NTPC Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2020

1. The above results have been reviewed by the Audit Committee of the Board of Directors in their meeting held on 27 June 2020 and approved by the Board of Directors in their meeting held on the same day.

2. The standalone financial statements of the Company for the year ended 31 March 2020 have been prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Companies Act, 201 3. The statutory auditors have issued unmodified opinion on these standalone financial Statements. The audited accounts are subject to review by the Comptroller and Auditor General of India under Section 143(6) of the Companies Act, 2013.

3. a) (i) The CERC notified the Central Electricity Regulatory Commission (Terms and Conditions of Tariff)Regulations, 2019 vide Order dated 7 March 201 9 (Regulations, 2019) for determination of tariff for the tariff period 2019-2024. Pending issue of provisional final tariff orders with effect from 1 April 2019 for all stations, capacity charges are billed to beneficiaries in accordance with the tariff approved and applicable as on 31 March 2019, as provided in Regulations, 2019.111 Case of projects declared commercial w.e.f. 1 April 2019 and projects where tariff applicable as on 31 March 2019 is pending from CERC, billing is done based on capacity charges as filed with CERC in the tariff petitions. Energy charges are billed as pet the operational norms specified in the Regulations 2019. The amount provisionally billed for the year ended 31 March 2020 is f 91,339.38 crore (31 March 2019: Rs. 88,278.09 crore).

(ii) Sales for the year ended 31 March 2020 have been provisionally recognized at Rs.91,491.55 crore (31 March 2019: Rs 89,007.64 crore) on the said basis.

b) Sales for the year ended 31 March 2020 include Rs. 31.59 wore (31 March 2019: (-) Rs. 2,775.82 crore) pertaining to previous years recognized based on the orders issued by the CERC/Appellate Tribunal for Electricity (APTEL).

c) Sales for the year ended 31 March 2020 include Rs. 1,768.88 crore (31 March 2019: (-) Rs. 0.02 crore) on account of income tax recoverable from I (refundable to) the beneficiaries as per Regulations, 2004. The current year amount is on account of income tax liability determined under Vivad se Vishwas Scheme notified under Direct Tax Vivad se Vishwas Act 2020. Sales also include Rs.79.97 crore (31 March 2019: Rs. 82.68 crore) on account of deferred tax materialized which is recoverable from beneficiaries as per
Regulations, 2019.

d) Revenue from operations for the year ended 31 March 2020 include Rs. 2,903.59 crore (31 March 2019: Rs. 2,894.74 crore) on account of sale of energy through trading.

4. Provision for current tax for the year ended 31 March 2020 includes Rs. 2,860.17 crore (31 March 2019: (-) Rs. 105.88 Crore) being tax related to earlier years. This includes additional tax provision amounting to Rs. 2,661.47 crore, as the Company has decided to settle pending Income Tax disputes by opting under the Vivad se Vishwas Scheme notified by the Government through 'The Direct Tax Vivad Se Vishwas Act, 2020'. The company is in the process of completion of procedural formalities under the scheme and settlement of pending balances will be carried out on completion of such formalities.

5. The environmental clearance ('clearance') granted by the Ministry of Environment and Forest, Government of India (MoEF) for one of the Company's project consisting of three, units of 800 MW each, was challenged before the National Green Tribunal (NGT). The NGT disposed off the appeal, inter alia, directing that the order of clearance be remanded to the MoEF to pass an Order granting or declining clearance to the project proponent afresh in accordance with the law and the judgement of the NGT and for referring the matter to the Expert Appraisal Committee ("Committee") for its re-scrutiny, which shall complete the process within six months from the date of NGT order. NGT also directed that the environmental clearance shall be kept in abeyance and the Company shall maintain status quo in relation to the project during the period of review by the Committee or till fresh order is passed by the MoEF, whichever is earlier. The Company filed an appeal challenging the NGT order before the Hon'ble Supreme Court of India which stayed the order of the NGT and the matter is sub-judice. All the units of the project have men declared commercial in the earlier years. The carrying cost of the project as at 31 March 2020 is f 15,662.28 wore (31 March 2019: T 15,598.80 crore). Management is confident that the approval for the project shall be granted, hence no provision is considered necessary.

6. The Company is executing a hydro power project in the state of Uttrakhand, where all the clearances were accorded. A case was filed in Hon'ble Supreme Court of India Prier the natural disaster in Uttrakhand in June 2013 to review whether the various existing and ongoing hydro projects have contributed to environmental degradation. Hon'ble Supreme Court of India on 7 May 2014. ordered that no further construction shall be undertaken in the projects under consideration until further orders. which included the said hydro project of the Company. In the proceedings, Hon'ble Supreme Court is examining to allow few projects which have all clearances which includes the project of the Company where the work has been stopped. Aggregate cast incurred on the project up to 31 March 2020 is Rs. 163.40 crore (31 March 2019: Rs. 163.33 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no provision is considered necessary.

7. An amount of Rs. 749.01 crore (31 March 2019: Rs. 719.71 crore) has been incurred upto 31 March 2020 in respect of one of the hydro power projects of the Company, the construction of which has been discontinued on the advice of the Ministry of Power (MOP), GOI, which includes f 439.57 crore (31 March 2019: Rs. 413.40 crore) in respect of arbitration awards challenged by the Company before the Hon'ble High Court of Delhi. In the event the Hon'ble High Court grants relief to the Company, the amount would be adjusted against provisions made in this regard. Management expects that the total cost incurred, anticipated expenditure on the safety and stabilisation measures, other recurring site expenses and interest costs as well as claims of contractors /vendors for various packages for this project will be compensated in full by the GOI. Hence, no provision is considered necessary.

8. The Company had entered into an agreement for movement of coal through inland waterways for one of its stations. As per the agreement, the operator was to design, finance, build, operate and maintain the unloading and material handling infrastructure for 7 years after which it was to be transferred to the Company at 1/-. After commencement of the operations, the Operator had raised several disputes, invoked arbitration and raised substantial claims on the Company. Based on the interim arbitral award and subsequent directions of the Hon'ble Supreme Court of India, an amount of Rs.356.31 crore was paid upto 31 March 2019. In the previous year, the Arbitral Tribunal had awarded a claim of Rs. 1,891.09 crore plus applicable interest in favour of the operator. The Company aggrieved by the arbitral award and considering legal opinion obtained, had filed an appeal &fore the Hon'ble High Court of Delhi (Hon'ble High Court) against the said arbitral award in its entirety. Considering the provisions of Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets'. Significant Accounting Policies of the Company and the principle of conservatism, an amount of Rs. 394.07 crore was estimated and provided for as at 31 March 2019 and balance amount of Rs.1,875.73 crore was disclosed as contingent liabilities, long with applicable interest.
During the year, against the appeal of the Company, Hon'ble High Court vide its order dated 23 September 2019 held that subject to deposit of Rs. 500 crore by the Company with the Registrar General of the Court within six weeks, execution of the impugned award shall remain stayed tit1 the next date of hearing and upon handing over the entire infrastructure in terms of the contract by the operator to the Company, the Registrar General shall release the amount to the operator against r bank guarantee. The said amount was deposited with the Hon'ble High Court on 5 November 2019. Hon'ble High Court vide its order dated 8 January 2020 directed the parties to commence formal handing over of the infrastructure in the presence of appointed Local Commissioner and also, directed release of Rs.500 crore to the operator by the Registrar General subject to the outcome of this application of the Company for formal handing over of the infrastructure. On 17 January 2020, unconditional BG was submitted by the operator to Registrar General and Rs. 500 crore was released to operator by the Hon'ble High Court. Further, Rs. 356.31 crow paid to operator has been booked to fuel cost and the corresponding provision has been reversed during the current year. As per orders of Hon'ble High Court, formal handing over of the infrastructure has started on 20 January 2020 at the project site. However, due to certain law and order issues initially and further due to COVID-19 pandemic, Local-Commissioner's visit has been deferred. The handing over of the infrastructure facility has not yet completed.

Pending final disposal of the appeal by the Hon'ble High Court, considering the provisions of Ind AS 37 'Provisions, Contingent Liabilities and Contingent Assets' and Significant Accounting Policies of the Company, provision has been updated by interest to Rs.37.92 crores as at 31 March 2020 (31 March 2019:Rs. 394.07 wore) and the balance amount of Rs. 2,014.84 crore (31 March 2019: Rs. 1,875.73 crore) has been disclosed as contingent liability.

9. During the year, thermal power units of one 800 MW at Gadarwara w.e.f. 1 June 2019, one 800 MW at Lara w.e.f. 1 October 2019, one 660 MW at Tanda w.e.f. 7 November 2019, one 660 MW at Khargone w.e.f. 1 February 2020, one 800 MW at Darlipalli w.e.f. 1 March 2020 and one 250 MW at Barauni w.e.f. 1 March 2020 have been declared commercial. Further, the Pakri Barwadih Coal Mine has been declared commercial w.e.f. 1 April 2019.

10. During the quarter, the Company has paid an interim dividend of Rs. 0.50 per equity share (par value Rs. 10/- each) for the financial year 2019.20, The Board of Directors has recommended final dividend of Rs. 2.85 per equity share (par value Rs.10/- each). The total dividend (including interim dividend) for the financial year 2019-20 is Rs.3.15 per equity share (par value Rs. 10/- each).

11. The Company has adopted Ind AS 116 'Leases' effective 1 April 2019, using modified retrospective approach and therefore the comparatives have not been restated. On the date of initial application, the lease liability has been measured at the present value of the remaining lease payments and right of use assets has been recognized at an amount equal to the lease liabilities. Application of Ind AS 116 does not have any material impact on the financial results of the Company.

12. In pursuance to Section 115BAA of the Income Tax Act, 1961 announced by Government of India through Taxation taws (Amendment) Act, 2019, the Company has an irrevocable option of shifting to a lower tax rate along with consequent reduction in certain tax incentives including lapse of the accumulated MAT credit. The Company has not opted for this option after evaluating the same and continues to recognize the taxes on income as per the earlier provisions.

13. a) During the quarter, the Company has acquired legal and beneficial ownership of 3,60,98,09,800 equity shares held by the President of India in North Eastern Electric Power Corporation LM. (NEEPCO) and the acquisition of beneficial ownership in 600 equity shares held by the nominees of the President of India in NEEPCO (collectively representing 100% of the total paid up share capital of NEEPCO) for an aggregate consideration of Rs.4000.00 crore (Rupees Four Thousand Crore only).

b) During the quarter, the Company has acquir6-d legal and beneficial ownership of 2,73,09,406 equity shares held by the President of India in THDC India Limited (THDCIL) and the acquisition of beneficial ownership in 6 equity shares held by the nominees of the President of India in THDClL (collectively representing 74.496% of the total paid up share capital of THDCIL) for an aggregate consideration of Rs.7500 00 crore (Rupees Seven Thousand Five Hundred Crore only).

With the above, the Company has become the holding company and also a promoter of NEEPCO and THDCIL.

14. Due to outbreak of COVID-19 globally and in India, the Company has made an initial assessment of its likely adverse impact on business and its associated financial risks.
The Company is in the business of generation and sale of electricity which is an essential I service as emphasized by the Ministry of Power (MOP), Government of India (GOI). By taking a number of proactive steps and keeping tn view the safety of all its stakeholders, the Company has ensured the availability of its power plants to generate power and has continued to supply power during the period of lockdown.

On the directions of MOP, the Central Electricity Regulatory Commission (CERC) issued an order dated 3 April 2020 whereby it directed that Late Payment Surcharge (LPSC) shall apply at a reduced rate of 12% p.a. instead of the normal rate of 18% p.a. if any delayed payment beyond 45 days from the date of presentation of the bills falls between 24 March 2020 and 30 June 2020. Accordingly, the LPSC for the year 2020-21 is expected to be lower by Rs. 58.00 crore approximately. Further as per the directions of MOP dated 15 & 16 May 2020, issued in accordance with the announcement of GO1 under the Atmanirbhar Bharat special economic and comprehensive package, the Company has decided to defer the capacity charges of Rs. 2,064.00 crore to DISCOMS for the lockdown period on account of,COVlD-19 pandemic for the power not scheduled by the DISCOMs, to h payable without interest after the end of the lockdown period in three equal monthly instalments and has allowed a rebate of Rs. 1,363.00 mote on the capacity charges billed during the lockdown period to DlSCOMs on account of COVID-19, in the financial year 2020-21. These amounts are provisional and may vary due to reconciliation of related data. Due to the above, there is no material impact on the profits of the Company for the year ended 31 March 2020.

The Company believes that the impact due to the outbreak of COVID-19 is likely to be short-term in nature and does not anticipate any medium to long-term risks in the Company's ability to continue as a going concern and meeting its liabilities as and when they fall due. Impact assessment of, COVID-19 is a continuing process considering the uncertainty involved thereon. The company will continue to closely monitor any material changes to the future economic conditions.

15. Formula used for computation of coverage ratios DSCR = Earning before Interest, Depreciation, Tax and Exceptional items / (1ntetest net of transfer to expenditure during construction + Scheduled principal repayments of the long term borrowings) and ISCR = Earning before Interest, Depreciation. Tax and Exceptional items /(Interest net of transfer to expenditure during construction).

16. For all secured bonds issued by the Company, 100% security cover is maintained for outstanding bonds. The security has been created on property, plant and equipment through English/Equitable mortgage as well as hypothecation of movable assets of the Company.

17. Figures of last quarter are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the current financial year.

18. Previous periods figures have been reclassified wherever considered necessary.

A K Gautam
Director(Finance)