NTPC Green Energy Ltd

Dear Members,

Your Directors have immense pleasure in presenting the Second Annual Report on the working of the Company for the financial year ended on 31^st March, 2024 together with Audited Standalone and Consolidated Financial Statements, Auditors' Report and review by the Comptroller & Auditor General of India for the reporting period.

1. FINANCIAL PERFORMANCE

Your Company was incorporated under Companies Act, 2013 on 7^th April, 2022 as a wholly owned subsidiary of NTPC Limited. It was incorporated to plan, promote and organize an integrated development of power generation through non-conventional/ renewable energy sources and to acquire renewable energy assets from NTPC and/ or from market. Your Company was incorporated with initial Authorized share capital of Rs. 10 lakh which was subsequently raised to Rs. 10,000 Crore. The initial Paid-up capital of the Company was Rs. 5 Lakh. The Paid- up capital of the Company as on 31^st March 2024 was Rs. 5719.61 Crore. The paid up capital as on 30.09.2024 is Rs. 7500 Crore.

1.1 STANDALONE FINANCIAL REVIEW:

The major financial highlights of your Company during 2023-24 are as follows: -

During the year ended on 31^st March 2024, your company has recorded a profit of Rs. 370.47 Crore and total revenue from operations of Rs. 1951.13 Crore.

1.2 CONSOLIDATED FINANCIAL RESULTS

In accordance with the provisions of the Companies Act 2013, and the Accounting Standards issued by the Institute of Chartered Accountants of India, the Company has prepared the Consolidated Financial Statement for the group, including subsidiaries, joint venture entities, and associate companies, which forms part of the integrated report.

The salient features of the consolidated financial statement for the financial year 2023-24 was as under:

A statement containing the salient feature of the financial statement of your Company's Subsidiaries, Associate and Joint Ventures Companies as per first proviso of section 129(3) of the Companies Act, 2013 is included under AOC-1 in the consolidated financial statements. The detailed financial results are available in the Financial Statement section of the report under the Standalone Financial Statement and Consolidated Financial Statement.

2. BUSINESS REVIEW:

Your Company has acquired 15 Renewable Energy (RE) assets and 100% shares of NTPC Renewable Energy Limited (NTPC REL) from NTPC Ltd. vide Business Transfer Agreement (BTA) and Share Purchase Agreement (SPA), both dated 08^th July 2022. On Closing Date i.e. 28^th February 2023, consideration for the said acquisition was fixed at Rs. 12,010.55 crore. Details of RE projects under commercial operation as on 31 March 2024 are as under:

In addition to above, NTPC REL, a wholly owned subsidiary of NTPC Green Energy, has commissioned its first wind and solar project at Dayapar 50 MW and Chhattargarh 150 MW respectively in FY24. Accordingly, on consolidated basis, total installed capacity as 31^st March 2024 was 2925 MW. The details of operating capacity and projects already awarded to the Group as on 31^st March 2024 are as under:

We were established to be the renewable energy arm for the NTPC Group and to help achieve its medium-term target of achieving 60 GW of renewable capacity by 2032. Your Company has taken various initiatives such as setting up of solar & wind power projects, Ultra-Mega Renewable Energy Power Parks (UMREPP), Green hydrogen and tie-up for Electrolysers etc.

The Company has signed joint venture agreements with ONGC Green Energy Limited, Maharashtra State Power Generation Company (MAHAGENCO), and Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL), MAHAPREIT and RVUNL and has also signed MOUs or term sheets with other public sector undertakings (PSUs) and private corporations, including Greenko ZeroC Private Limited. Your Company has signed a lease deed on 19 February 2024 for 1,200 acres of land for a period of 33 years with Andhra Pradesh Industrial Infrastructure Corporation Limited ("APIIC") for the development of the Green Hydrogen Hub in Andhra Pradesh.

Your company has been awarded the 'Green Ribbon Champions' title by Network 18 media house for its commitment to sustainability.

3. OPERATIONAL PERFORMANCE:

As of 31^st March 2024, your Company had 2,925 MW Capacity on consolidated basis operating across six states. Your company, along with the NTPC Group, believes it has strong in-house experience in renewable energy project execution and procurement.

During FY 2023-24, your company has generated 5712 MU. The average CUF was 23.86%.

The Company's projects generate renewable power and feed that power into the grid, supplying a utility or offtaker with energy. For the Company's operational projects, we have entered into long-term Power Purchase Agreements ("PPAs") or Letters of Award ("LoAs") with an offtaker that is either a Central government agency like the Solar Energy Corporation of India ("SECI") or a State government agency or public utility.

4. ISSUE OF SECURITIES/CHANGES IN SHARE CAPITAL

During the financial year 2023-24, the Company has alloted 100 crore Equity Shares @ Rs. 10 each amounting to Rs. 1000 Crore to its promoter on right basis. The amount has been utilized towards reimbursement of expenditure incurred on land at Pudimadaka by NTPC. In addition to above, allotment of 178,03,88,965 equity shares of Rs. 10 (Rupees Ten only) each of aggregate nominal value of Rs. 1780,38,89,650 for cash on rights basis was done to NTPC Limited on 7^th September 2024. The paid-up share capital of the Company as on date is

Rs. 7500 Crore.

Raising of funds through IPO:

The shareholders of your Company in its extra ordinary general meeting held on 10^th September 2024 had accorded approval for issuing shares of upto Rs. 10000 Crore through Initial Public Offer. Your Company filed Draft Red Herring Prospectus with the SEBI and Stock Exchanges on 18^th September 2024.

5. DIVIDEND:

The Company's subsidiaries/ JVs namely NTPC REL, GVREL and INGEL's CAPEX plans require large equity infusion in coming years which will be more than the internal accruals of the Company. Keeping in view the same, no dividend is proposed by your Board of Directors for financial year 2023-24. The Dividend Distribution Policy was approved by the Board of Directors on 9th September 2024 and is available on the Company's website at https://ngel.in/page/policies.

6. DEPOSITS:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

7. VIGILANCE MECHANISM:

A Whistle Blowing policy has been approved by the Board of Director on 9th September 2024 and is available on the Company's website at https://ngel.in/page/policies. The Company's whistle blowing policy provides an adequate safeguard against victimization of Director(s) or employee(s) or any other person who avail the mechanism and also provide for direct access to the Chairman of the audit committee in appropriate or exceptional cases.

8. HUMAN RESOURCE:

As on 31^st March 2024, total number of employees on consolidated basis were 206. All employees are posted on secondment basis from NTPC Limited.

9. JOINT VENTURE/SUBSIDIARIES:

The information of Subsidiaries and JV Companies along with details of partners of joint ventures as on 31^st March 2024 is given below:

Your Company has also signed joint venture agreements to produce renewable power with Oil and Natural Gas Corporation (ONGC), Maharashtra State Power Generation Company (MAHAGENCO), Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited (UPRVUNL) and have signed MOUs or term sheets with other PSUs/private corporates including Greenko ZeroC Private Limited.

Material Subsidiaries

As your company is gearing up to listing its shares, it has framed its policy for identification of material subsidiary pursuant to provisions of SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015. The policy is available on HYPERLINK "https://www.ngel.in/page/ policies". As per the policy, NTPC Renewable Energy Limited will be its material subsidiaries.

10.1 Statutory Auditors & Auditors' Report

As per the provisions of Section 139 of the Companies Act 2013, the Statutory Auditors of your Company are appointed by the Comptroller & Auditor General of India (C&AG). M/s P R Mehra & Co., New Delhi was appointed as Statutory Auditors for the financial year 2023-24. The financial statements of the Company for the Financial Year 2023-24 were audited by the statutory auditors and there is no adverse remarks or comments in their report.

10.2 Review of Accounts by the Comptroller & Auditor General of India

The Comptroller & Auditor General of India, through letter dated 23^rd July 2024, has given Comment on the Standalone and Consolidated Financial Statements of your Company for the year ended 31^st March 2024 after conducting supplementary audit under Section 143 (6) (a) read with Section 129 (4) of the Companies Act, 2013.

Comment of C&AG along with Management reply for both the standalone and consolidated financial statements of your Company for the year ended 31^st March 2024 are being enclosed as Annexure-VI.

10.3 Cost Audit

As per the provisions of Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Audit Committee recommended and the Board of Directors appointed M/s. R. J. Goel & Co., Cost Accountants, Delhi as Cost Auditors for the financial year 2023-24.

10.4 Secretarial Auditors & Secretarial Audit Report

As per the provisions of the Section 204 of the Companies Act, 2013 and Rules made there under, a company, whose paid-up share capital or loan or turnover is above the prescribed limit, existing on the last date of latest audited financial statement, such company needs to appoint a secretarial auditor. Since your company is falling in such category of companies in the financial year under review, your company has appointed M/s A.K.Rastogi & Associate as their Secretarial Auditors. The Report given by the Secretarial Auditors is annexed as Annexure IV. There is no adverse comment or observation in the secretarial audit report.

10.5 Secretarial Standards

Your Company follows the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

10.6 Particulars of Contracts or Arrangements with Related Parties

During the financial year, your company has entered into Related Party Transactions with the holding Company i.e. NTPC Limited. Transactions were done with the approval of the Board. It is also pertinent to mention that first and second proviso of Section 188 are not applicable in case of transaction between two Government companies. Form AoC-2 containing details of other related party transactions are enclosed with Directors Report as Annexure-III.

Further, policy on Materiality of Related Party Transactions and also, dealing with Related Party Transactions of the Company has been approved by the Board of Directors on 9^th September 2024 and is uploaded on the Company's website at https://www.ngel.in/page/policies.

10.7 Material Changes and Commitments

There is no material change/ commitment affecting the financial position of the Company which have occurred between the end of financial year of the Company to which financial statement relates and signing of this report.

10.8 Internal Control

Your Company has an adequate internal control system commensurate with the size of the Company and nature of business.

10.9 Particulars of Loans Guarantees or Investments under Section 186

There is no loan / advance made by your company during FY 2023-24 covered under section 186 of the Companies Act. As on 31st March 2024, your Company has invested

Rs. 1,444.46 Crore Crore in NTPC REL, a wholly owned subsidiary. Details related to investment are given in the notes to the Financial Statements. Further, as on 31st March 2024, your company had invested Rs. 5 lakh in Indianoil NTPC Green Energy Limited

10.10 Conservation of Energy, Technology Absorption and Foreign Exchange Earning & Outgo Conservation of Energy:

Your Company is engaged in the business of generation of energy using renewable sources and thereby using eco-friendly source of generation of energy.

Energy conservation measures taken:

Some of the key energy conservation measures implemented during the financial year 2023-24 in various areas are as under:

1. Incorporating Robotic Cleaning Storage Technologies to reduce auxiliary power consumption at various stations.

2. Using artificial intelligence ("AI") enabled tools for forecasting and scheduling, utilizing drones.

3. Implement new technologies i.e. new turbines, solar modules, which are capable of higher generation levels.

Technology absorption:

Your Company has an experienced in-house engineering team which constantly evaluates the latest technological advancements for all our projects, and which provides maximum performance for the invested capital. Your Company is also taking business development activities by exploring various new emerging energy technologies. Your company has been relentlessly engaging with external and internal stakeholders for latest technology scanning and adoption of the latest industry standards and practices in the dynamic renewable energy spectrum for accelerating the business growth of your company.

Foreign exchange earnings and Outgo:

There is no foreign exchange earnings and outgo during the financial year 2023-24.

10.11 Dematerialization of Shares

Your Company has entered its shares into Dematerialized mode. In this regard, M/s KFIN Technologies Limited (KFIN) is appointed as Registrar & Share Transfer Agent (RTA) for transfer. Your Company has entered into tripartite agreement with National Depository Services Limited (NSDL) and Central Depository Services (India) Limited for providing facility of dematerialization of shares of the Company. All the shares of your company is in dematerialized form.

11. CORPORATE GOVERNANCE REPORT & MANAGEMENT DISCUSSION & ANALYSIS REPORT

In compliance with the provisions of DPE Guidelines on Corporate Governance, Corporate Governance Report and Management Discussion & Analysis Report for the FY 2023-24 are enclosed at Annex- I and II respectively.

12. RISK MANAGEMENT

Your Company is not mandatorily required to frame risk management policy during the Financial Year 2023-24. However, being a wholly owned subsidiary of NTPC Limited, your Company is covered under the Risk Management Policy of NTPC Limited and all risk factors affecting the Company are being reviewed by the Risk Management Committee of NTPC Limited.

Further, in compliance with Regulation 17 and 21 of the SEBI Listing Regulations, the Board of Directors has formulated a Risk Management Policy on 9^th September 2024 for framing, implementing and monitoring the risk management plan for the Company. The purpose of framework of Risk identification is to identify the events that can have an adverse impact on the achievement of the business objectives. All Risks identified are documented and shall include internal and external risks including financial, operational, sectoral, sustainability (particularly ESG related risks), information, cybersecurity risks or any other risks as may be determined. Risk documentation shall include risk description, category, classification, mitigation plan, responsible function / department. The head of the respective departments within the Company shall be responsible for implementation of the risk management system as may be applicable to their areas of functioning and report to the Risk Management Committee.

13. PARTICULARS OF EMPLOYEES AND REMUNERATION

As per provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, company is required to disclose the ratio of the remuneration of each director to the median employee's remuneration and details of employees receiving remuneration exceeding limits as prescribed from time to time in the Directors' Report. However, as per notification dated 5^th June, 2015 issued by the Ministry of Corporate Affairs, Government Companies are exempted from complying with provisions of Section 197 of the Companies Act, 2013. Therefore, such particulars have not been included and do not form part of this Directors' Report.

14. BOARD OF DIRECTOR'S & KEY MANAGERIAL PERSONNEL

The Board of Directors of your Company as on 31^st March 2024, comprised of:-(i) Shri K. Shanmugha Sundaram, Chairman (ii) Shri Jaikumar Srinivasan, Director (iii) Shri Ajay Dua, Director (iv) Ms. Sangeeta Kaushik, Director The constitution of the Board has undergone change w.e.f. 09.09.2024 as under:

1. Shri Gurdeep Singh, Chairman & Managing Director

2. Shri Jaikumar Srinivasan, Director (Finance)

3. Shri K. Shanmugha Sundaram, Director (Projects)

4. Shri Ajay Dua, Non-Executive Director

5. Ms. Sangeeta Kaushik, Non-Executive Director

6. Ms. Ritu Arora, Non-Executive Director Details of Key Managerial Personnel are as under:

1. Shri Rajiv Gupta, Chief Executive Officer

2. Shri Neeraj Sharma, Chief Financial Officer

3. Shri Manish Kumar, Company Secretary

Details of changes in Board members and key managerial personnel are given in Corporate Governance Report at Annexure- I.

Board Diversity: The Company recognizes and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to the diversity of the Board of Directors.

15. PERFORMANCE EVALUATION OF THE DIRECTORS AND THE BOARD:

Ministry of Corporate Affairs (MCA) through General Circular dated 5^th June 2015 has exempted Government Companies from the provisions of Section 178 (2) of the Companies Act 2013 which requires performance evaluation of Board of Directors by the Nomination and Remuneration Committee.

16. BOARD MEETINGS:

The meetings of the Board of Directors are convened by giving appropriate advance notices. To address any urgent needs, sometimes Board meetings are also called at a shorter notice subject to observance of statutory provisions. In case of urgency, resolutions are also passed through circulation, if permitted under the statute.

Detailed agenda notes, management reports and other explanatory statements are circulated before the Board Meeting in a defined format amongst the Board Members for facilitating meaningful, informed and focused discussions in the meeting. Video-conferencing facilities for participation in Board/Committee meetings are also being provided to the Directors.

Twelve (12) meetings of the Board of Directors were held during the year under review and gap between two meetings did not exceed one hundred and twenty days. The said meetings were held on 12^th May, 2023, 25^th July, 2023, 14^th August, 2023, 26^th August, 2023, 01^st September, 2023, 26^th September, 2023, 25^th October, 2023, 08^th December, 2023, 20^th December, 2023, 23^rd January, 2024, 28^th February, 2024, 20^th March, 2024.

Details of Board meetings and attendance of directors are given in the Corporate Governance Report.

17. COMMITTEES OF THE BOARD

As per the provisions of Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, unlisted wholly owned subsidiaries are exempted from creation of Audit Committee & Nomination & Remuneration Committee. However, for better Governance, the Board of Directors of your Company in its meeting held on 9^th September 2024 had constituted various Committees details of which are as under:

AUDIT COMMITTEE

STAKEHOLDER'S RELATIONSHIP COMMITTEE

RISK MANAGEMENT COMMITTEE

The details of terms of reference and attendance of Directors at various Committee meetings are discussed in Corporate Governance Report.

18. CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the constitution of CSR Committee is in line with the previous year. Your company has constituted a CSR Committee for fulfillment of its CSR initiatives. The members of the as on 31st March 2024 were as under:

The Committee was reconstituted by the Board of Directors on 9th September 2024. The present constitution of CSR Committee is as under:

The scope of CSR Committee is as per the provisions of Section 135 of the Companies Act, 2013.

As per preceding financial year's (2022-23) financial statements, your company was required to incur CSR expenditure amounting to Rs. 1.13 crore (2% of average net profit as per Section 135 of Companies Act, 2013). In line with the provisions of Section 135 of the Companies Act, 2013 entire amount was deposited in PM Cares fund as per recommendation of the CSR Committee. Annual Report on CSR for the FY 2023-24 is enclosed as Annexure-V.

19. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

20. PROCUREMENT FROM MSEs

During the financial year, no payment has been delayed beyond 45 days to any Micro and Small Enterprises (MSEs) (including MSEs owned by SC/ST entrepreneurs).

21. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

All the employees of the Company are on secondment basis from holding company viz. NTPC. In line with the requirement of Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013, all the employees are regulated under the NTPC's Policy on Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace. No case under Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 had been reported during FY 2023-24.

22. Extract of Annual Return

Annual Return pursuant to Section 92 (3) of the Companies Act, 2013, read with Section 134(3)(a) and rule 12(1) of the Company (Management & Administration) Rules, 2014 for the Financial Year ended 31st March 2024 is available on the Company's website i.e. https://ngel.in/page/annual-returns.

23. DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) & 134(5) of the Companies Act, 2013, your Directors state that: i. In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures; ii. The Directors had 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 2023-24 and of the profit of the company for that period; iii. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. iv. The Directors had prepared the Annual Accounts on a going concern basis; and v. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

24. ACKNOWLEDGMENT

On behalf of the Directors of the Company, I would like to place on record our deep appreciation for the support and co-operation extended by NTPC Limited, Ministry of Power, Ministry of New & Renewable Energy (MNRE), Comptroller & Auditor General of India, Statutory Auditors and the Bankers of the Company.