NTPC Ltd

Dear Members,

Your Directors are pleased to present the 34^TH Annual Report and the auditedaccounts for the year ended March 31, 2010.

At the outset, your Directors are elated to state that your Company has been grantedthe coveted status of MAHARATNA by the Govt. of India on 19^th May 2010granting higher level of financial and managerial autonomy. Your Company is also theofficial power partner of Delhi 2010 Commonwealth Games.

FINANCIAL RESULTS

Rs. Million

FINANCIAL PERFORMANCE

The total income of the company for the year increased by 8.85% to Rs. 492,339 millionfrom Rs. 452,291 million during the previous year. The profit after tax but beforeprovisions and prior period adjustments increased by 3.98% to Rs. 86,484 million from Rs.83,172 million. Net profit after tax increased to Rs. 87,282 million from Rs. 82,013million registering a growth of 6.42% over last year.

DIVIDEND

In addition to interim dividend of Rs. 3.00 per equity share of Rs. 10/- each paid inMarch 2010, your Directors have recommended a final dividend of Rs.0.80 per equity shareof Rs. 10/- each for the year 2009-10. The total dividend for the year is Rs.3.80 perequity share of Rs. 10/- each as against Rs.3.60 per equity share of Rs. 10/- each paidlast year. The final dividend shall be paid after your approval at the Annual GeneralMeeting. The total dividend pay-out for the year amounting to Rs. 31,332 millionrepresents 35.89% of the profits after tax. The total dividend payout including taxaccounts for 41.94% of profit after tax. The dividend has been recommended in accordancewith your Company’s policy of balancing dividend pay-out with the requirement ofdeployment of internal accruals for its growth plans. Your Directors believe that growthof the company through capacity addition, backward and forward integration and strategicdiversification of its operations would lead to increase in shareholders’ value.

FURTHER PUBLIC OFFER

The President of India acting through Ministry of Power, Government of India divestedits stake by 5% in your Company through Further Public Offer of 412,273,220 equity sharesand the shareholding of Government of India reduced from 89.5% to 84.5% w.e.f 18^thFebruary 2010. These shares were issued during February 2010 for cash at prices determinedthrough the Alternate Book Building Method of Securities and Exchange Board of India(Issue of Capital and Disclosure Requirements) Regulations, 2009 under Fast Track route.

The proceeds of Further Public Offer amounting to Rs. 84,801 million were credited toGovernment of India Account. Post FPO, Government of India holds 6,967,361,180 equityshares of face value of Rs. 10/- each and public holds the balance 1,278,103,220 equityshares.

OPERATIONAL PERFORMANCE

During the year, the power stations of your Company generated 218.84 BU of electricitywhich was 28.60% of the total power generated in India. The power generated by the companyhas registered an increase of 5.75% over the previous year’s generation of 206.939BU. Your Company contributed 25.12% of the generation increase in the country during theyear. The coal based stations of your company operated at a Plant Load Factor (PLF) of90.81% (National PLF 77.48%) and Availability Factor of 91.76% at bar during the year.Your Company has an installed coal based capacity of 24,885 MW comprising 81 units withaverage fl eet age of 18.8 years. During the year, 12 coal based stations out of 15achieved more than 90% PLF including six stations registering PLF above 95%. This includedTalcher Thermal Power Station having an average age of 37 years, achieving 90.87% PLF.National Capital Thermal Power Station, Dadri (Stage-I) achieved highest ever annual PLFof 100.59%. The total generation contributed by coal stations is 191.259 BU. The gasstations having a capacity of 3955 MW achieved best ever annual generation of 27.581 BU ata PLF of 78.38% as against 67.01% last year registering a growth of 16.96%. The averageavailability for gas based stations for the year was 93.14% as compared to 86.65% duringprevious year. The Operation Monitoring Centre has been given a new look and have variousfeatures of monitoring Real-time unit outages, Fuel Monitoring Mechanism and efficiencyand environmental parameters monitoring etc.

A detailed discussion on the operations and performance for the year is given in the"Management Discussion and Analysis", Annexure-I included as a separate sectionto this report.

COMMERCIAL PERFORMANCE

During the year, your Company realized 100% payment of current bills raised for sale ofpower for seventh successive year. All the beneficiaries are paying within 30 days ofbilling except the states of UP and J&K which are making payment within thepermissible 60 days period. An innovative rebate scheme of providing incentive for earlypayment based on provisional bill has helped in achieving early realization of dues. Thematter of securitization of outstanding dues of Government of NCT of Delhi for DESU periodis under active consideration by the Ministry of Power.

All the beneficiaries have established and are maintaining Letters of Credit (LC). Ason date, your Company has monthly LCs of Rs. 40659.70 million.

RBI, on behalf of State Governments, serviced redemptions due on bonds and half-yearlyinterest installments on bonds in time as per One Time Settlement Scheme.

Your Company had signed Power Purchase Agreements (PPAs) with 13 beneficiaries duringthe year pertaining to new projects for 8442 MW capacity.

The following units were declared commercial during the year adding 1490 MW tocommercial capacity of your Company:

*COD- Commercial Operation Date

**JV Company

Your Company has filed tariff petitions for the five-year period starting 1.4.2009before CERC for all stations in accordance with the CERC (Terms and Conditions of Tariff)Regulations, 2009. Petitions have also been filed before CERC for revision of tariff forthe period upto 31.3.2009 due to additional capital expenditure incurred at the Stationsin that period as per the provisions of the CERC Tariff Regulations.

Customer Relationship Management (CRM) initiative has been taken by your companytowards strengthening relationship with our customers. It draws inspiration fromCompany’s core values (BCOMIT) that emphasize "Customer Focus". Under this,we provide Customer Support Services in selected areas, with the objective of overallgrowth of power sector. During the year, various workshops and seminars were held atcustomers’ end and free of cost training to 149 customers’ officers was providedbased on the requirement expressed by them. We also organize Regional Customer Meets,State specific Business Partner

Meets and GENCOS Meets regularly for better interaction and sharing of experiences.

Your Company has developed a Customer Satisfaction Index (CSI) for gatheringcustomers’ feedback and responding to their requirements.

INSTALLED CAPACITY

During the year, your Company has added 1,560 MW capacity detailed as under:

The total installed capacity of the NTPC Group has increased from 30,644 MW at the endof fiscal 2008-09 to 31,704 MW at the end of the year 2009-10 as detailed below:

During the current fiscal, your company has added another 490 MW to the capacity bycommissioning Unit 6 of National Capital Thermal Power Project, Dadri. With this, thetotal installed capacity of NTPC Group has crossed 32,000 MW.

CORPORATE PLAN 2032

Your Company has prepared its Long Term Corporate Plan to set the goals and targets forthe period upto 2032. Through this Corporate Plan, the Company has adopted the vision tobe ‘the world’s largest and best power producer, powering India’sgrowth."

Your company has set a target to have an installed power generating capacity of1,28,000 MW by the year 2032. The capacity will have a diversified fuel mix comprising 56%coal, 16% gas, 11% nuclear and 17% Renewable Energy Sources (RES) including hydro.Therefore, by 2032, non-fossil fuel based generation capacity shall make up nearly 28% ofNTPC’s portfolio.

Further beyond 12^th Plan, your Company plans to build only high efficiencysuper-critical and ultra super-critical coal based power plants. The plan also outlinesthe next generation R&D model to drive innovation and develop/ adopt futuretechnologies.

Your Company shall continue to strongly pursue the power trading business and wouldmaintain its scale in consultancy business.

The plan also provides strategies/ mix of options for ensuring fuel security. Theseoptions include long-term contracts from domestic and international markets, purchase fromspot markets, minority/ majority stake in mining companies and involvement in associatedinfrastructure.

CAPACITY ADDITION PROGRAM

Your company has adopted a multi-pronged growth strategy which includes capacityaddition through green field projects, brown field expansions, joint ventures andacquisitions. In addition to furthering capacity addition through Coal / Gas based thermalpower projects, your company has been pursuing enhancement of its power generationportfolio through Hydro, Renewable Energy and Nuclear energy projects. At present 1,920 MWHydro capacity is under implementation together with 552 MW under bidding. In its endeavorfor Renewable Energy, your Company plans to add 1000 MW from RES by 2017.

Projects planned

During the year, investment approval has been accorded by the Board of NTPC and therespective Boards of Joint Ventures/ Subsidiaries for projects having a total capacity of890 MW consisting of 500 MW Vallur Thermal Power Project Phase-II and 390 MW MuzaffarpurThermal Power Project Expansion, involving an investment of about Rs.62420 Million.Various projects having aggregate capacity of 17,830 MW including 4,390 MW, beingundertaken by Joint Venture companies, are under construction, as detailed below:

*commissioned w.e.f. 30^th July, 2010

Further, at present 7,092 MW capacity (3,501 MW NTPC owned and 3,591 MW through its JVsand Subsidiaries) is under bidding. In addition Feasibility Reports (FRs) have beenapproved for projects having an aggregate capacity of 8,460 MW.

Your Company is also identifying new sites for setting up power projects during 12^thPlan and beyond. These projects would be added to the plans after project viability isestablished.

As a measure for further capacity addition, your Company is in discussions with Govt.of Jharkhand and Jharkhand State Electricity Board (JSEB) for taking over Patratu TPS(770MW). A Memorandum of Understanding (MOU) was signed on July12, 2009 amongst yourCompany and Govt. of Chattisgarh to set up 4,000 MW regional power project at Lara,Chattisgarh. Another MOU was signed amongst your Company, Govt. of Madhya Pradesh and MPTradeco Ltd. to set up 2,640 MW regional power project at Narsinghpur district, MadhyaPradesh. Also, Feasibility Report is under preparation for setting up 3,960 MW powerproject at Barethi, Bundelkhand region of Madhya Pradesh. Govt. of Madhya Pradesh hasalready committed land and water availability for this project.

Project Management – A New Appraoch

Your Company has established a state of the art Project Monitoring Centre at Delhi. PMCprovides milestone based project monitoring, project-wise, vendor-wise, critical issuesreporting, enterprise-wide issue monitoring and site progress monitoring through remotecameras. As a matter of fact this has become the Nerve Centre of total project managementof NTPC.

Capacity addition through Subsidiaries and Joint Ventures (JVs)

Besides adding capacities on its own, your Company plans to add capacities through someof its subsidiaries and joint ventures. The detail of JV Companies/Subsidiaries along withdetails of Joint Venture partners for addition of coal based capacity is as under:

JVC denotes Joint Venture Company

Diversified Fuel Mix

Although coal will remain the mainstay for adding generation capacity owing to itsabundant reserves in the country, your Company is progressively diversifying its fuel mixto increase the share of non- fossil fuel with a view to promote sustainable energydevelopment and further reduce CO2 intensity of power generation.

Nuclear Power Development

To extract the benefits of alternate source of energy in order to deal with theproblems of global warming and rising fuel security concerns, your Company has enteredinto a joint venture agreement with Nuclear Power Corporation of India (NPCIL) forformation of a Company to set up a nuclear power project with two nuclear reactor units. Ablueprint for nuclear power development is in place. Experienced engineers/ professionalsand fresh executive trainees have been deputed for training at NPCIL to acquire expertisein nuclear power generation.

Hydro Power

At present, hydroelectric projects of 1920 MW consisting of Koldam (4x200 MW), TapovanVishnugad (4x130 MW) and Loharinag Pala (4 x150MW) are under advanced stage ofconstruction.

Your Company is also setting up small and medium sized hydro projects through itswholly owned subsidiary NTPC Hydro Limited (NHL). Two such projects under development are:

The techno economic clearance of CEA and environmental clearance of MoEF have beenobtained for both these projects. The land for both of these projects has been acquired.PPA has been signed with off-takers for Lata Tapovan HEPP. Infrastructure developmentactivities are under progress at these projects. Both the projects are scheduled to becommissioned during 12^th plan.

Further, in pursuance of MOA signed with Govt. of Mizoram, Detailed Project Report ofKolodyne HEPP (4X115MW) has been submitted to CEA for according Techno-Economic Clearance(TEC).

Your Company has signed an MOU with Gujarat Power Corporation Limited for developing500 MW Renewable Energy projects in Gujarat.

STRATEGIC DIVERSIFICATION - INCREASING SELF-RELIANCE

Your Company is continuously looking for opportunities in the related business areassuch as coal mining, LNG value chain, manufacturing activities, power trading,distribution, R&M and support to power sector development in its endeavour to leverageits strength and secure its interest in the entire power value chain, provide impetus toits core generation business and enhance shareholders’ value.

The details of joint venture companies taking up activities in other sectors such asR&M and support to power sector is as under:

In order to strengthen its competitive advantage in power generation business, theCompany has diversified into the area of manufacturing.

NTPC-BHEL Power Projects Pvt. Limited (NBPPL), a joint venture of your Company withBHEL, incorporated on April 28, 2008 for taking up activities of Engineering, procurementand construction of power plants and manufacturing of equipments, has acquired 750 acresof land in Andhra Pradesh. The Company has bagged two contracts from BHEL on nominationbasis. Your Company is also expected to give EPC contract for Singrauli (1X500MW) to thisCompany.

Another joint venture Company, BF-NTPC Energy Systems Limited was incorporatedwith Bharat Forge Limited on June19,2008 to manufacture castings, forgings, fittings andhigh pressure piping required for power projects and other industries. Land acquisitionfor establishing manufacturing plant at Sholapur, Maharashtra is in progress. A businessplan has been prepared by the consultant and a detailed study is being initiated formanufacturing of some of the shortlisted products.

Your Company has acquired 44.6% stake in Transformers and Electricals Kerala Limitedfrom Government of Kerala on June 19, 2009. The Company deals in manufacturing andrepair of Power Transformers. The Board of Directors of this Company has beenre-constituted. The Company plans to augment the existing capacity to 6000MVA.

Apart from the above initiatives, a subsidiary of your Company namely NTPC ElectricSupply Company Limited, has commenced business of distribution of power through its JVCnamely KINESCO Power and Utilities Private Limited, formed with KINFRA.

Please refer to "Management Discussion and Analysis", Annexure-I included asa separate section to this report for further details.

GLOBALISATION INITIATIVES

Your Company is continuously scanning business potential that global opportunitiesoffer. A representative office is functioning in Dubai since November 2006 for marketingof its services in Middle East Region.

After identification of site for setting up a 2x250 MW coal based power plant inTrincomalee region, Sri Lanka in Joint Venture with Ceylon Electricity Board, your Companyis in the process of finalizing the Implementation Agreement. NTPC Consultancy Wing hasreceived order for site specific studies and preparation of Feasibility Report for JV tobe formed with Ceylon Electricity Board.

Your Company has signed an agreement with Department of Energy, Ministry of EconomicAffairs, Royal Govt. of Bhutan, on December 22, 2009, for preparation of DPR for 620 MWAmochhu Reservoir Hydro-electric Project in Bhutan. Your Company has opened its siteoffice in Phuentsholing, Bhutan.

In terms of umbrella MOU for cooperation in power sector between the Govt. of India andGovt. of Bangladesh in January 2010, it was agreed that your Company will provideconsultancy services to Bangladesh Power Utility (BPDP) in different areas of O&Mservices, setting up power projects etc. The wholly owned subsidiary of your Companynamely NVVN has been identified as nodal agency for cross border power trading withBangladesh.

Your Company is also exploring the possibility of jointly pursing O&M assignmentswith Korea Plant Services and Engineering Co. Ltd (KPS) in countries other than India andKorea.

FINANCING OF NEW PROJECTS

The capacity addition programs shall be financed with a debt to equity ratio of 70:30.Your directors believe that internal accruals of the Company would be sufficient tofinance the equity component for the new projects. Given its low gearing and strong creditratings, your Company is well positioned to raise the required borrowings.

Your Company is exploring domestic as well as international borrowing options includingoverseas development assistance provided by bilateral agencies to mobilize the debtrequired for the planned capacity expansion program.

During the year 2009-10, your Company has tied up loans of Rs. 168,190 millionincluding a large ticket loan of Rs. 85,000 million with State Bank of India and Rs.27,500 million with Canara Bank for part funding of debt requirement in respect of capexfor next three years. In addition, loans amounting to Rs. 55,690 million have also beentied with other banks to fulfill the debt requirement for next three years.

Bonds amounting to Rs.15,000 million were raised from domestic market for financing thecapital expenditure and refifinancing of the loans.

Fixed Deposits

The cumulative deposits received by your Company from 277 depositors as at March 31,2010 stood at Rs 13.39 million. Further, an amount of Rs. 4 million has not been claimedon maturity by 33 depositors as on that date.

Coal Supplies

Your Company has signed Long Term Model Coal Supply Agreement (CSA) with Coal IndiaLimited (CIL) on May 29, 2009 for supply of coal to its stations for 20 years. Based onthe revised model CSA, coal agreements have been signed with the various subsidiary coalcompanies of CIL by coal based stations except Farakka and Kahalgaon. Additional 7.35MMTof coal has been tied up with CIL and Singareni Collieries Co. Ltd. for Farakka, Kahalgoanand other projects. This includes 0.55 MMT of coal procured through e-auction.

During the year 2009-10, your Company received 136.2 Million Tonnes of coal consistingof domestic coal of 129.9 Million Tonnes (about 4.5% higher than the coal received inprevious year) and imported coal to the tune of 6.3 Million Tonnes, at the stations.

During 2009-10, your Company entered into agreement with MMTC for supply of about 12.5MMT of imported coal which is highest ever in NTPC till date. Further, in order to bridgethe short fall in coal supply, Central Electricity Authority advised the power utilitiesto set target for import of coal during 2010-11. Your company has been advised by CEA toplace the orders for import of coal aggregating to 13.90 MTs during 2010-11.

Gas supplies

During the year 2009-10, your Company received 13.88 MMSCMD of gas/RLNG as against10.75 MMSCMD received during 2008-09 registering an increase of 29.12%. The gas off-takein 2009-10 includes 9.08 MMSCMD APM/ PMT gas, 4.45 MMSCMD RLNG and 0.35 MMSCMD of KG D6basin gas.

Your Company renewed APM gas agreements up to the year 2021 and PMT gas agreements upto the year 2019 for its gas stations. Your Company has also signed long term contract forsupply of RLNG of 2.0 MMSCMD on firm basis and 0.5 MMSCMD on fallback basis with GAIL fora period of 10 years for NCR gas stations viz. Anta, Auraiya, Dadri and Faridabad.Further, Government of India allocated additional gas of 4.46 MMSCMD from KG-D6 Basin. Outof this quantity, 1.81 MMSCMD has already been tied up and the balance would be tied upduring the year 2010-11.

Your company has arranged for tying up of spot RLNG on reasonable endeavour basis basedon requirement. Also, your Company has fallback RLNG supply agreements at pooled pricewith GAIL, IOCL, BPCL and GSPCL.

Development of Coal Mining projects

Coal Mining being integral to your company’s fuel strategies, is being developedin ‘Project Mode’.

All notifications for mining area land acquisition have been completed for PakriBarwadih, Chatti-Bariatu, Kerendari and Talaipalli Coal Blocks. Rehabilitation actionplan(s) were approved by Board for Pakri Barwadih, Chatti-Bariatu and Kerendari coalblocks and disbursement of land compensation commenced. With approval of Mining Plan forDulanga (7MTPA) and Talipalli (18MTPA) by Ministry of Coal this year, Mining Plan approvalfor total 53 MTPA was received. Environmental clearance was accorded for Pakri Barwadih,Chatti Bariatu and Kerandari Coal Blocks.

Stage-I Forest Clearance for Pakri Barwadih coal block was accorded by MOEF. Yourcompany has tied up with NESCL for permanent power arrangements for coal mining projects.

With completion of detailed exploration in two coal blocks i.e. Talipalli which wasun-explored and Dulanga which was partly explored, Geological Reports are available forall coal blocks.

Your Company has taken a number of CSR measures for the benefit of the people aroundits coal mining sites. Under community development activities, it is planned to set up anITI at Barkagaon, Distt. Hazaribagh, Jharkhand and also to adopt and upgrade another ITIat Pussore, Distt.

Raigarh, Chhatisgarh besides undertaking other community development activities.

Other initiatives for securing coal supply

To leverage the strength of established players in mining and related areas, yourCompany has formed following Joint Venture Companies:

Your Company is also exploring opportunities for acquiring stake in coal mines inIndonesia, Australia and Mozambique.

Exploration Activities

Under NELP VIII, your Company has been allotted one block at Cambay basin as a soleoperator and three blocks out of which two blocks are in KG basin and another in Andaman,as a member of the consortium led by ONGC with 10% participating interest in each block.

BUSINESS EXCELLENCE: GLOBAL BENCHMARKING

As a step towards developing ‘Total Quality’ culture in the organization,your Company took forward the Quality Circle and Professional Circle movements for itsemployees. These fora provide opportunities to the employees to get together, network andshare knowledge and experience on issues of professional interest. There are 800 QC teamsand 300 PC teams across the Company creating refreshing learning culture.

With the objective of benchmarking the performance of its units with internationalunits, your Company became a member of North American Electric Reliability Corporation(NERC). NERC has database of more than 5000 units worldwide under Generating AvailabilityData System (GADS). Your Company’s coal units of 200 MW and 500 MW capacity werebenchmarked with equivalent sized units amongst their peer group. The comparison revealedthat 200 MW as well as 500 MW units of your Company performed better than the peer groupunits during the year on parameters of availability, forced outage, planned outage andcapacity outage.

RENOVATION & MODERNISATION

Your Company undertakes Renovation & Modernization (R&M) under project modewith focus on feasible and cost effective technology upgrade, efficiency improvements tobring the latest design to old vintage units. It gives an opportunity to leverage thetechnological advancement which has taken place in the power industry so as to continueeconomical power generation. It may also help to reduce emission of green house gases andavail Clean Development Mechanism benefits apart from life extension of the plant.

Apart from the above, your Company is providing Consultancy Services for Renovation& Modernisation of old units of State Electricity Boards through a department"APDP-R&M". During the year 2009-10, your Company provided ConsultancyServices for R&M to Barauni TPS (2x110MW) & Muzaffarpur TPS (2x110MW) of BiharState Electricity Board, Obra TPS (5x200MW) & Harduaganj TPS (1x110MW) of UttarPradesh Rajya Vidyut Utapadan Nigam Limited and Ropar TPS (2x210MW) of Punjab StateElectricity Board.

Implementation of Integrity Pact

Your Company is striving to bring more transparency to its business processes and as astep in this direction has signed a Memorandum of Understanding with TransparencyInternational India in December, 2008. The Integrity Pact is being implemented for allcontracts having value exceeding Rs. 100 million. Two Independent External Monitors havebeen nominated by the Commission for all contracts values exceeding Rs. 1000 million.

Implementation of Fraud Prevention Policy

The Fraud Prevention Policy has been formulated and implemented in your Company since2006.The cases referred by the nodal officers are being investigated immediately to avoidfraudulent behaviors.

Workshops and Vigilance Awareness Week

Preventive Vigilance Workshops are being conducted every year to sensitize employeesabout sensitive points in work areas and their role in preventing corruption.

Vigilance Awareness Week is being organized every year in first week of November toemphasize on leveraging of IT, create awareness for transparency accountability, fair playand objectivity.

HUMAN RESOURCE MANAGEMENT

Your Company takes pride in its highly motivated and competent human resource that hascontributed its best to bring the Company to its present heights. The productivity ofemployees is reflected in the consistent improvement of Man-MW ratio over the years. Theover-all Man-MW ratio for the year 2009-10 excluding JV/subsidiary capacity is 0.82 and0.80 including capacity of JV/ Subsidiary. Generation per employee has increased to 9.22MUs registering an increase of 5.37% over the last year.

The total employee strength of the company stood at 24,955 as on 31.3.2010 against24,713 as on 31.3.2009.

The attrition rate of the executives during the year has reduced to 1.00% from 1.88% inthe previous year.

Employee Relations

During the year, employee relations scenario in your Company continued to be conducivemarked by industrial harmony and mutual trust. Regular interactions take place amongst themanagement and apex forums of workmen called National Bipartite Committee and withexecutives’ forum named NTPC Executive Federation of India. Employees’participation in Management has been boosting morale of the employees.

The process of pay revision of wage and benefit structure for employees in Executivecategory and for employees in unionized category (workmen) was completed on 16.09.2009 and07.07.2010 respectively.

Safety

Your Company has always given prime importance to occupational health and safety to allthe persons working in its projects and stations by making all efforts to prevent alltypes of accidents. To comply with the safety requirements, qualified Safety Officers havebeen appointed in all the units. The line executives take full responsibility of safetymanagement and take preventive measures.

To spread the awareness of safety measures, safety months are organized involving eachworker, wherein activities like safety related competitions including safety elocution,paintings and quizzes are conducted.

Training and Development

In line with its long-term objective of being a learning organization, your Company hasa policy of continuously investing in training and development of not only its ownemployees but also of all professionals of the power sector. The Company imparts trainingat its sites as well as at the corporate level in diverse areas including generalmanagement, power station operation and maintenance, project construction, erection andcommissioning and information technology. Training imparted is always in tune with newemerging needs in diverse areas like nuclear power, coal-mining, hydro-power,super-critical technology, power trading etc.

In pursuit of developing manpower in power sector, your Company established a dedicatedtraining institute – Power Management Institute (PMI) at NOIDA, U.P. in 1994. Sincethen PMI has grown into an impressive centre of learning. In the year 2009-10, PMIconducted a total of 330 programmes attended by a total of 9049 participants. Your Companyalso has largest number of Project Management Certified Professionals in India.

To widen its portfolio, PMI launched an on-going scheme of strengthening the IndustrialTraining Institutes (ITIs) across the country by investing in its infrastructureupgradation, starting of new trades’ teaching and commencing new classrooms wherenone existed earlier.

An international conference on O&M of power stations was held during December13-15, 2009 wherein several technical papers were presented for experiential learning byprofessionals from power sector companies of India as well from foreign countries.

INCLUSIVE GROWTH

Your Company is committed to inclusive growth through its Corporate SocialResponsibility initiatives under an integrated stakeholder approach covering environmentaland social aspects.

With a view to provide basic civic amenities in socio- economically backward areas,your Company is working in the areas of basic infrastructure development like sanitation,road, drinking water, primary education, community health, vocational training etc. YourCompany has expressed its commitment to provide financial support for setting up TechnicalPolytechnic at Kaladungi, Nainital Distt, and women’s polytechnic at Gopeshwar,Distt. Chamoli, Uttarakhand. Construction of a school cum multi-purpose building for girlsin Village Shaulana, Distt. Ghaziabad, Uttar Pradesh was completed in July 2009 with yourCompany’s support. Vocational training programs such as computer training, vehicleand mobile repairing for youths and coaching classes for children in villages was providedat various locations.

In order to help women to become more self reliant, assistance was provided to 500tribal girls/ women in 15 tribal villages in Udaipur Dist. of Rajasthan. A girls’hostel was constructed in Guntur Distt of AP. Financial support was provided fororganizing educational and developmental workshop for Kashmiri migrants.

As a measure to contribute towards conservation of selected national monuments, yourCompany in association with Archaeological Survey of India (ASI) has identified 3 sitesfor financial support.

Your Company was actively involved in preparation of "ISO 26000 Guidance on SocialResponsibility" and participated in various workshops/ meetings in the capacity ofindustry experts on CSR. It was also closely associated with Bureau of Indian Standards information of "Standard on Good Governance" and with the Ministry of CorporateAffairs in preparation of Guidelines on Corporate Social Responsibility.

Committed to its social responsibility, your Company became a member of Global Compact,a voluntary initiative of the UN for CSR. Your Company confirms its involvement in variousCSR activities in line with 10 Global Compact principles and shares its experience withthe representatives of the world through "Communication on Progress". A reporton progress made in this area is enclosed at Annex-IX to Directors’ Report.

NTPC Foundation

NTPC Foundation, registered in December’2004, is engaged in serving and empoweringthe physically challenged and economicallyweakersectionsofthesociety.TheInformation andCommunication Technology (ICT) Centre, set up jointly by NTPC Foundation and University ofDelhi, and similar ICT facilities to the existing blind schools in Lucknow, Ajmer,Thiruvanathapuram and Mysore are helping a large number of physically challenged studentsto learn IT Skills and move along with the mainstream society. More than 800 physicallychallenged students have got benefited in these centres till now.

Disability Rehabilitation Centre established at Tanda (U.P.) in collaboration withNational Institute of Orthopedically Handicap (NIOH), Ministry of Social Empowerment, Govtof India is providing rehabilitation/ restorative surgery tophysicallychallengedpersonslikemedicalinterventionsand surgical corrections, fitting ofartificial aids and appliances and therapeutic services etc. Till now, more than 26000physically challenged persons have got benefited from the centre and close to 1800 suchpersons have been provided with various artificial aids and appliances.

In the area of health, Direct Observation Treatment cum Designated Microscopy Centre(DOT cum DMC) with Mobile Vans, diagnostic equipments and paramedical services have beenstarted at 10 NTPC stations for diagnosis and treatment of the Tuberculosis patients inthe neighbourhood villages of the stations. Till date more than 5700 patients have beenexamined by these centres and treatment has been provided as per requirement.

NTPC Foundation is also providing grants for setting up of Distributed GenerationProjects for preparation of feasibility report, DPR, Insurance and for meeting fundinggap.

Rehabilitation & Resettlement

Your Company is committed to help the people displaced for execution of its projectsand has been making efforts to improve the Socio-economic status of Project AffectedPersons(PAPs)andalsoundertakingcommunitydevelopment activities in and around the projects.Rehabilitation Action Plans are implemented in most of the projects.

"Initial Community Development" (ICD) policy has been further widened tocover hydro/ mining and other projects to facilitate taking up community developmentactivities in new greenfield/ expansion projects soon after land and water clearances arereceived from State Governments.

Your Company has approved setting up of a new Greenfield Industrial Training Instituteat Bongaigaon.

IMPLEMENTATION OF OFFICIAL LANGUAGE

Your Company has made vigorous efforts for the propagation and successfulimplementation of the Official Language Policy of the Government of India. Several Hindiworkshops and competitions were conducted at projects, regional offices and corporatecentre during the year to encourage the employees to maximize the use of Hindi in officialwork. All office orders, formats and circulars were issued in Hindi as well. Importantadvertisements and house journals were released in bilingual form- in Hindi and inEnglish. Your company’s website also has a facility of operating in bilingual form-in Hindi as well as in English.

SUSTAINABLE ENERGY DEVELOPMENT

Your Company has adopted the following vision statement on sustainable energydevelopment:

" Going Higher on Generation, lowering GHGintensity"

Your Company is committed for development of renewable energy in view of global warmingand fast depletion of fossil fuel.

Your company envisages capacity addition of 1000 MW through renewable energy sources by2017. An MOU has been signed with GPCL for development of 500 MW renewable energy basedprojects, preferably wind and solar, in Gujarat. Your Company has approved a road map toforay into solar power generation business for capacity addition of 301 MW through solarenergy by March 2014. Out of 301 MW, 190 MW will be added through Solar Thermal technologyand the balance 111 MW will be added through Solar PV technology. As a first step, gridinteractive 15 MW solar thermal based project is being taken up at Anta in Rajasthan whichis the first of its kind in India. Another MOU has been signed with Andaman & Nicobaradministration for development of 5 MW solar PV based project in South Andaman and 1MWsolar energy based project in North Andaman.

Your Company has so far commissioned 15 Distributed Generation projects, out of which 5projects are in Uttar Pradesh, 4 in Chattisgarh, 1 in Rajasthan and 5 in Madhya Pradeshwith a total capacity of 300 KW, benefiting 2150 households. 5 DG projects near NTPCVindhyachal Project in Sidhi Distt. in Madhya Pradesh are based on biomass and 1 DGproject in Chattisgarh is based on micro-hydel. Feasibility studies for development of DGprojects near Company’s coal mining projects are being finalized.

NETRA – R&D Mission in Power Sector

NTPC Energy Technology Research Alliance focuses on areas such as Climate Change ,Waste Management, New & Renewable Energy, Efficiency improvement, Cost reduction andreliability of stations.

Research Advisory Council (RAC) of NETRA has been constituted with eminent experts fromNational and International organizations to deliberate on the projects of NETRA. Regularmeetings of RAC are being held and many new initiatives have been taken for R&D. AScientific Advisory Council has been constituted consisting of Regional EDs and Heads ofProjects as its members to help the stations in improving the efficiency, reliability andavailability and reducing cost of generation. More than 21 Networking partners areinvolved alongwith NETRA in carrying out various projects identified by NETRA.

NETRA has filed 3 patent applications for various activities like integrated approachfor bio-diesel preparation utilizing biofruit (Pongamia fruit), sensor for tube inspectionand method and apparatus for efficient heat integration.

NETRA has signed an MOU with IOCL (R&D) for collaborative research on BiochemicalTreatment of organic rich waters, development of energy efficiency lubricants, integratedplant for bio-diesel production, utilization of biomass for power generation, NDT andcorrosion related projects for health assessment.

Environment Management – Continuous Improvements

Your Company is pursuing the objective of sustainable power development. It has taken anumber of initiatives towards preservation of the environment by providing state-of-theart pollution control systems, regular environment monitoring and judicious use of naturalresources, adoption of advanced and high efficiency technologies such as super criticalboilers for the up-coming greenfield projects. High efficiency Electro-staticPrecipitators (ESPs) with efficiency of the order of 99.9% or higher and advanced ESPcontrol systems have been provided in all coal based plants to keep Suspended ParticulateMatter (PM) below the permissible level of 150 mg/Nm³. All new plants are beingprovided with ESPs designed for outlet dust burden of below 100 mg/Nm³. FlueGas Conditioning (FGC) system has also been provided at our older stations at Singrauli,Korba, Farakka, Ramagundam, Rihand and Badarpur which is further contributing in reductionof PM emissions below statutory limits.

To treat the waste water and reduce consumption of fresh water requirements for theplants, your Company has installed Liquid Waste Treatment Systems, Ash Water RecirculationSystem and closed cycle condenser cooling water systems with higher Cycle of Concentration(COC) in its stations. Further, treated waste water is used in various plant systemsresulting in reduction of fresh water requirement. This has resulted in considerablereduction in fresh water intake by 20% to 30% and also reduction in quantity of effl uentdischarge from the power plants.

Ash dykes in the Company have been engineered to ensure that all safety and environmentissues are addressed at design stage itself. Multi-lagoon ash ponds with provision ofover-fl flow Lagoons and ash pipe garlanding arrangement for change over of ash slurryfeed points have been provided for effective settlement of ash particles. Water sprinklershave been provided in the Ash Pond areas for control of fugitive dust.

As a proactive measure and to effectively utilize biodegradable solid wastes generatedin project canteens and townships, a pilot scale Bio-Methanation Plant has been set up atFaridabad and is under installation at Singrauli in order to convert the waste into usefulenergy and bio-fertilizer.

In order to monitor key environmental parameters of stack emissions, ambient air andeffl uents continuously on real time basis, 61 continuous Ambient Air Quality MonitoringSystem (AAQMS) along with Meteorological Sensors have been installed at 20 stationslocated all over India.

Clean Development Mechanism (CDM)

Your Company is pioneer in undertaking climate change issues proactively. It has takenseveral initiatives in CDM Projects in Power Sector. North Karanpura STPP, LoharinagpalaHEPP and Tapovan Vishnughad HEPP have got Host Country Approval from National CDMAuthority. A methodology prepared by your Company namely "Consolidated baseline andmonitoring methodology for new grid connected fossil fuel fired power plants using lessGHG intensive technology" for super critical Technology has been approved by"United Nations Frame Work Convention on Climate Change (UNFCCC)" under‘Approved Consolidated Methodology 13’. More green field and energy efficiencyCDM projects are in pipeline.

Ash Utilisation

During the year 2009-10, all time high 27.61 million tonne of ash has been utilized forvarious productive purposes which is 59.73% of the total ash generation against MoU targetof 55%.

Important areas of ash utilization are- manufacturing cement, concrete, ash basedproducts, asbestos sheets, construction of road embankment, ash dyke raising, mine fillingand land development. Issue of fl y ash to cement and concrete industry this year has been10.85 Million Tonnes, about 8.5% more than last year’s issue.

Fly ash and pond ash is being issued free of cost to fl y ash/ clay ash bricks, blocksand tiles manufacturers on priority basis over other users from all the NTPC’sStations. Fund collected from sale of ash is being maintained in a separate account by thesubsidiary company i.e. NTPC Vidyut Vyapar Nigam Limited and the same is being utilizedfor development of infrastructure facilities, promotion and facilitation activities toenhance ash utilization.

CenPEEP – towards enhancing efficiency

Center for Power Efficiency and Environmental Protection (CenPEEP), set up withtechnical assistance of USAID/ USDOE is a symbol of your Company’s commitment towardsgreen house gas (GHG) mitigation from existing thermal power plants. Through theimplementation of Efficiency Management System and Knowledge Based Maintenance in powerplants, your Company has avoided emission more than 30 Million tons of CO2 since inceptionof the programme in 1996. These systems are based on state-of-the-art technologies whichare customized to local conditions and disseminated to power stations byhands-on-training, guidelines and workshops.

Government of India has identified CenPEEP to support Asia Pacific Partnership programon Clean Development and climate change initiative. CenPEEP has worked with various stateutilities for identifying potential for reduction in CO2 emissions.

International cooperation for climate change has been expanded with signing of anagreement between Ministry of Power, NTPC Ltd. and Japan International Agency forCooperation (JICA) to undertake a ‘Study on enhancing Efficiency of Operating ThermalPower Plants in NTPC- India’. The study further strengthens CenPPEP as a resourcecentre, assimilating best practices from both eastern and western countries.

CenPEEP was conferred ‘International Star Gold Award 2009’ by BIDInternational at Geneva.

MANAGEMENT OF CHANGE

Your Company has taken several initiatives to improve business processes, promoteinnovation and leverage information & communication technology for over-allproductivity enhancement.

Rural Electrification

NTPC through its wholly owned subsidiary NESCL is carrying out the implementation ofrural electrification in 29 districts in 5 States namely Madhya Pradesh, Chhatisgarh,Orissa, Jharkhand and West Bengal under Rajiv Gandhi Grameen Vidyutikaran Yojna (RGGVY).MOU target of 7500 Un-electrified/ de-electrified (UE/DE) and 8.5 lac BPL householdconnection was achieved ahead of schedule. Total number of villages electrified during2009-10 was 8017 and BPL connection was provided to 8.65 lac households.

Right to Information

Your Company has implemented Right to Information Act, 2005 in order to provideinformation to citizens and to maintain accountability and transparency. The Company hasdesignated a Central Public Information Officer (CPIO), an Appellate Authority and APIOsat all projects/ stations/ offices of NTPC. During the year 2009-10, all 644 applicationsreceived under the RTI Act were processed and replied to. In compliance with Section 4 ofthe RTI Act, RTI manual has been updated and put on NTPC website. Further, RTI portal forbenefit of NTPC employees has been created on NTPC Intranet. Workshops on RTI Act havebeen conducted at regional headquarters and at projects to share and deliberate on latestnotifications, amendments and other issues for smooth implementation. Interaction werealso held with SAARC delegates on RTI.

Using Information and Communication technology for productivity enhancement

Enterprise Resource Planning has been implemented at all Company’s locations andits subsidiaries covering all core business processes of Finance, Materials, Maintenance,Projects, Operations, HR, Fuel Management, etc. ERP has been integrated with FreightOnline Integrated System of Railways. Also, new initiative like Activity Based Budgeting(ABB) and Overhaul Preparedness Index (OPI) have been implemented.

Your Company has set up a Project Monitoring Centre (PMC) at Delhi which is being usedby your Company very effectively to monitor all 44 units under construction. Thevideo-wall facility facilitates conferencing with all projects and web based projectmonitoring with respect to schedule.

NTPC GROUP : JOINT VENTURES AND SUBSIDIARIES

Your Company has formed 17 joint venture companies and 5 subsidiary companies forundertaking specific business activities. Another subsidiary, Pipavav Power DevelopmentCompany Limited, is under winding up through striking off its name under Section 560 ofthe Companies Act, 1956 pursuant to the Directive issued by the Ministry of Power.Accordingly, necessary application with declarations and affidavits for winding up of theCompany have been filed with the Registrar of Companies, NCT of Delhi & Haryana on29.04.2010.

The above Joint Venture Companies also include CIL NTPC Urja Pvt. Ltd. which wasincorporated on April 27, 2010.

The names of these companies and the percentage of your Company’s stake in theseCompanies is as follows:

The performance of these companies as well as the consolidated financial statements arebriefly discussed in the Management Discussion & Analysis section. The financialstatements of subsidiary Companies along with the respective Directors’ Report areplaced elsewhere in this Annual Report.

STATUTORY AND OTHER INFORMATION REQUIREMENTS

Information required to be furnished as per the Companies Act, 1956, Listing Agreementwith Stock Exchanges, Government guidelines etc. is annexed to this report as below:

**INFORMATION AS PER COMPANIES (PARTICULARS OF EMPLOYEES) RULES, 1975

The information required under Section 217(2A) of the Companies Act, 1956 read with theCompanies (Particulars of Employees) Rules, 1975, as amended, are set out in Annexure tothe Directors’ Report and forms part of this report. In terms of Section219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to allthe shareholders excluding the aforesaid annexure. Any shareholder interested in obtaininga copy of the said annexure may write to the Company Secretary at the registered office ofthe Company. The information is available at NTPC Website at www.ntpc.co.in. The Company(excluding JV’s and Subsidiaries) had 23743 employees as on March 31, 2010. 998employees employed throughout the year were in receipt of remuneration of Rs. 24 lac perannum and 151 employees employed for part of the year were in receipt of remuneration ofmore than Rs. 2 lac per month.

STATUTORY AUDITORS

The Statutory Auditors of your Company are appointed by the Comptroller & AuditorGeneral of India. M/s Varma & Varma, B.C. Jain & Co., Parakh & Co., S.K.Mittal & Co., Dass Gupta & Associates and S.K. Mehta & Co. were appointed asJoint Statutory Auditors for the financial year 2009-10.

MANAGEMENT COMMENTS ON STATUTORY AUDITORS’ REPORT

The Statutory Auditors of the Company have drawn attention to certain matters inParagraph 4 (f) (i) and (ii) of their Report to the Members. In this regard, yourDirectors clarify as under:

The CERC notified the Tariff Regulations 2009 containing, inter-alia, the terms andconditions for determination of tariff applicable for a period of five years w.e.f. 1stApril 2009. The Company has filed tariff petitions for determination of tariff in respectof all its stations with CERC. Pending determination of tariff by the CERC, the basis forbilling and accounting of sales for the year has been explained in Note nos. 2(a) &(b) of the Annual Accounts referred to by the Statutory Auditors.

The appeal filed by the CERC against some of the issues decided by the AppellateTribunal for Electricity in respect of tariff for the period 2004-2009 is pending fordisposal before the Hon’ble Supreme Court of India. This fact and the basis forrecognition of the sales in the financial statements has been disclosed in Note No. 2(e)of the Annual Accounts.

REVIEW OF ACCOUNTS BY COMPTROLLER & AUDITOR GENERAL OF INDIA

As advised by the office of the Comptroller & Auditor General of India (C&AG),the comments of C&AG for the year 2009-2010 are being placed with the report ofStatutory Auditors of your Company elsewhere in this Annual Report.

COST AUDIT

As prescribed under the Cost Accounting Records (Electricity Industry) Rules, 2001, theCost Accounting Records are being maintained by all stations of the Company since the year2002-03. The cost audit for the year 2009-10 has been completed and the Cost Audit reportsare being submitted by the Cost Auditors.

BOARD OF DIRECTORS

Shri R.K. Jain ceased to be Director (Technical) of the Company with effect fromDecember 31, 2009 on attaining the age of superannuation.

Shri D.K. Jain, Executive Director (Engineering) has taken over as Director (Technical)with effect from May 13, 2010.

Shri R.C. Shrivastav ceased to be the Director of the Company on June 30, 2010 onattaining the age of superannuation.

Shri Chandan Roy ceased to be the Director of the Company on July 31, 2010 on attainingthe age of superannuation.

The Board wishes to place on record its deep appreciation for the valuable servicesrendered by Shri R.K. Jain, Shri R.C. Shrivastav and Shri Chandan Roy during theirassociation with NTPC.

In accordance with the provisions of Article 41(iii) of the Articles of Association ofthe company four directors - Shri Shanti Narain, Shri P.K. Sengupta, Shri K. Dharmarajanand Dr. M. Govinda Rao shall retire by rotation at the Annual

General Meeting of your Company and, being eligible, offer themselves forre-appointment.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217(2AA) of the Companies Act, 1956 your Directors confirmthat:

1. in the preparation of the annual accounts, the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

2. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year 2009-10and of the profit of the company for that period;

3. the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies

Act, 1956 for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; and

4. the Directors had prepared the Annual Accounts on a going concern basis.

ACKNOWLEDGEMENT

Your Directors acknowledge with deep sense of appreciation the co-operation receivedfrom the Government of India, particularly the Prime Minister’s Office, Ministry ofPower, Ministry of Finance, Ministry of Environment & Forests, Ministry of Coal,Ministry of Petroleum & Natural Gas, Ministry of Railways, Planning Commission,Department of Public Enterprises, Central Electricity Authority, Central ElectricityRegulatory Commission, Appellate Tribunal for Electricity, State Governments, RegionalPower Committees, State Electricity Boards and

Office of Solicitor General of India.

Yourdirectorsalsoconveytheirgratitudetotheshareholders, various International andIndian Banks and Financial Institutions for the confidence reposed by them in the Company.The Board also appreciates the contribution of contractors, vendors and consultants in theimplementation of various projects of the Company. We also acknowledge the constructivesuggestions received from Government and the Statutory Auditors.

We wish to place on record our appreciation for the untiring efforts and contributionsmade by the employees at all levels to ensure that the company continues to grow andexcel.

A. CONSERVATION OF ENERGY:

a) Energy conservation measures taken:

Some of the important energy conservation measures taken during the year 2009-2010 indifferent areas are as under:

ENERGY AUDITS

During 2009-10, 107 energy audits in the areas of auxiliary power consumption, waterbalance, cooling water system, thermal insulation, compressed air, coal handling plant,MGR, milling system, air conditioning, ash handling system, GT compressors, GT open cycleefficiency, WHRB performance, lighting etc. were carried out at different stations of thecompany.

Till now 255 executives of NTPC have passed Energy Auditors Examination of Bureau ofEnergy Efficiency to become Certified Energy Auditors / Managers.

AUXILIARY POWER CONSUMPTION

Replacement of inefficient BFP cartridges and attending BFP recirculation valves atDadri, Rihand, Singrauli, Unchahar, Kahalgaon, Korba, Vindhyachal, Badarpur etc.,Application of efficiency improvement coating on cooling water pump internals at TalcherThermal & Kawas, Vapour Absorption System for control room airconditioning atUnchahar, Attending passing of LPBFP recirculation valve at Dadri gas, Installation of FRPblades in HVAC cooling towers and fin fan Coolers at Kawas, Optimization of operation ofCW pumps, ARCW and clarified water pumps & Cooling Tower Fans at Anta, Auraiya,Unchahar, Farakka, Korba, Vindhyachal, Maintaining optimum DP across Feed RegulatingStation at Kahalgaon, Korba, Singrauli and Vindhyachal, Optimization of HP/LP water pumpsat Dadri coal, Singrauli and Rihand, External cleaning of Fin Fan coolers by steam jettingat Kawas, Optimization of AC compressors and airwasher units at Kahalgaon, TalcherThermal, Simhadri and Anta, Optimization of air compressors at Tanda, Vindhyachal andSimhadri.

LIGHTING

Installation of timer switches in plant and township lighting at Anta and Kahalgaon,Replacement of conventional GLS lamps and conventional FTLs with CFLs at Singrauli,Unchahar, Vindhyachal, Ramagundam, Kayamkulam, Kawas and Gandhar.

HEAT ENERGY

New installation of Online condenser tube cleaning system at Rihand, New installationof Online water washing system for GT compressors at Kayamkulam, Repair of ThermalInsulation and cladding at Unchahar and Kayamkulam, Optimization of ejector steam pressureat Vindhyachal.

Arresting passing in HP heaters at Ramagundam, Improving condenser vacuum by tubecleaning, arresting air leakages etc at Anta, Talcher Thermal and Gandhar, Cleaning ofBoiler with ammonia at Auraiya.

DM WATER

Reuse of uncontaminated SWAS drains at various stations.

MISCELLANEOUS WATER

Reuse of water from ash pond at various stations, Reuse of clarified return water andraw water from coal settling pond at various stations

b) Additional investments and proposals for reduction in consumption of energy:

Provision of Rs.1068 lacs has been kept in BE 2010-11 for different energy conservationschemes like:

- On-Line Energy Management System

- Vapor absorption system for Air Conditioning

- Up gradation of Boiler Feed Pumps

- Energy efficient devices in lighting

c) Impact of measures taken for energy conservation:

Savings achieved during 2009-2010 on account of specific efforts for energyconservation:-

Savings achieved during 2008-09: Rs: 498.02 Million

B. Technology Absorption:

Efforts made towards technology as per Form –B (Form-B enclosed)

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Activities relating to export initiative taken to increase export, development of newexport markets for products and services and export plan:

1. MOU Projects with MoP for 2009 – 10 Completed : TechnicalSpecification of Centralized Ammonia based Flue Gas Conditioning System (with Heavy WaterBoard, Mumbai); Setup Advance Computing Centre : Phase-I; Design of integrated biodieselpilot unit for using 80% energy from biofruit instead of existing 15%; Optimization ofprocess parameter for bench scale PSA system for CO2 separation from fl ue gas (with IITMumbai, IIP Dehradun, NEERI Nagpur, CSMRI Bhavnagar); Lab scale design & dev ofautomated LTSH/eco tube surface inspection system; Feasibility study of producing methanefrom raw water, as a supplemental fuel to boiler (with IIT Delhi); ECBC 2007 compliance ofnew building; Lab scale development of technique for online monitoring of colloidal silicain steam water cycle

2. Developmental Projects undertaken by NETRA:

A. Climate Change: Study of CO2 capture technology (With IIT Guwahati); Study ofCO2 storage technology (With IIT Kharagpur); PSA based CO2 capture technology (With IITMumbai, IIP Dehradun, NEERI Nagpur, CSMRI Bhavnagar)

B. New & Renewable Energy: Preparation of Technical Specifications for ademonstration plant for Solar air Conditioning; Preparation of DPR for setting up of‘1 MW Solar Thermal Demonstration Plant; Designing of Integrated self sustainingbiodiesel plant

C. Efficiency Improvement and Cost reduction: Lab Testing of 5 KW MALAE Cycle pilotplant (With UICT, Mumbai); Studies on Flue Gas Heat Recovery from power plant; CFDModeling of 210 MW Boiler (With NCL Pune); Field trials of Robotic crawler for boiler tubethickness; Technical Feasibility Report for Plasma coal burners for Oil Gun Replacement;Technical Feasibility Report for Heat Pipe based Air Pre-Heater; Motor windingmodification specifications suitable for VFD retrofitting; Development of nano coatingmaterial for HV insulators (with IIT Roorkee); etc.

3. Scientific Support to NTPC Stations:

NETRA continued to provide scientific support to NTPC stations and other utilities suchas: Studies on Corrosion Induced damages to RCC structures of cooling towers of Simhadri(Stage 1); Change of specifications of PA fan blades of coastal power stations; 11 boilerswere chemically cleaned to improve the heat transfer; Environmental Appraisal of 20stations have been carried out and corrective actions are being taken by the stationsbased on the appraisal; Health assessment of plant components like Platen super heatertubes of Ramagundam, generator rotor, main steam pipeline, hot gas path components of gasstations, etc; failure investigations such as LP turbine blade of Tanda, condenser tubesof Badarpur, Condenser tubes of Tarapore Atomic Power station, etc; repair of criticalelectronic card; improvement in heat transfer of HRSGs of gas stations; Development ofguidelines for CW system operation & monitoring and cleaning of sulphuric acid tanks;development of chemical treatment programs for Tanda, Jhajjar, Talcher Kaniha, TalcherThermal, etc; Design of cathodic protection system for condenser water boxes at Badarpur;Condition monitoring of 500 HV transformers by DGA, 1300 rotating equipment by wear debrisanalysis, ion exchange resins of 18 stations; etc

4. Scientific Support to Other Utilities:

Scientific services provided to more than 60 other utilities such as Panipat, KotaThermal, Lehra Mohabat, Faridabad, JPL (Raigarh), Neyvelli, IPGCL, DVC, PGCIL. NHPC, etc

5. Works under Patent:

Three (3) Patents namely: 1 - Integrated approach for biodiesel preparation utilizingbiofruit (Pongamia fruit) utilizing 83% energy instead of existing 15%"; 2 –Sensor for tube inspection and 3 - Method and Apparatus for efficient heat integration;have been filed by NETRA in 2009 – 10

2.0 Benefits derived as a result of above Research & Technology Development:

NETRA activities as carried out have helped in increasing the availability, reliabilityand efficiency of the stations. Chemical treatment and corrosion control measuressuggested is helping the stations in improving the efficiency, availability and life ofvarious heat exchangers/cooling towers. Techniques developed by NETRA are implemented atstations, which are enhancing the life of boiler & turbine components.

The timely and scientific failure analysis of various components helped in identifyingthe cause of failure and thus providing necessary input for taking corrective action inpreventing re-occurrence of similar failures thereby increasing the availability of powerplant equipment.

Studies on CO2 fixation/utilization; solar thermal; biofuels will result intodevelopment of technologies for reduction in the impact on climate change and technologiesfor affordable renewable energy sources. Development of technologies for efficiencyimprovement will help in reducing cost of generation

3.0 FUTURE PLANS

Developmental Projects planned to be taken up:

A. Climate Change: Feasibility study of CO2 fixation for development ofProduct/EOR; Feasibility report for setting up of 100 Kg/day pilot plant of microalgaebased CO2 capture technology; NIT for setting up of pressure swing adsorption (PSA) basedCO2 capture pilot plant 100 Kg/hr. flue gas capacity; Feasibility studies on 1.2 T/day CO2fixation by aqueous carbonation of flyash at Ramagundam

B. New & Renewable Energy: Award for solar heating ventilation andair-conditioning (HVAC) system; TS for 1 MW solar thermal pilot plant; Commissioning ofintegrated biodiesel pilot plant to produce energy for existing biodiesel plant at Dadri;Set-up & commissioning of solar radiation station at suitable locations; Lab scaledemo of methane production from raw water of Badarpur (with IIT Delhi); Experimental setup of Thermoelectric Generation

C. Efficiency Improvement & Cost reduction: Installation of a demonstrationpilot plant at Dadri Thermal for the proof of concept of the theoretical model developedfor extraction of moisture from flue gas (With IIT Delhi); Completion of integratedPolarization Depolarization Current – Recovery Voltage (PDC-RV) measurement apparatusfor Insulation condition monitoring of Transformers; Preparation of TS for 100 TR Flue gasheat recovery – AC plant; Field trials of Robotic based inspection system at onestation; PR for heat pipe based air-preheater pilot plant; Finalization of TechnicalSpecifications for 2nd Phase Advanced computing Center

4.0 Expenditure on R&D:

Particulars of some of the important technology imported during last five (5) yearsare as follows:

Annex-V to Directors’ Report

STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956 RELATING TO SUBSIDIARYCOMPANIES

2009-10

Representation of SCs/STs as on 01.01.2010:

Recruitment of SCs/STs during the year 2009:

Promotions of SCs/STs during the year 2009:

The following backlog vacancies reserved for SCs/ STs/ OBCs have been filled throughspecial recruitment drive/ advertisement of backlog vacancies along with currentvacancies:

PHYSICALLY CHALLENGED PERSONS

With a view to focus on its role as a socially responsible and socially consciousorganization, NTPC has endeavored to take responsibility for adequate representation ofphysically challenged persons in its workforce. With this in view, NTPC launched a massiverecruitment drive to make up the shortfall of physically challenged persons. Presently,458 physically challenged persons are on rolls of NTPC. Reservation has been provided forPH as per rules/ policy. Some of the other initiatives taken for the welfare of physicallychallenged persons by NTPC over the years are as under:

- For individual needs of the VH employees, screen reading software and Braileeshorthand machines made available by the Projects of NTPC.

- "Sign language" training for the employees in general.

- Changes in the existing building have been/are being made to provide barrier freeaccess to physically challenged.

- Ramps have also been provided for unhampered movement of wheelchair.

- At most of the NTPC Projects, wherever house are located in multi-storied structure,allotment to physically challenged has been made on the ground fl oor.

- Special parking enclosure near the ramp at the office entrance as well as PH friendlytoilets and lift at CC and projects.

- Wheel chairs have been provided to employees with orthopaedics disabilities. Ifrequired, the assistance of an attendant has also been sanctioned.

- Wherever required, gates/door of the quarter has been widened.

- At CC procurement of stationery items like files, envelopes are mainly being donefrom NGOs/agencies like ADI, MUSKAN, Blind relief Association who are working forphysically challenged thereby creating indirect employment.

- Paintings made by disabled persons have also been procured and placed at differentlocations in the Company offices.

- Medical camps have been organized in various projects of NTPC for treatment anddistribution of aids like artificial limbs, tricycles, wheelchairs, calipers etc.

- Shops have been allotted in NTPC Township to physically challenged persons so thatthey may earn their livelihood. Similarly, PCOs within/outside plant premises are alsoallotted to physically challenged persons.

- Regular interactive meetings are being organized with physically challengedemployees.

- Training needs are being fulfilled as per the individual requirement.

- 5 number of scholarship @ Rs.1500/- per month/per student are given to PH studentspursuing MBA/PGDBM course.

- Petty contracts like book binding, scribbling pad preparation from waste paper, filebinding, furniture repair, screen printing spiral binding, painting contract are alsobeing given to disabled persons.

- Physically challenged (Orthopedically handicapped) employees have been allowed topurchase a three wheeler vehicle with a hand fitted engine against their normalentitlement (advance for scooter/motorcycle/moped) under NTPC Conveyance Advance Rules.

- At all projects/offices, Nodal Officers (physically challenged) have been nominated.

- Reimbursement towards low vision aids, dark glasses etc. subject to maximum ofRs.1000/- every year has been introduced. Similarly, hearing aid; behind the ear model foreach ear restricted to Rs.10,000/- or actual cost whichever is lower have been introduced.It may be replaced every 4 years subject to certificate of condemnation by ENT Specialist.

- Relaxation in qualifying marks for open recruitment: pass marks only and also 10%relaxation in written test and interview from the year 2002 onwards.

- The minimum performance level marks for promotions within the cluster is relaxed by 3marks in case of employees belonging to SC/ST/Physically Challenged category.

- NTPC has launched special recruitment drive for fulfilling up 18 backlog vacanciesfor Physically Challenged Persons in Group A posts and the recruitment process has beencompleted in July-2010.

UNGC – Communication on Progress (2009-10)

NTPC expresses its continued support for the Global Compact and its commitment to takeaction in this regard, as was communicated by the Chairman & Managing Director, NTPCin his letter dated May 29, 2001 addressed to Secretary General, United Nations.

NTPC has posted the brief of Global Compact and its commitment to the principles of GCon its website at www.ntpc. co.in . The principles of GC were communicated to allemployees through in – house magazines, internal training programmes and posters.NTPC, a core member of Global Compact Network (GCN), India, (formerly known as GlobalCompact Society) actively participated in the Annual Convention of the Global CompactNetwork at Mumbai and Asia Pacific Regional Conclave at New Delhi. NTPC representativecontributed as faculty for various training programmes organized by GCN for Global CompactMember Organizations in Chennai and Delhi.

NTPC is in the process of preparing its "Corporate Sustainability Report"covering Economic, Environmental and Social aspects with the "triple bottomline" approach based on widely accepted and updated Global Reporting Initiative (GRI)Guidelines.

Human Rights: Principle 1-2

Most of NTPC’s operating power stations are located in remote rural areas whichare socio-economically backward and deficient in the basic civic amenities. NTPC, asresponsible corporate citizen, has been addressing the issue of community development inthe neighbourhood areas of its stations, which had been impacted due to establishment ofthe project.

While, this has been initially administered as part of Resettlement and Rehabilitation(R&R) effort, NTPC recognized its social responsibility to continue community andperipheral development works where the same has been closed under R&R policy. Towardsthis, NTPC adopted "Corporate Social Responsibility–Community Development(CSR-CD) Policy" in July’04. Keeping in view the new Organizational Strategiestowards Community Development in line with the emerging trends and multifarious communityneeds, the CSR-CD policy of NTPC is being re-visited

Under this policy, during 2009-10, NTPC allocated a fund of Rs.86 million to 20operating stations for carrying out comprehensive Community Development work in the areaof health, education, drinking water and peripheral development. In addition, QualityCircles (QCs) are functioning in neighborhood villages of its stations. The NTPC employeesparticipate in various CD activities through Employee Voluntary Organization forInitiative in Community Empowerment (EVOICE). 50 Solar Lanterns were provided forGirls’ Hostel attached to one of the Kasturba Gandhi Balika Vidyalay in the vicinityof NTPC Korba Station through TERI under their LaBL campaign.

NTPC representatives associated with Confederation of Indian Industry (CII) asCertified Assessors for the assessment of CII-ITC Sustainability Award constituted by theCII and actively participated and contributed for establishing CSR Hub at TISS, Mumbai.

NTPC Foundation, registered in December’2004, is engaged in serving and empoweringthe physically challenged and economically weaker sections of the society. The Informationand Communication Technology (ICT) Centre, set up jointly by NTPC Foundation andUniversity of Delhi, and similar ICT facilities to the existing blind schools in Lucknow,Ajmer, Thiruvanathapuram and Mysore are helping a large number of physically challengedstudents to learn IT Skills and move along with the mainstream society. More than 800physically challenged students have got benefited in these centres till now.

NTPC Foundation is providing grants for setting up of Distributed Generation Projectsfor preparation of feasibility report, DPR, Insurance and for meeting funding gap.

Major activities taken up by NTPC in this area are highlighted under the head"Inclusive Growth" and "NTPC Foundation" under Directors’ Reportfor the Annual Report 2009-10.

Labour Standard: Principle 3-6

For addressing the issue of labour standard in comprehensive manner, NTPC has decidedto adopt international standards like SA-8000 and OHSAS-18001.

During the year 2009-10, accreditation SA-8000 got revalidated for Auraiya, Badarpur,Jhanor-Gandhar and Dadri stations of NTPC. Revalidation is in process at Faridabad,Kayamkulam, Unchahar and Vindhyachal. The process for accreditation has been initiated atKawas station.

Environment: Principle 7-9

As a result of pursuing sound environment management systems and practices, NTPC’sall 20 operating stations have obtained accreditation for ISO – 14001 Certification.Surveillance audit was done through agencies at various stations to ensure adherence tothe ISO requirements. During the year 2009-10, 6 stations viz. Korba, Singrauli, Unchahar,Ramagundam, Kayamkulam and NCPP-Dadri Stations have been recertified under ISO –14001

Steps have been taken up by dedicated groups for training of NTPC Employees forstrengthening Environment Management at Stations, Regional Headquarters and CorporateCentre. Following training programmes were organized in the area of environment during theyear:

"Strengthening Environment Management" for Executives working in EnvironmentManagement Group/ Function, "Insight into the Environmental Issues" exclusivelyfor Senior Officials at the level of DGM & Above, and "EnvironmentalConcerns" for Non-EMG Executives.

Major activities taken up by NTPC in the area of Environment are highlighted under thehead "Environment Management" under Directors’ Report for the Annual Report2009-10.

Anti-corruption: Principle10

The Company has a Vigilance Department headed by Chief Vigilance Officer who is anominee of the Central Vigilance Commission. The Vigilance Department Consisting of FourUnits, namely Corporate Vigilance Cell, Departmental Proceeding Cell (DPC), MIS Cell,Technical Cell (TC). These units deal with various facets of Vigilance Mechanism Exclusiveand independent functioning of these Units ensure transparency, objectivity and quality invigilance functioning. The Vigilance Department submits its reports to Competent Authorityincluding the Board of Directors. The CVO also reports to the Central Vigilance Commissionas per their norms.

Major activities taken up by NTPC in the area regarding Implementation of IntegrityPact, Implementation of Fraud Prevention Policy, Preventive Vigilance Workshops andVigilance Awareness Week etc. are highlighted under the head "Vigilance" underDirectors’ Report for the Annual Report 2009-10.

1. Induction of supercritical technology through bulk ordering of 660MWgenerating units for Central Public Sector Undertakings (CPSUs) under the Administrativecontrol of Ministry of Power

Vide Presidential Directive No.8/3/2002-Th-II (Vol.-IV) dated 4th September, 2009 readwith letter of even No. dated 7th October, 2009, the Government of India has directed NTPCfor induction of supercritical technology through bulk ordering of 660MW generating unitsby NTPC Limited for itself and on behalf of its JV Companies, and on behalf of DVC as perdetails given in the Appendix-I enclosed with the letter. Government of India has alsoapproved that the liquidated damages be made applicable to all the vendors and the samemay be followed strictly. A detailed road map for implementation of the same in thisregard was to be provided to the Ministry so that action is completed within 45 days fromthe date of issue of the letter. Government of India has further directed that the wholeprocedure has to be completed in accordance with the approval of Government of India asper detail given in Annexure to the letter and NTPC has to evolve a monitoring mechanismfor reviewing the progress in this regard and also depute a dedicated team forimplementation of the same.

Approval/ guidelines for bulk tendering of 11 units of 660 MW units of SG (SteamGenerator) and STG (Steam Turbine Generator) packages were received from MOP through theirletter no. 8/3/2002-Th.II (Vol.IV) dated 04.09.2009 as Presidential Directive.

As per directive, Invitation of Bids (IFB) had to be completed within 45 days of itsissuance. In compliance of the aforesaid directive, the IFB was published on 16.11.2009(within 45 days) for both SG and STG packages. Further, the provisions specified inPresidential Directive were adequately taken care while framing Qualification Requirementsand finalizing the bidding documents. The bidding documents were on sale from 21.10.2009to 23.12.2009. Subsequently, Stage-I (Techno-Commercial) bids have been opened on12.02.2010 for both SG and STG packages. As for SG Package only one valid bid wasreceived, the NIT was annulled and fresh bids have been invited. For STG Package, the bidsare under evaluation.

2. Winding up of Pipavav Power Development Company Limited (PPDCL) throughstriking off the name of PPDCL under Section 560 of the Companies Act, 1956 subject tofinal settlement of claims pending with Gujarat Power Corporation Limited/Government ofGujarat

Vide Presidential Directive No.5/5/2004-Th.II dated 3.7.2009, Government of India hasconveyed the approval of Government to permit NTPC Limited for winding up of Pipavav PowerDevelopment Company Limited pending final settlement of claims with Gujart PowerCorporation Limited/Government of Gujarat.

Vide Presidential Directive No.5/5/2004-Th.II dated 15th April, 2010, the Government ofIndia has conveyed the approval of Government to permit NTPC Limited for winding up of thePipavav Power Development Company Limited through striking off the name of PPDCL underSection 560 of the Companies Act, 1956 subject to final settlement of all claims pendingwith Gujarat Power Corporation Limited/Government of Gujarat and the completing allformalities under the statues.

After decision of disassociation of NTPC from Pipavav Project, Rs.131 million wasreceived towards reimbursement of cost of land and other expenditure incurred by NTPCLimited for Pipavav Project including interest thereon. On taking up the matter furtherpayment of Rs.20 million has been made by GPCL as full and final settlement of claims ofNTPC.

After receipt of approval of Government of India a necessary applications/declarationshave been filed with the Registrar of Companies, Delhi & Haryana on 29.4.2010 forstriking off the name of the company from the Register of the Companies maintained by theRegistrar of Companies.

3. Contract relating to Main Plant Package for Barh Super Thermal Power ProjectStage-I (3x660MW) awarded on M/s. Technopromexport, Russia by NTPC Ltd.

NTPC had sought permission from Ministry of Power for termination of Main Plant PackagePart-A (Steam Generator & Auxiliaries) Contract for Barh Super Thermal Power ProjectStage-I (3x660MW) awarded on M/s. Technopromexport,

Russia (TPE). However, Ministry of Power vide letter No.5/9/2010-th.II dated 28^thMay, 2010 has directed NTPC to invite reference to the record of discussions betweenMOP/NTPC and TPE on 12.03.2010 held in the Ministry of Power and to NTPC’s letterdated 17.04.2010 containing the anticipated cost implications of continuing/discontinuingwith the above contract. Ministry of Power has further directed that the matter was takento the Cabinet Committee on Infrastructure (CCI). CCI in its meeting dated 19.5.2010 hasdecided that "NTPC may carry on with the contract with TPE in Barh Stage-Inotwithstanding CBI’s advisory to NTPC for civil action against TPE as per tenderconditions and the contract. However, CBI is to continue with the investigation ofcorruption/criminal part of the case." Accordingly, NTPC has been asked to take allnecessary actions for early completion of the project in view of the CCI’s decisionas above.

In view of the above directive of the Ministry of Power, it has been decided to goahead with the contract with TPE and discussions are being held with them for execution ofwork and settlement of claims.

The exact financial implication of the above directive can not worked out at thisstage. However, anticipated extra financial implication works out to approx. Rs.1190crores.

The quantity of ash produced, ash utilized and percentage of such utilization during2009-10 from NTPC Stations is as under: