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NHPC Ltd.
Change Company :  Go
Chairman : RST Sai Industry : Power Generation/Distribution
Last Price Today's Change Open Prev Close Day's Range 52 Week Range
16.95 0.05 16.85 16.90 (17.20)   (16.65) (22.90)   (15.55)
BSE Code 533098
ISIN Demat INE848E01016
Book Value (Rs.) 26.24
Dividend Yield (%) 3.54
Market Cap (Rs Mn) 187647.83
P/E 8.25
EPS (Rs.) 2.06
Face Value (Rs.) 10
Volume 537708.00
March 2015 Select Base Year :

REPORT ON CORPORATE GOVERNANCE

1. Company's philosophy on Corporate Governance

NHPC has an established framework of Corporate Governance which emphasizes on commitment towards ethical and efficient conduct of the affairs of the Company. It helps in maximizing value for all its stakeholders at large and to build an environment of trust and confidence among all the constituents.

At NHPC, Corporate Governance has moved beyond mere compliance. The management is taking all possible steps to fulfil its commitment in a judicious, fair and transparent manner.

Besides adhering to the provisions of Listing Agreement with stock exchanges, NHPC also follow the guidelines on Corporate Governance for CPSEs issued by Department of Public Enterprises (DPE), Government of India.

2. Board of Directors

(i) Composition & category of Directors: NHPC Limited is a Government Company as defined under Section 2(45) of the Companies Act, 2013.

In terms of the Articles of Association of the Company, the strength of the Board shall not be less than four and not more than fifteen Directors, provided that the number of Independent Directors in any case shall not be less than half of the actual strength of the Board.

As on 31st March, 2015, there were seven Directors comprising three Functional Directors including Chairman and Managing Director, two Government Nominee Directors and two Independent Directors.

The Board of Directors has appointed Ms. Krishna Tyagi, Chief Controller of Accounts, Ministry of Power as a Nominee Director w.e.f. 8th July, 2015 consequent upon cessation of Directorship of Shri K. N. Garg, then Member (Hydro), Central Electricity Authority, retired on 30th June, 2015 on attaining the age of superannuation.

The Board of Directors has appointed Shri Jayant Kumar, Director (Finance) as an Additional Director of the Company w.e.f. 26th May, 2015 pursuant to Ministry of Power's letter no. 9/1/2014-NHPC of even date. Earlier, the additional charge for the post of Director (Finance), NHPC Limited was entrusted to Shri R.S. Mina, Director (Personnel), NHPC Limited in addition to his own duties w.e.f. 15th September, 2014 consequent upon cessation of Directorship of Shri A. B. L. Srivastava, then Director (Finance).

The Board of Directors in its 382nd meeting held on 20th March, 2015 appointed Shri Ashoke Kumar Dutta and Shri Atul Kumar Garg, Independent Directors as Additional Directors of the Company (as an interim measure considering the requirement of Independent Directors as per statutory and legal provisions). The tenure of above two Directors was completing on 22nd March, 2015, as per their respective appointment orders issued by the Ministry of Power.

The charge for the post of Chairman & Managing Director, NHPC Limited is being held by Shri R. S. T. Sai, CMD, THDC India Limited in addition to his own duties w.e.f. 8th June, 2014. Ministry of Power has also entrusted the additional charge for the post of Director (Projects), NHPC Limited to Shri Sai w.e.f. 11 th March, 2015 consequent upon cessation of Directorship of Shri J. K. Sharma, then Director (Projects).

The details of Directors who were appointed or have retired during the year are included in the Directors' Report.

Notes:

a) None of the Directors of the Company holds office of Director at the same point of time in more than ten (10) Companies. Further, none of the Directors of the Company is a member in more than ten (10) Committees or is a Chairman of more than five (5) Committees across all Companies in which he is a Director.

b) The Directors of the Company do not have any inter-se relationships.

c) None of the Directors is serving as an Independent Director in more than three Listed Companies.

ii) Number of Board Meetings held, dates on which held:

Eleven meetings of the Board of Directors were held during the year 2014-15. The maximum time interval between any two meetings did not exceed three months. Details of the Board Meetings held during 2014-15 are given in Table 4.

iii) Age limit and tenure of Directors: The age limit for Functional Directors is sixty years. The Functional Directors are appointed for a period of five years from the date of taking over the charge or the date of superannuation of the incumbent or until further orders from the Government of India, whichever event occurs earlier.

Nominee Directors representing Ministry of Power, Government of India, retire from the Board at the discretion of the nominating authority or on ceasing to be officials of the Ministry of Power, Govt. of India.

Independent Directors are appointed by the Ministry of Power, Government of India usually for a tenure of three years.

iv) Resume of Directors: A brief resume of Director(s) retiring by rotation/Additional Director seeking appointment at the Annual General Meeting is appended to the notice calling the Annual General Meeting. In addition to above, brief profiles of all the Directors are provided elsewhere in this Annual Report.

v) Board Meetings, Committee Meetings and procedures:

(A) Decision-making process: The Company has laid down a set of guidelines for the meetings of the Board of Directors to professionalize its corporate affairs. These guidelines helps in an informed and efficient decision-making during the Board Meetings.

(B) Scheduling and selection of agenda items for Board/Committee Meetings:

• Meetings of the Board/Committee of Directors are convened by giving appropriate notice with the approval of the Chairman of the Board/respective Committees. Detailed agenda notes, management reports and other explanatory statements are circulated in advance amongst the members to facilitate meaningful, informed and focused decision making. Whenever urgent issues need to be addressed, meetings are called at a shorter notice or agenda notes are placed on table or resolutions passed through circulation.

• Whenever it is not possible to attach a document to the agenda notes due to exceptional circumstances or to maintain secrecy, the said document(s) relating thereto are placed on the table during the meeting.

• Agenda papers are circulated after obtaining the approval of concerned Functional Director/CMD.

• The meetings are held at the Company offices situated in Faridabad or in New Delhi.

• As and when required, presentations are made before Board/Committee(s) on the matters related to finance, operations, human resources, etc.

• Members of the Board have complete access to the information pertaining to the Company. Board/Committee members are also free to recommend any issue which they may consider important for inclusion in the agenda. As and when necessary, senior management officials are called during the meeting to provide additional inputs on the matters being discussed by the Board/Committee.

(C) Recording of the minutes of the Board/Committee Meetings: The draft minutes of the proceedings of each Board/Committee Meeting are duly circulated to all members for their comments within fifteen days of the conclusion of the meeting. The Directors communicate their comments on the draft minutes within seven days from the date of circulation thereof. A comparative sheet of all comments received from Directors are placed before the Chairman & Managing Director/Chairman of respective Committees for consideration and approval thereof. The approved minutes of proceedings of each Board/Committee Meeting are duly recorded in the minutes book within thirty days of the conclusion of the meeting.

(D) Follow-up Mechanism: Based on the guidelines laid down by the Board/Committee, an action-taken report on the decisions of the Board/Committee is placed periodically, which helps in effective reporting on follow-up and review of decisions.

(E) Compliance: It is our endeavor to ensure compliance of all applicable provisions of the law, rules and guidelines. The Company ensures compliance of all applicable provisions of the Companies Act, 1956, Companies Act, 2013 to the extent these are applicable, SEBI Guidelines, Listing Agreement and other statutory requirements under different laws. The Board of Directors review the legal compliance report placed before it from time to time.

The following agenda items are usually presented to the Board of Directors for its consideration:

• Annual operating plans, budgets and related updates.

• Capital budgets and related updates.

• Quarterly/annual financial results of the Company.

• Minutes of meetings of Audit Committee and other committees of the Board.

• Minutes of Board Meetings of subsidiary companies.

• Statement of all significant transactions and arrangements entered into by subsidiary companies.

• Fatal or serious accidents, dangerous occurrences at different locations/units.

• Major investment, formation of subsidiaries, joint ventures and strategic alliances.

• Quarterly information with respect to purchases/works/contracts awarded on nomination basis.

• Quarterly report on compliance of various laws.

• Disclosure of interest by the Directors about their Directorships and committee positions held by them in other Companies.

• Significant capital investment proposals or award of large contracts.

• Action taken report on matters desired by the Board.

• Status of arbitration cases.

• Changes in significant accounting policies and practices along with reasons thereof.

• Any other information required to be presented to the Board either for information or approval as per the  requirement of applicable laws.

vi) Code of conduct: The code of business conduct and ethics for Board Members and senior management personnel was complied with by all concerned during the year 2014-15.

vii) Fraud policy:

In order to provide a system for detection and prevention of fraud, reporting of any fraud that is detected or suspected and for fair dealing of matters pertaining to fraud, a Fraud Policy has been formulated by your Company. HR-Incharge of each location i.e. projects/power stations/regions/LOs have been designated as nodal officers under the policy.

viii) Training of Board Members:

The Company has a training policy for its Board Members which aim at building leadership qualities, providing a platform to share the knowledge, skills and experience.

Whenever a new Director is appointed on the Board, formal induction and orientation with respect to the Company's vision, strategic direction, core values, financial matters & business operations is given through necessary documents/ brochures, reports and internal policies, which helps them to familiarize with Company's procedures, practices and risk profile.

A presentation on "Revised Companies Act, 2013" has been organized on 27th May, 2014 for the Board of Directors at Delhi Camp Office, Pragati Bhawan, New Delhi. The presentation was given by senior faculties from Corporate Knowledge Foundation, New Delhi.

In addition to the above, site visits are arranged for the Directors including Independent Director(s). Independent Directors are also considered for nomination to participate in seminars and training programmes organized by reputed institutions.

ix) Code for prevention of Insider Trading in securities of NHPC Limited: In compliance to the requirements of recently notified Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, NHPC Limited has formulated and implemented Code of conduct to regulate, monitor and reporting trading by Insider and Code for fair disclosure practices for prevention of Insider Trading in securities of NHPC Limited. Under the Code, trading window remains closed for designated persons as and when price sensitive information is about to be placed before the Board.

3. Committees of the Board of Directors

The Board has constituted mandatory and non-mandatory committees to review various aspects of business. The following committees have been constituted by the Board:

Mandatory Committees

1) Audit Committee.

2) Stakeholders' Relationship Committee.

3) Nomination & Remuneration Committee.

4) Committee on Corporate Social Responsibility (CSR) and Sustainability.

5) Risk Management Committee

Non-mandatory Committees

6) Committee of Directors for Allotment and Post-allotment Activities of NHPC Securities.

7) Committee of Directors for Self-Insurance Fund (Dissolved).

8) Projects Investment Committee.

9) Committee on Management Controls.

10) Committee of Directors - Appellate Authority.

Details of members of committee, meetings held, terms of reference etc. of each of the above committees are as under:

3.1 Audit Committee

The composition, quorum, terms of reference, etc. of the Audit Committee is in line with the Companies Act, 2013, provisions of Listing Agreement and guidelines on Corporate Governance issued by Department of Public Enterprises, Govt. of India.

As on 31st March, 2015, the Audit Committee comprised the following members:

1) Shri Atul Kumar Garg Independent Director - Chairman

2) Shri Ashoke Kumar Dutta Independent Director

3) Shri D. P. Bhargava Director (Technical)

Meetings and attendance:

The committee met nine times during the year on 7th May, 2014, 22nd May, 2014, 27th May, 2014, 5th August, 2014, 20th August, 2014, 30th October, 2014, 16th January, 2015, 2nd February, 2015 and 20th March, 2015 respectively. Details of the Audit Committee Meetings attended by members are given in Table 5.

**Shri A. Gopalakrishnan ceased to be Director on the Board w.e.f. 27th September, 2014 and Shri G.S. Vedi and Shri A.K. Mago ceased to be Directors on the Board w.e.f. 1st November, 2014 respectively.

***Shri J.K. Sharma ceased to be a member on the committee w.e.f. 16th October, 2014.

Director (Finance), head of Internal Audit department, Statutory Auditors and Cost Auditors were invited to the meetings of Audit Committee. Senior officers were also invited as and when required to provide necessary inputs to the committee.

Shri A. Gopalakrishnan, Independent Director chaired all the meetings held till 20th August, 2014 during the financial year 2014-15. The meeting held on 30th October, 2014 was chaired by Shri G.S. Vedi, Independent Director and the meetings held thereafter were chaired by Shri Atul Kumar Garg, Independent Director. The time interval between any two Audit Committee meetings had not exceeded three months during the financial year 2014-15. Director (Finance) and Head of Internal Audit department was present in all Meetings held during the year, as invitees. The Company Secretary is Secretary to the committee. The Chairman of the Audit Committee was not present in the last Annual General Meeting of the Company, however other members of the Audit Committee viz. Shri A. K. Mago, Shri G. S. Vedi, Shri Atul Kumar Garg, Independent Directors and Shri D. P. Bhargava, Director (Technical) were present to answer shareholders' queries.

Terms of reference of Audit Committee:

The terms of reference of the Audit Committee are as per the Companies Act, 2013, Listing Agreement as amended from time to time, and the guidelines on Corporate Governance issued by Department of Public Enterprises, which inter-alia includes:

1 Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

2 Recommending fixation of audit fees to the Board.

3 Approval of payment to Auditors for any other services rendered by the Statutory Auditors.

4 Reviewing, with the management, the annual financial statements and Auditor's Report thereon before submission to the Board for approval, with particular reference to:

a) Matters required to be included in the Directors' Responsibility Statement to be included in the Board's report;

b) Changes, if any, in accounting policies and practices and reasons for the same;

c) Major accounting entries involving estimates based on the exercise of judgment by management;

d) Significant adjustments made in the financial statements arising out of audit findings;

e) Compliance with listing and other legal requirements related to financial statements;

f) Disclosure of any related party transactions; and

g) Qualifications in the draft audit report.

5 Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.

6 Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control systems.

7 Reviewing the adequacy of the internal audit function, if any, including the structure of the Internal Audit department, staffing and seniority of the official heading the department, reporting structure coverage, and frequency of internal audit.

8 Discussion with Internal Auditors and/or Auditors of any significant findings and follow-up there on.

9 Reviewing the findings of any internal investigations by Internal Auditors/Auditors/agencies into matters where there is suspected fraud or irregularity or failure of internal control systems of a material nature, and reporting the matter to the Board.

10 Discussions with Statutory Auditors before the audit commences, about the nature and scope of the audit as well as post-audit discussion to ascertain any area of concern.

11 To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

12 To review functioning of the whistle blower mechanism.

13 To review the follow-up action on audit observations of the Comptroller & Auditor General of India (C&AG) audit.

14 To review the follow-up action taken on the recommendations of Parliament's Committee on Public Undertakings (COPU).

15 Provide an open avenue of communication between the Independent Auditors, Internal Auditor and the Board of Directors.

16 Approval or any subsequent modification of transactions of the Company with related parties.

17 Review with the Independent Auditor the coordination of audit efforts to assure completeness of coverage, reduction of redundant efforts, and the effective use of all audit resources.

18 Consider and review the following with Independent Auditor and management:

- The adequacy of internal controls, including computerized information system controls and security and

- Related findings and recommendations of the Independent Auditor and Internal Auditor, together with management responses.

19 Consider and review the following with management, Internal Auditor and Independent Auditor:

- Significant findings during the year, including the status of previous audit recommendations and

- Any difficulties encountered during audit work, including any restrictions on the scope of activities or access to required information.

20 Review and monitor the auditor's independence and performance and effectiveness of audit process.

21 Scrutiny of inter-corporate loans and investments.

22 Valuation of undertakings or assets of the Company, wherever it is necessary.

23 Evaluation of internal financial controls and risk management systems.

24 Reviewing, with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc), the statement of funds utilized for purposes other than those stated in the offer document/ prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or right issue, and making appropriate recommendations to the Board to take up steps in this matter.

25 Carrying out any other function as is mentioned in the terms of reference of the Audit Committee pursuant to the provisions of the Companies Act, 2013, Listing agreement and Corporate Governance Guidelines issued by DPE.

3.2 Stakeholders' Relationship Committee

The composition of Stakeholders' Relationship Committee as on 31 st March, 2015 was as under:

i) Shri Atul Kumar Garg Independent Director - Chairman

ii) Shri Ashoke Kumar Dutta Independent Director

iii) Shri R.S. Mina Director (Personnel)

Terms of reference:

1. The Stakeholders' Relationship Committee shall consider and resolve the grievances of the security holders of the Company including complaints related to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividends.

2. The committee shall carry out any other function, as required by the provisions of the Companies Act, 2013, Listing Agreement and Corporate Governance Guidelines issued by DPE.

Name and designation of Compliance Officer:

Shri Vijay Gupta, Company Secretary is the Compliance Officer in terms of Clause 47(a) of the Listing Agreement

SEBI Complaints Redress System (SCORES) - online portal of SEBI for lodging complaints against Listed Companies

Securities and Exchange Board of India (SEBI) has a web based complaints redressal system 'SCORES', which enables a shareholder to lodge his/her grievances against the Company and check status of his/her complaint. On registration of a complaint, a unique complaint registration number is allotted for future reference and tracking. The concerned entity (Intermediary or Listed Company) uploads action taken report on the complaints electronically. The concerned entity and the complainant can also seek and/or provide clarifications online from each other. SEBI disposes the complaints, if it is satisfied that the complaint has been adequately redressed.

An investor, who is not familiar with SCORES or does not have access to SCORES, can lodge the complaint(s) in physical form.

During the year 2014-15, shareholders' complaints received through SCORES have been promptly attended to and action taken reports on these complaints as received from Registrar and Transfer Agent have been submitted to the SEBI through  SCORES.

Number of pending share transfers:

No share transfer request was pending as on 31st March, 2015.

During the financial year ended 31st March, 2015, share transfers have been affected within the time prescribed by the stock exchanges and a certificate to this effect duly signed by a Practicing Company Secretary has been furnished to stock exchanges.

3.3 Nomination & Remuneration Committee

NHPC being a Central Public Sector Undertaking, the appointment, tenure and remuneration of its Directors are decided by the President of India. As per the DPE Guidelines on Corporate Governance, Remuneration Committee was constituted to decide the annual bonus/variable pay pool and policy for its distribution across the executives and non-unionized supervisors, within the prescribed limits. The Nomination & Remuneration Committee comprised the following members as on 31st March, 2015:

i) Shri Ashoke Kumar Dutta Independent Director - Chairman

ii) Shri Atul Kumar Garg Independent Director

iii) Shri K.N. Garg Government Nominee Director

Meetings and attendance:

The committee met five times during the year on 1st April, 2014, 21st August, 2014, 30th October, 2014, 2nd February, 2015 and 19th March, 2015 respectively. Details of the meetings of the Nomination & Remuneration Committee attended by the members are given in Table 8.

Terms of reference:

1. To formulate the criteria for determining positive attributes and independence of a Director.

2. To recommend distribution of the Annual Bonus/Performance Related Pay (PRP) and policy for its distribution across the Board and below Board level employees including Key Managerial Personnel.

3. To formulate the criteria for evaluation of Independent Directors and the Board.

4. To devise a policy on Board diversity.

5. To identify persons who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal.

6. To examine and recommend other allowances and perks, etc. to the Board of Directors for approval.

7. Carrying out any other function as may be required under the provisions of the Companies Act, 2013, Listing agreement and Corporate Governance guidelines issued by DPE.

3.4 Committee on Corporate Social Responsibility (CSR) and Sustainability

As on 31st March, 2015, the Committee on Corporate Social Responsibility (CSR) and Sustainability comprised the following members:

i) Shri Atul Kumar Garg Independent Director - Chairman

ii) Shri D. P. Bhargava Director (Technical)

iii) Shri R. S. Mina Director (Personnel)

Meetings and attendance:

The committee met six times during the year on 1st April, 2014, 19th June, 2014, 17th October, 2014, 26th November, 2014, 23rd January, 2015 and 19th March, 2015 respectively. Details of the meetings of the Committee on Corporate Social Responsibility (CSR) and Sustainability attended by the members are given in Table 9.

3.5 Risk Management Committee

The Board in their 374th meeting held on 7th July, 2014 has constituted Risk Management Committee. As on 31 st March, 2015, the Risk Management Committee comprised the following members:-

i) Shri D. P. Bhargava Director (Technical)

ii) Shri R. S. Mina Director (Personnel)

Terms of reference:

1) To assist the Board in Corporate Governance by overseeing the responsibilities relating to the identification, evaluation and mitigation of operational, strategic and external environment risks.

2) To formulate, review and monitor the risk policies/plans and associated practices of the Company.

3) To approve and review risk disclosure statements in any public documents or disclosures.

4) Carrying out any other function as required by the provisions of the Companies Act, 2013, Listing agreement and Corporate Governance guidelines issued by DPE.

3.6 Committee of Directors for Allotment and Post-Allotment Activities of NHPC Securities

As on 31st March, 2015, the committee comprised the following members:

i) Shri D. P. Bhargava Director (Technical) - Chairman

ii) Shri R. S. Mina Director (Personnel

Terms of reference:

1. Issue of certificate(s) relating to securities;

2. Transfer and transmission of securities;

3. Re-materialization of securities certificate(s);

4. Issue of duplicate certificate(s) relating to securities and

5. Consolidation/splitting of NHPC's securities.

3.7 Committee of Directors for Self-Insurance Fund

The Board of Directors in their 382nd meeting held on 20th March, 2015 decided to merge the fund with General Reserve and dissolved the committee. At the time of dissolution, the committee comprised the following members:

i) Shri D. P. Bhargava Director (Technical)

ii) Shri R. S. Mina Director (Personnel)

Meetings and attendance:

The committee met once during the year on 26th November, 2014. The meeting was attended by all members.

Terms of reference:

The committee has been authorized to invest the amount available with the self-insurance fund in government securities, public sector bonds, and time deposits with nationalized banks. The committee is also authorized to sell/realize the proceeds of such investments as deemed fit, considering the requirement of funds to compensate the losses occurred.

3.8 Projects Investment Committee

As on 31st March, 2015, the Projects Investment Committee comprised the following members:

i) Shri Ashoke Kumar Dutta Independent Director

ii) Shri D. P. Bhargava Director (Technical)

iii) Shri R. S. Mina Director (Personnel)

No meeting of Projects Investment Committee was held during the year ended on 31 st March, 2015

Terms of reference:

The committee shall examine and make recommendations to the Board on proposals for investment in new/expansion projects and feasibility reports of new projects.

3.9 Committee on Management Controls

As on 31st March, 2015, the Committee on Management Controls comprised the following members:

i) Shri Atul Kumar Garg Independent Director

ii) Shri D. P. Bhargava Director (Technical)

iii) Shri R. S. Mina Director (Personnel)

Meetings and attendance:

The committee met once during the year on 10th September, 2014. The meeting was attended by all members.

Terms of reference:

The committee shall establish transparent and effective system of internal monitoring. This committee inter alia, reviews the management control systems, significant deviations in project implementation and construction, operation & maintenance, budgets etc.

3.10 Committee of Directors - Appellate Authority

As on 31st March, 2015, the committee comprised the following members:

i) Shri Atul Kumar Garg Independent Director - Chairman

ii) Shri Ashoke Kumar Dutta Independent Director

iii) Shri R. S. Mina Director (Personnel)

Meetings and attendance:

The committee met thrice during the year on 2nd April, 2014, 2nd February, 2015 and 12th March, 2015. Details of the meetings of the Committee of Directors - Appellate Authority attended by members are given in Table 12.

Terms of reference:

The committee is to act as an appellate authority for the cases placed before it in terms of CDA rules.

4. Meeting of Independent Directors

Pursuant to the requirements of Schedule IV of the Companies Act, 2013 read with Department of Public Enterprises Office Memorandum No. F. No. 16 (4)/2012-GM dated 20th June, 2013, a separate meeting of Independent Directors without the presence of any Functional Directors, Government Nominee Directors and management personnel of NHPC Limited, was held on 3rd February, 2015 under the Chairmanship of Shri Ashoke Kumar Dutta.

5. Remuneration of Directors

The remuneration payable to Functional Directors including Chairman & Managing Director is decided by the Government of India. As per Companies Act, 2013 and DPE Guidelines, the Board of Directors of the Company is empowered to determine the sitting fee payable to Independent Directors within the ceiling prescribed under the Companies Act, 2013.

Accordingly, the Board in terms of extant guidelines issued by the Govt. of India, has fixed an amount of Rs. 20,000/- per meeting as sitting fees to Independent Directors for attending meetings of the Board or Committees thereof.

Details of remuneration of Functional Directors of the Company for the financial year 2014-15 are given in Table 13.

6. Subsidiary Companies

(i) NHDC Limited: NHDC Limited was promoted as a Joint Venture Company between NHPC Limited and the Government of Madhya Pradesh with equity shareholding of 51% and 49% respectively. During the year, the minutes of the meetings of the Board of Directors of NHDC Limited were placed before the Board of Directors of NHPC Limited. The Board of NHPC was also apprised about the significant transactions and arrangements entered into by the Company at periodical intervals.

NHDC Limited is a material non-listed Indian subsidiary company of NHPC Limited as per Clause 49 of the Listing Agreement and is also covered under the definition of 'Material Subsidiary' as per DPE guidelines on Corporate Governance.

Shri Ashoke Kumar Dutta, an Independent Director on the Board of NHPC Limited has been nominated on the Board of  NHDC Limited.

(ii) Loktak Downstream Hydroelectric Corporation Limited: Loktak Downstream Hydroelectric Corporation Limited (LDHCL) was incorporated on 23rd October, 2009. The Company was promoted as a Joint Venture Company between NHPC Limited and the Government of Manipur with equity shareholding of 74% and 26% respectively. The Company is not a material subsidiary as per the guidelines on Corporate Governance for CPSEs issued by DPE. The minutes of meetings of the Board of LDHCL were placed before the Board of NHPC Limited.

All statutory clearances for execution of Loktak Downstream Hydroelectric Project (66 MW) have been obtained. Bids for turnkey execution of the project were invited by the Company and the same is under evaluation.

(iii) Bundelkhand Saur Urja Limited: Bundelkhand Saur Urja Limited was promoted as a Joint Venture Company between NHPC Limited and UPNEDA (Uttar Pradesh New and Renewable Energy Development Agency) to implement a 50 MW solar power project in Uttar Pradesh. The Company was incorporated on 2nd February, 2015. As per the promoters' agreement the equity participation of NHPC shall not be less than 74% and of UPNEDA will not be more than 26% of the total share capital of the Company.

The award of EPC contract for the development of 50 MW solar crystalline photovoltaic grid connected power plant along with power evacuation equipments is under process.

8. Disclosures

i) Related party transactions: There were no materially significant related party transactions having potential conflict with the interests of the Company at large during the financial year 2014-15. Related party disclosures are included in the notes (note no. 29 to the financial statement) forming part of the accounts as per Accounting Standard - 18 notified by the Companies (Accounting Standards) Rules, 2006.

ii) Disclosure requirements as per Listing Agreement and DPE guidelines on Corporate Governance: The

Company has broadly complied with all the statutory requirements of the Listing Agreement with stock exchanges as well as regulations and guidelines prescribed by SEBI except as mentioned in paragraph 2(i) of this report. The Company has also complied with all the requirements of the guidelines on Corporate Governance for Central Public Sector Enterprise (CPSEs) issued by Department of Public Enterprises (DPE), Government of India except for the period from 26th September, 2014 to 31 st March, 2015, wherein the requirement of at least half of the Board comprising of Independent Directors was not fulfilled (refer paragraph 2(i)).

During the preceding 3 years, no penalty was imposed and/or stricture was made on it by any stock exchange or SEBI or any other statutory authority, on any matter related to the capital markets or guidelines issued by Government.

However, Company has received a notice for fine of Rs. 50,000/- for non-compliance with the requirement of Clause 49(II)(A)(1) of Listing Agreement - regarding appointment of Woman Director by BSE Limited on 10th April, 2015. The Company has requested the exchange to waive off the said fine on the ground that NHPC is a Central Public Sector Enterprise (CPSE), therefore appointment of Directors is being made by President of India as per Articles of Association of the Company.

The periodic results and other communications are regularly published on Company's official website (www.nhpcindia com). Information on adoption of the non-mandatory requirements as prescribed under Listing Agreement is provided in Annexure-A.

No presidential directives were issued to the Company during financial year 2014-15 and the preceding three financial years.

iii) Accounting treatment: In view of the management, all applicable accounting standards are being followed for preparation of financial statements.

iv) Whistle Blower Policy: NHPC has a defined and established whistle blower policy for reporting the instances of unethical/improper conduct and taking suitable steps to investigate and correct the same. No personnel have been denied access to the Audit Committee. In addition to above, a policy to prevent frauds has also been adopted by the Company for reporting frauds or suspected frauds, involving employees as well as representatives of vendors, suppliers, contractors, consultants, service providers or any other party doing any type of business with NHPC. The mechanism for prevention of frauds is also included in the policy. During the year 2014-15, no complaint has been reported under whistle blower policy.

v) Items of expenditure debited in books of accounts, which are not for the purposes of the business: NIL

vi) Expenses incurred which are personal in nature and incurred for the Board of Directors and top management: NIL

9. CEO/CFO certification

In terms of Clause 49 of the Listing Agreement, a certificate duly signed by Shri R.S. T. Sai, Chairman & Managing Director, and Shri Jayant Kumar, Director (Finance), was placed before the Board of Directors at the meeting held on 29th May, 2015 and is annexed to the Corporate Governance Report as Annexure-B.

10. Means of Communication

Periodical financial results of the Company are announced within the time specified in Listing Agreement. These results are published in the national and local dailies. The Company does not send periodical results to every shareholder, however these are placed at the Company's official website (www.nhpcindia.com).

The Company has also issued official news releases on significant corporate decisions and activities, which are also available on the Company's website.

(iii) Book closure

The register of members and share transfer books of the Company will remain closed from 12th September, 2015 to 23rd September, 2015 (both days inclusive).

(iv) Payment of Dividend

The Board of Directors of the Company has recommended a final dividend of Rs. 0.60 per share (6% on paid up share capital) for the financial year ended 31st March, 2015 including interim dividend of Rs. 0.20 per share (2% on paid up share capital) paid in February, 2015. The final dividend, if declared at the AGM, shall be paid within the stipulated period as per the Companies Act, 2013.

The record date for the purpose of determining eligibility to receive final dividend is 23rd September, 2015 in respect of physical shares. In respect of dematerialized shares, the final dividend will be payable to the "beneficial owners" of the shares whose names appear in the statement of beneficial ownership furnished by National Securities Depository Limited and Central Depository Services (India) Limited respectively as at the close of business hours on 11th September,  2015.

(vi) Listing on Stock Exchanges

NHPC equity shares are listed on the following stock exchanges:

BSE Limited

Address: Phiroze Jeejeebhoy Towers, Dalal Street,

Mumbai - 400001 Scrip Code: 533098 ISIN : INE848E01016

National Stock Exchange of India Limited

Address: Exchange Plaza, Plot No. C/1, G Block, Bandra

(East), Mumbai - 400051

Scrip Code: NHPCEQ

ISIN : INE848E01016

The annual listing fee for the financial year 2015-16 has been paid to both National Stock Exchange of India Limited  and BSE Limited before 30th April, 2015.

(ix) Registrar & Share Transfer Agent

M/s Karvy Computershare Private Limited, Karvy Selenium Tower B, Plot 31-32, Gachibowli, Financial District, Nanakramguda, Hyderabad - 500 032 Tel No.: 040 67161500 Fax No.: 040 23420814 E-mail ID: einward.ris@karvy.com

(x) Share transfer system

Share transfer activities under physical segment are being carried out by M/s Karvy Computershare Private Limited, Share Transfer Agent of the Company. The share transfer system consists of activities like receipt of shares along with transfer deed from transferees, its verification, preparation of Memorandum of Transfers, etc. Share transfers are approved by Committee of Directors for Allotment and Post-Allotment Activities of NHPC securities.

Pursuant to Clause 47(c) of the Listing Agreement, a certificate on half yearly basis confirming due compliance of share transfer formalities by the Company from Practicing Company Secretary have been submitted to stock exchanges within the stipulated time.

(xi) Transfer of unpaid/unclaimed amounts to Investor Education and Protection Fund (IEPF)

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with Companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 26th September, 2014 (date of last Annual General Meeting) on the website of the Company (www.nhpcindia.com), and also on the website of Ministry of Corporate Affairs.

(xiv) Dematerialization of shares and liquidity

The shares of the Company are in the compulsory dematerialized segment and are available for trading with both the depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

Reconciliation of Share Capital Audit Report regarding reconciliation of the total issued capital, listed capital and capital held by depositories in a dematerialized form with respect to the equity share Capital of the Company was obtained from the Practicing Company Secretary for each quarter during the year and submitted to the stock exchanges within the stipulated time.

1 National Securities Depository Limited

Trade World, 4th Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013

2. Central Depository Services (India) Limited

Phiroze Jeejeebhoy Towers, 28th Floor, Dalal Street, Mumbai - 400 023

(xvi) Outstanding GDRs/ADRs/warrants or any convertible instruments, conversion date and likely impact on equity:

NHPC Limited has not issued any GDRs/ADRs/warrants or any convertible instruments which has likely impact on equity.

(xviii) Locations of NHPC Plants:

Bairasiul NHPC Limited, P.O. Surangani, Distt. Chamba, Himachal Pradesh - 176 317

Loktak NHPC Limited, P.O. Loktak, Komkeirap, Manipur- 795 124

Salal - I & II NHPC Limited, P.O. Jyotipuram, Via Reasi, Distt. Reasi, Jammu & Kashmir - 182 312

Tanakpur NHPC Limited, P.O. T.P.S. Campus, Banbassa, Distt. Champawat, Uttarakhand - 262 310

Chamera-I NHPC Limited, Khairi, Distt. Chamba, Himachal Pradesh - 176325

Uri-I NHPC Limited, Gingle, P.O. Mohra, Distt. Baramulla, Jammu & Kashmir- 193 122

Rangit NHPC Limited, P.O. Rangit Nagar, South Sikkim - 737 1 1 1

Chamera-II NHPC Limited, P.O. Karian, Distt. Chamba, Himachal Pradesh -176310

Dhauliganga NHPC Limited, Post Box No.1, Tapovan, Dharchula, Distt. Pithoragarh, Uttarakhand - 262 545

Dulhasti NHPC Limited, Chenab Nagar, Sector-II, Kishtwar, Distt. Kishtwar, Jammu & Kashmir - 182 206

Teesta-V NHPC Limited, P.O. Singtam, East Sikkim - 737 134

Sewa-II NHPC Limited, P.O. Mashka, Distt. Kathua (J&K)

Chamera-III NHPC Limited, Village Dharwala, PO - 9, Distt. - Chamba, Himachal Pradesh - 176 31 1

Chutak NHPC Limited, P.O. Minji, Distt. Kargil (Ladakh), J & K - 194 103

Teesta Low Dam Project - III NHPC Limited, Rambi Bazar, P.O. Reang, Distt. Darjeeling (W.B.), PIN - 734 321

Nimmo Bazgo Project NHPC Limited, ALCHI, Distt. Leh (Ladakh), J & K, PIN 194101

Uri II NHPC Office cum residential complex, Nowpora, Uri, Distt. Baramulla, (J & K), PIN 193122

Parbati-III NHPC Limited, Village Behali, P. O. Larji, Distt. Kullu (H.P.), PIN 175122

(xix) Address for correspondence:

Shri Vijay Gupta, Compliance Officer, 5th Floor, NHPC Office Complex, Sector - 33, Faridabad, Haryana - 121 003 E-mail: companysecretary@nhpc.nic.in

As per circular of the Securities & Exchange Board of India dated 22.01.2007, exclusive e-mail address for redressal of Investor Complaints is companysecretary@nhpc.nic.in

For and on behalf of Board of Directors

(R S T Sai)

Chairman and Managing Director  

DIN:00171920

 Date: 6th August, 2015

Place: Faridabad

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