NUCLEAR POWER CORPORATION OF INDIA LIMITED ANNUAL REPORT 2010-2011 DIRECTOR'S REPORT Dear Stakeholders, Your Directors have immense pleasure in presenting the twenty-fourth Annual Report of the Company, together with the Audited Accounts for the year ended 31st March 2011. PERFORMANCE HIGHLIGHTS: A summary of the Company's Financial Results is given below: (Rs. in crore) As at As at Financial Results 31st March 2011 31st March 2010 Sale of Electrical Energy 6016 3807 Other Income 882 672 TOTAL INCOME 6898 4479 Operating & Maintenance 3680 2629 Expenditure Interest 662 441 Depreciation 868 721 TOTAL EXPENDITURE 5210 3791 Profit for the year 1688 688 Prior period adjustments (1) (214) Profit Before Tax 1687 474 Provision for Taxation 311 58 Profit After Tax 1376 416 Add: Balance brought 1122 981 forward from previous year Balance available for 2498 1397 Appropriations a) Interim Dividend 150 150 b) Tax on Interim Dividend 25 25 c) Proposed Dividend 263 - d) Tax on proposed Dividend 44 - e) Transfer to General Reserve 500 100 f) Balance carried to Balance Sheet 1516 1122 Earning per Share in RS. 136 41 (Equity share having face value of Rs.1000/- each) The Company has achieved higher average capacity factor of about 71% as against 61% for the previous year. The use of imported fuel for reactors under safeguards (1840 MW) and improved domestic fuel availability for reactors fuelled by domestic uranium (2840 MW) resulted in higher capacity utilization. The year under report recorded the highest nuclear power generation since the inception of the Company. Electricity generation, as per the billing cycle, in 2010-11 has been 26469 Million kWh (MUs) as against 18798 MUs in 2009-10 showing an increase of 41%. The revenue realization has been maintained at a high level of 99%. The Department of Atomic Energy (DAE) has issued revised tariff norms for determining tariff for sale of electricity by Atomic Power Stations, vide notification dated 8th December 2010. The tariffs, based on revised norms are effective from 1st July 2010 for all atomic power stations and are to remain effective for 5 years. However, the revised tariffs, as per new tariff norms, have not yet been notified. Pending such notification, the revenue for the year has been determined as per existing tariff / on provisional basis as per practice of the Corporation. Renovation & Modernization activities viz. Enmasse Coolant Channel Replacement (EMCCR), Enmasse Feeder Replacement (ENFR) together with upgrades have been completed at NAPS-2 and KAPS-1 and these reactors were synchronized to the grid during the year. With the commissioning of Kaiga-4 (220 MW) during the year under report, the number of Nuclear Power Reactors in operation in the country has increased to 20 with a total installed capacity of 4780 MW including RAPS-1 (100 MW) owned by the Government and operated by NPCIL. The revenue from sale of power generated from wind farm with an installed capacity of 10 MW at Kudankulam during the year was Rs. 6.42 crore as against Rs. 7.46 crore for the previous year. The provision for taxation during the year is Rs. 311 crore as compared to Rs. 58 crore last year. The increase is on account of hike in book profit to Rs. 1376 crore as against Rs. 416 crore in the previous year. Presently, the Company is being subjected to Minimum Alternate Tax @ 19.93% including surcharge and cess on tax after availing tax holiday benefits available under provisions of the Income Tax Act, 1961. The amount received towards interest on Research & Development Fund, Renovation & Modernization Fund and Decommissioning levy with interest thereon has not been considered as income of the Company. These funds are held by NPCIL on behalf of the DAE and the Decommissioning levy is collected from beneficiaries based on a statutory notification issued by the DAE. The Income Tax Tribunal has decided that the interest earned on these funds be treated as income of the Company. While an appeal has been filed in the Honorable High Court of Maharashtra, Mumbai, the Company has appropriated Rs. 27 crore from these funds towards the income tax, if finally, payable on these levies. The Company has been able to regulate its operational efficiency and has been able to achieve a net profit of Rs. 1376 crore after tax. The accumulated net deferred tax liability as on 31st March 2011 was Rs. 1893 crore on account of timing differences between book and tax profits. Since Income tax payable on income from generation of power is recoverable from the beneficiaries, the amount of deferred tax, so recognized, is recoverable on becoming a part of the current tax. Therefore, such deferred tax is considered as recoverable and netted from such deferred tax liability / expense. CAPITAL: There was no addition to the paid up share capital during the year. The Company has not drawn any budgetary support from the Government of India since FY 2004-05. The total equity paid-up capital continued to be Rs. 10145 crore as on 31st March 2011 against the Authorized Capital of Rs. 15000 crore. DIVIDEND: The Board has recommended a final dividend @ 30% of Profit After Tax (PAT) of the Company. This amounts to Rs. 412.90 crore, including the interim dividend of Rs. 150 crore. RESOURCE MOBILISATION: As per the plan of allocation approved by the Government of India, the Company raised a sum of Rs. 3000 crore during the year for its various projects by resorting to market borrowing by availing term loans from Public Sector Banks. The Company has redeemed Bonds of Rs. 148 crore during the year, as per the terms of their issue. OPERATING PERFORMANCE OF THE STATIONS: The performance of all operating stations was satisfactory during the year 2010-11 and these generated 26472 MUs of electricity (exclusive of infirm generation of 1 MU from Kaiga-4) recording the highest nuclear power generation since the incorporation of the Company. The overall Capacity Factor (i.e. Plant Load Factor) was 71% and the weighted average Availability Factor was 89%. In addition, Kudankulam Wind Farm generation during the year was 23 MUs. MAJOR HIGHLIGHTS: * Kaiga-4 attained first criticality on 27th November 2010 was synchronized to the grid on 19th January 2011. The Unit commenced commercial operation on 20th January 2011. * For the first time, NPCIL total operating power on a day crossed 4282 MW. * Generation of over 100 MUs of electricity in a single day on 20th February 2011. * After successful completion of Renovation & Modernization activities viz. EMCCR, EMFR together with upgrades, NAPS-2 and KAPS-1 were synchronized to the grid on 6th September 2010 and 12th January 2011 respectively. These activities were carried out with indigenously developed technology. India is one of the few countries in the world having expertise in Life Management of PHWRs. * During the financial year, more than 90% Availability Factor was recorded by TAPS-2, TAPS-3, RAPS-2, RAPS-4, MAPS-1, NAPS-1, KAPS-1, KGS-1 and KGS-3. * The uninterrupted continuous runs were as follows: Reactor No of days From To TAPS-2 590 22.07.2009 03.03.2011 MAPS-2 432 25.01.2009 03.04.2010 KAPS-2 406 04.07.2009 14.08.2010 RAPS-3 404 26.06.2009 05.08.2010 MAPS-1 346 17.12.2009 28.12.2010 * Calandria vault water leakage at KAPS-1 reactor was successfully repaired using innovatively designed remote welding technique. * KAPS-1&2 were placed under International Atomic Energy Agency (IAEA) Safeguards and operated at full power. HIGHLIGHTS OF THE OPERATING PERFORMANCE OF THE STATIONS: The commercial generation, the yearly Capacity Factor (CF) and the annual Availability Factor (AF) are summarized in the Table. Station: A B C D E taps 1 160 1142 81 82 2 160 1274 91 92 3 540 3582 76 93 4 540 3124 66 88 Station Total 1400 9122 74 90 raps 2 200 1720 98 94 3 220 1564 81 85 4 220 1807 94 96 5 220 1753 91 89 6 220 1060 55 59 Station Total 1080 7904 84 84 maps 1 220 1260 65 98 2 220 979 51 85 Station Total 440 2239 58 92 naps 1 220 1228 64 94 2 220 658 61 90 Station Total 440 1886 63 93 kaps 1 220 370 89 92 2 220 1076 56 86 Station Total 440 1446 62 86 kgs 1 220 1260 65 97 2 220 988 51 77 3 220 1334 69 96 4 220 293 78 84 Station Total 880 3875 63 90 NPCIL TOTAL 4680 26472 71 89 A = Unit No. B = Capacity (MW) C = Generation (MUs) D = CF (%) E = AF (%) Note: NAPS-2 and KAPS-1 after capital maintenance were synchronized to the grid on 6th September 2010 a 12th January 2011. KGS-4 commenced commercial operation on 20th January 2011. FUEL AVAILABILITY: The use of imported fuel for reactors placed under IAEA Safeguards and increased supply from indigenous sources resulted in operation of reactors at higher capacity factors. The power level of three PHWRs (TAPS-3&4 and Kaiga-4) was raised during the year. Other PHWRs were operated at reduced power level of about 70% consistent with fuel availability. COMPLETED PROJECTS: Kaiga Atomic Power Project-4 (220 MW PHWR): Kaiga-4 attained first criticality on 27th November 2010 after the fuel was made available during the year 2010-11. The unit commenced commercial operation on 20th January 2011 ONGOING PROJECTS: Kudankulam Nuclear Power Project-1&2 (2x1000 MW VVERs): The 2x1000 MW Kudankulam Project, located in Tirunelveli district of Tamil Nadu, is being implemented with technical cooperation from Russian Federation within the framework of the Inter-Governmental Agreement between India and the Russian Federation. All the equipment and the construction drawings are being supplied by the Russian Federation while civil construction, erection of equipment and commissioning of the systems are being executed by NPCIL. The construction of the project commenced on 31st March 2002 with the first pour of concrete. The project has recorded a cumulative progress of 96% as of March 2011 (Unit-1: 98% and Unit-2: 93%) with cumulative expenditure of Rs. 13781 crore. The break-up of progress achieved is: Design & Engineering 99% and Procurement & Supplies 99%. The Construction & Erection activities for Unit-1 are complete and in respect of Unit-2, all the civil construction work is complete and erection works are in advanced stage of completion. For Unit-1 of the project, significant milestones on the commissioning front were achieved during the year. These are completion of 'Hydro Test (Strength Test) of Primary Circuit at 24.5 MPa of the Nuclear Steam Supply System and Secondary Circuit at 10.8 MPa' and 'Strength and Leak Rate Test of Reactor Building Containment'. The preliminary works for carrying out the 'hot run' test at designed parameters are completed. Erection works for Unit-2 are closely following those of Unit-1. All the civil construction works have been completed and erection works are in advanced stage of completion. Trial assembly of the reactor pressure vessel and the reactor internals has been completed. The main fuel pool was fill- tested with de-mineralized water for carrying out the liner integrity checks. Turbine and generator erection has been completed and turbines are boxed up. Cabling works for loads in various buildings is in progress. NEW PROJECTS uNDER CONSTRuCTION: Kakrapar Atomic Power Project-3&4 (KAPP-3&4): The construction of KAPP-3&4 took off by laying the First Pour of Concrete on 22nd November 2010 after receiving regulatory clearances. KAPP-3&4 is the first twin reactor of 700 MW series being launched by NPCIL. Since first pour of concrete, various project activities are being executed expeditiously. Works are being executed simultaneously for all main plant buildings. The infrastructure facilities both at Plant Site and Colony are being established in line with the project requirement. KAPP-3&4 are slated for completion in the year 2016.: Rajasthan Atomic Power Project-7&8 (RAPP-7&8): The excavation work for two indigenously designed 700 MW PHWRs at RAPP-7&8 has commenced on 19th August 2010 after receiving regulatory clearances from the Atomic Energy Regulatory Board. Earlier, the contract for Main Plant Civil Works was awarded.: The excavation of Reactor Buildings has been completed and the regulatory clearance for First Pour of Concrete for the unit has been received on 16th July 2011. The FPC was achieved on 18th July 2011. The orders for all major long delivery items have been placed. The project is slated for completion in the year 2016. Kudankulam Nuclear Power Project-3&4 (KKNPP-3&4): The Kudankulam Project Unit-3&4 is an expansion of Unit-1&2, located in Tirunelveli district of Tamil Nadu, being implemented with cooperation from Russian Federation (RF) within the framework of the Inter-Governmental Agreement signed between RF and India in December 2008. The Ministry of Environment & Forests (MoEF) has conveyed environmental clearance. The process for Coastal Regulation Zone clearance from MoEF is in progress. Siting consent has been obtained from AERB. The application for excavation consent has been made to AERB. Techno-commercial discussions in respect of 2 x 1000 MW VVERs at KKNPP-3&4 with Atomstroyexport, Russian Federation are in the advanced stages of finalization. A contract for the first priority design works for initial design activities has been signed with Atomstroyexport and the work is in progress. The various pre-project activities were also completed. Jaitapur Nuclear Power Project (JNPP): The land measuring 938 Ha was acquired and handed over to NPCIL by the District Administration, Ratnagiri, Maharashtra. Agreement for Rehabilitation of Project Affected Families of JNPP has been signed between NPCIL and Government of Maharashtra. The Ministry of Environment & Forests, Government of India, has conveyed environment as well as CRZ clearance for 6 x 1650 units for JNPP. The General Framework Agreement and Early Work Agreement have been signed between NPCIL and AREVA, France for implementation of EPR at Jaitapur Site. Techno-commercial discussions with AREVA in respect of 2 x 1650 MW EPR units at Jaitapur Site are in advanced stage of conclusion. Pre-project activities viz. Geo-technical investigations, Construction of property-cum-boundary wall of Plant Site and Master Plan for residential complex are in progress. PROJECTS AT NEW SITES: In 2009, the Government of India has given 'In-principle' approval for full potential of Sites at Kudankulam and Jaitapur and also for five new sites; two for indigenous PHWRs and three for LWRs based on foreign cooperation. The details of the 'In-principle' approval / full potential are Capacity Location Reactor Type (MW) 1. Haryana Indigenous 4 x 700 2. Madhya Pradesh PHWRs 2 x 700 3. Kudankulam, Tamil Nadu 4 x 1000 4. Jaitapur, Maharashtra LWRs 6 x 1650 5. Mithi Virdi, Gujarat based on 6 x 1000 6. Kowada, Andhra Pradesh International 6 x 1000 7. Haripur, West Bengal co-operation 6 x 1000 Jaitapur and five sites located in Haryana, Madhya Pradesh, Gujarat, Andhra Pradesh and West Bengal as mentioned above are greenfield sites. The pre-project activities at new sites are in progress. These include opening of the NPCIL offices in nearby towns, Environment Impact Assessment for MoEF clearance, design input for regulatory clearance, steps for obtaining siting consent from the regulator, public awareness programmes and actions for land acquisition to prepare the sites ready for project construction within shortest time. The land acquisition applications for issuance of Section 4 notification under Land Acquisition Act, 1894 have been already submitted to the respective District Authorities in Haryana, Gujarat, Madhya Pradesh and Andhra Pradesh. In case of Haryana, the notification under section 4 was issued and the objections received under section 5A under the said Act were responded. The Section 6 notification was approved by Haryana Government on 25th July 2011. NEW INITIATIVES AND BuSINESS DEVELOPMENT NPCIL is taking various new business initiatives for public-public as well as public-private partnership to strengthen the Indian Nuclear Power capability and expanding power generation capacity. NPCIL with L&T Ltd. NPCIL and Larsen & Toubro Ltd. set up a Joint Venture Company in the FY 2009-10 under the name 'L&T Special Steel & Heavy Forgings Pvt. Limited' (LTSHF) as a subsidiary of L&T Ltd. with NPCIL having 26% shareholding. This Public-Private Partnership will produce special steels and ultra heavy forgings including those required for Nuclear Power Plants. The construction work at site is in full swing at Hazira, District Gujarat. It is expected that trial production of forgings would commence in October 2011. JV with NTPC Ltd. NPCIL and NTPC Limited have incorporated a Joint Venture Company under the name of 'Anushakti Vidhyut Nigam Limited' on 27th January 2011 to set up Nuclear Power Projects in the country. The JV Company is a subsidiary of NPCIL with 51% of share capital held by NPCIL. JV with IOC Ltd. A Joint Venture Agreement was signed in January 2011 between NPCIL and Indian Oil Corporation Limited (IOCL), a Government of India Enterprise, to form a joint venture company to set up Nuclear Power Projects in the country. The JVC under the name 'NPCIL - Indian Oil Nuclear Energy Corporation Limited' was incorporated on 6th April 2011 as a subsidiary of NPCIL. JV with THDCIL NPCIL and Tehri Hydro Development Corporation of India Ltd. (THDCIL), have signed an agreement for preparation of Detailed Project Report (DPR) of the Pumped Storage Scheme (PSS) having installed capacity of 700 MW at Malshej Ghat, near Mumbai. The survey and investigations have been completed and the DPR is submitted to the Government of Maharashtra. The JV partners are expecting formal award of the project by the Government of Maharashtra. Joint Venture with other CPSus MOUs have been signed in the FY 2009-10 between NPCIL and National Aluminum Company Limited (NALCO) to form Joint Venture Company to work together for setting up Nuclear Power Plants. The discussions are in progress to form the JVC. Renewable Energy Developments In line with the national priority, NPCIL is also contemplating utilization of Solar Energy for specific applications such as operating vapour absorption machine for cooling, desalination and generation of electricity. Techno-economic viability of the use of Solar Energy for these applications is planned to be evaluated. NPCIL has already made a beginning in utilization of Renewable Energy at KKNPP site where a 10 MW Wind Power Plant is already in operation since January 2007. NPCIL is considering the installation of additional Wind Farm at the same location. ENGINEERING & PROOJREMENT NPCIL is spearheading the efforts for capacity add-ons following indigenous route of proven PHWR technology which has been well adapted and mastered. 3-D modeling of the plant has been done for the first time in NPCIL so as to issue drawings after ascertaining virtual constructability. Bill of Materials (BOM) generated thereon also has high level of accuracy and thus it has been possible to arrive at the material requirement for the project more precisely. Better definition of scope of work contracts and minimizing changes during construction will result in improved cost and schedule performance. Open bidding has been the guiding principle of NPCIL to encourage wide participation and competition among the bidders. Proprietary purchases have been further reduced and brought to the minimal. New General Conditions of Contract adopted by the Corporation have formed the basis of tendering process. Total transparency has been brought in tender notification, qualifying criteria of bidders and bids evaluation methodology. Purchase Orders for long delivery items are already placed for ongoing projects. Manufacturing of critical equipment like Steam Generators, End Shields, Calandria, Reactor Headers, Coolant Channels, Reactivity devices, Primary Coolant Pumps & Motors, Fuelling Machine Heads and Fuelling Machine Column & Bridge for eight units have already begun. A strategic breakthrough was made into forging an alliance with BHEL & GEC Alstom for the supply of Turbine & Generator for 700 MW Units of KAPP-3&4. Purchase Order for Plant Water Package has already been placed and field works are in progress. Critical packages of Nuclear Piping, Common Services Piping, Balance of Turbine Island works and C&I packages are in different stages of awarding process. The Engineering Directorate is also working on the export model for the single unit plant of 220 MW and 540 MW PHWR reactors. CONTRACTS & MATERIALS MANAGEMENT During the year, the focus has been to process the requirements of upcoming 700 MW projects viz. KAPP-3&4 and RAPP-7&8. Placement of purchase orders in respect of long delivery equipment / items were made in a timely manner to meet the project schedule. NPCIL has innovatively implemented and successfully operated Integrated Materials Management and achieved substantial cost benefit. REACTOR SAFETY AND ANALYSIS The Directorate of Reactor Safety & Analysis (RSA) is responsible for carrying out the safety assessment for Nuclear Power Plants right from design, siting, commissioning and safe operation. It completed the Preliminary Safety Analysis Report (PSAR) of the 700 MW units meeting First Pour of Concrete requirements for KAPP-3&4 and RAPP-7&8 and performed comprehensive large break Loss of Coolant Accident (LOCA) analysis including identification of critical break, considering interleaved feeders configuration, 3D-neutron kinetics and limited boiling in the channels with several first of a kind features. The analysis demonstrated adequacy of safety systems and availability of large safety margins for KAPP-3&4. An innovative decision making tool namely Symptom based Intervention Guidelines Management System (SIGMAS) has been implemented in RAPS-5&6 as an operation aid to handle emergency conditions. Safety Analysis for Hydrogen Management in Containment during Severe Accident along with SIGMAS was carried out. NPCIL participated in the IAEA Coordinated Research Project on benchmarking of severe accident analysis codes for Heavy Water Reactors. First of its kind activities covering internal flood Probabilistic Safety Assessment (PSA), Fire PSA for KAPS-1&2 and Level-1 PSA for internal events has been completed for RAPS-2. HEALTH, SAFETY AND ENVIRONMENT Nuclear Power Plants (NPPs) of the Company have registered more than 335 reactor years of safe, reliable and accident-free operation. NPCIL accords utmost importance to nuclear, radiological, industrial, fire and environmental safety, over-riding the demands of production or project schedules. Continuing with its policy of 'Safety First' and striving for maintaining the highest standards of safety within NPPs, the occupational exposures of employees of the Company at various NPPs were maintained well below the values specified by the regulator, Atomic Energy Regulatory Board (AERB). Continuing with the emphasis on the principle of ALARA (As Low As Reasonably Achievable), the yearly radiation dose around the NPPs, measured over the last many years, is an insignificantly small fraction of natural radiation dose and the stipulated regulatory limits. For ensuring effective safety culture, different levels of reviews are in place to bring excellence in safety performance such as review by Directorate of Health, Safety & Environment, peer review by international agency, corporate review by a team of senior officers from stations & headquarters, Internal Review / Self Assessment by station and regulatory review by regulatory body. In line with the commitment of practicing the international safety standards, TAPS-1&2 was offered for peer review which was conducted by World Association of Nuclear Operators (WANO). During the year, the Corporate Review was carried out for TAPS-1&2, TAPS-3&4, RAPS- 1&2, RAPS-3&4, NAPS, KAPS and KKNPP. The Internal Reviews / Self Assessments were undertaken by Stations for assessment and reinforcement of safety practices and safety culture. Operational Health Physics functions at all NPPs were performed prioritizing the safety. The radiological safety aspects of PSAR of KAPS- 3&4 (700 MW) and RAPS-7&8 (700 MW) were prepared. Various technical assignments for general plant requirements of JNPP were reviewed and finalized. Review of post closure safety assessment of Near Surface Disposal Facility (NSDF), KAPS was carried out. The Environmental Management System (EMS) and Occupational Health and Safety Management System (OHSMS), as per ISO-14001:2004 and IS-18001:2007 respectively, were maintained at all the stations. An Environment Management Meet - 2010 was organized at NPCIL HQ focusing on environmental legislative compliances and effective maintenance of environmental management system. Continual strengthening of Industrial and Fire Safety activities at stations and projects remained the main focus during 2010-11 as well. Strengthening of safety organization and manpower planning up to 2018 was carried out. A safety guide on Construction Safety Management was also brought out in this direction. Implementation of Behavior Based Safety (BBS) programmes was given thrust. Celebration of National Safety Day with numerous awareness programmes carried significant importance for safety propagation. Independent review cum exchange visits to projects, self assessment of stations and corporate reviews were taken up as review techniques, for strengthening Industrial and Fire Safety. Nuclear Safety: Safety has always been NPCIL's continuous endeavor. In pursuit of safety improvements, it carries out comprehensive and systematic safety assessments by multi-tier multi-disciplinary review system during design, construction, commissioning and operation of NPPs. The assessments are well documented, subsequently updated (in the light of operating experience and significant new safety information) and reviewed at station level and corporate level and subsequently by the regulatory body. Verification by analysis, surveillance, testing and inspection is carried out to ensure that the physical state and the operation of a nuclear installation continue to be in accordance with its design, applicable national safety requirements and operational limits and conditions. Every event in an operating NPP is reviewed and lessons are learnt. The internationally reported events and their applicability to Indian NPPs are checked. Analysis of events is done to establish their root cause and accordingly the systems, procedures, aspects related to training and safety culture are further improved. These mechanisms have resulted in progressive improvements in the safety and reliability of units over the years. The inputs from operational experience are utilized for design improvements in the new reactors. Self assessment at sectional level, station level and corporate level are routinely organized to assess safety culture from an individual's perspective to the Company's goals on this issue. The targets are reviewed regularly to ensure that they continue to promote improvement. Peer reviews services by WANO are effectively utilized to gain safety assessment and insights on international level and avoid insular thinking on safety matters and broadening the range of 'operational feedback'. Recently, after the nuclear incident at Japan's Fukushima NPP which was triggered by Tsunami, NPCIL proactively constituted four task forces, one each for different generations of reactor design, which have reviewed preparedness and recommended measures for the 'beyond design basis scenarios'. All Stations have reviewed the status at the station with reference to the recommendations forwarded by WANO in this regard. Detailed walk-down of all the plants have also been conducted by specially constituted teams for this purpose. In the same context, two additional task forces reviewed the plants under construction - the Kudankulam units and the 700 MW units. QUALITY ASSURANCE: NPCIL, in all its endeavors, is committed towards upgradation and continuous improvement in Quality Management, Quality Assurance / Surveillance, Pre-service Inspection / In-service Inspection and interface with regulatory body. Quality Assurance / Surveillance activities have been carried out expeditiously for Projects and Stations. QA Directorate has ensured timely and effective QS coverage to meet the Projects and Stations schedules. Review and revision of In-service inspection programme document of TAPS-1&2 and MAPS-1&2 were undertaken. Developmental activities related to NDE tooling required for performing In-service Inspection has been undertaken. As part of indigenization, manipulator based Eddy Current Testing System has been developed for Steam Generator tubes of LWR and PHWR. Corporate QA reviews of Projects and Stations (including PSI / ISI audits) have been completed in a planned way. QA reviews have been conducted based on WANO guidelines. Emphasis was given for training and certification of QA manpower. In-house NDE training has also been imparted to QA Engineers and Scientific Assistants. Strengthening of QA activities has been undertaken by effective implementation of ISO-9001, imparting training and certification. Technical assistance and expediting of various Nuclear Power Plant components orders placed by PFBR Project (BHAVINI) and KKNPP have been provided by QA Directorate during the year. NPCIL continued to provide QA consultancy services to BARC, BHAVINI, DRDO, ITER-India and various State Electricity Boards in the country. HUMAN RESOURCE MANAGEMENT Human resource is the most vital asset of the organization and its performance has been improving year after year due to investment in enhancement of knowledge through training and skill development. A detailed projection of human resource management is made in the Management & Discussion Analysis which is annexed as Annexure-B to the Report. Implementation of Reservation Policies. SC/ST/OBC reservation policies are being fully complied with and development of SC / ST personnel is being given paramount importance. Reservation has also been provided to physically challenged as per rules / policy. Presently, 84 physically challenged persons are on rolls of NPCIL. The following represents the statistical information on reservation and related matters: Strength of reserved categories as on 31st March 2011. Total No. of Group Employees SC ST OBC A 4065 310 69 401 B 4468 716 277 796 C 3301 747 346 927 TOTAL 11834 1773 692 2124 Promotions effected during the year 2010-11. Total No. of Group Promotions SC ST OBC A 601 45 12 62 B 590 111 37 123 C 580 160 38 133 TOTAL 1771 316 87 318 IMPLEMENTATION OF OFFICIAL LANGuAGE NPCIL fully complies with the Government of India directives on implementation of Rajbhasha, 'Hindi'. NPCIL has been relentlessly making all efforts towards continuous improvements in the progressive use of official language among all its units, projects and HQs. NPCIL's efforts in propagation of official language have been receiving commendations and awards at various fora. Awards and Recognitions for implementation of Official Language: * NPCIL was awarded first prize for the year 2009-10 for best performance in the field of Official Language Implementation by a non-government Social and Literary Organization 'Ashirvaad' working for propagation and promotion of Hindi language since 40 years in Mumbai, Maharashtra. * NPCIL was awarded third prize for excellent performance in the field of Official Language Implementation by Town Official Language Implementation Committee, Mumbai for the year 2009-10 under the category of large Public Sector Undertakings (PSUs). To encourage the officers / employees of NPCIL to do their official work in Hindi and allay their apprehensions regarding use of the language, 32 workshops were organized during the year and 823 officers / employees were trained in these workshops. During the period, total 96 Hindi monthly competitions were conducted to promote the use of official language which were attended by more than 2769 participants. In continuation of the efforts, an 'All India Hasya Kavi Sammelan' was organized on the occasion of Vishva Hindi Divas on 10th January 2011. The Parliamentary Committee on Official Language carried out inspection of QA Office, Noida on 8th June 2010 and Tarapur Maharashtra Site on 4th January 2011 to evaluate NPCIL's endeavor in the field of Official Language Implementation. The Official Language related work being done at NPCIL was appreciated by the Committee during these inspections. VIGILANCE Vigilance is an important parameter of good corporate governance. The prime objective of Vigilance is to eradicate corruption and malpractices in the organization. The Vigilance Directorate has been playing an important role in imparting knowledge and enhancing awareness by sensitizing employees towards this direction. The focus is to encourage the system improvements to increase efficiency and productivity. The use of website developed by Vigilance Directorate hosts the guidelines issued by Chief Vigilance Commission (CVC) / NPCIL as a tool of communication for remaining vigilant. * A book on 'Preventive Vigilance for Purchase Contracts' was published to enhance efficiency and effectiveness of scientific officers and managers in Contract Management. * A number of System Improvements concerning Contract management, IT working, Finance and Personnel matters were implemented. * To boost preventive vigilance and to spread vigilance awareness, 9 one day seminars were organized at Headquarters and Units. Experts from Central Vigilance Commission and other eminent speakers from outside organizations were invited to address the seminars. * A documentary film titled 'Bhabha's Vision - Our Mission' containing vigilance message was produced in-house to motivate young scientific officers and other employees in the organization. Apart from the progress made by NPCIL, the film highlights the path shown by Dr. Bhabha with reference to Transparency, Integrity and Dedication towards peaceful use of nuclear energy. * First-ever Hindi Song on Vigilance i.e. 'Satarkta Abhiyan' was written and composed through in-house efforts. * Vigilance Awareness Period was observed in NPCIL Headquarters and all the Units during the period 25th October to 1st November 2010. CHETNA - annual edition of Vigilance Magazine was released during Vigilance Awareness Period. * NPCIL hosted a meeting of Vigilance Study Circle, Mumbai Chapter in December, 2010. * CVO and Vigilance Officers carried out 117 inspections including surprise inspections of ongoing contract works. Two CTE type examinations were also conducted, apart from other investigations. E-GOVERNANCE NPCIL is committed to the fulfillment of the expectations of stakeholders through continued enhancement of effectiveness, efficiency and transparency in its functions. In order to meet the above objective, potential of Information Technology as an enabler in its pursuit to achieve operational excellence is being leveraged. Over the years, NPCIL has employed Information Technology (IT) to automate work processes in order to build robust and transparent systems, improve efficiency, maintain records easing the day to day work of its around 12000 strong parivar. IT has endeavored to support automation of all the wings of NPCIL viz. HR, Finance, Purchase, Inventory, Operations and Maintenance. Major IT endeavors include the following: * Corporate Human Asset Review and Management System (CHARMS). * Computerised Maintenance Management System (CMMS). * Computerised Event Reporting System (CERS). * Integrated Business Application (IBA). * Annual Performance Assessment Report (e-APAR). CORPORATE SOCIAL RESPONSIBILITY NPCIL being responsible corporate citizen is committed for the philosophy of caring and sharing. NPCIL has always been well aware of the need to benefit society by enhancing the quality of lives of people in and around its power plants and surrounding areas. The organization continues to play an active role through a host of community development initiatives. The focus was on healthcare, education, infrastructure development and environment. In order to strengthen further the benefits to society by enhancing the lives of people around its power plants and surrounding areas management began a strong initiative to constitute a dedicated group headed by an official in the rank of Executive Director. The group was entrusted with the responsibilities for Rehabilitation and Resettlements for new Projects as well as the policy formulation, planning, developing the system of implementation and monitoring the Projects and activities pertaining to Corporate Social Responsibilities (CSR) for operating nuclear power stations and projects of NPCIL as well as initial community development near new projects. A comprehensive guideline on Corporate Social Responsibility in line with guidelines issued by Department of Public Enterprises has been put in place for clear direction for planning, implementation and monitoring of the same. An Advisory Council with eminent members having wide experience has been formed as an Apex body to guide and advice on matters pertaining to CSR and R&R. Rs. 8 crore was sanctioned for implementation of CSR works by all the operating sites and projects during 2010-2011. Out of this, Rs. 6 crore was spent or committed to be spent against total 77 activities/projects. In the past CSR activities were taken up based on the experience and the specific requirement of the surrounding areas around operating stations. More structured programme for sustainability and reaching the benefits to the community has been chalked out. NPCIL continues to focus on three major key dimensions like health, education and infrastructural support for overall development of the villages around Nuclear Power Plants. CORPORATE ENVIRONMENTAL RESPONSIBILITY NPCIL, as a responsible public sector enterprise, is conscious about its Corporate Responsibility towards Environment. The 'Environment Safety' has been prominently included in its Mission Statement and is also reflected in the HSE Policy Statement. There is a functional group established at HQ for oversight and guidance on Environmental Safety. The stations and projects are pursuing the Environmental Goals and Objectives of NPCIL. Operating stations have also adopted Environment Management Systems, in line with ISO-14001, and are audited and certified periodically by the accredited agencies. The Environment Management Meets are organized to propagate the knowledge and requirements of Environmental Safety and share Good Practices in this regard. CORPORATE COMMUNICATION To enhance the information to stakeholders external and internal communication initiatives were augmented. Periodically, the achievements of NPCIL were highlighted through print and electronic media throughout the country. NPCIL website was strengthened by loading large public information material essentially to raise awareness on nuclear power, safety of nuclear power, radiation aspects and so on. Several publications in different languages on Jaitapur Nuclear Power Project (JNPP) are also released. A Hall of Nuclear Power at Nehru Science Centre, Worli, Mumbai was also commissioned to share factual information on nuclear energy, nuclear power plants, health, radiation and safety among the visitors from various target groups. This hall of nuclear power comprises of interactive models, information kiosks, displays on all facets of nuclear power. An information centre comprising of multimedia kiosks, back-lit and front- lit panels and other interactive exhibits have been commissioned at the corporate office in Mumbai, especially to share key information regarding NPCIL and nuclear power to the visitors and employees. The Company organized several awareness campaigns on nuclear power and NPCIL including safety aspects, site selection process and pre-project activities. The awareness programmes were also conducted for the surrounding population, student and teacher community, revenue officers and journalists around the new green-field sites. The Company also organized scientific and technical displays at ten exhibitions showcasing the Company's achievements, capabilities and the benefits of nuclear power. In addition, exclusive exhibitions in Marathi language were organized in respect of JNPP at Mumbai and Ratnagiri region essentially to share the information on nuclear power, JNPP and allay the apprehensions of public. THE RIGHT TO INFORMATION ACT, 2005 An elaborate mechanism exists with 7 Nos. of Assistant Public Information Officers, one at each site, one Central Public Information Officer and an Appellate Authority at Headquarters to deal with the requests received under the RTI Act. CPIO's Office has been established with adequate manpower to carry out its functions. The mandatory information required under the Act [section 4(1)(b)] has been posted on NPCIL website and the information was updated as required. Three Hundred and Eighty Two (382) requests were received during the year 2010-11 under RTI Act, 2005, which have been replied. Sixty two (62) numbers of first appeals were disposed off. PARTICIPATION IN INTERNATIONAL ACTIVITIES NPCIL continues to be a member of various international organizations viz. World Association of Nuclear Operators (WANO), CANDU Owners Group (COG) and World Association of Nuclear Association (WNA). NPCIL actively participated in various programmes of these organizations to enhance the safety and reliability of its nuclear power plants. NPCIL also participates in various International Atomic Energy Agency (IAEA) and Nuclear Energy Agency (NEA) activities. NPCIL participated in preparation and presentation of National Report for International Convention on Nuclear Safety at IAEA, Vienna. NPCIL is one of the first members of WANO and is currently member of two WANO regional centres at Tokyo and Moscow. All the nuclear power plants operating in over 30 countries of the world are its members. Dr. S.K. Jain, Chairman & Managing Director is on worldwide WANO governing board. During the current year, NPCIL hosted WANO Peer Review of its plants which were carried out by teams consisting of experts from several countries representing global nuclear safety standards and found to be very useful in bringing in international perspective to our plants. Also, WANO organized Technical Support Missions for NPCIL to achieve next higher level of safety and reliability. Several persons from NPCIL participated in the important meetings, seminars and peer reviews organized by WANO and had the opportunity to discuss various issues related to improvement in plant performance with experts from other countries. COG has installed a satellite server to replicate all the data available of main server of COG for easy and fast access to valuable data available on COG. The database has also been provided access to plant sites so that they remain connected with latest developments in safety of operating CANDU plants worldwide. NPCIL participants regularly participate in various programmes. NPCIL also draws benefit from membership of WNA; especially it provides detailed worldwide report on all related issues of fuel like availability, utilization and forecast for future. Recently NPCIL got significantly benefitted from above organizations in obtaining accurate and timely information on Fukushima accident in Japan. DIRECTORS' RESPONSIBILITY STATEMENT As required under Section 217(2AA) of the Companies Act, 1956, the Directors confirm: 1. that in the preparation of the annual accounts, the applicable accounting standards have been followed, along with proper explanation relating to material departures; 2. that they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period; 3. that they have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; 4. that they had prepared the annual accounts on a going concern basis. CONSERVATION OF ENERGY / TECHNOLOGY ABSORPTION / FOREIGN EXCHANGE EARNINGS AND OuTGO Particulars as required under Section 217(1) (e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988, are given in Annexure-A to this report. PARTICuLARS OF EMPLOYEES Pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, none of the employees of the Company were in receipt of remuneration in excess of limits prescribed under the said rules. MANAGEMENT DISCUSSION AND ANALYSIS Annexed as Annexure-B to this report. CORPORATE GOVERNANCE The Department of Public Enterprises (DPE) has laid down guidelines on Corporate Governance for CPSEs. The Department of Atomic Energy (DAE), the administrative ministry of NPCIL, has requested NPCIL to comply with the instructions. The guidelines are similar to the Corporate Governance Clause in the Standard Listing Agreement of Stock Exchanges. The Board members and senior management have reaffirmed the compliance with the code of conduct. A compliance report on Corporate Governance is given as Annexure-C. The Company has obtained a certificate from M/s. Parikh & Associates, a firm of Practicing Company Secretaries regarding compliance of conditions of corporate governance as indicated in the DPE Guidelines. The Compliance Certificate is annexed to this report as Annexure-D. STATUTORY AUDITORS The Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India. M/s. Kalani & Co., Chartered Accountants, Jaipur were appointed as Statutory Auditors for the Financial Year 2010-11. OBSERVATIONS OF THE STATUTORY AUDITORS Comments of the management on the observations of the Statutory Auditors are given in Annexure-E to the report. COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA The accounts for the year ended 31st March 2011 were reviewed by the Comptroller and Auditor General (C&AG) of India. Comments of the C&AG on annual accounts have been given as Annexure to the report. CHANGES IN THE BOARD OF DIRECTORS * Dr. Srikumar Banerjee, who has been appointed as Chairman, Atomic Energy Commission and Secretary, DAE, has relinquished charge of the post of Director, BARC w.e.f. 19th May 2010 and consequently ceased to be Director of NPCIL. * Shri H.L. Bajaj, Member (Technical), Appellate Tribunal of Electricity, who had been re-appointed as a part-time Director on 16th December 2008, ceased to be Director w.e.f. 19th May 2010 upon his attaining the age of 65 years. * Dr. Nalini Bhat, Adviser (IA), Ministry of Environment & Forests has been appointed as a part-time Director on the Board w.e.f. 15th July 2010 vice Dr. G.K. Pandey. * Shri V.M. Kaul, Director (Personnel), Power Grid Corporation of India Ltd. has been appointed as a part-time Director on the Board w.e.f. 15th July 2010 vice Shri Anand Mohan. * Shri Chandan Roy, Director (Operations), NTPC Ltd., who had been appointed as a part-time Director w.e.f. 8th October 2004 ceased to be Director w.e.f. 1st August 2010 consequent on his superannuation. * Dr. R.K. Sinha, Director, Bhabha Atomic Research Centre has been appointed as a part-time director on the Board of NPCIL w.e.f. 15th September 2010. * Shri T.S. Bhattacharya, retired Managing Director of the State Bank of India, who had been appointed as a part-time Director w.e.f. 8th May 2008 for a period of 3 years, ceased to be Director w.e.f. 8th May 2011 on completion of his term. * Shri Rakesh Nath, Member (Technical), Appellate Tribunal for Electricity, has been appointed as a part-time Director w.e.f. 26th April 2011. * Dr. Arbind Prasad, Senior Adviser (Power & Energy), Planning Commission, has been appointed as a part-time Director on the Board w.e.f. 17th June 2011 vice Shri S.P. Sethi. * Shri J.K. Ghai, Director (Finance), NPCIL who had been appointed as a whole-time Director since 10th February 2006, ceased to be Director on completion of his term on 31st July 2011. The Board welcomes appointment of Dr. Nalini Bhat, Shri V.M. Kaul, Dr. R.K. Sinha, Shri Rakesh Nath and Dr. Arbind Prasad and places on record its sincere appreciation of the valuable services rendered by Dr. Srikumar Banerjee, Shri H.L. Bajaj, Shri Chandan Roy, Shri T.S. Bhattacharya and Shri J.K. Ghai during their association with the Company. APPRECIATION The Board would like to express its gratitude to the Department of Atomic Energy, Ministry of Power, Ministry of Programme Implementation & Statistics, Central Electricity Authority, Planning Commission, Ministry of Environment & Forests, other Ministries, Departments of the Government of India, State Governments for their cooperation, banks, financial institutions and other investors who have continued to repose their confidence in the Company. The Board would also like to place on record its appreciation of the services rendered by the auditors for their service and valuable advice. The Board wishes to express its special appreciation of the hard work put in by each and every employee of the Company and the cooperation extended by the Employees' Union, Supervisors' and Officers' Associations. For and on behalf of the Board of Directors (S.K. JAIN) Chairman & Managing Director Place: Mumbai Date : 6th August 2011 Annexure 'A' to the Directors' Report Information under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and forming part of the Directors' Report for the year ended 31st March 2011. CONSERVATION OF ENERGY A. Energy Conservation measures taken: Conservation of energy and optimization of resources have been given high priority in all the operating Nuclear Power Stations (NPPs) of NPCIL. A headquarter instruction exists to guide all the stations to take necessary measures for the conservation of energy. The following energy saving measures were continued to be taken by the Company. Energy Conservation Committees which were formed in all the operating NPPs of NPCIL meet periodically to review the situations and suggest measures for energy conservation. Continuous efforts at each station are put in to reduce steam, light water and compressed air leaks, consumption of various gases viz. hydrogen, nitrogen, carbon dioxide, helium, etc. and the same is closely monitored. During station operation, number of running equipment has been optimized. In some of the stations, particularly in northern region, the benefit of winter season is fully utilized to operate the units with optimal number of equipment without any loss of plant efficiency. To reduce the heat losses from hot piping and equipment, thermal imaging is carried out in all the stations and remedial measures like repair / replacement of insulation with better material is done. Equipment modifications and process modifications in the operating stations were done which resulted in a substantial gain in consumption of energy. Continuous trend monitoring of heavy water and light water collections during reactor operation has helped stations in taking appropriate remedial measures resulting in reduction in consumption of energy. During plant shutdown, minimum number of equipment are kept operating for energy conservation. Replacement of tube lights/lamps with solar power lamps and energy efficient lamps, proper maintenance of the vehicles to achieve fuel efficiency and various other energy conservation measures are taken up on priority. In off hours lights are optimized in offices, plant area, canteen and maintenance shops. 14th December 2010 was celebrated as Energy Conservation Day at all our stations to create awareness towards energy conservation among officers, employees and their families. B. Additional investments and proposals for reduction of consumption of energy: In all stations use of solar energy has been initiated. Energy saving lamps are being replaced in place of conventional lighting fixtures in almost all the stations. All the stations have targets of their own for next fiscal to bring down energy consumption in terms of reduction in auxiliary consumption, replacement of old equipment and lighting fixtures with energy efficient ones, replacement of conventional fan regulators with electronic regulators, installation of solar powered lamps and reduction in consumption of consumables. C. Impact of measures at A and B above for reduction of energy consumption: During the financial year, NAPS-2 and KAPS-1 were re-commissioned after EMCCR and KGS-4 was commission for the first time. Hence, because of additional requirements for commissioning of these units, the consumptii of high speed diesel, industrial gases, DM water and TG lub oil was higher as compared to previous year. Howev the various measures taken by the Stations for conservation of energy resulted in reduction of Station Auxilia consumption. FOREIGN ExCHANGE USED/EARNED (Rs. in crore) As at As at 31st March 31st March 2011 2010 1. Foreign Exchange Outgo a) Value of Import based on CIF basis 762 738 b) Expenditure - Project Related Payments 70 97 - Interest and Agency Fees - - - Others 5 6 2. Foreign Exchange Earned 0.04 0.10 FORM-B A. RESEARCH & DEVELOPMENT/TECHNOLOGY DEVELOPMENT (R&D/TD) 1. Specific areas in which R&D/TD is carried out: R&D/TD activities in the Company are oriented towards addressing the specific requirements emanating from its operating stations, projects under construction and the supporting groups within NPCIL. These efforts are focused more towards continued enhancement of nuclear safety, improvement in plant performance parameters, reduction in operational costs, reduction in project gestation period and costs and reduction in Person-Sievert (man- rem) expenditure. A greater thrust is also being imparted to indigenization of hitherto imported components and equipment and broadening the vendor base to facilitate the expansion of nuclear programme. The efforts are mostly application-oriented design & development specifically addressing the Control & Instrumentation (C&I) requirements emanating from power plants under construction and from operating stations to support the existing C&I electronics systems. The design and development efforts in R&D- ES are concentrated towards electronics and computer based controls and instrumentation systems for 700 MW projects. Specific areas of development in R&D-ES are standardization of Hardware Modules, Software building blocks, Human Machine Interface, Generic Embedded Software, development of computer based C&I systems, interaction with academic and research institutions to identify future needs for modernization of C&I, upgradation of computer based systems in operating stations, etc. 2. Benefits derived as a result of the above R&D/TD: The establishment of in-house development and testing facilities related to Nuclear Systems has benefitted the Company in the following areas: * Performance verification of first of a kind systems related equipment for 700 MW projects such as Containment Spray System, Passive Decay Heat Removal System. * Test facilities for nuclear safety studies are established / being established. Construction activities of Integral Test Facility at Tarapur (ITFT) and Hydrogen Recombiner Test Facility (HRTF) have progressed significantly. * Techniques developed for repair / rehabilitation / refurbishment of nuclear power plant systems and components. * Development of Tele-operated manipulators / tools / gadgets for inspection and maintenance tasks in nuclear power plants. * Establishment of facility for aging studies and life management of components. * Indigenisationofequipment/components. Significant progress has been achieved in indigenous development of Self-Powered Neutron Detectors (SPNDs) with requisite confidence to develop a wide range of such detectors within grasp. The establishment and maintenance of in-house R&D-ES laboratories and facilities enabled the Company in the following areas: * 'Development and Testing of System Software' and 'Finalization of Hardware' for several Computer Based Systems including safety and safety- related systems. The validated software was installed and commissioned on the corresponding hardware panels of the eleven systems at Kaiga-3, Kaiga- 4, RAPS-5 and RAPS-6 and these systems are working satisfactorily. * Upgradation of Electronics and Computer Based C&I Systems in KGS-1, KGS- 2, RAPS-3 and RAPS-4. * Development and testing of MCA based Stack Monitoring System and IR based Annulus Gas Monitoring System and setting up Radiation Monitors Calibration Test Facility at TAPS R&D Centre. * Standardization of hardware and software for computer based systems for new plants which will result in cost savings. ExPENDITURE ON R&D/TD a. Capital Rs. 12 crore b. Recurring Rs. 4 crore c. Total Rs. 16 crore d. Total R&D expenditure as % of 0.27% total turnover B. TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION The Company's self-reliance in the areas of design, construction, commissioning and operation of Pressurized Heavy Water Reactors (PHWRs) is near total. Continued efforts are made to upgrade and update the Company's knowledge-base and to adapt and absorb new technologies that are being evolved. Boiling Water Reactors (BWRs) are also operated by the Company meeting international standards on both safety and performance. Assimilation of technology with respect to the construction of Pressurized Water Reactors (PWR) and Fast Breeder Reactor (FBR) is also underway. Innovative techniques have been introduced in reactor design to upgrade 540 MW PHWR to 700 MW by permitting limited boiling in reactor coolant channels with minimum changes in nuclear components. This has led to relative ease in review and acceptance by regulatory body of new systems and concepts for 700 MW reactors. It is significant to note that 700 MW design has essentially conceptualized and incorporated the passive systems and hook-up schemes which have become relevant post-Fukushima. R&D activities had included testing and verification of such a new system. The role of erstwhile R&D Nuclear Systems Group has been expanded and this group is now known as Technology Development Group. Role of R&D-Electronics Systems Group is redefined to put greater thrust on development of all safety related C&I systems with the goals of higher reliability, availability and cost reduction and to fulfill all requirements of AERB. Annexure - B to Directors' Report MANAGEMENT DISCUSSION AND ANALYSIS ECONOMIC ENVIRONMENT The Indian economy has emerged with remarkable rapidity from the slowdown caused by the global financial crisis of 2007-09. GDP grew by 8.6% in FY 2010-11 from 6.8% in FY 2008-09 and 8.0% in FY 2009-10. Growth is strong in 2010-11 with a rebound in agriculture and continued momentum in manufacturing sector. INDUSTRY OVERVIEW India is the world's 5th largest energy consumer in the world and is expected to become the 3rd largest energy consumer by 2020 (after USA and China). India's Power Sector The Eleventh Five Year Plan (2007-12) originally envisaged a capacity addition of 78700 MW. The revised Mid Term Appraisal (MTA) target for total capacity addition is now 62,374 MW, which is lower than the original target but is nevertheless about three times the capacity actually added in the Tenth Plan. The revised targets of capacity addition during Eleventh Plan, source-wise, are as under: (in MW) Sector Hydro Thermal Nuclear Total Central 2,922 14,920 3,380 21,222 (34%) State 2,854 18,501 - 21,355 (34%) Private 2,461 17,336 - 19,797 (32%) Total 8,237 50,757 3,380 62,374 (100%) 13.21% 81.37% 5.42% At the time of independence, the Generation Installed Electric Power Capacity in India was only about 1.5 Giga Watt (GW). The power sector has registered significant progress since the process of planned development of the economy in 1950. The installed electric power capacity of the country as of 31st March 2011 stood at a total of 174 GW excluding captive generating capacities. The Generation Installed Capacity Mix as on 31st March 2011 is as under: Source Capacity (MW) % Share THERMAL 112824 64.98 COAL 93918 54.09 GAS 17706 10.19 DIESEL 1200 0.70 NUCLEAR 4780 2.80 HYDRO 37567 21.61 (Renewable) RES (MNRE) 18455 10.61 TOTAL 173626 100.00 Electricity generation from the power utilities in the country increased from a mere 5.1 Billion Kilowatt hours (BkWh) in 1947 to 811 BkWh in 2010- 11. The total electricity generation in the country during 2010-11 was 811 Billion Units (BUs) registering a year-to-year growth of around 5.5%. The break-up of generation during 2010-11 is as under: Category A B C D E Thermal 690.9 664.9 96.24 640.5 3.81 Nuclear 22.0 26.3 119.48 18.6 41.04 Hydro 111.4 114.3 102.64 103.9 10.01 Bhutan Import 6.5 5.6 85.68 5.4 4.69 Total 830.8 811.1 97.63 768.4 5.55 A = Target 2010-11 (BU) B = Actual 2010-11* C = % of Target D = Actual Last Year 2009-10 (BU) E = Growth (%) * Generation excludes generation from plants up to 25 MW Capacity. The electricity supply is, however, insufficient to meet the demand. The country's prevailing energy deficit is 8.5% and the peak capacity shortage is 10.3%. The per capita consumption of electricity increased from 15 kWh in 1950 to about 700 kWh. The Integrated Energy Policy of the Government of India forecasts that the growth of per capita electricity consumption in India is expected to rise about four times from 700 kWh to 2500 kWh by 2032. To meet the increasing energy requirements, the Integrated Policy projects the need for an installed capacity of about 778 GW by the year 2032 for a growth rate of 8%, of which nuclear power is envisaged to be about 63 GW by 2032 representing around 9% of the total installed capacity of the country. Nuclear Scenario Post Fukushima Incident An earthquake of magnitude 9.00 Richter scale hit northeast Japan on 11th March 2011 followed by tsunami of 14 to 15 meter high at Fukushima Reactor site beyond the design basis. This earthquake affected nuclear power plants at four sites (Onagawa 1, 2 and 3; Fukushima Dai-ichi 1, 2, 3, 4, 5 and 6; Fukushima Dai-ini 1, 2, 3 and 4; and Tokai 2). All the operating units at the time of earthquake were automatically shut down. However, at Fukushima Dai-ichi, the offsite power loss during earthquake was followed with loss of onsite power as the diesel generators for units - 1, 2, 3 & 4 were inundated by tsunami which followed. The decay heat could not be removed leading to extensive damage to the reactors and uncontrolled release of radioactivity followed. With the timely execution of emergency plan, no significant health effects to the workers and public have been reported. NPCIL has been closely monitoring the evolution of the event at Fukushima and getting information from International Agencies like International Atomic Energy Agency (IAEA), World Association of Nuclear Operators (WANO), Japan Atomic Industrial Forum (JAIF) and NPCIL representative posted at WANO Tokyo Centre. The safety review of Indian NPPs post Fukushima incident - i) Considering the severity of the incident, proactive action of constituting four task forces - one each for different generations of designs of reactors - was taken. Indian Nuclear Power Plants consist of two Boiling Water Reactors and eighteen Pressurized Heavy Water Reactors, with three types of designs. Additional task forces reviewed the plants under construction, namely VVERs at Kudankulam and 700 MW PHWRs at KAPP-3&4 and RAPP-7&8. The review and re-evaluation by the task forces as mentioned above re- affirm adequate provisions to handle station blackout situation and maintaining continuous cooling of reactor core for decay heat removal in the event of extreme external natural events. Notwithstanding the above, NPCIL has decided to reinforce the existing systems. ii) Atomic Energy Regulatory Board has also constituted a high level specialist committee for safety review of existing plants and its recommendations would be implemented by NPCIL. iii) Ministry of Environment & Forests, Government of India, has constituted a committee to assess impact of tsunami and how it can be mitigated. Global Nuclear Power Scenario Commercial nuclear power generation in the world is a mature, established technology, having accumulated over forty years of successful operation. There are 440 nuclear power reactors in the world with an installed capacity of about 375 GW having 14436 reactor-years of cumulative experience. Nuclear power accounts for around 14% of world's electricity generation. Post Fukushima incident, the initial apprehensions about nuclear power have subsided and world over there is a clear reconfirmation of the inherent safety of nuclear power. With initial exaggerated concerns having given way to a sober return of confidence based on facts rather than misconceptions, the world community has reposed its faith in nuclear power, as several countries are in the forefront to implement their own nuclear power programmes. Environmental Impacts of Nuclear Power While SPM, CO2, SOx and NOx, emissions and waste disposal are dominant in the context of generating energy from fossil fuels, safety of environment against radiation is a specific concern unique to nuclear power. Environmental risks that are taken care of at various stages of the nuclear fuel cycle are - mining (accidents, release of radon gas and radioactive dust from Uranium mines and mills), radioactive seepage from waste and land degradation, processing (accidents), transport (accidents, risk of proliferation), and electricity generation (risk of catastrophic accidents, low and high level radioactive wastes). Additionally, decommissioning of nuclear plants entails the disposal of radioactive wastes. Significant technological development has been made in the area of radioactive waste disposal and decommissioning. There is time in India for commercial deployment of these back-end activities. They are yet to be proven at large enough scale to satisfactorily resolve economic issues. The global data suggests that of all the conventional energy options, nuclear energy has posed the least risks in terms of mortality per billion megawatt hours of generation. Role of Nuclear Power and Potential in India India's nuclear power programme evolved in three stages to utilize modest uranium and large thorium reserves in the country for electricity generation. The first stage is based on Pressurised Heavy Water Reactors (PHWRs), using natural uranium as fuel. This stage yields plutonium, which forms the basis of development of the second stage, using plutonium along with thorium in Fast Breeder Reactors (FBRs). This stage yields more plutonium and an isotope of uranium. In the third stage, advanced power reactors based on Uranium-Thorium cycle are envisaged for deployment. The Integrated Energy Policy (2006) of the country recognizes that nuclear energy offers the most potent means to long-term energy security. India has to successfully realize the three-stage development programme and thereby tap its vast thorium resources to become truly energy independent beyond 2050. The commercial deployment of thorium requires a significant capacity of FBRs and development of technologies for thorium utilization. This requires time and therefore capacity addition through import of large capacity Light Water Reactors (LWRs) with fuel assumes importance. As per the said policy, country's energy requirement, considering 8% growth in GDP, will be 3880 BUs by 2031-32 needing an installed capacity of 778 GW. The projected nuclear power capacity by the year 2032 is at 63 GW. Nuclear energy has significant potential and, in the long run, the rapid depletion of India's fossil resources makes the country's nuclear fuel resources (natural uranium plus large thorium reserves) an important future energy source. In the short-term, nuclear power already enjoys a locational advantage in regions that are far from India's coal bearing areas. Nuclear power is a clean, compact, reliable, safe, environmentally benign, devoid of Green House Gas (GHG) emissions and economically viable source of power generation. The present share of nuclear power in the country's power scenario is 2.8% which needs to be raised to about 8% in the next two decades and gradually to 25% by 2050. This would necessitate augmentation of capacity and capability in several areas of nuclear power technology encompassing Sites for nuclear power plants, industrial infrastructure, capability and capacity in manufacture and supply of exacting-standard equipment and supplies, human resource development and so on. COMPANY OVERVIEW Role of NPCIL With the formation of Nuclear Power Corporation of India Limited in 1987 as a Central Public Sector Enterprise under the aegis of Department of Atomic Energy in India, the nuclear power generation moved to the commercial domain. NPCIL has attained maturity in the first stage of nuclear power programme. Today, NPCIL is unique in having comprehensive capacity in the various facets of nuclear technology viz. site selection, design, construction, commissioning, operation & maintenance and life extension of nuclear power plants. Nuclear Power Plant Operations Given the mandate of expanding the nuclear power base within the country, as per the plans and schemes of the Government of India, NPCIL owns and operates a fleet of 19 nuclear power reactors, in addition to operating the Rajasthan Atomic Power Station Unit-1 on behalf of DAE. A very high availability factor, one of the yardsticks for measuring operational efficiency of a nuclear power plant, sets apart the nuclear power reactors of NPCIL. The overall availability factor of operating stations for the year 2010-11 was 89%. The year 2010-11 recorded the highest nuclear power generation since the inception of the Company. The generation and capacity factor during the year under report were 26472 MU and 71% respectively as against 18803 MU and 61% respectively last year. This is an increase in generation by 41% over the last year resulting from improved fuel availability from both indigenous and imported sources. There are 10 reactors under IAEA Safeguards using imported fuel. They are TAPS-1&2, RAPS-1&2, RAPS-3&4, RAPS-5&6 and KAPS-1&2. The total capacity under safeguards stands at 1940 MW. TAPS-2 of the first pair of commercial nuclear power reactors in the country registered 590 days of continuous run, which is a record in the operation of Indian nuclear power reactors. Eight reactors viz. KAPS-1 (372 days), RAPS-4 (373 days), RAPS-3 (404 days), KAPS-2 (406 days), MAPS-2 (432 days), KGS-1 (487 days), KGS-2 (529 days) and TAPS-2 (590 days) have so far recorded continuous run of more than a year. Earlier, KAPS-1 became the first Indian nuclear power reactor operating uninterrupted for more than a year (372 days), fulfilling the long cherished target of operating a nuclear power plant continuously without any outage from one mandatory shutdown to another. Capacity Addition NPCIL added a capacity of 220 MW by completion of Kaiga-4 during the year, increasing its capacity base from 4460 MW to 4680 MW. Kaiga-4 became the 20th nuclear power reactor of the country. Kaiga-4 is the last unit in 220 MW size series. Ongoing and future PHWR projects are of 700 MW unit size. Renovation and Modernization Enmasse Coolant Channel Replacement (EMCCR) and Enmasse Feeder Replacement (EMFR) together with upgrades have been carried out at NAPS-2 and KAPS-1 and were synchronized to grid. Status of Ongoing Projects The work on Kudankulam (KKNPP) Unit-1 is nearing completion. KKNPP-2 is under an advanced stage of construction. These units are expected to commence operations in the year 2011 and 2012. The work on two other ongoing projects, KAPP-3&4 and RAPP-7&8 comprising of indigenous 700 MW PHWRs are progressing. These projects are expected to be completed by 2017 with a capacity addition of 2800 MW. New Projects Steps in respect of implementation of bio-diversity conservation plan as advised by the Ministry of Environment & Forests, Government of India are initiated for Jaitapur site. In respect of KKNPP-3&4, the site has been made ready in all respects to take up execution works. The CRZ clearance is awaited. Capacity Addition through International Cooperation Early Work Agreements (EWAs) have been signed with AREVA, France in respect of JNPP-1&2 (2 x 1650 MW) and Atomstroyexport, Russian Federation for KKNPP-3&4 (2 x 1000 MW) for expeditious project implementation. Pre-Project Activities at New Sites Pre-project activities including geo-technical studies, the process of obtaining environmental clearance, land acquisition and so on, at four new green field sites viz. Gorakhpur in Haryana and Chutka in Madhya Pradesh for indigenous 700 MW PHWRs and Kovvada in Andhra Pradesh and Mithi Virdi in Gujarat for setting up 1000 MW plus LWRs based on international cooperation have been commenced. Export of Nuclear Reactors NPCIL is open for export of 220 MW and 540 MW PHWRs known as small and medium size reactors, bearing the stamp of Indian ingenuity, which could prove to be optimal power solutions for countries where medium size electricity grids are in operation and are keen on expanding their power base. MOU Performance The expected MOU rating for the year 2010-11 is 'Very Good'. With the availability of imported fuel for reactors under IAEA safeguards and improved fuel supply from indigenous sources, NPCIL surpassed the generation target in the year 2010-11. Power Tariffs The tariffs of electricity generated from atomic power stations are finalized and notified by DAE in consultation with Central Electricity Authority. Atomic power stations have been following single part tariff structure taking into account the stipulated norms for technical and financial parameters. The pricing is based on the Return on Equity method. The average tariff of NPCIL stations during the year was Rs. 2.49 paise/kWh (as against Rs. 2.30 paise/kWh for 2009-10). The variation is due to fuel adjustment charges. Challenges Nuclear Power is inherently a high technology enterprise and that is the fundamental reason for not many countries having it. Its dual use capability, of its being used for producing devices capable of mass destruction, has also led restrictions in its extensive development. Although the inevitability of nuclear option is now universally accepted, there exist some associated challenges. These emerge mainly from the public perception of risks associated with nuclear power, which are disproportionately higher than the actual risks. These include safety, radio-active waste management, costs and other perceived risks like effects on health, security and proliferation. The most important challenge that has emerged at present is to address the perception of the public, policy makers, planners and other strata of the society about safety of nuclear power, in the wake of Fukushima incident in Japan. However, recognizing this aspect, NPCIL has taken several additional measures in the Public Awareness, with a multi-pronged approach for effective enhancement of public perception about nuclear power. This comprises structured public awareness and communication campaigns, outreach activities to disseminate authentic information about safety, radiation and other related aspects of nuclear power in a transparent manner to various groups. The availability of infrastructure for supply-chain and project execution, sites, human resource and investments are the other key challenges in implementation of the programme. Ensuring a smooth supply-chain and projects execution, capacity and capability enhancement of Indian industry, adequacy and appropriateness of the human resource and appropriate partnerships for investment for the power programme are the key focus areas. NPCIL has identified and initiated anticipatory actions in this regard. Although challenges ahead are many, the outlook for nuclear power remains positive. OUTLOOK Globally, fossil fuels will remain the dominant source of energy till 2030. As fossil fuel resources are not renewable, the worldwide energy mix of today will prove to be unsustainable. Therefore, industry experts are supporting increased adoption of nuclear and renewable energy as well as increased use of energy efficiency techniques. The country's nuclear power programme ahead to realize rapid nuclear power capacity addition provides robust outlook for NPCIL. With the improved fuel availability from domestic international sources (for reactors under safeguards in accordance with the Separation Plan) and the construction of two reactors under advanced stages of completion, the generation is expected to increase progressively in future. NPCIL plans to launch by 2012 additional in-house designed 4 x 700 MW PHWRs (Four have already been launched) and 10 LWRs having capacity of 10000 MW with International Cooperation. As per the long term plan of the Company, by 2032, LWRs upto the capacity of 40000 MW is expected to be launched. To conclude, at present, NPCIL is poised for meeting national expectations of rapid nuclear power capacity addition in the country. HUMAN RESOURCE MANAGEMENT NPCIL Parivar consists of 11834 strong and dedicated workforce with 3414 Engineers and Scientists, 5784 technical employees, 381 non-technical executives and staff and 2255 Auxiliary support staff such as paramedical service, fire service, etc., who spearhead the activities of the organization. NPCIL's workforce includes 1091 women employees. The group-wise staff strength consists of 4065 in Group A, 3301 in Group B and 4468 in Group C categories of employees. All HR initiatives are directed towards achievement of organizational goal of attracting, motivating and retaining the precious asset i.e. Human Resource. These measures included developing strategic and incremental packages from time to time for effective Human Resource Management to meet the aspirations of the employees. The implementation of the Sixth Pay Commission in all the areas which are in line with the Government orders has paved way to improvise the existing working conditions, facilities and benefits. It has created significant impact in reduction of attrition rate in NPCIL. Optimization of manpower continued to be an important strategy towards best utilization of human resource. Accordingly, staffing has been done strictly in accordance with the optimized manpower models for Projects, Stations and Headquarters, including multi-unit Sites. Training and Development initiatives covered competency development for fresh as well as experienced manpower across hierarchy. Besides, well developed internal training programmes, customized management development programmes with the involvement of professional training institutes and experts were organized for higher levels. 2426 man-days of training was imparted during the year. 34 employees were also sponsored for acquiring higher education in Technology, Management, etc. Students of reputed colleges were imparted practical training in different engineering and management disciplines to meet their curriculum requirements. During the year, as a part of annual induction programme of young blood to the Organisation, 110 posts in Scientific category for NPCIL Batch-18, 80 direct recruits in Scientific categories and 47 posts in the non-technical categories (Group - A & B) were filled through centralized recruitment process. In the career progression front, 856 employees in Scientific and Technical categories, 162 (82 executives and 80 non-executives (HQs) in non-technical categories were elevated to next higher grade. Design and development of online portal for inviting online applications for nontechnical executive posts were undertaken. Existing system of Annual Confidential Report (ACR) was modified to electronic Annual Performance Assessment Report system (eAPAR). Employee Relations Harmonious Employee Relations prevailed in all the Stations, Projects and Headquarters. Regular meetings were held with the recognized Unions at Station/Project levels and with the Joint Consultative Council at the apex level to discuss and resolve the various employees' related issues. The harmonious employee relations are a result of sound and constructive participative approach adopted by Management in decision making in matters affecting the general welfare and service conditions and conflict resolutions based on mutual understanding, which resulted in increased production and productivity. A structured mechanism for redressal of grievances is in operation which is sensitive and attentive to employee grievances at all levels. The pension grievances registered in CPENGRAMS, a website of Department of Pension and Pensioner's Welfare were attended immediately. Achievement by Stations TAPS-1&2, KAPS, RAPS-3&4 and TAPS-3&4 qualified as Excellent Performing Stations during the year and a reward of Rs. 2,000/- was sanctioned to each employee of the above Stations. MAPS and RAPS-3&4 achieved longest continuous run of 432 days and 404 days respectively and the employees of the stations have been sanctioned a special reward of Rs. 4,000/- each. Continuous run of Industrial Accident Free Period was achieved by RAPS-1&2 and Kaiga-3&4 and the employees were given a memento. Employee Participation Successful negotiations and participation of Employees' Unions have led to finalisation of NPCIL Performance Linked Incentive Scheme in NPCIL. Decentralised Certification of Standing Orders with regard to NPCIL and its Units have been taken up and the Standing Orders in respect of Headquarters and TAPS-1&2 have been duly got certified during the year. Industrial Dispute raised by NAPS Union on new Allotment policy was mutually settled. Other Welfare Measures Enhancement of insurance coverage and premium thereof was carried under NPCIL (Employees Group Savings Linked Insurance) Scheme and one more option to the left over employees to become members of the Scheme was extended and a total of 11,419 employees have become members under the revised coverage. Grant of payment of ex-gratia has been effected to the families of 24 deceased employees. FINANCIAL REVIEW Results of Operations (Profit and Loss Statement Analysis) Total Income The total income comprises of income from sale of electricity, consultancy services and interest earned on investments of temporary surplus in term deposits with banks and bonds. The total income for FY 2010-11 is Rs. 6898 crore as against Rs. 4479 crore in the previous year registering an increase of 54%. Sale of Electricity The Company's bulk customers are electricity utilities owned by State Governments and Union Territories. Revenue on sale of electrical energy is recognized net of levies. Income from sale of electricity for the FY 2010-11 was Rs. 6016 crore which constituted 87% of the total income. The income from sale of electricity has increased by 58% over the previous year's income of Rs. 3807 crore. Electricity generation, as per the billing cycle, in 2010-11 has been 26469 MUs as against 18798 MUs in 2009-10 showing an increase of 41%. The revenue realization has been maintained at a high level of 99%. Other Income The Company's other income in the FY 2010-11 was Rs. 882 crore as compared to Rs. 672 crore in the FY 2009-10 indicating an increase of 31%. The average yield on investment is around 8.80% during the year under report. Total Expenditure Total expenditure of the Company consisting of Operating & Maintenance Expenditure, Interest and Depreciation was Rs. 5210 crore as against Rs. 3791 crore in the previous year registering an increase of 37%. Expenditure related to operations The expenditure incurred on fuel & heavy water, operation & maintenance, employees' remuneration, administration and other expenses for the FY 2010- 11 was Rs. 3680 crore which is around 40% more than the expenditure of Rs. 2629 crore incurred during the previous year. The fuel charges and heavy water charges were Rs. 1670 crore and Rs. 622 crore as against Rs. 972 crore and Rs. 446 crore for the previous year. This increase is mainly on account of increase in level of operations. It is noteworthy that the year 2010-11 recorded the highest electricity generation since the formation of the Company. Interest Charges Interest charges (excluding Interest During Construction period) consist of interest amount on long term borrowings. The average interest cost is around 7.74% for the year 2010-11. Interest charges stood at Rs. 662 crore for the FY 2010-11 as compared to Rs. 441 crore in the previous year. Depreciation As per the accounting policy of the Company, depreciation is provided on straight line method on the capitalized cost at the rates specified in Schedule XIV of the Companies Act, 1956 except for computers and peripherals where depreciation is charged @ 19% and for software where depreciation is charged @ 20%. Cost of computers and peripherals are depreciated on straight line method over a period of 5 years to the extent of 95% and software to the extent of cent percent. With the capitalization of Unit-4 at Kaiga, Renovation & Modernization actions in NAPS-2 and KAPS-1 namely EMCCR, depreciation was higher at Rs. 868 crore in FY 2010-11 compared to Rs. 721 crore in the previous year registering an increase of 20%. Profit Before Tax, Provisions and Prior Period Adjustments The profit of the Company before tax, provisions and prior period adjustments for the FY 2010-11 was Rs. 1688 crore as compared to Rs. 688 crore in the previous year. Prior Period Adjustments Prior period items are incomes or expenses which arise in the current period as a result of 'errors' or 'omissions' in the financial statements prepared in earlier years. Effects of changes in estimates are not treated as omission or error. For the FY 2010-11, prior period adjustments amount to Rs. 1 crore. Provision for Taxation An amount of Rs. 311 crore has been provided towards current Income-tax under Minimum Alternate Tax provisions and Wealth Tax. Profit after Tax Inspite of the factors affecting operational revenue, the Company has earned a Profit After Tax of Rs. 1376 crore during FY 2010-11 as compared to Rs. 416 crore in FY 200910. The surge in profits is due to higher capacity utilization resulting in increased generation of electricity. Financial condition (Balance Sheet Analysis) Networth The networth of the Company at the end of FY 201011 increased to Rs. 22162 crore from Rs. 21268 crore in the previous year, registering an increase of 4% mainly due to retained earnings. Correspondingly, the Book Value per share also increased to Rs. 2184 from Rs. 2096. Loan Funds The loans as on 31st March 2011 were Rs. 17909 crore in comparison to Rs. 15462 crore as on 31st March 2010, registering a growth of 16%. A summary of the loans outstanding is given below: (Rs. in crore) As at As at 31st March 31st March Details 2011 2010 Bonds 2854 3001 Term Loans from Banks 9186 6186 Sub-Total 12040 9187 Unsecured Loans Loans from Government of India 5870 6275 SuB-TOTAL 5870 6275 As per the plan of allocation approved by the Government of India, the Company raised a sum of Rs. 3000 crore during the year for its various projects viz. RAPS-7&8, KKNPP-1&2 and KAPP-3&4 by availing term loans from Public Sector Banks as mentioned under: (Rs. in crore) State Bank of India 1250 Bank of India 1500 Dena Bank 250 The Company has redeemed Bonds amounting to Rs. 148 crore during the year. During the year 2010-11, the Company availed Rs. 34 crore of Unsecured Loan (Russian Credit) from Government of India. The Company has repaid Rs. 450 crore to the Department of Atomic Energy, Government of India, as per the Inter Governmental Agreement towards the loan (Russian Credit) availed from the former. Balance of Unsecured Loan (including Russian Credit) has been reduced by Rs. 405 crore during the year 2010-11. Reduction is due to the repayment to DAE and reduction in Foreign Exchange Rate Variation. The final balance of Unsecured Loan as on 31st March 2011 is Rs. 5870 crore. DAE loan (Russian Credit) represents funds provided by DAE to deposit with Controller of Aid Accounts & Audit (CAA&A) for repayment of credit extended by Government of Russian Federation to Government of India, after repayment in terms of various contracts entered into with M/s. Atomstroyexport to set up two units of 1000 MW each at Kudankulam, with an understanding that exchange fluctuation on repayment of the credit by Government of India shall be on account of the Corporation. Fixed Assets The Company's gross block increased from Rs. 19231 crore in FY 2009-10 to Rs. 21337 crore representing a growth of 11%. This is mainly on account of capitalization of Kaiga Unit-4 and Renovation & Modernization activities carried out in NAPS-2 and KAPS-1. Investments The investments consist mainly of power bonds, equity participation in joint venture viz. M/s. L&T Special Steels & Heavy Forgings Pvt. Ltd. to produce special steels and ultra heavy forgings and Bharatiya Nabhikiya Vidyut Nigam Ltd., a Company under the same management, NPCIL Employees' Group Leave Encashment Scheme with LIC of India, SBI Life Insurance Co. Ltd. and NPCIL Employees' Gratuity Schemes with LIC of India and SBI Life Insurance Co. Ltd. During the year, the Company has not made any non-trade investments. Total investments stood at Rs. 2290 crore as on 31st March 2011 as against Rs. 2413 crore as on 31st March 2010. Working Capital Current Assets after netting off current liability i.e. net working capital stood at Rs. 9632 crore as on 31st March 2011 as against Rs. 7084 crore as on 31st March 2010. Credit Rating The Company's Bonds have been accredited with a 'AAA' rating indicating highest safety from both CRISIL and CARE since FY 2001-02 onwards. Risk Management Enterprise Risk Management Policy has been formed for identification of key risk areas and formulate appropriate risk mitigation plans for taking corrective action in a time bound manner. Internal Control System and their adequacy The Company has adequate internal control system commensurate with the nature and size of business which meets the objectives of efficient use and safeguarding of resources, compliance with statutes, policies and procedures and maintaining accuracy of recording of transaction and reporting the same promptly. The scope of internal audit involves examination and evaluation of the adequacy and effectiveness of the system of internal accounting, system and procedures and other operational areas. Independent firms of Chartered Accountants who are appointed with the approval of the Audit Committee carry out the internal audit. The observations raised out of the audit are subject to periodic review and compliance monitoring by Audit Committee. Financials at a Glance The financial performance of NPCIL for the last 10 years along with the key financial ratios is summarized as 'Performance at a Glance'.