a) The CERC notified the Tariff Regulations, 2014 in February 2014
(Regulations, 2014). Pending issue of provisional/final tariff orders
w.e.f. 1st April 2014 for all the stations, beneficiaries are billed in
accordance with the tariff approved and applicable as on 31st March
2014 as provided in the Regulations 2014. The energy charges in respect
of the coal based stations are provisionally billed based on the GCV
''''as received'''' measured after the secondary crusher. The amount
provisionally billed for the year ended 31st March 2016 is Rs.
69,950.05 crore (previous year Rs. 73,703.99 crore).
b) The Company has filed a writ petition before the Hon''''ble Delhi High
Court contesting certain provisions of the Tariff Regulations, 2014. On
directions from the Hon''''ble High Court on the issue of point of
sampling for measurement of GCV of coal ''''as received'''', CERC has issued
an order dated 25th January 2016 (subject to final decision of the
Hon''''ble High Court) that samples for measurement of coal ''''as received''''
basis should be collected from loaded wagons at the generating
stations. Company has filed a review petition in respect of this CERC
order on 1st March 2016 and the matter is still sub-judice.
Pending disposal of the review petition and issue of provisional/final
tariff orders under Regulations, 2014 by the CERC, Sales have been
provisionally recognized at Rs. 71,546.92 crore (previous year Rs.
73,133.81 crore) on the basis of said Regulations, wherein energy
charges included in sales, in respect of the coal based stations have
been recognized based on the GCV ''''as received'''' measured after secondary
crusher which is generally within the station and at a distance less
than one KM from the unloading point of the wagons.
Further, vide order dated 19th February 2016 in respect of a petition
filed by a beneficiary, CERC issued directions that the grade slippage
between the loading point at the mines'''' end and unloading point at the
generating stations is to be passed on through tariff to the
beneficiaries. In the meantime, in compliance to the CERC directions
issued vide said order dated 19th February 2016, efforts are being made
to explore the mechanism for measurement of GCV of coal ''''as received'''',
from the loaded wagons at the generating stations.
In the absence of suitable measurement mechanism of comparable GCV, the
financial impact, if any, of the difference between the GCV ''''as
received'''' measured after collection of samples from loaded wagons at
the generating stations and that of GCV ''''as received'''' measured after
secondary crusher, cannot be quantified and considering the distance
between both the measuring points the difference will not be material.
c) Sales for the year ended 31st March 2016 include Rs. 50.74 crore
(previous year Rs. 679.62 crore) pertaining to previous years
recognized based on the orders issued by the CERC/Appellate Tribunal
for Electricity (APTEL).
d) Sales for the year ended 31st March 2016 include (-) Rs. 1,693.65
crore (previous year (-) Rs. 1,399.42 crore) on account of income-tax
payable to the beneficiaries as per Regulations, 2004. Sales for the
year ended 31st March 2016 also include Rs. 28.12 crore (previous year
Rs. 113.96 crore) on account of deferred tax materialized which is
recoverable from beneficiaries as per Regulations, 2014.
e) Electricity duty on energy sales amounting to Rs. 729.20 crore
(previous year Rs. 669.64 crore) has been reduced from sales in the
Statement of Profit and Loss.
f) Revenue from operations include Rs. 81.82 crore (previous year Rs.
86.21 crore) towards energy internally consumed, valued at variable
cost of generation and the corresponding amount is included in power
charges in Note 26.
g) CERC Regulations provides that where after the truing-up, the tariff
recovered is less/more than the tariff approved by the Commission, the
generating Company shall recover/pay from/to the beneficiaries the
under/over recovered amount along-with simple interest. Accordingly,
the interest recoverable from the beneficiaries amounting to Rs. 221.29
crore (previous year Rs. 332.82 crore) has been accounted as ''''Interest
from beneficiaries''''. Further, the amount payable to the beneficiaries
has been accounted as ''''Interest to beneficiaries'''' in Note 26.
h) One of the power stations of the Company, having three units of 95
MW each and two units of 210 MW each, was issued consent to operate
(Renewal) order by Delhi Pollution Control Committee (DPCC) on 2nd
January 2014 which was valid till 31st January 2018 with a condition
that particulate level omission level shall not exceed 150 mg/ Nm3.
During the year, in a volte face on 8th July 2015 DPCC issued a Show
Cause Notice to the station as to why four units out of five units of
plant ought not to be closed down for failing to bring down its
particulate level emission level below 50 mg/ Nm3. Further, vide order
dated 31st December 2015, DPCC directed four units out of five units of
plant shall not operate. Further, vide order dated 21st March 2016,
DPCC allowed operation of two units of 210 MW subject to meeting the
SPM of 50 mg/Nm3. Company''''s petition to direct beneficiaries for
payment of fixed charges from 31st December 2015 under change in law is
pending disposal before the CERC. Pending disposal of the petition,
capacity charges of Rs. 27.88 crore have not been recognised for the
period, these units were not allowed to operate.
2. Previous year figures have been regrouped /rearranged wherever
3. Amount in the financial statements are presented in Rs. crore
(upto two decimals) except for per share data and as other- wise
stated. Certain amounts, which do not appear due to rounding off, are
4. 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. 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 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.
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.
5. The levy of transit fee/entry tax on supplies of fuel to some of
the power stations has been paid under protest as the matters are
subjudice at various courts. In case the Company gets refund/demand
from fuel suppliers/tax authorities on settlement of these cases, the
same will be passed on to respective beneficiaries.
6. The environmental clearance ("clearance") granted by the Ministry
of Environment and Forest, Government of India (MoEF) for one of the
Company''''s ongoing project was challenged before the National Green
Tribunal (NGT). The NGT disposed the appeal, inter alia, directing that
the order of clearance be remanded to the MoEF to pass an order
granting or declining clearance to the project proponent afresh in
accordance with the law and the judgment of the NGT and for referring
the matter to the Expert Appraisal Committee ("Committee") for its
re-scrutiny, which shall complete the process within six months from
the date of NGT order. NGT also directed that the environmental
clearance shall be kept in abeyance and the Company shall maintain
status quo in relation to the project during the period of review by
the Committee or till fresh order is passed by the MoEF, whichever is
earlier. The Company filed an appeal challenging the NGT order before
the Hon''''ble Supreme Court of India which stayed the order of the NGT
and the matter is sub-judice. Aggregate cost incurred on the project
upto 31st March 2016 is Rs. 11,774.77 crore (previous year Rs. 8,732.44
crore). Management is confident that the approval for proceeding with
the project shall be granted, hence no provision is considered
7. The Company is executing a hydro power project in the state of
Uttrakhand, where all the clearances were accorded. A case was filed in
Hon''''ble Supreme Court of India after the natural disaster in Uttrakhand
in June 2013 to review whether the various existing and ongoing hydro
projects have contributed to environmental degradation. Hon''''ble Supreme
Court of India on 7th May 2014, ordered that no further construction
shall be undertaken in the projects under consideration until further
orders, which included the said hydro project of the Company. In the
proceedings, Hon''''ble Supreme Court is examining to allow few projects
which have all clearances which includes the project of the Company
where the work has been stopped. Aggregate cost incurred on the project
up to 31st March 2016 is Rs. 157.31 crore (previous year Rs. 154.57
crore). Management is confident that the approval for proceeding with
the project shall be granted, hence no provision is considered
8. Disclosure as per Accounting Standard - 1 on ''''Disclosure of
During the year, following changes in accounting policies have been
a) For more appropriate presentation of the financial statements, the
accounting policy relating to capital expenditure on assets not owned
by Company has been discontinued with retrospective effect. Based on
the guidance available in AS 10 notified by MCA on 30th March 2016 such
expenditure on assets not owned by the Company have been capitalised
retrospectively as part of the cost of project. As a result, cost
amortized till 31st March 2015 amounting to Rs. 75.36 crore as per
earlier policy has been written back as prior period adjustments and
depreciation has been recalculated retrospectively following the rates
and methodology notified by the CERC Tariff Regulations. Due to this
change, prior period depreciation (net) till 31st March 2015 is (-) Rs.
53.41 crore, depreciation for the year is lower by Rs. 10.08 crore,
profit for the year and fixed assets as at 31st March 2016 are higher
by Rs. 63.49 crore. Refer Note 12 i).
b) Consequent to adoption of the guidance note on Rate Regulated
Activities issued by the ICAI, Policy no. G has been inserted. Detailed
disclosure in this regard has been made in Note 48.
c) Considering the adoption of new policy no. G, policy no. N.4 has
been modified by replacing the word ''''Deferred foreign currency
fluctuation asset/liability'''' with ''''Regulatory asset/liability''''.
d) Policy no. O.2.4 related to charging off of the items of prepaid &
prior period expenses/income to the natural head of accounts has been
modified by increasing the threshold limit from Rs. 1 lakh to Rs. 5
lakh. Consequently, Short term loans & advances (Note 20) are lower by
Rs. 0.79 crore, Generation, administration and other expenses are
higher by Rs. 4.19 crore (Note 26), Prior period items (Net) (Note 27)
is lower by Rs. 3.40 crore and profit for the year is lower by Rs. 0.79
e) Policy N. 1 & O.1.9 related to income recognition & amortization of
machinery spares has been modified for better disclosures.
There is no impact on the accounts due to the changes at sl.no. (b) (c)
& (e) above.
9. Disclosure as per Accounting Standard - 5 on ''''Net Profit or Loss
for the Period'''' - Change in accounting estimate
The Company has reviewed and revised the estimated useful life of
certain assets as mentioned in accounting policy no. O 1.3, based on
technical evaluation. These assets were earlier depreciated as per CERC
Regulations as mentioned in accounting policy no. O 1.1. Consequently,
with prospectively application, profit for the year ended 31st March
2016 is lower by Rs. 27.43 crore, fixed assets as at 31st March 2016
are lower by Rs. 28.93 crore and capital work-in-progress as at 31st
March 2016 are higher byRs. 1.50 crore. (Refer Note 1, Policy no.
10. Disclosure as per Accounting Standard - 11 on ''''Effects of Changes
in Foreign Exchange Rates''''
The effect of foreign exchange fluctuation during the year is as under:
i) The amount of exchange differences (net) debited to the Statement of
Profit & Loss is Rs. 22.55 crore (previous year credit of Rs. 15.32
ii) The amount of exchange differences (net) debited to the carrying
amount of fixed assets is Rs. 1,956.61 crore (previous year Rs. 345.96
11. Disclosure as per Accounting Standard - 15 on ''''Employee Benefits''''
General description of various employee benefit schemes are as under:
1. Defined Contribution Plans
A. Provident Fund
The Company pays fixed contribution to provident fund at predetermined
rates to a separate trust, which invests the funds in permitted
securities. Contribution to family pension scheme is paid to the
appropriate authorities. The contribution of Rs. 242.60 crore
(previous year Rs. 236.48 crore) to the trust for the year is
recognised as expense and is charged to the Statement of Profit and
Loss. The obligation of the Company is to make such fixed contribution
and to ensure a minimum rate of return to the members as specified by
GOI. As per report of the actuary, overall interest earnings and
cumulative surplus is more than the statutory interest payment
requirement. Hence, no further provision is considered necessary. The
details of fair value of plan assets and obligitions are as under:
The defined contribution pension scheme of the Company for its
employees which is effective from 1st January 2007, is administered
through a separate trust. The obligation of the Company is to
contribute to the trust to the extent of amount not exceeding 30% of
basic pay and dearness allowance less employer''''s contribution towards
provident fund, gratuity, post retirement medical facility (PRMF) or
any other retirement benefits. The contribution of Rs. 223.24 crore
(previous year Rs. 225.39 crore) to the funds for the year is
recognized as an expense and charged to the Statement of Profit and
2. Defined Benefit Plans
A. Gratuity & Pension
(a) The Company has a defined benefit gratuity plan. Every employee who
has rendered continuous service of five years or more is entitled to
gratuity at 15 days salary (15/26 X last drawn basic salary plus
dearness allowance) for each completed year of service subject to a
maximum of Rs. 0.10 crore on superannuation, resignation, termination,
disablement or on death.
(b) The Company has pension schemes at two of its stations in respect
of employees taken over from erstwhile state government power
The existing schemes stated at (a) and at one of the power stations at
(b) above are funded by the Company and are managed by separate trusts.
The liability for gratuity and the pension schemes as above is
recognised on the basis of actuarial valuation. Based on acturial
valuation, best estimate of the contribution towards gratuity/pension
for the next financial year is Rs. 19.68 crore.
B. Post-Retirement Medical Facility (PRMF)
The Company has Post-Retirement Medical Facility (PRMF), under which
the retired employees and their spouses are provided medical facilities
in the Company hospitals/empanelled hospitals. They can also avail
treatment as out-patient subject to a ceiling fixed by the Company. The
liability for the same is recognised annually on the basis of actuarial
valuation. During the year, a trust has been constituted for its
employees superannuated on or after 1st January 2007, for the sole
purpose of providing post retirement medical benefit to them. The
liability as at 31st March 2016 ascertained as per actuarial valuation
amounting to Rs. 890.00 crore has been funded to the trust by actual
C. Terminal Benefits
Terminal benefits include baggage allowance for settlement at home town
for employees & dependents and farewell gift to the superannuating
employees. Further, the Company also provides for pension in respect of
employees taken over from ertwhile State Government Power Utility at
another station refered at 2.A.(b) above. Liability for the same is
recognised based on acturial valuation.
The Company provides for earned leave benefit (including compensated
absences) and half-pay leave to the employees of the Company which
accrue annually at 30 days and 20 days respectively. Earned leave is
en-cashable while in service. Half-pay leaves (HPL) are en-cashable
only on separation beyond the age of 50 years up to the maximum of 300
days. However, total number of leave that can be encashed on
superannuation shall be restricted to 300 days and no commutation of
half-pay leave shall be permissible. The liability for the same is
recognised on the basis of actuarial valuation.
The above mentioned schemes (C and D) are unfunded and are recognised
on the basis of actuarial valuation.
The summarised position of various defined benefits recognised in the
Statement of Profit and Loss, Balance Sheet is as under:
12. Disclosure as per Accounting Standard - 16 on ''''Borrowing Costs''''
Borrowing costs capitalised during the year are Rs. 3,442.62 crore
(previous year Rs. 2,969.11 crore).
13 Disclosure as per Accounting Standard - 17 on ''''Segment Reporting''''
(a) Business segments
The Company''''s principal business is generation and sale of bulk power
to State Power Utilities. Other business includes providing
consultancy, project management and supervision, oil and gas
exploration and coal mining.
(b) Segment revenue and expense
Revenue directly attributable to the segments is considered as ''''Segment
Revenue''''. Expenses directly attributable to the segments and common
expenses allocated on a reasonable basis are considered as ''''Segment
(c) Segment assets and liabilities
Segment assets include all operating assets in respective segments
comprising of net fixed assets and current assets, loans and advances.
Capital work-in-progress and capital advances are included in
unallocated corporate and other assets. Segment liabilities include
operating liabilities and provisions.
14. Disclosure as per Accounting Standard - 18 on ''''Related Party
a) Related parties:
i) Joint ventures:
Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd.,
BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian
Renewables Private Ltd., Trincomalee Power Company Ltd. and
Bangladesh-India Friendship Power Company Private Ltd.
ii) Key Managerial Personnel (KMP):
Shri Gurdeep Singh Chairman and Managing Director1
Shri Arup Roy Choudhury Chairman and Managing Director2
Shri I.J. Kapoor Director (Commercial)3
Shri A.KJha Director (Technical)4
Shri U.P.Pani Director (Human Resources)5
Shri S.C.Pandey Director (Projects)
Shri K.Biswal Director (Finance)
Shri K.K.Sharma Director (Operations)
Shri A.K.Rastogi Company Secretary
1. W.e.f. 4th February 2016 2. Upto 31st August 2015 3. Upto 20th
4. Acted as Chairman and Managing Director for the period from 1st
September 2015 to 3rd February 2016
5. Holding additional charge of Director (Commercial) w.e.f 2nd
September 2015 iii) Others:
NTPC Education and Research Society
15. Disclosure as per Accounting Standard - 26 on ''''Intangible Assets''''
Research expenditure charged to revenue during the year is Rs. 108.00
crore (previous year Rs. 97.56 crore).
16. Disclosure as per Accounting Standard - 28 on ''''Impairment of
As required by Accounting Standard (AS) 28 ''''Impairment of Assets'''', an
assessment of impairment of assets was carried out and based on such
assessment, the Company has accounted an impairment loss of Rs. 4.48
crore (previous year Nil) which has been recognised in
''''Depreciation/Amortisation and Impairment expense'''' in the Statement of
Profit and Loss in respect of assets falling under ''''Generation
Segment''''. Also refer Note 12(m) in this regard. Further, the amount of
impairment loss is not material considering the size of the company,
hence other disclosures required by the AS 28 are not applicable to the
17. Guidance Note (GN) on Rate Regulated Activities issued by the ICAI
is applicable mandatorily from the financial year 2015-16.
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 CERC through tariff regulations. 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 has applied the GN in
preparation of financial statements for the year, considering the
provisions of Tariff Regulations issued by the CERC.
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 the GN.
In view of the above, exchange differences arising from
settlement/translation of monetary item denominated in foreign currency
(other than long term) to the extent recoverable from or payable to the
beneficiaries in subsequent periods as per CERC Tariff Regulations are
recognized as ''''Regulatory asset/liability'''' by credit/debit to
''''Regulatory income/expense'''' during construction period and adjusted
from the year in which the same becomes recoverable from or payable to
18. Contingent Liabilities:
a) Claims against the company not acknowledged as debts in respect of:
(i) Capital works
Some of the contractors for supply and installation of equipments and
execution of works at our projects have lodged claims on the Company
for Rs. 8,768.55 crore (previous year Rs. 7,660.88 crore) seeking
enhancement of the contract price, revision of work schedule with price
escalation, 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. It
is not practicable to make a realistic estimate of the outflow of
resources if any, for settlement of such claims pending resolution.
(ii) Land compensation cases
In respect of land acquired for the projects, the erstwhile land owners
have claimed higher compensation before various authorities/courts
which are yet to be settled. Against such cases, contingent liability
of Rs. 332.34 crore (previous year Rs. 312.37 crore) has been
(iii) Fuel suppliers
Pending resolution of the issues with fuel companies, an amount of Rs.
2,179.93 crore (previous year Rs. 567.22 crore) towards surface
transportation charges, customs duty on service margin on imported
coal, grade slippage pursuant to third party sampling etc. has been
estimated by the Company as contingent liability
In respect of claims made by various State/Central Government
departments/Authorities towards building permission fee, penalty on
diversion of agricultural land to non-agricultural use, non
agricultural land assessment tax, water royalty etc. and by others,
contingent liability of Rs. 312.94 crore (previous year Rs. 896.34
crore) has been estimated.
(v) Possible reimbursement
The contingent liabilities referred to in (i) above, include an amount
of Rs. 1,298.80 crore (previous year Rs. 1,172.56 crore) relating to
the hydro power project stated in Note 15 A (b) - Other non current
assets, for which Company envisages possible reimbursement from GOI in
full. In respect of balance claims included in (i) and in respect of
the claims mentioned at (ii) above, payments, if any, by the company on
settlement of the claims would be eligible for inclusion in the capital
cost for the purpose of determination of tariff as per CERC Regulations
subject to prudence check by the CERC. In case of (iii), the estimated
possible reimbursement by way of recovery through tariff as per
Regulations is Rs. 2,051.77 crore (previous year Rs. 423.36 crore).
b) Disputed tax matters
Disputed income tax/Sales tax/Excise and other tax matters pending
before various Appellate Authorities amount to Rs. 7,499.37 crore
(previous year Rs. 4,161.87 crore). Many of these matters were disposed
off in favour of the Company but are disputed before higher authorities
by the concerned departments. In respect of disputed cases, the Company
estimate possible reimbursement of Rs. 3,602.24 crore (previous year
Rs. 1,508.46 crore).
Other contingent liabilities amount to Rs. 164.55 crore (previous year
Rs. 309.36 crore).
Some of the beneficiaries have filed appeals against the tariff orders
of the CERC. The amount of contingent liability in this regard is not
19. Capital and other commitments
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for as at 31st March 2016 is Rs. 55,449.01
crore (previous year Rs. 58,398.91 crore).
b) In respect of investments of Rs. 1,910.35 crore (previous year Rs.
1,822.61 crore) in subsidiary Companies, the Company has restrictions
for their disposal as at 31st March 2016 as under:
c) In respect of investments of Rs. 1,800.08 crore (previous year Rs.
1,693.88 crore) in the joint venture entities, the Company has
restrictions for their disposal as at 31st March 2016 as under:
d) The Company has commitments of Rs. 3,258.51 crore (previous year Rs.
3,638.40 crore) towards further investment in the joint venture
entities as at 31st March 2016.
e) The Company has commitments of Rs. 1,145.14 crore (previous year Rs.
131.82 crore) towards further investment in the subsidiary companies as
at 31st March 2016.
f) The Company has commitments of bank guarantee of 0.50 % of total
contract price to be undertaken by NTPC-BHEL Power Projects Private
Ltd. limited to a cumulative amount of Rs. 75.00 crore (previous year
Rs. 75.00 crore).
g) Company''''s commitment towards the minimum work programme in respect
of oil exploration activity of Cambay Block (100% owned by the company)
is Rs. 35.94 crore (USD 5.42 million) (previous year Rs. 140.27 crore,
USD 22.41 million).
h) Company''''s commitment towards the minimum work programme in respect
of oil exploration activities of joint venture operations has been
disclosed in Note 45 (b).
i) Company''''s commitment in respect lease agreements has been disclosed
in Note 43.
20. Corporate Social Responsibility Expenses (CSR)
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: