Investors

Chairman's Statement

43rd Annual General Meeting

Dear Shareholders,

It is my great pleasure to welcome you all to the 43rd Annual General Meeting of your Company.

At the outset, I would like to say thanks to each one of you for your continued support and investment in NTPC. I am proud of what we’ve accomplished together past year, and I am even more optimistic about the opportunities ahead.

Your Company has shown all round performance and strengthened its fundamentals further. With the current growth of country’s electricity demand, the power sector is poised for long term growth. With every Indian now having access to electricity coupled with Govt.’s initiative of “24X7-Power for all” there will be huge demand for power in future. As the demand grows, there is ample room ahead for the Company to grow.

Robust fundamentals and proven capabilities of your Company pave way for a bright future ahead. You will be glad to know that your Company has been ranked No#1 “Independent Power Producer and Energy Trader” in the Platts Top 250 Global Energy rankings 2018. 

Another important event has been the issuance of Tariff Regulations 2019, effective from 1st Apr’19 for a five-year period by Hon’ble CERC. These are forward looking regulations and capture the need of the sector through various provisions. The Govt. has also launched a scheme; Security Constrained Economic Dispatch on pilot basis with the objective of reducing cost of power. 

While the challenges in business environment remained, your Company has put in another year of great performance. Some of the major highlights are:

  • NTPC Group topped the 300 BU annual generation mark. Grew at ~4%.
  • Added 2180 MW commercial capacity in FY19 and 1460 MW in Q1 FY20. We are now a 55+ GW Company.
  • Pursued inorganic growth through acquisition of Barauni Thermal Power Station and acquisition of JV partner’s equity in KBUNL and NPGCL.
  • Won 545 MW Solar bids under Tariff Based Competitive Bidding (TBCB).
  • Realized 100% of the billed amount consecutively for the 16th year.
  • Achieved 6.81 MMT of coal production from Pakri-Barwadih and the mine has started commercial production from Apr’19.
  • In line with the request being made by our shareholders, we have issued bonus shares in the ratio of 1:5.
  • NTPC felicitated with certificate of appreciation by Hon’ble MoSP for timely completion of SAUBHAGYA works in Odisha.
  • Commissioned first Waste to Energy Plant at Karsara, Uttar Pradesh.
  • Received most coveted ATD BEST award in training domain, consecutively three times in a row from ATD, USA. 

Govt. of India and regulatory authorities are taking various initiatives for providing cleaner and affordable power for all, while fulfilling the needs of the sector thereby achieving inclusive growth. 

The 2019-24 regulations, SCED scheme and system of opening and maintaining of adequate Letter of Credit by Distribution Licensees to ensure payment security to generators are some of the recent changes in the sector.

Your Company has been making consistent efforts for maximizing the generation share to maintain its sectoral leadership. Operation and Maintenance practices are being reviewed on continuous basis and corrective steps are being taken for ensuring maximum availability of generators.

In FY19 also your Company’s PLF has consistently maintained a positive difference of over 15% as compared to the National PLF. 

With the addition of ~19 GW capacities under construction coupled with increased thrust on renewable addition, your Company’s generation share in the National generation portfolio is set to increase further.

Your Company’s strong balance sheet gives it an edge in terms of resourcefulness to pursue both organic and inorganic growth opportunities. Your Company is taking various initiatives and putting tireless efforts to fulfill the expectation of shareholders.
Many initiatives are being taken to ensure sustainable business growth. 

Renewable Energy has now acquired a much greater impetus in the total energy space across the globe; India is one of the major contributors towards this. Your Company is geared to increase its green energy space and going aggressively. 

Apart from 545 MW under TBCB, we are setting up 217 MW of floating solar in the State of Telangana, AP and Kerala. We are pursuing with Govt. of Gujarat for allocation of land for setting up of 5 GW ultra mega solar and wind project at Kutch. 

The installed capacity of NTPC Group has reached 55,786 MW and the commercial capacity is 54,326 MW. This includes 928 MW renewables and 800 MW hydro. 

The target for this year is for adding around 3.5GW of commercial capacity for the balance period. 

705 MW Badarpur plant in NCT of Delhi has been permanently decommissioned with effect from October 15, 2018. Even though the plant was meeting environmental norms, Delhi’s poor air quality index improvement requirement led to this decision.

Three fresh tenders have been issued with aggregate capacity of 4520 MW. These plants will be pit-head and ultra-super critical. 

With consistent efforts, close coordination with coal companies and Railways, the materialization of Annual Contracted Quantity of coal has increased. To ensure adequate coal availability while building up sufficient stock, action has also been taken for sourcing through e-auction, tie-up through MoU rote and importing of coal.

Your Company has made substantial progress in coal-mining. 7.31 MMT coal was extracted from Pakri Barwadih and Dulanga. Your Company is working relentlessly to enhance production from the captive mines to ensure fuel security and adopting best mining technologies. 

I am very proud to mention that Director General Mine Safety (DGMS), a Statutory Authority of Govt. of India, has selected Pakri-Barwadih as a model mine, which is one out of two in the entire country.

To fulfill your Company’s vision various initiatives are being taken to increase the geo-strategic reach. 

Your Company has opened an office in Myanmar to explore the business opportunities. Construction activities of (2X660) MW Coal based project at Bangladesh are under progress. Discussions are underway with Govt. of Sri Lanka for setting up of LNG based gas plant and a Solar PV Project. Business opportunities in BIMSTEC countries, Middle East and Africa also being pursued by your Company.

Your Company’s robust growth and operational excellence translate into sound financials. Prudent management of resources ensure that the fundamentals of your Company remain strong and are leveraged for further growth and higher returns.

In FY19, your Company recorded a profit of over ₹12,600 Crore which is an increase of over 20% and the Company declared dividend of over ₹5,400 Crore to shareholders. This is the 26th consecutive year that your Company has paid dividend and the increase in dividend is 28.5% over last year. 

As of 1st April, 2019 Government stake in your Company is 56.41%. Your Company’s sound financials coupled with credibility enable it to mobilize the required amount of debt at very competitive rate. The weighted average cost of borrowings in FY19 is less than 7%. 

Tireless efforts are underway for maximizing profitability and increasing operational efficiency. With sustained efforts, under recovery of fixed charges has reduced by 50%. Further, steps have been taken for eliminating under recovery. With robust all round performance, your Company is expected to retain the “Excellent” rating for the MoU signed with Government of India again.

Your Company is working with the objective of “Low Cost, Low Emission and Highest Safety”.  Your Company’s fleet of super critical boilers has resulted in reduction of specific coal consumption to 0.66 kg/kWh.

Reduction of water consumption, increasing ash utilization and environmental protection are the top most priorities of your Company. 

Significant steps are being taken for reducing water consumption. Specific water consumption has been reduced by 1.3% when compared to FY18. 

To address the issue of ash utilization, your Company had conducted ‘Grand Ash Challenge’ on pan India basis. Significant action has been taken for meeting the revised environmental norms issued by Environmental agencies. For meeting SOx norms, contracts have been finalized for over 75% of coal based capacity and rest of the capacity will be completed in next 6 months-time. Similarly, action has also been taken for NOx compliance.

Your Company is adopting digitalization for reducing downtime and thereby enhancing the availability of the power plants. Various digital initiatives are being taken to optimize processes, enable faster decision making, increase reliability, productivity and optimize resources. 

Human capital is the key driver for any performing organization. Your Company’s continued thrust on employee capability development has resulted in creating talent pool of power professionals, who are well trained to operate and maintain the power Stations and deliver projects. 

The dedication of the employees has been one of the key differentiators vis-à-vis the peer groups. Work-hard culture of the employees has created an environment for achieving the best results at all times, thereby ensuring sustained returns to its shareholders.

Your Company has been ranked 14th in the 2019’s Great Place to Work list, and stands first among PSUs. 

Corporate Social Responsibility has been the prime focus of your Company; Water, Sanitation, Health and Education are the focus areas. 

With the success of Girl Empowerment Mission (GEM) launched in FY18, the programmes has been started at 23 locations in FY19, covering 1900 school girls and inputs are given on academics, health, hygiene, self-defense, yoga and personality development. 
Your Company has proactively helped cyclone affected Odisha areas and took part in restoration of power supply and providing emergency medical services.

Your Company has taken proactive steps for setting up appropriate governance systems and processes. 

An example of the highly effective Corporate Governance practices at your Company is the fact that FY17, FY18 and FY19 saw ‘Nil’ audit observations from CAG, a great feat reflecting utmost transparency and integrity.

Your Company’s Sustainability Report for FY18 has been assured by Deloitte with Type-II, High Level category. NTPC is one of the three organizations and first PSU in India to have such highest level of assurance. 

I take this opportunity to place on record my sincere thanks and gratitude to the Government of India, particularly Ministry of Power, Ministry of Coal, Ministry of Railways, Ministry of Environment, Forest and Climate Change, Ministry of New and Renewable Energy, DIPAM, CERC, CEA, State Governments, our valued Customers, Auditors, Vendors, other authorities and agencies that provide unstinted support. 

I convey my appreciation to my colleagues on the Board for their invaluable contribution in strengthening the Company. I express my special thankfulness to the investors and shareholders for their sustained support to the Company.

On behalf of entire NTPC family, I assure you that your Company will continue to put tireless efforts and commitment to fulfill your expectations. With the unmatched knowledge pool and skill of Team NTPC, I once again assure you that each employee of the Company will work as a “Power Soldier” for improving the performance in the years to come.
 

Thank you,


(Gurdeep Singh)
Chairman & Managing Director