NTPC Subsidiary Companies Annual Report 2016-17 Company - NTPC Electric Supply Company Limited 2 A Maharatna Company NTPC ELECTRIC SUPPLY COMPANY LIMITED (A wholly owned subsidiary

NTPC Subsidiary Companies Annual Report 2016-17

A Maharatna Company

Shri K. Biswal, Director (Finance) receiving leading Infra Company Award for Excellent Financial and Operational performance from Shri Anil Swarup, the then Secretary (Coal) Government of India.

Achievements & Accolades

Shri S. Roy, Director (HR) receiving SCOPE Corporate Communication Excellence Award-2016 bestowed on NTPC for Brand Building.

Business Standard Star PSU Award presented by Shri Arun Jaitley, Hon’ble Union Finance Minister to Shri Gurdeep Singh, CMD, NTPC Limited.

Shri K.K. Sharma, Director (Operations) and Chairman NSPCL, receiving SCOPE Gold Trophy from Shri Pranab Mukherjee, the then Hon’ble President of India.

A Maharatna Company

1

A Maharatna Company

Contents

•NTPCElectricSupplyCompanyLimited.......................................................... 02

•NTPCVidyutVyaparNigamLimited................................................................. 39

•KantiBijleeUtpadanNigamLimited................................................................ 91

•BhartiyaRailBijleeCompanyLimited............................................................ 173

•Patratu Vidyut Utpadan Nigam Limited............................................................ 249

CONTENTS

Subsidiary Company - NTPC Electric Supply Company Limited

2

A Maharatna Company

NTPC ELECTRIC SUPPLY COMPANY LIMITED(A wholly owned subsidiary of NTPC Limited)

Directors’ Report

To

DearMembers,

Your Directors have pleasure in presenting the FifteenthAnnual Report on the working of the Company for thefinancial year ended on 31st March 2017 together withAuditedFinancialStatement,Auditors’ReportandReviewby the Comptroller & Auditor General of India for thereportingperiod.

FINANCIAL RESULTS

(`Lakh)

2016-17 2015-16

Total Revenue 0.30 140.48

TotalExpenses 16.48 4.37

Profit/(Loss) before Tax (16.18) 136.11

Taxexpenses 1.94 23.28

Profit/(Loss) after Tax (18.12) 112.83

DIVIDEND

During the financial year 2016-17, Directors have notrecommendedanydividend.

OPERATIONAL REVIEW

YourCompanyhastransferredandvestedallitsoperations,witheffectfromApril1,2015,toNTPCLimited,theholdingcompany.

Your Company was incorporated for the distributionbusinessandlaterstarteddepositandconsultancyworks.ThetransferandvestingofexistingoperationswouldenableafocusedbusinessapproachbytheCompanyintheareaofdistribution,theobjectiveforwhichyourCompanywasincorporated.

Although currently your Company does not have anybusinessoperations inretaildistribution,thesamewillbetaken-up at an appropriate time when the opportunitybecomesvisible.

Adetaileddiscussiononoperationsandperformancefortheyearisgivenin“ManagementDiscussionandAnalysis”,Annexure-Iincludedasaseparatesectiontothisreport.

FIXED DEPOSITS

YourCompanyhasnotacceptedanyfixeddepositduringthefinancialyearendedon31stMarch2017.

AUDITORS’ REPORT

The Comptroller & Auditor General of India (C&AG)appointed M/s. P.R.Kumar & Company, CharteredAccountantsastheStatutoryAuditorsofyourCompanyforthefinancialyear2016-17.

Thereisnoqualification,reservationoradverseremarkordisclaimerintheAuditors’ReportonfinancialstatementsoftheCompany.

Intheirreport,theStatutoryAuditorsofyourCompanyhavedrawn attention of themembers to the use of the goingconcern concept as brought out in Note 1, AccountingPolicies Part B read alongwith Note No.17 to the Notesto Financial Statementsof theCompany for the year. TheAuditors have mentioned that the parent company hastakenoverall theassetsand liabilitieson1stdayofApril2015,exceptBankBalances,AdvanceTaxesandIncomeTaxProvisions,athistoricalcostcarriedinthebooksofaccountsonthedateoftransferofsuchassetsandliabilitiesofyourCompany and these conditions alongwith other mattersset forth inNoteNo.17 indicate thematerialuncertaintyandthatmaycastsignificantdoubtaboutyourCompany’sabilitytocontinueasaGoingConcern.TheAuditorsfurthermention that however, the financial statements of yourCompanyhavebeenpreparedonagoingconcernbasisforthereasonsstatedinthesaidnote.

The shareholders of your Company in the Extra-OrdinaryGeneral Meeting held on March 24, 2015, inter alia,approved the proposal for transfer and vesting of alloperationsof your Company togetherwith all assets andliabilities relating to suchoperations toNTPC Limited, theholding company, with effect from April 1, 2015. Afterobtaining aforesaid approval, your Company enteredinto an agreement with NTPC Limited to implement suchtransfer. Accordingly, your Company does not have anyoperationsw.e.fApril1,2015.However,sincealltheassetsandliabilitiesweretransferredtoNTPCLimitedatthesamevaluesappearinginthebooksoftheCompanyasonMarch31,2015,alltheassetsandliabilitieswerereflectedinthesamemannerasdonepreviouslyasagoingconcern,i.e.,attheirbookvalues.AlthoughyourCompanydoesnothaveanybusinessoperationsinretaildistribution,thesamewillbetaken-upatanappropriatetimewhentheopportunitybecomesvisible.


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A Maharatna Company

C&AG REVIEW

The Comptroller and Auditor General (C&AG) of India,throughletterdatedJuly20,2017havecommunicatedthatbasedon the financial reportingby theManagementandthe independent audit carriedoutby StatutoryAuditors,C&AG has decided not to conduct the SupplementaryAuditof theFinancialStatementsof theCompany for theyearended31stMarch2017underSection143(6)(a)oftheAct.Acopyofthe letter issuedbyC&AGinthisregardisplacedafterreportofStatutoryAuditorsofyourCompany.

PARTICULARS OF EMPLOYEES

As per Notification dated June 5, 2015 issued by theMinistryofCorporateAffairs,GovernmentCompaniesareexempted from complyingwith the provisions of Section197oftheCompaniesAct,2013andcorrespondingrulesofChapterXIII.AsyourcompanyisaGovernmentcompany,the information has not been included as a part of theDirectors’Report.However,duringtheperiodunderreviewyourCompanyhadnofulltimeemployees.

DIRECTORS’ RESPONSIBILITY STATEMENT

AsrequiredunderSection134(3)(c)andSection134(5)oftheCompaniesAct,2013,yourDirectorsconfirmthat:

(i) in the preparation of the annual accounts, theapplicable accounting standards had been followedalong with proper explanation relating to materialdepartures;

(ii) the Directors had selected such accounting policiesand applied them consistently and made judgmentsandestimates thatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsofthecompanyattheendofthefinancialyear2016-17andofthelossofthecompanyforthatperiod;

(iii) the Directors had taken proper and sufficient carefor themaintenanceofadequateaccounting recordsin accordancewith the provisions of the CompaniesAct,2013forsafeguardingtheassetsofthecompanyand for preventing and detecting fraud and otherirregularities;

(iv) theDirectorshadpreparedtheannualaccountsonagoingconcernbasis;and

(v) the directors had devised proper system to ensurecompliancewith theprovisionsofallapplicable lawsand that such systemswere adequate andoperatingeffectively.

DIRECTORS

Duringthefinancialyearconsequentuponsuperannuation

from the services of NTPC Limited, Shri U. P. Pani (DIN:03199828),hasceasedtobetheDirectorofyourCompany.

The Board of Directors, consequent upon nominationreceived from NTPC Limited, appointed Shri SaptarshiRoy, (DIN: 03584600) Director (HR), NTPC Limited as anAdditionalDirectorwhoholdsofficeuptothedateofthisAnnual General Meeting and is eligible for appointment.TheCompanyhasreceivedarequisitenoticeinwritingfromNTPCLimited,proposinghiscandidature for theofficeofDirectorliabletoretirebyrotation.

TheBoardwishestoplaceonrecorditsdeepappreciationforthevaluableservicesrenderedbyShriU.P.PaniduringhisassociationwiththeCompany.

InaccordancewiththeprovisionsofCompaniesAct,2013,ShriGurdeepSingh,Chairman(DIN:00307037)shall retirebyrotationatthisAnnualGeneralMeetingofyourCompanyand,beingeligible,offershimselfforreappointment.

Number of meetings of the Board

During the financial year under review, 4meetingsof the

BoardofDirectorswereheldonthefollowingdates:

Date of Board Meeting Total strength of the

Directors

No. of Directors present

May17,2016 3 3

July28,2016 3 3

November16,2016 3 3

March3,2017 3 3

Thedetailsofthenumberofmeetingsattended,duringthefinancialyearunderreview,byeachdirectorareasfollows:

Name of the Director Designation Attendance during

2016-17

ShriGurdeepSingh Chairman 4outof4

ShriU.P.Pani(ceasedw.e.f31.10.2016)

Director 2outof2

ShriKulamaniBiswal Director 4outof4

ShriSaptarshiRoy(appointedw.e.f.16.11.2016)

Director 2outof2

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of theCompanies Act, 2013 and the Companies (Corporate


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A Maharatna Company

Social Responsibility Policy) Rules, 2014, your companyhas constituted the Corporate Social Responsibility (CSR)Committeeconsistingof3directors.

During the financial year under review, 2meetingsof theCSRcommitteewereheldonthefollowingdates:

Date of CSR Committee Meetings

Total strength of Directors


May17,2016 3 3

March28,2017 3 3

Thedetailsofthenumberofmeetingsattended,duringthefinancialyearunderreview,byeachdirectorareasfollows:

Name of the Director Designation Attendance during 2016-17

ShriGurdeepSingh Chairman 2outof2

ShriU.P.Pani(ceasedw.e.f31.10.2016)

Director 1outof1

ShriKulamaniBiswal Director 2outof2

ShriSaptarshiRoy(appointedw.e.f.16.11.2016)

Director 1outof1

Asper the requirementof Section135of theCompaniesAct, 2013 and Rule 8 (1) of the Companies (CorporateResponsibilityPolicy)Rules,2014theannualreportonCSRactivitiesisatAnnexure-II.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

Your company has not given any loans or guarantees ormade any investment covered under the provisions ofsection186oftheCompaniesAct,2013.

MATERIAL CHANGES AND COMMITMENTS

Nomaterial changes and commitments, have takenplacebetweenfinancialyearendedMarch31,2017,towhichthefinancial statements relate and thedate of this Directors’Report,whichaffectsthefinancialpositionofyourCompany.

EXTRACT OF ANNUAL RETURN

As per requirement of Section 92 (3), Section 134 (3) ofthe Companies Act, 2013 and Rule 12 of the Companies(ManagementandAdministration)Rules,2014,anextractoftheAnnualReturninformMGT-9isgivenunderAnnexure-III.

PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Your company has not entered into any contracts orarrangementswithrelatedpartiesduringthefinancialyear2016-17.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

During the financialyearunderreviewyourCompanydidnothaveanyoperationsandhasnosignificantparticulars,relating toconservationofenergy, technologyabsorptionunderRule8oftheCompanies(Accounts)Rules,2014.

During the period under review, there were no foreignexchangeearningsandexpenditureinforeigncurrency.

ACKNOWLEDGEMENT

The Board of Directors wishes to place on record itsappreciation for the support, contribution and co-operation extended by the Ministry of Power, variousstate governments, state utilities, customers, contractors,vendors,theAuditors,theBankersandNTPCLimited.

ForandonbehalfoftheBoardofDirectors

Sd/-(GURDEEP SINGH)

CHAIRMAN

DIN: 00307037

Place:NewDelhi

Date:July27,2017


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A Maharatna Company

Annexure-I

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

DISTRIBUTION

The electricity sector in India has been operated undera monolithic structure. With the growing requirementsfor improvement in the sector, variousmodels tobring inimprovementsand investments into the sectorhavebeencontemplated. Unbundling of the state electricity boardsinto functional companies is alreadya reality. Inorder tobring in accelerated improvements, further restructuringof the distribution segment is being contemplated.Restructuringcontemplatesbreakingdownthedistributionbusiness into smaller business units, with induction ofexpertise from private sector management, through -DistributionFranchiseeOperations.

Distributionandretailsupplyisthemostimportantcomponentinthepowersectorvaluechainwhichinterfaceswithendcustomersandprovidesrevenuefortheentirevaluechain.Sustenanceofothersectorlikemanufacturing&productionetc. is dependent on the commercial performance andfinancial viability of the distribution sector in India. Overthepast16-17years,anumberof stateshaveworked toimprovethecommercialperformanceoftheirstateutilities,unbundlingstateentities,creating independentregulatorysystems, and putting in place measures to control lossesandtheft.However,progresshasbeendifficultandslowerthanenvisaged.

There is substantial potential for reform and growth indistribution sector where industrial and commercialconsumers are willing to pay commensurate tariffs forquality and reliablepowerwhereasDiscomsdue to theirpoorfinancialconditionareunabletopurchasepowerandservicethecustomers.Keepingthisinmind,yourCompanyis contemplating for acquisition of distribution circleseither through franchisee biddingmode/ PPP or throughacquisitiononnominationbasis.

STRENGTH AND WEAKNESS

YourCompany’sstrengthliesinitsassociationwithastrongpromoterviz.NTPCLimitedhavingaformidabletrackrecordinpowerproject,engineering,construction,commissioning,operationandmaintenanceformorethan40years.NTPC’sformidablenetwork,rapportandcredibilitywithcustomerutilities,Discoms,itsdownstreampowermarketandtradingarmareaddedadvantagestoyourCompany.

OPPORTUNITIES AND OUTLOOK

TheElectricityAct,2003andGovernmentofIndiaschemefor Financial Restructuring of State owned Distribution

Companies for financial turnaround by restructuringtheir debt with support through a Transitional FinanceMechanism,hasprovidedanopportunitytoyourCompanytogetinvolvedaggressivelyindistributionbusinessincitiesand other areas. In the Financial Restructuring program,involvementofprivateparticipationinanymodehasbeenmadeamandatoryconditionforgettingfinancialassistancefromgovernment.Tobringincompetitionandefficiencyinthesupplyofelectricitywithmorethanonesupplylicenseeoffering supply of electricity to consumers in the samearea, separation of carriage (wire network) and content(electricity)inthedistributionsectorisbeinglookedatbytheGovernmentof India.MinistryofPower isplanningtointroducemultiplesupplylicenseesinthecontent(electricitysupplybusiness)basedonmarketprinciples.InthisregardPower Ministry has proposed various amendments incertainsectionsoftheElectricityAct,2003.Theproposedamendments will mandate distribution licensees to onlyoperateandmaintainthedistributionsystem(wirebusiness)withnoconcernforcommercialsupplyofelectricity.YourCompany is continuously looking into theseopportunitiesformakingafootprintinthischangedscenarioofelectricitydistributionbusinessasDistributionNetworkOperatorandsupplylicenseeaswell.

RISKS AND CONCERNS

SofarthemainthrustareaofyourCompanywasonprojectimplementation ondepositwork basis under RGGVY. Butsubsequent to the transfer of all business operations toNTPC,allmanpowerhasbeenrepatriatedbacktoNTPC.

Although new Electricity Act, 2003 provides ampleopportunities to new players in the field of retaildistributionbutinrealitythestateownedDiscomshavenotimplementedthesameinspirit.TheActenvisagedgrowthofelectricitydistributionbusinessthroughprivatelicensees,introduction of open access and phased withdrawal ofcross subsidy. But, so far, these goals are quite far fromrealization.Therefore,oneofthemajorrisksanticipatedbyyourCompanyisinabilitytomakeaperceptiblepresenceinthedistributionsectorunderprevalentscenario.

YourCompanybeingthewhollyownedsubsidiaryofNTPCLimitedisgovernedbytheframeworkofRiskManagementinNTPCLimited.Keyrisksareregularlymonitoredthroughreportingofkeyperformanceindicatorsofidentifiedrisks.

INTERNAL CONTROL

YourCompanyhasadequate internalcontrol systemsandprocedures in place commensurate with the size andnatureofitsbusiness.CurrentlyyourCompanyisnothaving


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A Maharatna Company

any business operations but your Company has adoptedtheinternalcontrolsystemofitsholdingcompanyviz.NTPCLimited.Duringthedaysofbusinessoperations,authoritiesvested in various levelswereexercisedwithin frameworkofappropriatechecksandbalances. TheeffectivenessofthechecksandbalancesandinternalcontrolsystemswerereviewedduringinternalauditcarriedoutbyInternalAuditDepartmentofNTPCLimited.Anindependentinternalauditwas also carried out by experienced firm of CharteredAccountantsincloseco-ordinationwithdepartmentsoftheCompanyand InternalAuditDepartmentofNTPCLimited.As the systems andproceduresof Internal control are inplace,thesamewillgetactivatedastheCompanystartsitsbusinessoperations.

PERFORMANCE DURING THE YEAR

Operations

Currently the Company does not have any businessoperationsinretaildistribution,thesamewillbetaken-upatanappropriatetimewhentheopportunitybecomesvisible.

Financial Performance

During the financial year under review the Company didnot have any operations and the main revenue of yourCompany is derived from Interest on bank deposits andmiscellaneousreceipts.

(`Lakh)

2016-17 2015-16RevenuesfromOperations - -Otherincome 0.30 140.48Total 0.30 140.48

The expenditure incurred by your Company on accountofOtherexpensesforthecurrentfinancialyearaswellaspreviousfinancialyearisasfollows:

(`Lakh)

2016-17 2015-16

Otherexpenses 16.48 4.37

Total operating expenses 16.48 4.37

The increase in expensesweremainlyonaccountof CSRexpenditurerequiredaspertheCompaniesAct,2013.

(`Lakh)

2016-17 2015-16

Profit/(Loss) before tax (16.18) 136.11

Taxexpenses 1.94 23.28

Profit /(Loss) for the year (18.12) 112.83

Duringthecurrentfinancialyear,theCompanyhasincurredalossof`18.12lakhascomparedtoprofitof`112.83Lakhduringthepreviousfinancialyear.

Reserves & Surplus

During the current financial year, a sum of (`18.12) LakhhasbeenadjustedtoReservesandSurplusascomparedto`112.83Lakhtransferredduringthepreviousyear.

Current Assets

The current assets at theendof the financial year underreviewwere `17.65 Lakh as compared to `17.35 Lakh inpreviousyear.

(`Lakh)

31.3.2017 31.3.2016Tradereceivables - -Cashandcashequivalent 17.65 17.35Otherfinancialassets - -Othercurrentassets - -Total Current Assets 17.65 17.35

The increase in current assets was mainly on account ofincrease in cash and cash equivalent due to receipt ofinterestincome.

Current Liabilities

During the financial year 2016-17, current liabilities haveincreasedto`3528.58Lakhascomparedto`3504.40Lakhinthefinancialyear2015-16mainlyonaccountofincreaseinotherfinancialliabilitiesrelatingtodepositworks.

(`Lakh)

31.3.2017 31.3.2016Tradepayables - -Otherfinancialliabilities 3528.58 3504.40Othercurrentliabilities - -Total Current Liabilities 3528.58 3504.40

Cash Flow Statement

(`Lakh)

2016-17 2015-16

Opening Cash and cashequivalents

17.35 50961.40

Net cash from operatingactivities

- (51142.31)

Net cash from investingactivities

0.30 198.26

Net cash flow from financing activities

- -

Net Change in Cash and cash equivalents

0.30 (50944.05)

Closing cash and cash equivalents

17.65 17.35


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A Maharatna Company

TheclosingcashandcashequivalentsforthefinancialyearendedMarch31,2017hasincreasedto`17.65Lakhfrom`17.35Lakh.

Financial Indicators

Thevariousperformanceindicatorsforthecurrentyearascomparedtopreviousyearareasunder:

2016-17 2015-16

Capitalemployedin`Lakh 4246.80 4264.92

Networthin`Lakh 4246.80 4264.92

Returnoncapitalemployed(PBT/CE)

(0.38%) 3.19%

Return on net worth (PAT/NW)

(0.43%) 2.65%

Dividend as % of equitycapital

- -

Earningpersharein` (22.40) 139.45

Thecapitalemployedaswellasnetworthhasdecreasedduetolossincurredduringthefinancialyear2016-17.

PROCUREMENT FROM MSEs

Your Company does not have any operations during thefinancialyearunderreview,hencenoprocurementofgoodsandservicesweremadefromMicroandSmallEnterprises(MSEs)(includingMSEsownedbySC/STentrepreneurs),asrequiredunderthePublicProcurementPolicyforMicroandSmallEnterprises,Order,2012.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE.

Duringthefinancialyearunderreviewthecompanydidnothaveanyemployee.Sinceincorporationalltheemployeesof the companywereon secondmentbasis fromholdingcompanyviz.NTPCLimited.Inlinewiththerequirementof

SexualHarassmentofWomenattheWorkplace(Prevention,Prohibition & Redressal) Act, 2013, all the employeeswere regulated under the NTPC’s Policy on Prevention,ProhibitionandRedressalofSexualHarassmentofWomenatWorkplace.

HUMAN RESOURCES

Ason31stMarch2017,therewerenoemployeespostedonsecondmentbasisfromholdingcompanyvizNTPCLimited.The NESCL manpower structure/resource is reviewedfrom time to time to align itwith the requirements of itsassignments.

CAUTIONARY STATEMENT

Statements in the Management Discussion and AnalysisdescribingtheCompany’sobjectives,projections,estimatesand expectations are “forward-looking” statementswithinthe meaning of applicable laws and regulations. Actualresults may vary materially from those expressed orimplied. Important factors that could make a differencetotheCompany’soperationsincludeeconomicconditionsaffecting demand/supply and price conditions in themarkets in which the Company operates, changes inGovernment regulations & policies, tax laws and otherstatutesandincidentalfactors.

ForandonbehalfoftheBoardofDirectors

Sd/-(GURDEEP SINGH)

CHAIRMAN

DIN: 00307037

Place:NewDelhi

Date:July27,2017


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A Maharatna Company

“AnnexureII”

1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

KeepinginviewthesizeoftheCompanyandmanpowerrequiredforexecutingtheCSRactivities,yourCompanyhas adopted the CSR policy of its holding companyviz. NTPC Limited and also undertaking CSR activitiesthroughNTPCLimited.

NTPCLimitedisexecutingtheCSRactivitiesforlongandhavingaformidableset-upforexecutingCSRactivities.TheCSRPolicyofNTPCLimited is formulatedkeepinginviewtherequirementsoftheCompaniesAct,2013and the Department of Public Enterprises. The CSRpolicy focused on Health, Sanitation, DrinkingWater,Education, Capacity Building, Women Empowerment,SocialInfrastructureDevelopment,supporttoPhysicallyChallenged Person (PCPs), and activities contributingtowardsEnvironmentSustainabilityandother subjectmatterdescribedunderscheduleVIIoftheCompaniesAct,2013.

2. The Composition of the CSR Committee.

Name of the Director Designation

ShriGurdeepSingh Chairman

ShriKulamaniBiswal Director

ShriSaptarshiRoy Director3. Average net profit of the company for last three

financial years. The average net profit of the Company for three

immediately preceding financial years i.e. 2013-14,2014-15and2015-16is`750Lakh.

4. Prescribed CSR Expenditure. TheCompanyaspertherequirementoftheCompanies

Act,2013,isrequiredtospend2%of`750Lakhi.e.`15Lakhinthefinancialyear2016-17.

5. Details of CSR spent during the financial year 2016-17.

(a) Total amount spent forthefinancialyear

: 16.16Lakh

(b) Amountunspent,ifany : Nil

(c) Manner in which theamountspentduringthefinancialyear

: Detailedbelow

(1) (2) (3) (4) (5) (6) (7) (8)

S.No CSR project or activity identified.

Sector in Which the Project is covered.

Projects or Programs (1) Local area or other

(2) Specify the State and the district where projects or progams was undertaken.

Amount outlay (budget) Project or Programs wise

Amount spent on the Projects or programs Sub-heads: (1) Direct expenditure on projects or programs-

(2) Overheads:

Cumulative expenditure upto to the reporting period.

Amount spent: Direct or through implementing agency

1. ProvidingDualDeskBenchesinSchools

Education Ramagundam,Dist.Karimnagar,Telangana

`16.16Lakh `16.16Lakh `16.16Lakh Direct

6. Reasons for not spending two per cent of the average net profit of the last three financial years or any part thereof.

NotApplicable

7. A responsibility statement of the CSR Committee

TheResponsibilityStatementoftheCorporateSocialResponsibilityCommitteeisreproducedbelow:

TheimplementationandmonitoringofCorporateSocialResponsibilityPolicy,isincompliancewithCSRobjectivesandpolicyoftheCompany.

For and on behalf of the Board of Directors

Sd/- (GURDEEP SINGH) CHAIRMAN DIN: 00307037Place:NewDelhiDate:July27,2017


9

A Maharatna Company

“AnnexureIII”

Form No. MGT-9Extract of Annual Return

as on the financial year ended on March 31, 2017

[Pursuanttosection92(3)oftheCompaniesAct,2013andrule12(1)oftheCompanies(ManagementandAdministration)Rules,2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN : U40108DL2002GOI116635

ii) RegistrationDate : August21,2002

iii) NameoftheCompany : NTPCElectricSupplyCompanyLimited

iv) Category/Sub-CategoryoftheCompany : CompanyLimitedbyshares

v) AddressoftheRegisteredofficeandcontactdetails : NTPCBhawan,Core7,SCOPEComplex,7, Institutional Area, Lodi Road, NewDelhi-110003,Ph.No.011-24360071

vi) WhetherlistedcompanyYes/No : NO

vii) Name,AddressandContactdetailsofRegistrarandTransferAgent,ifany : N.A.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Allthebusinessactivitiescontributing10%ormoreofthetotalturnoverofthecompanyshallbestated:-

Sl. No.

Name and Description of main products/Services

NIC code of the Product/service % to total turnover of the company

1. N.A N.A. N.A.

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES –

S. No.

Name and address of the Company

CIN/GLN Holding/ Subsidiary/Associate

% of shares held

Applicable Section

1. NTPCLimited

NTPCBhawan,Core7,SCOPEComplex,7,InstitutionalArea,LodhiRoad,NewDelhi-110003

L40101DL1975GOI007966 Holding 100 Section2(46)oftheCompaniesAct,2013

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

Category of Shareholders

No. of Shares held at the beginning of the year

No. of shares held at the end of the year % Change during

the yearDemat Physical Total % of Total

shares

Demat Physical Total % of Total

sharesA. Promoters

(1) Indiana) Individual/HUF - - - - - - - - -b) CentralGovt. - - - - - - - - -c) StateGovt.(s) - - - - - - - - -d) BodiesCorp. - 80,210 80,210 99 - 80,210 80,210 99 - (NTPC Limited)e) Banks/FI - - - - - - - - -


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A Maharatna Company





shares


sharesf) AnyOther

(Nominees of NTPC)

- 700 700 1 - 700 700 1 -

Sub-total (A) (1):- - 80,910 80,910 100 - 80,910 80,910 100 -(2) Foreigna) NRIs-

individuals- - - - - - - - -

b) Other-Individuals

- - - - - - - - -

c) BodiesCorp. - - - - - - - - -d) Banks/FI - - - - - - - - -e) AnyOther…. - - - - - - - - -Sub-total (A) (2):- - - - - - - - - -Total shareholding of Promoter (A) = (A)(1) + A(2)

- 80,910 80,910 100 - 80,910 80,910 100 -

B. Public Shareholding1. Institutionsa) MutualFunds - - - - - - - - -b) Banks/FI - - - - - - - - -c) CentralGovt. - - - - - - - - -d) StateGovt.(s) - - - - - - - - -e) VentureCapital

Funds- - - - - - - - -

f) InsuranceCompanies

- - - - - - - - -

g) FIIs - - - - - - - - -h) Foreign

VentureCapitalFunds

- - - - - - - - -

i) Others(specify) - - - - - - - - -Sub-total (B) (1):- - - - - - - - - -2. Non-institutionsa) BodiesCorp.i) Indian - - - - - - - - -ii) Overseas - - - - - - - - -b) Individualsi) Individual

Shareholdersholdingnominalsharecapitalupto`1lakh

- - - - - - - - -


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A Maharatna Company





shares


sharesii) Individuals

shareholdersholdingnominalsharecapitalinexcessof`1lakh

- - - - - - - - -

c) Others(specify) - - - - - - - - -Sub-total (B) (2):- - - - - - - - - -Total Public Shareholding (B)=(B)(1)+(B) (2)

- - - - - - - - -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total (A+B+C) - 80,910 80,910 100 - 80,910 80,910 100 -

(ii) Shareholding of Promoters

Sl No.

Shareholder’s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

No. of Shares

% of total Shares of the

company

% of Shares Pledged /

encumbered to total shares

No. of shares


company



% change in the

shareholding during the

year

1. NTPCLimited 80,210 99 - 80,210 99 - -

2. NomineeofNTPC 700 1 - 700 1 - -

(iii) Change in Promoters’ Shareholding (please specify, if there is no change)

Sl No.


Cumulative shareholding during the year

No. of Shares % of total Shares of the

company

No. of shares % of total Shares of the

company

Atthebeginningoftheyear 80,910 100 80,910 100

Date wise Increase / Decrease in PromotersShareholding during the year specifying thereasonsforincrease/decrease(e.g.allotment/transfer/bonus/sweatequityetc.):

Nochange Nochange Nochange Nochange

AttheEndoftheyear 80,910 100 80,910 100


12

A Maharatna Company

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, promoters and Holders of GDRs and ADRs)

Sl No.

For each of Top 10 shareholders Shareholding at the beginning of the year



company


company

Atthebeginningoftheyear - - - -

Datewise Increase / Decrease in Shareholdingduring the year specifying the reasons forincrease/decrease (e.g. allotment / transfer /bonus/sweatequityetc.):

- - - -

At the End of the year ( or on the date ofseparation,ifseparatedduringtheyear)

- - - -

(v) Shareholding of Directors and Key Managerial Personnel:

Sl No.

For each of the Directors and KMP Shareholding at the beginning of the year



company


company1. Shri Gurdeep Singh, Chairman

(As Nominee of NTPC Limited)Atthebeginningoftheyear 100 - 100 -Datewise Increase / Decrease in Shareholdingduring the year specifying the reasons forincrease/decrease (e.g. allotment / transfer /bonus/sweatequityetc.):


AttheEndoftheyear 100 - 100 -2. Shri U.P.Pani, Director

(As Nominee of NTPC Limited)Atthebeginningoftheyear 100 - 100 -Datewise increase / decrease in Shareholdingduring the year specifying the reasons forincrease / decrease (e.g. allotment / transfer/bonus/sweatequityetc):


CeasedtobeDirectorw.e.f31/10/2016 100 - 100 -3. Shri Kulamani Biswal, Director

(As Nominee of NTPC Limited)Atthebeginningoftheyear 100 - 100 -Datewise increase / decrease in Shareholdingduring the year specifying the reasons forincrease / decrease (e.g. allotment / transfer/bonus/sweatequityetc):


AttheEndoftheyear 100 - 100 -4. Shri Saptarshi Roy

(As Nominee of NTPC Limited)Atthebeginningoftheyear - - - -Equitysharestransferredon28.07.2016,asnomineeofNTPC

100 - 100 -

Attheendoftheyear 100 - 100 -


13

A Maharatna Company

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrue but not due for payment

Secured Loans excluding deposits

Unsecured Loans

Deposits Total Indebtedness

Indebtedness at the beginning of the financial year - - - -

i) PrincipalAmount - - - -

ii) Interestduebutnotpaid - - - -

iii) Interestaccruedbutnotdue - - - -

Total (i + ii + iii) - - - -

ChangeinIndebtednessduringthefinancialyear

• Addition

• Reduction - - -

Net Change - - - -

Indebtedness at the end of the financial year - - - -

i) Principalamount - - - -

ii) Interestduebutnotpaid - - - -

iii) Interestaccruedbutnotdue - - - -

Total ( i + ii + iii) - - - -

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. RemunerationtoManagingDirector,Whole-timeDirectorsand/orManager:

Sl. No.

Particulars of Remuneration Name of MD/WTD /Manager Total Amount

1. Gross Salary - - - - -

(a) Salary as per provisions contained insection17(1)oftheIncome-taxAct,1961

- - - - -

(b) Value of perquisites u/s 17(2) of theIncome-taxAct,1961

- - - - -

(c) Profits in lieu of salary under section17(3)oftheIncome-taxAct,1961

- - - - -

2. StockOption - - - - -

3. SweatEquity - - - - -

4. Commission - - - - -

-as%ofprofit -

-others,specify… -

5. Others,pleasespecify - - - - -

Total(A) - - - - -

CeilingaspertheAct - - - - -


14

A Maharatna Company

B. Remuneration to other directors:

Sl. No.

Particulars of Remuneration Name of Directors Total Amount

1. Independent Directors - - - - -

• Fee for attending board committeemeetings

• Commission

• Others,pleasespecify

Total(1) - - - - -

2. Other Non-Executive Directors - - - - -


• Commission


Total(2) - - - - -

Total(B)=(1+2) - - - - -

TotalManagerialRemuneration - - - - -

OverallCeilingaspertheAct - - - - -

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD

Sl. No.

Particulars of Remuneration Key Managerial Personnel

CEO Company secretary

CFO Total

1. GrossSalary N.A N.A N.A N.A

(a) Salaryasperprovisionscontainedinsection17(1)oftheIncome-taxAct,1961

N.A N.A N.A N.A

(b) Valueofperquisitesu/s17(2)of the Income-taxAct,1961

N.A N.A N.A N.A

(c) Profits in lieu of salary under section 17(3) of theIncome-taxAct,1961

N.A N.A N.A N.A

2. StockOption N.A N.A N.A N.A

3. SweatEquity N.A N.A N.A N.A

4. Commission -as%ofprofit N.A N.A N.A N.A

-others,specify

5. Others,pleasespecify N.A N.A N.A N.A

Total N.A N.A N.A N.A


15

A Maharatna Company

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type Section of the companies act

Brief description Details of Penalty /

Punishment / Compounding fees imposed

Authority (RD / NCLT / COURT)

Appeal made, if any (give

details)

A. COMPANY

Penalty - - - - -

Punishment - - - - -

Compounding - - - - -

B. DIRECTORS

Penalty - - - - -



C. OTHER OFFICERS IN DEFAULT

Penalty - - - - -




Sd/- (GURDEEP SINGH) CHAIRMAN DIN: 00307037

Place:NewDelhiDate:July27,2017


16

A Maharatna Company

NTPC ELECTRIC SUPPLY COMPANY LIMITEDBALANCE SHEET AS AT 31ST MARCH 2017

(Acountsin` Lakhs)Particulars NoteNo. As at

31.03.2017Asat

31.03.2016Asat

01.04.2015ASSETSNon-current assets

Property,plant&equipment 2 - - 38.69Intangibleassets 2 - - 0.57FinancialAssetsInvestments 3 - - 5.00Othernon-currentassets 4 7,757.73 7,751.97 5,361.00

Total non-current assets 7,757.73 7,751.97 5,405.26

Current assets Financial assets

Tradereceivables 5 - - 3,467.27Cashandcashequivalent 6 17.65 17.35 50,961.40Otherfinancialassets 7 - - 4,539.61Othercurrentassets 8 - - 98.34

Total current assets 17.65 17.35 59,066.62

TOTAL ASSETS 7,775.38 7,769.32 64,471.88

EQUITY AND LIABILITIESEquity

Equitysharecapital 9 8.09 8.09 8.09Otherequity 10 4,238.71 4,256.83 4,144.00

Total equity 4,246.80 4,264.92 4,152.09

LiabilitiesCurrent liabilities

FinancialliabilitiesTradepayables 11 - - 1,900.86Otherfinancialliabilities 12 3,528.58 3,504.40 1,725.78

Othercurrentliabilities 13 - - 56,693.15Total current liabilities 3,528.58 3,504.40 60,319.79

TOTAL EQUITY AND LIABILITIES 7,775.38 7,769.32 64,471.88SignificantAccountingPolicies 1Theaccompanyingnotes1to22formanintegralpartofthesefinancialstatements.

ThisistheBalanceSheetreferredtoinourreportofevendate.


For M/S. P R KUMAR & CO.CharteredAccountantsFirmRegNo-003186N

(Rahul Kathuria) (Animesh Jain) (Kulamani Biswal) (Gurdeep Singh)PartnerM.No.090657

ChiefExecutiveOffice Director Chairman

Place:NewDelhiDate:18thMay2017


17

A Maharatna Company

(Amountin`Lakhs)

Particulars NoteNo. For the year ended 31.03.2017

Fortheyearended31.03.2016

Revenue

Otherincome 14 0.30 140.48

Totalrevenue 0.30 140.48

Expenses

Otherexpenses 15 16.48 4.37

Totalexpenses 16.48 4.37

Profit /(Loss)before tax (16.18) 136.11

Tax expense

Currenttax

Currentyear - 23.28

Earlieryears 1.94 -

Total tax expense 1.94 23.28

Profit/(Loss) for the year (18.12) 112.83

Other comprehensive income/ (Loss)

Other comprehensive income /(Loss)for the year, net of income tax - -

Total comprehensive income for the year (18.12) 112.83

Significantaccountingpolicies 1

Earnings per equity share (Par value `10/- each) 18

Basic&Diluted(`) (22.40) 139.45

Theaccompanyingnotes1to22fromanintegralpartofthesefinancialstatements.

ThisistheStatementofProfit&Lossreferredtoinourreportofevendate.






NTPC ELECTRIC SUPPLY COMPANY LIMITEDSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2017


18

A Maharatna Company

NTPC ELECTRIC SUPPLY COMPANY LIMITEDCASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017

(Amountin`Lakhs)31.03.2017 01.04.2016

A. CASH FLOW FROM OPERATING ACTIVITIESNet Profit/(Loss) before tax (16.18) 136.11Adjustment for:Depreciation - -Provisions - -InterestReceived (0.30) (128.01)Operating Profit before Working Capital Changes (16.48) 8.10Adjustment for: Trade & Other Receivables - 3,467.27Trade Payables & Other Liabilities 24.18 (56,815.38)Other Current Assets - 4,611.94Loans&Advances - 24.18 -Cash generated from operations 7.70 (48,728.06)Direct Taxes Paid 7.70 2,414.25Net Cash from Operating Activities - A 0.00 (51,142.31)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase/SaleofFixedAssets - 39.25InterestReceived 0.30 128.01InvestmentinJointVenture - 31.00Net cash flow from Investing Activities - B 0.30 198.26

C. CASH FLOW FROM FINANCING ACTIVITIESDividendPaid - -TaxonDividend - -Net Cash flow from Financing Activities - C - -Net Increase/Decrease in Cash & Cash equivalents (A + B + C) 0.30 (50,944.05)Cash & cash equivalents (Opening balance) (see Note below) 17.35 50,961.40Cash & cash equivalents (Closing balance) (see Note below) 17.65 17.35

NOTESCash and Cash Equivalents consist of Balancewith Banks. Cash and cash equivalents included in the cash flowstatementcompriseoffollowingbalancesheetamountsasperNote6&6A:

Cashandcashequivalents 11.23 17.35Demanddepositincludedinotherbankbalance 6.42 -

17.65 17.35


IntermsofourAuditReportattachedFor M/S. P R KUMAR & CO.CharteredAccountantsFirmRegNo-003186N





19

A Maharatna Company

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20

A Maharatna Company

Note No.1 - Significant Accounting Policies

1 Company Information

A. Reporting Entity

NTPCElectricSupplyLimited(the“Company”)isaCompanydomiciledinIndiaandlimitedbyshares(CIN: U40108DL2002GOI116635). The address ofthe Company’s registeredoffice isNTPC Bhawan,SCOPE Complex, 7 Institutional Area, Lodi Road,NewDelhi-110003.ThecompanyiswhollyownedbyNTPCLimited.TheCompanywasincorporatedfor the distribution business and later starteddeposit and consultancy works, all operationsof which have been transferred to the parentCompanyw.e.f01.04.2015.

B. Basis of preparation

1 Statement of Compliance

These separate financial statements arepreparedonaccrualbasisofaccountingandcomplyinallmaterialaspectswiththeIndianAccountingStandards(IndAS)notifiedundertheCompanies(IndianAccountingStandards)Rules, 2015 and subsequent amendmentsthereto, and the Companies Act, 2013 (tothe extent notified and applicable). Theseare the Company’s first Ind AS compliantfinancialstatementsandIndAS101‘FirstTimeAdoptionofIndianAccountingStandards’hasbeenapplied.

Foralltheperiodsuptoandincluding31March2016, the Company prepared its financialstatements in accordance with GenerallyAccepted Accounting Principles (GAAP) inIndia, accounting standards specified underSection133oftheCompaniesAct,2013.TheCompany followed the provisions of Ind AS101 inpreparing itsopening IndASBalanceSheetasofthedateoftransition,viz.1April2015

The impact of transition to Ind AS has onthe reported financial position, financialperformanceandcashflowsoftheCompanyhave been discussed at Note no. 16 to theFinancialStatements.

2 Basis of Measurement

Thefinancialstatementshavebeenpreparedon the historical cost basis as prescribedunderIndAS101exceptotherwisestated.

3 Functional and Presentation Currency

These financial statements are presented inIndian Rupees (INR),which is the Company’sfunctionalcurrency.

4 Current and non-current classification

The Company presents assets and liabilitiesin the balance sheet based on current/non-currentclassification.

Anassetiscurrentwhenitis:

• Expected to be realized or intended tobesoldorconsumedinnormaloperatingcycle;

• Expected to be realized within twelvemonthsafterthereportingperiod;or

• Cashorcashequivalentunlessrestrictedfrombeing exchangedor used to settlealiabilityforatleasttwelvemonthsafterthereportingperiod.

All other assets are classified as non-current.

Aliabilityiscurrentwhen:

• It is expected to be settled in normaloperatingcycle;

• It is due to be settled within twelvemonthsafterthereportingperiod;or

• There is no unconditional right to defersettlement of the liability for at leasttwelvemonthsafterthereportingperiod.

All other liabilities are classified as non-current.

C. Significant Accounting Policies

A summary of the significant accounting policiesapplied in the preparation of the financialstatements are as givenbelow. These accountingpolicies have been applied consistently to allperiodspresentedinthefinancialstatements.

The Company has elected to utilize the optionunder IndAS101bynotapplyingtheprovisionsof Ind AS 16 (Property, Plant and Equipment)& Ind AS 38(Intangible Assets) retrospectivelyandcontinue touse thepreviousGAAPcarryingamount as a deemed cost under Ind AS at thedateoftransitiontoIndAS.Therefore,thecarryingamount of property, plant and equipment andintangibleassetsasperthepreviousGAAPasat1April2015,i.e;theCompany’sdateoftransitiontoIndAS,weremaintainedontransitiontoIndAS.

1 Property, Plant & Equipment

1.1 Initial Recognition and Measurement

Itemsofproperty,plant andequipmentare measured at cost less accumulateddepreciation/ amortization andaccumulated impairment losses. Cost


21

A Maharatna Company

includes expenditure that is directlyattributable to bringing the asset to thelocationandconditionnecessaryforittobe capable of operating in the mannerintendedbymanagement.

1.2 Derecognition

Property, plant and equipment isderecognizedwhenno futureeconomicbenefits are expected from their useorupontheirdisposal.Gainsandlossesondisposalofanitemofproperty,plantandequipmentaredeterminedbycomparingthe proceeds from disposal with thecarrying amount of property, plant andequipment, and are recognized in thestatementofprofitandloss.

1.3 Depreciation / Amortisation

Depreciation is recognized in statementofprofitand lossonastraight-linebasisover the estimated useful lives of eachpart of an item of property, plant andequipment.

Depreciation on the following assets isprovided on their estimated useful lifeascertainedontechnicalevaluation:

a) Photocopiers and Fax Machines:5years

b) Water coolers and refrigerators:5years

Depreciationonadditionsto/deductionsfromproperty,plant&equipmentduringthe year is charged on pro-rata basisfrom/uptothemonthinwhichtheassetisavailableforuse/disposed.

Whereitisprobablethatfutureeconomicbenefits deriving from the cost incurredwill flow to the enterprise and the costof the item can be measured reliably,subsequentexpenditureonaPPEalong-withitsunamortizeddepreciableamountis charged off prospectively over therevisedusefullifedeterminedbytechnicalassessment.

2 Cash and Cash Equivalents

Cash and cash equivalents in the balance sheetcomprise cash at banks andonhand and short-term deposits with an original maturity of threemonthsorless,whicharesubjecttoaninsignificantriskofchangesinvalue.

3 Provisions and Contingent Liabilities

A provision is recognized if, as a result of apast event, the Company has a present legal orconstructive obligation that can be estimatedreliably, and it is probable that an outflow ofeconomic benefitswill be required to settle theobligation.Iftheeffectofthetimevalueofmoneyismaterial,provisionsaredeterminedbydiscountingthe expected future cash flows at apre-tax ratethat reflects current market assessments of thetimevalueofmoneyandtherisksspecifictotheliability. When discounting is used, the increasein the provision due to the passage of time isrecognizedasafinancecost.

Theamountrecognizedasaprovisionisthebestestimateoftheconsiderationrequiredtosettlethepresent obligation at reporting date, taking intoaccount the risks and uncertainties surroundingtheobligation.

Whensomeoralloftheeconomicbenefitsrequiredtosettleaprovisionareexpectedtoberecoveredfromathirdparty,thereceivableisrecognizedasanassetifitisvirtuallycertainthatreimbursementwillbereceivedandtheamountofthereceivablecanbemeasuredreliably.Theexpenserelatingtoaprovisionispresentedinthestatementofprofitandlossnetofanyreimbursement.

Contingent liabilitiesarepossibleobligations thatarise from past events andwhose existencewillonly be confirmed by the occurrence or non-occurrence of one or more future events notwhollywithinthecontroloftheCompany.Whereit is not probable that an outflow of economicbenefitswill be required, or the amount cannotbe estimated reliably, the obligation is disclosedasacontingent liability,unless theprobabilityofoutflowofeconomicbenefitsisremote.Contingentliabilities are disclosed on the basis of judgmentof the management/independent experts. Theseare reviewed at each balance sheet date andare adjusted to reflect the current managementestimate.

4 Revenue

TheCompany’srevenuesarisefromother incomecomprisinginterestfrombankwhichisrecognized,whennosignificantuncertaintyastomeasurabilityorcollectabilityexists,onatimeproportionbasistaking into account the amount outstanding andtheapplicableinterestrate.

5 Income Tax

Income tax expense comprises current anddeferredtax.Currenttaxexpenseisrecognizedin


22

A Maharatna Company

profitorlossexcepttotheextentthatitrelatestoitemsrecognizeddirectlyinothercomprehensiveincomeorequity,inwhichcaseitisrecognizedinOCIorequity.

Current tax is the expected tax payable on thetaxableincomefortheyear,usingtaxratesenactedorsubstantivelyenactedandasapplicableatthereportingdate,andanyadjustmenttotaxpayableinrespectofpreviousyears.

Deferredtaxisrecognizedusingthebalancesheetmethod, providing for temporary differencesbetween the carrying amounts of assets andliabilitiesforfinancialreportingpurposesandtheamounts used for taxation purposes. Deferredtaxismeasuredatthetaxratesthatareexpectedto be applied to temporary differences whenthey reverse, based on the laws that have beenenactedorsubstantivelyenactedbythereportingdate.Deferredtaxassetsandliabilitiesareoffsetifthereisalegallyenforceablerighttooffsetcurrenttaxliabilitiesandassets,andtheyrelatetoincometaxesleviedbythesametaxauthorityonthesametaxable entity, but they intend to settle currenttaxliabilitiesandassetsonanetbasisortheirtaxassetsandliabilitieswillberealizedsimultaneously.

Deferredtaxisrecognizedinprofitorlossexceptto the extent that it relates to items recognizeddirectly in OCI or equity, in which case it isrecognizedinOCIorequity.

Adeferred tax asset is recognized to the extentthatitisprobablethatfuturetaxableprofitswillbeavailableagainstwhich the temporarydifferencecanbeutilized.Deferredtaxassetsarereviewedat each reporting date and are reduced to theextentthatitisnolongerprobablethattherelatedtaxbenefitwillberealized.

Additional income taxes that arise from thedistribution of dividends are recognized at thesame time that the liability to pay the relateddividendisrecognized.

6 Material Prior Period errors

Material prior period errors are correctedretrospectively by restating the comparativeamountsforthepriorperiodspresentedinwhichtheerroroccurred.Iftheerroroccurredbeforetheearliestperiodpresented,theopeningbalancesofassets,liabilitiesandequityfortheearliestperiodpresented,arerestated.

7 Earnings per share

Basic earnings per equity share is computed bydividingthenetprofitorlossattributabletoequity

shareholders of the Company by the weightedaverage number of equity shares outstandingduringthefinancialyear.

Dilutedearningsperequityshareiscomputedbydividingthenetprofitorlossattributabletoequityshareholders of the Company by the weightedaverage number of equity shares considered forderivingbasicearningsperequityshareandalsothe weighted average number of equity sharesthatcouldhavebeen issueduponconversionofalldilutivepotentialequityshares.

8 Cash Flow Statement

Cash flow statement is prepared in accordancewith the indirectmethodprescribed in IndAS7‘StatementofCashFlows’.

9 Financial Instruments

Afinancialinstrumentisanycontractthatgivesriseto a financial asset of one entity and a financialliabilityorequityinstrumentofanotherentity.

9.1 Financial Assets

Initial recognition and measurement

All financial assets are recognized initially atfairvalueplus, inthecaseof financialassetsnot recorded at fair value through profit orloss,transactioncoststhatareattributabletotheacquisitionorissueofthefinancialasset.

Derecognition

Afinancialasset(or,whereapplicable,apartofafinancialassetorpartofaCompanyofsimilarfinancialassets)isprimarilyderecognised(i.e.removedfromtheCompany’sbalancesheet)when:

• Therightstoreceivecashflowsfromtheassethaveexpired,or

• The Company has transferred its rightsto receive cash flows from the assetor has assumed an obligation to paythe received cash flows in full withoutmaterial delay to a third party under a‘pass-through’arrangement;andeither(a)theCompanyhastransferredsubstantiallyalltherisksandrewardsoftheasset,or(b) theCompanyhasneithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontroloftheasset.

9.2 Financial Liabilities


Financialliabilitiesareclassified,atinitialrecognition, as financial liabilities at fair


23

A Maharatna Company

valuethroughprofitor loss,borrowings,payables,orasderivativesdesignatedashedginginstrumentsinaneffectivehedge,asappropriate.Allfinancialliabilitiesarerecognized initially at fair value and, inthecaseofborrowingsandpayables,netofdirectlyattributabletransactioncosts.TheCompany’sfinancialliabilitiesincludetrade and other payables, borrowingsincluding bank overdrafts, financialguarantee contracts and derivativefinancialinstruments.

Derecognition

A financial liability is derecognizedwhen the obligation under the liabilityis discharged or cancelled or expires.When an existing financial liability isreplaced by another from the samelender on substantially different terms,or the terms of an existing liabilityare substantially modified, such anexchange or modification is treated asthederecognitionof theoriginal liabilityand the recognition of a new liability.Thedifferenceintherespectivecarryingamountsisrecognizedinthestatementofprofitorloss.

D Use of Estimates and Management Judgements

The preparation of financial statements requiresmanagement to make judgments, estimates andassumptions that may impact the application of

accounting policies and the reported value ofassets, liabilities, income, expenses and relateddisclosuresconcerningthe items involvedaswellascontingentassetsand liabilitiesat thebalancesheet date. The estimates and management’sjudgmentsarebasedonpreviousexperienceandotherfactorsconsideredreasonableandprudentinthecircumstances.Actualresultsmaydifferfromtheseestimates.

Estimatesandunderlyingassumptionsarereviewedon an ongoing basis. Revisions to accountingestimates are recognised in the period in whichtheestimatesarerevisedandinanyfutureperiodsaffected.

Inordertoenhanceunderstandingofthefinancialstatements, informationaboutsignificantareasofestimation, uncertainty and critical judgments inapplying accounting policies that have the mostsignificanteffectontheamountsrecognisedinthefinancialstatementsisasunder:

1 Provisions and Contingencies

The assessments undertaken in recognizingprovisionsandcontingencieshavebeenmadein accordance with Ind AS 37, ‘Provisions,Contingent Liabilities and ContingentAssets’. The evaluation of the likelihood ofthe contingent events has required bestjudgment by management regarding theprobability of exposure to potential loss.Should circumstances change followingunforeseeable developments, this likelihoodcouldalter.


24

A Maharatna Company

2. P

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25

A Maharatna Company

3. Non-current investments

(Amountin`Lakhs)

Particulars As at 31.03.2017

Asat01.04.2016

Asat01.04.2016

Numberofshares/bonds/securitiesCurrent year/ (previous year)

Facevaluepersharebond/securityCurrent year/ (previous year)

Longterm-Trade

Equity instruments (fully paid up)

Unquoted

Joint venture companies

KINESCOPowerandUtilitiesPvt.Ltd. - - 5.00

Total - - 5.00

4. Other non current assets

(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Advances other than capital advances

-Advancetax&taxdeductedatsource 10,334.81 10,327.10 7,912.50

Less:Provisionfortax 2,577.08 2,575.13 2,551.50

Total 7,757.73 7,751.97 5,361.00

AlsoreferNotenos.16&17.

5. Trade receivables

(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Tradereceivables

Unsecured,consideredgood - - 3,467.27

Considereddoubtful - - -

- - 3,467.27

Less:Allowanceforbad&doubtfulreceivables - - -

Total - - 3,467.27


NTPC ELECTRIC SUPPLY COMPANY LIMITED


26

A Maharatna Company

6. Cash and cash equivalents(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Balanceswithbanks

Currentaccounts 11.23 17.35 1,097.79

Depositswithoriginalmaturityofmorethanthreemonthsandmaturingwithinoneyear(includinginterestaccrued)

6.42 - 49,863.61

Total 17.65 17.35 50,961.40


7. Other current financial assets(Amountin`Lakh)


Asat31.03.2016

Asat01.04.2015

Claimsrecoverable

Unsecured,consideredgood - - 4,539.61

Total - - 4,539.61


8. Other current assets`Lakh


Asat31.03.2016

Asat01.04.2015

Security deposits (unsecured)

Advances

Relatedparties-KINESCOJV - - 26.00Interest accrued onAdvancestocontractors - - 72.34

- - 98.34AlsoreferNotenos.16&17.

9. Share capital`Lakh


Asat31.03.2016

Asat01.04.2015

Equity share capital

Authorised

1,00,00,000 shares of par value `10/- each (1,00,00,000 shares of parvalue`10/-eachasat31March2016and1April2015)whollyownedbyNTPCLtd.

1,000.00 1,000.00 1,000

Issued, subscribed and fully paid up80,910sharesofparvalue`10/-each(80,910sharesofparvalue`10/-eachasat31March2016and1April2015)whollyownedbyNTPCLtd. 8.09 8.09 8.09a) Movementsinequitysharecapital:

Duringtheyear,theCompanyhasneitherissuednorboughtbackanyshares.



27

A Maharatna Company

b) Termsandrightsattachedtoequityshares:

TheCompanyhasonlyoneclassofequityshareshavingaparvalue`10/-pershare.Theholdersoftheequitysharesareentitledtoreceivedividendsasdeclaredfromtimetotimeandareentitledtovotingrightsproportionatetotheirshareholdingatthemeetingsofshareholders.

c) 80,910equitysharesvaluing`8,09,100(previousyear80,910equitysharesvaluing`8,09,100)areheldbytheholdingcompanyieNTPCLtd.,anditsnominees.

10. Other equity(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Generalreserve 920.59 920.59 920.59

Retainedearnings 3,318.12 3,336.24 3.223.41

Total 4,238.71 4,256.83 4,144.00

For the year ended31.03.2017 01.04.2016

(a) General reserve

Openingbalance 920.59 920.59

Add:Transferfromretainedearnings - -

Less:Adjustmentsduringtheyear - -

Closing balance 920.59 920.59

(b) Retained earnings

Openingbalance 3,336.24 3,223.41

Add:Profit/(Loss)fortheyearasperStatementofProfitandLoss (18.12) 112.83

Closing balance 3,318.12 3,336.24

11. Trade Payable(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Forgoodsandservices - - 1,900.86

Total - - 1,900.86

12. Other current financial liabilities`Lakh


Asat31.03.2016

Asat01.04.2015

Otherpayables

Depositsfromcontractorsandothers - - -

Payabletoemployees - - 131.46

Others-RelatedParties

ParentCompany 3,528.58 3,504.40 1,574.21

JV-KINESCO - - 20.11

Total 3,528.58 3,504.40 1,725.78




28

A Maharatna Company

13. Other current liabilities(Amountin`Lakhs)


Asat31.03.2016

Asat01.04.2015

Advancesfromcustomersandothers - - 56,335.52

Otherpayables

Taxdeductedatsourceandotherstatutorydues - - 357.63

Total - - 56,693.15


14. Other income(Amountin`Lakhs)

Particulars For the year ended

31.03.2017

Fotheyearended

31.04.2016Othernon-operatingincome

Miscellaneousincome 0.30 140.48

Total 0.30 140.48

15. Other expenses(Amountin`Lakhs)


31.03.2017

Fotheyearended

31.04.2016Paymenttoauditors 0.29 0.92

Professionalchargesandconsultancyfee - 0.07

Legalexpenses - 1.41

Miscellaneousexpenses 0.03 1.97

0.32 4.37

CorporateSocialResponsibility(CSR)expense 16.16 -

Total 16.48 4.37

b)Detailsinrespectofpaymenttoauditors:

Asauditor

Auditfeeincludingservicetax 0.29 0.92

Total 0.29 0.92

16. First-time Adoption of Ind AS

ThesearetheCompany’sfirstFinancialStatementsinaccordancewithIndAS.Fortheyearended31March2016,theCompanyprepareditsfinancialstatementsinaccordancewithIndianGAAP,includingaccountingstandardsnotifiedunder theCompanies (Accounting Standards) Rules, 2006 (as amended). Theeffectivedate forCompany’s IndASOpeningBalanceSheetis1April2015(thedateoftransitiontoIndAS).

TheaccountingpoliciessetoutinNote1havebeenappliedinpreparingthefinancialstatementsfortheyearended31stMarch2017,thecomparativeinformationpresentedinthesefinancialstatementsfortheyearended31stMarch2016andinthepreparationofanopeningIndASBalanceSheetat1stApril2015(theCompany’sdateoftransition).AccordingtoIndAS101,thefirstIndASFinancialStatementsmustuserecognitionandmeasurementprinciplesthatarebasedonstandardsandinterpretationswhichareeffectiveat31stMarch2017ie.:thedateoffirst-timepreparationofFinancialStatementsaccordingtoIndAS.Theseaccountingprinciplesandmeasurementprinciplesmustbeappliedretrospectively to the date of transition to IndAS and for all periods presentedwithin the first IndAS FinancialStatements.



29

A Maharatna Company

AnyresultingdifferencesbetweencarryingamountsofassetsandliabilitiesaccordingtoIndAS101asof1stApril2015comparedwiththosepresentedintheIndianGAAPBalanceSheetasof31stMarch2015,wererecognizedinequityunderretainedearningswithintheIndASBalanceSheet.

AnexplanationofhowthetransitionfrompreviousGAAPtoIndAShasaffectedthecompany’sfinancialposition,financialperformanceandcashflowsissetoutinthefollowingtablesandnotes.

Exemption and exceptions availed

IntheIndASOpeningBalanceSheetasat1stApril2015,thecarryingamountsofassetsandliabilitiesfromtheIndianGAAPasat31stMarch2015aregenerallyrecognizedandmeasuredaccordingtoIndASineffectason31stMarch2017.Forcertainindividualcases,however,IndAS101providesforoptionalexemptionsandmandatoryexceptionstothegeneralprinciplesofretrospectiveapplicationofIndAS.TheCompanyhasmadeuseofthefollowingexemptionsandexceptionsinpreparingitsIndASOpeningBalanceSheet:

i) Property, plant and equipment & Intangible assets IndAS101permitsafirst-timeadoptertoelecttocontinuewith thecarryingvalue forallof itsproperty,plantandequipmentand intangibleassetsas recognised in thefinancialstatementsasatthedateoftransitiontoIndAS,measuredasperthepreviousGAAPandusethatasitsdeemedcostasatthedateoftransitionaftermakingnecessaryadjustmentsforde-commissioningliabilities.Accordingly,theCompanyhaselectedtomeasureallofitsproperty,plantandequipmentandintangibleassetsattheirpreviousGAAPcarryingvalueasitsdeemedcostasatthedateoftransition.

Reconciliationofequityasat1stApril2015andasat31stMarch2016

(Amountin`Lakhs)

1st April 2015 31st March 2016

Note Previous GAAP*

Adjustments Ind ASs Previous GAAP*

Adjustments Ind ASs

ASSETS

NON CURRENT ASSETS

Property,plantandequipment 39.26 - 39.26 - - -

Investments 5.00 - 5.00 - - -

Loans 5,361.00 (5,361.00) - - - -

Otherfinancialassets - 5,361.00 5,361.00 - - -

Othernon-currentassets - - - 7,751.97 - 7,751.97

CurrentAssets

Tradereceivables A 3,489.55 (22.28) 3,467.27 - - -

Cashandcashequivalents 50,961.40 - 50,961.40 17.35 - 17.35

Otherfinancialassets 4,539.61 - 4,539.61 - - -

Othercurrentassets 98.34 - 98.34 - - -

Total Assets 64,494.16 (22.28) 64,471.88 7,769.32 - 7,769.32

NONCURRENTLIABILITIES

EQUITY&LIABILITIES

EquitySharecapital 8.09 - 8.09 8.09 - 8.09

Otherequity A 4,166.28 (22.28) 4,144.00 4,256.83 - 4,256.83

CURRENTLIABILITIES - - - - -

Tradepayables 1,900.86 - 1,900.86 - - -

Othercurrentfinancialliabilities - 1,725.78 1,725.78 - 3,504.40 3,504.40

Othercurrentliabilities 58,418.93 (1,725.78) 56,693.15 3,504.40 (3,504.40) -

Total equity and liabilities 64,494.16 (22.28) 64,471.88 7,769.32 - 7,769.32


30

A Maharatna Company

A. ChangesduetopriorperioditemamountingtoRs.22.28lakhsadjustedthroughretainedearningsandtradereceivableshasbeenreflectedwithoutadjustmentofdeferredtaxduetothecompanynothavinganyoperations (Alsoreferpara17).

Reconciliationoftotalcomprehensiveincomefortheyearended31stMarch2016

(Amountin`Lakhs)

Previous GAAP* Adjustments Ind AS

INCOME

Revenue

Otherincome 140.48 - 140.48

TotalIncome 140.48 - 140.48

EXPENDITURE

Otherexpenses 4.37 - 4.37

Priorperioditems(Net) 22.28 (22.28) -

TotalExpenses 26.65 (22.28) 4.37

Profitbeforetax 113.83 22.28 136.11

Profit/Lossbeforetax 113.83 22.28 136.11

Currenttax - -

Currentyear 23.28 - 23.28

TotalTax 23.28 - 23.28

Profitaftertax 90.55 22.28 112.83

Othercomprehensiveincome

Othercomprehensiveincomefortheyear,netofincometax

- - -

Total comprehensive income for the year 90.55 22.28 112.83

*ThepreviousGAAPfigureshavebeenreclassifiedtoconformtoIndASpresentationrequirementsforthepurposesofthisnote.

Reconciliationoftotalequityasat31stMarch2016and1stApril2015

(Amountin`Lakhs)

31st March 2016 1st April 2015

Totalequity(shareholder’sfunds)asperpreviousGAAP 4,264.92 4,174.37

Totaladjustments - (22.28)

TotalequityasperIndAS 4,264.92 4,152.09

Notestofirst-timeadoption:

Retained earnings :Retainedearningsasat1April2015hasbeenadjustedconsequenttotheaboveIndAStransitionadjustments.Refer‘Reconciliationoftotalequityasat31stMarch2016and1stApril2015asgivenabovefordetails.

Other Notes to Financial Statements

17. TheshareholdersoftheCompanyinitsExtra-ordinaryGeneralMeetingheldon24thMarch,2015,interalia,approvedtheproposalfortransferandvestingofallexistingoperationsofthecompanytogetherwithallassetsandliabilitiesrelatingtosuchoperationstoNTPCLimited, theholdingcompany,witheffect from1stApril,2015.Afterobtainingtheaforesaidapproval, theCompanyentered intoanagreementwithNTPCLimited to implementsuch transfer. Inpursuanceoftheaboveevents,allthetransactionshavebeencarriedoutattheircarryingvalueinthebooksoftheCompanyason1stApril2015.TheCompanydoesnothaveanyoperationsw.e.f1stApril2015.


31

A Maharatna Company

18. Disclosure as per Ind AS 33 on ‘Earnings Per Share’

TheelementsconsideredforcalculationofEarningPerShare(Basic&Diluted)areasunder:

Current Year Previous Year

NetProfitafterTaxusedasnumerator(Amountin`Lakhs) (18.12) 112.83

Facevaluepershare(Amountin`) 10.00 10.00

Weightedaveragenumberofequitysharesusedasdenominator 80910 80910

EarningPerShare(Basic&Diluted)(Amountin`) (22.40) 139.45

19. ThecommonservicesbeingutilizedbytheCompanyforit’sofficeareprovidedwithoutanychargesbytheHoldingCompany.

20. Disclosure as per Ind AS 24 on ‘Related Party Disclosures’

TheCompanyisawhollyownedsubsidiaryofNTPCLtd,whichistheonlyrelatedpartywithwhichvarioustransactionshavetakenplace.

a) Thelistofrelatedpartyisgivenbelow:-

i) NTPCLtd-HoldingCompany. ii) KINESCOPowerandUtilitiesPvtLtd.-JVCompany iii) UtilityPowertechPvtLtd.-JVofHoldingCompany

b) Detailsoftransactionsofrelatedpartiesisgivenbelow:-

(Amountin`Lakhs)

Details Current Year Previous Year

Relatedtotransferofoperationsason01.04.2015

Transferoffurniture,fixtures,equipmentandsoftware - 39.26

TransferofbankbalancesincludingCLTDs - 50457.99

Transferofbalancestradereceivables - 3489.55

Transferofbalancesotherreceivables - 5389.64

Transferoftradepayables - 1900.89

Transferofotherliabilities - 56844.71

Transactionsduringtheyear:

ExpensespaidbyNTPCLtd.onbehalfofthecompany 24.18 2405.79

PaymentreceivedfromJVcompany(KINESCO) - 31.00

c) Outstandingbalanceswithrelatedpartiesareasfollows:

Particulars 31stMarch2017 31stMarch2016 1stApril2015

AmountpayabletoNTPCLtd-Holdingcompany 3528.59 3504.40 1574.21

PayabletoKINESCOPower&UtilitiesPvtLtd-JV - - 20.11

PayabletoUtilityPowertechLtd-JVofHoldingCo. - - 120.75

21. Contingent Liabilities:

21.1OrderstopayservicetaxalongwithinterestandpenaltyhavebeenservedonthecompanyforvariousyearsbytheCommissionerofServiceTaxastabledbelow.Forserialnumbers1to3,thedemandsareapassthroughitem,theliabilityofwhich isonRECLtd.aspertermsofcontract.TheordershavebeenchallengedbeforeCESTATandarependingdisposal.Demandat serialnumber4pertains to servicesprovided toCochinPort Trustby thecompany,againstwhichanappealhasbeenfiled.


32

A Maharatna Company

Sl. Particulars Financial Year (Amount in`Lakhs )

2014-15 2015-16 2016-17

1 ServiceTaxonDepositWorks(RGGVY) 2007-2011 84968.74 92439.24 99,371.50

2 ServiceTaxonDepositWorks(RGGVY) 2011-2012 4980.63 5590.43 6,216.22

3 ServiceTaxonDepositWorks(RGGVY) 2012-2013 293.84 334.33 376.47

4 ServiceTaxonDepositWorks(others) 2011-2012 34.36 37.12 39.77

Total 90,277.57 98,401.12 106,003.97

21.2ThecompanyhasreceivednoticeofdemandfromtheIncomeTaxDepartmentandinrelationtosuchdemandthecompanyhasfiledanappealwiththeappropriateauthoritiesandthesamehasbeentabledbelow:

Sl. Particulars Financial Year

(Amount in ` Lakhs ) Remarks for 2016-17

2014-15 2015-16 2016-17

1 OrderofITATreceived 2008-09 1038.10 1038.10 1,038.10 ITAT has ruled in favour of theCompany.However,no informationis available on whether thedepartmenthasproceededwiththecaseattheHighCourtlevel.AppealeffectispendingforITATorder.

2 Demandu/s143(3) 2010-11 2255.93 2255.93 2,255.93 PendingwithITAT

Demandu/s143(3) 2011-12 2398.45 - - DemandamountPaid

3 Demandu/s143(3) 2012-13 - 1451.87 1,451.87 InappealwithCIT(A)

4 Demandu/s143(3) 2013-14 - - 1,842.80 InappealwithCIT(A)

22. Previousyear’sfigureshavebeenregrouped/rearrangedwherevernecessary.

ThesearethenotesreferredtoinBalanceSheetandStatementofprofitandLoss



(Rahul Kathuria) (Animesh Jain) (Kulamani Biswal) (Gurdeep Singh)Partner

M.No.090657ChiefExecutiveOffice Director Chairman



33

A Maharatna Company

INDEPENDENT AUDITORS REPORTTotheMembersof

NTPC Electric Supply Company Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind ASfinancial statements of NTPC Electric Supply CompanyLimited (“the Company”), which comprise the BalanceSheetasat31stMarch,2017, and theStatementof ProfitandLoss(includingOtherComprehensiveIncome),theCashFlow Statement and the Statement of Changes in Equityfortheyearthenended,andasummaryofthesignificantaccounting policies and other explanatory information( herein after referred to as Standalone Ind AS FinancialStatements).

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for thematters stated in Section 134(5) of the Companies Act,2013(“theAct”)withrespect to thepreparationof thesestandaloneIndASfinancialstatementsthatgiveatrueandfair view of the financial position, financial performanceincluding other comprehensive income, cash flows andchangesinequityoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheIndianAccountingStandards(IndAS)prescribedundersection 133 of the Act read with relevant rules issuedthereunder.

This responsibilityalso includesmaintenanceofadequateaccounting records in accordancewith the provisions oftheActforsafeguardingtheassetsoftheCompanyandforpreventing and detecting frauds and other irregularities;selection and application of appropriate accountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessofthe accounting records, relevant to the preparation andpresentationofthestandaloneIndASfinancialstatementsthat give a true and fair view and are free frommaterialmisstatement,whetherduetofraudorerror.

Auditor’s Responsibility

Our responsibility is to express an opinion on thesestandaloneIndASfinancialstatementsbasedonouraudit.

We have taken into account the provisions of the Act,theaccountingandauditingstandardsandmatterswhicharerequiredtobeincludedintheauditreportundertheprovisionsoftheActandtheRulesmadethereunder.

WeconductedourauditinaccordancewiththeStandardson Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain

reasonable assurance about whether the standalone IndASfinancialstatementsarefreefrommaterialmisstatement.

An audit involves performing procedures to obtain auditevidence about the amounts and the disclosures in thestandalone Ind AS financial statements. The proceduresselected depend on the auditor’s judgment, includingthe assessment of the risks of material misstatement ofthe standalone Ind AS financial statements, whether dueto fraud or error. In making those risk assessments, theauditorconsiders internalfinancialcontrolrelevanttotheCompany’spreparationof thestandalone IndASfinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.Anauditalsoincludesevaluatingtheappropriatenessofthe

accounting policies used and the reasonableness of theaccountingestimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthestandaloneIndASfinancialstatements.

We believe that the audit evidence we have obtained issufficientandappropriatetoprovideabasisforourauditopiniononthestandaloneIndASfinancialstatements.

Opinion

In our opinion and to the best of our information andaccording to the explanations given to us, the aforesaidstandaloneIndASfinancialstatementsgivetheinformationrequired by the Act in themanner so required and givea true and fair view in conformity with the accountingprinciples generally accepted in India including the IndAS, of the financial position of the Company as at 31stMarch,2017,anditsfinancialperformanceincludingothercomprehensive income, itscash flowsand thechanges inequityfortheyearendedonthatdate.

Emphasis of Matters

Wedrawattentiontothefollowingmatters:

(a) Note – 1 ’Accounting Policies’ Part B related tobasisofpreparationofFinancialStatementsofthecompanybased on Going Concern read alongwith Note No.17 of the Notes to Financial Statements suggest thatthe parent company has taken over all the assetsand liabilities on 01st dayofApril 2015, except BankBalances, Advance Taxes and Income Tax Provisions,at a historical cost carried in the books of accountsonthedateoftransferofsuchassetsandliabilitiesofthe company, and these conditions alongwith othermattersset forth inNoteNo.17 indicatethematerialuncertaintyandthatmaycastsignificantdoubtabouttheCompany’sabilitytocontinueasaGoingConcern.However, the financial statements of the Companyhavebeenpreparedonagoingconcernbasisforthereasonsstatedinthesaidnote.

Ouropinionisnotmodifiedinrespectofthesematters.


34

A Maharatna Company

Report on Other Legal and Regulatory Requirements

1. AsrequiredbytheCompanies(Auditor’sReport)Order,2016(“theOrder”) issuedbytheCentralGovernmentin terms of Section 143(11) of the Act, we give in“Annexure I” a statementon thematters specified inparagraphs3and4oftheOrder.

2. WeareenclosingourreportintermsofSection143(5)oftheAct,onthebasisofsuchchecksofthebooksandrecordsofthecompanyasweconsideredappropriateand according to the information and explanationsgiven tous, in theAnnexure-II on thedirections andsub-directions issuedby theComptrollerandAuditorGeneralofIndia.

3. As requiredby Section143(3)of theAct,we reportthat:

a) wehavesoughtandobtainedall the informationand explanations which to the best of ourknowledge and belief were necessary for thepurposesofouraudit;

b) in our opinion, proper books of account asrequiredbylawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks;

c) the Balance Sheet, the Statement of Profit andLoss, the Cash Flow Statement and Statement ofChangesinEquitydealtwithbythisReportareinagreementwiththebooksofaccount;

d) in our opinion, the aforesaid standalone IndAS financial statements comply with the IndianAccounting Standards prescribed under section133 of the Act read with relevant rule issuedthereunder;

e) The going concern matter described in sub-paragraph (a) under the Emphasis of Mattersparagraph above, in our opinion, may haveadverseeffectonthefunctioningofthecompany;

f) Being a Government Company, pursuant tothe Notification No. GSR 463(E) dated 5th June2015 issued by Ministry of Corporate Affairs,

GovernmentofIndia,provisionsofsub-section(2)ofSection164oftheCompaniesAct,2013,arenotapplicabletotheCompany;

g) With respect to the adequacy of the internalfinancial controls over financial reporting of theCompanyandtheoperatingeffectivenessofsuchcontrols,refertoourseparateReportin“Annexure III”.

g) withrespecttotheothermatterstobeincludedintheAuditor’sReportinaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:

i. the Company has disclosed the impact ofpending litigations on its financial positionin its standalone IndAS financial statements(ReferNoteNo.21);

ii. the Company did not have any long-termcontracts including derivative contracts forwhich there were any material foreseeablelosses;

iii. therewerenoamountswhichwererequiredto be transferred to the Investor EducationandProtectionFundbytheCompany;

iv. the company does not have any cashbalanceduringthefinancialyearunderauditconsequently, the disclosure requirement asenvisaged in NotificationG.S.R 308(E) dated30th March 2017 is not applicable to theCompany.

For P. R. KUMAR & CO.CharteredAccountantsFirmReg.No.:003186N

(RAHUL KATHURIA)Partner

M.NO.:090657Place:NewDelhiDate:18thMay,2017

Annexure-I

ANNEXURE OF THE INDEPENDENT AUDITOR’S REPORT

(Referredtoparagraph(1)undertheheadingof“ReportonOtherLegalandRegulatoryRequirements”ofourreportofevendate)(i) The company does not have the fixed assets during

the financial year and consequently, clauses (i) ofparagraph3oftheOrderarenotapplicable,

(ii) The company does not have any inventory andconsequently,clauses(ii)ofparagraph3oftheOrderarenotapplicable.

(iii) According to the information and explanationsprovided to us, the Company has not granted anysecured or unsecured loans to companies, firms,LimitedLiabilityPartnershipsorotherpartiescoveredin the register maintained under section 189 of theCompaniesAct,2013,consequently,provisionsofsub-clause(iii)(a),(b)&(c)oftheParagraph3oftheOrderarenotapplicable.

(iv) TheCompanyhasnotgivenanyloan,guarantee,security


35

A Maharatna Company

ormadeinvestmentasstipulatedunderSections185&186oftheCompaniesAct,consequently,clause(iv)oftheParagraph3oftheOrderisnotapplicable.

(v) According to the information and explanation givento us, the Company has not accepted deposits asper the provisions of the Companies Act, 2013 andconsequently,directivesissuedbytheReserveBankofIndia;theprovisionsofsection73to76oranyotherrelevantprovisionsoftheCompaniesAct,2013andtheRulesframedthereunderarenotapplicable.

(vi) Theprovisionsofthemaintenanceofthecostrecordsashasbeenspecifiedundersub-section(1)ofSection148 of the Companies Act, 2013, are not applicable

tothecompanyasthecompanyisnotengagedinthedistributionoftheelectricity.

(vii) (a) According to the information and explanationsgiven to us, the liability related to Income Tax isbeingdischargedbyitsHoldingCompany,i.e.,M/sNTPC Limited as whole of the operations of thecompanyhasbeentransferred,however,nootherundisputedStatutoryDuesispendingasonMarch31,2017.

(b) According to the information and explanationsgiven to us, there are disputed statutory dues,whichhavenotbeendepositedasonMarch31,2017asgivenbelow:

Statute Nature of Dues Amount(` in Lacs)

Forum where disputes are pending

IncomeTaxAct,1961 TaxDemandedu/s143(3)(2008-09)

1,038.10 ITATDelhi(AppealEffectPendingandnoappealbyDeptttoHighCourt)

IncomeTaxAct,1961 TaxDemandedu/s143(3)(FY2010-11)

1,420.93* CIT(Appeals)Delhi


1,451.87 CIT(Appeals)Delhi


1,842.80 CIT(Appeals)Delhi

FinanceAct,1994 ServiceTaxonDepositWorks(2006-07to2010-11)

99,371.50 CESTAT,Delhi

FinanceAct,1994 ServiceTaxonDepositWorks(2011-12)

6,255.99 CESTAT,Delhi

FinanceAct,1994 ServiceTaxonDepositWorks(2012-13)

376.47 CESTAT,Delhi

*Thedemandisnettedoffwithdemandpaidunderprotest.

(viii)In our opinion and according to the informationand explanations given to us, the company has notdefaulted in repayment of loans or borrowing to afinancial institution, bank, government or dues to adebentureholder,henceprovisionsunderclause(viii)oftheParagraph3oftheOrderisnotapplicabletothecompany.

(ix) Accordingtotheinformationandexplanationsgiventous,thecompanyhasnotraisedmoneysbywayofinitialpublicoffer(includingdebt instruments)andnotermloanhasbeenraisedduringtheyear,henceprovisionsunderclause(ix)oftheParagraph3oftheOrderisnotapplicabletothecompany.

(x) Inouropinionandaccording to the informationandexplanations given to us, no fraud has been noticedorreportedbyoruponthecompanyduringtheyear,hencetheprovisionsofclause(x)oftheParagraph(3)oftheOrderisnotapplicabletothecompany.

(xi) The company has not paid or provided for themanagerial remuneration during the financial yearunderaudit,accordingly,inouropinionandaccording

totheinformationandexplanationsgiventous,clause3(xi)oftheOrderisnotapplicable.

(xii) The company is not a Nidhi Company, hence inour opinion and according to the information andexplanationsgiventous,clause3(xii)oftheOrderisnotapplicable.

(xiii)The company has transacted with the related party,i.e., M/s NTPC Limited (Parent Company) as per theprovisionsoftheSection177and188oftheCompaniesAct, 2013, however, such transactions have beencarriedoutatarm’slengthpriceaspertheinformationand explanations provided to us. Disclosure of suchtransactionsasprescribedbytheIndAS–24(RelatedPartyDisclosures)hasbeendoneaspertheNoteNo.20totheFinancialStatements.

(xiv)Thecompanyhasnotmadeanypreferentialallotmentor private placement of shares or fully or partlyexecutabledebenturesduring theyearunderreview,accordingly, in our opinion and according to theinformationandexplanationsgiventous,clause3(xiv)oftheOrderisnotapplicable.


36

A Maharatna Company

(xv)The company has not entered into any non cashtransactionswithdirectorsorpersonsconnectedwithhim,accordingly,inouropinionandaccordingtotheinformationandexplanationsgiventous,clause3(xv)oftheOrderisnotapplicable.

(xvi)The company is not required tobe registeredundersection 45-IA of the Reserve Bank of India Act, 934,accordingly, in our opinion and according to theinformationandexplanationsgiventous,clause3(xvi)oftheOrderisnotapplicable.


(RAHULKATHURIA)Partner


Annexure-II

ANNEXURE OF THE INDEPENDENT AUDITOR’S REPORT(Referredtoparagraph(2)undertheheadingof“ReportonOtherLegalandRegulatoryRequirements”ofourreportofevendate)

Sl. No.

Query Response

1. Whether the Company has clear title/lease deeds forfreeholdandleaseholdlandrespectively?Ifnot,pleasestatetheareaoffreeholdandleaseholdlandforwhichtitle/leasedeedsarenotavailable.

TheCompanydoesn’thaveanyleasehold/freeholdland,hencenotapplicable.

2. Whether there are any cases of waiver/write off ofdebts/loans/interestetc.Ifyes,thereasonsthereofandamountinvolved.

There were no cases of waiver / write-off of debts/loans/interest.

3. Whetherproperrecordsaremaintainedforinventorieslying with third parties and assets received as gift/grant(s)fromtheGovernmentorotherauthorities.

Therearenocasesofinventorieslyingwiththirdparties&assetsreceivedasgiftfromGovt.orotherauthorities.


(RAHUL KATHURIA)Place:NewDelhi PartnerDate:18thMay,2017 M.NO.:090657

Annexure - III

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF NTPC ELECTRIC SUPPLY COMPANY LIMITED

(Referredtoparagraph{3(g)}undertheheadingof“ReportonOtherLegalandRegulatoryRequirements”ofourreportofevendate)

[Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)]

Wehaveauditedtheinternalfinancialcontrolsoverfinancialreporting of M/s NTPC Electric Supply Company Limited(“theCompany”)asofMarch31,2017inconjunctionwithour audit of the standalone financial statements of theCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls

TheCompany’smanagementisresponsibleforestablishingand maintaining internal financial controls based on theinternalcontroloverfinancialreportingcriteriaestablishedby theCompanyconsidering theessentialcomponentsofinternal control stated in theGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting issuedby the Instituteof CharteredAccountantsof India. Theseresponsibilities include the design, implementation andmaintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and


37

A Maharatna Company

efficient conduct of its business, including adherenceto company’s policies, the safeguarding of its assets, thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparation of reliable financial information, as requiredundertheCompaniesAct,2013.

Auditors’ Responsibility

OurresponsibilityistoexpressanopinionontheCompany’sinternalfinancialcontrolsoverfinancialreportingbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsoverFinancialReporting(the“GuidanceNote”)andtheStandardsonAuditing,totheextentapplicabletoanauditofinternalfinancialcontrols,bothissuedbytheInstituteofCharteredAccountantsof India. ThoseStandardsand theGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceabout whether adequate internal financial controls overfinancial reportingwasestablishedandmaintainedand ifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

Ouraudit involvesperformingprocedurestoobtainauditevidence about the adequacy of the internal financialcontrolssystemoverfinancialreportingandtheiroperatingeffectiveness.Ourauditof internal financialcontrolsoverfinancialreportingincludedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingthe risk that a material weakness exists, and testing andevaluating the design and operating effectiveness ofinternalcontrolbasedontheassessedrisk.Theproceduresselected depend on the auditor’s judgement, includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

We believe that the audit evidence we have obtained issufficientandappropriatetoprovideabasisforourauditopinionontheCompany’sinternalfinancialcontrolssystemoverfinancialreporting.

Meaning of Internal Financial Controls over Financial Reporting

Acompany’sinternalfinancialcontroloverfinancialreportingis a process designed to provide reasonable assuranceregarding the reliability of financial reporting and thepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples.A company’s internal financial control over financialreporting includes thosepolicies andprocedures that (1)pertaintothemaintenanceofrecordsthat, inreasonable

detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded asnecessarytopermitpreparationoffinancialstatements inaccordancewithgenerallyacceptedaccountingprinciples,and that receipts and expenditures of the company arebeing made only in accordance with authorisations ofmanagementanddirectorsofthecompany;and(3)providereasonable assurance regarding prevention or timelydetectionof unauthorisedacquisition, use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financialcontrols over financial reporting, including the possibilityofcollusionorimpropermanagementoverrideofcontrols,material misstatements due to error or fraud may occurandnotbedetected.Also,projectionsof anyevaluationof the internal financial controls over financial reportingto futureperiods are subject to the risk that the internalfinancial control over financial reporting may becomeinadequatebecauseofchanges inconditions,or that thedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Opinion

Inouropinion, theCompanyhas, inallmaterial respects,anadequateinternalfinancialcontrolssystemoverfinancialreportingandsuchinternalfinancialcontrolsoverfinancialreportingwereoperatingeffectivelyasatMarch31,2017,basedontheinternalcontroloverfinancialreportingcriteriaestablished by the Company considering the essentialcomponents of internal control stated in the GuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.


(RAHUL KATHURIA)Partner



38

A Maharatna Company

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(B) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF NTPC ELECTRIC SUPPLY COMPANY LIMITED FOR THE YEAR ENDED 31 MARCH 2017ThepreparationoffinancialstatementsofNTPCElectricSupplyCompanyLimitedfortheyearended31March2017inaccordancewiththefinancialreportingframeworkprescribedundertheCompaniesAct,2013(Act)istheresponsibilityofthemanagementofthecompany.TheStatutoryAuditorsappointedbytheComptrollerandAuditorGeneralofIndiaunderSection139(5)oftheActisresponsibleforexpressingopiniononthefinancialstatementsunderSection143oftheActbasedonindependentauditinaccordancewiththestandardsonauditingprescribedunderSection143(10)oftheAct.ThisisstatedtohavebeendonebythemvidetheirrevisedAuditReportdated06July2017whichsupersedestheirearlierAuditReportdated18May2017.

I,onbehalfoftheComptrollerandAuditorGeneralofIndia,havedecidednottoconductthesupplementaryauditofthefinancialstatementsofNTPCElectricSupplyCompanyLimitedfortheyearended31March2017underSection143(6)(a)oftheAct.

For and on the behalf of the ComptrollerandAuditorGeneralofIndia

(RitikaBhatia)PrincipalDirectorofCommercialAudit&

Ex-officioMember,AuditBoard-III, NewDelhiPlace:NewDelhiDate:20thJune,2017

Subsidiary Company - NTPC Vidyut Vyapar Nigam Limited

39

A Maharatna Company

NTPC VIDYUT VYAPAR NIGAM LIMITED(A wholly owned subsidiary of NTPC Limited)

Directors’ Report

To

Dear Members,

Your Directors have immense pleasure in presenting the Fifteenth Annual Report on the working of the Company for the financial year ended on 31st March 2017 together with Audited Financial Statement, Auditors’ Report and Review by the Comptroller & Auditor General of India for the reporting period.

FINANCIAL RESULTS

(` in Crore)

2016-17 2015-16

Total Revenue 5261.16 4040.95

Total Expenses 5142.85 3960.68

Profit/(Loss) before Tax 118.31 80.27

Tax expenses 41.88 28.31

Profit/(Loss) for the year 76.43 51.96

DIVIDEND

Your Directors have recommended a dividend of `30 Crore @ `15 per equity share on the face value of fully paid-up equity share capital of `10 each, for the financial year 2016-17. The dividend shall be paid after your approval at the Annual General Meeting.

ENERGY TRADING AND OTHER BUSINESS

In accordance with Central Electricity Regulatory Commission (CERC) notification, your Company has a trading Licensee under Category I (highest category).

In the Financial Year 2016-17, your Company achieved highest ever power trading volume of 15861 million units (MUs) apart from Renewable Energy Certificates (RECs) equivalent to 68 MUs.

During the financial year under review, your Company has earned a margin of `86.17 Crore from trade of 15861 MUs including 5921 MUs traded under solar & thermal bundled power, 577 MUs traded under SWAP arrangements, 3592 MUs under bilateral trade, 2632 MUs traded through exchange and 3139 MUs traded under Cross Border Trading, as compared to margin of `66.78 Crore from trade of energy of 12600 MUs including 5789 MUs traded under solar & thermal bundled power, 1092 MUs traded under SWAP arrangements, 2416 MUs under bilateral trade, 1342 MUs traded through exchange and 1961 MUs traded under Cross Border Trading. The overall volume of energy traded by the Company during the financial year 2016-17 has

increased by 25.88% and margins increased by 29.04% over previous financial year 2015-16.

BUSINESS INITIATIVES

The Government of India designated your Company as the Nodal Agency for Phase I of Jawaharlal Nehru National Solar Mission (JNNSM) with a mandate for purchase of power from the solar power projects connected to grid at 33 KV and above, at tariff regulated by CERC and for sale of such power, bundled with the power sourced from NTPC coal power stations to Distribution Utilities under Phase I of JNNSM which envisages setting up of 1000 MW solar capacity. As on March 31, 2017 the total commissioned capacity under the Scheme of Batch I of Phase I of JNNSM is 733 MW.

During the Financial Year 2016-17, a total of 5921 MUs of bundled solar power (including 1114 MUs of Solar Power) have been supplied to Discoms/ Utilities of the states of Rajasthan, Punjab, Maharashtra, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, Karnataka, Assam, West Bengal, Odisha, Telangana, Chhattisgarh and Damodar Valley Corporation.

Your Company has been designated as the nodal agency for cross border trading of power with Bangladesh, Bhutan and Nepal. As per the Power Purchase Agreement (PPA) for supply of 250 MW power for 25 years from NTPC stations, signed between your Company and Bangladesh Power Development Board (BPDB), power is being supplied by the Company to Bangladesh from Oct’ 2013. Further PPA has been signed between BPDB and your Company on March 15, 2016 and back to back Power Sale Agreement (PSA) has also been signed with Tripura State Electricity Corporation Limited (TSECL) for supply of 100 MW power under radial mode from 2016. Power supply to BPDB from Tripura commenced from March 17, 2016. About 2467 MUs of energy has been supplied in the financial year 2016-17. PPA/PSA for additional 60 MW Power to Bangladesh from Tripura has been signed and power flow started from April’ 17.

PPA was signed between your Company and Nepal Electricity Authority (NEA) for supply of upto 80MW power through newly commissioned 400kV Muzaffarpur - Dhalkebar A/C line under radial mode from Indian Market. The Power supply commenced on February 18, 2016. Further PPA was signed on December 22, 2016 between the Company and NEA for supply of upto 160MW power from January to May 2017 to Nepal through 400 kV Muzafferpur-Dhalkabar transmission line presently charged at 132 kV. About 672 MUs of energy has been supplied in financial year 2016-17 to Nepal.


40

A Maharatna Company

Your Company has excelled in many fields including expanding customer base, selling captive power, selling power of Independent Power Producers (IPPs), entering into power banking arrangement, trading of Power and REC on the platform of Power Exchange(s) etc. The customer base of the Company has increased to more than 100 customers including state government utilities, private power utilities, IPPs and captive power generators in all five regions of India.

FIXED DEPOSITS

The Company has not accepted any fixed deposit during the financial year ended on 31st March 2017.


Management Discussion and Analysis is enclosed at Annexure-I.

AUDITORS’ REPORT

The Comptroller and Auditor General of India (C&AG) had appointed M/s S.S. Kothari Mehta & Co., Chartered Accountants as Statutory Auditors of the Company for the financial year 2016-17.

The Statutory Auditors of the Company have given unqualified report on the financial statements of the Company for the financial year 2016-17.

REVIEW OF ACCOUNTS BY THE COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comptroller and Auditor General (C&AG) of India, through letter dated 12 July 2017 communicated that they have conducted a supplementary audit of the financial statements of your Company for the year 31st March 2017 under section 143 (6) (a) of the Act. On the basis of their audit noting significant has come to their Knowledge which would give rise to any comment upon or supplement to statutory auditors’ report. As advised by the office of the C&AG, the comments of C&AG for the year 2016-17 are being placed with the report of Statutory Auditors of your company elsewhere in this Annual Report.


As per Notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, the Government Companies are exempted to comply with the provisions of Section 197 of the Companies Act, 2013 and corresponding rules of Chapter XIII. Your Company being a Government company is not required to include aforesaid information as a part of the Directors’ Report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Agarwal S. & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2016-17. The Report of the Secretarial Auditors is enclosed at Annexure-II.

Secretarial Auditors have expressed their observation on appointment of Independent Directors. The Management reply to the Secretarial Auditors observations are as under:

Secretarial Auditors observation:

During the Financial year, the composition of the Board & committees of the Board should be in compliance with the provisions of the Companies Act, 2013 with respect to appointment of Independent Directors & consequential non-compliances thereof.

Note: The Ministry of Corporate Affairs vide its notification dated 5th July, 2017, has exempted wholly owned unlisted public subsidiary companies from appointing Independent Directors. In view of the aforesaid notification NVVNL is not required to appoint Independent Directors. The above said observation is retained as it pertains to financial year prior to aforesaid notification.

Management reply

NTPC Limited, the holding company, by virtue of Maharatna powers, and previously Navratna powers, in order to achieve its corporate aims, formed your Company, as a wholly owned subsidiary. As per provisions of Articles of Association of your Company, all Board level appointments are made by NTPC Limited.

In case of a Government Company, the independent Directors are to be appointed by the Government of India. NTPC Limited, the holding company, has been writing letters to the Department of Public Enterprises, Government of India, requesting to authorize NTPC Limited for nominating Independent Directors on the Board of its subsidiaries. The reply on the same is awaited.

Your Company, being the wholly owned unlisted public subsidiary of NTPC Limited, is now exempted to appoint Independent Directors. The same has also been explained by the Secretarial Auditors in Note to their observation.


As required under Section 134 (3) (c) and Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(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 (except where newly


41

A Maharatna Company

issued accounting standards requires a change) 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 2016-17 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, 2013 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.

(v) the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system was adequate and operating effectively.

BOARD OF DIRECTORS

The Board of Directors of the Company comprises of Shri Gurdeep Singh, Chairman (DIN: 00307037), Shri A. K. Jha, Director (DIN: 03590871), Shri Kulamani Biswal (DIN: 03318539), Shri K.K. Sharma, Director (DIN: 03014947) and Smt. A. Sathyabhama, Director (DIN: 06904946).

In accordance with the provisions of Companies Act, 2013, Shri Kulamani Biswal, Director shall retire by rotation at this Annual General Meeting of your Company and, being eligible, offers himself for reappointment.

Number of meetings of the Board

During the financial year under review, 6 meetings of the Board of Directors were held on the following dates:

Date of Board Meeting

Total strength of the Directors


May 17, 2016 5 4July 20, 2016 5 5September 21, 2016 5 4October 21, 2016 5 4December 14, 2016 5 3February 13, 2017 5 4

The details of the number of meetings attended, during the financial year under review, by each director are as follows:


Shri Gurdeep Singh Chairman 6 out of 6

Shri A.K. Jha Director 6 out of 6

Shri Kulamani Biswal Director 6 out of 6

Shri K.K. Sharma Director 4 out of 6

Mrs. A. Sathyabhama Director 2 out of 6

Declaration of Independent Director.

Your Company is not having independent Directors during the financial year 2016-17. Hence, the statement on declaration by Independent directors under section 149(6) of the Companies Act, 2013, is not included.

Now the Ministry of Corporate Affairs vide its notification dated 5th July, 2017, has exempted wholly owned unlisted public subsidiary companies from appointing Independent Directors. In view of the aforesaid notification your Company is not required to appoint Independent Directors.

AUDIT COMMITTEE

Your Company has an Audit Committee of the Board comprising of 3 Directors. During the financial year under review 3 meetings of the Audit Committee were held on the following dates:

Date of Audit Meeting Committee



May 17, 2016 3 2

July 20, 2016 3 3

September 21, 2016 3 2

The details of the number of Audit committee meetings attended by each director, during the financial year under review are as follows:


Shri Kulmani Biswal Chairman 3 out of 3


Mrs. A. Sathyabhama Director 2 out of 3


In compliance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, your Company has constituted the Corporate Social Responsibility (CSR) Committee consisting of 3 directors.

During the financial year under review 3 meetings of the CSR committee were held on the following dates:

Date of CSR Committee Meeting



May 17, 2016 3 3

October 21, 2016 3 3

March 20, 2017 3 3

The details of the number of CSR committee meetings attended by each director, during the financial year under review are as follows:


42

A Maharatna Company


Shri Gurdeep Singh Chairman 3 out of 3Shri A.K. Jha Director 3 out of 3Shri Kulamani Biswal Director 3 out of 3

As per the requirement of Section 135 of the Companies Act, 2013 and Rule 8 (1) of the Companies (Corporate Responsibility Policy) Rules, 2014 the annual report on CSR activities is at Annexure-III.

Disclosure on the Nomination and Remuneration Committee.

In compliance with the provisions of Section 178 of the Companies Act, 2013 and the Companies (Meetings of Board and its Powers) Rules, 2014, your Company has constituted the Nomination and Remuneration Committee consisting of 3 directors.

As per Notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, the Government Companies are exempted to comply with the provisions of sub-sections 2, 3 and 4 of Section 178 of the Companies Act, 2013. Your Company being a Government company is not required to formulate and disclose policy, as a part of the Directors’ Report, as envisaged.

During the financial year under review one meeting of the Nomination and Remuneration Committee were held on the following date:

Date of the Nomination and Remuneration Committee



October 21, 2016 3 3The detail of number of the Nomination and Remuneration Committee meeting attended by each director, during the financial year under review is as follows:


Shri A.K. Jha Chairman 1 out of 1

Shri Kulamani Biswal Director 1 out of 1



Your Company has not given any loans or guarantees or made any investment covered under the provisions of Section 186 of the Companies Act, 2013.


No material changes and commitments, have taken place between financial year ended March 31, 2017, to which the

financial statement relates and the date of this Directors’ Report, which affects the financial position of your Company.


As per requirement of Section 92 (3), Section 134 (3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in form MGT-9 is given under Annexure-IV.

PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

As per requirement of Section 188 (2) of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014, particulars of contracts or arrangements, during the financial year 2016-17, with related parties referred to in Section 188 (1) of the Companies Act, 2013 in form AOC-2 is given under Annexure-V.


Being a trading company the norms for conservation of energy and technology absorption are not applicable to your Company.

During the financial year under review your Company has earned `848.65 crore from trade of power in foreign currency as compared to ` 446.17 crore foreign currency earned during the financial year 2015-16. An expenditure of `0.04 crore, during the financial year under review, in foreign currency has been incurred mainly towards travelling of employees and other payments/ reimbursements as compared to `0.09 crore expenses incurred towards travelling of employees during the financial year 2015-16.

ACKNOWLEDGMENT

The Board of Directors of your Company wishes to place on record their appreciation for the support and co-operation extended by NTPC Limited, the Ministry of Power and the Ministry of New and Renewable Energy of Government of India, the Central Electricity Regulatory Commission, the valued customers of the Company, various State Power Utilities, Statutory Auditors, Office of the Comptroller and Auditor General of India, Bankers of the Company and the untiring efforts made by all employees to ensure that the company continues to perform and excel.


Sd/-

(GURDEEP SINGH)

CHAIRMAN

DIN: 00307037

Place: New Delhi

Date: July 27, 2017


43

A Maharatna Company

Annexure-I



Trading is an essential tool, which plays an important role in optimization of resources by utilizing the surpluses of seasons or time of day of a state / utility to meet the unmet demand / deficits of the same or another state / utility/ consumers by way of sale/purchase or swap arrangements. Power traders play a key role for identification of such sources of surplus (supply) and deficits (consumers’), tie up open access, and arrange scheduling for matching supply and demand at optimum cost charging a very small margin of their own.

CERC has fixed a ceiling trading margin for short term trade at 7 paise per kWh in case the sale price is exceeding ` 3 per kWh and 4 paise per kWh where sale price is less than or equal to ` 3 per kWh. However, Transactions through power swapping/ banking are out of purview of the CERC Regulations for Short Term Trading.

During the last four years, 43 traders have obtained licenses for serving the needs of various clients. The traders are issued license under categories I, II or III depending on the volume of units proposed to be traded and their net worth. During the financial year 2016-17 out of the electricity generation of approximately 1158 Billion units, approximately 96 Billion units were traded, representing 8.29% of trading to total generation.

The short term power market volume increased to 96 BUs in the financial year 2016-17 as compared to 94 BUs during financial year 2015-16, registering a growth of 2.13%. During the financial year 2016-17 there is substantial growth in the volume of power exchange by 17.65% as compared to previous year. Despite increase in volume of Short term market, the volume transacted in bilateral direct and bilateral trading decreased by 12.5% and 2.77% respectively over the previous year.

Structure of Power Market in India*

(i) Long –Term (89.72 %) 1039 BU

(ii) Power Trading (8.29%) 96 BU

(iii) Balancing Market (UI) (1.99 %) 23 BU

Total 1158 BU

The trading of Power in India*

(i) Bilateral Trading 35 BU

(ii) Bilateral Direct 21 BU

(iii) Through Power Exchange 40 BU

Total 96 BU

*Source: CERC (2016-17).

STRENGTH AND WEAKNESS

Your Company’s strength lies in its association with a strong promoter viz. NTPC Limited having formidable network, established rapport, credibility with potential buyers & sellers and backed with professional manpower from NTPC and trading capabilities built over the years.

Your Company is exposed to credit risk due to buyers’ inability to make timely payments without strong payment security mechanism in place.

OPPORTUNITIES AND THREATS

The inter-regional power transfer capacity has increased to 75050 MW (*Source: Ministry of Power website). This is expected to provide considerable opportunities for enhancement of trading volumes. With the passage of time short term power market has shifted from a sellers’ market to a buyers’ market due to large availability of merchant power and low demand from Distribution utilities. Also with the introduction of DEEP e-bidding portal the market has become very competitive.

The financial health of Distribution companies (DISCOMs) is very poor. Government has come up with Ujwal Discom Assurance Yojana (UDAY scheme) to provide financial turnaround and revival of Power DISCOMs. Many states have joined UDAY scheme and with the implementation of UDAY scheme, the financial position of the State DISCOMS is expected to improve.

In recent times with the increase in entry of number of private traders the trading market has seen increased competition leading to power being traded without proper back-to-back payment security mechanism, making transactions prone to higher payment risk. The financial position of many State DISCOMs / Utilities is also a cause for concern for your Company


44

A Maharatna Company

OUTLOOK

Your Company was designated Nodal Agency for Cross Border trading of power with Bangladesh, Bhutan and Nepal. The PPA between your Company and BPDB for supply of 250 MW power from NTPC stations for 25 years was signed on February 28, 2012. The Power supply to Bangladesh commenced from October 5, 2013. Since 2013, the cross border trading business of the Company has grown significantly. Existing Power supply to BPDB from Tripura and power supply to Nepal from Indian market has increased the visibility of the company in the Power market of neighbouring countries. Guidelines on Cross Border trade of electricity have been issued by Ministry of Power and further the CERC regulations expected in financial year 2017-18, will bring transparency in the market and will also result in growth of Cross Border trade of electricity.

Your Company is also designated Nodal Agency under JNNSM Phase-I for buying power from solar power developers in India and selling to distribution utilities after bundling with thermal power from NTPC coal based stations. The business of selling bundled power to Discoms commenced from financial year 2011-12 and has grown with progressive commissioning of capacities.

Your Company is exploring new avenues for enhancement of future business in the Cross Border Trading of Power, Renewable Power Sector and trading of energy certificates (ESCerts) under Perform Achieve and Trade Scheme, cycle I started by Ministry of Power, Government of India and expects to consolidate its business in these segments for achieving long term growth.

RISKS, CONCERNS AND THEIR MANAGEMENT

Your Company is trading power on back-to-back basis, with the approval of the Board. It means terms & conditions, both for purchase/sale are on back-to-back basis. Deviation, if any, is reported to Board.

The trading margin capped by CERC for electricity trading limits revenues of trading companies. The risk gets further enhanced due to large number of private players offering lower trading margin than capped trading margin. Your Company continues to focus on increasing its market share in power trading with emphasis on back-to-back arrangements in order to mitigate risks while making endeavors to increase the business.

Your Company being the wholly owned subsidiary of NTPC Limited is governed by the framework of Risk Management in NTPC Limited. Key risks are regularly monitored through reporting of key performance indicators of identified risks.

INTERNAL CONTROL

Your Company has adequate internal control systems and procedures in place commensurate with the size and nature of its business. Your Company has adopted the internal control system of its holding company viz. NTPC Limited. A well defined internal control framework has been developed identifying key controls. The authorities vested in various levels are exercised within framework of appropriate checks and balances. Effectiveness of all checks and balances and internal control systems is reviewed during internal audit carried out by Internal Audit Department of NTPC Limited. An independent internal audit is also carried out by experienced firm of Chartered Accountants in close co-ordination with departments of the Company and Internal Audit Department of NTPC Limited. The Internal Audit Reports are regularly reviewed by the Audit Committee of the Board of Directors.


Operations

Your Company has been issued license under category “I” which allows trading of 1000 million units and above every year without any upper limit.

The details of the energy traded by the Company are as follows:

Trading of Power 2016-17 2015-16

Million units

Bilateral Trading 3592 2416

Power SWAP Arrangements 577 1092

Solar Bundled Power 5921 5789

Cross Border Trading 3139 1961

Trading through exchange 2632 1342

Total 15861 12600

During the Financial Year 2016-17, your Company traded 15861 MUs of power, which includes 5921 MUs of bundled solar power under JNNSM. The overall volume of power traded by Company has increased by 25.88% over last year.


45

A Maharatna Company

8529 8381 932110421

12600

15861

2379

30753532

3888 4055

5273

-1000

0

1000

2000

3000

4000

5000

6000

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2011

-12

2012

-13

2013

-14

2014

-15

2015

-16

2016

-17

Volume Traded by NVVN (MU)

Turnover (Rs Cr)

In the past three years your company has developed a good customer base and has served over 100 customers including State Government/Private Power Utilities, Captive Power Generators etc. in all five regions in the country.

MoU RATING & PERFORMANCE

The performance of your Company in terms of Memorandum of Understanding (MoU) signed with the NTPC, the holding company for the financial year 2015-16 has been rated as “Excellent” by Department of Public Enterprises. Your Company have successfully accomplished targets, under the MoU 2016-17, of % Increase in Power Exchange customers over previous year (160% was achieved against the MoU target of 10%). Your Company has also developed the Portal for Solar Power developers (SPD’s) on January 11, 2017 against the MoU target of January 31, 2017. Also % Reconciliation of the Billed Amount for April- Dec 2016 was 89% against the MoU target of 85%.


The revenue of your Company comprises of mainly sales from Energy traded and it contributes to 98% of total revenue.

` in Crore

2016-17 2015-16

Sales

Energy 5272.71 4054.58

Rebate on energy sale (48.87) (34.56)

Other income 37.32 20.93

Total 5261.16 4040.95

The Total operating expenses of the Company are as follows: -

` in Crore

2016-17 2015-16

Purchase of energy 5186.53 3987.80

Rebate from sellers (74.98) (51.06)

Employee benefits expense 14.58 13.97

Other expenses 11.29 9.79


The total expenses including operating expenses of the Company are as follows:-


46

A Maharatna Company

` in Crore

2016-17 2015-16


Finance cost 5.33 0.05

Depreciation, amortization and impairment expense

0.10 0.13

Total expenses including operating expenses

5142.85 3960.68

The depreciation cost as compared to total expense is negligible since the fixed assets in the Company are represented by furniture and fixtures, EDP machines and software etc. and the Gross Block was of the order of `0.34 Crore as on 31.3.2017.

During the year the Company earned profit after tax of ` 76.43 Crore registering an increase of 47.09% over the previous year.

` in Crore

2016-17 2015-16

Profit before tax 118.31 80.27

Tax expenses 41.88 28.31

Profit for the year 76.43 51.96

Dividend

Your Directors have recommended a dividend of `30 Crore @ `15 per equity share on the face value of fully paid-up equity share capital of `10 each, for the financial year 2016-17. The dividend shall be paid after your approval at the Annual General Meeting.

Reserves & Surplus

During the financial year 2016-17, a sum of ` 79 Crore have been added to General Reserve as compared to `26 Crore in the previous year.

Current Assets

The current assets at the end of the financial year 2016-17 were `1415.40 Crore as compared to `1225.38 Crore in financial year 2015-16 registering an overall increase of 15.51%.

` in Crore

31.3.2017 31.3.2016

Trade receivables 539.70 558.75

Cash and cash equivalents 183.80 24.35

Other bank balances 164.19 310.50

Other financial assets 525.21 327.73

Other current assets 2.50 4.05

Total Current Assets 1415.40 1225.38

The increase in Total Current Assets was mainly due to increase in other financial assets on account of unbilled revenues of `524.23 Crore as on March 31, 2017 against `325.22 Crore as on March 31, 2016. As on March 31, 2017 trade receivables have reduced to `539.70 Crore as compared to `558.75 Crore as on March 31, 2016. The receivables are equivalent to 37 days of billing as on March 31, 2017 against 51 days of billing as on March 31, 2016. The major amount of receivables has now been recovered from various buyers and balance amount would be realized soon.

Current Liabilities

During the financial year 2016-17, Current Liabilities have increased to `1132.65 Crore as compared to `1019.91 Crore in the financial year 2015-16, mainly on account of increase in trade payables.

`in Crore

31.03.2017 31.03.2016

Trade payables 850.88 643.03

Other financial liabilities 255.08 330.63

Other current liabilities 4.08 2.09

Provisions 18.32 41.23

Current tax liabilities (net) 4.29 2.93

Total Current Liabilities 1132.65 1019.91

Cash Flow Statement

` in Crore

2016-17 2015-16

Opening cash and cash equivalents

24.35 31.42

Net cash from operating activities

177.15 (12.47)

Net cash from investing activities

6.37 9.40

Net cash flow from financing activities

(24.07) (4.00)

Net change in cash and cash equivalents

159.45 (7.07)

Closing cash and cash equivalents

183.80 24.35

The closing cash and cash equivalent for the financial year ended March 31, 2017 has increased from `24.35 Crore in the previous year to `183.80 Crore in the current year, mainly due to heavy collection from our customers on March 31, 2017.


47

A Maharatna Company

Financial Indicators

The various performance indicators for the financial year 2016-17 as compared to financial year 2015-16 are as under: -

`in Crore

Description 2016-17 2015-16

A i) Capital employed 310.11 233.16

ii) Net worth 310.11 233.16

B i) Return on Capital Employed (PBT/CE)

38% 34%

ii) Return on net worth (PAT/NW)

25% 22%

C Dividend as % of Equity Capital

150 100

D Earning per share in ` (EPS) before exceptional item

38.22 25.98

The capital employed as well as net worth has increased due to addition of profit earned during the current financial year and such increase has also resulted increase in Return on Capital Employed, Return on Net Worth and EPS of the Company.

Procurement from MSEs

Your Company during the financial year under review has procured goods and services amounting to `2.02 Crore out of which procurement of goods and services from Micro and Small Enterprises (MSEs) was `82.51 Lakh. The percentage procurement from MSEs was 40.76%.

Sexual Harassment of women at workplace.

All the employees of the Company are on secondment

basis from holding company viz. NTPC Limited. In line with the requirement of Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, all the employees are regulated under the NTPC’s Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace.

Human Resources

As on 31st March 2017, there were 43 employees posted on secondment basis from holding company viz. NTPC Limited. To achieve the ambitious growth targets, the Company has drawn professional manpower from NTPC who have rich experience in dealing in various technical, financial and commercial issues.


Statements in the Management Discussion and Analysis describes the Company’s objectives, projections, estimates, expectations may be “forward-looking statements” within the meaning of applicable laws and regulations. Actual results may vary materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include economic conditions affecting demand/supply and price conditions in the markets in which the Company operates, changes in Government regulations & policies, tax laws and other statutes and incidental factors.


Sd/-

(GURDEEP SINGH)

CHAIRMAN

DIN: 00307037

Place: New Delhi

Date: July 27, 2017


48

A Maharatna Company

Annexure-II

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st MARCH, 2017

{Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014}

To,

The Members,

NTPC Vidyut Vyapar Nigam Limited.

We have conducted the Secretarial Audit of the Compliance of applicable statutory provisions and the adherence to good Corporate Practices by NTPC Vidyut Vyapar Nigam Limited (hereinafter called NVVNL/the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the NVVNL’s books, papers, Minute books, forms and returns filed and other records maintained by the Company and also the information’s provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial period ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and Compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by NVVNL for the financial year ended on 31st March, 2017 according to the provisions of:

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder; Not Applicable

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder; Not Applicable

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011; Not Applicable

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not Applicable

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; Not Applicable

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; Not Applicable

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; Not Applicable

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable

(vi) Compliances/ processes/ systems under other applicable Laws to the Company are being verified on the basis of periodic certificate submitted to the Board of Directors of the Company.

We have also examined compliance with the applicable clauses of the following:

(a) Secretarial Standards issued by the Institute of Company Secretaries of India.

(b) Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Not Applicable

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observation:

1. During the Financial year, the composition of the Board & committees of the Board should be in compliance with the provisions of the Companies Act, 2013 with respect to appointment of Independent Directors & consequential non-compliances thereof.

Note: The Ministry of Corporate Affairs vide its notification dated 5th July, 2017, has exempted wholly owned unlisted public subsidiary companies from appointing Independent directors. In view of the aforesaid notification NVVNL is not required to appoint Independent Directors. The above said observation is retained as it pertains to financial year prior to aforesaid notification.


49

A Maharatna Company

We further report that the Board of Directors of the Company is not duly constituted due to non-appointment of Independent Directors on the Board of the Company. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Generally, adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions made in the Board/Committee meeting(s) were carried out with unanimous consent of the all the Directors/Members present during the meeting.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the company to monitor and ensure

compliance with applicable laws, rules, regulations and guidelines and Company is in process of reviewing & strengthening the same.

We further report that during the audit period, there were no specific events/actions having a major bearing on the Company’s affairs in pursuance of the above referred laws.

For Agarwal S. & Associates,Company Secretaries,

Sd/-CS Sachin Agarwal

PartnerFCS No. : 5774CP No. : 5910

Place: New Delhi

Date: July 10, 2017

This report is to be read with our letter of even date which is annexed as “Annexure A” and forms an integral part of this report.

“Annexure A”

To,

The Members,

NTPC Vidyut Vyapar Nigam Limited

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the Company. Our Responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Where ever required, we have obtained the Management representation about the compliance of laws, rules and regulation and happening of events etc.

5. The Compliance of the provisions of corporate and other applicable laws, rules, regulations, standards are the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.


Sd/-CS Sachin Agarwal

PartnerFCS No. : 5774CP No. : 5910

Place: New DelhiDate: July 10, 2017


50

A Maharatna Company

“Annexure III”

1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programs.

Keeping in view the size of the Company and manpower required for executing the CSR activities, your Company has adopted the CSR policy of its holding company viz. NTPC Limited and also undertaking CSR activities through NTPC Limited.

NTPC Limited is executing the CSR activities for long and having a formidable set-up for executing CSR activities. The CSR Policy of NTPC Limited is formulated keeping in view the requirements of the Companies Act, 2013 and the Department of Public Enterprises. The CSR policy focused on Health, Sanitation, Drinking Water, Education, Capacity Building, Women Empowerment, Social Infrastructure Development, support to Physically Challenged Person (PCPs), and activities contributing towards Environment Sustainability and other subject matter described under schedule VII of the Companies Act, 2013. The CSR policy is also available on the website of the Company: www. nvvn.co.in.

2. The Composition of the CSR Committee.

Name of the Director Designation

Shri Gurdeep Singh Chairman

Shri A.K. Jha Director

Shri Kulamani Biswal Director

3. Average net profit of the company for last three financial years.

The average net profit of the Company for three immediately preceding financial years i.e. 2013-14, 2014-15 and 2015-16 is `78.50 crore.

4. Prescribed CSR Expenditure.

The Company as per the requirement of the Companies Act, 2013, is required to spend 2% of ` 78.50 crore i.e. ` 1.57 Crore in the financial year 2016-17.

5. Details of CSR spent during the financial year 2016-17.

(a) Total amount spent for the financial year : ` 2,07,77,525

(b) Amount unspent, if any : ` 11,13,740

(c) Manner in which the amount spent during the financial year

: Detailed below

(1) (2) (3) (4) (5) (6) (7) (8)





Amount outlay (budget) Project or Programs wise (Amount in ` lakh)


(2) Overheads: (Amount in ` lakh)

Cumulative expenditure upto to the reporting period. (Amount in ` lakh)


1. Implementation and commissioning of solar power Integrated Domestic Energy System in 300 households in 3 villages

Rural Development/Environment sustainability

In 3 villages of Chhatarpur District of Madhya Pradesh

40.668 *31.559 40.668 Implementing Agency


51

A Maharatna Company

(1) (2) (3) (4) (5) (6) (7) (8)





Amount outlay (budget) Project or Programs wise (Amount in ` lakh)


(2) Overheads: (Amount in ` lakh)

Cumulative expenditure upto to the reporting period. (Amount in ` lakh)


2. Designing, Supplying, Installing and commissioning of 150 kWp Rooftop Solar PV System

Environmental Sustainability

Birla Institute of Technology, Sindri, Jharkhand

79.769 53.179 53.179 Direct

3. Mukhya Mantri Jal Swalamban Abhiyan, Rajasthan

Rural Development Baran, Rajasthan 75.690 71.500 71.500 Implementing Agency

4. Installation of hand pumps

Promoting sanitation and safe drinking water

Phulpur, Uttar Pradesh

55.150 51.537 51.537 Implementing Agency

Total 251.277 207.775 216.884

* The project was undertaken during the financial year 2015-16. Out of budgeted amount of ` 40.668 Lakh an amount of `9.109 Lakh was incurred in financial year 2015-16 and an amount of `31.559 Lakh was incurred in financial year 2016-17


Entire CSR budget for the financial year 2016-17, as per the provisions of the Companies Act, 2013, has been committed for CSR activities and remaining unspent amount shall be utilized in subsequent financial year 2017-18 onwards as spill over for CSR activities.


The Responsibility Statement of the Corporate Social Responsibility Committee is reproduced below:

The implementation and monitoring of Corporate Social Responsibility Policy, is in compliance with CSR objectives and policy of the Company.


Sd/- Sd/- (Arun Kumar Garg) (GURDEEP SINGH) Chief Executive Officer CHAIRMAN DIN: 00307037

Place: New Delhi Date: July 27, 2017


52

A Maharatna Company

“Annexure IV”

Form No. MGT-9Extract of Annual Return

as on the financial year ended on March 31, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN : U40108DL2002GOI117584

ii) Registration Date : November 1, 2002

iii) Name of the Company : NTPC Vidyut Vyapar Nigam Limited

iv) Category / Sub-Category of the Company : Company Limited by shares

v) Address of the Registered office and contact details : NTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110 003, Ph. No. 011-24360071

vi) Whether listed company Yes / No : NO

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any : N.A.


All the business activities contributing 10 % or more of the total turnover of the company shall be stated: -

Sl. No.


NIC code of the Product/service % to total turnover of the company

1. Power Trading N.A. 100


S. No.


CIN/GLN Holding/ Subsidiary/Associate

% of shares held

Applicable Section

1. NTPC Limited NTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110 003

L40101DL1975GOI007966 Holding 100 Section 2 (46) of the Companies Act, 2013







shares


shares

A. Promoters

(1) Indian

a) Individual/ HUF - - - - - - - - -

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corp. - 1,99,99,300 1,99,99,300 100 - 1,99,99,300 1,99,99,300 100 -

(NTPC Limited)


53

A Maharatna Company





shares


shares

e) Banks/FI - - - - - - - - -

f) Any Other (Nominees of NTPC)

- 700 700 - - 700 700 - -

Sub-total (A) (1):- - 2,00,00,000 2,00,00,000 100 - 2,00,00,000 2,00,00,000 100 -

(2) Foreign

a) NRIs- individuals

- - - - - - - - -

b) Other-Individuals

- - - - - - - - -

c) Bodies Corp. - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other…. - - - - - - - - -

Sub-total (A) (2):- - - - - - - - - -

Total shareholding of Promoter (A) = (A)(1) + A(2)

- 2,00,00,000 2,00,00,000 100 - 2,00,00,000 2,00,00,000 100 -

B. Public Shareholding

1. Institutions

a) Mutual Funds - - - - - - - - -

b) Banks/FI - - - - - - - - -

c) Central Govt. - - - - - - - - -

d) State Govt.(s) - - - - - - - - -

e) Venture Capital Funds

- - - - - - - - -

f) Insurance Companies

- - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others(specify) - - - - - - - - -

Sub-total (B) (1):- - - - - - - - - -

2. Non-institutions

a) Bodies Corp.

i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

b) Individuals


54

A Maharatna Company





shares


shares

i) Individual Shareholders holding nominal share capital upto ` 1 lakh

- - - - - - - - -

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakh

- - - - - - - - -

c) Others(specify) - - - - - - - - -

Sub-total (B) (2):- - - - - - - - - -

Total Public Shareholding (B)=(B)(1)+(B) (2)

- - - - - - - - -


- - - - - - - - -

Grand Total (A+B+C) - 2,00,00,000 2,00,00,000 100 - 2,00,00,000 2,00,00,000 100 -


Sl No.

Shareholder’s Name


Shareholding at the end of the year

No. of Shares


company



No. of shares


company



% change in the


year

1. NTPC Limited 1,99,99,300 100 - 1,99,99,300 100 - -

2. Nominee of NTPC 700 - - 700 - - -


Sl No.




company


company

At the beginning of the year 2,00,00,000 100 2,00,00,000 100


55

A Maharatna Company

Sl No.




company


company

Date wise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment/transfer/ bonus/sweat equity etc.) :

No change No change No change No change

At the End of the year 2,00,00,000 100 2,00,00,000 100


Sl No.

For each of Top 10 shareholders Shareholding at the beginning of the year



company


company

At the beginning of the year - - - -

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc) :

- - - -

At the End of the year (or on the date of separation, if separated during the year)

- - - -


Sl No.




company


company

1. Shri Gurdeep Singh, Director (As Nominee of NTPC Limited)

At the beginning of the year NIL - NIL -

Equity shares transferred on 17.05.2016, as nominee of NTPC

100 - 100 -

At the End of the year 100 - 100 -

2. Shri A.K. Jha, Director (As Nominee of NTPC Limited)

At the beginning of the year 100 - 100 -

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.) :




56

A Maharatna Company

Sl No.




company


company

3. Shri Kulamani Biswal, Director (As Nominee of NTPC Limited)

At the beginning of the year 100 - 100 -




V. INDEBTEDNESS



Unsecured Loans


Indebtedness at the beginning of the financial year - - - -

i) Principal Amount - - - -

ii) Interest due but not paid - - - -

iii) Interest accrued but not due - - - -

Total (i + ii + iii) - - - -

Change in Indebtedness during the financial year

• Addition

• Reduction - - -

Net Change - - - -

Indebtedness at the end of the financial year - - - -

i) Principal amount - - - -



Total ( i + ii + iii) - - - -


A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl. No.



(a) Salary as per provisions contained in section 17(1) of the Income-tax Act,1961

- - - - -

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961

- - - - -

(c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961

- - - - -


57

A Maharatna Company

Sl. No.


2. Stock Option - - - - -

3. Sweat Equity - - - - -


- as % of profit -

- others, specify… -

5. Others, please specify - - - - -

Total (A) - - - - -

Ceiling as per the Act - - - - -


Sl. No.




• Commission


Total (1) - - - - -



• Commission


Total (2) - - - - -

Total (B) = (1 + 2) - - - - -

Total Managerial Remuneration - - - - -

Overall Ceiling as per the Act - - - - -


Sl. No.



CFO Total

1. Gross Salary


33,35,976 16,07,153 32,26,532 81,69,661

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961

93,334 45,794 95,761 2,34,889

(c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961

- - - -

2. Stock Option - - - -

3. Sweat Equity - - - -


58

A Maharatna Company

Sl. No.



CFO Total

4. Commission - as % of profit

- others, specify - - -

5. Others, please specify(Leave encashment) - - - -

Total 34,29,310 16,52,947 33,22,293 84,04,550


Type Section of the companies act

Brief description Details of Penalty /

Punishment / Compounding fees imposed


Appeal made, if any (give

details)

A. COMPANY

Penalty - - - - -



B. DIRECTORS

Penalty - - - - -




Penalty - - - - -







59

A Maharatna Company

“Annexure V”

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm’s length basis

(a) Name(s) of the related party and nature of relationship

: Utility Powertech Limited. A Joint Venture Company of holding company viz. NTPC Limited

(b) Nature of contracts/arrangements/ transactions

: The contract was for hiring of skilled and non-skilled manpower for carrying out day-to-day activities of the Company.

(c) Duration of the contracts/arrangements/ transactions

: Contracts were for the durations of 3 months, 9 months and 1 year

(d) Salient terms of the contracts or arrangements or transactions including the value, if any

: Cumulative approved contract value was upto `73,00,000

(e) Justification for entering into such contracts or arrangements or transactions

: Utility Powertech Limited (UPL), a Joint Venture Company of NTPC Limited, the holding Company, is providing manpower to joint ventures and subsidiaries of NTPC. Since incorporation of the Company, UPL is providing skilled and non-skilled manpower.

(f) Date(s) of approval by the Board : September 21, 2016

(g) Amount paid as advances, if any: : Nil

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

: Not Applicable

2. Details of material contracts or arrangement or transactions at arm’s length basis

(a) Name(s) of the related party and nature of relationship

Not Applicable

(b) Nature of contracts/arrangements /transactions

: Not Applicable

(c) Duration of the contracts / arrangements /transactions

: Not Applicable

(d) Salient terms of the contracts or arrangements or transactions including the value, if any:

: Not Applicable

(e) Date(s) of approval by the Board, if any:

: Not Applicable

(f) Amount paid as advances, if any: : Not Applicable





60

A Maharatna Company

BALANCE SHEET AS AT 31ST MARCH 2017 ` Lakh

Particulars Note No. As at 31.03.2017

As at 31.03.2016

As at 01.04.2015

ASSETSNon-current assets

Property, plant and equipment 2 13.06 17.21 24.74 Capital work-in-progress 3 - 3.41 3.41 Intangible assets 2 1.32 4.50 7.69 Deferred tax Asset (net) 4 5.02 - - Other non-current assets 5 2,727.29 2,891.56 2890.86

2,746.69 2,916.68 2926.70 Current assets

Financial assetsTrade receivables 6 53,970.29 55,874.67 48583.95 Cash and cash equivalents 7 18,379.80 2,435.13 3142.20 Other bank balances 8 16,418.99 31,050.32 32894.55 Other financial assets 9 52,521.18 32,773.31 28916.77

Other current assets 10 249.85 405.26 119.07 141,540.11 122,538.69 113656.54

TOTAL ASSETS 144,286.80 125,455.37 116583.24

EQUITY AND LIABILITIESEquity

Equity share capital 11 2,000.00 2,000.00 2,000.00 Other equity 12 29,021.76 21,378.22 18,589.58

31,021.76 23,378.22 20,589.58 LiabilitiesNon-current liabilities

Deferred tax liabilities (net) 4 - 86.63 1.83 - 86.63 1.83

Current liabilitiesFinancial liabilities

-Trade payables 13 85,087.79 64,303.23 53,782.83 -Other financial liabilities 14 25,507.47 33,062.67 41,267.91

Other current liabilities 15 408.43 208.48 426.17 Provisions 16 1,832.24 4,122.70 399.88 Current tax liabilities (net) 17 429.11 293.44 115.04

113,265.04 101,990.52 95,991.83 TOTAL EQUITY AND LIABILITIES 144,286.80 125,455.37 116,583.24 Significant Accounting Policies 1The accompanying notes 1 to 38 form an integral part of these financial statements.


(Nitin Mehra) (Alka Saigal) (A. K. Garg) (K. Biswal) (Gurdeep Singh)Company Secretary CFO CEO Director Chairman

For S S Kothari Mehta & Co.,Chartered Accountants

Firm Registration No.000756N

(Naveen Aggarwal)Partner ( M.No.94380)

Place: New DelhiDate:


61

A Maharatna Company

` Lakh

Particulars Note No. For the year ended 31.03.2017

For the year ended 31.03.2016

Revenue

Revenue from operations 18 522,384.31 402,002.47

Other income 19 3,731.57 2,092.92

Total revenue 526,115.88 404,095.39

Expenses

Purchase of energy 20 511,155.33 393,674.09

Employee benefits expense 21 1,458.12 1,397.36

Finance costs 22 532.95 5.23

Depreciation, amortization and impairment expense 2 9.61 13.07

Other expenses 23 1,128.56 978.97

Total expenses 514,284.57 396,068.72

Profit before tax 11,831.31 8,026.67

Tax expense

Current tax

Current year 4,279.65 2,746.08

Earlier years (0.23) -

Deferred tax (91.65) 84.80

Total tax expense 4,187.77 2,830.88

Profit for the year 7,643.54 5,195.79

Total comprehensive income for the year 7,643.54 5,195.79

Significant accounting policies 1

Earnings per equity share (Par value `10/- each)

Basic & Diluted (`) 38.22 25.98

The accompanying notes 1 to 38 form an integral part of these financial statements.






Place: New DelhiDate: 18.05.2017

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2017


62

A Maharatna Company

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017` Lakh


As at 31.03.2016

A. CASH FLOW FROM OPERATING ACTIVITIESNet profit/(loss) before tax 11,831.31 8,026.67 Adjustment for:Depreciation 9.61 13.07 Interest Charges 58.08 5.23 Interest income (639.43) (1,143.25)Provision 7.85 - Profit on disposal of fixed asset - (0.03)

(563.89) (1,124.98)Operating Profit before Working Capital Changes 11,267.42 6,901.69 Adjustment for:Trade and other receivables (17,976.26) (10,938.54)Trade payable, provisions and other liabilities 13,546.00 3,813.02 Deposits & other bank balances 14,631.33 1,844.23 Other Current Assets 288.18 (494.92)

10,489.25 (5,776.21)Cash generated from operations 21,756.67 1,125.48 Direct taxes paid (4,042.00) (2,372.69)Net Cash from Operating Activities-A 17,714.67 (1,247.21)

B. CASH FLOW FROM INVESTING ACTIVITIESPurchase of fixed assets (3.03) (5.00)Disposal of fixed assets 0.75 2.68 Interest on Investments Received 639.43 1,143.25 Income Tax on Interest on Investments (200.91)Net Cash used in Investing Activities -B 637.15 940.02

C. CASH FLOW FROM FINANCING ACTIVITIESDividend paid (2,000.00) - Tax on dividend (407.15) (399.88)Interest Paid - - Net Cash flow from Financing Activities-C (2,407.15) (399.88)Net Increase/(Decrease) in Cash and Cash equivalents (A+B+C) 15,944.67 (707.07)Cash and Cash equivalents (Opening balance) 2,435.13 3,142.20 Cash and Cash equivalents (Closing balance) 18,379.80 2,435.13

NOTESCash and Cash Equivalents consist of Balance with Banks in current accounts. Cash & cash equivalents included in the cash flow statement comprise of following balance sheet amounts as per Note 7:Balances with banksCurrent accounts 18,379.80 2,435.13








63

A Maharatna Company

(a)

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64

A Maharatna Company

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65

A Maharatna Company

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66

A Maharatna Company

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67

A Maharatna Company

3. Capital work-in-progress

` Lakh

Particulars As at Deductions/ As at

01.04.2016 Additions Adjustments Capitalised 31.03.2017

EDP/WP machines & satcom equipment 3.41 - - - 3.41

Less : Provision for unserviceable CWIP - 3.41 - - 3.41

Total 3.41 (3.41) - - -

` Lakh



EDP/WP machines & satcom equipment 3.41 - - - 3.41

Total 3.41 - - - 3.41

4. Deferred tax Assets & Liabilities

` Lakh

Particulars As at01.04.2016

Additions/ (Adjustments)

during the year

As at 31.03.2017

Deferred tax liability

- Difference in book depreciation and tax depreciation 0.65 (1.87) (1.22)

- Accrued rebate allowed to beneficiaries 137.11 (137.11)

Total deferred tax liability (A) 137.76 (138.98) (1.22)

Deferred tax asset

- Provisions & other disallowances for tax purposes 0.77 3.03 3.80

- Accrued rebate earned 50.36 (50.36)

Total deferred tax asset (B) 51.13 (47.33) 3.80

Net deferred tax liability (A-B) 86.63 (91.65) (5.02)

` Lakh



during the year

As at31.03.2016


- Difference in book depreciation and tax depreciation 2.59 (1.94) 0.65

- Accrued rebate earned 137.11 137.11

Total deferred tax liability (A) 2.59 135.17 137.76


68

A Maharatna Company

` Lakh



during the year

As at31.03.2016

Deferred tax asset

- Provisions & other disallowances for tax purposes 0.76 0.01 0.77

- Accrued rebate 50.36 50.36

Total deferred tax asset (B) 0.76 50.37 51.13

Net deferred tax liability (A-B) 1.83 84.80 86.63

- The net changes in deferred tax has been credited to Profit & Loss account.

- Deferred tax assets and deferred tax liability has been offset as they relate to the same governing law.

5. Other non current assets (Considered good, unless otherwise stated)

` Lakh


As at 31.03.2016

As at 01.04.2015

Deposits

- Deposit with Sales tax Authority 0.50 0.50 0.50

Advances

- Advance tax & tax deducted at source 11,771.55 13,169.06 10,413.38

Less: Provision for tax 9,044.76 10,278.00 7,523.02

2,726.79 2,891.06 2,890.36

Total 2,727.29 2,891.56 2,890.86


` Lakh


As at 31.03.2016

As at 01.04.2015

Unsecured, considered good 53,970.29 55,874.67 48583.95

Considered doubtful 2.23 2.23 2.23

53,972.52 55876.90 48586.18

Less: Allowance for bad & doubtful receivables 2.23 2.23 2.23

Total 53970.29 55874.67 48583.95

Unbilled revenues of `52402.93 Lakh (`32522.29 Lakh as on 31.03.2016 & `28874.48 Lakh as on 01.04.2015) is stated in Note 9.


69

A Maharatna Company

7. Cash and cash equivalents

` Lakh


As at 31.03.2016

As at 01.04.2015

Balances with banks

Current accounts 18,379.80 2,435.13 3,142.20

18,379.80 2,435.13 3,142.20

8. Other bank balances

` Lakh


As at 31.03.2016

As at 01.04.2015

Deposits with original maturity of more than three months and maturing within one year (incl. accrued interest)

14,943.76 29,682.08 15,939.68

Earmarked balances with banks # 1,475.23 1,368.24 16,954.87

Total 16,418.99 31,050.32 32,894.55

# Not available for use to the Company and include:

Term deposit as security with Sales Tax Authorities 0.25 0.25 0.25

Term deposits Fly Ash Utilisation Fund - - 15,711.39

Term Deposit as per the directive from the Hon'ble High Court of Delhi 1,474.98 1,367.99 1,243.23

1,475.23 1,368.24 16,954.87

9. Other current financial assets

` Lakh


As at 31.03.2016

As at 01.04.2015

Advances

Others

Unsecured 14.32 17.4 4.29

Deposits *

Others

Unsecured 103.93 233.62 38.00

118.25 251.02 42.29

Unbilled revenue # 52,402.93 32,522.29 28,874.48

Total 52,521.18 32,773.31 28,916.77

* Deposits include margin money with Indian Energy Exchange (IEX) & Power Exchange of India Ltd. (PXIL). # Unbilled revenues are for sale of energy for which the bills have been raised to customers subsequent to the reporting

date.


70

A Maharatna Company

10. Other current assets

` Lakh


As at 31.03.2016

As at 01.04.2015

Others

Unsecured 254.43 404.50 118.31

Less: Provision for Doubtful advances 5.34 - -

249.09 404.50 118.31

Assets held for disposal 0.76 0.76 0.76

Total 249.85 405.26 119.07

11. Share capital

` Lakh


As at 31.03.2016

As at 01.04.2015


Authorised

2,00,00,000 shares of par value of `10/- each

(Previous year 2,00,00,000 shares of par value of `10/- each) 2,000.00 2,000.00 2,000.00

Issued, subscribed and fully paid up

2,00,00,000 shares of par value of `10/- each

(Previous year 2,00,00,000 shares of par value of `10/- each) 2,000.00 2,000.00 2,000.00

a) During the period, the company has not issued/bought back any equity shares.

b) The company has only one class of equity shares having par value of `10/- each.

c) The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their shareholding at the meetings of its shareholders subject to approval of the shareholders.

d) Dividends: Paid during the year

2016-17 2015-16

Interim dividend for the year ended 31st March 2016 - 2,000.00

(`10/- per equity share of par value `10/- each) - -

Interim dividend for the year ended 31st March 2017


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A Maharatna Company

12. Other equity

` Lakh


As at 31.03.2016

As at 01.04.2015

Corporate social responsibility (CSR) reserve

As per last financial statements 61.89 62.14 -

Add : Transfer from surplus 11.14 61.89 62.14

Less: Transfer to surplus 61.89 62.14 -

11.14 61.89 62.14

General reserve 21,079.38 18,479.38 16,579.38

As per last financial statements 7,900.00 2,600.00 1,900.00

Add : Transfer from surplus - - -

Less: Adjustments during the year 28,979.38 21,079.38 18,479.38

Retained earnings

As per last financial statements 236.95 48.06 48.94

Add: Profit for the year as per Statement of Profit and Loss 7,643.54 5,195.79 4,361.14

Transfer from CSR reserve 61.89 62.14 -

Less: Transfer to CSR reserve 11.14 61.89 62.14

Transfer to general reserve 7,900.00 2,600.00 1,900.00

Interim dividend - 2,000.00 2,000.00

Tax on interim dividend - 407.15 399.88

31.24 236.95 48.06

Total 29,021.76 21,378.22 18,589.58

In terms of Section 135 of the Companies Act, 2013 read with guidelines on Corporate Social Responsibility issued by Department of Public Enterprise (DPE) GOI, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. The company has spent an amount of ̀ 207.77 Lakh during the year and unspent balance amounting to ̀ 11.14 Lakh has been appropriated to CSR reserve from surplus (refer note no. 34).

13. Trade payables

` Lakh


As at 31.03.2016

As at 01.04.2015

For goods and services 85,087.79 64,303.23 53,782.83

Disclosure with respect to Micro, Small and Medium Enterprises as required by Micro, Small and Medium Enterprises Development Act, 2006 is made in Note 33.


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A Maharatna Company

14. Other financial liabilities (Current)

` Lakh


As at 31.03.2016

As at 01.04.2015

Payable for capital expenditure 3.41 3.41 3.41

Other payables

Deposits from contractors and others 37.87 94.60 30.25

Payable to holding company 322.22 261.55 18,154.01

Payable to employees 88.38 105.14 111.90

Retention on A/c BG encashment (Solar) 23,362.24 18,764.91 19,911.86

Payable to Solar Payment Security Account 187.52 12,431.75 1,767.30

Others 1,505.83 1,401.31 1,289.18

Total 25,507.47 33,062.67 41,267.91

a) Other payables-Retention on A/c BG encashment (solar) comprises of:

For the year 2016-17

` Lakh



As at 31.03.2017

Amount received as liquidated damages on late commissioning of solar power plants

19,295.89 5,195.25 24,491.14

Add: Interest accrued on above ( Note 16) 1,818.91 - 1,818.91

Less: Legal expenses 634.34 481.23 1,115.57

Less: Liability on a/c of arbitration cases where award has been pronounced

1,715.55 116.69 1,832.24

Net Balance- Retention on A/c BG encashment (Solar) 18,764.91 4,597.33 23,362.24

For the year 2016-17

` Lakh



As at 31.03.2016

Amount received as liquidated damages on late commissioning of solar power plants

18,407.19 888.70 19,295.89

Add: Interest accrued on above ( Note 16) 1,818.91 - 1,818.91

Less: Legal expenses 314.24 320.10 634.34

Less: Liability on a/c of arbitration cases where award has been pronounced

1,715.55 1,715.55

Net Balance- Retention on A/c BG encashment (Solar) 19,911.86 (1,146.95) 18,764.91

- The above treatment in “Retention on A/c BG encashment (Solar)” is made as per the directions received from the Ministry of New and Renewable Energy (MNRE) vide letter ref. no. 29/5/2010-11/JNNSM(ST) dated 29.06.2012 and clarifications thereafter.


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A Maharatna Company

- The Company utilised ` 23362.24 Lakh from “Retention on A/c BG encashment (Solar)” for non payment of dues by its customers under JNNSM scheme .

b) Other payables - Payable to Solar Payment Security Account : Upto current year, the company has withdrawn an amount of ` 187.52 Lakh (other than SPSA Management Fees @ 1% recoverable) on account of default by its customers from Solar Payment Security Account as per the directions received from the Ministry of New and Renewable Energy (MNRE).

c) Other payables - Others include the amount received on encashment of the Bank Guarantee of ` 950.65 Lakh on 02.11.2011 invested in Fixed Deposit as per the directive from the Hon’ble High Court of Delhi till the matter is settled through Arbitration. Further, interest accrued thereon upto current year amounting to ` 555.18 Lakh (` 450.66 Lakh upto 31.03.2016 & ` 338.53 Lakh upto 01.04.2015) also stands credited in the said account.

d) Considering the directions received from MNRE and opinion of the tax consultant, there is a transfer of proceeds from BG encashment by overriding effect because the proceeds from BG encashment do not belong to the company since it has to be used for specified purposes and there will be no tax liability.

15. Other current liabilities

` Lakh


As at 31.03.2016

As at 01.04.2015

Advances from customers and others 134.34 54.74 15.62

Other payables

Tax deducted at source and other statutory dues 274.09 153.74 410.55

Total 408.43 208.48 426.17

16. Provisions

` Lakh


As at 31.03.2016

As at 01.04.2015

Provision for

Interim Dividend - 2,000.00 -

Tax on interim Dividend - 407.15 399.88

Arbitration Cases 1,832.24 1,715.55 -

Total 1,832.24 4,122.70 399.88

17. Current tax liabilities (net)

` Lakh


As at 31.03.2016

As at 01.04.2015

Provision for Current Tax 429.11 293.44 115.04


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A Maharatna Company

18. Revenue from operations

` Lakh

Particulars For the year ended 31.03.2017


Revenue from operations

Sale of energy 526,811.43 - 405,306.80

Less: Rebate to beneficiaries 4,886.52 - 3,456.05

521924.91 401,850.75

Commission 459.40 151.72

Total 522,384.31 402,002.47

a) Sale of bilateral energy and energy under SWAP arrangements in million units (MUs) are recognized on the basis of monthly Regional Energy Accounts (REA) issued by the concerned Regional Power Committee (RPC).

b) Sale of bilateral energy includes compensation received of ` 164.48 Lakh (previous period ` 93.96 Lakh) due to lesser supply/drawl of power by the supplier/buyers and open access charges on energy trading borne by the company.

c) Sale of Solar and thermal bundled energy in million units are recognized on the basis of monthly Joint meter reading (JMR)/Regional Energy Account (REA) issued by the concerned authorities.

d) Sale of energy under Swap arrangements is billed by margin only to buyers.

e) Commission on energy trading through exchange recognised as agreed with the client.

19. Other income

` Lakh



Interest from

Loan to employees 3.58 -

Deposits with banks/Reserve Bank of India 639.43 1,399

Less : Transferred to Holding Co. (Note 14)* - 639.43 255.75

1,143.25

Other non-operating income

Surcharge received from customers 2,775.53 730.27

Management Fee 241.15 120.69

Miscellaneous income # 71.88 98.68

Profit on disposal of fixed assets - 0.03

Total 3,731.57 2,092.92

- 167.24

* Amount transferred (net of tax)

# Miscellaneous income includes sundry balance written back, liquidated damages recovered etc.


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A Maharatna Company

20. Purchase of Energy

` Lakh



Purchase of energy 518,653.46 398,780.47

Less: Rebate to Sellers 7,498.13 5,106.38

Total 511,155.33 393,674.09

a) Purchase of energy in million units (MUs) are recognized on the basis of monthly Regional Energy Accounts (REA) issued by the concerned Regional Power Committee (RPC).

b) Bilateral energy purchase includes compensation payment of ` 164.48 Lakh (previous year `89.76 Lakh) due to lesser supply/drawl of power by the Company.

c) Purchase of Solar and thermal bundled energy in million units are recognized on the basis of monthly Joint meter reading (JMR) / REA issued by the concerned authorities.

21. Employee benefits expense

` Lakh



Salaries and wages 1,103.18 1,058.19

Contribution to provident and other funds 269.80 269.82

Staff welfare expenses 85.14 69.35

Total 1,458.12 1,397.36

a) All the employees of the Company are on secondment from NTPC Limited. Pay, allowances, perquisites and other benefits of the employees are governed by the terms and conditions under an agreement with NTPC Ltd. As per the agreement, amount equivalent to a fixed percentage of basic & DA of the seconded employees is payable by the company for employee benefits such as provident fund, pension, gratuity, post retirement medical facilities, compensated absences, long service award, economic rehabilitation scheme and other terminal benefits.

b) An amount of ` 202.79 Lakh (previous year ` 201.39 Lakh) towards provident fund, pension, gratuity, post retirement medical facilities & other terminal benefits and ` 67.01 Lakh ( previous year ` 68.43 Lakh ) towards leave & other benefits are paid/ payable to the holding Company and are included under Employee benefits.

c) The pay revision of the employees of the company is due w.e.f. 1st January 2017. Pending decision of the committee formed by GOI, a provision of ̀ 66.19 Lakh has been made on estimated basis as apportioned by the Holding company i.e. NTPC Ltd.

22. Finance costs

` Lakh



Interest paid

Income Tax 62.51 5.23

SPSA account 470.39 -

Others 0.05 -

Total 532.95 5.23


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A Maharatna Company

23. Other expenses

` Lakh



Power charges 19.14 18.31

Rent 499.19 464.18

Repairs & maintenance

Buildings 16.09 24.53

Others 1.65 1.41

17.74 25.94

Insurance 0.01 0.03

Rates and taxes 40.00 40.00

Training & recruitment expenses 0.06 0.94

Communication expenses 30.54 25.37

Travelling expenses 71.55 96.36

Tender expenses 93.10 8.72

Less: Receipt from sale of tenders 0.90 -

92.20 8.72

Payment to auditors 3.45 1.71

Entertainment expenses 10.95 12.08

Brokerage & commission 0.14

Corporate Social Responsibility (CSR) Expenses 207.78 147.25

Books and periodicals 0.34 0.22

Professional charges and consultancy fee 71.77 36.77

Surcharge expenses 0.47 0.00

Legal expenses 0.29 24.27

EDP hire and other charges 0.79 1.1

Printing and stationery 0.92 1.65

Hiring of vehicles 1.59 2.99

Bank charges/LC Charges 19.88 41.8

Miscellaneous expenses 31.15 29.14

1,119.81 978.97

Provision for advance 5.34 -

Provision for unserviceable CWIP 3.41 -

Total 1,128.56 978.97

24. a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. In addition, reconciliation with beneficiaries and other customers is generally done on a regular interval and therefore separate balance confirmation not required. For trade payables/loans/advances, balance confirmation letters were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.


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A Maharatna Company

b) In the opinion of the management, the value of assets, other than fixed assets and non-current investments, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

25. Disclosure as per Ind AS 12 ‘Income taxes’

(a) Income tax expense

(i) Income tax recognised in Statement of Profit and Loss

` Lakh

31 March 2017

31 March 2016

Current tax expense

Current year 4279.65 2746.08

Adjustment for prior periods (0.23) -

Deferred tax expense

Origination and reversal of temporary differences (91.65) 84.80

Total income tax expense 4187.77 2830.88

(ii) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate

` Lakh

31 March 2017

31 March 2016

Profit before tax 11831.31 8026.67

Tax using the Company’s domestic tax rate of 34.61%(31 March 2016 - 34.61%)

4094.58 2777.87

Tax effect of:

Non-deductible tax expenses 93.42 53.01

Others (0.23) -

Total tax expense in the statement of profit & loss 4187.77 2830.88

26. Disclosure as per Ind AS 17 ‘Leases’

The Company’s significant leasing arrangement are in respect of operating leases of the premises for residential use of the employees amounting to ` 37.87 Lakh (Previous period ` 44.92 Lakh) and are included in Note 21-“Employees Benefits Expense”. Similarly, lease payments in respect of premises for offices amounting to ` 499.19 Lakh (Previous period ` 464.18 Lakh) are shown in Rent in Note 23 -“Other Expenses”. The significant leasing arrangements for such leases are entered into by the Company and its Holding Company i.e. NTPC Limited and these leasing arrangements are usually renewable on mutually agreed terms but are not non-cancelable.

27. Disclosure as per Ind AS 24 ‘Related Party Disclosures’

List of Related parties:

i) Holding Company - NTPC Ltd.

ii) Joint Venture company of NTPC Ltd.:

Utility Powertech Ltd.

NTPC-SAIL Power Company Pvt. Ltd.

Aravali Power Company Pvt. Ltd.


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A Maharatna Company

iii) Key Management Personnel (KMP)

Shri Gurdeep Singh - Chairman

Shri A. K. Jha - Director

Shri K. Biswal - Director

Shri K. K. Sharma - Director

Ms. A. Satyabhama - Director

Shri N. K. Sharma - CEO - upto 30.09.2016

Shri A. K. Garg - CEO - w.e.f. 01.10.2016

Ms. Alka Saigal - CFO

Shri Nitin Mehra - Company Secretary

Transactions with the related parties are as follows:

Holding Company and Joint Venture Companies of Holding Company` Lakh

Particulars 2016-17 2015-16

Contracts for services received from JV of holding company 55.04 49.00

Purchase of goods from holding company 207,367.32 181,290.92

Purchase of goods from JV of holding company 3,206.58 -

Dividend paid to holding company - 2,000.00

` Lakh

Particulars 2016-17 2015-16

Compensation to Key management personnel

- Short term employee benefits 75.45 87.98

- Post employment benefits 1.91 4.83

- Other long term benefits 17.27 16.52

- Termination benefits 27.01 -

Total Compensation to Key management personnel 121.64 109.33

Outstanding balances with related parties are as follows:

` Lakh

Particulars 31 March 2017

31 March 2016

1 April2015

Utility Powertech Ltd. 4.93 21.45 16.32

NTPC Ltd. 23372.46 34,262.49 38,887.84

NTPC-SAIL Power Company Pvt. Ltd. * 592.62 - -

Aravali Power Company Pvt. Ltd. * 73.84 - -

* Payable towards exchange transaction

The company’s management is of the opinion that its domestic transactions with related parties are at arms length and will not have any impact on financial statements for the year ended 31.03.2017.


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A Maharatna Company

28. Disclosure as per Ind AS 33 ‘Earnings per Share’

The elements considered for calculation of Earning Per Share (Basic and Diluted) are as under:

Particulars Year ended 31.03.2017

Year ended 31.3.2016

Net profit/(loss) after Tax used as numerator (` Lakh) 7643.54 5195.79

Weighted average number of equity shares used as denominator 20000000 20000000

Earning per share (Basic & Diluted) - (`) 38.22 25.98

Face Value per share - (`) 10.00 10.00

29. Disclosure as per Ind AS 36 ‘Impairment of Assets’

There are no external/internal indicators which leads to any impairment of assets of the company as required by Ind AS 36 ‘Impairment of Assets’.

30. Disclosure as per Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’

Movements in provisions:

` Lakh

Particulars Provision for arbitration cases

Provision for doubtful debts

Provision for doubtful advances

Provision for unserviceable CWIP

31.03.17 31.03.16 31.03.17 31.03.16 31.03.17 31.03.16 31.03.17 31.03.16

Carrying amount at the beginning of the year

1,715.55 - 2.23 2.23 - - - -

Additions during the year 116.69 1,715.55 - - 5.34 - 3.41 -

Amounts used during the year - - - - - - - -

Reversal / adjustments during the year

- - - - - - - -

Carrying amount at the end of the year

1,832.24 1,715.55 2.23 2.23 5.34 - 3.41 -

Contingent Liability:

a) -Various solar power developers challenged the encashment/ forfeiture of EMD/Bid bond under provisions of PPA before arbitrator/High Courts. The contingent liability of ` 23469.84 Lakh and interest claim of ` 14789.09 Lakh thereon (31st March 2016: contingent liability ̀ 23469.84 Lakh and interest ̀ 8958.78 Lakh, 1st April 2015: contingent liability ` 22100.23 Lakh and interest ` 6206.57 Lakh) has been estimated. Any possible liability crystalised on the above will be recovered from “Retention on A/c BG encashment (Solar)” (Note 14).

b) -One party has challenged the invocation of BG of ` 100.00 Lakh on the ground of non conclusion of contract with the company for Ash Business. Interest on above has been estimated till current year ` 99.57 Lakh (31st March 2016: ` 77.08 Lakh, 1st April 2015: ` 63.52 Lakh).

c) - 3.84 Million units supplied by the sellers under SWAP arrangements are yet to be returned - Amount uncertainable.


These are the Company’s first Financial Statements in accordance with Ind AS. For the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2015 (the date of transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS.


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A Maharatna Company

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of 1 April 2015 compared with those presented in the opening Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position, financial performance and cash flows is set out in the following tables and notes.


In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the Indian GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

Tangible & Intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its tangible and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities.

Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

Reconciliation of equity as at 1 April 2015 and as at 31 March 2016

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of 1 April 2015 compared with those presented in the Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.


` Lakh

1 April 2015 31 March 2016

Previous GAAP*


Adjustments Ind ASs

ASSETS

Non-current assets

Property, plant and equipment 24.74 - 24.74 17.21 - 17.21

Capital work-in-progress 3.41 - 3.41 3.41 - 3.41

Intangible assets 7.69 - 7.69 4.50 - 4.50

Other financial assets

Deferred tax Asset (net) - - 0.12 (0.12) -

Other non-current assets 2,915.86 (25.00) 2,890.86 2,926.56 (35.00) 2,891.56

Current Assets

Financial assets

Trade receivables 48,583.95 - 48,583.95 56,020.18 (145.51) 55,874.67

Cash and cash equivalents 34,743.91 (31,601.71) 3,142.20 33,371.72 (30,936.59) 2,435.13

Other bank balances - 32,894.55 32,894.55 - 31,050.32 31,050.32

Other financial assets 106.58 28,810.19 28,916.77 221.35 32,551.96 32,773.31

Other current assets 30,197.10 (30,078.03) 119.07 33,035.94 (32,630.68) 405.26

Total Assets 116,583.24 - 116,583.24 125,600.99 (145.62) 125,455.37


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A Maharatna Company

` Lakh

1 April 2015 31 March 2016

Previous GAAP*


Adjustments Ind ASs

EQUITY & LIABILITIES

Equity

Equity Share capital 2,000.00 - 2,000.00 2,000.00 - 2,000.00

Other equity 18,589.58 - 18,589.58 21,214.28 163.94 21,378.22

Liabilities

Non-current liabilities

Deferred tax liabilities (Net) 1.83 - 1.83 - 86.63 86.63

Current liabilities

Financial liabilities

Trade payables 53,045.73 737.10 53,782.83 63,833.16 470.07 64,303.23

Other financial liabilities - 41,267.91 41,267.91 - 33,062.67 33,062.67

Other current liabilities 42,431.18 (42,005.01) 426.17 34,137.41 (33,928.93) 208.48

Provisions 514.92 (115.04) 399.88 4,416.14 (293.44) 4,122.70

Current Tax Liabilities (Net) 115.04 115.04 - 293.44 293.44

Total equity and liabilities 116,583.24 - 116,583.24 125,600.99 (145.62) 125,455.37

* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.Reconciliation of total comprehensive income for the year ended 31 March 2016

` Lakh Previous GAAP* Adjustments Ind ASs

INCOME Revenue 410,168.71 (8,166.24) 402,002.47 Other income 2,092.92 - 2,092.92 Total Income 412,261.63 (8,166.24) 404,095.39 EXPENDITURE Purchase of energy 398,780.47 (5,106.38) 393,674.09 Rebate on energy sale 3,310.54 (3,310.54) - Employee benefits expense 1,397.36 - 1,397.36 Finance expenses 5.23 - 5.23 Depreciation and amortization 13.07 - 13.07 Generation, Administration and Other expenses 978.97 - 978.97 Total Expenses 404,485.64 (8,416.92) 396,068.72 Profit before tax and Rate Regulated Activities(RRA) 7,775.99 250.68 8,026.67 Current tax Current year 2,746.08 - 2,746.08 Deferred tax (1.95) 86.75 84.80

2,744.13 86.75 2,830.88 Profit after tax 5,031.86 163.93 5,195.79

Total comprehensive income for the year 5,031.86 163.93 5,195.79

* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.

Reconciliation of total equity as at 31 March 2016 and 1 April 2015


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A Maharatna Company

` Lakh

31 March 2016 1 April 2015

Total equity (shareholder’s funds) as per previous GAAP 23,214.28 20,589.58

Adjustments:

Provision of rebate to customers & sellers (net) 250.69 -

Tax effect of above adjustments (86.75) -

Total adjustments 163.94 -

Total equity as per Ind AS 23,378.22 20,589.58

Reconciliation of total comprehensive income for the year ended 31 March 2016

` Lakh

31 March 2016

Profit after tax as per previous GAAP 5,031.86

Adjustments:

Provision of rebate to customers & sellers (net) 250.69

Tax effect of above adjustments (86.75)

Total adjustments 163.94

Profit after tax as per Ind AS 5,195.80

Other comprehensive income (net of tax): 5,195.80

Total comprehensive income as per Ind AS 5,195.80

32. Disclosure as per Ind AS 108 ‘Operating segments’

As on date the Company has no reportable segments as per the Chief operating decision maker (CODM) of the company.

The Company has not disclosed geographical segments as operations of the Company are mainly carried out within the country.

33. Information in respect of micro and small enterprises as at 31 March 2017 as required by Micro, Small and Medium Enterprises Development Act, 2006

` Lakh


31 March 2016

1 April 2015

a) Amount remaining unpaid to any supplier:

Principal amount 0.12 - -

Interest due thereon - - -

b) Amount of interest paid in terms of Section 16 of the MSMED Act along-with the amount paid to the suppliers beyond the appointed day.

- - -

c) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act.

- - -

d) Amount of interest accrued and remaining unpaid - - -

e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises, for the purpose of disallowances as a deductible expenditure under Section 23 of MSMED Act

- - -

34. Corporate Social Responsibility Expenses (CSR)


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A Maharatna Company

As per Section 135 of the Companies Act, 2013 read with guidelines issued by DPE, the Company is required to spend, in every financial year, at least two per cent of the average net profits of the Company made during the three immediately preceding financial years in accordance with its CSR Policy. The details of CSR expenses for the year are as under:

` Lakh

Particulars 31 March 2017 31 March 2016

A. Amount required to be spent during the year 157.02 147.00

B. Shortfall amount of previous year 61.89 62.14

C. Total (A+B) 218.91 209.14

D. Amount spent during the year on-(in collaboration with NTPC)

- Construction/ acquisition of any asset 136.27 138.33

- On purposes other than (i) above 71.50 8.92

Total 207.77 147.25

Shortfall amount appropriated to CSR reserve 11.14 61.89

Break-up of the CSR expenses under major heads is as under:

` Lakh

Particulars 31 Mrach 2017 31 Mrach 2016

1. Swachh Vidyalaya Abhiyan

2. Healthcare and sanitation - 107.22

3. Education and skill development - 8.92

4. Rural development 103.05 9.11

5. Environment 53.18 -

6. Drinking water 51.54 22.00

Total 207.77 147.25

35. Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016:

Particulars Specified Bank Notes Other denomination notes

Total

Closing cash in hand as on 08.11.2016 - - -

Add: Permitted receipts - - -

Less: Permitted payments - - -

Less: Amount deposited in Banks - - -


36. Financial Risk Management

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables

Trade receivables of the company can be dividedinto two parts- solar debtors & non-solar debtors. Payment from non-solar debtors are regular whereas in solar debtors there are some disputes with one of the beneficiary.


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A Maharatna Company

The ageing analysis of the trade receivables is as below:

As on 31.03.2017 ` Lakh

Ageing Not due 0-30 days past due

31-60 days past due

61-90 days past due

91-120 days

past due

More than 120 days past due

Total

Gross carrying amount 956.54 9712.96 18878.28 1419.38 5339.89 17663.25 53,970.29

As on 31.03.2016 ` Lakh


31-60 days past due

61-90 days past due

91-120 days

past due


Total

Gross carrying amount 3455.11 15181.82 18719.51 77.58 2921.93 15518.72 55874.67

As on 01.04.2015 ` Lakh


31-60 days past due

61-90 days past due

91-120 days

past due


Total

Gross carrying amount 5775.72 15953.08 12414.98 195.19 291.15 13953.83 48583.95

Deposits with banks and financial institutions

The Company held deposits with banks and financial institutions of ` 14943.76 Lakh (31 March 2016: ` 29682.08 Lakh, 1 April 2015: ` 15939.68 Lakh). In order to manage the risk, company accepts only high rated banks/institutions.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was nil.

37. Figures in the Financial Statements have been rounded off to `/Lakh upto two decimal.

38. Previous year figures have been regrouped / rearranged wherever considered necessary.






Place: New DelhiDate:


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INDEPENDENT AUDITORS REPORTTo the Members of

NTPC Vidyut Vyapar Nigam Limited

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of NTPC Vidyut Vyapar Nigam Limited (“the Company”), which comprise the Balance Sheet as at 31 March 2017, Statement of Profit and Loss (including other comprehensive income) and the statement of Cash Flows and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as “Ind AS Financial Statements”).

Management’s Responsibility for the Financial Statements.

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013(“Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Management, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017.In the case of the Profit and Loss including other comprehensive income, of the profit for the year ended on that date, In the case of the Cash Flow Statement, of the cash flows and the changes in equity for the year ended on that date.

Report on Legal and Other Regulatory Requirements

1. 1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of


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India in terms of section 143(11) of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 and 4 of the order.

2. We are enclosing our report in terms of section 143(5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to information and explanation given to us, in the “Annexure B” on the directions and sub-directions issued by Comptroller and Auditor General of India.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The balance sheet, the statement of profit and loss and the cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. Except IND AS-105

(e) Being a Government Company, pursuant to the Notification No. GSR 463(E) dated 5 June 2015 issued by Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure C”; and

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements- Refer note 30 to the Ind AS financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

(iv) The Company has provided requisite disclosures in its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 35 to the Ind AS financial statements.

For S.S. Kothari Mehta & Co.

Chartered AccountantsFirm Registration Number: 000756N

(Naveen Aggarwal)Partner

Membership Number: 094380Place: New DelhiDate : 18.05.2017


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ANNEXURE - A TO THE INDEPENDENT AUDITOR’S REPORTThe Annexure as referred in Paragraph (1) ‘Report on Legal and Other Regulatory Requirements of our Independent Auditors’ Report to the members of NTPC Vidyut Vyapar Nigam Limited on the Ind AS financial statements for the year ended 31 March 2017, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation

of fixed assets.(b) There is a regular programme of physical verification of all fixed assets over a period of two years which, in our

opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such verification.

(c) There is no immovable property in the name of the Company, therefore clause 3(i)(c) of “the Order” is not applicable to the Company.

(ii) There is no inventory in the company during the year under audit. Thus, paragraph 3(ii) of “the Order” is not applicable to the Company.

(iii) The Company has not granted any loans secured or unsecured to any Company, firm or other party listed in the register maintained under Section 189 of the Companies Act, 2013.

Accordingly 3(iii)(a), clause 3(iii)(b) and clause 3(iii)(c) are not applicable to the company.(iv) The Company has not made any loan, investments, guarantees and security under provisions of section 185 and 186 of

the Companies Act, 2013. Accordingly clause 3(iv) of “the Order” is not applicable to the Company.(v) The Company has not accepted any deposits from the public therefore provision of Section 73-76 of Companies Act

2013 is not applicable to the Company. Accordingly provision of clause 3(v) of “the Order” is not applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost accounts and records under section 148 of the Companies Act, 2013.Accordingly clause 3(vi) of the order is not applicable to the company.

(vii) (a) The employees of the Company are on secondment basis from its holding Company i.e. NTPC Ltd. As explained to us, the Holding Company is regular in depositing undisputed statutory dues including provident fund, employee state insurance etc.

According to the information and explanation given to us and according to the records of the Company, income tax, sales tax and service tax are being deposited by the Company on regular basis with the appropriate authority during the year. Duty of customs, duty of excise, value added tax, cess and other related statues are not applicable to the company. According to the information and explanations given to us, there are no undisputed provident fund, income tax, sales tax & service tax in arrear as at 31 March 2017 for a period of more than six month from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax and service tax which have not been deposited on account of any dispute. Duty of customs, duty of excise, value added tax, cess and other related statues are not applicable to the Company.

(viii) The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly paragraph 3 (viii) of “the Order” is not applicable.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly paragraph 3(ix) of “the Order” is not applicable.

(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit. Accordingly paragraph 3(ix) of “the Order” is not applicable.

(xi) As per notification no. GSR 463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs, Government of India, section 197 is not applicable to the Government Companies. Accordingly provisions of clause 3(xi) of “the Order” are not applicable to the company.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly paragraph 3(xii) of “the Order” is not applicable.

(xiii) All the transactions undertaken by the Company are in compliance with provisions of sections 177 and 188 of the Companies Act, 2013.


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(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly provisions of Clause 3(xiv) of “the Order” is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly paragraph 3 (xv) of “the Order” is not applicable.

(xvi) The Company is not required to obtain any registration under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly provision of clause 3(xvi) of the “Order” is not applicable to the Company.




Membership Number: 094380Place: New DelhiDate: 18.05.2017

ANNEXURE- B TO THE AUDITOR’S REPORTAnnexure referred to in our report of even date to the members of NTPC Vidyut Vyapar Nigam Limited on accounts for the year ended 31 March 2017.

Sr.No.

Direction/Sub-direction Actions Taken Impact on financial Statement

1 Whether the Company has clear title/ lease deeds for freehold and leasehold land respectively? If not, please state the area of freehold and leasehold land for which title/lease deeds are not available.

There is no freehold and leasehold land in the Company. Therefore requirements under clause 1 of the directions are note applicable during the year.

Not Applicable

2 Whether there are any cases of waiver/ write off of debts/loans/interest etc. If yes the reasons there of and amount involved.

There are no waiver/write off of debts/loans/ interest etc. by the company during the year, therefore requirements under clause 2 of the directions are not applicable during the year.

Not Applicable

3 Whether proper records are maintained for inventories lying with third parties and assets received as gift/ grant(s) from the Government or other authorities.

During the year under audit no inventory of the Company was lying with third party and no assets have been received as gift from Govt. or other authorities, therefore requirements under clause 3 of the directions are not applicable during the year.

Not Applicable






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ANNEXURE- C TO THE AUDITOR’S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) as referred to in paragraph 3(f) of Report on Other Legal and Regulatory Requirements’ section

We have audited the internal financial controls over financial reporting of NTPC Vidyut Vyapar Nigam Limited (“the Company”) as of March 31 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.


The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating

effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company’s internal financial controls system over financial reporting.


A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.


Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the


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degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

In our opinion, the Company has in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2017, based on “the internal control over financial reporting 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 the Institute of Chartered Accountants of India”.





COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(B) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF NTPC VIDYUT VYAPAR NIGAM LIMITED, NEW DELHI FOR THE YEAR ENDED 31 MARCH 2017The preparation of financial statements of NTPC Vidyut Vyapar Nigam Limited, New Delhi for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act is responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 18 May, 2017.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of NTPC Vidyut Vyapar Nigam Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.

For and on the behalf of the Comptroller and Auditor General of India

(Ritika Bhatia)Principal Director of Commercial Audit &

Ex-officio Member, Audit Board-III, New Delhi

Place: New DelhiDate: 12th July, 2017

Subsidiary Company - Kanti Bijlee Utpadan Nigam Limited

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A Maharatna Company

KANTI BIJLEE UTPADAN NIGAM LIMITED

DIRECTORS’ REPORTDear Members,

Your Directors are pleased to present 11th Annual Report on the business and operations of the Company along with Audited Financial Statements and Auditors’ Report thereon for year ended on 31st March 2017.

PERFORMANCE OF THE COMPANY

Pursuant to Memorandum of Agreement dated 26.12.2005 signed between NTPC, Government of Bihar and Bihar State Electricity Board for reviving and operating Stage-I (2X110 MW), your Company was entrusted with the work of renovating and modernizing (R&M) of existing (2x110 MW) units of Muzaffarpur Thermal Power Plant (MTPP).

Operational Performance:

After completion of R&M of both the units of 110 MW of Stage-I, first unit is under commercial operation since 01.11.2013 and the second unit became fully operational from 15.11.2014.

Unit#1 of Stage-I generated 382.28 MUs with a PLF of 39.67% during 2016-17 as against 346.83 MUs with a PLF of 35.90% during FY 2015-16.

Unit#2 of Stage-I generated 369.87 MUs with a PLF of 38.38% during 2016-17 as against 432.12 MUs with a PLF of 44.72% during FY 2015-16.

Unit#3 (1st unit of Stage-II) was declared commercial w.e.f. 18.03.2017 and had generated 17.73 MUs at a PLF of 27.06% after commercialization.

The total generation of the Company was 769.88 MUs during 2016-17.

Unit#4 (2nd unit of Stage-II ) was declared commercial wef 01.07.2017.

Ash Utilisation:

Total ash generated from Stage-I during the FY 2016-17 was 2,44,371 MT as against 2,54,211 MT ash generated during FY 2015-16.

Total ash generated from Unit#1 of Stage-II during the FY 2016-17 is 5,187 MT.

Out of 2,49,558 MT of ash produced, 66,952 MT of ash has been utilized for land fill and 2,949 MT ash has been issued to brick manufacturing units.

Construction Activities under progress:

Coal handling plant package was awarded in Aug’15 for Stage-II after termination of earlier contract. Priority stream commissioned & subsequently COD of both the units done. Work in main stream of CHP is in progress. Work of make-up water pump house is also progressing with completion of intake well pump floor in Budhi Gandhak River.

To take care of environmental norms, your Company is carrying out ambient air quality monitoring, analysis of drinking water and effluent water quality monitoring on monthly basis at plant and township area to keep check on emission of pollutants in the air and to maintain the quality of the air and water around the project. On-line stack monitoring system is available in both the units of Stage - I.

Company has also established online monitoring of ambient air quality monitoring system (AAQMS) at plant & township.

Apart from above company is also in the process of finalization of scheme for separation of plant drain water from storm water in consultation with NTPC.

Your Company organized environmental awareness program amongst employees and people in and around plant. World Environment Day was celebrated on 05.06.2017. On this day, 500 nos. of saplings were planted. Employees & other habitants took environment walk and oath for environment protection. Distribution of environment friendly carry bags were done to avoid use of polythene bags.

Seminar organized on 27.01.2017 for various uses of fly ash wherein 29 no. of persons participated.

FINANCIAL REVIEW

The financial highlights of the Company for the year ended on 31st March 2016 and 31st March 2017 are as under:-

(Amount in Lakh)

Balance Sheet Items as at 31.03.2017 31.03.2016

Paid-up Share Capital 1,12,224.30 1,06,150.77

Other equity 16,153.05 (220.48)

Non-current liabilities 2,42,048.21 2,27,005.55

Current liabilities 67,040.52 59,250.41

Non-current assets 4,43,811.07 3,98,990.87

Current assets 22,225.37 25,777.72

Items from Statement of Profit and Loss for the year ended

31.03.2017 31.03.2016

Total Revenue 41,630.24 37,762.54

Total Expenses 43,823.44 45,334.90

Profit/ (Loss) before Tax and Rate Regulated Activities

(2,193.21) (7,572.37)

Total Tax Expenses - (1,751.71)

Profit/ (Loss) for the year (2,193.21) (5,820.66)

INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013 and other regulations are as under:


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(1) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING & OUTGO

i. Energy conservation activities∙ BFP cartridge in stage # I units replaced with

energy efficient cartridge.∙ Thermal scanning of boiler insulation, high

energy drains being done.∙ Conventional lights are being replaced by

energy efficient LED lights. 1680 nos. light fittings have been replaced so far.

ii. Technological Absorption- Niliii. During the period under review, there was no

earning and no outgo in foreign exchange.

(2) The following information is provided in the Corporate Governance Report which forms part of the Annual Report as Annex-IIa. Number of Meetings of the Board held during the

year and attendance of Directors in the Board Meeting.

b. Constitution of the Audit Committee, number of Meetings held during the year and attendance of the Members in the Audit Committee.

c. Constitution of Corporate Social Responsibility Committee, number of Meetings held during the year, if any and attendance of Members in the Meeting.

d. Information about other Committees of the Board

(3) CORPORATE SOCIAL RESPONSIBILITY

During the three immediately preceding financial years, the Company had incurred loss of ` 31.23 crore. As such, the Company has not incurred any expenditure on Corporate Social Responsibility (CSR) activity during 2016-17. However, during the financial year 2015-16, the Company had to incur ` 20.23 Lakh on CSR activity, out of which ` 12.47 Lakh remained unspent.

The detail of activities on which part of the carried over amount of ` 12.47 Lakh pertaining to FY 2015-16 was incurred during 2016-17 is contained in Annual Report on Corporate Social Responsibility Activities at Annex-IV.

As a socially responsible corporate citizen, the Company undertook the following activities under Rehabilitation and Resettlement to the tune of ` 68.59 lakh:

Name of Project/ activityAmount Spent

( Lakh)Location

Distribution of Blanket to needy people in winter seasons

1.97Project affected villages and surrounding villages of KBUNL plant.

Repair & upgradation of Hand pump 25.00Project affected villages and surrounding villages of KBUNL plant.

Installation of 100 solar street light 15.20Project affected villages and surrounding villages of KBUNL plant.

Construction of 30 nos. hand pumps 14.03Project affected villages and surrounding villages of KBUNL plant.

Skill development training to 19 nos. wards of PAPs

11.40 Ward of PAPs

Providing torch and whistle to district adminstration for ODF programme

0.68 Trough District administration

Providing school bag, dari and shoes to govt. Primary school children

0.31 Govt. Primary School Puraina, Minapur

Total 68.59

(4) Statutory Auditors

The Comptroller & Auditor General of India through letter dated 22.07.2016 had appointed M/s Goel Mintri & Associates, Chartered Accountants as Statutory Auditors of the Company for the financial year 2016-17. The Statutory Auditors of the Company for the financial year 2017-18 are yet to be appointed by the Comptroller & Auditor General of India.

(5) Management comments on Statutory Auditors’ Report

The Statutory Auditors of the Company have given an

unqualified report on the accounts of the Company for the financial year 2016-17.

(6) Review of accounts by Comptroller & Auditor General of India

The Comptroller & Auditor General of India, through letter dated 20.07.2017, has given ‘NIL’ Comments on the Financial Statements of your Company for the year ended 31st March 2017. As advised by the Office of the Comptroller & Auditor General of India (C&AG), the comments of C&AG for the year 2016-17 are being placed with the report of Statutory Auditors of your


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Company elsewhere in this Annual Report Additional Disclosure is made in Directors Report as per commitment made during Current Year Supplementary Audit by C&AG:

North Bihar Power Distribution Co. Ltd. (NBPDCL) raised two bills on KBUNL of ` 3,058.70 lakh and ` 1,880.60 Lakh during March 2016 & March 2017 respectively for withdrawal and use of power in colony as well as in construction activities. KBUNL has raised its observations on the bills and the matter is under consideration.

(7) Cost Audit As prescribed under the Companies (Cost Records and

Audit) Rules, 2014, the Cost Accounting records are being maintained by the Company.

M/s V.P. Gupta & Co., Cost Accountants, had been appointed as Cost Auditors under Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014 for the financial year 2016-17.

The Cost Audit Report for your Company for the Financial Year ended on 31.03.2016 was filed with the Central Government on 10.10.2016.

The Cost Audit Report for the financial year ended March 31, 2017 shall be filed within the prescribed time period under the Companies (Cost Records & Audit) Rules, 2014.

(8) Your Company, being subsidiary of NTPC, is covered under the Enterprise Risk Framework established by Holding Co., NTPC Limited. Details about risks with the Company are covered in the Management Discussion & Analysis Report which forms part of this Report and placed at Annex-I.

(9) Extract of Annual Return Extract of Annual Return of the Company is annexed

herewith as Annex- III to this Report.(10) Performance Evaluation of the Directors and the Board Ministry of Corporate Affairs (MCA), through

General Circular dated 5th June, 2015, has exempted Government Companies from the provisions of Section

178 (2) which requires performance evaluation of every director by the Nomination & Remuneration Committee. The aforesaid circular of MCA further exempted listed Govt. Companies from provisions of Section 134 (3) (p) which requires mentioning the manner of formal evaluation of its own performance by the Board and that of its Committees and Individual Director in Board’s Report, if directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government as per its own evaluation methodology.

Now, MCA, through Notification dated 05.07.2017, has amended Schedule IV to the Companies Act, 2013 with respect to performance evaluation of directors of the Government Companies that in case of matters of performance evaluation are specified by the concerned Ministries or Departments of the Central Government or as the case may be, the State Governments and such requirements are complied with by the Government companies, such provisions of Schedule IV are exempt for the Government Companies.

As per the Articles of Association of KBUNL, all the Directors are nominated by NTPC and Bihar State Power Generation Company Limited (earlier BSEB). The Directors nominated by NTPC or BSPGCL are being evaluated under a well laid down procedure for evaluation of Functional Directors & CMD as well as of Government Directors by Administrative/ respective Ministry/ Department. Also, the performance of the Board of the Government Companies is evaluated during the performance evaluation of the MOU signed with the Holding Company i.e. NTPC Limited.

(11) Secretarial Audit The Board has appointed M/s Agarwal S. & Associates,

Company Secretaries, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as Annex- V to this Report.

The Management’s Replies on the observations of Secretarial Audit are as under:

Observations Management’s RepliesCompliance under Section 149(4) read with Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 of the Act and Clause 3.1.4 of the DPE Guidelines on Corporate Governance with respect to the appointment of Independent Directors on the Board of Company & consequential non-compliances thereof. Compliance under Section 149 (8) read with Clause VIII of Schedule IV of the Act with respect to performance evaluation of the Directors.

Kanti Bijlee Utpadan Nigam Limited (KBUNL) is a subsidiary of NTPC Limited, a Government Company, as such, KBUNL is a Government Company. Being a Government Company, its Independent Directors are required to be appointed by the Government of India.As per the Articles of Association of KBUNL, all the Directors are nominated by NTPC and Bihar State Power Generation Company Limited (earlier BSEB). NTPC (Holding Company) has requested the Government to either permit NTPC or to appoint requisite number of Independent Directors on the Board of KBUNL.However, the Ministry of Corporate Affairs through notification dated 05.07.2017, has exempted unlisted public company, inter-alia, including a joint venture company from appointing Independent Directors on its Board.As per MCA’s notification dated 05.07.2017, KBUNL is not required to appoint Independent Directors on its Board, therefore, there is no requirement of performance evaluation of director.


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(12) Particulars of contracts or arrangements with related parties

During the period under review, all transactions with related parties were at arm’s length and suitable disclosure has been provided in annual accounts. Approval has been taken from the Audit Committee where the transaction with related party falls under the purview of the Companies Act, 2013. All related party transactions were in the ordinary course of business and were negotiated on an arm’s length basis. They were intended to further the Company’s interests.

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.

(13) Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future

NIL. Contingent Liabilities are detailed in Note – 36 of Notes to Accounts to Financial Statements for the FY 2016-17. The details of disputed statutory dues pending before appropriate authorities is detailed in Annexure to Independent Auditors’ Report.

(14) Adequacy of internal financial controls with reference to the financial reporting

The Company has in place adequate internal financial controls with reference to financial reporting. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

(15) Procurement from MSEs The Government of India has notified a Public

Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012. In terms of the said policy, the total procurement made from MSEs (including MSEs owned by SC/ST entrepreneurs) during the year 2016-17 is ` 13,47,12,493/-* which is 22.68% of total procurement against target of 20% of total procurement made by your Company.

*It excludes Primary fuel, Secondary fuel, Steel & Cement, the Project procurement including R&M packages and procurement from OEM, OES & PAC sources.

(16) Particulars of Employees As per provisions of Section 197(12) of the Companies

Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each director to the median employee’s remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors’ Report.

However, as per notification dated 5th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors’ Report.

(17) Issue of Shares in the Financial Year:

During the year under review, the Company issued shares to NTPC and Bihar State Power Generation Company Limited. The details are as under:

Date of Allotment/ Name of Allottee

12.04.2016 21.09.2016

NTPC Limited 3,10,27,984 shares of ` 10/- each at par with existing equity holders

84,50,000 shares of ` 10/- each at par with existing equity holders

Bihar State Power Generation Company Limited

1,67,07,376 shares of ` 10/- each at par with existing equity holders

45,50,000 shares of ` 10/- each at par with existing equity holders

(18) 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. 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.

(19) Establishment of vigil mechanism/ whistle blower policy:

Your Company has established Whistle Blower Policy as required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014.

(20) The Company has not granted any loans, given any guarantee or made any investments under Section 186 of the Companies Act, 2013 during the year.

(21) The Company has not accepted any deposits during the year.

(22) The Company has no subsidiary or joint venture.

(23) No Presidential Directive was issued by the Government during the year under review.

(24) The Company has not declared any dividend during the year.

(25) KBUNL, being subsidiary of NTPC, it is covered under the Internal Complaints Committee constituted by NTPC under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.


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The particulars of annexures forming part of this report are as under:

Particulars Annexure

Management Discussion & Analysis I

Report on Corporate Governance II

Extract of Annual Return III

Annual Report on CSR Activities IV

Secretarial Audit Report in Form MR-3 V


As required under Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

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

2. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2016-17 and of the loss of the company for that period;

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

4. the Directors had prepared the Annual Accounts on a going concern basis; and

5. 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.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, BSPGCL nominated Shri R. Lakshmanan, Managing Director, BSPGCL as Director on the Board of KBUNL in place of Shri Manish Kumar Verma. The Board appointed him as the Director of the Company w.e.f. 25.04.2016.

Shri Ashwini Kumar Singh was repatriated to the Parent Company i.e. NTPC Limited on 21.01.2017 as he was attaining the age of superannuation on 31.01.2017. He ceased to be the Chief Financial Officer of the Company w.e.f. 21.01.2017.

Shri Kundan Kumar Mishra, DGM (Finance) was appointed as the Chief Financial Officer of the Company w.e.f. 21.02.2017.

Shri Vinay Kumar Mittal, AGM (Finance) was appointed as the Chief Financial Officer of the Company w.e.f. 18.05.2017 after his posting to KBUNL on secondment basis from NTPC in place of Shri Kundan Kumar Mishra.

The Board wishes to place on record its deep appreciation for the valuable services rendered by Shri Manish Kumar Verma during their association with the Company.

As per the provisions of the Companies Act, 2013, Shri P. Amrit and Shri K.S. Garbyal, Directors shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

ACKNOWLEDGEMENT

Your Directors acknowledge, with deep sense of appreciation, the co-operation extended by Ministry of Power/ Government of India, Government of Bihar, Bihar State Power Generation Company Limited (erstwhile Bihar State Electricity Board), Planning Commission (Niti Aayog), Central Electricity Regulatory Commission, Ministry of Environment, Forests & Climate Change and Airport Authority of India.

Your Directors also convey their gratitude to the Holding Company i.e. NTPC Ltd., Auditors, Bankers, Contractors, Vendors and Consultants of the Company.

We wish to place on record our appreciation for the untiring efforts and contributions by the employees at all levels to ensure that the Company continues to grow and excel.


(K.K. Sharma)Place: New Delhi ChairmanDated: 30.08.2017 DIN: 03014947


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Annexure- I to the Directors’ Report of KBUNIL


ECONOMIC AND SECTOR OUTLOOK

Indian economy has moved on a higher growth path. Gross Domestic Product for Financial Year 2016-17 has increased by 7.1% over the previous financial year. Electricity, water supply gas and other utilities have registered a growth rate of 7.2% at constant prices. With macro-economic stability, Indian economy is slated to grow between 7-8 percent and electricity generation will play a key role in India’s development.

For the power sector, the two recent biggest announcements pertain to rural electrification and solar energy. The Government has reiterated its priority to achieve “100 percent village electrification” by May 1, 2018. Giving impetus to the clean energy, the government has also announced the second phase of solar development for 20 GW capacity.

This augurs well for the entire Power Sector and would unleash the huge latent demand for electricity.

The year has been the land mark year for renewable energy. For the first time, renewable capacity addition matched the convention thermal capacity addition. With solar tariffs touching new lows which are even lower than the coal-fired power tariff, the landscape of the power sector is going to change rapidly.


Power Sector is a key enabler for India’s economic growth. The sector consists of generation, transmission and distribution utilities and is a crucial component of India’s infrastructure. The achievements regarding developments and various issues/challenges faced by the Power Sector have been discussed in the ensuing paragraphs.

Snap Shot 2016-17

Ø Gross annual generation of the country increased by 4.72% from 1107.82 BUs in the previous year to 1160.14 BUs in the financial year 2016-17.

Ø Generation capacity of 14209.8 MW (excluding renewable) added during the year compared to 23976.60 MW added in the previous year.

Ø Land mark year for renewable energy. 14410.85 MW Capacity added during the year.

Ø 26300 Ckms of transmission lines added during the year as compared to 28114 Ckms in the previous year.

Ø 81816 MVA of transformation capacity added during the year as against 62849 MVA in the previous year, a jump of 30%.

Ø PLF of thermal stations declined from 62.24% in financial year 2015-16 to 59.88% in the financial year 2016-17.

Ø During the financial year 2016-17, peak power deficit

and energy deficit was 2.6% and 1.1% respectively as against the peak power deficit and energy deficit of 3.2% and 2.1% during financial year 2015-16.

(Source: Central Electricity Authority)

Existing Installed Capacity

The total installed capacity in the country as on March 31, 2017 was 326848.54 MW (including renewable) with private sector contributing 44% of the installed capacity followed by State Sector with 32% share and Central Sector with 24% share.

Total Capacity (MW) % share

State 103967.28 32

Centre 80257.25 24

Private 142624.01 44

Total* 326848.54 100

*including RES

Source: Central Electricity Authority-Installed Capacity report

During the financial year 2016-17, capacity of 14209.80 MW (excluding renewable) was added. With this the total capacity addition during the 12th plan period is 99209.47 MW (excluding renewable) which is about 112.05% of the planned capacity addition of 88537 MW for the Plan.

Capacity Utilization and Generation

Capacity utilisation in the Indian power sector is measured by Plant Load Factor (PLF).

Sector wise PLF (Thermal) (in %)

Sector 2015-16 2016-17State 56.83 54.35Central 71.03 71.98Private 60.07 55.59All India 62.24 59.88

The overall decline in PLF was mainly due to backing down/ shut down of units on account of low schedule from beneficiary states(Source: Central Electricity Authority). The outlook of generation looks promising with expected increased industrial production and Government of India’s mission to provide 24x 7 electricity to all.

Existing Generation

The total power available in the country during the financial year 2016-17 was 1160.14 billion units as compared to 1107.82 billion units during last year, registering a growth of 4.72%. (generation figures pertains to monitored capacity by CEA)


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Sector-wise and fuel-wise break-up of generation (BUs) for the year 2016-17 is detailed as under:

Sector Thermal Hydro Nuclear Bhutan Import

Total

Central 337.92 57.90 37.92 - 433.74

State 299.59 51.35 - - 350.94

Pvt/IPP 356.72 13.12 - - 369.84

Bhutan Import

- - - 5.62 5.62

Total 994.23 122.37 37.92 5.62 1160.14(Source: Central Electricity Authority)

As far as Thermal generation is concerned, based on the monitored capacity by CEA, the generation contribution of central sector is 33.98% with installed capacity share of 28.32%, state sector contributes 30.13% of generation with installed capacity share of 33.12% and private sector contributes 35.89% of generation with installed capacity share of 38.56%. Central Sector utilities have better performing stations as compared to those of State utilities and Private Sector.

Consumption

In terms of per capita power consumption, India ranks among the lowest in the world. The per capita consumption of power in India is just 1075 units in financial year 2015-16 (provisional). (Source: Central Electricity Authority Executive Summary March 2017).

Major end users of power can be broadly classified into industrial, agricultural, domestic and commercial consumers. These consumers represented approximately 42%, 17%, 24% and 9%, respectively, of power consumption measured by units of electricity consumed in the year 2015-16 (provisional). Traction & Railways and others represented about 8% of power consumption. The electricity consumption in Industry sector and domestic sector has increased at a much faster pace compared to other sectors during 2006-07 to 2015-16 with CAGR of 9.47% and 7.97% respectively (Source: Ministry of Statistics and Programme Implementation- Energy Statistics 2017).

Energizing the Power Sector – Key Initiatives / Reforms & Regulatory Changes

(a) Flexibility in utilization of domestic coal: GoI has allowed flexibility in utilisation of domestic coal for reducing the cost of power generation. The Annual Contracted Quantity (ACQ) of each coal linkages would be aggregated as consolidated ACQ for each State/Central/Private Gencos. These Gencos now have flexibility in use of such coal amongst their different generating stations. This will facilitate power producers to use coal optimally in more efficient generating stations resulting in reduction in the power purchase cost for Discoms.

(b) Cross Border Electricity Trade Policy: At present, Cross Border Trade of Electricity has been taking place with Bangladesh, Bhutan and Nepal under bilateral Memorandum of Understanding (MoU) / Power Trade Agreement (PTA). In order to facilitate and promote cross border trade of electricity with greater transparency, consistency and predictability in regulatory approaches across jurisdictions and minimise perception of regulatory risks, GoI has issued guidelines on Cross Border Trade of Electricity. This policy is likely to help in creating demand for the Gencos.

(c) Amendment in the IEGC (4th) Amendment to allow compensation on account of partial loading of the units

i. CERC has allowed Compensation due to degradation of the operational parameters like Heat rate and auxiliary power consumption due to lower loading of the units. For this purpose, CERC has defined the technical minimum level of operation as 55% and has allowed compensation when unit operations are below 85% and upto 55%. These compensations will be in the form of increased norms in the Heat rate and APC as per different factors for different ranges of unit loading, as provided in the Regulations.

ii. It has also been provided that a unit can go under Reserve Shut Down (RSD) in case the schedules are below 55%. In these cases, the Units will be compensated for the additional oil consumption on account of higher start/stop of the units.

iii. CERC in its order dated 5th May 2017 has approved a detailed procedure for calculation of the compensation amount and process of apportionment among the beneficiaries.

(d) Reduction in coal import: On account of increased production of domestic coal, imports have fallen from 217.78 MT in 2014-15 to 199.88 MT in 2015-16, a decline of 8%. The trend of fall in import of coal has continued in 2016-17.This has helped the country in reducing cost of electricity generated in coal based power plants and reduction in forex expenditure.

(e) UJALA: Government has identified lighting as key focus area for energy efficiency. Under the Unnat Jyoti by Affordable LEDs for All (UJALA), more than 24 crore LED bulbs have been distributed. This will help in a recurring saving of ` 34.95 crore and 87 MU per day in terms of cost and energy respectively. It will also help in reduction of CO

2 to the extent of 70,780 ton

per day thereby reiterating India’s commitment made at Conference of Parties (COP) 21 Summit held in Paris to reduce its energy intensity.


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(f) SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India): During the current financial year (FY 17-18), GoI has introduced the Scheme, ‘SHAKTI’ to make coal allocation more transparent and bidding based. As per the Scheme, future allocation/grant of linkages to power producers/ IPPs will be based on auction.

The Scheme shall benefit the sector in terms of coal availability to all power plants in transparent and objective manner, cheaper and affordable power, reduction of sectoral stress on account of non-availability of linkages to power projects thereby enhanced confidence of financial institutions on power sector.

(g) Portal on weather information: Due to enhanced presence of Renewable Energy in the Indian power sector, weather information like irradiance, wind speed etc. have become very important. Besides, whether information is also very important for load forecasting. During the current financial year (FY 17-18), GoI has launched whether Portal for Power Sector in association with POSOCO and IMD. The information available in the Portal regarding weather forecast shall help State Discoms to take pro-active steps regarding short term and medium term management processes and supply planning requirements and also for better planning for infrastructure availability to ensure cost effective and reliable supply.

Demand, Supply and Consumption Position

Western, Southern & Eastern Regions met the demand almost in full with insignificant demand-supply gap both in terms of energy and peaking. Northern & North-Eastern Regions experienced minor demand-supply gap in terms of energy and/or peaking, on an overall basis. The demand-supply gap was on account of the factors other than non-availability of power e.g. transmission & distribution constraints. However, there were short-term surpluses in most of the states at some point of time or the other depending on the season or time of the day. The surplus power was sold to deficit states or consumers either through bilateral contracts, Power Exchanges or traders. (Source : Load Generation and Balance Report 2017-18) .

During the year 2016-17, total ex-bus energy availability increased by 4.1% over the previous year and the peak met increased by 5.7%. The energy requirement registered a growth of 2.6% during the year against the projected growth of 9.0% and Peak demand registered a growth of 4.0% against the projected growth of 7.8%.

The power supply position in Eastern Region and Bihar during 2016-17 is as under:

Particulars Year 2016-17 (Actual) Year 2017-18 (Anticipated)

Req Avail Surplus/ (Deficit)

Req Avail Surplus/ (Deficit)

Energy Requirement

Eastern Region (in MU)

1,27,783 1,26,868 (915 MUs)(0.8%)

1,50,151 1,49,871 (280 MUs)(0.2%)

Bihar (in MU) 25,712 25,131 (581 MUs)(2.2%)

26,600 21,207 (5,393 MUs)

(20.3%)

Peak Requirement

Eastern Region (In MW)

18,908 18,788 (120 MW)(0.6%)

21,577 23,743 2,166 MW10%

Bihar (In MW)

3,883 3,759 (124 MW)(3.2%)

4,000 3,494 (506 MW)(12.7%)

From the above, it is evident that there have been energy and peak shortages in the Eastern Region as well as in Bihar during the year 2016-17. In the year 2017-18, there would be anticipated energy shortages both in Bihar and the Eastern Region. Although, from the above, it is clear that there would be enough power available for peak requirement in Eastern Region during 2017-18, there would be shortage of 506MW of power in Bihar for peak requirements.

SWOT ANALYSIS

Strength/ Opportunity:

In the scenario of high demand versus low supply of power, implementing the Company’s project is justified. It has full support of NTPC, the promoter and major stake holder. The holding Company, i.e. NTPC Limited is providing engineering and management expertise from planning to commission and operating power plant.

The other promoter i.e. Bihar State Power Generation Company Limited (erstwhile Bihar State Electricity Board) is also the beneficiary of the Company.

Unit#1 and Unit#2 of 110 MW each of Stage-I have been declared commercial. Unit#3 and Unit # 4 of Stage-II has been synchronised on 31.03.2015 and 24.03.2016 respectively. Unit # 3 have been declared commercial wef 18.03.2017.

For Stage-I, Power Purchase Agreement for entire power exists with transmission companies of Bihar State Power Holding Company Limited. For Stage-II, Power Purchase Agreement has been signed with transmission companies of Bihar State Power Holding Company Limited for 67.7 % of power and balance has been signed with the GRIDCO, DVC, Sikkim, Jharkhand and West Bengal. Further 7.27 % power is allocated to Bihar from the un-allocated share of 9.7 % vide letter dated 27.06.2017 from Member Secretary, ERPC,


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Ministry of Power. This will be w.e.f. from 00:00 hrs of COD of Unit # 4 i.e. 01.07.2017.

Weakness/ Threats:

For Stage-II except Dis-coms Bihar state other beneficiaries are not giving schedule due to dispute raised by Gridco Orissa. The beneficiary of Stage-I power i.e. South Bihar Power Distribution Co. Ltd. and North Bihar Power Distribution Co. Ltd has overdue payment towards energy bills raised by the Company. Delayed payment of Energy Bills from beneficiaries causes stoppage of coal supply which results into shutting down of operating units resulting under recovery of fixed cost and compensation claimed by coal companies for short lifting of coal.

For both the stages proper realization arrangement like Tripartite agreements is the need of the hour.

RISK AND CONCERN

The risks to which company is exposed and the initiatives taken by the company to mitigate such risks are given below:

Hazard risks are related to natural hazards arising out of accidents and natural calamities like fire, earthquake or cyclone, floods etc.

Risk associated with protection of environment, safety of operations and health of people at work is monitored regularly with reference to statutory regulations prescribed by the govt. authorities. Risk arising out of accidents, fire etc is protected through insurance policies and limited through contractual agreements wherever possible.

Financial Risks:

With the declaration of both the units commercial the company managed to avoid the declaration of its asset as NPA in Lender’s books of accounts.

Unit # 3 declared commercial w.e.f. 18.03.2017 & U# 4 w.e.f. 01.07.2017.

The outstanding dues from the beneficiaries on account of Energy Bill stood ` 211.24 crores (including late payment surcharge of ` 9.9 Crores) as on 25.07.2017. The dues beyond 60 days stood at ` 143.87 crores & ` 29.81 crores beyond 30 days but less than 60 days. Realization of dues from the beneficiaries for both the stages should be at utmost priority level so that timely repayment of loan and interest can be made.

For the Financial Year 2016-17, the coal compensation payable is ` 25.67Cr for non-lifting of coal as per annual contracted quantity.

Operational Risks:

Water linkage and quantity:

At present water requirement is being met through under-ground water with running of Deep Tube Well as well as drawing water from canal. CWC has given their consent for 45 Cusecs of water on 19.02.2010 from river Budhi Gandak (15 Cusecs for Stage-I and 30 Cusecs for Stage-II). Water Resources Department, GoB has made their commitment of 45 Cusecs of water from Budhi Gandak. Readiness of Make-

up water system and availability of cooling water both for Stage – I and Stage – II is required for uninterrupted operation of the plant.

Risk: Land Acquisition for around 25.5 Acres of land for make up water pipe line laying not yet completed. Non- Completion of makeup water system affecting the operation of Stage-II units. However, water is being drawn from Canal of Irrigation Deptt. Govt.of Bihar but water availability in canal is for limited periods only.

District Administrtion is pursuing with land owner for consent towards perpetual lease.

Ash Disposal System for Stage – I & II and Coal Handling Plant of Stage-II:

Ash Dyke Stage-I – New Ash dyke (Lagoon –III) & R&M of Lagoon I&II along with AWRS (Ash Water Recirculation System) is to be constructed as per directive of CPCB. The work for Ash dyke (Lagoon I, II & III as per above) has been awarded on 5 Aug’2017. Technical bid for AWRS opened and is under evaluation. A bank guarantee has been submitted to Bihar State Pollution Control Board in compliance of CPCB directive. NOC for consent to operate & consent to discharge issued by BSPCB is valid till 30.11.2018.

Risk - A program for construction of Ash Dyke (Lagoon –III) & AWRS has been submitted. Revised time line is to be submitted again for consideration of CPCB. CPCB may give any direction as per EP Act.

Ash Dyke for Stage – II Contract has been awarded & work is progressing & lagoon is likely to be completed by Oct’17.

Risk: Work on the available stretch of ash pipe corridor has been started by company. Compensation amount of Rs. 14.82 Crores has been deposited with Land acquisition authority. 15.84 acres out of 36.765 acres is yet to be given possession as land owners are not taking compensation/disbursement. Further action will be taken by DLAO/Authority. Administration has assured that there will not be hindrance during execution of work on part of the land corridor which is not in possession. However, Stage-II ash is being dumped in stage – I dyke as contingency measure, till ash dyke Stage-II & ash pipe line work is completed.

Coal Handling Plant for Stage-II is not yet constructed but CHP of Stage-I has been linked for feeding Stage-II ( Priority bay). Due to this, commercial operation of both the units have been declared but running of all the units (both stage – I & stage – II) is not possible on sustainable basis.

The policies and process framework of the company supported by the proactive approach of management mitigate operational risks to great extent.

INTERNAL CONTROL

The Company has robust internal systems and processes for efficient conduct of business. The Company is complying with relevant laws and regulations. It is following delegation of powers as is being followed in NTPC Limited. The accounts are being prepared in accordance with the Accounting Standards issued by Institute of Chartered Accountants of


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India from time to time and as per the guidelines issued from NTPC Limited. The Company has implemented SAP in all modules. It is helping the Company a lot in retrieving data and maintaining systematic backup.

In order to ensure that all checks and balances are in place and all internal systems are in order, regular and exhaustive internal audits are conducted by experienced firm of Chartered Accountants in coordination with Internal Audit Department of NTPC Limited. The Company has constituted an Audit Committee to oversee the financial performance of the company. The scope of this Committee includes compliance and adequacy of Internal Control Systems in the Company.

FINANCIAL DISCUSSION AND ANALYSIS

The Company has prepared its first Financial Statement AS in accordance with Ind As for the year ended 31 March 2017. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2016 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2016 (the date of transition to Ind AS).

The accounting policies set out in Note 1 to the Financial Statements have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 ( the Company’s date of transition). Accordingly to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS as of 1 April 2015 compared with those presented in the Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

Exemptions and Exceptions Availed

In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the Indian GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS.

The Company has made use of the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

i. The Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

ii. The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the Indian GAAP

During the financial year 2016-17, 3,94,77,984 shares were issued to NTPC and 2,12,57,376 shares were issued to Bihar State Power Generation Company Limited (BSPGCL) (erstwhile BSEB). The equity share capital of the Company has reached ` 1,122.24 crore, which is in the ratio of 65:35 between NTPC and BSPGCL at the end of financial year 2016-17. The Company has enhanced the authorized share capital of the Company from ` 1,400 crore to ` 2,000 crore. Share application money pending allotment was ` 233.43 crore.

The grants received from Backward Region Grants Fund (Rashtriya Sam Vikas Yojna) was credited to capital reserve account initially and the same was treated as income in the same proportion as the depreciation written off on the assets acquired out of grants. Although no grant was received during the year, but grant of ̀ 40.12 crore received out of grants of previous years has been recognised as income during the year.

Secured term loan as on 31.03.2017 was ` 1773.83 crore from consortium led by State Bank of India. The secured loan from other financial institutions was ` 533.05 crore. The unsecured loan from the Holding Company stood at ` 121 crore at the end of the financial year. Your Company has made no defaults in repayment of any of the loans or interest thereon as at the end of the year.

The net tangible assets as at 31.03.2017 were ` 2,669.23 crore as compared to ` 677.83 crore as at 31.03.2016. The net intangible assets as at 31.03.2017 were ` 0.02 crore as compared to ` 0.03 crore as at 31.03.2016. The capital work-in-progress was ` 1,679.21 crore as at 31.03.2017 as compared to ` 3,228.24 crore as at 31.03.2016. As on 31.03.2017, Capital Advances (unsecured) were ` 85.47 crore and advances other than capital advances were ̀ 4.19 crore. As on 31.03.2016, Capital Advances (unsecured) were ` 79.75 crore and advances other than capital advances were ` 4.05 crore. The current assets stood at ̀ 222.25 crore as at 31.03.2017, while the current assets as at 31.03.2016 were ` 257.78 crore.

Borrowing costs attributable to the fixed assets during construction, renovation and modernisation have been capitalised. Such borrowing costs have been apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are recognised as an expense in the period in which they are incurred. The borrowing costs capitalised during the year ended 31.03.2017 amounted to ` 229.73 crore (Previous year ` 211.39 crore).


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The generation from Unit#1 was 382.28 MUs and Unit#2 was 369.87 MUs. Commercial operation of Unit#1 had commenced from 01.11.2013 and Unit#2 became fully operational from 15.11.2014 after R&M.

For Unit#1, Central Electricity Regulatory Commission issued tariff order dated 09.02.2016 for the period 01.11.2013 to 31.03.2014. KBUNL has filed a petition for review of CERC order dated 09.02.2016. CERC vide its order dated 07.07.2017 disposed of the review petition and rejected KBUNL’s prayer for review of order dated 09.02.2016.

In view of CERC order dated 09.02.2016, Unit#1 billing was revised w.e.f. 01.11.2013 (COD of U# 1) as per order. Unit # 2 billing is as per 85 % of fixed charges, filed in the petition before CERC for 2014-19.

The revenue from operations amounting to ` 388.25 crore (Previous year ` 375.52 crore) during the financial year included energy sales, energy internally consumed and capital grants recognised during the year. The other income of ` 28.05 crore included interest from banks, income from sale of scrap, other receipts from contractors/ suppliers, etc. The expenses were ` 438.23 crore, which included expenditure towards fuel, employee benefit expenses, finance cost, depreciation & amortisation expenses, generation & administration expenses, etc. There is no tax liability in this year. The Company incurred loss of ` 21.93 crore as against the last year’s loss of ` 58.21 crore.

Total sales of ` 348.13 crore (previous year ` 335.40 Crore) was recorded for the year 2016-17 which included ` 5.92 crore (previous year ̀ 5.28 crore) towards energy consumed internally. The CERC has issued final tariff order for U#1 for the period 01.11.2013 - 31.03.2014. Sales for the FY 2016-17 have been provisionally accounted for both units (U#1 & U#2) based on the CERC order Dt. 09.02.2016. U#1 of Stage-II (2x195 MW) was declared commercial w.e.f. 18.03.2017. Fixed charges accounting of this unit has been done based on the 85% of fixed charges claimed in tariff petition filed with CERC. For variable charges parameters has been taken based on 210 MW size units since no comparative units of this size of 195 MW is operational.

Pending issue of Tariff orders w.e.f. 01.01.2014 for KBUNL, beneficiaries are billed with the tariff approved and applicable on the GCV “as received” measured after the secondary crusher till 30th September 2016 and GCV measured on Wagon Top w.e.f. 01.10.2016.

An amount of ̀ 24.46 crore is recoverable from beneficiaries of Stage-I as interest due to late payments of bills and was accounted under the head ‘Surcharge income from beneficiary’.

The Company has made Net Loss after Tax of ` 21.93 crore. The reasons for the loss are as below:-

1. During the FY 2016-17, Plant Availability Factor of 38.72% & 45% could be achieved in Stage-I & Stage-II respectively. Due to low PAF, fixed cost recovery was on lower side for both the stages.

2. The main reason for low PAF was coal shortage.

HUMAN RESOURCE

Presently, the Company has total strength of 206 employees, out of which, 201 employees are deputed from the Holding Company i.e. NTPC Limited and 5 employees are on the rolls of KBUNL. Out of the total strength, the company has employed 29 SC candidates, 10 ST candidates and 44 OBC candidates as a socially responsible and conscious organisation. Apart from 206 employees, the Company has 2 Executive Trainees also posted at Site office.

The Company is paying adequate perks and also making employees part of profit sharing by giving Profit Related Payment. They are being imparted training / participation in seminar for their professional upgradation from time to time as an endeavour of your Company to become a learning organisation. The Company had incurred ` 44.98 crore (previous year ` 41.95 crore) - towards Salaries, Wages, Allowances, Benefits, Contribution to Provident and other Funds and welfare expenses. Out of ` 44.98 crore, the amount transferred to Expenditure during Construction amounted to ` 12.75 crore and transferred to fuel cost amounted to ` 1.88 crore.

During the year, the Company organised two meetings with the employees/ representatives & two open house with all executives to know their problems and to resolve the same to make the environment congenial.

Safety is being taken on topmost priority with adopting best safety practices. Safe methods are practised in all areas of Operation & Maintenance and Construction & Erection activities for the protection of workers against injury and diseases.

Occupational safety at workplace is given utmost importance. Safety Kiosk has been installed & training being provided to workers.

OUTLOOK

The Company’s outlook is very bright. It is generating revenue for growth and development of the company after becoming operational. It is also boosting employment opportunities to the local inhabitants.


Statements in the Management Discussion and Analysis, describing objectives, projections and estimates, are forward-looking statements and progressive, within the meaning of applicable security laws and regulations. Actual results may vary from those expressed or implied, depending upon economic condition, Government policies and other incidental/ related factors.

For and on behalf of Board of Directors

(K.K. Sharma)Chairman

(DIN: 03014947)Place: New DelhiDated: 30.08.2017


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A Maharatna Company

Annexure - II to the Directors’ Report of KBUNIL

REPORT ON CORPORATE GOVERNANCE

1. Company’s Philosophy on Code of Governance

Corporate governance is creation of and enhancing long-term sustainable value for the stakeholders through ethically driven business process. Your Directors are pleased to present the Corporate Governance Report for the financial year 2016-2017. The Corporate Governance philosophy is scripted as:

“Corporate Governance is more than a set of processes and compliances at Kanti Bijlee Utpadan Nigam Limited. It underlines the role that we see for ourselves for today, tomorrow and beyond.”

In line with its commitment to enhance stakeholders’ values, KBUNL believes in adhering to the standards of corporate ethics that enables principled goal setting, effective decision making and appropriate monitoring of compliance and performance. The Company believes that its business practices should be founded on transparency, disclosure, accountability and financial controls, the four pillars of a good corporate governance system.

We believe that our company shall go beyond adherence to regulatory & statutory framework. The Company expects to realise its Vision by taking such actions as may be necessary in order to achieve its goals of value creation, safety, environment protection and people’s health and progress.

We follow Guidelines on Corporate Governance for Central Public Sector Enterprises issued by the Department of Public Enterprises, Government of India to the extent such compliances are within the ambit of the Company.

2. Board of Directors

Our corporate structure, business, operations and disclosure practices have been strictly aligned to our Corporate Governance Philosophy.

The Board of Directors is the apex body constituted by shareholders for overseeing the Company’s overall functioning. Over the years, the Board has always endeavoured to fulfil corporate responsibility towards our stakeholders. The Board has necessary authority and processes to review and evaluate our operations when required. Further, the Board makes decisions that are independent of the Management.

i. Composition of the Board

The Company is managed by the Board of Directors which formulates strategies and policies and keeps updating them regularly. As per the Articles of Association, the number of Directors shall not be less than 4 and more than 12 subject to the condition that NTPC shall always have one Director more than the combined strength of Director nominated by BSPGCL (formerly BSEB)/Govt. of Bihar, the respective parties shall determine the period for which their respective nominees shall hold office.

ii. Independent Directors

As per the Companies Act, 2013 and the DPE Guidelines on Corporate Governance for CPSEs, the Company was required to appoint two Independent Directors on the Board. The Promoter Company had taken up the matter with Department of Public Enterprises, to either appoint Independent Directors or allow NTPC and BSPGCL to appoint Independent Directors. However, Ministry of Corporate Affairs, through Notification dated 05.07.2017, has exempted the public unlisted Joint Venture Companies from appointing Independent Directors.

Also, we understand that the DPE Guidelines are under revision to align it with the Companies Act, 2013.

iii. Woman Directors

As per the requirements of the Companies Act, 2013, the Company has one Woman Director on its Board.

iv. Board Meetings

As on 31.03.2017, there were 6 (six) Directors on the Board out of which four Directors were nominated by NTPC and two Directors were nominated by BSPGCL.

During the year, 6 (six) Meetings of the Board were held on 06.05.2016, 28.07.2016, 21.09.2016, 29.11.2016, 08.12.2016 and 21.02.2017. The attendance of Directors in Board Meetings is as under:


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A Maharatna Company

Date of the Meeting/ Name of the Director DIN

BOARD MEETINGS

06.05.16 28.07.16 21.09.16 29.11.16 08.12.16 21.02.17

Shri K.K. Sharma, Chairman(Nominated by NTPC)

03014947 Yes Yes Yes Yes Yes Yes

Shri P. Amrit, Director(Nominated by BSPGCL)

01192117 Yes No Yes Yes No Yes

Shri A.K. Gupta, Director(Nominated by NTPC)

07269906 No Yes No No Yes Yes

Shri K.S. Garbyal, Director(Nominated by NTPC)

07027435 Yes Yes Yes Yes Yes Yes

Smt. Sangeeta Bhatia, Director (Nominated by NTPC)

06889475 Yes Yes No No Yes Yes

Shri R. Lakshmanan(Nominated by BSPGCL)

06908182 Yes Yes No Yes Yes Yes

v. Number of Shares held by the Directors as on 31.03.2017

Directors No. of shares

Shri K.K. Sharma 100

Shri P. Amrit 100

Shri A.K. Gupta Nil

Shri K.S. Garbyal 100

Smt. Sangeeta Bhatia 100

Shri R. Lakshmanan 200

3. Committees of the Board

Our Board has constituted sub-committees to focus on specific areas and make informed decisions within the authority delegated to each of the Committees. Each Committee of the Board is guided by its Charter, which defines the scope, powers and composition of the Committee. All decisions and recommendations of the Committees are placed before the Board for information and approval respectively. Senior functional executives are also invited, as and when required, to provide necessary information/clarification to the Committees of the Board. We have following sub-committees of the Board as on 31.03. 2017:

A. Audit CommitteeB. Nomination and Remuneration CommitteeC. Corporate Social Responsibility CommitteeD. Committee of the Board for Allotment and Post

Allotment activities of KBUNL’s securities.E. Investment and Loan Sub- CommitteeF. Contracts Sub-Committee

A. Audit Committee

The term of reference of Audit Committee is in accordance with Section 177(4) of the Companies Act, 2013 and DPE Guidelines on Corporate Governance for CPSEs, which includes the following:

(i) Discussions with the Auditors about the scope of audit including observations of auditors;

(ii) Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that financial statement are correct, sufficient and credible;

(iii) Noting appointment and removal of external auditors. Recommending audit fee of external auditors and also approval for payment for any other service;

(iv) Recommending appointment and remuneration of Cost Auditors;

(v) Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

(vi) Approval or any subsequent modification of transactions of the company with related parties;

(vii) Scrutiny of inter-corporate loans and investments;

(viii) Valuation of undertakings or assets of the company, wherever it is necessary;

(ix) Evaluation of internal financial controls and risk management systems;

(x) Monitoring the end use of funds raised through public offers and related matters;

(xi) Receiving the findings of any internal investigation by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a nature and reporting the matter to the Board;


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A Maharatna Company

(xii) Consider and review the following with the management, internal Auditor and the independent Auditor:

1. Significant findings during the year, including the status of previous audit recommendations;

2. Any difficulties encountered during audit work including any restrictions on the Scope of the activities or access to required information.

(xiii) Review of all financial reports including Annexure to Cost Audit; Reports, Internal Audit reports etc;

(xiv) Review of Management Discussion and Analysis report;

(xv) Review of half-yearly and annual financial statements before submission to the Board for approval, with particular reference to:1. Change, if any, in accounting policies and

practices and reasons for the same;2. Significant adjustments made in financial

statements arising out of audit findings;3. Disclosure of any related party transactions;4. Qualifications in audit report.

(xvi) Review of observations of Statutory Auditors and Comptroller and Auditor General of India and

(xvii) Such matters as may be referred to it by the Board of Directors, from time to time.

The constitution of the Audit Committee of the Company as on 31.03.2017, comprised 5 (five) Members namely Shri A.K. Gupta, Shri P. Amrit, Shri K.S. Garbyal, Smt. Sangeeta Bhatia and Shri R. Lakshmanan, Directors.

The Company Secretary acts as the Secretary to the Committee.

During the year, 3 (three) Meetings of the Committee were held on 06.05.2016, 28.07.2016 and 21.09.2016. The attendance of Directors in these Meetings is as under:

Date of the Meeting/ Name of the Member

06.05.16 28.07.16 21.09.16

Shri A.K. Gupta No Yes No

Shri P. Amrit Yes No Yes

Shri K.S. Garbyal Yes Yes Yes

Shri R. Lakshmanan Yes Yes No

Smt. Sangeeta Bhatia Yes Yes No

During the year, there is no instance, where the Board had not accepted any recommendation(s) of the Audit Committee.

Your Company has ensured to remain in the regime of unqualified statement.

B. Nomination & Remuneration Committee

The term of reference of Nomination & Remuneration Committee is in accordance with Section 178 of the Companies Act, 2013, which is as under:

(i) Shall identify who may be appointed in senior management in accordance with the criteria laid down, recommend to the board their appointment and removal;

(ii) Shall formulate the criteria for determining qualifications, positive attributes & recommend to the board a policy relating to the remuneration for KMP & other employees;

(iii) Shall while formulating the policy, NRC ensure that:

1. Relationship of remuneration to performance is clear & meets appropriate performance benchmarks; and

2. Remuneration to KMP and senior management involves a balance between fixed & incentive pay reflecting short & long-term performance objectives appropriate to the working of the company & its goals.

The constitution of the Nomination and Remuneration Committee of the Company as on 31.03.2017 was as under:

i. Shri P. Amrit or in his absence Shri R. Lakshmanan, Directors

ii. Shri K.S. Garbyal or in his absence Shri A.K. Gupta, Directors

iii. Smt. Sangeeta Bhatia, Director

During the 2016-17, 1 (one) meeting of the Nomination and Remuneration Committee was held on 21.02.2017 in which all the Members were present.

C. Corporate Social Responsibility Committee

The term of reference of Corporate Social Responsibility Committee is in accordance with Section 135 of the Companies Act, 2013 which is as under:

(i) To formulate & recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII to the Companies Act, 2013 as amended from time to time by the Ministry of Corporate Affairs, GOI;

(ii) To recommend the amount of expenditure to be incurred on the activities referred to in clause (a) and approve the budget for CSR;

(iii) To monitor the CSR Policy of the company from time to time;

(iv) Shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company;

(v) Any other matter as may be delegated by the Board from time to time.


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A Maharatna Company

The constitution of the Corporate Social Responsibility Committee of the Company as on 31.03.2017 comprised 4 (four) Directors namely Shri K. S. Garbyal, Shri P. Amrit, Smt. Sangeeta Bhatia, and Shri R. Lakshmanan, Directors.

No meeting of the CSR Committee was held during FY 2016-17

D. Committee for Allotment and Post Allotment activities of KBUNL’s securities

The Committee has been constituted for Allotment and Post-allotment activities of Company’s Securities. The scope of work of this committee is to approve allotment and transfer of shares.

The constitution of the Allotment and Post Allotment Committee of the Company as on 31.03.2017 was as under:i. Shri P. Amrit or Shri R. Lakshmanan, Directorsii. Shri K.S. Garbyal or Shri A.K. Gupta or Smt.

Sangeeta Bhatia, Directors

During the 2016-17, 1 (one) meeting of the Committee for Allotment and Post Allotment activities was held on 12.04.2016 in which all the Members were present.

E. Investment and Loan Sub-Committee The term of reference of Investment and Loan sub-

committee of the Board is to approve deployment of surplus with scheduled banks from time to time and also to look into the loan proposals.

The constitution of the Investment and Loan Sub-Committee of the Company as on 31.03.2017 consisted 5 (five) members namely Shri K.S. Garbyal, Shri R. Lakshmanan, Smt. Sangeeta Bhatia, Directors and CEO and CFO.

No meeting of the Investment and Loan Sub-Committee was held during FY 2016-17.

F. Contracts Sub-Committee This Committee approves award of works or purchase

contracts or incurring commitments of value exceeding the powers of CEO as per Delegation of Powers as amended from time to time but not exceeding ` 250 crore.

The constitution of the Contracts Sub-Committee of the Company as on 31.03.2017 consisted 6 (six) members namely Shri A.K. Gupta, Shri K.S. Garbyal, Shri R. Lakshmanan, Smt. Sangeeta Bhatia, Directors and CEO and CFO.

No meeting of the Contracts Sub-Committee was held during FY 2016-17.

4. Remuneration Policy / Detail of Remuneration to Directors

Since the Directors are nominated by NTPC or by BSPGCL, they are governed by the remuneration policy as applicable to their parent company.

5. Performance Related Payment to Employees As majority of the employees are on secondment basis

from NTPC, their remuneration is as per the rules of NTPC. Only a few employees are on the rolls of KBUNL which were earlier from Bihar State Electricity Board and had opted to serve in KBUNL. They are also being paid remuneration as per NTPC Rules.

Annual Performance Related Payment is decided by the Remuneration Committee of NTPC and such decision is applicable to the employees on secondment basis to KBUNL and employees on the rolls of KBUNL.

6. General Body Meetings The attendance of Directors in Annual General Meeting

and Extra-Ordinary General Meeting is as under:

Date of the Meeting/ Name of the Director

AGM EGM

28.07.16 21.02.17

Shri K.K. Sharma, Chairman Yes Yes

Shri P. Amrit, Director No Yes

Shri A.K. Gupta, Director No No

Shri K.S. Garbyal, Director Yes Yes

Smt. Sangeeta Bhatia, Director

Yes Yes

Shri R. Lakshmanan, Director Yes Yes

The Chairman of the Audit Committee was present in the Annual General Meeting.

Forthcoming AGM: Date, Time and Venue

The 11th Annual General Meeting of the Company (AGM) is scheduled on Wednesday, 30th August, 2017 at 1:30 p.m. at the registered office of the Company situated at NTPC Bhawan, Scope Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003.

Location and Time of the Last Three AGMs

The location, time and details of the special resolutions passed during last three AGMs are as follows:

Year 2013-14 2014-15 2015-16

AGM 8th 9th 10th

Date and Time

09.07.20143.00 p.m.

10.09.20154.00 p.m.

28.07.20163:00 p.m.

Venue NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003

NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003

NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003


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A Maharatna Company

Year 2013-14 2014-15 2015-16

Special Resolution Passed

(i) To increase borrowing powers of the Board up to ` 3,500 Crore.(ii) Authorise the Board to mortgage the assets of the Company for securing loan.

- -

7. Means of Communication

The Company communicates with its shareholders through its Annual Report, and General Meetings.

8. Disclosures

a. The Annual Financial Statements FY 2016-17 are in conformity with applicable Accounting Standards. During the year, there have been no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large. The details of “Related Party Disclosures” are being disclosed in Notes to the accounts in the Annual Report.

b. The company has a system in place for monitoring of various statutory and procedural compliances. Further, a compliance certificate on applicable laws is in place on yearly basis.

c. CEO and CFO of the Company, inter-alia, confirmed the correctness of the financial statements, adequacy of the internal control and certified other matters to the Board and Audit Committee, as per the requirements of Department of Public Enterprises Guidelines.

d. All the Board Members and Senior Management Personnel are governed by the Code of Conduct

of NTPC Limited as they are nominated / deputed by NTPC. The affirmation to the Code of Conduct is given by Board Members and Senior Management Personnel at NTPC.

e. The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has implemented Whistle Blower Policy (Vigil Mechanism) under which the employees are free to report violations of applicable laws and regulations. No personnel have been denied access to the Audit Committee.

f. During the year under review, no Presidential Directive was received by your Company.

9. The information regarding shareholding pattern of Promoters and Directors is given under Extract of Annual Return which is at Annex-III to the Directors’ Report.

10. Training of Board Members

As the Board Members are the Nominees of NTPC and BSPGCL, they are being imparted training by the parent companies. However, detailed presentations were made by senior executives/professionals/ consultants on business-related issues at the Board/Committee meetings as and when required.

11. Location of Plant:

Muzaffarpur Thermal Power Station, Muzaffarpur, Bihar


(K.K. Sharma)Place: New Delhi ChairmanDated: 30.08.2017 DIN: 03014947


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A Maharatna Company

CHIEF EXECUTIVE OFFICER (CEO) & CHIEF FINANCIAL OFFICER (CFO) CERTIFICATIONWe, Rajiva Kumar Sinha, Chief Executive Officer and Kundan Kumar Mishra, Chief Financial Officer of Kanti Bijlee Utpadan Nigam Limited, to the best of our knowledge and belief, certify that:

(a) We have reviewed financial statements, including all notes to the financial statements and the cash flow statements for the year ended March 31, 2017 and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by the Company during the year, which is fraudulent, illegal or violative of the company’s various code(s) of conduct.

(c) We are responsible for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of the internal control systems of the Company pertaining to financial reporting and have disclosed to the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the company’s auditors and the Audit Committee of KBUNL’s Board of Directors:

(i) significant changes, if any, in internal control over financial reporting during the year;

(ii) significant changes, if any, in accounting policies during the year and the same have been disclosed in the notes to the financial statements; and

(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the company’s internal control system over financial reporting.

(Kundan Kumar Mishra) (Rajiva Kumar Sinha) Chief Financial Officer Chief Executive Officer

Place: New DelhiDate : May 18, 2017


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CERTIFICATE ON COMPLIANCE OF DPE GUIDELINES ON CORPORATE GOVERNANCEFOR THE FINANCIAL YEAR 2016-2017

The Members,

KANTI BIJLEE UTPADAN NIGAM LIMITED

We have examined the compliance of Guidelines on Corporate Governance for Central Public Sector Enterprise, 2010 as issued by DPE from time to time of your Company.

The Compliance of Guidelines on Corporate Governance is the responsibility of the management. Our examination was limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion on financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us by the management, we certify that, except the Composition of the Board of Directors & it’s committees, the Company has complied with the DPE Guidelines on Corporate Governance.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.


CS Sachin AgarwalPartner

Place: New Delhi FCS No. : 5774Date: August 04, 2017 CP No. : 5910


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A Maharatna Company

Annexure- III to the Directors’ Report of KBUNIL

FORM NO. MGT-9Extract of Annual Return

as on the financial year ended on March 31, 2017[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN : U40102DL2006GOI153167ii) Registration Date : September 6, 2006iii) Name of the Company : Kanti Bijlee Utpadan Nigam Limitediv) Category / Sub-Category of the Company : Public Company / Government Companyv) Address of the Registered office and contact details : NTPC Bhawan, Core 7, SCOPE Complex, 7,

Institutional Area, Lodhi Road, New Delhi-110003Ph. No.: 011-2436 0071Fax No.: 011-24360241E-mail: [email protected]

vi) Whether listed company Yes / No : Novii) Name, Address and Contact details of Registrar and Transfer

Agent, if any: Not Applicable

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANYAll the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No.


NIC code of the Product/service

% to total turnover of the Company

1. Electricity Power Generation by coal based power plant

35102 100%


Sl. No.

Name and address of the Company CIN/GLN Holding/Subsidiary/Associate

% of shares held

Applicable Section

1. NTPC LimitedNTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003

L40101DL1975GOI007966 Holding 65% 2 (46) of the Companies Act, 2013

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)i) Category-wise Share Holding


No. of Shares held at the beginning of the year No. of shares held at the end of the year % Change during the

yearDemat Physical Total % of

Total shares


sharesA. Promoters(1) Indiana) Individual (i) As Nominee of NTPC - 300 300 0.00 - 300 300 0.00 -(ii) As Nominee

of Bihar State Power Generation Company Limited

- 300 300 0.00 - 300 300 0.00 -

b) Central Govt. - - - - - - - - -c) State Govt.(s) - - - - - - - - -d) Bodies Corp. NTPC Limited - 68,99,79,692 68,99,79,692 65% - 72,94,57,676 72,94,57,676 65% - Bihar State Power

Generation Company Limited

- 37,15,27,388 37,15,27,388 35% - 39,27,84,764 39,27,84,764 35% -


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A Maharatna Company


No. of Shares held at the beginning of the year No. of shares held at the end of the year % Change during the

yearDemat Physical Total % of

Total shares


sharese) Banks/FI - - - - - - - - -f) Any Other - - - - - - - - -Sub-total (A) (1):- - 1,06,15,07,680 1,06,15,07,680 100% - 1,12,22,43,040 1,12,22,43,040 100% -(2) Foreigna) NRIs- individuals - - - - - - - - -b) Other-Individuals - - - - - - - - -c) Bodies Corp. - - - - - - - - -d) Banks / FI - - - - - - - - -e) Any Other - - - - - - - - -Sub-total (A)(2):- - - - - - - - - -Total shareholding of Promoter(A) = (A)(1) + (A)(2)

- 1,06,15,07,680 1,06,15,07,680 100% - 1,12,22,43,040 1,12,22,43,040 100% -

B. Public Shareholding1. Institutionsa) Mutual Funds - - - - - - - - -b) Banks/FI - - - - - - - - -c) Central Govt. - - - - - - - - -d) State Govt.(s) - - - - - - - - -e) Venture Capital

Funds- - - - - - - - -

f) Insurance Companies

- - - - - - - - -

g) FIIs - - - - - - - - -h) Foreign Venture

Capital Funds- - - - - - - - -

i) Others (specify) - - - - - - - - - Sub-total (B) (1):- - - - - - - - - -2. Non-institutionsa) Bodies Corp.i) Indian - - - - - - - - -ii) Overseas - - - - - - - - -b) Individualsi) Individual

Shareholders holding nominal share capital upto ` 1 lakh

- - - - - - - - -

ii) Individual shareholders holding nominal

share capital in excess of ` 1 lakh

- - - - - - - - -

c) Others(specify) - - - - - - - - - Sub-total (B) (2):- - - - - - - - - -Total Public Shareholding (B)=(B)(1)+(B)(2)

- - - - - - - - -


- - - - - - - - -

Grand Total (A+B+C)

- 1,06,15,07,680 1,06,15,07,680 100% - 1,12,22,43,040 1,12,22,43,040 100% -


111

A Maharatna Company


Sl. No.

Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year % change in the shareholding

during the yearNo. of Shares % of total

Shares of the

company




company



1. NTPC Limited 68,99,79,692 65% - 72,94,57,676 65% - -

2. Bihar State Power Generation Company Limited

37,15,27,388 35% - 39,27,84,764 35% - -

3. Nominees of NTPC 300 0.00 - 300 0.00 - -

4. Nominees of Bihar State Power Generation Company Limited

300 0.00 - 300 0.00 - -


SI. No.

Particulars Shareholding at the beginning of the year


No. of shares % of total shares of the company


At the beginning of the year 1,06,15,07,680 100% 1,06,15,07,680 100%

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc. ) :

- - - -

Allotment made on 12.04.2016 4,77,35,360 100% 1,10,92,43,040 100 %

Allotment made on 21.09.2016 1,30,00,000 100% 1,12,22,43,040 100%

At the End of the year 1,12,22,43,040 100% 1,12,22,43,040 100%


SI. No.


Cumulative Shareholding during

the year

For each of Top 10 shareholders No. of shares

% of total shares of the

company

No. of shares


company



- - - -

At the end of the year (or on the date of separation, if separated during the year)

- - - -


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A Maharatna Company


SI. No.


Cumulative Shareholding during the year

No. of shares


company

No. of shares


company

1. Shri K.K. SharmaChairman & Nominee of NTPC

At the beginning of the year 100 0.00 100 0.00

Date wise increase / decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer/ bonus /sweat equity etc):

Nil 0.00 Nil 0.00

At the End of the year 100 0.00 100 0.00

2. Shri P. AmritDirector & Nominee of BSPGCL



Nil 0.00 Nil 0.00


3. Shri K.S. GarbyalDirector & Nominee of NTPC



Nil 0.00 Nil 0.00


4. Shri R. LakshmananDirector & Nominee of BSPGCL

At the beginning of the year Nil 0.00 Nil 0.00

Date wise increase / decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer/ bonus /sweat equity etc): Transfer from Shri Manish Kumar Verma to Shri R. Lakshmanan on 25.04.2016

200 0.00 200 0.00


5. Ms. Sangeeta BhatiaDirector & Nominee of NTPC



Nil 0.00 Nil 0.00



113

A Maharatna Company

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrue but not due for payment(Amount in ` Lakh)

Particulars Secured Loans excluding deposits

Unsecured Loans Deposits Total Indebtedness

Indebtedness at the beginning of the financial year

i) Principal Amount 22,20,11,89,025.00 1,71,42,854.00 - -



Total (i + ii + iii) 22,20,11,89,025.00 1,71,42,854.00 - -


• Addition 86,75,81,761.00 121,00,00,000.00 - -

• Reduction - 1,71,42,854.00 - -

Net Change 86,75,81,761.00 1,19,28,57,146.00 - -

Indebtedness at the end of the financial year

i) Principal amount 23,06,87,70,786.00 121,00,00,000.00 - -



Total (i+ii+iii) 23,06,87,70,786.00 121,00,00,000.00 - -


A. Remuneration to Managing Director, Whole-time Directors and/or Manager: No such position is there

Sl. No.

Particulars of Remuneration Name of MD/WTD/Manager Total Amount

1. Gross Salary(a) Salary as per provisions contained in section 17(1) of the

Income-tax Act,1961(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) of Income-tax

Act, 1961

- - - - -



4. Commission - as % of profit - others, specify…

- - - - -


Total (A) - - - - -



114

A Maharatna Company


Sl.No.


1. Independent Directors • Feeforattendingboard/committeemeetings • Commission • Others,pleasespecify

- - - - -

Total (1) - - - - -

2. Other Non-Executive Directors • Feeforattendingboardcommitteemeetings • Commission • Others,pleasespecify

- - - - -

Total (2) - - - - -

Total (B) = (1 + 2) - - - - -




SI. No.


Remuneration details of CEO, PVUN CEO CFO* (Shri A.K. Singh)

CFO** (Shri K. K. Mishra)

Company Secretary

Total

1. Gross Salary


30,77,071 38,64,471 3,43,972 11,55,461 84,40,975.00

(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961

58,478 3,21,966 38,331 62,837 4,81,612.00

(c) Profits in lieu of salary under section 17(3) of Income-tax Act, 1961

- - - -




- - - -

5. Others, please specifyRent towards accommodation, medical expenses etc.

- - - -

Total 31,35,549 41,86,437 3,82,303 12,18,298 89,22,587.00

* Ceased to be Chief Financial Officer w.e.f. 21.01.2017**Appointed as Chief Financial Officer w.e.f. 21.02.2017#CS is posted at Delhi. Accordingly, salary is also being debited at NTPC CC.


115

A Maharatna Company


Type Section of the Companies Act

Brief description Details of Penalty / Punishment / Compounding fees imposed


Appeal made, if any (give details)

A. COMPANY

Penalty - - - - -



B. DIRECTORS

Penalty - - - - -




Penalty - - - - -




(K.K. Sharma) CHAIRMAN

Din: 03014947



116

A Maharatna Company

Annexure- IV to the Directors’ Report of KBUNIL

ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES1. A brief outline of the company’s CSR policy, including overview of projects or programs proposed to be undertaken

and a reference to the web-link to the CSR policy and projects or programs. Keeping in view the size of the Company and manpower required for executing the CSR activities, your Company has

adopted the CSR policy of its holding company viz. NTPC Limited. KBUNL has executed the CSR activities for long and having a formidable set-up for executing CSR activities. The CSR Policy

is formulated keeping in view the requirements of the Department of Public Enterprises and the Companies Act, 2013. The CSR policy focused on Health, Sanitation, Drinking Water, Education, Capacity Building, Women Empowerment, Social Infrastructure Development, support to Physically Challenged Person (PCPs), and activities contributing towards Environment Sustainability and other subject matter described under Schedule VII of the Companies Act, 2013.

2. The CSR Committee as on 31.03.2017 comprised Shri K. S. Garbyal (Chairman), Shri P. Amrit, Smt. Sangeeta Bhatia and Shri R. Lakshmanan, Directors.

3. Average net profit (loss) of the company for last three financial years. The average net profit (loss) of the Company for three immediately preceding financial years i.e. 2013-14, 2014-15 and

2015-16 is ` (31.23 Crores)4. Prescribed CSR Expenditure. As per requirement of the Companies Act, 2013, the Company is required to spend 2% of the average net profit of

the company made during three immediately preceding financial years in CSR activities. As the average net profit (loss) of the Company for three immediately preceding financial years was (` 31.23 Crore), the Company is not required to spend on CSR activities in the FY 2016-17.

However, the Company had carried forward the unspent amount of ̀ 12.47 Lakh from the previous FY 15-16 which was required to be spent on CSR activities in the FY 2016-17.

5. Details of CSR spent during the financial year 2016-17: CSR budget for FY 15-16 – ` 20.23 Lakh Amount spent in FY 15-16- ` 7.73 Lakh Amount spent in FY 16-17- ` 1.62 Lakh Total amount spent – ` 9.35 lakh Balance amount – ` 10.88 lakh

(a) Total amount to be spent for the financial year 16-17 : ` 12.50 Lakh(carried forward from FY 2015-16)

(b) Amount unspent, if any : ` 10.88 Lakh(c) Manner in which the amount spent during the

financial year: Detailed below

(1) (2) (3) (4) (5) (6) (7) (8)Sl.No.

CSR project or activity identified

Sector inWhich theProject is covered

Projects orPrograms(1) Local area or other(2)Specifythe State and the district whereprojects orprogams was undertaken

Amount outlay (budget)Project orPrograms wise(Amount in Lakh)

Amount spent on theProjects or programsSub-heads:(1) Direct expenditureon projectsor programs-(2) Overheads:(Amount in Lakh)

Cumulative expenditureupto thereporting period(Amount in Lakh)

Amount spent:Direct or throughimplementing agency

1 Installation of Water cooler at Govt. Public Health Centre, Kanti

Availabilities of safe drinking water

Muzaffrapur, Bihar

0.92 0.92 0.92 M/s Pawan Onida Arcade

2 Providing Multiseater Seating chair at Govt. Public Health Centre, Kanti

Community welfare

Muzaffrapur, Bihar

0.70 0.70 0.70 M/s Godrej

Total 1.62 1.62 1.62


117

A Maharatna Company


- Proposal has been initiated for Construction of PCC Road. Award/delivery didn’t materialize during FY 2016-17. Hence, the amount towards CSR couldn’t be spent fully. Unspent amount shall be utilized in FY 2017-18 as spill over for CSR activity.


The Responsibility Statement of the Corporate Social Responsibility Committee is reproduced below:

The implementation and monitoring of Corporate Social Responsibility Policy, is in compliance with CSR objectives and policy of the Company.


(Rajiva Kumar Sinha)Chief Executive Officer

(K.K. Sharma) CHAIRMAN

DIN: 03014947



118

A Maharatna Company

Annexure- V to the Directors’ Report of KBUNIL

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31st MARCH, 2017

{Pursuant to Section 204(1) of the Companies Act, 2013 andRule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014}

To,

The Members,KANTI BIJLEE UTPADAN NIGAM LIMITED.

We have conducted the Secretarial Audit of the Compliance of applicable statutory provisions and the adherence to good Corporate Practices by Kanti Bijlee Utpadan Nigam Limited (hereinafter called KBUNL/the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of KBUNL’s books, papers, Minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial period ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and Compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by KBUNL (“the Company”) for the financial year ended on 31st March, 2017 according to the provisions of:




(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011; Not Applicable

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not Applicable(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009;

Not Applicable(d) The SEBI (Share Based Employee Benefits) Regulations, 2014; Not Applicable(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

regarding the Companies Act and dealing with client; Not Applicable(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable and(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable

(vi) Compliances / processes / systems under other applicable Laws to the Company are being verified on the basis of periodic certificate submitted to the Board of Directors of the Company.

I have also examined compliance with the applicable clauses of the following:


(b) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Not Applicable

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

1. Compliance under Section 149(4) read with Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 of the Act and Clause 3.1.4 of the DPE Guidelines on Corporate Governance with respect to the appointment of Independent Directors on the Board of Company & consequential non-compliances thereof. Compliance under Section 149 (8) read with Clause VIII of Schedule IV of the Act with respect to performance evaluation of the Directors.

We further report that the Board of Directors of the Company is not duly constituted due to non-appointment of Independent Directors on the Board of the Company. The changes in the composition of the Board of Directors that took place during


119

A Maharatna Company

the period under review were carried out in compliance with the provisions of the Act.

Generally, adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions made in the Board/Committee meeting(s) were carried out with unanimous consent of all the Directors/Members present during the meeting.

Due to non-receipt of matching subscription amount towards Equity Capital from Bihar State Power Generation Company Limited (one of the Promoters & Shareholder of the Company), the Company has either allotted equity shares beyond statutory period or has not allotted equity shares, so as to maintain equity capital ratio amongst the Promoters as per the Articles of Association.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, there were no specific events/actions having a major bearing on the Company’s affairs in pursuance of the above referred laws.


Sachin AgarwalPartner

Place: New Delhi FCS No. : 5774Date: June 02, 2017 CP No. : 5910


“Annexure A”

To,

The Members,KANTI BIJLEE UTPADAN NIGAM LIMITED









Sachin AgarwalPartner

Place: New Delhi FCS No. : 5774Date: June 02, 2017 CP No. : 5910


120

A Maharatna Company

KANTI BIJLEE UTPADAN NIGAM LTDBALANCE SHEET AS AT 31st MARCH 2017

` LakhParticulars Note No. As at 31.03.2017 As at 31.03.2016 As at 01.04.2015ASSETSNon-current assets

Property Plant & Equipment 2 266,922.91 67,783.28 67,300.74Capital work-in-progress 3 167,921.04 322,823.79 276,566.93Intangible assets 2 1.60 3.23 2.49Other non-current assets 4 8,965.52 8,380.57 8,120.20

Total non-current assets 443,811.07 398,990.87 351,990.36Current assets

Inventory 5 3,482.69 4,023.98 2,818.18Financial Assets Trade Receivables 6 11,941.17 15,435.76 11,045.93 Cash and cash equivalent 7 1,426.94 1,835.12 5,840.28 Other current financial assets 8 2,655.63 3,125.39 5,526.87Other current assets 9 2,718.94 1,357.47 5,565.33

Total current assets 22,225.37 25,777.72 30,796.58TOTAL ASSETS 466,036.44 424,768.59 382,786.94EQUITY AND LIABILITIESEquity

Equity share capital 10 112,224.30 106,150.77 100,000.00Other equity 11 16,153.05 (220.48) 825.48

Total equity 128,377.36 105,930.28 100,825.48 LiabilitiesNon-current liabilities

Financial liabilities Borrowings 12 234,970.71 222,097.61 189,605.29 Other financial liabilities 13 7,077.51 4,907.94 4,911.44Deferred tax liabilities (net) 14 - - 1,751.71

Total non-current liabilities 242,048.21 227,005.55 196,268.44Current liabilities

Financial liabilities Borrowing 15 11,898.13 18,776.82 14,851.36 Trade payables 16 8,470.71 8,788.89 4,633.41 Other financial liabilities 17 42,571.86 28,488.75 25,186.49Other current liabilities 18 2,298.34 1,308.71 1,552.23Provisions 19 1,801.49 1,887.24 1,948.49Current tax liabilities (net) 20 - - 926.69

Total current liabilities 67,040.52 59,250.41 49,098.68Deferred Revenue 21 28,570.35 32,582.35 36,594.34TOTAL EQUITY AND LIABILITIES 466,036.44 424,768.59 382,786.94

Significant accounting policies 1The accompanying notes 1 to 41 form an integral part of these financial statements.


(Ruchi Aggarwal) (K.K. Mishra) (R. K.Sinha) (R. Lakshmanan) (K.K.Sharma) Company Secretary CFO CEO Director Chairman

Place: PatnaDate: 18th May 2017

For Goel Mintri & AssociatesChartered Accountants

Sunil Kumar GuptaPartnerMembership No. : 501430Firm Reg. No.: 013211N

Place: New DelhiDate: 19th May 2017


121

A Maharatna Company

` LakhParticulars Note No. For the

year ended 31.03.2017


RevenueRevenue from operations 22 38,825.22 37,552.20Other income 23 2,805.02 210.34Total revenue 41,630.24 37,762.54

ExpensesFuel 29,030.33 31,426.74Employee benefits expense 24 3,034.67 2,503.54Finance costs 25 1,911.20 1,763.83Depreciation, amortization and impairment expense 2 6,027.01 5,155.06Other expenses 26 3,820.23 4,485.73Total expenses 43,823.44 45,334.90

Profit before tax and Rate Regulated Activities (RRA) (2,193.21) (7,572.37)Add: Movements in regulatory deferral account balances - -Profit before tax (2,193.21) (7,572.37)Tax expense Current year - - Current tax - (1,751.71) Deferred tax - (1,751.71)

Profit for the year (2,193.21) (5,820.66)

Other comprehensive income - -

Total comprehensive income (2,193.21) (5,820.66)Significant accounting policies 1Expenditure during construction period (net) 27Earnings per equity share (Par value ` 10/- each) 32 From operations including regulatory deferral account balances Basic Earning Per Share (`) (0.20) (0.57) Diluted Earning Per Share (`) (0.18) (0.55)








KANTI BIJLEE UTPADAN NIGAM LTD

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2017


122

A Maharatna Company

KANTI BIJLEE UTPADAN NIGAM LTDCASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2017

` LakhParticulars For the



A. CASH FLOW FROM OPERATING ACTIVITIESNet Loss as per Statement of Profit & Loss (2,193.21) (7,572.37)Adjustment forDepreciation/ Amortisation 6,027.01 5,155.06Interest Cost 1,911.20 1,763.83Grants adjusted as income (4,012.00) (4,012.00)CSR Expense (1.62) -Operating loss before working capital changes 1,731.38 (4,665.47)

Adjustment for -Inventory 541.29 (1,205.80)Trade receivable 3,494.59 (4,389.83)Other Current financial assets 469.75 2,401.48Other current assets (1,361.47) 4,207.86Trade payables (318.18) 4,155.48Other financial liabilities 1,847.75 1,174.01Other current liabilities 989.63 (243.53)Provisions (85.76) (61.25)Cash generated from operations 7,308.99 1,372.96Income Taxes paid 28.79 1,132.24Net cash outflow from operating activities [A] 7,280.20 240.72

B. CASH FLOW FROM INVESTMENT ACTIVITIESPurchase of fixed assets & CWIP (44,144.79) (49,825.28)Net cash outflow from investing activities [B] (44,144.79) (49,825.28)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from issue of share 6,073.54 6,150.77Proceeds from share Application Money 18,568.37 4,774.70Proceeds from Non-Current borrowings 20,604.39 32,492.32Proceeds from Current borrowings (6,878.69) 3,925.46Interest paid (1,911.20) (1,763.83)Net cash inflow from financing activities [C] 36,456.40 45,579.41

Net increase/(decrease) in cash and cash equivalents [A+B+C] (408.19) (4,005.15)Cash and Cash equivalents at the beginning of the year 1,835.12 5,840.28Cash and Cash equivalents at the end of the year 1,426.94 1,835.12

Note: Previous year’s figures have been regrouped/rearranged wherever necessary.








123

A Maharatna Company

(A) Equity share capital

For the year ended 31 March 2017

` Lakhs

Balance as at 1 April 2016 Changes in equity share capital during

the year

Balance as at31 March 2017

106,150.77 6,073.54 112,224.30

For the year ended 31 March 2016` Lakhs

Balance as at 1 April 2016 Changes in equity share capital during

the year

Balance as at31 March 2016

100,000.00 6,150.77 106,150.77

(B) Other equity

For the year ended 31 March 2017 ` Lakhs

Reserves & Surplus Total

Retained Earnings

Corporate Social

Responsibility Reserve

Share Application

Money Pending Allotment

Balance as at 1 April 2016 (5,007.68) 12.50 4,774.70 (220.48)

Profit for the year (2,193.21) - - (2,193.21)

Less: CSR Expenses - 1.62 - 1.62

Share Application Money received - - 24,641.90 24,641.90

Less: Shares alloted against share application money

- - 6,073.54 6,073.54

Balance as at 31 March 2017 (7,200.89) 10.87 23,343.07 16,153.05

For the year ended 31 March 2016 ` Lakhs

Reserves & Surplus Total

Retained Earnings

Corporate Social

Responsibility Reserve

Share Application

Money Pending Allotment

Balance as at 1 April 2015 825.48 - - 825.48

Profit for the year (5,820.66) - - (5,820.66)

Less: Transfer to CSR reserve 12.50 - - 12.50

Add: Transfer from surplus - 12.50 - 12.50

Share Application Money received - - 10,925.47 10,925.47

Less: Shares alloted against share application money

- - 6,150.77 6,150.77

Balance as at 31 March 2016 (5,007.68) 12.50 4,774.70 (220.48)

KANTI BIJLEE UTPADAN NIGAM LTDSTATEMENT OF CHANGES IN EQUITY


124

A Maharatna Company

Significant Accounting Policies for FY 2016-17

1. Company Information and Significant Accounting Policies

A. Reporting entity

Kanti Bijlee Utpadan Nigam Limited (the “Company”) is a Company domiciled in India and limited by shares (CIN: U40102DL2006GOI153167). The address of the Company’s registered office is NTPC Bhawan, SCOPE Complex, 7 Institutional Area, Lodi Road, New Delhi - 110003. The Company is involved in the generation and sale of bulk power to State Power Utilities.

B. Basis of preparation

1. Statement of Compliance

These financial statements are prepared on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. These are the Company’s first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied.

For all the periods upto and including 31 March 2016, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies Act, 2013, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. The Company followed the provisions of Ind AS 101 in preparing its opening Ind AS Balance Sheet as of the date of transition, viz. 1 April 2015. Certain of the Company’s Ind AS accounting policies used in the opening Balance Sheet differed from its Indian GAAP policies applied as at 31 March 2015, and accordingly the adjustments were made to restate the opening balances as per Ind AS. The resulting adjustments arose from events and transactions before the date of transition to Ind AS. Therefore, as required by Ind AS 101, those adjustments were recognized directly through retained earnings

as at 1 April 2015. This is the effect of the general rule of Ind AS 101 which is to apply Ind AS retrospectively.

An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company is provided in note 28.

These financial statements were authorized for issue by Board of Directors on 18 May 2017.

2. Basis of measurement

The financial statements have been prepared on the historical cost basis.

3. Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency.

C. Significant accounting policies

A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.

The Company has elected to utilize the option under Ind AS 101 by not applying the provisions of Ind AS 16 and Ind AS 38 retrospectively and continue to use the Indian GAAP carrying amount as a deemed cost under Ind AS at the date of transition to Ind AS. Therefore, the carrying amount of property, plant and equipment and intangible assets at 1 April 2015, the Company’s date of transition to Ind AS, according to the Indian GAAP were maintained in transition to Ind AS.

1. Property, plant and equipment

1.1. Initial recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation/ amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for its intended use.

When parts of an item of property, plant and equipment have different useful lives, they are recognized separately.

Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses relatable to land in possession are treated as cost of land.


125

A Maharatna Company

In the case of assets put to use, where final settlement of bills with contractors is yet to be effected, capitalization is done on provisional basis subject to necessary adjustment in the year of final settlement.

Assets and systems common to more than one generating unit are capitalized on the basis of engineering estimates/assessments.

Expenditure on major inspection and overhauls of production plant is capitalized, when it meets the asset recognition criteria.

Items of spare parts, stand-by equipment and servicing equipment which meet the definition of property, plant and equipment are capitalized. Other spare parts are carried as inventory and recognized in the statement of profit and loss on consumption.

1.2. Subsequent costs

Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

1.3. Decommissioning costs

The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

1.4. Derecognition

Property, plant and equipment is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on

disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.


The cost of self-constructed assets includes the cost of materials & direct labour, any other costs directly attributable to bringing the assets to a working condition and location for their intended use, and the initial estimate of dismantling and removing the items and restoring the site on which they are located and borrowing costs.

Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.

Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.

Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for on estimated basis as per terms of the contracts.

3. Intangible assets

3.1. Initial recognition and measurement

Intangible assets acquired by the Company, which have finite useful lives, are measured at cost less accumulated amortization and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.

3.2. Subsequent costs

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognized in profit or loss as incurred.

3.3. Derecognition

An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.

4. Government Grants

Government grants are recognized initially as deferred income when there is reasonable assurance that they


126

A Maharatna Company

will be received and the Company will comply with the conditions associated with the grant. Grants that compensate the Company for expenses incurred are recognized over the period in which the related costs are incurred and are deducted from the related expenses. Grants that compensate the Company for the cost of an asset are recognized in profit or loss on a systematic basis over the useful life of the related asset.

5. Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or erection of qualifying assets are capitalized as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale.

When the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the borrowing costs incurred are capitalized. When Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the capitalization of the borrowing costs is computed based on the weighted average cost of general borrowing that are outstanding during the period and used for the acquisition, construction or erection of the qualifying asset.

Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization. Borrowing costs include exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Other borrowing costs are recognized as an expense in the year in which they are incurred.

6. Inventories

Inventories are valued at the lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.


Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

8. Foreign currency transactions and translation

Transactions in foreign currencies are initially recorded at the functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of fixed assets recognized upto 31 March 2016 are adjusted to carrying cost of fixed assets.

Non-monetary items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.

9. Revenue

The Company’s operations in India are regulated under the Electricity Act, 2003. Electricity Act has given powers to the CERC with an objective for making regulations for tariff for the power plants. Revenue to be earned from the generation and sale of electricity is regulated based on certain formulae and parameters set out in tariff regulations issued from time to time. Tariff is based on the cost incurred for a specific power plant and primarily comprises two components: capacity charge i.e. a fixed charge, that includes depreciation, cost of capital, cost of working capital, operating & maintenance expenses and energy charge i.e. a variable charge primarily based on fuel costs.

Revenue from sale of energy

Revenue from the sale of energy is measured at the fair value of the consideration received or receivable. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, there is no continuing management involvement, and the amount of revenue can be measured reliably.

Revenue from sale of energy is accounted for based on tariff rates approved by the CERC as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations where the tariff rates are yet to be approved, provisional rates are adopted considering the applicable CERC Tariff


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A Maharatna Company

Regulations. Revenue from sale of energy is recognized once the electricity has been delivered to the customer and is measured through a regular review of usage meters. Customers are billed on a periodic and regular basis. As at each reporting date, revenue from sale of energy includes an accrual for sales delivered to customers but not yet billed i.e. unbilled revenue.

The incentives/disincentives are accounted for based on the norms notified/approved by the CERC as per principles enunciated in Ind AS 18.

Rebates given to beneficiaries as early payment incentives are deducted from the amount of revenue.

The interest/surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significant uncertainty as to measurability or collectability exists.

Interest/surcharge recoverable on advances to suppliers as well as warranty claims wherever there is uncertainty of realization/acceptance are not treated as accrued and are therefore, accounted for on receipt/acceptance.

10. Other Income

Interest income is recognized, when no significant uncertainty as to measurability or collectability exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate, using the effective interest rate method (EIR).

Scrap other than steel scrap is accounted for as and when sold.

Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims are accounted for based on certainty of realization.

11. Depreciation/amortization

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term.

Depreciation on the assets of the generation of electricity business is charged on straight line method following the rates and methodology notified by the CERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

Depreciation on the following assets is provided on their estimated useful life ascertained on technical evaluation:

a) Kutcha Roads 2 yearsb) Enabling works- residential buildings 15 years- internal electrification of residential

buildings10 years

- non-residential buildings including their internal electrification, water supply, sewerage & drainage works, railway sidings, aerodromes, helipads and airstrips.

5 years

c) Personal computers & laptops including peripherals

3 years

d) Photocopiers, fax machines, water coolers and refrigerators

5 years

e) Temporary erections including wooden structures

1 year

f) Telephone exchange 15 yearsg) Wireless systems, VSAT equipments,

display devices viz. projectors, screens, CCTV, audio video conferencing systems and other communication equipments

6 years

Assets costing up to ` 5,000/- are fully depreciated in the year of acquisition

Cost of software recognized as intangible asset, is amortized on straight line method over a period of legal right to use or 3 years, whichever is less. Other intangible assets are amortized on straight line method over the period of legal right to use or life of the related plant, whichever is less.

Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the month in which the asset is available for use/disposed.

Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortized balance of such asset is charged off prospectively over the remaining useful life determined following the applicable accounting policies relating to depreciation/ amortization.

Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.

Leasehold land and buildings relating to generation of electricity business are fully amortized over lease


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A Maharatna Company

period or life of the related plant whichever is lower following the rates and methodology notified by the CERC Tariff Regulations. Leasehold land acquired on perpetual lease is not amortized.

Major overhaul and inspection costs which have been capitalized are depreciated over the period until the next outage which ranges from 2-8 years or actual major inspection/overhaul, whichever is earlier.

12. Other Expenses

Expenses on ex-gratia payments under voluntary retirement scheme, training & recruitment and research & development are charged to revenue in the year incurred.

Preliminary expenses on account of new projects incurred prior to approval of feasibility report/techno economic clearance are charged to revenue.

Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.

Transit and handling losses of coal as per Company’s norms are included in cost of coal.

Voluntary community development expenditure is charged to statement of profit & loss in the year incurred.

Liquidated damages, wherever there is uncertainty of realization/acceptance are not treated as accrued and are therefore, accounted for on receipt/acceptance and netted off from related expenses / project costs.

13. Employee benefits

Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into separate entities and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefits expense in profit or loss in the period during which services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due after more than 12 months after the end of the period in which the employees render the service are discounted to their present value.

In respect of employees from Holding Company NTPC- Employee benefits include provident fund, pension, gratuity, post-retirement medical facilities, compensated absences, long service award, economic rehabilitation scheme & other terminal benefits. In terms of the arrangement with the Holding Company, the company is to make a fixed percentage contribution

of the aggregate of basic pay and dearness allowance for the period of service rendered in the Company. Accordingly, these employee benefits are treated as defined contribution scheme.

In respect of employees on deputation from BSPGCL- Employee benefit include Earned leave and pension. The company is to make a fixed percentage contribution of Pay band and Grade Pay thereon. Accordingly, these employee benefits are treated as defined contribution scheme.

In respect of employees on roll of the company - Employee benefit expenditure like provident fund, gratuity and other terminal benefits are provided on actual basis.

14. Leases

As Lessee

Accounting for finance leases

Leases of property, plant and equipment where the Company, as lessee has substantially all risks and rewards of ownership are classified as finance lease. On initial recognition, assets held under finance leases are recorded as property, plant and equipment and the related liability is recognized under borrowings. At inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.

The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Accounting for operating leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognized as an expense over the lease term. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

15. Impairment of non-financial assets

The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ‘Impairment of Assets’. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated


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A Maharatna Company

future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”).

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are reduced from the carrying amounts of the assets of the CGU.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

16. Provisions and contingent liabilities

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/ independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

17. Income tax

Income tax expense comprises current and deferred tax. Current tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current income taxes are recognized under ‘Income tax payable’ net of payments on account, or under ‘Tax receivables’ where there is a credit balance.

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Deferred tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.


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A Maharatna Company

18. Material prior period errors

Material prior period errors are corrected retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest prior period presented, the opening balances of assets, liabilities and equity for the earliest prior period presented, are restated.

19. Earnings per Share

Basic earnings per equity share is computed by dividing the net profit attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year.

Diluted earnings per equity share is computed by dividing the net profit attributable to equity shareholders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

Basic and diluted earnings per equity share are also computed using the earnings amounts excluding the movements in regulatory deferral account balances.

20. Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 ‘Statement of Cash Flows’.

21. Current and Non-current classification

The Company presents assets and liabilities in the balance sheet based on current / non-current classification.

An asset is current when it is:

• Expected to be realized or intended to sold orconsumed in normal operating cycle;

• Heldprimarilyforthepurposeoftrading;

• Expected to be realized within twelve monthsafter the reporting period; or

• Cash or cash equivalent unless restricted frombeing exchanged or used to settle a liability for at least twelve months after the reporting period.


A liability is current when:

• It is expected to be settled in normal operatingcycle;

• Itisheldprimarilyforthepurposeoftrading;

• It isduetobesettledwithintwelvemonthsafterthe reporting period; or

• Thereisnounconditionalrighttodefersettlementof the liability for at least twelve months after the reporting period.


Deferred tax assets / liabilities are classified as non-current.

22. Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

22.1.Financial assets


All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset.

Subsequent measurement

Debt instruments at amortized cost

A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:

(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI (Fair Value through OCI)

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

(a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

(b) The asset’s contractual cash flows represent SPPI

Debt instruments included within the FVTOCI category are measured initially as well as at each


131

A Maharatna Company

reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL (Fair Value through Profit or Loss)

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:

• Therightstoreceivecashflowsfromtheassethave expired, or

• The Company has transferred its rights toreceive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

(a) Financial assets that are debt instruments, and

are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

(b) Trade receivables under Ind AS 18.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

22.2.Financial liabilities


All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include loans and borrowings and amounts payable for capital expenditure.

Subsequent measurement

Financial liabilities at amortized cost

After initial measurement, such financial liabilities are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the profit or loss. This category generally applies to trade payables and other contractual liabilities.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For


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A Maharatna Company

liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risk are recognized in OCI. These gains/loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.

Borrowings

After initial recognition, borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

D. Use of estimates and management judgments

The preparation of financial statements requires management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is as under:

1. Useful life of property, plant and equipment

The estimated useful life of property, plant and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.

Useful life of the assets of the generation of electricity business is determined by the CERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

The Company reviews at the end of each reporting date the useful life of property, plant and equipment, other than the assets of generation of electricity business which are governed by CERC Regulations, and are adjusted prospectively, if appropriate.

2. Recoverable amount of property, plant and equipment

The recoverable amount of property, plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows associated with the power plants. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

3. Revenues

The Company records revenue from sale of energy based on tariff rates approved by the CERC as modified by the orders of Appellate Tribunal for Electricity to the extent applicable, as per principles enunciated under Ind AS 18. However, in cases where tariff rates are yet to be approved, provisional rates are adopted considering the applicable CERC Tariff Regulations.

4. Provisions and contingencies

The assessments undertaken in recognizing provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions,


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A Maharatna Company

Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.

5. Assets held for sale

Significant judgment is required to apply the accounting of non-current assets held for sale

under Ind AS 105 ‘Non-current Assets Held for Sale and Discontinued Operations’. In assessing the applicability, management has exercised judgment to evaluate the availability of the asset for immediate sale, management’s commitment for the sale and probability of sale within one year to conclude if their carrying amount will be recovered principally through a sale transaction rather than through continuing use.


134

A Maharatna Company2.

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135

A Maharatna Company

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136

A Maharatna Company

c) The Company capitalised the borrowing costs in the capital work-in-progress (CWIP)/fixed assets. Asset-wise details of borrowing costs included in the cost of major heads of CWIP/fixed assets through ‘Addition’ or ‘Deductions/Adjustments’ column are given below:

` Lakh

Particulars Borrowing costs included infixed assets/ CWIP

For the year ended

31st March 2017

For the year ended

31st March 2016Building:

Main Plant 3,809.92 3,635.07

Others 657.94 19.22

MGR Track and Signalling system 312.39 189.90

Plant and equipment 18,075.23 16,647.39

Others 117.91 647.49

Total 22,973.39 21,139.07

d) Information regarding gross block of tangible assets and accumulated depreciation under previous GAAP is as follows

Particulars Gross blockas at

Accumulated depreciation

as at

Net Blockas at

01.04.2015 01.04.2015 01.04.2015

Land :

(including development expenses)

Freehold 12,172.30 - 12,172.30

Leasehold 0.00 0.00 0.00

Roads, bridges, culverts & helipads 124.31 38.81 85.50

Building :

Main plant 1,135.09 573.93 561.15

Others 2,699.59 614.26 2,085.33

Water Supply, drainage & sewerage system 44.45 13.53 30.92

MGR track and signalling system 899.83 127.78 772.04

Plant and machinery (including associated civil works) 61,275.02 10,706.07 50,568.95

Furniture and fixtures 190.90 66.16 124.74

Vehicles Owned 1.52 0.18 1.34

Office equipment 84.52 32.72 51.80

EDP, WP machines and satcom equip. 147.00 98.63 48.37

Construction equipments 334.57 83.25 251.32

Electrical Installations 637.76 91.68 546.09

Communication Equipments 1.13 0.31 0.81

Hospital Equipments 0.35 0.28 0.07

Total 79,748.32 12,447.59 67,300.74


137

A Maharatna Company

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138

A Maharatna Company


As at 31 March 2017 ` Lakh



Development of land 9,103.48 823.22 2,933.05 6,968.21 25.45

Roads, bridges, culverts & helipads 26.96 5.34 (2,588.04) 2,587.46 32.87

Buildings

Main plant 51,802.44 5,536.28 17,510.21 16,980.57 22,847.93

Others 346.15 52.34 (5.59) 95.99 308.10

Temporary erection 44.28 35.27 (345.59) 345.59 79.54

MGR track and signalling system 3,547.70 2,116.85 (99.81) 5,653.76 110.61

Earth dam reservoir 20.23 - - - 20.23

Plant and equipment 238,566.90 36,156.10 (25,639.83) 170,781.05 129,581.79

EDP/WP machines & satcom equipment 93.45 6.64 (19.63) 119.72 0.00

Construction equipments 16.94 0.91 4.95 - 12.90

Electrical installations 1,285.04 292.40 (138.12) 900.19 815.38

304,853.56 45,025.35 (8,388.41) 204,432.53 153,834.80

Expenditure pending allocation

Survey, investigation, consultancy and supervision charges

6,429.07 103.12 6,201.87 - 330.32

Precommissiong Expenses (net) 999.71 1,510.31 2,510.02 - -

Expenditure during construction period (net)*

665.23 25,401.25 - - -

Less: Allocated to related works - 26,066.48 - - -

312,947.57 45,973.56 323.49 204,432.53 154,165.12

Construction stores 9,876.22 3,879.70 - - 13,755.92

Total 322,823.79 49,853.26 323.49 204,432.53 167,921.04

* Brought from expenditure during construction period (net) - Note 27


139

A Maharatna Company



Particulars Deemed cost as at

01.04.2016

Additions Deductions/Adjustments

Capitalised As at 31.03.2016

Development of land 7,932.94 1,170.54 - - 9,103.48

Roads, bridges, culverts & helipads 13.96 13.00 - - 26.96

Buildings

Main plant 45,076.89 6,725.55 - - 51,802.44

Others 219.28 130.28 3.40 - 346.15

Temporary erection 31.55 12.73 - - 44.28

MGR track and signalling system 1,497.70 2,050.01 - - 3,547.70

Earth dam reservoir 20.23 - - 20.23

Plant and equipment 205,549.67 33,284.54 267.30 - 238,566.90

EDP/WP machines & satcom equipment 85.75 7.69 - - 93.45

Construction equipments 14.81 2.13 - - 16.94

Electrical installations 927.25 353.34 (4.46) - 1,285.04

261,370.01 43,749.79 266.24 - 304,853.56



6,246.73 182.34 - - 6,429.07

Precommissiong Expenses (net) 543.13 456.58 - - 999.71

Expenditure during construction period (net)* - 25,170.72 - - 665.23

Less: Allocated to related works - 24,505.49 - - -

268,159.88 45,053.94 266.24 - 312,947.57


Total 276,566.93 46,523.10 266.24 - 322,823.79


a) Pre-commissioning expenditure for the year amount to ` 1,793.11 lakhs (Previous year ` 456.58 lakhs) after adjustment of pre-commissioning sales of ` 282.80 lakhs (Previous Year Nil) resulted in net pre-commissioning expenditure of ` 1,510.31 lakhs (Previous year ` 456.58 lakhs)

b) Estimated amount of contracts remaining to be executed on capital account and is not provided for as at 31 March 2017 is ` 65,356.81 lakhs (31 March 2016 is ` 73,066.88 lakhs and 1 April 2015 is ` 63,451.35 lakhs).

c) Construction stores are net of provision for shortages pending investigation amounting to ` 54.82 lakhs (31 March 2016 ` 167.27 lakhs and 1 April 2015 ` 99.14 lakhs).


140

A Maharatna Company

4. Other Non Current Assets

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Capital advances

Unsecured

Covered by bank guarantee 4,117.87 4,400.20 3,473.60

Others 4,428.97 3,574.95 4,462.25

8,546.84 7,975.15 7,935.85


Security Deposit 84.63 100.17 84.63

Advance tax & tax deducted at source 334.05 305.26 99.72

Total 8,965.52 8,380.57 8,120.20

Disclosure with respect to Capital advances pertaining to related parties is made in Note 29.

5. Inventories

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Coal 820.87 1,499.75 178.80

Fuel Oil 9.53 134.36 137.57

Components and Spares 2,106.38 1,882.86 1,691.65

Chemicals & consumables 136.68 114.89 225.09

Steel scrap 118.82 112.19 354.63

Loose tools 6.35 7.10 14.25

Others (refer note c below) 343.31 376.57 303.31

3,541.93 4,127.71 2,905.31

Less: Provision for shortages 58.73 103.23 87.13

Provision for obsolete/unserviceable items/diminution in value of surplus inventory 0.51 0.51 -

Total 3,482.69 4,023.98 2,818.18

a) Inventories include material-in-transit

Coal 321.68 - -

Component & spares 12.20 83.16 103.70

Others - 0.48 1.18

b) Inventory items, other than steel scrap, have been valued as per accounting policy no. C.6 (Note 1). Steel scrap has been valued at estimated realisable value.

c) Inventories-Others includes steel, cement, electrical consumables etc.


141

A Maharatna Company

6. Trade Receivables

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Unsecured, considered good 11,941.17 15,435.76 11,045.93

Total 11,941.17 15,435.76 11,045.93

Disclosure with respect to trade receivables from related parties is made in Note 29.

7. Cash and Cash Equivalents

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Balances with banks

Current accounts 24.26 25.78 60.48

Deposits with original maturity upto three months 1,402.42 1,809.34 5,779.79

Cheques in hand 0.26 - -

Total 1,426.94 1,835.12 5,840.28

8. Other current financial assets

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Unbilled revenue 2,655.63 3,125.39 5,526.87

Total 2,655.63 3,125.39 5,526.87

9. Other Current assets

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015

Interest accrued on advances to contractor - - 26.03

Claims recoverable

Unsecured, considered good 47.99 16.54 8.88

Unsecured Advances

Employees 0.67 2.54 -

Contractors & suppliers 2,472.36 1,250.78 5,430.21

Prepaid insurance 197.45 87.13 99.73

Assets held for disposal 0.48 0.48 0.48

Total 2,718.94 1,357.47 5,565.33


142

A Maharatna Company

10. Share capital` Lakh


As at 31.03.2016

As at 01.04.2015

Equity share capitalAuthorised2,00,00,00,000 Equity shares of par value ` 10/- each (1,40,00,00,000 Equity shares of par value ` 10/- each as at 31 March, 2016 and 1,00,00,00,000 Equity shares of par value ̀ 10/- each as at 1 April 2015) 200,000.00 140,000.00 100,000.00Issued, subscribed and fully paid up1,12,22,43,040 shares of par value ` 10/- each (1,06,15,07,680 shares of par value ` 10/- each as at 31 March 2016 and 1,00,00,00,000 shares of par value ` 10/- each as at 1 April 2015) 112,224.30 106,150.77 100,000.00

a) Movements in equity share capital:


As at31.03.2016

Opening number of shares 1,06,15,07,680 1,00,00,00,000Shares issued during the year 6,07,35,360 6,15,07,680Shares bought back during the year - -Closing number of shares 1,12,22,43,040 1,06,15,07,680

b) Terms and rights attached to equity shares:

The Company has only one class of equity shares having a par value `10/- per share. The holders of the equity shares are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

c) Details of shareholders holding more than 5% shares in the Company:

Particulars No. of shares %age holdingAs on 31.03.2017NTPC Ltd. 72,94,57,976 65.00Bihar State Power Genration Co. Ltd. (BSPGCL) 39,27,85,064 35.00

As on 31.03.2016NTPC Ltd. 68,99,79,992 65.00Bihar State Power Genration Co. Ltd. (BSPGCL) 37,15,27,688 35.00

As on 1.04.2015NTPC Ltd. 65,00,00,000 65.00Bihar State Power Genration Co. Ltd. (BSPGCL) 35,00,00,000 35.00

11. Other equity` Lakh


As at 31.03.2016

As at 01.04.2015

Share application money pending allotment 23,343.07 4,774.70 -

Corporate social responsibility (CSR) reserve 10.87 12.50 -

Retained earnings (7,200.89) (5,007.68) 825.48

Total 16,153.05 (220.48) 825.48


143

A Maharatna Company


a) Share application money pending allotment

Reconciliation

Opening balance 4,774.70 -

Add: Share application money received during the year 24,641.90 10,925.47

Less: Shares issued against share application money 6,073.54 6,150.77


Share application money pending allotment has been received from

NTPC Ltd. 23,343.07 3,103.96

Bihar State Power Genration Co. Ltd (BSPGCL) - 1,670.74

23,343.07 4,774.70

The shares are likely to be allotted in the financial year 2017-18.

The authorised share capital of the company is sufficient to cover the share capital amount on allotment of shares out of the above share application money.

No amount is refundable out of above share application money and no interest is payable.


b) Corporate social responsibility (CSR) reserve

As per last financial statements 12.50 -

Add: Transfer from surplus - 20.23

Less: Expense during the year 1.62 7.73

Closing balance 10.87 12.50

In terms of section 135 of Companies Act, 2013 read with guidelines on corporate social responsibility issued by Department of Public Enterprises(DPE), GoI,the Company is required to spent, in every finaicial year, at least two percent of the average net profits of the company made during the three immedialtely preceeding financial years in accordance with its CSR policy. The company has spent an amount of ` 1.62 lakhs (previous year ` 7.73 lacs) during the year.


c) Retained earnings

Reconciliation

Opening balance (5,007.68) 825.48

Add: Loss for the year from Statement of Profit and Loss (2,193.21) (5,820.66)

Less: Transfer to CSR reserve - 12.50

Closing balance (7,200.89) (5,007.68)


144

A Maharatna Company

12. Non-Current Borrowings

` Lakh


As at 31.03.2016

As at 01.04.2015

Term loans

From Banks

Secured

Rupee loans 177,382.70 171,787.88 155,260.25

From Others

Secured

Rupee loans 53,305.01 50,224.01 34,087.90

Unsecured

Rupee loans 12,100.00 171.43 342.86

Less: Current maturities of term loan

Secured

Banks 7,370.00

Others 447.00

Unsecured

Others 85.71 85.71

Total 234,970.71 222,097.61 189,605.29

1 Term Loans- Secureda) Loan from consortium led by State Bank of India for expanansion project ( 2*195MW) at Kanti is secured by a first

priority charge on all assets of the Project, present & future, movable & immovable and land of 987.9293 acres. The security will rank pari-pasu with all term lenders of the project. The charge has been created in favor of Security trustee i.e. SBI Cap Trustee Co. Ltd. Legal mortgage of land in favor of security trustee has been executed for 877.18 acres of land.

b) Total sanctioned amount of loan and guarantee facility is ̀ 234,128 lakhs and ̀ 10,000 lakhs respectively. Repayment period of the loan is 11 years and repayment will start from 30.09.2017 on quarterly basis.

c) The loan bears floating rate of interest linked to the SBI Base Rate.d) In first phase the charge with Registrar of Companies (ROC) was filed on 27.09.2011 for 594.84 Acres of Land

and ROC issued certificate of Registration of Mortgage on 28.09.2011 , in second phase 282.34 Acres of land was mortgaged on 07.11.2014 ROC issued certificate of Registration of Mortgage on 05.12.2014, Certifying that the Mortgage/charge has been registered for `244,128 lakhs in their office in accordance with the provisions contained in section 125 to 130 of the Companies Act, 1956 on 28th September 2011.

2A Term Loan- Unsecured

a) The term loan of ` 12,100.00 lakhs has been taken from Holding company NTPC Ltd. in FY 2016-17.

b) The loan is repayable in two equal half yearly installments starting from 30th June 2019.

c) The rate of interest on the loan is 10 % p.a. on (Quaterly rests)

2B Term Loan- Unsecured

a) The balance outstanding as on 31.03.2016 & 01.04.2015 represents term loan taken from from Holding company NTPC Ltd. in earlier years.

b) The loan was repayable in 7 years on half yearly basis starting from 30th September 2008.

c) The rate of interest on the loan was at par with SBAR (State Bank Advance Rate) as adjusted to half yearly rests with a year of 365 days.

3 There has been no default in repayment of any of the Loans or interest thereon as at the end of the year.


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13. Other Non-current Financial Liabilities

` Lakh


As at 31.03.2016

As at 01.04.2015

Other liabilities

Payable for capital expenditure 7,077.51 4,907.94 4,911.44

Total 7,077.51 4,907.94 4,911.44

a) Payable for capital expenditure represents liability towards equipment supplier and erection vendors pending evaluation of performance and guarantee test results.

14. Deferred tax liabilities (net)

` LakhParticulars As at

31.03.2017As at

31.03.2016As at

01.04.2015Deferred tax liability

Difference in book depreciation and tax depreciation - - 1,815.61

Less: Deferred tax assets

Provisions & Other disallowances for tax purpose - - 63.90

- - 1,751.71

a) Deferred tax assets and deferred tax liabilities have been offset as they relate to the same governing laws.

Movement in deferred tax balances31 March 2016Particulars Net balance

1 April 2015Recognised in profit or loss

Net balance31 March 2016

Difference in book depreciation and tax depreciation 1815.61 (1815.61) -

Provisions 63.90 (63.90) -

Tax assets/(liabilities) 1751.71 (1751.71) -

15. Current Borrowings` Lakh


As at 31.03.2016

As at 01.04.2015

Secured loans repayable on demand

From Banks 11,898.13 18,776.82 14,851.36

a) The loan is secured by hypothecation of trade receivables and stock in trade of Stage 1.b) The loan bears a floating rate of interest rate linked to SBI base rate.c) There has been no default in repayment of any of the loans or interest thereon during the year.

16. Trade Payables` Lakh


As at 31.03.2016

As at 01.04.2015

For goods and services 8,470.71 8,788.89 4,633.41

a) Revision of pay scales of the employees of the Central Government was due w.e.f 1st January 2016. Pending acceptance of the recommedations of the VII Pay Commission constituted by the Central Government, provision of Nil (previous year ` 37.32 lakhs) towards the payments due to the employees of Central Industrial Security Force had been made on an estimated basis.

b) Refer Note No. 29 for amounts due to related party.c) Information in respect of micro and small enterprises is disclosed in Note 33.


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A Maharatna Company

17. Other Current Financial Liabilities` Lakh


As at 31.03.2016

As at 01.04.2015

Current maturities of term loan

Secured

Banks 7,370.00 - -

Others 447.00 - -

Unsecured

Others - 85.71 85.71


Other payables

Deposits from contractors and others 116.95 143.47 143.05

NTPC Ltd 6,560.65 4,963.54 3,838.19


Others 970.30 989.06 956.14

Total 42,571.86 28,488.75 25,186.49

a) The pay revision of the employees of the Company is due w.e.f 1st January 2017. Department of Public Enterprises, GOI (DPE) has constituted the 3rd Pay Revision Committee to review the structure of pay scales and allowances/benefits of various categories of Central Public Sector Enterprises and suggest changes after taking in to account 7th Central Pay Commission recommendations applicable to central government employees. The recommendations of the committee have been submitted and guidelines are yet to be issued by DPE. Pending issuance of the same, provision for the year amounting to ` 235.02 lakhs has been made towards pay revision on an estimated basis having regard to the recommendations of the committee.

b) Other payables - others includes balance payable to BSPGCL,etc.c) Information in respect of micro and small enterprises is disclosed in Note 33.

18. Other Current Liabilities` Lakh


As at 31.03.2016

As at 01.04.2015

Other payables

Tax deducted at source and other statutory dues 756.72 143.63 188.15

Advance from customers 1,541.62 1,165.08 1,364.08

Total 2,298.34 1,308.71 1,552.23

19. Short-Term Provisions` Lakh


As at 31.03.2016

As at 01.04.2015

Provisions for obligations incidental on land acquisition 1,799.75 1,885.50 1,946.75

Shortages in fixed assets pending investigation 1.74 1.74 1.74

Total 1,801.49 1,887.24 1,948.49


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A Maharatna Company

Provision for obligations incidental to land acquisition includes expenditure on rehabilitation & resettlement (R&R) including the amounts payable to the project affected persons (PAPs) towards, expenditure for providing community facilities and expenditure in connection with environmental aspects of the project. Company has estimated the provision based on the Rehabilitation Action Plan (RAP) approved by the board/competent authority. The outflow of said provision is expected to be incurred immediately on fulfilment of conditions.

Movement in provisions:

` LakhParticulars As at

31.03.2017As at

31.03.2016

Carrying amount at the beginning of the year 1,885.50 1,946.75

Add: Additions during the year - -

Less: Amounts used during the year 85.76 61.25

Carrying amount at the end of the year 1,799.75 1,885.50

There is no movement in provision for shortages in fixed assets pending investigation during the year

20. Current tax liabilities (net)` Lakh


As at 31.03.2016

As at 01.04.2015

Current tax (net of advance tax) - - 926.69

Total - - 926.69

21. Deferred revenue` Lakh


As at 31.03.2016

As at 01.04.2015

On account of government grants 28,570.35 32,582.35 36,594.34

Total 28,570.35 32,582.35 36,594.34

a) Government grants represents amount received from Government of India through Government of Bihar under RSVY for renovation and modernisation of stage I (2*110 MW).

b) There are no unfulfilled conditions or other contingencies attached to above grant.

Movement in Government grants:` Lakh


As at 31.03.2016

Carrying amount at the beginning of the year 32,582.35 36,594.34

Add: Additions during the year - -

Less: Amounts used during the year 4,012.00 4,012.00Carrying amount at the end of the year 28,570.35 32,582.35

22. Revenue from operations` Lakh


31.03.2017

For the year ended

31.03.2016Energy sales (including electricity duty) 34,220.95 33,012.32Energy internally consumed 592.27 527.88Other operating revenues Recognized from deferred revenue - government grant 4,012.00 4,012.00Total 38,825.22 37,552.20


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A Maharatna Company

a) The CERC has issued final tariff order for the period (01.11.2013-31.03.2014) for U#1 on 09.02.2016. Sales for the FY 2016-17 has been provisionaly accounted for both units (U#1 & U#2) based on the CERC order Dt. 09.02.2016.

b) U#1 of Stage-II (2X195MW) was declared commercial w.e.f 00:00 Hrs of 18.03.2017. Fixed charge accounting of this unit has been done based on the 85% of fixed chagres claimed in tariff petition filed with CERC. For variable charges parameters has been taken based on 210MW size units since no comparative units of this size of 195MW is operational.

c) Pending issue of Tariff orders w.e.f 01.04.2014 for KBUNL , beneficairies are billed in accordance with the tariff approved and applicable as on 31St March 2014 and as provided in the Regulation 2014. The energy charges are provisionally billed based on the GCV “as received” measured after the Secondary crusher till 30th September 2016 and GCV measured on Wagon Top w.e.f 01.10.2016.

d) As per regulation 45 of CERC regulation 2014-19 (Late payment surcharge) - In case the payment of any bill for charges payable under these regulations is delayed by a beneficiary , beyond a period of 60 days from the date of billing, a late payment surcharge at the rate of 1.50% per month shall be levied by the generating company . Accordingly the amount recoverable from the beneficiary has been accounted as ‘ Surcharge income from beneficary’ in note 23.

e) Revenue from operations include ` 592.27 (previous year ` 527.88) towards energy internally consumed valued at variable cost of generation and the corresponding amount is included in power charges (Note-26)

23. Other Income` Lakh


31.03.2017

For the year ended

31.03.2016Interest from Advance to contractors 387.27 207.52 Deposits with banks 4.89 8.14

Other non-operating income Surcharge income from beneficiaries 2,445.67 - Other receipt from contractor/Suppliers 0.70 0.80 Sale of scrap 130.35 52.05 Provision written back 197.12 99.25 Profit on disposal of Fixed Assets - 0.11 Miscellaneous income* 35.55 62.08

3,201.55 429.95Less: Transferred to expenditure during construction period (net)- Note 27 396.53 219.61Total 2,805.02 210.34

*Miscellaneous income includes income from Hire Charges, rent received etc.

24. Employee Benefit Expense` Lakh


31.03.2017

For the year ended

31.03.2016Salaries and wages 3,503.07 3,213.48Contribution to provident and other funds 803.01 781.99Staff welfare expenses 192.18 199.37

4,498.27 4,194.83Less: Allocated to fuel cost 188.19 206.32 Transferred to expenditure during construction period (net)- Note 27 1,275.40 1,484.97Total 3,034.67 2,503.54


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A Maharatna Company

In accordance with the Accounting Policy no. C.13 , an amount of ` 625.40 lakhs (previous year ` 612.65 lakhs) towards provident fund, pension, gratutity, post retirement medical facilities & other terminal benefits and ` 172.60 lakhs (previous year ` 164.66 lakhs) towards leave & other benefits, are paid /payable to the holding company (NTPC) and included in ‘Employee Benefits’.

In accordance with the Accounting Policy no. C.13 , an amount of ` Nil lakhs (previous year ` 15.66 lakhs) towards pension, and ` Nil lakhs (previous year ` 11.23 lakhs) towards leave benefits, are paid /payable to the other promoting partner (BSPGCL) and included in ‘Employee Benefits’.In respect of the Company’s employee, an amount of ` 17.05 lakhs (previous year ` 17.57 lakhs) towards gratuity and ` 26.87 lakhs (previous year ` 42.34 lakhs) towards leave benefits is payable.

25. Finance Costs

` Lakh


31.03.2017

For the year ended

31.03.2016Finance charges on financial liabilities measured at amortised cost Rupee term loans 22,074.56 21,138.50 Cash credit 1,405.28 1,719.48 Others-Loan from holding company 326.82 44.35 Unwinding of discount on vendor liabilities 402.63 665.23

24,209.29 23,567.56Other borrowing costs- upfront fee 10.08 0.57

24,219.37 23,568.13Less: Transferred to expenditure during construction period (net) - Note 27 22,308.17 21,804.30Total 1,911.20 1,763.83

26. Other Expenses

` Lakh




Less: Recovered from contractors & employees 3.49 5.09

588.79 522.79

Stores Consumed 135.98 190.45

Rent 9.62 24.60


Buildings 128.80 299.04

Machinery 1,978.45 2,401.03

Others 373.66 222.87

Insurance 342.47 251.03

Interest payable to customers - 246.81

Rates and taxes 0.33 2.29

Water cess & environment protection cess 0.84 14.20

Training & recruitment expenses 3.40 19.28




Less: Receipt from sale of tenders 0.68 0.99


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A Maharatna Company

` Lakh



23.36 38.73

Payment to auditors 3.53 2.46

Advertisement and publicity 1.58 0.31

Security expenses 1,425.69 1,340.54


Expenses for guest house 127.73 108.45

Less: Recoveries 1.48 0.96

126.25 107.48

Brokerage & commission 10.69 -

Ash utilisation & marketing expenses 0.44 -

Books and periodicals - 0.07



EDP hire and other charges 3.38 4.70


Hire charge of vehicles 120.12 140.94

Bank charges 64.73 32.24


Loss on disposal/write-off of fixed assets - 1.11

6,194.68 6,580.19

Less: Allocated to fuel cost 320.78 314.69

Transferred to expenditure during construction period (net) - Note 27 2,093.86 1,971.48

3,780.05 4,294.01

Corporate Social Responsibility (CSR) expense - 7.73

Provisions for

Shortage in stores 27.03 73.49

Obsolete/Dimnuition in the value of surplus store - 0.51

Shortage in construction stores 13.16 109.99

3,820.23 4,485.73

a) Miscellaneous expenses includes Horticulture expenses, hiring of DG set etc.

b) Details in respect of payment to auditors:

As auditor

Audit fee 1.39 1.15

Tax audit fees 0.37 0.23

In other capacity

Other services (certification fee) 0.77 0.74

Reimbursement of expenses 1.00 0.35

Total 3.53 2.46


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A Maharatna Company

27. Expenditure During Construction Period (net)` Lakh


31.03.2017

For the year ended

31.03.2016

A. Employee benefits expense

Salaries and wages 1,018.45 1,147.35

Contribution to provident and other funds 223.79 278.05

Staff welfare expenses 33.16 59.56

Total (A) 1,275.40 1,484.97

B. Finance costs

Interest on

Rupee term loans 21,909.25 21,138.50

Unwinding of discount on account of vendor liabilities 388.84 665.23

Other borrowing costs- upfront fee 10.08 0.57

Total (B) 22,308.17 21,804.30

C. Depreciation and amortisation 120.35 129.58

D. Generation, administration & other expenses


Rent 3.27 17.41


Buildings 3.77 60.00

Others 87.45 120.91

Insurance 33.46 54.12




Security expenses 1,053.68 840.48


Expenses for guest house 60.22 37.66



EDP Hire and other charges 2.89 1.26


Hiring of vehicles 92.69 107.09

Bank charges 25.11 4.21


Total (D) 2,093.86 1,971.48

E. Less: Other income

Interest from contractors 387.22 207.52

Miscellaneous income 9.31 12.10

Total (E) 396.53 219.61

Grand total (A+B+C+D-E) 25,401.25 * 25,170.72*

* Carried to Capital work-in-progress - (Note 3)


152

A Maharatna Company


The company has prepared its first Financial Statements in accordance with Ind AS for the year ended 31 March 2017.

For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in

accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards)

Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2015 (the date of

transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended

31 March 2017, the comparative information presented in these financial statements for the year ended 31 March

2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 (the Company’s date of transition).

According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that

are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of

Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied

retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial

Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of 1 April 2015

compared with those presented in the Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity

under retained earnings within the Ind AS Balance Sheet.

An explanation of how the transition from previous GAAP to Ind AS has affected the company’s financial position,

financial performance and cash flows is set out in the following tables and notes.


In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the Indian

GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017.

For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the

general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and

exceptions in preparing its Ind AS Opening Balance Sheet:

i) Property, plant and equipment & Intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and

equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the

previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for

de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38, Intangible

Assets. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible

assets at their previous GAAP carrying value.

ii) Long term foreign currency monetary items

The Company has elected to continue the policy adopted for accounting for exchange differences arising from

translation of long-term foreign currency monetary items recognised in the financial statements for the period

ending immediately before the beginning of the first Ind AS financial reporting period as per the Indian GAAP.


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A Maharatna Company

Reconciliation of Assets, Equity & Liabilities as at 1 April 2015 and as at 31 March 2016

` Lakh

1 April 2015 31 March 2016Note Previous

GAAP*Adjustments Ind ASs Previous

GAAP*Adjustments Ind ASs

ASSETSNon-current assetsProperty, plant and equipment

67,300.74 - 67,300.74 67,739.37 43.91 67,783.28

Capital work in progress 276,566.93 - 276,566.93 322,240.36 583.44 322,823.79Other Intangible assets 2.49 - 2.49 3.23 - 3.23Other non-current assets 8,120.20 - 8,120.20 8,380.57 - 8,380.57Current AssetsInventory 2,818.18 - 2,818.18 4,068.26 (44.28) 4,023.98Financial assets Trade Receivables 11,045.93 - 11,045.93 15,435.76 - 15,435.76 Cash and cash

equivalents 5,840.28 - 5,840.28 1,835.12 - 1,835.12

Other current financial assets

5,526.87 - 5,526.87 3,125.39 - 3,125.39

Other current assets 5,565.33 - 5,565.33 1,357.47 - 1,357.47Total Assets 382,786.94 - 382,786.94 424,185.52 583.07 424,768.59EQUITY & LIABILITIESEquityEquity Share capital 100,000.00 - 100,000.00 106,150.77 - 106,150.77Other equity (552.04) 1,377.52 825.48 (1,597.63) 1,377.14 (220.48)LiabilitiesNon-current liabilitiesFinancial liabilities Borrowings 189,605.29 0.00 189,605.29 222,097.60 0.00 222,097.61 Other financial

liabilities 6,288.96 (1,377.52) 4,911.44 5,702.02 (794.08) 4,907.94

Deferred tax liabilities (net)

1,751.71 - 1,751.71 - - -

Current liabilitiesFinancial liabilities Borrowings 14,851.36 (0.00) 14,851.36 18,776.82 (0.00) 18,776.82 Trade payables 4,633.41 - 4,633.41 8,788.88 0.00 8,788.89 Other financial

liabilities 25,186.49 (0.00) 25,186.49 28,488.75 (0.00) 28,488.75

Other current liabilities 1,552.23 (0.00) 1,552.23 1,308.71 - 1,308.71Provisions 1,948.49 - 1,948.49 1,887.24 - 1,887.24Current tax liabilities (net) 926.69 - 926.69 - - -Deferred Revenue 36,594.34 - 36,594.34 32,582.35 - 32,582.35Total equity and liabilities 382,786.94 (0.00) 382,786.94 424,185.52 583.07 424,768.59


Reconciliation of profit for the year ended 31 March 2016


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A Maharatna Company

There is an impact on statement of profit & loss by ` (0.37) lakhs due to depreciation on Capital spares recognised due to implementation of Ind-AS. The impact of finance cost recognised on vendor liabilities during FY 2015-16 amounts to ` 665.23 Lakhs and impact of discounting of vendor liabilities incurred during 2015-16 amounts to ` 81.79 Lakhs. The net impact of above adjustments has increased Capital work in progress by ` 583.44 Lakhs with corresponding decrease in vendor liabilities.


31 March 2016 1 April 2015


Adjustments:

Recognition of financial assets/liabilities at amortised cost 1,377.52 1,377.52

depreciation on Capital spares recognised due to implementation of Ind-AS (0.37) -


Notes to first-time adoption:

(a) Financial liabilities

Under Indian GAAP, liabilities such as payable for capital expenditure are recorded at cost. However, under Ind AS, liabilities in which the Company has a contractual obligation to deliver cash are classified as financial liabilities and recorded at amortized cost. Therefore, such financial liabilities have been discounted to present value since they do not carry any interest. The upfront benefit on transition date due to the discounting has been adjusted against the retained earnings. Further, interest cost on unwinding of discount has been capitalized to the cost of property, plant and equipment where such interest cost can be capitalized in accordance with Ind AS 23 ‘Borrowing cost’ otherwise charged off to statement of profit or loss. The effect of the adjustments resulted in reduction of the value of financial liabilities by ` 1,377.52 lakhs along with corresponding increase in retained earnings as on the transition date. During the year ended 31st March 2016, value of financial liabilites was reduced by ̀ 794.08 lakhs by corresponding increase in statement of profit and loss (Finance Cost) by ` 665.23 Lakhs and reduction in Capital Work In Progress by ` 81.79 lakhs. Finance Cost has been capitalised being expenditure during construction period.

(b) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.29. Disclosure as per Indian Accounting Standard - 24 on ‘Related Party Disclosures’

a) List of Related parties: i) Parent Company: 1. NTPC Limited

ii) Joint Venture of parent company: Utility Powertech Ltd

iii) Key Managerial Personnel (KMP):

Shri K.K. Sharma Chairman

Mrs. Ruchi Aggarwal Company Secretary

Shri P. Amrit Non-Executive Director

Shri R. Lakshmanan Non-Executive Director

Shri K.S. Garbyal Non-Executive Director

Mrs. Sangeeta Bhatia Non-Executive Director

Shri R.K. Sinha Chief Executive Officer

Shri A.K.Singh (01.04.16-21.01.17) Chief Finance Officer Shri K.K. Mishra (21.02.17-31.03.17) Chief Finance Officeriv) Entities under the control of the same government: The Company is a subsidiary of Central Public Sector Undertaking (CPSU) controlled by Central Government

by holding majority of shares (refer Note 10). Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and


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A Maharatna Company

other entities shall be regarded as related parties. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Company has significant transactions include but not limited to Eastern Coalfields Ltd., Bharat Petroleum Corporation Ltd., Hindustan Petroleum Corporation Ltd., Central Coalfields Ltd., Bharat Coking Coal Ltd., Bharat Heavy Electricals Ltd., RITES Ltd. etc.

b) Transactions with the related parties are as follows:

Transactions with the parent company: ` Lakh

Sl. No.

Name of the Company Nature of transaction 2016-17 2015-16

1 NTPC Limited Equity Contribution 24,186.90 7,101.96

2 Bihar State Power Generation Company Limited (BSPGCL) (erstwhile B.S.E.B)

Equity Contribution 455.00 3,823.51

3 NTPC Limited Equity share issued 3,947.80 3,998.00

4 Bihar State Power Generation Company Limited (BSPGCL) (erstwhile B.S.E.B)

Equity share issued 2,125.74 2,152.77

5 NTPC Limited Unsecured Loan 12,100.00 -

6 NTPC Limited Deputation of employees 1,543.33 1,124.34

7 NTPC Limited Consultancy Services 144.33 171.72

Transactions with the joint venture of parent company: ` Lakh

Sl. No.


1 Utility Powertech Limited Manpower Supply Services 1,069.80 1,053.13

2 Bhartiya Rail Bijlee Company Limited (BRBCL) Services - 6.61

Transactions with Other related parties: ` Lakh

Sl. No.


1 NBPDCL/SBPDCL Sales of power 34,220.95 33,012.32

Compensation to Key Managerial Personnel ` Lakh

Sl. No.

Name Nature of transaction 2016-17 2015-16

1 Rajiva Kumar Sinha Short term benefits 31.38 32.00

2 Rajiva Kumar Sinha Post retirement benefits 10.56 9.73

3 Rajiva Kumar Sinha Other Long term benefits 0.13 0.12

4 K K Mishra Short term benefits 3.25 0.00

5 K K Mishra Post retirement benefits 1.26 0.00

6 K K Mishra Other Long term benefits 0.02 0.00

7 A K Singh Short term benefits 23.99 31.41

8 A K Singh Post retirement benefits 6.81 9.73

9 A K Singh Other Long term benefits 0.10 0.13


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A Maharatna Company

Transactions with the related parties under the control of the same government: ` Lakh

Sl. No.


1 Eastern Coalfields Ltd. Purchase of Coal 13,593.39 21,748.18

2 Bharat Petroleum Corporation Ltd. Purchase of LDO 2,413.08 1,229.44

3 Hindustan Petroleum Corporation Ltd. Purchase of LDO 404.59 206.33

4 Central Coalfields Ltd. Purchase of Coal 4,897.92 -

5 Bharat Coking Coal Ltd. Purchase of Coal 1,536.88 1,303.31

6 Bharat Heavy Electricals Ltd. Purchase of Capital Goods & Erection Services

5,539.40 8,378.92

Purchase of Spares 944.83 860.60

7 RITES Ltd. Technical Consultancy Services

2,023.83 924.16

c) Outstanding balances with related parties are as follows:

` Lakh

Particulars 31 March 2017 31 March 2016 1 April 2015

Amount recoverable for sale/purchase of goods and services

- From NTPC Limited

- From Utility Powertech Limited

- From NBPDCL/SBPDCL 11,260.10 15,236.92 10,889.49

Amount payable for sale/purchase of goods and services

- To NTPC Limited 6,632.61 5,013.56 3,838

- To Utility Powertech Limited 240.44 187.62 165.64

- To Bhartiya Rail Bijlee Company Limited (BRBCL) 9.36 9.36 2.75

d) Terms and conditions of transactions with the related parties

(1) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(2) The Company is assigning jobs on contract basis, for sundry works in plants/stations/offices to M/s Utility Powertech Ltd (UPL), a 50:50 joint venture between NTPC Ltd. and Reliance Infrastructure Ltd. UPL inter-alia undertakes jobs such as overhauling, repair, refurbishment of various mechanical and electrical equipments of power stations. The Company has entered into Power Station office Maintenance Agreement with UPL from time to time. The rates are fixed on cost plus basis after mutual discussion and after taking into account the prevailing market conditions.

(3) NTPC Limited is seconding its personnel to the company as per the terms and conditions agreed between the companies, which are similar to those applicable for secondment of employees to other companies and institutions. The cost incurred by NTPC Limited towards superannuation and employee benefits are recovered from the company.

30. Fair Value Measurements

(a) Financial instruments by category

All financial assets and liabilities viz. trade receivables, cash and cash equivalents, borrowings, trade payables, employee related liabilities, payable to related parties, deposits from contractors and suppliers and payable for expenses are measured at amortized cost.


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A Maharatna Company

(b) Fair value hierarchy

To provide an indication about the reliability of the inputs used in determining fair value of financial instruments measured at amortised cost for which fair value is being disclosed, the company has classified these into levels prescribed under the Ind AS 113, ‘ Fair value measurement’ details of which are as under:

` Lakh

Liabilities which are measured at amortised cost for which fair values are disclosed

Level 2*

31 March 2017 31 March 2016 1 April 2015

Financial liabilities:

Rupee Term Loan 247,686.00 211,943.00 184,133.00


Total 254,639.00 216,583.00 189,263.00

*Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Fair value of financial assets and liabilities measured at amortized cost` Lakh


Carrying amount

Fair value Carrying amount


Fair value


Rupee term loans 242,787.71 247,686.00 222,183.32 211,943.00 189,691.00 184,133.00

Payable for capital expenditure

7,077.51 6,953.00 4,907.94 4,640.00 4,911.44 5,130.00

249,865.21 254,639.00 227,091.26 216,583.00 194,602.44 189,263.00

The carrying amounts of short term trade receivables, cash and cash equivalents, borrowings, trade payables, employee related liabilities, payable to related parties, deposits from contractors and suppliers and payable for expenses are considered to be the same as their fair values, due to their short-term nature.

The fair values for Rupee term loans and payable for capital expenditure were calculated based on cash flows discounted using a current lending rate. They are classified as level 2 fair values in the fair value hierarchy due to the use of observable market inputs.


The Company’s principal financial liabilities comprise loans in domestic currency and payables for capital expenditure. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include cash and short-term deposits.

The Company is exposed to the following risks from its use of financial instruments: - Credit risk - Liquidity risk - Market risk

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk.


158

A Maharatna Company

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations resulting in a financial loss to the Company. Credit risk arises principally from loans & advances, cash & cash equivalents and deposits with banks and financial institutions.

Trade receivables and Unbilled Revenue

The Company primarily sells electricity to bulk customers comprising, mainly Discoms owned by State Government. The Company has a robust payment security mechanism in the form of Letters of Credit (LC). The risk of default in case of power supplied to these state owned companies is considered to be insignificant. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years. A default occurs when in the view of management there is no significant possibility of recovery of receivables after considering all available options for recovery.

Cash and cash equivalents and Deposits with banks

The company has banking operations with State Bank of India and its subsidiaries which are scheduled banks and are owned by Government.The risk of defalut with state controlled entities is considered to be insignificant.

(i) Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

` Lakh


31 March 2016

1 April2015

Financial assets for which loss allowance is measured using 12 months Expected Credit Losses (ECL)

Trade Receivables 11,941.17 15,435.76 11,045.93

Cash and cash equivalent 1,426.94 1,835.12 5,840.28

Unbilled Revenue 2,655.63 3,125.39 5,526.87

Total 16,023.74 20,396.27 22,413.08

(ii) Provision for expected credit losses

Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has trade receivables and other assets where the counter- parties have strong capacity to meet the obligations and where the risk of default is very low. Hence based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of above mentioned financial assets.

(iii) Ageing analysis of trade receivables

The ageing analysis of the trade receivables and unbilled revenue is as below:

` Lakh

Ageing 0-30 days past due

31-60 days past due

61-90 days past due

91-120 days past due


Total

31 March 2017 681.07 1,892.86 1,348.45 7,822.34 196.44 11,941.17

31 March 2016 887.63 3,679.88 4,063.98 6,647.84 156.44 15,435.76

1 April 2015 156.44 7,836.96 3,052.53 - - 11,045.93

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.


159

A Maharatna Company

The Company has an appropriate liquidity risk management framework for the management of short, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by Treasury. The Board of directors has established policies to manage liquidity risk and the Company’s treasury department operates in line with such policies.Any breaches of these policies are reported to the Board of Directors.Long term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(i) Financing arrangements

The company had access to the following undrawn borrowing facilities at the end of the reporting period:

` Lakh


Floating-rate borrowings

Term loans 107,212.29 127,816.68 160,309.00

(ii) Maturitites of financial liabilities

The following are the contractual maturities of derivative and non-derivative financial liabilities, based on contractual cash flows:

31 March 2017 ` Lakh

Contractual maturities of financial liabilities

Contractual cash flows

3 months or less

3-12 months

1-2 years 2-5 years More than 5 years

Total

Non-derivative financial liabilities

Rupee Term Loan - 7,817.00 14,248.00 58,356.00 162,366.71 242,787.71

Trade Payables 8,470.71 - - - - 8,470.71

Payable for Capital Expenditure

26,603.01 7,077.51 33,680.51

Loans repayable on demand from bank

11,898.13 - - - - 11,898.13

Deposits from contractors and others

116.95 - - - - 116.95

Payable to related parties

6,560.65 - - - - 6,560.65

Payable to employees 503.96 - - - - 503.96

Others 970.30 - - - - 970.30

Total 55,123.69 7,817.00 21,325.51 58,356.00 162,366.71 304,988.91


160

A Maharatna Company

31 March 2016 ` Lakh



3 months or less

3-12 months


Total


Rupee Term Loan - 85.71 7,902.71 44,628.00 169,566.89 222,183.32

Trade Payables 8,788.89 - - - - 8,788.89


22,072.42 4,907.94 26,980.36


18,776.82 - - - - 18,776.82


143.47 - - - - 143.47


4,963.54 - - - - 4,963.54


Others 989.06 - - - - 989.06

Total 55,968.74 85.71 12,810.65 44,628.00 169,566.89 283,060.00

1 April 2015 ` Lakh



3 months or less

3-12 months


Total


Rupee Term Loan - 85.71 171.43 36,998.71 152,435.14 189,691.00

Trade Payables 4,633.41 - - - - 4,633.41


19,944.59 4,911.44 24,856.03


14,851.36 - - - - 14,851.36


143.05 - - - - 143.05


3,838.19 - - - - 3,838.19


Others 956.14 - - - - 956.14

Total 44,585.55 85.71 5,082.87 36,998.71 152,435.14 239,187.99

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.


161

A Maharatna Company

The Board of directors is responsible for setting up of policies and procedures to manage market risks of the company. At present, any gain or loss on account of exchange risk variation shall form part of the capital cost from declaration of Commercial Operation Date (COD) and shall be considered for calculation of tariff.

* Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Upto March 31, 2016 the company till the date of commercial operation capitalised the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiaries as part of rate regulated asset. From April 01, 2016 exchange gain/loss on long term foreign currency monetary item will be recovered from beneficiaries as a part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.

The currency profile of financial assets and financial liabilities as at March 31, 2017, March 31, 2016 and April 1, 2015 are as below:

` Lakh

Particulars USD JPY Total31 March 2017Financial LiabilitiesPayable for capital expenditure 41.85 37.28 79.1331 March 2016Financial LiabilitiesPayable for capital expenditure 49.91 37.83 87.751 April 2015Financial LiabilitiesPayable for capital expenditure 112.72 100.69 213.41

Sensitivity analysis

As per the CERC regulations, the gain/loss on account of exchange rate variations on all long term and short term foreign currency monetary items (up to COD) is recoverable from beneficiaries. Hence, the impact of strengthening or weakening of Indian rupee against USD and JPY on the statement of profit and loss would not be very significant. Therefore, sensitivity analysis for currency risk is not disclosed.

Interest rate risk

The Company is exposed to interest rate risk arising from long term borrowing with floating interest rate. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowing will fluctuate with changes in interest rate.

Refer Note 12 for interest rate profile of the Company’s interest-bearing financial instrument at the reporting date.

Cash flow sensitivity analysis for variable-rate instruments

A change of 50 basis points in interest rates at the reporting date would have increased (decreased) CWIP(PPE) and/or profit or loss (before tax) by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the previous year.

` Lakh


50 bp increase 50 bp decrease 50 bp increase 50 bp decrease

Rupee term loans 1,146.14 (1,146.14) 1,034.18 (1,034.18)

Of the above mentioned increase in the interest expense, major portion is expected to be capitalised and recovered from beneficiaries.


162

A Maharatna Company

32. Disclosure as per Ind AS 33 on ‘Earnings per Share’

In `

31 March 2017 31 March 2016

Basic earnings per share (0.20) (0.57)

Diluted earnings per share (0.18) (0.55)

Nominal value per share 10 10

(a) Profit attributable to equity shareholders (in ` Lakhs) (2,193) (5,821)

(b) Weighted average number of equity shares ` Lakh

31 March 2017 31 March 2016

Opening balance of issued equity shares 10,615.08 10,000.00

Effect of shares issued during the year, if any 531.35 141.10

Weighted average number of equity shares for Basic EPS 11,146.43 10,141.10

Opening balance of issued equity shares 10,615.08 10,000.00

Effect of shares issued during the year, if any 1,509.26 501.55

Weighted average number of equity shares for Diluted EPS 12,124.34 10,501.55

33. Disclosure in respect of amount due to micro and small enterprises

Information in respect of micro and small enterprises as at 31st March 2017 as required by Micro, Small and Medium Enterprises Development Act, 2006

` Lakh

Particulars 31.03.2017 31.03.2016 01.04.2015


Principal amount 301.82 53.30 -


b) Amount of interest paid in terms of Section 16 of the MSMED Act along with the amount paid to the suppliers beyond the appointed day.

- - -

c) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act.

- - -


e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises, for the purpose of disallowances as a deductible expenditure under Section 23 of MSMED Act

- - -

34. Disclosure as per Ind AS 17 on ‘Leases’

Operating leases

a) The Company’s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices and guest houses/transit camps for a period of one to three years. These leasing arrangements are usually renewable on mutually agreed terms but are not non-cancellable.

b) Expenses (net) on operating lease of the premises for residential use of the employees amounting to ` 21.55 lakhs (Previous year ` 24.55 lakhs) are included in Note-24 Employee Benefits.


163

A Maharatna Company

35. Capital Management

The Company’s objectives when managing capital are to:

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders and

- maintain an appropriate capital structure of debt and equity.

The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of long term and short term borrowings less cash and cash equivalent. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of the reporting periods was as follows:

` Lakhs

Particulars 31.03.2017 31.03.2016

Total Debt 254,686 240,960

Less : Cash and cash equivalent 1,427 1,835

Net debt 253,259 239,125

Total equity 112,224 106,151

Net debt to equity ratio 2.26 2.25

36. Disclosure as per Ind AS 37 on ‘Provisions, Contingent Liabilities and Contingent Assets’

Contingent Liability

a) Arbitration/Civil court cases against the company in respect of capital works:

Some contractors for supply and installation of equipment and execution of works at our project have made claims on the Company for ` 10120.70 Lakh (previous year ` 9061.51 Lakh) seeking revision of L2 rate for supply contract and erection contract, non-imposition of LD, payment of over stay compensation, compensation for the extended period of work, idle charges etc. These claims are being contested by the company as being not admissible in terms of the provisions of the respective contracts. The company is pursuing various options under the dispute resolution mechanism available in the contracts for settlement of these claims.

b) Disputed Income Tax/Sales Tax/ Excise Matters:

Disputed Income Tax demand for the assessment year 2012-13 amounting to ` 442.59 Lakh (previous year ` 399.76 Lakh which includes interest of ` 42.83 lakhs which was not considered in the last year) is pending in appeal before Commissioner of Income Tax-Appeals , New Delhi. Disputed entry tax demand amounting to ` 1262.44 Lakh (previous year ̀ 1400.56 Lakh) in respect of interest and penalty on differential Entry Tax on purchase of LDO and Steel pertaining to FY 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12 is pending before different authorities of Commercial Tax and electricity duty demand amount to ` 1867.83 Lakh (previous year ` 2839.87 Lakh ) is pending before Patna High Court.”

c) Debt Recovery Case in respect of Capital Works:

A Debts Recovery case was filed by SBI, Chennai originally against M/s G.E.T.Power Ltd (KBUNL Contractor for execution of works in stage-II 2X195 MW) in 2015 for recovery of its loan amount from M/s G.E.T.Power Ltd, Chennai as the loan became an NPA. But KBUNL has been dragged on as Garnishee / 2nd Repondent in an I A filed by SBI in February, 2017 before the DRT-II, Chennai seeking a Garnishee Order for payment of ` 1,170 Lakh by KBUNL to SBI from the receivables due to M/s G.E.T.Power Ltd under any contract between G.E.T.Power Ltd and KBUNL.

d) Others:

Other contingent liabilities amount to ` 69.81 Lakh (previous year ` 25.91 Lakh) relating to Industrial Dispute and Labour Court cases .


164

A Maharatna Company

36.A. Capital & Other Commitments:-

Estimated amount of contracts remaining to be executed on Capital Works account and not provided for as at 31.03.2017 is ` 65356.81 Lakh (Previous year ` 73066.88 Lakhs)

37. Sensitivity of estimates on provisions

The assumptions made for provisions relating to current period are consistent with those in the earlier years. The assumptions and estimates used for recognition of such provisions are qualitative in nature and their likelihood could alter in next financial year. It is impracticable for the company to compute the possible effect of assumptions and estimates made in recognizing these provisions.

38. Recent accounting pronouncements

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the company from April 1, 2017. The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

39. Certain contracts of the company for construction of power plants with vendors awarded through ICB (International competitive bidding) which are denominated in third currency (i.e. a currency which is not the functional currency of any of the parties to the contract) are falling under the purview of guidance provided as per Ind AS 109, ‘Financial instruments’ on derivatives and embedded derivatives. NTPC Limited (Promoter Company) has sought opinion from the Expert Advisory Committee (EAC) constituted by Institute of Chartered Accountants of India on the above matter. On receipt of opinion / clarification from EAC, company will account for such contracts.

40. Disclosure as required by Schedule III of the Companies Act, 2013:

The company does not maintain cash book since it does not have any dealing in cash transactions.

Therefore, the company neither held nor transacted in Specified Bank Notes (SBN) during the period 08/11/2016 to 30/12/2016.

41. Disclosure as per Ind AS 2

` Lakhs2016-17 2015-16

Value of Component Spares consumed 1039.10 1130.71








165

A Maharatna Company

INDEPENDENT AUDITORS’ REPORTThis report supersedes our earlier report dated 19.05.2017 in line with the CAG comments.

To

The Members of KANTI BIJLEE UTPADAN NIGAM LIMITED

REPORT ON THE IND AS FINANCIAL STATEMENTS

We have audited the accompanying Ind AS financial statements of KANTI BIJLEE UTPADAN NIGAM LIMITED, which comprise the Balance Sheet as at March 31, 2017 and the Statement of Profit and Loss (including other comprehensive income) the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “ Ind AS financial statements”).

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income and cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.


We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act.

Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the Ind AS financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company’s management and Board of Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31st March 2017 and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:

An amount of ` 25.67 Cr has been shown in Note No. 16 - Trade payables, pertaining to compensation payable to coal companies against short lifting of coal as per the Fuel Supply Agreement signed with the coal companies (ECL & CCL) . The same has been debited to Coal inventory value. Consequently it gets reflected in consumption and becomes part of sales as variable charges.


166

A Maharatna Company

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), as amended, issued by the Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the said Order.

2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the “Annexure 2” on the directions and sub-directions issued by The Comptroller and Auditor General of India.

3. As required by Section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the balance sheet, the statement of profit and loss, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid Ind AS financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, relevant rule issued thereunder;

e. Being a Government Company, pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 3”.

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS financial statements. Refer Note 36 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 40 to the Ind AS financial statements.

For M/s Goel Mintri & AssociatesChartered AccountantsFirm Reg. No.: 013211N

(Sunil Kumar Gupta)Partner

M. NO. : 501430Place: New Delhi

Date: 6th July, 2017


167

A Maharatna Company

Annexure-I

“ANNEXURE 1” TO THE INDEPENDENT AUDITORS’ REPORT

Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of even date to the Ind AS financial statements of the Company for the year ended March 31, 2017:

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) There is a regular programme of physical verification of all fixed assets over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties are held in the name of the Company except as follows:-

Description of Asset Area in acres Gross block as on 31.03.2017(` In lakhs)

Remarks (If Any)

Land Freehold 22.81 1162.93 The Company is taking appropriate steps for completion of legal formalities

(ii) The management has conducted the physical verification of inventory at reasonable intervals. No material discrepancies were noticed on such physical verification.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. In view of the above, the clauses (iii)(a), (iii)(b) and (iii)(c) of the Order are not applicable.

(iv) The Company has not granted any loans or given any guarantee and security covered under Section 185 and 186 of the Companies Act, 2013. In respect of investment in the Subsidiary and Joint Venture Companies, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(vii) (a) Undisputed statutory dues including provident fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2017 for a period of more than six months from the date they became payable. We have been informed that employees’ state insurance is not applicable to the Company.

(b) The disputed statutory dues aggregating to ` 3572.85 lakhs that have not been deposited on account of matters pending before appropriate authorities are detailed below:


168

A Maharatna Company

Sl. No

Name of Statute Nature of dues

Forum where the dispute is pending

` (lakhs)

1. Income tax Act,1961 Income tax CIT-Appeals 442.592. The Bihar Tax on Entry of Goods into Local Areas

for Consumption Use or Sale therein Act,1993Entry Tax Commissioner

Commercial Tax ,Patna13.96

3. The Bihar Tax on Entry of Goods into Local Areas for Consumption Use or Sale therein Act,1993

Entry Tax Commercial Tax Tribunal, Patna

15.52

4. The Bihar Tax on Entry of Goods into Local Areas for Consumption Use or Sale therein Act,1993

Entry Tax Joint Commissioner Appeal, Muzaffarpur

1232.95

5. Bihar Electricity Duty Act High Court,Patna

High Court 1867.83

Total 3572.85

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to a financial institution, banks.

(ix) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer. According to the information and explanations given to us, the money raised by the Company by way of term loans have been applied for the purpose for which they were obtained.

(x) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

(xi) As per notification no. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 is not applicable to the Government Companies. Accordingly, provisions of clause 3 (xi) of the Order are not applicable to the Company.

(xii) The provisions of clause 3 (xii) of the Order, for Nidhi Company, are not applicable to the Company.

(xiii) The Company has complied with the provisions of Section 177 and 188 of the Companies Act, 2013 w.r.t. transactions with the related parties, wherever

applicable. Details of the transactions with the related parties have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to the Company.

(xv) The Company has not entered into any non-cash transactions with the directors or persons connected with them as covered under Section 192 of the Companies Act, 2013.

(xvi) According to information and explanation given to us, the Company is not required to be registered u/s 45-IA of Reserve Bank of India Act, 1934. Accordingly, provision of clause 3(xvi) of the Order is not applicable to the Company.






169

A Maharatna Company

Annexure-II

“ANNEXURE 2” TO THE INDEPENDENT AUDITORS’ REPORTReferred to in our report of even date to the members of KANTI BIJLEE UTPADAN NIGAM LIMITED on the accounts for the year ended 31st March 2017

Sl.No

Directions u/s 143(5) of the Companies Act, 2013

Auditor’s reply on action taken on the directions

Impact on financial statement

1. Whether the Company has clear title/lease deeds for freehold and leasehold land respectively? If not, please state the area of the freehold and leasehold land for which title/ lease deeds are not available.

The Company is having clear title/lease deeds for entire freehold and leasehold land excepting 22.81 acres of freehold land valuing `11.63 Cr. The company has taken appropriate steps for getting clear title for such freehold land.

NIL

2. Whether there are any cases of waiver/write off of debts/loans/interest etc., if yes, the reasons thereof and the amount involved.

According to information and explanations given to us, there are no cases of waiver/write off of debts/ loans/interest etc.

NIL

3. Whether proper records are maintained for inventories lying with third parties & assets received as gift from Govt. or other authorities?

Proper records are maintained for inventories lying with third parties and also for assets received as gift from Govt. or other authorities.

NIL





Annexure - III

ANNEXURE 3 TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF KANTI BIJLEE UTPADAN NIGAM LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of KANTI BIJLEE UTPADAN NIGAM LIMITED, (“the Company”) as of March 31, 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.


The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that

were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed


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under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.


A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are

being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting 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 the Institute of Chartered Accountants of India.






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COMPLIANCE CERTIFICATEWe have conducted the audit of accounts of Kanti Bijlee Utpadan Nigam Ltd. for the year ended 31st March 2017 in accordance with the directions issued by C&AG of India under section 143(5) of the Companies Act, 2013 and certify that we have complied with all the directions issued to us.






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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF KANTI BIJLEE UTPADAN NIGAM LIMITED FOR THE YEAR ENDED 31 MARCH 2017The preparation of financial statements of Kanti Bijlee Utpadan Nigam Limited for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their revised Audit Report dated 06 July 2017 which supersedes their earlier Audit Report dated 19 May 2017.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of Kanti Bijlee Utpadan Nigam Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.


(Indu Agrawal)Principal Director of Commercial Audit &

Ex-officio Member, Audit Board, RanchiPlace: Ranchi


Subsidiary Company - Bhartiya Rail Bijlee Company Limited

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A Maharatna Company

BHARTIYA RAIL BIJLEE COMPANY LIMITEDDIRECTORS’ REPORT

Dear Members,

Your Directors are pleased to present 10th Annual Report on the business and operations of the Company along with Audited Financial Statements and Auditors’ Report thereon for year ended on 31st March 2017.

PERFORMANCE OF THE COMPANY

Your Company is setting up 1000 MW (4X250 MW) Thermal Power Project at Nabinagar in Aurangabad district of Bihar to meet the traction and non-traction electric power requirement of Railways.

Unit#1 was declared commercial on 15.01.2017.

Construction Activities under progress:

Unit#2 commissioned on 03.04.2017. Commercial operation of Unit#2 is scheduled in Aug’ 17, trial operation of Unit#3 and Boiler light up of Unit#4 targeted in Mar’ 18. Construction activities of Units, CHP, Rail corridor, AHP and MUW are going on in full swing. Land acquired in year 2016-17 is 55.27 Acres. Total land acquired for the plant is 1475.92 acres, out of 1522.50 acres required for the project.

FINANCIAL REVIEW

The financial highlights of the Company for the year ended on 31st March 2016 and 31st March 2017 are as under:-

(Amount in ` Lakhs)

Balance Sheet Items as at 31.03.2017 31.03.2016

Paid-up Share Capital 1,58,461.39 1,58,461.39

Other equity 29,238.02 5,243.11

Non-current liabilities 4,51,269.46 3,97,389.16

Current liabilities 72,648.93 66,849.24

Non-current assets 6,92,091.86 6,13,302.67

Current assets 20,185.00 15,147.14

Regulatory deferral account credit balances

659.06 506.91

Items from Statement of Profit and Loss for the year ended

31.03.2017 31.03.2016

Total Revenue 8,879.38 385.52

Total Expenses 7,761.93 2.58

Profit/ (Loss) before Tax 965.29 (2.55)

Total Tax Expenses 199.38 -

Profit/ (Loss) for the year 765.91 (2.55)

INFORMATION PURSUANT TO STATUTORY AND OTHER REQUIREMENTS

Information required to be furnished as per the Companies Act, 2013 and other regulations are as under:

(1) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING & OUTGO

(i) Your Company has installed following equipments for pollution control & conservation of energy:

Electrostatic Precipitator, Chimney, Cooling Towers, Ash handling equipments, Ash Dyke, Ash water recirculation system, Effluent treatment plant, Dust extraction & suppression system, fire detection system, DM plant waste treatment system, Sewerage treatment plant & disposal, Environmental Lab equipment etc.

(ii) The steps taken by the company for utilizing alternate sources of energy: Provision of Solar lights in plants as well as Project Affected Villages

(iii) The capital investment on energy conservation equipments: Approx. 350 Crore INR has been earmarked for the above mentioned equipments.

During the period under review, there was no earning in the foreign exchange. The outgo in foreign exchange was INR 35,96,76,561 (USD 1,01,801 & Euro 50,06,882).

(2) The following information is provided in the Corporate Governance Report which forms part of the Annual Report as Annex-II

a. Number of Meetings of the Board held during the year and attendance of Directors in the Board Meeting.

b. Constitution of the Audit Committee, number of Meetings held during the year and attendance of the Members in the Audit Committee.

c. Constitution of Corporate Social Responsibility Committee, number of Meetings held during the year, if any and attendance of Members in the Meeting.

d. Constitution of Nomination and Remuneration Committee, number of Meetings held during the year, if any and attendance of Members in the Meeting.

(3) Corporate Social Responsibility

The average Net Profit/ (Loss) of the Company made during the three immediately preceding financial years worked out to ` (4,42,044), hence, no amount was required to be spent on CSR during the financial year 2016-17.


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A Maharatna Company

(4) During the year the Company undertook the activities under Resettlement & Rehabilitation Plan as a responsible corporate citizen in and around plant, details of which are covered under the Management Discussion and Analysis Report attached as Annex-I to this Report.

(5) Statutory Auditors

The Comptroller & Auditor General of India through letter dated 12.07.2016 had appointed M/s N.C. Aggarwal & Co., Chartered Accountants as Statutory Auditors of the Company for the financial year 2016-17. The Statutory Auditors of the Company for the financial year 2017-18 are yet to be appointed by the Comptroller & Auditor General of India.

(6) Management comments on Statutory Auditors’ Report

The Statutory Auditors of the Company have given an unqualified report on the accounts of the Company for the financial year 2016-17.

The Statutory Auditors have drawn emphasis of matter, through its Report dated 21.07.2017, which is as under:

(i) On transition to IND AS, it was observed that certain liabilities of contractors/ other vendors were classified as non-current instead of current in the financial statements. The same has now been reclassified as short term, refer note 43(b) to the financial statements.

(ii) The Company has not yet appointed Whole time Company Secretary, as required under Section 203(1) of the Companies Act, 2013. However, the management has assured to have full time Company Secretary in the current financial year.

(7) Review of accounts by Comptroller & Auditor General of India

The Comptroller & Auditor General of India (C&AG), through letter dated 31.07.2017, has given ‘Nil’ comments on the financial statements of your Company for the year ended on 31.03.2017. As advised by the C&AG, the contents of letter dated 31.07.2017 are being placed with the report of the Statutory Auditors elsewhere in the Annual Report.

(8) Cost Audit

As prescribed under the Companies (Cost Records and Audit) Rules, 2014, the Cost Accounting records shall be maintained by the Company as the Company has declared one of its Units commercial w.e.f. 15.01.2017.

M/s A.K. Singh & Co., Cost Accountants, had been appointed as Cost Auditors under Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit & Auditors) Rules, 2014 for the financial year 2016-17.

The Cost Audit Report for the financial year ended March 31, 2017 shall be filed within the prescribed time period under the Companies (Cost Records & Audit) Rules, 2014.

(9) Your Company, being subsidiary of NTPC, is covered under the Enterprise Risk Framework established by NTPC (Holding Co.). Details about risks with the Company are covered in the Management Discussion & Analysis Report which forms part of this Report and placed at Annex-I.

(10) Extract of Annual Return

Extract of Annual Return of the Company is annexed herewith as Annex-III to this Report.

(11) Performance Evaluation of the Directors and the Board

Ministry of Corporate Affairs (MCA), through General Circular dated 5th June, 2015, has exempted Government Companies from the provisions of Section 178 (2) which requires performance evaluation of every director by the Nomination & Remuneration Committee. The aforesaid circular of MCA further exempted listed Govt. Companies from provisions of Section 134 (3) (p) which requires mentioning the manner of formal evaluation of its own performance by the Board and that of its Committees and Individual Director in Board’s Report, if directors are evaluated by the Ministry or Department of the Central Government which is administratively in charge of the company, or, as the case may be, the State Government as per its own evaluation methodology.

Now, MCA, through Notification dated 05.07.2017, has amended Schedule IV to the Companies Act, 2013 with respect to performance evaluation of directors of the Government Companies that in case of matters of performance evaluation are specified by the concerned Ministries or Departments of the Central Government or as the case may be, the State Governments and such requirements are complied with by the Government companies, such provisions of Schedule IV are exempt for the Government Companies.

As per the Articles of Association of KBUNL, all the Directors are nominated by NTPC and Ministry of Railways (MOR). The Directors nominated by NTPC or MOR are being evaluated under a well laid down procedure for evaluation of Functional Directors & CMD as well as of Government Directors by Administrative/ respective Ministry/ Department. Also, the performance of the Board of the Government Companies is evaluated during the performance evaluation of the MOU signed with the Holding Company i.e. NTPC Limited.


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A Maharatna Company

(12) Secretarial Audit

The Board has appointed M/s Agarwal S. & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit Report for the financial year ended March 31, 2017 is annexed herewith marked as Annex- IV to this Report.

The Managements’ replies on the observations of Secretarial Audit are as under:

Observations Management’s Replies

Compliance under Section 149(4) read with Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014 of the Act and Clause 3.1.4 of the DPE Guidelines on Corporate Governance with respect to the appointment of Independent Directors on the Board of Company & consequential non-compliances thereof. Compliance under Section 149(8) read with Clause VIII of Schedule IV of the Act with respect to performance evaluation of the Directors.

Bhartiya Rail Bijlee Company Limited (BRBCL) is a subsidiary of NTPC Limited, a Government Company, as such, BRBCL is a Government Company. Being a government company, its Independent Directors are required to be appointed by the Government of India.

As per the Articles of Association of BRBCL, all the Directors are nominated by NTPC and Ministry of Railways. NTPC (Holding Company) has requested the Government to either permit NTPC or to appoint requisite number of Independent Directors on the Board of BRBCL.

However, the Ministry of Corporate Affairs, through notification dated 05.07.2017, has exempted unlisted public company, inter-alia, including a joint venture company from appointing Independent Directors on its Board.

Further, the Ministry of Corporate Affairs, through notification dated 05.07.2017, has also exempted the Government Companies from evaluation of directors in case the requirements of evaluation of directors are specified by the concerned Ministry or Department.

As per MCA’s notification dated 05.07.2017, KBUNL is not required to appoint Independent Directors on its Board, therefore, there is no requirement of performance evaluation of director.

In terms of Section 203 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company is required to appoint a Company Secretary.

The Company is in the process of appointing Company Secretary.

(13) Particulars of contracts or arrangements with related parties

During the period under review, all transactions with related parties were at arm’s length and suitable disclosure has been provided in annual accounts. Approval has been taken from the Audit Committee where the transaction with related party falls under the purview of the Companies Act, 2013. All related party transactions were in the ordinary course of business and were negotiated on an arm’s length basis. They were intended to further the Company’s interests.

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.

(14) Significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company’s operations in future NIL. Contingent Liabilities are detailed in Note–40 of Notes to Accounts to Financial Statements for the FY 2016-17.

The details of disputed statutory dues pending before appropriate authorities is detailed in Annexure to Independent Auditors’ Report.

(15) Adequacy of internal financial controls with reference to the financial reporting

The Company has in place adequate internal financial controls with reference to financial reporting. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

(16) Particulars of Employees

As per provisions of section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, every listed company is required to disclose the ratio of the remuneration of each director to the median employee’s remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors’ Report.


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A Maharatna Company


(17) Issue of Shares in the Financial Year

During the year under review, there was no change in the paid-up capital of the Company. As on 31st March 2016 and 31st March 2017, the paid-up share capital of the Company was ` 1,58,46,13,85,00/-.

(18) 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. 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 schemes.

(19) Establishment of vigil mechanism/whistle blower policy

Your Company has established Whistle Blower Policy as required under Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014.

(20) The Company has not granted any loans, given any guarantee or made any investments under Section 186 of the Companies Act, 2013 during the year.

(21) The Company has not accepted any deposits during the year.

(22) The Company has no subsidiary or joint venture.

(23) No Presidential Directive was issued by the Government during the year under review.

(24) The Company has not declared any dividend during the year.

(25) BRBCL, being subsidiary of NTPC, is covered under the Internal Complaints Committee constituted by NTPC under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

(26) Procurement from MSEs

The Government of India has notified a Public Procurement Policy for Micro and Small Enterprises (MSEs), Order 2012. In terms of the said policy, the total contract placed on and procurement made from MSEs (including MSEs owned by SC/ST entrepreneurs)

during the year 2016-17 was ` 96,07,664.50* which was 10.79% of total procurement against target of 20% of total procurement made by the Company.

*It excludes Primary fuel, Secondary fuel, Steel & Cement, the Project procurement including R&M packages and procurement from OEM, OES & PAC sources.

The particulars of annexures forming part of this report are as under:

Particulars Annexure

Management Discussion & Analysis I

Report on Corporate Governance II

Extract of Annual Return III

Secretarial Audit Report in Form MR-3 IV


As required under Section 134 (5) of the Companies Act, 2013, your Directors confirm that:

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

2. the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year 2016-17 and of the loss of the company for that period;

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

4. the Directors had prepared the Annual Accounts on a going concern basis; and

5. 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.

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

There was no change in Directors of the Company during the year.

Shri C. Sivakumar, General Manager, BRBCL was appointed as the Chief Executive Officer of the Company w.e.f. 18.07.2016 in place of Shri Raj Kumar.


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As per the provisions of the Companies Act, 2013, Shri Sudhir Garg, Director shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

ACKNOWLEDGEMENT

Your Directors acknowledge with deep sense of appreciation for the co-operation extended by Ministry of Power and Ministry of Railways.

Your Directors also convey their gratitude to the Holding Company i.e. NTPC Ltd., Power Finance Corporation Limited, Rural Electrification Corporation Limited, auditors, bankers, contractors, vendors and consultants of the Company.

We wish to place on record our appreciation for the untiring efforts and contributions by the employees at all levels to ensure that the Company continues to grow and excel.


(S.C. Pandey)Place: New Delhi ChairmanDate: 25.08.2017 (DIN: 03142319)

Annex-1 to the Directors’ Report of BRBCL


ECONOMIC AND SECTOR OUTLOOK

Indian economy has moved on a higher growth path. Gross Domestic Product for Financial Year 2016-17 has increased by 7.1% over the previous financial year. Electricity, water supply gas and other utilities have registered a growth rate of 7.2% at constant prices. With macro-economic stability, Indian economy is slated to grow between 7-8 percent and electricity generation will play a key role in India’s development.

For the power sector, the two recent biggest announcements pertain to rural electrification and solar energy. The Government has reiterated its priority to achieve “100 percent village electrification” by May 1, 2018. Giving impetus to the clean energy, the government has also announced the second phase of solar development for 20 GW capacity.

This augurs well for the entire Power Sector and would unleash the huge latent demand for electricity.

The year has been the land mark year for renewable energy. For the first time, renewable capacity addition matched the convention thermal capacity addition. With solar tariffs

touching new lows which are even lower than the coal-fired power tariff, the landscape of the power sector is going to change rapidly.



Snap Shot 2016-17

Gross annual generation of the country increased by 4.72% from 1107.82 BUs in the previous year to 1160.14 BUs in the financial year 2016-17.

Generation capacity of 14209.8 MW (excluding renewable) added during the year compared to 23976.60 MW added in the previous year.

Land mark year for renewable energy. 14410.85 MW Capacity added during the year.

26300 Ckms of transmission lines added during the year as compared to 28114 Ckms in the previous year.

81816 MVA of transformation capacity added during the year as against 62849 MVA in the previous year, a jump of 30%.

PLF of thermal stations declined from 62.24% in financial year 2015-16 to 59.88% in the financial year 2016-17.

During the financial year 2016-17, peak power deficit and energy deficit was 2.6% and 1.1% respectively as against the peak power deficit and energy deficit of 3.2% and 2.1% during financial year 2015-16. (Source: Central Electricity Authority)



Total Capacity (MW)

% share

State 103967.28 32

Centre 80257.25 24

Private 142624.01 44

Total* 326848.54 100

*including RES



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During the financial year 2016-17, capacity of 14209.80 MW (excluding renewable) was added. With this the total capacity addition during the 12th plan period is 99209.47 MW (excluding renewable) which is about 112.05% of the planned capacity addition of 88537 MW for the Plan.



Sector wise PLF (Thermal)(in %)

Sector 2015-16 2016-17

State 56.83 54.35

Central 71.03 71.98

Private 60.07 55.59

All India 62.24 59.88

The overall decline in PLF was mainly due to backing down/ shut down of units on account of low schedule from beneficiary states (Source: Central Electricity Authority). The outlook of generation looks promising with expected increased industrial production and Government of India’s mission to provide 24x 7 electricity to all.

Existing Generation



Sector Thermal Hydro Nuclear Bhutan Import Total

Central 337.92 57.90 37.92 - 433.74

State 299.59 51.35 - - 350.94

Pvt/IPP 356.72 13.12 - - 369.84

Bhutan

Import

- - - 5.62 5.62

Total 994.23 122.37 37.92 5.62 1160.14


As far as Thermal generation is concerned, based on the monitored capacity by CEA, the generation contribution of central sector is 33.98% with installed capacity share of 28.32%, state sector contributes 30.13% of generation

with installed capacity share of 33.12% and private sector contributes 35.89% of generation with installed capacity share of 38.56%. Central Sector utilities have better performing stations as compared to those of State utilities and Private Sector.

Consumption

In terms of per capita power consumption, India ranks among the lowest in the world. The per capita consumption of power in India is just 1075 units in financial year 2015-16 (provisional). (Source: Central Electricity Authority Executive Summary March 2017).






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(c) Amendment in the IEGC (4th) Amendment to allow

compensation on account of partial loading of the

units

i. CERC has allowed Compensation due to

degradation of the operational parameters like

Heat rate and auxiliary power consumption due

to lower loading of the units. For this purpose,

CERC has defined the technical minimum level of

operation as 55% and has allowed compensation

when unit operations are below 85% and upto

55%. These compensations will be in the form

of increased norms in the Heat rate and APC as

per different factors for different ranges of unit

loading, as provided in the Regulations.

ii. It has also been provided that a unit can go under

Reserve Shut Down (RSD) in case the schedules

are below 55%. In these cases, the Units will be

compensated for the additional oil consumption

on account of higher start/stop of the units.

iii. CERC in its order dated 5th May 2017 has

approved a detailed procedure for calculation

of the compensation amount and process of

apportionment among the beneficiaries.

(d) Reduction in coal import: On account of increased

production of domestic coal, imports have fallen from

217.78 MT in 2014-15 to 199.88 MT in 2015-16, a decline

of 8%. The trend of fall in import of coal has continued

in 2016-17.This has helped the country in reducing cost

of electricity generated in coal based power plants and

reduction in forex expenditure.

(e) UJALA: Government has identified lighting as key focus

area for energy efficiency. Under the Unnat Jyoti by

Affordable LEDs for All (UJALA), more than 24 crore

LED bulbs have been distributed. This will help in a

recurring saving of ` 34.95 crore and 87 MU per day

in terms of cost and energy respectively. It will also

help in reduction of CO2 to the extent of 70,780 ton

per day thereby reiterating India’s commitment made

at Conference of Parties (COP) 21 Summit held in Paris

to reduce its energy intensity.

(f) SHAKTI (Scheme for Harnessing and Allocating Koyala

(Coal) Transparently in India): During the current

financial year (FY 17-18), GoI has introduced the Scheme,

‘SHAKTI’ to make coal allocation more transparent and

bidding based. As per the Scheme, future allocation/

grant of linkages to power producers/ IPPs will be

based on auction.

The Scheme shall benefit the sector in terms of coal

availability to all power plants in transparent and

objective manner, cheaper and affordable power,

reduction of sectoral stress on account of non-

availability of linkages to power projects thereby

enhanced confidence of financial institutions on power

sector.

(g) Portal on weather information: Due to enhanced

presence of Renewable Energy in the Indian power

sector, weather information like irradiance, wind

speed etc. have become very important. Besides,

whether information is also very important for load

forecasting. During the current financial year (FY 17-

18), GoI has launched whether Portal for Power Sector

in association with POSOCO and IMD. The information

available in the Portal regarding weather forecast shall

help State Discoms to take pro-active steps regarding

short term and medium term management processes

and supply planning requirements and also for better

planning for infrastructure availability to ensure cost

effective and reliable supply.

Demand, Supply and Consumption Position

Western, Southern & Eastern Regions met the demand almost

in full with insignificant demand-supply gap both in terms

of energy and peaking. Northern & North-Eastern Regions

experienced minor demand-supply gap in terms of energy

and/or peaking, on an overall basis. The demand-supply gap

was on account of the factors other than non-availability of

power e.g. transmission & distribution constraints. However,

there were short-term surpluses in most of the states at

some point of time or the other depending on the season

or time of the day. The surplus power was sold to deficit

states or consumers either through bilateral contracts,

Power Exchanges or traders. (Source : Load Generation and

Balance Report 2017-18).

During the year 2016-17, total ex-bus energy availability

increased by 4.1% over the previous year and the peak

met increased by 5.7%. The energy requirement registered

a growth of 2.6% during the year against the projected

growth of 9.0% and Peak demand registered a growth of

4.0% against the projected growth of 7.8%.


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The power supply position in Eastern Region and Bihar

during 2016-17 is as under:

Particulars Year 2016-17 (Actual) Year 2017-18 (Anticipated)

Req Avail Surplus/

(Deficit)

Req Avail Surplus/

(Deficit)

Energy Requirement

Eastern

Region (in

MU)

1,27,783 1,26,868 (915 MUs)

(0.8%)

1,50,151 1,49,871 (280 MUs)

(0.2%)

Bihar (in

MU)

25,712 25,131 (581 MUs)

(2.2%)

26,600 21,207 (5,393 MUs)

(20.3%)

Peak Requirement

Eastern

Region (In

MW)

18,908 18,788 (120 MW)

(0.6%)

21,577 23,743 2,166 MW

10%

Bihar (In

MW)

3,883 3,759 (124 MW)

(3.2%)

4,000 3,494 (506 MW)

(12.7%)

From the above, it is evident that there have been energy and peak shortages in the Eastern Region as well as in Bihar during the year 2016-17. In the year 2017-18, there would be anticipated energy shortages both in Bihar and the Eastern Region. Although, from the above, it is clear that there would be enough power available for peak requirement in Eastern Region during 2017-18, there would be shortage of 506 MW of power in Bihar for peak requirements.

SWOT ANALYSIS

Strength/ Opportunity

The Company is backed by strong promoters i.e. Ministry of Railways and NTPC Limited. NTPC is the consultant for the Company which is having wide experience in engineering and management expertise from planning to commissioning and operating power plants. Indian Railways, being a big transport organization, consumes about 2% of the total power generation of the country which is likely to go up with the current pace of electrification. Presently, the peak power requirement of IR is about 4000 MW which is being fed to the electric traction network of IR through its odd 400 traction sub stations spread across the length and breadth of the country. Out of this requirement, Nabinagar power plant having 1000 MW capacity will cater the captive need of 900 MW of Indian Railways and 100 MW will be given to the Bihar Government. Thus, BRBCL has good future prospects of dealing with the organisation like IR having sound financial fundamentals.

The Company is able to acquire major portion of land for establishing the project.Bharat Heavy Electricals Limited is the main plant contractor. The Company has tied up loan

with Power Finance Corporation Limited and with Rural Electrification Limited for meeting its debt portion. The Company has coal linkage for 4X250 MW capacity.

Weakness/ Threats:

The major threat the Company is facing in acquiring parts of land. Law and order situation and project security of the project has been also a concern for the Company.

RISKS AND CONCERN

The risk to which company is exposed and the initiatives taken by the company to mitigate such risks are given below:

The project is delayed as there is delay in the land acquisition due to which contractors are demanding compensation. This issue is being dealt as per provision of the contract and project implementation is being expedited to minimize the time overrun.

Hazard risks are related to natural hazards arising out of accidents and natural calamities like fire, earthquake etc.

Operational risks are associated with systems, processes & people and cover areas such as succession planning, attrition and retention of people, operational failure or interruption, disruption in supply chain, failure of research & development facilities and faulty application of information technology and non-compliance of regulatory provisions.

Also, non-receipt of schedule for generation of power and non-receipt of equity in time from Railways.

As the Company has not come in operation phase, it is not exposed to all such operational risks.

INTERNAL CONTROL

The Company has robust internal systems and processes for efficient conduct of business. The Company is complying with relevant laws and regulations. It is following delegation of powers as is being followed in NTPC Limited. The accounts are being prepared in accordance with the Accounting Standards issued by Institute of Chartered Accountants of India from time to time and as per the guidelines issued from NTPC Limited. The Company has implemented SAP in all modules. It is helping the Company a lot in retrieving data and maintaining systematic backup.

In order to ensure that all checks and balances are in place and all internal systems are in order, regular and exhaustive internal audits are conducted by experienced firm of Chartered Accountants in coordination with Internal Audit Department of NTPC Limited. The Company has constituted an Audit Committee to oversee the financial performance of the company. The scope of this Committee includes compliance with Internal Control Systems.


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A Maharatna Company

FINANCIAL DISCUSSION AND ANALYSIS

The Company has prepared its first Financial Statements in accordance with Ind AS for the year ended 31 March 2017. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2016 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2015 (the date of transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 ( the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS as of 1 April 2015 compared with those presented in the Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.

Exemptions and exceptions availed

In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the Indian GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS.

The Company has made use of the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

i. The Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

ii. The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency

monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the Indian GAAP.

At the end of the financial year 2016-17, the Company’s paid-up share capital was ` 1,58,461.39 lakh. Other equity amounted to ` 29,238.02 lakh which included share application money pending allotment and retained earnings. The Company had withdrawn cumulative loan of ` 4,47,491.58 lakh up to the end of FY 2016-17 as against ` 3,88,843.16 lakh up to FY 2015-16 from PFC and REC. Borrowing costs capitalized during the year was ̀ 43,494.83 lakh. There was no default in payment of interest on loan as at the end of the year.

In other long term liabilities, there was an amount of ` 3,777.88 lakh which was liability towards equipment supplier and erection vendors pending evaluation of performance and guarantee test results.

The Trade payables as at 31.03.2017 is ` 2,982.57 lakh as compared to ` 6099.17 lakh as at 31.03.2016. Other current liabilities (including interest accrued but not due on borrowings, amount payable for capital expenditure, deposits from contractors, payable to employees due to provision for pay revision) amounted to ` 56,895.73 lakh.

The property, plant & equipment (tangible assets) amounted to ` 2,50,496.42 lakh as at 31.03.2017 as against ` 47,798.18 lakh as at 31.03.2016. The intangible assets amounted to ` 3.19 lakh and ` 5.30 lakh as at 31.03.2017 and 31.03.2016 respectively. The depreciation transferred to Expenditure During Construction (EDC) for the financial year 2016-17 was ` 601.30 lakh. The capital work-in-progress stood at ` 4,34,915.65 lakh and ` 5,38,944.55 lakh as at 31.03.2017 and 31.03.2016 respectively.

The inventories stood at ` 1,393.88 lakh, trade receivables at ` 5,277.98 lakh and other current assets which included deposits with government authorities, recoverable from contractors and unsecured advances amounted to ` 9,562.96 lakh.

The revenue from operations was ` 8,686.67 lakh and other income was ` 192.71 lakh. Energy sales represented fixed charge bill on East Central Railway (` 7,818.00 lakh), North Bihar Distribution Company Limited (` 364.84 lakh) and South Bihar Distribution Company Limited (` 503.83 lakh) after Commercial Operation Date based on Declared Capacity.

Total expenses were ` 7,761.93 lakh, which comprised expenses towards employee benefit expense, finance


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A Maharatna Company

costs, depreciation, amortization, impairment and other

expenses. Total tax expenses were ` 199.38 lakh. The profit

for the year after tax was ` 765.91 lakh.

HUMAN RESOURCE

Presently, the Company has total strength of 218 employees

(including 11 Executive Trainees, 10 Diploma Trainees and

02 Assistant Chemist Trainees), all employees have been

deputed from the Holding Company i.e. NTPC Limited. As a

socially responsible and socially conscious organization, the

Company has deployed 30 SC employees, 10 ST employees

and 55 OBC employees out of the total strength of 218

employees deputed from NTPC.

The Company is paying Performance Related Pay to

its employees in order to boost their morale and also

extending the facility of retention of family anywhere in

India. Quarters have been hired at Dalmianagar also as

a Temporary Township until Permanent Township at the

site becomes ready to accommodate all the employees.

Further to this, various welfare measures including cultural

activities for employees and their family members are also

undertaken for boosting employee’s morale.

Further to this, we have Executive club and Ladies club

which takes care of sports and cultural activities.

The employee benefits expense (salaries & wages,

contribution to provident & other funds and staff welfare

expenses) was ` 853.45 lakh for the financial year 2016-

17. An amount of ` 514.74 lakh was included in employee

benefits expense towards provident fund, pension,

gratuity, post-retirement medical benefits facilities and

other terminal benefits and ` 112.10 lakh was payable to

NTPC Limited towards leave and other benefits. Similarly, an

amount of ` 8.54 lakh was included in employee benefits

expense towards provident fund, pension, gratuity, post-

retirement medical benefits facilities and other terminal

benefits and ` 0.48 lakh was payable to Ministry of Railways

towards leave and other benefits.

REHABILITATION AND RESETTLEMENT ACTIVITIES

Your Company has taken number of steps towards

rehabilitation and resettlement like construction of

road= 3 Kms, development of community pond= 01 No.,

beautification of Dih Baba Asthan in village Khaira and

providing drinking water through tankers during summer in

nearby villages.

OUTLOOK

The Company’s outlook is very bright. It will generate

sufficient revenue for the growth and development of the

company as well as of the nearby community at large once

the plant becomes operational.


Statements in the Management Discussion and Analysis,

describing objectives, projections and estimates, are

forward-looking statements and progressive, within the

meaning of applicable security laws and regulations.

Actual results may vary from those expressed or implied,

depending upon economic condition, Government policies

and other incidental/ related factors.


(S.C. Pandey)

Place: New Delhi Chairman

Dated: 25.08.2017 (DIN: 03142319)


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A Maharatna Company

Annexure - II to the Directors’ Report of BRBCL

Report on Corporate Governance

Corporate Governance is a set of standards which aims to improve the Company’s image, efficiency and effectiveness. It is the road map, which guides and directs the Board of Directors of the Company to govern the affairs of the Company in a manner most beneficial to all the shareholders, creditors, government and society at large.

The Directors, hereby, present the Company’s Report on Corporate Governance for the financial year 2016-17. Our corporate structure, business, operations and disclosure practices have been strictly aligned to our Corporate Governance Philosophy.

1. Company’s Philosophy on Code of Governance

Corporate Governance continues to be a strong focus area for the Bhartiya Rail Bijlee Company Limited. Our philosophy on Corporate Governance emanates from resolute commitment to protect stakeholder rights and interests, proactively manage risks and create long-term wealth and value. It permeates in all aspects of working-workplace management, marketplace responsibility, community engagement and business decisions. Corporate Governance can be summarized in the following words:

“Enhancement of stakeholder’s value through pursuit of excellence, efficiency of operations, quest for growth and continuous innovation.”

The Company, through its Board and Committees, endeavours to strike and deliver the highest governing standards to meet the aspirations of every stakeholder.It believes that the governance process should ensure that the resources are utilised in a manner that meets stakeholders’ aspirations and societal expectations.

We follow Guidelines on Corporate Governance for Central Public Sector Enterprises issued by the Department of Public Enterprises, Government of India to the extent such compliances are within the ambit of the Company.

2. Board of Directors

The Board of Directors is the apex body constituted by shareholders for overseeing the Company’s overall functioning. The Board provides and evaluates the Company’s strategic direction, management policies

and their effectiveness, and ensures that shareholders’ long-term interests are being served.

i. Composition of the Board

As per the Articles of Association, the number

of Directors shall not be less than 4 and more

than 15 subject to the condition that Directors

shall be nominated by each Party viz. NTPC and

Ministry of Railways in accordance with their

equity shareholdings. The respective parties shall

determine the period for which their respective

nominees shall hold office.

Also, the Chairman of the Board shall always be a

Director nominated by NTPC.

ii. Independent Directors

As per the Companies Act, 2013 and the DPE

Guidelines on Corporate Governance for

CPSEs, the company was required to appoint

two Independent Directors on the Board. The

Promoter Company had taken up the matter with

Department of Public Enterprises, to either appoint

Independent Directors or allow NTPC and Ministry

of Railways to appoint Independent Directors.

However, Ministry of Corporate Affairs, through

Notification dated 05.07.2017, has exempted the

public unlisted Joint Venture Companies from

appointing Independent Directors.

Also, DPE Guidelines are under revision to align it

with the Companies Act, 2013.

iii. Woman Directors

As per the requirements of the Companies Act,

2013, the Company has one Woman Director on its

Board.

iv. Board Meetings

As on 31.03.2017, there were 4 (four) Directors

on the Board, out of which three directors

were nominated by NTPC and one director was

nominated by the Ministry of Railways.

During the year, 7 (seven) Meetings of the Board

were held on 05.05.2016, 27.07.2016, 24.08.2016,

21.12.2016, 23.01.2017, 17.02.2017 and

22.03.2017. The attendance of Directors in Board

Meetings is as under:


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A Maharatna Company


DIN BOARD MEETINGS

05.05.16 27.07.16 24.08.16 21.12.16 23.01.17 17.02.17 22.03.17

Shri S.C. Pandey, Chairman

(nominated by NTPC)

03142319 Yes Yes Yes Yes Yes Yes Yes

Shri Sudhir Garg, Director

(nominated by Ministry of Railways)


Shri K.S. Garbyal, Director

(nominated by NTPC)

07027435 Yes Yes Yes Yes Yes Yes No

Smt. Sangeeta Bhatia, Director (nominated by NTPC)


v. Number of Shares held by the Directors as on 31.03.2017

Directors No. of sharesShri S.C. Pandey, Chairman 100Shri Sudhir Garg, Director -Shri K.S. Garbyal, Director 100Smt. Sangeeta Bhatia, Director 100

3. Committees of the Board

Our Board has constituted sub-committees to focus on specific areas and make informed decisions within the authority delegated to each of the Committees. Each Committee of the Board is guided by its Charter, which defines the scope, powers and composition of the Committee. All decisions and recommendations of the Committees are placed before the Board for information and approval respectively. Senior functional executives are also invited, as and when required, to provide necessary information/clarification to the Committees of the Board. We have following sub-committees of the Board as on 31.03.2017:

A. Audit Committee

B. Nomination and Remuneration Committee


A. Audit Committee

The term of reference of Audit Committee is in accordance with Section 177(4) of the Companies Act, 2013 and DPE Guidelines on Corporate Governance for CPSEs,which includes the following:

(i) Discussions with the Auditors about the scope of audit including observations of auditors;

(ii) Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that financial statement are correct, sufficient and credible;

(iii) Noting appointment and removal of external auditors. Recommending audit fee of external auditors and also approval for payment for any other service;

(iv) Recommending appointment and remuneration of Cost Auditors;

(v) Review and monitor the auditor’s independence and performance, and effectiveness of audit process;

(vi) Approval or any subsequent modification of transactions of the company with related parties;

(vii) Scrutiny of inter-corporate loans and investments;

(viii) Valuation of undertakings or assets of the company, wherever it is necessary;

(ix) Evaluation of internal financial controls and risk management systems;

(x) Monitoring the end use of funds raised through public offers and related matters;

(xi) Receiving the findings of any internal investigation by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a nature and reporting the matter to the Board;

(xii) Consider and review the following with the management, internal Auditor and the independent Auditor:

1. Significant findings during the year, including the status of previous audit recommendations;

2. Any difficulties encountered during audit work including any restrictions on the Scope of the activities or access to required information.

(xiii) Review of all financial reports including Annexure to Cost Audit Reports, Internal Audit reports etc;

(xiv) Review of Management Discussion and Analysis report;


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A Maharatna Company

(xv) Review of half-yearly and annual financial statements before submission to the Board for approval, with particular reference to:

1. Change, if any, in accounting policies and practices and reasons for the same;

2. Significant adjustments made in financial statements arising out of audit findings;

3. Disclosure of any related party transactions;

4. Qualifications in audit report.

(xvi) Review of observations of Statutory Auditors and Comptroller and Auditor General of India and

(xvii) Such matters as may be referred to it by the Board of Directors, from time to time.

The constitution of the Audit Committee of the Company as on 31.03.2017, comprised 3 (three)Members namely Shri S.C. Pandey, Shri Sudhir Garg and Smt. Sangeeta Bhatia.

During the year, four Meetings of the Committee were held on 05.05.2016, 27.07.2016, 24.08.2016 and 21.12.2016. The attendance of Directors in these Meetings is as under:

Date of the Meeting/ Name of the Member

05.05.16 27.07.16 24.08.16 21.12.16

Shri S.C. Pandey Yes Yes Yes Yes

Shri Sudhir Garg Yes Yes Yes Yes

Smt. Sangeeta Bhatia

Yes Yes Yes Yes

During the year, there is no instance, where the Board had not accepted any recommendation(s) of the Audit Committee.

Your Company has ensured to remain in the regime of unqualified statement.

B. Nomination & Remuneration Committee

The term of reference of Nomination & Remuneration Committee is in accordance with Section 178 of the Companies Act, 2013, which is as under:

(i) Shall identify who may be appointed in senior management in accordance with the criteria laid down, recommend to the board their appointment and removal;

(ii) Shall formulate the criteria for determining qualifications, positive attributes & recommend to the board a policy relating to the remuneration for, KMP & other employees;

(iii) Shall while formulating the policy, NRC ensures that:

1. Relationship of remuneration to performance is clear & meets appropriate performance benchmarks and meets appropriate performance benchmarks

2. Management involves a balance b/w fixed & incentive pay reflecting short & long-term performance objectives appropriate to the working of the company & its goals

The constitution of the Nomination & Remuneration Committee of the Company as on 31.03.2017, comprised 3 (three) Members namely Shri K.S. Garbyal, Shri Sudhir Garg and Smt. Sangeeta Bhatia.

During the 2016-17, 1 (one) meeting of the Nomination and Remuneration Committee was held on 27.07.2016 in which all the Members were present.


The term of reference of Corporate Social Responsibility Committee is in accordance with Section 135 of the Companies Act, 2013 which is as under:

(i) To formulate & recommend to the Board, a CSR Policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII to the Companies Act, 2013 as amended from time to time by the Ministry of Corporate Affairs, GOI;

(ii) To recommend the amount of expenditure to be incurred on the activities referred to in clause (a) and approve the budget for CSR;

(iii) To monitor the CSR Policy of the company from time to time;

(iv) Shall institute a transparent monitoring mechanism for implementation of the CSR projects or programs or activities undertaken by the company;

(v) Any other matter as may be delegated by the Board from time to time.

The constitution of the Corporate Social Responsibility Committee of the Company as on 31.03.2017 comprised 3 (three) Directors namely Shri S.C. Pandey, Shri Sudhir Garg and Smt. Sangeeta Bhatia.

No meeting of the CSR Committee was held during FY 2016-17.

4. Remuneration Policy/ Detail of Remuneration to Directors

Since the Directors are nominated by NTPC or by Ministry of Railways, they are governed by the remuneration policy as applicable to their parent company.


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A Maharatna Company

5. Performance Related Payment to Employees

As majority of the employees are on secondment basis from NTPC, their remuneration is as per the rules of NTPC.

Annual Performance Related Payment is decided by the Remuneration Committee of NTPC and such decision is applicable to the employees on secondment basis to BRBCL.

6. General Body Meetings

The attendance of Directors in Annual General Meeting and Extra-Ordinary General Meeting is as under:


EGM AGM

14.06.16 27.07.16

Shri S.C. Pandey Yes Yes

Shri Sudhir Garg Yes* Yes*


EGM AGM

14.06.16 27.07.16

Shri K.S. Garbyal Yes Yes

Smt. Sangeeta Bhatia

Yes Yes

* attended as nominee of Ministry of Railways

The Chairman of the Audit Committee was present in the Annual General Meeting.

Forthcoming AGM: Date, Time and Venue

The 10th Annual General Meeting of the Company (AGM) is scheduled on Friday 25th August, 2017 at 5.00 pm the day of, 2017 at :00 hrs. at the registered office of the Company situated at NTPC Bhawan, Scope Complex, 7, Institutional Area, Lodi Road, New Delhi-110003.

Location and Time of the last three AGMs

The location, time and details of the special resolutions passed during last three AGMs are as follows:

Year 2013-14 2014-15 2015-16

AGM 7th 8th 9th

Date and Time 10.07.2014 3.00 p.m.

28.08.2015 2.30 p.m.

27.07.2016 12:30 p.m.

Venue NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003

NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003

NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003

Special Resolution Passed

(i) To increase borrowing powers of the Board up to ` 4,000 Crore.

(ii) Authorise the Board to mortgage the assets of the Company for securing loan.

- -

7. Means of Communication

The Company communicates with its shareholders through its Annual Report and General Meetings.

8. Disclosures

a) The Annual Financial Statements FY 2016-17 are in conformity with applicable Accounting Standards. During the year, there have been no materially significant Related Party Transactions that may have potential conflict with the interest of the Company at large. The details of “Related Party Disclosures” are being disclosed in Notes to the accounts in the Annual Report.

b) The Company has a system in place for monitoring of various statutory and procedural compliances. Further, a compliance certificate on applicable laws is in place on yearly basis.

c) CEO and CFO of the Company, inter-alia, confirmed the correctness of the financial statements, adequacy of the internal control and certified other matters to the Board and Audit Committee, as per the requirements of Department of Public Enterprises Guidelines.

d) All the Board Members and Senior Management Personnel are governed by the Code of Conduct of NTPC Limited as they are nominated/ deputed by NTPC. The affirmation to the Code of Conduct is given by Board Members and Senior Management Personnel at NTPC.

e) The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal or unethical behaviour. The Company has implemented Whistle Blower Policy (Vigil Mechanism) under which the employees


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A Maharatna Company

are free to report violations of applicable laws and regulations. No personnel have been denied access to the Audit Committee.

f) During the year under review, no Presidential Directive was received by your Company.

9. The information regarding shareholding pattern of Promoters and Directors is given under Extract of Annual Return which is at Annex III to the Directors’ Report.

10. Training of Board Members

As the Board Members are the Nominees of NTPC and Ministry of Railways, they are being imparted training by the parent companies. However, detailed presentations were made by senior executives/

professionals/ consultants on business-related issues at the Board/Committee meetings as and when required.

11. Location of Plant:

Nabinagar Thermal Power Project (4x250 MW), Distt. Aurangabad, Nabinagar, Bihar.


(S.C. Pandey)


Dated: 25.08.2017 (DIN: 03142319)

Chief Executive Officer (CEO) & Chief Financial Officer (CFO) Certification

We, C. Sivakumar, Chief Executive Officer and D. Nandy, Chief Financial Officer of Bhartiya Rail Bijlee Company Limited, to

the best of our knowledge and belief, certify that:

(a) We have reviewed financial statements, including all notes to the financial statements and the cash flow statements for

the year ended March 31, 2017 and to the best of our knowledge and belief:

(i) these statements do not contain any materially untrue statement or omit any material fact or contain statements

that might be misleading;

(ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing

accounting standards, applicable laws and regulations.

(b) To the best of our knowledge and belief, no transactions entered into by the Company during the year, which is

fraudulent, illegal or violative of the Company’s various code(s) of conduct.

(c) We are responsible for establishing and maintaining internal controls for financial reporting and we have evaluated the

effectiveness of the internal control systems of the Company pertaining to financial reporting and have disclosed to

the auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we

are aware and the steps we have taken or propose to take to rectify these deficiencies.

(d) We have indicated to the company’s auditors and the Audit Committee of BRBCL’s Board of Directors:

(i) significant changes, if any, in internal control over financial reporting during the year;

(ii) significant changes, if any, in accounting policies during the year and the same have been disclosed in the notes

to the financial statements; and

(iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the

management or an employee having a significant role in the company’s internal control system over financial

reporting.

(D. Nandy) (C. Sivakumar)

Chief Financial Officer Chief Executive Officer

Place: New DelhiDate : May 15, 2017


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A Maharatna Company

CERTIFICATE ON COMPLIANCE OF DPE GUIDELINES ON CORPORATE GOVERNANCEFOR THE FINANCIAL YEAR 2016-2017

The Members,

Bhartiya Rail Bijlee Company Limited.

We have examined the compliance of Guidelines on Corporate Governance for Central Public Sector Enterprise, 2010 as

issued by DPE from time to time of your Company.

The Compliance of Guidelines on Corporate Governance is the responsibility of the management. Our examination was

limited to the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the

Guidelines on Corporate Governance. It is neither an audit nor an expression of opinion on financial statements of the

Company.

In our opinion and to the best of our information and according to the explanations given to us by the management, we

certify that, except the Composition of the Board of Directors & it’s committees & non-appointment of Company Secretary,

the Company has complied with the DPE Guidelines on Corporate Governance.

We further state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or

effectiveness with which the management has conducted the affairs of the Company.

For Agarwal S. & Associates

Company Secretaries

CS Sachin Agarwal PartnerPlace: New Delhi FCS No. : 5774Date: August 10, 2017 CP No. : 5910


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A Maharatna Company

Annexure - III to the Directors’ Report of BRBCL

Form No. MGT-9

Extract of Annual Return as on financial year ended on March 31, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]


i) CIN U40102DL2007GOI170661

ii) Registration Date November 22, 2007

iii) Name of the Company Bhartiya Rail Bijlee Company Limited

iv) Category / Sub-Category of the Company Public Company / Government Company

v) Address of the Registered office and contact details NTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003Ph. No.: 011-24360071Fax No.: 011-24360241E-mail: [email protected]

vi) Whether listed company Yes / No No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

Not Applicable


All the business activities contributing 10% or more of the total turnover of the company shall be stated:

Sl. No.

Name and Description of main products/Services NIC code of the Product/service


1 Electric Power Generation by coal based thermal power plants 35102 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.


CIN/GLN Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1 NTPC Limited

Address: NTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodhi Road, New Delhi-110003

L40101DL1975GOI007966 Holding 74% 2 (46) of the Companies Act, 2013



Category of Shareholders No. of Shares held at the beginning of the year No. of shares held at the end of the year % Change during the

yearDemat Physical Total % of Total

sharesDemat Physical Total % of Total

shares

A. Promoters

(1) Indian

a) Individual/ HUF

(i) As Nominee of NTPC - 500 500 0.00 - 500 500 0.00 -

(ii) As Nominee of Ministry of Railways

- 100 100 0.00 - 100 100 0.00 -


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A Maharatna Company

Category of Shareholders No. of Shares held at the beginning of the year No. of shares held at the end of the year % Change during the

yearDemat Physical Total % of Total

sharesDemat Physical Total % of Total

shares

b) Central Govt.

(Ministry of Railways)

- 41,19,99,900 41,19,99,900 26.00 - 41,19,99,900 41,19,99,900 26.00 -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corp.

NTPC Limited - 1,17,26,13,350 1,17,26,13,350 74.00 - 1,17,26,13,350 1,17,26,13,350 74.00 -

e) Banks/FI - - - - - - - - -

f) Any Other - - - - - - - - -

Sub-total (A) (1):- - 1,58,46,13,850 1,58,46,13,850 100% 1,58,46,13,850 1,58,46,13,850 100%

(2) Foreign

a)NRIs- individuals - - - - - - - - -

b)Other-Individuals - - - - - - - - -

c) Bodies Corp. - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other - - - - - - - - -

Sub-total (A) (2):- - - - - - - - - -

Total shareholding of Promoter (A) = (A)(1) + (A)(2)

- 1,58,46,13,850 1,58,46,13,850 100% - 1,58,46,13,850 1,58,46,13,850 100% -


1. Institutions

a) Mutual Funds - - - - - - - - -

b) Banks/FI - - - - - - - - -

c) Central Govt. - - - - - - - - -

d) State Govt.(s) - - - - - - - - -

e) Venture Capital Funds - - - - - - - - -

f) Insurance Companies - - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds - - - - - - - - -

i) Others (specify) - - - - - - - - -

Sub-total (B) (1):- - - - - - - - - -

2. Non-institutions

a) Bodies Corp.

i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

b) Individuals

i) Individual Shareholders holding nominal share capital upto ` 1 lakh

- - - - - - - - -

ii) Individuals shareholders holding nominal share capital in excess of ` 1 lakh

c) Others (specify) - - - - - - - - -

Sub-total (B) (2):- - - - - - - - - -

Total Public Shareholding (B)=(B)(1)+(B)(2)

- - - - - - - - -


- - - - - - - - -

Grand Total (A+B+C) - 1,58,46,13,850 1,58,46,13,850 100% - 1,58,46,13,850 1,58,46,13,850 100% -


191

A Maharatna Company


Sl. No.

Shareholder’s Name Shareholding at the beginning of the year Shareholding at the end of the year


company




company



% change in the shareholding

during the year

1. NTPC Limited 1,17,26,13,350 74.00 - 1,17,26,13,350 74.00 - -

2. Ministry of Railways 41,19,99,900 26.00 - 41,19,99,900 26.00 - -

3. Nominees of NTPC 500 0.00 - 500 0.00 - -

4. Nominees of Ministry of Railways

100 0.00 - 100 0.00 - -


SI. No.

Particulars Shareholding at the beginning of the year Cumulative shareholding during the year



At the beginning of the year 1,58,46,13,850 100.00 1,58,46,13,850 100.00

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.):

- - - -

At the End of the year 1,58,46,13,850 100.00 1,58,46,13,850 100.00

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs)

SI. No.

For each of Top 10 shareholders Shareholding at the beginning of the year Cumulative Shareholding during the year




Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.):

- - - -

At the end of the year ( or on the date of separation, if separated during the year)

- - - -


SI. No.

For each of the Directors and KMP Shareholding at the beginning of the year Cumulative Shareholding during the year



1. Shri S.C. Pandey

Chairman & Nominee of NTPC



Nil 0.00 Nil 0.00



192

A Maharatna Company

SI. No.

For each of the Directors and KMP Shareholding at the beginning of the year Cumulative Shareholding during the year



2. Shri K.S. Garbyal

Director & Nominee of NTPC



Nil 0.00 Nil 0.00


3. Ms. Sangeeta Bhatia

Director & Nominee of NTPC



Nil 0.00 Nil 0.00


V. INDEBTEDNESS



Unsecured Loans Deposits Total Indebtedness


i) Principal Amount 38,88,43,16,356 38,88,43,16,356

ii) Interest due but not paid 53,06,57,422 53,06,57,422

iii) Interest accrued but not due

- -

Total (i + ii + iii) 39,41,49,73,778 39,41,49,73,778


• Addition 5,86,48,41,337 5,86,48,41,337

• Reduction - -

Net Change 5,86,48,41,337 5,86,48,41,337


i) Principal amount 44,74,91,57,693 44,74,91,57,693

ii) Interest due but not paid 64,56,12,442 64,56,12,442

iii) Interest accrued but not due

- -

Total ( i + ii + iii) 45,39,47,70,135 45,39,47,70,135


193

A Maharatna Company


A. Remuneration to Managing Director, Whole-time Directors and/or Manager:

Sl. No.



(a) Salary as per provisions contained in section 17(1) if the Income-tax Act,1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961




- as % of profit

- others, specify…


Total (A) - - - - -



Sl. No.



• Fee for attending board / committee meetings

• Commission

• Others, please specify

Total (1) - - - - -


• Fee for attending board/ committee meetings

• Commission

• Others, please specify

Total (2) - - - - -

Total (B) = (1 + 2) - - - - -




SI. No.


CEO Co. Secy. CFO Total

1. Gross Salary 31,99,788 33,12,983 65,12,771


- - - -

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961 2,42,584 - 81,946 3,24,530

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961 -


194

A Maharatna Company

SI. No.


CEO Co. Secy. CFO Total



4. Commission - as % of profit

- others, specify… - - -

5. Others, please specify - - - -

Total 34,42,372 - 33,94,929 68,37,301






A. COMPANY

Penalty - - - - -



B. DIRECTORS

Penalty - - - - -




Penalty - - - - -




(S.C. Pandey)


Dated: 25.08.2017 (DIN: 03142319)


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A Maharatna Company

Annexure - IV to the Directors’ Report of BRBCL

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st MARCH, 2017

{Pursuant to Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014}

To,

The Members,

Bhartiya Rail Bijlee Company Limited.

We have conducted the Secretarial Audit of the Compliance of applicable statutory provisions and the adherence to good

Corporate Practices by Bhartiya Rail Bijlee Company Limited (hereinafter called BRBCL/the Company). Secretarial Audit was

conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances

and expressing our opinion thereon.

Based on our verification of BRBCL’s books, papers, Minute books, forms and returns filed and other records maintained by

the Company and also the information provided by the Company, its officers, agents and authorized representatives during

the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering

the financial period ended on 31st March, 2017 complied with the statutory provisions listed hereunder and also that the

Company has proper Board processes and Compliance mechanism in place to the extent, in the manner and subject to the

reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by BRBCL (“the

Company”) for the financial year ended on 31st March, 2017 according to the provisions of:




(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign

Direct Investment, Overseas Direct Investment and External Commercial Borrowings; Not Applicable

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI

Act’):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulation, 2011;

Not Applicable

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; Not Applicable

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; Not

Applicable

(d) The SEBI (Share Based Employee Benefits) Regulations, 2014; Not Applicable

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993

regarding the Companies Act and dealing with client; Not Applicable

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable and

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable


196

A Maharatna Company

(vi) Compliances/ processes/ systems under other applicable Laws to the Company are being verified on the basis of

periodic certificate submitted to the Board of Directors of the Company.

I have also examined compliance with the applicable clauses of the following:


(b) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Not

Applicable

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines,

Standards, etc. mentioned above subject to the following observations:

1. Compliance under Section 149(4) read with Rule 4 of Companies (Appointment and Qualification of Directors)

Rules, 2014 of the Act and Clause 3.1.4 of the DPE Guidelines on Corporate Governance with respect to the

appointment of Independent Directors on the Board of Company & consequential non-compliances thereof.

Compliance under Section 149 (8) read with Clause VIII of Schedule IV of the Act with respect to performance

evaluation of the Directors.

2. In terms of Section 203 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014, the Company is required to appoint a Company Secretary.

We further report that the Board of Directors of the Company is not duly constituted due to non-appointment of

Independent Directors on the Board of the Company. The changes in the composition of the Board of Directors that

took place during the period under review were carried out in compliance with the provisions of the Act.

Generally, adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on

agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and

clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All the decisions made in the Board/Committee meeting(s) were carried out with unanimous consent of the all the

Directors/Members present during the meeting.

Due to non-receipt of matching subscription amount towards Equity Capital from Ministry of Railways (one of the

Promoters & Shareholder of the Company), the Company has either allotted equity shares beyond statutory period or

has not allotted equity shares, so as to maintain equity capital ratio amongst the Promoters as per the Joint Venture

Agreement.

We further report that there are adequate systems and processes in the Company commensurate with the size and

operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines

and Company is in process of reviewing & strengthening the same.

We further report that during the audit period, there were no specific events/actions having a major bearing on the

Company’s affairs in pursuance of the above referred laws.


Company Secretaries

Sachin Agarwal PartnerPlace: New Delhi FCS No. : 5774Date: June 08, 2017 CP No. : 5910



197

A Maharatna Company

“Annexure A”

To,

The Members,

Bhartiya Rail Bijlee Company Limited









Company Secretaries

Sachin Agarwal PartnerPlace: New Delhi FCS No. : 5774Date: June 08, 2017 CP No. : 5910


198

A Maharatna Company

BHARTIYA RAIL BIJLEE COMPANY LIMITEDBALANCE SHEET AS AT 31st MARCH 2017

` LakhsParticulars Note No. As at

31.03.2017As at

31.03.2016As at

01.04.2015ASSETSNon-current assets

Property Plant & Equipment 2 250,496.42 47,798.18 37,862.23 Capital work-in-progress 3 434,915.65 538,944.55 450,263.52 Intangible assets 2 3.19 5.30 1.05 Other non-current assets 4 6,676.60 26,554.64 24,824.63 Deferred tax assets 5 - - -

Total non-current assets 692,091.86 613,302.67 512,951.43 Current assets

Inventories 6 1,393.88 - - Financial AssetsTrade receivables 7 5,277.98 - - Cash and cash equivalent 8 541.49 12,208.46 9,399.46 Other financial assets 9 3,408.69 - - Other current assets 10 9,562.96 2,938.68 1,520.47

Total current assets 20,185.00 15,147.14 10,919.93 TOTAL ASSETS 712,276.86 628,449.81 523,871.36 EQUITY AND LIABILITIESEquity

Equity share capital 11 158,461.39 158,461.39 158,461.39 Other equity 12 29,238.02 5,243.11 3,681.66

Total equity 187,699.41 163,704.50 162,143.05 LiabilitiesNon-Current liabilities

Financial liabilitiesBorrowings 13 447,491.58 388,843.16 299,817.23 Other financial liabilities 14 3,777.88 8,546.00 13,412.91

Total non-current liabilities 451,269.46 397,389.16 313,230.14 Current liabilities

Financial liabilitiesTrade payables 15 2,982.57 6,099.17 6,336.59 Other financial liabilities 16 56,895.73 49,189.36 30,835.77 Other current liabilities 17 630.79 277.96 186.34 Provisions 18 11,948.48 11,282.75 11,018.06 Current tax liabilities (net) 18A 191.36 - -

Total current liabilities 72,648.93 66,849.24 48,376.76 Regulatory deferral account credit balances 19 659.06 506.91 121.41 TOTAL EQUITY AND LIABILITIES 712,276.86 628,449.81 523,871.36 Significant Accounting Policies 1The accompanying notes 1 to 45 form an integral part of these financial statements.


(D. Nandy) (C. Sivakumar) (S. Bhatia) (S.C. Pandey)C.F.O. C.E.O. Director Chairman

For N. C. Aggarwal & Co.Chartered Accountants

G. K. AggarwalPartnerMembership No. : 086622Firm Reg. No.: 003273N



199

A Maharatna Company

` LakhsParticulars Note No. For the



RevenueRevenue from operations 20 8,686.67 - Other income 21 192.71 385.52 Total revenue 8,879.38 385.52 Expenses Employee benefits expense 22 853.45 0.92 Finance costs 23 2,942.96 - Depreciation, amortization and impairment expense 2 2,848.84 0.02 Other expenses 24 1,116.68 1.64 Total expenses 7,761.93 2.58 Profit before tax and Rate Regulated Activities (RRA) 1,117.45 382.94 Add: Movements in regulatory deferral account balances (152.16) (385.49)Profit before tax 965.29 (2.55)Tax expenseCurrent tax 230.81 - Tax expense/(saving) pertaining to RRA (31.43) - Deferred tax asset-MAT Credit Entitlement (199.38) -Add: Deferred liability for Rate Regulated Account 199.38 -Total tax expense 199.38 - Profit for the year 765.91 (2.55)


Total comprehensive income for the year 765.91 (2.55)Significant accounting policies 1Expenditure during construction period (net) 25Earnings per equity share (Par value ` 10/- each) 39From operations including regulatory deferral account balancesBasic Earning Per Share (`) 0.00 (0.00)Diluted Earning Per Share (`) 0.00 (0.00)From operations excluding regulatory deferral account balancesBasic Earning Per Share (`) 0.00 (0.00)Diluted Earning Per Share (`) 0.00 (0.00)The accompanying notes 1 to 45 from an integral part of these financial statements.






BHARTIYA RAIL BIJLEE COMPANY LIMITEDSTATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31st MARCH 2017


200

A Maharatna Company

BHARTIYA RAIL BIJLEE COMPANY LIMITEDCASH FLOW STATEMENT FOR THE YEAR ENDED 31st MARCH 2017

` LakhsParticulars For the



A. CASH FLOW FROM OPERATING ACTIVITIESNet Loss as per Statement of Profit & Loss 965.29 (2.55)Adjustment for Depreciation/ Amortisation 2,848.84 0.02 Interest Cost 2,942.96 - Provisions created during the year 701.21 264.70 Regulatory Income/(Expense) 152.16 385.49 Operating loss before working capital changes 7,610.46 647.66 Adjustment for - (Increase) in inventory (1,393.88) - (Increase) in trade receivable (5,277.98) - (Increase) in other financial assets (3,408.69) - (Increase)/ Decrease in other current assets 1,760.99 (1,837.30)(Increase)/ Decrease in other non current assets 6,204.44 (13.11)(Increase) in trade payables (3,116.60) (237.42)Decrease in other financial liabilities 1,152.78 1,094.57 Other current liabilities 352.83 91.62 Provisions (35.48) - Cash generated from operations 3,848.87 (253.98)Income Taxes paid 57.69 36.06 Net cash outflow from operating activities [A] 3,791.18 (290.04)

B. CASH FLOW FROM INVESTMENT ACTIVITIESPurchase of fixed assets & CWIP (95,554.75) (87,490.88)Net cash outflow from investing activities [B] (95,554.75) (87,490.88)

C. CASH FLOW FROM FINANCING ACTIVITIESProceeds from share Application Money 23,229.00 1,564.00 Proceeds from long term borrowings 58,648.42 89,025.92 Interest paid (1,780.81) - Net cash inflow from financing activities [C] 80,096.61 90,589.92 Net increase/(decrease) in cash and cash equivalents [A+B+C] (11,666.96) 2,809.00 Cash and Cash equivalents at the beginning of the year 12,208.46 9,399.46 Cash and Cash equivalents at the end of the year 541.50 12,208.46

Note: Previous year’s figures have been regrouped/rearranged wherever necessary.







201

A Maharatna Company

(A) Equity Share Capital


` Lakhs

Balance as at 1 April 2016 Changes in equity share capital during the year

Balance as at 31 March 2017

158,461.39 - 158,461.39

For the year ended 31 March 2016` Lakhs

Balance as at 1 April 2015 Changes in equity share capital during the year

Balance as at 31 March 2017

158,461.39 - 158,461.39

(B) Other Equity


` Lakhs

Particulars Other Equity Total

Share Application Money Pending

Allotment

Retained Earnings

Balance as at 1 April 2016 1,564.00 3,679.11 5,243.11

Profit for the year - 765.91 765.91

Share Application Money refunded 1,564.00 - 1,564.00

Share Application Money received 24,793.00 - 24,793.00

Balance as at 31 March 2017 24,793.00 4,445.02 29,238.02


` Lakhs

Particulars Other Equity Total

Share Application Money Pending

Allotment

Retained Earnings

Balance as at 1 April 2015 - 3,681.66 3,681.66

Profit for the year - (2.55) (2.55)

Share Application Money received 1,564.00 - 1,564.00

Balance as at 31 March 2016 1,564.00 3,679.11 5,243.11

BHARTIYA RAIL BIJLEE COMPANY LIMITEDSTATEMENT OF CHANGES IN EQUITY


202

A Maharatna Company

1. Significant Accounting Policies1. Company Information and Significant Accounting

PoliciesA. Reporting entity Bhartiya Rail Bijlee Company Limited (the

“Company”) is a Company domiciled in India and limited by shares (CIN: U40102DL2007PLC170661). The address of the Company’s registered office is NTPC Bhawan, SCOPE Complex, 7 Institutional Area, Lodi Road, New Delhi - 110003. The Company is involved in the generation and sale of bulk power to Indian Railways and State Power Utilities.

B. Basis of preparation1. Statement of Compliance These financial statements are prepared

on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. These are the Company’s first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied.

For all the periods upto and including 31 March 2016, the Company prepared its financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies Act, 2013, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. The Company followed the provisions of Ind AS 101 in preparing its opening Ind AS Balance Sheet as of the date of transition, viz. 1 April 2015. Certain of the Company’s Ind AS accounting policies used in the opening Balance Sheet differed from its Indian GAAP policies applied as at 31 March 2015, and accordingly the adjustments were made to restate the opening balances as per Ind AS. The resulting adjustments arose from events and transactions before the date of transition to Ind AS. Therefore, as required by Ind AS 101, those adjustments were recognized directly through retained earnings as at 1 April 2015. This is the effect of the general rule of Ind AS 101 which is to apply Ind AS retrospectively.

An explanation of how the transition to Ind AS has affected the reported financial position, financial performance and cash flows of the Company is provided in note 22.

These financial statements were authorized for issue by Board of Directors on 16 May 2017.

2. Basis of measurement The financial statements have been prepared

on the historical cost basis.3. Functional and presentation currency These financial statements are presented in

Rs. Lakhs (upto two decimals) which is the Company’s functional currency, except for per share data and as other-wise stated.

C. Significant accounting policies A summary of the significant accounting policies

applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all periods presented in the financial statements.

The Company has elected to utilize the option under Ind AS 101 by not applying the provisions of Ind AS 16 and Ind AS 38 retrospectively and continue to use the Indian GAAP carrying amount as a deemed cost under Ind AS at the date of transition to Ind AS. Therefore, the carrying amount of property, plant and equipment and intangible assets at 1 April 2015, the Company’s date of transition to Ind AS, according to the Indian GAAP were maintained in transition to Ind AS.

1. Property, plant and equipment 1.1. Initial recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation/ amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for its intended use.

When parts of an item of property, plant and equipment have different useful lives, they are recognized separately.

Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses relatable to land in possession are treated as cost of land.

In the case of assets put to use, where final settlement of bills with contractors is yet to be effected, capitalization is done on provisional basis subject to necessary adjustment in the year of final settlement.

Assets and systems common to more than one generating unit are capitalized on the basis of engineering estimates/assessments.

1.2. Subsequent costs Subsequent expenditure is recognized

as an increase in the carrying amount of


203

A Maharatna Company

the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in profit or loss as incurred.

1.3. Decommissioning costs The present value of the expected cost

for the decommissioning of the asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

1.4. Derecognition Property, plant and equipment is

derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.

2. Capital work-in-progress The cost of self-constructed assets includes the cost

of materials & direct labour, any other costs directly attributable to bringing the assets to a working condition and location for their intended use, and the initial estimate of dismantling and removing the items and restoring the site on which they are located and borrowing costs.

Expenses directly attributable to construction of property, plant and equipment incurred till they are ready for their intended use are identified and allocated on a systematic basis on the cost of related assets.

Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.

Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for on estimated basis as per terms of the contracts.

3. Intangible assets3.1. Initial recognition and measurement Intangible assets that are acquired by the Company,

which have finite useful lives, are measured at cost

less accumulated amortization and accumulated impairment losses. Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.

3.2. Subsequent costs Subsequent expenditure is capitalized only when it

increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognized in profit or loss as incurred.

3.3. Derecognition An intangible asset is derecognized when no future

economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.

4. Regulatory deferral account balances Expense/income recognized in the Statement of Profit

& Loss to the extent recoverable from or payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized as ‘Regulatory deferral account balances’.

Regulatory deferral accounts balances are adjusted from the year in which the same become recoverable from or payable to the beneficiaries.

5. Borrowing costs Borrowing costs that are directly attributable to the

acquisition, construction or erection of qualifying assets are capitalized as part of cost of such asset until such time the assets are substantially ready for their intended use. Qualifying assets are assets which take a substantial period of time to get ready for their intended use or sale.

When the Company borrows funds specifically for the purpose of obtaining a qualifying asset, the borrowing costs incurred are capitalized. When Company borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the capitalization of the borrowing costs is computed based on the weighted average cost of general borrowing that are outstanding during the period and used for the acquisition, construction or erection of the qualifying asset.

Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the qualifying assets for their intended uses are complete. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Income earned on temporary investment of the borrowings pending their expenditure on the qualifying assets is deducted from the borrowing costs eligible for capitalization. Borrowing costs include exchange differences arising from foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs.

Other borrowing costs are recognized as an expense in the year in which they are incurred.


204

A Maharatna Company

6. Inventories Inventories are valued at the lower of cost and net

realizable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Steel scrap has been valued at estimated realizable value.

The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.

7. Cash and cash equivalents Cash and cash equivalents in the balance sheet

comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

8. Foreign currency transactions and translation Transactions in foreign currencies are initially recorded

at the functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognized in profit or loss in the year in which it arises with the exception that exchange differences on long term monetary items related to acquisition of assets recognized upto 31 March 2016 are adjusted to carrying cost of assets.

Non-monetary items are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

9. Revenue Company’s revenues arise from sale of energy and

other income. The Company’s operations are regulated under the Electricity Act, 2003. Accordingly, the CERC determines the tariff for the Company’s power plant based on the norms prescribed in the tariff regulations as applicable from time to time. Tariff is based on the capital cost incurred for a power plant and primarily comprises two components: capacity charge i.e. a fixed charge, that includes depreciation, return on equity, interest on working capital, operating & maintenance expenses, interest on loan and energy charge i.e. a variable charge primarily based on fuel costs.

Revenue from the sale of energy is measured at the fair value of the consideration received or receivable. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, there is no continuing management involvement, and the amount of revenue can be measured reliably.

Revenue from sale of energy is accounted for based on tariff rates approved by the CERC (excepted items indicated as provisional) as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case the tariff rate is yet to be approved/items indicated provisional by the CERC in their order, provisional rate is adopted considering the applicable CERC Tariff Regulations. Revenue from sale of energy is recognized once the electricity has been delivered to the customer and is measured through a regular review of usage meters. Customers are billed on a periodic and regular basis.

The incentives/disincentives are accounted for based on the norms notified/approved by the CERC as per principles enunciated in Ind AS 18. In cases of power stations where the same have not been notified/approved, incentives/disincentives are accounted for on provisional basis.

Part of revenue from sale of energy is recognized based on the rates & terms and conditions mutually agreed with the beneficiaries.

Rebates allowed to beneficiaries as early payment incentives are deducted from the amount of revenue.

Exchange differences arising from settlement/translation of monetary items denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per the CERC Tariff Regulations are accounted as ‘Regulatory deferred account balances’ and adjusted from the year in which the same becomes recoverable/payable.

Revenue from other income comprises interest from banks, employees, contractors etc., surcharge received from customers for delayed payments, sale of scrap, other miscellaneous income, etc.

10. Other Income

Scrap other than steel scrap is accounted for as and when sold.

Other insurance claims are accounted for based on certainty of realization.

Interest/surcharge recoverable on advances to suppliers as well as warranty claims wherever there is uncertainty of realization/acceptance are not treated as accrued and are therefore, accounted for on receipt/acceptance.

Exchange differences arising from settlement/translation of monetary items denominated in foreign currency to the extent recoverable from or payable to the beneficiaries in subsequent periods as per the CERC Tariff Regulations are accounted as ‘Regulatory deferred accounts balances’ during construction period and adjusted from the year in which the same becomes recoverable/payable.

11. Depreciation/amortization

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment.


205

A Maharatna Company

Depreciation on the assets of the generation of electricity business is charged on straight line method following the rates and methodology notified by the CERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

Depreciation on the following assets is provided on their estimated useful life ascertained on technical evaluation:

a) Kutcha Roads 2 yearsb) Enabling works- residential buildings 15 years- internal electrification of residential buildings 10 years- non-residential buildings including their internal electrification, water supply, sewerage & drainage

works, railway sidings, aerodromes, helipads and airstrips.5 years

c) Personal computers & laptops including peripherals 3 yearsd) Photocopiers, fax machines, water coolers and refrigerators 5 yearse) Temporary erections including wooden structures 1 yearf) Telephone exchange 15 yearsg) Wireless systems, VSAT equipments, display devices viz. projectors, screens, CCTV, audio video

conferencing systems and other communication equipments6 years

Assets costing up to ` 5,000/- are fully depreciated in the year of acquisition.

Cost of software recognized as intangible asset, is amortized on straight line method over a period of legal right to use or 3 years, whichever is less. Other intangible assets are amortized on straight line method over the period of legal right to use or life of the related plant, whichever is less.

Depreciation on additions to/deductions from assets during the year is charged on pro-rata basis from/up to the month in which the asset is available for use/disposed.

Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortized balance of such asset is charged off prospectively over the remaining useful life determined following the applicable accounting policies relating to depreciation/ amortization.

Where it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably, subsequent expenditure on a PPE along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.

12. Other Expenses Expenses on ex-gratia payments under voluntary

retirement scheme, training & recruitment and research & development are charged to revenue in the year incurred.

Preliminary expenses on account of new projects incurred prior to approval of feasibility report/techno economic clearance are charged to revenue.

Net pre-commissioning income/expenditure is adjusted directly in the cost of related assets and systems.

Transit and handling losses of coal as per Company’s norms are included in cost of coal.

Liquidated damages, wherever there is uncertainty of realization/acceptance are not treated as accrued and

are therefore, accounted for on receipt/acceptance and netted off from related expenses / project costs.

13. Employee benefits The employees of the company are on secondment

from the parent company. Employee benefits include provident fund, gratuity, post-retirement medical facilities, compensated absences, long service award, economic rehabilitation scheme & other terminal benefits. In terms of arrangement with the parent company, the company makes a fixed percentage contribution of the aggregate of basic pay and dearness allowance for the period of service rendered in the company. Accordingly, these employee benefits are treated as defined contribution schemes.

14. Leases As Lessee Accounting for operating leases Leases in which a significant portion of the risks and

rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognized as an expense over the lease term. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.

15. Impairment of non-financial assets The carrying amounts of the Company’s non-financial

assets are reviewed at each reporting date to determine whether there is any indication of impairment considering the provisions of Ind AS 36 ‘Impairment of Assets’. If any such indication exists, then the asset’s recoverable amount is estimated.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment


206

A Maharatna Company

testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”, or “CGU”).

An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are reduced from the carrying amounts of the assets of the CGU.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

16. Provisions and contingent liabilities A provision is recognized if, as a result of a past event,

the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events not wholly within the control of the Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent liabilities are disclosed on the basis of judgment of the management/ independent experts.

These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

17. Income tax Income tax expense comprises current and deferred

tax. Current tax expense is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current income taxes are recognized under ‘Income tax payable’ net of payments on account, or under ‘Tax receivables’ where there is a credit balance.

Deferred tax is recognized using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

Deferred tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

18. Material prior period errors Material prior period errors are corrected

retrospectively by restating the comparative amounts for the prior periods presented in which the error occurred. If the error occurred before the earliest prior period presented, the opening balances of assets, liabilities and equity for the earliest prior period presented, are restated.

19. Cash flow statement Cash flow statement is prepared in accordance with

the indirect method prescribed in Ind AS 7 ‘Statement of Cash Flows’.

20. Current and Non-current classification The Company presents assets and liabilities in the

balance sheet based on current / non-current classification.


207

A Maharatna Company

An asset is current when it is:• Expected to be realized or intended to sold or

consumed in normal operating cycle;• Held primarily for the purpose of trading;• Expected to be realized within twelve months

after the reporting period; or• Cash or cash equivalent unless restricted from

being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current. A liability is current when:

• It is expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;• It is due to be settled within twelve months after

the reporting period; or• There is no unconditional right to defer settlement

of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current. Deferred tax assets / liabilities are classified as non-

current.21. Financial instruments A financial instrument is any contract that gives rise to

a financial asset of one entity and a financial liability or equity instrument of another entity.21.1.Financial assets Initial recognition and measurement All financial assets are recognized initially at fair

value plus or minus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition or issue of the financial asset.

Subsequent measurement Debt instruments at amortized cost A ‘debt instrument’ is measured at the amortized

cost if both the following conditions are met:(a) The asset is held within a business model

whose objective is to hold assets for collecting contractual cash flows, and

(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.

Debt instrument at FVTOCI (Fair Value through OCI)

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:(a) The objective of the business model is

achieved both by collecting contractual cash flows and selling the financial assets, and

(b) The asset’s contractual cash flows represent SPPI

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the profit and loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL (Fair Value through Profit or Loss)

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

In addition, the Company may elect to classify a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the profit and loss.

Derecognition A financial asset (or, where applicable, a part of

a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company’s balance sheet) when:• The rights to receive cash flows from the asset

have expired, or• The Company has transferred its rights to

receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Impairment of financial assets In accordance with Ind AS 109, the Company

applies expected credit loss (ECL) model for


208

A Maharatna Company

measurement and recognition of impairment loss on the financial assets that are debt instruments, and are measured at amortized cost e.g., recoverables and bank balance.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.

21.2.Financial liabilities Initial recognition and measurement All financial liabilities are recognised initially at fair

value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include payable for capital expenditure and loans and borrowings.

Subsequent measurement Financial liabilities at amortized cost After initial measurement, such financial liabilities

are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the profit or loss. This category generally applies to trade payables and other contractual liabilities.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.

Gains or losses on liabilities held for trading are recognized in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/losses attributable to changes in own credit risk are recognized in OCI. These gains/loss are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit or loss. The Company has not designated

any financial liability as at fair value through profit and loss.

Borrowings After initial recognition, borrowings are

subsequently measured at amortized cost using the EIR method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

Derecognition A financial liability is derecognized when the

obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

D. Use of estimates and management judgments The preparation of financial statements requires

management to make judgments, estimates and assumptions that may impact the application of accounting policies and the reported value of assets, liabilities, income, expenses and related disclosures concerning the items involved as well as contingent assets and liabilities at the balance sheet date. The estimates and management’s judgments are based on previous experience and other factors considered reasonable and prudent in the circumstances. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

In order to enhance understanding of the financial statements, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is as under:1. Useful life of property, plant and equipment The estimated useful life of property, plant

and equipment is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.


209

A Maharatna Company

Useful life of the assets of the generation of electricity business is determined by the CERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

2. Recoverable amount of property, plant and equipment

The recoverable amount of plant and equipment is based on estimates and assumptions regarding in particular the expected market outlook and future cash flows associated with the power plants. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.

3. Revenue The Company records revenue from sale of

energy based on tariff rates approved by the

CERC as modified by the orders of Appellate Tribunal for Electricity, as per principles enunciated under Ind AS 18. However, in cases where tariff rates are yet to be approved, provisional rates are adopted considering the applicable CERC Tariff Regulations.

4. Provisions and contingencies The assessments undertaken in recognizing

provisions and contingencies have been made in accordance with Ind AS 37, ‘Provisions, Contingent Liabilities and Contingent Assets’. The evaluation of the likelihood of the contingent events has required best judgment by management regarding the probability of exposure to potential loss. Should circumstances change following unforeseeable developments, this likelihood could alter.


210

A Maharatna Company

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212

A Maharatna Company

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213

A Maharatna Company

3. Non current assets - Capital work-in-progress

As at 31 March 2017 ` Lakhs



Development of land 9,298.63 85.82 2,805.57 - 6,578.88

Roads, bridges, culverts & helipads 210.19 247.05 - - 457.24

Buildings

Main plant 51,586.76 3,928.18 (3,150.41) 38,173.55 20,491.80

Others 6,579.50 4,191.64 2,952.92 1,376.31 6,441.91


Water supply, drainage and sewerage system 11.86 23.30 - - 35.16


Plant and equipment 410,739.41 73,088.81 (12,083.29) 161,005.93 334,905.58

Furniture and fixtures - 76.67 (2,011.46) 2,055.71 32.42


Electrical installations 20,930.95 2,442.60 5,404.99 1,063.77 16,904.79

511,817.77 90,266.41 (6,305.51) 203,899.10 404,490.59



8,528.09 - 2,132.02 - 6,396.07

Precommissiong Expenses (net) 395.99 3,009.60 3,068.10 - 337.49

Others expenses attributable to Project (Adj) 2,365.08 - 590.09 - 1,774.99


- 53,452.22 - - 53,452.22

Less: Allocated to related works - 53,452.22 - - 53,452.22

523,106.93 93,276.01 (515.30) 203,899.10 412,999.14


Total 538,944.55 99,354.90 (515.30) 203,899.10 434,915.65



214

A Maharatna Company



Particulars Deemed cost as at

Deductions/ As at


Development of land 10,662.40 114.10 1,477.87 - 9,298.63

Roads, bridges, culverts & helipads 6.42 204.27 - 0.50 210.19

Buildings

Main plant 42,168.56 9,418.20 - - 51,586.76

Others 5,831.53 1,073.31 7.38 317.96 6,579.50


Water supply, drainage and sewerage system 10.92 0.94 - - 11.86


Plant and equipment 338,442.16 72,297.25 - - 410,739.41


Electrical installations 18,218.90 2,712.05 - - 20,930.95

425,547.79 88,171.02 1,483.52 417.52 511,817.77



8,528.09 - - - 8,528.09

Precommissiong Expenses (net) - 395.99 - - 395.99

Others expenses attributable to Project construction

2,366.66 - 1.58 - 2,365.08


- 49,739.63 - - 49,739.63

Less: Allocated to related works - 49,739.63 - - 49,739.63

436,442.54 88,567.01 1,485.10 417.52 523,106.93


Total 450,263.52 90,583.65 1,485.10 417.52 538,944.55



a) The Company capitalised the borrowing costs in the capital work-in-progress (CWIP). Exchange differences capitalised are disclosed in the ‘Addition’ column of CWIP and allocated to various heads of CWIP in the year of capitalisation through ‘Deductions/Adjustment’ column of CWIP. Exchange differences in respect of assets already capitalised are disclosed in the ‘Deductions/Adjustments’ column of CWIP. Asset-wise details of exchange differences and borrowing costs included in the cost of major heads of CWIP through ‘Addition’ or ‘Deductions/Adjustments’ column are given below:


215

A Maharatna Company

For the year ended 31st March 2017 For the year ended 31st March 2016

Exchange Difference

included in CWIP

Borrowing costs included in CWIP

Exchange Difference

included in CWIP

Borrowing costs included in CWIP

Building:

Main Plant - 3,815.97 - 3,875.76

Others - 608.33 (68.06) 530.69

Plant & Machinery - 36,062.91 - 33,144.99

MGR Track and Signalling system - 1,231.28 - 928.16

Electrical Installation - 1,735.23 - 1,619.47

Others including pending allocation - 41.11 - 505.32

Total - 43,494.83 (68.06) 40,604.39

b) Depreciation/amortisation of tangible and intangible assets for the year is allocated as given below:

` Lakhs

For the year ended

31-Mar-17

For the year ended

31-Mar-16

Transferred to expenditure during construction period (net) - Note 25 601.30 634.02

Total 601.30 634.02

c) Pre-commissioning expenditure for the year amount to ` 4,010.52 lakhs (Previous year ` 397.57 lakhs) after adjustment of pre-commissioning sales of ̀ 1,000.92 lakhs (Previous Year ̀ 1.58 lakhs) resulted in net precommissioning expenditure of ` 3,009.60 lakhs (Previous year ` 395.99 lakhs)

4. Other Non Current Assets

` Lakhs


As at 31.03.2016

As at 01.04.2015

Capital advances

Unsecured

Covered by bank guarantee 3,282.42 16,853.35 14,837.17

Others 2,765.46 2,905.20 3,240.54

6,047.88 19,758.55 18,077.71


Deposit with Govt. Department 313.11 6,517.55 6,504.44

Advance tax & tax deducted at source 315.61 278.54 242.48

Total 6,676.60 26,554.64 24,824.63

Disclosure with respect to related parties is made in Note 27.


216

A Maharatna Company

5. Non-current assets - Deferred tax assets

` Lakhs


As at 31.03.2016

As at 01.04.2015

Deferred tax asset

Difference in tax profit and profit as per MAT 199.38 - -

Less: Deferred liability for Rate Regulated Account 199.38 - -

Total - - -

a) For the period commencing from 1 April 2014, CERC Regulations, 2014 provide for grossing up of the return on equity based on effective tax rate for the financial year based on the actual tax paid during the year on the generation and transmission income. Deferred liability for deferred tax asset for the year will be reversed in future years when the related deferred tax asset forms part of current tax.

b) Movement in deferred tax balances

` Lakhs


As at 31.03.2016

As at 01.04.2015

Difference in tax profit and profit as per MAT

Opening Balance - - -

Recognised in profit or loss 199.38 - -

Tax assets 199.38 - -

Less: Deferred liability for rate regulated account 199.38 - -

Net tax assets - - -

6. Current assets - Inventories

` Lakhs


As at 31.03.2016

As at 01.04.2015

Coal 4.14 - -

Fuel Oil 461.86 - -

Stores and Spares 27.28 - -

Chemicals & consumables 21.17 - -

Steel 822.08 - -

Others 57.35 - -

Total 1,393.88 - -

a) Inventory items have been valued as per accounting policy no. C.6 (Note 1).

b) There is no material in transit as on reporting date.

c) Other includes electrcial consumables.


217

A Maharatna Company

7. Current assets - Trade receivables

` Lakhs


As at 31.03.2016

As at 01.04.2015

Trade receivables

Unsecured, considered good 5,277.98 - -

Total 5,277.98 - -

8. Current assets - Cash and cash equivalents

` Lakhs


As at 31.03.2016

As at 01.04.2015

Balances with banks

Current accounts 439.39 5,207.55 375.37

Deposits with original maturity upto three months (including interest accrued)

100.06 7,000.91 9,021.61

Cheques in hand 2.04 - 2.48

Total 541.49 12,208.46 9,399.46

9. Current assets - Other financial assets

` Lakhs


As at 31.03.2016

As at 01.04.2015

Unbilled revenue 3,408.69 - -

Unbilled revenue represents amount billed to the beneficiaries after 31 March for energy sales.

10. Current assets - Other current assets

` Lakhs


As at 31.03.2016

As at 01.04.2015

Deposits with Government Authorities 8,221.06 - -

Other recoverable 116.18 116.18 116.18

Unsecured Advances

Employees 39.96 43.60 1.40

Contractors & suppliers 1,021.85 857.64 1,276.73

Others 163.91 1,921.26 126.16

Total 9,562.96 2,938.68 1,520.47

a) Other recoverable include amount recoverable from contractors and other parties towards hire charges, rent/electricity etc.

b) Other Advances represents advance insurance premium paid as at 31 March 2017 and payment of entry tax in advance as at 31 March 2016 and 1 April 2015.


218

A Maharatna Company

11. Equity Share capital` Lakhs


As at 31.03.2016

As at 01.04.2015


Authorised

2,50,00,00,000 Equity shares of par value ̀ 10/- each (1,60,60,00,000 Equity shares of par value ` 10/- each as at 31 March, 2016 and 1 April 2015) 250,000.00 160,600.00 160,600.00 Issued, subscribed and fully paid up

1,58,46,13,850 shares of par value ` 10/- each (1,58,46,13,850 shares of par value ` 10/- each as at 31 March 2016 and as at 1 April 2015) 158,461.39 158,461.39 158,461.39

a) Movements in equity share capital: During the year, the Company has neither issued nor bought back any shares.

b) Terms and rights attached to equity shares: The Company has only one class of equity shares having a par value `10/- per share. The holders of the equity shares

are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

c) Details of shareholders holding more than 5% shares in the Company as at:

` LakhsParticulars As at 31.03.2017

No. of shares %As at 31.03.2016

No. of shares %As at 31.03.2015

No. of shares %NTPC Ltd. 1,172,613,850 74.0 1,172,613,850 74.0 1,172,613,850 74.0

Ministry of Railways 412,000,000 26.0 412,000,000 26.0 412,000,000 26.0

12. Other equity` Lakhs


As at 31.03.2016

As at 01.04.2015

Share application money pending allotment 24,793.00 1,564.00 -

Retained earnings 4,445.02 3,679.11 3,681.66

Total 29,238.02 5,243.11 3,681.66

For the year ended 31.03.2017 31.03.2016

a) Share application money pending allotment Reconciliation

Opening balance 1,564.00 -

Add: Share application money received during the year 24,793.00 1,564.00

Less: Shares application money refunded 1,564.00 -


Share application money pending allotment has been received from

NTPC Ltd. 24,793.00 1,564.00

24,793.00 1,564.00 The shares are likely to be allotted in the financial year 2017-18. The authorised share capital of the company is sufficient to cover the share capital amount on allotment of shares out

of the above share application money. No amount is refundable out of above share application money and no interest is payable.


219

A Maharatna Company

` Lakhs

For the year ended 31.03.2017 31.03.2016

b) Retained earnings

Opening balance 3,679.11 3,681.66

Add: Profit/ (Loss) for the year from Statement of Profit and Loss 765.91 (2.55)


13. Non current liabilities -Borrowings

` Lakhs


As at 31.03.2016

As at 01.04.2015

Term loans

From Others

Secured

Rupee loans 453,947.70 394,149.73 304,289.04

Less: Interest Accrued 6,456.12 5,306.57 4,471.81

Total 447,491.58 388,843.16 299,817.23

a) Secured by Equitable mortgage/hypothecation of all present and future fixed and movable assets of Nabinagar TPP (4x250 MW), as first charge, ranking pari pasu with charge created with PFC and with REC.

b) The company has initial term loan facility of ` 3,74,675.00 lakhs (PFC : ` 2,24,800.00 lakhs + REC: ` 1,49,875.00 lakhs). The company has fully utilised the borrowing limit. Interest on initial term loan is payable at the applicable three year “AAA” Bond yield rate plus agreed margin. The Moratorium period for the project is up to 6 months from the COD of the station. The facility is available for a period of 48 months from the date of documentation or till the actual completion of the project plus 06 months (moratorium period), whichever is earlier. The repayment schedule is for a period of 15 years, beginning after 06 months from COD of the station, in 60 quarterly instalments.”

c) The company has 2nd term loan agreement of ` 25,325.00 lakhs from PFC. The company has fully utilised the borrowing limit. The interest rate on this facility is @ 9.36% p.a. with repayment schedule of 15 years, beginning after 06 months from COD of the station, in 60 quarterly instalments.

d) The company has taken 3rd term loan of ` 1,59,860.00 lakhs from PFC. The company has drawn ` 47,491.58 lakhs from this facility of loan till 31st March 2017. The interest rate on this facility is @ 9.36% p.a. with repayment schedule of 15 years, beginning after 06 months from COD of the station, in 60 quarterly instalments.

e) There has been no defaults in repayment of the loan or interest thereon as at the end of the year.

f) Rupee Loan has been fair valued at Amortised cost along with interest accrued thereon and thereafter accrued portion has been disclosed in other current financial liabilities.

14. Non-current liabilities - Other financial liabilities

` Lakhs


As at 31.03.2016

As at 01.04.2015

Other liabilities


Total 3,777.88 8,546.00 13,412.91

a) Payable for capital expenditure represents liability towards equipment supplier and erection vendors pending evaluation of performance and guarantee test results.

b) Refer Note No. 27 for amounts due to related party.


220

A Maharatna Company

15. Current liabilities - Trade payables

` Lakhs


As at 31.03.2016

As at 01.04.2015

For goods and services 2,982.57 6.099.17 6,336.59

a) Refer Note No. 27 for amounts due to related party.

b) Information in respect of micro and small enterprises as at 31st March 2017 is disclosed in Note 40.

16. Current liabilities - Other financial liabilities` Lakhs


As at 31.03.2016

As at 01.04.2015


Interest accrued but not due on borrowings 6,456.12 5,306.57 4,471.81

Other payables

Deposits from contractors 111.40 39.68 57.60

NTPC Ltd 1,239.35 638.33 418.39

Ministry of Railways - - 13.03


Others 125.10 84.74 51.90

Total 56,895.73 49,189.36 30,835.77

a) Revision of pay scales of the employees of the NTPC Limited posted on secondment basis to the company is due w.e.f 1st January 2017. Pending acceptance of the recommendations of the 3rd Pay Revision Committee of Department of Public Enterprises, provision of ` 181.63 lakhs (previous year Nil) towards the payments due to the employees of NTPC Ltd. has been made on an estimated basis.

b) Payable for capital expenditure represents liability towards equipment supplier and erection vendors pending evaluation of performance and guarantee test results.

c) Other payables - others include stale cheque, administration expenses payable etc.

d) Refer Note No. 27 for amounts due to related party.

17. Current liabilities - Other current liabilities` Lakhs


As at 31.03.2016

As at 01.04.2015

Other payables Tax deducted at source and other statutory dues 562.59 277.96 186.34 Others* 68.20 - -Total 630.79 277.96 186.34

* Others includes material received on loan.

18. Current liabilities - Provisions` Lakhs


As at 31.03.2016

As at 01.04.2015

Provisions for obligations incidental on acquisition 11,947.68 11,281.95 11,017.63

Shortages in fixed assets pending investigation 0.80 0.80 0.43

Total 11,948.48 11,282.75 11,018.06


221

A Maharatna Company

Disclosure as per Indian Accounting Standard AS 37 on ‘Provisions, Contingent Liabilities and Contingent Assets’

Movements in provisions:` Lakhs


As at 31.03.2016

Provisions for obligations incidental on land acquisitionCarrying amount at the beginning of the year 11,281.95 11,017.63Add: Additions during the year 701.21 264.32Less: Amounts used during the year 35.48 -Less: Reversal / adjustments during the year - -Carrying amount at the end of the year 11,947.68 11,281.95

Shortages in fixed assets pending investigationCarrying amount at the beginning of the year 0.80 0.42Add: Additions during the year - 0.38Less: Amounts used during the year - -Less: Reversal / adjustments during the year - -Carrying amount at the end of the year 0.80 0.80

Provision for obligations incidental to land acquisition includes expenditure on rehabilitation & resettlement (R&R) including the amounts payable to the project affected persons (PAPs) towards land, expenditure for providing community facilities and expenditure in connection with environmental aspects of the project. Company has estimated the provision based on the Rehabilitation Action Plan (RAP) approved by the board/competent authority. The outflow of said provision is expected to be incurred immediately on fulfilment of conditions by the land oustees/ receipts of directions of the local/government authorities.

18A. Current liabilities - current tax liabilities (net)` Lakhs


As at 31.03.2016

As at 01.04.2015

Current tax (net of advance tax) 191.36 - -

19. Regulatory deferral account credit balances` Lakhs


As at 31.03.2016

As at 01.04.2015

Exchange differences 659.06 506.91 121.41

Regulatory deferral account balances have been accounted in line with Accounting policy no. C.4. Refer Note 30 for detailed disclosures.

20. Revenue from operations` Lakhs


31.03.2017

For the year ended

31.03.2016Energy sales (including electricity duty) 8,686.67 –

Energy sales represents fixed charge bill of ` 8,686.67 lakhs on East Central Railway (` 7,818.00 lakhs), North Bihar Power Distribution Company Limited (` 364.84 lakhs) and South Bihar Power Distribution Company Limited (` 503.83 lakhs) after Commercial Operation Date (COD) based on Declared Capacity (DC).


222

A Maharatna Company

21. Other Income` Lakhs


31.03.2017

For the year ended

31.03.2016Interest from Contractors 66.20 267.00 Others (refer note a below) 24.96 6.12Other non-operating income Net gain in foreign currency transactions & translations 152.16 385.49 Miscellaneous income (refer note b below) 52.61 72.87 Profit on disposal of Fixed Assets 0.07 0.03

296.00 731.51Less: Transferred to expenditure during construction period (net)- Note 25 103.29 345.99Total 192.71 385.52

a) Interest from other includes interest on Income Tax refund.b) Miscellaneous income includes income from Hire Charges, rent received, EMD forfeited etc.

22. Employee Benefit Expense` Lakhs


31.03.2017

For the year ended

31.03.2016Salaries and wages 3,194.33 2,222.95Contribution to provident and other funds 671.19 542.05Staff welfare expenses 277.79 263.77

4,143.31 3,028.77Less: Transferred to expenditure during construction period (net)- Note 25 3,289.86 3,027.85

Total 853.45 0.92

In accordance with Accounting Policy no. C.13 (Note 1), an amount of ` 514.74 lakhs (previous year ` 417.03 lakhs) towards provident fund, pension, gratutity, post retirement medical facilities & other terminal benefits and ` 112.10 lakhs (previous year ` 114.13 lakhs) towards leave & other benefits, are paid /payable to the holding company (NTPC Ltd) and included in ‘Employee Benefits’.In accordance with Accounting Policy no. C.13 (Note 1), an amount of ` 8.54 lakhs (previous year ` 7.33 lakhs) towards provident fund, pension, gratutity, post retirement medical facilities & other terminal benefits and ` 0.48 lakhs (previous year ` 3.56 lakhs) towards leave & other benefits, are paid /payable to the other promoting partner (Indian Railways) and included in ‘Employee Benefits’.

23. Finance Costs

` Lakhs


31.03.2017

For the year ended

31.03.2016Interest Rupee term loans 44,869.97 38,348.21 Less: Interest on short term deposits 177.32 189.92

44,692.65 38,158.29 Financial liabilities measured at amortised cost- Vendor liabilities 1,555.21 2,256.18 Interest on Income Tax 12.60 -

46,260.46 40,414.47Less: Transferred to expenditure during construction period (net) - Note 25 43,317.50 40,414.47Total 2,942.96 -


223

A Maharatna Company

24. Other Expenses` Lakhs


31.03.2017

For the year ended

31.03.2016Power charges 3,991.23 4,085.57 Less: Recovered from contractors & employees

5.90 5.02

3,985.33 4,080.55 Water Charges 347.53 - Rent 6.85 18.10 Repairs & maintenanceBuildings 165.58 93.37 Machinery 115.70 36.28 Others 592.78 166.12 Insurance 118.96 2.34 License Fee 22.25 2.80 Training & recruitment expenses 2.96 0.71 Communication expenses 46.36 50.66 Inland Travel 165.11 182.75 Foreign Travel 0.46 0.44 Tender expenses 36.55 34.46 Less: Receipt from sale of tenders 0.51 0.48

36.04 33.98 Payment to auditors 1.00 0.57 Advertisement and publicity 11.49 1.71 Security expenses 791.98 894.00 Entertainment expenses 21.76 30.71 Expenses for guest house 5.20 0.45 Less: Recoveries 0.31 0.03

4.89 0.42 Books and periodicals 0.06 0.11 Professional charges and consultancy fee 144.43 1.11 Legal expenses 29.02 8.11 EDP hire and other charges 6.76 8.98 Printing and stationery 14.59 11.68 Hire charge of vehicles 216.88 163.98 Bank charges 4.47 7.49 Miscellaneous expenses 610.29 213.01 Loss on disposal/write-off of fixed assets - 0.56

7,463.53 6,010.54 Less: Transferred to expenditure during construction period (net) - Note 25 6,346.85 6,009.28 Provision for shortage in fixed assets - 0.38

1,116.68 1.64 a) Miscellaneous expenses includes

Horticulture expenses, hiring of DG set etc.

b) Details in respect of payment to auditors:

Audit fee 1.00 0.50 Reimbursement of service tax - 0.07 Total 1.00 0.57

c) Repairs & maintenance: machinery includes inventories others recognised as expense during the year amounting to ` 26.80 Lakh (Previous Year nil)


224

A Maharatna Company

25. Expenditure During Construction Period (net)` Lakhs


31.03.2017

For the year ended

31.03.2016A. Employee benefits expense Salaries and wages 2,501.17 2,222.03 Contribution to provident and other funds 568.17 542.05 Staff welfare expenses 220.52 263.77 Total (A) 3,289.86 3,027.85 B. Finance costs Interest on Rupee term loans 41,939.61 38,348.21 Less: Interest on short term deposits 177.32 189.92 Unwinding of discount on account of vendor liabilities 1,555.21 2,256.18 Total (B) 43,317.50 40,414.47 C. Depreciation and amortisation 601.30 634.02 D. Generation, administration & other expenses Power charges 3,885.78 4,080.56 Water charges 347.53 - Rent 4.53 18.10 Repairs & maintenance Buildings 105.82 93.38 Machinery 44.72 5.03 Others 289.97 197.72 Insurance 1.70 2.35 License Fee 22.25 2.80 Communication expenses 37.77 50.66 Travelling expenses 126.30 183.19 Tender expenses 23.80 33.98 Payment to auditors 0.03 0.57 Advertisement and publicity 3.26 1.71 Security expenses 622.11 894.00 Entertainment expenses 15.74 30.71 Expenses for guest house 2.69 0.42 Books and periodicals 0.02 0.11 Professional charges and consultancy fee 27.66 1.10 Legal expenses 28.46 8.11 EDP Hire and other charges 3.09 8.98 Printing and stationery 13.12 11.68 Hiring of vehicles 182.97 163.97 Bank charges 2.90 7.49 Miscellaneous expenses 554.63 212.66 Total (D) 6,346.85 6,009.28 E. Less: Other income Contractors 64.84 273.12 Miscellaneous income 38.45 72.87 Total (E) 103.29 345.99 Grand total (A+B+C+D-E) 53,452.22* 49,739.63*

* Carried to Capital work-in-progress - (Note 3)


225

A Maharatna Company

26. First-time Adoption of Indian Accounting Standard (Ind AS)

The company has prepared its first Financial Statements in accordance with Ind AS for the year ended 31 March 2017. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The effective date for Company’s Ind AS Opening Balance Sheet is 1 April 2015 (the date of transition to Ind AS).

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS Balance Sheet at 1 April 2015 (the Company’s date of transition). According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles must be applied retrospectively to the date of transition to Ind AS and for all periods presented within the first Ind AS Financial Statements.

Any resulting differences between carrying amounts of assets and liabilities according to Ind AS 101 as of 1 April 2015 compared with those presented in the Indian GAAP Balance Sheet as of 31 March 2015, were recognized in equity under retained earnings within the Ind AS Balance Sheet.



In the Ind AS Opening Balance Sheet as at 1 April 2015, the carrying amounts of assets and liabilities from the Indian GAAP as at 31 March 2015 are generally recognized and measured according to Ind AS in effect as on 31 March 2017. For certain individual cases, however, Ind AS 101 provides for optional exemptions and mandatory exceptions to the general principles of retrospective application of Ind AS. The Company has made use of the following exemptions and exceptions in preparing its Ind AS Opening Balance Sheet:

i) Property, plant and equipment & Intangible assets

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38, Intangible Assets. Accordingly, the company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

ii) Long term foreign currency monetary items

The Company has elected to continue the policy adopted for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period as per the Indian GAAP.

Reconciliation of equity as at 1 April 2015 and as at 31 March 2016` Lakhs




ASSETSNon-current assetsProperty, plant and equipment 34.a 37,862.23 - 37,862.23 47,798.18 - 47,798.18Capital work in progress 34.a, (a) 450,263.52 - 450,263.52 537,069.41 1,875.14 538,944.55Other Intangible assets 1.05 - 1.05 5.30 - 5.30Financial assets


226

A Maharatna Company




Loans - - - - - - Other non-current assets 24,824.63 - 24,824.63 26,554.64 - 26,554.64Current AssetsFinancial assets Cash and cash equivalents 9,399.46 - 9,399.46 12,208.46 - 12,208.46 Loans - - - - - - Other current assets 1,520.47 - 1,520.47 2,938.68 - 2,938.68Total Assets 523,871.36 - 523,871.36 626,574.67 1,875.14 628,449.81EQUITY & LIABILITIESEquityEquity Share capital 158,461.39 - 158,461.39 158,461.39 - 158,461.39Other equity (a) (79.77) 3,761.43 3,681.66 1,481.69 3,761.42 5,243.11LiabilitiesNon-current liabilitiesFinancial liabilities Borrowings 299,817.23 - 299,817.23 390,729.44 (1,886.28) 388,843.16 Other financial liabilities 34.b, (a) 17,174.34 (3,761.43) 13,412.91 8,546.00 - 8,546.00Other non-current liabilities - - - - - -Rate regulated asets/(liabilities) 121.41 - 121.41 506.91 - 506.91Current liabilitiesFinancial liabilities Trade payables 34.b 6,336.59 - 6,336.59 6,099.17 - 6,099.17 Other financial liabilities 34.b 30,835.77 - 30,835.77 49,189.36 - 49,189.36Other current liabilities 186.34 - 186.34 277.96 - 277.96Provisions 11,018.06 - 11,018.06 11,282.75 - 11,282.75Total equity and liabilities 523,871.36 (0.00) 523,871.36 626,574.67 1,875.14 628,449.81


Reconciliation of profit for the year ended 31 March 2016

` in LakhsNote Previous GAAP* Adjustments Ind ASs

INCOME Other income 385.52 - 385.52 Total Income 385.52 - 385.52 EXPENDITURE Employee benefits expense 0.92 - 0.92 Finance expenses a - - - Depreciation and amortization 0.02 - 0.02 Generation, Administration and Other expenses 1.64 - 1.64 Total Expenses 2.58 - 2.58 Profit before tax and Rate Regulated Activities(RRA) 382.94 - 382.94 Add: Regulatory Income/(Expense) (385.49) - (385.49) Profit before tax (2.55) - (2.55) Profit after tax (2.55) - (2.55) Other comprehensive income for the year - - - Total comprehensive income for the year (2.55) - (2.55)* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.


227

A Maharatna Company


` Lakhs

Note 31 March 2016 1 April 2015


Adjustments:

Recognition of financial assets/liabilities at amortised cost a 3,761.42 3,761.42



(a) Financial liabilities Under Indian GAAP, liabilities such as payable for capital expenditure are recorded at cost. However, under Ind AS, liabilities in which the Company has a contractual obligation to deliver cash are classified as

financial liabilities and recorded at amortized cost. Therefore, such financial liabilities have been discounted to present value since they do not carry any interest. The upfront benefit on transition date due to the discounting has been adjusted against the retained earnings. Further, interest cost on unwinding of discount has been capitalized to the cost of property, plant and equipment where such interest cost can be capitalized in accordance with Ind AS 23 ‘Borrowing cost’ otherwise charged off to statement of profit or loss.

The effect of the adjustments resulted in reduction of the value of financial liabilities by ` 3,761.42 lakhs along with corresponding increase in retained earnings as on the transition date. During the year ended 31st March 2016, value of financial liabilites was reduced by ` 1,875.14 lakhs by corresponding increase in statement of profit and loss (Finance Cost) by ` 2,256.18 lakhs and reduction in Capital Work In Progress by ` 381.04.

Finance Cost has been capitalised being expenditure during construction period.(b) Statement of cash flows The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.27. Disclosure as per Indian Accounting Standard - 24 on ‘Related Party Disclosures’

a) List of Related parties: i) Parent Company: NTPC Limited ii) Key Managerial Personnel (KMP): Shri Subhash Chandra Pandey Non-Executive Chairman Shri Sudhir Garg Non-Executive Director Shri Karan Singh Garbyal Non-Executive Director Ms. Sangeeta Bhatia Non-Executive Director Shri K.K. Singh Chief Executive Officer (Apr-15 to 26-Apr-15) Shri Rajkumar Chief Executive Officer (27-Apr-15 to 17-Jul-16) Shri C Sivakumar Chief Executive Officer w.e.f. 18-Jul-16 Shri Dipankar Nandy Chief Finance Officer w.e.f. 25-Jun-15

iii) Joint Venture of parent company: Utility Powertech Ltd.iv) Entities under the control of the same government: The Company is a subsidiary of Central Public Sector Undertaking (CPSU) controlled by Central Government

by holding majority of shares (refer Note 8). Pursuant to Paragraph 25 & 26 of Indian Accounting Standard 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. The Company has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Company has significant transactions include but not limited to Central Coalfields Ltd., BHEL Ltd., SAIL Ltd., Indian Oil Corporation Ltd., Bharat Petroleum Corporation Ltd., NBCC Ltd, ERLDC, PGCIL, Rashtriya Ispat Nigam Ltd, Rites Limited, Durgapur Chemicals Ltd, Bridge And Roof Co. (India) Ltd., Central Industrial Security Forces, etc.


228

A Maharatna Company


` Lakhs

i) Transaction with Parent Company


31.03.2017

For the year ended

31.03.2016

Consultancy services received 106.54 91.58

Equity contribution received 24,793.00 1,564.00

Equity contribution refunded 1,564.00 0.00

Deputation of Employees 533.31 98.54

` Lakhs

ii) Compensation to Key Managerial Personnel


31.03.2017

For the year ended

31.03.2016

Short term employee benefits 76.43 108.53

Post employment benefits 15.96 16.84

iii) Transactions with joint ventures of parent company

` Lakhs

Name of Company Nature of Transaction For the year ended

31.03.2017

For the year ended

31.03.2016

Utility Powertech Ltd. Operation and maintenance services 539.39 299.91

iv) Transactions with the related parties under the control of the same government` Lakhs

Name of Company Nature of Transaction For the year ended

31.03.2017

For the year ended

31.03.2016

BHEL Ltd. Procurement & erection of plant & machinery

12,280.74 14,093.25

Power Grid Corporation Of India Ltd. Transmission charges paid 3,787.90 4,303.77

SAIL Ltd. Purchase of capital goods 3,052.60 4,533.47

Central Coalfields Ltd. Purchase of coal 2,317.63 -

Rites Limited Deposit Work for Coal transportation system

5,960.80 1,132.10

National Buildings Construction Corporation Ltd.

Civil construction 2,329.80 -

The Oriental Insurance Company Ltd. Insurance services 119.34 1.76

Hindustan Petroleum Corporation Ltd. Puchase of fuel 424.74 -

Bridge And Roof Co. (India) Ltd. Purchase of capital goods 42.64 154.00

BEML Ltd. 53.55 453.24


229

A Maharatna Company


` Lakh


Amount payable to parent company

NTPC Ltd. 1,239.35 638.33 418.39

Amount payable to joint venture of parent company

Utility Powertech Ltd. 145.87 43.23 23.42

Amount recoverable from government related entities

Bharat Heavy Electricals Ltd. Capital Advance

3,194.30 13,948.20 12,245.57

Bharat Heavy Electricals Ltd. Others - - 135.75

Rites Limited Capital Advance

107.91 1,065.70 824.20

Steel Authority Of India Ltd. Capital Advance

- 325.81 1,011.51

Central Coalfields Ltd. Capital Advance

68.30 102.40 -

Central Coalfields Ltd. Others 14.26 177.60 -

Hindustan Petroleum Corporation Ltd. Others 122.02 - -

The Oriental Insurance Co. Others 163.53 - -

BEML Capital Advance

- - 2.66

BEML Others 2.10

Rashtriya Ispat Nigam Ltd. Capital Advance

- 12.20 12.20

Bharat Sanchar Nigam Ltd. Others - 0.23 0.18

National Safety Council Others - - 0.85

Bharat petroleum Corporation Ltd. Capital Advance

310.30 - -

Bharat petroleum Corporation Ltd. Others 277.31 593.53 48.23

Amount payable to government related entities

Bharat Heavy Electricals Ltd. 28,458.33 37,277.16 34,153.20

Rites Limited 1,196.84 12.17 12.17

Power Grid Corporation Of India Ltd. 6.36 183.45 293.09

Steel Authority Of India Ltd. 145.73 203.37 155.14

National Buildings Construction Corporation Ltd. 726.63 - -

Hindustan Petroleum Corporation Ltd. 4.05 - -

The Oriental Insurance Co. - 2.35 -

BEML 0.34 447.94 0.09

Bridge And Roof Co. (India) Ltd. 2.11 89.61 47.68

Bharat Sanchar Nigam Ltd. 6.24 0.42 -

Bharat petroleum Corporation Ltd. 8.02 - -


230

A Maharatna Company

d) Terms and conditions of transactions with the related parties

(1) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

(2) The Company is assigning jobs on contract basis, for sundry work in plant to M/s Utility Powertech Ltd (UPL), a 50:50 joint venture between NTPC LImited and Reliance Infrastructure Ltd. UPL inter-alia undertakes jobs such as overhauling, repair, refurbishment of various mechanical and electrical equipments of plant. The Company has entered into Power Station Maintenance Agreement with UPL from time to time. The rates are fixed on cost plus basis after mutual discussion and after taking into account the prevailing market conditions.

(3) NTPC Limited is seconding its personnel to the company as per the terms and conditions agreed between the companies, which are similar to those applicable for secondment of employees to other companies and institutions. The cost incurred by NTPC Limited towards superannuation and employee benefits are recovered from the company.


(a) Financial instruments by category

All financial assets and liabilities viz. cash and cash equivalents, trade payables, interest accrued but not due on borrowings, employee related liabilities, payable to related parties, deposits from contractors and suppliers and payable for expenses are measured at amortized cost.

(b) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

` LakhsLevel 2

Liabilities which are measured at amortised cost for which fair values are disclosed

31 March 2017

31 March 2017

1 April 2015

Financial liabilities:Rupee Term Loan* 500,295.00 422,907.00 323,983.00 Payable for capital expenditure* 52,065.02 51,207.68 38,541.44 Total 552,360.02 474,114.68 362,524.44

* Above fair values are based on the KPMG valuation report.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Fair value of financial assets and liabilities measured at amortised cost` Lakhs


Carrying amount



Fair value


Rupee term loans 447,491.58 500,295.00 388,843.16 422,907.00 299,817.23 323,983.00

Payable for capital expenditure

52,134.81 52,065.02 51,427.17 51,207.68 39,052.98 38,541.44

499,626.39 552,360.02 440,270.33 474,114.68 338,870.21 362,524.44

The carrying amounts of short term trade payables, capital creditors, interest accrued but not due on borrowings, employee related liabilities, payable to related parties, deposits from contractors and suppliers and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.

The fair values for Rupee term loans and payable for capital expenditure were calculated based on cash flows discounted using a current lending rate. They are classified as level 2 fair values in the fair value hierarchy due to the inclusion of unobservable inputs.


231

A Maharatna Company


The Company’s principal financial liabilities comprise loans in domestic currency and payables for capital expenditure. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include cash and short-term deposits.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk


Credit risk


Trade receivables and unbilled revenue

The Company primarily sells electricity to bulk customers comprising, mainly railways owned by central governent and state electrical utilities owned by State Government. The risk of default in case of power supplied to these state owned companies is considered to be insignificant. A default occurs when in the view of management there is no significant possibility of recovery of receivables after considering all available options for recovery.

Cash and cash equivalents and Deposits with banks

The company has banking operations with State Bank of India which is a scheduled banks and owned by Government. The risk of defalut with state controlled entities is considered to be insignificant.

(i) Exposure to credit risk


` Lakhs


31 March 2016

1 April2015

Financial assets for which loss allowance is measured using Lifetime Expected Credit Losses (ECL)

Trade Receivable 5,277.98 - -

Other financial assets (Unbilled Revenue) 3,408.69 - -


Cash and cash equivalent 541.49 12,208.46 9,399.46

Total 9,228.16 12,208.46 9,399.46

(ii) Provision for expected credit losses

Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Hence based on historic default rates, the Company believes that, no impairment allowance is necessary in respect of above mentioned financial assets.


232

A Maharatna Company

Financial assets for which loss allowance is measured using life time expected credit losses

The Company has customers (State government utilities) with capacity to meet the obligations and therefore the risk of default is negligible or nil. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. Hence, no impairment loss has been recognised during the reporting periods in respect of trade receivables.

(iii) Ageing analysis of trade receivables ` Lakhs


31-60 days past due

61-90 days past due


Total

31 March 2017 - 3,408.69 1,869.29 - - 5,277.98

31 March 2016 - - - - - -

1 April 2015 - - - - - -

Liquidity risk


The Company has an appropriate liquidity risk management framework for the management of short, medium and long term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

The Company’s treasury department is responsible for managing the short term and long term liquidity requirements of the Company. Short term liquidity situation is reviewed daily by Treasury. The Board of directors has established policies to manage liquidity risk and the Company’s treasury department operates in line with such policies.Any breaches of these policies are reported to the Board of Directors. Long term liquidity position is reviewed on a regular basis by the Board of Directors and appropriate decisions are taken according to the situation.

Typically the Company ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations, this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.



` Lakhs


31 March 2016

1 April2015

Floating-rate borrowings

Term loans 105,912.30 5,850.27 70,385.96


233

A Maharatna Company



31 March 2017

` Lakhs



3 months or less

3-12 months 1-2 years 2-5 years More than 5 years

Total


Rupee Term Loan - - - 89,498.32 357,993.26 447,491.58

Trade Payables 2,982.57 - - - - 2,982.57

Payable for Capital Expenditure 44,768.33 3,588.62 4,419.15 - - 52,776.10

Interest accrued but not due on borrowings

6,456.12 - - - - 6,456.12


111.40 - - - - 111.40


Payable to related parties 1,239.35 - - - - 1,239.35

Others 125.10 - - - - 125.10

Total 56,289.70 3,588.62 4,419.15 89,498.32 357,993.26 511,789.05

31 March 2016

` Lakhs



3 months or less


Total


Rupee Term Loan - - - 51,845.76 336,997.40 388,843.16

Trade Payables 6,099.17 - - - - 6,099.17

Payable for Capital Expenditure* 36,354.35 6,526.82 8,595.97 1,836.31 - 53,313.45


5,306.57 - - - - 5,306.57


39.68 - - - - 39.68

Payable to related parties 638.33 - - - - 638.33


Others 84.74 - - - - 84.74

Total 48,761.71 6,526.82 8,595.97 53,682.07 336,997.40 454,563.97


234

A Maharatna Company

1 April 2015

` Lakhs



3 months or less


Total


Rupee Term Loan - - - 19,987.82 279,829.41 299,817.23

Trade Payables 6,336.59 - - - - 6,336.59

Payable for Capital Expenditure* 22,070.50 3,569.55 8,696.68 8,477.66 - 42,814.40


4,471.81 - - - - 4,471.81


57.60 - - - - 57.60

Payable to related parties 431.42 - - - - 431.42


Others 51.90 - - - - 51.90

Total 33,602.79 3,569.55 8,696.68 28,465.48 279,829.41 354,163.92

* Payable for Capital Expenditure is inclusive of finance cost on account of winding up of long term liabilities

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Board of directors is responsible for setting up of policies and procedures to manage market risks of the company.

Interest rate risk

The Company is exposed to interest rate risk arising from long term borrowing with floating interest rate. The Company is exposed to interest rate risk because the cash flows associated with floating rate borrowing will fluctuate with changes in interest rate.

Refer Note 10 for interest rate profile of the Company’s interest-bearing financial instrument at the reporting date.


A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for the previous year.

Profit and Loss

31 March 2017 31 March 2016

Particulars 100 bp increase 100 bp decrease 100 bp increase 100 bp decrease

Rupee term loans (4,154.06) 4,154.06 (3,746.54) 3,746.54

Currency risk

The Company executes import agreements for the purpose of purchase of capital goods. Upto the date of commercial operation, the company capitalise the exchange gain/loss on account of re-instatement/actual payment of the vendor liabilities. Such capital cost is allowed by CERC as recovery from beneficiaries. If any exchange gain/loss arise after the date of commercial operation the same will also be recovered from beneficiary as part of rate regulated asset. Hence there is no risk in case of foreign exchange gain/loss on long term foreign currency monetary items. The exposure in case of foreign exchange gain/loss on short term foreign currency monetary items is considered to be insignificant.


235

A Maharatna Company

The currency profile of financial liabilities as at March 31, 2017, March 31, 2016 and April 1, 2015 are as below:

31 March 2017` Lakhs

Particulars USD EURO Total31 March 2017Payable for Capital ExpenditureIn foreign currency 0.98 126.56 127.53 In INR 64.35 8,922.19 8,986.55

31 March 2016Payable for Capital ExpenditureIn foreign currency 21.91 1,316.32 1,338.23 In INR 1,465.88 99,947.88 101,413.76

31 March 2015Payable for Capital ExpenditureIn foreign currency 10.17 12,674.11 12,684.28 In INR 642.61 868,937.12 869,579.73

Sensitivity analysis

A strengthening of the Indian Rupee, as indicated below, against the USD and Euro at 31 March would have increased (decreased) equity and profit before tax by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for previous year, except that the reasonably possible foreign exchange rate variances were different, as indicated below.

Profit before Tax ` Lakhs


Strengthening Weakening Strengthening Weakening

USD 6.44 (6.44) 146.59 (146.59)

EURO 892.22 (892.22) 9,994.79 (9,994.79)

Total 898.66 (898.66) 10,141.38 (10,141.38)

30. Disclosure as per Indian Accounting Standard 114 on ‘Regulatory Deferral Accounts’

(i) Nature of rate regulated activities

The Company is mainly engaged in generation and sale of electricity. The price to be charged by the Company for electricity sold to its customers is determined by the Central Electricity Regulatory Commission (CERC) which provides extensive guidance on the principles and methodologies for determination of the tariff for the purpose of sale of electricity. The tariff is based on allowable costs like interest, depreciation, operation & maintenance expenses, etc. with a stipulated return. This form of rate regulation is known as cost-of-service regulations which provide the Company to recover its costs of providing the goods or services plus a fair return.

The Company is eligible to apply Indian Accounting Standard 114, Regulatory Deferral Accounts. The standard permits an eligible entity to continue previous GAAP (Guidance Note on accounting for Rate Regulated Activities) accounting policy for its regulatory deferral account balances.

As per the CERC Tariff Regulations, any gain or loss on account of exchange risk variation during the construction period shall form part of the capital cost from declaration of Commercial Operation Date (COD) to be considered for calculation of tariff. CERC during the past period in tariff orders for various stations has allowed exchange differences incurred during the construction period in the capital cost. Accordingly, exchange difference arising during the construction period is within the scope of Indian Accounting Standard 114.


236

A Maharatna Company

Exchange differences arising from settlement/translation of monetary items denominated in foreign currency to the extent recoverable from the beneficiaries in subsequent periods as per CERC Tariff Regulations are recognized on an undiscounted basis as ‘Regulatory deferral account credit balance’ by credit/debit to ‘Movements in Regulatory deferral account balances’ during construction period and adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries.

(ii) Risks associated with future recovery of rate regulated assets:

(i) demand risk (for example, changes in consumer attitudes, the availability of alternative sources of supply or the level of competition)

(ii) regulatory risk (for example, the submission or approval of a rate-setting application or the entity’s assessment of the expected future regulatory actions)

(iii) other risks (for example, currency or other market risks).

(iii) Reconciliation of the carrying amounts:

Regulatory assets/(liability) recognized in the books to be recovered from or payable to beneficiaries in future periods are as follow:

` Lakhs

Particulars 31.03.2017 31.03.2016

Opening Balance 506.90 121.41

Addition during the year 152.16 385.49

Recovery / payment during the year

- -

Closing Balance 659.06 506.90

*Above balances have not been discounted.

The entity expects to reverse regulatory deferral account credit balance over the period of the project, i.e. 25 years.

31. Amount in the financial statements are presented in ` Lakhs (upto two decimals) except for per share data and as other-wise stated.

32. The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts and borrowings from banks & financial institutions. In addition, reconciliation with beneficiaries and other customers is generally done on quarterly basis. So far as trade/other payables and loans and advances

are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ‘External Confirmations’, were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact. In the opinion of the management, the value of assets, other than fixed assets, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

33. Sensitivity of estimates on provisions

The assumptions made for provisions relating to current period are consistent with those in the earlier years. The assumptions and estimates used for recognition of such provisions are qualitative in nature and their likelihood could alter in next financial year. It is impracticable for the company to compute the possible effect of assumptions and estimates made in recognizing these provisions.

34. Disclosure as per Indian Accounting Standard - 12 on ‘Income taxes’

a) Income Tax Expense

` Lakhs


31.03.2017

For the year ended

31.03.2016

Current tax expense

Current year 230.81 -

Pertaining to regulatory deferral accounts

(31.43) -

199.38 -

Deferred tax expense(MAT Credit entitlement)

Origination of temporary differences

(199.38) -

Add: Deferred liability for Rate Regulated Account

199.38 -

- -

Total income tax expense 199.38 -


237

A Maharatna Company

b) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate

` Lakhs


31.03.2017

For the year ended

31.03.2016

Profit before tax 965.29 (2.55)

Tax using the Company’s domestic tax rate of 33.063% (31 March 2016 - 30.90%) 319.15 -

Tax relating to origination and reversal of Timing difference

319.15 -

Less : Deferred Tax on account of reversal of depreciation during 80IA period

(319.15) -

Tax under normal provision of tax

But company is liable to pay tax under MAT

MAT Liabiltiy (Deferred Tax)

199.38 -

Tax Liability 199.38 -

c) The company has not recognized Deferred Tax Liability as the company is eligible for tax holiday u/s 80IA of Income Tax Act, 1961 and therefore depreciation difference reversing during the tax holiday period will be more than the net difference in WDV as on 31.03.2017.

35. Disclosure as per Indian Accounting Standard 17 on ‘Leases’

Operating leases

a) The Company’s significant leasing arrangements are in respect of operating leases of premises for residential use of employees, offices and guest houses/transit camps for a period of one to three years. These leasing arrangements are usually renewable on mutually agreed terms but are not non-cancellable.

b) Expenses (net) on operating lease of the premises for residential use of the employees amounting to `50.32 lakhs (Previous year `70.10 lakhs) are included in Note-22 Employee Benefits.

36. Disclosure as per Indian Accounting Standard 21 ‘The Effects of Changes in Foreign Exchange Rates’

The amount of exchange differences (net) credited

to the Statement of Profit & Loss is ` 152.16 lakhs (31 March 2016: ` 385.49 lakhs).

37. Disclosure as per Indian Accounting Standard 23 ‘Borrowing Costs’

Borrowing costs capitalised during the year is ` 43,494.83 lakhs (31 March 2016: ` 40,604.39 lakhs).

38. Disclosure as required by Schedule III of the Companies Act, 2013: vide notification No GSR 308(E) Dated 30.03.2017 issued by Ministry of Corporate Affairs for Demonetization

The company does not maintain cash book since it does not have any dealing in cash transactions.

Therefore, the company neither held nor transacted in Specified Bank Notes (SBN) during the period 08/11/2016 to 30/12/2016.

39. Disclosure as per Indian Accounting Standard 33 on ‘Earnings per Share’

Basic earnings per share

` Lakhs31 March 2017 31 March 2016

From operations including regulatory deferral account balances (a)

0.00 (0.00)

From regulatory deferral account balances (b)

(0.00) (0.00)

From operations excluding regulatory deferral account balances (a)-(b)

0.00 0.00

Diluted earnings per share

` Lakhs31 March 2017 31 March 2016


0.00 (0.00)


(0.00) (0.00)


0.00 0.00

Nominal value per share

10 10


238

A Maharatna Company

(a) Profit attributable to equity shareholders

` Lakhs

31 March 2017 31 March 2016


765.91 (2.55)


(152.16) (385.49)


918.07 382.94

(b) Weighted average number of equity shares

` Lakhs

31 March 2017 31 March 2016

Opening balance of issued equity shares

1,584,613,900 1,584,613,900

Effect of shares issued during the year, if any

- -

Weighted average number of equity shares for Basic EPS

1,584,613,900 1,584,613,900

31 March 2017 31 March 2016

Opening balance of issued equity shares

1,584,613,900 1,584,613,900

Effect of shares allotment money

99,658,438 2,528,110

Weighted average number of equity shares for Basic EPS

1,684,272,338 1,587,142,010

40. Disclosure as per Indian Accounting Standard 37 on ‘Provisions, Contingent Liabilities and Contingent Assets’

Contingent Liability

a) Demand notice received from the Commercial Tax Office, Aurangabad, Bihar for ` 590.30 lakhs (nil as on 31-Mar-2016 and nil as on 01-04-2015) on account of tax, penalty and interest under the Bihar VAT Act, 2005 for the FY 2013-14 & 2014-15. In the appeal filed by the company, the Commissioner of Commercial Taxes, Patna , in the order dated 17.03.2017, stay was given with order to deposit the amount of ` 300.00 lakhs on or before 25.03.2017. The same was deposited on time by the company. The case admitted in the hearing on 05-05-2017 and called for lower court record.

b) BRBCL has filed Income Tax Return for the Assessment Year 2014-15. The Assessing officer has disallowed Income from other sources of ` 540.38 lakhs (nil as on 31-Mar-2016 and nil as on 01-04-2015). Accordingly, department has imposed Tax Liability of ` 214.07 lakhs (nil as on 31-Mar-2016 and nil as on 01-04-2015). In the assessment, income from other sources has been considered as revenue in nature instead of capital in nature. BRBCL has filed an appeal against the assessment /fine/penalty to the commissioner of Income Tax Appeal-V New Delhi for settlement of the issue. However, the outcome is awaited. The total demand (net of Income Tax refund adjustment) amount is ` 186.24 lakhs including interest up to 31.03.2017.

c) BRBCL has filed Income Tax Return for the Assessment Year 2013-14. The Assessing officer has disallowed Income from other sources of ` 844.44 lakhs (` 844.44 lakhs as on 31-Mar-2016 and nil as on 01-04-2015). Accordingly, department has imposed Tax Liability of ` 288.65 lakhs (` 288.65 lakhs as on 31-Mar-2016 and nil as on 01-04-2015). Rectification order u/s-154 on 09.05.2016 has been passed which resulted in reduction of demand to ` 261.26 lakhs. In the assessment, income from other sources has been considered as revenue in nature instead of capital in nature. BRBCL has filed an appeal against the assessment /fine/penalty to the commissioner of Income Tax Appeal-V New Delhi for settlement of the issue. However, the outcome is awaited. The total demand (net of Income Tax refund adjustment) amount is ` 179.72 lakhs including interest up to 31.03.2017 (` 288.65 lakhs as on 31-Mar-2016 and nil as on 01-04-2015).

d) The Assessing officer of income tax had made an addition of ` 1,008.75 lakhs as Income from other sources for the assessment year 2012-13 (` 1,008.75 lakhs as on 31-Mar-2016 and ` 1,008.75 lakhs as on 01-04-2015). In the appeal filed by the company, the Commissioner of Income Tax (Appeal)-V had, in the order, deleted the addition made by assessing officer. The assessing officer has, however, filed appeal with the Appellate Tribunal against the deletion by the CIT Appeal. The total demand on account of deletion (net of Income Tax refund adjustment) amount to ` 526.36 lakhs including interest up to 31.03.2017 (` 509.10 lakhs as on 31-Mar-2016 and ` 443.13 lakhs as on 01-04-2015).

e) The Assessing officer of income tax had made an addition of ̀ 225.88 lakhs (` 225.88 lakhs as on 31-Mar-2016 and ` 225.88 lakhs as on 01-04-2015) as income from other sources for the assessment year 2011-12. In the appeal filed by the company, the Commissioner of Income Tax (Appeal)-V had, in the order, deleted the addition made by assessing officer. The assessing officer has, however,


239

A Maharatna Company

filed appeal with the Appellate Tribunal against the deletion by the CIT Appeal.The total demand on account of deletion amount to ` 94.03 lakhs including interest up to 31.03.2017 (` 86.03 lakhs as on 31-Mar-2016 and ` 77.11 lakhs as on 01-04-2015).

f) The work ‘Contract for residential quarter etc was awarded to a contractor. The contract was terminated due to poor progress in job. The Contractor has gone in arbitration with a claim of ` 184.42 lakhs (` 184.42 lakhs as on 31-Mar-2016 and ` 184.42 lakhs as on 01-04-2015) invoking arbitration under general condition contract for losses incurred by them during strike period. A claim has been sumbitted by the contractor amounting ` 5,442.01 lakhs before Learned sole Arbitrator on 30.11.2016. BRBCL also sumbitted counter claim amounting ` 8,447.79 lakhs on 28.02.2017.

g) The work ‘Contract for civil work and ash dyke’ was awarded to a contractor. The contract was terminated due to poor progress in job. The Contractor has gone in arbitration with a claim of ` 15,043.89 lakhs (` 15,043.89 lakhs as on 31-Mar-2016 and ` 15,043.89 lakhs as on 01-04-2015) invoking arbitration under general condition contract for losses incurred by them during strike period. As per the company’s contention, no claim is payable.

h) The work ‘Contract for Electrical equipments supply & erection package’ was awarded to a contractor. The Contractor demanded compensation of ` 329.58 lakhs (nil as on 31-Mar-2016 and nil as on 01-04-2015) on account of extended stay, overhead expenses and reimbursement of expenses incurred for establishing Temporary structure for beyond the original contract period.

i) Demand notice has been served by Asst.Commissioner of comercial taxes vide letter No 1663 dated 27th March 2015 for `558.74 lakhs (` 558.74 lakhs as on 31-Mar-2016 and ̀ 558.74 lakhs as on 01-04-2015) against Entry tax on materials procured from the agencies within the state but outside the Municipal limit of Nabinagar TPP. BRBCL did not accept the claim and Commercial tax authority had been informed that BRBCL had already deposited Works Contract Tax on a portion of the taxable amount and VAT on the other portion. The demand has not yet been withdrawn.

41. Disclosure in respect of amount due to micro and small enterprises

Information in respect of micro and small enterprises as at 31st March 2017 as required by Micro, Small and Medium Enterprises Development Act, 2006

` Lakhs

Particulars As at31.03. 2017#

As at31.03. 2016#

As at01.04.2015


Principal amount 507.04 371.75 -


b) Amount of interest paid in terms of Section 16 of the MSMED Act along-with the amount paid to the suppliers beyond the appointed day. - - -

c) Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under the MSMED Act. - - -


e) Amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises, for the purpose of disallowances as a deductible expenditure under Section 23 of MSMED Act - - -


240

A Maharatna Company





The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic and international financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The Company monitors capital, using a medium term view of three to five years, on the basis of a number of financial ratios generally used by industry and by the rating agencies. The Company is not subject to externally imposed capital requirements.

The Company monitors capital using gearing ratio which is net debt divided by total equity. Net debt comprises of long term and short term borrowings less cash and cash equivalent. Equity includes equity share capital and reserves that are managed as capital. The gearing ratio at the end of the reporting periods was as follows:

` Lakhs

Particulars 31.03.2017 31.03.2016

Total liabilities 453,947.70 394,149.73

Less : Cash and cash equivalent 541.49 12,208.46

Net debt 453,406.21 381,941.27

Total equity 158,461.39 158,461.39

Net debt to equity ratio 2.86 2.41

43. In order to conform current year’s classification the following comparative amounts have re-classified:

a) Change is on account of capital expenditure on assets not owned by the company to be capitalised once the project concerned asset became avaliable for intended use. Since the plant was not in operation as at April 01, 2015 hence been classified as CWIP.The same was already corrected in FY 2015-16.

` Lakhs

Particulars Ind AS Re-grouped

I GAAPReported

Difference

Tangible Fixed Assets 37,862.22 40,037.38 (2,175.16)

Capital Work in Progress 450,263.52 448,088.36 2,175.16

488,125.74 488,125.74 -

b) During transition to Indian Accounting Standards, it was observed that certain liabilities of contractors’ /other vendors were classified as non-current instead of current in the financial statements.The same has now been correctly reclassified as short term. This has resulted in reclassification of following heads:

As At 31st March 2016

` Lakhs


I GAAPReported

Payable for Capital Expenditure (Non-Current) 8,546.00 38,161.79

Trade Payable 6,099.17 239.09

Payable for Capital Expenditure (Current) 42,881.17 21,051.40

Deposits from Contractors 39.68 -

57,566.02 59,452.28


241

A Maharatna Company

As At 1st April 2015

` Lakhs


I GAAPReported

Payable for Capital Expenditure (Non-Current) 17,174.34 32,680.84

Trade Payable 6,336.59 23.15

Payable for Capital Expenditure (Current) 25,640.07 16,439.30

Deposits from Contractors 57.60 -

Other payable 51.90 117.20

49,260.50 49,260.49

44. Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’. The amendments are applicable to the company from April 1, 2017. The amendment to Indian Accounting Standard 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

45. Certain contracts of the company for construction of power plants with vendors awarded through ICB (International competitive bidding) which are denominated in third currency (i.e. a currency which is not the functional currency of any of the parties to the contract) are falling under the purview of guidance provided as per Indian Accounting Standard 109, ‘Financial instruments’ on derivatives and embedded derivatives. NTPC Limited (Promoter Company) has sought opinion from the Expert Advisory Committee (EAC) constituted by Institute of Chartered Accountants of India on the above matter. On receipt of opinion / clarification from EAC, company will account for such contracts.







242

A Maharatna Company

INDEPENDENT AUDITORS’ REPORTTo

The Members of BHARTIYA RAIL BIJLEE COMPANY LIMITED

This Audit Report supersedes our earlier report dated 16.05.2017 and is being revised as per the observation of the Comptroller and Auditor General of India (Refer (II) of ‘Emphasis of matter’).

Report on the Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of BHARTIYA RAIL BIJLEE COMPANY LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Standalone Ind AS financial statements”).

Management’s Responsibility for the Financial Statements

The Company’s company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income and cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015 (As amended).

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit.


We conducted our audit in accordance with the Standards

on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by company’s the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March, 2017 and its losses, cash flows and the changes in equity for the year ended on that date.

Emphasis of Matters


(i) On transition to Ind As, it was observed that certain liabilities of contractors’ /other vendors were classified as non-current instead of current in the financial statements.The same has now been reclassified as short term, refer note 43(b)to the financial statement.

(ii) The Company has not yet appointed whole time Company Secretary, as required under section 2013(1) of the Companies Act, 2013.

However, the management has assured to have full time Company Secretary in the current financial year.

Our report is not modified in respect of above matters.


243

A Maharatna Company

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure-1 a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

2. We are enclosing our report in terms of Section 143 (5) of the Act, on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, in the Annexure-2 on the directions and sub-directions issued by Comptroller and Auditor General of India.

3. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards (IND AS) specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2015 (As amended);

(e) Being a Government Company, pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the

Company and the operating effectiveness of such controls, refer to Annexure-3.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note-40 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

iii. There is no amount payable towards investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

iv. The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 38 to the financial statements.

For N.C. Aggarwal & Co.Chartered AccountantsFirm Reg. No.: 003273N

G. K. AggarwalPartner

Membership No. : 086622 Place: New Delhi

Date: 21st July, 2017


244

A Maharatna Company

Annexure-I

ANNEXURE - 1 TO INDEPENDENT AUDITORS’ REPORT

(Annexure referred to in our report of even date to the members of BHARTIYA RAIL BIJLEE COMPANY LIMITED on the accounts for the year ended 31st March, 2017)

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) A major portion of the fixed assets has been physically verified by the Management in accordance with a phased programmed of verification once in two years adopted by the company. In our opinion, the frequency of the verification is reasonable having regard to the size of the company and the nature of its assets. To the best of our knowledge, no material discrepancies have been noticed on such verification.

(c) As informed, the title deeds of all the immovable properties are held in the name of the Company.

2. As explained to us, the management during the year has physically verified inventories at reasonable interval and in respect of stores and spares, there is a perpetual inventory system and a substantial part of such stock has been verified during the year. However, stocks in the possession and custody of third parties and stock in transit as at 31st March 2017 have been verified by the management with reference to confirmation or statement of account or correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of verification is reasonable. The discrepancies noticed during physical verification of inventories as compared to book records were not material and the same have been properly dealt within the books of accounts.

3. According to the information and the explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, limited liability partnership or other parties covered in the register maintained under section 189 of the Companies Act 2013. Accordingly, the provisions of clause 3(iii)(a), 3(iii)(b) and 3(iii)(c) of the order are not applicable to the company and hence not commented upon.

4. The Company has not granted any loans or given any guarantee and security covered under Section 185

and 186 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iv) of the order are not applicable to the company and hence not commented upon.

5. According to the information given to us, the Company has not accepted any deposits under the provisions of section 73 to 76 of the Companies Act, 2013 or any other relevant provisions of the companies Act and the Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time. No order has been passed with respect to Section 73 to 76, by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal.

6. We have broadly reviewed the books of accounts and records maintained by the company pursuant to the rules made by the central government for the maintenance of cost records under section 148 (1) of the Companies Act, 2013 in respect of the company’s products and are of the opinion that, prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of records with a view to determine whether they are accurate or complete.

7. (a) Undisputed statutory dues including provident fund, employee’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as at 31st March, 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no material dues of sales tax, service tax, duty of customs, duty of excise, value added tax and cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of income tax and entry tax have not been deposited by the Company on account of disputes:


245

A Maharatna Company

Name of the statute Nature of dues Amount (in `) Period to which the amount relates

Forum where dispute is pending

Bihar Entry Tax Act Entry Tax 5,90,29,995 FY 2013-14 to FY 2014-15

Assistant Commissioner of Commercial Tax, Aurangabad

Income Tax Act, 1961

Income Tax 94,03,109 AY 2011-12 Income Tax Appellate Tribunal, New Delhi


Income Tax 5,26,35,577 AY 2012-13 Income Tax Appellate Tribunal, New Delhi


Income Tax 1,79,72,204 AY 2013-14 Commissioner of Income Tax (Appeal) New Delhi


Income Tax 1,86,24,233 AY 2014-15 Commissioner of Income Tax (Appeal) New Delhi

8. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions. There is no amount of dues to banks.

9. The Company has not raised any money by way of initial public offer or further public offer or debt instruments. According to the information and explanations given to us, the money raised by the Company by way of term loans have been applied for the purpose for which they were obtained.

10. According to the information and explanations given to us and as represented by the Management and based on our examination of the books and records of the Company and in accordance with generally accepted auditing practices in India, we have been informed that no case of frauds has been committed on or by the Company or by its officers or employees during the year.

11. As per notification no. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 is not applicable to the Government Companies. Accordingly, provisions of clause 3 (xi) of the Order are not applicable to the Company.

12. The company is not a Nidhi Company. Accordingly, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

13. The Company has complied with the provisions of Section 177 and 188 of the Companies Act, 2013 w.r.t.

transactions with the related parties, where applicable. Details of the transactions with the related parties have been disclosed in the financial statements under Note No. 27 as required by the applicable Indian accounting standards (IND AS).

14. The Company has not made any preferential allotment or private allotment of shares or fully or partly convertible debentures during the year. Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to the Company.

15. The Company has not entered into any non-cash transactions with the directors or persons connected with him as covered under Section 192 of the Companies Act, 2013.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India, 1934. Accordingly, provisions of clause 3 (xiv) of the Order are not applicable to the Company.






246

A Maharatna Company

Annexure-II

ANNEXURE - 2 TO INDEPENDENT AUDITORS’ REPORT(Referred to in paragraph (2) under the heading of ‘Report on other Legal and Regulatory Requirements’ of our report of even date for the year ended 31st March, 2017)

(1) Whether the Company has clear title/lease deeds for freehold and leasehold land respectively? If not, please state the area of the freehold and leasehold land for which title/lease deeds are not available.

Reply: As per the information and records, the Company is having clear title in respect of freehold land in possession of the Company. However, land of 117.74 acres is pending for mutation.

(2) Whether there are any cases of waiver/write off of debts/loans/ interest etc., if yes, the reasons thereof and the amount involved.

Reply: According to information and explanations given to us, there are no cases of waiver/write off of debts/loans/interest etc.

(3) Whether proper records are maintained for inventories lying with third parties & assets received as gift/grants from Govt. or other authorities?

As per the information and records, proper records are maintained by the Company for inventories lying with third parties. As informed to us the Company not received any assets/grants from as gift/grants from Govt. or other authorities.





Annexure referred to in our report of even date to the members of BHARTIYA RAIL BIJLEE COMPANY LIMITED on the accounts for the year ended 31st March, 2017

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Bhartiya Rail Bijlee Company Limited (“the Company”) as of 31st March, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.


The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company and the components of internal control stated in the Guidance Note on Audit of Internal Financial

Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to

Annexure - III

ANNEXURE-3 TO INDEPENDENT AUDITORS’ REPORT


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be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.



A Company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts

and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.



Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company and the components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.






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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF BHARTIYA RAIL BIJLEE COMPANY LIMITED FOR THE YEAR ENDED 31 MARCH 2017The preparation of financial statements of Bhartiya Rail Bijlee Company Limited for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their revised Audit Report dated 21 July 2017 which supersedes their earlier Audit Report dated 16 May 2017.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of Bhartiya Rail Bijlee Company Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to Statutory Auditors’ Report.



Ex-officio Member, Audit Board, Ranchi Place: Ranchi Date: 31st July, 2017

Subsidiary Company - Patratu Vidyut Utpadan Nigam Limited

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DIRECTORS’ REPORT

To

The Members,

Your Directors have pleasure in presenting 2nd Annual Report on the working & operations of the Company for the financial year ended on 31st March, 2017 together with Financial Statements, Auditors’ Report and Review by the Comptroller & Auditor General of India for the year ended 31st March, 2017.

IMPLEMENTATION, PROGRESS & OPERATION OF PATRATU THERMAL POWER STATION (PTPS)

Govt. of Jharkhand has notified “The Jharkhand State Electricity Reforms (Transfer of Patratu Thermal Power Station) Scheme 2015” on 1st April, 2016 for transfer of PTPS to PVUN. Status of various activities relating to existing units and expansion of the projects is given under:-

(i) For Existing Units

The Existing (De-rated) Capacity of 10 units of PTPS is 770 MW (4x40 + 2x90 + 2x105 + 2x110). At the time of takeover of Patratu TPS, only Unit 10 was operational and plant is under shut down since 24.01.2017. The decision for shutdown of plant was discussed and agreed to by all the stakeholders. In 2016-17, Unit-10 has generated 385.2 MU with PLF 40% and its availability was 85.15%.

Out of the above, Unit # 1, 2, 3, 5 & 8 were retired by PVUN and CEA has deleted these units from records of installed capacity. CEA has advised PVUN to retire Unit 4,6 & 7 and for unit 9 & 10 PVUN may take decision based on techno economic reason. Accordingly, the matter of phasing out of unit 9 & 10 is under discussion with JBVNL/Govt. of Jharkhand.

(ii) For Expansion of Project

The configuration of expansion of 4000 MW shall consist of 5 units of 800 MW to be implemented in two phases; Phase I: 3x800 MW and Phase II: 2x800 MW. Presently, your company is pursuing Phase I: 3x800 MW project named Patratu Super Thermal Power Project Expansion Phase-I (3x800 MW).

Phase-II expansion of 2X800 MW is to be taken up after commissioning of Phase-I and dismantling of existing old units. For Phase-I, out of total 1234 acres land to be transferred by GoJ to PVUN, approx., 1175.437 acres land has been transferred. For Phase-II, 625 acres (including 200 acres occupied by existing units) is to be transferred at the time of commencement of Phase-II at then prevailing circle rate.

Power Purchase Agreement has been signed with Govt. of Jharkhand for 85% power (Balance 15 % is under MoP).

Agreement for water supply from the Nalkari Dam for 27

cusecs water for Phase-I and 13 cusecs water for Phase-II with air cooled condenser has been signed with JUUNL.

Ministry of Coal had accorded approval for transfer/ assignment of Banhardih coal block of Latehar Distt. (Jharkhand) for the coal requirement of Phase-I expansion project (3X800 MW) to PVUN. Deed of adherence in this regard is signed.

Environment clearance of Phase-I project is under consideration with MoEF, the public hearing has been conducted successfully and your project was considered in the EAC meeting held on 28.06.2017.

For Phase-I, the Feasibility Report has been approved and its EPC contract award is under process. Patratu STPP will be based on new emission norms with High Efficiency ESP, Flue Gas Desulfurization and No Emission Control Systems. It will have an air cooled condenser system, zero liquid discharge system, Dry Ash Disposal System and rail loading facility for transportation of ash.

FINANCIAL REVIEW

The Company has adopted no profit no loss approach with mutual consent with beneficiary i.e. JBVNL till the date plant was in operation (i.e. 24.01.2017). Total Expenditure till 24.01.2017 is `18241.44 Lakh and `18208.55 Lakh (after adjusting other income of `32.89 Lakh) recognized as revenue from operation. Inspite of that, company has a loss of `6.75 Lakh due to accounting of Deferred Tax provision, which is reversible in future year. The total amount recognized as CWIP is `13023.92 Lakh which mainly includes `7388.16 Lakh as Development of Banhardih Coal Mine, `3815.00 Lakh as consultancy from NTPC Limited for Phase-I (3 x 800 MW) expansion and `1586.11 Lakh as Incidental Expenditure during construction.

Further, it was discussed and agreed to by all the stakeholders to close and dismantle the existing units and the value which will be actually realised from the sale of discarded assets of existing units net of dismantling cost, shall be transferred to GoJ or its assign affiliates by the Company in lieu of Specified Asset transfer consideration. Accordingly, these asset have been accounted in books as Assets held for disposal and valued at fair realisable value.

Ind AS and its implementation

The financial statements are prepared on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. These are the Company’s


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first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied.

CAPITAL & BORROWINGS

Capital

The paid up Equity share capital as on 31st March, 2017 was `10 Lakh and `4662.16 Lakh as Equity Capital Deposit by NTPC Limited (`3450 Lakh) & JBVNL (`1212.16 Lakh). The equity capital deposit of JBVNL i.e. `1112.16 Lakh was carved out from Deemed Loan of `3950 Lakh against consideration for specified current asset as valued by MECON Limited.

Borrowings

The Company has a loan sanction from NTPC Limited for `5000 Lakh bearing Interest @ 10% per annum. Out of this, company got disbursement of `3325 Lakh during FY 2016-17 and the same amount remains outstanding as on 31.03.2017.

Apart from the above loan, Company also recognized `2838 Lakh (Net of Total Deemed Loan `3950 Lakh minus `1112 Lakh as transferred to Equity capital Deposit in favor of JBVNL) as Deemed loan which is residual part of total deemed loan of `3950 Lakh from GoJ against consideration for specified Current Asset as valued by MECON Limited.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review is placed at Annexure-I.


No material changes and commitments have taken place between financial year ended on 31st March, 2017 to which the financial statements relates and the date of this Directors’ Report, which affects the financial position of the Company other than those mentioned herein above except changes in Equity Share Capital as below:

Changes in Equity Share Capital

Shareholder Equity Share Capital as on 31.03.2017

Source of Fund Equity Share Capital as on Date

of Report

Total Equity Share Capital as on Date

of Report

` in Lakh ` in Lakh ` in Lakh

NTPC 7.40 Existing Equity Share Capital 7.40

NTPC - From Equity Capital Deposit as on 31.03.2017

3450.00

NTPC - From fresh disbursement of Equity Capital Deposit after 31.03.2017

4555.00 8012.40

JBVNL 2.60 Existing Equity Share Capital 2.60

JBVNL - From Equity Capital Deposit as on 31.03.2017

1212.16

JBVNL - Carved Out of the deemed Loan as on 31.03.2017

1600.41 2815.17

Total Equity Share Capital

10.00 10827.57 10827.57


The Company has not given any loans or guarantees or made any investment covered under the provisions of section 186 of the Companies Act, 2013.

FIXED DEPOSITSThe Company has not accepted any fixed deposit during the period under review.

STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by

the Comptroller & Auditor General of India (C&AG). M/s Rajesh Srivastava & Co., Chartered Accountants, Ranchi were appointed as Statutory Auditors of the Company for the financial year 2016-17. C&AG vide letter ref: No./CA. V/COY/ CENTRAL GOVERNMENT, PVUNL (1)/771 dated 09/08/2017 has appointed M/s RAJESH SRIVASTAVA & CO.(ER0613) , Chartered Accountants, Kamayani H No. 143/2, Balihar Road Opposite Doon Public school, Morabadi, Ranchi, PIN 834008, Jharkhand, as the Statutory Auditors of the Company for the financial year 2017-18 as prescribed under provisions of Section 139 of the Companies Act, 2013.


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MANAGEMENT COMMENTS ON STATUTORY AUDITORS’ REPORT

The Statutory Auditors of the Company have given an unqualified report on the financial statements of the Company for the Financial Year 2016-17.

However, they have drawn attention under ‘Emphasis of Matter’ to the following matters in the notes to the financial statements:(a) Note No. 23, 23(a) & 23(b) in respect to transfer of

the specified assets to the Company for performance improvement of the existing plant and capacity expansion and subsequent shut down of Plants. Due to this, the specified assets has been shown as ‘Held for sale’.

(b) Note No. 23(d) regarding revenue from sale of electricity which has been recognized to the extent of cost of generation of electricity.

The issues have been adequately explained in the respective notes referred to by the Auditors.

REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA

The Comptroller & Auditor General of India (C&AG), through letter dated 3rd July, 2017, has given ‘NIL’ comments on Financial Statement of the Company for the Financial Year 2016-17 after conducting supplementary audit under section 143(6)(a) of the Companies Act, 2013.

As advised by the office of the C&AG, the comments of C&AG are being placed with the report of Statutory Auditors of your Company and the following disclosures related to accounts are made:-

1. The financial statements of the Company for the financial year 2016-17 were authorized for issue by Board of Directors on 9 May, 2017 and

2. Financial Risk Management – Credit Risk (Trade Receivables)

The Company primarily sells electricity to Jharkand Bijli Vitran Nigam Limited, owned by the Government of Jharkand. Beneficiary at the time of entering into Power Purchase Agreements with the Company also enters into a Guarantee Agreement of the state. The guarantor (State Government) unconditionally guarantees to the company to pay every sum of money with the beneficiary is liable to pay to the Company for supply of electricity. The Company has not experienced any significant impairment losses in respect of Trade Receivables in the current year as this being the first year of the Company.


Particulars relating to conservation of energy and

technology absorption in accordance with section 134(3) of the Companies Act, 2013 read with Company (Accounts) Rules, 2014 are as follows:-

Patratu TPS will be based on new emission norms with High Efficiency ESP, Flue Gas Desulfurization and Nox Emission Control Systems. It will have an air cooled condenser system, zero liquid discharge system, Dry Ash Disposal System, rail loading facility for transportation of ash. The capital expenditure of `3045.316 Crore is earmarked for equipments/instruments installed for Environmental Protection measures.

During the period under review, the Company had no earning and outgo in foreign exchange.


As per provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and as amended vide Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, every company is required to include a statement in the Board’s Report showing the names of top ten employees in terms of remuneration drawn and the name of every employee giving details of remuneration received by the employee was in aggregate Rupees One Crore and Two Lakh or more, if employed throughout the year and details of remuneration received by the employee was in aggregate Rupees Eight Lakh and Fifty Thousand or more, if employed for part of the year.


PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the period under review, the Company had no contract or arrangement falling under the purview of related party transactions. Accordingly, disclosure as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not required.

BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL

Following changes have been occurred in the Board of Directors and Key Managerial Personnel during the financial year 2016-17 and subsequent to the end of the Financial year 2016-17 :

a) Consequent upon letter regarding change in nomination received from NTPC, Shri A. K. Jha was appointed as additional director (part-time Chairman) of the company w.e.f. 29th July, 2016 in place of Shri U. P. Pani who ceased to be the Chairman of the Company w.e.f.


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27th May, 2016. Shri A. K. Jha was re-appointed as part-time Chairman of the Company in 1st Annual General Meeting dated 21st September, 2016.

b) Consequent upon subsequent letter regarding change in nomination received from NTPC, Shri S.Roy was appointed as additional director of the company w.e.f. 30th August, 2017 in place of Shri A. K. Jha who ceased to be the Chairman of the Company w.e.f. 31st July, 2017.

c) Consequent upon letter regarding change in nomination received from Govt. of Jharkhand (JBVNL), Shri R. K. Srivastava, IAS has been appointed as additional director (part-time Director) of the Company w.e.f. 29th July, 2016 in place of Shri S. K. G. Rahate, IAS who ceased to be Director of the Company w.e.f. 15th July, 2016. Shri R. K. Srivastava, IAS was re-appointed as Director of the Company in 1st Annual General Meeting dated 21st September, 2016.

d) Consequent upon subsequent letter regarding change in nomination received from Govt. of Jharkhand (JBVNL), Shri R. K. Srivastava, IAS has ceased to be Director of the Company w.e.f. 19th April, 2017 and Dr. Nitin Madan Kulkarni, IAS has been appointed as additional director (part-time Director) of the Company w.e.f. 9th May, 2017 who shall hold office up to the date of the ensuing Annual General Meeting and is eligible for re-appointment.

e) Shri B. B. Tripathy was appointed as CEO of the Company w.e.f. 11th May, 2016 in place of Shri C. V. Subramanian who had ceased to be CEO of the Company w.e.f. 11th May, 2016. Subsequently, Shri S. K. Patnaik has been appointed as CEO of the Company w.e.f. 10th April, 2017 in place of Shri B. B. Tripathy who had ceased to be CEO of the Company w.e.f. 10th April, 2017.

The Board wish to place on record its appreciation of the services rendered by Shri U. P. Pani and Shri A. K. Jha, as Chairman of the Company, Shri S. K. G. Rahate, IAS, Shri R. K. Srivastava, IAS as Directors of the Company.

In accordance with the provisions of the Companies Act, 2013 and the provisions of the Articles of Association of the Company, Shri K.Biswal, Director shall retire by rotation at the ensuing Annual General Meeting of your Company and, being eligible, offers themselves for re-appointment.


As per the provisions of the Companies Act, 2013 and rules made there under, the provisions with regard to Corporate Social Responsibility are so far not applicable on the Company.

However, during the year, your Company had organized medical camp, provided financial assistance for Patratu Block level sports meet of school children under initial

community development in nearby villages around the plant.

DETAILS REGARDING MEETINGS OF THE BOARD AND COMMITTEES

In terms of the requirements of Clause-9 of Secretarial Standard-1 on Meetings of the Board of Directors, the details regarding meetings of the Board and Committees held during the financial year under review are as follows:-

Board Meetings

During the Financial Year 2016-17, 4 (four) meetings of the Board were held.

Details of the meetings and attendance of the Directors at the meeting are as follows:

Meeting No.

Date of the Meeting Total No. of

Directors

No. of Directors present at

the Meeting

5th 23rd May, 2016 4 3

6th 29th July, 2016 4 4

7th 21st November, 2016 4 4

8th 20th January, 2017 4 3

Attendance of Directors in the Board Meetings were as follows:

Name No. of Meetings

held during Financial

Year/ Tenure

No. of Meetings attended

Shri U. P. Pani, Chairman(Ceased w.e.f. 27th May, 2016)

1 1

Shri A. K. Jha, Chairman(w.e.f. 29th July, 2016)

3 3

Shri S. K. G. Rahate, IAS Director(Ceased w.e.f. 15th July, 2016)

1 1

Shri R. K. Srivastava, IAS, Director (w.e.f. 29th July, 2016)

3 3

Shri K. Biswal, Director 4 3

Shri K. K. Sharma, Director 4 3

Committee Meetings

No committee of the Board was formed till the end of the Financial Year 2016-17.


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VIGIL MECHANISM

Employees of the Company who are on secondment from NTPC are primarily governed by the policies of NTPC including the Whistle Blower Policy and conduct & Discipline and Appeal Rules. Further, being a subsidiary Company of NTPC Limited, the Board of Directors of the Company had accorded approval to the proposal to appoint Chief Vigilance Officer (CVO), NTPC Limited as Chief Vigilance Officer (CVO), PVUN to oversee the vigilance function of PVUN.


As required under Section 134(5) of the Companies Act, 2013, your Directors confirm that:

(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 2016-17 and of the loss 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, 2013 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;

(v) 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 efficiently; and

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

INTERNAL CONTROL

The details regarding internal control and their adequacy are included in the Management Discussion & Analysis (Annexure-I), which forms part of this report.

RISK MANAGEMENT

The risks to which Company is exposed and the initiatives taken by the Company to mitigate such risks are included in the Management Discussion & Analysis (Annexure-I), which forms part of this report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place an anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment for all employees.

During the year 2016-17, no sexual harassment complaint had been filed.


As per requirement of Section 92 (3), Section 134 (3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in form MGT-9 is given at Annexure- II.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record their appreciation for the support and co-operation extended by NTPC Limited, Jharkhand Bijli Vitran Nigam Limited, Ministry of Power - Govt. of India, State Government of Jharkhand, the Auditors and Bankers of the Company.

The Board also appreciates the contribution of contractors, vendors and consultants in implementation of various contracts.

We wish to place on record our appreciation for the untiring efforts and contribution made by employees at all levels to ensure the effective functioning of the Company.


(K.Biswal) CHAIRMAN

DIN : 03318539

Place: New DelhiDate: August 30, 2017


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MANAGEMENT DISCUSSION AND ANALYSISAnnexure- I to Directors’ Report



Snap Shot 2016-17

Ø Gross annual generation of the country increased by 4.70% from 1107.82 BUs in the previous year to 1159.84 BUs in the financial year 2016-17.

Ø Generation capacity of 14209.8MW (excluding renewable) added during the year compared to 23976.60 MW added in the previous year.

Ø Land mark year for renewable energy. 14410.85 MW Capacity added during the year.

Ø 26300 Ckms of transmission lines added during the year as compared to 28114 Ckms in the previous year.

Ø 81816 MVA of transformation capacity added during the year as against 62849 MVA in the previous year, a jump of 30%.

Ø PLF of thermal stations declined from 62.24% in the financial year 2015-16 to 59.88% in the financial year 2016-17.

Ø During the financial year 2016-17, peak power deficit and energy deficit was 2.6% and 1.1% respectively as against the peak power deficit and energy deficit of 3.2% and 2.1% during the financial year 2015-16.




Total Capacity (MW)

% share

State 103967.28 32

Centre 80257.25 24

Private 142624.01 44

Total* 326848.53 100


During the financial year 2016-17, capacity of 14209.8 MW (excluding renewable) was added. With this, the total capacity addition during the 12th plan period is 99209.47 MW (excluding renewable) which is about 112.05% of the planned capacity of 88537 MW for the 12th Plan.



Sector wise PLF (Thermal)(in %)

Sector 2015-16 2016-17

State 56.83 54.35

Central 71.03 71.98

Private 60.07 55.59

All India 62.24 59.88

The overall decline in PLF was mainly due to backing down/ shut down of units on account of low schedule from beneficiary states (Source: Central Electricity Authority). The outlook of generation look promising with expected increased industrial production and Government of India’s mission to provide 24x7 electricity to all.

Existing Generation



Sector Thermal Hydro Nuclear Bhutan Import

Total

Central 337.86 57.91 37.66 - 433.43

State 299.52 51.28 0 - 350.80

Pvt./IPP 356.85 13.12 0 - 369.97

Bhutan Import

0.00 0.00 0 5.64 5.64

Total 994.23 122.31 37.66 5.64 1159.84


As far as Thermal generation is concerned, based on the monitored capacity by CEA, the generation contribution of central sector is 33.98% with installed capacity share


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of 28.32%, state sector contributes 30.12% of generation with installed capacity share of 33.12% and private sector contributes 35.89% of generation with installed capacity share of 38.56%. Central Sector utilities have better performing stations as compared to those of State utilities and Private Sector.

Consumption

In terms of per capita power consumption, India ranks among the lowest in the world. The per capita consumption of power in India is just 1075 units in the financial year 2015-16 (provisional). (Source: Central Electricity Authority Executive Summary March 2017).


Transmission

The transmission network (at voltages of 220 kV and above) in the country has grown at an average rate of ~ 8% p.a. during the 12th Plan.

The total inter-regional transmission capacity of country has been enhanced from 27,750 MW to 75,050 MW from 11th plan to 12th plan. During the period April 2016 to March 2017, 17600 MW inter-regional capacity has been added. This augmentation of the national grid will help promote competition and enable merit order dispatch of generation leading to lower cost of power for consumers.

Over the next few years, the demand for transmission capacity is expected to increase significantly, driven primarily by rising trend in power generation capacity, reforms in fuel sector and large scale integration of renewable energy.

Distribution

The electricity business is not merely about setting up power generation stations and transmission systems, but equally and probably more crucially, about retailing electricity and recovering the cost of service from consumers.

In the past few years the average tariff has increased. However, the rise has not been commensurate with the increase in the cost of supply. The consistent revenue gap, coupled with high AT&C losses have piled up huge losses for the state utilities.

To improve the distribution segment’s performance, Government of India launched the most comprehensive

power sector reform scheme ever i.e. Ujjawal Discom Assurance Yojana to turnaround Discoms (UDAY) on 5th November 2015.

UDAY has started to show results with improved performance of many of the State Distribution Companies with reduction in AT&C loses and reduction in revenue gaps. In fact one of the state discom has turn around and has posted profit during the financial year 2016-17.

Power Trading

In India, power is transacted largely through long term Power Purchase Agreements (PPA) entered into between Generating/Transmission Companies and the Distribution utilities. A small portion is transacted through various short-term mechanisms like trading through licensees, bi-lateral trading, trading through power exchanges and balancing market mechanism (i.e. Deviation Settlement Mechanism).

In the year 2016-17, around 90% of power generated in the country was transacted through the long term PPA route. 10% of the power was transacted through trading mechanism which included trading through short term licensees, bi-lateral trading, trading through power exchanges and through Deviation Settlement Mechanism. (Source: Central Electricity Regulatory Commission).




(c) UJALA: Government has identified lighting as key focus area for energy efficiency. Under the Unnat Jyoti by Affordable LEDs for All (UJALA), more than 24 crore LED bulbs have been distributed. This will help in a


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recurring saving of ` 34.95 crore and 87 MU per day in terms of cost and energy respectively. It will also help in reduction of CO

2 to the extent of 70,780 ton

per day thereby reiterating India’s commitment made at Conference of Parties (COP) 21 Summit held in Paris to reduce its energy intensity.

(d) SHAKTI (Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India): During the current financial year (FY 17-18), GoI has introduced the Scheme, ‘SHAKTI’ to make coal allocation more transparent and bidding based. As per the Scheme, future allocation/grant of linkages to power producers/ IPPs will be based on auction.

The Scheme shall benefit the sector in terms of coal availability to all power plants in transparent and objective manner, cheaper and affordable power, reduction of sectoral stress on account of non-availability of linkages to power projects thereby enhanced confidence of financial institutions on power sector.

(e) Portal on weather information: Due to enhance presence of Renewable Energy in the Indian power sector, weather information like irradiance, wind speed etc. have become very important. Besides, weather information is also very important for load forecasting. During the current financial year (FY 17-18), GoI has launched weather Portal for Power Sector in association with POSOCO and IMD. The information available in the Portal regarding weather forecast shall help State Discoms to take pro-active steps regarding short term and medium term management processes and supply planning requirements and also for better planning for infrastructure availability to ensure cost effective and reliable supply.

SWOT ANALYSIS

Strength/ Opportunity:

The Company is planning to set up 5 X 800 MW coal based thermal power project at Patratu in Distt. Ramgarh. Jharkhand. NTPC Limited, one of the Promoter Company, is providing engineering and management expertise from planning to commissioning and operating of the power plant. The other promoter Jharkhand Bijli Vitran Nigam Limited is also the beneficiary of the project. The captive coal block has been allocated to the company for end use of Patratu expansion.

With NTPC’s substantial experience in implementation & operation of power plants and with the support of JBVNL, the company foresees timely completion of the project

Weakness/Threats:

The financial closure of the project in time will be important for the company while scouting for cheaper source of

funding. Considering that NTPC and JBVNL are partners, the same shall not be difficult

RISK, CONCERNS AND THEIR MANAGEMENT

In the company, JBVNL has cashless equity. In the event of exhaustion of JBVNL cashless equity, both the promoters shall mutually discuss for the modalities of funding requirement of the company.

INTERNAL CONTROL

The Company has adequate internal systems and processes for efficient conduct of business. The Company is complying with relevant laws and regulations. It is following delegation of powers as is being followed in NTPC Limited. The financial statements are prepared in accordance with generally accepted accounting principles in India, accounting standards notified under Companies (Accounting Standards) Rules, 2006, read with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs, the Companies Act, 2013 (to the extent notified and applicable) and the provisions of the Electricity Act, 2003 to the extent applicable from time to time and as per the guidelines issued from NTPC Limited.

In order to ensure that all checks and balances are in place and all internal systems are in order, regular and exhaustive internal audits are conducted by experienced firm of Chartered Accountants. Further, in order to strengthen the internal control mechanism in the Company, your Company has implemented ERP System in all modules and it is helping the company in retrieving data and maintaining systematic backup.


Operational Performance

At the time of takeover of Patratu TPS on 01.04.2016, only Unit 10 was operational and plant is under shut down since 24.01.2017. The decision for shutdown of plant was discussed and agreed to by all the stakeholders. In 2016-17, Unit-10 has generated 385.2 MU with PLF 40% and its availability was 85.15%.


Overview

The financial statements are prepared on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956 and the provisions of the Electricity Act, 2003 to the extent applicable. These are the Company’s first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied. The Accounts of the Company for the year


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A Maharatna Company

ended 31st March, 2017 have been audited by the Statutory Auditors and Comptroller & Auditor General of India (C&AG) have also conducted the supplementary audit of the financial statements for the period from 1st April, 2016 to 31st March, 2017. Comptroller & Auditor General of India (C&AG) issued NIL comment for their supplementary audit of the financial statements for the period from 1st April, 2016 to 31st March, 2017. The accounting policies adopted by the Company and the estimates and judgements relating to the financial statements have been made on prudent basis and in accordance with the applicable Accounting Standards.

Revenue from Operations

The Company has adopted no profit no loss approach with mutual consent with beneficiary i.e. JBVNL till the date plant was in operation (i.e. 24.01.2017). Total Expenditure till 24.01.2017 was ` 18241.44 Lakh and `18208.55 Lakh (after adjusting other income of `32.89 Lakh) recognized as revenue from operation. Inspite of that, company has a loss of ` 6.75 Lakh due to accounting of Deferred Tax provision, which is reversible in future year. The total amount recognized as CWIP is ̀ 13023.92 Lakh which mainly includes ` 7388.16 Lakh as Development of Banhardih Coal Mine, ` 3815.00 Lakh as consultancy from NTPC Limited for Phase-I (3 x 800 MW) expansion and ` 1586.11 Lakh as Incidental Expenditure during construction.

Further, it was discussed and agreed to by all the stakeholders to close and dismantle the existing units and the value which will be actually realised from the sale of discarded assets of existing units net of dismantling cost, shall be transferred to GoJ or its assign affiliates by the Company in lieu of Specified Asset transfer consideration. Accordingly, these asset have been accounted in books as Assets held for disposal and valued at fair realisable value.

Share Capital

The paid up Equity share capital as on 31st March, 2017 was ` 10 Lakh and `4662.16 Lakh as Equity Capital Deposit by NTPC Limited (`3450 Lakh) & JBVNL (` 1212.16 Lakh). The Equity capital contribution of JBVNL `1112.16 Lakh was carved out from Deemed Loan of `3950 Lakh against consideration for specified current asset as valued by MECON Limited.

Borrowings

The Company has a loan sanctioned from NTPC Limited for ` 5000 Lakh bearing Interest @ 10% per annum. Out of

this, company got disbursement of ` 3325 Lakh during FY 2016-17 and the same amount remains outstanding as on 31.03.2017.

Apart from the above loan, Company also recognized ` 2838 Lakh (Net of Total Deemed Loan `3950 Lakh minus ` 1112 Lakh as transferred to Equity capital Deposit in favor of JBVNL) as Deemed loan which is residual part of total deemed loan of `3950 Lakh from GoJ against consideration for specified Current Asset as valued by MECON Limited.

HUMAN RESOURCE

As on 31.03.2017, total 49 no. of employees from NTPC and 35 no. of employees from JUUNL were posted in the Company.

The Company is paying adequate perks and also making employees part of profit sharing by giving Performance Related Payment. They are being imparted training for their professional upgradation from time to time as an endeavour of your Company to become a learning organisation.

Safe methods are practised in all areas of Operation & Maintenance and Construction & erection activities for the protection of workers against injury and diseases. Occupational safety at workplace is given utmost importance.

OUTLOOK

The Company’s outlook appears to be good, keeping in view of the shortage of power available in the Country.


Statements in the Management Discussion and Analysis, describing objectives, projections and estimates, are forward-looking statements and progressive, within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government policies and other incidental/related factors.


(K.Biswal) CHAIRMAN

DIN : 03318539



258

A Maharatna Company

Annexure - II to Directors’ Report

FORM NO. MGT-9

Extract of Annual Returnas on the financial year ended on March 31, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies(Management and Administration) Rules, 2014]


i) CIN : U40300DL2015GOI286533

ii) Registration Date : October 15, 2015

iii) Name of the Company : Patratu Vidyut Utpadan Nigam Limited

iv) Category / Sub-Category of the Company : Company Limited by shares/Public Limited Company

v) Address of the Registered office and contact details : NTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003

Ph. 0651-2253226

vi) Whether listed company Yes / No : No

vii) Name, Address and Contact details of Registrar and Transfer Agent, if any

: Not Applicable


All the business activities contributing 10% or more of the total turnover of the company shall be stated:-

Sl. No.


NIC code of the Product/service


1. Electricity Power Generation by coal based power plant

35102 N.A.


Sl. No.

Name and address of the Company CIN/GLN Holding/Subsidiary/Associate

% of shares held

Applicable Section

1. NTPC LimitedNTPC Bhawan, Core 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003

L40101DL1975GOI007966 Holding 74 2 (46)


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A Maharatna Company



Category of Shareholders No. of Shares held at the beginning of the year

No. of shares held at the end of the year

% Change during the

yearDemat Physical Total % of Total shares


shares

A. Promoters

(1) Indian

a) Individual/ HUF - - - - - - - - -

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corp.

(NTPC Limited)(Including Nominee Shareholders)

- 74,000 74,000 74 - 74,000 74,000 74 -

Jharkhand Bijli Vitran Nigam Limited(Including Nominee Shareholder)

- 26,000 26,000 26 - 26,000 26,000 26 -

e) Banks/FI - - - - - - - - -

f) Any Other... - - - - - - - - -

Sub-total (A) (1):- - 1,00,000 1,00,000 100 - 1,00,000 1,00,000 100 -

(2) Foreign

a) NRIs- individuals - - - - - - - - -

b) Other-Individuals - - - - - - - - -

c) Bodies Corp. - - - - - - - - -

d) Banks / FI - - - - - - - - -

e) Any Other…. - - - - - - - - -

Sub-total (A) (2):- - - - - - - - - -

Total shareholding of Promoter(A) = (A)(1) + (A)(2)

- 1,00,000 1,00,000 100 - 1,00,000 1,00,000 100 -


1. Institutions

a) Mutual Funds - - - - - - - - -

b) Banks/FI - - - - - - - - -

c) Central Govt. - - - - - - - - -

d) State Govt.(s) - - - - - - - - -

e) Venture Capital Funds - - - - - - - - -

f) Insurance Companies - - - - - - - - -

g) FIIs - - - - - - - - -

h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others(specify) - - - - - - - - -

Sub-total (B) (1):- - - - - - - - - -


260

A Maharatna Company

Category of Shareholders No. of Shares held at the beginning of the year

No. of shares held at the end of the year

% Change during the

yearDemat Physical Total % of Total shares


shares

2. Non-institutions

a) Bodies Corp.

i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

b) Individuals

i) Individual Shareholders holding nominal share capital upto `1 lakh

- - - - - - - - -

ii) Individuals shareholders holding nominal share capital in excess of `1 lakh

- - - - - - - - -

c) Others(specify) - - - - - - - - -

Sub-total (B) (2):- - - - - - - - - -

Total Public Shareholding (B)=(B)(1)+(B)(2)

- - - - - - - - -


- - - - - - - - -

Grand Total(A+B+C)

- 1,00,000 1,00,000 100 - 1,00,000 1,00,000 100 -


Sl. No.

Shareholder’s Name Shareholding at the beginning of the year

Shareholding at the end of the year % change in the


year

No. of Shares

% of total

Shares of the

company



No. of shares


company



1. NTPC Limited(Including Nominee Shareholders)

74,000 74 - 74,000 74 - -

2. Jharkhand Bijli Vitran Nigam Limited(Including Nominee Shareholders)

26,000 26 - 26,000 26 - -


261

A Maharatna Company


SI No.



No. of shares % of total shares of the

company

No. of shares % of total shares of the

company

At the beginning of the year 100000 100% 100000 100%

Date wise Increase / Decrease in Promoters Shareholding during the year specifying the reasons for increase / decrease (e.g. allotment / transfer / bonus / sweat equity etc.) :

- - - -

At the End of the year 100000 100% 100000 100%


SI No.

Shareholding at the beginning of the

year

Cumulative Shareholding during

the year

For each of Top 10 shareholders No. of shares


company

No. of shares


company



- - - -

At the end of the year (or on the date of separation, if separated during the year)

- - - -


SI No.

Shareholding at the beginning of

the year

Transaction during the year Cumulative Shareholding

during the year

For each of the Directors and KMP

No. of shares


company

Date Increase/decrease in

shareholding

Reason No. of shares


company

1. Shri U. P. Pani* 100 - 29.7.2016 100 Transfer out

- -

2. Shri K. Biswal 100 - - - - 100 -

3. Shri K. K. Sharma 100 - - - - 100 -

4. Shri A. K. Jha** - - 29.7.2016 100 Transfer in

100 -

* Ceased w.e.f. 27.5.2016** Appointed w.e.f. 29.7.2016


262

A Maharatna Company

V. INDEBTEDNESS


(Amount in ` Lakh)

Secured Loans

excluding deposits

Unsecured Loans



i) Principal Amount - - - -



Total (i + ii + iii) - - - -


• Addition - 7658.22 - -

• Reduction - 1112.16 - -

Net Change - 6546.06 - -


i) Principal amount - 6162.81 - -


iii) Interest accrued but not due - 383.25 - -

Total (i+ii+iii) - 6546.06 - -


A. Remuneration to Managing Director, Whole-time Directors and/or Manager: No such position is there

Sl. No.


1. Gross Salary(a) Salary as per provisions contained in section 17(1) of the

Income-tax Act,1961(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) of Income-tax

Act, 1961

- - - - -




- - - - -


Total (A) - - - - -



263

A Maharatna Company


Sl.No.


1. Independent Directors • Feeforattendingboard/committeemeetings • Commission • Others,pleasespecify

- - - - -

Total (1) - - - - -

2. Other Non-Executive Directors • Feeforattendingboardcommitteemeetings • Commission • Others,pleasespecify

- - - - -

Total (2) - - - - -

Total (B) = (1 + 2) - - - - -




SI. No.


Remuneration details of CEO, PVUN CEO Company Secretary

CFO Total

Shri C. V. Subramanian*

Shri B. B. Tripathy**



342982 3081112 - - 3424094

(b) Value of perquisites u/s 17(2) of Income-tax Act, 1961

5762 170526 - - 176288

(c) Profits in lieu of salary under section 17(3) of Income-tax Act, 1961

- - - - -




- - - - -

5. Others, please specifyRent towards accommodation, medical expenses etc.

- - - - -

Total 348744 3251638 - - 3600382

* From 01.04.2016 to 09.05.2016

** From 11.05.2016 to 31.03.2017 (his tenure ended on 10.4.2017)


264

A Maharatna Company






There were no penalties/punishment/compounding of offences for breach of any section of the Companies Act against the Company or its Directors or other officers in default, if any, during the year.


(K.Biswal) CHAIRMAN

DIN : 03318539



265

A Maharatna Company

BALANCE SHEET AS AT 31ST MARCH 2017 ` Lakh

Particulars Note No. As at31.03.2017

As at31.03.2016

ASSETSNon-current assets

Property, Plant & Equipment 2 151.05 - Capital work-in-progress 3 13,023.92 459.80 Intangible assets 2 2.98 - Other non-current assets 4 12.30 9.16

Total non-current assets 13,190.25 468.96 Current assets

Inventories 5 3,254.77 - Financial Assets

Trade receivables 6 15,241.34 - Cash and cash equivalent 7 313.14 209.40 Bank balances other than cash and cash equivalent 7A 1.00 -

Other current assets 8 15,567.43 - Total current assets 34,377.68 209.40

TOTAL ASSETS 47,567.93 678.36 EQUITY AND LIABILITIESEquity

Equity share capital 9 10.00 10.00 Other equity 10 4,654.74 199.33

Total equity 4,664.74 209.33 LiabilitiesNon-Current liabilities

Financial liabilitiesBorrowings 12 3,662.81 - Deferred tax liabilities (net) 13 6.75 -

Total non-current liabilities 3,669.56 - Current liabilities

Financial liabilitiesTrade payables 14 10,972.43 - Other financial liabilities 15 12,584.07 469.03

Other current liabilities 16 15,677.13 - Total current liabilities 39,233.63 469.03

TOTAL EQUITY AND LIABILITIES 47,567.93 678.36 Significant Accounting Policies 1The accompanying notes 1 to 37 form an integral part of these financial statements.


(S.K. Patnaik) (K.K. Sharma) (A. K. Jha)Chief Executive Officer Director Chairman

This is the Balance Sheet referred to in our report of even date

For Rajesh Srivastava & Co., Chartered Accountants

Firm Reg. No 012000C

(Rajesh Srivastava)Partner

M No.. 074792Place: RanchiDate: 09.05.2017


266

A Maharatna Company

` LakhParticulars Note No. For the



RevenueRevenue from operations 17 18,208.55 - Other income 18 32.89 - Total revenue 18,241.44 - Expenses Fuel 8,527.78 - Employee benefits expense 19 3,580.44 - Finance costs 20 508.41 - Depreciation and amortization expense 2 23.53 - Other expenses 21 5,601.28 0.67 Total expenses 18,241.44 0.67 Profit before tax - (0.67)Tax expense

Current taxDeferred tax 6.75 -

Total tax expense 6.75 - Profit for the year (6.75) (0.67)


Total comprehensive income for the year (6.75) (0.67)Significant accounting policies 1Expenditure during construction period (net) 22Earnings per equity share (Par value ` 10/- each) 28 (6.75) (0.67)The accompanying notes 1 to 37 form an integral part of these financial statements.

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH 2017









267

A Maharatna Company




A. Cash flows from operating activities Profit before tax - (0.67)Adjustment for Depreciation and amortization 23.53 - Interest income on fixed deposits (31.34) - Interest expense 563.07 - Operating Profit before working capital changes 555.26 (0.67)Adjustments for increase/(decrease) in operating liabilities:Trade payables 10972.43 - Other current financial liabilities 12115.04 469.03 Other current liabilities 15677.13 -

Adjustments for (increase)/decrease in operating assets:Other non-current assets (3.14) (9.16)Inventories (3254.77)Trade receivables (15241.34) - Other current assets (15568.43) Net cash generated from operations 5,252.18 459.20 Less: Taxes paid, net of refund - -Net cash outflow from operating activities [A] 5,252.18 459.20

B. Cash flows from investing activities Purchase of property, plant and equipment (173.48) - Purchase of Intangible assets (4.08) -Capital work in progress (12,564.12) (459.80)Interest income on fixed deposits 31.34 - Net cash outflow from investing activities [B] (12,710.34) (459.80)

C. Cash flows from financing activities Equity Share Capital - 10.00 Share Application Money 4,462.16 200.00 Borrowing 3,279.56 - Interest paid (179.82) - Net cash from / (used in) financing activities (C) 7,561.90 210.00 Net increase / (decrease) in cash and cash equivalents [A+B+C] 103.74 209.40 Cash and Cash equivalents at the beginning of the year 209.40 - Cash and Cash equivalents at the end of the year 313.14 209.40

Note: a) The cash flow has been prepared under the indirect method as set out in Ind AS 7 Cash Flow Statements.b) Amounts in brackets represent a cash outflow or a loss.c) Components of cash and cash equivalents included under cash and bank balances (note 7) are as under:


268

A Maharatna Company




Cash and cash equivalents (note 7)Balances with banks- In current account 0.11 209.40 -Deposits with original maturity of up to 3 months 313.03 - Total 313.14 209.40










269

A Maharatna Company

(A) Equity share capital

For the year ended 31 March 2017 ` lakh

Balance as at 1 April 2016 10.00

Changes in equity share capital during the year -

Balance as at 31 March 2017 10.00


Changes in equity share capital during the year 10.00

Balance as at 31 March 2016 10.00

(B) Other equity


Share Application Money

Reserve & Surplus Total

Other comprehensive

income

Retained Earning

Balance as at 1 April 2016 200.00 - (0.67) 199.33

Addition during the year

Profit during the year (6.75) (6.75)


Total 200.00 - (7.42) 192.58

Share Application Money received during the year

4,462.16 - - 4,462.16

Balance as at 31 March 2017 4,662.16 - (7.42) 4,654.74


Share Application Money

Reserve & Surplus Total

Other comprehensive

income

Retained Earning

Opening - - - -

Addition during the year

Profit during the year (0.67) (0.67)


Total - - (0.67) (0.67)

Share Application Money received during the year

200.00 - - 200.00

Balance as at 31 March 2016 200.00 - (0.67) 199.33

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST MARCH 2017


270

A Maharatna Company

Company Information and Significant Accounting Policies

Reporting entity

Patratu Vidhut Utpadan Nigam Limited is a Company incorporated in India on 15th Oct., 2015 (CIN:U40300DL2015GOI286533). The Company is a public limited company limited by shares and is a subsidiary of the NTPC Limited. The Company’s registered office is NTPC Bhawan, SCOPE Complex, 7 Institutional Area, Lodi Road, New Delhi - 110003. The Government of Jharkhand (GoJ) desirous of further capacity expansion and improving the performance of its existing plant - Patratu Thermal Power Station (PTPS) located at Patratu, Dist. Ramgarh in the State of Jharkhand. Accordingly a Joint Venture agreement with NTPC Limited and Jharkhand Bijli Vitran Nigam Limited was executed where by NTPC Limited and JBVNL are holding 74% and 26% equity shares issued by the Company and assets of PTPS transferred by Scheme notified by Government of Jharkhand. The Company is primarily engaged in setting up a new plant for generation of electricity and coal mining.

1. Significant Accounting Policies

A Basis of preparation

Statement of Compliance

These separate financial statements are prepared on accrual basis of accounting and comply with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. These are the Company’s first Ind AS compliant financial statements and Ind AS 101 ‘First Time Adoption of Indian Accounting Standards’ has been applied.

For the periods ending on 31 March 2016, the Company prepared its first financial statements in accordance with Generally Accepted Accounting Principles (GAAP) in India, accounting standards specified under Section 133 of the Companies Act, 2013, the Companies Act, 2013 (to the extent notified and applicable), applicable provisions of the Companies Act, 1956, and the provisions of the Electricity Act, 2003 to the extent applicable. Since the Company’s first financial statement was prepared on year ending 31st March 2016 therefore the provisions of Ind AS 101 in preparing its opening Ind AS Balance Sheet as of the date of transition, viz. 1 April 2015 are not applicable, however the Company translated its Financial statement for the year ending 31st Mach 2016 as per Ind As, accordingly the Balance sheets and assets are showing the position as at 31st March 2017 and corresponding position as at 31st March 2016.

Basis of measurement

The financial statements have been prepared on the historical cost basis except for certain financial assets and liabilities that are measured at fair value. The methods used to measure fair values are discussed further in notes to financial statements.

Functional and presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded to the nearest Lakh (up to two decimals), except as stated otherwise.

Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is current when it is:

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.


A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.


Deferred tax assets/liabilities are classified as non-current.

B. Use of estimates

The preparation of financial statements requires estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses during the reporting period. Although such estimates and assumptions are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates & assumptions and such differences are recognized in the period in which the results are crystallized.


271

A Maharatna Company

C. Fixed assets

1. Tangible assets are carried at historical cost less accumulated depreciation/amortisation.

2. Expenditure on renovation and modernisation of tangible assets resulting in increased life and/or efficiency of an existing asset is added to the cost of related assets.

3. Intangible assets are stated at their cost of acquisition less accumulated amortisation.

4. Deposits, payments/liabilities made provisionally towards compensation, rehabilitation and other expenses relatable to land in possession are treated as cost of land.

5. In the case of assets put to use, where final settlement of bills with contractors is yet to be effected, capitalisation is done on provisional basis subject to necessary adjustment in the year of final settlement.

6. Assets and systems common to more than one generating unit are capitalised on the basis of engineering estimates/assessments.

D. Capital work-in-progress

1. Administration and general overhead expenses attributable to construction of fixed assets incurred till they are ready for their intended use are identified and allocated on a systematic basis to the cost of related assets.

2. Deposit works/cost plus contracts are accounted for on the basis of statements of account received from the contractors.

3. Unsettled liabilities for price variation/exchange rate variation in case of contracts are accounted for on estimated basis as per terms of the contracts.

E. Rate Regulated Activities

1. Expense/income recognized in the Statement of Profit & Loss to the extent recoverable from or payable to the beneficiaries in subsequent periods as per Central Electricity Regulatory Commission the (CERC) Tariff Regulations are recognized as ‘Regulatory asset/liability’ by credit/debit to ‘Regulatory income/expense’.

2. Regulatory asset/liability is adjusted from the year in which the same becomes recoverable from or payable to the beneficiaries by credit/debit to ‘Regulatory income/expense’.

F. Development of coal mines

Expenditure on exploration and development of new coal deposits is capitalized as ‘Development of coal mines’ under capital work-in-progress till the mines project is brought to revenue account.

G. Foreign currency transactions

1. Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction.

2. At the balance sheet date, foreign currency monetary items are reported using the closing rate. Non-monetary items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.

3. Exchange differences arising from settlement/translation of long term foreign currency monetary items are adjusted in the carrying cost of related assets.

4. Other exchange differences are recognized as income or expense in the period in which they arise.

H. Borrowing costs

Borrowing costs attributable to the qualifying fixed assets during construction/exploration, renovation and modernisation are capitalised. Such borrowing costs are apportioned on the average balance of capital work-in-progress for the year. Other borrowing costs are recognised as an expense in the period in which they are incurred.

I. Inventories

1. Inventories are valued at the lower of, cost determined on weighted average basis and net realizable value.

2. The diminution in the value of obsolete, unserviceable and surplus stores & spares is ascertained on review and provided for.

J. Income recognition

1. Sale of energy is accounted for based on tariff rates approved by the CERC as modified by the orders of Appellate Tribunal for Electricity to the extent applicable. In case of power stations where the tariff rates are yet to be approved, provisional rates are adopted considering the cost incurred as mutually agreed / applicable CERC tariff regulations.

2. Interest/surcharge on late payment/overdue sundry debtors for sale of energy is recognized when no significant uncertainty as to measurability or collectability exists.

3. Interest/surcharge recoverable on advances to suppliers as well as warranty claims/liquidated damages wherever there is uncertainty of realisation/acceptance are not treated as accrued and are therefore, accounted for on receipt/acceptance.


272

A Maharatna Company

4. Scrap other than steel scrap is accounted for as and when sold.

5. Insurance claims for loss of profit are accounted for in the year of acceptance. Other insurance claims are accounted for based on certainty of realisation.

K. Expenditure

1. Depreciation/amortisation

1.1 Depreciation on the assets of the generation of electricity business is charged on straight line method following the rates and methodology notified by the CERC Tariff Regulations in accordance with Schedule II of the Companies Act, 2013.

1.2 Depreciation on the assets of the coal mining is charged on straight line method following the useful life specified in Schedule II of the Companies Act, 2013.

1.3 Depreciation on the following assets is provided on their estimated useful life ascertained on technical evaluation:

a) Kutcha Roads 2 years

b) Enabling works

- residential buildings 15 years

- internal electrification of residential buildings

10 years

- non-residential buildings including their internal electrification, water supply, sewerage & drainage works, railway sidings, aerodromes, helipads and airstrips.

5 years

c) Personal computers & laptops including peripherals

3 years

d) Photocopiers, fax machines, water coolers and refrigerators

5 years

e) Temporary erections including wooden structures

1 year

f) Telephone exchange 15 years

g) Wireless systems, VSAT equipments, display devices viz. projectors, screens, CCTV and audio video conferencing systems and other communication equipments

6 years

1.4 Assets costing up to ̀ 5,000/- are fully depreciated in the year of acquisition.

1.5 Cost of software recognized as intangible asset, is amortised on straight line method over a period of legal right to use or 3 years, whichever is less. Other intangible assets are amortized on straight line method over the period of legal right to use or life of the related plant, whichever is less.

1.6 Depreciation on additions to/deductions from fixed assets during the year is charged on pro-rata basis from/up to the month in which the asset is available for use/disposed.

1.7 Where the cost of depreciable assets has undergone a change during the year due to increase/decrease in long term liabilities on account of exchange fluctuation, price adjustment, change in duties or similar factors, the unamortised balance of such asset is charged off prospectively over the remaining useful life determined following the applicable accounting policies relating to depreciation/amortisation.

1.8 Where the life and/or efficiency of an asset is increased due to renovation and modernization, the expenditure thereon along-with its unamortized depreciable amount is charged off prospectively over the revised useful life determined by technical assessment.

1.9 Leasehold land and buildings relating to generation of electricity business are fully amortised over lease period or life of the related plant whichever is lower following the rates and methodology notified by the CERC Tariff Regulations. Leasehold land acquired on perpetual lease is not amortised.

L. Employee benefits

The employees of the company are on secondment from the holding company. Employee benefits, inter-alia include provident fund, pension, gratuity, post retirement medical facilities, compensated absences, long service award, economic rehabilitation scheme and other terminal benefits. In terms of the arrangement with the holding company, the company is to make a fixed percentage contribution of the aggregate of basic pay & dearness allowance for the period of the service rendered in the company. Accordingly, these employee benefits are treated as defined contribution schemes.

M. Leases

1. Finance lease

1.1 Assets taken on finance lease are capitalized at fair value or net present value of the minimum lease payments, whichever is less.

1.2 Depreciation on the assets taken on finance lease is charged at the rate applicable to similar type of fixed assets as per accounting policy no. K.1. If the


273

A Maharatna Company

leased assets are returnable to the lessor on the expiry of the lease period, depreciation is charged over its useful life or lease period, whichever is less.

1.3 Lease payments are apportioned between the finance charges and outstanding liability in respect of assets taken on lease.

2. Operating lease

Assets acquired on lease where a significant portion of the risk and rewards of the ownership is retained by the lessor are classified as operating leases. Lease rentals are charged to revenue.

N. Impairment

The carrying amount of cash generating units is reviewed at each Balance Sheet date where there is any indication of impairment based on internal/external indicators. An impairment loss is recognised in the Statement of Profit and Loss where the carrying amount exceeds the recoverable amount of the cash generating units. The impairment loss is reversed if there is change in the recoverable amount and such loss either no longer exists or has decreased.

O. Provisions and contingent liabilities

A provision is recognised when the company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are determined based on management estimate required to settle the obligation at the balance sheet date and are not discounted to present value. Contingent liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.

P. Cash flow statement

Cash flow statement is prepared in accordance with the indirect method prescribed in Ind AS 7 “Statement of Cash Flow”.

Q Taxes on income

Current tax is determined on the basis of taxable income in accordance with the provisions of the Income Tax Act, 1961. Deferred tax liability/asset resulting from ‘timing difference’ between accounting income and taxable income is accounted for considering the tax rate & tax laws that have been enacted or substantively enacted as on the reporting date. Deferred tax asset is recognized and carried forward only to the extent that there is reasonable certainty that the asset will be realized in future. Deferred tax assets are reviewed at each reporting date for their realisability.


274

A Maharatna Company

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275

A Maharatna Company





Buildings

Main plant 18.97 - - - 18.97

Railway siding - 200.40 - - 200.40

Office equipment - 6.16 - - 6.16

EDP/WP machines & satcom equipment - 9.12 - - 9.12

Development of coal mines - 7,388.16 - - 7,388.16

18.97 7,603.84 - - 7,622.81



23.02 3,791.98 - - 3,815.00


417.81 1,168.30 - - 1,586.11

459.80 12,564.12 - - 13,023.92


a) Additions to the development of coal mines include expenditure on development of mines ̀ 4519.24 lakh accounted on basis of claim of Jharkhand Urja Utpadan Nigam Limited in terms of allotment agreement of Banhardi Coal Block.


Particulars Additions Deductions/ Capitalised As at

Adjustments 31.03.2016

Buildings

Main plant 18.97 - - 18.97

Others - - - -

18.97 - - 18.97

Expenditure pending allocation - -


23.02 - - 23.02

Expenditure during construction period (net) 417.81 - - 417.81

459.80 - - 459.80


276

A Maharatna Company

4. Other non current assets

` Lakh


As at 31.03.2016

Capital advances

Unsecured - -

Others 9.16 9.16

9.16 9.16


Advance tax & tax deducted at source 3.14 -

3.14 -

Total 12.30 9.16

5. Inventories

` Lakh


As at 31.03.2016

Coal 49.88 -

Fuel oil 327.69 -

Stores & spares 2,532.41 -

Chemicals & consumables 16.10 -

Steel scrap 252.68 -

Others 76.01 -

Total 3,254.77 -

Inventories include material-in-transit

Stores & spares 12.62 -

a) Inventory items, other than steel scrap have been valued as per accounting policy no. I (Note 1). Steel scrap has been valued at estimated realisable value.

b) Inventories - Others includes steel and cement etc.


277

A Maharatna Company


` Lakh


As at 31.03.2016

Trade receivables

Unsecured, considered good* 15,241.34 -

Total 15,241.34 -

* Recoverable from Jharkand Bijli Vitran Nigam Limited


` Lakh


As at 31.03.2016

Balances with banks -

Current accounts 0.11 209.40

Deposits with original maturity upto three months (including interest accrued) 313.03 -

Total 313.14 209.40

7A. Other bank balances ` Lakh


As at 31.03.2016

Earmarked balances with banks towards VAT registration. 1.00 -

Total 1.00 -

8. Other current assets` Lakh


As at 31.03.2016

Advances

Employees Unsecured 1.49 -

Contractors & suppliers Unsecured 65.86 -

67.35 -

Assets held for disposal 15,483.60 -

Others Unsecured 16.48 -

Total 15,567.43 -

a) Assets held for disposal accounted at fair realisable value net of decommissioning cost based on assessment made by the company in terms of the applicable accounting practices. These assets were initially transferred to the Company by the Scheme notified by the Government of Jharkhand (GoJ) vide notification No. 888 dated 01/04/2016 of Patratu Thermal Power Station, for generation of the electricity under PPA supply arrangement to Jharkhand Bijli Vitran Nigam Limited (JBVNL), an enterprises of GoJ however due to heavy cost of generation the JBVNL / GoJ proposed to shut down the plant and scrap all the existing units and accordingly plant has been shut down on 25th Jan 2017. It has been further agreed that consideration of these assets shall be amount realised from decommissing scrap sale (net of cost) of which payment to be made to GoJ or its assign, accordingly these transferred assets are accounted as discarded assets in the accounts and consequential liability has been accounted.


278

A Maharatna Company

9. Equity Share capital` Lakh


As at 31.03.2016


Authorised

500,000,000 shares of par value `10/- each (500,000,000 shares of par value `10/- each as at 31 March 2016)

50,000.00 50,000.00

Issued, subscribed and fully paid up

1,00,000 shares of par value ` 10/- each (1,00,000 shares of par value `10/- each as at 31 March 2016)

10.00 10.00

10.00 10.00 a) Movements in equity share capital: During the year, the Company has neither issued nor bought back any shares.b) Terms and rights attached to equity shares: The Company has only one class of equity shares having a par value `10/- per share. The holders of the equity shares

are entitled to receive dividends as declared from time to time and are entitled to voting rights proportionate to their share holding at the meetings of shareholders.

c) Details of shareholders holding more than 5% shares in the Company as at:

Particulars 31.03.2017 31.03.2016

No. of shares %age holding

No. of shares %age holding

NTPC Ltd. 74,000 74.00 74,000 74.00

Jharkhand Bijli Vitran Nigam Limited 26,000 26.00 26,000 26.00

10. Other equity` Lakh


As at 31.03.2016

Retained earnings

Opening balance (0.67) -

Add: Profit for the year as per Statement of Profit and Loss (6.75) (0.67)

(7.42) (0.67)

Share Application Money*

Opening balance 200.00 -

Addition during the year 4,462.16 200.00

Closing balance 4,662.16 200.00

Total 4,654.74 199.33

* For details of share application money refer note No. 11


279

A Maharatna Company

11. Share Application Money

` Lakh


As at 31.03.2016

Share application money pending for allotment -

Received from NTPC Limited 3450.00 100.00

Received from JBVNL 1212.16 100.00

Total 4,662.16 200.00

a) The application money shall be utilised for issue of 46621620 equiry shares of ` 10/- each at par. b) The shares shall be allotted in the next Board meting scheduled in May 2017. c) The company has sufficient authorised capital to cover the share capital amount resulting from allotment of shares out

of such share application money. d) Amount received from JBVNL includes transfer from deemed loan of Government of Jharkand ̀ 1112.16 lakh pursuant

to Joint Venture agreement.

12. Non current liabilities -Borrowings

` Lakh


As at 31.03.2016

Term loans

From Others

Unsecured

Term loans 3,325.00 -

Other Long term Loan

Unsecured 3,221.06 -

6,546.06 -

Less: Current maturities of term loan - Unsecured 2,500.00 -

Interest Accrued but not due Other Loan- Unsecured 383.25 -

Total 3,662.81 - a) Details of terms of repayment and rate of interest

i) Unsecured rupee term loans from Parent Company NTPC Limited carry interest rate 10% p.a. with quarterly rests. The loans are repayable in two (2) equal or substantially equal yearly instalments as per the terms of the respective loan agreement. The first instalment of ` 2500 lakh is payable on 30th Sept 2017 and last on 30th Sept 2018.

ii) Unsecured rupee long term loans from Government of Jharkhand carry interest rate 10% p.a. per annum until the date of investment approval and equivalent to weighted average cost of borrowing subject to ceiling of 10% per annum. The said loans is proposed to be utilised as consideration for subsequent issue and allotment of shares in its % ownership as prescribed in JV agreement. During the year a sum of ` 1112.16 lakh has been transferred in share application money.

13. Deferred tax liabilities (net)

` Lakh


As at 31.03.2016


Difference in book depreciation and tax depreciation 6.75 -

Total 6.75 -


280

A Maharatna Company

14. Trade payables

` Lakh


As at 31.03.2016

For goods and services 10,972.43 -

Total 10,972.43 -

15. Other Current financial liabilities` Lakh


As at 31.03.2016

Current maturities of long term borrowings

From Others

Unsecured

Rupee term loans 2,500.00 -

Book overdraft 70.19 -

Interst accrued but not due on borrowing 383.25

Payable for capital expenditure 8,685.83 17.33

Other payables

Deposits from contractors and others - 13.42

Payable to employees 0.87 -

Others 943.93 438.28

Total 12,584.07 469.03

a) Details in respect of rate of interest and terms of repayment of current maturities of secured and unsecured long term borrowings indicated above are disclosed in Note 12.

b) Payables for capital expenditure includes amount ` 4136.98 lakh (31 March 2016: ` Nil) payable to holding company NTPC Limited.

c) Other payables - Others include amount ` 943.93 lakh (31 March 2016: ` 438.28 lakh payable to holding company NTPC Limited.

16. Other current liabilities` Lakh


As at 31.03.2016

Other payablesTax deducted at source and other statutory dues 48.56 - Deposits from contractors and others 108.43 - Others 15,520.14 - Total 15,677.13 -

a) Others include amount ` 15483.60 lakh payable to Government of Jharkand on disposal of the discarded assets.


281

A Maharatna Company

17. Revenue from operations ` Lakh



Energy sales 17,734.14 -

Other operating revenues

Interest from beneficiaries 474.41 -

Total 18,208.55 -

a) The generation and sale of the electricity of the plant is governed by CERC notified Tariff Regulations, 2014, (Regulations, 2014). Accordingly the Company has filed petition with CERC for deciding the tariff, however the same was not finalised due to JBVNL’s objection on capital cost. Pending issue of provisional/final tariff orders w.e.f. 1 April 2016 beneficiaries are billed initially in accordance with the tariff as provided in the Regulations 2014 but due to decision of closure of all the generating units during the year the Company adjusted the sale of energy to the extent of cost incurred during the relevant period.

18. Other Income` Lakh


31.03.2017

For the year ended

31.03.2016Interest fromOthers Deposits with bank 31.34 - Other non-operating incomeMiscellaneous income 1.55 - Total 32.89 -

19. Employee Benefit Expense` Lakh


31.03.2017

For the year ended

31.03.2016Salaries and wages 3,573.31 268.91 Contribution to provident and other funds 234.18 57.84 Staff welfare expenses 38.60 14.84

3,846.09 341.59 Less: Transferred to expenditure during construction period (net)- Note 22 265.65 341.59

Total 3,580.44 -

20. Finance Costs

` Lakh


31.03.2017

For the year ended

31.03.2016Finance charges on financial liabilities measured at amortised costRupee loans 383.25 - Term Loan 179.82 - Sub-Total 563.07 - Less: Transferred to expenditure during construction period (net) - Note 22 54.66 - Total 508.41 -


282

A Maharatna Company

21. Other Expenses` Lakh


For the year ended31.03.2016

Power charges 27.37 - Less: Recovered from contractors & employees

0.40 -

26.97 - Water charges 1,730.83 - Stores consumed 148.09 - Repairs & maintenanceBuildings 23.13 0.10 Plant & machinery 2,016.72 - Others 5.70 0.23

2,045.55 0.33 Insurance 51.34 - Rates and taxes 10.00 - Training & recruitment expenses 0.08 - Less: Receipts - -

0.08 - Communication expenses 18.02 - Travelling expenses 78.84 36.78 Tender expenses 45.58 7.68 Less: Receipt from sale of tenders 0.45 -

45.13 7.68 Payment to auditors 1.17 0.23 Advertisement and publicity 6.07 5.26 Security expenses 1,799.88 - Entertainment expenses 7.91 4.23 Expenses for guest house 22.62 0.09 Less: Recoveries - -

22.62 0.09 Education expenses 0.22 - Professional charges and consultancy fee

25.00 -

Legal expenses 287.93 - EDP hire and other charges 8.72 0.16 Printing and stationery 9.04 1.41 Hiring of vehicles 77.32 15.84 Bank LC Charges 23.94 Horticulture expenses 0.03 - Transport vehicle running expenses 0.31 - Preliminary expenses - 0.67 Miscellaneous expenses 48.17 4.21

6,473.18 76.89

Less: Transferred to development of coal mines

23.91 -

Transferred to expenditure during construction period (net) - Note 22

847.99 76.22

Total 5,601.28 0.67


283

A Maharatna Company

21. Other Expenses` Lakh


For the year ended31.03.2016

a) Details in respect of payment to auditors: As auditor Audit fee 0.75 0.20 Tax audit fee 0.20 - In other capacity - Other services (certification fee) - Reimbursement of expenses* 0.08 - Reimbursement of service tax 0.14 0.03 Total 1.17 0.23

* Includes ` 0.08 lakh related to earlier years.

b) Rates and taxes represents lease rent expenses.

c) Miscellaneous expenses include expenditure on books & periodicals, Community development, furnishing expenses etc.


284

A Maharatna Company

22. Expenditure During Construction Period (net)` Lakh


31.03.2017

For the year ended

31.03.2016A. Employee benefits expense Salaries and wages 215.10 268.91 Contribution to provident and other funds 45.43 57.84 Staff welfare expenses 5.12 14.84 Total (A) 265.65 341.59 B. Finance costsFinance charges on financial liabilities measured at amortised costRupee term loans 54.66 - Total (B) 54.66 - C. Depreciation and amortisation - - D. Generation, administration & other expenses Repairs & maintenance Buildings - 0.10 Plant and machinery 180.98 - Others - 0.23

180.98 0.33 Communication expenses 4.65 2.46 Travelling expenses 14.64 36.78 Tender expenses 16.94 7.68 Advertisement and publicity - 5.26 Security expenses 327.43 - Entertainment expenses 3.90 4.23 Expenses for guest house 1.66 0.09 Legal expenses 274.64 - EDP hire and other charges 3.23 0.16 Printing and stationery 1.08 1.41 Hiring of vehicles 8.11 15.84 Miscellaneous expenses 10.73 1.98 Total (D) 847.99 76.22

Grand total (A+B+C+D) 1,168.30* 417.81*

* Carried to Capital work-in-progress - (Note 3)23 The Government of Jharkhand (GoJ), vide its notification No. 888 dated 1st April 2016, notified ‘The Jharkhand State

Electricity Reforms (Transfer of Patratu Thermal Power Station) Scheme 2015’ for the transfer of the specified assets to the Company for performance improvement of the existing plant and capacity expansion. Due to higher cost of the generation, the GoJ proposed for closure of all the existing units having already reached end of life, which were transferred to the Company on 1st April 2016 and accordingly a meeting held between GoJ and the management of the Company in December 2016, wherein it was discussed and agreed that the existing running units shall be closed, dismantled and scrapped and the value realised from sale of the Scrap, net of cost of dismantling shall be transferred to GoJ or its assign or affiliates by the Company in lieu of Specified Assets Transfer consideration. Based on the decision the Company had shut down the plant with effects from 24th Jan 2017. However, working on expansion phase is going on.


285

A Maharatna Company

The Company has given following accounting effects :

a) The value of Current Assets transferred by GoJ has been accounted based on MECON valuation under major component like Coal, LDO, HFO, Scrap and Stores & Spares and thereafter dealt with as per the accounting policy of the company. The Stores included many of the old and unserviceable items, which is valued by applying discounting technique to arrive at its current realizable value, of which item wise value and quantity has not been provided therefore accounting of same carried out on consolidated basis and accounting effects of consumption of items given on appropriate basis.

b) In accordance with the accounting principles, assets retired from active use classified as held for sale are carried at lower of its carrying amount and fair value less cost of sale, accordingly the assets were accounted at fair value less cost of sale at ` 15483.60 lakh.

The assets acquired considered as discarded assets under current assets and aggregate of specified assets consideration has been accounted as current liability. Any change in the value of the discarded assets, consequental liability shall be changed in terms of the arrangement, on crystalisation of scrap realisation and decommissioning expenses.

c) The land proposed for expansion project not yet transferred to the Company therefore specified asset consideration towards the land has not been accounted.

d) The revenue from sale of electricity recognised to the extent of cost of generation of the electricity, direct and indirect including all other incidental expenditure incurred by the company towards generation and performance improvement.The cost incurred after closure of the plant has been considered recoverable which relates to dismantling.

The Summary of the specified assets consideration as per notification and amount accounted in the accounts are given here under:

` lakh

S. No.

Particulars As per Notification

Considered in Account

Remarks

1 Lease hold Land 200 Acre - - Accounted as operating lease

2 Freehold Land# 83665 - Pending for transfer favoring the Company.

3 Plant Civil Structure 24589 15484 At fair value less cost of sale

4 Plant & Machinery 48204

5 Current Assets* 13759 3697

Breakup:

Coal 356 Based on Mecon Ltd. Valuation report.

LDO 402 Based on Mecon Ltd. Valuation report.

HFO 336 Based on Mecon Ltd. Valuation report.

Stores & Spares 2603 Based on Mecon Ltd. Valuation report.

6 Value of Scrap* 332 253 Based on Mecon Ltd. Valuation report.

Notes:

# Freehold land yet not accounted as physical possession / transfer of title is pending,

* Consideration payable towards current assets transferred and accounted as deemed loan.


286

A Maharatna Company

24 Amount in the financial statements are presented in ` lakh (upto two decimals) except for per share data and as other-wise stated. Certain amounts, which do not appear due to rounding off, are disclosed separately.

25 a) The Company has a system of obtaining periodic confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of bank accounts. With regard to receivables for sale of energy, the Company sends demand intimations to the beneficiaries with details of amount paid and balance outstanding which can be said to be automatically confirmed on receipt of subsequent payment from such beneficiaries. In addition, reconciliation with beneficiaries customers is generally done on quarterly basis. So far as trade/other payables and loans and advances are concerned, the balance confirmation letters with the negative assertion as referred in the Standard on Auditing (SA) 505 (Revised) ‘External Confirmations’, were sent to the parties. Some of such balances are subject to confirmation/reconciliation. Adjustments, if any will be accounted for on confirmation/reconciliation of the same, which in the opinion of the management will not have a material impact.

b) In the opinion of the management, the value of assets, other than fixed assets, on realisation in the ordinary course of business, will not be less than the value at which these are stated in the Balance Sheet.

26 Disclosure as per Ind AS 2 ‘Inventories’

Amount of inventories recognised as expense during the year is as under:

` Lakh


31.03.2017

For the year ended

31.03.2016Fuel 8528 - Others (included in Note 21 - Other expenses) 148 - Total 8676 -

27. Disclosure as per Ind AS 24 ‘Related Party Disclosures’a) List of Related parties:

i) Parent Company: NTPC Limitedii) Parent’s Joint ventures:

Utility Powertech Ltdiii) Key Managerial Personnel (KMP): Shri A.K.Jha Chairman Shri K.Biswal Director Shri K.K.Sharma Director Dr. N. M. Kulkarni; IAS Director Shri C.V. Subramanian Chief Executive Officer w.e.f. 15th Oct. 2015 to 09th May 2016 Shri B. B. Tripathy Chief Executive Officer w.e.f. 09th May 2016 iv) Entities under the control of the same government:

The Company is a Subsidiary of Central Public Sector Undertaking (CPSU) controlled by Central Government by holding majority of shares . Pursuant to Paragraph 25 & 26 of Ind AS 24, entities over which the same government has control or joint control of, or significant influence, then the reporting entity and other entities shall be regarded as related parties. The Parent company has applied the exemption available for government related entities and have made limited disclosures in the financial statements. Such entities with which the Company has significant transactions include but not limited to Coal India Limited, SAIL Ltd., Indian Oil Corporation Ltd.

v) Others:

1. Jharkhand Bijli Vitran Nigam Limited


287

A Maharatna Company


` lakh

Parent, Parent Subsidiaries and Joint Venture Companies

NTPC Limited Utility Powertech Ltd.

Particulars 2016-17 2015-16 2016-17 2015-16

i) Sales/purchase of goods and services during the year

- Contracts for works/services for services received by the Company

4136.98 - 45.87 -

ii) Deputation of employees and other expenses

943.93 417.81 - -

iii) Payment of Interest 179.81 - - -

iv) Equity contributions made - 10.00 - -

v) Share aplication money received 3350.00 100.00 - -

vi) Loans received 3325.00 - - -

Note:- Refer Note no. 36 for other commitments with Subsidiaries and Joint Venture Companies

` lakh

2016-17 2015-16

Compensation to Key management personnel

- Short term employee benefits 35.99 13.35

` lakh

Transactions with the related parties under the control of the same government:

Sl. No.


1 Central Coal Field Limited Purchase of coal 7308.69 -

2 Indian Oil Corporation Ltd. Supply of oil products 619.46 -

3 Steel Authority of India Ltd. Supply of steel and iron products 75.25 -

4 BEML Purchase of spares 3.62 -


` lakh


Loans to/from:

- From Holding Company 3325.00 -

Amount payable (other than loans)

- To Holding Company 5080.91 438.05

- To Joint Ventures 45.87 -


288

A Maharatna Company

d) ` Lakh

Transactions with others listed at (a) (v) (1) above 2016-17 2015-16

Transactions during the year

- Sale of Energy and interest thereon 18208.55 -

- Equity contributions made 1112.16 100.00

e) Terms and conditions of transactions with the related parties

i) Transactions with the related parties are made on normal commercial terms and conditions and at market rates.

ii) The Company is assigning jobs on contract basis, for sundry works in plants/stations/offices to M/s Utility Powertech Ltd (UPL), a 50:50 joint venture between the Parent Company and Reliance Infrastructure Ltd. UPL inter-alia undertakes jobs such as overhauling, repair, refurbishment of various mechanical and electrical equipments of power stations. The rates are fixed on cost plus basis after mutual discussion and after taking into account the prevailing market conditions.

iii) The holding company is seconding its personnel to our Company as per the terms and conditions agreed between the companies, which are similar to those applicable for secondment of employees to other companies and institutions. The company also reimbursed the cost incurred by the holding company towards superannuation and employee benefits.

iv) The loan from holding Company - NTPC Limited is at 10% interest quarterly rest, the loan is repayable within 2 years.

28. Disclosure as per Ind AS 33 ‘Earnings per Share’

` LakhBasic and diluted earnings per share For the year

ended 31.03.2017

For the year ended

31.03.2016Profit attributable to equity shareholders (` lakh) (6.75) (0.67)Nominal value per share (`) 10 10Weighted average number of equity shares (used as denominator)Opening balance of issued equity shares 100,000 100,000 Effect of shares issued during the year, if any - - Weighted average number of equity shares for Basic and Diluted EPS 100,000 100,000

Earning per Share (Par value ` 10/- each) in ` (6.75) (0.67)

29 Disclosure as per Ind AS 36 ‘Impairment of Assets’

As required by Ind AS 36 : Impairment of Assets, an assessment of impairment of assets was carried out and no indication of any impairment exists at the end of reporting period.


These are the Company’s first Financial Statements in accordance with Ind AS. For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The Company has been incorporated on 15th Oct 2015, accordingly comparative information in the Financial statementr are of period ended on 31st March 2016.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the period ended 31 March 2016. According to Ind AS 101, the first Ind AS Financial Statements must use recognition and measurement principles that are based on standards and interpretations that are effective at 31 March 2017, the date of first-time preparation of Financial Statements according to Ind AS. These accounting principles and measurement principles are applied retrospectively for period ending 31st March 2016 and presented within the first Ind AS Financial Statements. There exists no effects on equity as reported under previous GAAP financial statement as on 31st March 2016 and


289

A Maharatna Company

equity as reported in accordance with Ind AS. This note explains the principal adjustment made by the Company in restating its indian GAAP financial statement to Ind AS financial statement for the year ended 31st March 2016.

Reconciliation of equity as at 31 March 2016

` Lakh

31 March 2016

Note Previous GAAP* Adjustments Ind ASs

ASSETS

Non-current assets

Capital work in progress 459.80 - 459.80

Financial assets

Loans b 9.16 (9.16) -

Other non-current assets b - 9.16 9.16

Current Assets

Financial assets

Cash and cash equivalents 209.40 - 209.40

Total Assets 678.36 - 678.36

EQUITY & LIABILITIES

Equity

Equity Share capital 10.00 - 10.00

Other equity 199.33 - 199.33

Liabilities

Other non-current liabilities a 13.42 (13.42) -

Current liabilities

Other financial liabilities a - 469.03 469.03

Other current liabilities a 455.61 (455.61) -

Total equity and liabilities 678.36 - 678.36



290

A Maharatna Company


` lakh

Previous GAAP* Adjustments Ind ASs

INCOME - - -

EXPENDITURE

Generation, Administration and Other expenses 0.67 - 0.67

Total Expenses 0.67 - 0.67

- -

Profit before tax (0.67) - (0.67)

Current tax -

Profit after tax (0.67) - (0.67)

Other comprehensive income - - -

Other comprehensive income for the year, net of income tax

(0.67) - (0.67)

Total comprehensive income for the year (0.67) - (0.67)


Reconciliation of total equity as at 31 March 2016

` lakh

31 March 2016

Total equity (shareholder’s funds) as per previous GAAP

Equity 10.00

Retained Earning (0.67)

Share application money 200.00

Total equity (shareholder’s funds) as per previous GAAP 209.33

Adjustments: -

Total equity as per Ind AS 209.33


` lakh

31 March 2016

Profit after tax as per previous GAAP (0.67)

Adjustments: -

Nil

Total adjustments -

Profit after tax as per Ind AS (0.67)

Other comprehensive income (net of tax): -

Total comprehensive income as per Ind AS (0.67)


291

A Maharatna Company


(a) Financial liabilities

Under Indian GAAP, liabilities such as payable for capital expenditure, retention money etc. are recorded at cost.

However, under Ind AS, liabilities in which the Company has a contractual obligation to deliver cash are classified as financial liabilities and recorded at amortized cost. Therefore, such financial liabilities have been discounted to present value since they do not carry any interest. The upfront benefit on transition date due to the discounting has been adjusted against the retained earnings. Further, interest cost on unwinding of discount has been capitalized to the cost of property, plant and equipment where such interest cost can be capitalized in accordance with Ind AS 23 ‘Borrowing cost’ otherwise charged off to statement of profit or loss.

On transalation to Ind AS reclassification of the liability has been made having no impact on statement of profit & loss.

(b) Financial assets

Under Indian GAAP, employee loans and other long term advances to be settled in cash or another financial asset are recorded at cost.

However, under Ind AS, certain assets covered under Ind AS 32 meet the definition of financial assets which include employee loans and long term advances to be settled in cash or another financial asset are classified as financial assets at amortized cost. Thus in case interest rate on such financial assets is lower than market rate, these financial assets have been discounted to present value.

On transalation to Ind AS reclassification of the assets have been made having no impact on statement of profit & loss.

(c) Retained earnings :

No effect on the retained earning on account of transalation to Ind AS.

(d) Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

31. Disclosure as per Ind AS 108 ‘Operating segments’

The Company has one reportable segments, which is generation of energy. Information about reportable segments are same as reflected in the financial statements.


The Company’s principal financial liabilities comprise loans and borrowings in domestic currency, trade payables and other payables. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include capital work in progress and incidental expenses during the construcion period, trade and other receivables, and cash and short-term deposits that derive directly from its operations.

The Company is exposed to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk



292

A Maharatna Company

Risk Exposure arising from Measurement Management

Credit Risk Cash and cash equivalents, trade receivables, financial assets measured at amortised cost.

Ageing analysis Credit ratings

Placement of deposit with Banks having sound finacials status and adequate capital ratio, credit limits.

Liquidity risk Borrowings and other liabilities

Cash flow forecasts Maintaining adequate funds in the form of cash and bank balances and monitoring expected cash inflows on trade receiveables.

Market risk – interest rate risk

Domestic Loan Analysis of changes in current market interest rate

To maintain adequate mix between variable rate and fixed-rate funding

Risk management framework

The Company’s activities makes it susceptible to various risks. The Company has taken adequate measures to address such concerns by developing adequate systems and practices. The Company’s overall risk management program focuses on the unpredictability of markets and seeks to manage the impact of these risks on the Company’s financial performance.

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company has policies covering specific areas, such as interest rate risk, other price risk, credit risk and liquidity risk. Compliance with policies and exposure limits is reviewed on a continuous basis.

A. Credit risk


i) Trade receivables

The Company primarily sells electricity to Jharkhad Bijali Vitran Nigam Limited, owned by State Governments. The beneficiaries at the time of entering into the Power Purchase Agreement with the Company also enters into a Guarantee agreement of the respective State. The guarantor (State Government) unconditionally guarantees to the Company to pay every sum of money which the beneficiary is liable to pay to the Company for supply of power. The Company has not experienced any significant impairment losses in respect of trade receivables in the past years.

ii) Cash and cash equivalents

The Company held cash and cash equivalents of ` 313.14 lakh (31 March 2016: ` 209.40 lakh). The cash and cash equivalents are held with banks with high rating.

iii) Deposits with banks and financial institutions

Cash and Cash equivalents includes deposits held with banks and financial institutions of ` 313.03 lakh (31 March 2016: ` Nil). In order to manage the risk, company accepts only high rated banks/institutions.


293

A Maharatna Company

a) Exposure to credit risk


` lakh



Other non-current financial assets 9.16 9.16

Cash and cash equivalents 313.14 209.40

Other current financial assets 15567.43 -

15889.73 218.56

Financial assets for which loss allowance is measured using Life time Expected Credit Losses (ECL)

- -

Trade receivables 15241.34 -

15241.34 -

b) Provision for expected credit losses

i) Financial assets for which loss allowance is measured using 12 month expected credit losses

The company has assets where the counter- parties have sufficient capacity to meet the obligations and where the risk of default is very low. Further it includes assets held for disposal which are valued at fair value, and in case realisation fetch below fair value the consequent loss shall be on the part of GoJ as per arrangement. Hence, no impairment loss has been recognised during the reporting periods.

ii) Financial assets for which loss allowance is measured using life time expected credit losses

The company has customers (State government utilities) with strong capacity to meet the obligations and therefore the risk of default is negligible or nil. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. Hence, no impairment loss has been recognised during the reporting periods in respect of trade receivables.

iii) Ageing analysis of trade receivables

The ageing analysis of the trade receivables is as below:

` lakh


31-60 days past due

61-90 days past due



Total

Gross carrying amount

- - 687 1827 1827 10901 15241

iv) Reconciliation of impairment loss provisions

No allowance for impairment in respect of financial assets arises during the year ended on 31st March 2017 and 31st March 2016.

B. Liquidity risk


Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due and to close out market positions.The Company manages liquidity risk by maintaining adequate cash reserves by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.


294

A Maharatna Company

As part of the CERC regulations, tariff inter alia includes recovery of capital cost. The tariff regulations also provide for recovery of fuel cost, operations and maintenance expenses and interest on normative working capital requirements. Since billing to the customers are generally on a monthly basis, the Company maintains sufficient liquidity to service financial obligations and to meet its operational requirements.



` lakh


Term loans and deemed loan from GoJ 81369.63 -

Floating-rate borrowings -

Total 81369.63 -



31 March 2017

` Lakh



3 months or less


Total


Term loans from Partent Company

- 2,500.00 825.00 - - 3,325.00

Deemed Loan from GOJ# 1,600.40 - - - 1,620.66 3,221.06

Trade and other payables 4,432.54 6,539.89 - - - 10,972.43

Other financial liability 4,519.24 5,181.58 - - - 9,700.82

Derivative financial liabilities - - - - - -

# Deemed loan shall be repaid through conversion in to equity as per arrangement. No repayment schedule stipulated hence remaining balance considered in bucket more than 5 years.

31 March 2016

` Lakh



3 months or less


Total


- - - - - -

Trade and other payables 469.03 - - - - 469.03

Derivative financial liabilities - - - - - -


295

A Maharatna Company

C. Interest rate risk

The Company is exposed to interest rate risk arising mainly from long term borrowings with fixed interest rates.

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments is as follows:

` lakh


Fixed-rate instruments

Rupee term loans 6,546.06 -

Variable-rate instruments - -

Total 6,546.06 -

Fair value sensitivity analysis for fixed-rate instruments

The company’s fixed rate instruments are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.


The company is not exposed to risk of variable rate instrument.

Equity Price risk

The Company has no investment in tradeable equity.





The Board of Directors has the primary responsibility to maintain a strong capital base and reduce the cost of capital through prudent management of deployed funds and leveraging opportunities in domestic financial markets so as to maintain investor, creditor and market confidence and to sustain future development of the business.


The carrying amounts of short term trade receivables, trade payables, capital creditors and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. Also, carrying amount of claims recoverable approximates its fair value as these are recoverable immediately.

No effect of fair value measurement of borrowing as the current borrowing rate and documented rate are same.

The Company is not carrying any non-current trade payables and capital creditors where fair value measurement required based on discounted cash flows using a current borrowing rate.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

35. Information in respect of micro and small enterprises as at 31 March 2017 as required by Micro, Small and Medium Enterprises Development Act, 2006

No amount remaining unpaid reported to any supplier reported at the year end. During the year no interest due, paid and payable to any of supplier.

36. Contingent liabilities and commitments

Contingent liabilities

a. Claims against the company not acknowledged as debts : Nil

b. Commitments

a. Estimated amount of contracts remaining to be executed on capital account (property, plant & equipment) and not provided for as at 31 March 2017 and 31st March 2016 are given hereunder:.


296

A Maharatna Company

` lakh

31 March 2017 31 March 2016

Property, Plant & Equipment* 108687.01 -

Includes with NTPC Limited ` 28363.02 lakh

37. Details of Specified Bank Notes (SBN) held and transacted during the period 08/11/2016 to 30/12/2016:

Particulars Specified Bank Notes

Other than specified Bank

Note

Total


Add: Permitted receipts - - -

Less: Permitted payments - - -

Less: Amount deposited in Banks - - -











297

A Maharatna Company

INDEPENDENT AUDITORS REPORTTo the Members of

Patratu Vidyut Utpadan Nigam Limited

This audit report supersedes our earlier report dt. 09.05.2017 and is being revised as per the observation of Comptroller and Auditor General of India.

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Patratu Vidyut Utpadan Nigam Limited, which comprise the Balance Sheet as at 31st March, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS Financial Statements”).

Management’s Responsibility for the Standalone Financial Statements

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the act’) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income and cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind As) specified under Section 133 of the Act, read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.


We conducted our audit in accordance with the Standards

on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the standalone Ind AS financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s management and Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matters


(a) Note No. 23, 23(a) & 23(b) in respect to transfer of the specified assets to the Company for performance improvement of the existing plant and capacity expansion and subsequent shut down of Plants. Due to this, the specified assets has been shown as ‘Held for sale’.

(b) Note No. 23(d) regarding revenue from sale of electricity which has been recognised to the extent of cost of generation of electricity.

Our opinion is not modified in respect of these matters.


298

A Maharatna Company

Report on Other Legal and Regulatory Requirements1. As required by the Companies (Auditor’s Report)

Order, 2016 (“the Order”), as amended, issued by the Government of India in terms of sub-Section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure I” a statement on the matters specified in paragraphs 3 and 4 of the said Order.

2. We are enclosing our report in terms of Section 143(5) of the Act, on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, in the Annexure-II on the directions and sub-directions issued by the Comptroller and Auditor General of India.

3. As required by Section 143(3) of the Act, we report that:a) we have sought and obtained all the information

and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) the Balance Sheet, the Statement of Profit and Loss, the Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the applicable Accounting Standards specified under section 133 of the Act, relevant rule issued thereunder;

e) Being a Government Company, pursuant to the Notification No. GSR 463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India, provisions of sub-section (2) of Section 164 of the Companies Act, 2013, are not applicable to the Company;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure III”.

g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company does not have any pending litigations which would impact its financial position.

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 37 to the standalone Ind AS financial statements.

For and on behalf of Rajesh Srivastava & Co.Chartered AccountantsFirm Reg. No.: 012000C

(CA RAJESH SRIVASTAVA)Partner

M. NO. : 074792Place: RanchiDate: 21st June, 2017

Annexure-I

ANNEXURE OF THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph (1) under the heading of “Report on Other Legal and Regulatory Requirements” of our report of even date to the standalone Ind AS financial statements of the company for the year ended March 31, 2017)

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management in a phased manner, designed

to cover all the items over a period of two/three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.

(c) The Company is in process of obtaining Conveyance


299

A Maharatna Company

Deeds/Title deeds for 1175.437 acres of land to be transferred by Govt. of Jharkhand. No accounting has been done in the books of the Company in this regard. The Company has Leasehold Agreement for 200 acres of land.

(ii) The management has conducted the physical verification of inventory at reasonable intervals. No material discrepancies were noticed on such physical verification.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. In view of the above, the clauses (iii)(a), (iii)(b) and (iii)(c) of the Order are not applicable.

(iv) The Company has not granted any loans or given any guarantee and security covered under Section 185 and 186 of the Companies Act, 2013. In respect of investment in the Subsidiary and Joint Venture Companies, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013.

(v) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(vi) We have broadly reviewed the accounts and records maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013 read with Companies (Cost Records & Audit) Rules, 2014 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate and complete.

(vii) (a) Undisputed statutory dues including provident fund, income tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues have generally been regularly deposited with the appropriate authorities and there are no undisputed dues outstanding as on 31st March 2017 for a period of more than six months from the date they became payable. We have been informed that employees’ state insurance is not applicable to the Company.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute.

(viii) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank, government or dues to debenture holders.

(ix) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised any money by way of initial public offer or further public offer. According to the information and explanations given to us, the money raised by the Company by way of term loans have been applied for the purpose for which they were obtained.

(x) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

(xi) As per notification no. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 197 is not applicable to the Government Companies. Accordingly, provisions of clause 3(xi) of the Order are not applicable to the Company.

(xii) The provisions of clause 3(xi) of the Order, for Nidhi Company, are not applicable to the Company.

(xiii) The Company has complied with the provisions of Section 177 and 188 of the Companies Act, 2013 w.r.t. transactions with the related parties, wherever applicable. Details of the transactions with the related parties have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, provisions of clause 3(xiv) of the Order are not applicable to the Company.

(xv) The company has not entered into any non-cash transactions with directors or persons connected with them as covered under Section 192 of the Companies Act, 2013.

(xvi) According to information and explanation given to us, the Company is not required to be registered u/s 45-IA of Reserve Bank of India Act, 1934. Accordingly, provision of clause 3(xvi) of the Order is not applicable to the Company.

For and on behalf ofRajesh Srivastava & Co.Chartered AccountantsFirm Reg. No.: 012000C




300

A Maharatna Company

Annexure-II

ANNEXURE OF THE INDEPENDENT AUDITOR’S REPORT(Referred to in our report of even date to the members of Patratu Vidyut Utpadan Nigam Limited on the accounts for the year ended 31st March 2017)

Sl. No.

Directions u/s 143(5) of the Companies Act, 2013

Auditor’s reply on action taken on the directions

Impact on financial

statement1. Whether the Company has clear title/lease deeds

for freehold and leasehold land respectively? If not, please state the area of freehold and leasehold land for which title/lease deeds are not available.

The Company is having clear Lease deed of Leasehold Land of 200 acres. The company does not own any Freehold land.

NIL

2. Whether there are any cases of waiver/write off of debts/loans/interest etc. if yes, the reasons thereof and amount involved.

According to information and explanations given to us, there are no cases of waiver/write off of debts/loans/interest etc.

NIL

3. Whether proper records are maintained for inventories lying with third parties and assets received as gift from Government or other authorities.

According to information and explanations given to us, the Company does not have any such inventory which is lying with third parties. Also, Company has not received any asset as gift/grants from Government or other authorities.

NIL

For and on behalf of Rajesh Srivastava & Co.Chartered Accountants



Annexure - III

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF PATRATU VIDYUT UTPADAN NIGAM LIMITED

[Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)]

We have audited the internal financial controls over financial reporting of Patratu Vidyut Utpadan Nigam Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the standalone Ind As financial statements of the Company for the year ended on that date.


The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 the Institute of Chartered Accountants of India. These

responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed


301

A Maharatna Company

under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.



A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,

and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.



Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting 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 the Institute of Chartered Accountants of India.

For and on behalf of Rajesh Srivastava & Co.Chartered Accountants




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COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(B) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF PATRATU VIDYUT UTPADAN NIGAM LIMITED FOR THE YEAR ENDED 31 MARCH 2017The preparation of financial statements of Patratu Vidyut Utpadan Nigam Limited for the year ended 31 March 2017 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their revised Audit Report dated 21 June 2017 which supersedes their earlier Audit Report dated 09 May 2017.

I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6) (a) of the Act of the financial statements of Patratu Vidyut Utpadan Nigam Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplement to statutory auditors’ report.



Ex-officio Member, Audit Board, Ranchi.Place: RanchiDate: 03 July, 2017


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NOTES


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NOTES

A Maharatna Company

NTPC Limited(A Govt. of India Enterprise)

(CIN: L40101DL1975GOI007966)

Regd. Office : NTPC Bhawan, SCOPE Complex,7, Institutional Area, Lodhi Road, New Delhi- 110003. Tel No : 011-24387333, Fax No : 011-24361018,

E- Mail : [email protected]; Website : www.ntpc.co.in

CMD and Directors of NTPC Limited

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Documents

NTPC Subsidiary Companies Annual Report 2016-17 Company - NTPC Electric Supply Company Limited 2 A Maharatna Company NTPC ELECTRIC SUPPLY COMPANY LIMITED (A wholly owned subsidiary