NTPC Ltd

Dear Shareholders,

I am delighted to update you all as we look back on our company's performance over the past year and reaffirm our goals for building a stronger and sustainable business. This year has been nothing short of extraordinary for your company, and we are proud of the achievements it has accomplished.

During FY24 Our market capitalization touched an all-time high of '3.49 lakh Crore ($42 billion). This surge in investor confidence is a testimony to the company's sound financial management and belief in its long-term growth prospects. I would like to congratulate you on this achievement and express my sincere thanks for reaffirming your trust in us.

Your company's balance sheet has been growing bigger and stronger demonstrating its financial strength and stability. Consolidated PAT for FY24 stood at '21,332 Crore ($ 2.54 billion), registering an increase of nearly 25% over FY23. We have also realized over 100% of our current billing with a total realization of '1,57,138 Crore ($ 18.93 billion) and our debtors stand at only 31 days of average billing. These achievements could not have been possible without the consistent efforts of a dedicated team.

Furthermore, as informed earlier, to solidify our commitment to clean energy, the Initial Public Offering of our subsidiary, NTPC Green Energy Limited (NGEL) is on the anvil.

We remain steadfast in our commitment to enhancing financial performance, delivering consistent returns for our shareholders, and maintaining our reputation as a trusted and responsible leader in the energy industry. This commitment is reflected in the payment of dividend for the 31st consecutive year with a declaration of a total dividend of '7.75 per equity share for FY24, subject to shareholders' approval in the upcoming Annual General Meeting. This dividend payout is nearly 42% of our profit. We are completely focused on increasing the wealth of shareholders and working on alternative ways of incentivizing the shareholders as well.

One of the important events in the past year has been the issuance of the Tariff Regulations by the Central Electricity Regulatory Commission for the five-year period (2024-29) starting 1st April 2024. These are forward-looking and capture the needs of the sector through various provisions. These tariff regulations are

expected to help us continue our growth trajectory, which is essential for meeting the country's growing power needs.

Providing reliable and affordable power has been, and will continue to be, our guiding principle as we define priorities for the future. We're continuously investing in and adapting to advanced technologies to meet the nation's growing electricity demand. Our team has been working relentlessly to deliver value in all facets of our business and our goal is to make decisions that will benefit the shareholders.

Due to the strong focus on the "Make-in-India" initiative of the Government coupled with changes in residential consumption patterns, it is expected that India will continue to register 6-7% annual growth in power demand at least for the next decade. This mandates the requirement of additional capacities both renewable and conventional sources till significant storage capacity is in place. This offers enough room for power utilities like NTPC to expand their horizons. Accordingly, your company is fully geared up to tap this opportunity and take all required actions for expanding its portfolio with the right fuel mix.

Ensuring the safety of our operations is paramount. We are continuously evaluating to enhance our safety measures to meet and exceed industry standards, reflecting our dedication to operational excellence and responsible stewardship of shareholder interests. We have implemented rigorous safety protocols, devised training modules for imparting training to all the employees including contractual workers and investing in state- of-the-art technology to maintain a safe working environment.

Building a Brighter, Sustainable Future for India

NTPC holds a commanding 17% share of India's total installed power capacity. When it comes to generation, the company contributes a substantial 24% of India's total power generation which underscores our robust O&M and asset management practices.

Your company achieved generation of 422 BU of electricity, registering a growth of ~6% year-on-year. We have also added 3924 MW capacity, taking the total installed capacity to 76 GW. The addition includes not just coal-based power plants but Renewable energy capacity as well. This impressive growth translates to a stronger ability to meet India's ever-growing energy demands.

India met a peak demand of 250 GW in May 2024. As per the estimates prepared by the Central Electricity Authority, the peak demand is expected to touch 366 GW in 2032. Accordingly, the additional coal-based capacity requirement is 80 GW including 28 GW which is currently under construction. Out of the 80 GW, your company is expected to add 26 GW of coal-based capacity including 9.5 GW which is under construction, and all these capacities are planned to be commissioned by 2031-32.

As part of the above plan, in FY24, orders have been placed for 3200 MW of coal-based capacity at Singrauli-III and Lara- II. Further, tenders have been issued for 10.4 GW of capacity which is expected to be placed in 2024 and the orders for the balance capacity is also expected to be placed in next one year. We are keeping a strong focus on delivering projects on time and developing mechanisms to make our decision-making process faster within the ambit of all principles.

We recognize the urgency of addressing climate change and are actively diversifying our portfolio beyond traditional sources. Our Renewable energy installed capacity has reached 3.6 GW. By investing in renewables, and storage solutions, with over 11 GW of renewable energy and hydro projects under construction, and a strong pipeline of over 20 GW in various stages of tendering, your company is taking a significant step towards becoming a fully integrated clean energy provider.

We are well poised to achieve the committed 60 GW of renewable capacity by 2032. We are constantly evolving and developing new strategies and business models for fast-tracking the renewable capacity addition. Our focus has been changed from implementing projects through a plain EPC model to sourcing components and aggregating which includes solar PV modules, land patches and connectivity. Your company's strong presence across the length and breadth of the country gives us an edge to collaborate with various State Governments for securing land patches and we are effectively utilising this position.

We are fast-tracking the development of hydro projects through your company's subsidiaries THDC and NEEPCO. I am pleased to inform you that we are close to commissioning of a 1000 MW Pumped Storage Project at the existing Tehri hydro project complex. Additionally, the Government of Tamil Nadu has allocated 1000 MW upper Bhavani PSP to be executed in a JV mode for which the developmental activities have started. With the current plan, your company's fossil and non-fossil mix is expected to be nearly 60:40 by 2032.

This expansion strengthens your company's stature as a leading power generator in India and positions us to make the most of future market opportunities. By strategically increasing its generation capacity, NTPC ensures a secure and sustainable stream of revenue generation.

I am happy to share that your company's commitment to selfsufficiency in coal production has yielded impressive results. During the FY24, total coal despatch of 34.15 MMT was achieved, registering over 50% growth when compared to the preceding year. This accounts for nearly 13% of our total coal consumption. Looking ahead, we are strategizing to fulfil a minimum of 25% of our coal requirement through captive mines by FY30. Furthermore, NML secured the rights to develop the North Dhadu (East) coal block. This not only supports our fuel security but also translates to cost savings. NTPC's dedication to sustainable mining practices is highlighted by the recent recognition of two of our mines, which have received Star Rating Awards under the category of Opencast mines by the Ministry of Coal.

NTPC has conceptualized the development of all its mines as a "Model Mine" by adopting the best technological practices, integrating digital tools for operational efficiency, striving towards 'Zero Incident potential', promoting green footprints, and setting benchmarks in the mining industry.

I am happy to share that your company is driving India's clean energy transition by leading initiatives in green hydrogen, green chemicals, and carbon capture utilization. These efforts contribute to the government's goal of achieving a carbon- neutral economy. Towards this endeavour, we have joined forces with leading players like IOCL, ONGC, HPCL Mittal Energy, and NALCO to develop large-scale renewable energy parks. These partnerships will not only accelerate project development but also support collaboration across the energy sector.

You all will be pleased to know that your company is making big moves in nuclear power, with 2.8 GW capacity project in Rajasthan through ASHVINI a JV between NTPC and Nuclear Power Corporation of India. Simultaneously, action has been taken for the formation of a separate subsidiary for carrying out nuclear business and requisite approvals of the Government are in the advanced stage. After gaining the requisite expertise in nuclear project development, we would like to undertake projects on our own under the new subsidiary.

This fiscal year we achieved a major milestone by fully commissioning our first overseas power station in Bangladesh. This achievement assumes significance in our "Golden Jubilee" year. Our collaborations with Indian states and foreign governments on power projects solidify our position as a global energy player. Thus, NTPC climbed 61 positions to secure the 372nd rank in Forbes' Global 2000 List for 2024.

I'm happy to announce the groundbreaking advancements achieved by our R&D team this year. One key development is the first-of-its-kind waste-to-charcoal plant in Varanasi. This facility tackles waste management while creating a valuable resource. Furthermore, the successful trial of hydrogen buses in Leh showcases our commitment to clean transportation solutions, especially for remote areas. This pioneering initiative paves the way for wider adoption and a reduced carbon footprint. We aspire to address environmental and societal challenges through innovative technologies. To sustain and accelerate these advancements, we've significantly increased our R&D expenditure by 70%, reaching nearly '484 Crore ($ 58.3 Million).

Investing in Our People

As we look back on a year full of achievements, I am particularly proud of the company's strong commitment to its most valuable asset- people. The strong operational and financial performance shows our dedication to advancing a world-class workforce and implementing impactful initiatives. We've invested in our employees' potential by implementing new policies and career development programs. This has not only helped us deploy our workforce more effectively but also prepared our high performers to take on future leadership roles.

We're committed to keeping our employees at the forefront of their fields to ensure we maintain the optimal skillset; we've implemented a multifaceted manpower strategy. We have integrated advanced technological tools into our learning modules and partnered with leading institutions to offer training in the latest technologies. This continuous skill development ensures our workforce stays future-proof. We've streamlined our systems to increase transparency and eliminate discretionary decision-making. I am happy to share that your company triumphed again at the ATD BEST Awards 2024, marking its seventh win in talent development excellence. Your company is also certified as a "Top Employer 2024" in India by Brandon Hall Group.

Beyond the Bottom Line: Our Commitment to Social Impact

At our core, we uphold the principles of sound corporate governance and are unwavering in our dedication to ethical business practices. Guided by values of conscience, transparency, fairness, professionalism, and accountability, these principles form the bedrock of our operations.

NTPC's commitment to ESG is evident through its focus on environmental responsibility, social development, and robust corporate governance. From reducing water consumption and implementing emission control technologies to its impactful CSR initiatives and dedication to employee well-being, NTPC is actively shaping a sustainable future for India, its stakeholders, and its workforce.

The decision to permanently discontinue operation of the outdated Barauni Thermal Power Station reflects our commitment to optimizing our operations and focusing on more efficient power generation technologies.

NTPC's consistent commitment to high standards of corporate governance is recognized by the Gold Award it received in December 2023 for its Annual Report at the "Corporate Governance Disclosures Competition 2022," organized by the South Asian Federation of Accountants (SAFA). Additionally, the company's Internal Audit department was honoured with the "Internal Auditor of the Year" award at the 5th Audit and Risk Summit & Awards (UBS Forums, May 2024).

I am pleased to share with you that NTPC's ESG Score has ascended by two levels, transitioning from D rating in 2022 to C rating in 2023 in the Carbon Disclosure Project (CDP) Water Security Rating. To support GoI's initiatives towards creating additional carbon sinks, we have planted more than 1 million trees in the last fiscal, totalling 39 million trees till date. Additionally, we are undertaking the Green Credit Program of GoI for eco-restoration of degraded forest lands on a voluntary basis. This will promote a sustainable lifestyle and environmental conservation as part of the 'LiFE' initiative announced by our Prime Minister in COP26.

We understand and value the trust and confidence reposed in us by our stakeholders. By adhering to robust governance standards and nurturing a culture rooted in integrity, we strive to ensure that our company operates in a manner that serves the best interests of all those we serve.

Beyond delivering reliable and affordable power, we recognize the impact we have on the social and environmental fabric of India. Our focus has always been to take development beyond boundaries and be inclusive in our approach. This year, we have further strengthened our commitment to Corporate Social Responsibility (CSR) initiatives, adopting a holistic approach that creates value for our society.

As India's largest power generation company, we understand the critical role we play in shaping the nation's sustainable future. Our CSR initiatives have focused on Health, Sanitation, Education, Sports, Skill Development, and Women Empowerment, ensuring social well-being alongside economic growth. Our Girls Empowerment Mission (GEM), with a vision to create a brighter future for both girls and society, has blossomed into a nationwide movement and has already benefited more than 10,000 girls in India. Through many such initiatives, NTPC has made a positive impact on the lives of over 16 lakh people.

Unlocking New Opportunities

NTPC remains committed to innovation and excellence in the ever-evolving energy landscape. Guided by our core values, we are constantly seeking out new opportunities for responsible and sustainable growth.

India, home to around one-sixth of the population, aspires to become a developed country by 2047. This calls for the significant build-up of infrastructure and expansion of the manufacturing base which in turn gives rise to the energy demand.

Your company being India's largest power utility, is ready for significant growth in the coming years. NTPC's expertise in the power sector makes it well-equipped to capitalize on this growth opportunity. India's demographic strength, with a large and young population, coupled with the vast latent demand for electricity, is set to drive rapid growth in the power sector.

Acknowledgements

I extend my heartfelt gratitude to the Government of India, especially the 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, CAG, State Governments, our esteemed Customers, Auditors, Vendors, and other authorities and agencies for their unwavering support. Your strong and continued support has played a pivotal role in our achievements.

I also want to acknowledge and thank my fellow Board members for their invaluable contributions in strengthening the Company. To our investors, shareholders, employees, and customers, I deeply appreciate your trust and support. Your confidence is paramount to us, and we are committed to maintaining it through our dedicated efforts.

Once again, I sincerely thank all stakeholders for their trust and confidence in our Company. We are committed to exceeding expectations and fostering a sustainable energy future.