MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENT:

The per capita availability of electricity in India is less than one fourth of world's average. As the Indian economy is growing at a fast pace, there is an urgent need to accelerate further investment in power sector for country's sustained industrial and economic growth.

India has witnessed a robust growth in power sector since independence. The total installed capacity as on 31 st March, 2015 was 2,67,637 MW with contribution from Thermal, Hydro, Nuclear and Renewable power of 1,88,898 MW, 41,267 MW, 5,780 MW and 31,692 MW respectively. Major share of power, from various sources such as coal, water, nuclear, fuel, solar and wind is generated by public sector (State and Central).

During the past two decades, hydropower has gained much momentum across the globe. India ranks amongst top countries worldwide for possessing feasible hydro-power capacity, much of which remains unutilized. Considering the growing need for power, future of India's hydropower generation looks promising and role of NHPC Limited, prominent.

NHPC is a Miniratna Schedule -'A' Enterprise having an authorized share capital of Rs.15,000 crore, investment base of over Rs. 55,000 crore and an installed capacity of 4961.20 MW. During 2014-15, your Company generated 22,038 MUs through various power stations located across the country.

Hydropower potential in India

Our country is endowed with an enormous hydro power potential. The re-assessment studies of hydro-electric potential of the country were completed by Central Electricity Authority (CEA) in 1987. According to study, the hydro power potential in terms of installed capacity is estimated at 1,48,701 MW, out of which 1,45,320 MW of the potential consists of hydro-electric schemes having installed capacity above 25 MW.

Strategic Diversification

NHPC Limited, India's leading Company in hydro power generation is also at the initial stages of adding development of thermal and renewable energy to its operation.

SWOT ANALYSIS

A) STRENGTHS

NHPC has the following primary competitive strengths:

• Established track record in implementing hydro-electric projects: NHPC has wide experience and expertise in implementing hydro-electric projects, which provide it significant competitive advantage. It has a strong design and engineering base with in-house expertise in geology, geo-physics, geo-technics, construction and material surveys. Its engineering capabilities range right from the stage of conceptualization till the commissioning of projects. NHPC's team is supported by international and domestic project consultants.

• Exposure to the construction and operation of hydro projects in remote/ non-penetrative areas, geo-technically sensitive Himalayan terrain: Almost all NHPC projects are situated in remote areas with a range of challenges- logistical, climatic and technological. However, with its strong and efficient team of competent and experienced professionals, who have the capability to execute all types and sizes of hydro power projects, NHPC has successfully managed to develop and implement 20 power stations, including two through its subsidiary Company, NHDC Limited. The Chamera-II Power Station (300 MW) in Himachal Pradesh and two hydro-electric projects of NHDC Limited viz. Indira Sagar Power Station (1,000 MW) and Omkareshwar Power Station (520 MW) in Madhya Pradesh were commissioned ahead of schedule.

• Long-term power purchase agreements with customers: NHPC gets most of its revenue from the sale of energy to state electricity boards/power departments and their successor entities through power purchase agreement. The allocation of power from different power stations to various beneficiaries is made by the Ministry of Power, Government of India. The billings made to the state entities are currently secured through letters of credit pursuant to the tripartite agreements entered amongst the Government of India, the Reserve Bank of India and respective State Governments. Further, the Company also obtains commitments from beneficiaries for purchase of power from new projects as and when the Government of India approves the investment in such projects.

• Competent and committed workforce: Your Company has a competent and committed workforce. Its executives have extensive experience in the industry. Their skills, industry knowledge and operating experience provide your Company a significant competitive advantage.

• Strong financial position: NHPC is a Mini-Ratna schedule 'A' enterprise with an authorized share capital of Rs. 15000 crore and an investment base of over Rs. 55,000 crore. Fitch has assigned a rating of 'AAA (ind)' for domestic borrowings.

B) OPPORTUNITIES

The deteriorating hydro-thermal mix, increase in peaking shortages and frequency variations have forced policy makers to turn their attention towards water resources and development of hydro power. India's huge untapped hydro potential, especially in the north eastern region, provides opportunity for hydro power development. Further, NHPC is diversifying its activities to explore new opportunities in other areas namely thermal, wind, solar etc.

C) THREATS/ WEAKNESSES

Your Company's management perceives the following as threats/ risks/weaknesses in construction of hydro power projects:

• Geological uncertainties - In spite of extensive survey and investigation, various components of hydro-electric projects such as head race tunnel, underground power house, brssure shaft, surge shaft etc. encountered geological surprises especially in young Himalayan regions. NHPC with its rich experience & expertise coupled with state-of-the art technology has overcome such surprises many a times in the past. However, frequent occurrences of these surprises results in time and cost over-run of the projects.

• Environment & forest clearances - Stringent norms and cumbersome procedures for getting environment clearance, forest clearance and clearance from National Board for Wild Life (where ever applicable) delays the construction of projects, which may affect the capacity addition programme of your Company.

• Land acquisition - The process of land acquisition for infrastructure works as well as for project's components including submergence, is quite cumbersome and time consuming.

• Inter-state and international disputes - As per the Constitution of India, water is a state subject. Due to inter-state river disputes, many hydro projects were delayed or abandoned. Likewise, the projects/power stations located near the international borders, quite often become point of reference.

• Natural calamities - Most hydro projects are generally located in remote mountainous terrains which are at the receiving end of devastating natural calamities like landslides, hill slope collapses and roadblocks etc. These calamities cause severe setbacks in construction schedules.

• Unexpected complexities - Unexpected complexities and delays in clearances/execution due to reasons beyond ones control may cause variation / escalation in estimates. Further, changes in CERC's tariff regulations may also affect cash flow and results of operations.

• Competition from Independent Power Producers (IPPs) - NHPC is facing stiff competition from IPPs and other competitors in allotment of new projects.

• Law & order - Projects/power stations of your Company are located at sensitive border areas and at remote locations witnessing law & order problem. Militant and extremist groups of the areas quite often target NHPC, perceiving it to be a Government rebrsentative.

RISKS AND CONCERNS

Hydro-electric power projects are capital intensive and have a long gestation period. Availability of funds is always seen as one of the major constraints for construction of hydro-electric power projects in the Country. Further, water being a state subject, state governments are demanding for higher share of free power and other incentives, which results in higher tariff. Besides the above, following are some of the risks/concerns identified by your Company:

1. Time and cost overrun of projects due to the following reasons:

i) Uncertain geological conditions.

ii) Delay in clearances/approvals from respective Ministries particularly Ministry of Environment, Forest & Climate Change.

iii) Unanticipated changes in the regulations by Central/State Government.

iv) Lack of effective project monitoring, integrated scheduling, implementation and regular updating.

v) Stoppage of work due to labour problems of contractor.

vi) Law & order problem in the respective states.

2. Flooding of power house and damages to structures of other vital installations.

3. Fire inside power house (risk is much more in case of underground power house).

4. Unsettled claims of various contractors leading to disputes resulting into arbitration and legal complications besides delay in project.

5. Non-availability of defined operational strategy for power stations working in cascade.

6. Non-realization of outstanding dues from the beneficiaries.

OUTLOOK

Effective initiatives has been adopted by your Company for technological advancements in the areas of civil and electrical engineering, which have improved key functions vis-a-vis planning, survey & investigation, construction, operation & maintenance, etc. Similarly, optimum use of information technology has streamlined monitoring of construction activities as well as supervision of post commissioning operation & maintenance of power stations.

SEGMENT-WISE OR PRODUCT WISE PERFORMANCE

Electricity generation is the principal business of the Company. Other operations viz., contracts, project management and consultancy works do not form a reportable segment as per the Accounting Standard-17 on 'Segment Reporting'. The Company is having a single geographical segment as all its power stations are located within the country.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

NHPC has a well defined and well laid out inbuilt control system in all the functional and operational areas. The processes involved are in accordance with a system of delegation of powers, documented policies, guidelines and manuals. The organization is well structured in terms of hierarchical authority and responsibilities at various levels.

Shri Vijay Kumar, General Manager (Finance), Internal Auditor of the Company is heading internal audit department. The department has qualified and experienced workforce to carry out audits periodically. Internal audit department has been carrying out special audits from time to time as desired by the management. A summary of audit observations and action taken reports are being submitted before the Audit Committee and the recommendations of the Audit Committee are duly complied with.

FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS

The other operating income includes Interest from Beneficiaries and other income comprises interest earned on investments of surplus funds, interest on Securitized Bonds/Long Term Advances, Dividend Income etc. Total income in Fiscal 2015 increased by 9.57 % to Rs. 7663.58 crore from Rs. 6993.99 crore in Fiscal 2014, primarily due to full year operation of four power stations viz TLDP-III, Nimoo-Bazgo, Uri-II and Parbati-III commissioned in FY 2013-14, restoration of Dhauliganga Power Station, increased generation in other power stations, increase in reimbursement of water charges, increase in write back of liabilities/ provisions, offset by decrease in dividend income from subsidiary company, NHDC Ltd., decrease in late payment surcharge, decrease in interest on Fixed Deposits and decrease in interest from beneficiary states. During Fiscal 2015 the insurance company has not paid any amount towards loss due to business interruption at Dhauliganga Power Station as against realisation of Rs.99.99 crore in Fiscal 2014.

Tariff

The charges for electricity are determined power station wise by the Central Electricity Regulatory Commission (CERC). The CERC vide its notification no. L-1/144/2013/CERC dated February 21, 2014 has issued tariff regulations for the tariff period 2014-19 and subsequent amendments from time to time.

Tariff is determined by reference to Annual Fixed Charges (AFC) in pursuance to notified regulations for the tariff period 2014-19, which comprises Return on Equity (ROE), debrciation, interest on loan, interest on working capital and operation & maintenance expenses. ROE is grossed-up with reference to effective income tax rate, so as to recover income tax incidence. Recovery of capacity charges is dependent on the actual utilisation of machines for generating power. Capacity is determined with reference to the Normative Annual Plant Availability Factor (NAPAF) which has been brscribed for each power station based on the nature of the power station.

Incentives are given on achieving plant availability factor greater than NAPAF as well as for generation of energy in excess of the design energy of the plant.

Sale of Energy

Electricity is sold to bulk customers comprising, mainly of electricity utilities owned by State Governments/Private Distribution Companies pursuant to long-term power purchase agreements. Central Electricity Regulatory Commission (CERC) Tariff notification for the period 2014-19 has been notified vide notification no. L-1/144/2013/CERC dated 21st Feb. 2014. Pending approval of tariff for the period 2014-19 by Central Electricity Regulatory Commission (CERC), sales have been recognized provisionally as per tariff notified by CERC for the period 2009-14 and taking into account provision towards truing up of capital cost of the power stations in line with CERC tariff regulations 2014.

The said regulations inter-alia provides that, for the purpose of filing tariff petitions, the Return on equity (ROE), a component of tariff, is to be grossed-up using effective tax rate of the respective financial year. For the purpose of recognizing sales, ROE has been grossed up using effective tax rate for FY 2014-15.

In Fiscal 201 5, 19078.1 5MUs of electricity was sold from installed capacity of 4961.20MW as against 15942.30 MUs from installed capacity of 4831.20MW in Fiscal 2014. Accordingly there was an increase of 19.67% in the number of units sold out. The average selling price (after adjustment of components of earlier year sales) was Rs.3.53 per unit in Fiscal 2015, compared to Rs.3.38 per unit in Fiscal 2014.

Sale of energy increased by 26.27% to Rs.6736.64 crore in Fiscal 2015 from Rs.5335.1 1 crore in Fiscal 2014 primarily due to full year operation of four power stations commissioned in FY 2013-14 and commissioning of 4th Unit of Parbati-III Power Station, increase in generation due to restoration of Dhauliganga Power Station and better generation in other power stations partly offset by decrease in sales due to accidental fire resulting in forced shut down of Uri-II Power Station. Company's plant availability factor (PAF) in Fiscal 2015 was 77.30% as compared to 77.70% in Fiscal 2014.

Adjusted Sales of Energy

The revenue from sales of energy includes sales pertaining to earlier years but recognised in current year. The sales also includes charges for deviation in generation with respect to schedule (payable or receivable) at rates linked to frequency brscribed in the CERC regulation to bring grid discipline and re-imbursement on account of foreign exchange rate variation (FERV).

As per CERC Tariff Regulations, exchange rate variation on interest payments and loan repayments corresponding to the normative loans considered for tariff of stations/units is payable/recoverable to/from the beneficiaries on repayment of the loans and interest thereon. Pursuant to the opinion of Expert Advisory Committee of the ICAI, foreign exchange rate variation on restatement of foreign currency loans as at the Balance Sheet date, payable/recoverable to/from customers later-on on actual settlement, is accounted for by creating a deferred liability/asset in the accounts instead of adjusting the same in the statement of profit & loss.

For the purpose of year to year comparison, the impact of earlier year sales has been excluded from sales of energy in order to arrive at the adjusted sales of energy.

Revenue from Contracts, Project Management and Consultancy Works

The revenue under this head includes revenue from assignments pertaining to construction contracts, project management & consultancy contracts. These assignments primarily include works pursuant to the Pradhan Mantri Gram Sadak Yojna Scheme in connection with the development of rural roads and the Rajiv Gandhi Grameen Vidyutikaran Yojna Scheme relating to the development of rural electrification infrastructure. These two schemes are overseen by different agencies of the Government of India (GOI) and executed by different PSUs and government departments.

The income from contracts, project management and consultancy works decreased by 44.98% from Rs.86.39 crore in Fiscal 2014 to Rs.47.53 crore in Fiscal 2015 due to reduced activities in Fiscal 2015.

Generation, Administration and Other Expenses (excluding Water Cess)

Generation, administration and other expenses consist primarily of repair and maintenance of buildings and plant & machinery, security expenses, insurance expenses, electricity charges, provisions etc. These expenses rebrsent approximately 16.84% of the total expenditure in Fiscal 2015 as against 20.28% in Fiscal 2014. In absolute terms, these expenses decreased approximately by 8.37 % to Rs. 912.09 crore in Fiscal 2015 from Rs. 995.40 crore in Fiscal 2014. The decrease of Rs. 83.31 crore in generation, administration and other expenses is primarily due to provision in respect of electricity charges of Rs. 64.11 crore during Fiscal 2014, charging off full year expenditure due to interruption of work in respect of Subansiri Lower & TLDP-IV projects in Fiscal 2014 (impact of (-) Rs. 136.57 crore) as compared to the charging of expenditure upto 31.10.2014 in respect of TLDP-IV as the work at TLDP-IV resumed w.e.f. 01.11.2014, decrease in expenditure of Rs.18.44 crore in respect of power stations commissioned upto Fiscal 2013 offset by increase in expenditure due to full year operation of four projects namely TLDP-III, Nimoo-Bazgo, Uri-II and Parbati-III commissioned in FY 2013-14 (impact of Rs. 43.42 crore) and increase by Rs. 92.39 crore due to other factors.

In terms of expenses per unit of saleable energy, it was reduced to Rs. 0.48 in Fiscal 2015 as against Rs. 0.62 in Fiscal 2014.

Water Cess

Water Cess has increased to Rs. 748.51 crore during Fiscal 2015 from Rs. 620.51 crore during Fiscal 2014 mainly on account of full year operation of Nimoo-Bazgo and Uri-II Power Stations and increase in generation at Salal and Uri-I Power Stations.

Employees' Benefits Expenses

Employee benefit expenses include salaries and wages, allowances, incentives, contribution to provident fund and Employees Defined Contribution Superannuation Scheme and expenses related to other welfare funds. These expenses account for 21.22% of our total expenditure in Fiscal 2015 as against 21.57 % in Fiscal 2014. In absolute terms, the employee costs have increased by Rs. 90.56 crore in Fiscal 2015 mainly due to full year operation of four power stations commissioned in Fiscal 2014 by Rs. 74.90 crore, impact of Rs. 23.46 crore due to charging of current year expenditure due to interruption of work in respect of Subansiri Lower & TLDP-IV project, offset by decrease in employee cost of Power Stations commissioned till Fiscal 2013 by Rs. 7.80 crore. During the Fiscal 2015, employee cost per unit of saleable energy decreased to Rs. 0.60 from Rs. 0.66 in the Fiscal 2014.

There were 9211 employees on the payroll as of March 31, 2015, compared to 9843 employees as of March 31, 2014. Of this, 5413 and 5607 employees were engaged in operation and maintenance areas of our business during Fiscal 2015 & 2014 respectively. Employee Benefit expenses increased by 8.55% to Rs. 1 149.23 crore in Fiscal 2015 from Rs. 1058.67 crore in Fiscal  2014.

As a percentage of total income, employees' benefits expenses decreased to 15.00% in Fiscal 2015 from 15.14 % in Fiscal  2014.

Debrciation & Amortization

As per accounting policy of the Company, debrciation is charged to the extent of 90% of the Cost of Assets following the rates and methodology notified by CERC vide notification dated 21.02.2014 on straight line method, except for some items on which debrciation is charged to the extent of 95% and at the rates derived as per Companies Act, 2013.

Debrciation cost increased by 17.77% to Rs. 1425.87crore in Fiscal 2015 from Rs. 1210.76 crore in Fiscal 2014. The reason for increase in Debrciation Expenses is primarily due to commissioning of 4th unit of Parbati-III Power Station during Fiscal 2015 & full year operation of four power stations commissioned in Fiscal 2014 by Rs. 204.32 crore.

As a percentage of total income, debrciation increased from 17.31% in Fiscal 2014 to 18.61% in Fiscal 2015.

Finance Costs

'Finance costs' consist of interest expense on bonds and term loans. In books of accounts, borrowings are denominated in Indian Rupees, including amount raised in foreign currencies, primarily Japanese Yen and Canadian Dollars. We also incur expenses on account of Guarantee Fees in connection with loans raised from Foreign Market.

Finance Cost in Fiscal 2015 increased by 15.39 °% to Rs. 1 179.77 crore from Rs. 1022.40 crore in Fiscal 2014. The increase in Finance Cost is mainly due to increase of current year expenditure due to full year operation of four power stations commissioned in Fiscal 2014 by Rs. 224.23 crore, partial offset by decrease in interest expenditure by Rs. 66.86 crore in respect of power stations commissioned till Fiscal 2013 due to repayment of borrowings and decrease in charging off of expenditure in respect of TLDP-IV project for part of the year i.e. upto 31.10.2014 as compared to full year charging off during Fiscal 2014.

Prior Period Items (Net)

Prior Period Items (Net) in Fiscal 2015 decreased by Rs. 559.30 crore due to charging off of expenditure during fiscal 2014 for the period 16.12.2011 to 31.03.2013 due to interruption of work in respect of Subansiri Lower Project and Teesta Low Dam-IV for the period 20.03.2013 to 31.03.2013 . Also reversal of one of provision created earlier in respect of Dhauliganga Power Station amounting to Rs. 70.84 crore in the Fiscal 2015.

Regulatory Income

In line with the Guidance Note on "Accounting for Rate Regulated Activities" issued by the Institute of Chartered Accountants of India (ICAI), 'Regulatory Assets' has been created and corresponding 'Regulatory Income' has been recognised for Rs. 521.95 crore, against the borrowing cost and administrative and other cost incurred on Subansiri Lower project during the current financial year which have been charged to the Statement of Profit & Loss as per the relevant Accounting Standard and GAAP.

Profit Before Tax

Due to the reasons outlined above, our profit before tax increased by 78.53% to Rs. 2826.17crore in Fiscal 2015 from Rs. 1 583.06 crore in Fiscal 2014.

Tax Expenses

In Fiscal 2015, we provided Rs. 701.70 crore for tax expenses as compared to Rs. 604.27 crore in Fiscal 2014. The increase in tax in Fiscal 2015 is on account of increase in current year taxes by Rs. 359.63 crore due to increase in profit for the year which is partially offset by decrease in Deferred Tax by Rs. 262.20 crore.

Impact of charging off borrowing cost and administrative and other general expense incurred in respect of projects under construction namely Subansiri Lower & Teesta Low Dam Project (TLDP)-IV Projects, due to interruption of work included in Income & Expenditure as above is summarised below:

Work at Subansiri Lower interrupted since 16.12.2011 is yet to resume. However, work at TLDP-IV which was under interruption since 20.03.2013 has been resumed on 01.11.2014. Impact on Income & Expenditure heads, due to non-capitalisation of borrowing cost and administrative and other expense incurred/income earned in respect of these Projects for the respective periods, is as under:

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS

NHPC organises various developmental programs for its employees relating to improvement of behavioral/managerial and core competencies. These programs help employees to keep them updated with the latest developments and changes happening in the field of operations, technology, HR, finance, engineering etc.

The Company has also set up four training centers at Tanakpur Power Station, Uttarakhand, Chamera-I Power Station, Himachal Pradesh, Salal and Uri-I Power Stations, Jammu and Kashmir.

TRAINING

NHPC holds training and developmental programs through various brstigious management and engineering institutions like IIMs, XLRI Jamshedpur, ASCI Hyderabad, IITs, ISM Dhanbad, CPRI Bangalore, NCB Ballabgarh, etc. Technical hands on training has also been provided to our employees by reputed manufactures i.e. BHEL, ABB, Areva T&D, Alstom etc. Special training programmes were also conducted for employees of reserved categories, to acquaint them with the features of the reservation policy and essential provisions devised especially for them. In addition to above, these employees were also recommended for external training programs on relevant subjects.

NHPC has sponsored executives to acquire higher qualifications & specialization in M. Tech in structural engineering, water resource development and power systems to IIT’s, which will encourage them to improve their efficiency and productivity by acquiring higher qualifications.

Steps taken for the welfare of women employees:

• Special attention is given to nominate women employees for programmes/seminars for women empowerment andother issues related to women.

• Crèche facility provided in corporate office for employees with infants.

• Special committees with third party association have been set up to look into grievances/complaints of sexual harassment lodged by women employees.

• Child care leave for women employees to take care of their newborn/infant children.

• Maternity leave as per the rules.

• Option to declare parents/parents-in-law as dependents under medical rules.

• Relaxation in attendance timings for female employees at the co rporate office.

• Rebrsentation of women on selection board/committee.

• Creation of Women in Public Sector Forum (WIPS) cell in NHPC Corporate Office.

RESERVATIONS FOR SCs/STs/OBCs

Your Company is taking care for socio-economic developments of SCs/STs/OBCs and weaker sections of the society at various projects/power stations. Your Company has provided budget allocation for schools and colleges at various SC/ST/OBC populated locations of projects/power stations. During natural calamities/epidemic, your Company has provided help in different ways and organizing medical camps etc.

The reservation and relaxation is provided to SCs/STs and OBCs in direct recruitment as per guidelines issued by DoPT from time to time. The relaxed standard and reservation is applicable for SC/ST employees while considering promotion. The organization holds periodical meetings with SC/ST employees. A SC/ST cell has been set up for the welfare of SCs/STs and OBCs under the direct control of separate liaison officers for SC/ST and OB C respectively.

Steps taken for the welfare of physically challenged employees:

The reservation and relaxation has been provided to physically challenged candidates/employees in direct recruitments and promotions as per guidelines issued by DoPT/Ministry of Social Justice & Empowerment from time to time in addition to following welfare schemes:-

- Employees with disabilities as well as employees who are care giver of dependent child are exempted from the rotational transfer and brference in place of posting at the time of tran sfer/promotion, subject to administrative constraints

- Grant of financial assistance for vocational training, who get p hysically handicapped while in service.

Reimbursement of monthly conveyance allowance for blind and orthopedically handicapped employees.

- Reimbursement of charges for purchase of hearing aid to the employees and their dependents and reimbursement of cost of artificial limbs and extending interest free loans for the sa me.

- Restriction of age is not applicable in respect of physically/mentally retarded children while considering them as dependents.

ENVIRONMENT PROTECTION AND CONSERVATION, TECHNOLOGICAL CONSERVATION, RENEWABLE ENERGY DEVELOPMENTS, FOREIGN EXCHANGE CONSERVATION

NHPC is committed to brserve country’s heritage, natural endowments, and protection of environment while carrying out hydropower construction work to set the country on the path of economic growth.

The Company makes an effort to create an environment where economic growth and environmental brservation can become compatible in the long run. Adverse impacts of construction are compensated by adopting measures like, compensatory afforestation, catchment area treatment, wildlife conservation, green belt development, fishery management, health management, rejuvenation of dumping and quarry sites, resettlement & rehabilitation, etc.

NHPC shows concerns and sensitivity to the problems and aspirations of Project Affected Families (PAFs). Thus, after consultation with various stakeholders, NHPC has formulated its own Resettlement & Rehabilitation (R&R) Policy in 2007 in line with National Rehabilitation and Resettlement Policy, 2007.

The policy assesses issues like loss of land, houses, and other means of livelihood of the PAFs. It facilitates an insight into resolving issues of income generation. Major emphasis is on mak ing PAFs economically self-reliant and stable.

The policy offers benefits over and above what is proposed in NRRP, 2007. These include irrigation support systems, marriage grants to unmarried girls in BPL section, subsistence grants for asset-less youth, formation of self-help groups, facilities for orphans and allotting up to 0.75 per cent of the estimated hard cost of a project towards community and social development plan.

In addition to this, NHPC also conducts post-construction environment and social impact assessment studies to evaluate the effectiveness of the management plans implemented during the course of construction of the project.

Corporate Social Responsibility

NHPC has a well-defined CSR and Sustainable Development policy in line with the provisions of Section 135 of the Companies Act, 2013 read with Schedule VII of the Act and the guidelines on Corporate Social Responsibility and Sustainability issued by

Department of Public Enterprises (DPE), Government of India. A separate chapter on Corporate Social Responsibility (CSR) & Sustainable Development (SD) is given at Annexure-VI

CAUTIONARY STATEMENT

The views and forward-looking statements contained in this report are based on reasonable assumptions and subject to certain risks and uncertainties that could cause actual results to diff er from those reflected in such statements.

Readers are requested to review and confirm with the other information in this report and in the Company’s periodic reports.

The Company undertakes no obligation to publicly update or revise any of these forward-looking statements whether as a result of new information, future events, or otherwise. The financial figures shown above are based on the audited results of the Company.

For and On behalf of the Board of Directors

(R. S. T. Sai)

Chairman and Managing Director

DIN No.:00171920

Date: 6th August, 2015

Place: Faridabad