NTPC Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

1 The above standalone financial results have been reviewed by the Audit Committee of the Board of Directors in their meeting held on 19 June 2021 and approved by the Board of Directors in their meeting held on the same date.

2 The standalone financial statements of the Company for the year ended 31 March 2021 have been prepared in accordance with the Indian Accounting Standards (Ind-AS) as prescribed under Section 133 of the Corr panies Act, 2013. The statutory auditors have issued unmodified opinion on these standalone financial statements. The audited account:; 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 Central Electricity Regulatory Commission (CERC) notified the CERC (Terms and Conditions of Tariff) Regulations, 2019 vide

Order dated 7 March 2019 (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, capacity charges are billed to beneficiaries in accordance with the tariff approved and applicable as on 31 March 2019, as provided in Regulations. 2019. in case of new projects, which git commercialised from 1 April 2019 and projects where tariff approved and applicable as on 31 March 2019 is pending 'rom CERC, billing] is done based on capacity charges as filed with CERC in tariff petitions. Energy charges are billed as per the open tional norms specified in the Regulations 2019. The amount provisionally billed is 7 94,099.85 crore (31 March 2020: 7 91,339.38 crore).

(ii) Sales have been provisionally recognized at 7 94,464.04 crore (31 March 2020 7 91.491.55 crore) on the said basis.

b) Sales include 7 (-) 1,101,47 crore (31 March 2020: 7 1,768.88 crore) on accoun: of income tax recoverable from J (refundable to) the beneficiaries as per Regulations, 2004 due to reversal of tax provisions created in the previous year pursuant to! 'Vivad se Vishwas Scheme’ (VsVS) introduced by the government vide The Direct Tax Vivad Se Vishwas Act, 2020 for settlement of pending income tax disputes. Sales also include 7 81.88 crore (31 March 2020: 7 79.97 crore) on account of deferred tax imaterialized which is recoverable from beneficiaries as per Regulations, 2019.

c) Sales include 7 1,154,64 crore (31 March 2020: 7 31,59 crore) pertaining to earlier years on account 'of revision of energy charges due to grade slippages and other adjustments.

d) Revenue from operations for the year ended 31 March 2021 Include 7 3,112.51 c ore (31 March 2020: 7 2,903.59 crore) on account of sale of energy through trading.

4 On 7 February 2021, a massive unprecedented flood consisting of debris and muck, silt, boulders,! rock pieces, etc. caused by glacier burst in the upstream of the project in the Himalayas, hit a part of the Company's under construction 520 MW hydropower project in the state of Uttarakhand. This resulted in large scale inundation and silting at the project site, especially the barrage intake structure, desilting chamber/basin and adjoining facilities including their approach. However, the main power house and darn was not significantly affected by the floods. Most of the mechanical and electrical equipment are in safe condition.

Industry Experts engaged by the Company including experienced officials of the Company, are preparing a comprehensive assessment -cum- action plan for restoration of the project. It is anticipated that the restoration work may take tinjie up to the end , of the next financial year i.e. 2021-22, which is being closely monitored by the Company. Insurance cover is availably for the loss/damage caused. The company is committed to the completion of the project at the earfiest.

The carrying cost of the project as at 31 March 2021 is 7 5,337.69 crore (31 Mart h 2020: 7 4,868.7j9 crore). Damage to the project due to the calamity is indemnifiable as stated above and Management is of the view that there would not be any material impact on the financials and confident that any additional expenditure consequent to the natural calamity, would tie covered as part of project cost as per Tariff Regulations, hence no adjustment is considered necessary in respect of the carrying value of the project,

5 The Company is executing a hydro power project in the state of Uttarakhand, whe re alt the clearances were accorded. A case was filed in Hon'ble Supreme Court of India after the natural disaster in Uttarakhand in June 2013 to review whether the various existing and ongoing hydro projects have contributed to environmental degradation, Hon'ble S jpreme Court of India on 7 May 2014, ordered that no further construction shall be undertaken in the projects under consideration until f jrther orders, which included the said hydro project of the Company, In the proceedings, Hon'ble Supreme Court is examining to allow ew projects which have all clearances which includes the project of the Company where the work has been stopped. Aggregate cost in turred on the project up to 31 March 2021 is 7 163 86 crore (31 March 2020: 7 163,40 crore). Management is confident that the approval for proceeding with the project shall be granted, hence no adjustment is considered necessary in respect of the carrying value of the project,

6 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 challenge! I 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 ttj> 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 fijom 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 wh!ich stayed the order of the NGT and the matter is sub-judice. All the units of the project have been declared commerc al in the earlier years The carrying cost of the project as at 31 March 2021 is 7 15,115.02 crore (31 March 2020: 7 15,662.28 crore). Me nagement is confident that the approval for the project shall be granted, hence no adjustment is considered necessary in respect of the carrying value of th^ project.

7 The Company is executing a thermal power project consisting of two units of SCO MW each in th,e State of Te,angana. The project construction commenced in the year 2016 after obtaining the requisite approval and Environment Clearance (Ed) from MOEF&CC (Ministry of Environment, Forest and Climate Change). On 27 May 2021, the National Green Tribuna (NGT) has passed an order instructing MOEF&CC to keep the EC granted for the project in abeyance for a per od of seven months or till the period the re-appraisal is done and additional conditions imposed by the MOEF&CC, whichever is earlier. NGT has further directed the MOEF&CC to conduct additional studies pertaining to Environment Impact Assessment of the project, :o be carried out)through the company, for further assessment by its Expert Appraisal Committee (EAC) and get recommendations of the EAC for imposing additional conditions by the MOEF&CC, if any, on the company for allowing the units to operate. The Company has obtained advice of prominent legal experts and has filed an appeal before Hon'ble Supreme Court of India against the directions o! NGT. Both the units of the project are in advanced stage of construction and commissioning of the units is envisaged in the next year. The carrying cost of the project as at 31 March 2021 is ? 9,376.31 crore (31 March 2020: ? 8,017.48 crore). Management is confident that the approval for the continuation of the project shall be granted, hence no adjustment is considered necessary in respect of the carrying value of the project.

8 An amount of ? 700,30 crore (31 March 2020: ? 749.01 crore) has been incurrec upto 31 March 2,o21 in respect of one of the hydro power projects of the Company, the construction of which has been discontini ed on the advice of the Ministry of Power (MOP), Government of India (GOI), which includes ? 449.88 crore (31 March 2020: ? 439 57 crore) in respect of arbitration awards challenged by the Company before the Flon'ble High Court of Delhi. In the event the Hon'bie 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 interes' costs as well as) claims of contractors/vendors for various packages for this project will be compensated in full by the GOI, hence, no xovlsion is consic(ered necessary.

9 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? 356.31 crore was said upto 31 March 2019.

Further, the Arbitral Tribunal had awarded a claim of ? 1,891.09 crore plus applicable interest inj favour of the operator, during the financial year 2018-19. The Company aggrieved by the arbitral award and consideiing legal opinion Obtained, had filed an appeal before the Hon'ble High Court of Delhi (Hon’ble High Court) against the said arbitral award in its entirety.

In the financial year 2019-20, against the appeal of the Company, Hon'ble High Court directed the Company to deposit ? 500.00 crore with the Registrar General of the Court. The said amount was deposited with the Hon'ble High Court jon 5 November 2019. Hon'ble High Court vide its order dated 8 January 2020 directed the parties to commence forma handing over of the infrastructure in the presence of appointed Local Commissioner and also directed release of ? 500.00 crore tc the operator by the Registrar General subject to verification of bank guarantee and outcome of the 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 T500.0Q crore was released to the operator by the Hon'ble High Court. As per order of Hon'ble High Court, formal handing over of the infrastructure started on 20 January 2020 at the project site. However, due to certain local administrative issues initially and further due to Covid-19 pandemic, Local Commissioner’s visit had to be deferred, *

In view of delay in the handover exercise, NTPC had filed an Application in Honble High Court praying to pass further directions to operator in this regard. Hon’ble High Court on 11 November 2020 disposed off the application requesting the Ldj Local Commissioner appointed by the Court, to visit the project site expeditiously preferably within 2 wes :ks and carry out the commissiqn. The handing over exercise has been delayed due to operator's issues with local labours at the site and Covid situation. Date of hearing at Hon'ble High Court of Delhi has been adjourned several times in light of restricted functioning of the Hon’ble High Court and now stands adjourned till 15 July 2021 in view of the current Covid-19 situation.

Pending final disposal of the appeal by the Hon’ble High Court, considering the pro /isions of Ind AS 37 'Provisions, Cjontingent Liabilities and Contingent Assets' and Significant Accounting Policies of the Company, provision has been updated by interest to ? 38.09 crore (31 March 2020:? 37.92 crore) and the balance amount of? 2,153.57 crore (31 March 2020: ? 2,014184 crore) has fcieen considered as contingent liability,

10 The Company is in the business of generation and sale of electricity which is an essential service as emphasized by MOP, GOI. During the outbreak of COVID-19, including recent surge in the number of cases, the Company has ensured the availability of its power plants to generate power and has continued to supply power during the period of lockdown. In line with th]e directions of ItJOP dated 15 & 16 May 2020, issued in accordance with the announcement of GOI under the Atmar irbhar Bharat Special Economic and Comprehensive package, to allow a rebate of between 20%-25% on the capacity charges during the lock down period subject to approval of the Board, an amount of ? 1,363.00 crore has been approved by the Board, to be allowed d jring the year 2020-21. The entire amount has since been accounted for and disclosed as exceptional item.

CERC issued an order dated 3 April 2020 whereby it was 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. on the payments becoming overcue during the perjod from 24 March 2020 to 30 June 2020 to contain the impact of COVID-19. Further, GOI has notified Electricity (Ldte Payment Surcharge) Rules, 5021 on 22 February 2021 .These rules envisage that base rate of LPSC to be considered as SBI one year MCLR, as on J April of the financial year, plus five percent. The rate of LPSC shall be increased by 0.5 percent for every month of delay, provided that) the LPSC shall jnot be more than 3 percent higher than the base rate at any time.

Further, under the Atmanirbhar Bharat package, the Company has deferred the capacity charges to! DISCOMS for the lockdown period for the power not scheduled to be payable without interest after the lock down peri 3d in three equal monthly installments. The impact on profit for the the year due to the reduction in LPSC rate and deferment of capacity c harges, is not material.

The demand for power is continuously increasing with increase in economic activiti rs in the Country, Jalthough demand may get impacted in short term due to lock downs in certain parts of the country.The Management i toes not anticipate any material' medium to long-term impact on the financial position of the Company. The Company will continue tc closely monitor ^ny material changes to the future economic conditions and take appropriate remedial measures as needed to respord to the Covid related risks, if any.

, 11 During the year ended 31 March 2021, one thermal unit of 660 MW at Khargone w. ;.f. 4 April 2020, cine thermal unit pf 800 MW at Lara

w.e.f. 7 November 2020. 8 MW solar PV capacity at Auraiya w.e.f. 10 Novembe 2020, 7 MW solar PV capacity at Auraiya w.e.f 4 December 2020, 140 MW solar PV capacity at Bilhaur w.e.f. 18 January 2021, 5 t/IW solar PV cappcity at Auraiya W.e.f, 20 February 2021, one thermal unit of 800 MW at Gadarwara w.e.f. 1 March 2021 and 70 MW solar PV capacity Bilhaur w.e.f. 28 March 2021 have been declared commercial. Further, Dulanga Captive Coal Mine of the Company has been declared commercial w.e[f. 1 October 2020. Further, the operations of 460 MW Talcher Thermal Power Station have been disco itinued w.e.f. the end of 31 March, 2021.

12 During the quarter, the Company has paid an interim dividend of? 3.00 per equitv share (par value ? 10/- each) for the financial year 2020-21. The Board of Directors has recommended final dividend of ? 3.15 per equity share (par value ? 10/- each; The total dividend (including interim dividend) for the financial year 2020-21 is ? 6.15 per equity share 1 par value ? 10/- each).

13 Pursuant to the approval of Board of Directors of the Company for buyback of equity shares in its meeting held on 2 November 2020, the Company has bought back 19,78.91,146 equity shares of the Company for an aggregate amount o: ? 2,275.75 crore being 2% of the total paid up equity share capital at ? 115.00 per equity share. The settlement of all valid bids was completed on 30 December 2020 and the equity shares bought back were extinguished on 1 January 2021. Accordingly, he paid up equity share capital has been reduced by e 197.89 crore and other equity is reduced by ? 2,565.93 crore (including tax on buy back of shares of ? 484.06 crore and other buyback expenses of ? 4.01 crore (net of tax)). Further, earnings per share has been adjusted on account of buy back of shares.

14 The Company has entered into a tripartite framework agreement with Ratnagin Gas & Power pjvt. Ltd. (RGPPl).), a Joint Venture Company of NTPC Limited, and its lenders on 31 December 2020 for settlemer t of RGPPL's oujstanding debt liabilities as per the Composite Resolution Plan. As per the Resolution Plan, the Company has provided inter corporate loan of ? 885 crore to RGPPL for settlement of loan with the lenders. Further, 35.47% of equity held by lenders in RG PPL have been transferred to the fCompany as a part of the Resolution Plan, at nominal value. Consequently, the Company’s equity shareholding in RGIPPL has increased from 25.51 % to 60.98% on 31 December 2020 and RGPPL has become a subsidiary company of NTPC Limited with effect from 31 December 2020.

Further, the Company has executed Share Purchase Agreements with GAIL (India; Limited (GAIL) op 23 February 2021, for purchase of GAIL's share (25.51%) in RGPPL and Sale of NTPC's share (14.82%) (on fully d tutive basis) in Konkan LNG Ltd. (KLL) at a nominal value of ?1/-, After transfer of shares as per the Share Purchase Agreements, NT3C has exited frojn KLL and NfPC's shareholding in RGPPL has become 86.49% with effect from 23 February 2021.

15 The GOI introduced Vivad se Vishwas Scheme (VsV Scheme) through The Cirect Tax Vivad Eie Vishwas Act; 2020’. During the previous year, the Company had created an additional tax provision amounting to ? 2,661.47 crore as it proposed to settle all its pending Income Tax disputes for fourteen years by opting for the VsVs scheme. During ihe year, the Company decide^ to settle its pending disputes for three years only, under the VsVs scheme, for which the Company is i i the process of completion of procedural formalities. Accordingly, excess tax provision amounting to ? 1.889 05 crores has been written jack during the quarter ended 31 March 2021.

16 Formula used for computation of coverage ratios DSCR = Earning before Interest, Depreciation/amortisation, Tax and Exceptional items /(Interest net of transfer to expenditure during construction + Principal repayment); of the long term borrowings excluding prepayments made out of refinancing arrangements) and ISCR = Earning before Interest, D ;preciation/amortisation. Tax and Exceptional items-(Interest net of transfer to expenditure during construction).

17 The Company has maintained required asset cover as per the terms of offer document/ Information Memorandum and/or Debenture Trust Deed, including compliance with all the covenants, in respect of the listed nor -convertible debt securities.

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

19 Previous periods figures have been reclassified wherever considered necessary.

A K Gautam
Director (Finance)