catchment area treatment (CAT), fisheries management, vocational training programmes, medical camps and infrastructural development were also undertaken during the year.

25. CORPORATE GOVERNANCE

A separate statement on Corporate Governance is enclosed as a part of the Directors' Report along with the Certificate for Compliance as Annexure-I and the Management Discussion and Analysis Report as Annexure-II to this Report.

26. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act 2005, your Company provided various documents/records on its website during the year.

To enable nationwide access to information, Assistant Public Information Officers were appointed at each of the power stations/ projects/regional offices/units.

All the applications received under the Right to Information Act were attended to and the information furnished to the applicants. Shri S.K. Dubey, Chief Engineer, is designated as the Central Public Information Officer.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy and technology absorption and foreign exchange earnings and outgo as required under Section 217 (1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Repository, the Board of Directors) Rules, 1986 is given in Annexure III and forms part of the Directors' Report.

See Annexure-III to the report for details.

28. PARTICULARS OF EMPLOYEES

This information is required under Section 217(2A) of the Companies Act 1956 read with the Companies (Particulars of Employees) Rules 1975 is given in Annexure-IV to the report.

29. AUDITORS

M/s. SBG & Co., Delhi were appointed as statutory auditors for conducting the audit for 2010-11. Baweja & Kaul, Tiwari & Associates, Singhi & Co. and A. Kayes & Co. were appointed as branch auditors for 2010-11.

30. AUDITOR'S REPORT

The Auditor's Report refers to various notes incorporated by the Company in Schedule 24, which are self-explanatory. The report of the Statutory Auditors and with comments of the Comptroller and Auditor General of India are enclosed as Annexures-V and VI respectively. The consolidated financial statement of the Company along with the Auditor's Report is given in Annexure-VII.

31. COST AUDITORS

As prescribed under the Cost Accounting Records (Electricity Industry) Rules 2001, cost accounts are being maintained by all stations of the Company since 2002-03. The cost audit for 2010-11 is under progress. The following firms of cost auditors were appointed to conduct an audit of cost accounting records of power stations indicated against each firm for the financial year 2010-11 under Section 233-B of the Companies Act 1956:

Name of the Firm Name of Power Station

M/s K. L. Jaisingh & Co., Noida Uri-Power Station & Dulhasti Power Station

M/s K. G. Goyal & Associates, New Delhi Sewa-II H.E Project & Chamera-I Power Station

M/s. S.K. Adya & Co., Faridabad Dhauliganga Power Station & Tanakpur Power Station

M/s Jugal K Puri & Associates, New Delhi Bairasiul Power Station & Chamera- II Power Station

M/s. D. Dutt & Associates, Kolkata Loktak Power Station & Rangit Power Station

M/s R.M Bansal & Co., Kanpur Salal Power Station & Teesta-V Power Station

The details of the cost audit report filed for the financial year-2009-10 are given below:

Sl. Power Name of Cost Auditor Member No. Station ship No.

1 Uri I K L JAISINGH AND CO., 1222 COST ACCOUNTANTS

2 Dulhasti K L JAISINGH AND CO., 1222 COST ACCOUNTANTS

3 Salal K G GOYAL AND 10884 ASSOCIATES, COST ACCOUNTANTS

4 Chamera I K G GOYAL AND 10884 ASSOCIATES, COST ACCOUNTANTS

5 Bairasiul JUGAL K PURI AND 3703 ASSOCIATES, COST ACCOUNTANTS

6 Chamera II JUGAL K PURI AND 3703 ASSOCIATES, COST ACCOUNTANTS

7 Loktak D DUTT AND 11633 ASSOCIATES, COST ACCOUNTANTS

8 Rangit DGM AND ASSOCIATES, 10223 COST ACCOUNTANTS

9 Teesta V DGM AND ASSOCIATES, 10223 COST ACCOUNTANTS

10 Dhauliganga S K ADYA AND CO., 765 COST ACCOUNTANTS

11 Tanakpur S K ADYA AND CO., 765 COST ACCOUNTANTS

Sl. Address Due Date Actual Date of filing of of filing of Cost Audit Cost Audit Report Report No.

1 J-7, SECTOR- XI, JAISINGH 9/27/2010 9/1/2010 HOUSE, NOIDA - 201301

2 J-7, SECTOR- XI, JAISINGH 9/27/2010 9/1/2010 HOUSE, NOIDA - 201301

3 4-A, POCKET 2, MIX 9/27/2010 9/2/2010 HOUSING, NEW KONDLI, MAYUR VIHAR III NEW DELHI- 110096

4 4-A, POCKET 2, MIX 9/27/2010 9/2/2010 HOUSING, NEW KONDLI, MAYUR VIHAR III NEW DELHI- 110096

5 K 19 (GF), SOUTH 9/27/2010 9/8/2010 EXTENSION PART - II, NEW DELHI-110049

6 K 19 (GF), SOUTH 9/27/2010 9/8/2010 EXTENSION PART - II, NEW DELHI-110049

7 58, CREEK ROW, 9/27/2010 9/13/2010 KOLKATA - 700014

8 64 BB GANGULY STREET, 9/27/2010 9/2/2010 2ND FLOOR, KOLKATA. 700012

9 64 BB GANGULY STREET, 9/27/2010 9/2/2010 2ND FLOOR, KOLKATA. 700012

10 1158/SECTOR -14, 9/27/2010 9/7/2010 FARIDABAD - 121007, Haryana

11 1158/SECTOR -14, 9/27/2010 9/7/2010 FARIDABAD - 121007, Haryana

32. CONSOLIDATED financial STATEMENTS:

In accordance with the Accounting Standard AS-21 on Consolidated financial Statements read with Accounting Standard AS-23 on Accounting for Investments in Associates and AS-27 on financial Reporting of Interest in Joint Ventures, the Audited Consolidated financial Statements are provided in the Annual Report. A statement of the holding company's interest in the Subsidiary Company is annexed to the report.

33. SUBSIDIARY COMPANIES

Your company has two subsidiary companies - NHDC Limited and Loktak Downstream Hydroelectric Corporation Limited. Detailed information about these companies is given in the Management Discussion Report.

The Annual Accounts along with Report of the Auditors, Directors' Report of the shareholders NHDC Ltd and Loktak Downstream Hydroelectric Corporation Limited are not being attached with the Balance sheet of the company. In accordance to the general circular issued by the Ministry of Corporate Affairs, Government of India any shareholder interested in obtaining a copy of these reports related to the Subsidiary Companies may write to the Company Secretary at the Company's registered office. The information is also available on the NHPC website www.nhpcindia.com.

The annual accounts of the subsidiary will also be kept open for inspection at the Registered Office of the Company and that of the respective of subsidiary companies. The consolidated financial statements presented by the Company include the financial results of its subsidiaries.

The statement under Section 212 of the companies Act, 1956 is annexed to this Report.

34. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with 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 at the end of the financial year and of the profit of the Company for that period;

iii. The Directors have 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 to the best of their knowledge and ability; and

iv The Directors have prepared the annual accounts on a going concern basis.

35. BOARD OF DIRECTORS

Since the last report the Chairman and Managing Director of NHPC Limited Shri S.K.Garg superannuated on 31.12.2010. The following independent directors have also completed their tenures:

Smt. Komal Anand, Independent Director, ceased to be Director on the Board with effect from 02.04.2011

Shri A.K.Mago, Independent Director, ceased to be Director on the Board with effect from 03.04.2011

Shri Raman Sidhu, Independent Director, ceased to be Director on the Board with effect from 07.04.2011

Shri R. Jeyaseelan, Independent Director, ceased to be Director on the Board with effect from 23.04.2011

Dr. Kuriakose Mamkottam, Independent Director, ceased to be Director on the Board with effect from 17.06.2011

The present composition of the Board is given in the Report on Corporate Governance.

ACKNOWLEDGEMENTS

The Board of Directors acknowledges with deep appreciation, the cooperation and guidance received from the Government of India, especially the Ministry of Power, Ministry of Finance, Planning Commission, State Governments, Bankers, SEBI, Stock Exchanges, financial nstitutions, Lenders and Investors. The Board also acknowledges and appreciates the contributions made by contractors, vendors, consultants and others for achieving the desired goals of the Company.

The Board places on record its special appreciation for the beneficiaries drawing power, State Electricity Boards and other valuable clients for consultancy assignments.

The Board also places on record its deep admiration for the cooperation extended by Statutory Auditors, Cost Auditors and the Office of the Comptroller and Auditor General of India. Further, the Board wishes to convey its gratitude to all the employees of NHPC for their untiring efforts, valuable services, dedication and commitment. The co-operation of these stakeholders have been vital for the success and achievements of the Company.

For and On behalf of the Board of Directors

(A.B.l. Srivastava)

Chairman and Managing Director

DIN No.: 01601682

Date : Faridabad

Place: 12.08.2011

---

Mar 31, 2010

The directors have pleasure in presenting the 34th Annual Report on the performance of your Company together with Audited Statement of Accounts, Auditors Report and the Review of Accounts by the Comptroller and Auditor General of India for the financial year ended 31st March 2010.

1. FINANCIAL PERFORMANCE

The financial performance for the year ended as on March 31st 2010 is summarized here under:-

Table I

FINANCIAL HIGHLIGHTS (Rs. in Crore)

Particulars 2009-10 2008-09

Sales 4326.87 2698.06

Profit before Depreciation, Interest and Tax 3892.41 2201.76

Depreciation 1033.25 518.24

Profit after Depreciation but before Interest and Tax 2859.16 1683.52

Interest & Finance Charges 457.08 505.18

Profit after Depreciation and Interest but before Tax 2402.08 1178.34

Tax 311.58 103.12

Profit after Depreciation, Interest and Tax 2090.50* 1075.22

Surplus of Profit and Loss Account of earlier years 1963.66 1344.53

Amount written back from Bond Redemption Reserve 14.25 14.25

Amount written back from Self Insurance Reserve - 0.06

Tax on Dividend-written back 3.98 8.57

Balance available for appropriation 4072.39 2442.63

APPROPRIATIONS

Transfer from Bond Redemption Reserve 100 --

Transfer to Self Insurance Fund 32.99 98.74

Interim Dividend - 12.5

Proposed Final Dividend 676.54 200.00 Tax on Dividend

Interim - 21.24

Proposed 112.36 33.99

Balance carried over to Reserve and Surplus 3150.50 1963.66

* The increase in profits during the year is mainly on account of finalization of tariff for the Chamera -II, Dulhasti and Teesta-V Power Stations and recognition of sales as per revised tariff guidelines issued by CERC, applicable w.e.f 01.04.09.

2. POWER GENERATION

The operating power stations of the NHPC, located in different parts of the country, have generated 16960 MUs during the year 2009-10 eRs.ceeding the annual MOU targets of 16381 MUs for the ‘Very Good rating by 579 MUs. Further the generation in 2009-10 is higher by 1.62% as compared to the generation during the previous year (2008-09). Sewa HE Project stage - II, Jammu and Kashmir having 120 MW has been commissioned and all the three units have been put into commercial operation .

3. PROPOSED DIVIDEND

Your Directors have recommended a dividend of Re. 0.55 per share (excluding dividend Tax) for the year 2009-10.

4. CAPITAL STRUCTURE

During the year your company came out with the Initial Public Offer which was oversubscribed by 23 times. Due to IPO, the share capital amounting to Rs. 1118.24 Crore has been added during the period under report. The paid up capital as on 31.03.2010 was Rs. 12300.74 Crore.

5. STATUS OF ONGOING PROJECTS

The Corporation is engaged in the construction of the following hydroelectric projects:

Hydroelectric Projects likely to ERs.pected Proposed Installed give benefits in the Rs.I Plan period: generation Capacity (MW) (MUs per annum)

Uri II, Jammu & Kashmir 1123.76 240

Chamera III, Himachal Pradesh 1104.00 231

Nimoo Bazgo, Jammu & Kashmir 239.00 45

Chutak, Jammu & Kashmir 216.00 44

Parbati III, Himachal Pradesh 1963.29 520

Teesta Low Dam III, West Bengal 594.07 132

Teesta Low Dam IV, West Bengal 720.00 160

Hydroelectric Projects likely to give benefits beyond Rs.I Plan period:

Subansiri Lower, Assam / Arunachal Pradesh 7421.00 2,000

Parbati II, Himachal Pradesh 3108.66 800

Kishanganga, Jammu & Kashmir 1350.00 330

Total 4,502

Despite challenges such as geological obstacles, natural calamities and local problems, construction activities are continuing at a brisk pace and the projects are at various stages of completion.

6. NEW SCHEMES

Projects under Clearances/Approvals

Sr. No. Name of the project Capacity

1 Kotli Bhel I-A, Uttarakhand 195 MW

2 Kotli Bhel I-B, Uttarakhand 320 MW

3 Kotli Bhel II, Uttarakhand 530 MW

4 Dibang, Arunachal Pradesh 3,000 MW

5 Tawang-I, Arunachal Pradesh 600 MW

6 Tawang-II, Arunachal Pradesh 800 MW

7 Pakal Dul , J&K 1000 MW

8 Kiru, J&K 600 MW

9 Kwar, J&K 520 MW

10 Tipaimukh, Manipur 1500 MW

11 Teesta-IV, Sikkim 520 MW

Detailed Project Reports for all these projects have already been prepared and got approved by the Competent Authorities in most of the cases. The clearances in respect of environmental, forest clearances are awaited in some of these projects. On getting clearances, the construction activities of the projects will be undertaken by the Company. In respect of projects in J&K, a Memorandum of Understanding has been signed among NHPC, JKSPDC and PTC to eRs.ecute these projects through a Joint Venture Company.

7. PROJECTS UNDER DPR / FR PREPARATION

The preparation of Detailed Project Reports, Feasibility Report preparation and Survey and Investigation are being undertaken by the Company in respect of following projects and are at various stages.

Sl. No. Projects Capacity

1 Bursar, J&K 1,020 MW

2 Chungar Chal, Uttarakhand 240 MW

3 Garba Tawaghat, Uttarakhand 630 MW

4 Karmoli Lumti Tulli, Uttarakhand 55 MW

5 Lachen, Sikkim 210 MW

8. CONSULTANCY & BUSINESS DEVELOPMENT SERVICES

NHPC is providing consultancy services in the various fields of hydro power i.e. river basin studies, survey works, design and engineering, geological studies, geotechnical studies, hydraulic transients studies, hydrological studies, contract management, construction management, equipment planning, under ground construction, testing commissioning, operation and maintenance etc. to leading organizations of the country. NHPC is registered with World Bank, Asian Development Bank, African Development Bank and Kuwait Fund for Arab Economic Development, Central Water Commission, and Consultancy Development Centre as a Consultant in the area of Hydropower. Major consultancy assignments undertaken by your company include assignments from Central and State Government agencies in India including State Electricity Boards and Public Sector Undertakings. Seventy nine consultancy assignments have already been completed besides seventeen ongoing assignments in hand.

Under the ‘Action Plan on India-Bhutan cooperation in hydropower development of 10,000 MW by the year 2020, NHPC has been entrusted with the work for preparation of DPRs of Chamkharchhu - I H.E. Projects (670MW) and Kuri Gongri H.E. Project(1800MW) in Bhutan by the Ministry of Power. An agreement has also been signed between NHPC Ltd and Department of Energy, Royal Govt. of Bhutan for providing Engineering Consultancy Services for the Pre-constuction Activities of Mangdechhu HE Project (720 MW) in Bhutan in March 2010.

NHPC has also signed two agreements in Jan 2010 for taking up additional investigations and Preparation of Updated DPRs for 1200 MW Tamanthi and 642 MW Shwezaye HydroPower and Multipurpose Project in Myanmar, as consultancy Assignments, with Ministry of ERs.ternal Affairs (MEA), Government of India. The assignment has been funded by Government of India through MEA. In June 2010, the Ministry of Power, GoI has designated NHPC as the eRs.ecuting agency for these projects.

9. RGGVY - RURAL ELECTRIFICATION (RE) PROJECTS

NHPC has taken the initiative of contributing towards village electrification under the Rajiv Gandhi Gramin Vidyutikarn Yojna (RGGVY). The works are spread over 27 districts in the states of Bihar, Chhattisgarh, Jammu & Kashmir, Orissa and West Bengal, covering electrification of 31909 villages and providing service connections to 20.80 lakh below the poverty line (BPL) households at an awarded cost of about Rs. 2,450 crore. During 2009-10, NHPC brought electricity to 8,092 villages (including 5391 that had partial electricity) and provided service connections to 6.03 lakh BPL households.

10. RURAL ROAD PROJECTS

NHPC has signed a Memorandum of Understanding with the Ministry of Rural Development, Government of India and Government of Bihar for construction of Rural Roads and their maintenance in siRs. districts of Bihar under the Pradhan Mantri Gram Sadak Yojna (PMGSY). Under this scheme 832 Nos roads totaling to 3517 KM with a cost of Rs 1921 crore have been cleared by Ministry of Rural Development, Govt.of India. Under this project, 229 roads totaling 1186.50 km (full length) with a cost ofRs. 547.99 crore have already been completed.

11. INFORMATION TECHNOLOGY & COMMUNICATIONS

NHPC has made a major break-through in utilizing information technology in its core functions by implementing ERP with an objective of meeting the business objectives of timely completion of construction projects and optimally operating the generating power stations towards maRs.imizing profit. After implementation of ERP at pilot locations during 2008-09, ERP has been rolled out across the organization at all regional offices, power stations and construction projects for all modules e.g. Energy Sales Accounting, Project Monitoring, Power Plant O&M, HR, Finance, Procurement etc. Employee Compensation and Employee Self Service functions are also being performed in ERP.

IT&C infrastructure has also been strengthened to support ERP, considerably during the year. Various remote locations have been connected through additional MPLS-VPN link. New ERP servers have been commissioned in enterprise class TIER-III Data Centre of NICSI at Delhi and DR site has been operationalized at its Regional Office at Kolkata.

ERP has become backbone for information flow and decision making of various key business processes of NHPC as well as other routine functions across the Organization.

12. TRAINING & HUMAN RESOURCE DEVELOPMENT

Your Company gives highest importance to training and learning of employees at all levels. The company believes that a well-trained and eRs.perienced team of employees is crucial for its continued growth. As a part of commitment to training, the Company has set up training centers at various power stations and has also developed learning - ventures with the leading educational institutions of the country for skill and knowledge enrichment of all sections of employees. Training Programmes are designed and conducted on the prevailing and upcoming technologies in Power Sector.

Special Training Programmes were also conducted for creating awareness about the features of Reservation policy and other essential provisions for the employees in SC/ST/OBC category. The Company attaches special importance to train women employees for empowering them to compete and collaborate with others.

13. EMPLOYEE RELATIONS

During the year under report, Industrial Relations were cordial and harmonious at all NHPC Projects /Stations/ Units. There was no report of any strike or lockout during the period.

The representatives of workmen were allowed to participate in decision making process, wherever feasible.

14. RESEARCH & DEVELOPMENT (R&D)

Your company attaches special attention to Research & Development activities to bring innovation and improve upon its areas of operation. Specific areas in which R&D was carried out by the company include-

Computational Fluid Dynamics (CFD) analysis of penstock of two power stations viz Baira Siul & Loktak power station

Development of 3.75 MW Durgaduani Mini Tidal Power Project in West Bengal.

National R&D Project- Development of Silt Resistant Material for Turbine of Hydro Generators.

New R&D Projects under National Perspective Plan (NPP) - Tunneling in water charged zones under high hydrostatic pressure.

15. REHABILITATION & RESETTLEMENT (R&R).

Your company is sensitive towards problems, concerns and aspirations of Project Affected Families (PAFs). The company has formulated its own Resettlement & Rehabilitation (R&R) Policy - 2007 in line with National Rehabilitation and Resettlement Policy (NRRP), 2007 after consultation with various stakeholders. The Companys Policy provides certain eRs.tra benefits over and above of what is proposed in NRRP-2007. The policy assesses the issues related to loss of land, house, other resources, means of livelihood etc. of the PAFs. The policy provides a definitive insight in resolving the issues of income generation and concerns of indigenous people and vulnerable groups. Major emphasis has been laid upon economic sustenance of the PAFs.

16. VIGILANCE ACTIVITIES

Vigilance Division has been granted ISO 9001-2000 certification by BIS, procedures have been documented, systems of monitoring of Vigilance complaint and disciplinary cases have been implemented.

Regular and surprise inspections were conducted by the Vigilance Department at regular intervals; actionable points were identified by the Project Vigilance Officer and intimated to Head of the Project. Intensive examination of the works were carried out by Chief Technical ERs.aminer of the CVC.

As a preventive vigilance measure, circulars and guidelines based on inspection/intensive examinations were issued from time to time. Various vigilance awareness programs were conducted at regular intervals. Two Workshops of Vigilance Officers were conducted from 3rd to 4th September, 2009 and 16th to 19th March, 2010 respectively in order to review and improve their functioning.

17. OFFICIAL LANGUAGE IMPLEMENTATION

Your company is making all out efforts for the progressive use of Official Language in the Company. In order to encourage use of Hindi various training programmes, eRs.hibitions and competitions were organized during the year. Quarterly meetings of Official Language Implementation Committee were held regularly during the year at Corporate Office and its units.

Rajbhasha Magazine ‘Rajbhasha Jyoti was published during the year and the magazine bagged second prize from Rashtriya Hindi Academy, Rupambra as eRs.cellent magazine at All India level.

NHPC bagged ‘Rajbhasha Shiromani award for remarkable contribution in official language implementation from Bhartiya Bhasha Evam Sanskriti Kendra, New Delhi.

18. CORPORATE COMMUNICATION

NHPC has participated in various eRs.hibitions for creating awareness among the public about the strength and capabilities of NHPC in development of hydro power. In addition to above, various means of communication were also used to appropriately highlight activities of NHPC.

NHPC has hosted the 15th Chess and 14th Inter-PSU Bridge tournament held at NHPC Residential CompleRs., Faridabad from 6th to 8th January, 2010 under the aegis of Power Sports Control Board, Ministry of Power. A total of 10 teams from various Power Sector PSUs participated in the tournaments. During 2009-2010, NHPC teams also participated in the various Inter- PSU sports tournaments organized by Power Sports Control Board and won prizes in various events mentioned below: winners trophy in the 14th Inter-PSU Bridge tournament hosted by NHPC at Faridabad from 6-8 January, 2010.

NHPC women team won the winners trophy in the 12th Inter-PSU Carrom Tournament hosted by THDC at Rishikesh from 16th to 19th February, 2010.

NHPC Athletics team won the second runners-up trophy in 8th Inter-PSU Athletics tournament hosted by BBMB at Chandigarh from 15th to 16th March,2010

NHPC Corporate Office Cricket team won the runners-up trophy at the Indian Oil Golden Jubilee T20 Cricket tournament held on 30.3.2010 at Manav Rachna Cricket Ground, Faridabad.

In addition to above, employees of NHPC have also participated in the various individual events.

19. AWARDS AND ACHIEVEMENTS:

During the year 2009-10, NHPC received various prestigious awards. Some of the important awards are listed below:

In 2009, NHPC was conferred the Second Prize in the ‘Office Buildings Sector under the National Energy Conservation Awards in recognition of NHPCs commendable efforts in Electricity Saving at its Corporate Office building. The award was given by Honble Minister of Power Shri Sushil Kumar Shinde.

NHPC won the Indian Institute of Industrial Engineerings (IIIE) ‘Performance ERs.cellence Award in recognition of its operational eRs.cellence in the development of hydro power projects for the year 2007-08.

The "Amity HR ERs.cellence Award for Best Socio-Economic Responsive Organization" was awarded to NHPC for the year 2009 by the Amity International Business School, NOIDA in recognition of its HR practices.

The Council of Power Utilities, New Delhi, in association with KW Conferences presented the "Jury Award" to NHPC for large scale implementation of Hydro Projects.

NHPCs efforts in environmental management and sustainable initiatives helped the Company win the "TERI Corporate Environmental Award 2009" instituted by The Energy Research Institute, New Delhi.

NHPCs CSR Initiatives have been consistently recognised and lauded among the many awards and recognition that have been bestowed on the Company are: the SCOPE Meritorious Award for Corporate Social Responsibility and Responsiveness, Power HR Forum Award for Best Practices as a Corporate Citizen, AMITY Award for Best CSR Practices, Golden Peacock Award for Environmental ERs.cellence, GreenTech Environmental ERs.cellence Award, SRISHTI Awards for Good Green Governance, etc.

20. CORPORATE SOCIAL RESPONSIBILITY (CSR) AND REHABILITATION AND RESETTLEMENT (R&R)

NHPC has contributed to the economic development and improving the quality of life of internal as well as eRs.ternal stakeholders and the Society at large with its continued commitment towards Corporate Social Responsibility (CSR) and ethical behaviour. The CSR aspects find echoes in the Corporates Mission Statement "To eRs.ecute and operate projects in a Cost effective, Environment friendly and Socio-economic responsive manner".

NHPC as a Good Corporate Citizen has outreached itself for the Social Good with a deep concern for the Social Milieu around which it exists and works.

The Company has a Scheme on Corporate Social Responsibility - Community Development (CSR-CD), Initiatives at Power Stations. Your company has undertaken a number of CSR-CD Initiatives in the areas of Health, Education, Peripheral Development, Sports & Culture, development of Employment opportunities, Preservation of Nature etc. for the community living in and around the Power Stations and Construction Projects. Various other initiatives have also been undertaken which includes creation of Herbal Parks with Medicinal Value, large scale afforestation, Catchment Area Treatment (CAT), Fisheries Management, Vocational Training Programmes, Medical Camps, Development of Infrastructural facilities etc.

For the FY 2010-11, NHPC has earmarked Rs. 3.50 Crores to undertake various community development activities in the vicinity of its power stations.

Under the R&R Policy and also in respective DPRs of projects, NHPC has earmarked funds for various Community Development Initiatives to be taken up at the construction project sites.

21. CORPORATE GOVERNANCE

A separate statement on Corporate Governance is enclosed as a part of the Directors Report along with the Certificate for compliance as AnneRs.ure - I and the Management Discussion and Analysis Report as AnneRs.ure - II to this report.

22. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act, 2005 the Corporation has provided various documents/ records at its website during the year under review. To enable nation wide access to the information, Assistant Public Information Officers at each of Power Station / Project / Regional Office / Unit were also appointed. All the applications received under this Act have been attended and suitable reply/information furnished to the applicants. Shri S.K.Dubey, Chief Engineer is at present designated as Central Public Information Officer.

23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN exchange EARNINGS AND OUTGO

The information is given in the AnneRs.ure-III to the Report.

24. PARTICULARS OF EMPLOYEES

Information required under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 is given in the AnneRs.ure-IV to the Report.

25. AUDITORS

M/s. GSA & Associates, Chartered Accountants, New Delhi, were appointed as statutory auditors for conducting the audit for the year 2009-2010. M/s N Sarkar & Co, Chartered Accountants, Kolkata , K. C. Bhattacherjee & Paul, Chartered Accountants, Kolkata , K. K. Ghei & Co, Chartered Accountants, New Delhi and M/s. Baweja & Kaul, Jammu were appointed as branch auditors of the Company.

26. AUDITORS REPORT

The Auditors Report refers to various notes incorporated by the Corporation in Schedule 24, which are self-eRs.planatory The reports of the Statutory Auditors and comments of the Comptroller and Auditor General of India are enclosed as AnneRs.ure- V and VI respectively. The consolidated Financial Statement of the Company along with the Auditors Report is placed at AnneRs.ure-VII.

27. COST AUDITORS

The following firms of Cost Auditors were appointed to conduct the audit of cost accounting records of power stations indicated against each firm for the financial year 2009-10 subject to the approval of the Central Government under Section 233-B of the Companies Act, 1956:-

Name of the Firm Name of Power Station

M/s K. L. Jaisingh & Co., Noida Uri-I & Dulhasti

M/s K. G. Goyal & associates, New Delhi Salal & CPS-I

M/s S. K. Adya & Co., Faridabad Dhauliganga & Tanakpur

M/s Jugal K Puri & Associates, New Delhi Bairasiul & CPS II

M/s D.Dutt & Associates Loktak Power Station

M/s DGM & Associates, Kolkata Teesta-V & Rangit

Contingencies and Event occurring after the Balance Sheet

As per the assurance given to Member, Audit Board of CAG of India, it is informed that

(a) the Corporation has issued Secured, Redeemable, Taxable, Non-Cumulative, Non-Convertible Debentures (NCD), in the nature of Bonds for Rs. 2000 crore (P-Series ) on private placement basis with LIC on one to one basis . NCDs in the nature of bonds (P-Series) was secured by first pari-passu charge over the fiRs.ed assets of the company both eRs.isting and future, with minimum asset coverage of 1.25 times of the issue amount. Necessary security was provided with in the stipulated time.

(b) NHPC is charging depreciation in the books as per Significant Accounting Policy No. 5.2 (Schedule 23 of Annual Accounts), deriving strength from the Tariff Policy 2006 issued under Electricity Act, 2003. CERC vide notification dated 19.01.2009 has revised the rates of depreciation & Methodology to compute depreciation for determination of tariff. As per said methodology, rates so notified shall be applicable for a period of first twelve years from the date of commercial operation. The depreciable value as on 31st March of the year closing after a period of twelve years from the date of commercial operation shall, however, be spread over the balance useful life of the assets. Since as per Generally Accepted Accounting Principles, depreciation is to be provided asset wise, asset wise rates of depreciation as prescribed by CERC has been continued to be followed even in respect of assets of the projects which have completed a period of twelve years from date of commercial operation in line with the provisions of Section 205 of the Companies Act, 1956 as well as AS-6 of ICAI Standard. The Office of C&AG of India has however observed that Company should have adopted rates as well as methodology prescribed by CERC for determination of tariff, for accounts also. It has been agreed with the Office of C&AG of India that the issue shall be referred to Ministry of Power (MOP) for seeking clarification, which has since been done.

28. SUBSIDIARY COMPANY

The Annual Accounts along with the Report of Auditors and Directors Report of NHDC Ltd and Loktak Downstream Hydroelectric Corporation Limited are anneRs.ed along with the statement under Section 212 of Companies Act 1956. Details regarding the subsidiaries are provided in Management Discussion and Analysis Report.

29. DIRECTORS RESPONSIBILITY STATEMENT

As required under section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following:

i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper eRs.planation 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 at the end of the financial year and of the profit of the Company for that period;

iii) The Directors have 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 to the best of their knowledge and ability; and

iv) The Directors have prepared the annual accounts on a going concern basis.

30. BOARD OF DIRECTORS

Since last Report Shri Rakesh Jain, Joint Secretary & Financial Advisor, Ministry of Power has joined as a Govt. nominee Director on 29-09-2009.

Shri Sudhir Kumar, Joint Secretary (Hydel), Ministry of Power has joined as a Govt. nominee Director on 21-10-2009.

Shri A. GopalaKrishnan has joined as an Independent Director on 15-12-2009.

Shri Jayant Kawale, JS(Hydel), MOP ceased to be a Director w.e.f 24-09-2009.

The present composition of the Board is given in the report on corporate governance.

ACKNOWLEDGEMENTS

The Board of Directors acknowledges with deep appreciation, the cooperation and guidance received from the Government of India especially the Ministry of Power, Ministry of Finance, Planning Commission, State Governments, Bankers, SEBI, Stock exchanges Financial Institutions, Lenders and Investors. The Board also acknowledges and appreciates the contributions made by contractors, vendors, consultants and others for achieving the desired goals of the Company.

The Board places its special appreciation to the beneficiaries drawing power, State Electricity Boards and other valuable clients for consultancy assignments.

The Board places on record its deep appreciation for the cooperation eRs.tended by Statutory Auditors, Cost Auditors and Office of the Comptroller and Auditor General of India. Further, the Board wishes to convey its appreciation to all the employees of NHPC for the valuable services , dedications and commitments in achieving eRs.cellent performance of the Company.

For and On behalf of the Board of Directors

(S.K. Garg)

Chairman and Managing Director DIN No.: 00055651

Date: August 13, 2010 Place: Gurgaon

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Mar 31, 2009

The Directors are pleased to present the 33rd Annual Report on the performance of your Company along- with Audited Statement of Accounts, Auditors’ Report and the Review of Accounts by the Comptroller and Auditor General of India for the financial year ended 31st March, 2009.

1. FINANCIAL PERFORMANCE

The financial performance for the year ended as on March 31st 2009 is summarized here under:

Table I

FINANCIAL HIGHLIGHTS (Rs. in Crore)

Particulars 2008-2009 2007-2008

Sales 2698.06 2301.00

Profit before Depreciation, Interest and Tax 2201.76 2043.79

Depreciation 518.24 443.74

Profit after Depreciation but before Interest and Tax 1683.52 1600.05

Interest & Finance Charges 505.18 453.40

Profit after Depreciation and Interest but before Tax 1178.34 1146.65

Tax 103.12 142.56

Profit after Depreciation, Interest and Tax 1075.22 1004.09

Surplus of Profit and Loss Account of earlier years 1344.53 715.18

Profit available for appropriations 2419.75 1719.27

APPROPRIATIONS

Transfer from Bond Redemption Reserve (14.25) 23.75

Transfer to Self Insurance Reserve 98.74 0.00

Tax on Dividend written back (8.57) 0.00

Amount written back from Self Insurance Reserve (0.06) 0.00

Interim Dividend 125.00 100.00

Proposed Final Dividend 200.00 200.00

Corporate Dividend Tax 55.23 50.99

Transfer to general reserve 0.00 0.00

Balance Profit carried to Reserves and Surplus 1963.66 1344.53

Disclaimer: “NHPC Limited is proposing, subject to market conditions and other considerations, a public issue of its equity shares and has filed a Red Herring Prospectus with the Registrar of Companies, National Capital Territory of Delhi and Haryana. The Red Herring Prospectus is available on the website of SEBI at www.sebi.gov.in and the respective websites of the Book Running Lead Managers at www.enam.com, www.kotak.com and www.sbicaps.com. Investors should note that investment in equity shares involves a high degree of risk and for details relating to the same, see the section titled “Risk Factors” of the aforementioned Red Herring Prospectus.”

2. POWER GENERATION

NHPC has generated 16,582.72 MUs of electricity in Fiscal 2009. In Fiscal 2009, the Company sold 14,587.88 MUs of electricity.

3. PROPOSED DIVIDEND

Your Directors have recommended a lump sum dividend of Rs. 325 Crore including the interim dividend of Rs. 125 Crore (excluding dividend tax) for the year 2008-09.

4. CAPITAL STRUCTURE

During the year, the capital structure of the Company remained unchanged with paid up capital of Rs. 11,182.49 Crore.

5. PROGRESS OF ONGOING PROJECTS

The Corporation is presently engaged in the construction of the following hydroelectric projects:

Hydroelectric State Proposed Projects Installed Capacity (MW)

Sewa-II Jammu & Kashmir 120

Teesta Low Dam-III West Bengal 132

Uri-II Jammu & Kashmir 240

Chamera-III Himachal Pradesh 231

Teesta Low Dam-IV West Bengal 160

Nimoo Bazgo Jammu & Kashmir 45

Parbati-III Himachal Pradesh 520

Parbati-II Himachal Pradesh 800

Chutak Jammu & Kashmir 44

Subansiri Lower Assam/Arunachal Pradesh 2,000

Kishanganga Jammu & Kashmir 330

Total 4,622

STATUS OF ONGOING PROJECTS

The Status of ongoing projects is given below:

I Sewa-II Hydroelectric Project (120 MW), Jammu & Kashmir:

Sewa-II Hydroelectric Project is a run of the river scheme with an expected capacity of 120 MW. This project is expected to generate 533.52 MUs annually in a 90% dependable year. The project is scheduled to be commissioned in December 2009.

II Teesta Low Dam-III Hydroelectric Project (132 MW), West Bengal:

Teesta Low Dam-III Hydroelectric Project came under the control of NHPC Limited in November 2000. The project is located on the River Teesta in the district of Darjeeling in the state of West Bengal. The project is anticipated to generate 594.42 MUs annually in a 90% dependable year. The project is scheduled to be commissioned in February 2011.

III Uri-II Hydroelectric Project (240 MW), Jammu & Kashmir:

Uri-II Hydroelectric Project is located in the Uri Tehsil of the Baramulla district. This project is estimated to generate 1,123.76 MUs of energy in a 90% dependable year. The project is scheduled to be commissioned in February 2011.

IV Chamera-III Hydroelectric Project (231 MW), Himachal Pradesh:

Chamera-III Hydroelectric Project is situated in the Chamba district in the state of Himachal Pradesh. This project is situated in the lower Himalayan region and it is being constructed in the Chamba metamorphic rock formation on the River Ravi. This project is anticipated to generate 1,108.17 MUs annually in a 90% dependable year. The project is scheduled to be commissioned in August 2010.

V Teesta Low Dam-IV Hydroelectric Project (160 MW), West Bengal:

Teesta Low Dam-IV Hydroelectric Project is located in the district of Darjeeling in the state of West Bengal. This project is a run of the river scheme with storage for peaking purpose. The annual energy generation of this project is estimated to be 720 MUs in a 90% dependable year. The project is scheduled to be commissioned in August 2011.

VI Nimoo Bazgo Hydroelectric Project (45 MW), Jammu & Kashmir:

Nimoo Bazgo Project is a run of the river scheme to harness the hydropower potential of River Indus in the Leh district of Jammu & Kashmir. The project is anticipated to generate 239 MUs in a 90% dependable year. The project is scheduled to be commissioned in August 2010.

VII Parbati-III Hydroelectric Project (520 MW), Himachal Pradesh:

Parbati-III Hydroelectric Project is located in the Kullu district in the state of Himachal Pradesh. It is a run of the river scheme. It is anticipated that the project will generate 1,963.29 MUs of energy in a 90% dependable year. It is believed that the delay in the commissioning of the Parbati-II project may result in a reduction in the generation capacity of Parbati-III project from approximately 1,963 MUs to approximately 972.20 MUs of energy since the Parbati-III project is dependent upon the tailrace discharge from the Parbati-II project.

VIII Parbati-II Hydroelectric Project (800 MW), Himachal Pradesh:

The Parbati-II Hydroelectric Project is a run of the river scheme on the River Parbati. It is anticipated that the project will generate 3,108.66 MUs of energy in a 90% dependable year. The project is scheduled to be commissioned in March 2013.

IX Chutak Hydroelectric Project (44 MW), Jammu & Kashmir:

Chutak Hydroelectric Project is a run of the river scheme intended to harness the hydropower potential of the River Suru in the Kargil district of the state of Jammu & Kashmir. It is expected that this project will generate 212.93 MUs in a 90% dependable year. The project is scheduled to be commissioned in February 2011.

X Subansiri Lower Hydroelectric Project (2,000 MW), Assam/Arunachal Pradesh:

Subansiri Lower Hydroelectric Project is the biggest hydroelectric project being undertaken in India to date. It is a run of the river scheme on the Subansiri River. This project is located near north Lakhimpur on the border of Assam and Arunachal Pradesh. It is estimated that the annual energy generation from this project will be 7,421 MUs in a 90% dependable year. The project is scheduled to be commissioned in December 2012.

XI Kishanganga Hydroelectric Project (330MW), Jammu & Kashmir:

The Kishanganga Hydroelectric Project is located on the Kishanganga River and was initially being constructed by the state government of Jammu & Kashmir and was subsequently transferred to us for implementation. CCEA clearance was granted by the Ministry of Power on January 19, 2009. Construction work has been awarded to M/s Kishanganga Consortium on a turnkey basis. Infrastructure work and mobilisation of a major contractor is currently in progress. The project is scheduled to be commissioned in January 2016.

6. NEW SCHEMES

Projects under Govt. Sanction

1. Loktak Down Stream (66 MW), Manipur : The Loktak Downstream Hydroelectric Project is being implemented through a joint venture with the state government of Manipur. The TEC approval for this project was granted on November 15, 2006 by the CEA. The PIB recommended the project for investment sanction on November 23, 2006 and the clearance for pre-construction activities and the terms of reference for undertaking the EIA studies was given by MoEF on April 20, 2007. The EIA EMP studies have been approved on April 8, 2008.

2. Pakal Dul and other hydroelectric Projects (2,100 MW) J&K: The Pakal Dul and other hydroelectric projects with an aggregate installed capacity of about 2100 MW are being established in the Chenab River Basin in the Kishtwar District of Jammu & Kashmir. A MoU was signed among NHPC, JKSPDC, the government of Jammu & Kashmir and PTC on October 10, 2008 for the execution of these projects through a joint venture between JKSPDC, NHPC and PTC with equity interests of 49%, 49% and 2%, respectively. The project requires approval from the Supreme Court as it is located in the Kishtwar High Altitude National Park.

3. Kotli Bhel-IA (195 MW) Uttarakhand: The agreement with the state government of Uttarakhand for the implementation of the Kotli Bhel Stage-IA hydroelectric project was entered into on June 8, 2006. The TEC for this project was granted on October 3, 2006 by the CEA. The PIB recommended the project for investment sanction on February 7, 2007. We received the required environmental clearances from the MoEF in respect of this project in May 2007 and are awaiting the forest clearance from MoEF and the CCEA clearance.

Kotli Bhel-IB (320 MW) Uttarakhand: The agreement with the state government of Uttarakhand for the implementation of this project was entered into on June 8, 2006. The TEC for this project was granted on October 31, 2006 by the CEA. The PIB recommended the project for investment sanction on February 7, 2007. We received the required environmental clearances from the MoEF in respect of this project in August 2007 and are awaiting the forest clearance from MoEF and the CCEA clearance.

Kotli Bhel-II (530 MW) Uttarakhand:

The agreement with the state government of Uttarakhand for the implementation of the project was entered into on June 8, 2006. The TEC for this project was granted on November 30, 2006 by the CEA. The PIB recommended the project for investment sanction on May 15, 2007. We received the required environmental clearances from the MoEF in respect of this project in August 2007 and are awaiting the forest clearance from MoEF and the CCEA clearance.

4. Dibang (3,000 MW) Arunachal Pradesh: The Company entered into a MoA on June 24, 2007 to execute this project on an own and operate basis, which supersedes the MoA signed earlier on September 21, 2006 with the state government of Arunachal Pradesh for the implementation of this project as a joint venture partnership. The TEC for this project was granted on January 23, 2008 by the CEA. The PIB recommended the project for investment sanction on January 28, 2008 and we are awaiting CCEA clearance. EIA and EMP studies have been finalised and submitted to the State Pollution Control Board. The public consultation process for this project is currently underway. The MoEF has through its letter dated June 29, 2009 intimated that this project was considered by the Expert Appraisal Committee (“EAC”) which was of the opinion that fresh public hearing is to be conducted as per the EIA Notification, 2006.

5. Teesta-IV (520 MW) Sikkim: An agreement for the implementation of this project was entered into with the state government of Sikkim on March 1, 2006. Site clearance for stage I and II activities was granted by the MoEF on October 6, 2005. DPR for the project was submitted to the CEA on March 31, 2008 for approval. EIA studies were approved on January 30, 2006 and are currently being carried out. Clearance for preconstruction activities was granted by the MoEF on June 4, 2009.

PROJECTS UNDER DPR / FR PREPARATION

1. Bursar (1,020 MW) J&K: An agreement for the implementation of this project was signed by the Ministry of Power with the state government of Jammu & Kashmir on July 20, 2000 wherein the Government of Jammu & Kashmir transferred this project to NHPC for its implementation. Preparation of DPR for this project is under process. EIA and EMP studies for the project were commenced on July 14, 2005 and are currently underway. Approval from the Supreme Court is required to execute this project as it is located in the Kishtwar High Altitude National Park. The report of a committee of the Ministry of Water Resources to evaluate the techno-economic feasibility and finalise an optimised storage cum hydroelectric project is awaited.

2. Chungar Chal (240 MW) Uttarakhand: An agreement for the implementation of this project was entered into with the state government of Uttarakhand on November 21, 2005. The site clearance for stage-I was granted on November 11, 2005. The EIA studies were awarded on January 30, 2006 and are currently being carried out. The state government has applied for a wildlife clearance, which is currently pending with the Supreme Court and the NBWL. Clearance from the Standing Committee of the NBWL is required as the project is located within the Askot Musk Deer Sanctuary. In light of the same, the survey and investigation works for preparation of DPR is currently on hold.

3. Garba Tawaghat (630 MW) Uttarakhand: An agreement for the implementation of this project was signed with the state government of Uttarakhand on November 21, 2005. The state government has applied for a wildlife clearance, which is currently pending with the Supreme Court and the NBWL. Clearance from the Standing Committee of the NBWL is required as the location of the project falls within the Askot Musk Deer Sanctuary. In light of the same, the survey and investigation works for preparation of DPR is currently on hold. Since the project is being developed on the River Kali (Sharda), which flows through both India and Nepal, the project needs to be examined under the provisions of the Mahakali Treaty, 1996, which requires that the project benefits are shared with Nepal. Accordingly, a letter dated February 16, 2009 was sent requesting that the MoP examine this issue and the MoP has referred the matter to the Ministry of External Affairs who will begin consultation with the Government of Nepal.

4. Karmoli Lumti Tulli (55 MW) Uttarakhand: An agreement for the implementation of this project was signed with the state government of Uttarakhand on November 21, 2005. The state government has applied for a wildlife clearance, which is currently pending with the Supreme Court and the NBWL. Clearance from the Standing Committee of the NBWL is required as the project is located within the Askot Musk Deer Sanctuary. In light of the same, the survey and investigation works for the preparation of DPR is currently on hold.

5. Lachen (210 MW) Sikkim: An agreement for the implementation of this project was signed with the state government of Sikkim on March 1, 2006. Site clearance for stage I was granted by the MoEF on February 27, 2006. However, survey and investigation works have been delayed on account of local opposition to the project. In addition, the MoEF through its letter dated October 8, 2008 has intimated that the final report on the carrying capacity study for the entire Teesta River basin undertaken by the Centre for Interdisciplinary Studies of Mountain and Hill Environment, University of Delhi, recommended that North Sikkim is ecologically sensitive and geologically unstable for undertaking major projects. In view of the same it was decided that projects above the Chungthang area should not be considered for the construction of dams and large scale development activities. Since Lachen Hydroelectric Project is situated above the Chungthang area, the status of the project is under review by the management of the Company.

6&7. Tawang-I (750 MW) Arunachal Pradesh and Tawang-II (750 MW) Arunachal Pradesh: An agreement for the implementation of this project was signed with the state government of Arunachal Pradesh on September 21, 2006 for Tawang-I and II that were revised on June 24, 2007. The environmental clearance for pre-construction activities and terms of reference for undertaking EIA studies was granted by the MoEF on December 8, 2006. Survey and investigation works are currently underway.

8&9. Subansiri Middle (1600 MW) Arunachal Pradesh & Subansiri Upper (2000 MW) Arunachal Pradesh: The proposed Subansiri (Middle) Project is located on the River Kamla in Lower Subansiri District of Arunachal Pradesh. CEA has advised to prepare a DPR and commence essential infrastructure works, however, survey and investigation works for the preparation of DPR have been suspended due to lack of site clearance for Stage-II from the MoEF.

The proposed Subansiri (Upper) Project is located on the river Subansiri in the Upper Subansiri District of Arunachal Pradesh. The CEA has advised to prepare a DPR and commence essential infrastructure works, however, survey and investigation works for the preparation of DPR have been suspended due to lack of site clearance Stage-II from the MoEF.The project work at Subansiri Upper and Subansiri Middle is pending due to a Supreme Court order that restrains the construction of dams upstream of the Subansiri Lower project currently under construction.

The state government of Arunachal Pradesh appealed against this order and the matter was referred to the Standing Committee of the NBWL. The matter has been considered by the Standing Committee of NBWL. The MoEF has through its letter dated January 12, 2009, endorsed the recommendations of the Standing Committee of NBWL and stated, among other things, that any proposal pertaining to the upstream of Subansiri River would be considered independently on its merits.

7. CHANGES IN THE NATURE OF COMPANY’S BUSINESS - CHANGE OF OBJECTS CLAUSE OF THE COMPANY

During the year 2008-09 your Company has changed its objects clause to include generation of power through Conventional and Non Conventional Sources by passing a special resolution through postal ballot passed on 19th March, 2009. Accordingly, your Company has decided to pursue thermal projects through its Subsidiary i.e. through Narmada Hydroelectric Development Corporation Limited now known as NHDC Limited.

8. CONSULTANCY SERVICES

Major consultancy assignments includes assignments from central and state government agencies in India including State Electricity Boards and Public Sector Undertakings. The consultancy services of the company are registered with the World Bank, the Asian Development Bank, the African Development Bank, the Kuwait Fund for Arab Economic Development and the Central Water Commission and Consultancy Development Centre. A number of foreign governments and private sector entities are on the client list of the company.

Seventy Six consulting assignments have been completed and as at May 31, 2009 there are seventeen ongoing consulting assignments.

Further, on August 12, 2008, an agreement with the Ministry of External Affairs, GoI and Bharat Heavy Electricals Limited was signed in connection with the renovation, modernisation and uprating of the Varzov Hydropower Plant-I (2x3.67 MW), in Tajikistan.

A MoU with the Union of Myanmar dated September 16, 2008 was signed to study the master plan for the hydropower development of the Chindwin river basin and to review the DPRs for the Tamanthi hydroelectric project (1200 MW) and the Shwzaye hydroelectric project (642 MW). Project review reports for these two projects were submitted to the government of Myanmar in December 2008.

9. RURAL ROAD PROJECTS

NHPC has signed a Memorandum of Understanding with the Ministry of Rural Development, Government of India and Government of Bihar for construction of Rural Roads and their maintenance in six districts of Bihar under the Pradhan Mantri Gram Sadak Yojna (“PMGSY”). Sanction has been received for construction of 832 roads of the length 3,517 kms.

10. RURAL ELECTRIFICATION (RE) PROJECTS

NHPC has taken initiative for contributing in village electrification programme under Rajiv Gandhi Gramin Vidyutikaran Yojna (“RGGVY”) in 27 districts of five States at an estimated cost of about Rs. 2,580 crore. NHPC has been sanctioned 33 projects in these 27 districts.

So far about 3,396 villages have been electrified and approximately 3,28,389 connections have also been provided to below poverty line families.

11. INFORMATION TECHNOLOGY AND COMMUNICATIONS

NHPC has over the years implemented and developed software applications in key business areas like human resource, finance, commercial, project management, power generation, material management etc.

Now, NHPC has made a major break-through in utilizing information technology in its core functions by implementing Enterprise Resource Planning (“ERP”) for meeting its business objectives by timely completion of construction projects and optimal operation of the generating power stations towards maximizing profit. During the year 2008-09, ERP has been implemented at pilot locations for energy sales accounting, project monitoring, power plant operation, human resource, finance, procurement etc. Employees Compensation and Employee Self Service functions are also being performed in ERP. Various modules of ERP are being rolled out across the organization in a phased manner. Once rolled out to all the locations during 2009-10, ERP shall provide backbone for information flow and decision making of various key business processes of NHPC as well as other routine functions across the Company.

Information Technology and Communication (“IT&C”) infrastructure has also been strengthened considerably during the year to support ERP. Various remote locations have been connected through additional link of Ku- band based Very Small Aperture Terminal (“VSAT”).

12. VIGILANCE ACTIVITIES

NHPC’s Vigilance Division in the Corporate Office has been granted ISO 9001:2000 certification by BIS. Regular and surprise inspections are conducted by the Vigilance Department of various units at regular intervals. Intensive examination of the works is carried out by Chief Technical Examiner of the Central Vigilance Commission (“CVC”) as well as personnel of the Vigilance Department of NHPC.

Emphasis has been laid on preventive vigilance by issuing circulars and guide-lines based on inspection / intensive examinations. Various vigilance awareness programs are conducted at regular intervals so as to make working as transparent as possible. Two Workshops of Vigilance Officers were conducted on 2nd June, 2008 and 10th February, 2009 respectively, in order to review and improve functioning.

13. OFFICIAL LANGUAGE IMPLEMENTATION

All efforts were made to increase the progressive use of Official Language policy of the Government of India. During the year appropriate action was taken to ensure implementation of the provisions of the Official Languages Act, 1963 and the Rules framed thereunder.

As per directives of the Government of India, “Hindi Month” was observed from 1st to 30th September, 2008 in company. Various competitions, programmes were conducted and a book exhibition was organised on this occasion. A large number of employees participated in these events.

In order to review the progress of the implementation of the Official Languages Act in the Corporation, 2nd Sub-Committee of the Committee of Parliament on Official Language conducted inspection of the Region-III Office, Kolkata on 7th April, 2008 and Corporate Office on 12th September, 2008. Hon’ble members of the Committee of Parliament on Official Languages appreciated our efforts. Annual magazine of Rajbhasha

‘Rajbhasha Jyoti’ was also released on this occasion. A team of officers from Ministry of Power visited the Corporate Office, Liaison office in Shimla, Dulhasti Power Station and Region-I office, Jammu. The senior officers at the level of Director/Executive Directors conducted Rajbhasha inspection of 10 Projects.

Quarterly meetings of the Official Language Implementation Committee of NHPC were held during the year. The Official Language Implementation Committee meetings held at Corporate Office are chaired by the Chairman & Managing Director.

During the year, 17 Hindi workshops including Computer workshops were organized in the

Corporate Office and 347 employees were trained in these workshops. During the year Hindi Training classes were organized to impart training for Hindi Language, Hindi Typing and stenography to the employees.

Hindi Books were purchased for Rajbhasha Library and prizes were given to employees under ‘Hindi Book Incentive Scheme’.

NHPC received Sahastrabdi Rajbhasha Shield from Rashtriya Hindi Academy, Rupambara. The Shield was given to NHPC by Her Excellency, Governor of Himachal Pradesh, Smt. Prabha Rao. ‘Rajbhasha Jyoti’ was awarded excellent magazine award on All India Level.

Rajbhasha Shield (First prize) and letter of appreciation was given to NHPC by the

Hon’ble Minister of Power Shri Sushilkumar Shinde for doing excellent work of Rajbhasha amongst all Power Sector Undertakings. Rajbhasha Shield (First prize) and Letter of Appreciation was given to NHPC by Town Official Language Implementation Committee, Faridabad for doing excellent work during the year 2007-08 amongst Undertakings/ Corporations at Faridabad.

Second Tuesday of every month was observed as Hindi Diwas in the Corporation. In order to increase implementation of Official language Rajbhasha Desk has been established. ‘Aaj Ka Shabda’ and ‘Aaj Ka Vichar’ is being written and displayed on computers and boards – regularly in the Corporation.

14. CORPORATE COMMUNICATION

The Corporate Communication Department plays an important role in projecting the image of the Company and sustaining it by using various mediums of communication. Periodically, the achievements of NHPC were appropriately highlighted through print and electronic media throughout the country. To create better awareness among the public about the strength and capabilities of NHPC in development of hydro power, NHPC has participated in a number of exhibitions like “International Exhibition and Conference - Power India -2008” organized by India Tech Foundation in Mumbai, India Electricity-2008 organized by FICCI in New Delhi, Power Gen- India & Central Asia -2008 International Conference & Exhibition organized by Inter Ads Exhibitions Pvt. Ltd. at New Delhi and India International Trade Fair 2008 organized by India Trade Promotion Organization at New Delhi. NHPC Pavilion at the Power India- 2008 exhibition bagged the ‘Best Exhibit Display Award’.

The “NHPC News” and “From CMD’s Desk” continued to be an effective tool of internal communication.

NHPC has been regularly organizing and participating in various sports related activities under the aegis of Power Sports Control Board, Ministry of Power. During 2008-09, NHPC successfully hosted the 11th Inter-PSU Table Tennis Tournament from 6th to 8th April, 2009 at Tanakpur Power Station in Uttarakhand. Nine teams from various Central Power Sector Undertakings participated in this tournament. Besides this, NHPC teams also participated in the various Inter-PSU sports tournaments organized by the Power Sports Control Board during 2008-09 and have won first prize in the Inter-PSU Women Carom Tournament hosted by Rural Electrification Corporation Limited at New Delhi, first prize in the Inter -PSU Bridge tournament hosted by North Eastern Electric Power Corporation Ltd. (“NEEPCO”) at Shillong, second prize in the Inter-PSU Chess tournament hosted by Tehri Hydro Development Corporation Ltd.

(“THDC”) at Rishikesh and third prize in the Inter-PSU Kabaddi Tournament hosted by Satluj Jal Vidyut Nigam Ltd. (“SJVNL”) at Shimla.

In respect of individual events Smt. Poorva Maini and Smt. Chanchal Bala bagged first prize in the doubles of events of Carom and Smt. Chanchal Bala also bagged second prize in singles event of carom. Shri C.L. Khayuingam bagged first prize in the chess game. Shri Rajesh Kumar bagged first prize in the singles event of Badminton tournament. Shri Luvkesh Ahuja and Shri Ashutosh Swarnkar bagged third position in the doubles event of Inter-PSU Table Tennis Tournament.

Ms. A. Nalini, TO (Fin.-Banking) participated in the 2nd Asian Paralympics Cup 2008 (Badminton for Challenged) from 9th to 15th December, 2008 at Bangalore and won Bronze Medal in the women’s singles event under BMSTU-L1/L2 category.

Energy Conservation Day

As a part of celebration of Energy Conservation Day 2008, NHPC coordinated the painting competition for school children in five states, viz. Jammu & Kashmir, Manipur, Sikkim, Arunachal Pradesh and

Madhya Pradesh, organized by Bureau of Energy Efficiency (BEE), Ministry of Power at National level and State level.

15. CORPORATE SOCIAL RESPONSIBILITY AND REHABILITATION AND RESETTLEMENT:

NHPC is committed to Corporate Social Responsibility (“CSR”) efforts and strive to demonstrate environmentally as well as ethically conscious behaviour. It seeks to incorporate best practices in corporate governance, employee welfare, and environmental commitment, and have taken various initiatives towards community development. In this endeavour to align business operations with social values, NHPC

has sanctioned a budget for various large- scale community empowerment and capacity building initiatives to be undertaken in and around its power stations and construction sites pursuant to provisions made in the DPRs.

The resettlement and rehabilitation program of NHPC aims to improve the economic status of people displaced or otherwise affected adversely by the projects. NHPC is committed to safeguarding the interests of PAPs through implementation of Rehabilitation and Resettlement Policy, 2007, (“R&R Policy”) which is based on the National Resettlement and Rehabilitation Policy, 2007 (“NRRP”) of the GoI.

The R&R Policy of NHPC aims to provide PAPs with an adequate rehabilitation package beyond monetary compensation. This includes active and transparent participation of PAPs in deciding their compensation packages, compensation for those who do not have a legal or recognised right over the land on which they depend for subsistence, continuity in livelihood options after resettlement, quantification of costs and benefits that will accrue to society (as to the desirability and justifiability of each project), expeditious implementation of the rehabilitation process and special care for vulnerable sections of society.

Each resettlement and rehabilitation program is developed on a project-by-project basis, based on specific local requirements and guided by extensive socio-economic surveys. An institutional framework has been created to implement R&R Policy. However, the government of the state in which the project is located is ultimately responsible for disbursing compensation to PAPs. Where the Company is unable to extend direct employment to PAPs, relief packages may be deposited with local government authorities for further distribution, and various local capacity development and community empowerment programmes are undertaken for the benefit of PAPs. It is the endeavour of the company to involve local communities and non- governmental organisations in community empowerment and capacity building initiatives, including at the planning, implementation, and maintenance stage.

Recent initiatives towards socio-economic development in connection with Power Stations and projects, including initiatives under R&R Policy for the benefit of PAPs, include the following:

- Construction, widening and maintenance of roads and bridges.

- Afforestation, catchment area treatment, and fisheries management.

- Development of irrigational facilities, water supply, and drainage facilities.

- Creation of botanic parks and biodiversity conservatories.

- Rural electrification works.

- Organisation of educational, career guidance and vocational training programs, awareness programs on horticultural and agricultural practices, healthcare programs and promotion of sports and culture.

- Organisation of health checkup camps, vaccination and immunisation works, free distribution of medicines and

- On occasion, the Company has assisted in reconstruction of flood-affected villages.

16. CORPORATE GOVERNANCE

A separate statement on Corporate Governance is enclosed as a part of the Director’s Report along with the Certificate for compliance as Annexure-I and the Management Discussion and Analysis Report as Annexure-II to this report.

17. RIGHT TO INFORMATION ACT, 2005

In compliance with the provisions of the Right to Information Act, 2005 the Corporation has provided various documents / records at its website and appointed the Company Secretary as the Central Public Information Officer (PIO) of the Corporation. To enable nation wide access to the information, Assistant Public Information Officers at each of Power Station / Project / Regional Office / Unit were also appointed. All the applications received under this Act have been attended and suitable reply/information furnished to the applicants.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information is given in the Annexure-III to the Report.

19. PARTICULARS OF EMPLOYEES

Information required under section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules 1975 is given in the Annexure-IV to the Report.

20. AUDITORS

M/s. GSA & Associates, Chartered Accountants, New Delhi, were appointed as statutory auditors for conducting the audit for the year 2008-2009. M/s N. Sarkar & Co., Chartered Accountants, Kolkata, K.C. Bhattacherjee & Paul, Chartered Accountants, Kolkata, K.K. Ghei & Co., Chartered Accountants, New Delhi and M/s. O. P. Garg & Co., Jammu were appointed as branch auditors of the Company.

21. AUDITOR’S REPORT

The Auditor’s Report refers to various notes incorporated by the Corporation in Schedule 24, which are self- explanatory. The reports of the Statutory Auditors and comments of the Comptroller and Auditor General of India are enclosed as Annexure-V and VI respectively. The consolidated Financial Statement of the Company along with the Auditor’s Report is placed at

Annexure-VII.

22. COST AUDITORS

The following firms of Cost Auditors were appointed to conduct the audit of cost accounting records of Power Stations indicated against each firm for the financial year 2008-09 subject to the approval of the Central Government under Section 233-B of the Companies Act, 1956:-

Name of the Firm Name of Power Station

M/s. K. L. Jaisingh & Co.,Noida Uri-I & Dulhasti

M/s. K. G. Goyal & Associates, New Delhi Salal & CPS-I

M/s. S. K. Adya & Co., Faridabad Dhauliganga & Tanakpur

M/s. Jugal K Puri & Associates, New Delhi Bairasiul & CPS II

M/s. Mani & Co., Kolkata Rangit & Loktak

M/s. DGM & Associates, Kolkata Teesta-V

23. SUBSIDIARY COMPANY

The Annual Accounts along with the Report of Auditors’ and Directors’ Report of NHDC Ltd. are annexed along with the statement under Section 212 of Companies Act 1956. Details regarding the subsidiary are provided in Management Discussion and Analysis Report.

24. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm the following:

i) In the preparation of the Annual Accounts, the applicable accounting standards have been followed along with 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 Corporation at the end of the financial year and of the profit of the Corporation for that period.

iii) The Directors have 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 Corporation and for preventing and detecting fraud and other irregularities to the best of their knowledge and ability and

iv) The Directors have prepared the annual accounts on a going concern basis.

25. BOARD OF DIRECTORS

Since last Report Shri S. K. Dodeja, Director (Projects) superannuated from the services of the Corporation w.e.f. 31st July, 2008. Shri S. K. Chaturvedi, Director (Personnel), relieved from the services of the Company to join Power Grid Corporation of India Limited as its Chairman & Managing Director. Shri S. P. Sen, Director (Technical) has taken pre-mature retirement w.e.f. 8th May, 2008.

As reported in last report, five Independent Directors i.e. Smt. Komal Anand, Shri A. K. Mago, Shri Raman Sidhu, Shri R. Jeyaseelan and Dr. Kuriakose Mamkoottam have joined the Board of NHPC Limited. Shri K. Dharmarajan was also appointed on the Board of your Company as Independent Director. Shri D. P. Bhargava took over the charge of Director (Technical) on 26th March, 2009.

Shri J. K. Sharma, Director (Projects) and Shri R. S. Mina, Director (Personnel) joined your company on 10th April, 2009 and 28th April, 2009 respectively. Shri Gurdial Singh ceased to be a Director w.e.f. 22nd June, 2009.

At present, the Board of your company comprises the following Directors:

1. Shri S. K. Garg Chairman and Managing Director

2. Shri A. B. L. Srivastava Director (Finance)

3. Shri D. P. Bhargava Director (Technical)

4. Shri J. K. Sharma Director (Projects)

5. Shri R. S. Mina Director (Personnel)

6. Shri Jayant Kawale Director, Government Nominee

7. Shri A. K. Mago Independent Director

8. Smt. Komal Anand Independent Director

9. Shri Raman Sidhu Independent Director

10. Shri R. Jeyaseelan Independent Director

11. Dr. Kuriakose Mamkoottam Independent Director

12. Shri K. Dharmarajan Independent Director

ACKNOWLEDGEMENTS

The Board of Directors acknowledge, with deep appreciation, the cooperation and guidance received from the Government of India specially the Ministry of Power, State Government and their ministries, Departments / Boards, Bankers, Financial Institutions, lenders and investors. The Board places its appreciation for contributions of contractors, bankers, vendors and consultants for their efforts in timely completion of projects.

The Board places its special appreciation to the beneficiaries drawing power, State Electricity Boards and other valuable clients for consultancy assignments.

The Board places on record its deep appreciation for the cooperation extended by Statutory Auditors, Cost Auditors and Office of the Comptroller and Auditor General of India. Further, the Board wishes to record its deep gratitude to all the members of NHPC family for their whole hearted support. The Board is also confident that the employees will continue to contribute their best in the years to come.

For and On behalf of the Board of Directors

(S.K. Garg) Date : 25.07.2009 Chairman and Managing Director

Place: Faridabad DIN No. : 00055651