NHPC Ltd Directors Report.

Dear Members,

The Board of Directors are pleased to present the 45th Annual Report highlighting the development and progress of your Company along with audited financial statements, Auditors’ Report thereon and review of financial statements by the Comptroller and Auditor General of India (C&AG).

Major highlights of your Company since last report are as under:

NHPC has earned highest ever net profit (after tax) of 3,233.37 crore on standalone basis in the financial year 2020-21 compared to 3,007.17 crore in the previous financial year. The consolidated net profit rose to 3,582.13 crore in FY 2020-21 from 3,344.91 crore in previous financial year.

Total income and revenue from operations

(net) were 9,657.39 crore and 8,506.58 crore respectively during the FY 2020-21. Total comprehensive income and other comprehensive income were 3,240.57 crore and 7.20 crore respectively.

NHPC power stations achieved generation of 24,471 Million Units (MUs) during financial year 2020-21 despite ongoing COVID-19 pandemic.

Cash contribution of 1,118.90 crore was made to Government of India’s exchequer through dividend during the financial year 2020-21.

Ratle Hydroelectric Power Corporation

Limited, a Joint Venture Company of NHPC Limited and Jammu and Kashmir State Power Development Corporation Limited (JKSPDCL) has been incorporated on June 1, 2021 with equity participation of 51:49 respectively, for implementation of Ratle Hydro-electric Project (850 MW) in the Chenab River Basin in Union Territory of Jammu and Kashmir.

Chenab Valley Power Projects Private Limited

(Earlier a Joint Venture Company of NHPC (49%), JKSPDCL (49%) and PTC (2%)) has become Subsidiary Company of NHPC consequent upon taking over of 2% equity of PTC India Limited (PTC) in CVPPPL by NHPC Limited in June, 2021.

Jalpower Corporation Limited (JPCL) has become wholly owned subsidiary of NHPC on March 31, 2021 consequent upon its takeover by NHPC through Corporate Insolvency Resolution Process (CIRP). NHPC has infused equity of 165 crore in JPCL as consideration amount pursuant to approved resolution plan. JPCL is executing Rangit IV HE Project (120 MW) in Sikkim.

NHPC has signed a Memorandum of Understanding (MoU) with JKSPDCL on January 3, 2021 for execution of Sawalkot (1856 MW), Uri-1 (Stage-II) (240 MW), Dulhasti (Stage-II) (258 MW), Hydro-electric Projects (to be implemented by NHPC) and Kirthai-II H.E. Project (930 MW) (to be implemented by CVPPPL) in UT of Jammu & Kashmir.

NHPC has signed a MoU with Bihar State Hydroelectric Power Corporation Limited (BSHPC) on June 14, 2021 for implementation of Dagmara HE Project (130.1 MW) in Supaul District of Bihar.

NHPC has signed MoU with Indian Renewable

Energy Development Agency Limited (IREDA) on January 8, 2021 with a view to increase NHPC’s footprint in renewable energy in the Country.

1. FINANCIAL PERFORMANCE

The important financial highlights for the year ended

March 31, 2021 are given in Table 1.

Table 1: Financial Highlights

( in crore)

PARTICULARS Financial Year
2020-21 2019-20
Revenue from operations 8,506.58 8,735.15
Profit before depreciation, interest, exceptional items, rate regulated income and tax 5,755.50 5,605.32
Depreciation 1,234.50 1,545.34
Profit after depreciation but before exceptional items, rate regulated income, interest and tax 4,521.00 4,059.98
Interest and finance charges 649.59 795.42
Profit after depreciation and interest but before exceptional items, rate regulated income and tax 3,871.41 3,264.56
Exceptional Items (185.00) 0.00
Rate regulated income 227.09 343.61
Tax 680.13 601.00
Profit after depreciation, interest, exceptional items, rate regulated income and tax 3,233.37 3,007.17
Other Comprehensive Income (OCI) 7.20 (0.62)
Total Comprehensive Income (TCI) 3,240.57 3,006.55
Surplus from statement of profit and loss of earlier years (including Other Comprehensive Income) 6,009.97 4,995.92
Transfer from bond redemption reserve 306.43 244.97
Sub-total 9,556.97 8,247.44
Less : Appropriations
Dividend and Corporate Dividend Tax (CDT) 1,577.07 2,237.47
Closing Balance of Retained Earnings including Other Comprehensive Income 7,979.90 6,009.97

1.1 REVENUE

Your Company has generated total income of 9,657.39 crore during the financial year 2020-21. The total income during the financial year 2019-20 was 9,771.59 crore.

1.2 EXPENSES

The total expenditure during financial year 2020-21 was decreased to 5,785.98 crore as compared to 6,507.03 crore in the previous financial year.

1.3 TOTAL COMPREHENSIVE INCOME

Total Comprehensive Income of your Company was increased to 3,240.57 crore during the financial year 2020-21 as compared to 3,006.55 crore in the previous financial year.

1.4 NET WORTH

Your Company’s net worth as on March 31, 2021 was 31,647.31 crore as compared to 29,983.81 crore at the end of previous financial year.

1.5 SHARE CAPITAL

Your Company’s paid-up share capital as on March 31, 2021 was 10,045.03 crore which remained unchanged during the financial year 2020-21.

2. DIVIDEND

Your Company has a consistent track record of dividend payment. The Board of Directors has recommended a final dividend of Re. 0.35 per equity share for the financial year 2020-21 amounting to 351.58 crore. The above dividend is in addition to the interim dividend of 1.25 per equity share amounting to 1,255.63 crore paid in March, 2021. Accordingly, total dividend for the financial year 2020-21 comes to 1.60 per equity share amounting to 1,607.21 crore. Your Company has a Dividend Distribution Policy. As per Dividend Distribution Policy of the Company, broadly the dividend payment shall be 30% of PAT or 5% of the Net worth, whichever is higher. Accordingly, total dividend payout for financial year 2020-21 (subject to approval of final dividend by the members of the Company) @ 1.60 per share will be 1,607.21 crore representing 50% of Profit After Tax for financial year 2020-21 & 5.08% of Net worth as on March 31, 2021 as against total dividend pay-out of 1,506.76 crore representing 50% of the Profits After Tax for financial year 2019-20 & 5.03% of Net Worth as on March 31, 2020 in the previous year.

3. OPERATIONAL PERFORMANCE

Your company has achieved generation of 24,471 MUs of electricity during the financial year 2020-21 as against generation of 26,121 MUs in the previous financial year. Your directors are pleased to inform that NHPC power stations performed remarkably well and remained operational even during lockdown due to COVID-19 pandemic. All NHPC power stations were operated as per COVID-19 guidelines issued by Central / State Government. Chutak Power Station became the first power station of NHPC to be under Clean Development Mechanism (CDM) of United Nations Framework Convention on Climate Change (UNFCCC) on March 30, 2021.

During the financial year 2020-21, ten power stations of your company viz. Loktak, Salal, Tanakpur, Chamera-I, Uri, Dulhasti, Dhauliganga, Teesta-V, Uri-II & TLDP-IV have achieved their respective annual design energy. The power stations of your company have achieved overall Plant Availability Factor (PAF) of 84.87% during FY 2020-21 against 84.04% in the previous financial year. Six power stations viz. Dulhasti,

Teesta-V, Chamera-III, TLDP-IV, Uri-II & Kishanganga have achieved highest ever plant availability factor. The power station wise generation and PAF are given at Table 2.

Table 2: Power Station wise generation and PAF during the financial year 2020-21

NAME OF POWER STATION GENERATION TARGET* (MU) ACTUAL GENERATION (MU) ACTUAL PAF (%)
Loktak (105 MW) 532 622 90.52
Chamera – I (540 MW) 2471 2265 97.37
Rangit (60 MW) 326 289 86.73
Chamera – II1 (300 MW) 1391 685 59.11
Dhauliganga (280 MW) 1110 1153 96.05
Dulhasti (390 MW) 2238 2330 101.44
Teesta – V (510 MW) 2662 2830 99.33
Sewa – II1 (120 MW) 534 376 53.39
Chamera – III (231 MW) 1075 996 97.40
TLDP – III (132 MW) 562 541 93.14
TLDP – IV (160 MW) 691 719 94.46
Bairasiul (180 MW) 437 458 52.74
Salal (690 MW) 3654 3632 94.04
Tanakpur (94.2 MW) 461 473 73.90
Uri (480 MW) 2970 2986 91.29
Chutak (44 MW) 195 158 46.99
Nimoo Bazgo (45 MW) 218 218 72.70
Uri – II (240 MW) 1587 1626 100.71
Parbati – III (520 MW) 721 617 56.08
Kishanganga (330 MW) 1647 1111 61.72
Parbati – II2 (800 MW) 320 235 -
TOTAL (HYDRO) 25802 24320 84.87
Wind Power Project, Jaisalmer (50 MW) 100 61 -
Solar Power Project, Tamil Nadu (50 MW) 98 90 -
TOTAL (NHPC) 26000 24471 84.87

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

Note:

1. PAF is less primarily on account of:

(a) Long outage of Unit I & II of Chamera-II Power Station w.e.f. August 7, 2019 due to fire incidence in generator. Unit I & II restored on October 19, 2020 and November 06, 2020 respectively; and

(b) Complete shutdown of Sewa-II Power Station w.e.f. September 25, 2020 due to damage of Head Race Tunnel (HRT).

2. Actual generation shown is infirm power

Your Company has earned net deviation charges of 154 Crore (approx.) during the financial year 2020-21 due to efficient operation and timely response to change in the grid frequency. NHPC is undertaking Renovation & Modernization for Life Extension (R&M LE) of two Power Stations i.e. Bairasiul Power Station (180 MW) and Loktak Power Station (105 MW). Bairasiul Power Station (3 x 60 MW) completed its 35 years of commercial operation in the financial year 2016-17. R&M LE of two units i.e. Unit I & Unit II of Bairasiul Power Station were already completed. R&M LE of Unit-III which was under progress since November 27, 2020 has also been completed in August, 2021. Loktak Power Station (3x35 MW) has completed its 35 years of commercial operation in financial year 2018-19. R&M LE of Loktak Power Station is scheduled during 2021-2024. NHPC has successfully implemented SCADA system in its two old power stations viz. Tanakpur & Rangit. These power stations were commissioned during the year 1993 & 2000 respectively.

4. COMMERCIAL PERFORMANCE

Your Company’s revenue from operations stood at 8,507 crore during the financial year 2020-21. Your directors are pleased to inform that NHPC has been able to realize an amount of 10,114 crore during the financial year 2020-21 which is the highest ever collection in a single financial year till date. NHPC has provided one time rebate of 185 crore to beneficiary DISCOMs on the bills raised during the period of lockdown i.e. from March 25, 2020 to May 17, 2020 to ease out the financial burden on beneficiary DISCOMs in line with the directions of Ministry of Power in the wake of COVID-19 pandemic.

As on March 31, 2021, the total outstanding dues (pending for more than 45 days) against principal bills was 1,470 crore which mainly pertains to Power Development Department, Jammu & Kashmir ( 1,117 crore) and Uttar Pradesh Power Corporation Limited ( 108 crore). The total outstanding dues against late payment surcharge is 122 crore. Your company is making all out efforts to liquidate the outstanding dues by continuous follow-up.

5 STATUS OF PROJECTS UNDER CONSTRUCTION

Your company along with its subsidiary / joint venture companies is presently engaged in the construction of seven hydroelectric projects namely Parbati-II (800 MW), Subansiri Lower (2000 MW), Teesta-VI (500 MW), Rangit-IV (120 MW), Ratle (850 MW), Pakal Dul (1000 MW) & Kiru (624 MW) and two Solar projects namely Ganjam (40 MW) & Kalpi (65 MW) with an aggregate installed capacity of 5,999 MW. Out of above, two hydro-electric projects namely Parbati-II and Subansiri Lower with an aggregate installed capacity of 2,800 MW are being implemented by NHPC on standalone basis and remaining projects are being executed through subsidiary / joint venture companies. The status of under construction hydroelectric projects is given below. The status of under construction solar projects is given at Para 8 ‘Renewable Energy Projects’.

5.1 PARBATI-II H.E. PROJECT - 800 MW (4 X 200 MW), HIMACHAL PRADESH:

Parbati-II HE project is being constructed by your Company as a run-of-river scheme to harness the hydro-potential of the lower reaches of Parbati River. The project is located in Kullu District of Himachal Pradesh. The estimated annual energy generation from the project is 3,124 MUs in a 90% dependable year.

A Concrete Gravity Dam of 83.7 m height has been constructed at Village Pulga in Parbati valley to divert the river water through a 31.52 Km long Head Race Tunnel (HRT). An underground Power House of 800 MW (4 x 200 MW) capacity has been constructed at Village Suind in Sainj valley utilizing gross head of 863 m. The diverted discharge of the Parbati River has been further augmented by diverting the discharge of various nallahs viz. Jiwa, Hurla, Pancha and Manihar falling along the HRT alignment.

Major civil works of Dam, intake structure, desilting chamber, pressure shafts, surge shaft, power house, Jiwa and Hurla nallah works of the project have been completed. Electro-Mechanical (E&M) works of the project have also been completed and presently limited generation of electricity (infirm power) is being made as per availability of water from Jiwa and Hurla Nallah.

Despite very poor rock conditions, 95% HRT excavation has been completed till June, 2021. Presently, HRT excavation from both the faces (face-3 and face-4) is being carried out using Drill and Blast Method (DBM) and Tunnel Boring Machine (TBM).

The project is anticipated to be commissioned by March, 2023. States/ Union Territories of Himachal Pradesh, Punjab, Haryana, Rajasthan, Uttar Pradesh, Delhi, Jammu & Kashmir and Chandigarh will be benefitted from the power generated from Parbati-II Project.

5.2 SUBANSIRI LOWER H.E. PROJECT - 2,000 MW

(8 X 250 MW), ARUNACHAL PRADESH:

Subansiri Lower HE Project is the biggest hydroelectric project undertaken for implementation in India so far and is a run-of-river scheme on Subansiri River, a tributary of Brahmaputra. The project is located at Gerukamukh / Kolaptukar on the border of Arunachal Pradesh and Assam.

Major components of the project includes 116m high concrete gravity dam, 8 nos. HRT with total length of 7102m, 8 nos. surge tunnels, 8 nos. pressure shafts, surface power house with 8 units of 250 MW capacity each. The estimated annual energy generation is 7,422 MUs in a 90% dependable year.

After Hon’ble National Green Tribunal (NGT) clearance vide order dated July 31, 2019, the construction work is going on in full swing at all fronts and 72% works have been completed till June, 2021. Memorandum of Agreement with Govt. of Assam and PPA with Govt. of Arunachal Pradesh were signed in August, 2019. The project is scheduled to be commissioned by August, 2023. However, best efforts are being made to commission two units by August, 2022.

Subansiri Lower Project is also implementing downstream protection works and downstream developmental works for safety and uplifting the living status of project affected families. Various Corporate Social Responsibility and Sustainable Development programmes have been implemented for welfare of the local populace of Assam/ Arunachal Pradesh. All seven north-eastern states (Assam, Manipur, Meghalaya, Nagaland, Tripura, Arunachal Pradesh, Mizoram), six northern states/ UTs (Haryana, Punjab, Rajasthan, Uttar Pradesh, Chandigarh, Delhi) and five western states (Gujrat, Madhya Pradesh, Chhattisgarh, Maharashtra, Goa) will be benefitted from the power generated from Subansiri Lower H.E. Project.

5.3 TEESTA-VI H.E. PROJECT- 500 MW (4x125 MW), SIKKIM

Teesta-VI H.E. Project is being developed by Lanco Teesta Hydro Power Limited (LTHPL). LTHPL was taken over by NHPC through CIRP Process on October 09, 2019. Teesta-VI HE Project is a run-of-river scheme in Sirwani Village of Sikkim to utilize the power potential of Teesta River Basin in a cascade manner. Major components of the project include 26.5m high barrage and underground Power house having 4 units of 125 MW each. The project is having an estimated annual energy generation of 2400 MUs in a 90% dependable year.

Civil works package (Lot-I), Hydro mechanical works package (Lot-III) and six out of eight E&M works packages have been awarded. Tendering of other works are in the process. Excavation of various faces of HRT, drilling in head regulator area, concrete cutting, silt removal from head regulator & desilting basin, filling of upstream coffer dyke is in progress.

Design & Engineering are in process for HM and E&M packages. The project is scheduled to be completed by March, 2024.

5.4 RANGIT-IV H.E. PROJECT- 120 MW (3x40 MW), SIKKIM

Rangit-IV HE Project is being developed by Jalpower Corporation Limited (JPCL). JPCL was taken over by NHPC through CIRP process on March 31, 2021. The project is located on Rangit River near Rishi village, West Sikkim. Major components of the project include 44 m high concrete gravity dam, 6488 m long HRT of 6.40 m diameter and a surface Power House having 3 units of 40 MW each. The project is having estimated annual energy generation of 513 MUs in a 90% dependable year.

Civil and E&M work packages of the Project are under tendering stage. HM works package has been awarded.

5.5 RATLE H.E. PROJECT- 850 MW (4x205 MW+ 1x30 MW), UNION TERRITORy OF J&K

The project is being developed by Ratle Hydroelectric Power Corporation Limited, a Joint Venture Company of NHPC Limited and JKSPDCL. The Promoters agreement between NHPC and JKSPDCL was signed on April 13, 2021 and JV Company was incorporated on June 01, 2021. Ratle HE Project (850 MW), is a run-of-river scheme on Chenab River and is located at Kishtwar District of UT of Jammu & Kashmir.

Major components of the project include 133m high concrete gravity dam and an underground power house having 4 units of 205 MW each. In addition, a unit of 30 MW is envisaged to utilize the stipulated continuous release of environmental flows. The project is having estimated annual energy generation of 3,137 MUs in a 90% dependable year. EPC contract for the project is likely to be awarded by December, 2021.

5.6 PAKAL DUL H.E. PROJECT - 1,000 MW

(4x250 MW), UNION TERRITORY OF J&K The project is being executed by CVPPPL, a Joint Venture Company of NHPC Limited and JKSPDCL. Pakal Dul HE Project is being developed on Marusudar River, a tributary of Chenab in Kishtwar District, UT of Jammu & Kashmir. The project has been planned as a storage scheme and shall utilise the permissible storage under Indus Water Treaty with storage of 0.1 MAF. The scheme envisages construction of a 167 m high Concrete Face Rockfill Dam (highest in India) to store and carry water through two HRT of 9.6 Km length each to an underground power house, thereby utilizing a net rated head of 397.30 m to generate 3,330 MUs energy annually through 4 units of 250 MW each. All contract packages have been awarded. Power House works, Dam works and HRT- DBM works are in progress. Detailed Engineering of HM and E&M component is in progress. River diversion is likely to be completed by October, 2021.

5.7 KIRU H.E. PROJECT- 624 MW (4x156 MW), UT OF J&K

The project is being executed by CVPPPL, a Joint Venture Company of NHPC Limited and JKSPDCL. The project is being developed as a run-of-river scheme on Chenab River and is located at Village Kiru / Pathrnakki in Kishtwar District of UT of Jammu & Kashmir. Major components of project includes 135 m high concrete gravity dam, 4 nos. (5.5 m dia) pressure shafts/ penstocks and an underground Power House having 4 units of 156 MW each. The project is having estimated annual energy generation of 2,272 MUs in a 90% dependable year. All contracts packages have been awarded. Civil works have been started and are in progress. Detailed engineering of HM and E&M component is in progress. Breakthrough of DT heading excavation was achieved on March 01, 2021. River diversion is likely to be completed by October, 2021.

6 PROJECTS UNDER CLEARANCE/ APPROVAL

The status of projects including of subsidiaries/ joint ventures under various stages of clearance/ approval are given in Table 3.

Table 3: Projects under clearance/ approval stage:

S. No. PROJECT STATE/ UNION TERRITORy INSTALLED CAPACITy (MW)
A. STANDALONE BASIS
(a) HyDRO PROJECTS
i Goriganga-IIIA Uttarakhand 150
ii Kotli Bhel-IA1 195
iii Teesta-IV Sikkim 520
iv Dibang 2,880
v Tawang-I2 Arunachal Pradesh 600
vi Tawang-II3 800
vii Bursar Jammu & Kashmir 800
viii Sawalkot 1,856
ix Dugar Himachal Pradesh 500
x Dagmara Bihar 130.1
Sub-total (a) 8,431.1
(b) SOLAR PROJECT
i Floating Solar Project West Kallada, Kerala 50
Sub-total (b) 50
Total A (a+b) 8,481.1

B. THROUGH SUBSIDIARIES/ JOINT VENTURES

HyDRO PROJECTS (In India)

i Loktak Downstream H.E. Project through Loktak Manipur Downstream Hydroelectric Corporation Limited (A Joint Venture with Govt. of Manipur) 66
ii Kwar through Chenab Valley Power Projects Private Limited (A Joint Venture with JKSPDCL) Jammu & Kashmir 540
iii Kirthai-II through Chenab Valley Power Projects Private Limited (A Joint Venture with JKSPDCL) 930

HyDRO PROJECT (In Bhutan)

iv Chamkharchu-I4 (A Joint Venture with Druk - Green Power Corporation, Bhutan-yet to be incorporated) 770
Total (B) 2,306
Grand Total (A+B) 10,787.1

1 Public Investment Board (PIB) approval for the project (given on October 23, 2013) is subject to clearance by the Hon’ble Supreme Court. Construction activities of the project shall start after clearance from Hon’ble Supreme Court and Government Sanction. NHPC is proposing not to pursue the project.

2 The project has been put on hold due to local protest.

3 All statutory clearances viz. TEC, Forest Clearance (Stage-I), Environment Clearance and Defence Clearance of the project have been obtained. However, Forest Clearance (Stage-II) is pending for want of compliance under Forest Rights Act, 2006.

4 Druk Green Power Corporation had conveyed their inability to provide consent for the project. NHPC is proposing not to pursue the project.

7 Projects under Survey and Investigation (S&I)

NHPC is presently engaged in survey and investigation of projects with aggregate installed capacity of 1,130 MW. The status of projects under survey and investigation are given in Table 4.

Table 4: Projects under S&I stage:

Sl. No. Project State/UT Installed Capacity (MW)
1 Garba Tawaghat Uttarakhand 630
2 Uri-I Stage-II Jammu & Kashmir 240
3 Dulhasti Stage-II 260
Total 1,130

8 RENEWABLE ENERGy PROJECTS

Your company has embarked into Renewable Energy (RE) projects development in a big way and intends to be part of the Renewable Energy growth story of India by contributing to the 450 GW target set by the Government of India by 2030. World over, various new and advanced technologies are being explored in the transition to a net-zero carbon future and your company is aggressively looking forward in this direction. Your company, in line with the latest technological developments and advancements, is now exploring road maps and strategies to scale up projects in the field of Floating Solar and Pumped Storage Projects.

To meet the variability in supply due to large influx of Renewable Energy, the requirement is being felt for Hydropower & Pumped Storage Projects (PSPs), which are also termed as natural battery storages. PSPs provide affordable means of storing and deploying electricity and currently huge impetus is being given to develop the identified schemes of PSPs in India.

Your company is looking ahead for developing techno-commercially viable PSPs for providing energy storage solutions to RE development. Innovative ways to bundle Renewable Energy projects with conventional projects like hydropower and PSPs are also being explored to ensure round the clock supply of electricity to the grid. Flexible power supply options are being worked out to keep in tandem with the competition of supplying power at the most optimal tariff.

Your company has identified mega scale solar projects which are under various stages of planning and development especially in Kerala and Odisha. Floating Solar offers an innovative way of generating electricity thereby saving huge costs on land development and lease. Your Company is actively working for increasing its Renewable Energy portfolio by making efforts for capacity addition through different sources of renewable energy viz. wind, solar projects. The efforts of the company for establishment of such projects are as under:

8.1 SOLAR POWER PROJECTS

8.1.1 Projects envisaged under Ultra Mega Renewable Energy Power Parks (UMREPPs) Scheme of MNRE

Your company is exploring possibilities for development of UMREPPs in various States such as Odisha, Kerala, Rajasthan, Uttar Pradesh etc. The status of development of UMREPPs projects are as under:

(i) 500 MW Floating Solar Project in Odisha

Your company has signed a Memorandum of Understanding (MoU) with Green Energy Development Corporation of Odisha Limited (GEDCOL) in July, 2020 for setting up of a Joint Venture Company (JVC) for exploring and developing 500 MW Floating Solar and other such power projects in the State of Odisha. The projects will be developed in a phased manner by the JVC. Approval process for formation of JVC is under progress. MNRE has already given in-principle approval for development of 100 MW Floating Solar Power Project under UMREPPs mode of Solar Park Scheme through the proposed JVC. Detailed Project Report (DPR) of the project is under finalization.

(ii) 600 MW Solar Project (including Solar Park development) in Rajasthan:

Your Company has identified a land parcel of about 2,800 Acre to be taken on lease basis in Jaisalmer District, Rajasthan through invitation of Expression of Interest (EOI) on open tender basis. The identified land is suitable for development of 600 MW Solar Power Project. Power evacuation arrangement through nearest ISTS Sub-station is being firmed up through Central Transmission Utility (CTU). Further actions for development of solar park and installation of Solar Plant on the identified land are under process.

(iii) 50 MW Floating Solar Project in Kerala

MNRE has accorded in-principal approval for development of 50 MW Floating Solar Power Project at West Kallada, Kerala by NHPC under UMREPPs mode of Solar Park Scheme. DPR of the project has been submitted to MNRE. Transfer of water body/ land to NHPC is under process. Tendering for EPC contract is also in process.

(iv) Explorations at other locations

Development of UMREPP in other States such as Uttar Pradesh, Bihar, Jharkhand etc. are also being explored.

8.1.2 UTILITy SOLAR POWER PROJECTS

(i) 140 MW NHPC Solar Park in Odisha

MNRE has conveyed its in-principle approval to NHPC for enhancement of Solar Park capacity (from 100 MW to 140 MW) in Odisha, which envisages development of 40 MW Project in Ganjam District and 100 MW Project in Deogarh District. Approval of State Technical Committee for both projects has been obtained and necessary lands for development of these projects have been identified. 175 Acre of identified land has been allocated to NHPC by The Odisha Industrial Infrastructure Development Corporation (IDCO). EPC contract for 40 MW project along with 10 years comprehensive O&M has been issued to M/s Tata Power Solar System Limited, Mumbai on May 24, 2021 with scheduled commissioning period of 12 months.

Land identified for 100 MW Project at Deogarh District has been earmarked by IDCO. Transfer of land, signing of PPA and other activities for the development of projects are in progress.

(ii) Other utility scale solar projects

Company is exploring the possibilities of other utility scale solar projects in different States such as Telangana, Tamil Nadu, Andhra Pradesh etc.

(iii) Development of Solar Projects in Developer Mode (As an Intermediary Procurer):

NHPC has awarded an aggregate capacity of 2,000 MW ISTS connected Solar Power projects to the selected five developers as an ‘Intermediary Procurer’.

Power Sale Agreements (PSAs) with State Discoms and Power Purchase Agreements (PPAs) with selected developers have been signed for 25 years project life period. The developmental activities are in progress by the selected developers. The awarded projects are scheduled to be commissioned from February, 2022 to April, 2022.

(iv) Development of Solar Project through Bundelkhand Saur Urja Limited (BSUL):

Bundelkhand Saur Urja Limited (a Joint Venture Company with Uttar Pradesh New & Renewable Energy Development Agency) is implementing Kalpi Solar Power Project (65 MW). EPC contract for the project has been awarded on March 17, 2021 along with comprehensive O&M for 10 years with scheduled commissioning period of 12 months.

8.2 WIND POWER PROJECTS Kerala Wind Power Project (72 MW)

As consented by Kerala State Electricity Board (KSEB), NHPC is in the process of exploring possibility of development of 72 MW Wind Power Project in Agali Village in Palakkad District of Kerala. The identification of land and power evacuation arrangement is in process. Further activities for development of the project shall be initiated after assessment of wind resource subsequent to submission of report by National Institute of Wind Energy (NIWE).

9 POWER TRADING LICENSE AND POWER TRADING BUSINESS

Your Company, as part of business expansion and diversification programme, has ventured into Power Trading business. Endeavour of Power Trading business of the Company is to provide efficient and smart business solution to its clients viz. Buyers/ DISCOMs, Generators/ Sellers, Utilities etc. NHPC has already obtained Category-I license from CERC for inter-state trading of electricity in whole of India and is registered at DEEP (Discovery of Efficient Electricity Price) e-bidding portal. NHPC has also obtained trader membership in Indian Energy Exchange (IEX) and Power Exchange of India Limited (PXIL). After issue of Category-I Trading License in April, 2018, NHPC in short span of time has established itself as reputed and reliable trader in India. Energy of around 505.2 MUs with turnover of 218.60 crore has been traded during financial year 2020-21.

NHPC has successfully signed Power Sale Agreements (PSAs) for 2,000 MW with different parties to sell power during the financial year 2020-21. NHPC has also signed Power Purchase Agreement (PPAs) on back-to-back basis with Solar Power Developers (SPD) for purchase of power for 2,000 MW.

10. DETAILS OF SUBSIDIARIES AND ASSOCIATE/ JOINT VENTURE COMPANIES

Your company has following subsidiaries and associate/ joint venture companies as on March 31, 2021:

Name of the company Details of joint venture partners (equity participation) Performance of the company during Fy 2020-21
SUBSIDIARY COMPANIES
NHDC Limited (NHDC) NHPC (51.08%) and Government of Madhya Pradesh (48.92%). Government of Madhya Pradesh (GoMP) share includes 23% held by Narmada Basin Projects Company Limited, Wholly Owned Company of GoMP. NHDC has two operating power stations viz. Indira Sagar (1,000 MW) and Omkareshwar (520 MW) in Madhya Pradesh. During the year 2020-21, NHDC generated 4,236.12 MUs from its power stations i.e. 2,793.56 MUs from Indira Sagar Power Station and 1,442.56 MUs from Omkareshwar Power Station.
Loktak Downstream Hydroelectric Corporation Limited (LDHCL) NHPC (74.92%) and Government of Manipur (25.08%) LDHCL is currently implementing Loktak Downstream Hydroelectric Project (66 MW) in Noney District of Manipur. All statutory clearances for the project have been received and PPA has been signed with Govt. of Manipur. Tendering process for the EPC packages is under progress. Public Investment Board (PIB) clearance of the project is awaited.
Bundelkhand Saur Urja Limited (BSUL) NHPC (74%) and UPNEDA (26% )

BSUL was incorporated for the development of 50 MW Solar Power Project in Tehsil Kalpi, District Jalaun, Uttar Pradesh and other conventional & non-conventional power projects entrusted by the Govt. of Uttar Pradesh. Status of construction of Kalpi SPP (65 MW) has been provided under paragraph 8 of the report. BSUL is in the process of development of more than 1,500 MW Solar Power Projects in the State of Uttar Pradesh through various modes of implementation. Development of Solar Project in EPC Mode and development of Solar Park followed by plant installation in Developer Mode. Detailed Project Reports (DPRs) of two projects viz. Mirzapur SPP (100 MW) and Madhogarh SPP (45 MW) have been approved.

 

Notice Inviting Tender (NIT) for EPC work of Mirzapur SPP has been floated in March, 2021. Land survey for Pratapgarh SPP (100 MW) has been completed. Project Report for 1,200 MW Solar Park under UMREPP has been submitted to SECI.
Lanco Teesta Hydro Limited (LTHPL) Power Wholly Owned Subsidiary LTHPL was acquired by NHPC through CIRP process in October, 2019 and equity of 897.50 crore was infused as consideration amount pursuant to approved resolution plan. LTHPL is executing 500 MW Teesta VI HE Project in Sikkim. Status of construction of Teesta VI HE Project has been provided under paragraph 5 of the report.
Jalpower Corporation (JPCL) Limited Wholly Owned Subsidiary

JPCL was acquired by NHPC through CIRP process on March 31, 2021 and equity of 165 crore was infused as consideration amount pursuant to approved resolution plan. JPCL is executing Rangit IV HEP (120 MW) in Sikkim. Government of India (GoI) approval for investment was conveyed on March 30, 2021 for acquisition and execution of balance works of Rangit-IV HE Project with estimated cost of 938.29 Crore at October, 2019 price level. The balance works of the project will be completed in a period of 38 months from the date of issuance of sanction by GoI. Status of construction of Rangit IV HE Project has been provided under paragraph 5 of the report.

Chenab Valley Power Private Limited (CVPPPL) Projects NHPC (51.9%), Jammu & Kashmir State Power Development Corporation Limited (47.9%) and PTC India Limited (0.2%) CVPPPL is developing four hydroelectric projects in UT of Jammu & Kashmir i.e. Pakal Dul HE Project (1,000 MW), Kiru HE Project (624 MW), Kwar HE Project (540 MW) and Kirthai II HE Project (930 MW). Status of construction of Pakal Dul HE Project and Kiru HE Project has been provided under paragraph 5 of the report. Investment sanction for Kwar HEP is awaited whereas Kirthai II HE Project is under clearance stage.
ASSOCIATE/ JOINT VENTURE COMPANy
National High Power Laboratory Private (NHPTL) Test NHPC Limited, NTPC Limited Limited, Power Grid Corporation of India Limited, Damodar Valley Corporation and Central Power Research Institute (each having shareholding of 20%) NHPTL was established to set up an online high power test laboratory for short-circuit test facility in the country. The laboratory for High Voltage Transformer (HVTR) at 400 kV level and 765 kV level is already operational at Bina, Madhya Pradesh. Laboratory for Medium Voltage Transformer (MVTR) has not been commissioned till date.

During the financial year 2020-21, Jalpower Corporation Limited has become wholly owned subsidiary company of NHPC Limited. Further, Chenab Valley Power Projects Private Limited (CVPPPL) has become subsidiary company of NHPC Limited as on March 31, 2021, pursuant to provisions of the Companies Act, 2013 as required matching contribution not made by other Joint Venture Partners. A statement containing the salient features of the financial statements of subsidiaries and associate/ joint venture companies as per first proviso to Section 129(3) of the Companies Act, 2013 including details of individual contribution of these companies in the overall performance of the Company during the year is given under Consolidated Financial Statements.

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

11. HEALTH, SAFETy & ENVIRONMENT (HSE)

Your company is committed to conduct its business with a strong environment conscience, ensuring sustainable development, safe workplaces and enrichment of quality of life of its employees, customers and the community. It is well aware of its obligation to conserve and protect environment. During the investigation stage, probable impact on environment while executing the projects, are assessed and identified. Environmental Management Plans (EMPs) are proposed and implemented to compensate the adverse impacts of the project by taking necessary measures. In addition to above, construction of buildings is designed to make them environment friendly.

Most of the power stations of your company are ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environmental Management System) and OHSAS-18001:2007/ ISO 45001:2018 (Occupational Health and Safety Management System) certified, thus ensuring sustainable development and enrichment of quality of life of its employees. Compliance to safety systems & procedures and environmental laws is regularly monitored.

12. CONSULTANCY SERVICES

Your Company takes up consultancy assignments mainly to increase its outreach and footprint across the country and in its neighboring countries. The main aim is to share its best practices with fellow organizations and other stakeholders in the hydro power sector in construction of hydro-electric projects in the geologically fragile Himalayan Region. The best O&M practices, which have allowed NHPC to achieve best plant availability, increased efficiency and increased plant/ equipment life across its various power stations are also shared through consultancy. NHPC has been recently entrusted the prestigious consultancy assignment of preparation of DPR for diversion of Seri Nallah away from Atal Tunnel at Rohtang.

During the financial year 2020-21, payments of 45.55 Crore have been received by NHPC for consultancy services rendered to its different clients

13. FINANCING OF NEW PROJECTS

Internal accruals of the Company are sufficient to finance the equity component for the new/ upcoming projects. NHPC is well positioned to raise the borrowings as per CERC norms given its low geared capital structure and strong credit ratings. NHPC is exploring domestic as well as international borrowing options including overseas development assistance provided by multilateral/ bilateral agencies to mobilize the debt required for the planned capacity addition programmes. During the year 2020-21, your Company has raised 2,315.31 crore through various options of borrowing from domestic sources i.e. 2,250 crore through Corporate Bonds on private placement basis and 65.31 crore through Sub-ordinate debts from Government of India.

14. CREDIT RATING

Domestic Rating

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

International Rating

S&P Global Rating has revised its outlook on NHPC to ‘negative’ from ‘stable’ in October, 2020 and maintained ‘BBB-’ long term issuer credit rating on the Company.

15. INFORMATION TECHNOLOGy AND COMMUNICATION

Your Company considers information technology as a strategic tool for the attainment of sustainable growth in business and to improve overall productivity and efficiency. Various locations of the Company including remotely located Power Stations / Projects are connected to Corporate Office / Regional offices through multimode communication links using MPLS-VPN / ILL / VSAT-Ku band / ISAT Phones. These multimode links have been integrated through SDWAN (Software Defined Wide Area Network) technology to function in a fail-safe mode.

Your company has implemented Enterprise Resource Planning (ERP) application across all its locations integrating its various business processes. The company is in the process of upgrading ERP to further strengthen business processes and incorporate business intelligence. Apart from ERP, your company has implemented a host of other software applications / Mobile apps to take care of day-to-day business requirements. NHPC’s bilingual website and integrated intranet are functioning as powerful information dissemination systems to take care of external / internal information requirements. As per Government of India directives, e-procurement, Government e-Market (GeM), vendor payment portal and e-Reverse auction system are operational in the Company.

During the year 2020-21, office functioning remained uninterrupted amid COVID-19 lockdowns through the efficient functioning of various software applications / tools i.e. e-office, e-IOM, ERP/ESS, video conferencing, e-mails etc.

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

16. HUMAN RESOURCES

Your company has a strong and dedicated workforce of 5,569 employees, consisting of 3,281 executives and 2,288 non-executives as on March 31, 2021. The above workforce includes 590 women employees. Your Company is strongly focused towards lifelong learning and competency development of its employees for their overall capacity building by improving their performance and enhancing organizational capabilities. Training programmes to employees are facilitated through internal faculty as well as through external agencies. NHPC has four regional hydro training centers located at Salal Power Station, Tanakpur Power Station, Chamera-I Power Station and Uri-I Power Station. NHPC has organized various training and development programmes for its employees through premier management and engineering institutions like IIMs, IITs etc. to enhance their skills and competencies and to encourage them to utilize their full potential in their respective field of operations. Your Company also deputes senior and high potential employees to foreign training programmes to keep them abreast with the latest know how and to understand the global scenario in the field of hydro power. NHPC also sponsors its executives to acquire higher qualification and specialization to improve their productivity and effectiveness. During COVID-19 pandemic, your company has organized virtual workshops to fulfill training requirements of its employees in addition to knowledge sharing sessions through webinars. Industrial relations in the Company remained cordial and harmonious during the year. Employees actively contributed in the growth of the Company.

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

17. RESETTLEMENT AND REHABILITATION (R&R)

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

18. VIGILANCE

The Company believes in conducting its affairs in a fair and transparent manner by adopting highest level of integrity and ethical behavior. Your Company has a Vigilance Department headed by Chief Vigilance Officer to ensure transparency, objectivity and quality of decision making in its operations. All the procedures are documented to monitor and handle vigilance complaints and disciplinary cases. Vigilance Department co-ordinates with Ministry of Power, Central Bureau of Investigation (CBI), Central Vigilance Commission (CVC) and other concerned departments of the Government. As on March 31, 2021, two vigilance cases relating to misconduct and disproportionate assets against employees were under disciplinary proceedings.

As a part of preventive vigilance, circulars and guidelines are being issued regularly based on various inspections / intensive examinations carried out from time to time. Vigilance awareness week and other vigilance awareness programmes are also being organized by the Company to promote transparency and ethics in working system.

19. INTERNAL FINANCIAL CONTROLS

Adequate internal financial controls with reference to financial reporting are in place in the Company. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

20. RISK MANAGEMENT

Your Company recognizes that effective management of risks associated with the business is a fundamental requirement to its continued profitability and long-term sustainability. Your Company has an elaborate Risk Management policy to have structured and disciplined approach towards risks. The development and implementation of Risk Management policy has been covered in the Management Discussion and Analysis Report, which forms part of this report.

21. PROCUREMENT FROM MICRO & SMALL ENTERPRISES

Government of India has notified Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012 to support marketing of products produced and services rendered by MSEs. In compliance to the policy, annual procurement plan including items to be procured from MSEs are uploaded on NHPC’s website (www.nhpcindia.com) for the benefit of MSEs.

The benefits to MSEs like exemption from tender fees and earnest money deposit, purchase preference, interest on delayed payments and exemption from prior experience–prior turnover criteria subject to meeting of quality and technical specifications, are also extended to encourage these enterprises.

During the financial year 2020-21, your Company has procured products and services from MSEs, which has constituted 61.78% of the total annual procurement value, against the mandate of 25% set by Ministry of Micro, Small and Medium Enterprises, Govt. of India.

During the year, 1981 MSEs were benefited out of which 48 MSEs and 118 MSEs were owned by SC/ST and Women entrepreneurs respectively.

Trade Receivables Discounting System (TReDS) platform facilitates the discounting of invoices of MSMEs facilitating generation of working capital for their regular business operations. NHPC is also registered on the platform for the benefit of MSMEs.

22. IMPLEMENTATION OF OFFICIAL LANGUAGE

Your company is committed for the implementation of Official Language ‘Hindi’ at its various locations in day-to-day functioning in line with the provisions of the Official Languages Act, 1963 and rules notified thereunder. During the year 2020-21, quarterly meetings of the Official Language Implementation Committee were regularly organized through video conferencing to review the progressive use of Official Language across the Company.

During the year, NHPC organized various programmes like Hindi Pakhwara, Hindi Competitions, Akhil Bhartiya Rajbhasha Sammelan, Hindi Kavi Sammelan, monthly departmental meetings etc. to encourage the use of Official Language. Attractive incentive schemes for employees by contributing for articles/ write-ups for in-house magazines, reading Hindi books, noting & drafting in Hindi etc. have been implemented for progressive use of Official Language.

23. SPORTS AND OTHER ACTIVITIES

During the year 2020-21, NHPC participated in seven Inter CPSU tournaments organized under the aegis of Power Sports Control Board, Ministry of Power.

The tournaments started in February, 2021 owing to COVID-19 pandemic. NHPC teams achieved podium positions in Inter CPSU Badminton, Carrom and Bridge Tournaments.

NHPC announced 2nd batch Sports Scholarships under its ‘Sports Scholarship scheme for upcoming sportspersons’ on July 29, 2020 amounting to 52.64 lakh to ten promising talented sportspersons covering sporting disciplines of Kabaddi, Football, Boxing, Wrestling and Para sports for the next three years. Your company also organized Power Cup 2021, a T-20 cricket tournament wherein Ministry of Power and Power PSUs based in Delhi NCR under the aegis of Ministry of Power participated. The tournament was organized in Feb-March, 2021. Your company has organized Vasant Utsav 2021 with great fervour and enthusiasm at NHPC Residential Complex, Faridabad on February 13, 2021. Stalls promoting local handicrafts, dress materials, food delicacies etc. from various states/ union territories such as J&K, Himachal Pradesh, Sikkim, West Bengal, Manipur, Uttarakhand,

Assam etc. were set up. NHPC has also released NHPC anthem (composed & sung by renowned playback singer Padma Shri awardee Shri Kailash Kher) to inspire & motivate NHPCians as well as to instill a sense of pride and belongingness amongst them. During the year, your Company also participated in various virtual national exhibitions to showcase its activities.

24 AWARDS & RECOGNITIONS

Your company has been proud recipient of following awards for excellence in different areas during the financial year 2020-21:-

Ministry of Home Affairs, Government of India has awarded NHPC with three national level awards under various categories of Rajbhasha Kirti Puraskar Yojana for the year 2019-20. These awards have been presented for excellence in implementing and promoting Official Language.

NHPC was awarded ‘Silver Shield’ at the prestigious ICAI Awards for Excellence in Financial Reporting for 2019-20. NHPC has received this award under the category of Public Sector Entities for its Annual Report and Financial Statement for the year ended March 31, 2020.

Govt. of Haryana recognized the CSR initiatives and the best practices in CSR by NHPC during the COVID 19 pandemic and honoured NHPC with CSR award on January 26, 2021.

NHPC has been awarded ‘Best Performing PSE’ for Excellence in Hydropower and Renewable Sector at the PRAKASHmay 13th ENERTIA Awards 2020 on December 23, 2020. The award has been instituted by REPA (Renewable Energy Promotion Association) and ENERTIA foundation.

25 RIGHT TO INFORMATION ACT

An elaborate mechanism is in place to deal with the matters related to Right to Information Act, 2005. The Company has nominated a senior level executive as the Appellate Authority. The Company has nominated one Central Public Information Officer (CPIO) and one Transparency Officer. These officers are based at Corporate Office. In addition to above, 33 Assistant Public Information Officers (APIOs) are nominated at different units/ offices. The details of all the designated officials, third party audit reports, etc. are available on the website of the Company i.e. www.nhpcindia.com. The online RTI portal of the Company is aligned with the portal launched by Department of Personnel & Training (DoPT). All applications/ appeals received through the portal are attended and disposed-off accordingly.

During the year 2020-21, 465 applications and 50 first stage appeals were received out of which 458 (98.50%) applications and 50 (100%) first stage appeals were replied/ disposed-off. 2 second stage appeals were filed by the applicants before the Central Information Commissioner (CIC) which were also disposed-off in favour of NHPC.

26 CORPORATE SOCIAL RESPONSIBILITy

Your company has been actively engaged in various CSR activities over the years with the aim to create a deeper positive impact on the society at large by addressing the social, economic, environmental and welfare concerns of the stakeholders. The CSR initiatives of the Company includes programmes on promoting Education & Skill Development, Healthcare & Sanitation, Rural development, Women Empowerment, Sports, promoting and conserving Art & Culture etc. in accordance with Schedule VII of the Companies Act, 2013. While selecting the CSR & Sustainability schemes, it is ensured that maximum benefits reach to the poor/ backward and needy sections of the society. Your Company is supporting the local Government in setting up of engineering colleges and ITIs in different parts of the country. NHPC has contributed 15 Crore from its CSR funds to ‘PM CARES Fund’ to support the Country in fight against COVID 19 pandemic.

Your Company has provided assistance to the local administration in fighting the COVID-19 pandemic by upgrading medical infrastructure near Company’s locations, procuring Cold Chain equipment, creating quarantine centres in Company’s dispensaries, distributing essential food items, medicines, hygiene kits, providing Oxygen concentrators, assisting in sanitation drives etc.

Your Company is also open to join hands with other CPSEs in planning, implementation and monitoring of mega-projects for optimal use of resources, synergy of expertise and for maximizing socio-economic or environmental impact with regard to CSR activities undertaken. A report on CSR activities undertaken by your company during the financial year 2020-21 is given as separate annexure to this report.

27. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

Your company has not entered into any material transaction with any of its related parties during the financial year 2020-21. Company’s major related party transactions are generally with its subsidiary and associate companies for providing consultancy services, leasing out of properties and manpower services. All the contracts/ arrangements / transactions entered into with related parties were on arm’s length basis, intended to further the company’s interest. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

Attention of the members is also drawn to para no. 8 of note no. 34 of the standalone financial statements, which sets out related party disclosures as per Ind AS-24.

28. VIGIL MECHANISM - POLICy ON WHISTLE BLOWER AND FRAUD PREVENTION

Your Company has framed a ‘Whistle Blower Policy’ wherein Directors, employees, contractors and vendors of the Company are free to report any unethical practice, violation of applicable laws, rules, regulations or Company’s code of conduct, that could adversely impact Company’s operations, business performance and/or reputation. The policy also allows direct access to the Chairperson of the Audit Committee. During the year, no person was denied access to the Audit Committee (during its existence) on issues relating to Whistle Blower Policy. The identity of the whistle blower is kept confidential so that he/she shall not be subjected to any discriminatory practice. A senior level officer has been nominated as Coordinator for effective implementation of the policy and to deal with complaints reported under the policy. During the year 2020-21, no complaint was received under Whistle Blower Policy.

Your Company has also framed a Fraud Prevention & Detection Policy to prevent, detect and allow speedy disposal of fraud or suspected fraud. Mechanism under the policy is appropriately communicated within the organization across all levels and has been displayed on company’s intranet.

29. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

Your company believes that diversity at workplace creates an environment conducive to engagement, alignment, innovation and high performance. Every employee in the company is treated with dignity, respect and afforded equal treatment. A policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 is in place. ‘Internal Complaints Committees’ have been constituted at various locations of the company for the redressal of complaints against sexual harassment of women at workplace. The committee at Corporate Office, Faridabad is headed by a senior woman officer and includes representative from an NGO, as one of its members. Your company has also prohibited sexual harassment of women by incorporating it as misconduct under "NHPC Conduct, Discipline and Appeal Rules". Disclosure in respect of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for the financial year 2020-21 is as under:

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

* complaint is under investigation by the Internal Complaints Committee.

30. DEBENTURE TRUSTEES

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

31. COVID-19

Your company has adopted a holistic approach to spread awareness among its employees, their dependent and other stakeholders to sensitize about safety measures during COVID-19 pandemic. A campaign on Public Health Response to COVID-19 : Campaign for COVID Appropriate Behavior was launched across all NHPC locations.

Your company has taken all necessary measures for mitigating impact of challenges being faced due to COVID-19 pandemic by setting up of COVID care centers with oxygen support facilities at various NHPC locations, augmenting supply side logistics related to availability of Medical oxygen by funding for setting up of oxygen plants at various Govt. hospitals besides providing support for purchase of oxygen concentrators.

Your Company played a significant role in mitigating the effects of COVID-19 pandemic through various initiatives at its locations across the Country. Ministry of Power, Govt. of India has entrusted NHPC the responsibility to compile the daily reports of COVID-19 related activities taken up by various CPSUs under its administrative control. Short video clips and infographics, short presentations regarding COVID-19 were made to create awareness among people and keep them abreast about NHPC activities. Vaccination is the most important armour in the battle against the COVID-19 pandemic. NHPC has organized multiple camps for vaccination of employees of various organizations and PSUs under Ministry of Power/ MNRE and their family members. In order to augment the vaccination drive against COVID-19, your company procured & handed over various Cold Chain Equipment such as Ice Line Refrigerator, Deep Freezer, Walk-in Cooler and Walk-in-Freezer for three states/ UTs namely Arunachal Pradesh, Himachal Pradesh & Jammu & Kashmir under its CSR initiative. NHPC procured total 281 Cold Chain Equipment amounting to 2.72 crore through GeM portal and handed it over to the respective State Government Authorities. Amidst all the challenges posed by the pandemic, your company has continued to serve the Nation by running its power stations efficiently.

32. STATUTORY AND OTHER INFORMATION

Information required to be furnished as per the Companies Act, 2013, SEBI LODR, Guidelines issued by Department of Public Enterprises (DPE) on Corporate Governance for CPSEs etc. is annexed to this report as follows:

Particulars Annexure
Report on Corporate Governance I
Certificate from Practicing Company Secretary regarding compliance to conditions of Corporate Governance II
Management Discussion and Analysis Report III
Conservation of energy, technology absorption and foreign exchange earnings and outgo IV
Business Responsibility Report V
Annual Report on CSR Activities VI

33 DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCy AND BANKRUPTCy CODE, 2016 DURING THE yEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

No application was made or any proceeding was pending against NHPC Limited under the Insolvency and Bankruptcy Code, 2016 during the financial year 2020-21. However, NHPC has taken over "Jalpower Corporation Limited" a debt ridden company implementing Rangit Stage-IV H.E. Project (120 MW) in the State of Sikkim through CIRP process on March 31, 2021 during the financial year 2020-21. CIRP process of JPCL was initiated on April 9, 2019 vide an order of Hon’ble NCLT, Hyderabad Bench.

Resolution Plan of NHPC for takeover of JPCL was approved by Hon’ble NCLT, Hyderabad Bench vide order dated December 24, 2020. Secured Financial Creditors comprising two lenders i.e. Power Finance Corporation Limited and Punjab National Bank were listed. The award cost of the project approved by Hon’ble NCLT was 165 Crore.

34. AUDIT AND AUDITORS’ REPORT

34.1 SECRETARIAL AUDIT

The Board had appointed M/s Agarwal S. & Associates, Company Secretaries, Delhi to conduct Secretarial Audit of the company for the financial year 2020-21.

The Secretarial Auditor, in its report, has given some observations. The Secretarial Auditor’s Report along with management replies on the observations is given at Annexure-VII.

In compliance to Regulation 24A of SEBI LODR,

Secretarial Audit Report of NHDC Limited, which is a material unlisted subsidiary company of NHPC Limited, is also given at Annexure-VIII.

34.2 STATUTORy AUDIT

The Statutory Auditors of your company are appointed by the C&AG. C&AG had appointed following Joint

Statutory Auditors for the financial year 2020-21:

1. M/s Arora Vohra & Co, Jammu.

2. M/s K.G. Somani & Co., New Delhi

3. M/s Lodha & Co., Kolkata

The Joint Statutory Auditors have given un-modified report on the standalone and consolidated financial statements of the company for the financial year 2020-21. Further, no instance of fraud by any officer or employee of the company has been reported by the Auditors under Section 143(12) of the Companies Act, 2013.

The standalone financial statements of the Company along-with Statutory Auditors’ Report thereon are given at Annexure-IX. The consolidated financial statements of the Company along-with the Statutory Auditors’ Report thereon are given at Annexure-X.

34.3 REVIEW OF ACCOUNTS By C&AG

The C&AG has given NIL comments on the standalone and consolidated financial statements of your Company for the year ended March 31, 2021 after conducting supplementary audit under Section 143(6)(a) of the Companies Act, 2013. The comments of C&AG for both the standalone and consolidated financial statements of your company for the year ended March 31, 2021 are given at Annexure- XI.

34.4 COST AUDIT

The Company maintains necessary cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014. As recommended by the Audit Committee, your Board has appointed the following firms of Cost Accountants to conduct audit of cost accounting records of power stations for the financial year 2020-21 under Section 148 of the Companies Act, 2013:

Name of the Firm Power Stations
M/s Dhananjay V. Joshi & Associates, Delhi (Lead Cost Auditor) Chutak and Nimmo Bazgo
M/s ABK & Associates, Gurgaon Chamera-I, Sewa-II and Parbati-III
M/s Narasimha Murthy & Co., Delhi Uri-I, Uri-II and Kishanganga
M/s R. M. Bansal & Co., Delhi Bairasiul, Chamera-II and Chamera-III
M/s K. G. Goyal & Co., Jaipur Dulhasti, Salal and Wind Power Project, Jaisalmer
M/s AJS and Associates, Dehradun Tanakpur and Dhauliganga
M/s Bandyopadhyaya Bhaumik & Co., Kolkata Rangit, Teesta-V and Solar Power Project, Tamil Nadu
M/s Y. S. Thakar & Co., Asansol, West Bengal Loktak, TLDP-III and TLDP-IV

The consolidated Cost Audit Report in XBRL format for the financial year ended March 31, 2020 was filed with the Central Government on September 24, 2020.

The Cost Audit Report for the financial year ended March 31, 2021 shall be filed within the prescribed time period.

35 ANNUAL RETURN

Pursuant to Section 134(3)(a) and Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company as on March 31, 2021 is available on the Company’s website at http://www.nhpcindia.com/NHPC-annual-reports.htm

36. PARTICULARS OF LOANS, INVESTMENTS AND CORPORATE GUARANTEES

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

37. PARTICULARS OF EMPLOyEES

In accordance to notification dated June 5, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from the disclosure requirements of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included as part of Directors’ Report.

The policy on remuneration, pay structure, allowances and other benefits of employees of the company are governed by relevant DPE Guidelines. Pay structure and allowances of the company are also available on the website at http://www.nhpcindia. com/writereaddata/images/pdf/RTI%20Corner%20 Wages%20UpdationENG_CAA_201905_1.pdf

38. BOARD AND COMMITTEES OF THE BOARD

The Board of Directors met eleven times during the financial year 2020-21. The details of the Board meetings and attendance therein are given in the Corporate Governance Report, which forms part of this report.

The mandatory Committees of the Board i.e.

Audit Committee, Nomination & Remuneration Committee, Stakeholders’ Relationship Committee, Risk Management Committee and Committee on Corporate Social Responsibility & Sustainability were duly constituted till September 7, 2020 i.e. up to the tenure of remaining two Independent Directors on the

Board of NHPC Limited. In view of non-appointment of Independent Directors by the Administrative

Ministry i.e. Ministry of Power, the Board of Directors has reconstituted its mandatory Committees (except Nomination & Remuneration Committee) i.e. Audit Committee, Risk Management Committee, Stakeholders’ Relationship Committee and Committee on Corporate Social Responsibility & Sustainability with available Non-independent Directors to substantially comply with the requirements of the

Companies Act, 2013, SEBI LODR and DPE Guidelines on Corporate Governance. The details of various committees of the Board, their meetings and composition are given in the Corporate Governance Report.

During the financial year 2020-21, there was no instance, where the Board has not accepted the recommendation(s) of any committee of the Board which is mandatorily required.

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

Your Company has framed a policy on performance evaluation of Board, Board level Committees and Independent Directors in line with provisions of SEBI LODR. The annual performance evaluation of Board, Board level Committees and Independent Directors of the Company for the financial year 2019-20 has been carried out by the Board in its meeting held on

February 11, 2021. The Independent Directors in their separate meeting held in June, 2019 decided not to carry out the performance evaluation of Functional Directors as their performance is being evaluated by the Administrative Ministry i.e. Ministry of Power. The process of annual performance evaluation of Board, Board level Committees and Independent Directors is given in the Corporate Governance Report.

40. DIRECTORS’ RESPONSIBILITy STATEMENT

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

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

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

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

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

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

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

41. SECRETARIAL STANDARDS

Your company has followed applicable Secretarial

Standards relating to ‘Meetings of the Board of

Directors’ and ‘General Meetings’ issued by Institute of Company Secretaries of India (ICSI).

42. GENERAL

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

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

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

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

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

5. Details related to public deposits as required under Chapter V of the Act.

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

43. WEBSITE LINK FOR VARIOUS POLICIES OF THE COMPANY

Website links for the information required to be hosted on the website of the Company i.e. www.nhpcindia.com as per the Companies Act, 2013,

SEBI LODR etc. are as follows:

Particulars Website Link
Policy on Related Party Transactions http://www.nhpcindia.com/ writereaddata/Images/ pdf/Policy-Related-Party- Transaction.pdf
Corporate Social Responsibility & Sustainability Policy www.nhpcindia.com/ csr-policy.htm
Policy on Material Subsidiaries http://www.nhpcindia.com/ writereaddata/Images/pdf/ Policy-Material-Subsidiary.pdf
Whistle Blower Policy http://www.nhpcindia.com/ writereaddata/images/pdf/ wbp.pdf
Familiarization Programme for Directors http://www.nhpcindia.com/ writereaddata/Images/pdf/ Details%20of%20Director%20 Training_FY2019-20%20-%20 English.pdf
Dividend Distribution Policy http://www.nhpcindia.com/ writereaddata/Images/pdf/ Dividend-Policy-21062017.pdf
Annual Return http://www.nhpcindia.com/ NHPC-annual-reports.htm

44. BOARD OF DIRECTORS & KEy MANAGERIAL PERSONNEL

The following changes in composition of Board of Directors and Key Managerial Personnel took place since the last annual report:

1. Shri Jugal Kishore Mohapatra and Shri Bhagwat Prasad ceased to be Independent Directors of the Company on completion of their tenure on September 7, 2020.

2. Shri Mahesh Kumar Mittal ceased to be Director (Finance) & Chief Financial Officer (CFO) of the Company on attaining the age of superannuation on September 30, 2020.

3. Shri Rajendra Prasad Goyal was appointed as Director (Finance) & Chief Financial Officer (CFO) of the company w.e.f. October 1, 2020.

4. Shri Ratish Kumar ceased to be Director (Projects) of the Company on attaining the age of superannuation on December 31, 2020.

5. Shri Biswajit Basu was appointed as Director (Projects) of the Company w.e.f. January 1, 2021.

6. Late (Shri) Vijay Gupta ceased to be Company Secretary of the Company on January 16, 2021 due to sad demise.

7. Shri Saurabh Chakravorty was appointed as Company Secretary of the Company w.ef. February 11, 2021.

Details of remuneration and sitting fee paid to directors during the year 2020-21 are given in the Corporate Governance Report.

There was no Independent Director on the Board of NHPC Limited as on March 31, 2021 since completion of tenure of remaining two Independent Directors i.e. Shri Jugal Kishore Mohapatra and Shri Bhagwat Prasad on September 7, 2020. Accordingly, details relating to criteria of independence and other matters for Independent Directors have not been provided in the Directors’ Report.

Shri Nikhil Kumar Jain, Director (Personnel) and Shri Yamuna Kumar Chaubey, Director (Technical) are liable to retire by rotation and being eligible are proposed to be re-appointed at the forthcoming Annual General Meeting. Brief profile of the Directors proposed to be appointed/ re-appointed at the forthcoming AGM is given in the notice of AGM.

45. ACKNOWLEDGEMENT

The Board of Directors would like to express heartfelt gratitude to the Government of India, particularly the Ministry of Power, as well as various State Governments, regulatory and statutory authorities for their valuable guidance and overwhelming support from time to time.

The Board is also thankful to all stakeholders, including bankers, investors, shareholders, customers, consultants, contractors, vendors, etc. for their never-ending trust, continued support and confidence reposed in the Company.

The Board sincerely acknowledges the invaluable suggestions received from the Office of C&AG,

Statutory Auditors, Secretarial Auditor and Cost Auditors.

The Board would like to place on record its appreciation for the expertise, enthusiasm, directions and significant contribution made by Shri Ratish Kumar, Shri Mahesh Kumar Mittal, Shri Jugal Kishore Mohapatra and Shri Bhagwat Prasad during their respective tenure on the Board of the Company. The Board would like to express its appreciation for the dedicated and sincere efforts put by NHPCians at all levels for the excellent performance of the Company during the year.

The Board salutes with deepest gratitude the dedication, commitment, courage and tireless efforts of all functionaries and personnel in the Government, doctors, nurses, technicians, transporters, police, law enforcement and other agencies who are at the frontline to fight the pandemic by keeping essential services operational, helping register and administer the vaccination drive and to protect our nation from COVID-19 pandemic. NHPC is proud of the sustained and tenacious efforts of its employees especially posted at power stations and projects who are contributing in the service of nation during this challenging time.

For and on behalf of the Board of Directors

(Abhay Kumar Singh)

Chairman and Managing Director

DIN 08646003

Date: August 27, 2021

Place: Faridabad