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NTPC Ltd.

BSE: 532555 Sector: Infrastructure
NSE: NTPC ISIN Code: INE733E01010
BSE 00:00 | 12 Aug 158.55 5.00
(3.26%)
OPEN

153.40

HIGH

158.90

LOW

152.80

NSE 00:00 | 12 Aug 158.50 4.85
(3.16%)
OPEN

153.70

HIGH

159.00

LOW

152.60

OPEN 153.40
PREVIOUS CLOSE 153.55
VOLUME 935141
52-Week high 166.30
52-Week low 111.95
P/E 9.24
Mkt Cap.(Rs cr) 153,741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 153.40
CLOSE 153.55
VOLUME 935141
52-Week high 166.30
52-Week low 111.95
P/E 9.24
Mkt Cap.(Rs cr) 153,741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NTPC Ltd. (NTPC) - Chairman Speech

Company chairman speech

Dear Shareholders

Year 2020 has been a year of unprecedented disruption. The coronavirus pandemic andresultant economic distress has challenged the entire humanity. The second wave of thepandemic has had a significant impact on lives livelihoods and the businesses. At itspeak it put tremendous burden on the country's health care infrastructure.

As the government has taken steps for containing the spread of the virus and providingvaccination for all your Company has responded rapidly by putting the safety health andwellbeing of its employees their families and other stakeholders as the topmostpriority.

Quick action was taken by your Company for upgradation of its health careinfrastructure. The number of beds for COVID-19 treatment was enhanced from 192 to 1000across hospitals in NTPC townships including over 550 beds with oxygen support. Twodedicated Covid care centers with 200 beds and oxygen support were set-up at Noida andDelhi and were made operational quickly. Action has also been taken for installation of 30oxygen plants at various locations.

Your Company extended help to State Governments by way of strengthening theirhealthcare infrastructure providing essential medical equipment etc. It is pertinent tomention that your Company took rapid action for rectification of two bulk oxygen plants inthe vicinity of its power plants in the States of Madhya Pradesh and Bihar.

As the country's largest and responsible power company your Company has ensured thatits generators are on bar to meet the power requirement of the country while continuingfighting with the pandemic. Even when many employees were infected with the virus yourCompany ensured 24X7 power supply which is essential for running the hospitals and othereconomic activities.

Despite our utmost efforts unfortunately we lost a few employees and family members.My heartfelt condolence to their families. For taking care of the families of deceasedemployees your Company was the first to put in place policies to help them. In factquite a few organizations have formulated similar policies to help their employees.

With the starting of vaccination programme in the country your Company has tied-upwith State Governments and major hospital chains for prioritizing vaccination for itsemployees families and associate members and we have helped vaccinate over 150000persons.

Even in these difficult times the commitment of employees and cooperation of thestakeholders has helped in ensuring that our growth trajectory remains intact.

As the pandemic continued to rage we also had to contend with the natural calamitythat afflicted Uttarakhand and our Tapovan Vishnugad hydro project. I would like to extendmy deepest condolences for the families of all those who lost their lives in this naturalcalamity. We would like to put on record our gratitude to the Govt. of UttarakhandDistrict authorities SDRF ITBP Indian Army and NDRF for all the support which theyextended for rescue and search operations.

The efforts and actions of your Company in the face of extreme difficultiesdemonstrated its character and resilience.

Growth with energy transition:

Your Company made significant achievements during this period and took several newinitiatives for transforming NTPC to a more robust organization. Your Company strengthenedits fundamentals further and laid significant steps for spearheading energy transition tomake NTPC a "Sustainable Integrated Energy Company".

In the past year your Company improved its realization established leadership inwinning RE bids started foray into e-mobility participated in bidding of distributioncontinued capacity addition programme and met capex targets.

On generation front your Company set new benchmarks and registered highest evergeneration of 314 BUs an increase of over 8% over previous year even as the country'sgeneration remained at the same level. Your Company crossed 1BU/day generation mark forthe first time on January 18 2021 and recorded highest ever single day gross generationof 1192.41 MUs (Group) on March 19 2021 and 990.65 MUs (Standalone) on March 20 2021.

Your Company's coal stations have maintained a positive difference of over 12% comparedto the national PLF of coal stations once again. Further your Company's oldest unitsSingrauli#1 and Korba#2 achieved over 100% PLF again and stood as top performing Units inthe country which underlines your Company's standing as the best in class.

Your Company's bills realization has crossed Rupees one lakh crores for the first-timeregistering realization of 100% of the billed amount.

Your Company achieved capacity addition of 4160 MW and commercial capacity addition of3824 MW including 904 MW capacity from renewable and Hydro sources in FY 2020-21. Further1075 MW has been added in FY 2021-22 till date taking NTPC group installed capacity to66885 MW.

Robust Financial Performance:

In FY 2020-21 your Company registered its highest ever profit of ' 13769.52 Crore asagainst ' 10112.81 Crore in the corresponding previous year registering an increase of36.16%. The total income stood at ' 103552.71 Crore as against previous year income of '100478.41 Crore.

In FY 2020-21 the Board of your Company has recommended final dividend @31.50% ofpaid-up capital i.e @ ' 3.15 per share subject to approval of Shareholders in the AnnualGeneral Meeting in addition to the interim dividend @ 30% of paid-up capital i.e @ ' 3per share already paid. This is the 28th consecutive year that the company haspaid dividend. Additionally your Company has also done buyback of 2% of its paid-upcapital in FY 2020-21 for the first time.

In FY 2020-21 your Company incurred capital expenditure of ' 20686 Crores. Next levelof growth and excellence:

Renewables:

With the focus shifting towards cleaner sources of power and the Government setting atarget of 450 GW of RE capacity by 2030 your Company has also sharpened its focus on REas the next pillar of growth. Your Company has prepared its business plans to tap thisopportunity appropriately while continuing work on operating its thermal fleetefficiently economically and reliably to meet the growing energy needs of the country.

NTPC Renewable Energy Limited (NTPC REL) a 100% subsidiary has been incorporated toadd renewables through focused approach. Your Company has also made plans for creating itsrenewables portfolio which could be as large as the thermal portfolio. Accordingly therenewable targets have been revised to 60 GW from 30 GW by 2032.

A total of 15% (1560 MW) of renewable bids finalized in the country have been won in FY2020-21 and 325 MW in FY 2021-22 till date by competing with various players in thesector. It is pertinent to mention that your Company had won solar capacity in the GUVNLtender at a record low tariff of '1.99/kWh which set a new benchmark in the sector. Thisunderlines the seriousness of your Company on its RE strategy.

Currently your Company has nearly 1.5 GW of operational renewable capacity 3 GWprojects are in development stage and tenders have been issued for 5 GW of new capacity.Under outsourced/ developer mode 4.7 GW is operational and 790 MW is under construction.During the year your Company has commissioned 225 MW solar project at Bilhaur which isthe largest solar project in the state of Uttar Pradesh.

NTPC REL has also received approval from the Ministry of New and Renewable Energy forsetting up of 4750 MW renewable energy park in Rann of Kutch in Gujarat which is thelargest in the country. Approval has also been received from Government of Madhya Pradeshfor development of solar plant in the land acquired for a coal-based plant. Additionallydiscussions are also in progress with various State Governments for allocation of landparcels and water bodies. Further efforts are on for partnering with National Investmentand Infrastructure Fund (NIIF) and ONGC for exploring opportunities in acquisitions anddevelopment of renewable assets including offshore wind.

Green Hydrogen:

Hydrogen is expected to be the future of energy and the momentum for "GreenHydrogen" is gaining traction across the globe. Your Company believes that GreenHydrogen is going to occupy significant energy space in future and the interplay betweenelectrons and molecules would lead to significant benefits. Accordingly your Company hasinitiated development projects as well as field demonstration projects for Hydrogenproduction. An agreement has been signed with Union Territory of Ladakh for setting up ofcountry's first green Hydrogen mobility project in the region.

Your Company has also taken up pilot projects on fuel cell-based storage and shorttermenergy storage micro grid project. Additionally R&D works are in progress fordevelopment of High Temperature Steam Electrolysers Static Hydrogen Compression Systemand development of sea water electrolyser.

Your Company is exploring various options using Hydrogen like transport blending withnatural gas green ammonia methanol etc. and aspires to lead "Hydrogen Economy"in India and globally.

Competitive Debt to accelerate growth:

Competitive debt plays a very critical role in the current business regime especiallywhen we need to compete to win capacity in the tenders. Your Company's sound financialsenable it to mobilize the required amount of debt at optimal cost. Your Company enjoys themost favored borrower status due to its prudent management of debt financing.

The proactive refinancing strategy adopted by your Company to leverage marketconditions for availing low-cost debt has resulted in your Company being able to raise themost competitive debt in the market.

During FY 2020-21 your Company has entered into a foreign currency loan agreement withthe Japan Bank for International Co-operation (JBIC) the Japanese Government policy-basedfinancial institution for JPY 50 billion (approx. USD 475 million or '3500 crore). Thefacility is extended under JBIC's initiative entitled ‘Green action for ReconcilingEconomic growth and Environment preservation' ("GREEN") for projects whichensure conservation of global environment. The loan proceeds shall be utilized by theCompany for funding its capex for Flue Gas Desulphurization (FGD) and Renewable Energyprojects. FGD substantially reduces the SOx emission in the flue gases of thermal powerplants and is a positive step towards environmental sustainability. This is the first andthe largest loan under JBIC's GREEN operations in India.

Sustainability:

I would like to reaffirm that your Company is committed to make fundamental changes inits business to transform itself into the most sustainable power producer as well as tobecome more transparent in the timely disclosure of its social environmental andeconomic performances. Your Company has already adopted integrated reporting for itssustainability performance disclosures along with financial disclosures. Your Company'sability to manage utilize and transform the six capitals - Natural Human ManufacturedIntellectual Financial and Social and Relationship- is the key to creating value for ourstakeholders.

In our quest to deliver sustainable and affordable energy we have declared our EnergyCompact goals at UN and became the 1st energy company across world to do so.Aligned to our "The Brighter Plan 2032" goals we have been able to reduce ourspecific GHG emission to 840 gm/ kWh (-3.4 % y-o-y reduction). This has been achieved dueto our various energy efficiency measures and increased production from non-fossil sourcesincluding Biomass. Our current zero-carbon based energy capacity is around 7.5 % and withour further massive RE addition we anticipate reducing our specific CO2emissions substantially over few years.

Operating in a water intensive sector we consider it as our moral responsibility toundertake water efficiency measures at war scale and set tougher targets. Towards thisend your Company has become signatory of UN CEO Water Mandate to better its waterstewardship programs as part of long-term Sustainable Development goals. Your Company iscommitted to champion circular economy through exploring multiple avenues of ashutilization and Waste-to-energy projects. In mere six years our ash utilization hasincreased from 41 % in FY 2015-16 to 79 % in FY 2020-21. To improve safety at ourworkplace your Company has imparted 1.3 million Man-hours of safety training (includingcontract workers) in FY 2020-21 an increase of 26 % over previous year even amid toughtimes of COVID.

Being a responsible corporate organization community engagement is one of yourCompany's business priorities. In FY 202021 your Company has spent around '419 croretowards various CSR activities. It gives me immense pleasure to share with you that yourCompany has partnered with Archery Association of India since 2018 and the Indian athletesare representing India at Olympic Games Tokyo 2020.

Power Sector Outlook: Challenges and Opportunities

Indian power sector is undergoing a significant change that has redefined the industryoutlook. Sustained economic growth continues to drive electricity demand in India. TheGovernment of India's focus on reducing the carbon footprint has accelerated growth ofrenewable capacity addition in the country and the renewable capacity targets have beenrevised to 450 GW and more by 2030.

Many power sector reforms are being introduced by the Government for bringingefficiency and discipline in the sector including proposed amendment to Electricity Act.Along with this new market mechanisms are under discussion to promote competition therebyproviding affordable power to the consumers. Additionally Government has also recentlyissued guidelines allowing distribution companies to exit from Power Purchase Agreement(PPAs) of Central Generating Units which have completed 25 years of life.

While these policies and reforms offer new opportunities and bring discipline into thesector they will also offer certain challenges. Your Company is geared up to adapt tothese changes and is working on various models to maintain leadership in the sector.

Indian power sector is evolving at a fast pace and the power demand is increasingrapidly. India recently witnessed all-time high peak demand of 200.57 GW and energy met of4508 MUs in a day on July 07 2021. The country also registered a generation growth of17.17% in Q1FY 2021-22. The growth in demand augurs well for your Company. These numberscoupled with ‘Atmanirbhar Bharat' initiative indicate that there is huge potentialfor growth in the power sector going forward.

Proactive Corporate Governance:

Your Company believes in setting standards of transparency and sound systems. YourCompany is committed to sound corporate practices based on conscience transparencyfairness professionalism and accountability.

Your Company has put in place well defined Risk Management Framework in place involvingrisk optimization risk strategy risk reporting structure and its monitoring. For itsexemplary practices your Company has received CII-Sustainability award under"Corporate Governance" category in FY 2019-20 as well.

Developments and Excellence in Other Business Areas:

Your Company is working on improving and achieve excellence in every facet of itsbusiness. Some of the most significant achievements in other areas are:

NVVN the trading arm of your Company traded over 18 BUs of power in FY 2020-21 whichis the highest volume since its inception. NVVN has started plying 40 nos. e-buses in PortBlair and won tender for supplying and operating 90 nos. e-buses to Bangalore MetropolitanTransport Corporation (BMTC). With this your Company has forayed into e-mobility.

In captive coal mining your Company achieved 11.00 MMT of coal production in FY2020-21. Dulanga coal mine has been declared commercial and works are in advance stage foropening two more mines.

Your Company has participated in bidding for Union Territory Discom privatization. YourCompany has taken initiative for setting up of captive industries and sought Expression ofInterest for the same which are under evaluation.

Talcher Thermal Power Station having installed capacity of 460 MW in Odisha which wasthe oldest plant in NTPC's portfolio has been shut down permanently w.e.f. March 312021.

Your Company believes in digitalization and automation as the key drivers for improvingbusiness efficiency speed transparency and efficacy. Accordingly your Company isdeploying various digital AI/ML tools for power plant operation to increase efficiencysafety cost optimization ensuring cyber security and to reduce downtime.

Your Company is actively pursuing various option for increasing its geo-strategicreach. Your Company has undertaken PMC assignments at many countries under partnershipwith International Solar Alliance (ISA).

Your Company has secured 38th rank in Great Place to Work (India). YourCompany has been conferred "Excellence" in the prestigious CII-ITCsustainability award-2020 in "Corporate Social Responsibility" category.Further your Company has secured 5th position (Utilities segment) in Forbes -World's Best Employer list - 2020 and 1st in PSUs (India). The overall rank is261st.

To improve the gender diversity your Company conducted a special recruitment drive forwomen. Your Company has been conferred with the prestigious FICCI "Jury CommendationCertificate" under the Category "Women Empowerment". The award has beenreceived for your Company's flagship "Girl Empowerment Mission" Project. YourCompany has also received "Role Model" award in HR domain from CII.

Committed For Brighter Tomorrow:

Your Company is constantly working on imbibing agility in workforce improving thecapability of its employees and building a strong leadership pipeline. Various initiativeshave been taken in Human Resource front to make the organization future ready includingintroduction of job rotation compulsorily undergoing training before taking up newresponsibility.

Your Company is focusing on delivering high performance levels in all facets of itsbusiness. Your Company is constantly working on improving its competitiveness. Efforts areunderway for improving the profitability and thereby increasing the wealth of theshareholders. With constant efforts the under-recoveries on account of fuel wereeliminated in FY 2020-21. Additionally with strong focus on efficiency improvementsadoption of best O&M practices and optimization of fuel linkages the Energy ChargesRate (ECR) of your Company's coal plants were reduced which resulted in savings to thetune of '5000 crore for the beneficiary states.

I take this opportunity to place on record my sincere thanks and gratitude to theGovernment of India particularly Ministry of Power Ministry of Coal Ministry ofRailways Ministry of Environment Forest and Climate Change Ministry of New andRenewable Energy DIPAM CERC CEA CAG State Governments our valued CustomersAuditors Vendors other authorities and agencies that provide unstinted support.

I convey my appreciation to my colleagues on the Board for their invaluablecontribution in strengthening the Company. I express my sincere thanks to investorsshareholders employees and customers for their unstinted support. Your Company valuesyour trust and confidence and shall continue to work tirelessly to take it forward.

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