Private Placement Offer Letter Private & Confidential-not for circulation

NTPC LIMITED (A Government of Enterprise)

Registered Office and Corporate Office: NTPC Bhawan, Scope Complex, 7, Institutional Area, Lodi Road, New Delhi 110003. Tel: (011) 24387716 Fax: 91-11- 24360849 ; E-mail: [email protected];Website: www.ntpc.co.in ; CIN : L40101DL1975GOI007966

THIS IS A PRIVATE PLACEMENT OFFER LETTER ISSUED IN CONFORMITY WITH FORM PAS-4 PRESCRIBED UNDER SECTION 42 AND RULE 14(1) OF COMPANIES (PROSPECTUS AND ALLOTMENT OF SECURITIES) RULES, 2014, THE COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES, 2014, SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE AND LISTING OF DEBT SECURITIES) REGULATIONS, 2008 ISSUED VIDE CIRCULAR NO. LAD-NRO/GN/2008/13/127878 DATED JUNE 06, 2008, AS AMENDED FROM TIME TO TIME AND SUCH OTHER CIRCULARS APPLICABLE FOR ISSUE OF DEBT SECURITIES ISSUED BY SEBI FROM TIME TO TIME.

(Our Company was incorporated on November 7, 1975 under the Companies Act 1956 as a private limited company under the name, ‘National Thermal Power Corporation Private Limited’. The name of our Company was changed to ‘National Thermal Power Corporation Limited’ on September 30, 1976 consequent upon a notification issued by the Government of India exempting government companies from the use of the word ‘private’. On September 30, 1985, our Company was converted from a private limited company into a public limited company. The name of our Company was changed to ‘NTPC Limited’ and a fresh certificate of incorporation was issued on October 28, 2005.)

PRIVATE PLACEMENT OFFER LETTER FOR PRIVATE PLACEMENT OF 7.58% SECURED, NON-CUMULATIVE, NON-CONVERTIBLE, REDEEMABLE, TAXABLE, BONDS OF RS. 10,00,000/- EACH (SERIES 62) IN THE NATURE OF DEBENTURES AMOUNTING UPTO RS 500 CRORE WITH A GREEN SHOE OF RS 300 CRORE AGGREGATING UPTO RS 800 CRORE (THE “ISSUE”).

TRUSTEE FOR THE BONDHOLDERS REGISTRAR TO THE ISSUE BANKER TO THE ISSUE IL&FS TRUST COMPANY LIMITED BEETAL Financial & Computer Services (P) Ltd. Registered Office Registered Office BEETAL House, 3rd Floor The IL&FS Financial Centre, Plot C 22, G Block, 99,Madangir Jawahar Vyapar Bhavan Bandra Kurla Complex, Bandra (East), Mumbai New Delhi-110062 11th Floor,1, Tolstoy Marg 400 051 Tel No: (011) 29961281,282 New Delhi-110 001. Tel: (+91 22) 2659 3612 Fax No. 91-11-29961284 Tel No: 011-23353115 Fax: (+91 22) 2653 3297 E-Mail:[email protected] Fax: 011-23353101 Email:[email protected]

LISTING The Bonds are proposed to be listed on Debt Market segment of the National Stock Exchange of India Limited (“NSE”) and BSE Limited. NSE is proposed to be the Designated Stock Exchange.

ARRANGER(S) TO THE ISSUE

A.K. Capital Services Limited Limited & Company Private Limited HDFC Bank Limited ICICI Securities Primary Dealership Ltd Trust Investment Advisors Private Limited Limited

This Bond issue is being made strictly on a private placement basis. It is not and should not be deemed to constitute an offer to the public in general. It cannot be accepted by any person other than to whom it has been specifically addressed.

The contents of this Private Placement Offer Letter are non-transferable and are intended to be used by the parties to whom it is distributed. It is not intended for distribution to any other person and should not be copied / reproduced by the recipient for any purpose whatsoever.

The information contained in this document has certain forward looking statements. Actual result may vary materially from those expressed or implied, depending upon economic conditions, government policies and other factors. Any opinion expressed is given in good faith but is subject to change without notice. No liability is accepted whatsoever for any direct or consequential loss arising from the use of this document.

NTPC does not undertake to update this Private Placement Offer Letter to reflect subsequent events and thus it should not be relied upon without first confirming the accuracy of such events with NTPC.

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TABLE OF CONTENTS

I. DEFINITIONS/ABBREVIATIONS ...... 4 II. DISCLAIMER ...... 5 III. GENERAL INFORMATION...... 6 Name and address of the registered and corporate office of the issuer ...... 6 Date of Incorporation ...... 7 Business carried on by the company and its subsidiaries with the details of branches or units ...... 7 Compliance officer and Company Secretary ...... 11 Nodal Officer ...... 11 Chief Finance Officer: CFO ...... 11 Trustee for the Bondholders ...... 11 Registrar and Transfer Agent to Issue ...... 11 Names and addresses of the credit rating agencies for the Issue...... 11 Names and address of Joint Statutory Auditors ...... 11 IV. OUR MANAGEMENT ...... 12 Details of change in Directors since last three years ...... 16 V. MANAGEMENT PERCEPTION OF RISK FACTORS ...... 20 VI. BRIEF SUMMARY OF THE BUSINESS/ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS ...... 36 Overview: Business of the Company ...... 36 Corporate Structure ...... 36 Ownership ...... 37 Projects profile ...... 38 Operational Performance...... 39 Capacity expansion...... 41 Business Strategy ...... 42 Financial performance of NTPC for last three financial years (Standalone & Consolidated) ...... 45 Profits of the Company before and after making provision for Tax for three financial years ...... 46 Gross Debt: Equity Ratio of the Company on Standalone basis ...... 46 VII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS ...... 47 Capital structure as on last quarter end ...... 50 Equity shares Capital History of the Company ...... 52 Details of an Acquisition or Amalgamation in the last 1 year ...... 53 Details of any Reorganization or Reconstruction in the last 1 year ...... 53 Top 10 Equity Shareholders ...... 54 Details regarding the Statutory Auditors of the Company ...... 54 Details of change in Statutory Auditors since last three years ...... 55 VIII. FINANCIAL INDEBTEDENESS - DETAILS OF OTHER BORROWINGS (DETAILS OF SECURED & UNSECURED LOAN FACILITIES, NON CONVERTIBLE DEBENTURES (NCDs), PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION, TOP TEN DEBENTURE HOLDERS ,DETAILS OF CORPORATE GUARANTEES, DEFAULTS etc.) ...... 56 Details of Foreign Currency un-secured loans As on 31.03.2016 ...... 56 Details of Domestic NCDs ...... 61 Details of Rest of the Borrowing ...... 65 Details of default in statutory dues or debt servicing, amount and duration of default ...... 65 Top 10 holders of domestic bonds ...... 65 Promoter Holding in the Company ...... 66

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Private Placement Offer Letter Private & Confidential-not for circulation

IX. DISLCOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION ETC...... 67 X. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGE(S) WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR) ...... 76 XI. SUMMARY TERM SHEET ...... 86 XII. CREDIT RATING & RATING RATIONALE ...... 92 XIII. NAME & ADDRESS OF DEBENTURE TRUSTEE ...... 92 XIV. STOCK EXCHANGE(s) WHERE SECURITIES ARE PROPOSED TO BE LISTED ...... 93 XV. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS ...... 94 XVI. UNDERTAKING REGARDING COMMON FORM OF TRANSFER ...... 94 XVII. ABRIDGED AUDITED CONSOLIDATED AND STANDALONE FINANCIAL INFORMATION / SUMMARY OF FINANCIAL POSITION ...... 94 XVIII. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE ...... 94 XIX. PERMISSION/ CONSENT FROM PRIOR CREDITORS ...... 94 XX. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER ...... 94 XXI. DECLARATION ...... 95

ANNEXURE

(I) CONSENTS OF TRUSTEE, REGISTRAR & TRANSFER AGENT AND BANKER (II) RATINGS AND RATIONALE (III) ABRIDGED FINANCIALS OF PREVIOUS YEARS

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I. DEFINITIONS/ABBREVIATIONS Articles Articles of Association of the Company Board/ Board of Directors Board of directors of our Company or a duly constituted committee thereof, including the Committee of the Board for Allotment and Post-Allotment Activities of NTPC’s Securities. Bonds Secured, non-cumulative, non-convertible, redeemable, taxable, bonds in the nature of debentures issued under series 62 Bondholder/Debenture holder Any person or entity holding the Bonds and whose name appears in the list of Beneficial Owners provided by the Depositories. Book Closure/ Record Date The date of closure of register of Bonds or date of determining the beneficiaries for payment of interest and repayment of principal BSE BSE Limited BUs Billion Units CARE Credit Analysis and Research limited CDSL Central Depository Services (India) Limited CERC Central Electricity Regulatory Commission CIL Coal India Limited CMD Chairman and Managing Director of NTPC CRISIL CRISIL Limited CSA Coal Supply Agreement Company NTPC Ltd. , unless otherwise specified Company would refer to NTPC standalone Depository(ies) A Depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time Depositories Act The Depositories Act, 1996, as amended from time to time (DP) A Depository participant as defined under Depositories Act Deemed Date of Allotment The date on which the Board/Committee of the Board approves the Allotment of Bonds for the Issue. All benefits accruing in relation to the Bonds including interest on Bonds shall be available from Deemed Date of Allotment. Actual Allotment of Bonds may occur on a date later than Deemed Date of Allotment DISCOM Distribution Companies DRR Debenture Redemption Reserve EPC Engineering, Procurement and Construction FIIs / FPIs Foreign Institutional Investors / Foreign Portfolio Investors Fiscal Period of twelve months period ending March 31 , of that particular year unless otherwise stated FY Financial Year GAIL GAIL (India) Limited Government/GOI Government of India HEPP Hydro Electric Power Project ICRA ICRA Limited Issuer/ NTPC/ Company NTPC Limited a company incorporated on November 07, 1975 under the Companies Act, 1956 and having its registered and corporate office at NTPC Bhawan, Scope Complex, 7, Institutional Area, Lodhi Road, New Delhi - 110003 Income Tax Act/I.T. Act The Income Tax Act, 1961, as amended from time to time kWh kilowatt hour

MOP Ministry of Power, Government of India

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Private Placement Offer Letter Private & Confidential-not for circulation

Memorandum Memorandum of Association of the Company MF Mutual Fund MMSCMD Million Metric Standard Cubic Metres per day MUs Million Units MW Megawatt NSE National Stock Exchange of India Limited NSDL National Securities Depository Limited PAN Permanent Account Number PLF Plant Load Factor PPA Power Purchase Agreement Private Placement Offer Letter / Private Placement offer letter by NTPC Limited for Series 58 Offer Letter RGPPL Ratnagiri Gas and Power Private Ltd. Rs / INR Indian Rupee RTGS Real Time Gross Settlement Registrar Registrar to the Issue, in this case being BEETAL Financial & Computer Services (P) Ltd. RBI The Reserve SAIL Steel Authority of India Limited SEB(s) State Electricity Board(s) and their successor(s), if any, including those formed pursuant to restructuring/unbundling SEBI The Securities and Exchange Board of India, constituted under the SEBI Act, 1992 SEBI Debt Regulations/SEBI Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations Regulations, 2008 issued vide Circular No. LAD-NRO/GN/2008/13/127878 dated June 06, 2008 as amended from time to time and such circulars applicable for Issue of Debt Securities issued by SEBI from time to time. SEBI(LODR) SEBI (Listing Obligations and Disclosure Requirements)Regulations,2015 State Utilities SEBs and the Unbundled entities of SEBs Stock Exchange(s) NSE and/or BSE as the Company may decide for listing the Bonds T&D Transmission and Distribution TDS Tax Deducted at Source The Companies Act Companies Act 2013 as amended The Issue/ The Offer/ Private Private placement of 7.58% secured, non-cumulative, non-convertible, Placement redeemable, taxable, bonds in the nature of debentures (series 62) having face value of Rs. 10 lakh each upto Rs 500 crore with green shoe option of Rs.300 crore TPA(s)/Tripartite Agreement(s) Tripartite Agreements executed by the Government, and the respective State Governments TPP Thermal Power Project Trustee IL&FS TRUST COMPANY LIMITED Unit 1 kWh; that is, the energy contained in a current of one thousand amperes flowing under an electromotive force of one volt during one hour

II. DISCLAIMER

GENERAL DISCLAIMER

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Private Placement Offer Letter Private & Confidential-not for circulation

This Private Placement Offer Letter is neither a Prospectus nor a Statement in Lieu of Prospectus and is prepared in conformity with Form PAS-4 prescribed under Section 42 and Rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014 and in accordance with SEBI Debt Regulations. This document does not constitute an offer to the public generally to subscribe for or otherwise acquire the Bonds to be issued by the Issuer. The document is for the exclusive use of the Institution(s)/investors to whom it is delivered and it should not be circulated or distributed to third party(ies).The Company certifies that the disclosures made in this document are generally adequate and are in conformity with the captioned Companies Act provisions and SEBI Debt Regulations. This requirement is to facilitate investors to take an informed decision for making investment in the proposed Issue.

DISCLAIMER OF THE ISSUER The Issuer confirms that the information contained in this Private Placement Offer Letter is true and correct in all material respects and is not misleading in any material respect. All information considered adequate and relevant about the Issue and the Company has been made available in this Private Placement Offer Letter for the use and perusal of the potential investors and no selective or additional information would be available for a section of investors in any manner whatsoever. The Company accepts no responsibility for statements made otherwise than in this Private Placement Offer Letter or any other material issued by or at the instance of the Issuer and anyone placing reliance on any other source of information would be doing so at his/her/their own risk. Although every effort has been made to provide accurate and up-to-date information in this document, however, there is the possibility that an unintentional omission or error exists. NTPC is not responsible for any such unintentional errors or omissions.

Prospective subscribers must make their own independent evaluation and judgment before making the investment and are believed to be experienced in investing in debt markets and are able to bear the economic risk of investing in Bonds. It is the responsibility of the prospective subscribers to have obtained all consents, approvals or authorizations required by them to make an offer to subscribe for, and purchase the Bonds. It is the responsibility of the prospective subscribers to verify if they have necessary power and competence to apply for the Bonds under the relevant laws and regulations in force. Prospective subscribers should conduct their own investigation, due diligence and analysis before applying for the Bonds. Nothing in this Private Placement Offer Letter should be construed as advice or recommendation by the Issuer or by the Arrangers to the Issue to subscribers to the Bonds. The prospective subscribers also acknowledge that the Arrangers to the Issue do not owe the subscribers any duty of care in respect of this private placement offer to subscribe for the Bonds. Prospective subscribers should also consult their own advisors on the implications of application, allotment, sale, holding, ownership and redemption of these Bonds and matters incidental thereto.

DISCLAIMER OF THE SECURITIES & EXCHANGE BOARD OF INDIA The Securities have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this document. It is to be distinctly understood that this document should not, in any way, be deemed or construed that the same has been cleared or vetted by SEBI. SEBI does not take any responsibility either for the financial soundness of any scheme or the project for which the Issue is proposed to be made, or for the correctness of the statements made or opinions expressed in this document. The issue of Bonds being made on private placement basis, this document is required to be filed with SEBI within 30 days of circulation; SEBI reserves the right to take up at any point of time, with the Company, any irregularities or lapses in this document.

DISCLAIMER OF THE STOCK EXCHANGE(S) As required, a copy of this Private Placement Offer Letter has been/will be submitted to the Stock Exchange(s) for hosting the same on their websites. It is to be distinctly understood that such submission of the document with Stock Exchange(s) or hosting the same on its website should not in any way be deemed or construed that the document has been cleared or approved by stock exchange; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this document; nor does it warrant that this Issuer’s securities will be listed or continue to be listed on the Exchange(s); nor does it take responsibility for the financial or other soundness of this Issuer, its promoters, its management or any scheme or project of the Company. Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Stock Exchange(s) whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

III. GENERAL INFORMATION

Name and address of the registered and corporate office of the issuer Name of the Issuer NTPC Limited

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Private Placement Offer Letter Private & Confidential-not for circulation

Registered & Corporate Office NTPC Bhawan, Core-7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003. Telephone Number 011-24387379 Fax Number 011-24360849 Website www.ntpc.co.in E-mail [email protected]

Date of Incorporation Our Company was incorporated on November 7, 1975 under the Companies Act 1956 as a private limited company under the name, ‘National Thermal Power Corporation Private Limited’. The name of our Company was changed to ‘National Thermal Power Corporation Limited’ on September 30, 1976 consequent upon a notification issued by the Government of India exempting government companies from the use of the word ‘private’. On September 30, 1985, our Company was converted from a private limited company into a public limited company. The name of our Company was changed to ‘NTPC Limited’ and a fresh certificate of incorporation was issued on October 28, 2005.

For details of projects/units refer to chapter VI of the Offer Letter

Business carried on by the company and its subsidiaries with the details of branches or units NTPC is a diversified power major with presence in the entire value chain of the power generation business. Apart from power generation, which is the mainstay of the company, NTPC has also ventured into consultancy, power trading, ash utilisation, equipment manufacturing, coal mining etc.

Subsidiaries The Company has 5 subsidiary Companies. The activities of subsidiaries are briefly discussed here: a) NTPC Vidyut Vyapar Nigam Limited (NVVN)

The company was formed on November 1, 2002 as a wholly owned subsidiary company of NTPC with an objective to undertake business of sale and purchase of electric power.

During the year 2015-16, the Company transacted business with various State Electricity Boards spread all over the country and traded 12,766 MUs of electricity.

The Company is designated Nodal Agency for implementation of Jawahar Lal Nehru National Solar Mission Phase-I by purchasing and selling of grid connected bundled solar power across the country.

NVVN has also been designated as the nodal agency for cross border trading of electricity with Bhutan, Bangladesh and Nepal.

Office of NVVN Registered and Corporate Office : NTPC Bhawan, Core-7, Scope Complex 7, Institutional Area, Lodhi Road, New Delhi – 110003

b) Kanti Bijlee Utpadan Nigam Limited (KBUNL) A subsidiary Company in which NTPC holds 65% shares in joint venture with BSPGCL (erstwhile BSEB), took over MTPS having 2 units of 110 MW each from BSEB. Both the units of Stage-I have been declared on commercial operation. Total generation in FY 2015-16 was 778.96 MU at 40.31 % PLF.

The Company has also taken up expansion of the project by 2X195 MW units. Unit#3 of Stage-II was commissioned on 31.03.2015 and Unit#4 of Stage-II on 24.03.2016.

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Offices of KBUNL Registered Office : NTPC Bhawan, Core-7, Scope Complex 7, Institutional Area, Lodhi Road, New Delhi – 110003

Site Office: P.O. - Kanti Thermal, Distt. - Muzaffarpur- 843130 (Bihar)

c) Bhartiya Rail Bijlee Company Limited (BRBCL)

A subsidiary of NTPC in joint venture with Ministry of Railways with equity contribution in the ratio of 74:26 respectively for setting up power project of 1000 MW (4X250 MW) capacity at Nabinagar in Bihar. Unit#1 of 250 MW was commissioned on 20.03.2016. Construction activities in other units are in progress.

Offices of BRBCL Registered Office : NTPC Bhawan, Core-7, Scope Complex 7, Institutional Area, Lodhi Road, New Delhi – 110003 Corporate Office : 2nd Floor, Vidyut Bhawan II, Bailey Road, Patna, Bihar- 800001 Camp Office: Jain Bungalow, Post - Dalmianagar, Dheri-on-Sone, District Rohtas Bihar- 821305

d) NTPC Electric Supply Company Limited (NESCL)

A wholly owned subsidiary was incorporated to foray into the business of distribution and supply of electrical energy as a sequel to reforms initiated in the power sector. The Company was implementing Rajiv Gandhi Gramin Vidyutikaran Yojna (RGGVY) projects on turnkey basis and undertaken turnkey execution of sub-stations for utilities and project management consultancy.

The shareholders of NESCL have transferred existing business of deposit and consultancy works under RGGVY from NESCL to NTPC on 01.04.2015.

This subsidiary had also dis-associated with the business of retail distribution of power in various industrial parks developed by Kerala Industrial Infrastructure Development Corporation (KINFRA), through its Joint Venture Company namely KINESCO Power and Utilities Private Limited, as the future prospects of the JV Company are bleak. The shares held by NESCL had been purchased by KINFRA on 17.12.2015 and thus NESCL had ceased to be the joint venture partner of KINESCO.

Offices of NESCL Registered Office : NTPC Bhawan, Core-7, Scope Complex 7, Institutional Area, Lodhi Road, New Delhi – 110003 Corporate Office: NTPC EOC and R&D Building, Sector-24, Noida-201301

e) Patratu Vidyut Utpadan Nigam Limited (PVUNL) : PVUNL has been incorporated on 15.10.2015 as a subsidiary of NTPC with 74% stake in the Company and 26% of stake held by JBVNL to acquire, establish, operate, maintain, revive, refurbish, renovate and modernize the performing existing units and further expand capacity of Patratu Thermal Power Station, District Ramgarh, Jharkhand in two phases i.e. Phase-I (3X800 MW) and Phase –II (2X800MW).

Government of Jharkhand has issued the Notification dated 01.04.2016 for transfer of assets of Patratu Thermal Power Station to Patratu Vidyut Utpadan Nigam Limited. As a result 325 MW has been added to NTPC’s group capacity.

Office of PVUNL Reg. Office : NTPC Bhawan, Core - 7, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi – 110 003. Site Office: Patratu Thermal Power Station, Patratu, Distt. Ramgarh – 829119, Jharkhand

JOINT VENTURES OF THE COMPANY

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Private Placement Offer Letter Private & Confidential-not for circulation

Sl Name of the JV NTPC’s Holding as Area(s) of Operation Company on 31.03.2016 1 Utility Powertech 50% Undertakes assignments of construction, erection and supervision Limited in power sector and other sectors in India and abroad as well as to provide man power to power , telecom and other sectors. 2 NTPC-SAIL Power 50% Operating a capacity of 814 MW with SAIL at Durgapur, Rourkela Company Pvt. Ltd. and Bhilai. The Company is pursuing coal based expansion power plants at Rourkela, Durgapur, Bhilai and green field lignite based power plant at Salem. 3 NTPC-Alstom Power 50% Take up Renovation & Modernization assignments of power Services Private plants both in India and SAARC countries. Company has ventured Limited into other areas such as Balance of Plant (BOP) services, project management services, electrical substations, plant assessment studies and O&M services. 4 Transformers And 44.60% Manufacturing and repair of heavy duty transformers. Due to low Electricals Kerala Ltd. utilization factor, non-competitiveness in market, locational disadvantage etc, NTPC Board has accorded in-principle approval to exit form this non-core Joint Venture. 5 Aravali Power 50% Operating Coal based power project of 1500 MW (3x500 MW),in Company Private Jhajjar District of Haryana. Limited 6 NTPC TamilNadu 50% Operating Coal-based power station of 1500 MW (3X500 MW), at Energy Company Ltd. Vallur, using Kamarajar port infrastructure facilities for coal receipt. 7 NTPC BHEL Power 50% Engineering Procurement and Construction (EPC) activities in the Projects Pvt Ltd. power sector and to engage in manufacturing and supply of equipment for power plants and other infrastructure projects in India and Abroad. However, as this JV company has not been able to procure any business from the open market on competition basis and due to conflict of interest with BHEL, NTPC Board has accorded in-principle approval to exit from this non-core Joint Venture 8 Energy Efficiency 28.79% Engaged in the business of carrying on and promoting business of Services Limited energy efficiency and climate change, including manufacture and supply of energy efficiency services and products and providing consultancy services in relation to the same. 9 Meja Urja Nigam 50% Setting up a power plant of 1320 MW (2X660 MW) at Meja Tehsil Private Limited in Allahabad district in the state of Uttar Pradesh. Both units are under construction. 10 Nabinagar Power 50% Setting-up a coal based power project having capacity of 1980 Generating Company MW (3X660 MW) and operation & maintenance thereof at New Private Limited Nabinagar in district Aurangabad of State of Bihar. The construction is in progress. 11 National High Power 21.63% To set-up On-line High Power Test Laboratory for short circuit test Test Laboratory facility in the Country. Private Limited (NHPTL) 12 Anushakti Vidhyut 49% Company formed to develop nuclear power projects in the Nigam Limited country within the framework of Atomic Energy Act, 1962 (as amended).

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13 Trincomalee Power 50% A Joint Venture Company incorporated to set up a 2x250 MW coal Company Limited based power project in Trincomalee region in Sri Lanka 14 Bangladesh – India 50% The Joint Venture Company has been formed to develop and Friendship Power Co. operate coal based power project(s) of 1320 MW in Bangladesh. Pvt. Ltd. 15 Ratnagiri Gas and 25.51% Operating gas based Power Project consisting of 1967 MW gas Power Pvt. Limited based plant alongwith 5 MMTPA LNG terminal at Ratnagiri. 16 BF-NTPC Energy 49% The Company was incorporated to manufacture castings, forgings, Systems Limited fittings and high pressure piping required for power projects and other industries. However, since the project could not take off, it has been decided to wind up BF-NTPC. The proposal is awaiting clearance from Ministry of Power. 17 National Power 16.67% The Company was formed to facilitate, promote, assist, regulate Exchange Limited and manage nationwide trading of all forms of electrical energies and also to settle trades in a transparent fair and open manner.

In view of the change in market scenario and the fact that NTPC’s objective of joining NPEX has not been met till date, Company has decided to exit from NPEX. The Company is in Voluntary Winding up. 18 NTPC-SCCL Global 50% The Company is being wound up voluntarily as the Company Ventures Pvt. Ltd. could not start its business since its incorporation due to non- availability of any business prospects. 19 International Coal 0.13% The Company was incorporated for exploring various Ventures Private opportunities in Australia, Mozambique, Canada, Indonesia and Limited (ICVL) USA for acquisition of stake in coking and thermal coal mines

NTPC has decided to exit from International Coal Ventures Private Limited for which clearance from cabinet is awaited. 20 CIL NTPC Urja Private 50% Undertaking the development, operation and maintenance of Limited coal blocks at Brahmini and Chichro Patsimal in Jharkhand and integrated coal based power plants.

The company has applied to the Government of India for reallocation of above coal blocks deallocated from it in 2011. 21 Pan-Asian 50% Incorporated to develop renewable energy projects in India.

Renewables Pvt. Ltd. The Company is under voluntary wind up as it could not find third investor in spite of great efforts. 22 Hindustan Urvarak & 50% HURL was incorporated on 15.06.2016 with Coal India Limited in Rasayan Limited which each NTPC and CIL shall hold 50% in the equity of the Company. It has been formed for taking up revival of fertilizer plants of Fertilizer Corporation of India Limited at Sindri, Jharkhand and Gorakhpur, Uttar Pradesh by setting up ammonia urea plant at each location.

Other Branches and Units Apart from the registered and corporate office of NTPC at Delhi , NTPC group has 44 power projects, Joint Venture and Subsidiary Companies, Regional Head Quarters, Coal Mining projects/blocks, oil exploration block(s), Consultancy wing, R&D facility called NTPC Energy Technology Research Alliance (NETRA), Regional Inspection Offices, Commercial Offices and several under construction projects. - 10 -

Private Placement Offer Letter Private & Confidential-not for circulation

The above branches, units, sites, offices etc are spread at several locations all over India and 2 JV offices in Bangladesh and Sri Lanka.

Compliance officer and Company Secretary Nodal Officer Shri A.K. Rastogi Ms. Sangeeta Bhatia Executive Director & Company Secretary and General Manager (Finance) Compliance Officer NTPC Limited, NTPC Bhawan, NTPC Limited, NTPC Bhawan, SCOPE Complex, Lodi Road, SCOPE Complex, Lodi Road, New Delhi –110 003, New Delhi –110 003, Tel: 011 24387379 Tel. : 011 24360071 Fax: 011 24361724 Fax.: 011 24360241 Email : [email protected]; E-mail:[email protected] [email protected] The investors can contact the Compliance Officer/Nodal Officer in case of any pre-issue/ post-issue related problems such as non-credit of letter(s) of allotment/ bond certificate(s) in the demat account, non-receipt of refund order(s), interest warrant(s)/ cheque(s) etc.

Mr K. Biswal Chief Finance Officer: CFO Director (Finance) NTPC Bhawan SCOPE Complex 7, Institutional Area, Lodhi Road New Delhi 110 003 IL&FS TRUST COMPANY LIMITED Trustee for the Bondholders The IL&FS Financial Centre, Plot C 22, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 BEETAL Financial & Computer Services (P) Ltd. Registrar and Transfer Agent to Issue BEETAL House, 3rd Floor, 99, Madangir, New Delhi-110062 Names and addresses of the credit rating agencies for the Issue CRISIL Limited CRISIL House, Central Avenue , Hiranandani Business Park, Powai ,Mumbai – 400 076 ICRA Limited Building No. 8, Tower A, 2nd Floor, DLF Cyber City, Phase II, Gurgaon-122 002 Arrangers to the Issue A.K. Capital Services Limited Darashaw & Company Private Limited Axis Bank Limited HDFC Bank Limited ICICI Securities Primary Dealership Ltd Yes Bank Limited Trust Investment Advisors Private Limited

Names and address of Joint Statutory Auditors Name Address Auditor since*

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Name Address Auditor since* M/s T R Chadha & Co LLP Chartered Accountants, FY 2015-16 B-30, Connaught Place, Kuthiala Building, New Delhi-110 001 M/s P S D & Associates Chartered Accountants FY 2014-15 H-197 Arjun Nagar, S J Enclave New Delhi-110 029 M/s. Sagar & Associates Chartered Accountants, FY 2015-16 H.No. 6-3-244/5, Saradadevi Street, Premnagar, Khairatabad, – 500 004 M/s. Kalani & Co. Chartered Accountants, FY 2015-16 703, VII Floor, Milestone Building, Gandhi Nagar Crossing, Tonk Road, Jaipur - 302 015 M/s. P A & Associates Chartered Accountants, FY 2015-16 20, Govind Vihar, Bamikhal, Bhubaneshwar - 751 010 M/s. S K Kapoor & Co. Chartered Accountants, FY 2015-16 16/98, LIC Building, The Mall, Kanpur - 208 001 M/s. B M Chatrath & Co. Chartered Accountants, FY 2015-16 Centre Point, 4th Floor, Room No. 440, 21, Hemanta Basu Sarani, Kolkata - 700 001 *Note: The appointment of auditors is being done by C&AG on year to year basis.

IV. OUR MANAGEMENT Presently, there are 11 (eleven) Directors on the Board, of which 6 (six) are whole-time Directors including CMD, 2 (two) Government Nominee Directors and 3 (three) independent Directors who act as part-time non-official Directors on the Board. The details of the Board of Directors as of the date of this Offer Letter are set forth below.

Name, Designation, Date of Approximate Address Other Directorships Occupation and Director joining the Age (Years) Identification Number Board (“DIN”) Shri Gurdeep Singh February About 52 A-5,Niti Bagh New Indian Companies Chairman & Managing 4, 2016 years Delhi-110049 - North Eastern Electric Director Power Corporation Limited Occupation: Whole-time - NTPC Vidyut Vyapar Director Nigam Limited DIN: 00307037 - NTPC Electric Supply Company Limited Term: Five years with - NTPC BHEL Power effect from 04.02.2016, Projects Private Limited - 12 -

Private Placement Offer Letter Private & Confidential-not for circulation or until further orders, whichever is earlier Foreign Companies - Mr. Anil Kumar Jha July 1, 59 years D 831, Tower 7, Indian Companies Director (Technical) 2012 Ashiyana Upwan, - NTPC ALSTOM Power Ahinsa Part 2, Services Private Limited Occupation: Whole-time Indirapuram, - NTPC Vidyut Vyapar Director Ghaziabad -201301, Nigam Limited DIN: 03590871 U.P. - Patratu Vidyut Utpadan Nigam Limited (PVUNL) Term: Five years with effect from July 1, 2012, Foreign Companies or superannuation, or - Bangladesh - India further order, whichever Friendship Power is earlier Company Private Limited Mr. Umesh Prasad Pani March 1, About 60 170, Madan Lal Block, Indian Companies Director (Human 2013 years Asian Games Village - NTPC Electric Supply Resources) Complex, New Delhi Company Limited 110 049 - Transformers And Occupation: Whole-time Electricals Kerala Limited Director - Aravali Power Company DIN: 03199828 Private Limited

Term: Five years with Foreign Companies effect from March 1, - Trincomalee Power 2013, or Company Limited superannuation, or further order, whichever is earlier Mr. Subhash Chandra October 1, 59 years 151, Madan Lal Block, Indian Companies Pandey 2013 Asian Games Village Director (Projects) Complex, New Delhi - BF-NTPC Energy Systems 110 049 Limited Occupation: Whole-time - Bhartiya Rail Bijlee Director Company Limited DIN: 03142319 - Meja Urja Nigam Private Term: Five years with Limited effect from October 1, - NTPC BHEL Power 2013, or Projects Private Limited superannuation, or - Nabinagar Power further order, whichever Generating Company is earlier Private Limited - Hindustan Urvarak & Rasayan Limited

Foreign Companies - Bangladesh - India Friendship Power Company Private Limited - Trincomalee Power Company Limited

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Mr. Kulamani Biswal December 55 years 157, Madan Lal Block, Indian Companies Director (Finance) 9, 2013 Asian Games Village Complex, New Delhi - Meja Urja Nigam 110 049 Private Limited Occupation: Whole-time - NTPC Electric Supply Director Company Limited DIN: 03318539 - NTPC Vidyut Vyapar Term: Five years with Nigam Limited effect from the date of - NTPC Tamilnadu Energy taking over of charge,i.e Company Limited 09.12.2013 or - PTC India Limited superannuation, or - Patratu Vidyut Utpadan further order, whichever Nigam Limited (PVUNL) is earlier

Foreign Companies - Bangladesh-India Friendship Power Company Private Limited Mr. Kaushal Kishore November About 59 E-10, B-703, Indian Companies Sharma 1, 2014 years Saketdham CGHS, Director (Operations) Sector-61, Noida – - NTPC Vidyut Vyapar 201301, U.P. Nigam Limited Occupation: Whole-time - NTPC SAIL Power Director Company Private DIN: 03014947 Limited - The West Bengal Term: Five years with Development effect from the date of Corporation Limited taking over of charge, or - NTPC Tamilnadu Energy superannuation, or Company Limited further order, whichever - Kanti Bijlee Utpadan is earlier Nigam Limited - Patratu Vidyut Utpadan Nigam Limited (PVUNL)

Foreign Companies Nil Dr. Pradeep Kumar September About 55 C 2/52, Shahjahan Indian Companies Government nominee 10, 2013 years Road, New Delhi 110 Director 011 - Power Grid Corporation of India Limited Occupation: Service DIN: 05125269 Foreign Companies Term: Three years from 10.09.2013 or until Nil further orders, whichever is earlier. Not liable to retire by rotation Mr. Rajesh Jain November 49 years 1002, Petit Towers, Indian Companies Non-official part-time 18, 2015 Bomanjee Petit Road,

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Director (Independent) Kemps Corner, - Netcore Solutions Private Occupation: Managing Mumbai – 400036 Limited Director, netCore - C M Jain Impex And Solutions Private Limited Investments Private Limited - Emergic Venture Capital DIN: 00103150 Private Limited Term: Three years from - Seraja Technologies Private November 18, 2015, or Limited until further orders, - Greynium Information which ever is earlier. Not Technologies Private Limited liable to retire by - Give Foundation rotation. - Ravience Digital Private Limited - NITI Digital Private Limited

- TRANSFORMITI Research Solutions Private Limited

- NetCore Skill Development Foundation - Bulekraft Digital Foundation Dr. Gauri Trivedi November 56 years 5/B, Mamta Park Indian Companies Non-official part-time 18, 2015 Society, Behind Director (Independent) Navgujarat College, - Cue Strategic Inputs Private Ashram Road, Limited DIN: 06502788 Ahemdabad-380014, Term: Three years from Gujarat - Denis Chem Lab Limited November 18, 2015, or until further orders, - Bajaj Energy Limited which ever is earlier. Not liable to retire by Foreign Companies rotation. - Nil Mr. Aniruddh Kumar February About 56 D-II/4 Shanjahan Indian Companies Government Nominee 25,2016 Years Road New Delhi- -Damodar valley Corporation Director 110003 Foreign Companies Occupation: Service DIN:07325440 Nil Term: Three years from 25.02.2016 or until further orders whichever is earlier. Not liable to retire by rotation Mr. Seethapathy June 22, About 62 2202, Gowri Indian Companies Chander 2016 years Apartment, New BEL - Tata Power Trading Non-official part-time Road, IInd Stage, Company Limited Director (Independent) Bangalore - 560054 - Tata Power Solar DIN: 02336635 Systems Limited Foreign Companies Occupation: Senior Advisor to the President Nil

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of the Asian Infrastructure Investment Bank Term: Three years from June 22, 2016, or until further orders, which ever is earlier. Not liable to retire by rotation.

All our Directors are Indian nationals. None of our Directors are wilful defaulters as identified by the RBI and/or included in the Export Credit Guarantee Corporation default list.

Details of change in Directors since last three years

Name DIN Designation Appointment/Ces Date of Change Date of joining Reason sation/ Board in case of Designation cessation change Dr. Govinda 01982343 Independent Cessation February 4, 2013 August 26, 2011 Resignation Marapalli Rao Director Mr. 02296585 Director Cessation February 28, 2013 October 16, Superannuation Shailendra Pal (Human 2010 Singh Resources) Mr. Umesh 03199828 Director Appointment March 1, 2013 - Appointed Prasad Pani (Human pursuant to Resources) letter (No. 8/1/2012-Th- I(DHR)) dated January 3, 2013 from the MoP

Mr. Rakesh 02682574 Government Cessation July 9, 2013 June 9, 2009 Repatriation to Jain nominee parent cadre Director pursuant to letter (No. 2/2/2009- Adm.II) dated July 4, 2013 from the MoP Mr. Prashant 02284299 Independent Appointment July 30, 2013 - Appointed Mehta Director pursuant to letter (No. 8/6/2013-Th-I) dated July 12, 2013 Dr. Pradeep 05125269 Government Appointment September 10, - Appointed Kumar nominee 2013 pursuant to Director letter (No. 8/7/2013-Th.I) dated September 9, 2013 from the MoP Mr. Bhajan 01507784 Director Cessation September 30, August 1, Superannuatio Pratap Singh (Projects) 2013 2009 n

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Name DIN Designation Appointment/Ces Date of Change Date of joining Reason sation/ Board in case of Designation cessation change Mr. Indra 00042289 Government Cessation September 30, May 4, 2009 Nomination Chandra nominee 2013 withdrawn Prasad Director pursuant to Keshari letter (No. 2/2/2008-Adm. II) dated September 20, 2013 from the MoP Mr. Subhash 03142319 Director Appointment October 1, 2013 - Appointed Chandra (Projects) pursuant to Pandey letter (No. 8/4/2012-Th-I) dated August 5, 2013 from the MoP Mr. Ashok 00011085 Director Cessation October 9, 2013 August 1, Resigned Kumar (Finance) 2005 consequent Singhal upon joining Central Electricity Regulatory Commission as a member Mr. G. Sai 00325308 Government Appointment December 5, - Appointed Prasad nominee 2013 pursuant to Director letter No. 8/7/2013-Th.I dated November 5, 2013 from the MoP Mr. 03318539 Director Appointment December 9, - Appointed Kulamani (Finance) 2013 pursuant to Biswal letter No. 8/6/2012-Th.I dated December 5, 2013 from the MoP Mr. G. Sai 00325308 Government Cessation June 16, 2014 December 5, Premature Prasad nominee 2013 Repatriation to Director parent cadre pursuant to letter (No. 1/2/2013- Adm.II) dated June 16, 2014

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Name DIN Designation Appointment/Ces Date of Change Date of joining Reason sation/ Board in case of Designation cessation change from the MoP

Mr. Rajib 02708503 Independent Cessation August 25, 2014 August 26, Completion of Sekhar Director 2011 Tenure Sahoo Mr. Syamal 00145886 Independent Cessation August 25, 2014 August 26, Completion of Bhushan Director 2011 Tenure Ghosh Dastidar Mr. N.N. 00575501 Director Cessation October 31, 2014 October 19, Superannuatio Misra (Operations) 2010 n Mr. Anil 07004069 Government Appointment October 31, 2014 - Appointed Kumar Singh Nominee pursuant to Director letter No. 8/7/2013-Th.I dated 15th October, 2014 from the MoP Mr. Kaushal 03014947 Director Appointment November 1, - Appointed Kishore (Operations) 2014 pursuant to Sharma letter No. 8/10/2013-Th-I dated 7th October, 2014 from the MoP Mr. Ajit M. 02749940 Independent Cessation January 19, 2015 January 20, Completion of Nimbalkar Director 2012 Tenure Mr. S. R. 00841288 Independent Cessation January 19, 2015 January 20, Completion of Upadhyay Director 2012 Tenure Ms. H.A. 00365880 Independent Cessation February 27, February 28, Completion of Daruwalla Director 2015 2012 Tenure Mr. A.N. 05219334 Independent Cessation February 27, February 28, Completion of Chatterji Director 2015 2012 Tenure Prof. Sushil 0115364 Independent Cessation February 27, February 28, Completion of Khanna Director 2015 2012 Tenure Mr. I. J. 02051043 Director Cessation August 20, 2015 December 26, Resigned Kapoor (Commercial) 2008 consequent upon his appointment as Technical Member of Appellate Tribunal for Electricity Dr. Alwyn 00275577 Independent Cessation August 22, 2015 August 23, Completion of Didar Singh Director 2012 Tenure Dr. Arup Roy 00659908 CMD Cessation August 31, 2015 September 1, Completion of Choudhury 2010 Tenure

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Name DIN Designation Appointment/Ces Date of Change Date of joining Reason sation/ Board in case of Designation cessation change

Mr. Rajesh 00103150 Independent Appointment November 18, - Appointed Jain Director 2015 pursuant to Notification no. 08/06/2013- Th.I dated 16.11.2015 from the MOP Dr. Gauri 06502788 Independent Appointment November 18, - Appointed Trivedi Director 2015 pursuant to Notification no. 08/06/2013- Th.I dated 16.11.2015 from the MOP Shri Anil 07004069 Government Cessation December 8, October 31, Nomination Kumar Singh Nominee 2015 2014 withdrawn Director pursuant to letter No. 1/2(i)/2013- Adm.III dated December 8, 2015 Shri 00307037 Chairman & Appointment February 4, 2016 - Appointed Gurdeep Managing pursuant to Singh Director Notification No. 8/1/2016- Th-I dated 28.01.2016 from MOP Shri 07325440 Government Appointment February 25,2016 - Appointed Aniruddh Nominee pursuant to Kumar Director Order No. 19/02/2016- Th-I dated 23.02.2016 from MOP. Shri 02336635 Independent Appointment June 22, 2016 - Appointed Seethapathy Director pursuant to Chander Notification no. 08/06/2013- Th.I dated 13.06.2016 from the MOP

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Name DIN Designation Appointment/Ces Date of Change Date of joining Reason sation/ Board in case of Designation cessation change Mr. Prashant 02284299 Independent Cessation July 29, 2016 July 30, 2013 Completion of Mehta Director Tenure

Relationship with other Directors

None of the Directors of the Company are, in any way, related to each other.

V. MANAGEMENT PERCEPTION OF RISK FACTORS

You should carefully consider all the information in this Offer Letter, including the risks and uncertainties described below before making an investment in the Bonds. Additional risks and uncertainties not known to us or that we currently believe to be immaterial may also have an adverse effect on our business, financial condition and prospects. If any of the following or any other risks actually occur, our business, financial condition and prospects may be adversely affected and the price and value of your investment in the Bonds could decline such that you may lose all or part of your investment.

The numbering of risk factors has been done to facilitate ease of reading and reference, and does not in any manner indicate the importance of one risk factor over another.

RISKS RELATING TO OUR BUSINESS

1. Our expansion and diversification plans are subject to a number of risks and uncertainties, which may result in an adverse effect on our business, financial condition and prospects.

Our growth strategy and expansion plans subject us to a number of considerations, including the following:

 Our ability to finance capital expenditure for expansion, including the management of new equipment and projects and the maintenance and upgradation of existing equipment and projects, is subject to a number of risks, contingencies and other factors, including interest rates, availability of loans and cost of borrowing.  Our ability to procure fuel at prices and terms acceptable to us. In particular, estimates of coal reserves are subject to assumptions and, if the actual amounts of such reserves are less than estimated or if the quality of the coal reserves is lower than estimated or we are unable to commence planned captive coal mining activities for any other reason including de-allocation of mines by authorities, we may not be able to implement our expansion plans.  Our ability to obtain licenses under the Electricity Act, 2003, including transmission licenses, distribution licenses and electricity trading licenses.  Our ability to obtain licenses/consents/approvals under environmental laws (including mining laws) and labour, health and safety laws.  Actual increases in demand for power as well as other services and products offered by us, such as our consultancy and other allied businesses, may not meet anticipated demand based on which we have planned our operations and growth for any given periods, or the success or sustainability of any of our growth plans may be adversely affected by other industry trends that we have been unable to correctly anticipate.  Our ability to sell power is dependent upon the financial position of the various SEBs/Distribution companies of the states who may not purchase power which is costly in merit order or otherwise.  There may be potential adverse short-term effects on operating results through increased costs or otherwise, such as change in regulatory norms etc. - 20 -

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 We may experience economic, political and social uncertainty or volatility in the diverse regions in which we currently operate or in which we plan to set up operation.  We may face challenges associated with recruitment and retention of adequate skilled personnel as well as possible diversion of management time and focus and managing the realignment of our management and administrative resources.  We may not be selected for projects that we may bid for in the future, including as a result of other entities being able to make a more competitive bid.  We may face increasing competition going forward, including from private sector players, in our current as well as proposed business activities.  Our plans may further be affected by litigations, adverse judicial rulings, change of law etc.

We also expect that the execution of our growth strategy and new power projects will place significant strains on our management, financial and other resources. Continued expansion increases the challenges involved in financial and technical management, recruitment, training and retaining sufficient skilled technical and management personnel, and developing and improving our internal administrative infrastructure. If we are unable to successfully implement our business plan and growth strategy, we may also be unable to meet the annual performance targets set by the Government pursuant to the annual Memorandum of Understanding which we enter into with the Government. Any of these factors may have an adverse effect on our business, financial condition and prospects.

In particular, as we seek to diversify our operations, including by way of forward and backward integration in the power sector and by way of diversifying our fuel mix, we may be subject to a number of additional risks. Any new business that we may enter into, may subject to a legal, regulatory, policy and business environment that we are not currently familiar with, or may pose significant challenges to our administrative, financial and operational resources. The early stages and long gestation periods of new businesses may make it difficult to predict their economic viability. Therefore, there is no assurance as to the timing and amount of any returns or benefits that we may receive from new business initiatives or new fuel sources that we are currently exploring or developing.

2. Power projects generally have long gestation periods and subject us to various operational risks, which may result in an adverse effect on our business, financial condition and prospects.

Power projects generally have long gestation periods, which may entail a significant period of time before the economic viability of a given project can be established and there may be substantial capital outflow before we are able to realize expected benefits or returns on our investment. Moreover, the construction, development or operation of our power projects, coal mines or other facilities may be disrupted or affected by various factors that may be beyond our control, including the following:

 Our ability to acquire land depends on its ownership status, the classification of land use and the willingness of owners to sell or lease their land. Acquisition of land may involve a number of difficulties relating to rehabilitation and resettlement and provision of adequate compensation to project affected people, while diversion of forest land would be subject to Government clearance.  We depend on independent contractors for construction, installation, delivery and commissioning, as well as the supply and testing of key plant equipments and other non-core aspects of our business. We may only have limited control over the timing and quality of services, equipment or supplies provided by contractors as well as suppliers and vendors, and any failure or delay in performance by any such persons or entities could result in time and cost overruns for us.  We may experience geological difficulties during the execution of construction projects, especially during the development of hydroelectric, oil and gas and coal mining projects. For example, during the execution of our construction projects, we may discover adverse rock strata or terrain, or trapped gases or trapped water and our plant designs may be unsuitable for dealing with such geology. These geological factors may result in costs and time overruns or cause us to determine that a planned project or expansion is no

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longer economically feasible.  Mechanical failure and equipment shutdowns, explosions, fires, natural disasters such as cyclones and earthquakes, breakdown, failure or substandard performance of equipment, improper installation or operation of equipment, accidents, transmission or transportation interruptions, environmental disasters, significant social or political disruptions including terrorism and labour disputes or industrial action may significantly affect our operations.  Non-availability of fuel of desired quantity and quality may significantly disrupt our operations or reduce our profitability.

If such operational difficulties occur, our ability to supply electricity to our customers or source fuel (coal, oil and gas) may be adversely affected. In the event any facility is significantly damaged or forced to shut down for a significant period of time, our business, financial condition and prospects may be adversely affected.

In particular, many of our power stations are ageing and may subject us to additional risks to the extent that we may be required to undertake renovation and modernization schemes involving significant capital expenditure.

3. We have significant fuel requirements and may not be able to ensure availability of adequate fuel at competitive prices. Also, we may not be able to ensure availability of sufficient amounts of coal of the grade, quality and specifications that we require in order to operate our coal-based power stations, at commercially reasonable prices.

Availability of fuels at competitive prices is critical to our business. Fuel costs represent our largest expense. Although we purchase a significant part of our fuel requirements, particularly coal and gas, under long-term fuel supply agreements, there is no assurance that our suppliers will be able to satisfy their contractual commitments, particularly in relation to the grade and quality of coal that we may require for our operations, or that alternative sources of supply will be available to us on reasonable terms. In the event our contracted sources of fuel supply or other domestic sources of fuel supply (for instance, through short term purchase agreements or orders placed by us on the spot market) fall short for any reason including uncertainty in the domestic market regarding coal blocks allocation, or the grade, quality and specifications of fuel available for supply to us does not match our specifications and requirements, we may be required to explore alternative sources of fuel supply, including for import of fuels such as coal from other countries at prices that may be significantly higher than the prices at which we have historically sourced fuel for our power stations in the past.

Further, domestic coal and gas allocations and gas prices are currently determined by Government policy, while coal prices are contractually set, which limits our financial and operational flexibility to an extent. In the event that coal and gas supplies or gas prices in India were to be deregulated, there is no assurance that we will be able to obtain adequate supplies of coal and gas at competitive prices. Moreover, the availability and cost of fuels, including coal and gas, are subject to volatility in world commodity markets, the level of investment in exploitation of mine reserves in India and elsewhere, the quality and grade of coal and gas available in India and elsewhere, and other factors that may be beyond our control. Any constraints on sourcing adequate quantities of fuel at commercially reasonable costs, and of acceptable grade, quality or other specifications, may adversely affect our business, financial condition and prospects.

The domestic demand for coal is expected to increase significantly in the future, driven by significant capacity addition in the Indian power sector. High dependence on domestic coal could therefore expose us to potential price and availability risks. In the event of a shortage of coal, not only will the productivity of our coal-fired power stations be reduced but it will also hinder our expansion plans. We also source coal through bilateral short term memoranda of understanding, through imports and through e-auctions. However, there is no assurance that such sources of coal will continue to be available to us in the future at reasonable prices or terms or at all.

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With respect to gas, our use has been limited in the past due to inadequate supply of domestic gas. We have arranged for the supply of re-liquefied natural gas through long- and short-term contracts to meet part of its requirements. The short-term RLNG contracts are agreed on a “reasonable endeavours” basis with no obligation on our part of such charges as “ship-or-pay” or, “take-or-pay” and no supply or pay obligation on the part of the suppliers. However, due to high re-liquefied natural gas prices, the off-take of power by distribution companies and beneficiaries and, consequently, re-liquefied natural gas consumption has been low. If we experience a shortage in the supply of gas to our gas-fired power stations, the productivity of those power stations would be reduced. There is no assurance that we will be able to secure an adequate supply of gas for our current gas-fired power stations or future gas-fired projects. Our ability to secure adequate fuel supply for our Kawas and Gandhar projects may also be affected by our dispute with Limited (“RIL”) on the sale and purchase agreement for gas supply for those projects.

4. The power sector in India is highly regulated. For instance, tariff regulations issued by the CERC, may adversely affect our business, financial condition and prospects. Moreover, other regulatory matters and changes in applicable law and policy may adversely affect us.

Our businesses are regulated by the central and state governments in India, through a number of laws, rules, regulations and policies applicable to the power sector in India.

The CERC has issued the Tariff Regulations vide its notification No.L-1/144/2013/CERC dated 21.02.2014 (Regulations) applicable for the period from 01.04.2014 to 31.03.2019. The salient features of these Regulations relating to thermal power plants are discussed as under:

. Recovery of fixed charges allowed at normative annual plant availability factor (NAPAF) of 83% for all thermal plants till 31.03.2017. Thereafter, recovery of fixed charges will be allowed at NAPAF of 85%. . Incentive on scheduled generation at the rate of Rs. 0.50 per unit for excess energy delivered beyond the normative annual PLF of 85%. . Grossing up of Income Tax on Return on Equity to be done by grossing by actual effective tax rate. . Coal based stations may opt to avail Special Allowance in lieu of renovation & modernization which has been increased to Rs. 7.5 lakh/MW/year w.e.f financial year 2014-15, thereafter escalated at the rate of 6.35% per annum. . Water charges and capital spares have been excluded from the operation & maintenance expenses and allowed to the generators on actual basis. . Sharing of savings in operational norms in the ratio of 60:40 between generator and beneficiaries has been introduced. . Energy Charge shall be derived on the basis of the normative operational parameters, Gross Calorific Value (GCV) and landed fuel cost of the fuel for a generating station. GCV for the calculation of energy charge rate will be on ‘as received basis’.

The above regulations have negative impact on the profitability of the Company. Further, for the period beyond March 31, 2019, the nature of the tariff regulations may pose additional risks which presently are not foreseeable. While the Company has approached the High Court of Delhi against some of the provisions of the 2014-19 Regulations, an unfavorable decision of the High Court of Delhi will have an adverse effect on the Company’s results of operation and cash flows from operations.

Moreover, the regulatory framework in India continues to evolve and there is a particular focus on increasing private participation in the future. Non-compliance with applicable laws and regulations may also lead to penalties, revocation of our permits and registrations, or costly litigation. Any significant legal or regulatory change or uncertainty in the power sector may adversely impact our business, financial condition and prospects.

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5. Our PPAs may expose us to certain risks that may affect our business, financial condition and prospects. Further, there is no assurance that we will be able to sell power outside the long term PPAs and this could have an adverse impact on our revenues.

Under our PPAs with our customers, which are generally state utilities, our profitability is largely a function of our ability to operate our power projects at optimal levels in accordance with minimum performance standards that may be determined from time to time by regulatory bodies and our ability to manage our costs. Any failure to meet such minimum performance standard or manage our costs may have an adverse effect on our business, financial condition and prospects. Further, the PPAs have inherent risks that may restrict our operational and financial flexibility. For example, long-term PPAs provide for sale of power to customers at tariffs and terms determined by the regulator. Accordingly, if there is an industry-wide increase in tariffs, we will not be able to take advantage of increased tariffs or negotiate satisfactory alternative off-take arrangements. These limitations affect our ability to enjoy the benefits of an increased tariff rate that our competitors selling power outside long-term PPAs may otherwise enjoy.

In addition, in the event that PPAs are terminated prematurely, or not renewed or not honoured or extended after the initial term expires and, if we are unable to enter into purchase agreements with other customers, this may have an adverse effect on our business, financial condition and prospects. Further, MOP has allowed us to sell power from our thermal plants which are over 25 years old after bundling with our upcoming solar capacity. We are not able to guarantee that we will be able to enter into PPAs with beneficiaries for selling power on bundled basis. Such agreements may create additional variability in our revenues and could expose our business to risks of market fluctuations in demand and price for power.

6. Weak financial position of distribution companies adversely affects our ability to recover dues from them and poses an off take risk which may adversely affect our financial position.

The distribution companies and State Electricity Boards (“SEBs”) have had weak credit histories in the past and continue to operate under financial constraints, due in part to the regulatory and policy constraints applicable to them in their respective states. Historically, we have had significant problems recovering payments from the SEBs, which, we believe, have been largely resolved due to Governmental intervention. However, any inability to adequately enforce such customers’ ability to honour their off-take obligations towards us, or the escrow, letter of credit or other arrangements entered into with the SEBs or any other change including the proposed/undertaken financial restructuring of various SEBs that adversely affects our ability to recover dues from the SEBs or other state utilities (for instance, due to state policy or regulatory requirements that the state utilities may be subject to, or other factors affecting the profitability, creditworthiness and operations of such entities) may adversely affect our business, financial condition and prospects.

Further, lack of schedules for off take of power given by the distribution companies due to their poor financial health will result in lower plant load factor (“PLFs”) and lower operational efficiencies.

7. We are involved in a number of legal and other proceedings and claims that may be determined against us. Further, opposition from local communities may adversely affect our business.

In the ordinary course of our business, we, as well as our Directors and officers, are subject to several legal, regulatory, arbitral and administrative proceedings and claims at various levels of investigation or adjudication. These proceedings may include criminal cases (including motor accident claims, fatal accident claims, dishonour of cheques, claims regarding theft of goods, petitions for revision enforcement or quashing of orders previously passed in relation to employment claims, etc.), public interest litigation (“PIL”), appeals against tariff orders of the CERC, civil suits, arbitral claims, taxes (including income and sales tax) and other statutory levies (including royalty claims), employment-related disputes, land-acquisition related disputes, environmental disputes, claims regarding alleged defect in title of properties, trespass and claims for premium,

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rental and other payments in respect of property owned, leased or otherwise used by us, etc. The total claim, financial implication or amount of contingent liability relating to such proceedings as on the date of this Offer Letter is not ascertainable, including due to the monetary claim against us not having been quantified in many instances, and may be substantial. An adverse decision in any such proceeding may have an adverse effect on our business, financial condition and prospects. There is also no assurance that similar proceedings will not be initiated against us in future. Further, should new developments arise, such as a change in Indian law or rulings against us by appellate courts or tribunals, we may need to make provisions in our financial statements, which could increase our expenses and liabilities.

In addition, the acquisition of land for our projects and related rehabilitation and resettlement requirements, as well as the construction and operation of our projects or our fuel diversification plans (including coal mining, hydroelectric, renewable or nuclear power projects), may face opposition from local communities or special interest groups due to the perceived negative impact such activities may have on the environment and community access to natural resources, or other specific factors from time to time. Significant opposition by local communities, special interest groups and other parties may delay project implementation, divert management focus and otherwise adversely affect our business, financial condition and prospects.

8. We have incurred significant indebtedness and may incur substantial additional borrowings in connection with our business.

We have substantial outstanding indebtedness including secured borrowings. As on March 31,2016, our financial indebtedness, on a standalone basis stands at Rs.91,809.76 crore. Our indebtedness and restrictions imposed on us under current or future loan arrangements may adversely impact our business, financial condition and prospects in various ways, including the following:

 We may be required to dedicate a significant portion of our cash flow towards repayment of debt, which will reduce availability of cash flow to fund working capital, capital expenditures, acquisitions and other general corporate requirements.  We may be required to maintain certain financial ratios and satisfy certain financial or other covenants.  As some of our borrowings are secured against our assets, lenders may sell or take over those assets to enforce their claims in the event of any default.  We may be required to obtain approval from our lenders/trustees, regarding, among other things, reorganisation, amalgamation or merger, incurrence of additional indebtedness, disposition of assets and expansion of our business, and no assurance can be given that we will receive such approvals in a timely manner or at all.  Our project costs may increase since we capitalize interest during the construction of our facilities.

Moreover, our ability to meet our debt service obligations and to repay outstanding borrowings will depend primarily upon the cash flow generated by our business over time, as well as our ability to tap the capital markets as a source of capital. If we fail to meet our debt service obligations or financial or other covenants under our financing documents, our lenders could declare default and cancel unutilized facilities, accelerate the maturity of our obligations or enforce security, which may have an adverse effect on our business, financial condition and prospects, particularly in the event cross-default under multiple financing arrangements is triggered. Further, in such event, the availability and cost of future borrowings may be negatively impacted, with consequences that may include increased finance charges, decreased income available to fund future growth, decreased working capital and imposition of restrictive covenants under financing arrangements.

9. Failure to obtain or renew necessary regulatory approvals may adversely affect our business, financial condition and prospects.

In the ordinary course of our business, we as well as our independent contractors and counterparties, are

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required to obtain and, in several cases, renew, from time to time, various regulatory approvals, including, for instance, consents from the state pollution control boards in India to establish and operate our projects and other facilities and for appropriate handling of biomedical and other hazardous waste, discharge of waste water, as well as registrations with relevant tax and labour authorities in India. In particular, several of our environmental, electrical installation testing, wireless set and boiler-usage or gas-cylinder storage, height clearance, structural design and stability and other approvals across several of our projects may expire in the near future, and we have applied for or are in the process of applying for renewals or extensions of such approvals in due course.

Failure to obtain and maintain or renew required approvals and registrations may have an adverse effect on our business, financial condition and prospects. Further, such approvals and registrations may be subject to numerous conditions, including periodic reporting or audit requirements, which may require us to undertake substantial compliance-related expenditure and other procedures. Any actual or alleged non-compliance with specified conditions may result in suspension or cancellation of, or refusal to renew, required approvals and registrations or imposition of penalties, which may be significant, by the relevant authorities. A suspension, cancellation or refusal to extend required approvals and registrations may require us to cease production at some or all of our facilities or to engage in time-consuming and costly administrative and/or legal proceedings in order to resolve such issues, or may affect other aspects of our operations, which may have an adverse effect on our business, financial condition and prospects.

10. Our ability to raise foreign capital is constrained by global economic conditions and conditions in foreign financial markets.

We have raised and expect to continue to raise capital in foreign markets. Our ability to raise foreign capital is constrained by the conditions of these markets. The global capital and credit markets have recently been experiencing periods of extreme volatility and disruption. The global financial crisis, including the continuing sovereign debt crisis in Europe, concerns over recession, inflation or deflation, energy costs, geopolitical issues, commodity prices and the availability and cost of credit, have contributed to unprecedented levels of market volatility and diminished expectations for the global economy and the capital and credit markets. On 23 June 2016, the United Kingdom held a referendum on its membership of the European Union and voted to leave (Brexit). There is significant uncertainty at this stage as to the impact of Brexit on general economic conditions in the United Kingdom and the European Union and any consequential impact on global financial markets. For example, Brexit could give rise to increased volatility in foreign exchange rate movements and the value of equity and debt investments. A lack of clarity over the process for managing the exit and uncertainties surrounding the economic impact could lead to a further slowdown and instability in financial markets. These factors, combined with others, may impact our ability to raise capital in foreign markets. An inability to raise foreign capital or access foreign credit markets would have a material adverse effect on its business and financial condition.

11. Our Joint Statutory Auditors may have included certain notes and matters of emphasis in their reports on financial statements included in this Offer Letter, which should be considered carefully by prospective investors in the Issue.

While there is no reservation, qualification or adverse remarks in the Joint Statutory Auditors’ report on our standalone and consolidated financial statements as on and for the years ended March 31, 2016,2015, 2014, 2013, and 2012, our Joint Statutory Auditors have included certain notes and matters of emphasis in their reports, which should be considered carefully by prospective investors in the Issue. For audit reports refer http:// www.ntpc.co.in/ en/ investors/ financial-results.

12. We have significant contingent liabilities, which may result in an adverse effect on our business, financial condition and prospects, to the extent that any such liabilities materialize.

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The contingent liabilities appearing in our consolidated financial statements, as on March 31, 2016, are summarized below: (in Rs. crore) Sl. Nature of Claim 2015-16 1 Capital Works 8,768.55 2 Land compensation cases 332.34 3 Fuel Suppliers (surface transportation charges, custom duty on service margin 2,179.93 on imported coal, grade slippage etc) 4 Others (claims by State/Central Govt Deptt./Authorities) 312.94 5 Taxation matters including income tax matters 7,499.37 6 Others 164.55 Total 19,257.68

13. We are subject to various environmental, occupational, health and safety and other laws, which may subject us to increased compliance costs that may have an adverse effect on our business, financial condition and prospects.

Our operations are subject to central, state and local laws and regulations relating to the protection of the environment and occupational health and safety, including those governing the generation, handling, storage, use, management, transportation and disposal of, or exposure to, environmental pollutants or hazardous materials resulting from power projects as well as with respect to the utilization of fly ash produced in course of our generation and with respect to mining operations conducted in India . For instance, we require approvals under the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981, in order to establish and operate our power projects, and will require prospecting licences and, subsequently, mining leases in order to commence prospecting and mining activities at the coal blocks allocated to us.

In addition, in the ordinary course, we are subject to several risks generally associated with power generation as well as coal mining, including explosions, fires, mechanical failures, accidents, discharges of toxic or hazardous substances or gases and other environmental risks. These hazards may cause personal injury and loss of life, environmental damage and severe damage to or destruction of property and equipment. We may incur substantial costs, including clean up or remediation costs, fines and civil or criminal sanctions, and third- party property damage or personal injury claims, as a result of violations of or liabilities under environmental or health and safety laws or actual or alleged noncompliance with permits or registrations required at our facilities, or the conditions imposed on us under such permits and registrations. Further, on the expiry or termination of any operating permits held by us, including any mining licences granted to us in the future, we may be required to incur significant costs to dismantle and decommission our operations and remove our equipment and installations at such sites.

Moreover, environmental and health and safety laws, regulations and policies, and the interpretation and enforcement thereof, are subject to change and have tended to become stricter over time. In particular, we expect that the GoI, as well as the governments of several nations worldwide, may be considering/has considered further measures to achieve a significant reduction in carbon and greenhouse gas emissions, particulate matter, Sulphur Dioxide, etc. Compliance with current and future environmental and health and safety laws, regulations and policies, particularly at older power stations, may require substantial capital expenditure. If we fail, or are alleged to have failed, to comply with such laws, regulations and policies, we may be subject to significant fines, penalties, costs, liabilities or restrictions on operations. In certain cases, we may also be required to become involved in costly and time-consuming legal or administrative proceedings in order to resolve any such allegations or claims that may arise against us, in relation to compliance with applicable

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environmental and health and safety laws, regulations and policies, which may adversely affect our business, financial condition and prospects.

Recently, in December 2015, the Government put forth the Environment (Protection) Amendment Rules, 2015, stipulating strict requirements regarding water consumption and emissions of particulate matter, sulphur dioxide, oxides of nitrogen and mercury for thermal power plants. The standards have been revised under three categories in terms of thermal power plants brought online before 31 December 2003, between 1 January 2003 and 31 December 2016 and after 1 January 2017. The notice provides that thermal power stations brought online before 31 December 2016 shall meet the revised limits prior to 7 December 2017. The Issuer has written to the Government for certain amendments to the notification citing difficulties in its implementation and for extending the timeline.

There is no assurance that we can complete the required modifications in the plants to ensure compliance to the revised regulations before the stipulated date or at all and this can have adverse implications for the Group.

14. Our accounts are subject to audit by the Comptroller and Auditor-General of India and may be adversely affected by any adverse finding in the audit of the accounts.

Section 143(6)(b) of the Companies Act, 2013 provides that the Comptroller and Auditor-General of India (“CAG”) shall, within sixty days from the date of receipt of the audit report, have a right to comment upon or supplement such audit report.

Our Company could be subject to adverse findings by CAG which could have material adverse impact on our financial conditions, profitability, operations and profits.

15. Our business, financial condition and prospects may be adversely affected if we are unable to take advantage of certain tax benefits or if there are adverse changes to the tax regime in the future.

Section 80-IA of the Income Tax Act provides that, subject to certain conditions, 100.00% of the profits from projects for generation, distribution or transmission of power, which begin generation or distribution of power before March 31, 2017, are entitled for deduction from total income for 10 consecutive assessment years out of 15 years, beginning from the year in which the project commences power generation, transmission or distribution. If such or other tax benefits become unavailable, our financial condition, business and prospects may be adversely affected.

Further, bill on goods and services tax is yet to be approved by Parliament. Till its implementation, Company is unable to ascertain the full impact of the proposed tax changes on its revenues.

16. Inability to attract and retain, or appropriately replace, our key personnel and sufficient skilled workers may adversely affect our business, financial condition and prospects.

Our success depends substantially on the continued service and performance of our senior management team and other key personnel, as well as on our skilled workforce. If we lose the services of any key individuals and are unable to find suitable replacements in a timely manner, our ability to realize strategic objectives may be impaired. Moreover, as we are a public sector undertaking, Government policies regulate and control emoluments and benefits that we pay to our employees, and such policies may not permit us to pay market rates. Consequently, private sector participants in power generation, coal mining, oil exploration and production and related activities may dilute the talent pool available to public sector undertakings. Also, since most of our operations lie in remote regions of India, we may face competitive disadvantages in attracting and retaining key personnel and skilled workers at various levels and positions across our organization.

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17. We may be adversely affected by strikes, work stoppages or increased wage demands or any other kind of disputes involving our work force. Further, Government announcements relating to increased wages for public sector employees will increase our expenses.

We employ a significant number of employees and engage various contractors who provide us with labourers at our power projects. Most of our non-executive workers are unionized. Any shortage of skilled personnel or work stoppages caused by disagreements with our work force and the unions may have an adverse effect on our business, financial condition and prospects. Further, under Indian law, we may be required to absorb a portion of contract labour as our employees or we may be held responsible for wage payments, benefits and amenities to labour engaged by our independent contractors, should such contractors default on wage payments or in providing benefits and amenities. Moreover, being a public sector undertaking, we will be affected by any increase in prescribed employee pay scale and benefits on account of an announcement by the Government. The next revision of wage and benefits is due in fiscal 2017.

18. We may encounter problems relating to the operations of our Joint Venture/Subsidiaries, which may result in an adverse effect on our business, financial condition and prospects.

As on the date of this Offer Letter, our Company has formed 22 Joint Ventures for undertaking specific business activities, as well as 5 subsidiaries out of which 2 are wholly owned by our Company. Our Joint Ventures/Subsidiaries, present and future, as well as our obligations under any joint venture agreements, whether subsisting or future, may subject us to certain risks, including the following:

 Our joint venture partners may be unable or unwilling to fulfil their financial or other obligations to us, or may have economic or business interests or goals that are inconsistent with ours, or may take actions contrary to our instructions, requests, policies and objectives or actions that are not acceptable to regulatory authorities or may become involved in litigation with us or third parties or may have financial difficulties that may make it difficult for us to enforce our agreements with them.  Some of our joint venture agreements prohibit us from, among other things, disposing of our shareholding in the Joint Ventures for specified periods or acquiring additional shares without the written consent of the other party. Such covenants may limit our ability to make optimum use of our investments or exit these joint venture companies at our discretion, which may have an adverse impact on our business, financial condition and prospects.  We may withdraw from our JVs or subsidiaries if they are unable to operate in the desired manner to achieve the goals for which the same were set up.

19. Our operations and expansion plans have significant water requirements and we may not be able to ensure regular and adequate availability of water.

Water is a key input for hydroelectric and thermal power generation. Our operations and the proposed expansion of generation capacity will be dependent on, among other things, our ability to ensure unconstrained and undiminished availability of committed water supply from State Governments during the life cycle of the existing and planned power stations. Changing weather patterns and inconsistent rainfall and change in law can hamper water supply at our power stations. Although we create reservoirs to hold water to cover any temporary shortfall, these reservoirs do not have sufficient capacity to sustain supply to our power stations for extended periods of time.

We rely on water supply arrangements with certain State Governments and State Government bodies. Such water sources may run through several States and may be the subject of interstate water disputes. Any interstate water disputes may affect the ability of these State Governments to supply water to us. Water is a limited and politically sensitive resource, and is carefully allocated by the State Governments for use between several groups of users. Accordingly, due to political pressures, State Governments may not fulfil their contractual obligations to us under these water supply agreements.

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In the event of water shortages, our power projects may be required to reduce their water consumption, which would reduce their power generation capability, thereby adversely affecting our average PLF which could have an adverse affect on our business and financial conditions. Expansion of our generation capacity and the development of new power stations cannot be initiated unless we have regular and adequate availability of water and/or confirmation of water availability for these projects.

20. We have negative cash flows in investing and financing activities in recent periods.

We have had negative cash flows in investing and financing activities in recent periods. The following table sets forth, on a consolidated basis, certain information with respect to our historical negative cash flows in investing and financing activities in the periods indicated, and accordingly the net decrease in cash and cash equivalents: (In Rs. crore) Particulars Fiscal 2016 Fiscal 2015 Fiscal 2014 Net cash from operating 15,410.61 14,745.85 16,530.84 activities Net cash used in investing (20,640.65) (15,834.50) (15,509.42) activities Net cash used in financing (3,520.63) (1,474.50) (2,709.06) activities Net increase (decrease) in cash (8,750.59) (2,563.13) (1,687.45) and cash equivalents

Negative cash flow over a long period and inability to generate and sustained positive cash flows in the future may adversely affect our business, results of operation and financial condition.

21. Our Company has not appointed the requisite number of independent directors on its Board.

Our Company being a Government Company, the power of appointment of Directors on the Board is vested with the President of India, acting through administrative ministry. Accordingly, our Company has not been able to maintain the minimum Board composition as required under the Companies Act, 2013 and the rules there under and the SEBI(LODR). If the Stock Exchanges undertake any action against our Company including levying of penalties or if there is any communication with the regulatory agencies in that regard, it may have a material adverse effect on our reputation or profitability.

22. While we generate high levels of ash in our operations, our ash utilization activities may be insufficient to dispose of all the ash that we generate. Our power generation capacity may be adversely affected to the extent that we are unable to appropriately utilize ash generated for our operations as per stipulated laws and timelines.

In particular, our Company generates high levels of ash in its operations. There are limited uses for ash and therefore demand for ash is low. While we continue to explore methods to utilize or dispose of ash, our ash utilization activities are insufficient to dispose of the ash we generate. This may add to our capital expenditures and operating expenses. In certain cases where it may not be possible to increase our utilization of ash to comply with this requirement, we may need to reduce the generation of ash through a partial or full shutdown of our operating power stations, thereby reducing our average PLF which could have an adverse effect on our business, financial condition and prospects.

23. The interests of our Directors may cause conflicts of interest in the ordinary course of our business.

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Conflicts of interest may arise in the ordinary course of decision making for our Company. Some of our non- Executive Directors and General Managers are also on the board of directors of certain companies which are engaged in businesses similar to our business. There is no assurance that our Directors will not provide competing services or compete with our business in which we are already present or will enter into in future.

24. Some of our immovable properties may have certain irregularities in title, which may adversely affect us.

There may be certain irregularities in respect of our title to some of the land acquired for our various power stations as well as other properties owned by and leased to us, for instance, the title deeds may not have been properly executed or stamped or registered or lease agreements may have expired and not yet been renewed. In certain cases, the prescribed land acquisition procedures are yet to be completed and, accordingly, we do not yet have clear and absolute title to certain immovable properties. Further, in respect of certain immovable properties, we are involved in legal or regulatory proceedings that are pending before various courts and authorities in India and the total claim against us in such proceedings is not quantifiable. Further, a portion of the land acquired for our projects is subject to adverse possession. Failure to possess or repossess such land may adversely affect our business, financial condition and prospects.

25. Inability to adapt to technological changes or disruptions to our technology platforms or business or communication systems may adversely affect us.

Our success depends in part on our ability to respond to technological advances and emerging industry standards and practices on a cost-effective and timely basis. Changes in technology and costs of equipment and compliance, particularly as we continue to diversify into non-conventional energy sources, may require us to make significant additional capital expenditures to upgrade our facilities. If we are unable, for technical, legal, financial or other reasons, to identify and adapt in a timely and cost effective manner to technological changes and consequently evolving market conditions and customer requirements, our business, financial condition and prospects may be adversely affected. In addition, as we source hardware and software from third parties, there is no guarantee that there will not be any defects in these products, which may affect or disrupt our business.

26. Our business involves numerous risks that may not be covered by insurance.

While we maintain insurance cover that we believe to be consistent with industry practice, including a mega risk policy which covers risks as to physical loss or damage and machinery breakdown including certain extensions to cover risks such as burglary, leakage and overflowing, fire fighting expenses, deliberate damage, removal of debris, subject to certain standard exclusions, exemptions and clarifications such as standard wear and tear and gradual deterioration of insured assets, the occurrence of any events that are not covered by our insurance, or any losses that are in excess of our insurance coverage or that may be claimed by us in the future but not honoured by our insurers for any reason, may have an adverse effect on our business, financial condition and prospects.

27. The President of India acting through the MoP exercises a majority control in the Company, which enables it to influence the decision making process.

The President of India acting through the MoP holds 69.74% of the paid-up Equity Share capital of our Company which enables the Government of India to influence the outcome of any matter submitted to shareholders for their approval. Exercise of such influence by the Government of India may adversely affect the interests of the Company and its other shareholders which, in turn, could adversely affect the goodwill, operations and profitability of the Company.

28. We may be adversely affected by changes in Government policy and shareholding.

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Government owns 69.74% of our Company’s paid-up capital. While we generally manage our business on a daily basis with a high degree of financial and operational autonomy, in large part as a result of our ‘Maharatna’ status, Government ownership has been an important factor in many aspects of our business, including the settlement of electricity dues payable by the SEBs. Any pursuit of Government policies that are not in the interests of our Company, or the loss of ‘Maharatna’ status, or any significant change in Government shareholding in our Company could adversely affect our business, financial condition and prospects.

29. Failure to protect intellectual property rights may adversely affect our business and prospects.

We have not registered our trademark or that of our Subsidiaries and Joint Ventures. Consequently, we do not enjoy the statutory protections accorded to registered trademarks in India and may, in the event of a competing claim, be required to enter into expensive and prolonged litigation in order to establish or protect our use of such trademarks and other intellectual property.

30. Risks relating to accelerated solar capacity addition

The Company intends to add 10,000 MW to its capacity by way of renewable (solar) energy based power projects in future (“Renewable Projects”). Renewable Projects are subject to other risks including higher tariffs as compared to conventional coal based plants and the associated off-take risk, determination of adverse tariff, technology risk, sub-optimal performance, parallel investment required from state agencies and central transmission utilities in infrastructure for evacuation of power, grid instability, regulations mandating forecasting and scheduling of solar power, non-availability of tax benefits and lower merit order.

31. Risks relating to trading of solar power under National Solar Mission

Our Company has been designated as the nodal agency by the Government of India for selection of solar power developers for 15,000 MW grid-connected solar photo voltaic power plants to be developed under ‘National Solar Mission’ in a time span of 5 (five) years from the years 2014 - 2015 to 2018 - 2019 in three tranches. Our Company shall also be required to purchase solar power from these plants for further sale to state distribution companies.

Any default by state distribution companies in payment of dues on account of solar power generated or traded by the Company and foreign currency exchange rate variations or refusal to off-take solar power is likely to have an adverse impact on the balance sheet of the Company affecting the overall credit-risk.

32. We have entered into certain transactions with related parties. Any transaction with related parties may involve conflicts of interest

We have entered into transactions with several related parties. We can give no assurance that we could not have achieved more favourable terms had such transactions not been entered into with related parties. Furthermore, it is likely that we will enter into related party transactions in the future. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations. The transactions we have entered into and any future transactions with our related parties have involved or could potentially involve conflicts of interest.

33. In addition to our Rupee borrowings and financial activities, we currently have foreign currency borrowings as well as financing activities, which are likely to continue or increase in the future, which will expose us to fluctuations in foreign exchange rates, which could adversely affect our financial condition.

As at March 31,2016 our aggregate foreign currency borrowings amounted to Rs 28,354.60 crore. We may seek to obtain additional foreign currency borrowings in the future. We are therefore affected by adverse movements in foreign exchange rates. While we seek to hedge foreign currency exposures, there can be no

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assurance that our hedging policies and mechanisms will remain effective or that we will enter into effective hedging with respect to any new foreign currency borrowings. To the extent we increase our foreign currency borrowing in the future, we may be further exposed to fluctuations in foreign currency rates. Volatility in foreign exchange rates could adversely affect our business, prospects, results of operations and financial condition. Further, adverse movement of foreign exchange rates may also affect our borrowers negatively, which may in turn adversely affect the quality of our exposure to these borrowers.

34. Failure or delayed updating of our Information Technology systems could significantly affect our business operations.

Continued updating of our information technology systems commensurate with the nature and volumes of business operations is necessary. While, we have been upgrading our information technology systems, there can be no assurance that the new systems will be successfully integrated into our existing systems, that our employees can be successfully trained to utilise the upgraded systems, that the upgraded systems, if installed and operational, will not become quickly outdated or that the upgraded systems will bring about the anticipated benefits.

RISKS RELATING TO INDIA

35. Economic, political or other factors beyond our control may have an adverse impact on our business, financial condition and prospects.

The following external risks may have an adverse impact on our business, financial condition and prospects:

 slowdown in economic growth, especially in the power sector, may adversely affect our business, financial condition and prospects;  decline in India’s foreign exchange reserves may affect liquidity and interest rates in the Indian economy and an increase in interest rates may adversely impact the valuation of the Indian Rupee vis-à-vis foreign currencies, as well as our access to capital and borrowing costs, which may constrain our ability to grow our business and operate profitably;  the Indian and global economies have had sustained periods of high inflation in the past. High inflation may increase our employee costs and decrease demand for power, which may have an adverse effect on our profitability and competitive advantage;  a downgrade of India's sovereign rating by international credit rating agencies may adversely impact our access to capital and borrowing costs, which may constrain our ability to grow our business and operate profitably;  political instability, resulting from a change in government or in economic and fiscal policies, may adversely affect economic conditions and our own operations;  natural disasters such as cyclones and earthquakes may disrupt our operations or adversely affect the economy, on the health of which our business depends;  civil unrest, terrorist attacks, regional conflicts or situations of war may adversely affect the financial markets and our own operations; and  availability and reliability of transport and telecommunications infrastructure, particularly in India, may affect our business, financial condition and prospects, including in terms of impacting our cost of fuel and profit margins, as well as the expected schedule of commissioning of our projects under construction.

36. Changing laws, rules and regulations and legal uncertainties, including adverse application of corporate and tax laws, may adversely affect our business, financial condition and prospects.

The regulatory and policy environment in which we operate is evolving. Such changes, including the instances mentioned below, may adversely affect our business, financial condition and prospects, to the extent that we are unable to suitably respond to and comply with such changes in applicable law and policy:

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 The Companies Act 2013 has been notified and it envisages significant changes, including on issue of capital, corporate governance, audit and corporate social responsibility.  The GoI proposes to revamp implementation of direct taxes through a Direct Taxes Code (“DTC”). If the DTC is enacted and notified, the tax impact on the Company may be altered.  The GoI has proposed a national goods and services tax (“GST”) regime to combine taxes and levies by the central and state governments into a unified rate structure.

Uncertainty in applicability, interpretation or implementation of any change in governing law or policy, including by reason of an absence or limited body of administrative or judicial precedent may be time consuming as well as costly for us to resolve and may impact our business and prospects.

37. Our ability to raise capital outside India may be constrained by Indian law.

As an Indian company, the Issuer is subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit the Issuer’s financing sources for power projects under development and future investment plans and could constrain its ability to obtain financings on competitive terms and refinance existing indebtedness. In addition, no assurance can be given that the required approvals will be granted to the Issuer without onerous conditions, or at all. The limitations on foreign debt may have an adverse effect on the business growth, financial condition and results of operations of the Issuer.

38. The proposed adoption of Indian Accounting standards converged with IFRS (IND-AS) could have a material adverse effect on the presentation of the Issuer’s financial statements.

The Company has historically prepared its annual and interim financial statements under Indian GAAP. Public companies in India, including the Issuer, are now required to prepare annual and interim financial statements under IND-AS in accordance with the roadmap announced on 2 January 2015 by the Ministry of Corporate Affairs, Government of India (the MCA), in consultation with the National Advisory Committee on Accounting Standards (the MCA Press Release) for convergence with IFRS. On 16 February 2015, the MCA notified the public of the Companies (Indian Accounting Standards) Rules, 2015, which have come into effect from 1 April 2016. The Company intends to announce its quarterly financial results pursuant to IND- AS for the first time for the quarter ended 30th June 2016. There can be no assurance that the Issuer’s financial condition, results of operations, cash flows or changes in shareholders’ equity will not appear materially worse under IND-AS than under Indian GAAP. During transition to IND-AS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing the Issuer’s management information systems. Moreover, there is increasing competition for the small number of IND-AS-experienced accounting personnel available as more Indian companies begin to prepare IND-AS financial statements. Furthermore, there is no significant body of established practice on which to draw in forming judgments regarding the new system’s implementation and application. There can be no assurance that the Company’s adoption of IND-AS will not adversely affect the Issuer’s reported results of operations or financial condition and any failure to successfully adopt IND-AS could adversely affect the Issuer’s business, financial condition and results of operations. In addition, in its transition to IND-AS reporting, the Issuer may encounter difficulties in the on-going process of implementing and enhancing its management information systems.

39. Our ability to invest in overseas Subsidiaries and Joint Ventures may be constrained by Indian and foreign laws.

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RBI issues guidelines, from time to time, for Overseas Direct Investment in JV’s and wholly subsidiaries imposing certain restrictions on investments. Our failure to comply with these guidelines may hamper our investment plans. In addition, there are certain routine procedural and disclosure requirements in relation to any such overseas direct investment. These limitations may constrain our ability to acquire or increase our stake in overseas entities as well as to provide other forms of financial support to such entities, which may adversely affect our growth strategy and prospects.

RISKS RELATING TO INVESTMENT IN THE BONDS

40. We are required to create a debenture redemption reserve (DRR) equivalent to 25% of the value of the NCD offered through this Issue out of profits available for distribution of dividends. In the absence of sufficient profits, we may not be able to transfer adequate amounts to the DRR.

Sub rule 7 of Rule 18 of the Companies (Share Capital and Debenture) Rules, 2014 read with Section 71 of the Act states that any company that intends to issue debentures must create a DRR to which adequate amounts shall be credited out of the profits of the company available for payment of dividend until the debentures are redeemed. The quantum of DRR to be created before the redemption liability actually arises in normal circumstances should be ‘adequate’ which has been prescribed to be 25% of the value of debentures issued through public issue. As further clarified by the DRR Circular, the amount to be credited as DRR will be carved out of the profits of the Company only and there is no obligation on the part of the Company to create DRR if there is no profit or no adequate profit for the year to pay dividends for the particular year. Accordingly, if we are unable to generate adequate profits, the DRR created by us may not be adequate to meet the 25% of the value of the NCDs issued.

41. There has been only a limited trading in the bonds of such nature and the price of the Bonds may be volatile subject to fluctuations.

The Bonds have no established market and there is no assurance that an active market for these Bonds will develop or be sustained. Further, the liquidity and price of the Bonds may vary with changes in market and economic conditions, our financial condition and other factors that may be beyond our control.

42. There is no guarantee that the Bonds will be listed on the Stock Exchange(s) in a timely manner or at all, or that monies refundable to Applicants will be refunded in a timely manner.

In accordance with Indian law and practice, approval for listing and trading of the Bonds will not be granted until after the Bonds have been Allotted. While we will use best efforts to ensure that all steps for completion of the necessary formalities for Allotment, listing and commencement of trading on the Stock Exchange(s) are taken within the time prescribed by SEBI or applicable law, there may be a failure or delay in listing the Bonds on the Stock Exchange(s). We cannot assure you that any monies refundable on account of (a) withdrawal of the Issue, or (b) failure to obtain final approval from the Stock Exchange(s) for listing of the Bonds, will be refunded in a timely manner. We shall, however, refund any such monies, with interest due and payable thereon, as prescribed under applicable law.

43. You may not be able to recover, on a timely basis or at all, the full value of outstanding amounts on the Bonds.

Our ability to pay interest accrued and the principal amount outstanding from time to time in connection with the Bonds is subject to various factors, including our financial condition, profitability and the general economic conditions in India and in the global financial markets. Although we have undertaken to ensure at least 100.00% asset cover for the Bonds, the realizable value of secured assets may be lower than the sum of the outstanding principal and interest accrued in connection with the Bonds.

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44. Changes in interest rates may affect the price of the Bonds.

Securities where a fixed rate of interest is offered, such as the Bonds, are subject to price risk. The price of such securities will vary inversely with changes in prevailing interest rates, i.e., when interest rates rise, prices of fixed income securities fall and when interest rates drop, the prices increase. The extent of fall or rise in the prices is a function of the coupon rate, days to maturity and increase or decrease in prevailing interest rates. Increased rates of interest, which may accompany inflation and/or a growing economy, may have a negative effect on the price of the Bonds.

45. A downgrade in credit rating of the Bonds may affect the price of the Bonds.

The Bonds are rated by ICRA, CRISIL, and CARE and have been assigned AAA ratings. We cannot guarantee that this rating will not be downgraded, suspended or withdrawn at any time during the tenor of the Bonds. Any downgrade, suspension or withdrawal in the credit rating on the Bonds may lower the price of the Bonds.

46. Payments on the Bonds will be subordinated to certain tax and other liabilities preferred by law.

The payment on the Bonds will be subordinated to certain liabilities preferred by law, such as claims of the GoI on account of taxes, and certain liabilities incurred in the ordinary course of our business. In an event of default in excess of the DRR, in particular, in an event of bankruptcy, liquidation or winding-up, our assets will be available to meet payment obligations on the Bonds only after all liabilities that rank senior to the Bonds have been paid and, in such event, there may not be sufficient assets remaining, after paying amounts relating to these claims, to pay amounts due on the Bonds.

VI. BRIEF SUMMARY OF THE BUSINESS/ACTIVITIES OF THE ISSUER AND ITS LINE OF BUSINESS

Overview: Business of the Company Ever since the Government gave approval to construct its first thermal power project at Singrauli in December 1976, the company has not looked back. The first unit at Singrauli was successfully commissioned on February 13, 1982. Since 1982, through expansion of existing plants, construction of new plants and take-over of plants from State Utilities, NTPC has grown to become the largest thermal generation utility in India .

No. of Plants Capacity (MW) % Share NTPC Owned Coal 18 35085 74 Gas/Liquid Fuel 7 4017 9 Solar 9 360 1 Hydro 1 800 2 Sub-total 35 40262 85 Owned by JVs and Subs Coal 8 4999 11 Gas 1 1967 4 Sub-total 9 6966 15 Total 44 47228 100

Corporate Structure

The broad organization structure of NTPC has been given below. The structure depicts CMD, Directors, Regional Executive Directors and power stations under their control.

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NTPC LTD Chairman & Managing Director

Director (HR) Director (Tech) CVO Director (Oprns.) Director (Finance) Director (Comml.)* Director (Projects)

ED(PMI) ED ( Engg.) ED (Nuclear & RE) ED(OS) GM (I/C) ED(CP) ED(Comml.) ED(PP&M) CC&M

ED(HR) ED ( PE-Civil&Infra) ED(NETRA) ED (OS-Boiler) ED to CMD ED(Finance) ED(BD) RED( Hydro)

ED(CSR/R&R) GM -I/C (IT/ERP) ED (FM ) CFO ED( Comp. Secy.) ED(Consultancy) GM(Koldam)

ED (Coal Washery), ED(Security) ED (FT) ED (Internal Audit) GGM (TV & Lata Tap) Kolkata

GM(SD) GM-I/C (Safety) GM(CPC) GM (Rammam)

RED(D/B/F) RED(W-I) RED (South) RED(N) RED(E-I) RED(E-II) RED(W-II) RED ( Coal Mining )

GM (Badarpur) GGM(Mouda) ED(RSTPS) ED(VSTPS) GGM(Barh) ED(TSTPP) GGM (Sipat) ED (PB/CB/KD)

GM (Faridabad) GGM (Solapur) GGM (Simhadri) GGM (Singrauli) GGM(Kahalgaon) GM(TTPS) GGM(KSTPS) GM(Talaipalli)

GGM(Dadri) GGM(Kudgi) GGM(Puddimadaka) GGM(Rihand) GGM (FSTPS) GGM(Bongaigaon) GGM(Lara) GM(Dulanga)

GM(Bhadla) GM(Gandhar) GM (RGCPP) GGM(Unchahar) GGM (NKSTPP) GGM (Darlipalli) GGM (Gadarwara)

GM(Kawas) GM(Kadiri) GGM(Tanda) GM(Katwa) GM(Mandsaur) GGM(Khargone)

GM(Anta) GM(Auraiya) GM (Bilhaur) GM(Rajgarh) GM(Barethi)

Note: *Director (HR) is holding the additional charge of Director (Comml.) )OS-Operation Services, CP-Corporate Planning, BD-Business Development, PP&M-Project Planning & Monitoring, FM-Fuel Mgmt, FT-Fuel Transportation, CM-Coal Mining, PB-Pakri-Barwadih, CB-Chattibariatu, KD-Karandari, CFO-Chief Forest Officer, CS-Company Secy., CC-Corporate Communication, PMI-Power Management Institute, Comml-Commercial, CPC-Central Procurement Cell

Ownership Our Company was incorporated on November 7, 1975 under the Companies Act 1956 as a private limited company under the name, ‘National Thermal Power Corporation Private Limited’. The name of our Company was changed to ‘National Thermal Power Corporation Limited’ on September 30, 1976 consequent upon a notification issued by the GoI exempting government companies from the use of the word ‘private’. On September 30, 1985, our Company was converted from a private limited company into a public limited company. The name of our Company was changed to ‘NTPC Limited’ and a fresh certificate of incorporation was issued on October 28, 2005.

In October 2004, the Company came out with its Initial Public Offering (IPO) consisting of 5.25% as fresh issue comprising of 432,915,000 equity shares of Rs.10 each and another 5.25% of 432,915,000 equity shares of Rs.10 each as an offer for sale by the President of India acting through the Ministry of Power, Government of India. On November 5, 2004, the shares of the Company were listed on NSE and BSE. NTPC thus became a listed company with Government holding 89.5% comprising of 7,379,634,400 equity shares and the remaining 10.5% of equity comprising of 865,830,000 equity shares held by institutional investors and public.

Pursuant to decision of Cabinet Committee of Economic Affairs on October 19,2009, 412,273,220 Equity Shares of Rs.10/- each were offered to public through “Further Public Offering” by Government of India thereby reducing the stake of Government of India from 89.5 % to 84.5%.

Pursuant to the decision of Cabinet Committee of Economic Affairs on 22 November 2012, 78,32,62,880 Equity Shares of Rs.10/- each were offered to public by way of Offer for Sale through stock exchange mechanism on February 7, 2013, thereby reducing the Government of India’s shareholding to 75%.

Further, Cabinet Committee of Economic Affairs while according the approval for above Offer for Sale also approved issuance of shares to NTPC employees at a discounted price of Rs. 138.27 per equity share. Accordingly, Employee OFS was made in May 2014 and 34,83,320 equity shares were transferred from Government of India to respective successful applicants (employees). Thus, Government of India’s share holding in NTPC has reduced to 6,18,06,14,980 i.e 74.96% of paid-up equity capital of the Company from 6,18,40,98,300 shares i.e 75.00%.

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Cabinet Committee on Economic Affairs (CCEA) in May 2015 accorded approval for further disinvestment of 5% of paid- up equity capital i.e.41,22,73,220 shares in NTPC through OFS by promoters through Stock Exchange Mechanism. On 22 February 2016, meeting of High Level Committee of the Officers recommended the opening of the bidding for OFS Mechanism on 23.02.2016 for non-retail investors and on 24.02.2016 for retail investors. The offer was oversubscribed by 1.8 times (184.78%). After this disinvestment the Government of India’s stake in NTPC has reduced from 74.96%. to 69.96% and now GoI holds 5,76,83,41,760 shares.

GOI has further divested 0.22% of the paid-up share capital in NTPC through Employee OFS during July-2016. Consequent upon transfer of shares to employees of NTPC, the Government of India’s stake has reduced from 69.96%. to 69.74% i.e. 575,07,59,170 shares out of total 824,54,64,400 shares.

Projects profile By virtue of its projects (including projects under construction) the Company has a pan India presence. The project wise details of installed capacity are furnished below:

Sl. Coal based State Installed Capacity (MW) 1 Singrauli Uttar Pradesh 2000 2 Korba Chhattisgarh 2600 3 Ramagundam Telangana 2600 4 Farakka West Bengal 2100 5 Vindhyachal Madhya Pradesh 4760 6 Rihand Uttar Pradesh 3000 7 Kahalgaon Bihar 2340 8 NCTPP Uttar Pradesh 1820 9 Talcher Kaniha Orissa 3000 10 Unchahar Uttar Pradesh 1050 11 Talcher Angul Orissa 460 12 Simhadri Andhra Pradesh 2000 13 Tanda Uttar Pradesh 440 14 Badarpur Delhi 705 15 Sipat Chhattisgarh 2980 16 Mauda Maharashtra 1660 17 Barh Bihar 1320 18 Bongaigaon Assam 250 Total (Coal based) 35085 Gas based State Installed Capacity (MW) 19 Anta Rajasthan 419.33 20 Auraiya Uttar Pradesh 663.36 21 Kawas Gujarat 656.20 22 Dadri Uttar Pradesh 829.78 23 Jhanor-Gandhar Gujarat 657.39 24 Rajiv Gandhi CCPP Kayamkulam Kerala 359.58 25 Faridabad Haryana 431.59 Total (Gas based) ~ 4017 Renewable (Solar) State/UT Installed Capacity (MW) 26 Dadri Uttar Pradesh 5

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27 Andaman Andaman & Nicobar 5 28 Ramagundam Telangana 10 29 Talcher Orissa 10 30 Faridabad Haryana 5 31 Unchahar Uttar Pradesh 10 32 Rajgarh Madhya Pradesh 50 33 Singrauli Uttar Pradesh 15 34 NP Kunta Andhra Pradesh 250 Total (Renewable) 360 Hydro State/UT Installed Capacity (MW) 35 Koldam Himachal Pradesh 800 Power plants under joint ventures/subsidiaries Sl. Coal/Gas Based State Fuel Installed Capacity (MW) 36 Durgapur West Bengal Coal 120 37 Rourkela Orissa Coal 120 38 Bhilai Chhattisgarh Coal 574 39 RGPPL Maharastra Naptha/LNG 1,967 40 Kanti Bihar Coal 610 41 Jhajjar Haryana Coal 1,500 42 Vallur Tamil Nadu Coal 1,500 43 Nabinagar (BRBCL) Bihar Coal 250 44 Patratu (PVUNL) Jharkhand Coal 325 Total(Joint Venture Companies/ Subsidiaries) 6,999 Grand Total (Coal + Gas + Renewable + JV+ Subsidiary) 47,228 For further details refer to NTPC website www.ntpc.co.in

Operational Performance The engineering, construction and operation of power plants for the thermal generation of power is the core business of the Company. Sales of electricity accounts for major portion of the gross income of NTPC.

The following table presents certain key operating data of the Company for the preceding 3 years and fiscal 2015-16 on a standalone basis:

Description Fiscal 2013 Fiscal 2014 Fiscal 2015 Fiscal 2016 Gross Generation (BUs) BU 232.028 233.284 241.261 241.980 Availability Factor(DC) - Coal Stations % 87.63 91.79 88.69 91.94 - Gas Stations % 93.14 95.24 92.18 97.30 - Hydro Stations % - - - 95.41 Plant Load Factor - Coal Stations % 83.08 81.50 80.23 78.61 - Gas Stations % 55.98 35.72 32.93 25.14 - Solar Stations % - - 12.72 16.64 - Hydro Stations % - - - 36.23

The Company’s operations strategy includes use of forward planning and monitoring tools; active institution building; use of advanced IT enabled tools; new technology initiatives; emphasis on quality of repair and maintenance

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Long term power purchase agreements (PPAs) with our customers Most of our stations have long term PPAs with its customers which are generally equal to the expected useful lives of the projects. The GoI allocates the capacity of each of our stations among the station's customers. Electricity is supplied to the distribution companies and/or SEBs in accordance with the terms of the allocation letters issued by the GoI. The terms are equal to the expected useful lives of the stations. The actual lives of the stations are often longer, and, unless the customer ceases to draw power, contracts continue in force until they are formally extended, renewed or replaced. As part of investment approval procedures, PPAs are required to be in place for all new stations except for merchant power stations.

Historically, the Company had significant problems recovering payments from the SEBs and the distribution companies. However, the introduction of the OTSS in 2002 significantly improved the recovery of payment under the PPAs with SEBs. The Letter of Credit coverage provided by the SEBs have been adequate to cover the monthly billings. For the consecutive 13th year, the recoveries of dues from SEBs have been 100 percent.

Beyond 2016, the sales are secured through supplementary agreements with the customers under which the customers have agreed to create a first charge on their own receivables in our favour and in the event of a payment default assign such receivables into an escrow account. Further, most of the states have agreed to extend the Tripartite Agreement.RBI has also accorded the approval for the same.

Tariffs Tariffs of our project are regulated by Central Electricity Regulatory Commission (CERC), the CERC has issued tariff regulations for the period from April 1, 2014 to March 31, 2019 (“2014-19 Regulations”) vide notification no.L- 1/144/2013/CERC dated 21.02.2014.

Fuel supply Fuel accounts for the major portion of expenditure. The power plants of the Company use two primary fuel sources, coal and natural gas. Fuel supply linkages which are tied to plant life are typically finalized prior to investment approval.

A. Coal The company mainly procures coal from subsidiaries of Coal India Limited (CIL) and Singareni Collieries Company Limited (SCCL), both Government owned companies. NTPC has entered into long term fuel supply agreements with subsidiaries of CIL to ensure fuel security.

The Company also sources coal through imports as well as through e-auctions conducted by the subsidiary coal companies of CIL. The Company intends to continue to import coal to meet the shortfall in the supply of coal from domestic sources.

10 coal blocks for captive coal mining have been allotted to NTPC namely, Pakri Barwadih ,Chatti-Bariatu, Kerendari, Dulanga, Talaipalli, Banai, Bhalumunda Kundanali – Laburi , Mandakini and Banhardih . These blocks have estimated geological reserves of approx 7.3Billion Tonnes.

B. Natural Gas India's domestic natural gas supply is insufficient to satisfy demand. Natural gas is allocated to each of NTPC’s plants by a Gas Linkage Committee, consisting of a representative each from various concerned Ministries, Oil & Natural Gas Corporation Limited and Oil India Limited. Following allocation, the Company enters into a long term gas supply agreement with GAIL to purchase the allocated gas. Gas prices are fixed by the MoPNG using the Administered Pricing Mechanism (APM). APM is a mechanism used by the Government to fix gas prices for various priority sectors including Power Sector.

C. Diversification into Hydro and Solar

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NTPC has diversified into Hydro and 1st hydro project of 800 MW has been commissioned in Koldam. NTPC also has an installed solar capacity of 360 MW. Further, we have given a commitment to GOI for adding 10 GW of solar capacity in next 5 years. NTPC has also been given the mandate to identify solar power developers for 15GW and trade the solar power after bundling under National Solar Missions.

Human Resource Management Competence building, commitment building, culture building and systems building are the 4 building blocks on which our human resources systems are based, and our human resources vision is “to enable our people to be a family of committed world class professionals”. We have adopted a people-first approach and believe that our continuing initiatives have strengthened our identity as a preferred employer. The NTPC Group has close to 23000 employees posted at its various plants and offices, joint ventures and subsidiaries.

Market Leadership The Company has adopted a Vision " To be the world's largest and best power producer, powering India's growth" In order to realize this Vision, it has planned an ambitious capacity addition programme .

Capacity expansion NTPC group has 24009 MW of projects under construction as detailed below:

Sl. No. Name of the project (Fuel)/ State Capacity (MW) A Ongoing projects A.1 Coal Based (Own Plants) i. Bongaigaon (Coal)/ Assam 500 ii. Mouda-II (Coal)/ Maharashtra 660 iii. Barh-I (Coal)/ Bihar 1980 iv. Kudgi-I (Coal)/ Karnataka 2400 v. Solapur (Coal)/ Maharashtra 1320 vi. Lara-I (Coal)/ Chattisgarh 1600 vii. Gadarwara (Coal)/ Madhya Pradesh 1600 viii. Unchahar-IV (Coal)/ Uttar Pradesh 500 ix. North Karanpurra (Coal)/ Jharkhand 1980 x. Darlipalli-I (Coal)/ Odisha 1600 xi. Tanda II (Coal)/ Uttar Pradesh 1320 xii. Khargone (Coal)/ Madhya Pradesh 1320 xiii. Telangana (Coal)/ Telangana 1600 Sub Total A.1 18380 A.2 Coal Based ( JV/Subsidiary) xiv. Nabinagar (Coal)/ Bihar – Subsidiary (with Railways) BRBCL 750 xv. Meja (Coal)/ Uttar Pradesh – JV with UPRVUN- MUNPL 1320 xvi. Nabinagar (Coal)/ Bihar – JV with BSPGCL (NPGCL) 1980 xvii. Rourkela (Coal)/ Odisha – JV with SAIL (NSPCL) 250 Sub Total A.2 4300 Total Coal Based Capacity (A.1 + A.2) B.1 Hydro Based xviii. Tapovan Vishnugad (Hydro)/ Uttarakhand 520 xix. Lata Tapovan (Hydro)/ Uttarakhand 171 xx. Rammam (Hydro)/(West Bengal) 120 Total hydro based capacity 811 C Renewable xxi. Singrauli CW Discharge HEPP (Small Hydro )/ Uttar Pradesh 8 xxii. Bhadla (Solar PV)/Rajasthan 260 xxiii. Mandsaur (Solar PV)/Madhya Pradesh 250

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Total Renewable Capacity (C) 518 Grand Total Capacity Under Construction 24009

Business Strategy The Company intends to expand in the power sector through forward and backward integration and diversification along the following three key dimensions:

 Capacity addition program  Diversification along the power value chain  Exploiting potential services business opportunities in the domestic and international markets

Strategy for capacity addition The Company will continue to adopt a multi-pronged growth strategy through Greenfield projects, expansion of existing stations, acquisitions and the joint venture/subsidiary route.

Expansion of Existing Stations Expansion of existing stations generally provides some cost advantage driven by shared facilities, scale of operation, etc. Due to these inherent advantages, the Company adopts this approach for expanding capacities of coal and gas based stations wherever feasible.

Acquisitions A number of power projects with SEBs /State Utilities are technically viable but they are not run efficiently due to various constraints. The turnaround capability of the Company can be effectively utilized to improve the performance of such plants. In the past this strategy has been adopted to reduce the receivables problem, with part of the outstanding of SEBs being adjusted against cost of acquisition. Going forward, it would continue acquiring existing plants wherever it is technically and economically feasible and is aligned with business strategy.

Joint Ventures/Subsidiary Route Subsidiaries can be an effective vehicle for mitigating risks that are associated with making significant investments in new business areas. The subsidiaries could also provide a route to invest in alliances and joint ventures for the new business without sacrificing benefits from the main/core business. The Company will consider options for capacity addition through Joint Ventures (JV)/ subsidiary route in the long run. NTPC could form JVs with suitable partners (including customers, fuel suppliers, equipment suppliers, etc.) if found technically and commercially feasible. Among other considerations, the decision to adopt the JV route would be influenced by the value that the JV partner could add to the relationship for e.g. tying up with fuel suppliers could lead to fuel supply security for NTPC.

The Company is also considering installing generation capacities in markets outside India. To de-risk its domestic operations from the risks of operating in other markets, the overseas venture would be structured as subsidiary or Joint Venture of the Company.

Energy mix for capacity addition Currently, coal has a dominant share in the power generation capacities in India. This is also reflected in the high share of coal-based capacities in the Company’s current portfolio. With high uncertainties involved in domestic gas/LNG, both in terms of availability and prices, the Company would continue to set up large pit-head coal based projects, including few integrated coal cum power projects. To reduce the dependence on fossil fuels, there is a need to push for renewable sources of power in the sector.

The Company has been giving increased thrust to hydro development so as to have a balanced portfolio for long term sustainability and such projects are excellent for meeting peak demand. First step in this direction was taken by initiating investment in Koldam Hydro Electric Power Project (HEPP) located on Satluj river in Bilaspur district of Himachal Prades which has now been commissioned. Other hydro projects under construction are 520 MW Tapovan- - 42 -

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Vishnugad HEPP near Joshimath on river Alaknanda in Uttarakhand, Lata Tapovan (171 MW) in Uttarakhand and Rammam-III (120 MW) in West Bengal. NTPC has also added 360 MW of Solar Energy based power plants till date and 510 MW is under construction.

The Company has also set up a Joint Venture Company with Nuclear Power Corporation of India Limited (NPCIL) has been incorporated under the name “Anushakti Vidhyut Nigam Limited” (Company) for the purpose of development of nuclear power, in which NPCIL hold 51% equity and the balance 49% is being held by NTPC Limited

By 2032, NTPC targets a capacity of 128GW with increased capacity mix of non-fossil sources.

Diversification along the power value chain a. Backward Integration – foray into coal mining Currently, the Company sources its fuel requirements primarily from Coal India Limited for its coal-based plants. However, to provide greater fuel security for its existing as well as new plants, the Company has forayed into backward integration by entering into captive coal mining and gas exploration. 10 coal blocks for captive coal mining have been allotted to NTPC namely, Pakri Barwadih ,Chatti-Bariatu, Kerendari, Dulanga, Talaipalli, Banai, Bhalumunda Kundanali – Laburi , Mandakini and Banhardih . These blocks have estimated geological reserves of approx 7.3Billion Tonnes. b. Forward integration – foray into trading Electricity trading has become an attractive opportunity in India. This has resulted in creation of a power market where power can be traded.

In order to leverage this opportunity, the Company has already set up a wholly owned subsidiary for power trading, NTPC Vidyut Vyapar Nigam Limited (NVVN). This company focuses on developing a wholesale power market by providing fair, transparent, secure and reliable systems for power trading. Going forward, NTPC plans to actively track opportunities to profitably grow its presence in power trading and move towards real time trading when a business opportunity is presented. c. Lateral Integration-foray into Distribution Takeover of distribution circles in India could provide an opportunity for the Company in terms of synergy with generation business. However, significant challenges remain in the takeover of existing distribution circles in India. These challenges emerge from the poor state of the current distribution infrastructure and high incidence of losses. Therefore, while NTPC would evaluate options for taking over existing distribution “circles”, it would adopt a cautious approach.To takeover existing circles, a comprehensive techno-economic evaluation needs to be carried out that would help determine the price to be paid for the circle, preconditions for purchase, regulatory and administrative support required for the turnaround, etc. In order to take up distribution, a wholly owned subsidiary NTPC Electric Supply Company Limited (NESCL) was formed. d. Thrust for services business

There is a significant demand for EPC services, O&M services, and R&M related services in the domestic and international markets. NTPC is well positioned to exploit these opportunities by levering its expertise in engineering, procurement, construction, operations and maintenance areas. NTPC has already made inroad into the business of providing services through the Consultancy wing.

NETRA- NTPC Energy Technology Research Alliance NETRA is envisioned as a state-of-the-art centre for research, technology development and scientific services in the domain of electric power to enable seamless work flow right from concept to commissioning. NETRA complex is the first Energy Conservation Building Code compliant building in NTPC.

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NETRA’s laboratories are ISO 17025 accredited and provide high end scientific services to all the Company’s stations as well as many outside stations resulting in improved availability and reliability of stations by providing condition assessment, failure analysis, by solving and analyzing specific problems, and helping our stations in increasing the availability and reliability of their units.

Towards green power development, NETRA has taken up projects for Solar Heating, Ventilation and Air Conditioning (HVAC), solar experimental power plant and Flue Gas Heat Recovery.

Corporate Social Responsibility (CSR)

NTPC has a Board level committee for CSR and Sustainability which frames and reviews CSR policy including sustainable development. The Company has been a pioneer in conceptualizing and executing Resettlement & Rehabilitation (R & R) and CSR policies and programme. It has committed 2% of net profit of the previous year annually for CSR & Sustainable Development Activities. The welfare of project affected persons and the local population around NTPC projects is taken care of under a comprehensive R&R policy.

RELATIONSHIP WITH GOVERNMENT OF INDIA“GOI” NTPC Ltd. is a Govt. of India company, 69.74% of its equity is owned by the Government of India, and the remaining 30.26% of equity is vested with foreign institutional investors, financial institutions, banks and the general public. Under the Company’s Articles of Association, the Chairman & Managing Director (the CMD) is appointed by the Government of India. Other functional directors on the Board of Directors (the Board) are appointed by the Government of India in consultation with the CMD. Independent directors as well as Government nominated directors are appointed by the President of India.

The Company enters into an annual Memorandum of Understanding (MOU) with the Government. The MOU sets annual performance targets in respect of the physical, financial and operational parameters of NTPC. These parameters include total electricity generated, availability factor, financial gross margin and the ratio of net profit to net worth. An evaluation of the actual performance of NTPC against the targets is conducted at the end of each fiscal year.

COMPANY’S DIVIDEND POLICY

The company’s dividend policy takes into account its requirements for internal resources to fund its capacity expansion programme and the guidelines issued by the Ministry of Finance. The declaration and payment of dividend is recommended by the Board and approved by the shareholders of NTPC. It pays dividends to the Government and its other shareholders consistently.

Our Company has paid dividend for fiscal 2016 and 2015, 2014, 2013, 2012, 2011 as under:

Fiscal Nature Dividend per share (Rs.)

2016 Proposed Final (subject to shareholders’ approval at AGM) 1.75 Interim 1.60 2015 Interim 0.75 Final 1.75 2014 Interim 4.00 Final 1.75 2013 Interim 3.75 Final 0.75 Special 1.25 2012 Interim 3.50 Final 0.50 2011 Interim 3.00

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Final 0.80 Further, Company has rewarded its shareholders by way of issue of one bonus debenture of face value of Rs. 12.50 for every equity share of face value of Rs, 10/- each during FY 2014-15.

Financial performance of NTPC for last three financial years (Standalone & Consolidated) Rs. Crore Parameters 2015-16 2014-15 2013-14 Standalone Consolidated Standalone Consolidated Standalone Consolidated Net worth 88,782.00 89,196.51 81,657.35 82,093.98 85,815.32 87,329.72 Total debt 93,109.26 112,030.70 85,995.34 102,252.00 67,170.22 81,454.98 of which - Non current maturities of long term borrowing 85,083.26 102,238.28 78,532.33 93,362.92 62,405.75 75,542.30 - Short term borrowing 1,299.50 2,141.39 - 640.15 - 433.64 - Current maturities of long term borrowing 6,726.50 7,651.03 7,463.01 8,248.93 4,764.47 5,479.04 Net fixed assets 158,063.46 186,045.63 135,342.56 159,407.09 116,999.50 138,032.32 Non current assets 184,872.95 205,892.48 159,721.29 177,784.53 139,684.43 155,659.74 Cash & bank balances (including cash & cash equivalents) 4,406.36 5,393.32 12,878.81 14,251.61 15,311.37 17,050.67 Current investments 343.63 343.63 1,878.06 1,887.39 1,636.96 1,636.96 Current assets 29,746.31 34,556.57 37,363.43 41,791.62 39,869.75 44,385.39 Current liabilities 33,846.39 40,090.17 30,519.52 35,946.33 25,279.80 29,665.11

Net Sales 70,049.18 78,136.12 72,637.75 79,943.97 71,602.63 78,478.70 EBITDA# 17,525.08 19,174.15 16,085.60 17,512.28 17,807.75 19,698.70 EBIT# 12,099.76 13,020.74 11,173.95 11,947.67 13,665.56 14,928.71 Finance Costs** 3,230.36 4,151.26 2,743.62 3,570.37 2,406.59 3,203.07 PAT$ 10,242.91 10,182.81 10,290.86 9,986.34 10,974.74 11,403.61 Dividend amounts*** 2,762.24 2,762.24 2,061.38 2,061.38 4,741.15 4,791.76 Current ratio (Total current assets / Total current liabilities) 0.88 0.86 1.22 1.16 1.58 1.50 Interest coverage ratio 5.85 4.96 6.72 5.54 8.62 7.09 Gross debt / equity ratio 1.05 1.26 1.05 1.25 0.78 0.93

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Debt service coverage ratio 1.72 1.66 2.44 2.27 2.77 2.68 * Figures for the year 2013-14 & 2014-15 have been regrouped/rearranged wherever necessary. ** Includes Interest, Other Borrowing Costs and Exchange Differences regarded as an adjustment to interest costs. *** Dividend amounts represent interim dividend (paid) and final dividend proposed for the respective periods. # EBITDA/EBIT excludes other income and exceptional items. $ PAT in respect of consolidated financial statements is after minority interest.

Profits of the Company before and after making provision for Tax for three financial years (Rs. Crore) 2015-16 2014-15 2013-14 Profit before tax 10,058.67 10,546.65 13,904.65 Less : Tax (Net) (184.24) 255.79 2,929.91 Profit after tax 10,242.91 10,290.86 10,974.74 Note : Based on standalone financials

Gross Debt: Equity Ratio of the Company on Standalone basis Before the issue of Bonds as on 31.03.2016 1.05 After the issue of Bonds – Proposed issue size aggregating upto Rs 500 crore 1.05# # The impact of other fresh borrowings/redemptions (including bonds) and accretion to Reserves & Surplus after March 31,2016 has not been considered.

Audited Cash Flow Statement for the three years

Refer Annexure III.

Investors can also visit the following link on our website for detailed information on financials : http://www.ntpc.co.in/en/investors/financial-results

Change in Accounting Policies during the last three years and their effect on profit and the Reserves of the Company (wherever applicable)

Financial Year Change in accounting policy

2015-16 a) For more appropriate presentation of the financial statements, the accounting policy relating to capital expenditure on assets not owned by Company has been discontinued with retrospective effect. Based on the guidance available in AS 10 notified by MCA on 30th March 2016 such expenditure on assets not owned by the Company have been capitalised retrospectively as part of the cost of project. As a result, cost amortized till 31st March 2015 amounting to Rs.75.36 crore as per earlier policy has been written back as prior period adjustments and depreciation has been recalculated retrospectively following the rates and methodology notified by the CERC Tariff Regulations. Due to this change, prior period depreciation (net) till 31st March 2015 is (-) Rs. 53.41 crore, depreciation for the year is lower by Rs.10.08 crore, profit for the year and fixed assets as at 31st March 2016 are higher by Rs.63.49 crore. Refer Note 12 i). b) Consequent to adoption of the guidance note on Rate Regulated Activities issued by the ICAI, Policy no. G has been inserted. Detailed disclosure in this regard has been made in Note 48. c) Considering the adoption of new policy no. G, policy no. N.4 has been modified by replacing the word 'Deferred foreign currency fluctuation asset/liability' with 'Regulatory asset/liability'. d) Policy no. O.2.4 related to charging off of the items of prepaid & prior period expenses/income to the natural head of accounts has been modified by increasing the threshold limit from Rs.1 lakh to Rs. 5 lakh. Consequently, Short term loans & advances (Note 20) are lower by Rs.0.79 crore, Generation, administration and other expenses are higher by Rs. 4.19 crore (Note 26), Prior period items (Net) (Note 27) is lower by Rs.3.40 crore and profit for the year is lower by Rs.0.79 crore. e) Policy N. 1 & O.1.9 related to income recognition & amortization of machinery spares has been modified for - 46 -

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better disclosures. There is no impact on the accounts due to the changes at sl.no. (b) (c) & (e) above.

2014-15 a) Policy A 'Basis of preparation' has been modified considering the provisions of the Companies Act, 2013. b) The Company has revised the accounting policy nos. N.1.1, N.1.2 & N.1.3 regarding depreciation in alignment with Schedule-II to the Companies Act, 2013 which has become applicable from 1st April 2014. Consequently, profit for the year ended 31st March 2015 is lower by Rs. 14.97 crore and fixed assets as at 31st March 2015 are lower by Rs. 20.44 crore. Further, an amount of Rs. 3.58 crore (net of deferred tax of Rs. 1.89 crore) has been recognized in the opening balance of the retained earnings where the remaining useful life of such assets is Nil as at 1st April 2014 in line with the provisions of Schedule-II to the Companies Act, 2013. c) Policy N.1.11 regarding depreciation on leasehold land and buildings has been modified to cover all the tariff regulations of CERC viz. for thermal, hydro and renewable energy sources. d) Policy S 'Segment reporting' has been added for improved disclosures. There is no impact on the accounts due to the changes at sl.no. (a) (c), & (d) above. The Accounting Policy for FY 2014-15 enclosed at Annexure III 2013-14 a) Policy A “Basis of Preparation” has been amended to reflect that the financial statements have been prepared inter alia, in accordance with General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs and the Companies Act, 2013 (to the extent notified and applicable). b) Accounting of capital expenditure on assets not owned by the company for community development is disclosed in accounting policy D.4 instead of in M.a.10 for better presentation. c) Consequent to the revised guidance note on 'Accounting for Oil & Gas Producing Activities' issued by ICAI becoming effective from 1st April 2013, the policy to charge off exploratory wells-in-progress which have been found dry or not planned to be developed after two years from the date of completion of drilling has been modified and henceforth, such expenditure shall be charged off as and when the wells are determined to be dry/abandoned. d) Policy M.a.11 has been modified to state that leasehold land and buildings relating to generation of electricity business are fully amortised over the lease period or life of the related plant whichever is lower, to cover both hydro and thermal power plants. e) Policy H.5 and L.5 regarding accounting of derivative contracts and recovery of cost of hedging from the beneficiaries have been added consequent upon entering into derivative transactions for hedging as per the exchange risk management policy in the current year. f) In Policy N.1, contribution to pension fund has been included as an employee benefit following the implementation of a contributory pension scheme in the Company in the current year. g) Policy S "Taxes on Income" has been added for improved disclosures. There is no impact on the accounts due to the above changes. The Accounting Policy for FY 2013-14 enclosed at Annexure III

Investors can also visit the following link on our website for detailed information on financials: http://www.ntpc.co.in/en/investors/financial-results

VII. BRIEF HISTORY OF ISSUER SINCE INCORPORATION, DETAILS OF ACTIVITIES INCLUDING ANY REORGANIZATION, RECONSTRUCTION OR AMALGAMATION, CHANGES IN CAPITAL STRUCTURE, (AUTHORIZED, ISSUED AND SUBSCRIBED) AND BORROWINGS

HISTORY & BACKGROUND Prior to the establishment of the Issuer, power generation and capacity augmentation in India was largely the responsibility of State Electricity Boards (SEBs). The gap between demand and supply for electricity and the ability of SEBs to supply it was perceived as a significant factor by the Govt. of India affecting the economic development of India. To address these shortages in generation of electricity, the Company was set up as a Central Sector Power Utility to augment power generation.

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The Company was incorporated as National Thermal Power Corporation Private Limited, a private limited company, 100% owned by Government of India, on November 7, 1975 under the Companies Act. The name of our Company was changed to ‘National Thermal Power Corporation Limited’ on September 30, 1976 consequent upon a notification issued by the GoI exempting government companies from the use of the word ‘private’. Pursuant to the resolution of our shareholders in a general meeting held on September 30, 1985, Company was converted from a private limited company to a public limited company in accordance with the provisions of the Companies Act.

On 28 October 2005, in order to give the Company a new corporate identity, its name was changed from “National Thermal Power Corporation Limited” to “NTPC Limited” pursuant to the resolution of shareholders in a general meeting held on September 23, 2005.The new name signifies the substantial ground covered by NTPC and its subsidiaries in the areas of hydro power, coal mining, oil and gas value-chain, power trading and also the substantial efforts in the area of power distribution. All the initiatives of backward, forward and lateral integration are primarily aimed at strengthening NTPC’s core business of power generation.

In July 1976, the registered office of was changed from Shram Shakti Bhawan, New Delhi to Kailash Building, Kasturba Gandhi Marg, New Delhi; subsequently, in May 1979 to NTPC Square, 62-63, Nehru Place, New Delhi and thereupon in October 1988 to the present Registered Office.

Major Events Year EVENT 1975  Incorporated on November 7, 1975 1978  Takeover of management of the Badarpur project. 1982  The first 200MW unit at Singrauli is commissioned.  The first direct foreign currency borrowing for NTPC- a consortium of foreign banks led by Merchant Bank extends a loan of GBP 298.41 million for the Rihand project.  Establishment of Power Management Institute, Delhi, a centre for education 1984  The transmission line based on HVDC (High Voltage Direct Current) technology, commissioned for power transmission from Rihand to Delhi.  Singrauli project receives World Bank loan of USD 150 million through Government of India. 1986  Synchronization of its first 500MW unit at Singrauli.  Becomes one of the first PSUs to issue bonds in the debt market. 1987  Crossed the 5000 MW installed capacity mark. 1988  Raised first syndicated Japanese loan of 30 billion JPY 1989  Consultancy division launched.  First unit (88 MW) of first gas based combined cycle power plant at Anta, Rajasthan commissioned.

1990  Total installed capacity crosses 10000 MW 1992  Acquisition by the Company of Feroze Gandhi Unchahar Thermal Power Station (2x210MW) from Uttar Pradesh Rajya Vidyut Utpadan Nigam of Uttar Pradesh.  Pursuant to legislation by the Parliament of India, the transmission systems owned by The Company was transferred to Power Grid Corporation of India Limited. 1993  For the first time, IBRD extended direct loan of USD 400 million under time slice concept for its projects 1994  Crossed 15000 MW of installed capacity.  Declared a dividend of Rs. 65 crore for the first time.  Jhanor-Gandhar (Gujarat) becomes the first thermal power station to have commissioned an integrated Liquid Waste Treatment Plant (LWTP) 1997  Identified by the GoI as one of the Navratna public sector undertakings.  Achieved 100 billion units generation in one year.  A consortium of foreign banks led by Sumitomo Bank, Hong Kong extended foreign currency loan of 5 billion Japanese Yen for the first time without GOI guarantee. 1998  Commissioned the first Naphtha based plant at Kayamkulam with a capacity of 350MW. 1999  Dadri thermal power project, Uttar Pradesh adjudged the best in India with a PLF of 96.12%.  Dadri, Uttar Pradesh certified with ISO-14001 on October 7, 1999. 2000  Commeced construction of a first hydro-electric power project of 800MW capacity in Himachal Pradesh.

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2002  Three wholly owned subsidiaries of NTPC viz. NTPC Electric Supply Company Limited. NTPC Hydro Limited and NTPC Vidyut Vyapar Nigam Limited incorporated.  Crossed the 20000 MW installed capacity mark. 2003  Raised funds through bonds (Series XIIIth & XIVth) for prepayment of high cost GOI loans. 2004  Awarded contract for the first Super Critical Thermal Power Plant at Sipat.  NTPC’s Feroze Gandhi Unchahar Thermal station achieved a record PLF of 87.43% in 2004 up from 18.02% in February 92 when it was taken over by NTPC.  LIC extended credit facility for Rs.70 billion. Rs.40 billion is in the form of unsecured loans and Rs.30 billion in the form of bonds.  NTPC made its debut issue of euro bonds amounting to USD 200 million in the international market.  First coal mining block allotted.  Listing of our Equity Shares on the Stock Exchanges 2005  NTPC received the International Project Management Award 2005 for its Simhadri project at the International Project management Association World Congress. NTPC became the only Asian Company to receive this award.  NTPC ranked as the Third Great Place to work for in India for second time in succession by a survey conducted by Grow Talent and Business World 2005. 2006  On 01.06.2006, Badarpur Thermal Power Station having an installed capacity of 705 MW was transferred by Government of India to NTPC.  Another 740 MW was added through its Joint Venture, Ratnagiri Gas and Power Private Limited, Dabhol thus taking installed capacity of the NTPC group to 27904 MW. 2007  Ministry of Coal, Government of India granted in-principle approval for allocation of a new coal block, namely, Chhati Bariatu South to NTPC subject to the conditions stipulated in the approval letter. 2008  NTPC allocated 0.5% of distributable profits annually for its R & D fund for sustainable Energy for development of green & clean technologies.  Strategic forays into manufacturing by forming Joint Venture Companies with BHEL and Bharat Forge.  Joint Venture Company under the name “ National Power Exchange Limited” incorporated on 11th December 2008 . 2009  A Joint Venture Company of NTPC Limited has been incorporated on May 22, 2009 under the name “National High Power Test Laboratory Private Limited” (NHPTLPL) in association with NHPC Limited (NHPC), Power Grid Corporation of India Limited (Power Grid) and Damodar Valley Corporation (DVC). NTPC, NHPC, Power Grid and DVC shall equally contribute in the equity share capital of the Company. The Company has been incorporated for setting up an On-line High Power Test Laboratory for short- circuit test facility in the Country.  Long term Fuel Supply Agreement was signed between Coal India Ltd. (CIL) and NTPC Ltd. for supply of coal to NTPC Power Stations for a period of 20 years on 29th May, 2009.  NTPC has acquired 44.6% of presently paid-up capital of TELK (Transformers and Electricals Kerala Limited) on 19.06.2009 from Government of Kerala. TELK is engaged in manufacturing and repair of heavy duty transformers.  A Joint Venture Company "Energy Efficiency Srevices Limited" was formed on 10th December 2009 amongst NTPC Limited, Power Finance Corporation Limited, Power Grid Corporation of India Limited and Rural Electrification Corporation Limited to promote the business of Energy Efficiency, Energy Conservation and Climate Change. 2010  On 19th May 2010, Government of India, Deptt. of Public Enterprises, Ministry of Heavy Industries & Public Enterprises conveyed grant of Maharatna status to NTPC . Consequent upon grant of Maharatna status, the Board of Directors of NTPC shall be, inter-alia, empowered to make equity investment to establish financial joint ventures and wholly-owned subsidiaries and undertake mergers & acquisitions, in India or abroad, subject to a ceiling of 15% of the net worth, limited to Rs.5000 crore in one project as against earlier limit of Rs.1000 crore.  NTPC prepared its Long Term Corporate Plan to set the goals and targets for the period up to 2032. NTPC has set for itself a target to have an installed power generating capacity of 1,28,000 MW by the year 2032.  Ministry of Power has allowed 15% of power to be sold outside long term PPA (Power Purchase Agreement) in respect of each of Unit No.7 of 500MW Korba Super Thermal Power Project and unit No.6 of 500 MW of Farakka Super Thermal Power Project. 2011  A Joint Venture Company between NTPC Limited (NTPC) and Nuclear Power Corporation of India

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Limited (NPCIL) has been incorporated on January 27, 2011 under the name “Anushakti Vidhyut Nigam Limited” (Company). for the purpose of development of nuclear power projects in the country within the framework of Atomic Energy Act, 1962.  Pipavav Power Development Company Limited , a subsidiary of NTPC has been dissolved.  First Super Critical Unit (660 MW) of Sipat Super Thermal Power Station, Sipat-I (3x660MW) commissioned on 28.06.2011.  A Joint Venture Company between NTPC Limited (NTPC) and Ceylon Electricty Board, Srilanka (CEB) has been incorporated on September 26, 2011 under the name “Trincomalee Power Company Limited” (Company). The Joint Venture Company has been formed to set upa 2x 250 MW Coal based Power Project in Trincomalee region in Srilanka.  A Joint Venture Company under the name 'Pan-Asian Renewables Private Limited' has been incorporated on 14.10.2011 amongst NTPC Limited (NTPC). Asian Development Bank (ADB) and Kyuden International Corporation, a wholly owned subsidiary of Kyushu Electric Power Company Inc. (Kyushu). The Company has been incorporated to develop renewable energy projects and intially establish over a period of three years a portfolio of about 500 MW of Renewable Power Generation resources in India. 2012  NTPC has signed a Joint Venture Agreement with Bangladesh Power Development Board (BPDP) on 29.01.2012 with the objective of setting up and implementing 1320 MW coal based power plant(s) in Bangladesh to cater to the growing power requirements of Bangladesh. This project will be developed through a 50:50 Joint Venture Company between NTPC Limited and BPDP incorporated in Dhaka on October 31, 2012 under the name “Bangladesh India Friendship Power Company (Pvt.) Limited on Build, Own and Operate basis. 2013  GoI disinvests 9.5% of paid-up capital in NTPC through Offer for Sale through Stock Exchange Mechanism, bringing down the total shareholding of GoI in NTPC to 75%.  NTPC has commissioned first solar power projects of 5 MW each at Andaman & Nicobar Islands and Dadri.  Farakka Super Thermal Power Station in West Bengal had started the movement of imported coal by barges through inland waterway  Public Issue of Tax Free Bonds in pursuance of CBDT notification dated 08.08.2013 of Rs 1750 crore was made in December 2013.  Merger of NTPC Hydro Limited (NHL) with NTPC Limited . The Scheme of Amalgamation became effective from 18.12.2013 and NTPC Hydro Limited stand dissolved accordingly. The scheme shall become binding on all Shareholders and Creditors of the Company w.e.f. appointed dated i.e. 01.04.2013 2014  Central Electricity Regulatory Commission (CERC) in exercise of powers conferred under section 178 of the Electricity Act, 2003 has issued CERC (Terms and conditions of tariff) Regulations, 2014 which came into force w.e.f 01.04.2014 and shall remain in force for a period of 5 years from the date of commencement.  Disinvestment by GOI of 0.04% of NTPC’s paid up through employee offer for sale reducing the GOI stake to 74.96%. 2015  Issued bonus debentures of Rs 12.50 each amounting to Rs 10306.83 crore to shareholders in March 2015 in the ratio of 1:1  Commissioned 1st hydro electric power project of 800 MW at Koldam , Himachal Pradesh 2016  GoI disinvested 5% of paid-up capital in NTPC through Offer for Sale through Stock Exchange Mechanism, bringing down the total shareholding of GoI in NTPC to 69.96%.  Disinvestment by GOI of 0.22% of NTPC’s paid up capital through employee offer for sale reducing the GOI stake to 69.74%.

Capital structure as on last quarter end (as on 31.03.2016) Particulars Amount (Rs.in crore) 1. SHARE CAPITAL a. Authorised Equity Share Capital 10,000,000,000 Equity Shares of Rs. 10/-each 10,000.00 b. Issued Equity Share Capital 8,245,464,400 Equity Shares of Rs. 10/- each 8,245.46 c. Subscribed & Paid-up Equity Share Capital

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Private Placement Offer Letter Private & Confidential-not for circulation

8,245,464,400 Equity Shares of Rs. 10/- each 8,245.46 2. SHARE/SECURITIES PREMIUM ACCOUNT 2,228.46

Notes : Since the present offer comprises of issue of non-convertible debt securities as par, it shall not affect the paid-up equity share capital and securities premium of the Company after the offer.

Changes in its capital structure for last five years upto the last quarter end Since last five years there has been no change in capital structure of the company.

In Rs Crore 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11 Authorized 10000.00 10000.00 10000.00 10000.00 10000.00 10000.00 Share Capital Issued , 8245.46 8245.46 8245.46 8245.46 8245.46 8245.46 Subscribed & Paid Up

Date of No of Face Issue Consideration Nature of Cumulative Remarks Allotment Equity Value Price (Cash other than Allotment shares (Rs) (Rs) cash, etc) No of Equity Equity equity share shares shares Capital Premium (Rs) (in Rs) 2016-17 There has been no fresh issue of share capital and hence no allotment of equity shares in the Financial Year 2016-17 till date. However, the President of India acting through Ministry of Power divested its stake by 0.22% in the Company through Employee Offer for Sale of 1,75,82,590 equity shares and the shareholding of GOI was reduced from 69.96% to 69.74% w.e.f. 15.07.2016. Now, President of India holds 69.74% of equity share capital of the Company i.e. 575,07,59,170 number of shares. Balance equity is held by FIIs, Mutual Funds, Indian Public etc. 2015-16 There was no fresh issue of share capital and hence no allotment of equity shares in the Financial Year 2015-16. However, the President of India acting through Ministry of Power divested its stake by 5% in the Company through Offer for Sale (OFS) through Stock Exchange Mechanism of 41,22,73,220 equity shares and the shareholding of GOI was reduced from 74.96% to 69.96% w.e.f. 25.02.2016. Now, President of India holds 69.96% of equity share capital of the Company i.e. 576,83,41,760 number of shares. Balance equity is held by FIIs, Mutual Funds , Indian Public etc. 2014-15 There was no fresh issue of share capital and hence no allotment of equity shares in the Financial Year 2014-15. However, the President of India acting through Ministry of Power divested its stake by 0.04% in the Company through Employee Offer for Sale of 34,83,320 equity shares and the shareholding of GOI was reduced from 75% to 74.96% w.e.f. 05.06.2014. Now, President of India holds 74.96% of equity share capital of the Company i.e. 6,18,06,14,980 number of shares. Balance equity is held by FIIs, Mutual Funds, Indian Public etc. 2013-14 (There was no fresh issue of share capital and hence no allotment made in FY 2013-14) 2012-13 There was no fresh issue of share capital and hence no allotment of equity shares in the Financial Year 2012-13. However, the President of India acting through Ministry of Power divested its stake by 9.5% in the Company through Offer for Sale (OFS) through Stock Exchange Mechanism of 78,32,62,880 equity shares and the shareholding of GOI was reduced from 84.5% to 75% w.e.f. 07.02.2013. Now, President of India holds 75% of equity share capital of the Company i.e. 6,18,40,98,300 number of shares. Balance equity is held by FIIs, Mutual Funds , Indian Public etc. 2011-12 (There was no fresh issue of share capital and hence no allotment made in FY 11-12)

2010-11

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(There was no fresh issue of share capital and hence no allotment made in FY 10-11) 2009-10 There was no fresh issue of share capital and hence no allotment of equity shares in the Financial Year 2009-10. However, the President of India acting through Ministry of Power divested its stake by 5% in the Company through Further Public offer of 412,273,220 equity shares and the shareholding of GOI was reduced from 89.5% to 84.5% w.e.f. 18.02.2010. These shares were issued during Feb 2010 for cash at prices determined through Alternate Book Building Method of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Guidelines, 2009 under Fast Track Route. Post FPO, GOI holds 6,967,361,180 equity shares of face value of Rs.10 each in NTPC and public holds balance 1278103220 equity shares.

Equity shares Capital History of the Company Year of No. of Equity Face Issue Consideration in Nature of allotment Cumulative Equity Allotment Shares Value price Cash/ Share Capital (Rs.) (Rs.) other than cash (Rs.) 1977 2 1,000 1,000 Cash Subscription to Equity 2,000 Shares on signing of the Memorandum of Association 2 1,000 1,000 Cash Release of Equity by 4,000 GoI for issue of share in favour of nominees of President of India 258,597 1,000 1,000 Cash Further issue* 258,601,000 1978 550,000 1,000 1,000 Cash Further issue* 808,601,000 1979 1,280,100 1,000 1,000 Cash Further issue* 2,088,701,000 1980 2,462,800 1,000 1,000 Cash Further issue* 4,551,501,000 1981 2,520,500 1,000 1,000 Cash Further issue* 7,072,001,000 1982 4,048,130 1,000 1,000 Cash Further issue* 11,120,131,000 1983 2,829,831 1,000 1,000 Cash Further issue* 13,949,962,000 1984 5,080,100 1,000 1,000 Cash Further issue* 19,030,062,000 1985 6,212,276 1,000 1,000 Cash Further issue* 25,242,338,000 1986 3 1,000 1,000 Cash Release of Equity by 25,242,341,000 GoI for issue of share in favour of nominees of President of India. 5,678,196 1,000 1,000 Cash Further issue* 30,920,537,000 1987 5,564,765 1,000 1,000 Cash Further issue* 36,485,302,000 1988 6,866,650 1,000 1,000 Cash Further issue* 43,351,952,000 1989 3,686,550 1,000 1,000 Cash Further issue* 47,038,502,000 1990 10,198,600 1,000 1,000 Cash Further issue* 57,237,102,000 1991 10,310,692 1,000 1,000 Cash Further issue* 67,547,794,000 1992 7,352,000 1,000 1,000 Cash Further issue* 74,899,794,000 1993 5,098,600 1,000 1,000 Cash Further issue* 79,998,394,000 1996 (13,862,600) 1,000 - - Reduction of Equity 66,135,794,000 Shares upon transfer of assets pertaining to transmission systems to Powergrid Corporation of India Limited as per MoP order dated March

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Private Placement Offer Letter Private & Confidential-not for circulation

Year of No. of Equity Face Issue Consideration in Nature of allotment Cumulative Equity Allotment Shares Value price Cash/ Share Capital (Rs.) (Rs.) other than cash (Rs.) 31, 1994 7,213,900 1,000 1,000 Cash Further issue* 73,349,694,000 1997 688,100 1,000 1,000 Cash Further issue* 74,037,794,000 1998 1,587,700 1,000 1,000 Cash Further issue* 75,625,494,000 1999 2,500,000 1,000 1,000 Cash Further issue* 78,125,494,000 Each Equity Share of the Company of face value Rs. 1,000 has been split into 100 Equity Shares of the face value of Rs. 10 each, pursuant to a shareholders’ resolution dated September 23, 2002. October 27, 432,915,000 10 62 Cash Allotment pursuant to 82,454,644,000 2004 the IPO of our Company Total 8,245,464,400 82,454,644,000 * Allotment of Equity Shares to the President of India acting though the MoP against funds released by the GoI.

Our Company has not made any issue of Equity Shares during the preceding one year from the date of this Private Placement Offer Letter.

Details of an Acquisition or Amalgamation in the last 1 year Our Company has not undertaken any acquisition or amalgamation in the last one year.

Details of any Reorganization or Reconstruction in the last 1 year There has been no reorganisation or reconstruction in the last 1 year.

Statement showing Shareholding Pattern (as on 31.03.2016) Category Category of No of Total No. of Shareholding as Number of Shares Number of equity Shareholder Share- Shares Held a % of total no. pledged or otherwise shares held in holders of shares encumbered dematerialized form

No. As a % of total Shares held

Promoter & Promoter (A) 1 5768341760 69.96 0 0.00 5768341760 Group (B) Public 682946 2477122640 30.04 NA NA 2477015847 Non Promoter-Non (C) Public

(C1) Shares underlying DRs 0 0 NA NA NA 0

Shares held by (C2) 0 0 0.00 NA NA 0 Employes Trusts Total: 682947 8245464400 100.00 8245357607

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Note: 1. No Equity Shares held by our Promoter are pledged or otherwise encumbered. 2. Our Company (standalone) has not issued any Equity Shares or debt securities for consideration other than cash, whether in whole or part. Further, we have issued Bonus Debentures out of free reserves , however keeping in view the structure of the transaction , wherein money was first paid as deemed dividend to escrow account and then received back the same is not considered as being issued for consideration other than cash.

Top 10 Equity Shareholders (as on 31.03.2016) SNO HOLDER TOTAL SHARES % TO EQUITY 1 PRESIDENT OF INDIA 5768341760 69.9578% 2 LIFE INSURANCE CORPORATION OF INDIA 1070530189 12.9833% 3 ICICI PRUDENTIAL MUTUAL FUND 83548388 1.0133% 4 T. ROWE PRICE INTERNATIONAL STOCK FUND 56692172 0.6876% 5 PLATINUM INTERNATIONAL FUND 43142033 0.5232% 6 GOVERNMENT OF SINGAPORE 36823897 0.4466% 7 ABU DHABI INVESTMENT AUTHORITY - GULAB 31479719 0.3818% 8 VANGUARD EMERGING MARKETS STOCK INDEX FUND ASERIE 30633010 0.3715% 9 BIRLA SUN LIFE TRUSTEE COMPANY PRIVATE LIMITED A/C 30128976 0.3654% 10 PLATINUM ASIA FUND 28571415 0.3465% *The investments by above entities through their sub-schemes with same PAN have been clubbed

Details regarding the Statutory Auditors of the Company Name Address Auditor since* M/s T R Chadha & Co LLP Chartered Accountants, FY 2015-16 B-30, Connaught Place, Kuthiala Building, New Delhi-110 001 M/s P S D Associates Chartered Accountants FY 2014-15 H-197 Arjun Nagar, S J Enclave New Delhi-110 029 M/s. Sagar & Associates Chartered Accountants, FY 2015-16 H.No. 6-3-244/5, Saradadevi Street, Premnagar, Khairatabad, Hyderabad – 500 004 M/s. Kalani & Co. Chartered Accountants, FY 2015-16 703, VII Floor, Milestone Building, Gandhi Nagar Crossing, Tonk Road, Jaipur - 302 015 M/s. P A & Associates Chartered Accountants, FY 2015-16 20, Govind Vihar, Bamikhal, Bhubaneshwar - 751 010 M/s. S K Kapoor & Co. Chartered Accountants, FY 2015-16 16/98, LIC Building, The Mall, Kanpur - 208 001 - 54 -

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M/s. B M Chatrath & Co. Chartered Accountants, FY 2015-16 Centre Point, 4th Floor, Room No. 440, 21, Hemanta Basu Sarani, Kolkata - 700 001 *Note: The appointment of auditors is being done by C&AG on year to year basis.

Details of change in Statutory Auditors since last three years For the Financial Name Address years Date of Change Remarks M/s. O.P.Bagla & Co. Chartered Accountants, FY 2012-13 Appointed by CAG vide The 8/12, Kalkaji Extension, FY 2013-14 letters dated July 25, 2012; appointment New Delhi-110 019 FY 2014-15 July 30, 2013 and July 30, of auditors is 2014 being done by M/s. K.K.Soni & Co. Chartered Accountants FY 2012-13 Appointed by CAG vide C&AG on year 130, Sarojini Market, FY 2013-14 letters dated July 25, 2012 to year basis. New Delhi-110 023 and July 30, 2013.

M/s. P S D & Associates Chartered Accountants FY 2014-15 Appointed by CAG vide H-197 Arjun Nagar, S J FY 2015-16 letters dated July 30, 2014; Enclave June 30, 2015. New Delhi-110 029 M/s. PKF Sridhar & Chartered Accountants, FY 2012-13 Appointed by CAG vide Santhanam 105, Ist Floor, FY 2013-14 letters dated July 25, 2012; Door no. 6-3-639/640 FY 2014-15 July 30, 2013 and July 30, Golden Edifice, Khaitrabad 2014. Circle Hyderabad – 500 004 M/s. V.Sankar Aiyar & Chartered Accountants, FY 2012-13 Appointed by CAG vide Co. 2-C Court Chambers, FY 2013-14 letters dated July 25, 2012; 35, New Marine Lines, FY 2014-15 July 30, 2013 and July 30, Mumbai-400 020 2014. M/s. Ramesh C Agrawal Chartered Accountants, FY 2012-13 Appointed by CAG vide & Co. S-203 Prayagkunj, FY 2013-14 letters dated July 25, 2012; 3 Strachey Road, FY 2014-15 July 30, 2013 and July 30, Civil Lines 2014. Allahabad-211 001 M/s. A.R. & Co., Chartered Accountants, FY 2012-13 Apointed by CAG vide C-I, II Floor, RDC FY 2013-14 letters dated July 25, 2012; RajNagar FY 2014-15 July 30, 2013 and July 30, Ghaziabad-201 001 2014 M/s T R Chadha & Co Chartered Accountants, FY 2015-16 Appointed by CAG vide LLP B-30, Connaught Place, letter dated June 30, 2015. Kuthiala Building, New Delhi-110 001

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Private Placement Offer Letter Private & Confidential-not for circulation

For the Financial Name Address years Date of Change Remarks M/s. Sagar & Associates Chartered Accountants, FY 2015-16 Appointed by CAG vide H.No. 6-3-244/5, letter dated June 30, 2015. Saradadevi Street, Premnagar, Khairatabad, Hyderabad – 500 004 M/s. Kalani & Co. Chartered Accountants, FY 2015-16 Appointed by CAG vide 703, VII Floor, Milestone letter dated June 30, 2015. Building, Gandhi Nagar Crossing, Tonk Road, Jaipur - 302 015 M/s. P A & Associates Chartered Accountants, FY 2015-16 Appointed by CAG vide 20, Govind Vihar, letter dated June 30, 2015. Bamikhal, Bhubaneshwar - 751 010 M/s. S K Kapoor & Co. Chartered Accountants, FY 2015-16 Appointed by CAG vide 16/98, LIC Building, letter dated June 30, 2015. The Mall, Kanpur - 208 001 M/s. B M Chatrath & Chartered Accountants, FY 2015-16 Appointed by CAG vide Co. Centre Point, 4th Floor, letter dated June 30, 2015. Room No. 440, 21, Hemanta Basu Sarani, Kolkata - 700 001

VIII. FINANCIAL INDEBTEDENESS - DETAILS OF OTHER BORROWINGS (DETAILS OF SECURED & UNSECURED LOAN FACILITIES, NON CONVERTIBLE DEBENTURES (NCDs), PARTICULARS OF DEBT SECURITIES ISSUED FOR CONSIDERATION OTHER THAN CASH OR AT A PREMIUM OR DISCOUNT OR IN PURSUANCE OF AN OPTION, TOP TEN DEBENTURE HOLDERS ,DETAILS OF CORPORATE GUARANTEES, DEFAULTS etc.)

Set forth below is a summary of our outstanding standalone borrowings as at 31.03.2016: S. No. Category of Borrowing Outstanding Amount (in Rs. crore) 1. Secured bonds 25,472.83 2. Unsecured domestic loans 37,889.27 3. Unsecured foreign currency loans 14,974.60 4. Unsecured foreign currency bonds 13,380.00

5. Unsecured financial lease obligation 93.06 Total 91,809.76

Details of Foreign Currency un-secured loans As on 31.03.2016 Lender Name Type of Interest Amount Loan Repayment Date/ Schedule Facility rate(% per Sanctioned outstanding as Annum)as (in million) on 31st March on , 2016 21.03.2016 (Rs. in crore) Japan Bank for Loan 2.30 Fixed JPY 19,370.00 620.71 39 half-yearly instalments International commencing February 20,

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Private Placement Offer Letter Private & Confidential-not for circulation

Co-operation 2007 (“JICA”) JICA Loan 1.80 Fixed JPY 12,190.00 533.02 39 half-yearly instalments commencing March 20, 2011 JICA Loan 1.80 Fixed JPY 27,290 .00 1,113.75 35 half-yearly instalments commencing February 20, 2012 JICA Loan 1.80 Fixed JPY 1,250.00 38.30 26 half-yearly instalments commencing March 20, 2013 Korea Exim Loan 4.31 Fixed US$ 354.25 824.04 22 half-yearly instalments Bank, BNP commencing August 14, Paribas and 2008 HSBC Bank Asian Tranche 1.487 Floating US$ 75.00 167.28 9 half-yearly instalments Development A commencing August 14, Bank 2013 KfW Loan 1.8750 6M US$ 100.00 95.57 14 half-yearly instalments LIBOR+0.625% commencing September 15, 2010 Sumitomo Loan 1.281 6M US$ 380.00 1,815.83 28 half-yearly instalments Mitsui Banking LIBOR+0.675% commencing May 20, 2012 Corporation, (SMBC). Nordic Loan 0.596 6M € 68.56 231.38 18 half-yearly instalments Investment EURIBOR+0.650% commencing July 20, 2011 Bank The Bank of Loan 1.9465 Floating US$ 300.00 2,007.00 4 half-yearly instalments Tokyo- commencing June 15, 2016 Mitsubishi UFJ Mizuho Loan 1.5555 Floating US$ 100.00 669.00 4 half-yearly instalments Corporate Bank commencing September 15, 2017 KfW Loan 3.50 Fixed € 72.50 458.76 24 half-yearly instalments commencing September 30, 2014 State Bank of Loan 2.0050 Floating US$ 250.00 1,672.50 2 half-yearly instalments India, New York commencing July 29, 2019 and Mizuho Corporate Bank KfW- Mouda-II Loan 2.44 Fixed € 52.00 348.84 24 half-yearly instalments (ECA) commencing June 30, 2017 KfW-ESP Loan 3.19 Fixed € 95.00 508.73 16 half-yearly instalments commencing September 15, 2017 KfW-Mouda- Loan 3.24 Fixed € 55.00 265.75 16 half-yearly instalments II(ESP &other) commencing March 15, 2018 JBIC & SMBC Loan 4.13 60% Fixed , 40% US$ 350.00 1,494.24 24 half-yearly instalments &1.17136 Floating commencing February 17, 2017 JBIC & SMBC Loan 1.88 Fixed ¥ 8021.62 437.40 24 half-yearly instalments commencing May 23, 2017 Mizuho -II Loan 2.1097 Floating US$ 250.00 1,672.50 4 half-yearly instalments commencing March 26, 2020

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Private Placement Offer Letter Private & Confidential-not for circulation

Total - - 14,974.60

Foreign Currency bonds facilities (Unsecured)

Debenture Tenor/ Period of Coupon Amount Deemed Date Redemption Date/ Credit Rating Series Maturity (%) Outstanding (Rs. of Allotment Schedule in crore) EURO BOND 10 years from 5.625 3,345.00 July 14, 2011 Bullet repayment on S&P BBB- 2021* deemed date of July 14, 2021 (Stable allotment Outlook) Fitch BBB- (Stable Outlook) EURO BOND 10 years from 4.75 3,345.00 October 3, Bullet repayment on S&P BBB- 2022* deemed date of 2012 October 3, 2022 (Stable allotment Outlook) Fitch BBB- (Stable Outlook) EURO BOND 10 years from 4.375 3,345.00 November 26, Bullet repayment on S&P BBB- 2024* deemed date of 2014 November 26 , 2024 (Stable allotment Outlook) Fitch BBB- (Stable Outlook) EURO BOND 10 years from 4.25 3,345.00 February 26, Bullet repayment on S&P BBB- 2026* deemed date of 2016 February 26 , 2026 (Stable allotment Outlook) Fitch BBB- (Stable Outlook) Total 13,380.00 *The noteholders may demand early redemption if the GoI at any time ceases to own, directly or indirectly, more than 50.00% of the voting securities of our Company.

Domestic Loans as on 31.03.2016 ( In Rs Crore) Amt Principal Sanction Type of Amount Lender's Name Loan ed as per Repayment Date/ Schedule facility outstandin Agreeme g S. No nt Term 14 equal half-yearly installments 1 II Loan 400 - commencing March 23, 2009 Term 14 equal half-yearly installments 2 Allahabad Bank III Loan 500 192.86 commencing March 28, 2014 Term 9 annual installments commencing 3 Allahabad Bank IV Loan 500 200.00 Decmber 31,2021 Term 14 equal half-yearly installments 4 I Loan 150 64.29 commencing August 13, 2012 Term 10 equal annual installments 5 Andhra Bank II Loan 300 300.00 commencing March 28,2019 Term 14 equal half-yearly installments 6 Axis Bank Ltd I Loan 250 142.86 commencing September 30, 2013 7 Bank of India II Term 2000 10 equal annual installments - 58 -

Private Placement Offer Letter Private & Confidential-not for circulation

Loan 1,500.00 commencing June 28, 2019 Term 9 annual installments commencing 8 I Loan 2000 200.00 Decmber 15,2021 Term 14 equal half-yearly installments 9 III Loan 300 150.00 commencing March 22, 2013 Term 20 equal half-yearly installments 10 Bank of Maharashtra IV Loan 100 80.00 commencing September 23, 2014 Term 16 equal half-yearly installments 11 Bank of Maharashtra V Loan 400 400.00 commencing September 29, 2016 Term 14 equal half-yearly installments 12 II Loan 2750 55.00 commencing December 31, 2012 Term 20 equal half-yearly installments 13 Canara Bank III Loan 1000 400.00 commencing September 28, 2018 Term 14 equal half-yearly installments 14 II Loan 275 - commencing March 30, 2010 Term 14 equal half-yearly installments 15 Central Bank of India III Loan 550 196.43 commencing December 23, 2011 Term 14 equal half-yearly installments 16 Central Bank of India IV Loan 500 5.00 commencing December 31, 2012 Term 10 equal annual installments 17 Central Bank of India V Loan 490 50.00 commencing June 28, 2019 Term 14 equal half-yearly installments 18 Citi Bank N.A. II Loan 100 - commencing Jun 27, 2009 Term 20 equal half-yearly installments 19 II Loan 200 - commencing Jan 5,2009 Term 14 equal half-yearly installments 20 Corporation Bank III Loan 500 335.00 commencing Mar 28,2018 Term 14 equal half-yearly installments 21 I Loan 200 71.43 commencing February 16, 2012 Term 20 equal half-yearly installments 22 Dena Bank II Loan 500 410.00 commencing December 1,2017 Term 10 equal annual installments 23 Dena Bank III Loan 500 100.00 commencing July 21,2020 Term 14 equal half-yearly installments 24 HDFC Bank Limited II Loan 1000 392.86 commencing April 26, 2014 Term 9 annual installments commencing 25 HDFC Bank Limited III Loan 2000 500.00 Decmber 4,2021 Term 22 equal half-yearly installments 26 HUDCO Ltd I Loan 2000 286.30 commencing May 31, 2014 Term 9 annual installments commencing 27 ICICI Bank IV Loan 2000 100.00 February 16, 2023 Term 14 equal half-yearly installments 28 IDBI Limited III Loan 1000 5.71 commencing September 30, 2013 Term 40 equal quarterly installments 29 IDFC Ltd I Loan 200 105.00 commencing August 26, 2011 Term 40 equal quarterly installments 30 IDFC Ltd II Loan 300 187.50 commencing September 30, 2012 Term 10 equal annual installments 31 IDFC Ltd III Loan 2000 1,980.00 commencing April 15,2020 Term 14 equal half-yearly installments 32 II Loan 300 82.50 commencing December 31, 2012 Term 16 equal half-yearly installments 33 Indian Bank III Loan 500 500.00 commencing December 1, 2016 Term 14 equal half-yearly installments 34 II Loan 100 - commencing September 29, 2009 Term 16 equal half-yearly installments 35 Indian Overseas Bank III Loan 2000 881.25 commencing March 19, 2016 - 59 -

Private Placement Offer Letter Private & Confidential-not for circulation

Term 9 annual installments commencing 36 Indian Overseas Bank IV Loan 1900 200.00 Decmber 11,2021 Jammu & Kashmir Term 10 equal annual installments 37 Bank III Loan 600 350.00 commencing December 18, 2018 Term 14 equal half-yearly installments 38 Ltd I Loan 100 0.36 commencing March 29, 2010 Life Insurance Term 20 equal half-yearly installments 39 Corporation of India III Loan 4000 774.95 commencing December 31, 2007 Life Insurance Term 14 equal half-yearly installments 40 Corporation of India IV Loan 1000 428.57 commencing August 4, 2012 Life Insurance Term 14 equal half-yearly installments 41 Corporation of India V Loan 1000 428.00 commencing September 17, 2012 Oriental Bank of Term 14 equal half-yearly installments 42 Commerce I Loan 500 142.86 commencing June 15, 2011 Oriental Bank of Term 14 equal half-yearly installments 43 Commerce II Loan 500 5.71 commencing September 30, 2013 Oriental Bank of Term 9 annual installments commencing 44 Commerce III Loan 1000 100.00 Decmber 11,2021 Power Finance Term 48 equal quarterly installments 45 Corporation Ltd V Loan 10000 7,708.33 commencing July 15, 2013 Term 14 equal half-yearly installments 46 Punjab & Sind Bank I Loan 500 250.00 commencing March 22, 2013 Term 14 equal half-yearly installments 47 Punjab & Sind Bank II Loan 300 200.00 commencing March 28, 2019 Term 14 equal half-yearly installments 48 II Loan 1000 17.86 commencing March 27, 2010 Term 14 equal half-yearly installments 49 II Loan 100 - commencing January 31, 2013 State Bank of Term 14 equal half-yearly installments 50 Hyderabad, II Loan 500 5.71 commencing September 30, 2013 State Bank of Term 10 equal annual installments 51 Hyderabad, III Loan 500 400.00 commencing January 31, 2020 State Bank of Bikaner Term 10 equal annual installments 52 & Jaipur II Loan 500 300.00 commencing Mar 14, 2020 Term 14 equal half-yearly installments 53 IV Loan 1500 - commencing August 28, 2009 Term 14 equal half-yearly installments 54 State Bank of India V Loan 1500 428.57 commencing September 30, 2011 Term 14 equal half-yearly installments 55 State Bank of India VI Loan 8500 675.00 commencing September 30, 2012 Term 16 equal half-yearly installments 56 State Bank of India VII Loan 10000 5,775.00 commencing September 30, 2015 Term 9 annual installments commencing 57 State Bank of India VIIII Loan 10000 5,650.00 January31,2022 Term 10 equal annual installments 58 II Loan 500 150.00 commencing Jun 20, 2020 Term 14 equal half-yearly installments 59 II Loan 500 94.29 commencing September 30, 2013 Term 16 equal half-yearly installments 60 Syndicate Bank III Loan 1000 780.00 commencing December 1,2016 Term 9 annual installments commencing 61 Syndicate Bank IV Loan 1000 200.00 Decmber 05,2021 Tamilnad Mercantile Term 14 equal half-yearly installments 62 Bank Ltd. I Loan 100 21.43 commencing March 27, 2011 The Term 14 equal half-yearly installments 63 Ltd II Loan 75 - commencing September 29, 2009 64 The Karur Vysya Bank III Term 100 14 equal half-yearly installments - 60 -

Private Placement Offer Letter Private & Confidential-not for circulation

Ltd Loan 57.14 commencing September 30, 2013 Term 16 equal half-yearly installments 65 UCO Bank Ltd II Loan 500 500.00 commencing September 29, 2016 Term 20 equal half-yearly installments 66 II Loan 2000 1,060.00 commencing February 1, 2017 Term 14 equal half-yearly installments 67 II Loan 400 114.29 commencing September 28, 2011 Term 14 equal half-yearly installments 68 United Bank of India III Loan 225 96.43 commencing September 23, 2012 Term 16 equal half-yearly installments 69 United Bank of India IV Loan 250 250.00 commencing September 29, 2016 Term 14 equal half-yearly installments 70 II Loan 300 42.86 commencing August 26, 2010 Term 14 equal half-yearly installments 71 Vijaya Bank III Loan 225 64.29 commencing September 28, 2011 Term 14 equal half-yearly installments 72 Vijaya Bank IV Loan 379 243.65 commencing March 15, 2014 Term 14 equal half-yearly installments 73 Vijaya Bank V Loan 350 300.00 commencing September 29, 2015 Term 10 equal annual installments 74 Vijaya Bank VI Loan 285 200.00 commencing March 14, 2020

TOTAL 37,889.27

Details of Domestic NCDs As on 31.03.2016 (Rs. in crore) Debenture Tenor/ Period Coupon Amount Deemed Redemption Date/ Credit Security* Series of Maturity (%) Outstanding Date of Schedule Rating (in Rs. crore) Allotment XIIIA(1) 15 years from 9.55 150.00 April 18, Redeemable at par in CRISIL AAA First pari passu deemed date 2002 10 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA movable and commencing April 18, (Stable) immovable assets of 2008 our Company XIIIB(1) 15 years from 9.55 150.00 April 30, Redeemable at par in CRISIL AAA First pari passu deemed date 2002 10 equal instalments CARE AAA charge on specific of allotment commencing April 30, [ICRA] AAA movable and 2008 (Stable) immovable assets of our Company XVI 15 years from 8.00 100.00 April 10, Redeemable at par on CRISIL AAA First pari passu deemed date 2003 April 10, 2018 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XVII 20 years from 8.48 50.00 May 1, 2003 Redeemable at par on CRISIL AAA First pari passu deemed date May 1, 2023 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XIX 15 years from 7.50 50.00 January 12, Redeemable at par on CRISIL AAA First pari passu deemed date 2004 January 12, 2019 CARE AAA charge on specific of allotment [ICRA] AAA movable and (Stable) immovable assets of our Company XX 14 years from 7.552 150.00 March 23, Redeemable at par in CRISIL AAA First pari passu deemed date 2005 20 equal half-yearly CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing (Stable) our Company September 23, 2009 until March 23, 2019 XXI 14 years from 7.7125 400.00 February 2, Redeemable at par in CRISIL AAA First pari passu

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Private Placement Offer Letter Private & Confidential-not for circulation

Debenture Tenor/ Period Coupon Amount Deemed Redemption Date/ Credit Security* Series of Maturity (%) Outstanding Date of Schedule Rating (in Rs. crore) Allotment deemed date 2006 20 equal half-yearly CARE AAA charge on specific of allotment instalments [ICRA] AAA movable and commencing August 2, (Stable) immovable assets of 2010 until February 2, our Company 2020 XXII 14 years from 8.1771 250.00 January 2, Redeemable at par in CRISIL AAA First pari passu deemed date 2007 20 equal half-yearly CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing July 2, (Stable) our Company 2011 until January 2, 2021 XXIII 14 years from 8.3796 250.00 February 5, Redeemable at par in CRISIL AAA First pari passu deemed date 2007 20 equal half- yearly CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing August 5, (Stable) our Company 2011 until February 5, 2021 XXIV 14 years from 8.6077 250.00 March 9, Redeemable at par in CRISIL AAA First pari passu deemed date 2007 20 equal half- yearly CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing (Stable) our Company September 9, 2011 until March 9, 2021 XXV 10 years and 9.37 214.00 December Redeemable at par in CRISIL AAA First pari passu 343 days from 28, 2007 14 half-yearly CARE AAA charge on specific deemed date installments [ICRA] AAA immovable assets of of allotment commencing from June (Stable) our Company 4, 2012 and ending on December 4, 2018. XXVI 10 years and 9.06 214.00 January 31, Redeemable at par in CRISIL AAA First pari passu 309 days 2008 14 equal half- yearly CARE AAA charge on specific years from installments [ICRA] AAA immovable assets of deemed date commencing June 4, (Stable) our Company of allotment 2012 until December 4, 2018 XXVII 15 years from 11.25 350.00 November Redeemable at par in 5 CRISIL AAA First pari passu deemed date 6, 2008 equal annual CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing November (Stable) our Company 6, 2019 until November 6, 2023 XXVIII(2) 10 years from 11.00 1,000.00 November Redeemable at par on CRISIL AAA First pari passu deemed date 21, 2008 November 21, 2018 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXIX(2) 10 years from 8.65 550.00 February 4, Redeemable at par on CRISIL AAA First pari passu deemed date 2009 February 4, 2019 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXX(2) 10 years from 7.89 700.00 May 5, 2009 Redeemable at par on CRISIL AAA First pari passu deemed date May 5, 2019 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXXI(3) 10 years from 8.78 500.00 March 9, Redeemable at par on CRISIL AAA First pari passu deemed date 2010 March 9, 2020 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXXII(2) 20 years from 8.8493 98.00 March 25, Redeemable at par 15 CRISIL AAA First pari passu deemed date 2010 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing March 25, (Stable) our Company 2016 until March 25, - 62 -

Private Placement Offer Letter Private & Confidential-not for circulation

Debenture Tenor/ Period Coupon Amount Deemed Redemption Date/ Credit Security* Series of Maturity (%) Outstanding Date of Schedule Rating (in Rs. crore) Allotment 2030 XXXIII(3) 10 years from 8.73 195.00 March 31, Redeemable at par on CRISIL AAA First pari passu deemed date 2010 March 31, 2020 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXXIV(2) 20 years from 8.71 150.00 June 10, Redeemable at par in CRISIL AAA First pari passu deemed date 2010 15 equal annual CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing June 10, (Stable) our Company 2016 until June 10, AAA 2030 XXXV(2) 20 years from 8.785 120.00 September Redeemable at par in CRISIL AAA First pari passu deemed date 15, 2010 15 equal annual CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing (Stable) our Company September 15, 2016 until September 15, 2030 XXXVI(2) 20 years from 8.8086 75.00 December Redeemable at par in CRISIL AAA First pari passu deemed date 15, 2010 15 equal annual CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing December (Stable) our Company 15, 2016 until December 15, 2030 XXXVII(3) 10 years from 8.93 300.00 January 19, Redeemable at par on CRISIL AAA First pari passu deemed date 2011 January 19, 2021 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XXXVIII(2) 20 years from 9.17 75.00 March 22, Redeemable at par in CRISIL AAA First pari passu deemed date 2011 15 equal annual CARE AAA charge on specific of allotment installments [ICRA] AAA immovable assets of commencing March 22, (Stable) our Company 2017 until March 22, 2031 XXXIX(2) 20 years from 9.3896 105.00 June 9, Redeemable at par in CRISIL AAA First pari passu deemed date 2011 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing June 9, (Stable) our Company 2017 until June 9, 2031 XL(2) 20 years from 9.558 75.00 July 29, Redeemable at par in CRISIL AAA First pari passu deemed date 2011 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing July 29, (Stable) our Company 2017 until July 29, 2031 XLI(2) 20 years from 9.6713 75.00 December Redeemable at par in CRISIL AAA First pari passu deemed date 23, 2011 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing December (Stable) our Company 23, 2017 until December 23, 2031 XLII(2) 15 years from 9.00 500.00 January 25, Redeemable at par in 5 CRISIL AAA First pari passu deemed date 2012 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing January (Stable) our Company 25, 2023 until January 25, 2027 XLIII(2) 20 years from 9.2573 75.00 March 2, Redeemable at par in CRISIL AAA First pari passu deemed date 2012 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing March 2, (Stable) our Company 2018 until March 2, 2032 - 63 -

Private Placement Offer Letter Private & Confidential-not for circulation

Debenture Tenor/ Period Coupon Amount Deemed Redemption Date/ Credit Security* Series of Maturity (%) Outstanding Date of Schedule Rating (in Rs. crore) Allotment XLIV(2) 15 years from 9.25 500.00 May 4, 2012 Redeemable at par in 5 CRISIL AAA First pari passu deemed date equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing May 4, (Stable) our Company 2023 until May 4, 2027 XLV(2) 20 years from 9.4376 75.00 May 16, Redeemable at par in CRISIL AAA First pari passu deemed date 2012 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing May 16, (Stable) our Company 2018 until May 16, 2032 XLVI(2) 20 years from 9.3473 75.00 July 20, Redeemable at par in CRISIL AAA First pari passu deemed date 2012 15 equal annual CARE AAA charge on specific of allotment instalments [ICRA] AAA immovable assets of commencing July 20, (Stable) our Company 2018 until July 20, 2032 XLVII(2) 10 years from 8.84 390.00 October 4, Redeemable at par on CRISIL AAA First pari passu deemed date 2012 October 4, 2022 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XLVIII(2) 10 years from 8.73 300.00 March 7, Redeemable at par on CRISIL AAA First pari passu deemed date 2013 March 7, 2023 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company XLIX(2) 10 years from 8.80 200.00 April 4, Redeemable at par on CRISIL AAA First pari passu deemed date 2013 April 4, 2023 CARE AAA charge on specific of allotment [ICRA] AAA immovable assets of (Stable) our Company L – 10/15/20 December Redeemable at par on CRISIL AAA First pari passu 1A/2A/3A(1) Years from 8.41 488.03 16, 2013 December 16, [ICRA] AAA charge on specific the deemed 2023/2028/2033 (Stable) immovable assets of date of 8.48 249.95 our Company L – allotment 1B/2B/3B(1) 8.66 312.03

8.66 208.64

8.73 91.39

8.91 399.97 LI – A/B/C (1) 10/15/20 8.19 75 March 4 , Redeemable at par on CRISIL AAA First pari passu Years from 2014 March 04,2024 [ICRA] AAA charge on specific the deemed 8.63 105 /2029/2034 (Stable) immovable assets of date of our Company allotment 8.61 320 LII(1) 10 Years from 9.34 750 March 24, Redeemable at par on CRISIL AAA First pari passu the deemed 2014 March 24, 2024 [ICRA] AAA charge on specific date of (Stable) immovable assets of allotment our Company 53(2) 10 Years from 9.17 1000 September Redeemable at par on CRISIL AAA First pari passu the deemed 22, 2014 September 22, 2024 [ICRA] AAA charge on specific date of (Stable) immovable assets of allotment CARE AAA our Company 54(1) 8/9/10 years 8.49 10,306.83 March Redeemable at par on CRISIL AAA First charge on from deemed 25,2015 March 25, 2023/24/25 [ICRA] AAA specific immovable date of in the ratio 20:40:40 (Stable) assets of our allotment CARE AAA Company 55(1) 10 years from 7.15 300 August Redeemable at par on CRISIL AAA First pari passu deemed date 21,2015 August 21,2025 [ICRA] AAA charge on specific of allotment (Stable) immovable assets of CARE AAA our Company 56(1) 10/15/20 7.11% 700 October 5, Redeemable at par on CRISIL AAA First pari passu - 64 -

Private Placement Offer Letter Private & Confidential-not for circulation

Debenture Tenor/ Period Coupon Amount Deemed Redemption Date/ Credit Security* Series of Maturity (%) Outstanding Date of Schedule Rating (in Rs. crore) Allotment Years from 7.28% 2015 October 5, [ICRA] AAA charge on specific the deemed 7.37% 2025,2030,2035 (Stable) immovable assets of date of 7.36% CARE AAA our Company allotment 7.53% 7.62% 57(1) 10 years from 8.19% 500 December Redeemable at par on CRISIL AAA First pari passu deemed date 15,2015 December 15,2025 [ICRA] AAA charge on specific of allotment (Stable) immovable assets of CARE AAA our Company 58(1) 5 years from 8.18% 300 December Redeemable at par on CRISIL AAA First pari passu deemed date 31,2015 December 31,2020 [ICRA] AAA charge on specific of allotment (Stable) immovable assets of CARE AAA our Company 59(1) 5 years from 8.33% 655 February Redeemable at par on CRISIL AAA First pari passu deemed date 24, 2016 February 24,2021 [ICRA] AAA charge on specific of allotment (Stable) immovable assets of CARE AAA our Company Total 25,472.83 * Bonds are secured under various trust deeds. The bonds are secured by a first pari passu charge through registered/equitable mortgage (mortgage by deposit of title deeds) of immovable property and/or hypothecation of all present and future movable assets (excluding receivables) of our Company’s various power stations/projects/offices. (1)These bonds are listed on NSE and BSE. (2)These bonds are listed on the debt market of NSE. (3) These bonds are listed on the debt market of BSE. Note: Further on 05.05.2016 & 27.05.2016, Series 60 & 61 Bonds amounting to Rs. 1000 crore & Rs.1072.50 crore were issued respectively. Charge for Series 60 & 61 Bonds has been created.

Details of Rest of the Borrowing (as on 31.03.2016) Party Name Type of Facility Amount Outstanding Repayment Schedule Security and Credit (Rs Crore) Rating Unsecured financial Lease 93.06 Not Applicable Not Applicable lease obligation Total 93.06

Details of default in statutory dues or debt servicing, amount and duration of default

On standalone basis there are no defaults in payment of statutory dues and repayment of borrowings as on 31.03.2016.

Top 10 holders of domestic bonds (as on 31.03.2016)

Sl No. Name of Debenture Holders Amount Rs Crore 1 CBT EPF 11450.36 2 LIC OF INDIA 3035.25 3 ARMY GROUP INSURANCE FUND 1028.00 4 NPS TRUST- A/C SBI PENSION FUND SCHEME - STATE GOVT 538.96 5 NATIONAL THERMAL POWER CORPORATION LIMITED EMPLOYEES PROVIDENT FUND TRUST 500.00

6 HDFC STANDARD LIFE INSURANCE COMPANY LIMITED 451.00

7 NPS TRUST A/C - KOTAK MAHINDRA PENSION FUND LIMITE 369.17 8 HDFC TRUSTEE COMPANY LTD A/C HDFC MEDIUM TERM OPPORTUNITIES FUND 320.00

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Private Placement Offer Letter Private & Confidential-not for circulation

Sl No. Name of Debenture Holders Amount Rs Crore 9 TATA AIA LIFE INSURANCE CO LIMITED-LIFE FUND 260.00 10 SBI LIFE INSURANCE CO.LTD 240.20 *The investments by above entities through their sub-schemes with same PAN have been clubbed

Particulars of debt securities issued (i) for consideration other than cash, whether in whole or part, (ii) at a premium or discount, or (iii) in pursuance of an option

The Company confirms that out of the debt securities outstanding as on 31.03.2016 mentioned elsewhere in the document, it has not issued any debt securities or agreed to issue debt securities for consideration other than cash, whether in whole or in part, in pursuance of an option or at a premium or discount except the following:

Series Nature of Mode Coupon Date of Amount (In ` Issued at Issued at Security Issue Crore) Premium (In Discount (In `) `) Series LI A Bonds Private 8.19% 04.03.2014 75.00 75,000 Nil (Tax Free) Placement Series LI B Bonds Private 8.63% 04.03.2014 105.00 2,75,000 Nil (Tax Free) Placement Series LI C Bonds Private 8.61% 04.03.2014 320.00 1,92,0000 Nil (Tax Free) Placement Total 500.00 22,70,000 Nil Series 55 Bonds Private 7.15% 21.08.2015 300.00 12,80,000 Nil (Tax Free) Placement

Further, we have also issued Bonus Debentures out of free reserves , however keeping in view the structure of the transaction , wherein money was first paid as deemed dividend to escrow account and then received back the same is not considered as being issued for consideration other than cash.

Amount of corporate guarantees issued by the issuer in favor of various counter parties including its subsidiaries, joint venture entities, group companies etc.

The Company has not given any corporate guarantee to its subsidiaries, joint venture companies or its associates. However, NTPC has given 2 sponsor’s undertaking to Meja Urja Nigam Private Limited amounting to Rs. 972.71 crore and Rs. 7574.77 crore

Bank Guarantee of 0.50% of total contract price to be undertaken by NTPC-BHEL Power Projects Private Limited to cumulative amount to Rs 75 crore.

Commercial Paper Issued by the Issuer (standalone) Our Company does not have any outstanding Commercial Paper as on March 31, 2016.

Other borrowings (standalone) (including hybrid debt like foreign currency convertible bonds (“FCCBs”), optionally convertible bonds/ debentures/ preference shares)

The Issuer has not issued any hybrid debt like Foreign Currency Convertible Bonds (“FCCBs”), Optionally Convertible Bonds / Debentures/ Preference Shares etc.

As at the date of this Offer Letter, there has been no default in payment of principal or interest on any existing secured or unsecured term loan or debt security including any corporate guarantees issued by our Company (standalone) in the past 5 years.

Promoter Holding in the Company (as on 31.03.2016)

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Private Placement Offer Letter Private & Confidential-not for circulation

% of Equity Total No of Shares shareholding Equity pledged Sr. Name of Number of shares held in as a Total number of shares Shares with No shareholder de materialized form percentage of Pledged respect to total number shares of shares owned

The President of 1 India, acting 5768341760 5768341760 69.96 Nil Nil through the MoP * GOI has done further disinvestment in NTPC of 0.22% through Employee OFS during July-2016. After this round of disinvestment of NTPC, the Government of India’s stake has reduced from 69.96%. to 69.74% i.e. 575,07,59,170 shares out of total 824,54,64,400 shares.

IX. DISLCOSURES WITH REGARD TO INTEREST OF DIRECTORS, LITIGATION ETC.

Financial or other material interest of the directors, promoters or key managerial personnel in the offer and the effect of such interest in so far as it is different from the interests of other persons.

NIL

Details of any litigation or legal action pending or taken by any Ministry or Department of the Government or a statutory authority against any promoter of the offeree company during the last three years immediately preceding the year of the circulation of the offer letter and any direction issued by such Ministry or Department or statutory authority upon conclusion of such litigation or legal action

Since the Government of India is the Promoter of the Company, it is not possible to give details of litigations, legal actions or directions pending or taken by any Ministry or Department of the Government or a statutory authority against the Promoter of the Company during the last three years.

Remuneration of Directors (during the current year and last three financial years)

Current Year 2015-16

Details of remuneration of Functional Directors for the financial year 2015-16 are given below:- (in Rs.) Name of the Director Salary Benefits Performance Total Linked Incentives Sh. Arup Roy Choudhury 4570446 310748 2216565 7097759 (upto 31.08.2015) Sh. I J Kapoor 3608235 471863 1218433 5298531 (upto 20.08.2015) Sh.Gurdeep Singh 439514 92434 0 531948 Sh. A K JHA 2698905 1237791 1152304 5089000 SH. U P Pani 2645682 885002 1129623 4660307 Sh.S C PANDEY 3669234 472323 720963 4862520 Sh. K. Biswal 2538994 572058 1087144 4198196 SH K K SHARMA 2625703 1268346 821805 4715854 Total 22796713 5218131 8346837 36454115

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Private Placement Offer Letter Private & Confidential-not for circulation

Details of payments towards sitting fee to Independent Directors during the financial year 2015-16 are given below: (in Rs.) Name of Part-time non-official Sitting Fees Total Directors (Excluding Service Tax) Board Meeting Committee Meeting Dr.A Didar Singh (upto 22.08.2015) 120,000.00 200,000.00 320,000.00 Sh.Prashant Mehta 240,000.00 560,000.00 800,000.00 Dr.Gauri Trivedi (w.e.f. 18.11.2015) 60,000.00 80,000.00 140,000.00 Sh.Rajesh Jain (w.e.f. 18.11.2015) 100,000.00 80,000.00 180,000.00

Financial Year 2014-15 Details of remuneration of Functional Directors for the financial year 2014-15 are given below:- (in Rs.) Name of the Director Salary Benefits Performance Linked Total Incentives* Dr. Arup Roy Choudhury 22,55,932.00 11,13,757.00 16,74,383.00 50,44,072.00 Shri I.J. Kapoor 22,12,759.00 22,23,818.00 11,95,022.00 56,31,599.00 Shri N.N. Misra (upto 33,33,776.00 19,55,110.00 10,99,103.00 63,87,989.00 31.10.2014) Shri A.K. Jha 20,26,467.00 16,43,580.00 11,31,652.00 48,01,699.00 Shri U.P. Pani 21,56,475.00 10,27,850.00 11,14,523.00 42,98,848.00 Shri S.C. Pandey 19,44,410.00 9,97,378.00 7,77,772.00 37,19,560.00 Shri K. Biswal 19,06,391.00 12,24,270.00 3,89,785.00 35,20,446.00 Shri K.K. Sharma (w.e.f. 8,46,329.00 6,48,566.00 69,147.00 15,64,042.00 01.11.2014) *Performance linked incentives paid is based on the incentive scheme of the Company. The Company has not issued any stock options during the financial year 2014-15.

Details of payments towards sitting fee to Independent Directors during the financial year 2014-15 are given below:

(in Rs.) Name of Part-time non-official Directors Sitting Fees Total (Excluding Service Tax) Board Meeting Committee Meeting Shri S.B. Ghosh Dastidar (upto 25.08.2014) 1,00,000 2,00,000 3,00,000 Shri R.S. Sahoo (upto 25.08.2014) 1,00,000 2,60,000 3,60,000 Shri Ajit M. Nimbalkar (upto 19.01.2015) 1,80,000 1,40,000 3,20,000 Shri S.R. Upadhyay (upto 19.01.2015) 1,80,000 2,20,000 4,00,000 Ms. H.A. Daruwalla (upto 27.02.2015) 2,20,000 6,40,000 8,60,000 Shri A.N. Chatterji (upto 27.02.2015) 2,20,000 3,80,000 6,00,000 Prof. Sushil Khanna (upto 27.02.2015) 2,00,000 4,20,000 6,20,000 Dr. A. Didar Singh 1,80,000 1,80,000 3,60,000 Shri Prashant Mehta 2,40,000 1,60,000 4,00,000

FY 2013-14 Details of remuneration of functional Directors of the Company paid for the financial year 2013-14 are given below:

(in Rs.) Name of the Director Salary Benefits Performance Linked Total Incentives* Dr. Arup Roy Choudhury 20,54,391.22 10,86,720.00 20,28,075.78 51,69,187.00 Shri A.K. Singhal (upto 27,15,485.79 21,73,216.00 14,74,074.21 63,62,776.00 08.10.2013) Shri I.J. Kapoor 28,52,982.54 16,42,099.00 14,55,328.46 59,50,410.00 - 68 -

Private Placement Offer Letter Private & Confidential-not for circulation

Shri B.P. Singh (upto 30.09.2013) 25,36,229.54 20,06,062.00 13,07,165.46 58,49,457.00 Shri N.N. Misra 23,66,037.91 14,49,161.00 13,94,486.09 52,09,685.00 Shri A.K. Jha 29,18,998.17 16,35,089.00 10,30,931.83 55,85,019.00 Shri U.P. Pani 19,08,492.16 10,67,202.00 7,25,631.84 37,01,326.00 Shri S.C. Pandey (w.e.f. 9,29,471.72 6,14,713.00 5,76,443.28 21,20,628.00 01.10.2013) Shri K. Biswal (w.e.f. 09.12.2013) 5,31,846.00 4,41,655.00 - 9,73,501.00 *Performance linked incentives paid is based on the incentive scheme of the Company. The Company has not issued any stock options during the financial year 2013-14.

Details of payments towards sitting fee to Independent Directors during the financial year 2013-14 are given below: (in Rs.) Name of Part-time non-official Sitting Fees Total Directors Board Meeting Committee Meeting

Shri S.B. Ghosh Dastidar 2,00,000 4,60,000 6,60,000 Shri R.S. Sahoo 1,80,000 4,40,000 6,20,000 Shri Ajit M. Nimbalkar 2,00,000 1,00,000 3,00,000 Shri S.R. Upadhyay 2,00,000 1,20,000 3,20,000 Ms. H.A. Daruwalla 2,20,000 5,20,000 7,40,000 Shri A.N. Chatterji 2,00,000 2,40,000 4,40,000 Prof. Sushil Khanna 2,20,000 2,80,000 5,00,000 Dr. A. Didar Singh 1,80,000 20,000 2,00,000 Shri Prashant Mehta 1,60,000 60,000 2,20,000 (w.e.f. 30.07.2013)

FY 2012-13

Details of remuneration of functional Directors of the Company paid for the financial year 2012-13 are given below:- (in Rs.) Name of the Director Salary Benefits Performance Linked Total Incentives* Shri Arup Roy Choudhury 30,03,600.64 7,60,047.00 16,24,011.36 53,87,659.00 Shri A.K. Singhal 28,05,034.81 15,18,750.00 11,75,716.19 54,99,501.00 Shri I.J. Kapoor 20,05,611.91 13,98,048.00 10,98,961.09 45,02,621.00 Shri B.P. Singh 26,27,407.43 14,68,150.00 11,49,773.57 52,45,331.00 Shri D.K. Jain (upto 22,82,615.37 4,73,970.00 10,00,126.63 37,56,712.00 30.06.2012) Shri S.P. Singh (upto 23,59,386.62 8,15,997.00 11,04,827.38 42,80,211.00 28.02.2013) Shri N.N. Misra 20,93,312.70 12,21,822.00 11,12,821.30 44,27,956.00 Shri A.K. Jha (w.e.f. 12,00,720.16 9,92,881.00 3,70,930.84 25,64,532.00 01.07.2012) Shri U.P. Pani (w.e.f. 1,38,200.20 82,679.00 4,853.80 2,25,733.00 01.03.2013) *Performance linked incentives paid is based on the incentive scheme of the Company. The Company has not issued any stock options during the financial year 2012-13.

Details of payments towards sitting fee to Independent Directors during the financial year 2012-13 are given below: (in Rs.) Name of Part-time non-official Directors Sitting Fees Total

Board Meeting Committee Meeting Dr. M. Govinda Rao (upto 03.02.2013) 1,55,000 1,50,000 3,05,000 Shri S.B. Ghosh Dastidar 1,75,000 2,95,000 4,70,000

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Private Placement Offer Letter Private & Confidential-not for circulation

Shri R.S. Sahoo 1,90,000 1,35,000 3,25,000 Shri Ajit M. Nimbalkar 1,50,000 - 1,50,000 Shri S.R. Upadhyay 2,15,000 1,15,000 3,30,000 Ms. H.A. Daruwalla 2,30,000 2,80,000 5,10,000 Shri A.N. Chatterji 1,75,000 1,45,000 3,20,000 Prof. Sushil Khanna 1,05,000 90,000 1,95,000 Dr. A. Didar Singh (w.e.f. 23.08.2012) 1,30,000 - 1,30,000

Related party transactions during last three financial years including with regard to loans made , guarantees given or securities provided.

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' – 2015-16 a) Related parties: i) Joint ventures: Utility Powertech Ltd., NTPC -Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh-India Friendship Power Company Private Ltd.

ii) Key Managerial Personnel (KMP): Shri Gurdeep Singh Chairman and Managing Director1 Shri Arup Roy Choudhury Chairman and Managing Director2 Shri I.J. Kapoor Director (Commercial)3 Shri A.K.Jha Director (Technical)4 Shri U.P.Pani Director (Human Resources)5 Shri S.C.Pandey Director (Projects) Shri K.Biswal Director (Finance) Shri K.K.Sharma Director (Operations)

Shri A.K.Rastogi Company Secretary

1. W.e.f. 4th February 2016 2. Upto 31st August 2015 3. Upto 20th August 2015

4. Acted as Chairman and Managing Director for the period from 1st September 2015 to 3rd February 2016

5. Holding additional charge of Director (Commercial) w.e.f 2nd September 2015

iii) Others: NTPC Education and Research Society b) Transactions with the related parties at sl. a i) & iii) above are as follows: Rs.Crore Particulars Current year Previous year i) Transactions during the year · Contracts for works/services for services received by the Company: - Utility Powertech Ltd. 601.70 522.02 - 70 -

Private Placement Offer Letter Private & Confidential-not for circulation

- NTPC-Alstom Power Services Private Ltd. 56.27 30.82 - NTPC Education and Research Society 4.28 - · Contracts for works/services for services provided by the Company: - Utility Powertech Ltd. 0.01 0.02 - Trincomalee Power Company Ltd. 4.25 1.16 · Deputation of Employees: - Utility Powertech Ltd. 0.32 0.39 - NTPC-Alstom Power Services Private Ltd. 0.95 0.77 - Trincomalee Power Company Ltd. 1.69 1.77 - Pan-Asian Renewables Private Ltd. - 0.35 - Bangladesh-India Friendship Power Company Private Ltd. 4.67 3.10 ii) Dividend received: - Utility Powertech Ltd. 7.00 7.00 - NTPC-Alstom Power Services Private Ltd. 0.60 0.47 iii) Amount recoverable for contracts for works/services received: - Utility Powertech Ltd. - 0.19 - NTPC-Alstom Power Services Private Ltd. 5.11 17.96 - NTPC Education and Research Society 0.60 - iv) Amount payable for contracts for works/services received: - Utility Powertech Ltd. 96.16 81.27 - NTPC-Alstom Power Services Private Ltd. 13.97 8.18

v) Amount recoverable for contracts for works/services provided: - Utility Powertech Ltd. - 0.01 - BF-NTPC Energy Systems Ltd. 0.12 0.12 - Trincomalee Power Company Ltd. 3.19 1.62

vi) Amount payable for contracts for works/services provided: - Trincomalee Power Company Ltd. 0.74 0.92 vii) Amount recoverable on account of deputation of employees: - Utility Powertech Ltd. 0.32 0.10 - NTPC-Alstom Power Services Private Ltd. 0.44 0.53 - Trincomalee Power Company Ltd. 3.53 1.90 - Pan-Asian Renewables Private Ltd. - 0.04 - Bangladesh-India Friendship Power Company Private Ltd. 8.98 4.44 viii) Equity contributions made: - Trincomalee Power Company Ltd. 5.94 2.54 - Bangladesh-India Friendship Power Company Private Ltd. 38.25 25.31

The Company has received bank guarantees from Utility Powertech Ltd. for an amount of Rs. 17.82 crore (previous year Rs.7.67 crore).

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Private Placement Offer Letter Private & Confidential-not for circulation c) Details of remuneration to the KMP are as under: Rs. Crore Managerial remuneration to Key management personnel Current year Previous year Shri Gurdeep Singh 0.05 - Shri A.K.Jha 0.51 0.48 Shri U.P.Pani 0.47 0.43 Shri S.C.Pandey 0.49 0.37 Shri K.Biswal 0.42 0.35 Shri K.K.Sharma 0.47 0.16 Shri Arup Roy Choudhury 0.71 0.50 Shri I.J. Kapoor 0.53 0.56 Shri N.N.Misra - 0.64 Shri A.K. Rastogi 0.47 0.44 Total 4.12 3.93 Amount of dues outstanding to the Company as at 31st March 2016 are Rs.0.10 crore (previous year Rs.0.01 crore).

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' – 2014-15 a) Related parties: i) Joint ventures: Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh-India Friendship Power Company Private Ltd. ii) Key Management Personnel: Shri Arup Roy Choudhury Chairman and Managing Director Shri I.J. Kapoor Director (Commercial) Shri A.K.Jha Director (Technical)

Shri U.P.Pani Director (Human Resources)

Shri S.C.Pandey Director (Projects)

Shri K.Biswal Director (Finance) Shri K.K.Sharma Director (Operations)1

Shri N.N.Misra Director (Operations)2 1. W.e.f. 1st November 2014 2. Superannuated on 31st October 2014 b) Transactions with the related parties at a (i) above are as follows: Rs. Crore Particulars Current year Previous year i) Transactions during the year · Contracts for works/services for services received by the Company: - Utility Powertech Ltd. 522.02 439.74 - NTPC-Alstom Power Services Private Ltd. 30.82 0.94

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Private Placement Offer Letter Private & Confidential-not for circulation

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' – 2014-15

- National Power Exchange Ltd. - 0.36 · Contracts for works/services for services provided by the Company: - Utility Powertech Ltd. 0.02 - - Trincomalee Power Company Ltd. 1.16 0.20 · Deputation of Employees: - Utility Powertech Ltd. 0.39 0.25 - NTPC-Alstom Power Services Private Ltd. 0.77 0.85 - Trincomalee Power Company Ltd. 1.77 0.96 - Pan-Asian Renewables Private Ltd. 0.35 0.33 - Bangladesh-India Friendship Power Company Private Ltd. 3.10 1.34 ii) Dividend received: - Utility Powertech Ltd. 7.00 5.50 - NTPC-Alstom Power Services Private Ltd. 0.47 0.30 iii) Amount recoverable for contracts for works/services received: - Utility Powertech Ltd. 0.19 0.17 - NTPC-Alstom Power Services Private Ltd. 17.96 0.04 - National Power Exchange Ltd. - 0.14 iv) Amount payable for contracts for works/services received: - Utility Powertech Ltd. 81.27 69.49 - NTPC-Alstom Power Services Private Ltd. 8.18 6.52 v) Amount recoverable for contracts for works/services provided: - Utility Powertech Ltd. 0.01 - - BF-NTPC Energy Systems Ltd. 0.12 0.12 - Trincomalee Power Company Ltd. 1.62 0.55 vi) Amount payable for contracts for works/services provided: - Trincomalee Power Company Ltd. 0.92 - vii) Amount recoverable on account of deputation of employees: - Utility Powertech Ltd. 0.10 0.10 - NTPC-Alstom Power Services Private Ltd. 0.53 0.66 - Trincomalee Power Company Ltd. 1.90 1.12 - Pan-Asian Renewables Private Ltd. 0.04 - - Bangladesh-India Friendship Power Company Private Ltd. 4.44 1.34 viii) Equity contributions made: - Pan-Asian Renewables Private Ltd. - 1.00 - Trincomalee Power Company Ltd. 2.54 - - Bangladesh -India Friendship Power Company Private Ltd. 25.31 6.12 The Company has received bank guarantees from Utility Powertech Ltd. for an amount of Rs. 7.67 crore (previous year Rs. 6.36 crore). c) Remuneration to key management personnel for the year is Rs. 3.49 crore (previous year Rs. 4.09 crore) and amount of dues outstanding to the Company as at 31st March 2015 are Nil (previous year Rs. 0.03 crore). Rs. Crore

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Private Placement Offer Letter Private & Confidential-not for circulation

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' – 2014-15 Managerial remuneration to Key management personnel Current year Previous year Shri Arup Roy Choudhury 0.50 0.52 Shri I.J. Kapoor 0.56 0.59 Shri A.K.Jha 0.48 0.56 Shri U.P.Pani 0.43 0.37 Shri S.C.Pandey 0.37 0.21 Shri K.Biswal 0.35 0.10 Shri K.K.Sharma 0.16 - Shri N.N.Misra 0.64 0.52 Shri.B.P.Singh - 0.58 Shri A.K. Singhal - 0.64 Total 3.49 4.09

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' - 2013-14 a) Related parties: i) Joint ventures: Utility Powertech Ltd., NTPC-Alstom Power Services Private Ltd., BF-NTPC Energy Systems Ltd., National Power Exchange Ltd., Pan-Asian Renewables Private Ltd., Trincomalee Power Company Ltd. and Bangladesh - India Friendship Power Company Private Ltd. ii) Key Management Personnel: Shri Arup Roy Choudhury Chairman and Managing Director Shri I.J. Kapoor Director (Commercial) Shri N.N.Misra Director (Operations) Shri A.K.Jha Director (Technical) Shri U.P.Pani Director (Human Resources) Shri S.C.Pandey Director (Projects)1 Shri K.Biswal Director (Finance)2 Shri A.K. Singhal Director (Finance)3 Shri B.P.Singh Director (Projects)4 1. W.e.f. 1st October 2013 2. W.e.f. 9th December 2013 3. Up to 8th October 2013 4. Superannuated on 30th September 2013 b) Transactions with the related parties at a (i) above are as follows: Rs. Crore Particulars Current year Previous year i) Transactions during the year Contracts for works/services for services received by the Company: - Utility Powertech Ltd. 439.74 393.14 - NTPC-Alstom Power Services Private Ltd. 0.94 6.19 - National Power Exchange Ltd. 0.36 0.84 Deputation of Employees: - Utility Powertech Ltd. 0.25 0.51 - NTPC-Alstom Power Services Private Ltd. 0.85 1.23 - Trincomalee Power Company Ltd. 0.96 0.82 - Pan-Asian Renewables Private Ltd. 0.33 -

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Private Placement Offer Letter Private & Confidential-not for circulation

Disclosure as per Accounting Standard - 18 on 'Related Party Disclosures' - 2013-14 - Bangladesh-India Friendship Power Company Private Ltd. 1.34 0.13 ii) Dividend Received: - Utility Powertech Ltd. 5.50 4.00 - NTPC-Alstom Power Services Private Ltd. 0.30 0.36 iii) Amount recoverable for contracts for works/services received: - Utility Powertech Ltd. 0.17 0.22 - NTPC-Alstom Power Services Private Ltd. 0.04 0.04 - National Power Exchange Ltd. 0.14 1.06 iv) Amount payable for contracts for works/services received: - Utility Powertech Ltd. 69.49 64.27 - NTPC-Alstom Power Services Private Ltd. 6.52 7.86 v) Amount recoverable on account of deputation of employees: - Utility Powertech Ltd. 0.10 0.66 - NTPC-Alstom Power Services Private Ltd. 0.66 1.32 - Trincomalee Power Company Ltd. 1.12 0.97 - Bangladesh-India Friendship Power Company Private Ltd. 1.34 0.13 vi) Equity contributions made: - Pan-Asian Renewables Private Ltd. 1.00 - - Bangladesh -India Friendship Power Company Private Ltd. 6.12 -

The Company has received bank guarantees from Utility Powertech Ltd. for an amount of Rs. 6.36 crore (previous year Rs. 6.35 crore). c) Remuneration to key management personnel for the year is Rs. 4.09 crore (previous year Rs. 3.59 crore) and amount of dues outstanding to the Company as at 31st March 2014 are Rs. 0.03 crore (previous year Rs. 0.07 crore). Rs. Crore Managerial remuneration to Key management personnel 31.03.2014 31.03.2013

Shri Arup Roy Choudhury 0.52 0.54 Shri I.J. Kapoor 0.59 0.45 Shri N.N.Misra 0.52 0.44 Shri A.K.Jha 0.56 0.26 Shri U.P.Pani 0.37 0.02 Shri S.C.Pandey 0.21 - Shri K.Biswal 0.10 - Shri.B.P.Singh 0.58 0.52 Shri A.K. Singhal 0.64 0.55 Shri D.K. Jain - 0.38 Shri S.P.Singh - 0.43 Total 4.09 3.59

Summary of reservations or qualifications or adverse remarks of auditors during last five financial years

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Private Placement Offer Letter Private & Confidential-not for circulation

No reservations or qualifications or adverse remarks of auditors during last five financial years. However, CAG comments for financial year 2014-15 are at Annexure III.

For more details on the related party transactions, reservations and qualifications refer our website www.ntpc.co.in , Investors Section

Details of any inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years till date in the case of company and all of its subsidiaries. Also if there were any prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter and if so, section-wise details thereof for the company and all of its subsidiaries.

There was no inquiry, inspections or investigations initiated or conducted under the Companies Act or any previous company law in the last three years till date in the case of company and all of its subsidiaries. Also, there was no prosecutions filed (whether pending or not) fines imposed, compounding of offences in the last three years immediately preceding the year of the offer letter.

Details of acts of material frauds committed against the company in the last three years

There is no material fraud committed against the company in last three years.

X. TERMS OF OFFER (DETAILS OF DEBT SECURITIES PROPOSED TO BE ISSUED, MODE OF ISSUANCE, ISSUE SIZE, UTILIZATION OF ISSUE PROCEEDS, STOCK EXCHANGE(S) WHERE SECURITIES ARE PROPOSED TO BE LISTED, REDEMPTION AMOUNT, PERIOD OF MATURITY, YIELD ON REDEMPTION, DISCOUNT AT WHICH OFFER IS MADE AND EFFECTIVE YIELD FOR INVESTOR)

PRIVATE PLACEMENT OF 7.58 % SECURED, NON-CUMULATIVE, NON-CONVERTIBLE, REDEEMABLE, TAXABLE BONDS (SERIES 62) IN THE NATURE OF DEBENTURES OF FACE VALUE OF RS. 10 LAKH EACH ISSUED AT PAR AMOUNITNG UPTO RS 500 CRORE WITH GREEN SHOE OF RS 300 CRORE AGGREGATING UPTO RS 800 CRORE (THE “ISSUE”).

Issue Size Private Placement by NTPC Limited of secured, non-cumulative, non-convertible, redeemable, taxable bonds (Series 62) of face value of Rs. 10,00,000 each, in the nature of debentures (Bonds) for an amount upto Rs 500 crore with green shoe of Rs.300 crore aggregating upto Rs.800 crore (“Issue Size”).

Eligibility to make the Issue Our Company and persons in control of our Company have not been restrained, prohibited or debarred by SEBI from accessing the securities market or dealing in securities and no such order or direction is in force.

Registration, Government Approvals and Resolutions

The Issue is being made under SEBI Debt Regulations and Companies (Prospectus and Allotment of Securities ) Rules , 2014 as amended from time to time .The Company can undertake the activities proposed by it in view of the present approvals and no further approval from any government authority(ies) is required by it to undertake the proposed activities save and except those approvals which may be required to be taken in the normal course of business from time to time.

The present issue is being made pursuant to the following:

i. Resolution of the Board of Directors of the Company passed in its 423rd meeting held on 30.07.2015 wherein the Chairman and Managing Director / Director (Finance) have been authorized to decide the final terms

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Private Placement Offer Letter Private & Confidential-not for circulation

and conditions of each tranche of the Bond including timing, structure, mode etc., execute documents and deeds as may be necessary in respect of the allotment of Bonds and all other details with regard to issuance of bonds.

ii. Special Resolution of the Shareholders of the Company passed under Section 42 and other applicable provisions of the Companies Act, 2013 read with Rule 14(2) of Companies (Prospectus and Allotment of Securities) Rules, 2014 in the 39th Annual General Meeting held on 18.09.2015, authorizing the Board of Directors to raise funds upto Rs 5,000 crore by offering Bonds/Debentures to eligible investors on Private Placement basis in one or more tranches.

iii. Shareholder’s resolution dated 05.09.2014 pursuant to section 180(1)(c) of Companies Act 2013 to borrow money for the purposes of the business of the Company which together with the moneys already borrowed (apart from the temporary loans obtained from the bankers of the Company in the ordinary course of business) at any time shall not exceed in the aggregate Rs. 1,50,000 crore. The aggregate amount of borrowings including the Bonds offered through this document is well within the limits of borrowings mentioned above. The Company can issue the bonds proposed by it in view of the present approvals and no further approvals in general from any Government Authority are required by it to undertake the proposed activity.

Objects of the Issue The funds raised through this issue will be utilized for, inter alia, funding of capital expenditure, refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred.

The main objects of the Memorandum of Association of our Company enable us to undertake the activities for which the funds are being raised in the Issue. Further, we confirm that the activities we have been carrying out until now are in accordance with the objects specified in our Memorandum of Association.

In accordance with SEBI Debt Regulations, our Company is not permitted to utilize the proceeds of the Issue for providing loans to or acquisitions of shares of any person who is a part of the same group as our Company or who is under the same management as our Company. Our Company is a public sector enterprise and, as such, we do not have any identifiable ‘group’ companies or ‘companies under the same management’. Further, the Issue proceeds shall be utilized in course of our normal business activities and shall not be utilized in contravention of the regulations/ guidelines/ norms issued by the RBI/ SEBI/ RoC/ Stock Exchange(s).

Utilisation of Issue Proceeds In terms of the SEBI Debt Regulations, there is no requirement for appointment of a monitoring agency in relation to the use of proceeds of the Issue. The Board/Sub-Committee of Board/Authorised officer shall monitor the utilisation of the proceeds of the Issue.

The Company is managed by professionals under the supervision of its Board of Directors. Further, the Company is subject to a number of regulatory checks and balances as stipulated in its regulatory environment. Therefore, the management shall ensure that the funds raised via this private placement shall be utilized only towards satisfactory fulfilment of the Objects of the Issue. The Company further confirms that the proceeds of the current issue of Bonds shall not be used for providing loan to or acquisition of shares of any person who is part of the same group or who is under the same management.

Minimum Subscription In terms of the SEBI Debt Regulations, the Issuer may decide the amount of minimum subscription which it seeks to raise by issue of Bonds and disclose the same in the offer document. The Issuer has decided not to stipulate any minimum subscription for the present Issue and therefore the Issuer shall not be liable to refund the issue subscription(s)/ proceed(s) in the event of the total issue collection falling short of issue size or certain percentage of issue size.

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Private Placement Offer Letter Private & Confidential-not for circulation

Underwriting The present Issue of Bonds is on private placement basis is not underwritten

Nature of Bonds The Bonds are to be issued in the form of Secured, Non-Cumulative, Non-Convertible, Redeemable, Taxable Bonds in the nature of Debentures (Series-62).The Bonds shall be issued under the Bond Trust Deed which will be executed in favour of the Debenture Trustee or by payment of stamp duty on Bonds itself.

Principle terms of Security The Bonds will be secured by a first/pari passu first charge on specified assets of the Company as may be mentioned in the Bond Trust Deed. The security will be created within the time stipulated as per the relevant statutory provisions.

The Company shall at all times maintain a minimum security cover of 1.0 times of the value of Bonds proposed to be issued including the interest accrued thereon. Necessary documents for the creation of the charge, where applicable, including the Trust Deed will be executed and the same would be forwarded to the Stock exchange(s) for uploading on their website within stipulated time. The creation of such security is sufficient compliance of the Company’s obligation to create security.

Face Value, Issue Price, Effective Yield for Investor

Each Bond has a face value of Rs. 10,00,000/- each and is issued at par .Since there is no premium or discount on either issue price or on redemption value of the Bonds, the effective yield for the investors shall be the same as the coupon rate on the respective bond series.

Terms of Payment The full face value of the Bonds applied for is to be paid alongwith the application form. Investor(s) need to send in the application form and the RTGS details to the Company as contained in the general instructions in the application form.

Face Value per Bond Amount Payable on Application per Bond Rs. 10,00,000/- Rs. 10,00,000/-

Deemed Date of Allotment Interest on Bonds shall accrue to the Bondholder(s) from and including Deemed Date of Allotment. All benefits relating to the Bonds will be available to the investor(s) from the Deemed Date of Allotment. The actual allotment of Bonds may take place on a date other than the Deemed Date of Allotment. The Company reserves the right to modify allotment date/ deemed date of allotment at its sole and absolute discretion without any notice. In case if the issue closing date is changed (pre-poned / postponed), the Deemed Date of Allotment may also be changed (pre-poned/ postponed) by the Company at its sole and absolute discretion.

Issue of Letter of Allotment(s)/Bond(s) The beneficiary account of the investor(s) with National Securities Depository Ltd. (NSDL)/ Central Depository Services (India) Ltd. (CDSL)/ Depository Participant will be given initial credit within 2 working days from the Deemed Date of Allotment. The initial credit in the account may be akin to the Letter of Allotment. On completion of the all statutory formalities, such credit in the account will be akin to Bonds.

The Bonds since issued in electronic (dematerialized) form, will be governed as per the provisions of The Depository Act, 1996, Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996, rules notified by NSDL/ CDSL/ Depository Participant from time to time and other applicable laws and rules

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Private Placement Offer Letter Private & Confidential-not for circulation

notified in respect thereof.

Registrar & Transfer Agent & Depository Arrangements The Company has appointed Beetal Financial & Computer Services Private Limited, Beetal House, 3rd Floor, 99, Madangir, New Delhi-110062 [Tel No. (011) 29961281 and 29961282, Fax No. 011-29961284, E-mail: [email protected] as Registrars & Transfer Agent for the present bond issue. The Company has made necessary depository arrangements with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) for issue and holding of Bonds in dematerialised form. In this context the Company has signed two tripartite agreements as under:

 Tripartite Agreement dated 18.06.2005 between NTPC Limited, BEETAL Financial & Computer Services Private Limited and National Securities Depository Ltd. (NSDL) for offering depository option to the investors.  Tripartite Agreement dated 03.05.2005 between NTPC Limited, BEETAL Financial & Computer Services Private Limited and Central Depository Services (I) Ltd. (CDSL) for offering depository option to the investors.

Investors can hold the bonds only in dematerialised form and deal with the same as per the provisions of Depositories Act, 1996 as amended from time to time

Market Lot The market lot will be one bond (“Market Lot”). Since the bonds are being issued only in dematerialised form, the odd lots will not arise either at the time of issuance or at the time of transfer of Bonds.

Trading of Bonds The marketable lot for the purpose of trading shall be one bond i.e. in denomination of Rs 10 lakh. Trading of bonds would be permitted in demat mode only and such trades shall be cleared and settled in recognised stock exchange(s) subject to conditions specified by SEBI. In case of trading in Bonds which has been made over the counter, the trades shall be executed and reported on a recognized stock exchange having a nation wide trading terminal or such other platform as may be specified by SEBI.

Mode of Transfer of Bonds Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant. The provisions of The Depositories Act,1996 read with the Companies Act shall apply for transfer and transmission of Bonds.

The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Issuer.

Transfer of Bonds to and from NRIs/ OCBs, in case they seek to hold the Bonds and are eligible to do so,will be governed by the then prevailing guidelines of RBI.

Fictitious Applications Attention of applicants is specifically drawn to the provisions of sub section (1) of section 38 of the Companies Act 2013, which is reproduced below: “Any person who-

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Private Placement Offer Letter Private & Confidential-not for circulation

(a) makes or abets making of an application in a fictitious name to a Company for acquiring, or subscribing for, its securities; or (b) makes or abets making of multiple applications to a Company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or (c) otherwise induces directly or indirectly a Company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name”

Determination of Coupon: The Coupon has been decided based on bids received on EBP of NSE.

Basis of Allocation / Allotment: As approved by Competent Authority of the Company.

Interest on Application Money Interest at the respective Coupon Rates (subject to deduction of income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) will be paid to the investor(s) on face value of Bonds for the period starting from and including the date of realization of application money in Issuer’s Bank Account upto one day prior to the Deemed Date of Allotment. Such interest would be paid on all the valid allotted applications. To clarify, in case the deemed date of allotment and date of receipt of application money is same no interest on application money will be payable.

The interest cheque(s)/ demand draft(s) for interest on application money (along with Refund Orders, in case of refund of application money, if any) shall be dispatched by the NTPC within 7 days from the Deemed Date of Allotment, as the case may be, will be dispatched by registered post/courier/speed post to the sole/ first applicant, at the sole risk of the applicant. Alternatively, the payment towards interest on application money/refund of application money ,if any, will be credited to the applicant’s account within 7 days from the deemed date of allotment. The investor is requested to furnish complete details of their Bank Account including IFSC code if they desire to have payment through RTGS/EFT/NECS.

Interest on the Bonds The Bonds shall carry interest at the Coupon Rate from, and including, the Deemed Date of Allotment up to, but excluding the Redemption Date. Interest shall be payable on the “Coupon Payment Dates”, excluding such coupon payment date, on the outstanding face value amount of Bonds till Redemption Date, to the holders of Bonds as on the relevant Record Date. Interest on Bonds will cease from the Redemption Date in all events. For Coupon Payment Dates refer the Term Sheet.

Computation of Interest: Day Count Convention The interest shall be computed on the basis of Actual/Actual day convention as per term sheet.

Effect of Holidays If any Coupon Payment Date falls on a day that is not a Working Day, the payment shall be made on the immediately succeeding Working Day along with interest for such additional period. Further, interest for such additional period so paid, shall be deducted out of the interest payable on the next Coupon Payment Date.

If the Redemption Date (also being the last Coupon Payment Date) of the Bonds falls on a day that is not a Working Day, the redemption proceeds (including coupon payment) shall be paid on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment.

For the purpose of interest and redemption payment refer working day definition in term sheet. An illustration for guidance in this regard is as tabled below:

The following table is indicative and only for illustration, does not reflect actual amount and dates. For convenience the cash flows have been reflected for face value of security i.e. Rs 10 lacs of Rs. 10 lakh each. Also only Sundays have been considered as holidays, the actual holidays may differ from year to year.

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Private Placement Offer Letter Private & Confidential-not for circulation

Company NTPC Limited Face Value (per security) 10,00,000 Issue Date/Date of 23-Aug-2016 Allotment Redemption Date 23-Aug-2026 Coupon Rate 7.58% Frequency of the Interest Annually corresponding to the Deemed Date of Allotment Payment

Day Count Convention Actual / Actual

Cash Flows Date Day Effective Date Effective Day due Base days for the No. of days Amount (in to holiday Interest Period Rupees) ** of relevant FY

Coupon 1 23-Aug-17 Wednesday 23-Aug-17 Wednesday 365 365 75800

Coupon 2 23-Aug-18 Thursday 23-Aug-18 Thursday 365 365 75800

Coupon 3 23-Aug-19 Friday 23-Aug-19 Friday 365 365 75800

Coupon 4* 23-Aug-20 Sunday 24-Aug-20 Monday 366 367 76007

Coupon 5 23-Aug-21 Monday 23-Aug-21 Monday 365 364 75592

Coupon 6 23-Aug-22 Tuesday 23-Aug-22 Tuesday 365 365 75800

Coupon 7 23-Aug-23 Wednesday 23-Aug-23 Wednesday 365 365 75800

Coupon 8* 23-Aug-24 Friday 23-Aug-24 Friday 366 366 75800

Coupon 9 23-Aug-25 Saturday 25-Aug-25 Monday 365 367 76215

Coupon 10 23-Aug-26 Sunday 21-Aug-26 Friday 365 361 74969 Maturity 23-Aug-26 Sunday 21-Aug-26 Friday 1,000,000 *leap year. ** Figures have been rounded off to ensure total interest payment over 10 years does not exceed Face Value x Rate x Years Record Date Date falling 15 days prior to the relevant Coupon Payment Date or the Redemption Date on which interest amount or the Maturity Amount respectively, is due and payable.

In the event that the Record Date falls on a Sunday or a holiday of Depositories, the succeeding working day or a date notified by the Company to the stock exchanges shall be considered as the Record Date.

Working Day : Refer Term Sheet for definition of Working Day.

Tax Benefits The holder(s) of the Bonds are advised to consider in their own case, the tax implications in respect of subscription to the Bonds after consulting their own tax advisor/ counsel.

Deduction of Tax at Source Tax as applicable under the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof will be deducted at source from Interest on Application Money and/or Interest on Bonds, as applicable. For seeking TDS exemption/ lower rate of TDS, relevant tax exemption certificate/ declaration of non-deduction of tax at source on interest on application money, should be submitted along with the application form. Where any deduction of Income Tax is made at source, the Company shall send to the Bondholder(s) a Certificate of Tax Deduction at Source. - 81 -

Private Placement Offer Letter Private & Confidential-not for circulation

Regarding deduction of tax at source and the requisite declaration forms to be submitted, prospective investors are advised to consult their own tax consultant(s).

Redemption Bonds will be redeemed at par on the Redemption Dates. The Bond will not carry any obligation, for interest or otherwise, after the date of redemption. The Bonds shall be taken as discharged on payment of the redemption amount by the Company on maturity to the registered Bondholders whose name appear in the Register of Bondholders on the record date. Such payment will be a legal discharge of the liability of the Company towards the Bondholders.

Settlement/ Payment on Redemption Payment on redemption will be made by way of cheque(s)/ redemption warrants(s)/ demand draft(s)/ credit through RTGS system/ECS in the name of the Bondholders whose name appear on the List of Beneficial Owners given by Depository to the Company as on the Record Date/ Book Closure Date.

The Bonds shall be taken as discharged on payment of the redemption amount by the Company on maturity to the list of Beneficial Owners as provided by NSDL/ CDSL/ Depository Participant. Such payment will be a legal discharge of the liability of the Company towards the Bondholders. On such payment being made, the Company shall inform NSDL/ CDSL/ Depository Participant and accordingly the account of the Bondholders with NSDL/ CDSL/ Depository Participant shall be adjusted (debited).

The Company’s liability to the Bondholders towards all their rights including for payment or otherwise shall cease and stand extinguished from the due date of redemption in all events. Further the Company will not be liable to pay any interest or compensation after the date of redemption. On the Company dispatching/ crediting the amount to the Beneficiary(ies) as specified above in respect of the Bonds, the liability of the Company shall stand extinguished.

List of Beneficial Owners /Register of Beneficial Owners The Company shall request the Depository to provide a list of Beneficial Owners as at the end of the Record Date. This shall be the list, which shall be considered for payment of interest or repayment of principal amount, as the case may be. The depositories shall maintain a register and an index of Beneficial Owners in the manner provided in relevant provisions of the Companies Act, 2013.

Succession In the event of the demise of the sole/first holder of the Bond(s) or the last survivor, in case of joint holders for the time being, the Issuer shall recognize the executor or administrator of the deceased Bondholder, or the holder of succession certificate or other legal representative as having title to the Bond(s).The Issuer shall not be bound to recognize such executor or administrator, unless such executor or administrator obtains probate, wherever it is necessary, or letter of administration or such holder is the holder of succession certificate or other legal representation, as the case may be, from a Court in India having jurisdiction over the matter. The Issuer may, in its absolute discretion, where it thinks fit, dispense with production of probate or letter of administration or succession certificate or other legal representation, in order to recognize such holder as being entitled to the Bond(s) standing in the name of the deceased Bondholder on production of sufficient documentary proof or indemnity.

Where a non-resident Indian becomes entitled to the Bond by way of succession, the following steps have to be complied: a. Documentary evidence to be submitted to the Legacy Cell of the RBI to the effect that the Bond was acquired by the NRI as part of the legacy left by the deceased holder. b. Proof that the NRI is an Indian National or is of Indian origin.

Such holding by the NRI will be on a non-repatriation basis.

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Private Placement Offer Letter Private & Confidential-not for circulation

Who Can Apply

The following categories are eligible to apply for this private placement of Bonds:

1. Qualified Institutional Buyers (“QIBs”):  Public Financial Institutions as defined in Section 2(72) of the Companies Act 2013;  Alternative Investment Funds;  Scheduled commercial banks;  Mutual Funds registered with SEBI;  State industrial development corporations;  Insurance companies registered with the Insurance Regulatory and Development Authority;  Provident funds with a minimum corpus of Rs. 25 crore;  Pension funds with a minimum corpus of Rs. 25 crore;  The National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of the GoI, published in the Gazette of India;  Insurance funds set up and managed by the army, navy, or air force of the Union of India; and  Insurance funds set up and managed by the Department of Posts, India,

subject to such being authorized to invest in the Bonds.

2. Non QIBs:  Companies and Bodies Corporate authorized to invest in bonds/ debentures;  Other Banks authorized to invest in bonds/ debentures;  Gratuity Funds and Superannuation Funds;  Provident Funds and Pension Funds with corpus of less than Rs. 25.00 crore;  Societies authorized to invest in bonds/ debentures;  Registered Trusts authorized to invest in bonds/ debentures;  Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/ debentures;  Resident Individual Investors;  Hindu Undivided Families through Karta;  Limited liability partnerships, Partnership firms formed under applicable laws in India in the name of the partners.

Any other investor that are authorized to invest in Bonds by their respective constitutional and/or charter documents, subject to compliance with respective applicable laws, subject to confirmation from the issuer.

Applicants are advised to ensure that Applications made by them do not exceed the investment limits that they are subject to under applicable statutory and/or regulatory provisions. Applicants are advised to ensure that they have obtained the necessary statutory and/or regulatory permissions/consents/approvals in connection with applying for or subscribing to the Bonds pursuant to the Issue.

Who are not eligible to apply for Bonds? The following categories of persons, and entities, shall not be eligible to participate in the Issue and any applications from such persons and entities are liable to be rejected: i. Minors without a guardian name (A guardian may apply on behalf of a minor. However, Applications by minors must be made through Application Forms that contain the names of both the minor Applicant and the guardian); ii. Non-resident investors including NRIs, FIIs, QFIs, FPIs and SWFs; iii. Venture Capital Fund and Foreign Venture Capital Investor; iv. Overseas Corporate Bodies; and v. Person ineligible to contract under applicable statutory/regulatory requirements - 83 -

Private Placement Offer Letter Private & Confidential-not for circulation

However, out of the aforesaid class of investors eligible to invest, this Private Placement Offer Letter is intended solely for the use of the person to whom it has been sent by the Company for the purpose of evaluating a possible investment opportunity by the recipient(s) in respect of the securities offered herein, and it is not to be reproduced or distributed to any other persons (other than professional advisors of the prospective investor receiving this Private Placement Offer Letter from the Company.

Documents to be provided by applicant Investors need to submit duly certified true copies of the following documents, as may be applicable to them, alongwith the Application Form:-

 Memorandum and Articles of Association/ Constitution/ Bye-laws/ Trust Deed;  Board Resolution authorizing the investment and containing operating instructions;  Power of Attorney/ relevant resolution/ authority to make application;  Specimen signatures of the authorized signatories (ink signed), duly certified by an appropriate authority;  Copy of Permanent Account Number Card (“PAN Card”) issued by the Income Tax Department;  Copy of a cancelled cheque for ECS payments;  Necessary forms for claiming exemption from deduction of tax at source on interest on application money, wherever applicable.

In addition to above, the investors may also attach such other documents as may be considered necessary by them. For investments made under Power of Attorney, certified true copy of notarised/registered Power of Attorney or other authority may also be submitted.

Application under Power of Attorney In case of application made under a Power of Attorney, the relevant Power of Attorney or the relevant resolution or authority to make the application, as the case may be, together with the certified true copy thereof along with the certified copy of the Memorandum and Articles of Association and/or Bye-Laws , as the case may be and the tax exemption certificate must be attached to the Application Form or lodged for scrutiny separately with the photocopy of the application form, quoting the serial number of the application form and the Bank’s branch where the application has been submitted, at the office of the Registrars to the Issue after submission of the application form to the Banker to the issue or directly to Company as mentioned in the general instructions annexed to the Application Form, failing which the application is liable to be rejected. Further modifications/ additions in the power of attorney or authority should be notified to the Company or to its Registrars or to such other person(s) at such other address(es) as may be specified by the Company from time to time through a suitable communication.

Mode of Subscription/ How to Apply

This being a private placement offer, who has been addressed through this communication directly, only are eligible to apply.

Copies of Private Placement offer Letter and Application form may be obtained from the Registered Office of NTPC Ltd. Application for the Bonds must be in the prescribed form (enclosed) and completed in BLOCK LETTERS in English and as per the instructions contained therein.

Investors must remit their application money only by way of electronic transfer of funds through RTGS mechanism for credit in the account of “NTPC Limited Application Money Bonds” on pay-in-date as per the details given in the general instructions to the applicants, attached to the application form.

Application complete in all respects (along with all necessary documents as detailed in this Private Placement Offer Letter) must be submitted on /before the last date indicated in the issue time table or such extended time as decided by the Issuer, accompanied by details/proof of remittance of the application money. Cash, outstation cheques,

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Private Placement Offer Letter Private & Confidential-not for circulation money orders, postal orders and stock invest shall not be accepted. Detailed instructions for filling up the application form and details of collection centre are provided elsewhere in the Application Form.

Application for the Bonds must be in the prescribed form (enclosed) and completed in BLOCK LETTERS in English and as per the instructions contained therein. The name of the applicant’s bank, type of account and account number must be filled in the Application Form. This is required for the applicant’s own safety and these details will be printed on the refund orders and interest/ redemption warrants.

The payment to be made for subscription to securities shall be made from the bank account of the person subscribing to such securities.

The applicant should mention their Permanent Account Number (PAN) allotted under the Income-Tax Act, 1961 or where the same has not been allotted, the GIR No. and the Income tax Circle/Ward/District. As per the provision of Section 139A(5A) of the Income Tax Act, PAN/GIR No. needs to be mentioned on the TDS certificates. Hence, the investor should mention his PAN/GIR No. if the investor does not submit Form 15AA/other evidence, as the case may be for non-deduction of tax at source. In case neither the PAN nor the GIR Number has been allotted, the applicant shall mention “Applied for” and in case the applicant is not assessed to income tax, the applicant shall mention ‘Not Applicable’ (stating reasons for non applicability) in the appropriate box provided for the purpose. Application Form without this information will be considered incomplete and are liable to be rejected.

Applicants are requested to tick the relevant column “Category of Investor” in the Application Form.For further instructions, please read General Instructions along with the Application Form carefully.

Force Majeure The Company reserves the right to withdraw the issue prior to the closing date in the event of any unforeseen development adversely affecting the economic and regulatory environment. The Company reserves the right to change the Issue Schedule.

Right to Accept or Reject Applications The Company reserves it’s full, unqualified and absolute right to accept or reject the application, in part or in full, without assigning any reason thereof. The rejected applicant will be intimated along with the refund warrant, if applicable. No interest on application money will be paid on rejected applications. The application form that is not complete in all respects is liable to be rejected and would not be paid any interest on the application money. Application would be liable to be rejected on one or more technical grounds, including but not restricted to:

a. Number of bonds applied for is less/ more than the number of bonds allocated to the investor; b. Application exceeding the issue size; c. Bank account details not given; d. Details for issue of bonds in electronic/ dematerialised form not given; PAN/GIR and IT Circle/Ward/District not given; e. In case of applications under Power of Attorney by limited companies, corporate bodies, trusts, etc. relevant documents not submitted;

In the event, if any Bond(s) applied for is/ are not allotted in full, the excess application monies of such Bonds will be refunded, as may be permitted.

Signatures Signatures should be made in English or in any of the Indian Languages. Thumb impressions must be attested by an authorized official of a Bank or by a Magistrate/ Notary Public under his/her official seal.

Nomination Facility Nomination facility is available as per provisions under Companies Act 2013.

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Private Placement Offer Letter Private & Confidential-not for circulation

Bondholder not a Shareholder The bondholders will not be entitled to any of the rights and privileges available to the shareholders. If, however, any resolution affecting the rights attached to the Bonds is placed before the members of the Company, such resolution will first be placed before the bondholders for their consideration.

Modification of Rights The rights, privileges, terms and conditions attached to the Bonds may be varied, modified or abrogated with the consent, in writing, of those holders of the Bonds who hold at least three fourth of the outstanding amount of the Bonds or with the sanction accorded pursuant to a resolution passed at a meeting of the Bondholders, provided that nothing in such consent or resolution shall be operative against the Company where such consent or resolution modifies or varies the terms and conditions of the Bonds, if the same are not acceptable to the Company.

Future Borrowings The Company will be entitled to borrow/raise loans or avail of Financial Assistance in whatever form and to issue Debentures/Bonds/Notes/other Securities in any manner with ranking as pari-passu basis or otherwise and to change its capital structure, including issue of shares of any class or redemption or reduction of any class of paid up capital on such terms and conditions as the Company may think appropriate without any consent of Bondholders under any series.

Bond/ Debenture Redemption Reserve (DRR)

Pursuant to Regulation 16 of the SEBI Debt Regulations and the Companies (Share Capital and Debentures) Rules, 2014, “For other companies including manufacturing and infrastructure companies, the adequacy of DRR will be 25% of the value of debentures issued through public issue as per present SEBI (Issue and Listing of Debt Securities), Regulations 2008 and also 25% DRR is required in the case of privately placed debentures by listed companies.” Accordingly, we are presently required to create DRR of at least 25% of the value of Bonds and to credit amounts to the DRR from our profits every year until the Bonds are redeemed. The maintenance of such DRR may be modified in the future in the event of any change in applicable law.

The Company shall create a Bond/Debenture Redemption Reserve in accordance with applicable provisions.

Disputes & Governing laws and jurisdiction The Bonds shall be construed to be governed in accordance with Indian laws and rules framed there under. The Courts in New Delhi alone shall have exclusive jurisdiction in connection with any dispute/difference between the Company and the Beneficial Owners of Bonds under these presents.

Notices The notices to the Beneficial Owners of Bonds required to be given by the Company shall be deemed to have been given if sent by Registered Post/ Speed Post/ Courier/Ordinary Post to the Registered Beneficial Owner of Bonds and /or if an advertisement is given in one All India English daily newspaper and one regional language newspaper and/ or if communication in this regard has been effected to the depositories.

All notices to be given by the Beneficial Owners of Bonds shall be sent by Registered Post or by Hand Delivery to the Company or such persons, at such address, as may be notified by the Company from time to time.

XI. SUMMARY TERM SHEET Series 7.58% Series 62 Security Name 7.58% Series 62 – 2026 Issuer NTPC Limited Issue Size Rs 500 crore green shoe of Rs.300 crore aggregating upto Rs.800 crore Date of Passing Board 30.07.2015 - 86 -

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Resolution Date of Passing 18.09.2015 resolution in the general meeting Objects of the Issue The funds raised through this issue will be utilized for, inter alia, funding of capital expenditure, refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred Instrument Secured, Non –Cumulative, Non-Convertible, Redeemable, Taxable Bonds in the nature of Debentures Issuance Mode In demat mode only Trading Mode In demat mode only Credit Rating “CRISIL AAA” by CRISIL Limited and “[ICRA] AAA (Stable)” by ICRA Limited Seniority The claims of the Bondholders shall be superior to the claims of any unsecured creditors of the Company and subject to applicable statutory and/or regulatory requirements, rank pari passu inter se to the claims of other secured creditors of our Company having the same security Mode of Issue Private Placement Security The Bonds will be secured by a first/pari passu first charge on specified assets of the Company as may be mentioned in the Bond Trust Deed. The security will be created within the time stipulated as per the relevant statutory provisions.

The Company shall at all times maintain a minimum security cover of 1.0 times of the Bonds proposed to be issued and interest accrued thereon.

The Company reserves the right to create further charge on such asset cover for its present and future financial requirements or otherwise, without any prior consent of the Bondholders, or as provided for under the Bond Trust Deed, provided that minimum asset cover of one time is maintained. Face Value Rs. 10 lakh per Bond Premium on Issue Nil

Discount on issue Nil Issue Price Rs 10 lakh per bond Premium/ Discount Nil on redemption Redemption Amount At par Tenor 10 Years from the Deemed Date of Allotment Put Option None Put Option Price Not applicable Put Option Date Not applicable Put Notification Time Not applicable Call Option None Call Option Price Not applicable Call Option Date Not applicable Call Notification Time Not applicable Redemption/ At par at the end of 10th year (s) from the Deemed Date of Allotment Maturity Redemption Date 23.08.2026 Coupon Rate 7.58% p.a. Step Up/ Step Down None - 87 -

Private Placement Offer Letter Private & Confidential-not for circulation

Coupon Rate Coupon Payment Annual Frequency Coupon Payment Annually on 23rd August of each year till maturity of Bonds ( corresponding to the Dates deemed date of allotment) Coupon Type Fixed Coupon Reset Process None (including rates, spread, effective date, interest rate cap and floor etc) Minimum Application 50 Bonds (face value of Rs 5 crore) and in multiples of 50 Bonds (face value of Rs 5 crore). Day Count Basis Actual/ Actual Interest on Interest on application money will be paid at Coupon Rate (subject to deduction of Application Money income tax under the provisions of the Income Tax Act, 1961, or any other statutory modification or re-enactment thereof, as applicable) on face value of Bonds for the period starting from and including the date of realization of application money in Issuer’s Bank Account upto one day prior to the Deemed Date of Allotment. To clarify , in case the deemed date of allotment and date of receipt of application money is same No interest on application money will be payable. Listing / Designated Proposed on National Stock Exchange of India Limited (“NSE“) and BSE Limited. NSE is Stock Exchange proposed to be the Designated Stock Exchange. Valuer who Not applicable performed valuation of the security (instrument) Trustees IL&FS Trust Company Limited Depository National Securities Depository Limited and Central Depository Services (India) Limited Registrars Beetal Financial & Computer Services Private Limited Settlement Payment of interest and repayment of principal shall be made by way of cheque(s)/ interest warrant(s) / redemption warrant(s)/ demand draft(s)/ credit through direct credit/ NECS/ RTGS/ NEFT mechanism and any other electronic payment mode. Business Days/ All days excluding Sundays or a holiday when commercial banks are not open Working Days for business in New Delhi, except with reference to Record Date, where Working Days shall mean all days, excluding Sundays or holiday for depositories. Record Date Date falling 15 days prior to the relevant Coupon Payment Date or the Redemption Date on which interest amount or the Maturity Amount respectively, is due and payable.

In the event that the Record Date does not fall on a Working Day, the succeeding Working Day or a date notified by the Company to the stock exchanges shall be considered as the Record Date. Effect of Holidays If any Coupon Payment Date falls on a day that is not a Working Day, the payment shall be made on the immediately succeeding Working Day along with interest for such additional period. Further, interest for such additional period so paid, shall be deducted out of the interest payable on the next Coupon Payment Date.

If the Redemption Date (also being the last Coupon Payment Date) of any Series of the

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Private Placement Offer Letter Private & Confidential-not for circulation

Bonds falls on a day that is not a Working Day, the redemption proceeds (including the coupon payment) shall be paid on the immediately preceding Working Day along with interest accrued on the Bonds until but excluding the date of such payment. Mode of Subscription Applicants shall make remittance of application money only through electronic transfer of funds through RTGS mechanism for credit of Issuer’s designated bank account Eligible Investors The following categories are eligible to apply for this private placement of Bonds:

1. Qualified Institutional Buyers (“QIBs”):  Public Financial Institutions as defined in Section 2(72) of the Companies Act 2013;  Alternative Investment Funds;  Scheduled commercial banks;  Mutual Funds registered with SEBI;  State industrial development corporations;  Insurance companies registered with the Insurance Regulatory and Development Authority;  Provident funds with a minimum corpus of Rs. 25 crore;  Pension funds with a minimum corpus of Rs. 25 crore;  The National Investment Fund set up by resolution F. No. 2/3/2005-DD-II dated November 23, 2005 of the GoI, published in the Gazette of India;  Insurance funds set up and managed by the army, navy, or air force of the Union of India; and  Insurance funds set up and managed by the Department of Posts, India,

subject to such being authorized to invest in the Bonds.

2. Non QIBs:  Companies and Bodies Corporate authorized to invest in bonds/ debentures;  Other Banks authorized to invest in bonds/ debentures;  Gratuity Funds and Superannuation Funds;  Provident Funds and Pension Funds with corpus of less than Rs. 25.00 crore;  Societies authorized to invest in bonds/ debentures;  Registered Trusts authorized to invest in bonds/ debentures;  Statutory Corporations/ Undertakings established by Central/ State legislature authorized to invest in bonds/ debentures;  Resident Individual Investors;  Hindu Undivided Families through Karta;  Limited liability partnerships , Partnership firms formed under applicable laws in India in the name of the partners.

Any other investor that are authorized to invest in Bonds by their respective constitutional and/or charter documents, subject to compliance with respective applicable laws, subject to confirmation from the issuer.

Who are not eligible to apply for Bonds? The following categories of persons, and entities, shall not be eligible to participate in the Issue and any applications from such persons and entities are liable to be rejected: i. Minors without a guardian name (A guardian may apply on behalf of a minor. However, Applications by minors must be made through Application Forms that contain the names of both the minor Applicant and the guardian); ii. Non-resident investors including NRIs, FIIs, QFIs, FPIs and SWFs; iii. Venture Capital Fund and Foreign Venture Capital Investor;

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Private Placement Offer Letter Private & Confidential-not for circulation

iv. Overseas Corporate Bodies; and v. Person ineligible to contract under applicable statutory/regulatory requirements

Also Refer ‘who can apply’ under the section Terms of Offer Transaction The Company has executed/ shall execute the documents including but not limited to Documents the following in connection with the Issue: 1. Bond Trustee Agreement; 2. Bond Trust Deed; 3. Tripartite Agreement between the Issuer; Registrar and NSDL for issue of Bonds in dematerialized form; 4. Tripartite Agreement between the Issuer, Registrar and CDSL for issue of Bonds in dematerialized form; 5. Application to stock exchange for seeking in-principle approval for listing of Bonds; 6. Consents from Banker to the issue, Registrar and Trustee

Conditions precedent The subscription from investors shall be accepted for allocation and allotment by the to subscription of Company subject to the following: Bonds 1. Rating letter(s) not being more than one month old from the issue opening date; 2. Consent of Trustees; 3. Application to Stock Exchange(s) for seeking its in-principle approval for listing of Bonds. Conditions The Company shall ensure that the following documents are executed/ activities are subsequent to completed as per permissible time frame: subscription of Bonds 1. Credit of demat account(s) of the allottee(s) by number of Bonds allotted within 2 working days from the Deemed Date of Allotment; 2. Making listing application to stock exchange(s) within 15 days from the Deemed Date of Allotment of Bonds and seeking listing permission within 20 days from the Deemed Date of Allotment of Bonds in pursuance of SEBI Debt Regulations; 3. Execution of Bond Trust Deed for creation of security within time frame prescribed in the relevant regulations/ act/ rules etc and submitting the same with stock exchange(s) within 5 working days of execution for uploading on its website in pursuance of SEBI Debt Regulations. 4. The Company shall, till the redemption of Bonds, submit its latest audited/ limited review half yearly consolidated (wherever available) and standalone financial information and auditor qualifications, if any, to the Trustees within the timelines as specified in SEBI (LODR). Besides, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustees and the Trustees shall be obliged to share the details so submitted with all ‘Qualified Institutional Buyers’ (QIBs) and other existing Bondholder(s) within two working days of their specific request.

Besides, the Company shall perform all activities, whether mandatory or otherwise, as applicable. Events of Default If the Company commits a default in making payment of any installment of interest or repayment of principal amount of the Bonds on the respective due date(s), the same shall constitute an “Event of Default” by the Company . Excluding in cases of technical errors due to reasons beyond the control of company. Cross Default Not Applicable

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Private Placement Offer Letter Private & Confidential-not for circulation

Role and The Trustees shall protect the interest of the Bondholders in the event of default by the Responsibilities of Company in regard to timely payment of interest and repayment of principal and shall Trustees take necessary action at the cost of the Company. No Bondholder shall be entitled to proceed directly against the Company unless the Trustees, having become so bound to proceed, fail to do so.

The Trustees shall carry out its duties and perform its functions as required to discharge its obligations under the terms of SEBI Debt Regulations, the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Bond Trusteeship Agreement, the Bond Trust Deed, Disclosure Document and all other related transaction documents, with due care, diligence and loyalty.

The Trustees shall ensure disclosure of all material events on an ongoing basis and shall supervise the implementation of the conditions regarding creation of security for the Bonds. Governing Law and The Bonds are governed by and shall be construed in accordance with the existing laws Jurisdiction of India. Any dispute arising thereof shall be subject to the jurisdiction of district courts of Delhi. Additional Covenants 1. Default in Payment: In the event of delay in the payment of interest amount and/ or principal amount on the due date(s), the Company shall pay additional interest of 2.00% per annum in addition to the respective Coupon Rate payable on the Bonds, on such amounts due, for the defaulting period i.e. the period commencing from and including the date on which such amount becomes due and upto but excluding the date on which such amount is actually paid.

2. Delay in Listing: The Company shall complete all the formalities and seek listing permission from stock exchange(s) within 20 days from the Deemed Date of Allotment. In the event of delay in listing of Bonds beyond 20 days from the Deemed Date of Allotment, the Company shall pay penal interest of 1.00% per annum over the respective Coupon Rate from the expiry of 30 days from the Deemed Date of Allotment till the listing of Bonds to the Bondholder(s).

3. Security Creation: The Company undertakes that it shall obtain permission/ consent from the existing creditor(s) to create pari passu charge and execute the necessary documents for creation of the charge, including the Bond Trust Deed, within time frame prescribed in the relevant regulations/ act/ rules etc and submit with stock exchange(s) within five working days of execution of the same for uploading on its website. In case of delay in execution of Bond Trust Deed and/or other security documents, the Company will refund the subscription with agreed respective Coupon Rate or pay penal interest at the rate of 2.00% p.a. over the respective Coupon Rate till these conditions are complied with at the option of the investor.

The interest rates mentioned in above three covenants shall be independent of each other.

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Private Placement Offer Letter Private & Confidential-not for circulation

Issue Schedule * Issue Opening Date 23.08.2016

Issue Closing Date 23.08.2016

Intimation of allocation to Investors 19.08.2016

Pay-In Date 23.08.2016

Deemed Date of Allotment 23.08.2016

Validity of the Offer Till the date of closure of the Issue Letter * NTPC reserves its sole and absolute right to modify (pre-pone/ postpone) the above issue schedule without giving any reasons or prior notice. In such a case, investors shall be intimated about the revised time schedule by NTPC. In case if the Issue Closing Date/ Pay in Dates is/are changed (pre-poned/ postponed), the Deemed Date of Allotment may also be changed (pre-poned/ postponed) by NTPC at its sole and absolute discretion. Consequent to change in Deemed Date of Allotment, the Coupon Payment Dates and/or Redemption Dates may also be changed at the sole and absolute discretion of NTPC.

XII. CREDIT RATING & RATING RATIONALE CRISIL CRISIL vide letter dated 05.08.2016 has assigned “CRISIL AAA” (pronounced 'CRISIL Triple A”) rating to the Bonds being issued under the current placement. This rating indicates highest safety with regard to timely payment of interest and principal on the instrument. Copy of letter from CRISIL is enclosed elsewhere in this Offer Letter.

ICRA ICRA vide letter dated 08.08.2016 has assigned “ICRA AAA [stable]” (pronounced as "ICRA triple A” with outlook on the long term is stable) rating to the Bonds being issued under the current placement. This is the highest credit quality rating assigned by ICRA and indicates the lowest credit risk carried by the instrument. Copy of the letter from ICRA is enclosed elsewhere in this Offer Letter.

The above ratings are not a recommendation to buy, sell or hold securities and investors should take their own decision. The ratings may be subject to revision or withdrawal at any time by the assigning rating agencies and each rating should be evaluated independently of any other rating. The ratings obtained are subject to revision at any point of time in the future. The rating agencies have the right to suspend, withdraw the rating at any time on the basis of new information etc.

Rating Rationale are as per Annexure.

XIII. NAME & ADDRESS OF DEBENTURE TRUSTEE In accordance with the provisions of the Section 71 of Companies Act, 2013, Rules made there under and Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993, the Company has appointed IL&FS Trust Company Limited , to act as Trustees (“Trustees”) for and on behalf of the holder(s) of the Bonds. The address and contact details of the Trustees are as under:

IL&FS TRUST COMPANY LIMITED Registered Office The IL&FS Financial Centre, Plot C 22, G Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 Tel: (+91 22) 2659 3612 Fax: (+91 22) 2653 3297 Email:[email protected] - 92 -

Private Placement Offer Letter Private & Confidential-not for circulation

Debenture Trustee has given his consent for his appointment under regulation 4(4) of Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and Rule 18(2)(b) the Companies (Share Capital and Debentures) Rules 2014 , Copy of letter from IL&FS Trust Company Ltd , conveying their consent to act as Trustee for the current issue of Bonds is enclosed elsewhere in this Private Placement offer Letter .

The Company hereby undertakes that a Trust Deed will be executed by it in favour of the Trustees. The Trust Deed will contain such clauses or be as near thereto as possible as may be prescribed under section 71 of the Companies Act, 2013 and rules made there under and those mentioned in Schedule IV of the Securities and Exchange Board of India (Debenture Trustees) Regulations, 1993. Further the Trust Deed shall not contain any clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Trustees or the Company in relation to any rights or interests of the holder(s) of the Bonds, (ii) limiting or restricting or waiving the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992); Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 and circulars or guidelines issued by SEBI, (iii) indemnifying the Trustees or the Company for loss or damage caused by their act of negligence or commission or omission.

The Bondholder(s) shall, without further act or deed, be deemed to have irrevocably given their consent to the Trustees or any of their agents or authorized officials to do all such acts, deeds, matters and things in respect of or relating to the Bonds as the Trustees may in their absolute discretion deem necessary or require to be done in the interest of the holder(s) of the Bonds. Any payment made by the Company to the Trustees on behalf of the Bondholder(s) shall discharge the Company pro tanto to the Bondholder(s). The Trustees shall protect the interest of the Bondholders in the event of default by the Company in regard to timely payment of interest and repayment of principal and shall take necessary action at the cost of the Company. No Bondholder shall be entitled to proceed directly against the Company unless the Trustees, having become so bound to proceed, fail to do so.

XIV. STOCK EXCHANGE(s) WHERE SECURITIES ARE PROPOSED TO BE LISTED Series 62 Bonds are proposed to be listed on NSE and BSE. In connection with listing of Bonds with stock exchange(s), the Company hereby undertakes that: (a) It shall comply with conditions of listing of Bonds as may be specified in the Listing Agreement with Stock Exchange(s). (b) Credit Ratings obtained by the Company shall be periodically reviewed by the credit rating agencies and any revision in the rating shall be promptly disclosed by the Company to Stock Exchange(s). (c) Any change in rating shall be promptly disseminated to the holder(s) of the Bonds in such manner as Stock Exchange(s) may determine from time to time. (d) The Company, the Trustees and Stock Exchange(s) shall disseminate all information and reports on Bonds including compliance reports filed by the Company and the Trustees regarding the Bonds to the holder(s) of Bonds and the general public by placing them on their websites. (e) Trustees shall disclose the information to the holder(s) of the Bonds and the general public by issuing a press release in any of the following events: i. default by the Company to pay interest on Bonds or redemption amount; ii. revision of rating assigned to the Bonds; (f) The information referred to in para (e) above shall also be placed on the websites of the Trustees, Company and Stock Exchange(s). (g) Issuer would, till the redemption of the debt securities, submit the Latest Audited / Limited Review Half Yearly Consolidated (wherever available) and Standalone Financial Information and auditor qualifications , if any to the Trustee within the timelines as provided in SEBI(LODR) for furnishing / publishing its half yearly/ annual result. Further, the Issuer shall within 180 days from the end of the financial year, submit a copy of the latest annual report to the Trustee and the Trustee shall be obliged to share the details submitted under this clause with all ‘Qualified Institutional Buyers’ (QIBs) and other existing debenture- holders within two working days of their specific request. - 93 -

Private Placement Offer Letter Private & Confidential-not for circulation

XV. SERVICING BEHAVIOR ON EXISTING DEBT SECURITIES AND OTHER BORROWINGS The Company hereby confirms that: a) The main constituents of the Company’s borrowings have been in the form of borrowings from Banks and Financial Institutions, External Commercial Borrowings & Bonds. b) The Company has been servicing all its principal and interest liabilities on time and there has been no instance of delay or default. c) The Company has neither defaulted in repayment/ redemption of any of its borrowings nor affected any kind of roll over against any of its borrowings in the past.

XVI. UNDERTAKING REGARDING COMMON FORM OF TRANSFER The Bonds shall be transferred subject to and in accordance with the rules/ procedures as prescribed by the NSDL/ CDSL/ Depository Participant of the transferor/ transferee and any other applicable laws and rules notified in respect thereof. The normal procedure followed for transfer of securities held in dematerialized form shall be followed for transfer of these Bonds held in electronic form. The seller should give delivery instructions containing details of the buyer’s DP account to his depository participant.

The transferee(s) should ensure that the transfer formalities are completed prior to the Record Date. In the absence of the same, interest will be paid/ redemption will be made to the person, whose name appears in the records of the Depository. In such cases, claims, if any, by the transferee(s) would need to be settled with the transferor(s) and not with the Company.

The Company undertakes that it shall use a common form/ procedure for transfer of Bonds issued under terms of this Offer Letter.

XVII. ABRIDGED AUDITED CONSOLIDATED AND STANDALONE FINANCIAL INFORMATION / SUMMARY OF FINANCIAL POSITION Refer Annexure attached elsewhere in the document. Investors can also visit the following link on our website for detailed information on financials, auditor reports and comments: http://www.ntpc.co.in/en/investors/financial-results

XVIII. MATERIAL EVENT, DEVELOPMENT OR CHANGE AT THE TIME OF ISSUE The Company hereby declares that there has been no material event, development or change at the time of issue which may affect the issue or the investor’s decision to invest/ continue to invest in the debt securities of the Company.

XIX. PERMISSION/ CONSENT FROM PRIOR CREDITORS The Company hereby confirms that it is entitled to raise money through current issue of Bonds without the consent/ permission/ approval from the Bondholders/Trustees/ Lenders/ other creditors of the Company. The Company has obtained/will obtain consent from the existing charge holders, whenever required, for creation of security for the Bonds on pari- passu basis. In future, the Trustees shall provide consent to create pari- passu charge subject to Company’s complying with the requisite terms of the Bonds issued without making any reference to the Beneficial Owners.

XX. MATERIAL CONTRACTS & AGREEMENTS INVOLVING FINANCIAL OBLIGATIONS OF THE ISSUER By very nature and volume of its business, the Company is involved in a large number of transactions involving financial obligations and therefore it may not be possible to furnish details of all material contracts and agreements involving financial obligations of the Company. However, the contracts referred to in Para A below (not being contracts entered into in the ordinary course of the business carried on by the Company)

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which are or may be deemed to be material have been entered into by the Company. Copies of these contracts together with the copies of documents referred to in Para B may be inspected at the Corporate Office of the Company between 10.00 a.m. and 2.00 p.m. on any working day until the issue closing date.

A. MATERIAL CONTRACTS a. Appointment Letter of Registrar and Transfer Agent dated 19.08.2016. b. Appointment Letter of Trustee dated 09.12.2015. c. Bond Trustee Agreement dated 09.12.2015.

B. DOCUMENTS a. Memorandum and Articles of Association of the Company as amended from time to time. b. Board Resolutions dated 30.07.2015 authorizing issue of Bonds offered under terms of this Private Placement Offer Letter. c. Shareholder’s Resolution dated 18.09.2015 authorizing issue of Bonds offered under terms of this Private Placement Offer Letter d. Consent Letters of Debenture Trustee, RTA and Banker to the Issue as applicable, in their respective capacities. e. Copy of application made to NSE & BSE respectively for grant of in-principle approval for listing of Bonds. f. Letters from NSE and BSE conveying its in-principle approval for listing of Bonds. g. Tripartite Agreement dated July 16, 2004 between the NTPC, NSDL and BEETAL Financial & Computer Services Private Limited for issue of Bonds in dematerialised form. h. Tripartite Agreement dated September 3, 2004 between the NTPC, CDSL and BEETAL Financial & Computer Services Private Limited for issue of Bonds in dematerialised form.

Any of the contracts or documents mentioned in this Information Memorandum may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the Bondholders subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

XXI. DECLARATION The Company undertakes that this Private Placement Offer Letter contains full disclosures in conformity with Form PAS-4 prescribed under section 42 and rule 14(1) of Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008 issued vide circular no. LAD-NRO/GN/2008/13/127878 dated June 06, 2008, as amended from time to time and such other applicable circulars issued by SEBI from time to time.

The Company has complied with the provisions of the Companies Act, 2013 and the rules made there under. It is to be distinctly understood that compliance with the Companies Act, 2013 and the rules does not imply that payment of interest or repayment of Bonds, is guaranteed by the Government of India.

The Company undertakes that the monies received under the Issue shall be utilized only for the purposes and ‘Objects of the Issue’ indicated in the Private Placement Offer letter.

The Company accepts no responsibility for the statement made otherwise than in the Private Placement Offer Letter or in any other material issued by or at the instance of the Company and that any one placing reliance on any other source of information would be doing so at his own risk.

The Board of Directors of the Company vide resolution number 423.2.7 dated 30.07.2015 have authorized Director (Finance) to nominate a person not below the rank of General Manager to do all acts including signing of documents,deeds,agreements etc. related with issue of bonds. Accordingly, the undersigned has been authorized by - 95 -

Private Placement Offer Letter Private & Confidential-not for circulation the Director (Finance) to sign this Private Placement Offer Letter and declare that all the requirements of Companies Act, 2013 and the rules made there under in respect of the subject matter of this form and matters incidental thereto have been complied with. Whatever is stated in this Private Placement Offer Letter and in the attachments thereto is true, correct and complete and no information material to the subject matter of this form has been suppressed or concealed and is as per the original records maintained by the Promoter subscribing to the Memorandum of Association and Articles of Association of the Company.

It is further declared and verified that all the required attachments have been completely, correctly and legibly attached to this Private Placement Offer Letter.

(Sangeeta Bhatia) General Manager(Finance) Place : New Delhi Date: 22.08.2016

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Rating Rationale August 05, 2016 | Mumbai NTPC Limited 'CRISIL AAA/Stable' assigned to NCD

Total Bank Loan Facilities Rated Rs.720 Billion Long Term Rating CRISIL AAA/Stable (Reaffirmed) Short Term Rating CRISIL A1+ (Reaffirmed) (Refer to Annexure 1 for Facility-wise details)

Rs.100 Billion Non-Convertible Debentures CRISIL AAA/Stable (Assigned) Rs.103068.305 Million Non-Convertible Debentures* CRISIL AAA/Stable (Reaffirmed) (Series LIV) Rs.3 Billion Non-Convertible Debentures (Series LV) CRISIL AAA/Stable (Reaffirmed) Rs.7 Billion Non-Convertible Debentures (Series LVI) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Non-Convertible Debentures (Series LVII) CRISIL AAA/Stable (Reaffirmed) Rs.3 Billion Non-Convertible Debentures (Series LVIII) CRISIL AAA/Stable (Reaffirmed) Rs.6.55 Billion Non-Convertible Debentures (Series CRISIL AAA/Stable (Reaffirmed) LIX) Rs.10.0 Billion Non-Convertible Debentures (Series CRISIL AAA/Stable (Reaffirmed) LX) Rs.10.725 Billion Non-Convertible Debentures (Series CRISIL AAA/Stable (Reaffirmed) LXI) Rs.4.725 Billion Non-convertible Debentures CRISIL AAA/Stable (Reaffirmed) (including Tax Free Bonds) Rs.40 Billion Non-Convertible Debentures CRISIL AAA/Stable (Reaffirmed) Fixed Deposit Programme FAAA/Stable (Reaffirmed) Rs.7.5 Billion Bond Issue (Series XIIIA) CRISIL AAA/Stable (Reaffirmed) Rs.7.5 Billion Bond Issue (Series XIIIB) CRISIL AAA/Stable (Reaffirmed) Rs.1 Billion Bond Issue (Series XVI) CRISIL AAA/Stable (Reaffirmed) Rs.500 Million Bond Issue (Series XVII) CRISIL AAA/Stable (Reaffirmed) Rs.500 Million Bond Issue (Series XIX) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XX) CRISIL AAA/Stable (Reaffirmed) Rs.10 Billion Bond Issue (Series XXI) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXII) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXIII) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXIV) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXV) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXVI) CRISIL AAA/Stable (Reaffirmed) Rs.3.5 Billion Bond Issue (Series XXVII) CRISIL AAA/Stable (Reaffirmed) Rs.10 Billion Bond Issue (Series XXVIII) CRISIL AAA/Stable (Reaffirmed) Rs.5.5 Billion Bond Issue (Series XXIX) CRISIL AAA/Stable (Reaffirmed) Rs.7 Billion Bond Issue (Series XXX) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XXXI) CRISIL AAA/Stable (Reaffirmed) Rs.1.05 Billion Bond Issue (Series XXXII) CRISIL AAA/Stable (Reaffirmed) Rs.1.95 Billion Bond Issue (Series XXXIII) CRISIL AAA/Stable (Reaffirmed) Rs.1.5 Billion Bond Issue (Series XXXIV) CRISIL AAA/Stable (Reaffirmed) Rs.1.2 Billion Bond Issue (Series XXXV) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XXXVI) CRISIL AAA/Stable (Reaffirmed) Rs.3 Billion Bond Issue (Series XXXVII) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XXXVIII) CRISIL AAA/Stable (Reaffirmed) Rs.1.05 Billion Bond Issue (Series XXXIX) CRISIL AAA/Stable (Reaffirmed)

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Rs.0.75 Billion Bond Issue (Series XL) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XLI) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XLII) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XLIII) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series XLIV) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XLV) CRISIL AAA/Stable (Reaffirmed) Rs.0.75 Billion Bond Issue (Series XLVI) CRISIL AAA/Stable (Reaffirmed) Rs.3.9 Billion Bond Issue (Series XLVII) CRISIL AAA/Stable (Reaffirmed) Rs.3 Billion Bond Issue (Series XLVIII) CRISIL AAA/Stable (Reaffirmed) Rs.2 Billion Bond Issue (Series XLIX) CRISIL AAA/Stable (Reaffirmed) Rs.17.5 Billion Bond Issue (Series L) CRISIL AAA/Stable (Reaffirmed) Rs.5 Billion Bond Issue (Series LI) CRISIL AAA/Stable (Reaffirmed) Rs.7.5 Billion Bond Issue (Series LII) CRISIL AAA/Stable (Reaffirmed) Rs.10 Billion Bond Issue (Series LIII) CRISIL AAA/Stable (Reaffirmed) Rs.20 Billion Short-Term Debt (including commercial CRISIL A1+ (Reaffirmed) Paper) *Refers to Rs.103,068.305 million bonus debentures to be issued by NTPC to mark its 40th year of operations. The debentures have a 10-year tenor with repayments in the 8th, 9th, and 10th years and will carry interest rates of G-Sec plus 50 bps.

CRISIL has assigned 'CRISIL AAA/Stable' rating for the Rs. 100 billion Non-Convertible Debenture of NTPC Ltd (NTPC) while reaffirming its ratings on bank facilities, debt, commercial paper, and fixed deposit programme at 'CRISIL AAA/FAAA/CRISIL A1+'. CRISIL has also assigned 'Stable' outlook on the existing bank facilities, debt and fixed deposit programme of NTPC.

The ratings continue to be reflect NTPC's dominant position in India's regulated power generation sector, strong business and financial risk profiles, and strategic importance to the Government of India (GoI), which holds a 69.96 percent equity stake in the company. These rating strengths are mitigated by weak credit risk profiles of customers.

NTPC is India's largest power generation company with around 15 percent of the country's overall installed power generation capacity; accounting for around 24 percent of the power generated in India. NTPC has strong business and financial risk profiles and superior project execution skills. Moreover, the tariff structure ensures recovery of all fixed expenses, including debt-servicing charges, and provides for fixed return on equity, based on achievement of performance benchmarks mandated by the regulator. Although profitability has been impacted by changes under the Central Electricity Regulatory Commission's (regulator) tariff regulations for the tariff period, from fiscal 2015 to fiscal 2019, the company's fixed costs continue to be recovered at 83 percent of plant availability with 15.5 percent return on equity. For fiscal 2016, NTPC's coal based and gas based plants reported plant availability factor of 91.94 percent and 97.30 percent, respectively. NTPC's power generation and cash flows are expected to continue to grow, driven by ongoing capacity expansion and superior operating efficiency. The company's collection efficiency was consistent at 98-100 percent over the past eight years despite deterioration in the credit risk profiles of state power utilities (SPUs).

Low gearing, comfortable debt protection ratios, and robust liquidity continue to mark NTPC's strong financial risk profile. The company had comfortable consolidated gearing of 1.24 times and net profit margin of around 13 percent in fiscal 2016 on a provisional basis. Gearing remained at previous year levels as the company utilized its cash accruals to part fund the ongoing capacity expansions (capex). Though gearing will increase over the medium term, it will remain comfortable and well within the stipulated norms prescribed by the regulator. Financial risk profile is further supported by robust liquidity; the company had cash balance of Rs.53.93 billion as on March 31, 2016 at a consolidated level. While the liquidity has reduced over the years due to ongoing capex, CRISIL expects it to still remain robust over the medium term.

GoI has granted the Maharatna status to NTPC. As a part of its divestment plans, GoI in February 2016, divested 5 percent of its shareholding in NTPC consequently reducing its overall shareholding to 69.96 percent. Nevertheless GoI continues to be the majority shareholder in the company. In the past, GoI had provided NTPC with need-based financial support in the form of guarantees for foreign currency borrowings; CRISIL believes that GoI will extend support if needed.

However, credit risk profiles of NTPC's customers (SPUs) are weak. The repayment performance of SPUs remains a key rating sensitivity factor for NTPC's credit risk profile. Further, lower demand from SPU's and its impacts the operating performance, and consequently, the credit risk profile of NTPC will continue to be monitored by CRISIL. Outlook: Stable CRISIL believes that NTPC will continue to maintain its dominant position in India's power generation sector thereby underscoring its strategic importance to GoI. Its credit risk profile will continue to remain strong on back of efficient operations, regulated tariff structure, and comfortable debt protection metrics respectively. The outlook may be revised to negative in case there is significant deterioration in operating performance of power plants or if there are delays in recovery of dues from counterparties resulting in adverse impact on its liquidity.

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About the Company NTPC was incorporated in 1975. As on March 31, 2016, NTPC had installed capacity of 46,653 megawatt, including capacity owned by subsidiaries and joint venture companies. The company enjoys GoI's Maharatna status. GoI's shareholding in NTPC as on March 31, 2016 was 69.96 percent.

Consolidated net profit was Rs.101.62 billion on net sales of Rs.787.06 billion in fiscal 2016 on provisional basis, against Rs.99.86 billion and Rs.806 billion, respectively, for the previous year.

Annexure 1 - Details of various bank facilities Current facilities Previous facilities Amount Amount Facility Rating Facility Rating (Rs.Million) (Rs.Million) Bank Guarantee 19000 CRISIL A1+ Bank Guarantee 19000 CRISIL A1+ CRISIL Cash Credit 2000 Cash Credit 2000 CRISIL AAA AAA/Stable Letter of Credit 29000 CRISIL A1+ Letter of Credit 29000 CRISIL A1+ CRISIL Long Term Loan 550492.7 Long Term Loan 589893.5 CRISIL AAA AAA/Stable Proposed Bank Proposed Bank 1000 CRISIL A1+ 1000 CRISIL AAA Guarantee Guarantee Proposed Cash Credit CRISIL Proposed Cash Credit 18000 18000 CRISIL AAA Limit AAA/Stable Limit Proposed Letter of Proposed Letter of 1000 CRISIL A1+ 1000 CRISIL A1+ Credit Credit Proposed Long Term CRISIL Proposed Long Term 99507.3 60106.5 CRISIL AAA Bank Loan Facility AAA/Stable Bank Loan Facility Total 720000 -- Total 720000 --

Links to related criteria CRISILs Approach to Financial Ratios CRISILs Bank Loan Ratings - process, scale and default recognition Rating Criteria for Manufacturing Companies Rating Criteria for Power Generation Utilities CRISILs Criteria for Consolidation Criteria for Notching up Stand Alone Ratings of Entities Based on Government Support Criteria for rating Short-Term Debt (including Commercial Paper)

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NTPC Limited

Instrument Details Amount Rating Action In Rs. Crore^ August 2016 Term Loans 65,000.00 [ICRA]AAA (stable); reaffirmed Fund Based Limits 2,000.00 [ICRA]AAA (stable); reaffirmed Non Fund Based Limits 5,000.00 [ICRA]A1+; reaffirmed Commercial Paper/STD 2,000.00 [ICRA]A1+; reaffirmed Bonds Programme 10,000.00 [ICRA]AAA (stable); assigned Bonds Programme/ Bonus 27,545.33 [ICRA]AAA (stable); reaffirmed Debentures (reduced from 28617.83)

ICRA has assigned rating of [ICRA]AAA (pronounced ICRA AAA) on the long term scale to Rs 10,000 crore bonds programme of NTPC Limited. ICRA has reaffirmed the rating of [ICRA]AAA (pronounced ICRA triple A) on the long term scale to Rs. 65,000 crore term loans, Rs 2,000 crore fund based limits and the rating of [ICRA]A1+ (pronounced ICRA A one plus) on short term scale to Rs 5,000 crore non fund based limits and Rs 2,000 crore commercial paper/STD of NTPC Limited. ICRA has also reaffirmed rating of [ICRA]AAA (pronounced ICRA triple A) on the long term scale for Rs 27,545.33 crore (reduced from Rs 28617.83 crore) bonds programme/ bonus debentures programme of NTPC Limited. The outlook on long term rating is ‘Stable’.

ICRA’s rating reaffirmation factors in NTPC’s dominant position in the Indian power generation sector, its strategic importance to the Government of India, its diversified customer base, and its cost competitiveness arising out of superior operational efficiencies along with proximity of most of its coal-based plants to pit heads. This coupled with the cost plus nature of tariffs has resulted in healthy and stable profitability indicators which are likely to be sustained in near future. The rating also factors in NTPC’s strong financial position as reflected in low gearing and healthy coverage indicators. NTPC’s cash collections have continued to remain strong since 2003-04 (as a result of tripartite agreement for settlement of SEB dues and the resultant payment discipline), as reflected by collections of 100% for 13th year in succession. Sustainability of the collection performance, going forward, remains an issue if sectoral reforms, including implementation of UDAY (Ujwal DISCOM Assurance Yojana), do not result in a fundamental improvement in the financial position of the state power utilities. Successful implementation of the UDAY scheme, timely issuance of tariff orders, adequate tariff hikes for reduction of revenue gaps, time-bound recovery of the regulatory assets, reduction of distribution loss levels and ultimately decreasing subsidy dependence remain imperative for the financial health of the power distribution sector.

NTPC has consistently demonstrated superior operating performance, as reflected by PAF and PLF levels of its generation stations which have remained much higher than the national average. For FY2016, the company’s coal based power plants reported average PAF levels of 91.94% (as compared to the normative levels of 83%) and average PLF levels of 78.61% (as against the national average of 62.28%). However, the PLFs for gas based power stations remained low at 25.14% for FY2016 which is attributable to low demand from grid for RLNG and Naphtha based power due to its high cost. Nevertheless, PAF levels for gas based plants remained adequate at 97.30% for FY2016.

For FY 2015, PLF of coal-based stations was 80.23% as compared to the National PLF of 64.25% for the year. Availability Factor of coal stations in FY 15 was 88.69% as compared to AVF(DC) of 91.8% in FY14. Given that tariffs of NTPC plants are determined by CERC tariff regulations on a cost plus basis subject to meeting operational norms, achievement of such availability factors have contributed to profitable operations. ICRA expects the operational performance to be sustained going forward.

NTPC’s coal availability remained satisfactory in FY2016 which is also reflected in satisfactory generation performance of the company’s coal based power plants during the year. ICRA also continues to derive comfort from the company’s existing FSAs with CIL & SCCL for 910 MW generation capacity yet to be commissioned and for 32,605 MW operational capacity which assures it of significant volumes of domestic coal. In addition, commencement of supply of coal from its own Pakri Barwadih coal block (Jharkhand) in FY 2017, likelihood of

^ 100 lakh = 1 crore = 10 million

supplies commencing in the medium term from other captive mines and its ability to source fairly large quantities of coal from overseas suppliers, if required, also adds comfort.

NTPC has substantial expansion plans which are likely to be funded with a debt: equity ratio of 70:30 which may result in a higher gearing compared to the present debt equity ratio of 1.03 times (as on March 31, 2016). However, the company’s debt servicing ability is expected to remain strong, given the cost plus tariff structure and tariff competitiveness of its existing power plants. While a few of NTPC’s ongoing projects have seen some slippages in terms of project execution, this is unlikely to have a significant impact on the debt servicing capabilities given the strong cash flows from a large basket of operational power plants.

Going forward, NTPC’s ability to ensure fuel security for its substantial expansion projects as well as sustenance of the strong collection performance will remain key rating drivers.

Company Profile NTPC was incorporated in 1975 as a thermal generation company and is currently India’s largest power generating entity. The total installed generation capacity of the company stood at 47,228 MW (including JVs/subsidiaries) as on July 31, 2016. In 2015-16, NTPC group generated 263.42 billion units. NTPC has been accorded the status of “Maharatna”, which gives it considerable operating flexibility. While continuing with its core business of coal and gas based thermal generation, NTPC has recently diversified (in some cases through JVs) into related activities like consulting, hydro-power development, power trading, coal mining, renewable projects (like solar) and exploration for oil and gas.

NTPC reported operating income of Rs. 73,237 crore and profit after tax (PAT) of Rs. 10,291 crore for FY 2015, and total income from operations of Rs.70,507 crore and profit after tax (PAT) of Rs.10,243 crore for FY 2016.

August 2016

For further details please contact: Analyst Contacts: Mr. Sabyasachi Majumdar (Tel. No. +91 124 4545304) [email protected]

Relationship Contacts: Mr. L. Shivakumar, (Tel. No. +91 22 6114 3406) [email protected]

© Copyright, 2016, ICRA Limited. All Rights Reserved Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA’s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website www.icra.in or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents.

Registered Office ICRA Limited 1105, Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi 110001 Tel: +91-11-23357940-50, Fax: +91-11-23357014

Corporate Office Mr. Vivek Mathur Mobile: +91 9871221122 Email: [email protected]

Building No. 8, 2nd Floor, Tower A, DLF Cyber City, Phase II, Gurgaon 122002 Ph: +91-124-4545310 (D), 4545300 / 4545800 (B) Fax; +91- 124-4050424

Mumbai Kolkata Mr. L. Shivakumar Mr. Jayanta Roy Mobile: +91 9821086490 Mobile: +91 9903394664 Email: [email protected] Email: [email protected]

3rd Floor, Electric Mansion A-10 & 11, 3rd Floor, FMC Fortuna Appasaheb Marathe Marg, Prabhadevi 234/3A, A.J.C. Bose Road Mumbai—400025, Kolkata—700020 Board : +91-22-61796300; Fax: +91-22-24331390 Tel +91-33-22876617/8839 22800008/22831411, Fax +91-33-22870728 Chennai Bangalore Mr. Jayanta Chatterjee Bangalore Mobile: +91 9845022459 Mr. Jayanta Chatterjee Email: [email protected] Mobile: +91 9845022459 Email: [email protected] 5th Floor, Karumuttu Centre 634 Anna Salai, Nandanam 'The Millenia' Chennai—600035 Tower B, Unit No. 1004,10th Floor, Level 2 12-14, 1 & 2, Tel: +91-44-45964300; Fax: +91-44 24343663 Murphy Road, Bangalore 560 008 Tel: +91-80-43326400; Fax: +91-80-43326409 Ahmedabad Pune Mr. L. Shivakumar Mr. L. Shivakumar Mobile: +91 9821086490 Mobile: +91 9821086490 Email: [email protected] Email: [email protected]

907 & 908 Sakar -II, Ellisbridge, 5A, 5th Floor, Symphony, S.No. 210, CTS 3202, Range Ahmedabad- 380006 Hills Road, Shivajinagar,Pune-411 020 Tel: +91-79-26585049, 26585494, 26584924; Fax: Tel: + 91-20-25561194-25560196; Fax: +91-20- +91-79-25569231 25561231 Hyderabad Mr. Jayanta Chatterjee Mobile: +91 9845022459 Email: [email protected]

4th Floor, Shobhan, 6-3-927/A&B. Somajiguda, Raj Bhavan Road, Hyderabad—500083 Tel:- +91-40-40676500

Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 st March 2016, based on the internal controls over financial reporting criteria established by the Company considering the components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

For T R Chadha & Co LLP For PSD & Associates For Sagar & Associates Chartered Accountants Chartered Accountants Chartered Accountants FRN- 006711N/N500028 FRN - 004501C FRN - 003510S

[CA. Neena Goel] [CA. Thalendra Sharma] [CA. V. Vidyasagar Babu] Partner Partner Partner M. No. 057986 M. No. 079236 M. No.027357

For Kalani & Co. For P. A. & Associates For S. K. Kapoor & Co. For B.M. Chatrath & Co. Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants FRN - 000722C FRN - 313085E FRN - 000745C FRN - 301011E

[CA. Vikas Gupta] [CA. P. S. Panda] [CA. V. B. Singh] [CA. P. R. Paul] Partner Partner Partner Partner M. No. 077076 M. No.051092 M.No.073124 M. No. 051675

Place : New Delhi Dated : 30th May 2016

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF NTPC LIMITED FOR THE YEAR ENDED 31 MARCH 2016 AND MANAGEMENT REPLIES THEREON

Sl.No. Comment Management Reply The preparation of financial statements of NTPC Limited for the year ended 31 March 2016 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 30 May 2016. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) of the Act of the financial statements of NTPC Limited for the year ended 31 March 2016. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matters under Section 143(6)(b) of the Act which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related audit report.

184 Comments of the Comptroller and Auditor General of India on SFS Sl.No. Comment Management Reply 1. Balance Sheet Tangible Assets (Note -12) ` 91,355.82 crore Capital work-in-progress (Note -13) ‘Expenditure pending allocation- other expenditure directly attributable to project construction’:- ` 469.96 crore A reference is invited to the comment of the Comptroller and Auditor The Company is a Rate Regulated Entity. Accounting of capital General of India on the annual accounts of the Company for the year expenditure on the assets not owned by the Company was 2014-15 on accounting treatment of expenditure amounting to ` being done by the Company considering the Guidance Note 130.77 crore on the assets not owned by the company. on ‘Treatment of Expenditure during Construction Period’ As per opinion of Expert Advisory Committee of the Institute of since long. With the withdrawal of the above guidance note, Chartered Accountants of India of May 2010 and reiterated in July accounting of such expenditure is being done in line with the 2011, expenditure incurred on enabling assets not owned by the provisions of Para 9.1 and 10 of AS 10 on ‘Accounting for Fixed Company should be charged off to revenue in the accounting period Assets’ which provides that expenditure on assets which is in which such expenditure is incurred. directly attributable to the construction of the power project Up to the year 2014-15, Company distinctively showed such should be capitalized. expenditure under the head ‘Capital expenditure on assets not Expenditure incurred on these assets is directly attributable owned by the Company’ both under ‘Tangible Assets’ and ‘Capital to the construction of the power projects without which the work in progress’. On commissioning of the power stations, construction of the projects of the Company would not be expenditure under Capital work in progress was capitalized and possible. In the opinion of the Management, such expenditure amortized over a period of four years. However, in the year 2015- is necessary for bringing the asset to the location and condition 16, the Company changed this policy and reversed the amortization necessary for it to be capable for operating in the manner made up to 2014-15 and provided depreciation according to CERC intended by the management. approved rates. As a result, Net Block was increased by `86.90 crore. Similarly, `117.76 crore was included against ‘Other expenditure AS-10 on ‘Property, Plant and Equipment’ (PPE) notified by directly attributable to project construction’ under ‘Capital work in Ministry of Corporate Affairs GOI vide notification no. GSR progress’ with the objective of capitalizing the same in future. 364 (E) dated 30 March 2016 effective from the financial year The above accounting treatment of expenditure on enabling assets 2016-17 and Ind AS-16 on ‘Property, Plant and Equipment’, by the Company is not in line with the Accounting Standard 10 and permit that such expenditure shall form part of the project opinion of Expert Advisory Committee of ICAI. This has resulted in cost considering the principles of ‘Unit of Measure’. The AS overstatement of ‘Tangible Assets’ by ` 86.90 crore and ‘Capital Work 10 on PPE has transitional provisions facilitating retrospective in Progress’ by ` 117.76 crore. Consequently, ‘Profit for the year’ is application and therefore permits its application from earlier overstated by `204.66 crore. period. Taking guidance from the AS 10 on PPE, the Company has changed the treatment of such expenditure and capitalized retrospectively as part of cost of project. Adequate disclosure in this regards has also been made in the Note no.35 (a) forming part of the financial statements for the year 2015-16. 2. Independent Auditors’ Report Annexure 1 to the Independent Auditors’ Report A reference is invited to item (vii) (b) of Annexure I to Independent No comments. Auditors’ Report containing details of disputed statutory dues aggregating to ` 891.02 crore that have not been deposited on account of matters pending before appropriate authorities along with forum where the dispute is pending. As per para 43(g) of the Guidance Note on CARO 2016 issued by ICAI, the fact of disputed amount of statutory dues deposited under protest should be brought out by the auditor in his report. As per Note No.52(b) of the financial statements, Company made a disclosure that ‘Disputed income tax/sales tax/excise and other tax matters pending before various appellate Authorities amount to `7,499.37 crore’. It was noticed that the Company deposited ` 6,545.43 crore on account of disputed demand of statutory dues with the appropriate authorities. However, this fact has not been reported by the Joint Statutory Auditors in their Independent Auditor’s Report.

As such, Independent Auditors’ Report is deficient to the above extent.

For and on behalf of the For and on behalf of the Comptroller & Auditor General of India Board of Directors (Ritika Bhatia) (Gurdeep Singh) Principal Director of Commercial Audit & Chairman and Managing Director Ex-officio Member, Audit Board – III, New Delhi Place : New Delhi Place : New Delhi Dated: 28 July 2016 Dated : 29 July,2016

185 Comments of the Comptroller and Auditor General of India on SFS COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129 (4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF NTPC LIMITED FOR THE YEAR ENDED 31 MARCH 2016 AND MANAGEMENT REPLIES THEREON

Sl.no. Comment Management Reply 1. The preparation of consolidated financial statements of NTPC Limited for the year ended 31 March 2016 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under Section 139(5) read with Section 129(4) of the Act are responsible for expressing opinion on the financial statements under Section 143 read with Section 129(4) of the Act based on independent audit in accordance with the standards on auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 30 May 2016. I, on behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6) (a) read with Section 129(4) of the Act of the consolidated financial statements of NTPC Limited for the year ended 31 March 2016. We conducted a supplementary audit of the financial statements of NTPC Limited, Kanti Bijlee Utpadan Nigam Limited, Bhartiya Rail Bijlee Company Limited, NTPC Tamilnadu Energy Company Limited, Aravali Power Company Private Limited, Meja Urja Nigam Private Limited, Nabinagar Power Generating Company Private Limited, National High Power Test Laboratory Private Limited and NTPC SAIL Power Company Private Limited, but did not conduct supplementary audit of the financial statements of subsidiaries, associate companies and jointly controlled entities listed in Annexure-I for the year ended on that date. Further, Section 139(5) and 143 (6)(b) of the Act are not applicable to Utility Powertech Limited, NTPC Alstom Power Services Private Limited and BF-NTPC Energy Systems Limited being private entities and Trincomalee Power Company Limited and Bangladesh-India Friendship Power Company Private Limited being entities incorporated in Foreign countries under the respective laws, for appointment of their Statutory Auditor or for conduct of supplementary audit. Accordingly, C&AG has neither appointed the Statutory Auditors nor conducted the supplementary audit of these companies. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matter under Section 143(6)(b) read with Section 129(4) of the Act which has come to my attention and which in my view is necessary for enabling a better understanding of the financial statements and the related audit report: Balance Sheet Tangible Assets (Note -12) ` 1,04,211.88 crore Capital work-in-progress (Note -13) ‘Expenditure pending allocation- other expenditure directly attributable to project construction’:- ` 493.62 crore A reference is invited to the comment of the Comptroller The Company is a Rate Regulated Entity. Accounting of and Auditor General of India on the annual accounts of the capital expenditure on the assets not owned by the Company for the year 2014-15 on accounting treatment of Company was being done by the Company considering expenditure amounting to ` 167.99 crore on the enabling the Guidance Note on ‘Treatment of Expenditure during assets not owned by the company. Construction Period’ since long. With the withdrawal of the

393 Comments of the Comptroller and Auditor General of India on CFS Sl.no. Comment Management Reply As per opinion of Expert Advisory Committee of the Institute above guidance note, accounting of such expenditure is of Chartered Accountants of India of May 2010 and reiterated being done in line with the provisions of Para 9.1 and 10 of in July 2011, expenditure incurred on enabling assets not AS 10 on ‘Accounting for Fixed Assets’ which provides that owned by the Company should be charged off to revenue in expenditure on assets which is directly attributable to the the accounting period in which such expenditure is incurred. construction of the power project should be capitalized. Up to the year 2014-15, Company distinctively showed such expenditure under the head ‘Capital expenditure on assets Expenditure incurred on these assets is directly attributable not owned by the Company’ both under ‘Tangible Assets’ to the construction of the power projects without which and ‘Capital work in progress’. On commissioning of the the construction of the projects of the Company would power stations, expenditure under Capital work in progress not be possible. In the opinion of the Management, such was capitalized and amortized over a period of four years. expenditure is necessary for bringing the asset to the However, in the year 2015-16, the Company changed this location and condition necessary for it to be capable for policy and reversed the amortization made up to 2014-15 operating in the manner intended by the management. and provided depreciation according to CERC approved rates. As a result, Net Block was increased by `113.52 crore AS-10 on ‘Property, Plant and Equipment’ (PPE) notified (NTPC Limited - `86.90 crore, Aravali Power Company Private by Ministry of Corporate Affairs GOI vide notification Limited - `20.66 crore and NTPC Tamil Nadu Energy Company no. GSR 364 (E) dated 30 March 2016 effective from the Limited - `5.96 crore). Similarly, `120.08 crore was included financial year 2016-17 and Ind AS-16 on ‘Property, Plant against ‘Other expenditure directly attributable to project and Equipment’, permit that such expenditure shall form construction’ under ‘Capital work in progress’ with the part of the project cost considering the principles of ‘Unit objective of capitalizing the same in future. of Measure’. The AS 10 on PPE has transitional provisions The above accounting treatment of expenditure on enabling facilitating retrospective application and therefore permits assets by the Company is not in line with the Accounting its application from earlier period. Taking guidance from Standard 10 and opinion of Expert Advisory Committee of the AS 10 on PPE, the Company has changed the treatment ICAI. This has resulted in overstatement of ‘Tangible Assets’ of such expenditure and capitalized retrospectively as by ` 113.52 crore and ‘Capital Work in Progress’ by ` 120.08 part of cost of project. Adequate disclosure in this regards crore. Consequently, ‘Profit for the year’ is overstated by has also been made in the Note no.37 (a) forming part of ` 233.60 crore. the consolidated financial statements for the year 2015-16. ANNEXURE-I List of subsidiaries, associate companies and jointly controlled entities of NTPC Limited whose financial statements for the year 2015-16 were not audited by the Comptroller and Auditor General of India A. Subsidiaries incorporated in India 1. NTPC Vidyut Vyapar Nigam Limited 2. NTPC Electric Supply Company Limited 3. Patratu Vidyut Utpadan Nigam Limited

B. Joint Ventures incorporated in India 1. Ratnagiri Gas & Power Pvt. Ltd. 2. NTPC-BHEL Power Projects Pvt. Ltd. 3. Transformers & Electricals Kerala Ltd. 4. CIL NTPC Urja Pvt. Ltd. 5. Anushakti Vidyut Nigam Ltd. 6. Energy Efficiency Services Ltd.

For and on behalf of the For and on behalf of the Comptroller & Auditor General of India Board of Directors

(Ritika Bhatia) Principal Director of Commercial Audit & (Gurdeep Singh) Ex-officio Member, Audit Board – III, Chairman and Managing Director New Delhi

Place : New Delhi Place: New Delhi Dated: 28 July 2016 Dated: 29 July 2016

394 Comments of the Comptroller and Auditor General of India on CFS BALANCE SHEET AS AT Rs. Crore Particulars Note 31.03.2015 31.03.2014

EQUITY AND LIABILITIES Shareholders' funds Share capital 2 8,245.46 8,245.46 Reserves and surplus 3 73,411.89 77,569.86 81,657.35 85,815.32 Deferred revenue 4 1,394.15 1,609.88

Non-current liabilities Long-term borrowings 5 78,532.33 62,405.75 Deferred tax liabilities (net) 6 979.07 1,051.61 Other long-term liabilities 7 2,886.59 2,512.46 Long-term provisions 8 1,115.71 879.36 83,513.70 66,849.18 Current liabilities Trade payables 9 5,953.15 6,429.60 Other current liabilities 10 16,807.62 11,547.60 Short-term provisions 11 7,758.75 7,302.60 30,519.52 25,279.80

TOTAL 197,084.72 179,554.18

ASSETS Non-current assets Fixed assets Tangible assets 12 78,586.91 71,865.86 Intangible assets 12 262.16 244.97 Capital work-in-progress 13 56,463.11 44,886.74 Intangible assets under development 13A 30.38 1.93 Non-current investments 14 7,154.07 8,120.90 Long-term loans and advances 15 15,527.89 12,777.26 Other non-current assets 15A 1,696.77 1,786.77 159,721.29 139,684.43 Current assets Current investments 16 1,878.06 1,636.96 Inventories 17 7,453.00 5,373.35 Trade receivables 18 7,604.37 5,220.08 Cash and bank balances 19 12,878.81 15,311.37 Short-term loans and advances 20 2,407.59 3,116.04 Other current assets 21 5,141.60 9,211.95 37,363.43 39,869.75

TOTAL 197,084.72 179,554.18

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED Rs. Crore Particulars Note 31.03.2015 31.03.2014

Revenue Revenue from operations (gross) 22 73,915.69 72,644.02 Less: Electricity duty 669.64 625.09 Revenue from operations (net) 73,246.05 72,018.93 Other income 23 2,116.32 2,645.68 Total revenue 75,362.37 74,664.61

Expenses Fuel 48,845.19 45,829.71 Employee benefits expense 24 3,669.78 3,824.78 Finance costs 25 2,743.62 2,406.59 Depreciation and amortization expense 12 4,911.65 4,142.19 Generation, administration & other expenses 26 4,979.31 4,543.85 Prior period items (net) 27 (333.83) 12.84 Total expenses 64,815.72 60,759.96

Profit before tax 10,546.65 13,904.65 Tax expense Current tax Current year 2,278.97 3230.56 Earlier years (1,952.53) (436.96) Deferred tax Current year 888.75 136.31 Less: Deferred asset for deferred tax liability 959.40 - Total tax expense 255.79 2,929.91

Profit for the year 10,290.86 10,974.74

Significant accounting policies 1 Expenditure during construction period (net) 28

Earnings per equity share (Par value ` 10/- each) 44 Basic & Diluted (`) 12.48 13.31

CASH FLOW STATEMENT FOR THE YEAR ENDED ` Crore Particulars 31.03.2015 31.03.2014 A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 10,546.65 13,904.65 Adjustment for: Depreciation/amortisation 4,911.65 4,142.19 Prior period depreciation / amortisation 12.12 2.35 Provisions 224.78 156.36 Deferred revenue on account of advance against depreciation (283.35) (16.05) Deferred foreign currency fluctuation asset/liability 236.35 (211.93) Deferred income from foreign currency fluctuation (22.50) 516.36 Fly ash utilisation reserve fund 401.14 - Exchange differences on translation of foreign currency cash and cash equivalents (0.02) (0.19) Interest charges 2,702.53 2,368.33 Guarantee fee & other finance charges 41.09 38.26 Interest/income on term deposits/bonds/investments (1,527.88) (2,042.91) Dividend income (246.75) (138.25) Provisions written back (186.15) (199.87) Profit on disposal of fixed assets (4.54) (12.86) Loss on disposal of fixed assets 146.05 73.92 6,404.52 4,675.71 Operating profit before working capital changes 16,951.17 18,580.36 Adjustment for: Trade receivables (2,384.46) 144.92 Inventories (1,816.80) (1,084.66) Trade payables, provisions and other liabilities 584.31 1,372.07 Loans & advances and other current assets 2,850.41 (724.25) (766.54) (291.92) Cash generated from operations 16,184.63 18,288.44 Direct taxes paid (1,919.93) (2,556.26) Net cash from operating activities - A 14,264.70 15,732.18 B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (17,128.27) (16,739.70) Disposal of fixed assets 5.69 17.66 Sale of investments 1,636.96 1,622.46 Investment in subsidiaries/joint ventures (689.26) (620.24) Loans & advances to subsidiaries (148.05) 27.90 Interest/income on term deposits/bonds/investments received 1,787.17 2,349.85 Income tax paid on interest income (303.59) (775.89) Dividend received 246.75 138.25 Net cash used in investing activities - B (14,592.60) (13,979.71) C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from long term borrowings 23,360.37 12,366.65 Repayment of long term borrowings (4,751.15) (4,993.49) Grants received - 0.65 Security premium received - 0.23 Interest paid (5,586.31) (4,741.40) Guarantee fee & other finance charges paid (104.16) (153.56) Dividend paid (including bonus debentures) (12,368.21) (4,947.28) Tax on dividend (including tax on bonus debentures) (2,428.62) (840.79) Net cash used in financing activities - C (1,878.08) (3,308.99)

D. Exchange differences on translation of foreign currency cash and cash equivalents 0.02 0.19 Net increase/(decrease) in cash and cash equivalents (A+B+C+D) (2,205.96) (1,556.33) Cash and cash equivalents at the beginning of the year (see Note 1&2 below) 15,311.37 16,867.70 Cash and cash equivalents at the end of the period (see Note 1&2 below) 13,105.41 15,311.37

CONSOLIDATED BALANCE SHEET AS AT Particulars Note 31.03.2015 31.03.2014

EQUITY AND LIABILITIES Shareholders' funds Share capital 2 8,245.46 8,245.46 Reserves and surplus 3 73,848.52 79,084.26 82,093.98 87,329.72 Deferred revenue 4 1,394.15 1,609.88 Minority interest 887.94 680.43

Non-current liabilities Long-term borrowings 5 93,362.92 75,542.30 Deferred tax liabilities (net) 6 1,265.61 1,239.31 Other long-term liabilities 7 3,481.85 3,081.58 Long-term provisions 8 1,143.37 896.80 99,253.75 80,759.99

Current liabilities Short-term borrowings 5A 640.15 433.64 Trade payables 9 7,107.63 7,223.96 Other current liabilities 10 20,202.14 14,427.18 Short-term provisions 11 7,996.41 7,580.33 35,946.33 29,665.11

TOTAL 219,576.15 200,045.13

ASSETS Non-current assets Goodwill on consolidation 0.62 0.62 Fixed assets Tangible assets 12 91,579.48 83,957.77 Intangible assets 12 272.92 249.59 Capital work-in-progress 13 67,524.31 53,819.15 Intangible assets under development 13A 30.38 5.81 Non-current investments 14 14.12 1,663.46 Long-term loans and advances 15 16,631.62 14,157.35 Other non-current assets 15A 1,731.08 1,805.99 177,784.53 155,659.74 Current assets Current investments 16 1,887.39 1,636.96 Inventories 17 7,972.46 5,988.48 Trade receivables 18 9,249.92 6,725.66 Cash and bank balances 19 14,251.61 17,050.67 Short-term loans and advances 20 2,456.70 3,230.15 Other current assets 21 5,973.54 9,753.47 41,791.62 44,385.39 TOTAL 219,576.15 200,045.13

CONSOLIDATED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED ` Crore Particulars Note 31.03.2015 31.03.2014

Revenue Revenue from operations (gross) 22 81,367.02 79,648.12 Less: Electricity duty / Excise duty 744.98 697.49 Revenue from operations (net) 80,622.04 78,950.63 Other income 23 2,078.91 2,760.12 Total revenue 82,700.95 81,710.75

Expenses Fuel 51,461.12 47,790.26 Electricity purchased 2,082.64 2,189.97 Employee benefits expense 24 3,889.69 4,038.63 Cost of material and services 631.02 315.81 Changes in inventories of finished goods,work-in-progress 4.64 1.66 Finance costs 25 3,570.37 3,203.07 Depreciation and amortisation expense 12 5,564.61 4,769.99 Generation, administration & other expenses 26 5,358.87 4,903.75 Prior period items (net) 27 (318.22) 11.85 Total expenses 72,244.74 67,224.99

Profit before tax 10,456.21 14,485.76

Tax expense Current tax Current year 2,395.29 3,372.68 Earlier years (1,952.99) (438.09) Deferred tax Current year 940.00 158.59 Earlier years 83.87 - Less :Deferred asset for deferred tax liability 994.66 - MAT credit recoverable 7.67 10.82 Total tax expense 463.84 3,082.36

Profit after tax 9,992.37 11,403.40

Less: Share of Profit /(loss)-Minority interest 6.03 (0.21)

Group profit after tax 9,986.34 11,403.61

Significant accounting policies 1 Expenditure during construction period (net) 28 Earnings per equity share (Par value of ` 10/- each) 45 Basic & Diluted (`) 12.11 13.83

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF NTPC LIMITED FOR THE YEAR ENDED 31 MARCH 2015 AND MANAGEMENT REPLIES THEREON

Comment Management Reply

The preparation of financial statements of NTPC Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the management of the company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139 (5) of the Act are responsible for expressing opinion on the financial statements under Section 143 of the Act based on independent audit in accordance with the Standards of Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 29 May 2015.

I, on the behalf of the Comptroller and Auditor General of

India, have conducted a supplementary audit under

Section 143(6)(a) of the Act of the financial statements of

NTPC Limited for the year ended 31 March 2015. This

supplementary audit has been carried out independently

without access to the working papers of the Statutory

Auditors and is limited primarily to inquiries of the

Statutory Auditors and Company personnel and a selective

examination of some of the accounting records. Based on

my supplementary audit, I would like to highlight the

following significant matter under Section 143 (6)(b) of

the Act which has come to my attention and which in my

view is necessary for enabling a better understanding of

the financial statements and the related Audit Report:

Balance Sheet Fixed Assets Tangible Assets (Note No.12) Capital Expenditure on assets not owned by the Company (Net Block)- ` 54.40 crore

Capital work-in-progress - (Note No.13)

Capital Expenditure on assets not owned by the

Company - ` 76.37 crore

As per provisions of AS-10 highlighted by the Expert Advisory Committee (EAC) of the Institute of Chartered The Company is a Rate Regulated Entity. Accounting of Accountants of India (ICAI) in their opinion of May 2010 capital expenditure on the assets not owned by the reiterated in July 2011, the expenditure incurred on Company was being done by the Company considering enabling assets not owned by the Company should be the Guidance Note on ‘Treatment of Expenditure during Construction Period’ since long. With the Comment Management Reply charged off to revenue in the accounting period in which withdrawal of the above guidance note, accounting of such expenditure is incurred. such expenditure is being done in line with the provisions of Para 9.1 and 10 of AS 10 on ‘Accounting The Company, however, capitalized the expenditure for Fixed Assets’ which provides that expenditure on incurred on assets not owned by the Company. The assets which is directly attributable to the construction Company was requested (September 2014) by Audit, to of the power project should be capitalized. revise its Accounting Policy in line with the opinion given by EAC of ICAI, if the decision of EAC on the review The balances appearing under the head ‘Capital application of NTPC of October 2011 is not received till expenditure on assets not owned by the company’ in finalization of annual accounts of the Company for 2014- Tangible Assets and Capital Work-in-Progress 15. Though the decision of EAC of ICAI in the matter represents expenditure incurred on roads, raised by the Company was not received till finalization of construction power lines, etc. the accounts for 2014-15, the Company did not revise its Accounting Policy on enabling assets not owned by the Expenditure incurred on these assets is directly Company in the current year. attributable to the construction of the power projects without which the construction of projects of the The Company stated that based on their follow up, ICAI Company would not be possible. In the opinion of the issued Exposure Draft of AS-10 which would replace the Management, such expenditure is necessary for existing AS-10. The issue is being addressed in the revised bringing the asset to the location and condition AS-10. The reply is to be viewed against the fact that necessary for it to be capable for operating in the Revised AS-10 has not yet been notified and is likely to manner intended by the management. have prospective application. Therefore, booking of expenditure on enabling assets not owned by the Company Accordingly, a reference has been made to the Expert under Tangible Assets and Capital work in progress up to Advisory Committee of the Institute of Chartered March 2015 has resulted in understatement of “Expenses” Accountants of India for review of its opinion which is by ` 130.77 crore and overstatement of “Tangible Assets” (Net block) by ` 54.40 crore as well as “Capital work in still awaited. Pending disposal of the reference, the progress” by ` 76.37 crore. Consequently, profit for the company has continued its existing practice of year is also overstated by ` 130.77 crore. capitalization of such expenditure which has been followed consistently over the years. This has also been disclosed in Note No.12 (h) of the financial statements.

THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) READ WITH SECTION 129 (4) OF THE COMPANIES ACT, 2013 ON THE CONSOLIDATED FINANCIAL STATEMENTS OF NTPC LIMITED FOR THE YEAR ENDED 31 MARCH 2015 AND MANAGEMENT REPLIES THEREON

Comment Management Reply The preparation of Consolidated Financial Statements of NTPC Limited for the year ended 31 March 2015 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under Section 139(5) read with section 129(4) of the Act are responsible for expressing opinion on the financial statements under Section 143 read with section 129(4) of the Act based on independent audit in accordance with the Standards on Auditing prescribed under Section 143(10) of the Act. This is stated to have been done by them vide their Audit Report dated 29 May 2015.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under Section 143(6)(a) read with Section 129(4) of the Act of the Consolidated Financial Statements of NTPC Limited for the year ended 31 March 2015. We conducted a supplementary audit of the financial statements of NTPC Limited, Kanti Bijlee Utpadan Nigam Limited, Bhartiya Rail Bijlee Nigam Limited, Aravali Power Company Private Limited, NTPC Tamilnadu Energy Company Limited, Meja Urja Nigam Private Limited, Nabinagar Power Generating Company Private Limited, NTPC-SAIL Power Company Private Limited and National High Power Test Laboratory Private Limited but did not conduct supplementary audit of the financial statements of subsidiaries, associate companies and jointly controlled entities listed in Annexure for the year ended on that date. This supplementary audit has been carried out independently without access to the working papers of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and a selective examination of some of the accounting records. Based on my supplementary audit, I would like to highlight the following significant matter under Section 143(6)(b) read with Section 129(4) of the Act which has come to my attention and which in my view is necessary for enabling a better understanding of the consolidated financial statements and the related Audit Report:

Balance sheet Fixed Assets Tangible Assets (Note No.12) Comment Management Reply Capital Expenditure on assets not owned by the Company (Net Block)- ` 89.39 crore Capital work-in-progress - (Note No.13) Capital Expenditure on assets not owned by the Company - ` 78.60 crore

As per provisions of AS-10 highlighted by the Expert The Company is a Rate Regulated Entity. Accounting of Advisory Committee (EAC) of the Institute of Chartered capital expenditure on the assets not owned by the Accountants of India (ICAI) in their opinion of May 2010 Company was being done by the Company considering reiterated in July 2011, the expenditure incurred on the Guidance Note on ‘Treatment of Expenditure enabling assets not owned by the Company should be during Construction Period’ since long. With the charged off to revenue in the accounting period in which withdrawal of the above guidance note, accounting of such expenditure is incurred. such expenditure is being done in line with the provisions of Para 9.1 and 10 of AS 10 on ‘Accounting The Company, however, capitalized the expenditure for Fixed Assets’ which provides that expenditure on incurred on assets not owned by the Company. The assets which is directly attributable to the construction Company was requested (September 2014) by Audit, to of the power project should be capitalized. revise its Accounting Policy in line with the opinion given by EAC of ICAI, if the decision of EAC on the review The balances appearing under the head ‘Capital application of NTPC of October 2011 is not received till expenditure on assets not owned by the company’ in finalization of annual accounts of the Company for 2014- Tangible Assets and Capital Work-in-Progress 15. Though the decision of EAC of ICAI in the matter represents expenditure incurred on roads, raised by the Company was not received till finalization of construction power lines, etc. the accounts for 2014-15, the Company did not revise its Accounting Policy on enabling assets not owned by the Expenditure incurred on these assets is directly Company in the current year. attributable to the construction of the power projects without which the construction of projects of the The Company stated that based on their follow up, ICAI Company would not be possible. In the opinion of the issued Exposure Draft of AS-10 which would replace the Management, such expenditure is necessary for existing AS-10. The issue is being addressed in the revised bringing the asset to the location and condition AS-10. The reply is to be viewed against the fact that necessary for it to be capable for operating in the Revised AS-10 has not yet been notified and is likely to manner intended by the management. have prospective application. Therefore, booking of expenditure on enabling assets not owned by the Company under Tangible Assets and Capital work in progress up to Accordingly, a reference has been made to the Expert March 2015 has resulted in understatement of “Expenses” Advisory Committee of the Institute of Chartered by ` 167.99 crore and overstatement of “Tangible Assets” Accountants of India for review of its opinion which is (Net block) by ` 89.39 crore as well as “Capital work in still awaited. Pending disposal of the reference, the progress” by ` 78.60 crore. Consequently, profit for the company has continued its existing practice of year is also overstated by ` 167.99 crore. capitalization of such expenditure which has been ANNEXURE followed consistently over the years. This has also been disclosed in Note No.12 (h) of the Consolidated List of subsidiaries, associate companies and jointly Financial Statements. controlled entities of NTPC Limited whose financial statements for the year 2014-15 are not audited by the Comptroller and Auditor General of India

A. Subsidiaries incorporated in India 1. NTPC Vidyut Vyapar Nigam Limited 2. NTPC Electric Supply Company Limited

Comment Management Reply B. Joint Ventures incorporated in India 1. Ratnagiri Gas & Power Pvt. Ltd. 2. NTPC-SCCL Global Ventures Pvt. Ltd. 3. NTPC-BHEL Power Projects Pvt. Ltd. 4. Transformer & Electricals Kerala Ltd. 5. CIL NTPC Urja Pvt. Ltd. 6. Anushakti Vidyut Nigam Ltd. 7. International Coal Ventures Pvt. Ltd. 8. Energy Efficiency Services Ltd. 9. National Power Exchange Ltd. 10. Utility Powertech Ltd. 11. NTPC-Alstom Power Services Pvt. Ltd. 12. BF- NTPC Energy Systems Ltd. 13. Pan-Asian Renewables Pvt. Ltd.

C. Joint Ventures incorporated outside India 1. Trincomalee Power Company Ltd. 2. Bangladesh India Friendship Power Company Pvt. Ltd.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED ` Crore Particulars 31.03.2015 31.03.2014

A. CASH FLOW FROM OPERATING ACTIVITIES Profit before tax 10,456.21 14,485.76 Adjustment for: Depreciation/amortisation 5,564.61 4,769.99 Prior period depreciation/amortisation 15.62 3.73 Provisions 231.84 160.54 Deferred revenue on account of advance against depreciation (283.35) (16.06) Deferred foreign currency fluctuation asset/liability 244.39 (215.77) Deferred income from foreign currency fluctuation (22.50) 516.36 Fly ash utilisation reserve fund 76.74 91.30 Exchange differences on translation of foreign currency cash and cash equivalents (0.02) (0.19) Interest charges 3,528.57 3,164.29 Guarantee fee & other finance charges 41.80 38.78 Interest/income on term deposits/bonds/investment (1,581.36) (2,130.45) Dividend income (160.22) (139.06) Provisions written back (187.14) (200.86) 7,468.98 6,042.60 Operating profit before working capital changes 17,925.19 20,528.36

Adjustment for: Trade receivables (2,976.09) (629.02) Inventories (1,677.83) (1,154.24) Trade payables, provisions and other liabilities 1,019.90 1,378.81 Loans & advances and other current assets 2,464.63 (906.42) (1,169.39) (1,310.87) Cash generated from operations 16,755.80 19,217.49 Direct taxes paid (2,009.95) (2,686.65) Net cash from operating activities - A 14,745.85 16,530.84 B. CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (19,177.24) (18,948.45) Purchase of investments 2.12 - Sale of investments 1,636.96 1,622.46 Interest/income on term deposits/bonds/investments received 1,847.03 2,453.40 Income tax paid on interest income (303.59) (775.89) Dividend received 160.22 139.06 Net cash used in investing activities - B (15,834.50) (15,509.42)

C. CASH FLOW FROM FINANCING ACTIVITIES Proceeds from long term borrowings 25,450.85 14,523.70 Repayment of long term borrowings (5,076.24) (5,189.74) Proceeds from short term borrowings 206.51 51.48 Grant received 20.00 20.32 Interest paid (7,124.72) (6,088.36) Guarantee fee & other finance charges paid (112.36) (154.55) Dividend paid (including bonus debentures) (12,388.20) (5,018.96) Tax on dividend (including tax on bonus debentures) (2,450.34) (852.95) Net cash used in financing activities - C (1,474.50) (2,709.06)

D. Exchange differences on translation of foreign currency cash and cash equivalents 0.02 0.19

Net increase/(decrease) in cash and cash equivalents (A+B+C+D) (2,563.13) (1,687.45)

Cash and cash equivalents at the beginning of the year (see Note 1 below) 17,050.67 18,738.12 Cash and cash equivalents at the end of the year (see Note 1 below) 14,487.54 17,050.67

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 39 th Annual Report 2014-15 NTPC Limited CIN: L40101DL1975GOI007966 Regd. Office : NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110003 Tel : 011-2436 0100 Fax: 011-24361018. Web : www.ntpc.co.in Email: [email protected] ATTENDANCE SLIP 39 TH ANNUAL GENERAL MEETING TO BE HELD ON FRIDAY, 18 TH SEPTEMBER, 2015 AT 10.30 A.M.

NAME OF THE ATTENDING MEMBER (IN BLOCK LETTERS) *Folio No. DP ID No. Client ID No. No. of shares Held

NAME OF PROXY (IN BLOCK LETTERS, TO BE FILLED IN IF THE PROXY ATTENDS INSTEAD OF THE MEMBER)

I, hereby record my presence at 39 th Annual General Meeting of the Company held on Friday, 18 th September, 2015 at Manekshaw Centre, Parade Road, New Delhi – 110010.

Signature of Member/ Proxy

*Applicable in case of shares held in Physical Form. NOTES: 1. The attendance slip should be signed as per the specimen signature registered with Karvy Computershare Private Limited, Registrar & Transfer Agent (RTA)/ Depository Participant (DP). Such duly completed and signed Attendance Slip(s) should be handed over at the RTA counter(s) at the venue against which RTA will provide admission card. Entry to the hall will be strictly on the basis of admission card as provided by RTA. Members in person and Proxy holders may please carry photo-ID card for identification/verification purposes. 2. Shareholder(s) present in person or through registered proxy shall only be entertained. 3. Due to strict security reasons mobile phones, brief cases, eatables and other belongings are not allowed inside the Auditorium. Shareholder(s)/proxy holder(s) will be required to take care of their belonging(s). 4. No gifts will be distributed at the Annual General Meeting.

39 th Annual Report 2014-15 303 NTPC Limited CIN: L40101DL1975GOI007966 Regd. Office : NTPC Bhawan, SCOPE Complex, 7, Institutional Area, Lodi Road, New Delhi-110 003 Tel : 011-2436 0100 Fax: 011-2436 1018. Web : www.ntpc.co.in Email: [email protected] FORM OF PROXY Name of the member (s): Registered address: Folio No/ DP ID- Client Id: Email ID No. of Shares held

I/We, being the member (s) of …………. shares of the above named company, hereby appoint: 1. Name: Address: Signature: E-mail Id: Or failing him 2. Name: Address: Signature: E-mail Id: Or failing him 3. Name: Address: Signature: E-mail Id: as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Annual General Meeting of the company, to be held on Friday, 18 th September, 2015 at Manekshaw Centre, Parade Road, New Delhi – 110 010 and at any adjournment thereof in respect of such resolutions as are indicated below:

Sr. No. Resolution For Against Ordinary Business 1. Adoption of audited financial statements and consolidated financial statement of the Company for the year ended March 31, 2015, the reports of the Board of Directors and Auditors thereon. 2. Confirmation of payment of interim dividend and declare final dividend for the year 2014-15 3. Re-appointment of Shri Anil Kumar Jha (DIN: 03590871), who retires by rotation 4. Re-appointment of Shri Umesh Prasad Pani (DIN: 03199828), who retires by rotation 5. Fixation of remuneration of Statutory Auditors Special Business 6. Appointment of Shri Anil Kumar Singh (DIN: 07004069), as Director 7. Appointment of Shri Kaushal Kishore Sharma (DIN: 03014947) as Director (Operations) 8. Raising of funds upto Rs. 5,000 Crore through issue of Bonds/Debentures on Private Placement basis 9. Ratification of remuneration of the Cost Auditors for the financial year 2015-16 10. Approval for entering into transaction(s) with associate company

Affix Revenue Signed this…… day of……… 20…. Stamp of ` 1/- Signature of shareholder ______Signature of Proxy holder(s) ______NOTES: 1. This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the meeting. 2. The Proxy Form should be signed across the stamp as per specimen signature registered with the RTA/Depository Participant (DP). 3. Please put ‘X’ in the appropriate column against the resolutions indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he/she thinks appropriate. 4. In the case of joint holders, the signature of any one holder will be sufficient, but names of all the joint holders should be stated.

(i) User ID and Password for remote e-voting is provided as below: EVEN (Remote e-voting Event Number) USER ID PASSWORD / PIN

(ii) Please read instruction given overleaf before casting your vote.

39 th Annual Report 2014-15 305 General Information and instructions relating to remote e-voting are as under: 1. Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014 and Clause 35B of the Listing Agreement with Stock Exchanges, a member of the Company holding shares either in physical form or in dematerialized form, may exercise his right to vote by electronic means in respect of the resolution(s) contained in this notice. 2. The Company is providing facility for voting by electronic means to its members to enable them to cast their votes through such voting. The Company has engaged the services of Karvy Computershare Private Limited (“Karvy”) as the Authorised Agency to provide remote e-voting facility (i.e. the facility of casting votes by a member by using an electronic voting system from a place other than the venue of annual general meeting). 3. The Company shall also provide facility for voting through polling paper which shall be available at the meeting and members attending the meeting who have not already casted their vote by remote e-voting shall be able to exercise their right to vote at the meeting. 4. The members who have casted their vote by remote e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again. 5. The Board of Directors have appointed Shri Pradeep K. Mittal, Advocate, M/s PKMG Law Chambers as the Scrutinizer, for conducting the voting/poll and remote e-voting process in a fair and transparent manner. 6. The cut-off date for the purpose of voting (Including remote e-voting) is 11 th September, 2015. 7. The remote e-voting facility will be available during the following period after which the portal shall forthwith be blocked and shall not be available: Commencement of remote e-voting: From 9.00 a.m. (IST) on September 15, 2015 End of remote e-voting: Up to 5.00 p.m. (IST) on September 17, 2015 8. The result of voting will be declared within 48 hrs. of the conclusion of the AGM. The results declared along with the consolidated scrutinizer’s report shall be placed on the website of the Company i.e. www.ntpc.co.in and on the website of Karvy https://evoting.karvy.com. The results shall simultaneously be communicated to the Stock Exchanges. 9. The procedure and instructions for remote e-voting are as under: a. Open your web browser during the voting period by typing the URL: https://evoting.karvy.com b. Enter the login credentials (i.e. User ID and password mentioned in the email forwarding the Notice of AGM or mentioned on the Proxy Form accompanying the Notice of AGM, in case email-id is not registered and physical copy of the Annual Report is being received by you). The said login credentials shall be valid only in case you continue to hold the shares on the cut-off date. Your Folio No./ DP ID Client ID will be your User ID. c. Any person who becomes a member of the Company after dispatch of the Notice of the Meeting and holding shares as on the cut-off date i.e. September 11, 2015, may obtain the User ID and password in the manner as mentioned below: I. If the mobile number of the member is registered against Folio No. / DP ID Client ID, the member may send SMS: MYEPWD DP ID Client ID or MYEPWD E-Voting Event Number + Folio No. to 9212993399. Example for NSDL: MYEPWD IN12345612345678 Example for CDSL : MYEPWD 1402345612345678 Example for Physical : MYEPWD XXXX1234567890 II. If e-mail address or mobile number of the member is not registered against Folio No. / DP ID Client ID, then on the home page of https:// evoting.karvy.com, the member may click “Forgot Password” and enter Folio No.or DP ID Client ID and PAN to generate a password. III. Member may call Karvy’s toll free number 1800-3454-001 IV. Member may send an e-mail request to [email protected]. d. If the member is already registered with Karvy e-voting platform then he can use his existing User ID and password for casting the vote through remote e-voting. If you forgot your e-voting password, then it can be retrived as per step (c) (ii) above. e. After entering these details appropriately, click on “LOGIN” f. You will now reach password change menu wherein you are required to mandatorily change your password. The new password shall comprise of minimum 8 characters with at least one upper case (A-Z), one lower case (a-z), one numeric (0-9) and a special character (@,#,$,etc.). The system will prompt you to change your password and update your contact details like mobile number, email ID, etc. on first login. You will also be required to enter a secret question and answer of your choice to enable you to retrieve your password in case you forget it. g. It is strongly recommended that you do not share your password with any other person and that you take utmost care to keep your password confidential. h. You need to login again with the new credentials. i. On successful login, the system will prompt you to select the E-Voting Event Number for NTPC Limited. j. On the voting page, you will see the Resolution Description and options “FOR/AGAINST/ ABSTAIN” for voting. Enter the number of shares (which represents the number of votes) as on the cut-off date under “FOR/AGAINST” or alternatively, you may partially enter any number in “FOR” and partially in “AGAINST” but the total number in “FOR/AGAINST” taken together should not exceed your total shareholding as on the cut-off date, as mentioned above. You may also choose the option “ABSTAIN” in case you do not want to cast vote. k. You may then cast your vote by selecting an appropriate option and click on “SUBMIT”. l. A confirmation box will be displayed. Click “OK” to confirm else “CANCEL” to modify. Once you confirm, you will not be allowed to modify your vote. During the voting period, Members can login any number of times till they have voted on the Resolution(s). m. Members holding multiple folios/demat accounts shall choose the voting process separately for each of the folios/ demat accounts. n. Corporate/Institutional Members (i.e. other than Individuals, HUF,NRI,etc.) are also required to send scanned certified true copy (PDF Format) of the Board Resolution/ Authority Letter,etc. together with attested specimen signature(s) of the duly authorized representative(s), to the Scrutinizer at e-mail id: [email protected] with a copy to [email protected]. The scanned image of the above mentioned documents should be in the naming format “Corporate Name_EVENT NO.” o. Once the vote on a resolution is casted by a Member, the Member shall not be allowed to change it subsequently. Further, the Members who have cast their vote through remote e-voting shall not be allowed to vote again at the Meeting. p. In case of any query pertaining to remote e-voting, please contact Karvy’s toll free no. 1800-345-4001 or visit the FAQ’s section available at Karvy’s website https://evoting.karvy.com q. In case of grievances connected to the remote e-voting, please contact Mr. Suresh Babu D, Deputy Manager, Karvy Computershare Private Limited, Karvy Selenium Tower-B, Plot No. 31 & 32, Gachibowli Financial District, Nanakramguda, Serilingampally, Hyderabad – 500 032 Phone No.: 040-67161518 , E-mail: suresh.d @karvy.com.

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