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NTPC Ltd.

BSE: 532555 Sector: Infrastructure
NSE: NTPC ISIN Code: INE733E01010
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VOLUME 442069
52-Week high 121.00
52-Week low 78.10
P/E 10.00
Mkt Cap.(Rs cr) 114,566
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 118.75
CLOSE 118.75
VOLUME 442069
52-Week high 121.00
52-Week low 78.10
P/E 10.00
Mkt Cap.(Rs cr) 114,566
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NTPC Ltd. (NTPC) - Auditors Report

Company auditors report

To

The Members of NTPC Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of NTPC Limited("the Company") which comprise the Balance Sheet as at 31 March 2020 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "Standalone FinancialStatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs (financial position) of the Companyas at 31 March 2020 and its profit (financial performance including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditors' Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the Standalone Financial Statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to the following matters in the notes to theStandalone Financial Statements:

(a) Note No. 32(a) regarding billing and accounting of sales onprovisional basis.

(b) Note No. 44 in respect of one of the projects of Company consistingof three units of 800MW each where the order of National Green Tribunal (NGT) on thematter of environmental clearance for the project has been stayed by the Hon'bleSupreme Court of India the matter is sub-judice and the units have since been declaredcommercial.

(c) Note No. 57(iii)(b) with respect to appeal filed by the companywith the Hon'ble High Court of Delhi in the matter of Arbitral award pronouncedagainst the company and the related provision made/disclosure of contingent liability asmentioned in the said note.

(d) Note No. 41 which describe the assessment of the impact of Covid-19pandemic by the management on the business and its associated financial risks.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below description of how our auditaddressed the matter is provided in that context. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Sr. No. Key Audit Matter How our audit addressed the Key Audit Matter
1. Recognition and Measurement of revenue from Sale of Energy
The company records revenue from sale of energy as per the principles enunciated under Ind AS 115 based on tariff approved by the Central Electricity Regulatory Com- mission (CERC) as modified by the orders of Appellate Authorities. Pending issue of provisional/final tariff order w.e.f. 01 April 2019 sales has been provisionally recog- nised considering the applicable CERC Tariff Regulations 2019. We have obtained an understanding of the CERC Tariff Reg- ulations orders circulars guidelines and the Company's internal circulars and procedures in respect of recognition and measurement of revenue from sale of energy compris- ing of capacity and energy charges and adopted the follow- ing audit procedures:
This is considered as key audit matter due to the nature and extent of estimates made as per the CERC Tariff Reg- ulations which leads to recognition and measurement of revenue from sale of energy being complex and judge- mental. - Evaluated and tested the effectiveness of the Company's design of internal controls relating to recognition and measurement of revenue from sale of energy.
(Refer Note No. 32 to the Standalone Financial Statements read with the Significant Accounting Policy No. C.15) - Verified the accounting of revenue from sale of energy based on provisional tariff computed as per the principles of CERC Tariff Regulations 2019 Based on the above procedure performed the recognition and measurement of revenue from sale of energy are con- sidered to be adequate and reasonable.
2. Impairment assessment of Property Plant and Equipment (PPE)
The Company has a material operational asset base (PPE) relating to generation of electricity and is one of the com- ponents for determining the tariff as per the CERC Tariff Regulations which may be vulnerable to impairment. We have obtained an understanding and tested the design and operating effectiveness of controls as established by the Company's management for impairment assessment of PPE.
We considered this as a key audit matter as the carrying value of PPE requires impairment assessment based on the future expected cash flows associated with the power plants (Cash generating units) We evaluated the Company's process of impairment assess- ment in assessing the appropriateness of the impairment model including the independent assessment of discount rate economic growth rate terminal value etc.
(Refer Note No. 56(a) to the Standalone Financial State- ments read with the Accounting Policy No. C.20) We evaluated and checked the calculations of the cash flow forecasts prepared by the Company taking into considera- tion the CERC (Terms and Conditions of Tariff) Regulations 2019 (applicable for the tariff period of 5 years from 1 April 2019 to 31 March 2024) along with the aforementioned as- sumptions.
Based on the above procedures performed we observed that the Company's impairment assessment of the PPE is ad- equate and reasonable.
3. Deferred Tax Asset relating to MAT Credit Entitlement and corresponding Regulatory Deferral Liability
The company has recognised deferred tax asset relating to MAT credit entitlement. Utilisation of MAT credit will result in lower outflow of Income Tax in future years and accordingly Regulatory Deferral Liability attributable to the said MAT credit entitlement has also been recognised payable to the beneficiaries in subsequent periods as per CERC Tariff Regulations. The recoverability of this deferred tax asset relating to MAT credit entitlement is dependent upon the generation of sufficient future taxable profits to utilise such entitlement within the stipulated period pre- scribed under the Income Tax Act1961. We identified this as a key audit matter because of the importance of this matter to the intended users of the Fi- nancial Statements and its materiality; and requirement of judgement in forecasting future taxable profits for recog- nition of MAT credit entitlement considering the recovera- bility of such tax credits within allowed time frame as per the provisions of the Income Tax Act1961. (Refer Note No. 182549 & 64 to the Standalone Financial Statements read with the Accounting Policy No. C.4 and C.18) We have obtained an understanding for recognition of deferred tax asset relating to MAT credit entitlement and corresponding liability of the same in Regulatory Deferral Account including the management's judgement.
We further assessed the related forecasts of future taxable profits and evaluated the reasonableness of the consider- ations /assumptions underlying the preparation of these forecasts. We have also verified the regulatory deferral ac- count balance attributable to the said MAT credit payable to the beneficiaries in subsequent periods.
Based on the above procedures performed the recogni- tion and measurement of Deferred tax asset relating to MAT credit entitlement and attributable Regulatory Deferral Lia- bility towards beneficiaries are considered adequate and reasonable.
4. Contingent Liabilities
There are a number of litigations pending before various forums against the Company and the management's judgement is required for estimating the amount to be disclosed as contingent liability. We have obtained an understanding of the Company's internal instructions and procedures in respect of estimation and disclosure of contingent liabilities and adopted the following audit procedures:
We identified this as a key audit matter because the estimates on which these amounts are based involve a significantdegreeofmanagementjudgementininterpreting the cases and it may be subject to management bias. - understood and tested the design and operating effectiveness of controls as established by the management for obtaining all relevant information for pending litigation cases;
(Refer Note No. 69 to the Standalone Financial Statements read with the Accounting Policy No. C.13) - discussed with the management regarding any material developments thereto and latest status of legal matters;
- read various correspondences and related documents pertaining to litigation cases and relevant external legal opinions obtained by the management and performed substantive procedures on calculations supporting the disclosure of contingent liabilities;
- examined management's judgements and assessments in respect of whether provisions are required;
- considered the management assessments of those matters that are not disclosed as contingent liability since the probability of material outflow is considered to be remote;
- reviewed the adequacy and completeness of disclosures; Based on the above procedures performed the estimation and disclosures of contingent liabilities are considered to be adequate and reasonable.

Information other than the Standalone Financial Statements andAuditors' Report thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the CorporateGovernance Report and the information included in the Directors' Report includingAnnexures Management Discussion and Analysis Business Responsibility Report and othercompany related information ( but does not include the Standalone Financial

Statements and our auditors' report thereon) which are expectedto be made available to us after the date of this auditors' report.

Our opinion on the Standalone Financial Statements does not cover theother information and we do not and will not express any form of assurance conclusionthereon.

In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the Standalone Financial Statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take appropriate actions if required.

Responsibilities of management and those charged with governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditors' report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate Internal Financial Controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors'report to the related disclosures in the Standalone Financial Statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditors' report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the StandaloneFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of Section143(11) of the Act and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the said Order to the extent applicable.

2. We are enclosing our report in terms of Section 143(5) of the Acton the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us in the"Annexure 2" on the directions issued by the Comptroller and Auditor General ofIndia.

3. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlows dealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Financial Statementscomply with the Indian Accounting Standards prescribed under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended.

(e) Being a Government Company pursuant to the Notification No. GSR463(E) dated 5 June 2015 issued by the Ministry of Corporate Affairs Government of Indiaprovisions of sub-section (2) of Section 164 of the Act are not applicable to theCompany.

(f) With respect to the adequacy of the Internal Financial Controlswith reference to the Standalone Financial Statement of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure 3".

(g) As per Notification No. GSR 463(E) dated 5 June 2015 issued by theMinistry of Corporate Affairs Government of India Section 197 of the Act is notapplicable to the Government Companies. Accordingly reporting in accordance withrequirement of provisions of section 197(16) of the Act is not applicable on the Company.

(h) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

I. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements. Refer Note No. 69 to theStandalone Financial Statements;

II. The Company has made provision as required under the applicablelaw or Indian accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.

III. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For S.K. Mehta & Co. For S.N.Dhawan & Co LLP For Varma & Varma
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No.000478N Firm Reg. No. 000050N/N500045 Firm Reg. No. 004532S
(Rohit Mehta) (S. K. Khattar) (P.R.Prasanna Varma)
Partner Partner Partner
M. No.091382 M. No.084993 M. No.025854
UDIN: 20091382AAAAIQ5307 UDIN: 20084993AAAABY5299 UDIN: 20025854AAAABK3338
Place: New Delhi Place: New Delhi Place: Chennai
For Parakh & Co. For C.K. Prusty & Associates For B.C. Jain & Co. For V.K. Jindal & Co
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No. 001475C Firm Reg. No. 323220E Firm Reg. No. 001099C Firm Reg. No. 001468C
(Thalendra Sharma) (C.K.Prusty) (Ranjeet Singh) (Suresh Agarwal)
Partner Partner Partner Partner
M. No.079236 M. No.057318 M. No.073488 M. No.072534
UDIN: 20079236AAAACC4600 UDIN: 20057318AAAAAY2503 UDIN: 20073488AAAAAN4655 UDIN: 20072534AAAAGQ6574
Place: Jaipur Place: Bhubaneshwar Place: Kanpur Place: Hazaribagh
Dated : 27 June 2020
Digitally signed by signatory

ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of NTPCLIMITED on the Standalone Financial Statements for the year ended 31 March 2020

(i) (a) The Company has generally maintained proper records showingfull particulars including quantitative details and situation of fixed assets (PropertyPlant & Equipment).

(b) The Company is having a regular programme of physical verificationof all fixed assets (Property Plant & Equipment) over a period of three years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits fixed assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties are held in thename of the Company except as follows:

Description of Asset No. of cases Area in acres Gross block as on 31.03.2020 (Rs Crore) Net block as on 31.03.2020 (Rs Crore) Remarks
Land
- Freehold 1014 10142 1508.27 1508.27 As per explanation given to us the Company is taking appropriate steps for completion of legal formalities
- Leasehold 109 10011 1392.74 1191.91
Building & Structures 2 - 4.97 2.55

(ii) In our opinion the inventory has been physically verified by themanagement at reasonable intervals. No material discrepancies were noticed on suchphysical verification.

(iii) The Company has not granted any loans secured or unsecured toany companies firms limited liability partnership or other parties covered in theregister maintained under Section 189 of the Act.

In view of the above reporting under clause 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order is not applicable.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theAct as applicable in respect of loans advanced to subsidiary companies & jointventure company and investments made in the subsidiary and joint venture companies. TheCompany has not given any guarantee or provided any security in respect of which theprovisions of section 185 and 186 of the Act are applicable.

(v) The Company has not accepted deposits from the public. As such thedirectives issued by the Reserve Bank of India the provisions of Sections 73 to 76 or anyother relevant provisions of the Act and the rules framed thereunder are not applicable tothe Company. The Company has obtained deposits from the dependents of employees who die orsuffer permanent total disability for which the Company has applied to the Ministry ofCorporate Affairs Government of India for continuation of the exemption earlier obtainedin respect of applicability of Section 58A of the Companies Act 1956 which is stillawaited (refer Note No. 28 (d) of the Standalone Financial Statements). No order has beenpassed with respect to Section 73 to 76 by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the accounts and records maintained bythe Company pursuant to the Rules made by the Central Government for the maintenance ofcost records under sub-section (1) of Section 148 of the Act read with Companies (CostRecords & Audit) Rules 2014 as amended and we are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have not howevermade detailed examination of the records with a view to determine whether they areaccurate and complete.

(vii) (a) Undisputed statutory dues including provident fund incometax sales tax goods and service tax service tax duty of customs duty of excise valueadded tax cess and other statutory dues have generally been regularly deposited with theappropriate authorities and there are no undisputed statutory dues outstanding as on 31March 2020 for a period of more than six months from the date they became payable. We havebeen informed that employees' state insurance is not applicable to the Company.

(b) According to information and explanations given to us the grossdisputed statutory dues of income tax or sales tax or service tax or duty of customs orduty of excise or value added tax amounts to Rs. 10619.79 crore in aggregate as on 31March 2020 out of which Rs. 5300.14 crore has been deposited under protest/adjusted bytax authorities and the balance of Rs. 5319.65 crore of dues have not been deposited onaccount of matters pending before appropriate authorities as detailed below:

SI Name of the statute No. Nature of the disputed statutory dues Period to which the amount relates (Financial Year) Forum where the dispute is pending Gross Disputed Amount (Rs. crore) Amount deposited under protest/ adjusted by Tax Authorities (Rs. crore) Amount not deposited (Rs. crores)
1 Income Tax Act 1961 Income Tax / 2003-04 2004-05 High Court* 581.40 30.25 551.15
Penalty / TDS @
2001-02 2005-06 to 2011-12 Income Tax Appellate Tribunal* 8510.38 3858.49 4651.89
2009-10 2010-11 2012-13 to 2016-17 Commissioner of Income Tax (Appeals) 1462.07 1399.21 62.86
2013-14 to 2014-15 Assistant Commissioner of Income Tax 0.32 0.13 0.19
2007-08 to 2018-19 ITO(TDS) / AO 0.20 - 0.20
2 Sales tax and VAT Act of various states Sales Tax / VAT 1997-98 2000-01 High Court 2.58 0.05 2.53
1985-86 2000-01 to 2011-12 2013- 14 to 2014-15 Appellate Tribunal / Board of Revenue 32.35 8.33 24.02
2005-06 to 2008-09 2000-01 2002-03 2004-05 2006-07 Commissioner of Sales Tax ** 2.37 1.17 1.20
2014-15 to 2016-17 Additional Commissioner of Sales Tax *** 6.27 1.86 4.41
1988-89 to 1997-98 2011-12 2015-16 Additional Commissioner of sales Tax (Appeal) 2.13 0.17 1.96
2001-02 to 2006-07 Deputy Commissioner Sales Tax 11.70 - 11.70
2000-01 2005-06 Joint Commissioner of Sales Tax **** 1.05 0.36 0.69
3 Finance Act 1994 Service Tax 2012-13 to 2015-16 CESTAT 1.19 0.03 1.16
2009-10 to 2013-14 Commissioner (Appeals) 0.63 0.05 0.58
2015-16 to 2016-17 Assistant Commissioner Appeals 0.36 0.02 0.34
4 Customs Act 1962 Custom Duty 2016-17 Commissioner of Customs (Appeal) 0.29 0.02 0.27
2008-09 2012-13 CESTAT 4.50 - 4.50
Total 10619.79 5300.14 5319.65

* includes disputed amount of Rs. 6010.47 crore in respect of certainmatters where the lower Appellate Authority has decided in favour of the companyalthough the Assessing Officer has disputed the same with appropriate Appellate Authority.

** includes Rs. 2.08 crore and Rs. 0.29 crore towards demand for VATraised by Sales Tax Officer which has been stayed by the Hon'ble High Court andCommissioner of sales tax respectively.

*** includes Rs. 5.01 crore towards demand for VAT and CST raised bySales Tax authority which has been stayed by Commissioner / Additional Commissioner ofsales tax.

**** includes Rs. 1.02 crore towards demand for CST raised by Sales TaxOfficer which has been stayed by the Hon'ble High Court.

@ During the year the GOI has introduced Vivad Se Vishwas Scheme 2020(VsVs). The Company has decided to settle its pending Income Tax disputes by opting forthe VsVs. The Company is in the process of completion of procedural formalities under thescheme and the same will be settled. (Refer Note No. 49 (II) (b) to the standalonefinancial statements).

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks or dues to debenture holders. The company has not taken anyloan from the Government.

(ix) The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments). According to the informationand explanations given to us the money raised by the Company by way of term loans havebeen applied for the purposes for which they were obtained.

(x) According to the information and explanations given to us and asrepresented by the Management and based on our examination of the books and records of theCompany and in accordance with generally accepted auditing practices in India no case offraud by the Company or any fraud on the Company by its officers or employees has beennoticed or reported during the year.

(xi) As per Notification No. GSR 463(E) dated 5 June 2015 issued by theMinistry of Corporate Affairs Government of India Section 197 of the Act is notapplicable to the Government Companies. Accordingly provisions of clause 3 (xi) of theOrder are not applicable to the Company.

(xii) The provisions of clause 3 (xii) of the Order for Nidhi Companyare not applicable to the Company.

(xiii) The Company has complied with the provisions of Section 177 and188 of the Act w.r.t. transactions with the related parties wherever applicable. Detailsof the transactions with the related parties have been disclosed in the StandaloneFinancial Statements as required by the applicable Indian Accounting Standards.

(xiv) The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly provisions of clause 3 (xiv) of the Order are not applicable to theCompany.

(xv) The Company has not entered into any non-cash transactions withthe directors or persons connected with them as covered under Section 192 of the Act.

(xvi) According to information and explanation given to us the Companyis not required to be registered under section 45-IA of Reserve Bank of India Act 1934.Accordingly provision of clause 3(xvi) of the Order is not applicable to the Company.

For S.K. Mehta & Co. For S.N.Dhawan & Co LLP For Varma & Varma
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No.000478N Firm Reg. No. 000050N/N500045 Firm Reg. No. 004532S
(Rohit Mehta) (S. K. Khattar) (P.R.Prasanna Varma)
Partner Partner Partner
M. No.091382 M. No.084993 M. No.025854
UDIN: 20091382AAAAIQ5307 UDIN: 20084993AAAABY5299 UDIN: 20025854AAAABK3338
Place: New Delhi Place: New Delhi Place: Chennai
For Parakh & Co. For C.K. Prusty & Associates For B.C. Jain & Co. For V.K. Jindal & Co
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No. 001475C Firm Reg. No. 323220E Firm Reg. No. 001099C Firm Reg. No. 001468C
(Thalendra Sharma) (C.K.Prusty) (Ranjeet Singh) (Suresh Agarwal)
Partner Partner Partner Partner
M. No.079236 M. No.057318 M. No.073488 M. No.072534
UDIN: 20079236AAAACC4600 UDIN: 20057318AAAAAY2503 UDIN: 20073488AAAAAN4655 UDIN: 20072534AAAAGQ6574
Place: Jaipur Place: Bhubaneshwar Place: Kanpur Place: Hazaribagh
Dated : 27 June 2020
Digitally signed by signatory

ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of NTPCLIMITED on the Standalone Financial Statements for the year ended 31 March 2020

Sl. No. Directions u/s 143(5) of the Companies Act 2013 Auditors' reply on action taken on the directions Impact on financial statement
1 Whether the Company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. As per the information and explanations given to us the Company has a system in place to process all the accounting transactions through IT system. SAP-ERP has been implemented for all the processes like Financial Accounting (FI) Controlling (CO) Sales and Distribution (SD) Payroll / Human Capital Management (HCM) Material Management (MM) Commercial billing / Industry Solution Utilities (ISU) etc. Based on the audit procedures carried out and as per the information and explanations given to us no accounting transactions have been processed /carried outside the IT system. Accordingly there are no implications on the integrity of the accounts.

Nil

2 Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/ loans/ interest etc. made by a lender to the company due to the company's inability to repay the loan? If yes the financial impact may be stated. Based on the audit procedures carried out and as per the information and explanations given to us there was no restructuring of existing loans or cases of waiver/write off of debts/ loans/ interest etc. made by the lender to the company due to the company's inability to repay the loan. Nil
3 Whether funds received / receivable for specific schemes from Central / State agencies were properly accounted for/utilized as per its term and conditions? List the cases of deviation. Based on the audit procedures carried out and as per the information and explanations given to us the funds received/receivable for specific schemes from Central/State agencies were properly accounted for/utilized as per the respective terms and conditions. Nil
For S.K. Mehta & Co. For S.N.Dhawan & Co LLP For Varma & Varma
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No.000478N Firm Reg. No. 000050N/N500045 Firm Reg. No. 004532S
(Rohit Mehta) (S. K. Khattar) (P.R.Prasanna Varma)
Partner Partner Partner
M. No.091382 M. No.084993 M. No.025854
UDIN: 20091382AAAAIQ5307 UDIN: 20084993AAAABY5299 UDIN: 20025854AAAABK3338
Place: New Delhi Place: New Delhi Place: Chennai
For Parakh & Co. For C.K. Prusty & Associates For B.C. Jain & Co. For V.K. Jindal & Co
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No. 001475C Firm Reg. No. 323220E Firm Reg. No. 001099C Firm Reg. No. 001468C
(Thalendra Sharma) (C.K.Prusty) (Ranjeet Singh) (Suresh Agarwal)
Partner Partner Partner Partner
M. No.079236 M. No.057318 M. No.073488 M. No.072534
UDIN: 20079236AAAACC4600 UDIN: 20057318AAAAAY2503 UDIN: 20073488AAAAAN4655 UDIN: 20072534AAAAGQ6574
Place: Jaipur Place: Bhubaneshwar Place: Kanpur Place: Hazaribagh

Dated : 27 June 2020

Digitally signed by signatory

ANNEXURE 3 TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 3 (f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date to the members of NTPCLIMITED on the Standalone Financial Statements for the year ended 31 March 2020

Report on the Internal Financial Controls with reference to theStandalone Financial Statement under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act").

We have audited the internal financial controls with reference to theStandalone Financial Statements of NTPC Limited ("the Company") as of 31 March2020 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal controls over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by The Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the Standalone Financial Statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting (the "Guidance Note") andthe Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by ICAI. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to the Standalone Financial Statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial control with reference to the standalone FinancialStatements and their operating effectiveness. Our audit of internal financial control withreference to the Standalone Financial Statements included obtaining an understanding ofinternal financial control with reference to the Standalone Financial Statementsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgement including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to the Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to the StandaloneFinancial Statements

A Company's internal financial control with reference to theStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of StandaloneFinancial Statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control with reference to theStandalone Financial Statements includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on theStandalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference tothe Standalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to the Standalone Financial Statements including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the internalfinancial controls with reference to the Standalone Financial Statements to future periodsare subject to the risk that the internal financial controls with reference to theStandalone Financial Statements may become inadequate because of changes in conditions orthat the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls with reference to the Standalone Financial Statements in place and suchinternal financial controls with reference to the Standalone Financial Statements wereoperating effectively as at 31 March 2020 based on the internal controls over financialreporting criteria established by the Company considering the components of internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the ICAI.

For S.K. Mehta & Co. For S.N.Dhawan & Co LLP For Varma & Varma
Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No.000478N Firm Reg. No. 000050N/N500045 Firm Reg. No. 004532S
(Rohit Mehta) (S. K. Khattar) (P.R.Prasanna Varma)
Partner Partner Partner
M. No.091382 M. No.084993 M. No.025854
UDIN: 20091382AAAAIQ5307 UDIN: 20084993AAAABY5299 UDIN: 20025854AAAABK3338
Place: New Delhi Place: New Delhi Place: Chennai
For Parakh & Co. For C.K. Prusty & Associates For B.C. Jain & Co. For V.K. Jindal & Co
Chartered Accountants Chartered Accountants Chartered Accountants Chartered Accountants
Firm Reg. No. 001475C Firm Reg. No. 323220E Firm Reg. No. 001099C Firm Reg. No. 001468C
(Thalendra Sharma) (C.K.Prusty) (Ranjeet Singh) (Suresh Agarwal)
Partner Partner Partner Partner
M. No.079236 M. No.057318 M. No.073488 M. No.072534
UDIN: 20079236AAAACC4600 UDIN: 20057318AAAAAY2503 UDIN: 20073488AAAAAN4655 UDIN: 20072534AAAAGQ6574
Place: Jaipur Place: Bhubaneshwar Place: Kanpur Place: Hazaribagh
Dated : 27 June 2020
Digitally signed by signatory

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