37th ANNUAL GENERAL MEETING
Dear fellow shareowners,
It is my great pleasure to welcome you all to this 37th Annual General Meeting of your Company.
Considerable acceleration in your Company's growth momentum in the recent past, amid numerous challenges, encourages me to assure you that the Company will continue to grow and prosper despite the issues emerging on the global and national business horizons.
Robust growth outlook even amid economic concerns
Economies all over the world, including the Indian economy, are grappling with the still unfolding aftershocks of the global financial crisis that erupted in 2008. After demonstrating initial resilience in dealing with the global crisis, the Indian economy has also been sucked into the downward spiral.
Public Sector Enterprises like NTPC had played a major role in the resilience demonstrated by the Indian economy in coping with the first waves of the crisis.
I have strong reasons to believe that the Indian economy will weather the storms and regain its desired growth trajectory, aided by enterprises like NTPC. Despite current economic downturn, the country has to work for regaining its growth momentum. NTPC will be among the growth engines in this process.
Amid all the uncertainties and challenges, there are some very strong factors clearly indicating a robust growth outlook for the power sector and for your Company:
Power demand in India is bound to grow due to growing population, rising standards of living, increasing urbanization and industrial growth.
India’s large power capacity requirement translates into an overall estimated capacity of 778 GW for 8% GDP growth and 960 GW for 9% growth by 2032.
Massive investments are envisaged in the power sector (about 15 lakh crore in the Twelfth Plan. The Twelfth Plan capacity addition target is about 88,500 MW).
Raising the bar with a robust overall performance in 2012-13
Your Company's performance during 2012-13 has demonstrated that we are breaking into higher levels of growth and excellence. Some highlights of the overall robust performance are:
Addition of 4,170 MW capacity, by far the highest ever in any single year.
Awarded contracts for work of 8,521 MW.
Capital expenditure (CAPEX) of 19,925.53 crore, 24.58% higher than the previous year.
Average PLF of 83.08% as against all India PLF of 69.95% with six stations recording more than 90% PLF.
Highest ever net profit after tax (PAT) of 12,619.39 crore, marking an increase by 36.81% over the previous year’s PAT.
Highest-ever dividend of 5.75 per share (total 4,741.16 crore).
Garnered over USD 2 billion ( 11,469.39 Cr) during ‘Offer for Sale’ for 9.5% stakes of the Government of India, which got oversubscribed by 1.7 times with 45% coming from foreign investors.
Cabinet approval for payment of long pending DESU dues amounting to 2520.07 crore.
Sustaining sector leadership through rapid capacity addition, high efficiency and competitive cost of power
You may like to know that the Company took 10 years to build its first 10,000 MW capacity, 11 years to build the next 10,000 MW, 7 years to build the third block of 10,000 MW capacity and only 3 years and 3 months to build the last nearly 10,000 MW becoming a 40,000 MW plus Company. Thus, nearly one fourth of the total capacity of 41,184 MW has been commissioned in the last 39 months.
Your Company's leadership position in the Indian power sector in terms of size and efficiency is seen in its contribution of over 27% of the total power generation with 18.44% share in total capacity of the country, demonstrating a very high efficiency factor.
Your Company has been among the lowest cost producers of power in India at its overall tariff of 2.96 per unit.
Your Company has been reaching power to 32 out of the 35 States and Union Territories. This makes it a truly national power Company with a geographically diversified customer base.
Quantum jump in investment levels and a strong growth pipeline
Year wise capex of your Company has nearly doubled from the level of about 10,500 crore in 2009-10 to about 20,000 crore in 2012-13.
A record capex of 19,926 crore (standalone) during financial year 2012-13 compared to 15,994 crore during financial year 2011-12 marks an increase of about 25%.
Your Company has 20,579 MW capacity under construction and about 5,000 MW under bidding.
Long Term Fuel Security for reliable and economic power generation
Your Company has long term Coal Supply Agreements (CSAs) for 23,895 MW units commissioned till 31.03.2009. For additional capacity of 13,510 MW (including 3890 MW JV capacity) to be commissioned during the period April 1, 2009 to March 31, 2015, the business units of your Company have signed CSAs with subsidiaries of Coal India Limited.
Development of Coal mining projects
Your Company has been allotted four coal blocks with estimated geological reserves of 2 billion tonnes. Added to the 6 coal mining blocks having estimated geological reserves of over 3.7 billion tonnes allocated to NTPC in the past, these new mining blocks take your Company’s coal reserves to 5.7 billion tonnes.
Sensitivity to the planet while meeting the growth requirements
More than 34 MT of CO2 has been avoided by your Company’s all round efforts for reducing CO2 per unit of power generated out of which 2.15 MT CO2 has been avoided in the year 2012-13.
Cleaner generation through state-of-the-art technology
From the conversion efficiency levels of about 35% obtained in the average subcritical plants, your Company has reached 38-39% efficiency levels through adoption of supercritical technology in its power stations starting from the 3X660 MW units at Sipat.
Your Company plans to reach conversion efficiency levels in the range of 45% during the Thirteenth Plan.
It is noteworthy that every 1% increase in conversion efficiency leads to 2.5% reduction in CO2 emission.
You may like to know that your Company is engaged in developing extremely high grade material for advanced ultra supercritical technology with much higher conversion efficiency in association with Indira Gandhi Centre for Atomic Research (IGCAR) and BHEL.
This effort is among only three such initiatives in the entire world, the other two being in the US and Japan.
Managing the environment with sensitivity and alertness
Creation of a green wealth of nearly 19 million trees along with other environmental initiatives has helped improve eco systems in and around many NTPC power stations.
Growth with inclusion
Social inclusion is a guiding feature of your Company’s growth strategy with specific initiatives in areas of infrastructure development, healthcare, education, water supply, sanitation, women empowerment etc. Your Company is investing in promotion of employability through vocational education. These initiatives benefit the neighbourhood population around project sites.
Your Company’s efforts to reach out to the physically challenged continue with strong passion and purpose, benefitting a large number of such people.
Growth with governance, excellence with ethics
Your Company’s emphasis on corporate governance goes much beyond compliance. It has been taking many steps to promote transparency and accountability before they become mandatory. This pro-active approach has attracted awards and accolades and more importantly, it has resulted in a robust corporate image among stakeholders including investors, both domestic and international.
Collective commitment of Team NTPC
The productivity of employees is demonstrated by increase in generation per employee and consistent reduction of Man-MW ratio year-after-year. Your Company is the only PSU to constantly figure among the 10 best employers in prestigious surveys.
A grateful enterprise committed to the stakeholders
I take this opportunity to place on record my sincere thanks to the Government of India, especially the Ministry of Power, the State Governments, our valued customers, all the authorities and agencies who provide unstinted support to your Company. I convey my appreciation and thankfulness to my colleagues on the Board for their invaluable contribution in strengthening the Company. I express my thankfulness to the valued customers and investors for their sustained support to the Company.
On behalf of about 26,000 competent and committed members of 'Team NTPC', I assure you of our total dedication and tireless efforts in order to fulfill your expectations.
(Arup Roy Choudhury)
Chairman and Managing Director
September 17, 2013